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November 20, 2001
Standing Committees
Economic Development
Meeting topics: 
Economic Development -- Tue., Nov. 20, 2001

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HALIFAX, TUESDAY, NOVEMBER 20, 2001

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

9:00 A.M.

CHAIRMAN

Mr. Brooke Taylor

MR. CHAIRMAN: Good morning committee members. If I could I would like to bring the Standing Committee on Economic Development to order. This morning we have with us, from the Christmas Tree Council of Nova Scotia, Mr. Shawn Lacey - Shawn is the gentleman to my left - president of the council and Mr. Len Giffen, coordinator. I know these gentlemen are no strangers to most committee members around the table. If I could I would ask the committee members to introduce themselves. Perhaps we could start with my colleague, the member for Hants East.

MR. JOHN MACDONELL: John MacDonell, ordinarily not a member of this committee, but they thought it was necessary to improve it so I came today.

MR. DONALD DOWNE: Don Downe, member for Lunenburg West, the balsam fir Christmas tree capital of the world - all of Lunenburg County.

MR. CHAIRMAN: I'm Brooke Taylor, MLA for the beautiful Colchester-Musquodoboit Valley, and we also have a number of Christmas tree growers in that community.

MR. JOHN CHATAWAY: Indeed you do. I'm John Chataway, Chester-St. Margaret's. That's part of Lunenburg County, a certain part of my riding, and I agree with the member opposite, it's a very important business to Lunenburg County and all of Nova Scotia. I'm sitting in today for Richard Hurlburt.

MR. CHAIRMAN: Oh yes, thank you.

MR. WILLIAM DOOKS: Good morning, Bill Dooks, Eastern Shore.

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MR. JON CAREY: Jon Carey, Kings West.

MR. FRANK CHIPMAN: Frank Chipman, Annapolis.

MR. CHAIRMAN: You gentlemen are very familiar with the procedure, having recently appeared before the Standing Committee on Resources, so if you would like to begin with your presentation. Maybe colleagues from the NDP and Liberal Party would indicate if their colleagues are coming in. I know they are stretched pretty thin right now.

MR. DOWNE: We were in Yarmouth last night. We drove in last night from Yarmouth. I understand Brian was here this morning, but I haven't seen him. I will call over, but I think he's planning on coming - Brian Boudreau.

MR. MACDONELL: I'll be alone.

MR. CHAIRMAN: Okay, great. Brian Boudreau is from Cape Breton The Lakes, the member who is not here. If you would like to begin, gentlemen.

MR. SHAWN LACEY: It's basically the same presentation we had before. Would the chairman like for us to enter that into the record or paraphrase it?

MR. CHAIRMAN: Is that the consensus? It is the same, so that would be fine.

MR. MACDONELL: This committee hasn't heard the presentation, so I think . . .

MR. LACEY: Okay, I guess we should read it then.

MR. LEN GIFFEN: By way of background, when the provincial government presented its budget in the spring of the year 2000, the Nova Scotia Christmas tree industry felt it would be severely hampered by some of the proposals to eliminate the specialists on staff in the department, as well as other cuts affecting the seed nursery, research funding and a reduction in services from the entomology facility in Shubenacadie. Collectively, all of these services played a major role in helping the industry to develop into the major economic force of the $32 million annual industry that it represents today in Nova Scotia.

Over 1.8 million trees are harvested each year by approximately 3,000 growers from some 30,000 acres across the province. Since 95 per cent of that harvest is sold outside the province, this represents a major source of new dollars into the provincial economy and a significant level of seasonal employment for the 2,500 Nova Scotia workers, as well as the 500 permanent jobs for those involved in the year-round plantation operations.

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Accordingly, the Nova Scotia Christmas Tree Council initiated a series of meetings with government officials over a period of months, and we are pleased to report the re-establishment of these services by the department and the establishment of a much closer working relationship between the industry and the Department of Natural Resources.

Currently we have direct input into the department's annual priority planning process, and we are able to respond quickly to factors that impact the industry. Further, the Christmas tree levy legislation, passed some years ago, has provided the council with a stable source of income from the growers themselves to enable the council to provide a wide range of educational, technical and promotional services to the industry, which is truly a leader in Canada and is looked to by growers in other provinces in Canada as well as a number of American state organizations as one worthy of emulation.

As a result of this renewed co-operation between the council and the department, we have recently harvested some 50,000 enhanced-quality seeds from the seed nursery, and these are being grown and will be ready as seedlings in two years for trial across the province. In addition, these seedlings will be grown in a variety of container sizes and formats to determine the optimum conditions for future growth of seedlings adapted to the variety of soils and geographic conditions in Nova Scotia.

Substantial progress has also been made on identifying optimum times and products for treatment of insect pests which impact the Christmas tree industry. We will shortly have an at-a-glance visual chart available to all growers in the province for insect control as part of a completely updated grower's manual to be distributed to all members in the next several months. In spite of that progress, we are concerned about the very heavy workload of Eric Jorgensen's entomology centre in Shubenacadie, further stretched by the extensive work that resulted from the brown spruce longhorn beetle infestation in the Halifax area this past spring and summer. We hope it will be possible to add additional resources to this very important service to the forest industry as a whole and to the Christmas tree industry in particular.

The wreath and brush components of our industry are continuing to grow rapidly, and the council has offered its services to growers and manufacturers, many of whom are already members in their capacity as Christmas tree growers. Of special note was the recent wreath makers short course in the community college in Bridgewater that was initiated by several of our members in the Lunenburg County Association. We are also pleased to note that the Department of Natural Resources has undertaken to provide regular and timely information on a number of important issues to our members on its Web site.

This past spring the Nova Scotia Christmas Tree Council was accepted as a full charter member of the National Christmas Tree Association of the United States. Since over 90 per cent of our exports are shipped to the United States, it is critical that we are fully aware of all issues in America that may impact growers and shippers here in Nova Scotia, and this membership gives us a seat on the NCTA Board of Directors and a voice at the table to

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address problems and concerns as they arise. Nova Scotia is the only Canadian province thus represented.

Looking to the future, growers in the province are anticipating a good sales year this year, and each year many more of them are using e-commerce to do more of their own brokering. There is some uncertainty over possible delays at the border crossings due to recently increased security; however, we are encouraging our shippers to allow a bit of extra time and we are working with our colleagues in New Brunswick to provide contingency services should truckers be required to unload their trees for detailed examination or inspection. I just might note that to date a number of vehicles have passed through the border, and we have not yet been aware of any problems or concerns or delays.

We also continue to have concerns over the suggestion by Agriculture Canada, apparently for convenience sake, that all of Nova Scotia was to be declared a gypsy moth infected area as opposed to only the western part of the province, as is presently the case. Such a declaration would mean additional expense and a major complication for growers and shippers in areas where this insect has never been found, and we appreciate the support that the Nova Scotia Government is giving us to ensure the change is not carried out.

As mentioned earlier, we are working in concert with DNR to ensure continued growth in the industry, and our meetings have begun, in fact now, for the planning process for the 2002-03 fiscal year.

Members of our Lunenburg association continue to work with the Departments of Economic Development, and Tourism and Culture to provide trees to the Nova Scotia Legislature, the City of Boston and the Canadian Embassy in Washington annually. These are all important public relations initiatives for the industry in the province, and we hope to further capitalize on these events, particularly those in the U.S.A., through the promotion of our membership in the National Christmas Tree Association mentioned earlier.

Thank you for the opportunity to give you this update, and we would be pleased to address your questions.

MR. CHAIRMAN: Thank you very much, Mr. Giffen. I would like to point out that the very interested MLA representing Preston is with us this morning, David Hendsbee. Mr. Downe did indicate he wanted to ask a question, obviously he's not here. You have to sit at the table, Mr. Hendsbee. We will go to Mr. Chipman.

MR. CHIPMAN: Where's your nursery located, you mentioned it earlier?

MR. LACEY: The nursery is in Debert at our seed orchard there. With some of the recent cutbacks in the budget, the Nova Scotia group has been doing some of the labour and some of the smaller jobs to help maintain that seed orchard.

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MR. CHIPMAN: How long have you been growing Christmas trees?

MR. LACEY: We've been at it for over 25 years.

MR. CHIPMAN: What impact would a 25 per cent to 50 per cent increase in protection have on the industry right now?

MR. LACEY: It would pretty much destroy it, I would say.

MR. CHIPMAN: An increase would?

MR. LACEY: I would say.

MR. CHIPMAN: I think back in the late 1970's there was some government intervention there with money and a lot of people got into the industry, and I don't necessarily think that was helpful.

MR. LACEY: No. What happened, it put a lot of product out on the market that wasn't sustainable. That means to look after it, there just wasn't the money to look after it. I don't mean that as outside money; I mean private money. Once the money was gone, then so was the will to try to make that business work. It is definitely a separate business. In our company, I look after five divisions and one of them is Christmas trees. Every operation is enterprised out. It has to stand alone or it doesn't stand.

MR. DOWNE: It's great seeing you guys again. I imagine you'd rather be out in the woods, that's for sure. Just a couple of things - I had made some calls to find out how the border crossings were going. I was happy to hear your report because I was only talking to Jack Wentzell and a couple of others, but I hadn't talked to too many people throughout the province. Maybe the last presentation and the fact that through the leadership of all-Party committee here - and I guess the Premier met with Ambassador Cellucci, and that all helps - we're all working together, trying to make sure that the industry goes forward. I was happy to hear, so far, that we've got that positive approach.

The tree specialist issue - and I know that's a nervous issue for everybody - has there been any final decision with regard to continuing with the tree specialists for the next budget year?

MR. LACEY: I have assurance from Dan Graham that that position will be filled.

MR. DOWNE: Well, if he said that, then I know it will be. You can't find a more honest person in Nova Scotia, so I am glad to hear that.

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[9:15 a.m.]

This working relationship - I don't know if you remember if you've ever talked to Jack Wentzell or those guys about it, but that committee was struck a few years ago. I was involved with that when it got struck and it's been of good benefit for everybody because it gives the priorities of the department - just talking to the communications officer here - it allows the department to know what the priorities of the industry are and it also allows the industry to understand the complexity of the budget within a department.

Eric Jorgensen, the entomologist in the entomology department, I remember attending one of the meetings down home and the concern was the ability to have enough money in the budget to be able to do proper evaluations, whether it's gypsy moth or brown spruce longhorn beetle or whatever the issue is, the research that needs to be done. That's probably a key issue for forestry and for the Christmas tree industry. Is there any sense in your discussions - is that something that you'd also consider as high a priority right now as a specialist?

MR. LACEY: Yes. I think so. I am also involved with agriculture - I am a dairy farmer - pretty well all the services were taken away. Now we have the new organization there. We don't get the bulletins for insect alerts. For example, the army worm - that caught a lot of people broadside and did a terrific amount of damage. It seems like all these things are running through Eric's office now. He gets agricultural calls and everything, so really his workload doubled. It was heavy enough before. Never mind the industry problems, he gets every home grower call. They're just overwhelmed, they can't handle it.

MR. DOWNE: It's a huge problem. It's just like on our poultry farm; if we didn't have a specialist or a vet come every week to check and do autopsies on the birds, you could have a problem before you know it. You need to have somebody out doing counts and we need to know what's going on.

The wreath issue you're talking about, I was able to be at the grand opening of Rick Lord's wreath operation and there's a lot of interest in expanding that business as a value-added part of it. Do you find that the industry has had enough - this was a short course that was put on. I guess it was reasonably well attended?

MR. LACEY: Yes, it was full.

MR. DOWNE: Do you think we should be doing more of that type of activity, or do you think we have enough trained people and we just need to make sure we access the market better?

MR. LACEY: The people that I am dealing with, there is no limit to what we could sell for brush wreaths and garland and rope. There's no limit. What limits us is really the

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people, production. The problem with that is that it's such a short time frame business. In our business, I am able to give people other work throughout the year to maintain a crew because we're large enough to do that. But a lot of the people who are specific into wreaths, it's a six week job. To keep training people and trying to get people into positions like that. We have to go about looking at our wreath production like some of the larger farms in the United States. They set up tree orchards just for brush. The way we work our tree lots for Christmas trees, they farm their tree lots for brush.

We're going to have to look at things like that to provide more of a year-round operation to keep these people in place. You just can't be training people every year for a four- to six-week job. There has to be some kind of infrastructure in there to support that. I think if you talk to anybody, whether it's Richard Lord or Norman MacIsaac up the eastern end, they'll all tell you the same thing. There's no limit to what we can do with this.

MR. DOWNE: Just being able to find the people to do the work and that's exactly what I heard back home, it was the same problem to find people.

MR. LACEY: In our position and our location, we're so close to Halifax; if you offer somebody an $8.00 an hour job, they laugh at you.

MR. DOWNE: Or piecemeal work.

MR. LACEY: Yes, or piecework. Days before large processing, we cut pulpwood by the cord and you had to do a good day's work to get a good day's pay. It's the same as getting tips and brush; it's so many cents a pound and you have to work at it. There are a lot of people who aren't prepared to do that.

MR. DOWNE: My last comment, Mr. Chairman. I know that the department has worked over the years, and probably continues to work, on the ability to find new markets, and I know that's been a big issue for the industry as well. I was talking to one last night who deals with New England and the area outside Boston, and they're saying there's a little uncertainty in the American market right now to buy the trees. Are you hearing any nervousness about that, or is everything fine?

MR. LACEY: The only thing I heard is that some people who normally would be selling trees aren't this year because they're working around the World Trade Center. The fire departments, the Lions clubs and people like are that are doing the charity work. They're focusing on that instead of selling Christmas trees like they normally would. Other than that, you can hear and talk to - and I don't like to use the word brokers as a derogatory term, but it's a business. If you look at this province, there are a couple of dozen large brokers that sort of control it. Every year, if you talk to them, there's something wrong. But no, I haven't got that.

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MR. MACDONELL: Thank you, and I didn't mind hearing that presentation over again at all. My memory is not quite so good that I could remember it verbatim, so it was nice to have it again. I am curious, you say that so far things are going across the border fine; there doesn't seem to be any problem. As far as people who are shipping trees, their time will pretty near be to an end, will it? Is it the American Thanksgiving that most try to aim for? How much longer will you be in production?

MR. LACEY: That's the trigger, the Thanksgiving weekend. We'll continue to ship trees until - right now I have one booked for December 1st. So if they're selling trees, they're going to want more. We'll probably get some late orders, but the big push is now.

MR. MACDONELL: Probably about half of it is through by now, isn't it? I am wondering, too, has the milder weather been more of a problem - other than making it easier to work in the woodlots, but other than that - as far as the quality of the trees and their ability to stand the trip and all that?

MR. LACEY: I would say it's better because we've had enough frost to harden the trees off. So we get our rains, they're absorbing the water, and so when they're cut it's still cool enough that they're staying but they're not freezing and drying. The weather is basically ideal. Maybe a little warm, but it's great for working around. It's better than freezing cold and windy.

MR. MACDONELL: I have a question about the seed nursery. When you say we've recently harvested some 50,000 enhanced quality seeds from the seed nurseries, I am curious about what you mean by enhanced quality.

MR. LACEY: We've had a process over the past number of years from one end of the province to the other. We had criteria for what an ideal Christmas tree was: branch angle, density, needle length, how quick it grew, late flushing, early flushing, whether it seemed to have some resistance qualities, to aphid for example. What we did was we selected trees all over the province and they were scored. The top percentage of those trees was taken for seeds and signs for grafting, and this is how we developed our orchard in Debert.

Between that process and the time you collect the seeds, there have been budget restraints. It's a bare-bones operation there now with some association labour going into that.

MR. MACDONELL: So what we're saying is the top quality of the trees that you chose for your seed trees, they've come to a stage now that they're producing seed?

MR. LACEY: Yes.

MR. MACDONELL: And then you collected that seed?

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MR. LACEY: Yes.

MR. MACDONELL: It's the Debert facility where this is being done?

MR. LACEY: Yes.

MR. MACDONELL: This is an issue, I think, that concerns me. I mean, you can go and buy trees there, I think, seedlings, at 50 cents apiece. I think someone from the public can do that, but when you look at what this facility does and you're talking about trees, this is something that requires consistency and longevity. When you're doing research on trees, it's not something where you can plant them in the spring and look at them in the fall and say, well, that was a pretty good crop. This is something where you're looking at years and years of research in order to answer specific questions. So it does worry me that something like this that would have had support - it obviously would have had support from the previous Liberal Government and the previous Tory Government - so it would seem that a lot of the investment that has gone into that facility is at risk by not allowing it to do what it needs to do in a competent way.

I mean, I think it's great that the association is willing to help, but that's not really its role. That's stretching it to pick up the slack that somebody else should be doing. So have you had any indications that that's going to get worse?

MR. LACEY: I would say it has more danger than anything else of slipping away, and the time we already have invested in it. A lot of this work was volunteer work, too.

MR. MACDONELL: Yes.

MR. LACEY: Selection and everything like that, plus DNR time and wages were put into the orchard. So, yes, everything is at risk. Everything always is.

MR. MACDONELL: I am curious about the term formats: "In addition, these seedlings will be grown in a variety of container sizes and formats . . .", I am wondering, what does that mean?

MR. LACEY: The format is the number of seedlings in a tray. I think that's what we're talking about here. We're going to do the different types and in different locations, and we would get the results from and monitor those trees.

MR. GIFFEN: A tray is pretty much a standard size, but it runs anywhere from about 15 seedlings in a tray to 48 or 60. They're doing some various testing to see, in that style, whether the ones with the lesser amount do better or the ones with the larger amount. This is one particular item because it's obviously a little more expensive to work with the smaller numbers in a tray, but the other side of it is a format that I am not familiar with, but Shawn,

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I think, certainly is, as opposed to growing them in trays. What's that other term? It's a natural type of growth and I forget, there's a special term that the experts use for it, but it's a different way of growing them rather than in the trays, seedlings.

MR. EPSTEIN: Tissue culture?

MR. LACEY: No, it's something like when you can buy a little tree in a box. The seed is already in it and you just water it. So the roots aren't going to be bound up. They will just plant it and it will grow right through the walls of the container.

MR. MACDONELL: I have one more question if I can, Mr. Chairman. Hearing this over again was a good thing for me, Len, and I can't remember - maybe my colleague, the member for Lunenburg West, can remember - I am not sure what we said around the gypsy moth - Agriculture Canada was looking to declare a gypsy moth infected area in all of Nova Scotia, and maybe you could expand a little bit for this committee on how that would impact you. I think maybe this is something this committee should pursue with Agriculture Canada, with maybe a letter from the committee expressing concern, I think, after you have a chance to enlighten the committee as to what that would mean.

[9:30 a.m.]

MR. LACEY: The comments we made at the last presentation are true and accurate. It is really the lumber business versus the Christmas tree business. We are dwarfed when you look at that. The gypsy moth is not a native, it can either be blown in or it comes in on tourism, trucking or comes out of the States. The gypsy moth likes deciduous trees, particularly oak. To my knowledge, on record there has never been a gypsy moth egg mass found on a Christmas tree, ever. With the western part of the province, Annapolis Valley, in that area you get a lot of tourist trade and you get a lot of gypsy moths and it's closer to the United States, so you get the blow-ins. They have some hot spots there, but it hasn't been found in the eastern parts.

What happens is that now it's in the province, our logs are moving back and forth to the mills. What Ag Canada is saying is instead of doing an inspection based on the lobby from the lumber groups, that it's just an extra cost to us to have extra inspections on our logs moving back and forth, why don't we just quarantine the whole province so we can freely move our logs back and forth. To us that's really a no-go because the people in the gypsy moth area have to have protocols set up saying this is how they monitor, how they control it, keep records of everything like that. I will give an example. If I try to market my trees in Mexico, if I'm in the zone, I have to pay to have Mexican inspectors come up to do inspections on my lots, whether or not there is a history there.

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It really is an extra cost. Now, for myself I haven't done the pencil work, what is the extra cost of it because I don't need to do that, and I don't intend to have the extra costs to find out. We are pretty close to the line, but we're all right. Your certificate of origin has to state exactly where you're from and that you're in a non-quarantine zone, then I can move my trees freely. If not, then I have to have all the inspections - and inspections cost you - if you can get them booked. You can pay overtime, but there is an extra rate for that, to try to get orders. The customers ask you that question too, do you have gypsy moths? Never mind that the cost of monitoring that insect, you may lose the sale because of that.

What we're trying to do is to maintain the lines, keep the status quo. I put the blame for this problem squarely on the shoulders of Ag Canada. When the gypsy moth was first identified, they didn't do anything, they just monitored. Now we have half the province.

MR. MACDONELL: Mr. Chairman, I would like to move a motion that the committee send a letter in support of the Christmas Tree Council's case in maintaining the status quo in regard to the gypsy moth and not pursue classifying the whole province as a gypsy moth zone.

MR. CHAIRMAN: Is there a seconder to the motion?

MR. DOWNE: I second the motion.

MR. CHAIRMAN: Any debate on the motion? Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Just for the record, last year - I think I was speaking with you, Shawn - we did a resolution and it received unanimous consent in the Legislature. Maybe an honourable member would consider doing the same again. I don't think there would be any Nays when the Speaker calls for a vote. If somebody from the committee, perhaps it would be appropriate, would do a resolution, and send that along with the letter, I trust we would have provincial support. I know we did last year. I know there is another questioner - Mr. Hendsbee - Shawn, its not Agriculture Canada specifically, isn't it the Canadian Food Inspection Agency or something?

MR. LACEY: Yes, but that's under Ag Canada.

MR. CHAIRMAN: Did they not agree - was the exemption just for last year, this year? It's not in perpetuity.

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MR. LACEY: It's year to year. The problem with that year-to-year decision is that a lot of times we don't get a decision until late. If we could get a decision in September or late August saying okay, we're changing the rules, because it pretty near takes you out of that season.

MR. GIFFEN: The Mexican inspectors were in last June and July, in Canada to do those inspections for people who wanted them. If you don't know if your area is designated until September, you've lost that season.

MR. LACEY: That would go along with markets other than Mexico.

MR. CHAIRMAN: Mr. Chataway has a number of Christmas tree growers, and if he was to work up a resolution where John made the motion and Don seconded it, it wouldn't matter, in fact, if different members brought a resolution for him, but I think it would have some consequence and be of value, in addition. We don't have to have a motion on that or anything, but it is something we could work at. Maybe we should work at it very quickly, based on the way stuff is going through the House.

Mr. Hendsbee.

[9:37 a.m. Mr. Brian Boudreau took the Chair.]

MR. DAVID HENDSBEE: Mr. Chairman, I would like to thank you and the committee for the opportunity to be here this morning to hear this presentation once again. I was participating in the last Resources Standing Committee to hear this presentation. I was very intrigued, and I had a series of questions I was to hoping to ask towards the end of that, and I hope to get them in today. Before I do that, I was wondering, I know it's your busy season right now and I don't know if any of you gentlemen had an opportunity to be at the Ambassador's dinner last Wednesday evening, November 14th.

If you weren't, I just want to bring to your attention that in his speech there were three points. One of them was about trying to ensure the ease of border crossing, to make sure it's facilitated, to make sure that the regular, routine traffic would not be held up because he knows the importance of commerce in this region with the Eastern Seaboard. After the speech was over, I went up to Mr. Cellucci and told his excellency, I just wish you had made reference to one item in that whole cross-border traffic, Christmas trees. He said yes, perhaps I should have said that; with this audience, with the media here, perhaps I should have pinpointed that topic directly. I wish he had taken that opportunity to seize the moment. He was aware of the issue, and I did bring it to his attention after the speech.

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Mr. Chairman, there is a series of questions I want to ask in regard to the Christmas Tree Council and the levies and the legislation. First of all, I tried to ask this question last time and your answer is not recorded in the minutes, so I thought I better get the question in now, how many members are there in the Christmas Tree Council?

MR. LACEY: There are 800, and that represents probably about 95 per cent of the industry.

MR. HENDSBEE: Is it broken down for vendors, producers and brokers, the amount of members?

MR. LACEY: No, those are producers.

MR. HENDSBEE: You say you have 90 per cent or 95 per cent of the industry, is there not compliance or requirement of all vendors, producers and brokers to be registered with the Christmas Tree Council?

MR. LACEY: Yes.

MR. HENDSBEE: Who provides the enforcement for the compliance to this piece of legislation under the Forests Act and the Christmas tree levy?

MR. LACEY: There are several steps involved with that. We have a committee put together and we review the list of who is submitting funds as the levy. We have a pretty good handle on who is and who isn't, because everybody knows everybody in the business. It's just like anything else, if I'm paying for five loads and I know you're shipping two and I don't see your name on the list, well, that's how we're catching them. Then we do a follow-up letter on these people, well, you have your contributions. There is a time limit in there, and then we send DNR enforcement. There has been some reluctance on that.

MR. HENDSBEE: I was kind of wondering if it was self-regulation by peer pressure or was there actually an enforcement agency that goes out there to do an inspection - do they have their certification and stuff, of membership?

MR. LACEY: It's a bit of both. There's a lot of peer pressure in there.

MR. HENDSBEE: In regard to the amount of levy, the legislation says it is 1 per cent of the roadside value. Could you tell me currently what that value is in regard to dollar amount?

MR. LACEY: We collect approximately $55,000 a year. So if you can relate that back to that number at a roadside value. The tree is just cut and laid beside the road. That's not graded, it's not baled, or handled however many times. An analogy of a Christmas tree is like

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firewood, you know how many times you handle firewood. So a Christmas tree is like that, and that's sort of what the baseline for a roadside value is.

MR. GIFFEN: The value ranges substantially as well. It depends upon the tree and whatever, but it will range anywhere from $3.00 or $4.00 to $20. I've had roadside value quoted in some of the people submitting of $25, $35 a tree, but those are for a few very large specialized trees.

MR. HENDSBEE: That's why I was trying to get a clarification, this is 1 per cent of roadside value. I know that when it comes to Christmastime, the Christmas tree values vary from lot to lot and, like you said, the degree or type or the quantity of tree.

MR. GIFFEN: We have shippers, or producers, who submit their annual report and they have x number of trees at $5.00, x number of trees at $8.00, et cetera. Their report might have four or five different roadside values, depending upon the quality of the tree that they're actually cutting.

MR. HENDSBEE: The levies that are charged and received, does the Christmas Tree Council have the full use of those funds or is part of it retained by the department of any sort?

MR. LACEY: No, full use.

MR. GIFFEN: Total to the council.

MR. LACEY: I just might add, don't get mixed up with brokers and vendors. It is strictly producer driven. Any money that's submitted, like under a vendor's name or a broker's name, they take it off the money that they have to pay the producers. So it's strictly producer driven.

MR. HENDSBEE: But the legislation requires for brokers to be registered also?

MR. LACEY: Yes.

MR. HENDSBEE: To provide reports and everything else.

MR. LACEY: Yes, there's a form for that.

MR. HENDSBEE: I was hoping that perhaps we may want to ask or make a request to the minister - I understand that every year on June 30th the Christmas Tree Council must submit a financial statement of the previous year's activities, I was hoping that perhaps the minister could be asked to submit the latest statement to each of the caucuses, just for information in regard to how the industry has been performing over the last year. I thought it would have been helpful to answer all the questions that I had here today.

[Page 15]

In regard to the amount, I was looking at the fine structure and stuff. Do you find the fine structure reasonable? Do you think it's too low, I noticed that this was back in 1994. Sometimes they always try to update fines; they last updated in March 2001, so I am not sure if there's been a recent adjustment to the fine structure or not. So do you find that the fines are reasonable, or perhaps too low or too harsh?

MR. LACEY: Never had to use it.

MR. HENDSBEE: Pardon?

MR. LACEY: Never had to use it.

MR. HENDSBEE: Never had to use it.

MR. GIFFEN: We followed up with some folks who we were aware were not complying and a little bit of persuasion and help from the department has resolved those problems in every case.

MR. HENDSBEE: So the question to ask, how many infractions might have been invoked upon? I guess they are minuscule, if any.

MR. LACEY: There's not that much, and with the time and money spent chasing after them it's hardly worth it. Yes, you still sort of have to do that because if somebody sees that you don't do that then that could snowball and get away from you.

MR. HENDSBEE: The last question I wanted to ask was about the smaller tree market in regard to apartments and condominiums. I guess everybody is worried about Fire Code regulations and these artificial trees and stuff but, personally, nothing beats a natural tree, and where you talk about the wreaths becoming more popular in these smaller units. Have there been any opportunities at looking at probably having a smaller tree market available where you can cut off the top of the tree for the smaller market but use the rest of the tips and lower limbs for your wreaths. I wasn't sure that that had been explored as a possible market opportunity.

MR. LACEY: Yes, that certainly is and it does happen, but when we're looking at smaller trees - I mean we're growing the smaller trees, if you go out on any tree lot, or even a commercial lot here in town, if you just look at the tree and if you cut off the top two feet, you wouldn't have much of a tree. So to get that small tree we actually have to grow just a small tree. We've cut hundreds of them this year, two feet tall, for tabletops and stuff for what the market is, but there is always brush created. The thing is that there's a product that's available, but it's the price that you get for it to make you bother to go around gathering up.

[Page 16]

[9:45 a.m.]

If I was doing this all by myself and it was a cash-based business - and a lot of this business is - then, yes, you could probably do that. But if I have to hire three people to go, run around and collect this stuff, it's a no-win situation. I just can't do that.

So, as in my statements earlier, you might have to set up your farm or your plantations just geared up for that kind of production. There's a gentleman in Maine, for example. He had a tree plantation; he switched it over. What he does is grow his trees and one year he goes down one side of them, mow them off - he has a machine that mows them off, it cuts them all into bins - then the following year or the year after, he will go down the other side of the tree and collect it. That's how he goes back and forth; that's his entire business, tips for wreaths.

There are mechanisms that do that. We aren't set up to that level. Here in Nova Scotia it seems like - and sometimes it's the strength, the independence thing - a lot of people don't want to work together. It's like, I am independent; I can do this, look at me. I feel we have to be more co-operative in our marketing and production strategies. This is something that we're not used to. In our lot and some of the more progressive lots, they have gridded road systems in there; they can do plant protection by machine and fertilization by machine, but where it's not on a field we still have to do the shearing all by hand and stuff. But there are a lot of people who just have one single road down the lot and they do a lot of work and dragging to get that tree to that because that's the way they've always done it. It's a thing that we should be looking at. We can do it here, and somebody has to be aggressive enough to take it.

It's a large investment, and I was just doing some numbers before we came to the meeting here today on production numbers. For the cost to raise an acre of trees, 1,000 or 1,100 trees an acre, it costs about $7,700 for a rotation on that. If I do well, then I may get about $3,000 return on top of that in a 10 or 12 year cycle. That's the way the pricing is right now. So it has some great value if you look at that versus a red spruce stand that you plant. You plant a tree, it's your lumber trade; it's your most valued tree. It takes 100 years to get a big log that everybody wants, everybody would like to see. You may have $2,000 or $3,000 into the acre for plant protection, thinnings and what have you. But a Christmas tree acre, I would have pretty near $80,000 in that because I can do 10 or 12 cycles that you would do with one red spruce. It has a lot more economic value in that regard. All that production cost goes right back into the community as wages and purchase of supplies and things. When we look at an acre of ground in our forestry production, you have to look at it in another way instead of looking at a lumber mill.

MR. HENDSBEE: My last question is, with regard to the discussion, there were talks about the clear-cutting areas and things that are happening around the province. Has there been any discussion with any of the producers, whatever, to perhaps be in partnership with

[Page 17]

some of these lumber companies with regard to replanting them and perhaps using these clear-cut lands as possible Christmas tree pasture?

MR. LACEY: There is some leasing being done in that regard. Again, it's availability and what you can do with the land. It's one thing to get 100 acres and grow Christmas trees, but are they going to allow you to put roads through it to manage it? And, can you get a long-term lease? There are a million questions. What are they going to charge for leases? It's not free you know.

MR. HENDSBEE: The lot is there. They would have their roads put in, but they had to put the roads in to get the logs out, so I thought the infrastructure basically would be there.

MR. LACEY: Part of it. As I said earlier, when you have your acreage, you have to do a proper job of protection. You have to grid it and you have to work it, and there's nobody in this room, me included, who is going to run around in a backpack doing this. It's to the point you have to do as much mechanical production as you can.

MR. CHAIRMAN: Just for the courtesy of the minutes, I'm in the Chair because Mr. Taylor had to leave for a moment.

Mr. Dooks.

MR. DOOKS: It's nice to see you in the Chair. Just a couple of quick questions. I am curious, how long have we, as a province, been exporting Christmas trees?

MR. LACEY: Well over 100 years. My grandfather, Lawrence Swinamer, when he was a young man, they were putting them on schooners and rail cars then. They were talking about bales of trees and my uncle asked me one day, well, what are they - four, six and eights? One tree now means six of the others.

MR. DOOKS: So we started a long time ago. I guess with proper marketing procedures or practices, the export has increased and has it increased steadily, continuously going ahead, or have we had great loss in some years?

MR. LACEY: We're going backwards. Quebec right now out-produces us.

MR. DOOKS: So what year would be our peak export, the 1970's, 1980's?

MR. LACEY: I'm not sure of the history. I would say it would be the 1970's probably. At that time you could name your price for a balsam fir. There was a lot of it being shipped.

[Page 18]

MR. DOOKS: That's because probably different states in America are growing their own product now?

MR. LACEY: Yes, along with Quebec. They've increased their production tremendously.

MR. DOOKS: What about our own province? I would think that the sales within the province must be increasing. How could it not be?

MR. LACEY: People are buying artificial trees.

MR. DOOKS: To that degree?

MR. LACEY: Oh, yes. Just look at the Canadian Tire commercial on there now. He walks through the tree lot and sees small trees, big trees, and then says go buy a tree at Canadian Tire and we'll give a family $5.00 to have a real Christmas.

MR. DOOKS: The real issue with the rural communities of course, years ago, was the practice that people who lived in the country go back to their own woodlot or someone else's or maybe even Crown land - I hope not - to cut a Christmas tree and drag it home and put it up and do the whole family thing. I know now that people in the rural areas are certainly not doing that. They're going out to the Christmas tree farms in their own area and cutting so I thought that might have offset that.

MR. LACEY: No, it's not. We're continuously losing markets to artificial trees, but there seems to be a trend maybe of a balancing off.

MR. DOOKS: Is there any money going into marketing to say, hey, buy a real tree where the whole society is going back to the real way of life - healthier eating, more exercise? I was just wondering why these couldn't be - or is there? - a promotion to buy a real tree, one that would be grown on a farm rather than in the wild.

MR. LACEY: Yes, there is. That's part of what we do with the money we collect on the roadside levy. That goes to domestic promotions at the local fairs they're advertising and we also send money to the United States on the real tree campaign. I might add, Nova Scotia sends more on a province basis than a lot of states send down there too - 90 per cent or so - that's where our market is. That's the whole idea behind Nova Scotia joining NCTA, so we can get in there and get in on their marketing programs to promote that.

[9:53 a.m. Mr. Brooke Taylor resumed the Chair.]

MR. DOOKS: I represent the Eastern Shore and there are a couple of exporters there and I would just like to say that I appreciate the Christmas tree industry. On the Eastern Shore

[Page 19]

it's small, but it does create a certain amount of employment when it's very much needed. I wish you well.

MR. LACEY: Thank you.

MR. GIFFEN: I think there's another factor that Shawn addressed when he was before the last committee as well. As you're driving into Halifax, through either of the highways, you just see continuous row after row now of apartment buildings springing up all over the place. There's a propensity on the part of apartment owners to say you're not allowed real trees; theoretically, maybe because it's a fire hazard, but often, in fact, it's because they don't want people dragging trees in and out. But this does have an impact.

A lot of people are moving into apartment buildings and there are a lot more apartment buildings going up so even though the population may be increasing somewhat in the province, and particularly in the metro Halifax area where presumably that major market would be, an awful lot of that is not into single private dwellings, it's into apartment buildings where there is pressure. Although there is no legislation prohibiting real trees or stating that they're any more of a fire hazard than any other product in the house, nevertheless it's pressure from people who say this is not good.

MR. CHAIRMAN: Mr. Boudreau.

MR. BRIAN BOUDREAU: Mr. Chairman, just for the minutes, I would like to apologize for being a few minutes late. Representing a Cape Breton riding, issues arise very quickly, so I do apologize. I recognize that this is a very important issue in Nova Scotia and I do want to express my disappointment for being late.

I would like to move right to the Christmas tree legislation. Here it says educational, technical, and promotional. Did you guys have that ability before this?

MR. LACEY: No.

MR. BOUDREAU: So this is a very important tool you are using as a positive asset?

MR. LACEY: Yes.

MR. BOUDREAU: Would you like to see more of that? Do you have other suggestions such as this?

MR. LACEY: Yes. At the present time we are trying to find ways to raise money, whether it's through our colouring books - we get some printing support through DNR and through Forestry Canada, we are always looking for funds. When you stop to think about it, we are running an entire office, advertising and everything for a $32 million industry, on

[Page 20]

$55,000. A lot of the work being done is by volunteers. The board for Nova Scotia is all volunteer, except for Len's position and it's just like any other organization, the same people are doing all of the work and it was going downhill. Plus, our journal editor, she gets paid. Other than that, everybody else is volunteer. It's a pretty hard way to run an industry. I don't know any other industry that does that, the director doesn't get a per diem or anything.

MR. BOUDREAU: It's obvious your efforts are second to none. I think everybody in this room understands that being a volunteer, you have a limited amount of time to volunteer, particularly when you are trying to look after your own business and create a positive atmosphere for the industry. I guess it's fair to say then that you feel you have a good listening ear with this government?

MR. LACEY: I do. I think all the governments we have had here have listened to us. Sometimes I think a lot of people don't fully understand what they are hearing. We have a saying at work that if somebody doesn't do something then we aren't communicating properly. The reality is what you are telling them they just don't like to hear it. Sometimes it seems like yes, we hear you but we have more important things. We find that with trade issues too, you know, how important are Christmas trees to the Canadian economy when you have Nortel? I guess the importance is sometimes forgotten on the local level, really.

MR. BOUDREAU: I would like to encourage you to continue your efforts because it's obvious that you have had some type of impact with the previous government in which they came forward with this positive legislation. I would encourage you to continue on that road.

I would like to ask you about the brown spruce longhorn beetle. That beetle, to my knowledge, is a federal responsibility. I am wondering why provincial funds are being used to rob our industries of, you know, the Centre in Shubenacadie, really?

[10:00 a.m.]

MR. LACEY: You are asking the wrong people that question.

MR. BOUDREAU: My question to the association is, have you approached any of the departments, either provincially or federally, in regard to this one issue?

MR. LACEY: We have lent support to the activities to control this insect. We feel that at a council level if you control this and something else comes in - and I refer back to the gypsy moth where if you are going to do it for this you better do it for that - if there is a history there, hopefully we have some strength in that area. We do support anything that may possibly - whether remotely or not - damage our industry.

[Page 21]

MR. BOUDREAU: I know when they were cutting trees and all that sort of stuff, the federal government, to my knowledge, was paying the bill, if there was any research or whatever, and it is kind of bewildering.

MR. GIFFEN: The big problem was that this past year they just physically needed knowledgeable people to go out and comb the woods in the area around Halifax, in an attempt to determine the spread of that particular beetle. They physically needed everybody they could get hold of but the people had to be knowledgeable and experienced and so a lot of those people came from the Nova Scotia Department of Natural Resources, simply because of their experience and knowledge of the territory. That kind of pulled away human resources that were not being able to be replaced elsewhere. I think that was part of the major issue there.

MR. BOUDREAU: Yes but it concerns me. I agree that this is a battle you people should be involved in, really. You have some experience there and hopefully can provide some solutions. We are all looking for solutions in regard to this.

MR. LACEY: We have to be careful for the industry not to be associated with this, where it is a quarantine task. You have to be careful because you can't just stand up and shoot these things. Under the table you can work with them but just for the committee's sake, you have to be careful how you stand up and voice your opinion. Our competitors in Quebec, New Brunswick and the United States, all they have to say is ah-hah, and you couldn't sell a tree for love of God nor money.

MR. BOUDREAU: It is pretty delicate, yes. It still concerns me when I see provincial resources being taken to deal with a federal issue. I am wondering why the provincial government didn't at least put some effort into trying to obtain extra funding to deal with this issue. It appears to me that the resources the province has, they are busy dealing with the federal issue and in the meantime, industries like yours are perhaps being neglected - not intentionally - because of budget restraints. It is occurring. There is nobody here from the Department of Agriculture and Fisheries but I think the government and the provincial minister, if they were really taking this issue seriously, they would already be chasing down the federal government to contribute financially to this issue.

MR. LACEY: I thank you for your concern, but I think that question is for the House. I realize it is a statement, but that would be a question for the House.

MR. BOUDREAU: I realize that HRD must have - the course, I would suggest, you were involved in the course at Bridgewater?

MR. LACEY: The council gave some financial support toward that, yes.

MR. BOUDREAU: Was it in partnership with HRD?

[Page 22]

MR. LACEY: Yes.

MR. BOUDREAU: I am wondering if any consultation with HRD, with the other issues that you spoke about, with the short-term employment and the $8.00 an hour, the low wage, I am wondering has the HRD been approached with regard to those types of issues?

MR. LACEY: Not directly. We have done that on an individual basis and just like this committee, there are politics, just as in council there are politics. There are brokers who have established markets and then there are people who are trying to get into the market. There are people somewhere in between that and everybody is protecting their territory and I mentioned that at the last session. There is always a disagreement between marketing and promotion. Like I said, in my mind, I am still not sure what the difference is. It is all right to grow, but we are not allowed to market because somebody is scared they might get in and sell. That is a sad thing on that level because it seems like every time we try to do that, the perception is that we are going to try to take a customer away from somebody who is sitting in the room, and that is not really the case. But that is sort of where that discussion comes from.

I know this is public record, so sometimes it is hard to say what you think about some of these things. It is hard for me to find the correct words, but on the political side, in the council, it is very sharp and it is clearly defined. We are trying to work around these issues to do these other things. For example, if we wanted to go to a trade show market, whether it is Philadelphia or Brazil, nobody on the council can actually go because we are using council funds, or any other funds, whether from provincial or federal funds, if we can access them. What we would have to do is send somebody like Len down and then he would promote the Nova Scotia balsam. Because if they sent me down and I grow and sell Christmas trees, there would be the perception that I would have an advantage that everybody else is paying for. So those are the kinds of things that sometimes inhibit us from doing some of the things that maybe we would really like to do, but that is the nature of the beast that we are living with.

MR. BOUDREAU: Just a couple of quick ones, Mr. Chairman, if I may. Your membership on the NCTA Board of Directors, that is very positive?

MR. LACEY: Yes, it is.

MR. BOUDREAU: You feel that is really a step forward?

MR. LACEY: Oh, definitely.

MR. BOUDREAU: That will be it, Mr. Chairman, thank you.

MR. CHAIRMAN: Thank you, Mr. Boudreau. Mr. Chataway.

[Page 23]

MR. JOHN CHATAWAY: Thank you, Mr. Chairman, and I very much appreciate, as many other people do around this table, the talk again. It is certainly emphasizing, from Lunenburg County, what a very important business it is. In fact, your last comments, Shawn, when I first became interested in Christmas tree growing, things like this, and one person said sort of, I thought, eloquently, look, if you get in any position, tell the government that they are not to give us taxes on the money we make in the Christmas tree business, and the way we will do this is to make sure that we don't ask the government for a lot of money to get ahead in the Christmas tree producers business. In theory, I think that is a very good idea. A lot of the advancement in Christmas tree growing has been just good incentives and good thoughts, and they have done well.

I am afraid, a bit. I would like to ask if Christmas tree producers have an immediate reaction to these taxes on lumber and things like this, and does it affect you people? Do you have immediate reactions? Do you have long-term concerns about this? Because I do know that it is a very important industry to the wood fibre producers in the country. Do you have a specific reaction to that or anything like that?

MR. LACEY: No. A lot of the tree farms are agricultural farms. There are ways to turn over a farm for tax advantages through that. If it was an independent, straight-out tree lot, I am not sure what the implications are on it because I don't deal with it personally. So on a council level, we really haven't dealt with that. Our main concerns, on a council level, at this time have been production and marketing and promotion.

MR. MACDONELL: Are you talking about the 12 per cent tariff?

MR. LACEY: Yes.

MR. GIFFEN: It doesn't affect Christmas trees directly, so the tree people directly are not - unless they are involved in other aspects of the lumber and the forestry industry.

MR. CHATAWAY: It has not affected Christmas tree production, sales or anything like that, or costs going up or anything like that?

MR. LACEY: Excuse me, I thought you were talking about an estate tax. That is sort of what I was thinking.

MR. CHATAWAY: Well this is the tariff thing.

MR. GIFFEN: It doesn't affect Christmas trees.

MR. CHATAWAY: It has not come forth, because most people have ways of getting around that in this business, but it has not come up. The other interesting thing I think is the course in Bridgewater, learning to make wreaths and things like that. Basically, just a reaction,

[Page 24]

are there many new machines to come out and make better wreaths? I understand that you had a machine that sort of took this brush and sort of wrapped it together and stuff like that and that enabled a very good product with old brush stuff and they make it far more useable for wreaths, et cetera. Going forward, we have more and more machines, I presume and things like that, or is there a great cry for people to get better machinery to make better wreaths?

MR. LACEY: There are a lot of people who still make them by hand.

MR. CHATAWAY: Oh, I know there are.

MR. LACEY: The tree business is the tree business and brush and wreaths are an entirely other business, and it is very hard to do both at the same time. You have to set up separate operations to do that. So when you get into machines you have to have buildings. You have to have the support of that. You really can't do some of this and some of that. It is either/or, or do separate businesses. We are at the level, as I mentioned, about the brush orchard, for example. That's the next step. A lot of us, in the range where I am at, you are at the max at this step and you go to the next step and then you really have to look at whether you want to do that or not, and it is a separate operation. Then it comes back to, well, if I do this, can I get the people to do the work. It is a hell of a way to run a business. You don't know every year if you are going to have people do the work for you.

MR. CHATAWAY: If I could just ask a question. Basically, wreath making, et cetera, is growing very quickly. We ship Christmas trees and have it down to a good science and things like this, but wreath making, et cetera, is a boom business sort of thing, basically. How much will that market grow, in your opinion, in the next five years? Say we sell 100 wreaths this year, how many will we sell in five years?

MR. LACEY: Well, the people I have been talking to, there is no limit. They don't see a limit at either brush supply, or roping, or wreaths. If we can make it, we can sell it. There is just no limit to it, but the limitations are to labour and some of the supplies. One of the young fellows who is delivering brush to us for some of the loads that we are sending pays DNR, I think he said $1.23 or something like that for a 50 pound brush just to go cut on Crown land, for example. So there are sources out there. We got talking about the cost of it and it is all right for a one-man operation, but he can't afford to pay anybody for what he gets for the brush. So there has to be a change in pricing to do this. When everybody is nickle and diming themselves to death for the business, you can't do that.

I have 200 acres of Christmas trees, so I can sell every tree on that property this year. I mean, I could cut every tree off of it. It is the price I am going to get for them is what you are constantly working at.

[Page 25]

[10:15 a.m.]

MR. CHAIRMAN: Jon Carey. Oh, I'm sorry, John had another short snapper there, did you?

MR. CHATAWAY: If I may, I think we have a few minutes.

MR. CHAIRMAN: We are going to respect that these gentlemen came in before to the Resources Committee, and we want to make sure that everybody gets an opportunity to get a question on the floor. Hopefully we can let the gentlemen go; they have work to do.

MR. CHATAWAY: Indeed, at this time of year. The National Christmas Tree Association, have you just been basically called to that group now?

MR. LACEY: Yes.

MR. CHATAWAY: What's your reaction to that? Obviously the Christmas tree growers in Nova Scotia thought it was worth going for. Can you just sort of elaborate? Why is it good?

MR. LACEY: It's a national body. They lobby and have strong influence with Washington. So any issues that they have, we have, whether it's chemical issues - whatever affects them affects us. When they sneeze, we sneeze; it's the same thing. If we're going to have problems on this side of the border, we might as well be sitting at their table, be part of the discussion, and hopefully we can influence part of that discussion. I just think that if you're not there, you don't have any influence at all. We can get a heads-up when some things are coming down the pike, too.

MR. CHATAWAY: The National Christmas Tree Association, is this manned by volunteers or is it . . .

MR. LACEY: No, they have a completely paid board. They have a management company that runs that organization. The president and others are elected from the growers, just like our organizations are, but they have a management company that runs that.

MR. CHATAWAY: How often do they meet?

MR. LACEY: I think they try to meet four to six times a year, probably two face-to-face and the balance on phone conferences and the like. They have biannual events.

MR. CHATAWAY: Thank you very much, Mr. Chairman.

[Page 26]

MR. CHAIRMAN: You're quite welcome, Mr. Chataway. I'm sorry if I was a little short there; I didn't realize you had more questions. Mr. Jon Carey.

MR. JON CAREY: Mr. Chairman, back a number of years, I think possibly it was brokers who were putting the packages together, but they were shipping to various parts of the world: South America, the Carribean, perhaps other places I am not aware of. Has this market grown or has it stabilized? Is there potential? I guess we have one of the better products, and there are areas where people have the wealth to purchase. Are we growing that market, or is that something that's not happening?

MR. LACEY: That market is growing, especially south. I think as you get in Central America, South America, that market is growing. It has to grow. The United States market is pretty well saturated, between real trees and artificial trees. If you get a client down there, you are usually taking them from another Christmas tree grower. What we're trying to do is expand that. There are trade fairs that go down there. There are Christian countries; they have Christmas. Christmas is a pretty big deal to them, so if you can get into some of these markets and some of these cities, like Mexico City, I'll use that just for an example. There are over 20 million people there. Yes, there is a lot of poverty in Mexico City, but not everybody is poor. If you take the top 10 per cent, that's still 2 million people.

If Nova Scotia can capture part of that market, the high-end market, that's where you want to go. Our market here in Nova Scotia seems to be two trees, the bale tree or the premium tree. It's either/or. We are always usually sold out of either/or, it's the middle-grade fancy tree, but that fancy tree is an excellent tree for that market. Yes, we're shipping trees down there. Ourselves, we ship trees to El Salvador, that kind of thing. We're working on that; we're working on Venezuelan markets. We have lost a lot of market there, but we're starting to get some of it back. Europe would be a strong market for us; it's closed out for political reasons. And it's my understanding there are trees going to Tokyo or Japan this year.

We can be competitive. We have one of the greatest seaports in North America here, and we're 30 miles away from it. Why can't we compete? That's definitely doing it. What we find is that for every tree we can move out of North America, it will strengthen the price for all the other trees.

MR. CAREY: My last question would be, I'm fairly familiar with the agricultural products and pricing. I'm not as familiar with Christmas trees, but I know in agriculture they are getting the same prices or less than they got in 1970 for product. What's happening to you people? You can only become so efficient and do things so well, then it becomes a matter of not being able to make a profit.

MR. LACEY: The story I told at the start of the last meeting is one I will tell you today; it's the same thing. I graduated from AC in 1975, and in that winter, 1975-76, we were selling cultivated Christmas trees in Truro and we were getting $18 to $21 for a premium tree.

[Page 27]

The trees are better now, and we are getting $28, tax in, for the same tree, 26 years later. That is a direct result of our competition in the States. I talked about fallow land policies and just the surplus on the market, and that's what happened to it.

MR. CAREY: Leading from that, is it strictly people working more efficiently and not doing a larger volume to make a profit, or are subsidies a part of your competition?

MR. LACEY: Subsidies are definitely part of it. As a Nova Scotia industry we try to pride ourselves on not having that, partly to some detriment because our competitors didn't say that. As I said at the last meeting, they have a lot of support; our competition has a lot of support from the States that we're competing with with the Fraser fir. They have a specialist, a full-time specialist, strictly Christmas trees, for every county down in Georgia and stuff like that. You can go on Web sites, the universities, and get all kinds of research material from them that the universities are doing. We don't get that here.

A lot of the stuff that we're learning here in the industry, some is from our specialists, but the specialists are only directed by the producers and hands-on things that we've learned. Most people are very free with the information that they've learned. I was remiss the last time; there is an open invitation for the committee, this committee and the other committee, to come out to our lots and have a look, to see what we're doing, see what we're trying to do, see the mistakes we made, see the things we're doing right.

You're right, you can only be so efficient. Like the old fellow said, just when I trained my horse not to eat he died. (Laughter) That's exactly where we're going. You can't even compare what we were getting then and what we're getting now, the margins. If I worked on a gross margin of 10 per cent, I get a gross margin of 10 per cent, I'm doing really well. You always have to have a target, but that's it. It's really tough.

MR. CHAIRMAN: The final question will go to Mr. Chipman.

MR. CHIPMAN: Is that plural or singular?

MR. CHAIRMAN: Singular, Mr. Chipman.

MR. CHIPMAN: I think Nova Scotia is probably lucky in one sense of the word; we have natural regeneration. I think the fir here is probably top quality compared to the New England states, and that's probably why the wreath and garland, whatever you produce here, is so prevalent. One thing that raises a question is, what is your top grade? Is it premium choice, fancy select? What's your top grade?

MR. LACEY: It's a marketing thing. We call it a heavy-density tree. In Nova Scotia, it's a premium or select.

[Page 28]

MR. CHIPMAN: What would you get for an eight foot tree, say f.o.b. in Boston, wholesale price?

MR. LACEY: I'm getting, trucking included, you're talking about $15.

MR. CHIPMAN: Is that U.S. money?

MR. LACEY: Yes.

MR. CHAIRMAN: Thank you, Mr. Chipman. I meant it when I said one question. We'll certainly let the gentlemen wrap up here, but (Interruptions) I think it's important we respect that they took time out of their busy schedules to come in before a legislative committee. We certainly support that. If you have some closing remarks, succinct remarks, you're more than welcome to make them.

MR. LACEY: There's one important part that we haven't talked about, our U-Pick business. We're trying to get more people aware of it. We're having some roadblocks and some signage.

MR. GIFFEN: We're currently having some discussions about the most effective way to get the signage out. Some new legislation was passed or regulations were put in place this past summer. I'm going back to the drawing board and working with the Department of Transportation and Public Works to ensure that we're going to be able to get signs for the U-Picks on the 100-Series Highways and to assist our people who have U-Picks to be able to identify themselves on all the highways in the province. I'm hoping that come the first of the year, we will have that squared away and we will be able to progress with that.

MR. LACEY: I guess one of the items we have a problem with is that you have to be in business so many months of the year in order to qualify for one of these signs. The industry we're in, there is no way that that's going to happen. Whether you get around some of this legislation, I don't know. It's another thing, if we want to promote our U-Picks, and that's another revenue-generating activity that's in the rural areas - but if we can't put signage up, and we're talking about the same kind of signs, like for the automatic teller machine, or the wine with the grape, that kind of thing on the sign, and we're having some problems with that.

MR. CHAIRMAN: Mr. Downe had a clarification just on that point.

MR. DOWNE: We also have farm market signs that are on those 100-Series Highway posts that are out there now, the farm market, and you have a farm market there, it doesn't name the name, but maybe that's what you're talking about to be added to those, to have the Christmas tree U-Pick sign established?

MR. LACEY: Yes.

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MR. DOWNE: That makes sense and that could be done right with the other signs that are currently on the posts that are there.

MR. LACEY: Yes. We have a design, but I guess one of the sticking points is that we're not in business enough months of the year.

MR. BOUDREAU: Mr. Chairman, can we write the minister in support of the initiative?

MR. CHAIRMAN: Are you making that a motion, Mr. Boudreau?

MR. BOUDREAU: I will make it a motion at least.

MR. DOWNE: I will second that.

MR. CHATAWAY: Mr. Chairman, before I vote on that, could I perhaps get more information so I can vote more intelligently?

MR. CHAIRMAN: You can ask a question on the motion, absolutely, and the motion is to write a letter to the minister, Mr. Boudreau, indicating our support for . . .

MR. BOUDREAU: Yes.

MR. CHATAWAY: Have you talked to the Department of Transportation, how many times, and basically you're going forward with this or not?

MR. GIFFEN: Yes, I had a meeting with department officials this past week. We had originally . . .

MR. CHATAWAY: This is the first meeting you've had concerning signs?

MR. GIFFEN: Some of our people had talked to the department officials earlier in the year and then I was asked to pursue it on behalf of the council. When I began to pursue it, I discovered that some new regulations had come into effect since the time that our original people had talked to them and the regulations had changed somewhat. The problem has been that one of the new regulations says the business must be operating for 90 business days a year in order to be eligible to have one of these signs on the highway, the signs that you're talking about, and there is some concern that many of the U-Picks may not operate 90 business days a year in order to qualify. I am now working with the department and some of our people to deal with that issue.

MR. CHATAWAY: And I presume they're pretty optimistic that you will get the support of . . .

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MR. GIFFEN: That's really up in the air at this point.

MR. CHAIRMAN: Okay, look, we do have a motion on the floor.

MR. DOWNE: I already seconded it.

MR. CHAIRMAN: Order, please, just for a second. We have a motion on the floor by Mr. Boudreau, seconded by Mr. Downe. Are there any other questions on the motion? Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

In the spirit of fairness, Mr. Chipman did have one short snapper that he wanted to get in and then Mr. MacDonell and, being a flexible chairman, we'll have to let that be the last word and let these gentlemen on their way.

[10:30 a.m.]

MR. CHIPMAN: Yes, just related to the question I asked, Mr. Chairman, about the return you get. I remember a few years ago - and I guess this relates to one province in particular - Quebec was dumping trees in the U.S. market for $7.00 and most of their trees are plantation trees. Are they heavily subsidized or is there any proof, is there any fact that you can prove that?

MR. LACEY: I think if you wanted to go do that, I think you can find that. There's money available, like I said at the last committee meeting. If we spent $2,000 to do an aphid study, they'll spend $100,000 on it. They see themselves as a nation unto themselves. So any export is a national export so they support it and that brings revenue back into Quebec; it's a real issue. They also look at it as an agricultural product and here we're torn between agriculture and forestry. I think really we're an agriculture industry.

MR. CHIPMAN: Is it federal or provincial money that's going into that?

MR. LACEY: In Quebec? It would be their own provincial money, I believe.

MR. CHAIRMAN: Mr. MacDonell, you have some questions.

MR. MACDONELL: Mr. Chairman, a couple of comments, I will try to be brief. A couple of things around where you think you may be losing market and in the case of competing with artificial trees and so on, one thing I think we should be aware of is that the baby boomers are getting older and there's going to be certainly a proportionately larger number of seniors and you may find that the small tree market may be a way to capture some of that because I think a lot of seniors go to an artificial tree, it's less bother for them.

[Page 31]

The other one is around chemical sensitivities. I notice that there were people when I sold trees who didn't want a natural tree because they had a reaction with their children, even though we think families with children would be the ones who would go for a U-Pick or a natural tree and there's more and more sensitivity among children, more asthma, you know, and I think this is another area that may be affecting the market.

The other point I want to make is around the entomologist and for the record to say that I think the province does have a role in supporting that even though it may be under federal jurisdiction with Agriculture Canada or CFIA. The longhorn beetle doesn't know it's a federal jurisdiction and so I would say that I think it's appropriate for the province to act because when the Maritime Lumber Bureau was before one of these committees, and I keep bouncing from one to the other so often, I can't remember which one, but the impact of the beetle on access to the American market for lumber would be significant if it is seen that the province and the country are not working vigorously to try to eradicate or monitor it or control it, or whatever. So I think the province does have a role to spend money there, but the problem has been the cuts that were made, I think, to agriculture that have put those responsibilities in the lap of the entomologist for Natural Resources and have tied him up and I think any change there to his benefit would be appropriate. I would encourage the government to do that and that's really all I want to say, Mr. Chairman.

MR. CHAIRMAN: On behalf of the Standing Committee on Economic Development, I would like to thank the members, President Shawn Lacey, and Coordinator Mr. Len Giffen, for coming in this morning. We found it, I am sure I can speak for everybody, very informative and helpful. I know there were a couple of resolutions passed and the recommendation to do a resolution in the House to support the industry and I would like to, again, thank you on behalf of all colleagues. Thank you very much for coming in.

MR. LACEY: I appreciate it, thank you. (Applause)

MR. CHAIRMAN: Committee members, if I could just ask for your attention for a minute, the next meeting date is December 4th and we have the Cape Breton Growth Fund coming in 9:00 a.m. until 11:00 a.m. We have the annual report completed and Darlene would like us to sign it off if members could wait and just sign it, if you've had an opportunity to peruse it.

MR. MACDONELL: Mr. Chairman, I am not sure I should wait for my colleagues to sign off on that.

MR. CHAIRMAN: Perhaps Darlene could comment. (Interruption) Yes, members of the committee should vote. Yes. Absolutely right, John. Thanks. Mr. Downe.

MR. DOWNE: Yes, I have no problem with that. I just want to bring up one small point, and it may be just a clarification. I realize there is a lot of interest in the tree industry,

[Page 32]

and we had members, six presenters and here we have two or three. I am not playing sour grapes, but I would like to know what the policy is because this is new to me.

In other words, if Brian and I were here and we had another member of our caucus come in and just take over my chair and ask questions and then I would have a chance to ask questions, and Brian would have a chance to ask questions, I am just wondering what the process is there so that we know that if there are five members on the Conservative side and they bring six people and all six get the chance to ask questions and we get to ask one each, or something like that. I am not complaining about today, but I just think it is good to know what the policy is so we can know in the future. There are no hard feelings; I just want to clarify that point. I think it is a fair point to ask.

MR. CHAIRMAN: Okay, it is a fair point. Is there any comment on Mr. Downe's concern?

MR. DOOKS: It is a fair point. I was wondering, is today just an isolated time, or has it happened before? I haven't noticed it happening before. I think today might have been just an isolated incident.

MR. DOWNE: If it was, then that is fine. I think the New Democratic Party and the Liberal Party would like to stack the backroom here, and we will bring our people in too. If it was just an isolated case, then no big deal. But I think if there is a policy that if somebody wants to speak on the issue. Normally in our caucus what we do is, if somebody really wants to speak about something, they would replace the individual and it would go on their behalf, like I did for Kennie MacAskill. I was asked if I would like to attend on behalf of Kennie and I came. So I was there on Kennie's behalf. So there was only the two.

MR. CHAIRMAN: If I could just interject on David's behalf, David indicated to me early on that he thought I was off to Truro today attending the Electoral Boundaries Commission meetings, which I plan on doing later on. Then he must have made some arrangement for Mr. Chipman to . . .

MR. CHIPMAN: I thought he was filling in for somebody.

MR. CHAIRMAN: . . . take a seat. I do apologize as chairman and I think the vice-chairman would concur. I will certainly try to be more vigilant, but I think it was sort of like, as Bill indicated, an aberration from the norm. But it is a good point because any Party could do the same thing, and it is something we should nip in the bud right today. I apologize if it did happen under my watch. Next time, I would like to be fair with questions, but I get complaints that we don't get enough.

MR. MACDONELL: Since I am not a usual member of the committee, you can just take this question for whatever it is worth. But my concern is if we are coming into committee

[Page 33]

to hear a presenter and the time slot is 9:00 a.m to 11:00 a.m., I would like to go as close to the time unless nobody has any questions. Also, in regard to the people who come, if they are coming all this way to bring information to the committee, to say well, we are going to let them go in an hour and a half, or an hour, or whatever. Sometimes I think when they are walking out they might be thinking, gee, you know, we came all this way; you would think they would want to have us there longer.

Certainly, for me, if I am going to come in until 11:00 a.m., I would at least like to think that the committee will sit close to that. I can understand a few housekeeping things that you might want to get done and rise a minute or two early to take care of those. All that would make sense. You can use that information for whatever it is worth, since I am not a regular member of the committee, but it is something that bothers me on occasion. I will put it that way.

MR. CHAIRMAN: I believe when Aliant was in, we went well over the two hours. So on average, I think we pretty much use up our two hours. I did have a helpful suggestion from an honourable colleague and a reminder that these two gentlemen appeared before the Standing Committee on Resources and had indicated, I believe, to a member of this committee that their presentation is brief. They had a longer Q & A session than most presenters. It started at 9:10 or something. I think maybe there are some questions that are lingering, and that is an excellent point. I am not going to say it isn't, but, Mr. Chipman, that one finger means about 10 questions.

MR. CHIPMAN: The fact is, you were out of the room and Mr. Boudreau was chairman and Mr. Hendsbee had several more questions than I had. I was maybe a little miffed because I am a regular member of the committee and I think he asked six questions. You were out of the room at that time.

MR. CHAIRMAN: Mr. Chipman, and I will be fair, you could have either rolled him out of the chair or brought another up or grabbed him by the scruff of the neck, I don't care what you do. But we have to be fair and make sure that everybody who is a regular member gets an opportunity, or somebody substituting like John or whoever. I do want to be fair and I apologize, Mr. Chipman, but I think we had lots of questions today.

MR. BOUDREAU: On a point of order, Mr. Chairman. I don't know how Mr. Hendsbee's name got on the list because I called Mr. Hendsbee's name according to the list.

MR. CHAIRMAN: Mr. Hendsbee was sitting around the table and raised his hand. He was in his seat. He wasn't sitting back, but anyway, we will try to keep an eye on that. I do apologize, Mr. Chipman, if you didn't get the number of questions that you wanted, but that chair certainly had an ample number of questions, irrespective of the member in it.

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MR. CHIPMAN: The meeting on December 4th, that is on a Friday. We normally meet on Tuesdays. Is that the intended date, to be on a Friday?

MR. CHAIRMAN: It is on a Tuesday, Mr. Chipman.

MR. CHIPMAN: It is? I must be looking at 2002 then.

MR. CHAIRMAN: A motion to adjourn is always in order.

MR. BOUDREAU: So moved.

MR. CHAIRMAN: Is it agreed?

It is agreed.

Thank you everybody for your helpful hints and co-operation.

[The committee adjourned at 10:45 a.m.]