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April 23, 2002
Standing Committees
Economic Development
Meeting topics: 

[Page 1]



9:00 A.M.


Mr. Brooke Taylor

MR. BRIAN BOUDREAU (Chairman): First of all I want to apologize, I am a few minutes late, however, I wasn't aware I was going to chair the meeting this morning. But I'm here now and we're on our way. I want to introduce myself first, I'm Brian Boudreau, the MLA for Cape Breton The Lakes. I want to welcome Mr. Frank Anderson, Mr. David Whiting, who are both with the Yarmouth Area Industrial Commission, Port of Yarmouth; and Mr. Comeau, Chairman of the Shelburne Port Authority. I want to say welcome to both delegations this morning. I would ask the committee members to introduce themselves.

[The committee members introduced themselves.]

MR. DONALD DOWNE: Welcome. Mr. Chairman, I have to be at the other committee meeting. They booked two committee meetings at the same time. Our Mr. MacAskill will be over, when he comes over then I will come back to this one.

MR. FRANK CORBETT: Our loss is their gain, Don.

MR. CHAIRMAN: That will be fine, Mr. Downe. Order. As is the custom, we allow approximately 10 or 15 minutes for a presentation. If it runs over that a little bit, a minute or so, we're not going to penalize you in any way. I will open the floor and allow Mr. Anderson or Mr. Whiting - who wants to be first?

MR. P.G. COMEAU: Good morning, Mr. Chairman, members of the committee. I want to thank you for the opportunity to be here today. You must excuse my presentation, I've been away for several days. We did put a request in for some funding from FRAM to do a business development plan for us, unfortunately that $20,000 request was denied. We are now looking for other means to fund that.


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We will be assuming ownership around mid-May of the former government wharf in Shelburne. Of course, it's vital that we market and expand this facility. Presently I chair the Port Authority with three members of my council. Our anchor tenant, of course, is Clearwater, with a 20 year lease which is transferable to us when we take over the facility. We've made application under the infrastructure program to provide fresh water to that facility, which has been many years without water which is rather disgraceful. We are going to rectify that very shortly, we hope.

We would like to expand. We have acquired and are about to acquire additional lands to join the wharf. We did negotiate a 300 metre water lot around the entire perimeter, which will provide an area for expansion without going through a lot of criteria to do that down the road. We are also, at this time, working on a truck route to circumvent the Town of Shelburne, not only to provide a quick service to our wharf, but to the hospital and also to service the industrial park that's located in the municipal district of Shelburne.

A brief history of the wharf. Of course, the Department of Transport did own the wharf and they transferred it over DFO and Small Crafts and Harbours. We have 26 feet of water at the wharf at low tide. The wharf has a T-section on the end. It's 15 metres wide, including the stem. The wharf stem is 130 metres in length, approximately, and the "T" is 163 metres. I have provided you with photocopies of marine charts. You can see on the Shelburne Harbour, the wharf is at the predominant south end of the town. We have a very deep channel into the harbour, which gives us, in some places, 42 feet of water at low tide.

Initially the wharf was about 80 per cent fishery related, but that has reversed almost 180 degrees over the last couple of years, and we do 80 per cent to 90 per cent commercial work with a lot of traffic from the Green Line and Eimskip. We also, of course, host the tuna fleet and the inshore and offshore fishery, which is not as great as it used to be. That's why we are up to 80 per cent to 90 per cent commercial.

Our port is ice-free. There's no requirement for pilots. While we do provide stevedoring service, there are no unions in Shelburne in stevedoring, so our rates are very competitive. We do have a crane there to handle containers, to stack them, and we also have a reefer. We are reputed to be the third best natural harbour in the world, and, of course, there's no dredging required in the Port of Shelburne.

Basically, we're looking at potential clients, which would be Black Bull Resources, which would be shipping a significant amount of quartz and, down the road, perhaps two years, kaolin. El Paso is looking at landing a gas line in the Shelburne/Queens area. We're hoping it will be eastern Shelburne County. We also would like to court the offshore supply ships when the gas lines are up and running, and we're looking at an $8 million to $10 million expansion to that facility.

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I want to show you on the second chart the fantastic approaches to the harbour - McNutts Island at the extreme south end of the outer harbour and then it's about a five-mile run to the inner harbour. We are also looking at an agent to ship, for the next 10 years, granite from Shelburne to Bermuda and the Carolinas in the United States. I understand that maybe Mersey might be bringing coal shipments into Shelburne, and we are also looking at some factory ships related to the fishery using that. Of course, then there's their high-speed ferry from Massachusetts to Shelburne that we're progressing very positively on, which would make a tremendous impact. We do host some mega yachts at that wharf, but basically with the smaller yachts, we're looking at a marina about one-third of a mile north of the existing wharf where we will provide berthing, water, fuel, pump-outs, and everything that goes with a marina and operation with a local yacht club.

I guess, to sum up, as far as land transportation goes, Shelburne has had a distinct disadvantage due to our geographical location. Our feeling is that history has a way of repeating itself; years ago, marine transportation was the main source of transportation and we can see that coming to be now with the high cost of fuel. We have great potential to increase our container shipping from Shelburne now and we hope to work very strenuously on that to promote the wharf. We see that the fast ferry service will open up, not only for tourism for all of Nova Scotia, but we feel that with the favourable exchange rate on the dollar, the people we've been talking to in New England would be anxious to use Shelburne to manufacture raw material into refined goods because we can compete better than Mexico can. Even though our rates may be a bit higher, with the dollar being favourable and our quality of work and our available workforce, we feel that we certainly will be looking at venues in that area.

Also, we have been pursuing the cruise ship trade and we hope to have a cruise ship in there in the year 2003. We can accommodate cruise ships up to 1,000 passengers. Mr. Chairman, that's my presentation.

MR. CHAIRMAN: Thank you. Certainly it was brief, right to the point, very educational, and the way the committee members prefer because it allows more time for them to ask questions, of course. So we do appreciate that, and it was very detailed. What I would suggest is that there would be another presentation from Yarmouth. Is that fine with the committee members, if we allow the Industrial Commission from Yarmouth? (Interruptions) Mr. Anderson.

MR. FRANK ANDERSON: Mr. Chairman, you have a copy of our presentation and I will just highlight some of the items. It will just take a few minutes. In December 1995 the national policy to sell, to divest the ports - the basic statement was much of Canada's marine system is overbuilt and overly dependent on government subsidization. Canada's marine system must be more responsive to the needs of its users. Canadian taxpayers can no longer afford the status quo.

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With that process, the South West Shore Development Authority, acting with the approval and encouragement of our two municipal units, the Town of Yarmouth and the Municipality of Yarmouth, commenced a process of due diligence, looking at the three wharves in Yarmouth for the divestiture of these three wharves to the community. We entered into an agreement with the federal government to do this due diligence, and lo and behold, on November 16, 2001, the transfer of the three public wharves in Yarmouth to the Yarmouth Area Industrial Commission was complete. Along with the asset we received $4.65 million in cash as an operational subsidy to run these facilities.

Dave Whiting, with me today, is the port manager and runs the day-to-day operations. The commission is made up of 12 individuals, four from each one of the three municipal units of Yarmouth County. It, in turn, set up a committee of users and stakeholders who are on the wharf, and this committee provides policy and direction to the commission itself and the commission runs the day-to-day operation. To date we have not made any major changes since November to the port. We've taken a wait-and-see attitude and are trying to learn from what's happening there. We've not changed any rates. We're learning of the expenses that are required. Sometimes these expenses are a little different than, actually, the documents we receive from the federal government, but we continue on in a learning process.

[9:15 a.m.]

With the $4.6 million received, we invest these dollars. These dollars must be invested in AA-minus bonds or better. It's the only thing we're allowed to invest in. Over the 10 year period, we must spend the $4.65 million. If we do not, that money will return to the federal government; at the same time, the individual goal, the goal set up by the commission for the community, is that we will spend the $4.65 million on the facility in the 10 years and at the end of 10 years we will still have $4 million in the bank. It is a feat to do, but it is possible to do it. In this situation the expenses are charged to this account. The revenue for this process is allowed to be kept by the community.

The task over the next number of years will be challenging. We will be looking for new sources of revenue for the port. The port now brings in between $80,000 and $100,000 in revenue, which definitely does not cover the ongoing costs of this port, but we look forward to the challenges. Today we will challenge your committee and the fact that we would like to talk to you concerning allowing for the divestiture going through the province right now. We believe that the provincial government, along with the federal government, should look, as they are now doing in P.E.I., at a regional port system for the province. This regional port system would involve the divested ports of Yarmouth, Shelburne, Port Hawkesbury, Sydney, and probably, since the province owns it, Sheet Harbour.

MR. CHAIRMAN: Mr. Anderson, again I want to thank you for your brief and detailed presentation. We'll open the floor now for questions, Mr. Hurlburt first.

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MR. RICHARD HURLBURT: I welcome you people to our committee this morning. I would like to start off with the Mayor of Shelburne, if I may. Mr. Mayor, how is the deal transpiring with the federal government? How long has it been in the works, and do you feel that your community is getting a fair deal with the federal government on the transfer of the wharves?

MR. COMEAU: No, we're not. The transfer of the deed is in our hands now and will not become our ownership until we record the deed. We're holding off a few weeks because of a recent environmental study that the government has conducted on that site; there may be some pollution, and before we record the deed, we don't want to be left holding any problems with pollution. But we received $435,000 as part of the package deal and we feel that we should have received about $2 million. So we felt we got a very bad deal.

MR. HURLBURT: That's the total package that they're offering your community?

MR. COMEAU: Yes, and we have accepted it because we had no alternative but to do so.

MR. HURLBURT: Did they sort of put the gun to your head and say either take the deal or else we go out to the private sector?

MR. COMEAU: Exactly.

MR. HURLBURT: And on to your cruise ship from Massachusetts, how is that . . .

MR. COMEAU: That's the fast ferry service between . . .


MR. COMEAU: The ship is available now for charter. It's in Spain and they will charter on a two-year basis with an out clause after 90 days if they so desire. It's particularly a U.S. investors' private syndicate that will be funding this project, and that's behind schedule, unfortunately. We had it set up, dated this summer, but we're not going to make it now - political reasons in the U.S., September, and of course there's been a change in Gloucester, in the city, and a change for the better, I must add, in the mayors in Gloucester. The former mayor at that time was always favouring Lunenburg, and he held the project back by about 18 months.

MR. HURLBURT: But it is on track?

MR. COMEAU: It definitely is. It's on track.

MR. HURLBURT: It's just delayed for a year, is that what I'm hearing?

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MR. COMEAU: Yes, it is, but it is a go.

MR. HURLBURT: May I ask now the people from Yarmouth? Mr. Anderson, the time frame to work the deal out with the federal government, how do you feel that the federal government dealt with you and the community of Yarmouth on this issue?

MR. ANDERSON: Well, we commenced in 1997 and concluded the deal on November 16, 2001. So we definitely did take our time; we did the due diligence and the federal government did pay 50 per cent of that due diligence. In the end the community paid the other 50 per cent. We looked at the process. We were not in any hurry to do this. We were kind of hoping at one point that somebody would change the policy and it would go back to normal and leave the port alone. The community of Yarmouth would much rather have the federal government continue running the regional port that is there. They, in turn, today, still run the ferry terminal that is in the middle of these three-quarters we've taken over but that didn't happen. We finished the due diligence. The negotiations, the amount received, $4.65 million, was not what we originally requested, but it was a negotiation process and at the end of the day it was felt by the committee that that was about as good as we were going to get, so we cut the deal and away we went.

MR. HURLBURT: Again, was that the offer by the federal government and it was either take it or leave it, that is the deal?

MR. ANDERSON: In the end it came down to that, yes.

MR. HURLBURT: Or else they were going out to the private sector, i.e. urban or whatever?

MR. ANDERSON: The process was federal to provincial to municipal to private sector. That process was put in play and in some cases the federal government did transfer the properties in Nova Scotia, in other parts of the country to the private sector.

MR. HURLBURT: Would you explain this deal about the ferry terminals? That was in the original deal when you started negotiating with the federal government, then it was taken out of the deal, am I correct on that?

MR. ANDERSON: When we started in 1997 to do the divestiture process we looked at the three wharves and the ferry terminal - the ferry terminal sort of being the jewel in the process because it has a revenue-generating base, and if nothing else, you would put a port tax on it, or a head tax, as most of our facilities in this country have done today. In 1999, Transport Canada removed the ferry terminal from the negotiation process and left us with the three wharves.

MR. HURLBURT: Excuse me, that was 1999?

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MR. HURLBURT: Is there a clause in the contract with the new Port Authority and the federal government that you negotiated after their lease expires with Bay Ferries?

MR. ANDERSON: We in turn negotiated and had a right of first refusal from the federal government in the divestiture process, if they go to divestiture. Right now, until 2007, the terminal is leased to Bay Ferries. If that leasing situation stops or they go to divestiture, and I know Transport Canada last year commissioned a national study on transportation and part of that process was - and there's a very thick book out on this right now - of looking at divesting the federal government of ferry terminals across the country. It's the one part they stayed in and they're looking now, of possibly getting out. It would be the same process. It would be offered to the province, which they would decline. It would be offered to the community; in our case our community has stated quite clearly, as we did in 1997, that if the terminal comes up for divestiture, we, the community, will be the owners of that facility.

MR. HURLBURT: Would you explain to the committee, if you would please, what transpired in the past year with Scotia Prince and Bay Ferries because it sure looked as though the federal government was showing favouritism to one business over the other. That's what it appeared to be in all the media clippings and everything that I read, and it seemed as though it held our community up for ransom trying to make this deal work, so would you explain what happened?

MR. ANDERSON: In 2002, the lease between Scotia Prince and Bay Ferries was coming due. The two companies commenced negotiations in 2001 to renew this lease, and I guess you were in a situation where Scotia Prince was feeling that the amount requested by Bay Ferries was exceedingly high compared with international rates for renting a facility of that type. They got into a stalemate and the community was the pawn in the middle of this process because you have the two ferries which bring hundreds of thousands of people to the province's door and it looked as though one - and we only read what we could read through the papers that were trying to cover it - was going to stop the other one from docking in Yarmouth because of the fact that they weren't going to pay the new rent.

But, lo and behold, in this particular case the federal government did step in, they did put a mediator in play, the mediator sat down, the community sat down with the mediator - and I believe it was in March, so it was almost the eleventh hour of the eleventh day because the process starts again in April, the runs start in April - an agreement was made between Scotia Prince and Bay Ferries for the next five years. But I guess what it shows is the community was held to ransom. Whatever effects, we want those two ferries, we want ten more ferries to come to our shores and come to our community but, in turn, when one is controlling the destiny of the other of docking there by charging rent, it hurts the community as a whole.

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We're in a situation now that we know for the next five years, reasonably, the agreements are there, and we can go forward and plan accordingly and wait to see what the federal government's move will be on, inevitably, the divestiture of that ferry terminal, because in their new policy it looks as though they're going to look at divesting themselves of those too.

MR. HURLBURT: So the deal with the two companies now is struck until the lease expires with Bay Ferries and the federal government?

MR. ANDERSON: We're not privy to the lease, but our understanding, from speaking to the people, until 2007, it's fine. But, these are two private companies, they can still agree to have a marriage, and maybe divorce, before it's over and done with. I'm not sure what's going to take place then.

MR. HURLBURT: But, tentatively, it was agreed until 2007, and the lease is until 2007?

MR. ANDERSON: The lease with the federal government expires in 2007.

MR. CHAIRMAN: One more question, Mr. Hurlburt.

MR. HURLBURT: Oh, I have numerous other ones, Mr. Chairman.

MR. CHAIRMAN: Well, we will come back to you, sir.

MR. HURLBURT: Could you show me a little favouritism here this morning, please?

MR. CHAIRMAN: Sorry, I have other members to deal with as well.

MR. HURLBURT: Okay, my last point at this time and, hopefully, I will get another chance here. The business community, they've accepted the new Port Authority of Yarmouth. I think that's because the new Port Authority is owned and operated by the community. Let me use the Yarmouth Airport Commission, I think it's called, no one in our community has been able to get information about the Yarmouth Airport Commission, the expenditures or anything else. The Port Authority reports to the Yarmouth Industrial Commission and then the commission reports directly to the councillors, am I correct?

MR. ANDERSON: That's correct.

MR. HURLBURT: And maybe that's why the working community is working so well with the new Port Authority?

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MR. ANDERSON: From the beginning when we set up the due diligence process we involved all of the stakeholders in that who were affected by those three wharves, from the people who were running businesses on it, to the two councils who were involved in it, and we just carried that process along. There's no question in this case here, the committee set up the port committee, runs and sets policy of what happens to the port, because they are the users, whatever happens to the wharf will affect them directly. In turn, the commission runs the day-to-day operation, and through Dave and his crew to get the work done and so forth. We report to the councils on a monthly basis as to what we're doing financially, whatever and so forth and answer any questions. We have limits set by the two councils as to what the commission can do with the dollars we have. Decisions by the port committee must be ratified by the commission. Expenditures exceeding $250,000 must be approved by the councils for the Town of Yarmouth and the Municipality of Yarmouth to watch over the dollars we have - because $4.65 million is a lot of money to have and to watch over for the community and because they are public funds and they must carry those facilities into the future beyond the time that we will be there.

MR. HURLBURT: The tax implications on the real property, has that been addressed by the councils? That has been the ongoing issue and I'm sure the Mayor of Shelburne can attest to this, with the Yarmouth Airport Commission. That's been an ongoing issue and it seems like it's not going away, but that has been dealt with in your business plan?

MR. ANDERSON: The federal government paid a grant in lieu of and we in turn negotiated prior to the takeover a grant in lieu of too, so we pay the taxes.

MR. CHAIRMAN: Thank you, Mr. Hurlburt. Mr. O'Donnell.

MR. CECIL O'DONNELL: Mr. Chairman, I will ask the mayor a question and possibly Frank a question, then give the other members a chance. Just to follow up on the ferry issue, concerning the proposed ferry for Shelburne. I know you have worked very hard and long for this ferry, however, I have heard and I'm sure you have heard some of the negative comments from some of the doubters in Shelburne County but, knowing you, I'm sure this ferry will eventually become a reality. Can you briefly tell the committee what you see as some of the advantages for the local economy to have an international ferry coming to the Port of Shelburne?

MR. COMEAU: First of all there are two ferries now, as you know, from Yarmouth to northern Maine. We're looking at tapping into the more densely populated areas. We don't feel that we will be a competitor to the two ferries out of Yarmouth, we feel perhaps the three of us will enhance each other by perhaps promoting a round-trip excursion from maybe Massachusetts to Shelburne and back down to the U.S. by Yarmouth and Maine, or vice-versa. We see a ferry that will carry 200 automobiles with 450 passengers on a 6.5 to 7 hour run between Massachusetts and Shelburne out of the Port of Gloucester. There will be daily runs during the summertime, one trip to Shelburne, which will be departing the U.S. around

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8:00 a.m. their time and another trip in the afternoon departing Shelburne about 4:00 p.m. to 5:00 p.m. our time. That will also accommodate a limited number of tour buses and a few transport trucks. While our study revealed and other studies have that the market is not there for commercial traffic, and it isn't there, and they say it won't be for some time, to look at a ferry that would accommodate a number of heavy trucks, what it will do is expose us to that market now. People are not making the trip because of the distance and the cost of fuel.

We feel that we will capitalize more on the people coming into Shelburne to depart Shelburne than we will the people arriving, because as a rule the majority of people who arrive in a port, they're like myself, they get in their car and they drive for a couple more hours. By doing that, we will enhance the economy along the South Shore, perhaps in as far as Halifax. Also, with that ferry opening, there are a number of investors we've had to Shelburne and they've expressed a desire to locate small businesses there, but it's all dependent on the ferry service. Once that's up and running, we see a number of small processing plants, fishery related as well as other industrial uses.

[9:30 a.m.]

MR. O'DONNELL: Mr. Anderson, with Black Bull Resources, I guess there's probably a good chance that it will be coming to our area or to Yarmouth County. How do you see that Black Bull will enhance the Port of Yarmouth? What are the advantages of Black Bull? Will the Port of Yarmouth be receiving or shipping their product through the Port of Yarmouth?

MR. ANDERSON: In my talks with Black Bull, their main shipping would go through Shelburne, but they've looked at other ports, one of the other ports being Yarmouth. Right now our understanding is their main port of choice will be Shelburne. Once they nail down where they're going to land and stockpile the quartz before they move it out and so forth. They have asked the Port of Yarmouth, and there is a process going through to look at that, but their main port of choice will be Shelburne.

MR. CHAIRMAN: Mr. Corbett.

MR. FRANK CORBETT: Mr. Chairman, I will start with Mayor Comeau, too. Mayor, 89 per cent of your wharf area is commercial work. In relative terms, the capacity of your wharf, how would you describe it compared to 10 years ago, is the volume higher or lower? I know you said you've changed from a majority of fishing to commercial work. Describe how busy your port actually is.

MR. COMEAU: It's higher. At times we could use another T on that wharf to accommodate freighters and container ships. That's why we're looking at an $8 million to $10 million expansion for additional berthing and holding and marshalling areas. The commercial traffic has increased dramatically over the last two and a half years.

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MR. CORBETT: With Black Bull, I don't know if they're talking about doing any kind of lay-down area in and around your wharf. I really can't tell from the map here, excuse my ignorance of the Shelburne area. Do you have a large lay-down area for any kind of ore or anything like that?

MR. COMEAU: We have acquired additional lands just to the north of the wharf from Irving Oil. We, right now, have an option on other lands from CNR that are presently being leased to Irving until an environmental assessment is completed. We hope to capture those lands as well. That will give us an area. When we negotiated the wharf takeover, while we only received $435,000 for it, we did negotiate the water lot, which we feel you can't put a value on because without that, expansion would be pretty well impossible. By acquiring the land under the water, a perimeter of 300 metres around that existing facility, that will give us an easy way in for land in-fill situations there. We will be the up-land owner, which controls the water lot as well.

We certainly do have the area to accommodate ore, container traffic and offshore development. One thing we're interested in, and I would like to direct that to the chairman, is acquiring the column. I understand the federal government may be releasing those to the province. When that happens, the Port of Shelburne would be most interested in acquiring that column because we feel it's necessary to control that. As it sits now, large vessels can berth in the harbour, and they're pretty well exempt from any fees. We would like to be in a position to govern the traffic in the harbour as a Port Authority should do and also to maybe increase revenues by collecting from ships that do anchor in the column.

MR. CORBETT: You also talked about coal from Mersey. What type of tonnage are you looking at there?

MR. COMEAU: It's come to me from Black Bull, because they were using that as an argument for us on our truck route. I'm not certain of the volumes, I didn't go into any detail with it at this stage. Bowater were using their byproduct which is chips and byproduct from the pulp to further heat-generating systems, but they find that coal would be more economical and would be more efficient. We have deep water, and I guess that's why they're looking at the Port of Shelburne.

MR. CORBETT: Thank you, mayor. Mr. Anderson, one of the last statements you made in your opening remarks was about divestiture. You named certain ports. Can you tell the committee how you envision this divestiture taking place?

MR. ANDERSON: From the federal divestiture process, their statements were that they were going to get out of the port business in a lot of areas, and they have over the last five or six years. What we see left in the Province of Nova Scotia is the need for a regional port system. If you look at Yarmouth, Shelburne, Sydney, Port Hawkesbury and we add

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Sheet Harbour, again, because the province owns Sheet Harbour because Halifax is still under federal control and still run by the federal government.

Those five regional ports, if there was a regional port system put in play, using best practices from what's happening with them all and collectively doing things together, it will be a lot more efficient system than having the five harbours all run individually by themselves. It doesn't make sense to run individual ones out by themselves. If you have five collectively working as one and thinking as one for the province as a whole, it's going to be a lot better system than five little individual Port Authorities being out there. I sort of take that from the fact that I watched P.E.I. in their divestiture process and they have four ports and now you see those four ports are actually going to be run under one Port Authority for the four.

So it's a process to look at. I'm not sure where it's going to go, but the regional thinking of those five ports working as one for the betterment of Nova Scotia we believe to be a better idea and it needs to be looked at, than to have five individual ports out there doing what they do.

MR. CORBETT: I will ask you a question and if you feel uncomfortable answering it, don't answer it. Around the Port Authorities, I know that in the Port of Sydney there's what used to be referred to as the Sydney Government Wharf, which the municipality owns. You had three other ports, one was owned by the federal government which was sold to a private group. The former coal piers, which belong to Cape Breton Development Corporation, which were sold to Emera, and now the Sysco wharves, which are now being run by a partnership of the provincial government and a private company out of the United States, AMCI, run by a company called Provincial Energy Ventures. I am just wondering, do you find this causes confusion when marketing ports?

The reason I'm going this way - so I won't blindside you, like I said, if you don't feel comfortable answering, please don't - I know that the municipality worked very hard to bring all of those ports under their umbrella and one of their ideas is for economic development, obviously, because they feel that if we can market all the ports as one we would then have control over them and no one person could block out somebody else from using that port. Has that caused you folks any problems? I noticed you talked about having the ferry terminal kind of like sitting in the middle of yours and maybe, as a revenue generator, blocking some growth. Do you find multi-ownership a problem?

MR. ANDERSON: One comment about Cape Breton because, basically, I'm not knowledgeable about what's happening in it. I know, in our system, the two municipal units of Yarmouth County, the Town of Yarmouth, the Municipality of Yarmouth, knew from the beginning that if the federal government was to divest these properties they would come into the public domain. They're entitled to the future of Yarmouth. This is more of a fishing port than Shelburne would be. Shelburne is more commercial. But our big commercial aspect to what happens there is the ferry terminal. We, in 1997, wanted to bring the ferry terminal into

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play. That being said, originally when we looked at it, we would like the federal government to stay where the responsibility is, which is running these regional ports, not all the ports. They've come out of that situation so we had to go through with the divestiture, but the communities wish was to have them stay, do what they are supposed to do; we, the community, do what's what.

Now the community is into running ports through it's commission. It likes that. It is the right way to do it. It had a choice, it could have let them go out to private sector and the community said, no, that would be wrong. They need to stay, in this particular case, within the community's domain, the community controlling them, because it controls the future. What has happened with our ferry terminal concerns the community, as long as it's under the federal government's name and there is reasonable fairness between them because we have two tenants, one landlord tenant, which makes it kind of difficult, and we knew that in 1995 when they were doing this divestiture process that this landlord-tenant, just tenant, was not going to work completely and it did show up this year because we had a lot of confusion. We had the community quite concerned about it. But it's resolved now; it has come to a head; the minister put a mediator in; we're okay until 2007. In 2007 we will face that process again. Hopefully, everything will go all right.

Our community feels that the Yarmouth wharf and the system there must be under the community's control if it's not going to stay within the federal government and they're not doing it, and they, I believe, have put a process in that will see the sustainability of those three ports and, inevitably, the ferry terminal into the future. But they're in the community's hands; the community does control them.

MR. CHAIRMAN: Thank you, Mr. Corbett. Mr. Chipman.

MR. FRANK CHIPMAN: I guess my first question will be for the Mayor of Shelburne. You're the third largest port in the world, the third deepest port in the world?

MR. COMEAU: The third best natural port.

MR. CHIPMAN: Who are number two and number one?

MR. COMEAU: Sydney, Australia is number two. Number one, I'm not certain of.

MR. CHIPMAN: Right. So where would you place in relationship to Halifax?

MR. COMEAU: Say again?

MR. CHIPMAN: Where would you place in relationship to Halifax?

MR. COMEAU: Where would I place it?

[Page 14]

MR. CHIPMAN: You're 26 feet deep at low tide. I don't know what the depth of Halifax is; what is it, 30, 40 feet or 60?

MR. COMEAU: Halifax is far deeper and it can accommodate larger ships, but the approaches - ours is a natural harbour and we have better approaches and a pilot is not required.

MR. CHIPMAN: A pilot is not required. Right. Is there any hope or potential for Shelburne to become a container port, or do you have the depth?

MR. COMEAU: We do have containers now. We do a lot of container work out of the U.S. into Iceland as well. We have facilities now for the reefers and for storage and we have a land-based crane to stack containers. We are doing a lot and we hope to increase that dramatically. They're very happy with Shelburne.

MR. CHIPMAN: Highway infrastructure - any problems?

MR. COMEAU: Yes, definitely. A truck route is essential, of course, for that, and as I said earlier, our fresh water - we must have fresh water there, and the wharf will require some $100,000 worth of repairs over the next few years.

MR. CHIPMAN: The highway infrastructure, I mean provincial highways.

MR. COMEAU: Highway No. 3 possibly could need upgrading. When you drive on Highway No. 101, Highway No. 103 is just a very secondary highway, unfortunately. We do need that upgraded. I assume they will too with Black Bull. If they want to use the Ohio Road, they will have to upgrade that because that's in sad shape.

MR. CHIPMAN: Mr. Corbett mentioned coal from Bowater's. What would they be importing - oh, I guess it was . . .

MR. COMEAU: From the U.S.

MR. CHIPMAN: Right. To use it for . . .

MR. COMEAU: It's cheaper.

MR. CHIPMAN: Right, okay. I don't know whether it's feasible or not, but I notice you have a marina and there's a marina in Dartmouth and Yarmouth. We know there's lots of money in the U.S. Eastern Seaboard, a lot of boats, pleasure craft, yachts, that sort of thing. I can see the coast of Nova Scotia, particularly on the South Shore, having marinas. Has there ever been any initiative that you know of to attract pleasure craft, promotionally, through marinas throughout Nova Scotia? Say you could come to Yarmouth, then go to

[Page 15]

Shelburne, then to Mahone Bay, whatever. I'm not a seaman. I'm a landlubber, so I don't know what our tides and our oceans are like to handle pleasure craft. To me, it would seem like a natural.

MR. COMEAU: We accommodate about 290 visitors a year, yachtsmen from the United States and Europe. We don't have a marina as such now. That's in the plans to develop this summer and we hope to have the yacht club come in and partner with us. They're bringing $100,000 to the table with them so we can lever additional funds. At that time we will have water, fuel, berthing, and pump-out stations; we hope to more than triple the number of visitors. We've also been active over the last few years with the international sponsoring of visits to Shelburne. We have up to 32 yachts at one time coming in just for a two-day visit with plank salmon suppers and whatnot. So, yes, we feel that's very vital.

MR. CHIPMAN: Do you feel there's a tremendous amount of potential there? I know we attract tourists by land, but how many do we attract by sea?

MR. COMEAU: We could attract a lot more if we had a better marina system. I know Shelburne certainly would. We probably would attract 1,000 per year at least, compared to our 290 now.

MR. CHIPMAN: Perhaps I could ask you that same question, Mr. Anderson.

[9:45 a.m.]

MR. ANDERSON: Yarmouth has a marina system. The Town of Yarmouth, over the last number of years, has spent a lot of money building its waterfront up and building its marina system and so forth. One of the major attractions, if you're ever around on Labour Day, if you want to see what tourism does by boat, come in because we have the international yacht race, which comes in on Labour Day weekend and Yarmouth Harbour is full of international yachts. They race over to here and they race back.

You mostly hear about the Halifax to Marblehead race, but this is our race, which was started many, many years ago and it works well and it's an exciting time in our town. The town is full. The hotels are full. The two ferries are going and you see all these gorgeous yachts in the harbour. They have various divisions going through from two or three pontoons - I'm not a sailor either, but pontoons - this and that, all various types from probably $50,000 to X number of millions of dollars. There are beautiful boats coming in. It's a great race and it brings a lot of people in on Labour Day weekend. It shows that if you put that amount of effort into your waterfront, into your marina system, which Shelburne is trying to do too, it will pay back; it pays back a hundred-thousandfold.

MR. CHIPMAN: I guess that's my point. You're basically the highway to the sea, so your purpose is to attract navigational traffic and not highway traffic.

[Page 16]

MR. ANDERSON; Exactly.

MR. CHIPMAN: Do you get a fair percentage of cruise ships coming in? I know that Saint John, New Brunswick, and Halifax do.

MR. ANDERSON: Unlike Shelburne Harbour, Yarmouth Harbour is restricted by its depth and its turning radius. So we're in a situation where cruise vessels that would be coming to us would be a smaller version. I'm not a good one to answer that question - Mr. Whiting would be because he deals with that.

MR. DAVE WHITING: The size of ship that we can attract in Yarmouth Harbour would be about 300 passengers, the maximum. The channel coming in is sheer rock on the eastern side, and with the tides its been described to me by the captain of the Scotia Prince as, for instance it's as if you were driving your car down the road at about 20 miles an hour trying to turn into your laneway and somebody suddenly gave you a shove and pushed you to 30 miles an hour. That's what its like. So you can't back in or back out as they would in, say, Portland. So we're restricted to the size of the vessel that we can bring in there.

MR. CHIPMAN: I know Digby has attracted a fair amount of ferry traffic. I just have one quick question. The Play Yarmouth program - and I'm assuming that has nothing to do with Richard Hurlburt or golf - was incorporated in 1998 and been expanded. Do you see other similar recreational services being offered in the future?

MR. WHITING: Play Yarmouth was an initiative of the Yarmouth Development Corporation, that I also manage and it provides entertainment along the rejuvenated waterfront - the province and the federal government co-operated with the Town of Yarmouth to rebuild those facilities. Play Yarmouth just uses the facilities. We provide live entertainment using artists from western Nova Scotia, from July 1st through Labour Day. It provides entertainment for visitors and residents, and it gives a venue for artists who are just starting out. It gives them the experience of playing before quite a diverse crowd, and they don't often get that. For instance, our Seafest Festival, that's on in July, for the last couple of years we've attracted somewhere in the vicinity of 35,000 people on fireworks night. The band that plays there that night would play for about 10,000 people; they don't get that opportunity at any other time.

MR. CHIPMAN: I just have one more quick question, Mr. Chairman. In years past, probably 80 per cent of your traffic at your wharves were local fishermen or commercial fishermen. Now that's commercial, what's caused that? Can you give me anything specific on that? You mentioned, Mr. Comeau, earlier that . . .

MR. COMEAU: Well, I think that probably it's somewhat a decline in the fishery. In other factors, I think that the other ports, the smaller ports, such as Sandy Point, Ingomar in our area, have been upgraded and they are now just as attractive and there's no congestion

[Page 17]

for the fishing boats now. Commercial traffic is heavier and sometimes there is just not the room to accommodate the fishing boats, so I think maybe that's some of what contributes to that. Of course, there is a five-mile run in the inner harbour to Shelburne. If you dock down five miles, there's lesser room and that means time and money now.

MR. CHAIRMAN: Thank you, Mr. Chipman.

Mr. Downe.

MR. DONALD DOWNE: Thank you, very much, and I apologize. There are two meetings scheduled at the same time and I'm filling in on both, and likely maybe some of these items have been addressed, and excuse me if they are repetitive. We talked last week about the importance of the port issue in HRM and how economically beneficial it has been for this area. We talked about Sheet Harbour and the need to do work in that particular area as well, to expand the port opportunities. We know we've talked about Shelburne for a long time, about the opportunities that could be there in Yarmouth and other areas.

Number one, have the RDAs, the regional development authorities, ever tried to bring the port communities together in the western end of the province to see if we can develop a long-term strategy for economic development instead of having one against the other, competing with each other, but competing as a region?

MR. COMEAU: Well, the RDAs did attempt to assist us in our struggle to lever more money from the federal government, but they were not successful, any more than we were. I would like to go into just a little bit of detail to answer your question. I see us expanding our existing port authority. Right now, I would more or less refer to it as a steering company.

Down the road when we get it up and running, I would like to see us to include users, such as Clearwater, the fishery and the commercial users. I don't particularly support regionalization, maybe because I'm a very competitive person, but on the other hand competition is healthy. I see us operating on our own and not being regionalized. Bigger, in my opinion, is not better. I think that's been proven by the premature attempts to amalgamate municipal units. I would say that we should run our own port authority in Shelburne, and we should acquire the column to do so. That's where I stand on that.

MR. DOWNE: So, Mr. Hendsbee's comments about lending Shelburne to Queens County . . .

MR. COMEAU: Forget it. (Laughter)

MR. DOWNE: We got that message. What about in Yarmouth, do you feel similarly in regard to the port?

[Page 18]

MR. ANDERSON: No, we would propose the fact that since the federal government has done the divestiture and divested out the ports - we talked earlier with Don before you came in - that we looked at the province to take some sort of leadership role in looking into setting up a regional port system which would involve Yarmouth, Shelburne, Port Hawkesbury, Sydney and Sheet Harbour, leaving out only Halifax which is still run by the federal government. We've got these five ports all divested out. Most of them did not want to divest; they didn't have a choice, the federal government chose that process to go through.

Now we're all out there, we're all trying to do our things, and we feel that looking regionally and sharing best practices and so forth would be a smart thing to do, so you would be more efficient. These communities, some have received fairly decent amounts of money to operate. I know in Shelburne's case, they did not. That was basically because the federal government decided in Shelburne that they would transfer that port to DFO and not go through a divestiture process. As soon as DFO got it, they decided to divest it. The only problem is DFO did not have a divestiture fund, but they did take the money from Transport Canada. They were actually transferred, I believe the amount was $600,000 per year for the 12 ports they took over in the country, because they were offered first, of the federal departments. The word I got from Ottawa was $600,000 in perpetuity, and I think that means forever.

We're into a situation, they receive that much money through their A budget, but then, hocus pocus, they decided in Shelburne's case to divest it and they ended up giving $400,000 as a one-time payment. Somehow, if you took 12 and divided it into 600, that's $50,000 forever. If I had a choice between $400,000 or $50,000 forever, I would take the $50,000 forever. Shelburne did get hurt in this process.

The worst point about the whole process was that when they looked at Shelburne, DFO chose Shelburne because it was a fishing port. Digby was a fishing port; Yarmouth was a fishing port. Shelburne is not a fishing port, has not been a fishing port for the last number of years; 80 per cent of its activity is commercial. Why DFO chose Shelburne several years ago, back in 1995, as the only port in Nova Scotia to be transferred to them is a mystery to everyone.

Through all that process, in the end, at the end of the day, when the town takes control of this facility in the next while, the Town of Shelburne loses because it's getting $400,000, and it should have been an amount, as the mayor has said, based on what the rest are doing, about $2 million. Shelburne is shortchanged.

[Page 19]

MR. COMEAU: And it was a losing battle because even the Province of Nova Scotia went to bat for us. I know Mr. Downe, personally, did. We just couldn't do anything because of that transfer to DFO. We're happy in one aspect to be the owners of that facility, because we can market it and we can make it a money-maker. We're not playing the victim here too much, we just felt that we were treated very poorly in the monies that were offered to us as compared to other ports.

MR. DOWNE: Frank mentioned about working together. We have other areas in the province, as well - we have talked about Southwest Nova, we obviously have Cape Breton that has ports - and if nothing else, if we're not necessarily working totally together but at least working together to find out how we can strategize long-term mechanisms or opportunities to grow and I understand where you're coming from, but my concern will also be with the other ports that are there. If we don't think smarter and understand how we can do things better, we might all lose out a little bit.

The other one is the infrastructure. The federal government has, in their divestiture, talked about infrastructure: is the infrastructure that's there, at some point in time, going to be a huge issue of expense. I know the concern you're going to have down in Shelburne, a huge bill, $0.75 million or something if I recall correctly, for infrastructural upgrades. What about in Yarmouth?

MR. ANDERSON: Over the three-to five-year period that we looked at that process, we had those wharves inspected from stem to stern and backwards. We know the repairs that have to be done and that $4.6 million is a large amount of money for repairs, and they will be done on an ongoing process, but we reserved the right from the beginning to take the dollars we received and leverage them again with whoever we could, provincial, federal, other departments, et cetera, even private sector. We will take the dollars that we have, leverage those dollars to get a lot of the work we have to get done. If we can take our dollars and leverage 50 cent dollars, 80 cent dollars, whatever it may be, there are enough dollars there to do what we have to do in the foreseeable future, the next 5 to 10 years.

MR. DOWNE: The last question is in regard to The Cat. Has The Cat been a benefit to the Yarmouth area?


MR. DOWNE: From an economic point of view, I know everywhere in Nova Scotia from the tourism point of view have seen the benefit of The Cat. Has The Cat been a benefit for Yarmouth?

MR. ANDERSON: The two ferries benefit Yarmouth. The Cat is now coming twice a day because it's a short run from Bar Harbor. It truly has an effect on the community, it has an effect on our community, western Nova Scotia and the province because it's bringing more

[Page 20]

and more people. The Scotia Prince continues to bring a bit different clientele that seems to be going to stay a lot longer, because now it's changing it's schedule and leaving earlier, we're into a process where they have to come to Yarmouth overnight and stay instead of staying somewhere else and then driving to Yarmouth and getting on the boat. They have to come to Yarmouth, stay overnight and in turn leave the next day.

Both ferry systems keep Yarmouth basically alive, because tourism is a major business in our area, with the number of room nights we have and so forth. We would like to see some more ferries. We have the terminal, we can definitely handle it. But those two continue to do all that we wanted them to do. With the introduction this year - forgive the little advertisement - of the blue Cat, the larger Cat is coming. That will be a whole new attraction, a whole new spin put out on that from The Cat to the blue Cat, a larger Cat. The advertising is out there. I know the province is involved in that right now. It should help keep the hype up for tourism coming through Yarmouth.

MR. DOWNE: I just want to say you've done a tremendous job on the port, the upgrades. My wife and I go down there every year, and it's very impressive, what you've done with the walkways and the restaurants and all the other. I'm amazed every time I go. I'm very impressed.

MR. ANDERSON: A little advertising; the only place in Nova Scotia now you can receive for $9.95, put on your table, one whole lobster. It's good. We've finally convinced the restaurants to start serving lobster, almost like as a false lever, because if you go into the store to buy them, they're $10, you can go to this restaurant on the waterfront, served for $9.95. You can't beat it. (Laughter)

MR. DOWNE: Chicken probably for $4.99. (Interruptions)

MR. ANDERSON: This is good. We're taking some of the American ways of marketing and using them on our side, and it does make a difference.

MR. CHAIRMAN: I will just turn the floor over to Mr. Carey now.

MR. JON CAREY: Mr. Chairman, I just have a couple of short questions. The information that we were given shows that the average traffic for viability is 22,000 tons annually for Shelburne. Not being really familiar with freight, what number of vessels would this entail normally? I guess what I'm trying to get at is the employment issue as well. How many people are employed in the port, actually depend on the traffic? From what you're saying I understand tourism is - at this point, although you're going to get there - is not the major part of your business.

[Page 21]

[10:00 a.m.]

MR. COMEAU: No, it's not at this time. As far as the commercial traffic goes, we have a stevedoring force of about 30 to 40 contracted out from Clearwater, or Continental Seafoods. Those people would be deployed at least two to three days per week when the container ships are in and when the freighters are in. There are other spinoffs from that, of course, there are the truck drivers and the other support things such as fuel, food and sometimes accommodations. In place of the tuna fleet, when they're in port they sometimes spend a lot of money at motels and they provision there, of course, and they purchase their fuel and they do ship from there. There will be an expansion in the fishery fleet there as well as far as factory ships go and that will increase the workforce at Continental Seafoods, or Clearwater, which is a subsidy of theirs. I don't know if I'm answering your questions properly or not.

MR. CAREY: Yes and I guess just to build on that, what percentage of your business would be U.S.? You said you had some European and Iceland business, would the U.S. be the major player in coming into Shelburne?

MR. COMEAU: Not at this time they're not, it's the European market right now. It comes from the United States, the ships originate from there and sometimes products do go back to the U.S., but I would say the U.S. probably is about 30 to 35 per cent at this particular time, with the others being the European market - Iceland and other parts of Europe.

MR. CAREY: To try to get a feeling for a comparison for Yarmouth, from my limited knowledge of Yarmouth, it looks like tourism is quite a large player in the port, although I do realize the commercial impact. Employment and that type of thing, how does that compare?

MR. ANDERSON: Basically, Yarmouth does not have the container traffic that Shelburne has. Shelburne has the Eimskip line coming down through from Iceland, going down to the States and then returning every week back up through. Yarmouth is a fishing port, a tourism port from April to October, with the two ferries running. The rest is the commercial fleet being in there, the fleet from up and down the shore. It has very heavy traffic in the fishing side, that's why we have the three wharves and they are usually always full. We're now looking at, because of the land and facilities being transferred to us, more commercialized, what's possible for Yarmouth, allowing for the restrictions of our turning radius and the depth in the harbour.

MR. CAREY: Is there any possibility or is it even on the radar screen that Yarmouth would eventually be looking after what the federal government is doing there for incoming traffic and so on for your tourism aspect? The feds have part of the port there, do they not?

[Page 22]

MR. ANDERSON: They only own now what they call the ferry terminal, which is then leased to Bay Ferries; Bay Ferries runs it. The federal government, other than that, do not have any employees on the ground in Yarmouth with their ports. That was taken over basically by ourselves.

MR. CAREY: So would your desire be for them to divest themselves of all interests there or would you see that as an improvement to what you could do as a community with the wharves, or is it something that doesn't really have any significance?

MR. ANDERSON: No, Jon, originally we were sort of hoping that the federal government decided, well, we divested all we want to divest and we won't divest Yarmouth, we will leave it in the federal fold. They've decided not to do that, so if they're in the process of divesting, they might as well divest the middle, what we call the jewel, out. Several hundred people are going through there per year and it would not be hard to generate the dollars. Yarmouth Port, as it now stands, is not profit-making, it needs money, that's why we're receiving a lot of that money for subsidization of that port until we can try to get it to a profit-making basis. It will not be profit-making, in my estimation, until that ferry terminal is transferred over and you will see, like Halifax just did, a bed tax or a head tax or whatever is going to go in, a dollar or whatever; there's enough traffic through it, she will cover the operation of it forever.

MR. CHAIRMAN: Mr. Hurlburt.

MR. HURLBURT: Mr.Whiting, probably you know the stats that I gathered last week on tourism for the Province of Nova Scotia and for Yarmouth. Basically, the Province of Nova Scotia stayed fairly flat on tourism for last year, but Yarmouth was up 5 per cent over the year before in room nights and tourists visiting our shores. I think that's due to the two ferries, definitely, coming into our beautiful town. All the capital work that has been done in our community and our community working together, I think, is what's helped develop the waterfront. It's an attraction for all tourists to come to.

I maybe do not disagree with the Mayor of Shelburne, but I have my own comments. I believe what's good for Shelburne is good for Yarmouth and vice versa. What's good for Yarmouth is good for Shelburne. I think that we have to work closely together. Southwest Nova is 200 miles away from Halifax and in the past years, it seems like Southwest Nova was cut off from the Province of Nova Scotia. Now it's part of Nova Scotia again and I hope that we keep it that way, and we have to work it together.

Mr. Whiting, maybe you could tell me what mechanism is in place right now for you people to seek capital funding? I heard the Mayor of Shelburne say that they could use another finger on their structure in Shelburne, and I know that we need some work done in Yarmouth. Is there any mechanism in place now with the federal government to seek capital funding?

[Page 23]

MR. WHITING: We can seek funding through the normal avenues that anybody would. The $4.6 million that we have is operational funding. We are not allowed to use any of that to acquire land or do any capital building. It's strictly for maintenance. We are allowed to use the revenue side; anything that we bring in in revenue can be used to leverage money on the capital side.

MR. HURLBURT: Well, again, I hear the Mayor of Shelburne stating that he needs another finger on the wharf in Shelburne and I feel that the federal government gouged the Town of Shelburne on the deal. When you're talking $435,000, that's a really fair deal, I feel. Anyhow, in Yarmouth I've heard our councils, the fishing community and the group that's trying to attract cruise ships to our community, say that we need dredging in our harbour, and I talked to the federal government agencies and they're saying that they're doing no more dredging. So where does the money come from to do the dredging? We're talking millions of dollars.

MR. WHITING: I think, given that the federal government also got out of ice breaking but broke the ice in the St. Lawrence Seaway and that they've agreed to dredge a harbour - I think it's Port Hawkesbury, one of the harbours up there - the federal government seems to be lessening its stand on the dredging. At the present time, last year they did dredge in front of the government wharf and the ferry terminal. The Cat, when it operates, churns up a lot of silt and makes it more difficult for the other ferry to dock. The federal government, because it owns the ferry terminal, took responsibility for dredging near it. At the present time the channel is okay, but there are still impediments to the channel operation beyond the dredging. The sheer rock on the one side and the turning radius - all the dredging in the world isn't going to correct that.

So our operation is pretty much limited to what we're doing now. We can bring barges in there to haul out some resources that could be mined nearby. We can bring in smaller cruise ships; there is a market there, although two of the - Renaissance Cruises and American Classic Voyages went under following September 11th last year, so there's only about four left in the world that operate that size of vessel. We do get a couple of small ones in each year, but we're working with it. The airport is an advantage to us in that regard. There's a market out there involving motor yachts - large ones - and we've had them come into Yarmouth; they like Yarmouth Harbour because it's quiet. What they basically do is send a crew in to bring the vessel in. The owners fly in, board the vessel there, tour Nova Scotia on the water and then come back and depart from there. When the boat comes in, they drop a fair bit of money in town because there are fresh flowers, groceries and this sort of thing that they pick up to entertain the owners. So there's a market there too that we've been quite successful in.

MR. HURLBURT: Thank you. I want to congratulate both communities for having the wisdom to go ahead with the ports. I think it's critical that the communities own and operate the ports instead of a private enterprise. As you know, in the mid 1990s jobs were

[Page 24]

taken from southwest Nova Scotia and we are finally getting jobs back in all of our communities and I congratulate you people for your hard work.

MR. CHAIRMAN: Thank you, Mr. Hurlburt. Mr. Downe.

MR. DOWNE: I guess having the Honourable Robert Thibault for South West Nova doesn't hurt the opportunities of continuing to expand the economic opportunities of the area that we're talking about. I want to go back to this issue of working together and I, too, see the differences here. One of the areas that I've seen, in dealing with the federal government and/or the provincial government and/or regulatory changes and/or other issues, is there some mechanism whereby the ports could work together dealing with the broader, bigger issues from a strategic point of view? I know, as Your Worship and I have tried to work together on, we all agree, the bad deal that Shelburne got - and I fought with Shelburne against the position that happened - maybe if all the areas were to work together on some of those broader issues, we all could win. Is there a possibility of that from a regional point of view to take a look at dealing directly with the federal/provincial regulatory, other areas of marketing, that would be beneficial to all without taking the independence away of being competitive? I guess I address the question to both.

MR. COMEAU: If I may, I guess I would reflect back to when the RDA, which represents Yarmouth and Shelburne Counties, attempted to help us as a united front, it didn't work. So, do I need to say more?

MR. ANDERSON: Don, I would agree with you that there has to be a system where best practices and efficiencies come into play. There's no taking away the independence of any one port of the five that I proposed - Yarmouth, Shelburne, Port Hawkesbury, Sydney and Sheet Harbour - but there is sometimes safety in numbers, more clout in numbers, but the best part, there are efficiencies. We can learn from what the others are doing and in turn if one of them is trying to do a process and the other port has already done it, they share that information. They don't have to go out and pay for that information. It would be, in our opinion, something that should be looked at, something that has to come together because if you have like industries and they're all independent - and these are spread from the east to the west, we don't really get to talk to Cape Breton that often - so if we could find out what's happening and what they're doing versus what we're doing and hopefully, if they've made a mistake and we made a mistake, the other one won't go down that road. It just makes good sense.

MR. DOWNE: The last question is, there's concern in our area, we're hearing about in the divestiture, Bridgewater has a small area, we have a wharf, we have the HMCS Fraser tied up to it, some appreciate that, some don't, but nevertheless it's there. There's talk about the footprint of the LaHave River being potentially sold. It's one of those divestiture issues. It's a huge problem, I think it's absolutely ludicrous to think that the federal government would want to give up what we call the footprint or the floor. They maintain the mineral

[Page 25]

opportunities that would be there, but to sell the floor off. All of you are more knowledgeable than I am in regard to that, but is there any talk about that with regard to the ports both in Shelburne and down in Yarmouth and how do you feel about that? I personally think it's stupid, but can you explain it to me?

MR. COMEAU: I think maybe you were absent when I commented on that. They refer to it as the column or the footprint, in your terms. To me, I think it's essential for the Port Authority to control the column. If the federal government has given up the wharves, then I think they should give up the columns and they should go to the people that have had to take over the wharves. I think that their goal would be to offer it to the province first and then, the province doesn't want to take authority of the column, they would probably approach the municipal units, and if they do so, Shelburne is most anxious to acquire the column.

[10:15 a.m.]

MR. WHITING: I think the difficulty right now is that the federal government has a three part process; the wharf facilities, where the first part has been divested; the deproclamation of the harbour is the second part of the process; and, then, the harbour bed, as you call it the footprint, is the third part. In only giving up one section of it they've created a little bit of confusion. There's a group in Yarmouth right now, for instance, that would like to put some mooring buoys in the harbour for pleasure vessels, and they naturally assume because there is a port authority there that that's who they should be dealing with. Unfortunately, we don't have anything to do with the harbour. So, given that nobody wanted the facilities in the first place, now that we have them they should go to the next step and, as the mayor says, give us the whole thing. They haven't as yet.

MR. DOWNE: But where you've been so proactive in going after and taking over the ports themselves and, in my area, for example, they didn't do that and the private sector took over the port. So that means that anybody can take over the land base, you have underground cables there, you've got all sorts of things. So it doesn't stay within the economic circle that you're referring to and I guess probably herein lies some of the problems in some areas that I can see if you're talking about one totally stand-alone operation, you have the whole base. Where we have private sector owning our port, owning our area - we'll call it a port I guess, in Bridgewater - somebody else could go out, technically, and be able to buy the land base underneath, it has caused a lot of the residents a lot of concern. I think if it was under municipal control then you would feel safe with that. I don't know if I would feel all that safe if some independent individual took it over because gosh knows what could happen at that point, depending on who had the money. That's my only concern with regard to that.

MR. WHITING: I think, as the mayor said, the process is, it gets offered to the province, then to the municipality and on down the line, and in both Shelburne and Yarmouth we felt it imperative that the citizens have control of those facilities. Letting it go to the

[Page 26]

private sector, we've had an experience at the ferry terminal that has not proven the best for the community.

MR. CHAIRMAN: One question, Mr. Hurlburt.

MR. HURLBURT: Your Worship, I heard the Honourable Robert Thibault's name mentioned here. What has he done to help you with your deal with the federal government on the divestiture of the port?

MR. COMEAU: Basically it was before his time, but in the latter stages of it we've received no assistance from him.

MR. HURLBURT: Thank you, I appreciate that answer.

MR. CHAIRMAN: Mr. Chipman.

MR. CHIPMAN: Mr. Anderson or Mr. Whiting, of course, and Mr. Comeau, what role do you see your ports, Shelburne and Yarmouth, play in the development of the offshore oil and gas as far as shaping the economy of your areas, what role do you see your communities playing or your ports playing?

MR. COMEAU: We've been meeting with El Paso and we have another meeting scheduled with potential pipeline developers. We see it as vital, but we would like to make the stipulation that if they're going to land natural gas on our shores, if they're going to do that, then we want the natural gas before it's sent on to the U.S. markets or other markets in Canada. I think that it's essential that be part of the deal because we must benefit from it. Our citizens need the low cost energy and I feel that would be a very strong point that I would argue with them.

To me, it's essential because it would revitalize our community college. They're talking about using that. Our community college at this time is I would almost say in the danger of closing with the lack of classes in trades that are being taught there, and with the offshore development they have indicated that they would like to use the community colleges in Shelburne and Yarmouth both, to train the people for these jobs and, for the first two years, it would be a fantastic shot in the arm. Now, the major part of the employment structure would be a great number of employees for the first two years and thereafter it would taper down, but it would revitalize the community college and it would give us more arguments for truck routes and infrastructure programs for our wharf.

MR. CHIPMAN: By having a pipeline come ashore there, there are possibilities you could develop a petrochemical industry there, too. They're talking about that.

[Page 27]

MR. COMEAU: Well, they would need a distillery-type thing to take out the liquids, and that would employ up from 100 to 200 people.

MR. CHIPMAN: It's better to have the jobs here.

MR. COMEAU: Exactly.

MR. ANDERSON: From both the wharves point of view, moreso the Shelburne wharf, Shelburne has exploration for the next eight years. It goes down the coast of Nova Scotia to western Nova Scotia, Shelburne is sort of a jumping off point there. It has a beautiful harbour. It has the facilities in play. You would look for supply bases, in this particular case not being Halifax servicing these ships and servicing these rigs, those supply ships would work out of Shelburne Harbour and be closer to the rigs that are going to be there, and therefore Shelburne would benefit immensely because if you're supplying all the materials and needs of these rigs, it's a lot of money and Shelburne sits positioned very well to take advantage of that and backing up, because we only have the one wharf. You also, in Yarmouth with the three wharves, you could do a backup to it, but the greater benefit would go to Shelburne by virtue of the fact that they're closest to, the harbour's easy in, easy out, and it's just simple economics - they're closest to where the rigs are going to be drilling. Shelburne will benefit immensely.

MR. COMEAU: The tide's more . . .

MR. ANDERSON: Yes, everything.

MR. CHIPMAN: Do you see any potential for, say, decentralizing what we have in Halifax? Are there opportunities in Shelburne or Yarmouth, some of the facilities that are used here in Halifax, to . . .

MR. ANDERSON: Well, the first thing that's going to come, when the drill ships come out off the shore, they need supply bases. They have to have a supply base; vessels have to be going back and forth, with one sitting - I think the scenario is three vessels, one going, one coming and one sitting waiting in case there's an emergency. So you've three 300-foot vessels sitting and moving back and forth supplying materials to those rigs. That now is done normally out of Halifax. Not when you're drilling off western Nova Scotia. As has been said, if you're going to drill off western Nova Scotia and you're finally going to take the gas out of the ground, it has to show an economic benefit to that end of the province, and the fishing community there reasonably is very cautious about what is going on with the drilling, but most of the ones we've talked to have said at least show some benefit to the community and that means economic spin there - just don't bring the gas ashore and send it to any place else, in this particular case the U.S., without some major benefit this one time coming to our end of the province, and in this particular case, Shelburne, because it is the closest to where the drilling is going to take place.

[Page 28]

MR. CHIPMAN: And that's fair and reasonable; that's not an unreasonable request.

MR. COMEAU: Also, while I'm not here to speak on behalf of the Municipal District of Shelburne, they have an industrial park, and, of course, they have the marine railway there. I think that would certainly enhance Shelburne Marine and it may go back to the 120 employees, three shifts a day, that they used to run back a few years ago.

MR. CHAIRMAN: Do I have any other requests for questions?

MR. CHIPMAN: Do you have any of your own?

MR. CHAIRMAN: I do have a couple of my own actually. Thank you for that, Mr. Chipman. Mr. Anderson, it's a little confusing because I believe you're suggesting the creation of a regional port system?

MR. ANDERSON: The creation that we should look at a way for, in this particular case the province could take some sort of leadership role into looking to setting up a regional system whereby the five regional ports that I have named could benefit as they see fit out of the setting up of a regional system. It has to be looked at. The five of them are out there on their own now doing good, bad, or indifferent, but it would in my mind be a great leadership role from the province if they looked into setting up some sort of regional port system, so that the best practices of all the five ports can benefit all; it would be very, very helpful.

MR. CHAIRMAN: Now, is there any dialogue ongoing in regard to the five?

MR. ANDERSON: No. As I said earlier, we're one of the newest ones. Shelburne is just coming on in May/June, and we only came into play in November. We're just trying to find our feet right now, but you're into a system - we've taken over these ports, we're responsible for what happens there from the day we took it over, insurance, liability, this, that and everything else, and what happens if this, and we have to put policies and procedures in play, while if somebody has already taken over a wharf and they've got policies and procedures, why am I always spending tens of thousands of dollars creating policies and procedures, why can't I copy somebody else? Basically, we were left with the fact, here's your cheque, it's yours, goodbye.

So we have a lot of work to do. We've done some of this process during the due diligence, but now it is ours, the community's, we're running it for them. We have a big learning curve and it would be a lot more helpful, and we will push out as time goes by to try to learn from the other ports. Learn from what's happening in Sheet Harbour, that is a provincially-owned facility. Port Hawkesbury was divested prior to us, and Sydney is still in the throes of doing a divestiture of some sort, or whatever. I think we all have a lot to learn and we could learn it better collectively and more efficiently. So I think it would be a good thing for the province to say these are our five regional ports, it's important for this province

[Page 29]

to have these ports and that they stay in play. Otherwise, if you wait to the nth degree, it could be a situation where they've gone too far the other way.

MR. COMEAU: Mr. Chairman, if I may, it distresses me to hear Mr. Anderson make comments like that since he is the CEO of the Shelburne and Yarmouth RDA. I don't know whether he's representing the RDA here today or the Development Commission of Yarmouth, but he is the CEO and perhaps there is a conflict here for him to make those expressions.

I'm not opposed to the idea of exchanging information and working together, but what I'm telling you, Mr. Chairman, is don't create five ports and put me as one member on a five-man board of those ports because I don't like it and I don't think it's going to work. As far as I'm concerned, the RDA - and I'm sure I won't be too popular by saying this, but - being joint with Shelburne and Yarmouth, Shelburne has not gained all that much from RDAs. I often questioned the wisdom in forming RDAs originally.

MR. CHAIRMAN: Thank you for that, Mr. Mayor. Could I ask the question, perhaps, of Mr. Comeau? We will drop that topic since it seems to be a hot topic. It's obvious though that some dialogue - and if I understand what Mr. Anderson is saying, he is in support of some dialogue, and perhaps you gentlemen can settle that at a later date. In any event, Mr. Comeau, may I ask you - 80 per cent of your fishing community, the harbour, if I heard right, was in fishery activity; however, you diversified to 80 per cent to 90 per cent commercial. Is that correct?

MR. COMEAU: Yes, that's correct.

MR. CHAIRMAN: Could you give us some understanding or explanation of how that was achieved?

MR. COMEAU: Well, no, I think it's just the change in times. First of all, the downturn in the fishery, ports being more competitive, like Shelburne with lower berthing fees, easier accessibility, and no pilots required. I think that was looked at in that regard.

MR. CHAIRMAN: Thank you for that. Basically, unless there are other members with any questions, I think we will wrap up. Mr. Anderson and Mr. Whiting from the Yarmouth Area Industrial Commission and the Port of Yarmouth, I want to express our appreciation for you coming here today. I am going to turn the floor over to my colleague, Mr. O'Donnell.

[Page 30]

MR. O'DONNELL: Mr. Chairman, could we go on record as supporting the Port Authority of Shelburne and its endeavour in acquiring federal funding for the extension of the public wharf, this finger that they're talking about, and maybe send a letter of support to that effect, too, along with it? Is that possible?

MR. CHAIRMAN: I don't see any difficulty in the committee sending a letter to the minister suggesting or recommending that funding be provided to the Port of Shelburne for that purpose.

MR. O'DONNELL: I'll make that motion.

MR. HURLBURT: I second that motion.

MR. CHAIRMAN: Okay, it's a motion on the floor. We will call for the vote. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

MR. DOWNE: We should inform our colleague who just left of the motion today.

MR. CHAIRMAN: Yes, I will. In concluding, I want to thank Mr. Anderson and Mr. Whiting for coming up here. Mr. Anderson is becoming familiar here; I believe most of the committee members are recognizing you when you walk in the door, so it is obvious that you're very well informed and committed to your community. I want to express my appreciation, on behalf of all the committee members, for you both coming here today.

Mr. Comeau, I want to apologize because being a former municipal politician, I should have recognized that you were, in fact, the Mayor of Shelburne. Through my previous role as a municipal politician, I learned that you're very well-respected throughout the municipal world. In regard to your colleagues and witnessing your presentation here today, the knowledge of your own town, as well as the surrounding areas, is really very compelling and I want to thank you for coming up here from Shelburne, on behalf of the committee. I think it was very informative and, hopefully, with my colleague's motion - the MLA for Shelburne - we can hopefully help, in some regard, your ongoing difficulties in operating these facilities.

I think it's important to recognize that, economically, it's a very difficult issue to deal with, particularly when you don't have the tools that are required. I think it's obvious that both the federal and the provincial governments are not providing all the tools that perhaps they should and could be doing. So in closing, I want to again say thank you, and I certainly hope you have an enjoyable ride back home. Thank you for your time today.

[Page 31]

MR. COMEAU: Well, thank you, Mr. Chairman. I certainly did enjoy being invited here and I enjoyed the exchange that we had this morning.

MR. CHAIRMAN: In regard to the committee members, I still have to hold you back because, in fact, although we were late starting, I hope everybody's aware - before the delegations go, perhaps I would apologize, also, as the chairman - I'm the vice chairman of the committee. I came in a little late this morning and wasn't aware - unfortunately, the chairman was not available to attend today and he does apologize for that. I hope that's acceptable.

[10:30 a.m.]

In regard to the committee members, the next meeting, of course, is on May 7th from 9:00 a.m. to 11:00 a.m. Railtex (RailAmerica) will be the witness. Mr. Peter Tousenard is the General Manager and he will be the witness who will be here in regard to Railtex on that particular date. Also, we have to reschedule the Sydney Port Authority, so perhaps we should do that this morning.

MRS. DARLENE HENRY (Legislative Committee Clerk): We could, but since there are several members missing and we have several replacements, I don't know if they want to bring that to the full committee on May 7th or not.

MR. CHAIRMAN: Yes, that may be a good idea. Perhaps if we agree that the meeting on May 7th is okay and that this issue will be discussed at that time, is that fine with the committee members?

It is agreed.

Okay, we will accept the motion to adjourn.

[The committee adjourned at 10:32 a.m.]