HALIFAX, THURSDAY, SEPTEMBER 28, 2017
SUBCOMMITTEE OF THE WHOLE ON SUPPLY
Ms. Suzanne Lohnes-Croft
MADAM CHAIRMAN: The Subcommittee of the Whole on Supply will come to order. We will be doing the estimates of the Department of Agriculture.
Resolution E1 – Resolved, that a sum not exceeding $41,992,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Agriculture, pursuant to the Estimate, and the business plans of the Nova Scotia Crop and Livestock Insurance Commission, the Nova Scotia Farm Loan Board, and the Nova Scotia Fisheries and Aquaculture Loan Board be approved.
MADAM CHAIRMAN: I will ask for introductions by members, starting with Ms. Zann.
MS. LENORE ZANN: I think the minister is trying to say something.
MADAM CHAIRMAN: The honourable Minister of Agriculture.
HON. KEITH COLWELL: It is traditional in the committee that the minister gets to make a statement.
MADAM CHAIRMAN: Before introductions?
MR. COLWELL: Yes.
MADAM CHAIRMAN: Okay, my mistake, sorry. Minister Colwell.
MR. COLWELL: Thank you Madam Chairman. I just want to say a few words about the Department of Agriculture and the progress we have made over the last three or four years. As we move forward to growing Nova Scotia’s economy, it became very clear in its mandate and successive Speeches from the Throne since we’ve been elected, since 2013, that agriculture and fisheries and aquaculture have been identified as the opportunity to grow Nova Scotia’s economy, and we’ve been very successful. Thank you very much, and thank you very much to the innovation and hard work of the farming community in the province and the dedication of them and their families to help grow Nova Scotia’s economy. They’ve done very well. I also want to thank my staff for the innovation, hard work and dedication that they’ve shown to us all, both to the industry and to myself, and to government as we’ve grown the economy.
The One Nova Scotia report identified a 10-year goal of growing exports in Nova Scotia’s agricultural industry. We have reached 80-plus per cent of that goal in just three years. It was also brought to my attention by Sobeys – I met with them the other day – and they also have exported Nova Scotia products, which we would not have shown on our books – another $16 million. So, we’re very, very close to meeting the One Nova Scotia Ivany report for doubling the export of agricultural products in the province. I am very proud of that and the industry should be very proud of that. That has happened because of innovation from the industry. A lot of work has been done in research and development, both internally from the farms themselves, a lot of innovative things have been done. A lot of work has been done by the universities and community colleges in the province to help that grow.
As we look at the possibility for agriculture in the province and exports, and displacement of imports, it has been a very positive picture. Again, I want to stress, it has been the farming community that has been responsible for that, with the assistance of our department and other agencies. I always say, our job is to set up the environment for business to do their work. Once we get the environment set up, then they will come in, they will do the work and we’ll be in very good shape.
We’re seeing our exports, that’s in 2016, of $350 million, and we can add another $16 million to that, that Sobeys bought in Nova Scotia, that aren’t recorded as exports. So, we’re roughly up to $366 million in exports, over what we were when the Ivany report came to government. Those exports are mainly to the U.S. at the present time, the European Union, and we have a huge market emerging in China as well as Vietnam, South Korea and Japan. So, over the next few years, those markets will grow and we should be well beyond the Ivany goal of expanding and doubling the exports. That’s very important.
I worked many years in export myself and years ago, I remember the Department of External Affairs told me that for every dollar that’s exported from Nova Scotia, or anywhere in Canada, or outside the country, or outside your province even, it adds seven dollars to the local economy. That’s very significant. If you look at the numbers we’ve achieved, the numbers are staggering.
As we continue to do that, it will help young people stay in Nova Scotia, it will make opportunities, so that young people - and, indeed, in some of the fields, in the wine industry, some of the wine industry reporting up to 50 per cent of their staff are other Nova Scotians returning to Nova Scotia, who worked away, some of them, all over the world, and other ones moving to Nova Scotia, who had never lived in Nova Scotia, because of a lifestyle and our wonderful province we have to live in, to work on the wineries.
At least two wineries have confirmed that that’s the case, and we’re seeing more and more of them, the same opportunities. So, it’s a great opportunity. It’s a great change from where we were a few years ago, when our population was dropping and things weren’t as good as they should have been. It’s through these exports that really you can grow the economy.
We’ve seen that there’s been a lot of discussion lately about blueberry sales. Blueberry sales is a good news, good news, sort of bad news story. The good news is, the exports of blueberries and the sale of blueberries are the highest they’ve ever been. They’re continuing to grow every day.
The other good news is that thanks to the hard work of the Nova Scotia Agricultural College, they’ve actually been able to increase their productivities, somewhere between 5 per cent and 15 per cent in the blueberry fields. That’s very positive news. Unfortunately, when those two things aren’t quite in line - our exports and our sales of blueberries are lagging behind our opportunity to grow the blueberries. Over time, that will reverse again.
We’ve always had a shortage of blueberries, and now with the science that was applied to it, it really has become a very good crop and, indeed, an opportunity for us to grow our exports further. In the meantime, we’ve taken some steps to help the industry export even more, and sell even more. We will probably get questions on that later. The blueberry industry now represents $95 million of exports every year, just in blueberries.
The other thing that has been a real success in Nova Scotia is our high-value apples. Apples such as Honeycrisp, SweeTango, Gala, and there are several other ones. The price of these apples is really, really high. Higher-density planting that could be done in traditional methods. When you look at an apple orchard today, it looks more like a vineyard, and it’s pretty hard to tell them apart. The same trellis systems, the same sort of spacing. The vineyards are a little bit closer together than the apple orchards, but it’s really a new way to do business. The industry has really adapted and set some new standards.
I’ll give you one example, of Honeycrisp apples. We’re increasing production every year substantially, and the value of increasing over the past five years in these high-value apples, and other apples that have been traditionally from Nova Scotia, exports have exceeded 262 per cent growth. To the point that a Honeycrisp apple, just as an example, last year in Florida was selling for $5.99 a pound U.S., when our dollar was about 70 cents, which is well over $7 or $8. Right beside it was typically, an organically-grown Washington State apple, that - ours aren’t organically grown - selling for at least one dollar a pound less than Nova Scotia apples. That’s the kind of quality apple that we have.
Last year, we sold out of apples about two months before the season was there. So, it’s a real success story, and that continues. They’ve developed the industry, developed holding facilities that hold these apples. When you pull them out of storage after a year, it’s virtually impossible to tell they hadn’t been picked that day.
It’s science working with industry, industry working with science. Then when we put the marketing together, we’ve got a real chance for success, and we’re seeing success in Nova Scotia. It’s an exciting time to be in agriculture. It’s an exciting time to be Minister of Agriculture, it’s an exiting time for our staff to work on these things. If we look at all of the things that have happened over the years; for instance, the maple industry had some very serious problems a few years ago, when storms came through, the big snowstorms, and virtually destroyed some of the tap systems, and the piping systems they had. Now, it’s been turned around. Last year the maple products grew by 167 per cent. So every tragedy we seem to have in the industry seems to bring a lot of success in the future. We don’t want to ever see tragedy, we don’t want to see that ever happen. But the maple industry in Nova Scotia - and we’re not very large in Nova Scotia - in 2016, it went up to $3.2 million. We are looking at some other things in the maple industry that may grow that production more, or add significant value to that product, without harvesting any more.
So, there are lots of opportunities. The agricultural employment numbers, direct employment in 2016, was right around 4,500 people, and the total agriculture-related employment was 8,300; a significant contributor to the Nova Scotia economy. We also have to talk about food security in the province. We talk about food safety a lot, and food safety is an issue we deal with every day. The province is doing a very good job on that. So are the industries and the processors and the farmers themselves.
A lot of concern around that, always, and there should be. W always do the best we can. But the one thing I’ve been talking about more and more all the time, is food security. In other words, our food supply. So, if the highways were broken between New Brunswick and Nova Scotia and the trucks couldn’t flow, I would guess - I’m just guessing, this is totally a guess - the grocery stores would be cleaned out in one or two days. There’d be panic buying; there wouldn’t be anything left on the shelves. It would be quite a few days, if the road stayed closed for a period of time, before that could be reinstated, and a sustainable food supply be put back in place. Not many of us think about that, because it’s been so - my whole lifetime, you go to the grocery store and, basically, if you could afford to buy it, you bought it. And, that has been the case with more and more selection over the years.
Not only is food security important, it’s from the standpoint that, if we can grow it here, it means that adds a tremendous amount to the economy. As I said earlier, a product that you can take and grow here in Nova Scotia to displace an import, has several benefits. Number one, that has the same economic impact as an export, exact same. Also, we control the food safety related to it. I can remember a few years ago, we had a scare with lettuce in Nova Scotia, and it was not from Nova Scotia, it was imported from outside the country. We have no idea what happened to that lettuce before it got here, no idea how it was handled in the fields, at harvest time, packaging time, or even the trucking time until it gets to our province.
Even though the Canadian Food Inspection Agency would inspect the facilities that were there, to ensure that every precaution was taken, we still don’t have the control we have in Nova Scotia, or even in the rest of Canada. A lot of countries don’t pay the attention that we do to food safety. That’s a concern as well.
We have to look at more sustainable supply of food in the province. Make sure we can feed ourselves in a time of an emergency. There’s always a lot of talk about the U.S., and the somewhat different political situation in the U.S. since the new president was elected, that could affect our food supply in the future. They’re talking about some pretty unusual trade negotiations that are under way. Hopefully they’re successful, I’m sure they will be. But, it is a concern, and it should be a legitimate concern.
I talked earlier about the possibility of the border between Nova Scotia and New Brunswick not being accessible by vehicle. We’re working on a project now with New Brunswick and the federal government, to ensure that the dykes in that area are raised, and really mitigate any risk that’s there - there’s a major study that has been done on that, and that is under way. What I’m talking about could potentially happen. Hopefully it never does, never will, but again, we have to be prepared for the worst.
As we look at other industries we have in the province, I’m very proud of what we have accomplished in the wine industry in Nova Scotia. It was an industry that, five years ago or 10 years ago, really didn’t have much interest in Nova Scotia. There was a lot of interest maybe in hobby wineries at that time. There were a few people who were really thinking long term, and planting some grapes that they thought would work. A lot of experimentation was done. Today, I’m very pleased to see that, indeed, we have turned the corner. There are still a lot of hobby wineries around, and that is fantastic. That’s all part of the wonderful lifestyle that we have. We have also got some companies that are emerging as world class wineries producing world class wine.
I always ask the question to an audience when I go, what is the highest price ever paid for a Canadian wine? Everyone thinks it’s from B.C. or it’s from Ontario, and the questioning goes on for a little while. The truth of the matter is, it was a Nova Scotia wine produced by Benjamin Bridge. They sold 500 bottles in 24 hours, at $288 a bottle - the highest price in history ever paid for Canadian wine. Every time I see Gerry McConnell, who owns Benjamin Bridge, I tell him he made a major mistake, and he should have sold them for $500 a bottle. He just smiles and says to me, you’re absolutely right, I could have got the $500. I would think when he does another offering like that in a few years - I know he has some wines that he has been aging for some time. If he ever does that again, I’m sure the price would be well beyond $500.
Also, when you talk success in the wine industry - I will talk a little bit about Benjamin Bridge just as an example. We have great wineries all over the province. There was a study done recently by wine experts in the world around bubbly wine because we can’t call our sparkling wines champagne. You’re not allowed to do that unless you make them in Champagne, France. They have been named as one of the top 14 bubbly wine producers in the world - in the world. Think about that. A small industry, just started a very few years ago competing against countries like France, Italy, Spain, and others that have been in this business for literally thousands of years. We have developed these products, put them on the shelves, and over time have changed the flavour of the wines to ensure that they really appeal to people with higher quality, higher quality all the time. We started way down the scale, and now we are among the leading wine producers in the world.
To give you another example of a very small winery in the province, there is a story you would see and not believe. L’Acadie went to Champagne, France, to compete against French champagne. Number one, they’re a very small winery. They made the wine the traditional way, turning the bottles a certain amount each day, and then there’s a process where you take the top off and let all the gases escape and all the sediment, and then you rebottle the wine. The traditional way that was perfected probably 2,000 or 3,000 years ago, they made the wine like that.
They went to Champagne, France, and they competed in their competition at Champagne, France, and they won the gold medal. Well, that didn’t sit very well with the people in Champagne, France. They decided that that had to be a mistake. There was no way that a little winery from Nova Scotia could possibly beat them in their own country at their own game with a product that didn’t come from Champagne, France.
Before I finish the story, they have never ever in history given a medal outside of Champagne, France, for bubbly wine champagne - ever in history. That’s where we’re starting the story.
So they decided that this couldn’t be happening. What they did was they put the bottles in paper bags like when you watch movies, and there’s an old guy on a park bench with his drink in a paper bag. So they put all these bottles of wine in paper bags. The same sample group went through them all together and lo and behold they won the silver medal instead of the gold one. So now they’re in a real spot because they can’t say this wine isn’t good. So they gave them the silver medal and it’s actually in Nova Scotia now - the only one ever outside of Champagne, France. You can go buy that wine now - we can’t call it champagne, the bubbly wine - at l’Acadie’s winery. I think it’s $45 a bottle, and I’m not particularly a big lover of champagne, but I can tell you, this is an incredible product.
That’s what we’re seeing. We see time and time again our wineries going to national and international competitions and winning awards - award after award after award. Remember, we’re a very small, small business.
The other thing I did shortly after I became minister was set up the minister’s wine advisory board. I didn’t really know what the rest of the country did or the rest of North America. I found out after I set it up - a gentleman was visiting from Ontario who is actually producing most of the grape vines for Canada. He said, this is an incredible thing you have done. He said, this does not exist anywhere else in North America and nowhere else in the world that he knew about. This group is dominated by the industry, dominated by the wine-making industry, the wineries themselves and also the grape growers. They’re on this board. It’s an advisory board. Everything we do, we work with them and talk with them about it and get advice from them. Then we model programs and other problems they have, start addressing problems they have in a direct manner.
It has been very successful, very successful, over the last few years. I really personally want to thank the people from the industry for agreeing to participate in this and being the driving force around many of the changes we’re making and will continue to make in the future. We’re very excited about that.
We are now in Nova Scotia where Ontario was probably 25 years ago in the development of our industry. We have between 21 and 24 wineries - no comparison to the hundreds of wineries they have in Ontario. But 25 years ago, they had about the same number of wineries. Our difference in Nova Scotia is we get better quality wine, a lot better quality than Ontario has.
A friend of mine was telling me that a friend of theirs - so hearsay, that helps a lot - was in Quebec. As everyone knows, Quebec is very protective of their agriculture industry. They were on a winery tour, and they were having a great time. The tour guide asked, where is the best ice wine in the world made? If you’re in Quebec and you’re on a tour, the answer would be obvious: Quebec of course. They said, no, it’s not Quebec. Well, if it’s not Quebec, then it will be Ontario. No, not there. Well, it’s got to be B.C. No. It’s Nova Scotia. We also have a reputation now - making a very limited supply of ice wine. Ice wine, I can tell you, is a very valuable product. That’s another product we really don’t produce a lot of because we’re having enough trouble now supplying the marketplace.
I remember when I first met with the wine board. They were shocked when I said I wanted to see the vineyards grow five times bigger in five years. They all almost fell off their chairs. After they yelled and screamed at me for a little while, they said, no, we can’t sell what we’ve got now. We’re finding we can sell what we’ve got now. We’re going to be out of grapes shortly.
I notice one of the wineries that just opened, a new expansion - anyone who hasn’t been there should visit it. Actually, you should visit every winery in Nova Scotia and see how exciting this is and what’s happening. Lightfoot and Wolfville opened about two weeks ago, and within two weeks, they sold out of the chardonnay total supply for this year, and they sold out of their pinot noir. Their pinot noir is selling for $43 a bottle, so it’s not cheap wine. But they sold out. They can probably sell 10 times what they can produce. That’s what’s beginning to happen.
We’re also seeing some interest in export markets that we will develop and work with, but again high-end export markets. We’re not interested in selling $10 bottles of wine. Every bottle of wine that’s produced in Nova Scotia with 100 per cent Nova Scotia grapes - and this is a study that was done by the wine industry across Canada - is worth $36.62 to Nova Scotia’s economy, every single bottle. It doesn’t matter if it sells for $10 which we don’t have hardly any that do that but $20 or if it sells for $150 it’s an average of $36.62.
A bottle of imported wine, so if you buy a bottle of wine that’s from France, the economic benefit to Nova Scotia is $1. So, it doesn’t take much math to figure out what kind of wine you should be drinking in the province if you’re so inclined to drink wine. So, the economic benefit is just incredibly possible that we can become one of the premium wine areas in the world and we’re on the road to do that now. Again, I want to thank the growers for that.
I know when I met with them first they said I was pushing them instead of them having to push government and they were smiling when they said that and they said it’s about time we had government really working with us and that’s something, if you ask the wineries, they’ll tell you themselves and, in 2016, it seemed like a small industry but direct employment in the industry is 550 people and that number will grow substantially and these are long-term, permanent jobs and well-paid jobs as well and I don’t really gauge growth in the economy by jobs. I gauge it by wealth generation. If a company makes money, they will invest, they will reinvest, and they will keep investing to buy a new home. They will do all kinds of things in a community and spinoffs to the communities are incredible as well as employ a lot of people.
So, it has been stated that our growing conditions in Nova Scotia are better than Bordeaux, France, because of climate change. Our soil conditions are a bit acidy, and the industry was telling me first when they came out they were producing some wines and they were a bit acidy and they were trying to get the acid out and they brought some experts in from France that are the experts in the world in wines and they said why are you trying to get rid of this acid, this makes this wine very unique. So, now, they work with the wines and really get the full body out of the grapes and it’s a tremendous success story.
That’s an industry we’re going to see grow exponentially and our province has put in, our government has put in $12 million over three years to do research development. A couple of things, one of the particular things we did we made an investment - two investments now - in Acadia University to set up a world-class wine lab. That was to ensure that the wine industry had the resources they needed to get their industry to grow. What was happening, when you had to export wines, they had to ship the wines out of the province and sometimes out of the country to get the testing done before you were allowed to get an export certificate for it or an import certificate, whichever the case may be. Those tests now can all be done at Acadia University and not only just for our own wineries but anybody in Eastern Canada or anywhere in the world that wanted to get the testing done and I think you’ll see the tests in that lab grow more over time as the requirements come. We’re very happy about that and it’s something that the industry requested and part of the $12 million over the four years we have was invested to make sure - we needed that resource in place to make that happen.
So, I could talk about the wine industry for a very long time and we’ve got so many things that can be done to improve the industry and work with the industry and it really, really has seen significant growth and, if we can get to where Ontario or British Columbia is and we do have better quality wine, and I keep stressing that, and that is a fact, you’re going to see land values in the wine regions go through the roof.
I was in B.C. on another trip and I managed to see some of the wineries in some of the areas and when you go to the areas and you see a house and you normally think what a nice lawn and driveway and gazebo and all that kind of stuff, the houses are a driveway, a house, and vineyards touching the building. The land is so valuable and the production is needed so much. Ontario is a little bit behind that. B.C. now is around $145,000 an acre. Even with trees on it, you can plant grapes plants. Ontario is about $35,000 an acre, for land you can grow grapes on and in Nova Scotia you can still buy it very inexpensively. That gives us an opportunity to see investment in the wine industry from other parts of the world and we’re getting people interested now from places like Bordeaux and Champagne and Chablis, France, and other areas of the world and people are excited about the industry and if you travel and you talk to anybody in the wine industry, people know about Nova Scotia. They really know about Nova Scotia. It’s a great tourism attraction.
The wine bus that they put together, the industry put together themselves, is sold out every year and I remember they were hoping to get I believe it was 100 people on a weekend three years ago and they’re averaging now about 500 people a day. I know I talked to some of the wineries, they’re getting visitors on a Saturday up to 1,300, 1,400 people in one day. So that also lets their restaurant do very well. Luckett Vineyards is doing incredibly well with the restaurant and their line of products. Domaine de Grand Pré is doing really well. All of them, they’re really setting a new standard in Nova Scotia.
It’s very exciting with great career opportunities for people and it’s a world industry, so if you’re trained in Nova Scotia or you work in Nova Scotia, it gives you an opportunity to go to other places in the world and work. Some of the wineries here have actually paid their staff to go away for a couple of years, work at a winery in Chile or in France or wherever the case may. They make deals with the winery there and they pay their staff to go to get trained and then come back and work in the wineries in Nova Scotia and that’s happening right today. That’s a big investment for Nova Scotia companies but they’re doing that and they do it on their own. There’s no subsidy or anything like that. It’s an investment in people and that’s really, really critical.
So, as we move forward with that, just a few other things I’d like to talk about. I want to talk about how we’ve got all kinds of programs and everything that I’m sure we’ll have questions on and we’ll answer those questions when they come but I want to talk about a couple of files that I inherited when I first became minister. I know one of the first problems I had was Nova Scotia’s complex strawberry virus. It was found in Nova Scotia and the industry says all kinds of different things about why it happened and what happened and what the problem was. It basically wiped out almost every strawberry plant in Nova Scotia and the ones that weren’t wiped out had to be plowed under or destroyed to get rid of this virus.
So, we went from that three and a half years ago, I met with five of the top farmers in the strawberry business on two successive Sundays at the airport hotel and, number one, they couldn’t believe a minister would come on a Sunday to see anybody or talk to anybody, so, that set us in good stead. I wasn’t too sure we were in such good stead when the meetings were over but we reached the first one. But what happened was we worked with the industry, took their advice, and we started a marketing monitoring project, done by Perennia Innovation Centre, so they’re completely independent to look for the aphid – there are two different aphids that carry this disease and when the two diseases come together it makes a perfect storm for a virus.
We’ve gone from basically in one year wiping out the industry, all the plants and, two years later, bigger crops, healthier conditions than we’ve ever seen in the province and, now, one of the farmers near the Truro area is providing strawberries almost six months a year, fresh, to Sobeys and Sobeys have a policy with it. Everything he can deliver to the door they’ll buy and it has been a real success and that product that he’s bringing in is top quality and the market is getting better and better for these strawberries. So that is one of those things that I’m so proud to see, that we’re able to work with the industry and to listen to them and work with them.
We turned a real disaster into a real success story, which will continue for years to come - and it didn’t cost a fortune for the province or the federal government. There were some programs put together to help, and I’m pleased to say we did negotiate those with the federal government under AgriRecovery. That helped get everything redone, replanted, and back in place. I want to thank the federal government for the work they did with that. We went through that whole crisis, and it was pretty interesting.
One of the other files I inherited - I did an interview about the protection of cats and dogs. I’ll never forget it. It’s a very passionate group, and I’m a very passionate pet lover myself. I have a black Lab at home who’s past spoiled. I’ve had successive dogs, the same, and I’ve had cats as well.
I was interviewed by a lady at The Chronicle Herald, and she told me before she did the interviews, “I’m one of the cat activists in the province. I’m going to tell you that up front.” I said, “Okay, that’s fine.” We were looking at possibilities, because I get all kinds of calls and emails from people about how we’re not doing enough to protect companion animals in the province.
We were going to look at dogs - and I want to thank my Cabinet colleagues at that time, as well, for the support I got on this. We were going to put some new laws and rules around protection of dogs, because there were a lot of bad things - dogs being left tied outside, all kinds of bad things. A lot of animal rights groups were very concerned, and rightfully so, about what was going on. They really hadn’t had a voice before. No one ever listened to them before. I started listening to them.
I did this interview, and we talked about dogs, about how, yes, we’re going to change some things to protect dogs. She said, what about cats? I said, well, cats will be protected too - that’s all I said. There were 200-some “Are you going to protect cats?” emails on my desk the next morning. Anyway, with support from my Cabinet colleagues and a great deal of enthusiasm to protect cats, we did that too.
We have worked to support the SPCA and their work. I want to thank my colleagues in all the Parties for the support they gave us on the Animal Protection Act that we put forward. That was well appreciated. It was a pretty easy one to do - I think 99 per cent of the people in the whole province really love animals. It’s the 1 per cent that we have a problem with.
So we got that Act put in place, and I set up a minister’s advisory panel on that as well, and I’ve met with them now - I believe this was the third year. We have an agreement to meet in December every year. I’m impressed with how the organizations are now working together, talking to each other - they wouldn’t even talk to each other when we started all this. They’re working together. They’re coming up with ways to protect animals better, and indeed, we have some of the strongest regulations and legislation in the country.
But it’s not just that. It’s awareness we’ve raised. I was at a grocery store one day, and there was a half-ton truck there with the engine running. It was a hot day. There was a sign in the driver’s door: “Don’t break my window. I’ve got the air conditioning on because my dog is in the vehicle and I didn’t want it to get warm.” Now, that’s a sign you would never have seen five years ago. There’s all kinds of change in attitude and in how these things have happened, and I’m really pleased to see it.
The first meeting I had after we put the new regulations in place and everything that year, I didn’t know what to expect. We have this advisory committee, and there’s no agenda. It’s a free chance for everybody to talk and discuss the issues they have and what they’re seeing.
They came up with two extremely good ideas. I’m sitting there saying to myself, how am I going to get this done, now? How are we going to do this? I may have to change the legislation to get it done, and it’s going to take time - as they’re talking about this idea. We’ll definitely have to change regulations, but we can do that. That’s not a problem. We’ll do consultations and all those things.
They explained it all. They had it very well planned, what they wanted to do. At the end of the meeting, they said, we don’t want you to do it now. We personally - our groups - want to go out and talk to the people in the community. We will come back with some solid recommendations, as they did last year and we’re looking at those recommendations right now to see how we can make them happen. I was from the standpoint of nobody working with each other, who would hardly talk to each other to the point now that the whole industry, and I call it an industry, is working together and they’re coming up with innovative ideas and approaches to things. I think the difference is because we took the time and listened. We had a very passionate staff that worked on this and came up with some great ideas that we incorporated. We listened to the people. We listened carefully and we instituted what we could do under the Acts and regulations that make it work.
One of the conversations we had was around, well, the fines aren’t high enough. Well, I don’t know if anybody in this room realizes but if you tie your dog out - there was a lot of discussion about tying your dog out too long in the sun and all that stuff and that’s a hard one to measure because you’re going to have to have someone watch all day to see if the dog’s out too long. We didn’t know how we’d ever get it done or videotape it and it would have to be a video system that no one could find and detect that was there with timers and all this stuff on it. So, what we did instead, we put a standard in place for housing an animal, all kinds of things about how you tie the animal out, times that you should, you know, have to be in for so many hours a day, and stuff that’s pretty hard to enforce but we have it. Then we also put in place if there’s no water in the dish you get a fine, no food in the dish you can get a fine, for no dish you get a fine. If the yard is not cleaned up, you can get a fine. So, if you go to somebody’s house that’s not looking after an animal and, I’m telling you, my dog, if I put food in the dish and tie her out, as soon as I’m gone, the dish is empty and I’d be liable for a fine on the spot.
So, there’s all kinds of tools and we found those tools that worked very well. The SPCA has done an incredible job of working with these regulations and they’ve come forward with some updates and improvements that we will probably put in place to help them as well.
So, it has been an incredible journey with that file and it is very important to people. I believe that companion animals are a lot better protected now than they’ve probably ever been in the history of the province. So, it’s a lot of things we’ve done like that.
We also wanted to talk about one of the programs that was started before I came to the department and I want to congratulate whoever put it in place, Select Nova Scotia. That has been a really, really solid program. We’ve expanded it since I’ve become minister from the recommendations from the staff and the department and the great work the staff and the department does in Select Nova Scotia. It’s really about doing, again, the food security that we talked about, sooner, helping the farmers sell their produce, raising awareness of Nova Scotia products, where they come from, and who they are. We had Open Farm Day. This year, I guess it was the best attended that it had ever been. It gives people an opportunity to go and see a working farm to see what’s going on in the farm. It was quite an eye opener.
When you go on a modern farm today, it’s like the apple orchard I talked about earlier. It’s not big sprawling trees and low-tech business, it’s a very high-tech business and people say, well, Nova Scotia wouldn’t have technology but there are some tractors and equipment in the province, itself, can plow a field by themselves. I can remember about a couple of years ago, I was visiting a farm and the lady that owned the farm, her and her husband owned the farm, her family, she said we’ve got a combine in the garage, in one of the buildings they had there stored and she said that trailer with the cutting heads on it are off the combine. I said why have you got the trailer with the combine heads on it. She said it’s so wide that it goes from one shoulder of the road to the other shoulder of the road, so, we can’t drive it on the road, we’ve got to take it to the field, assemble it there and disassemble it before we take it back.
I say okay, that’s fine. So, she said you should come in and see the combine itself - and this is not a big combine compared to what they’d have out West. The thing that struck me about it when I crawled up in the cab, which was quite a way up, I sit down in the operator’s seat and there’s four computer screens in this combine. So, it’s high-tech business today and she said this is not one of the most modern ones. But this is where we’re going in Nova Scotia and there’s all kinds of discussion about supply management on dairy farms and all those issues but you go on a dairy farm today and you see milking robots where basically the operation can run by itself and it allows a family to not have to work 24 hours a day, seven days a week, anymore which is very positive. Also, it gives the complete breakdown of each animal, what kind of production they were in, all kinds of data that they never could even imagine getting before and helps them run a very efficient operation. So, our dairy farms are probably some of the most efficient in the world as we see the technology that they’ve adapted and are working with and that’s critical if you’re going to be competitive in today’s market.
So, when you look at the opportunities now, I’d like to thank the Department of Labour and Advanced Education too for putting the Red Seal program in on the equipment for farm training. I think that’s long overdue. That’s a great career opportunity for young people now as equipment gets more and more complicated. You’re no longer just changing the mechanical parts, you’re changing electronic parts and programming things in the machines and doing the interface between the two mechanical and electronic components. It’s very tedious work and you really have to have well-trained people.
I had the privilege of announcing that in the Valley a while ago and I talked to the three young men who were already enrolled in the program. They were so excited. They said for all these years - one young man had worked there 10 years at the trade and he said I’ve never had a chance before to become a qualified tradesperson and he said now I’m going to and he still had a couple of years ahead of him through the Red Seal program to do that.
So, all these things in development is to grow Nova Scotia’s economy. It’s important that we have people trained properly. There are lots of shortfalls, a lot of opportunities that we have to pursue in that area and it’s a pleasure to work with the Department of Labour and Advanced Education to see them really paying attention, really wanting to put these things in place because only through these sorts of programs can we possibly ever grow Nova Scotia’s economy and we have to grow the economy. There is no choice. There’s always all kinds of discussion about, you know, health care and education. Well, education is critical but health care and all these other things, we can’t pay for those things if we don’t have a strong economy and balanced books in our province to pay for these things and make them move forward. Those are debates for another time but it shows that you have to grow that, you have to have people want to stay in Nova Scotia and live and operate in Nova Scotia.
I remember the first time I went to the Nova Scotia Federation of Agriculture. My executive assistant at the time, who was born and brought up in the agriculture industry in the province and I swear she knows every single farmer and all their kids and their grandkids and everybody in the whole country, or the province at least, we were going to the event and I had a great big thick speech and I was reading through the speech and I said no way to myself. I can’t give this speech. So, I sat the speech down in the car after I read about half of it and, not knowing what to do, I was only a minister for a few days, and after I did that she said, well, you realize - and John can probably attest to this - but he said that typically the federation chews up and spits out agriculture ministers pretty regularly so you better be prepared for the worst.
So, I’m going in there prepared for the worst but what I did that day was I told the industry that you need to make money, you have to make money and I went through the first page of it and all the introduction stuff, you know, that sort of stuff and you have to make money if you’re going to grow your industry and I’ll give you reasons why. What I told them was you’re going to make money, you’re going to be able to do anything in life you want to do. You can educate your children, you can buy yourself a new car, you can expand your farm, you can go on a vacation, anything you want to do but just as importantly as that, you’re going to pay more taxes without taxes going up. Those taxes will contribute to health care you need for your family, roads need improvement, health care, education, all the other things you need and there was a huge round of applause.
You talk to a farmer, most of the farmers or probably all the farmers in Nova Scotia now and they talk about making money. That was a change, not because I did it, but because nobody else ever told him in history that was the case.
This gentleman came up to me, and he was all crippled up. I can’t tell you on record here exactly what he said because it would be out of order. He came up, he was all crippled over, and he said, I’m 84 years old, and it’s about time someone told us to make money, and I’ve been farming since I was a little kid. So that’s a process we have done.
We have still got a lot of hard work to do with the industry, a lot of things to help the industry grow. We have to be the facilitators of that and not tell them what to do. That’s very important. It’s very important to me, and I know it is to our staff. I can go on for a long time here about a lot of very positive things we have done in the industry.
There’s all kinds of success stories, some that the department was involved in, a lot the department helped a little bit in, and a lot of them that the industry itself did. The ones that the industry did themselves are the most valuable ones. All of them are valuable. It’s so nice to see the industry innovating, doing some exciting things, and actually making career opportunities for young people.
That’s one thing we have to do. As we move towards more and more food security, we have to ensure that we have young people to replace the people who are retiring and people who will step up to the plate, innovate more, do more things in our province that will encourage someone to become a professional farmer or someone who works with them to make the industry better.
I think with those few words, I will end my initial part of it. I’m sure there’s lots of questions.
MADAM CHAIRMAN: Thank you, minister. Do you want to introduce your staff before we move on?
MR. COLWELL: I’ll actually get them to introduce themselves. We’ll start with Ernest.
[The committee members and department staff introduced themselves.]
MADAM CHAIRMAN: We’ll start with Mr. Lohr for one hour.
MR. JOHN LOHR: Thank you, Mr. Minister, for your comments. You covered a lot, quite a broad swath of the agricultural industry in the province.
I do want to go immediately into some of the budget details first off. I’m hoping you’re going to tell me that this is an artifact, and this shows up somewhere, but the total budget in 2016-17 estimate was $60,217,000, and the actual was $65 million. The estimate for this year is $41,992,000. Depending on which way you look at it that is approximately a $20 million cut. I guess I would just like it if you could explain that to me, minister. That would be really helpful.
MR. COLWELL: We were giving the Agricultural College through our department approximately $20 million a year for operating. A deal was struck by the previous government. That funding has been transferred to Labour and Advanced Education, as they look after all the universities in the province, so that funding went to them but the funding is still there in agriculture activity but, again, it has gone to the Department of Labour and Advanced Education.
MR. LOHR: So, you’re telling me that that $20 million was going to the Dalhousie University Faculty of Agriculture. Is that $20 million still going to the Agricultural College?
MR. COLWELL: The exact same amount.
MR. LOHR: The exact same amount but where does it show up now in the budget?
MR. COLWELL: It would show in the Department of Labour and Advanced Education. It would show up there. It’s $19 million - what’s the exact number? The exact number is $19,776,000.
I believe but I’m not sure, you have to check with the Department of Labour and Advanced Education, they may also be eligible for a 1 per cent increase in that but I’m not sure. You’d have to ask them.
MR. LOHR: So, does that signal any change between the Department of Agriculture and Dalhousie Agricultural College? Does that signal any change in the relationship?
MR. COLWELL: No.
MR. LOHR: So, what I hear you saying is it’s merely an accounting change. It showed up in one line and it shows up in another line but the relationship between the department and Dalhousie Agricultural College are exactly the same? Nothing else has changed?
MR. COLWELL: Actually, nothing else has changed. It has really gone to where it probably should have been to start because they have more resources to put in an establishment like the Agricultural College beyond what we would have under their budget. So, I think it was a very good move to do it that way. We have worked closely with the college and will continue to do that in many projects and those projects being over and above what this money is.
MR. LOHR: So, I know that for the farmers of the province the sort of allegiance to Dalhousie University Faculty of Agriculture or the Nova Scotia Agricultural College and the belief that that college has made a huge impact on agriculture in the province and I’m not sure that the farmers of the province would be the graduates, the many alumni would be happy to know that even though you might say that it’s going from one part of the book to the other maybe that’s it but I think there would be a certain sense of loss of control of that - or maybe there never was control - but loss of sort of prestige of that or the loss of the influence of the department. What would you say to those comments? Will the school still continue to work just as closely with the Department of Agriculture?
MR. COLWELL: Well, we’ll work very closely with the Agricultural College as we always have. I think it’s very important that we have a very close working relationship. We actually will still be involved in developing an MOU and all the deliverables from the university in conjunction with the Department of Agriculture. So, those are still all in place. If someone would ask me if we should have given the university away to Dalhousie the only thing I could tell you was if I would have been minister at the time, we would have fought very much against it.
MR. LOHR: Mr. Minister, I have a document here called Grants and Contributions, Department of Agriculture, for 2016-17 and I see in that there was a $8,791,266.84 contribution to Agriculture and Agri-Food Canada, right, and I guess I didn’t notice in that the contribution to Dalhousie and maybe I just didn’t look in the right line here, but Dalhousie Agricultural College but would that show up in this document. Would your staff be familiar with this?
Actually, I do see it there. I stand corrected. I’ll let you answer.
MR. COLWELL: This actually was payments to vendors representing a provincial cost-share of 60-40 - 60 per cent by the federal government and 40 per cent provincial, administered by Agriculture and Agri-Food Canada. Some of it was through AGinvest. We made a $67,000 investment there. We paid another one for administration of AgriStability, of $422,396. We also made a payment of $8,295,347 program costs in the AgriStability program.
I talked earlier about the strawberry fund - funding for $5,866. The strawberry assistance program was the last part of the strawberry assistance I talked about earlier. That’s all the programs we had to fund under the existing agreements. Some of that funding was dispensed - our share of it, and also the federal government’s - to Dalhousie University for some programs that they did, as well.
You also asked about the funding - the previous year, in our budget we had the $19 million-plus - this year’s budget is going in. We won’t have that $19 million. It’s gone to Labour and Advanced Education.
MR. LOHR: Could you speak a little more clearly into the microphone? I’m not always hearing what you’re saying. I didn’t quite catch all that. I know you said a few different parts of the answer there. My apologies if I go back over that.
I notice that in the Grants and Contributions of the Department of Agriculture to Agriculture and Agri-Food Canada - $8.791 million - I think I heard you say something about that, but I couldn’t quite follow. Could you go back over that again?
MR. COLWELL: I agree, it’s hard to hear in here. Maybe because I’m getting old.
I’ll give it to you again. This is cost-shared money through agreements we had with Agriculture and Agri-Food Canada. Under AGinvest, it was a $67,657 cost for administration. That’s administered by the federal government, some of that. AgriStability’s administration costs were $422,000, roughly. There was also a payment of $8.295 million-plus for the program costs of AgriStability that would have been produced to distributers. This is something we do every year. It’s under the program that they have.
On top of that, as I said before, there was funding for the strawberry assistance program, a program put in place several years ago - and this is probably one of the last times we’ll see this - of $5,900, roughly.
MR. LOHR: So to sum it up, that $8.791 million contribution by the Department of Agriculture to Agriculture and Agri-Food Canada was cost-shared money that the province owed the federal government on programs? Is that what you’re telling me?
MR. COLWELL: It’s actually our 30 per cent of the program for that year under Growing Forward 2.
MR. LOHR: I do want to get into Growing Forward 3. I guess what I would like to ask is - I know that there’s a nationally calculated eligibility level for each province to what amount of federal money they can access. What is that for our province?
MR. COLWELL: I just want to correct something. Actually, we pay 40 per cent, and the feds pay 60 per cent. Sorry about that.
If you have questions around programs, I’ll let you know there’s a staff member up here, if you have particular ones you would like. I’ve got to get the expert here for each one.
MR. LOHR: No problem. I can reiterate my question. I know that when we talk about Growing Forward 2 and Growing Forward 3, these programs, there’s a cap on the amount of money that the province would be eligible to access due to our share of the federal agricultural gross production, I believe. I’m just wondering what that amount is.
MR. COLWELL: It’s approximately $37 million over a five-year period, the total program. Our percentage of what we get from the country was negotiated a long time ago. The new program that we’re in the process of finalizing the negotiation on, we’re going to get the same amount of money in the next five years as we did in the last five years.
The formula how they calculate this is quite a complicated answer. What we can do is get that information together in a format that’s easy to understand for all of us, and we can forward that to your caucus and to all the members of the committee. As it stands, it’s a formula that was struck many years ago.
The basis of it is 1.8 per cent of the gross farm receipts. That the basis of it. But all the formulas have to go together. We can provide that information.
MR. LOHR: That $37 million worth of eligibility would be the 60 per cent, so the 40 per cent there represents our share of that money? I’m not quite sure where this $8 million comes from in this document.
MR. COLWELL: The $8 million is under AgStability and AGinvest. We have no idea what they’re going to be every year. It’s based on requirements, demand, if we have any crisis. If the farmers decide to invest more in the AGinvest program, we have to match it. So we really can’t say how much it’s going to be every year. If the AGinvest number is high, it is really positive, the AgStability isn’t so positive usually.
MR. LOHR: So, just to clarify, that $8 million in the grants and contributions that’s AGinvest, AgriStability money. So that depends, if the farmers all have a great year that number would be lower presumably, right? But that represents the province’s 40 per cent share of these. So, presumably, at the end of the year - or maybe every month, I don’t know - the federal government sends a bill to the provincial government. So, that doesn’t really represent the $37 million that we were talking about at all. That was our five-year envelope in Growing Forward 2, which is nearly expired, right?
MR. COLWELL: That money is with the Agri-Stability in particular and ag insurance and those files. We never know quite where we’re going to be.
If we have some kind of a crisis like we did in the maple industry, we access that money and we’ve got to pay our 40 per cent. We’ve had that happen in the mink industry and we’re still paying a 40 per cent on that one but that’s soon going to be done and these bills can get, as you know, you’ve been in the farming business, how important it is for the industry but you never know when it starts because, once we approve it and make the deal with the federal government to move forward, the cap is what is claimed and I know the mink industry has been a real big moving target. The one for the strawberry industry was below what we had estimated and the money we had left over, that money we took and reinvested in testing and other things for strawberries. So, it didn’t go anywhere else.
So, the really good programs, we set money aside for them every year in the budget. How much did we set aside this year? What we set aside is sort of based on the risk we’ve seen over average risk over time and, usually, we’re okay. When we have a major crisis, in some fields, with a big storm or disease or something happens, as you are well aware, that number can go up substantially and we have to put extra money in the budget.
We’ll just be a minute getting that number. It’s an amount that we change every year based on how much we’ve already had accumulated in the budget, what a risk is and we typically are pretty well on the mark. When it came to the mink industry a few years ago, it was way beyond anything we would ever imagine and we had to do extra expropriations and, fortunately, my Cabinet colleagues agreed with that and we moved it forward and so did the federal government, so it really did make a major difference for the mink industry. We’re still looking for that number.
MR. LOHR: I’m still waiting to hear that number and we can get back to that.
MADAM CHAIRMAN: Would you like to ask another question, Mr. Lohr, while they’re finding it?
MR. LOHR: I would like to ask the next question and don’t mind jumping back to that. I’ll ask a question on the same subject. I guess my overarching question is in the Growing Forward 2, was there money left on the table federally that we could have accessed that we didn’t? That’s my question, do we maximize what we can get out of Growing Forward? Did we or can we maximize what we can get?
MR. COLWELL: I can assure you, we don’t want to have any money left on the table when the federal government’s going to give us money.
Year one - before I was involved with this - there was money left on the table, and that was probably attributed to getting the system up and going and operating. Since then, we’ve been running between 98 and 99 per cent of full utilization of the program. We want to do that every year. The money is no good if it’s not in the hands of either research establishments or the farmers themselves to help the industry grow, and us, we’re all about growing the industry.
MR. LOHR: So what about the next policy framework negotiations? What can you tell me about where that is?
MR. COLWELL: That’s going very well. We’ve come to an agreement with the provinces and the federal government. It was doubtful if Ontario was going to sign on at one point, but that did happen at the last federal-provincial meeting we had this summer. We’re very excited about that. As I said before, it’s going to be the exact same amount of money.
This year it’s changed a little bit from the standpoint of where our focus is, but one thing that we requested and did get is a lot of latitude so we can change programs as the industry needs change - not because of us, but because the industry says, “We need to look at this.” I could use the example of when the last government put in the regulations around the mink farms and having to do environmental plans and all that stuff. That money was well spent and well identified, but it was not identified when the program initially went into place. Those are the kinds of flexibility we asked for, which we did get.
The official focus this time is on science and innovation, market access, environment and climate change, value-added processing, and public trust. Those are the key elements of this. We’re still working on one section of this. They’re doing a review, and I believe that’s in the business management risk programs. That’s being done now. There’s a panel being struck at the present time to look at that from across the country. It was an issue Ontario raised, and the other provinces and federal government agreed with it, to make sure we’re getting the best value out of those programs and see if we can maybe spend a little bit less money on those, but at the same time, service the industry as they need to be serviced. Those are critical things when there is a problem, as you well know. You’ve lived through many of them yourself, and have seen your neighbours and your friends who have accessed these things, and thank goodness they’re there.
MR. LOHR: I do want to go back to - are we still waiting on that number? We got that number, did we?
MR. COLWELL: Yes, we did.
MR. LOHR: I don’t want to change the subject until we get that.
MR. COLWELL: It’s $4.6 million that we set aside this year.
MR. LOHR: And where does that show up in the budget here?
MR. COLWELL: I think it’s in our programs, but we’ll just double check.
MR. LOHR: Page 3.3, Programs and Risk Management.
MR. COLWELL: It’s on Page 3.3. You’re correct. It’s under Programs and Risk Management. It’s in that number.
MR. LOHR: I do want to go back to the Grants and Contributions, just some of the items in this. I guess one of the items that I noticed - I do want to talk about a couple of the items that are in there - I did notice that the Women’s Institutes didn’t show up in Grants and Contributions this year - 2016-17 or 2015-16.
Can you tell me if I’m incorrect? Maybe I missed that. Maybe it shows up a different way. What is the province doing for the Women’s Institutes association?
MR. COLWELL: We have an MOU with the Women’s Institutes. It was a five-year declining balance MOU that we put in place. It was agreed to by the Women’s Institutes and we can give you what it was. We started with a pretty substantial number that was well above anything they’ve ever received before and I don’t know what it is.
I don’t know the exact number for this year but I’m guessing it’s probably around $20,000 this year. But we also have a very close working relationship with them and we do a lot of extension work, so they get more money from us than just the MOU. The MOU was designed at the end of the five years so they could be self-sufficient and that self-sufficiency would come from things that we would have worked with jointly with them that we could provide funding for and other things they could do. It’s a fantastic organization, the Women’s Institutes.
Actually, I was at the 85th Anniversary of one the subsidiary women’s institutes on the weekend and it was pretty exciting to see 85 years and had a lot of history and some very young ladies and young people involved in it as well which is very good to see. But we can get you the information on that.
MR. LOHR: Okay. I guess just looking through this from 2000, last year and the previous year I see the 4-H Council received $121,000 in 2015-16 and $12,500 in 2016-17. I just wondered if you could explain to me what happened there with 4-H from one year, previous year, to this year.
MR. COLWELL: They had an agreement, again on a declining balance over an MOU with them. We’re just about to the end of that one. That’s why the number was less. It has been exciting working with 4-H, it is an incredible organization as well and we have done a lot of work with 4-H. We gave them some funding to do some IT work over and above. I don’t know if it’s shown there or not but I think that project was $25,000 we gave them outside of the agreement.
We’ve looked at many things at 4-H at their request. We’ve changed how we work with 4-H and we’ve also seen a change sort of in the management of 4-H, something that’s always been really good. They’re interested in taking on more and more things that we were doing and I think that’s very positive and when they make those changes and they’re interested in those changes, we’ve always helped them go through and fund the changes and the things that they want to do. So, we’ve actually, it may not show on the books there, but they actually probably got more money and more support from us last year than they have in a long, long time.
We’re working on a new MOU provincially. The Colchester 4-H club actually approached us, and we have just about finished now a 99-year lease so they can lease the land from the province for the barn that they built years ago. Plus we made an arrangement with the county in the area, the mayor and the council. For the next four years, we’re going to put in $25,000 a year, each one of us. That’s $50,000 a year and any other fundraising they get. The barn is in good shape now, but they’ll bring it up to a whole new standard so they can have a facility that they can use for multi-purpose things. That isn’t shown on the 4-H funding although it is 4-H funding. That’s an MOU between us, the municipality, and the 4-H.
We’re really excited about that one, and it’s something we’ll look at in other areas. We started with a really good barn, a lot of use for it, that needed some maintenance work - not to the amount of money that we’re talking about here, but some maintenance work.
What that does is allow the 4-H to take that money they’re going to get every year, $50,000 from the two levels of government. They can go to the federal government to get more funding and maybe do some major things on the building. Are you familiar with the Truro Exhibition? If you look at the tractor barn, that’s a standard in place for buildings. I’m positive when the 4-H is done, their building will be to that standard or beyond. That’s the goal.
They’ve been a great group to work with. They have a great vision. I understand they had a fundraiser recently. Unfortunately I couldn’t get to it because I was travelling. I don’t know how much they raised, but I think it was a substantial amount of money to go towards that, all volunteers. It’s exciting because it gives them a facility that can help grow 4-H.
If it was up to me, and seeing what I know about 4-H since I’ve been in the position I have now as minister, I would make a mandatory 4-H program in the schools. That’s no understatement. You see the young people, and if you look around at our staff here, probably most of them are 4-H graduates, the directors and executive directors and really key people in the department, not just in our department but all over industry in Nova Scotia. It’s an incredibly good organization. I have been trying to promote it more and more and more.
I’ll make this promise to you, to your Party, and to the NDP. If you come up with any ideas how we can grow 4-H, I want to know about it, and I’ll help.
MR. LOHR: Is the department still supplying staffing to 4-H?
MR. COLWELL: Yes, we are. The roles have changed slightly, just slightly, because 4-H has taken over reporting their membership. We didn’t really have a good system for doing that, so we funded them for $25,000 to come up with the software to do that. That will allow them to keep better track of their membership, and that’s who should be doing that.
We’re providing the staff in other areas as they need it. It’s a very, very close working relationship, probably the closest we have had in about 25 or 50 years, which we’re very happy about. Our staff is a lot happier, and 4-H is very happy about it. As we move forward and we work with 4-H more and more, it’s going to be interesting.
They are also interested in taking over Camp Rankin and actually working it. We’re in the transition phase for that now. It’s their request, we didn’t download it on them. We will still be working with them and helping them in that regard with Camp Rankin. That’s a fantastic opportunity for young people every summer, and it’s nice to see provincial 4-H taking it on. They’re very excited about it. They did the camp last year. I believe we helped with hiring, and that’s about all we did, the staff, till they get geared up so they can do that themselves. It was a total success. It allows them not only to get funding from us for upgrades there but also municipalities and other places they probably couldn’t have got funding from before. It opens new doors for them.
MR. LOHR: The Atlantic Agricultural Fall Fair Association, I assume that would be the same as what we call the Truro exhibition. I see that that has a $105,000 contribution in 2017. Can you tell me what they did with that and is that correct that’s the Truro exhibition?
MR. COLWELL: That’s not the Truro exhibition. If you remember years ago, they had the Atlantic Winter Fair. You probably remember that years ago.
MR. LOHR: Yes.
MR. COLWELL: Then they lost the location about three years ago and they decided to not have an exhibition. So they approached us and the City of Halifax here and a bunch of other people to fund an Atlantic Agricultural Fall Fair that was put together and it was held out at Exhibition Park. It was an attempt to try to bring back something similar to Atlantic Winter Fair but more content to it than Atlantic Winter Fair - somewhere between what Saltscapes is and Atlantic Winter Fair and that’s what that was, a one-time funding for that program.
MR. LOHR: The Truro exhibition, can you tell me where we are with that, what we’re funding, and how much we’re funding that or how that’s going?
MR. COLWELL: Well, the Truro exhibition, we continually monitor the situation there. We will probably make some changes there in the next year. We’re very happy with the board that was there. We’re not happy when there was a problem there that the - I want to put this on the record - that the chair of the board didn’t call for a police investigation at that time and there was no argument from anybody, that should have happened. Unfortunately, I didn’t have the authority to do it or I would have done it. We’ve had very serious talks with the chair of the exhibition around that and it was a mistake they made. He was under the belief at that time that they couldn’t have proved anything. They couldn’t have gotten any charges. So, that’s why they didn’t pursue it but I still think it should have been investigated.
So, we are looking at the exhibition. We’re going to make sure that facility stays in place. It needs some upgrades to it to make sure it will work. Some of the buildings probably should be torn down. We’re going to do an evaluation on all the buildings, see what kind of cost it would be to renovate them, destroy them, remove them, whatever the case may be, based on recommendations and see if we can get the cost under control in the location. There’s a great opportunity there for that facility, a fantastic opportunity. There has been, I’ll be quite blunt, very poor management over the years, extremely poor management and I could even go further than that but there are a lot of corrections that have been made, a lot of positive things happened there. We’ve still got a way to go but, by the end of this year, we’re going to have it fixed.
MR. LOHR: So, and I don’t want to spend too much time on the Truro one but I know it’s a very valuable, a reasonably valuable piece of real estate too. It’s in the hands of the province, right? The province has control over that piece of real estate?
MR. COLWELL: Yes, actually, we own the buildings and the land and everything. That’s why we did the 99-year lease with the 4-H on the piece of property that their building is set on. They built the building. They raised the money for it. That’s why we did that.
MR. LOHR: Okay.
MR. COLWELL: But the province does control it but we did, under actual legislation if you will recall a few years ago, did turn it over to a board of the community with some accountability that they had to have in place.
MR. LOHR: I do want to go through a couple of these other grants and contributions which are, many of them are my friends and neighbours and most of them are for very small amounts but some of them are for particularly large amounts and you’ve mentioned a couple of those businesses already in your opening remarks, so I do want to ask about them. I notice that two years ago Benjamin Bridge received $207,000 and this past year $115,000 approximately, a little more than that but I’m just wondering if you could outline to me what those projects were and what was done there.
MR. COLWELL: Benjamin Bridge - one of the items there was roughly $14,500 under the department’s innovation program for applied research and innovation. That was one, and the beneficial management practices. Another one was roughly $76,600, and that was under the department’s competitiveness and market development program to provide funding to early stages of adopting food safety systems, national traceability systems, national biosecurity systems - a whole fleet of things that they would have to do with their winery to make sure that everything is up and the safety - and also under the market development program. It would have been a mixture of things, and that’s $76,000.
The other one, they received $24,500 in our vineyard expansion program, where we put money into the vineyards to expand the vineyards in the province, which we desperately have to do. That accounted for, cumulatively, the $115,600.
MR. LOHR: That was the 2017, and I believe I referenced the previous year’s. Maybe you don’t have that information right on you, but it would be similar, no doubt.
MR. COLWELL: That was actually 2016-17.
MR. LOHR: I guess my question about that number would be, how much of that number was actually for - was there planting of grapes involved in that too?
MR. COLWELL: Close to $25,000 - $24,600, roughly.
MR. LOHR: Okay. I take it from your opening remarks that you’ve been very pleased with that investment? I know that has been one of our premier outstanding businesses in the wine industry.
I would like to go on to another number that jumped out. Forgive me for jumping back two years, but it was two years ago that Fox Harbour Resort received almost $60,000 from the Department of Agriculture. I’m wondering if you could tell me what that was about.
MR. COLWELL: While we’re waiting for that answer, Benjamin Bridge’s Nova 7, just so you know, is the biggest-selling wine in Nova Scotia liquor stores against all competition, including the $10 bottles of wine that come in. Just a bit of information.
MR. LOHR: She hasn’t recognized me, but I’m a big fan of Nova 7 too. I’m well aware of Nova 7.
MR. COLWELL: That number you were looking for, was that for 2015-16 or 2016-17?
MR. LOHR: I think Fox Harbour was 2015-16.
MR. COLWELL: We don’t have those numbers with us. We can get those numbers. We believe it was, again, for vineyard expansion, but we’ll have to double check because we don’t have those numbers with us today.
MR. LOHR: I wasn’t aware that there was a vineyard at Fox Harbour.
MR. COLWELL: There is a vineyard.
MR. LOHR: I wasn’t aware of that.
MR. COLWELL: I believe it’s in co-operation with Jost.
MR. LOHR: Okay, that makes sense.
I do want to ask about - I apologize for jumping back two years on you, but I noticed that Metro SPCA, in 2015-16, received $240,000 from the Department of Agriculture, and in 2016-17 it received $20,000 from the Department of Agriculture. Could you just explain to me what that was about?
MR. COLWELL: What it was - we’ve committed to the SPCA, over a number of years, $20,000 per month to help them do the enforcement on companion animals, the ones I talked about earlier. When the transfer was made from enforcement from our department - responsible enforcement - even though we still hold all the regulations and make the rules around what needs to be enforced and everything, the money, by accident went to the enforcement with Department of Environment. You’ll see that number, $240,000, is exactly the same. This year again, the $240,000 is back in our department because it really has nothing to do with enforcement. It helps them fund enforcement, but it’s not an enforcement task. It’s $240,000 for the SPCA. They did receive it last year, and they received it the year before. They got it from a different department, and this year, they will receive it from us again, and that will continue.
That’s a long-term commitment to help them meet the enforcement needs that they do for the province, and it’s great for them. I remember when we negotiated that arrangement. It’s perfect for them. It’s exactly what they had asked for. For the province, it’s a very good deal. We couldn’t come anywhere near to the enforcement level, the quality, they’re doing for $240,000.
MR. LOHR: I take it the name metro is a little bit misleading. It probably has a wider mandate than the metro. Would that be correct, the Metro SPCA?
MR. COLWELL: This is the provincial SPCA, and they’re really right across the province now. They made arrangements with a lot of other areas. If I remember right, and I’m going strictly from memory here now, they have taken over the management of almost all of the SPCAs right across the whole province over time. A lot of them outside of metro - even in metro for a while I know there were some issues with the SPCA. I know HRM had cancelled the contract with them at one time. But they have new management and a new board now, and they’re really doing a great job both for us and in the province in animal protection. That’s another success story and a really fantastic group of people to work with.
MR. CHAIRMAN: Mr. Lohr with about 10 minutes remaining.
MR. LOHR: Oh my goodness. Time went fast.
I guess I’ll just ask one more, and then we’ll move off this page. I have a long history in my past of working with struggling farm associations, and I know the effort that they go through to lobby the government to get funding for the association. I noticed the Winery Association received $280,000 from the department in 2016-17. I’m just wondering if you can tell me what that money was used for and where that went.
MR. COLWELL: Fox Harbour, we just double-checked. That was for vineyard expansion. Again, as far as I know, it was with Jost.
The Winery Association, we gave them almost $184,000 under the Vineyard Marketing Assistance Program we have to help develop their market share in Nova Scotia and start working on developing export markets. We also fund them for $70,000 for vineyard quality enhancements to improve and put some quality standards in place. That’s a project we’re still working on. We also provide them with $15,000 to assist them with the Atlantic Wine Symposium, a three-year event showcasing innovation and a lot of other items. We were just one of the small funders in that. We also fund them for $10,000 for adaptability and industry capacity program to develop the agri-food sector through business information programs and services. Then there was a sponsorship fund of $2,000 that was provided to the 12 Tides event from Nova Scotia. Again, Select Nova Scotia has been working also to improve the penetration in markets of Nova Scotia wines. That’s the breakdown.
MR. LOHR: I would like to go to the Crown Corporations Business Plan book and just talk very briefly about the Crop and Livestock Insurance Commission and the Farm Loan Board. I don’t know how far we’ll get into that.
I guess my question about the Crop and Livestock Insurance Commission, possibly I could have found the answer to this if I had gone to the website, I don’t know. Can you tell me who is on the Board of Directors? There’s a Board of Directors of that and I’m just wondering who is on that and are all the positions filled?
MR. COLWELL: I’ll just be a minute to get that information. If you like, instead of chewing up your time while we’re looking for this, how about if we send you the information? It’s public record anyway.
MR. LOHR: Okay. Are there any vacancies on the Board of Directors of the Crop and Livestock Insurance Commission?
MR. COLWELL: Yes. Actually, that’s a very important topic. We’re having an awful time finding qualified people to serve on the boards. We’ll put advertisements out, we advertise in some cases ourselves within our department to find people qualified for the boards.
Typically, we may have three openings and we’ll get two applications or one, and if we get two applications usually one of the people isn’t even qualified for the position, they put it in just in case they would get it. We’re really interested in getting more applications from people and filling these positions because these are important positions, of course.
MR. LOHR: So to clarify, you didn’t receive enough applications for the Crop and Livestock Insurance Commission Board to fill the vacancies?
MR. COLWELL: Well we did finally get enough applications but they are in the process of going through the process right now to fill the last vacancy.
MR. LOHR: I’ve heard that the process can be quite slow. Can you tell me why the process of approving someone would be slow, or is that not correct? Maybe I’m wrong.
MR. COLWELL: Typically this process around appointments is slow. The intake process, if I remember right, it only goes out twice a year, although we’ll accept applications any time they come in. Then it has to go through a whole vetting system internally with the bureaucracy to get it through. That all has to happen.
I don’t even know how all that works. All I know is we get a list of names and recommendations that come forward and when they come forward we approve them and send them on. Then it has to go to Cabinet to get approval and sometimes it takes, as you may or may not know, sometimes even to get those on the Cabinet agenda may take four or five weeks, not just because - they didn’t want to hold them up, just because that’s how long it takes. So it takes time to do all that. It’s a long, slow process.
We are actually usually looking for people before they expire so it gives us time to do that. But we are having an awful time finding qualified people. We want to make sure we have qualified people on these boards because if they’re not, it causes more grief than good. A lot of them have some pretty significant impact on the industry and on the province.
MR. LOHR: I just have one question on the balance sheet here, the financial statements, Page 6 on this section on the Crop and Livestock Insurance Commission business plan. I take it that the indemnity claims shown in the middle of that page, of $1,426,000, which I think is the actual, is down a fair bit, so I would take it that the Crop and Livestock Insurance Commission had a pretty good year, just based on claims?
MR. COLWELL: The quick answer is yes, it has been a very good year and we hope we have another good year and another one after that.
The three I’ve got so far for the members on the board are Robert Prang, Arthur Pick and John Vissers.
MR. LOHR: Could you read that a little clearer? I couldn’t quite catch the names. I’m sorry, I’m having trouble hearing those names.
MR. COLWELL: The three people who I’ve got here so far are Robert Prang, Arthur Pick and John Vissers, on the board.
MR. LOHR: And how many vacancies are there?
MR. COLWELL: Two vacancies.
MR. CHAIRMAN: Mr. Lohr with about two minutes.
MR. LOHR: I struggle with how much to say about this - I do know a farmer in the Annapolis Valley who has suffered a severe drought in 2015-16, had purchased a product from the Crop and Livestock Insurance Commission which was a weather-derivative that didn’t qualify, really on a technicality. In fact, their farm was more than adequately dry enough to qualify. I know they appealed and lost that appeal. I could tell you their names but I think you probably know them, too.
I’m just wondering, is there going to be any effort made to - the perception on their part is that this wasn’t really a fair process, and maybe that’s just the way it is, but is there going to be any effort made to look into some of these products that the Crop and Livestock Insurance Commission has, to make them more accurate to the actual conditions on the farm?
MR. COLWELL: I’m very familiar with that file. It’s a very unfortunate situation. Unfortunately, the nearest weather station to that particular farm indicated there was no problem. Now you know and I know and the industry knows, there are micro climates every place, and we couldn’t prove that there was a micro climate there, that they actually suffered the loss they did because of the situation. That’s all just based on the rules that are set up and everything that goes with that. So where do you draw the line? Where do you make exceptions? You don’t make exceptions.
I would like to see a province-wide weather monitoring system, a lot larger one than we have, so we could take those things into consideration, both for insurance and also for opportunities in agriculture, because we might think some area . . .
MR. CHAIRMAN: Order, please. Time has expired for the PC caucus. We will now move to the NDP caucus and whom should I acknowledge? Ms. Zann.
MS. LENORE ZANN: I’d just like to check and make sure if the minister would like a short break or not. No, you’re good? Okay.
I would like to ask a few questions related to the budget, but I also have a number of questions that I want to ask you regarding a few different programs. First of all, I wanted to make sure that the reduction in the Policy and Corporate Services budget, that it comes from a reduction in administration. It cost $22.3 million last year and then was reduced $2.3 million this year. Is this the same money that you said was transferred to the Department of Labour and Advanced Education or is that a different amount for something else?
MR. COLWELL: That’s the money we talked about going to Dalhousie and the Agricultural College.
MS. ZANN: Right, thank you. It’s now the Dalhousie Agricultural Campus, it’s not the Agricultural College any more. Are they going to be receiving that money every year, on and on until eternity? Or is there a finite date for that to end?
MR. COLWELL: As far as I know, and you never know how all these things work long term, I can only talk about probably as long as I’ll be around. I believe that’s the case, it will receive that amount and there may be accelerators in that to increase the amount over time, like the other universities get or as sections of universities. It’s a very important establishment for the province.
MS. ZANN: I understand, yes. Living in Truro, I understand how important it is, too. Staying with that Policy and Corporate Services budget, last year the budget for Agencies, the Crop and Livestock Insurance Commission, farm, fisheries, aquaculture, loan boards, the Natural Products Marketing Council, was $3.1 million, but the actual amount spent was $7.9 million. Could you explain why this line for agencies was more than double the original estimate? Thank you.
MR. COLWELL: Most of that money over budget is related to the mink farm problem we have, bad debts set up by our loan board, unforeseen problems we never thought would happen.
MS. ZANN: Do you mean one particular mink farm or the whole industry?
MR. COLWELL: I don’t know how many, but there was more than one. They had overextended and really had not prepared themselves for a downturn in price.
MS. ZANN: Thank you. I might like to get a copy of which farms and how many and all that.
MR. COLWELL: I would have to check if we can do that. I don’t know if we can because some of this is protected under privacy. Anything that’s not under privacy protection, we will gladly supply.
MS. ZANN: Maybe your department could check and see, and if it’s possible, we could have a copy of that. Thank you.
In last year’s budget, it’s estimated to have 173.4 full-time employees. However, the actual number of staff last year was 165.1. Could you please explain why there was a reduction in staff and approximately how much the department saved as a result of this reduction if they did save any?
MR. COLWELL: Basically, we have a small turnover in the Agriculture Department. That’s vacancies through retirements, people moving to new positions inside of government or outside of government. Those are vacancies that we’re in the process of filling. We would always have a discrepancy there from one year to the other, depending on who has retired, who has moved on, and who we have hired to fill those positions.
This is no exaggeration. We have some very high-quality staff in our department, very high-quality staff. When one of the staff members leaves, we have an awful time now filling those positions with someone who is as qualified, and it’s really difficult sometimes. That’s even more so, and I won’t talk about that here - we’re having an awful time in Fisheries and Aquaculture finding marine biologists, just to give you an example of the sort of problem we’re having. Ours is a very specialized issue, as you know, and we can’t just go hire anybody because it doesn’t work.
We have lost several really top-notch employees because they’re top notch, and they have had other opportunities, which is fantastic for them. It’s good for us because we have another opening, but it’s difficult to find really highly qualified top-notch people.
MS. ZANN: I actually know a number of the people who are on the staff there and who have retired who are extremely great workers and good friends too. I notice that this year, you have budgeted for 175.4 full-time employees. Why are you budgeting for 10 more staff this year than you had at the end of last year? Is it because you’re trying to fill those positions?
MR. COLWELL: Actually, our full complement of staff is 175, so we’re hoping to fill all those positions, again, if we’re successful in finding qualified candidates. It’s usually not hard to get the applications. It’s hard to get the people who can really fill those positions at the level we’re used to having them.
MS. ZANN: So are you trying to get them filled in the next year?
MR. COLWELL: We’re trying to fill them all the time. We’re actually in the process of looking for several people right now, and we always are. It’s good news because it’s opportunities for young people. Other people have either retired, like I said earlier, or moved on to something better for them. We’re happy for them, but we miss them.
MS. ZANN: I understand. First of all, I wanted to say congratulations on the successes that you have had. I know personally, from being a critic and knowing you for a number of years, that you had said that you wanted to increase the productivity of agriculture and the exports. It sounds like you have done a very good job. Congratulations to you and the department and to the farmers and the people who work in this industry in Nova Scotia.
One of the promises that was made by your government in 2013 was to work with industry stakeholders to create a provincial agricultural land preservation plan that was complemented by easements through an agricultural land trust. Could you provide me with an update on how that’s going, how the plan is going, and how many agricultural land trusts have been created in the last four years?
MR. COLWELL: I’ll just start with an overview first. This is a very complex issue, as you are well aware. We have pretty well ready now a report that we’re going to move forward on, that we’re going to act on shortly. We have been working on that plan for three years.
It’s not that we’re not in a rush to get this done. We want to get this done sooner than later. We don’t want to lose even one acre of agricultural land. Some of the municipalities have seen it more profitable to have it in a subdivision than farmland, and once it’s gone, it’s gone for good. We’re also concerned about the 25-acre lots on prime farmland that you build a $100,000 or $500,000 home on, and the farmland is gone for good. We’re looking at all that.
Maybe it’s time we started taxing that land at a whole different level. It would help the municipality and also deter the people wanting to build on prime farmland.
We’re working on that. We will have something ready probably in the next six months or so. Again, it’s complicated. We looked across the country and looked at other countries to see what has been done. There has been one system set up by individuals that seems to work reasonably well. That’s going well, but that’s not the solution. That’s part of the solution, but we have a long way to go on this.
Any ideas you have about how we can do this, we want to hear them. What we’re doing right now is working with our department, Municipal Affairs, DNR, UNSM, and the Federation of Agriculture to look at this.
We’re engaging the municipalities a lot more than they have ever been engaged in the departments that I work for. For so many years, the province would come along and make a rule, and then the municipalities would have to figure out how to deal with it. Instead of that, we want to work with them very closely. We’re building a better and better relationship all the time, which is critical because that way, if we get that relationship, and they’re thinking about doing a subdivision, we can hopefully talk them out of it. If not, we can do something else to prevent that.
MS. ZANN: You were mentioning that the land is becoming more and more valuable in the Valley in particular, where we’re getting the vineyards. Is there anything in place at all right now that prevents people from buying that land and just building those $1 million homes like you said?
MR. COLWELL: Not presently, but I have heard initial rumours that - land used to go from about $1,500 an acre to around $5,000. I know one of the vineyards has paid up to $25,000 an acre already for vineyard land, undeveloped. If we get to the point where Ontario is, at $35,000, that’s still a pretty cheap price for a piece of land if you’re looking at HRM, but in rural areas, that’s a really good price for a piece of land if you’re selling it.
Hopefully, over time, with what we’re working on with the other departments and everything, we’ll find a solution to this. There’s no more land. According to the United Nations about four or five years ago, they said within 20 years we’re not going to be able to feed the middle class in the world, and the middle class is going to be in Asia, 65 per cent of it. It’s important for us to protect every acre we can and not only protect it but also get it in production. I was talking to one of my colleagues today, he said it’s the first time he has seen land being cleared for agriculture in years. In the Valley one big piece of land is being cleared and it’s for agriculture.
MS. ZANN: You must also probably be a little concerned - or not a little bit but you must be quite concerned about coastal erosion, too.
MR. COLWELL: That is a concern for us and again we’re doing some work around that as well. It’s really complicated when you look at the problems we’re having with global warming and Nova Scotia, it’s a good news-bad news story. It has been great for a lot of our industries, growing kale here that we couldn’t grow before. We’re putting vineyards in that we couldn’t do before, all those things. But then with our huge coastline - we’ve got 7,400 kilometres of coastline in Nova Scotia - that also poses a lot of difficulties. All those things we’re working on but these are long-term evaluations to see what we’re going to end up doing over time.
MS. ZANN: Also, your department is in charge of the dikes, too. What is the latest? Can you give me an update, what is the latest information about what we need to do to protect our dikes from the water levels rising and more powerful storms?
MR. COLWELL: Being from the Truro area, you’re very familiar with floods.
MS. ZANN: Yes, I am, and dikes, too.
MR. COLWELL: Unfortunately. I believe we have 254 kilometres of dikes in the province that we look after. There’s an ongoing program to raise the dikes up - I was wrong, it’s 241. We have 260 aboiteaux, from very small ones to very expensive ones, one we just did in Amherst that protects a large area. We have an annual budget of $3.8 million a year. Some of that money is to improve the dikes, raise the level on them, and some of that money is for maintenance.
I will say it’s rewarding - the gentleman beside me is responsible for the dikes in the province and his staff make frequent visits to the metal junkyard. They will buy scrap metal at a fraction of its value and keep it stored and in turn they’ll make these small aboiteaux out of them at a fraction of the cost we would have to go to get them fabricated - they fabricate them themselves and save us millions of dollars over a number of years.
MS. ZANN: So you started to say that there is an ongoing plan. Is part of the plan to raise all the dikes or what?
MR. COLWELL: We’ve done quite a bit of work on raising the dikes. They have to raise them another three feet, or a metre higher, for global warming as the water level rises. We’re working on that. They have a 25-year plan looking ahead. They’re working on that plan now, a renewed plan to where it goes. We are also going to try to access some funding that the federal government has, in addition to what we do. We do $3.2 million a year in ongoing maintenance to cover the cost of all that.
Again, the maintenance crew is always looking for free fill, so if a municipality is doing some work or someone wants to get some fill, they’re looking to get it. So every dollar we can save there means that we can do more of the dike. So they’re very innovative, which the government never gets credit for that kind of work, ever. It’s usually just the opposite. It’s pretty exciting the work they’ve done with the limited budget they have.
MS. ZANN: Do you think $3.8 million a year is going to be enough or are we going to need to start investing more in that project over the next few years? Also, I think probably 25 years is wishful thinking. It seems to me like the waters are rising a lot faster than what scientists had even predicted. Is there any leeway and give and take for that?
MR. COLWELL: There is always give and take in these plans, but the idea is to do a 25-year plan based on history and based on projections of where it should be so we can properly fund it if we need to fund it further, and really have a plan forward. If indeed it goes higher, then it’s like everything in government - we’ll have to find the money some place to do it.
It’s a very planned approach - very methodical, and we’re doing a lot of work, as I said earlier, with New Brunswick around the Tantramar Marshes area and into New Brunswick. Most of the risk is in New Brunswick, not Nova Scotia, so we’re a small portion of that. So that’s not going to cost us a lot of money, but it’s an area that’s got to be protected. That’s going to be mostly federal and New Brunswick money in that, but we’re part of that.
Overall, we’re in pretty good shape with the dikes. You never have the dikes high enough. You never have them protected enough, no matter what you do. From the risk we see, it looks very acceptable at this point.
MS. ZANN: Hopefully some federal funds will come in too if we need them in a desperate situation. I’m sure the Tantramar Marshes must be a spot where everybody has their eye on them because it could easily become an island here in Nova Scotia with the way things are going. I know that is a worry and concern for your department - so good luck.
In 2013, your government also promised to work with stakeholders to create a strategic plan that would increase the number of new farmers entering the industry. Could you please provide me with an update on that plan? More specifically, can you please tell me how many new farmers have entered the industry since 2013 and maybe define a little bit as to what exactly a new farmer is? Are they just from outside the province or are they from outside of the country? Are they considered a new farmer if they just moved here from outside the province?
I just wanted to underline a ThinkFARM program - that was the one that I’m referring to that was supposed to attract new entrepreneurs to agriculture. I’d also like to know about how that initiative is doing and how it’s being measured.
MR. COLWELL: That is a lot of questions in one question.
MS. ZANN: Yes, sorry.
MR. COLWELL: We’ll try to answer them all and if we miss one, let us know and we’ll bring it back again. I’ll just get some information on ThinkFARM - let’s start there.
MS. ZANN: How many new farmers have entered the industry since 2013?
MR. COLWELL: We do a percentage increase - not count the number of farms on the farming. We are the only province in Canada that showed a growth. Basically, even the growth is very modest, but we stabilize it and the other provinces’ negative growth. So we’re going in the right direction. It’s very difficult to get people into farming that haven’t been.
We also want to preserve the farms we have, and that’s a concern as well. Succession on the farms is a big problem. So if we can maintain the ones we have and go it a little bit, we’re making progress.
On the FarmNEXT program, that’s a program - if you’re not familiar with it, if you borrow money through the Farm Loan Board, they will forgive $30,000 worth of interest on your loan over the time.
The way that they apply that is, that would be strictly for brand new farms. We got nine farms that achieved that last year which is really good as the numbers are increasing all the time. That is very positive. What they do with that, they take the $30,000 immediately and apply it against the loan. So that cuts the principal down by $1,000. Not only does it have the effect of reducing a loan but also reduces the interest. So actually you are getting more benefit than $30,000 out of it. So it is a very good program, and that is a provincial one only.
MS. ZANN: So did you say those are new farmers? Or those are succession farms? Who did you say those are available for?
MR. COLWELL: Well it could be someone whose it’s the first time in farming, buying a new farm. It could be a new farm that they are funding. It would be someone entering the farming business. So if I was going to farm and I buy a farm and meet all the requirements and I would have to borrow the money from the Farm Loan Board and not another institution. I could qualify for that. If I hadn’t farmed before. But there is criteria around that too. I have to prove that I can farm.
MADAM CHAIRMAN: Ms. Zann, did you have all those questions answered?
MS. ZANN: Well, I am just going to keep on going. For instance, I met a couple from Syria in the summertime in River John and they wanted to buy a sheep farm. So they were visiting the Lismore sheep farm. They had never sheep farmed before in their lives but that is what they want to do. A realtor was showing them different places.
Somebody like that, they would be able to hopefully apply or do they have to prove they have done it before?
MR. COLWELL: They have to qualify for the loan. They would have to have good credit and all that sort of the thing. And they would have to prove they have some experience farming. Or they can get someone to teach them what to do.
They would have to make sure - because we want them to succeed. So they could potentially qualify for that. But only the loan board could tell you that because they administer that program. It is exciting to hear that you got people interested, especially sheep because one thing that we did that I didn’t talk about earlier, we have NorthumberLamb, we worked with them very closely over a year to get them CFIA approved. That means every lamb that goes through there, every sheep or whatever, can be exported to anywhere in the world. So that opens up new markets for us. It means the value of the lamb that they process goes up and they also have a market for them.
But now their problem is they don’t have enough. So now would be a great time for someone to expand into that field.
MS. ZANN: I will pass along the message to the realtor. It was Charlie Parker.
MR. COLWELL: I am not supposed to talk about a particular supplier. I know one supplier in particular, Sobeys basically will buy everything that they can produce.
MS. ZANN: Everything that is local.
MR. COLWELL: They can only buy there because they have to have it CFIA approved to send to a warehouse in New Brunswick. But from there they can send it to anywhere in Canada or U.S. Anywhere they want to send it. It is an exciting new market for us.
It is one of those things where we made a small investment to help the co-op and it is making a difference in Nova Scotia’s economy.
MS. ZANN: Okay. Coming from Australia, I’m well aware of the sheep farming, the sheering, the wool industry. Lamb is very popular in Australia, always has been. When we moved here, it was not quite as well known or popular. But definitely there is room to grow.
So one other thing, in 2013, your government promised to make certain local products present in our academic and health care facilities. So I know at the time you said you wanted to work with municipalities - which you are doing obviously - academic institutions, schools and hospitals to expand homegrown products in our establishments, providing healthy foods to Nova Scotians and a healthy business environment for local farmers. So could you please provide me with an update on that promise and perhaps provide me with any data that shows what has happened in that regard since 2013.
MR. COLWELL: We’re making progress but it’s a long, hard battle. I would like to see 100 per cent Nova Scotia products in every institution in Nova Scotia and well beyond that.
MS. ZANN: So, what are the main things getting in the way of doing it other than just the institutions, themselves, and wanting the same amount of product all the time and that kind of thing?
MR. COLWELL: That’s part of the problem because they need a continuous supply of broccoli year-round. We can’t supply year-round. So, that is a real problem for us and anything like that. That’s a problem we run into in Nova Scotia. It’s great when it’s in season and some of the things like I talked about earlier today - we’re using a day-neutral strawberry now and we get not quite six months a year production out of it. A few years ago, it was like four weeks. So, we’re making progress. We don’t have enough greenhouses yet and it’s very expensive to set a greenhouse up and operate it so, we’re making progress.
There’s a lot of will too. We’ve met with the different hospital purchasing people and the corrections and they all committed to want to do this but we’ve got to have a steady supply and we have to have a steady supply of product and the problem is getting a steady supply. One thing we have been working on and it has been very successful for years is the School Milk Program. That’s one thing we subsidize in addition to the dairy. So, that’s very positive. As we get more and more of these things, as we get more and more of these institutions getting more and more interested, but not just the institutional part of it but if we can get Nova Scotians in general interested in Nova Scotia products which is happening but that means that those people . . .
MS. ZANN: Yes, you’d think they’d all be into it.
MR. COLWELL: Yes, it’s really positive because the people that get interested are also the people who are the buying agents for these facilities. So, if they’re buying it at home, they want to buy it for work, as well. So, it’s interesting. The School Milk Program, we put $200,000 a year into that program. It’s a very successful program but we need to do a lot more. We’ve got to be able to overcome the barriers and we’ve found some real successes and, again, a lot of it is to do with supply, that year-round supply because when you’re the chef at the, say the VG Hospital, you’ve got to know for sure that whatever you’re going to have on the menu for the next year that you can get it. Even though you can change your menu with the season.
MS. ZANN: Yeah, I mean, can’t they change the menu like, so, for instance, let’s say we had that glut of blueberries this summer, right. So, were those extra blueberries ever used by any of these institutions or can we freeze them and use them later on in the year?
MR. COLWELL: Blueberries aren’t an issue because we can get them year-round. They’re frozen. But, again, you have to get the chefs to change their menus. You have to see if the menu fits what they need for their patients in the case of a hospital or establishment but it’s a long process and we’ve really been pushing it. I can tell you who is leading this whole thing is Dalhousie University in Halifax here. They’re leading this program trying to get their students to eat healthy, needless to say, and also buy as much local as they can. There’s a real change and I’ve only been minister for roughly four years and I see a big change in attitude in buy local in that time. One time, it was sort of a neat thing to do and, now, it’s almost a must thing to do when you go grocery shopping or are asking, you know, is it made locally and, I think, one thing we haven’t done well that we’re starting to do very well now or a lot better through Select Nova Scotia’s labelling that clearly identifies Nova Scotia products. If you go in the store and you don’t see the label, if you don’t see it, you’re not likely to buy it.
MS. ZANN: I was going to say, was it last year that we introduced the tax credit for farmers to provide food to the food banks? It was last year, right? Was that your bill - I’m trying to remember? No, okay. I just have a . . .
MADAM CHAIRMAN: Can you let the minister answer on the microphone?
MR. COLWELL: That’s actually one that we - it had to go through the Department of Finance and Treasury Board, the bill, but we pushed for the bill, based on the request from the Federation of Agriculture and the farming industry. I can get you some numbers on it, it has been extremely successful and it has put fresh produce on the tables of people who otherwise who would not ever have it.
MS. ZANN: I know. Yes, I was going to say but that has been really successful. I noticed that it says that actually donations from farmers have doubled, thanks to that. The person who runs the Feed Nova Scotia, there was a story on CBC the other day that mentioned that he has called for an expansion of that tax credit - rewarding farmers who donate excess crop to feed hungry Nova Scotians - he is asking that we try to get them a credit to provide donations of meat and milk because people who are hungry, one of the things they can’t afford is protein.
I’m just wondering if over the next four years that you have here, if that might be something you’d be interested in doing, trying to expand that program so that more hungry Nova Scotians could be fed?
MR. COLWELL: It’s a little bit more difficult to deal with milk and meat in particular because the food banks have to have facilities to look after it. It’s something we’re looking at all the time. We don’t want any Nova Scotians, nobody in our Chamber would ever want any Nova Scotian to go to bed hungry every night and that does happen for sure, unfortunately. In our country that should never happen. It’s something we can look at.
I know there has been interest from the Federation of Agriculture in that regard. We don’t produce, for instance if it’s beef, we don’t produce enough beef in the province to supply ourselves. We still are short on lamb products and some of the other products. The only ones we do have a sufficient supply of is chicken and turkeys. The other ones are sort of hit and miss, it depends on the year and what farmers decide they might be able to profitably grow, so it’s something we’ll definitely look at.
MS. ZANN: If you are interested, I’ll pass this story on to you so you could take a look at it. It’s very interesting and it’s saying that that program was very successful and Feed Nova Scotia is saying maybe we could expand it. It’s something for you to look into anyway.
The other thing which is growing, there’s a trend growing which is food hubs. They can help small-scale farmers get their food ready for market and help link buyers and suppliers. Apparently in Inverness County the Inverness County Food Security Committee received funding in 2014 from your department for a two-year pilot program. Could you tell me how that is going and how much funding was provided and what the results are of that pilot project? Is it still receiving funding?
MR. COLWELL: It has actually been a very successful program. The initial funding was a pilot project and not only is it for individuals to do but the restaurants have really taken up on it as well, which is fantastic because that introduces local product into a restaurant and people are going to wonder where it came from and then look for the local farms to do it. We’re trying to get you the numbers right now but we think it’s getting very close to self-sufficiency. It’s a model that appears that it might be something that we want to do province-wide. It’s pretty exciting because a small farm is - I think you could make a very good living from it if you get the right products, like anything, and you manage your facility right, but if you get a guaranteed customer that you can send your product to on a regular basis, it gives you a lot more confidence to plant and invest and do all those things.
I think they had a little bit of a rocky start from what I remember, because of a lot of logistics and everything, but I believe that they’ve sorted all that out. It looks like it’s very successful at this point. We’ll get the numbers for you.
MS. ZANN: That would be great. Is it finished now - the pilot project - or is it still going on?
MR. COLWELL: It was a pilot project. We funded it, if I recall right, to two years. I don’t think they’re funding them now because it’s pretty well self-sufficient, but we’ve got to doublecheck that to make sure and we’ll get you the numbers.
MS. ZANN: If you can get me the numbers on that, that would be great. If you were going to be expanding it, when might that happen?
MR. COLWELL: The funding was $60,000 per year for two years and we’re done the funding and the project is continuing. I think that we’d have to have somebody that’s interested in doing it, because we’re not in that kind of business. So if an organization was interested in doing it, we would talk to them. We’ve got a great model in that one to sort of lean on and get the (Interruption) Sorry about that, it’s $60,000 over two years - $30,000 per year, not $60,000 a year.
With that model now working - and there are some people here in Halifax that have the same sort of model where you buy your produce - whatever the fresh produce that week is, they put a package together for you, bring it in packaged and deliver it to your home - something similar to that. At least one entrepreneur in the city has done it successfully with no funding from us at all. Again, it supports not only the small farm, but some of the larger farms that would supply products for that as well.
MS. ZANN: Maybe it needs more advertisement or something, because not that many people seem to really know about it.
MR. COLWELL: No, they don’t. Again, the company that does it is expanding continuously. It’s ideal for someone in the city that doesn’t get a chance to get to a farmer’s market or doesn’t have the transportation to get there. It could be for whatever - maybe they’re seniors and they want some nice, fresh produce. It was quite inexpensive. I was there one day when they were packaging the boxes and what they were packing in the box for what they were charging was a good investment. You get good return on your grocery dollar - let’s put it that way. It’s all first quality fresh produce.
MS. ZANN: I’d like to now turn to the Green Economy Act, which was legislated to meet certain requirements related to local food production and consumption. Section 4 of the Act sets the goal of 20 per cent of the money spent on food by Nova Scotians to be spent on locally produced food by 2020. Could you explain how the government now is measuring this goal and whether the province is actually on track to meet this goal?
MR. COLWELL: We’re making significant progress. When it started, we were at 13 per cent of the total food supply. This is only farm produce. This is not counting the fish supply. If we add fish in, we’re probably at 20 per cent now. Now if we haven’t achieved 17 per cent, we’re very close to achieving 17 per cent. We’re on track to make it for 2020, but we’ll have to wait and see. We’re doing a lot to promote it. Select Nova Scotia is continuously running programs.
Again, if we can convince people to buy local, the more we buy local, we can very rapidly get there. There is a mood for that, I know from everybody I talk to, and you have probably seen the same thing, you talk about local produce, and they’re asking now, is it local? Is it grown locally? Is it produced locally?
Sometimes when they go and find something for $1, and the local one is $2, they may not buy the local one. But overall, if it’s a very close price, typically our local stuff is better quality, and they will pay a little bit extra money for quality. It’s a buyer’s choice.
I know we ran some programs with Sobeys and some other institutions that have really, really pushed local. That’s a big game changer that didn’t happen before.
MS. ZANN: People are talking about it more now than they used to. But it’s hard when Giant Tiger or some of these places have steaks on for very little. It’s difficult for them to compete. But that’s good to hear, 17 per cent. So you’re saying it is close to 17 per cent now?
MR. COLWELL: We think it’s either close or at 17 per cent. Again, I’m going to use Sobeys as an example because they’re dedicated to local. I have never seen anything like it. They actually go knock on a farmer’s door, look in a field, and say, we may be interested in buying this. Then they help them qualify. We met with them recently to that goal.
If I remember it right, it’s something like $46 million they buy a year in local produce. That’s huge. I know when we started, it was around $25,000 two or three years ago, so it really is changing. As I said earlier, $16 million of that $46 million - if I have my numbers right because I’m going by memory here - was exported out of the province.
MS. ZANN: That was $16 million?
MR. COLWELL: Yes, $16 million of that goes to New Brunswick, Prince Edward Island, and maybe across the country in some cases. It’s pretty exciting when you look at that. We also have other companies like Walmart and Loblaws interested in programs.
I want to give our Select Nova Scotia staff a lot of credit. They have come forward with extremely innovative ideas and approaches to doing things, and it’s paying off. It really is started to pay off.
MS. ZANN: Did you say Walmart is interested?
MR. COLWELL: We have talked to Walmart, yes.
MS. ZANN: How interested are they?
MR. COLWELL: I don’t know if we have anything on the shelves yet, but they’re interested. They never were before.
MS. ZANN: That’s good.
MR. COLWELL: We’re interested in talking to all of the major chains as well as the small farmers’ markets. We have the highest per capita farmers’ markets in Canada. That really helps the produce, too.
Some of this we can’t track. We have no way of tracking how many cabbage are sold or whatever the thing may be at a farmers’ market that a small producer might put out there. We have no way of tracking that, so we may be above 17 per cent now and not even know it. That’s only going by what we can track.
MS. ZANN: Could you also tell me if we’re on track to meet another target? Section 4 of the Green Economy Act sets the goal of increasing the number of local farms, as we have talked about before, by 5 per cent by 2020. I know you had said that it was minimal right now and that you do it by percentage. Do you know, are we on track to increase the number of local farms by 5 per cent by 2020?
MR. COLWELL: Again, we track percentages of the farm increases and we’re leading the country but I don’t know if we’re on track for it or not because we go by percentage.
Here’s another statistic that I didn’t know we had, which is actually very positive. We’re concerned about people aging out of the farm business. We’re very concerned with that and that would have a lot to do with farm starts and farm expansions and farm maintaining.
We actually have, between the ages of 35 and 54, we have 35 per cent of farm families are that age group. That’s very positive. Over 55 years we’ve got 58.8 per cent but under 35, which is a low number, it’s 6.9 per cent but over the last year that increased by 1 full per cent. So we’re seeing younger people starting to get into farming now. That will probably give us a trend that we’re going in the right direction and when we look at other things that we’re doing, the wine industry again is farming.
I was talking to two individuals who actually moved back from the U.S. and set up a vineyard, they wouldn’t be counted in these numbers, yet. So it’s expanding, it’s coming. Are we going to meet the 5 per cent? I don’t know, we’re going to have to track it differently to find out. I sure hope we do, and exceed it.
MS. ZANN: So since 2013, I mean what would it be of the percentage? Do we have that on file anywhere?
MR. COLWELL: Again, we track this by percentage and we’re just about even to where we were, maybe a little bit above, but every other province in the country has gone below, they’ve dropped. So the actual numbers, we haven’t been able to track because again, what qualifies as a farm? The actuals are a really good idea and one that I think is very positive but maybe we’re tracking the wrong thing. We should probably be looking at the number of acres in production because the number of acres in production would take in small farms, large farms, everything. The more acres we can get into production, the more real economic benefit we get from farming, both socially and economically.
MADAM CHAIRMAN: Ms. Zann, you have about seven and a half minutes.
MS. ZANN: Thank you. You were mentioning earlier about food security. I think that is something that also, as an Environment Critic, that I am also very concerned about. I was noticing that in Vermont they have a program called Farm to Plate. I don’t know if you’ve heard of it. It’s a 10-year program. They have developed basically a comprehensive, state-wide food system plan to increase local food security and they are in the process now of implementing it. As I said, it’s a 10-year, Farm to Plate program.
Does your department have anything similar to this or is this something that you might be interested in looking into getting involved with and looking into what they are doing in Vermont and maybe introducing it here, if you like what you see?
MR. COLWELL: My quick answer is definitely yes. Just one second, I’ll see if we’ve reviewed that. I should have absolutely known - any time I ask my staff about something, they’re already ahead of me, which is a good sign. Actually, they’re reviewing it right now. We have to see, of course, if it fits in Nova Scotia or something similar fits in Nova Scotia. I think it’s a fantastic idea on the surface, and anything we can do to move to total food security in the province is better. That will bring the number of acreage up - the acreage up that we have in produce, and maybe some other things.
When we talk about food supply, we sort of ignore the fishing industry because all of us eat fish - or most all of us eat fish. We’ve got to put that in the factor too. That wouldn’t change the goals of improving the farming whatsoever, but we have to look at that because we’re the biggest producer of wild caught fish in Canada and the biggest exports in Canada for the last two years. I know there is a large utilization of that.
I don’t want to get sidetracked here because it’s important that we get as much farming acreage in production as we possibly can, both for local and export consumption.
MS. ZANN: I know my time is getting short. I have two quick questions. One is about the small hive beetle that has been discovered in New Brunswick - in fact, very close to the Nova Scotia border, a little town called Aulac. What is the department doing to minimize the risk of the small hive beetle infesting bee colonies in Nova Scotia? Do you have the resources that it will take to tackle this issue?
MR. COLWELL: The small hive beetle has been a concern for us for a long time. There had been need in the past to import hives and there was some discussion with the bee industry. They said they had enough hives. I don’t know if they did or not, for the blueberry industry. The blueberry industry is down so the requirement for hives isn’t as much as it was.
We instituted the toughest inspection program for importing beehives in the country. Actually, when we put that in place it’s 100 per cent inspection. It’s on the truck - the system we have now - we observe the truck and the truck leaves. It’s not to stop any place except for fuel on the way when they bring them in. It has been quite successful.
Actually, in our first year that we did this, we found hives in Ontario that did have small hive beetles that were certified clear by the Ontario Government.
MS. ZANN: I remember asking you about that on the floor of the House.
MR. COLWELL: So those hive areas were eliminated. We eliminated them on the spot. After that experience and bringing them in and also when the hives come in they’re inspected here - the percentage inspected - to check them again. As soon as they’re done they’re gone back again. That’s the process we used in the past.
After our first year, I wrote to the minister in New Brunswick because I continually told the industry, a risk is New Brunswick, not what we’re importing and inspecting properly. I did write - we offered to share our experiences, share the program we had, maybe come up with a better program jointly with them. I got an answer back, which I will share with you and this committee from the minister in New Brunswick that really didn’t help us much - not at all. In the fields that we had found small hive beetle, that’s where New Brunswick brought them in from last year. Last year we brought in hives from New Brunswick before the beetle was there. We did 100 per cent inspection before we did and we found nothing.
As for the current situation, we’ll have to see what we do next year. We do not want small hive beetle in this province - there’s no question. So we have bee experts on staff.
MS. ZANN: Yes, I know - I think I’ve met some of them.
MR. COLWELL: We are also doing work through Perennia. We have some bee experts that do that.
MS. ZANN: Yes, I know. I think I’ve met some of them.
MR. COLWELL: We also are doing work through Perennia Innovation Centre. We have the experts there that do that and we’re looking at possibly hiring someone else, another bee expert. So, what we have now, we have traps out within 20 kilometres of the border to see if we find any hives. Those are checked on a regular basis. We have a whole regimen and a whole system for doing that. We’re doing checks on hives in Nova Scotia to ensure that the whole regimen has been put in place and I want to thank the experts in the bee industry and the department and at Perennia, the great work they’re doing so far.
MS. ZANN: Yeah, they do excellent work. I know because they’re in Bible Hill.
Just a quick question now because my time is going to run out. Do you need more cash? Do you need some more cash to help?
MR. COLWELL: No.
MS. ZANN: Sure?
MR. COLWELL: We have the resources to do it.
MS. ZANN: Okay.
MR. COLWELL: We’re looking at possible ways to, if we find a hive that’s infected, what we’re going to do with it. There are several ways you can do it. You can either burn the hive totally, absolutely destroy everything in it and I believe - and I would have to check with a bee expert on that - you can also freeze them. If you freeze them quickly, hold the temperature down for a certain length of time, it kills them.
So, we’re looking at equipment that possibly would do one or the other or both and a whole protocol around that and I’ve already asked staff to do that cost to see what it would cost and we’re going to invest in it. There’s no question.
MS. ZANN: Thank you very much. I appreciate that and thank you for all your answers.
MR. COLWELL: Thank you.
MS. ZANN: I think my time is up.
MADAM CHAIRMAN: It’s just about up.
MS. ZANN: So, I’ll just say thank you very much and I know we’ve been talking about the Provincial Exhibition and the raceway and we will continue to talk about that outside this Chamber. So, thank you very much and great to see all of you today. Thank you.
MR. COLWELL: Thank you.
MADAM CHAIRMAN: Thank you, Ms. Zann.
We’ll turn it over to the Progressive Conservative caucus and Mr. Lohr.
MR. JOHN LOHR: If the minister or assistants would like to take a five-minute break, that would be fine.
MR. COLWELL: No.
MR. LOHR: Would you like to do that? I know you never do want to do that.
MR. COLWELL: I may have to. I’m drinking a lot of liquid today, so, maybe.
MR. LOHR: Okay. I know the blueberry industry has been suffering from, maybe a good thing, but oversupply. Obviously, the production has gone way up and there has been a drop in price in yields and that has caused some stress in the industry and I’m wondering, Mr. Minister, what your department is doing to try to alleviate that stress in the blueberry industry.
MR. COLWELL: It’s a problem. Our own success has been a problem and I want to give agriculture credit, a tremendous amount of credit for the work they’ve done in improving the crops and their precision spraying equipment and all the other equipment they’ve worked with in conjunction with the industry. That has been a real success story and I’ve discussed this with them and I told them, don’t stop. You know, let’s continue this research. Let’s make it better as we go by.
One thing I want to state that we’ve got to all do, we have to all do - we’ve got to stop talking about the price of blueberries because what’s happening is one of the blueberry farmers went out there and he probably about killed his industry and said we’re charging 20 cents a pound, we’re only getting 20 cents a pound this year. So, if I’m sitting in Europe or Asia someplace and they say the blueberries are only worth 20 cents a pound, and we’re trying to sell blueberries that they bought a year ago or maybe a little past that and they paid 65 cents a pound for them, we’re in big trouble. So, we’ve got to stop talking about the price of blueberries in the field. I can tell you from markets that I’m working with in Asia they’ve got people full time, all they do is watch the media and I’m going to deviate a little bit here but this is very important, this is extremely important.
I instituted a lobster quality handling program and I didn’t consult - and I intentionally did not consult because it would never have happened - and one of those gentlemen came in at a meeting we were at very angry and said, you know, you’re not going to tell me who to train and all that stuff but, besides that, and then he pointed at me and he said you’ve got to stop talking about this quality of lobster. I looked back at him and I said I never spoke about it, you did, and I responded to the media. He said, I’ve lost contracts in Asia because of that, because they said we have poor quality.
So if you ask me a question in the Legislature or any of your members do, ask any question you want but, please, never mention the price because we’re monitored all the time internationally and if I’m a customer sitting at the end of the table, say with Braggs or one of the other companies or Wyman’s out of P.E.I., and I’m trying to sell them for $1.50 a pound, which I have to get from the storage costs and all the costs I’ve had in the past and they said well here’s an article right here, you’re paying only 20 cents a pound, so we’re going to pay you 50 cents a pound. That’s what’s happening.
At one time you could go to the media and it would help your cause, this time it could have killed the industry. It’s that simple and that complex. We’ve talked over and over again at the blueberry association about this, not to do it, based on what we’ve seen in the lobster industry and other industries. These guys are sharp, I mean they’re not any more selling to your corner store, they’re selling to these guys in an international market with big competition from highbush blueberries from B.C. with no tariffs on them, zero tariffs in China and in Europe. But all that said, that’s a very important message we’ve got to put out to everybody, that those conversations should be had internally and then we’ve got to do everything we can to get that price as high as we can get it in the field.
We’re working on a lot of things with the industry. One thing the industry has not done a very good job marketing locally are wild blueberries. They are an incredibly good product, they are fantastic for our health, they are just a good product. The industry calls them the perfect food and I agree with them and probably everybody in the province would. But you try to find a fresh, wild Nova Scotia blueberry in a grocery store, you can’t find it. But you can find a highbush blueberry in the grocery store 12 months of the year. So we’ve done a very, very poor job of marketing in our own province or in Atlantic Canada or in Canada, period.
We’ve got a superior product but we’re changing, not all the focus, but focus at looking at markets because we can’t supply our own market with that kind of product, we can’t export it and we’ve got to export blueberries. So that work is under way and we’re working with the blueberry association and we’re also working with New Brunswick, Prince Edward Island, ourselves, ACOA and with some of the companies - pretty well all the companies, actually - looking at different marketing. We are funding substantially into marketing the blueberries and that is starting to pay off but we have a long road ahead of us. We’re going to be two, three years, maybe four years because we’ve got to come up with packaging for fresh, wild blueberries that are fresh and not frozen. If the highbush people can do it, we can do the same thing, but we’ve traditionally just frozen everything, put it away and away we go.
So with that in mind, we’re working with all sectors of the industry. We are talking to the retail chains, just what do you need for a product to sell. So we’re going back to the supplier, the people that actually sell it that know the industry a whole lot better than anyone else. We’ve been talking with them, they’re very interested in certain size packaging, done a certain way. So R & D, we’re putting enough money into R & D. We’re going to put substantial money into R & D.
We made a commitment with New Brunswick to match their funding. Prince Edward Island is also going to, not as much as New Brunswick and Nova Scotia are going to put into it. ACOA looks like they are going to put money in, strictly for marketing and we’re also going to put money into it for product development in this new packaging, new market ideas, new market places and we have great hope for it but there’s no quick solution, this is not a quick solution. We’ve been years getting into this situation.
The really good news story about this whole thing is that it continually increased, even with the oversupply, the markets have continually increased. So the markets have been going up but the supply has got ahead of it. So it used to be that we had too many markets and not enough supply and now we’ve just reversed that.
I think this exercise is just a correction in the market and as we help the market, and they’re getting better at marketing, and we had some bonuses that happened this year that haven’t been talked about yet. There’s a partial failure of the blueberry crop on the West Coast and in Chile and in Europe of the highbush berries so that has opened up some new markets for us that we didn’t have. Actually, they are way beyond the sales last year already. I can’t give you the numbers because it’s confidential to the company.
There is some real optimism in the Chinese market, a huge market. Our problem marketing in China is supply. I met with so many people who came in from China. What they look for - we need a container load a week every week to start the market, and then we need 10 container loads a week every week. We cannot miss a week. That’s the kind of conversation you have. Blueberries, we can do that at the present time.
As we move forward with this marketing, it’s going to help us a lot, and there’s buy-in from everybody in the industry. We’re looking at a total marketing plan. We’re working on that now. Again, we’re working co-operatively with New Brunswick and Prince Edward Island and the businesses because we all have to work together. CETA has already kicked in now, which dropped the 12 per cent tariff that was on wild blueberries. That’s going to help us tremendously. That will make us more competitive with the highbush blueberries and the local blueberries in the area.
We’re on the right track. We’re going to make a substantial investment. I don’t want to tell you right now because I have to wait until we get everything lined up with ACOA and New Brunswick and Prince Edward Island about who is going to do what. We have already got a commitment ourselves for a certain amount of money. New Brunswick has matched the money, and hopefully ACOA will match it, and one of the companies in particular and the organizations are matching money as well. We’re looking at a two- to five-year marketing plan initially to start. We’re hoping more for a five-year plan.
Again, at the same time, we will do R&D into packaging, how we hold the products fresh to get it on the shelf. There would be nothing better than to be able to go and buy a reasonable sized pack of blueberries that you maybe pay four times as much for per pound as you would a big box, but you know you can get it and you can use it to do whatever you’re going to do at home. That would put the consumption up. But that’s not enough of what we need. That would just get some of it.
Knowing this is coming - and also the wine industry, I go back to the wine industry because it’s all integrated. I called up the chairman of the wine industry association, WANS, one day, and I said, why don’t you make blueberry wine? That was quite an interesting conversation. At the end of the conversation, I said to him, how long do you use your containment vessels for? It’s six to eight weeks a year. I said, what kind of blueberries do you need? Frozen blueberries. We’ve got frozen blueberries. Why don’t we make high-end, high-quality blueberry wine? After the conversation, an hour, he finally realized that this is not a bad idea.
We do have a shortage of grapes, and we’re going to have a bigger shortage as we improve our markets. We have all kinds of blueberries. We have the medicinal value of the blueberries in the wine that you don’t have in grape wine. You have an endless supply, presently, of raw material, very inexpensive, cheaper than grapes are, and small companies that need cash flow. It all adds together to another product.
Not only that, but in Asia, there’s a requirement for a bottle of blueberry wine that’s between $150 and $250 U.S. a bottle. That’s high margins for a product that really the input costs are pretty low on.
We’re doing some test marketing now. There is some blueberry wine that is very shortly going to be on the market in Asia as well as on the shelves here, once we get the right one. They’re trying to get a blueberry wine that’s similar in quality to Tidal Bay. Then at the end of it all when we get to some place, we will probably have a blueberry wine that’s judged the same as Tidal Bay. Each winery will have a little different version of it, but it has to meet minimum requirements in all of these areas, including the taste test, what goes in, the ingredients, alcohol content, whatever the criteria is.
It’s a good bad news story, the blueberries. Every time a farmer opens his mouth, any time I open my mouth, or anyone else in the province and says blueberries are 20 cents a pound in the field, we might as well shoot both feet off. That’s how bad it is. People just don’t get it. With social media now, stuff is all over the world instantly, and they actually pay people full time to watch all the social media, all our media, all the TV, print - everything you could imagine. They’ve got a subscription to every magazine in the country and all the online papers. It’s unbelievable.
I sat in the boardroom of one of the companies selling lobster - and a guy came in and said, here’s what the shore price of lobster is for the last five years. I don’t even have that information - and here’s the fluctuation month by month. He said, we track this all the time. Then they go back to the suppliers and say, okay lobster at the wharf is $5 a pound, I’m going to pay $6 - and the guy is trying to get $12.
This is so sensitive. I don’t know how we educate our farmers and producers to keep quiet about this stuff and let us work on it to get the price back up. We need to get way back up in the price - there’s no question. We’ve got to do that in a manner that we do it internally so we can sell our berries and make a good margin on them so we can reinvest in marketing, reinvest in new product development and all those things. The farmer in the field doesn’t understand that. You would because your wife is in some of that business, which is fantastic. We need more people like your wife doing these things. The average farmer doesn’t know that. I don’t know how we educate them. I don’t know how we educate the fishermen that it’s actually hurting them to talk about low price. It makes the price lower.
MR. LOHR: Sorry to agree with you. I know it was a few years ago when the production levels were going up so much I remember hearing John Bragg complain about the fact that the WBANA was publishing the numbers all the time. It didn’t help the industry, that’s for sure.
I think that’s all a very interesting good news story about the blueberry wine, and it’s interesting that you’ve got the wineries involved in that, and I hope that all works out very well. I know that you probably have some marketing consultants and you’re probably using people around the province to help with marketing, or is that an in-house marketing plan? Are you using exterior consultants for that?
MR. COLWELL: This is not just Nova Scotia. This is a co-operative effort between the companies - and not just Braggs - and the three provinces and ACOA as well. So they’re working now on an overall marketing strategy talking about all the things. If we made 25,000 bottles of wine a week at one of the wineries, we’re not even going to dent the blueberry production, but it will help. The same as small packs - that will help too. It all helps.
So if we can find new markets for 5 per cent of the total production every year, it’s a big help. The marketing is going to be done in different ways from what we see so far. Some of the larger companies will want to do their own sort of marketing and we’ll help them fund that and work with them and do whatever we need there. The blueberry association themselves and the blueberry growers, they’ve got projects that they’re interested in that make a lot of sense, but they have to go hand in hand with marketing and research to get the product that we need to market.
We’re not going to just do all this internally. We’re not going to do it all externally. It’s going to be a combination of many things. Again, it’s going to be a concerted effort. We’re not going to just say, okay, we’re going to look at this market over here - that’s the only one to go to. That’s not what we’re going to do. We have to look at all the different markets, all the different ways we can do this.
We have to really do a concerted effort right across the board because not just for our over-supply now - we want to develop markets into the future and then get the production out in the fields again so we again get the export stuff and get the economy rolling better because it’s a great product.
We did second Kim Forsyth from NSBI and she is working full time on the blueberry file for us. She worked closely with all the people in the blueberry industry in the province. As well, she coordinates the work with New Brunswick, ACOA and P.E.I. So it’s a pretty concerted effort and there’s a substantial amount of money committed to it. I can’t tell you how much right now until we get all these deals put together, but it’s a substantial amount and it’s going to be over an extended period of time because that’s really what it needs.
MR. LOHR: I have two questions about the blueberry industry in particular and one would be I know that, as you know, one of the reasons the yield went up so much in blueberries, which was really a good-news story, is because of the aggressive use of pollination, right, beekeeping. I’m just wondering if, given the fact that now it would seem we have to keep New Brunswick and southern Ontario bees out of Nova Scotia, is there a plan to continue the Pollination Expansion Program or where is that program headed?
MR. COLWELL: The Pollination Expansion Program is going to be eliminated this year but we’re looking at other options. We’re very concerned about the number of queen bees that are imported to Nova Scotia and I know it’s complicated to get queen bees from Nova Scotia but we’re probably going to put a program together, and we haven’t decided anything now to look at creating queens for use here and also potential export because some of the queen bees - and there’s discussion whether they come or not, a lot of the queen bees are coming from areas that have the small hive beetle, California, Australia, and some other areas. So, the beekeepers on one hand are saying let us bring all the queens in we want from these infected areas but don’t bring any other ones in. So, you can’t speak from both sides of your mouth on this issue.
So, we will have some kind of a bee program this year. We don’t know quite what that’s going to be and, again, it’s partly to do with the new program that’s a federal-provincial program as well but we’re not going to continue to expand - I can’t continue to expand hives when the industry said we’ve got more than enough hives and, in the same letter they sent me and I can share that letter with you, they said but we want to continue the Pollination Expansion Program. So, there’s no way in the world I’d ever get that to the auditor’s department and to the public to justify spending money on something that the industry itself said there’s too many of now. So, again, it’s another one of those situations of the farming industry not really paying attention to what they’re talking about, shooting themselves in the foot.
MR. LOHR: Right. I mean, I do know a little bit about queen bees, being a hobby beekeeper, and you probably have seen the queens that come in from other parts of the world. They come in a little plastic case that you can see right through with four little bees. So, if something could come, it’s possible something could come in that way but I do know there is a domestic queen-rearing industry and I would suspect that the issue, the regular industry will say is that the queens aren’t ready when we need them in the spring, right. So, there’s a timing issue. So, that’s probably the one issue that they will say, well, yes, the domestic local queens are ready in July. We need them in May, you know, so and it’s just climate but that’s just my comment on that.
I guess I’m wondering about the Lowbush Blueberry Development program. I know it was a three-year program and I believe it ended in 2017. Is there an intent to continue that program, development of lowbush blueberry land?
MR. COLWELL: Well, in our overall approach to the blueberry oversupply we are going to look at all at those programs. We’ve been approached by some of the industry to possibly do something around the commercial growers, the guys that are commercial, not just the small hobby-type operations because the hobby ones will be the first ones that will claim they’re going to plow their fields under. I can’t understand why they’d ever do that with a blip in the price but, some interest maybe buying some of those fields out or doing some other things. Again, we’re still developing an overall program for the blueberry industry because we don’t want to see those acreages removed and anyone . . .
MR. LOHR: So, pardon me, you don’t want to do what? Can you just put the microphone a little closer.
MR. COLWELL: Okay. We don’t want to see those fields that are in production now removed. It would be better to just let them sit idle a little while and, then, bring them back into production when we need more supply. So, again, that’s all under review. Any funding we had put aside for the blueberry industry won’t disappear from the blueberry industry because it’s too important for us. So, we haven’t decided exactly what we’re going to do yet. We’re still talking to the industry about some ideas and approaches that we can do here and, again, it’s a work in progress really.
MR. LOHR: I’d like to ask a couple of questions about the mink industry. I know that you are well aware of the ups and downs of the mink industry, it’s a very cyclical industry. I’m just wondering, what do you see your department doing to assist the mink industry at this time or where do you see that industry going or what are you doing for it?
MR. COLWELL: The mink industry, as you are aware, they go through - some people claim it’s a 10-year cycle and some people claim it’s more than that or less than that. The problem with the mink industry is low prices and over-supply, not just in Nova Scotia but all over the world. It has been a really difficult time for the industry.
The industry is surviving. They have made some adjustments. Some people have gone out of business and I can’t comment on whether that was a good idea or not but they have done that. It’s unfortunate we have any farming operation ever go out of production, that’s not good, but if you don’t make money at it, you had better quit doing it, no matter what it is and do something else that you can make money at.
We do have 119 licences issued this year to grow mink. I don’t really want to share the number of mink we have publicly. Again, we want to shoot ourselves in the foot for the supply because it is a world commodity that is watched all over the world. It looks like it’s going to be a really good year for Nova Scotia mink. The Aleutian disease problem they had, they are getting that under control a lot better because that’s one of the reasons the price of the mink has dropped in Nova Scotia.
I did visit one of the top mink farmers in the U.S. and when you look at the facility they have and how they operate, they’re still making money today - not as much money as they were, but they’re still making money. You go in their farm and it almost looks like - how can I describe it - not quite as clean as a grocery store but not far off. It’s really well-lit, clean, well-ventilated, feeding efficiencies way beyond anything we’ve seen here, just because of the way they do things and a really high-end, well-developed business. That’s new facilities now and these things are super expensive. The one I looked at probably was about $15 million or $20 million.
If you go in their old farms that they’re replacing with these few facilities, they’re way ahead of where we are but they got there because they realized that they have to change.
They also have a policy of mixing the colour of the mink, so they would grow white mink, blue mink, colours I’ve never seen in my life but a lot of them. Those ones get huge prices because they’re not dyed, they’re the real thing so they get huge prices. A whole different business model.
The business model here for a while was, grow as many as you can, the lowest input costs you could possibly have and come up with a product, and for a few years they got away with it and they made a lot of money, which I’m glad they did. As far as the mink industry goes for me personally, if we still had a mink industry at $150 million a year I’d be way over the Ivany goal of our exports so that would be very positive as well and a huge economic impact that would have on the province.
But they are coming. The industry has rationalized a lot and I think it helped. I met with them about almost two years ago when all this is coming and they were proposing a subsidy by the province. Well that would cause us all kinds of problems with free trade and with trade agreements in other countries and I said no, there’s no more money for the mink industry, we had already spent $11 million at that time in Agricovery and more since then, I said no, I can’t take that back to Cabinet.
That answer when I heard back from the industry, the people who are still in the industry says it’s the best thing we ever did because then it forced them to really get efficient and to work on doing the things they should be doing.
From what I understand, this year the mink are bigger than ever, which means the price will be higher on them. They’re healthier than ever, and they think the pelts are probably some of the best crop we’ve ever had. We’ll have to wait until the auctions come, but we did a lot of work with the auction houses, the provincial Farm Loan Board, the industry - a lot of work. We didn’t put money in, but it has cost us money, and it will continue to cost us money.
It’s an important industry for Nova Scotia, and we have to see it grow. The way to grow and get to a point where we have a really high-quality product - again, for a while we had some of the best mink pelts, black ones in particular, in the world. Then with Aleutian disease and quick money, they let off on quality some, and that went down. The price dropped a little bit but they kept the same way.
A lot of that has been corrected now because they realized that they have to really step up. There’s a lot of optimism. I can’t tell you any numbers or anything, but the auction houses have made substantial investments in some of the farms in Nova Scotia. They have that much faith in our industry about the quality they can get and the things they can do. I give them a lot of credit for that.
It has been a long, hard road for us, but it appears to be coming around this year. Last year, the prices were still under what they claim the production costs were, but everybody that sold last year - and they all sold last year, which is the first year that has happened in a number of years.
MR. LOHR: Pardon me, they all what? They all did what last year?
MR. COLWELL: They all sold. All the pelts sold. For a couple of years, they weren’t all sold. They would have a surplus of pelts, and then the next year, they would have to try to sell them, so that put the price down for the new crop. With that crop all sold, that set up a really good situation for this year. It’s not a perfect story. If we were to subsidize them, they would all have been broke by now, quite frankly, because they would have kept turning out a product that’s not saleable at a high value.
One thing you learn in this business is that people will pay for quality. They pay a super premium for quality, but you have to have top quality. It can’t be what you think is quality. It has to be what the market thinks is quality. When you reach that, then all of a sudden, it’s a whole different game.
That’s what the farm we visited in the U.S. was all about. They survived, and they made money through all those bad times. They sold all their pelts - never an issue. Their margins were probably a little bit lower than normal, but they never lost any money, not one year, not one month, and they’re a big operation. At the peak of the industry here, they were probably 15 per cent of the size of our whole industry, maybe more. They’re that big. Clean as a whistle, the whole place. You wouldn’t even know it’s a mink farm when you drive outside.
The thing that the last government put in place, which I give them credit for - I don’t give them credit for a whole lot, and I would say it if they were too - is the standards they put around the manure handling from the mink farms. That was a real bonus. That really has elevated Nova Scotia’s reputation for being environmentally sound. That was a really good thing they did. We followed through on it and made no exceptions, and all the farms now are up to standard. It’s better for them. The neighbours aren’t complaining any more and calling us all the time and putting complaints in about the farms, which is good too.
Internationally, everything is watched today, everything. If we get complaints like that from individuals that are legitimate, and I stress legitimate, people don’t forget that, and that goes for the marketplace. If it’s from whatever area in the world, they’re not going to pay as good a price for those because these guys aren’t looking after the environment. Even countries that aren’t known for being as environmentally careful as other countries are looking at this the same way now. Things are starting to tighten up, and they’re starting to realize how important this stuff is.
MR. LOHR: You mentioned in your lengthy comments on the mink industry, which I do appreciate hearing, the Farm Loan Board, FCC - I think I heard you mention both of them. I just want to jump to the Farm Loan Board a little bit.
If we go back to the Nova Scotia Farm Loan Board business plan, I guess it kind of relates to the mink industry, but I guess the question is - I know the Farm Loan Board had quite a bit of exposure to the mink industry - is the Farm Loan Board still loaning money to the mink industry? Were they ever instructed not to? I know they had a fair bit of exposure. Are they loaning money to the mink industry?
MR. COLWELL: They look at each farm individually. We’re still loaning money to some of the farms, but they have to meet certain equity requirements, like they would do normally, to get the loan from us. Typically, the only ones they’d be loaning money to would be the ones that are minimum risk.
A lot of this stuff that was written off by the loan board - we didn’t mention it, but some of the loans go back to the 1960s. We’re cleaning up all those things and getting them off the books, and some things, the loan board just sat on them, make the loans look better, or whatever the thing was - we’re cleaning all those up.
Some of those old loans we’re writing off. There was never any hope of ever collecting, or there hasn’t been for 25 years, so we’re cleaning those all off and getting the books straightened out.
MR. LOHR: I guess that’s my question - I noticed that in the Farm Loan Board this year there was almost five times the amount of a principal portion of bad-debt adjustment. So there was a $500,000 expectation, and there was a $4.35 million write-off. So this is where we’re going.
I think you’ve already started to address it, but I just want to ask you, can you explain that number? Maybe you already have, partly.
MR. COLWELL: Most of it was allowances they set up for mink, just so we have them in place. Some of them were the old debts that we talked about. A lot of this mink and some of the old loans - when I first came to the department, I wanted to clear off all the loans that were questionable. I don’t mean stuff that was maybe not going to be paid and stuff that there was no way we were ever going to collect. Unfortunately, at that time they didn’t do it. They gave us some of them, but not enough. Then when the mink issue hit us, we had even more.
So when you look at the overall file and portfolio they have in the loan board - we’ve had external auditors come in and look at it, and they agree with where we are. We cleaned up that loan so the mink board and the other things - and they’re very happy with where we are now, which is what I really needed to see from day one.
MR. LOHR: If you look at Page 10 on the Nova Scotia Farm Loan Board business plan, you see less principal written off. There was a $3 million estimate, and it shows a $434,000 principal written off, actual, about four lines down principal portion of bad-debt expense adjustments. I’m just wondering why those two numbers are expressed that way. Wouldn’t those two things be the same?
MR. COLWELL: Could you repeat the question to make sure we’re looking at the right place?
MR. LOHR: Page 10 - middle of the numbers, there is a $434,000 - I guess that’s the forecast, which I take to be the actual, less principal written off. Then you see down below, additions, principal portion of bad debt. Aren’t those two numbers both the same thing? Maybe that’s an accounting question.
MR. COLWELL: If you look on that page, the less principal written off - $434,000, right? That has actually been written off.
MR. LOHR: Pardon me?
MR. COLWELL: Sorry about that. The $434,000 and less principal written off, that has actually been written off, that’s gone. It’s understanding accounting practices they tell me here. I’ve got an accountant here and one there and another one over there.
MR. LOHR: I realize they went into an accounting question because it just didn’t make sense to me to see the two numbers there, and maybe that’s not your expertise either.
MR. COLWELL: Anyway, so the four online additional provincial portion of bad debt expense adjustments, it’s a setup for the future possible write-off, and that may be written off in the future at some time. Then it would go up to less written off amount in that area, if that makes any sense.
Now the $4.358 million is what the auditor said loans that could be at risk.
MR. LOHR: So, it wasn’t actually written off, it could be written off.
MR. COLWELL: Could be at risk. So, they would come in and look at those loans and say okay, we might be able to reserve in case they have to be written off. Now indeed, they may collect some of that, they may collect none of it, or they may collect all of it. But the auditors have that put there as a reserve just in case, to really make the books truly reflect the loan portfolio, so that’s why it’s like that.
Again, you might write some of it off, might write all of it off, and you might write none of it off. I would say that none of it off is a pretty long shot, but some of that will be written off.
One thing I can tell you I give the Farm Loan Board credit for, they’ve actually collected on some payments that were 20 years old, and collected the monies in the last couple of years. They really went after it. One gentleman we have working there is unbelievable. He has talked people into making payments who would never make payments before. Needless to say, the ones who haven’t been making payments haven’t gotten any more loans, or haven’t for a long time.
We really get aggressive with this, and we’re hoping to get these numbers a lot lower as we move forward.
MR. LOHR: So, the $4.358 million is reserved, it’s not actually written off. Would that number be reflected in the value of the portfolio? Would that take down the actual value of the portfolio at the end of the year - $165 million - was that $4.358 million in that actual value, or not in that actual value of the portfolio?
MR. COLWELL: Our provincial budget would show the $4.358 as written off, even though we may collect it, part of it, it shows it as written off, so it’s not included in the $165 million.
MR. LOHR: So, if it was, then that would probably be - the value of the portfolio would be $170 million.
MR. COLWELL: Exactly.
MR. LOHR: I’d like to express a concern about those numbers, and I’ll tell you what that concern is. If it was forecast that the Farm Loan Board would have a $182 million portfolio at the end of the year, and it actually has only $165 million, or if you included that bad debt, it has maybe $170 million. I can tell you that the value of our farms is not going down, and the value of land is not going down. If there had been a normal turnover of farm sales, that portfolio should have grown by 5 per cent or 10 per cent.
That tells me that the Farm Loan Board is likely losing clients to other lending institutions. Maybe it’s just a one-year variation, but what I’m saying is I don’t think the trend is good for the Farm Loan Board that the net value of the portfolio has decreased that much. It’s a bad sign, a negative sign, for how the Farm Loan Board is operating.
I’m wondering if you would agree with that. If you do, what are you doing to fix that?
MR. COLWELL: We can’t agree with that because the portfolio just depends how many new loans there were and how many payments have been made. It’s a floating number all the time. Most farms are paying their bills, and if they haven’t taken any new loans out, they may be paying their debt down. It would show as a smaller loan portfolio even though the farm is worth more than it was when they took it out.
But most of the people pay. If they pay more of it down for whatever reason, again, we have to do complete analysis on it and see exactly where all these numbers are made because it’s not just the number of loans you have out there. There’s a whole bunch of other things that make up that number.
MR. LOHR: I would beg to differ with you on that. Maybe I can get you to understand my point.
I recognize, and I would say it’s probably a good thing that there’s an accurate accounting of bad debt, no problem there. I think that’s very positive if the Farm Loan Board is dealing with old debt and accurately accounting for it.
What I’m saying is that it would be my hope that the Farm Loan Board would continue in normal operations. Each year, a certain number of farms sell and turn over. As new people buy them, if the Farm Loan Board was getting its share of the turnovers, if it was maintaining its base of loans, then there would be a slight increase in the net portfolio at the end of the year. In other words, that net portfolio is sort of an indication of the total amount of loans out to the agricultural industry.
If that number is declining, even if it was holding its own, was staying exactly the same, I would say it would be an indication that the Farm Loan Board was not maintaining its share of the loans in the agricultural industry for whatever reason. That is not a good sign for the Farm Loan Board if you’re a person who believes in the Farm Loan Board and believes we want to see it continue, which I am.
I’m just asking for your comment on why the portfolio dropped by, I would guess, more than 5 per cent, the value of the portfolio. It’s got nothing really to do with whether farmers made their payments or not, if you understand what I’m saying.
MR. COLWELL: There’s a couple of things here. I’ll start in 2015-16: our total number of loans was $25.7 million, and in 2016-17 it was $32 million. So, it has actually gone up substantially. But also, if you look at the estimate for 2016-17 and the forecast 2016-17, you’ll see less repayments. We estimated that it would be $23 million, and it actually turned out to be $32 million. If you take that $9 million and add it here, we’re already up to $174.5 million. You can see a change in any of this stuff makes a substantial difference in the bottom line. Then, when you factor in the write-offs, we’re pretty well on target. It shows that, based on the actual loan portfolio, the loans have gone up. The accounting doesn’t make it look like it has, but it’s a proper accounting process. In 2016-17, we had 112 new loans.
MR. LOHR: Okay. I realize I’m not - I’m comparing the 2016-17 estimate to 2016-17 actual, and I should probably be carrying the previous year’s actual. I realize that, but I still think that it is not a good sign and, if whatever reason, I would think the Nova Scotia Farm Loan Board would be making reasonably conservative estimates when it made an estimate. So, to have that type of decline is not a good sign.
MR. COLWELL: Again, you know, there’s more repayments, $9 million more in repayments and if you take the possible principal amount that we’re allowing for adjustments, that’s another $4 million, so you very quickly get up very close to $180 million. So, with the actual loans being $6 million above what they were the year before, we’re going in the right direction, except for the amounts we’re writing off and the payments are coming in better. Again, that’s credit to the Farm Loan Board for collecting money that they never collected before, and also for the good farms that always pay their bills every year.
MR. LOHR: So, I guess I’m saying that the fact that there was more in repayments would also be an indication that other farmers went to other lending institutions. More than anticipated.
MR. COLWELL: Well, again, you can make numbers do anything you want. It depends how you look at them, depends how you work on them to get the answer that you want, but basically, these are the real numbers and this has, again, been - external auditors agree with this, and we have grown the loan portfolio, and we’ve improved the repayment process. I think we’re really going in the right direction. So, if you look at the forecast on the top line there, we’re within $5 million of where we’ve said we would be, and I think that’s a pretty darn close estimate for that big a portfolio.
MADAM CHAIRMAN: Mr. Lohr, you have about nine and a half minutes.
MR. LOHR: Oh, nine and a half minutes. I would like to change the topic. We’ll agree to disagree.
This is an old topic - maybe I’ve been neglectful because we never actually FOIPOPed this, and maybe that’s what we should have done. A number of years ago, I asked about - I had a good friend who was a cabbage farmer, who felt that Québec was unfairly dumping product in our area, and of course, dumping is hard to prove, but felt that because of its self-directed risk management programs, various types of risk management programs, Québec had a competitive advantage in pricing of cabbage, and I think you could probably take that discussion through virtually every agricultural commodity that we grow and they grow. I believe there was a grower in Berwick who, last summer, made that comment about some crop, I think it was tomatoes - it might have been the summer before. I never did FOIPOP it but you did a study, Mr. Minister, on the relative subsidy levels between Québec and Nova Scotia, and what accounted for their ability to - I have heard you reference it a few times but I’ve never seen it. Would you be able to give me the results of that study without me having to FOIPOP it?
MR. COLWELL: Actually, that study was mailed to you over a year ago. Actually, it was mailed to you before the last time you asked me this question in the House, with a letter and we’re just looking for the letter I sent to you. It never came back. So, somewhere in your operation at your constituency office, you’ve got to have this report. If it was misplaced for some reason, we have documents that show we sent it to you. We’re just trying to dig them out here, and I can provide you with a copy of that letter, but I would gladly give you a copy of the report tomorrow.
MR. LOHR: Okay, it is possible that we misplaced it. It’s always possible. Anyway, if you could email it to me now, that would be great. I would appreciate that.
MR. COLWELL: Yes.
MR. LOHR: I do think that that condition still exists. I heard by way of my farmer friends that they didn’t believe the answer. I haven’t seen it, but I was told that it was because Québec was more productive.
I don’t know how to best explain it to you, but it’s two different products, even though it’s called cabbage. There are many, many different types of cabbage. The product that this grower was growing, the count was different. It wasn’t 10 heads of cabbage to a bag. It was more like 22 to 25 going into the market.
It was his belief that you had it wrong, that you were comparing apples and oranges, in terms of productivity, just based on the number. This is cabbage, and that’s cabbage - two different things. If you are growing heavy cabbage at a wider spacing of the volume of cabbage per acre, tons of cabbage per acre is way different, versus the type of cabbage that we were growing in our area. I can tell you that the productivity argument didn’t hold a lot of water with our growers. I’m wondering if you’ll comment on that.
MR. COLWELL: I’ll get you a copy of the report. Actually the report was tabled in Public Accounts Committee here a while ago as well, as well as one being mailed to you. That was sent to the chairman of Public Accounts, Allan MacMaster, and the letter was signed by the deputy, the one he sent. But I did also send you a copy at the time when we finished the report.
What I would suggest on this whole thing is, after you get the report to read it and have a look at it. What you can see by this is that they produce a lot more cabbage than we do. Québec in 2013 produced 73,000 metric tonnes of cabbage compared to only 2,100 metric tonnes of cabbage produced in Nova Scotia, just to give you a comparison. The production yield from 2004 to 2013 in Nova Scotia was about 20,723 pounds per acre. In the same acreage in Québec, they were getting 34,832 pounds per acre. An average grower in Québec has a 67 per cent greater yield per acre as compared to Nova Scotia. Those were the actual numbers that happened at that time.
We’ll make sure you get this right away. I would suggest that the farmer should be talking to us and perhaps Perennia to see if we can help him get the production up on the crop if he’s going to continue to grow cabbage, and make sure that he can make money on this. If he can’t make money on it, then he’s going to have to make a decision on whether he wants to continue to grow or not, even though the product may be a little bit different. Maybe we have to help with marketing to market a superior product that he may have, which I wouldn’t doubt in the least. I would think that we have to look at a broader approach in this.
We couldn’t prove anywhere that Quebec was subsidizing it, and I’d be the first to admit it, if I could find it. I would love to find something Quebec is doing that with, just to make an example of it, but it appears that it’s just better production overall. Now it could be the growing season, or it could be the soil conditions. As you know, one farmer can grow one thing and another farmer can grow it next door and get twice the production of it.
That’s one thing we really should look at, to help the farmer, if he decides he wants to continue to grow cabbage - and I hope he does, but he’s got to make money at it - and to see what we can do to help him. We would gladly put a program together and help him do that.
MR. LOHR: I have to defend Art Woolaver, the cabbage grower’s integrity on this issue of yield. Art Woolaver, if he was sitting right here, would tell you that he’s growing cabbage for the Newfoundland market. They want 25 heads in a bag. They want three, four, or five wrapper leaves loose around that head of cabbage. He’s growing for that market. That means that you plant at a certain density. A higher density would give you a smaller head of cabbage. The loose leaves hanging around it, for some reason, they like that in Newfoundland. That is the issue. Québec produces that same product too and sells it for less than we can grow it for.
When you look at the averages, you have people who are growing for sauerkraut. If we were growing for sauerkraut or that type of industrial cabbage, we would get those high yields too, and the average would look better. The only cabbage grower we have left is one of the few we have left. That industry is all gone. I can tell you that I’m a reformed cabbage grower myself. I took the step that you recommended already for Art, but I wouldn’t recommend that for Art. It’s Art’s choice to keep growing. He’s frustrated by the fact that we know in the industry that, in fact, Québec does have a better level of subsidy for farmers for some of these products. That applies not just to cabbage. It’s not that Québec has a cabbage subsidy, they have self-directed risk management products available, and it’s relatively easy to find that out if you simply want to go and ask. I’m sure that if we were to go just to the website we could determine that. That has been there for a long time.
MADAM CHAIRMAN: Order. Time has elapsed. The Liberal Party will have the remaining time. You’ve just seven and a half minutes.
Can he make his comment? Agreed. Go ahead, Mr. Lohr.
MR. LOHR: I just wanted to say thank you for the time and to your staff for being here. I appreciate your work. Thank you.
MADAM CHAIRMAN: From the government side, Mr. Jessome.
MR. BEN JESSOME: Thank you, Minister. Thank you, folks, for your time today. This may kind of open up an opportunity for you to kind of go on and feel free to do so. I’m wondering if you can talk about one of the - I don’t know whether you’d call it a sector or an aspect of the industry - I’m thinking either focus on the wine industry - you can focus on farming or mink, or reference different ones. I’m just wondering what information or what sense of the demographics in a given industry is in the context of if people in the wine industry going to, dare I say, age out? What’s the plan for succession? Are there any opportunities for younger people to get into the sector? What kind of succession planning goes along with any industry?
MR. COLWELL: Madam Chairman, if you let me know when we’ve got a minute and a half or two minutes left, I have to read the resolution into the record.
MADAM CHAIRMAN: I’ve been told we’re continuing tomorrow.
MR. COLWELL: Coming in tomorrow again?
MADAM CHAIRMAN: Yes.
MR. COLWELL: Okay, that’s fine. I like that actually.
Succession planning is a big problem in the agriculture industry if you don’t have a family member who’s going to take over your farm. Some of these farms are very valuable. They’re worth millions.
I remember one of the first meetings I had - we were talking about the strawberry virus that I talked about here earlier today. The farmers around the table, all of them are very, very successful. I asked all of them, what’s your gross profit margin there? One of the farmers spoke up and said, I don’t know. I make money, but my payroll is $5 million a year. With a $5 million a year payroll, you’ve got a farm that not everybody can buy.
I know this farmer is extremely successful. I would say his gross profit margin is probably one of the highest in the province by far. Just because he didn’t know the number doesn’t mean he doesn’t know how to run his business - just the opposite. But it’s difficult. In his case, he has some family - they’re actually expanding the whole operation, which is very positive.
There’s more interest in farming now than there probably has been in a long time. I was talking to one of our colleagues today, and he was telling me it’s the first time we have seen land being cleared in the Valley in probably 25 years or longer for farming. That’s a really positive move. There’s more optimism in the industry now. You have to have optimism.
We can do loans. The banks are doing loans. The federal Farm Credit Canada is doing loans around agriculture, which is very, very positive. We have put some succession planning programs in. They can do succession planning with those funds we have with our suite of services and Growing Forward in the past. We can make those available as well.
If you look at the wine industry, it’s just the opposite problem - it’s not a problem. It’s actually excellent, because a lot of younger people are moving back to Nova Scotia. If you see the staff members at a winery, including the winemaker, the viticulturist, and all the other people who are there, they’re pretty young. I would say the oldest ones I have seen, except for the owners, are probably in their 30s. Some are in their 20s. They’re highly skilled people who want to live and work in Nova Scotia. That’s an industry that is going to grow exponentially.
We are where Ontario was 20 or 25 years ago. They had about the same number of wineries, and they have 180 or so wineries now - I don’t know the exact number - and they’re still expanding. I talked today about that. We have superior quality by far. They can’t produce the grapes that we can to produce the wines that we produce.
The industry here has done it right. They have gone all over the world and looked for the experts in the industry, and they have hired them. They haven’t just hired them to come and have a chat for five minutes. They have them on a retainer. There are several wineries in the province that have done exactly that.
One of them in particular that has led the way in this went to Europe and asked, who are the best experts in Europe for this? They came up with three names, and they sat down and talked at length with all three of them, and hired one on a retainer for a long period of time. They did the same thing in North America.
I was talking to the gentleman in North America on the weekend when I was at Lightfoot & Wolfville, the opening there. I got to cut the ribbon on a second winery in Nova Scotia since I have been minister, and was very excited about it. They are looking at innovation beyond belief.
I have been after the industry to go to a VQA quality system. We brought the people in from B.C. to talk about their system. We brought the people in from Ontario to talk about their system. We brought the VQA people in who actually run the whole program. VQA is Vintners Quality Alliance. They have all told us the same thing: don’t do what they did. You can go buy an Ontario wine that has a VQA stamp on it that’s $10. It has actually ruined their industry from the standpoint of real credibility.
We’re presently looking at what kind of quality standard, if we can find one in the world, and we haven’t yet found a quality standard we can put in place. We’re not going to go away from the VQA, and we may . . .
MADAM CHAIRMAN: Order. Time has elapsed.
We are adjourned, and we will return tomorrow. Thank you, everyone
[The subcommittee adjourned at 7:05 p.m.]