STANDING COMMITTEE ON RESOURCES
Mr. James DeWolfe
MR. CHAIRMAN: Can I have your attention, ladies and gentlemen? I think we'll call this meeting to order. We have with us today, Mr. Len Giffen, Coordinator of the Christmas Tree Council; Mr. Shawn Lacey, President of the Christmas Tree Council; and Mr. George Cornelius, President of the Lunenburg County Christmas Tree Producers. Gentlemen, we welcome you as presenters to our Resources Committee. You represent a very important industry in this province. I can tell you that most of us around this table are from resource and rural areas of Nova Scotia. Indeed, it is an important topic. Without further ado, I would like to introduce the members around the table. We will start with Mr. Hendsbee.
[The committee members introduced themselves.]
MR. CHAIRMAN: I am going to turn the meeting directly over to the presenters. I guess you have already been informed that . . .
MR. DONALD DOWNE: Excuse me, we have a guest, John Chataway, also from Lunenburg County and no stranger to the Christmas tree industry.
MR. JOHN CHATAWAY: An important business for Lunenburg County.
MR. DOWNE: Absolutely, so I just thought it would be appropriate, excuse me for interrupting.
MR. CHAIRMAN: Mora Stevens will be serving as the Clerk for the meeting. Gentlemen, we will ask that each or all of you, I don't know how many are planning to make presentations and how many are going to assist . . .
MR. SHAWN LACEY: We have a small, short brief that we passed around. We sort of did that up yesterday. Len Giffen is going to read it. I am not sure if George has anything, but after that we'll be open to questions.
MR. CHAIRMAN: George, you can jump in at any time and assist with answers when we get to the question and answer section. Mr. Giffen, you are going to start off with a presentation, I will turn the chair over to you, sir.
MR. LEN GIFFEN: Mr. Chairman, members of the committee, by way of background, when the provincial government presented its budget in the spring of 2000, the Nova Scotia Christmas tree industry felt it would be severely hampered by proposals to eliminate the two Christmas tree specialists on the staff in the Department of Natural Resources, as well as other cuts affecting the seed nursery, research funding and a reduction in services from the entomology facilities in Shubenacadie. Collectively, all of these services have played a major role in helping the industry develop into a major economic force of a $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 the 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 Scotian workers as well as 500 permanent jobs for those involved in the year-round plantation operations.
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 being worthy of emulation.
Currently, as a result of this co-operation between the council and the department, we have recently harvested some 50,000 enhanced-quality seeds from the seed nursery, and these seeds are being grown and will be ready for seedlings in two years for trials across the province. In addition, these seedlings will be grown in a variety of container sizes and formats to determine optimum conditions for further 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, and we will shortly have at-a-glance visual charts 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 resulting from the brown spruce longhorn beetle infestation in the Halifax area. We hope it will be possible to add additional resources to this very important service to the forestry industry as a whole and to the Christmas tree industry in particular.
The wreath and brush components of the 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 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 issues important 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 National Christmas Tree Association Board of Directors and a voice at the table to address problems and concerns as they arise. Nova Scotia is the only Canadian province thus represented.
Looking ahead, growers in Nova Scotia are anticipating a good sales year in the immediately upcoming season, 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 crossing 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 to truckers should they be required to unload their trees for detailed examination or inspection.
We also continue to have concerns over the suggestion by Agriculture Canada to have, apparently for the sake of convenience, all of Nova Scotia 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 will begin next week for the planning process for the 2002-03 fiscal year. We thank you for the opportunity to provide this update, and we would be pleased to address any questions that you may have.
MR. CHAIRMAN: Thank you, Mr. Giffen, very much. We'll now turn our attention over to the members. George, do you have a few remarks you would like to make before we go on to questions?
MR. GEORGE CORNELIUS: Not really. Everything is pretty well covered in that brief.
MR. CHAIRMAN: Okay then, we will turn to the members. Who would like to start off? Mr. MacDonell.
MR. JOHN MACDONELL: Thank you for the presentation, Len. I am curious about the past few years with regard to competition in the industry and how much finer your margins are. That really doesn't give you much wiggle room. It seems to me, when I drive around, that just about every place that could have a Christmas tree yard has one. I noticed that even someone selling out of the local Irving station - I looked at the price of the wreaths and the price of the trees, and I thought, gee, I think I would have a tough time trying to sell trees and compete with that.
I am just curious, over the past number of years, where is the market, do you see it expanding, and what are the impacts that have occurred over the most recent history that have made margins that much finer?
MR. LACEY: I will start by just saying a little story. I tell the same story wherever I go just for the impact of how tight our margins are with our increased costs over the number of years. In 1975, I graduated from the AC and worked in a greenhouse for awhile, then went to the farm where I presently am and have been for the last 26 years. In that winter we started selling cultivated Christmas trees in Truro, and we were the first ones in Truro to have cultivated Christmas trees. Now the quality was far better then than it is today. We were getting $18 to $21 for those trees. Right now we are selling trees in Halifax and Dartmouth for $27, HST included. That is the impact of the competition that we've had from overproduction in the United States and competition within our own groups.
The margins were good then; they are not good now, but I feel that it's changing somewhat because we are competing with a tax regime in the United States, quite frankly. At that time, they had a fallow field policy where they paid farmers not to grow corn or soy beans or whatever it was at the time, but they could grow Christmas trees on the land, and that is what they did. There was a tax incentive for that, and that is what we were competing with.
These cycles take 12 to 20 years, probably, 15 maybe, maximum, in that area, to rotate out, and we are seeing sort of the end of that cycle there now. Along with the somewhat dubious climate change, the trees in the Midwest and some of the Eastern Seaboard States are getting burnt up. Some of them in Minnesota, for example, have lost their entire crop of plantings this year. This is reflected in our ability to sell our product.
The ability to make a margin, the traditional method was that as growers we would sell our trees to brokers. They would come in and offer us a price, take it or leave it. Most of the time we took it because that was the only source of selling it. That is partly the reason why the prices have maintained what they are today. I don't know whether it is a Nova Scotian or a Canadian mentality to be scared that if you increase your price on something nobody is going to buy it.
It is an uphill battle, and this is where e-commerce comes in. The Internet, believe it or not, for a Christmas tree business is sort of a godsend. More and more of our growers are becoming their own brokers. The ability to sell the trees is getting easier. We have a good product; we're probably the only product in North America that has a scented product, outside of maybe Maine. The balsam smell is the traditional Christmas smell. We have that; nobody else does. That's part of it.
Selling our product is easy in that regard. Getting paid for it is another thing. It seems that this is one business where nobody can trust anybody to get paid. In any other business I have been in, if you did a service you got paid for it. A lot of times now you have to have the money in the bank, or a substantial deposit, before you ship a tree. The further south you go, the tougher it gets.
That is just sort of where we're heading a little bit, but I think the future is bright. If we can get into these markets where these other trees are servicing and provide the service, provide the product, then we can work on the price. Doing our own brokering, we cut out the middle man and we can sell a little cheaper than what they're selling for and we can make more money. The conversion factor is terrific, we sell in U.S. dollars.
MR. MACDONELL: A couple of things. Should I understand that in the present system the best way to have a good year is for someone else to have a disaster and, also, balsam fir grown anywhere else doesn't have a balsam smell, if it's grown in Quebec or if it's grown in Michigan?
MR. LACEY: No, they do have the odour, but what's going on is they're taking seed sources from Maine, Nova Scotia, New Brunswick, and Quebec and they're growing balsam fir in states that balsam fir is not needed. They're making enough money off the balsam that they're irrigating these plantations, either through traditional irrigation methods or even drip-line plantations. They're trying to grow them in southern Ontario. I gave a brief to the Forest Products Association last year and the market is certainly changing from long needle, i.e. the
pines, to the short needle, the firs. They're even moving away from spruces, which is a traditional tree in that part of the world. But they're taking our seed source, our product and they're promoting it because it is a quality product.
We have a bit of a disadvantage in our location, for transportation, but only by land. We should be beating them over the head with the competition from here in Halifax.
MR. MACDONELL: I have a question about Georgia and Alabama. I had heard that in Christmas tree plantations there they shear three times a year and it's tough . . .
MR. CORNELIUS: In the pines. I attended a conference in Georgia and yes, they do, three times a year. In three years they can produce a nine foot pine tree for market. As you said, they subsidize the farmers. They planted soy beans - they didn't plant soy beans, they planted pine and in three years' time they had a cash crop which they rotated and there was no way we could compete against that.
I have to comment on some things that were said. We do have an excellent product, that's one thing we do have. If we can keep the quality up, that's what we have to do. As we stated, we are at a disadvantage because of other trees that are going into the New England market, such as out of Quebec. There's no way as a producer that I can compete with trees coming out of Quebec. I look at the trees that come into the nurseries down there where I ship and I'm paying the producer, at one time for a number-one sheared tree it was $13.50 for that tree. Those people in Quebec are landing those trees down there at that nursery for $10. How can I sell that tree there and make a profit?
There's no way; there's no way that I can compete in that business, so we have to refocus and find out where we're going, and what we're shipping. The bale market is excellent. We have the quality and the quantity, but also we have a problem too. I don't know about up Antigonish way, but down Lunenburg way, when you go to a meeting and you look around the room there are a lot of grey-haired, bald-headed men sitting in that room, and no young people. There's where I am concerned, looking at the small grower and exporter - who is going to take up the slack? Are they going to let those Christmas tree lots grow up? Some of them are doing that because they're getting older and they're finding they're having a hard job to produce those trees.
You're looking at our labour force, we're close to Halifax and the economy is fairly good and the labour force is short term and it's hard to get good quality labour to work in the Christmas tree industry, because it's so short. One good person is worth three poor when you're working in the Christmas tree industry because it is a labour-intensive industry. As a small exporter and producer, I find it very difficult to get good labour. I could expand, the market is there, it's just to get the labour force because it is such a short period of time, and that's in the Christmas tree industry; it also boils down to the wreath industry.
That's an open-end market. There is no limit to the wreaths that we can sell in the U.S.A. It's just a matter of getting the product produced. Years ago, where I live right now, within three houses there were 3,000 wreaths produced - 1,000 wreaths per house. Right now, you'd get 50 and that's only because they know me, you know what I am saying? There is the problem right there. The wreath industry is a cottage industry. They're made in the basements, in the garages, whatever, but we're finding it difficult to get the quality wreaths produced because of the market.
There are all kinds of little factors here, so as a Christmas tree grower and producer - and I am sure this gentleman can attest to this - you have to scrimp and save every dollar and cent and cut every corner in order to make a profit, because that $30 million or $32 million coming into the province looks great but it's not all a bed of roses.
MR. CHAIRMAN: Thank you, Mr. Cornelius. Mr. Hendsbee.
MR. DAVID HENDSBEE: Mr. Chairman, I have a series of questions, but I won't monopolize the time.
Regarding the margins you spoke of, last year we had exorbitant gas prices but this year gas is going to be down, so I would anticipate transportation costs to be somewhat lower for you. Will it not? Could you explain that? Also, with the impact of September 11th, have you found the border has affected you yet? When do the trees start going out across the border?
MR. LACEY: The first question, no, it has no effect on us. Actually, the containers would have $500 U.S. for transportation - the trucking is up $200 or $300 a trip; they base that on no haul-back.
As far as the borders, we have been in contact with both our federal and provincial people, the NCTA, to make everybody aware of potential problems. It's one thing to unload a load of lobsters in crates and unload a truckload of trees. You can't put the load back together when it's frozen or cold the way it was when you loaded it. A lot of these loads have multi-drops; if the loads aren't put back in the right way it costs a grower probably if he has a truck to unload, $1,200 to $1,500 U.S.. So if he was going to make anything, it's gone.
That's the danger with some of the small growers trying to do their own brokering. I mean, if I get a call at midnight saying I have been stopped at Houlton and they want to tear it apart, when they do that it's on U.S. territory and only U.S. people can unload it and only U.S. people can reload it. It depends on how aggressive they want to do the checks. Last year, with some work on the other side of the border through the NCTA and our contacts here, we never had a truck stopped last year, but this year could certainly be a whole different ball of wax. We have been in contact with the border people and the American Consulate here in Halifax and they're telling us two things: they never even thought about Christmas trees
coming over the hill at them and when they come it's very, very intense - a lot of loads in a short period of time - the second thing is that they are going to leave the decision to the guys on the ground.
So, if a fellow has a bad day - I have been there when they've had bad days and all they have to do is say "no" and there's nothing you as a Canadian citizen can say about it. It can be disastrous. Whether they would do that with all the trucks coming at them, I don't know.
MR. HENDSBEE: With regard to the imports and exports, you say 90 per cent go to the United States. Do you have any other export markets you're exploring, like perhaps, the Caribbean or elsewhere? Also, regarding any imports - are any other Christmas tree products coming into the province from other places?
MR. LACEY: Yes, to both questions. We're selling trees - for example, we have trees going to El Salvador, Panama and Puerto Rico, which is a United States territory, so its effects are the same thing - either it gets checked here or there.
Yes, there are products coming in. We call them wholesale lots. When you see a Canadian Tire store or a Wal-Mart or a K-Mart selling trees, they'll put a bid out for trees and I can't bid on a Wal-Mart store in Lower Sackville. If I were going to win the bid, I would have to win all the Wal-Mart stores. If somebody won the contract for Canadian Tire or Wal-Mart, they could be coming from Ontario or Quebec or someplace down in the United States. That product is coming in and that's being sold here. There's a good chance it's not a Nova Scotia product unless the contractor has to buy the product here to fill the contract and then, maybe so.
[9:30 a.m.]
MR. CORNELIUS: A good example of that was Home Depot on Chain Lake Drive last year. They had Fraser, balsam fir, and some pine there. It just so happened that we dropped in and took a look at them and if you look at that product - and that's the product they're selling to the people in the local area - no wonder they get turned off because of the quality of those trees. They were crap, let's face it. There happened to be a young fellow from Lunenburg County working there and I asked him where they came from and he said it's an awful pile of garbage. He knew himself because he had worked in the Christmas tree industry and he happened to be there in the greenhouse and we looked at some of the product, some of the trees, and it was really bad. This is something that works against the industry. People go out and get a tree and then they'll go buy an artificial tree which is competition to us. These are things that we have to look at as an industry and take into consideration.
MR. HENDSBEE: I always thought that the local trees were from local suppliers.
MR. CORNELIUS: No. It's like trees that go down into the U.S. markets sometimes - they may not come out of Nova Scotia, but it's Nova Scotia balsam fir and if people cut trees early, which some people do, they get them down there in the market and they're dried, they shed, they're poor quality. The first thing they look at is it is Nova Scotia balsam fir. Nova Scotia is the first name and we get the rap for it. They could have come out of Quebec, New Brunswick and so on and we have to look at that too.
MR. HENDSBEE: Do you have a tag or something that shows it is a Nova Scotia grown tree, that promotes it?
MR. CORNELIUS: Yes, pretty well every exporter has their own tag. It could be H.C. Sanders and Son, New Ross or my company.
MR. HENDSBEE: But not a universal tag? These are, for instance, all the members of the Nova Scotia Christmas Tree Council growers? Not a universal tag stating this is a product from this province. We're talking about trying to Buy Nova Scotia first products or whatever the case may be, not from our local market but also abroad. I thought there might be an identification tag that people could see that this was a tree from Nova Scotia, not elsewhere.
MR. CORNELIUS: We do have a "Product of Nova Scotia" and a member of the Nova Scotia Christmas Tree Council or whatever. Not all of them do, you design your own tag. Wreaths have to be tagged, Product of Canada - you don't have to have made in Nova Scotia or whatever, but they have to have a Product of Canada tag for a wreath, for instance. But, getting back to what you said; Christmas tree tags there are no guidelines or anything. It's just the address of the company that it comes from, pretty well.
MR. LACEY: As a broker buying trees, the other thing is that he wants to protect his market, so if he gets good trees the last thing he wants his buyer to know is where he gets these great trees. He will go to him directly. If you're forbidden to put your own tag on the tree, they protect the source from the customer.
MR. CHAIRMAN: Over the weekend I was talking with a group of people and one gentleman, an old friend of mine, used to be in the Christmas tree business and he indicated that he felt that there was a tremendous market in Japan for trees if we could get them there. I was wondering if the association or the council ever explored that as a marketplace?
MR. LACEY: I believe the past president of Lunenburg, D. Bezanson, has done a load or two there.
MR. CHAIRMAN: Has it been successful to your knowledge? (Interruption)
MR. LACEY: He's not loose with that information. (Laughter)
MR. CHAIRMAN: Mr. Downe.
MR. DONALD DOWNE: Thank you very much. Just as an aside, I remember being Minister of Natural Resources and working very closely with the Christmas tree producers across the province and in Lunenburg County. We were in Washington, D.C. where we always give a tree, for the tree lighting ceremony at the Canadian Embassy. I got to say a few words to welcome all these people to this big party. Forrest Higgins was President of the Christmas Tree Council and that was around the time that the Forrest Gump movie was on TV and so I said it was my pleasure to introduce a man that is quite famous in our province and maybe famous to some of you. His name is Forrest, and everybody in the room stopped to take a look at who I was going to talk about. But, Forrest did a great job of promoting trees.
I guess a couple of things - the levy - Matt Wright was quite instrumental in pushing for that, we brought that legislation in and that's working? Good.
Secondly, I want to compliment Len for the presentation. I thought it was an excellent presentation, you got the essence of the industry down and also some of the challenges that are there.
There are three areas of concern. Number one - the hold-backs you say are not as bad as they were. I think we can continually write the American and Canadian Governments to make sure that the border crossings are not going to harass our producers when they ship across and I think that's on an ongoing year-to-year basis. I know I remember writing every year to the Consulate General and so on and so forth. So anything that we can do as a body to keep that going would be a big help. There is a concern now because of September 11th. I think we need to weigh anything we can do here at this level - maybe we can talk about that later.
The issue of value added. On Sunday, I was down to Rick Lord's place and they just opened their new wreath facility. How much value added do you see happening in the industry now relative to the current market? Do you see that value added is going to be a major part of the industry in the future? Should we be focusing on more of that as an industry? Or, do you think that it's just going to grow its own natural course?
MR. LACEY: What I see is with New Brunswick. I really do see that because for the labour and this and this and this, what we've been talking about. I really do see that on an overall operation I really think it is with New Brunswick. I think that the value-added products - garland roping, wreaths - are going to match and probably surpass the Christmas trees. For example, wreaths - you probably get as much for a wreath as for a tree, so why would you do the tree?
MR. DOWNE: So, the big issue is going to be finding and accessing tips to be able to put wreaths together? The brush?
MR. LACEY: Finding tips shouldn't be a problem with the way the native species is for the balsam fir, especially with the 200-some years of logging history. The balsam fir is a prominent species now. That should be a problem. Again, getting people to do the work to get the tips and pay a fair rate.
MR. DOWNE: The wreath makers?
MR. LACEY: We already discussed the wreath-making part of it, but you still have to have the tips before you can make the wreaths.
MR. DOWNE: And accessing that, 25 cents a pound, I understand, is what they're paying right now.
MR. LACEY: That's probably premium tips.
MR. DOWNE: That's premium? Okay.
MR. LACEY: It's a lot of effort for a pound.
MR. DOWNE: The Quebec plantations. You mentioned earlier, George, about the Quebec operations. I visited those as well. There was some question about the amount of subsidy going into that product and in those big plantations. Lunenburg County, I know, and in the province, we've always stayed away from subsidies because it's countervailing. How did Quebec get away with these subsidies in their plantations and never been charged and yet, where . . .
MR. LACEY: They are smarter than us. They don't call it subsidies. (Laughter) They do it through supporting the universities and research grants. For example, if we do an aphid study here, we get a couple of thousand dollars. If they do an aphid study, they get $100,000. Quebec, their government, considers themselves a nation, so when they do any exports, they support it as a nation and so if you're exporting products - whether you do the trucking or the product itself - they support that because it brings in revenue. So they're willing - that's why the $10 tree hits Boston. There are other programs out there that they don't talk much about, but they are definitely there and they do it in other ways. Every time we hand out money, either our government or the media says subsidies, subsidies, subsidies and we don't call it R & D, or this and that. I mean we have to call it something else, guys.
MR. DOWNE: So the issue of last year, when there was some concern a year or so ago about losing our Christmas tree specialists, that's really an extension side. It's not a subsidy, it's really extension for the growers, the 3,000 growers, or whatever we have, in the
province. So I think we have got those back now, and a little noise, but if we have them back, which is good - we need those, that extension side. I am concerned about the entomologists. I remember last year at one of the meetings Eric was talking about the concern of not having enough staff and backup to look after the industry effectively and whether or not without the entomologists and the research that's being done there, we could be in serious trouble of losing or putting in question the ability to export quality Christmas trees, balsam fir trees, from Nova Scotia to the market and putting a $30-some million industry in question. Should we be looking to see if we could have more staff involved with that to do that research, because that's really not a subsidy. That's research and development, extension and protecting the viability of the industry itself. How do you feel about that?
MR. LACEY: I agree strongly because the beetle problem we had this year, entire focus went onto that and everything else took a back burner. To give examples of introduced species, for example, the wooly adelgid, or people call it wooly aphid, for example, it's an introduced species, and on some lots and in the province, I mean the province won't even do silviculture work now on fir stands because it wipes them out. It has been here for 40 years and there are no natural predators. So the argument that something will take care of it, the only thing that will take care of that is cold weather and we haven't had a whole lot of that. So I think when you get focused on one item and everything else takes a back burner to it, yes, it is temperamental not just for the tree industry, but the forest industry or any of the nursery stuff.
Gypsy moth is another example. The mandate for Ag Canada is to eradicate anything introduced into the province. It started in Yarmouth and what did they do? Monitor, monitor it until everything is quarantined. So if you want to solve a problem or not do anything, well, just tell everybody you're going to monitor it to see where it goes.
MR. DOWNE: I guess my last question is really tied to that, Shawn, Len or George, the emphasis, and we can talk about the entomologists and the need for more entomologists in research and extension people for the industry because it is not a direct subsidy. My concern is that the Americans will use that as a phytosanitary issue on trade, in other words a trade sanction against Nova Scotia to the market for the quality that we produce.
The gypsy moth issue is a case in point. If we are to make all our trees gypsy-moth free or advertise for that, you know, we don't have the technical people on the ground to be able to do that effectively and to be able to provide that classification. So my concern is what message should we be giving to the government about that issue? Should we be talking about the need for technical staff and entomologists and research in order to be able to maintain the viability of the industry in not only Lunenburg County, which is the balsam fir Christmas tree capital of the world, but all of Nova Scotia in its Christmas tree industry?
MR. CORNELIUS: I think you're absolutely right because once we lose the technical people, the industry could theoretically be shut down. I know every day there's something new, there's aphids, the gypsy moth or the beetle. Every day there's something different that comes along, and if it's not monitored, that could cause a real problem. I just want to comment on the Christmas tree specialist. I think his term ends March of this year. So after today we don't know what the story is. I understand the budget is coming down. So there could be a problem there. So we have to seriously look at that.
If we lose our Christmas tree specialists in the industry, especially down in this end, I think we're going to be in real hard shape and I know Scott, up in the other end, is working hard and doing everything. It's a small province but it's a big province and this is a fairly good industry. If we start just taking everything for granted, then we are going to be in a big problem.
MR. LACEY: Just as an idea of some of our competition on specialists, the care line as Fraser fir. Every county has a dedicated person for that industry plus the support of the universities, right. So I mean when we talk about entomology and Eric's position, we're not just for the tree industry. The Christmas trees is not fiber industry. It's a foliage industry. It's a foliage industry just like all the nursery stock, whether it is orchard apple trees or anything like that, I mean it seems like every time there's a bug, it doesn't matter where it is, their office gets flooded. There is just not enough support.
Yes, in the different depots around the province there's supposed to be somebody dedicated for contact, but the question is really, how do they keep time schedules? For example, somebody may not have any contacts at all for that year for Christmas trees because there are no Christmas trees in the area, but he will have 10 per cent of his time allotted to Christmas trees. I'm a manager too so I know how to move numbers around on a budget sheet to extend that area and this is maybe sometimes when it says this many hours equals this many dollars or, man equivalent to the tree industry is not really the way it is. That's a fact of life.
MR. DOWNE: Mr. Chairman, I guess the upshot is no grants and subsidies, that's not what you're looking for, you are just wanting expertise and technical help and assistance for the future industry. Thank you very much, Mr. Chairman.
MR. CHAIRMAN: Thank you, Mr. Downe, and just before we go to Mr. Barnet, I was just concerned about this possible border problem that we may be facing. We don't need that in this industry and I was wondering, as committee chairman and perhaps on behalf of the committee with the committee's permission, would it be in your mind useful for us to send a letter to Paul Cellucci, U.S. Ambassador to Canada and Canadian Ambassador to the U.S., to ask him if he could intervene to ensure that the shipments aren't slowed down too much this year. Maybe if we jump in there in advance of the problem and explain the importance of
this industry to Nova Scotia and the importance of getting the trees through in a timely fashion, perhaps it may be useful. What are your thoughts on that?
MR. LACEY: We've had contact with Gordon Young, he is our president out of New Brunswick. We've been talking to Vince Santilli for the government part of it. We've talked to our council level in Lunenburg. We've talked to Tom Ernst, our delegate for the NCTA, to come around on that side of it, and some of the major other players. There's no way we're going to change U.S. policy. We recognize that and we don't want to change the structure that they have for inspections. All we want is not to get paranoid and overzealous on the load checking. If we could send a letter, and I agree with the letter, just let's do business as usual. If their percentage numbers deserve a check, then you do the check. It's not because everybody is paranoid at the border what's coming in or you're going to have somebody in a load or something. If we can get that kind of thing and just indicate that we would really appreciate business as usual and it was indicated that the guys on the ground at the border are going to have the final say. So if we can just somewhere, just a subtlety - and that's what we're looking for, subtlety, because we feel that if we go really aggressively at this thing, and being a pessimist, say, well, you know, how come these guys are really getting aggressive, wanting these trucks across the border. We may get undue attention that we don't want. So, yes, a subtle letter saying business as usual would be a favour.
MR. CHAIRMAN: Can I just ask the committee now . . .
MR. HENDSBEE: Mr. Chairman, I would make a motion to that.
MR. CHAIRMAN: I just want to mention to the committee first that if we send this letter, it will be subtle and we will appeal to the fair business practices that we've had in the past and enjoyed in the past. So would the committee be in agreement with that?
MR. HENDSBEE: Mr. Chairman, I would like to add that Ambassador Cellucci being in the past affiliated with Massachusetts and Boston and everything else, is quite familiar with the Nova Scotia history with that industry and with that part of the country. As well, he's going to be in town here in two weeks time speaking at the Halifax Chamber of Commerce's annual dinner. I don't know if the gentlemen here plan to attend the dinner and have an opportunity for perhaps an audience afterwards, but I think this letter right now would be timely perhaps and maybe give him some substance for his address to the dinner.
MR. CHAIRMAN: Thank you for your comments. Just on this same subject.
MR. WILLIAM LANGILLE: Yes, on the same subject. The optimum time for cutting, have you started cutting?
MR. LACEY: Yes, I have.
MR. LANGILLE: And when do you start shipping?
MR. LACEY: Our first load to go out of the Port of Halifax is November 1st. That's why today wasn't a great day because we're really up to our eyeballs in trees, but . . .
MR. LANGILLE: No, and I'm leading up to this, about the letter.
MR. LACEY: The bulk of our stuff has to go out and be in the Eastern Seaboard before the American Thanksgiving. That's when they want the trees down there.
MR. LANGILLE: Which is November 22nd.
MR. LACEY: November 22nd, so we have got a lot of stuff rolling say from November 10th on.
MR. LANGILLE: And that's my point. Would we have enough time to send a letter out or would it be too late at this juncture?
MR. CHAIRMAN: We can fast-track that. Anybody else on the question? The motion has been seconded by Brian Boudreau. The question has been called for. Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
Thank you very much for cutting into your time everyone. We will turn attention to Barry Barnet.
MR. BARRY BARNET: Thank you, Mr. Chairman. Last year, George, you and I met at Province House when you presented a Christmas tree to the province. You encouraged me to visit one of the U-pick stands and my family and I actually did that last December and we cut our own tree. To me it was a great experience. It seems to me that there may be some lost opportunities there in terms of Christmas tree cutting, tourism, or the cross-promotion of tourism and Christmas tree cutting. I would like to know what it is your association is doing to encourage this possible market that's out there and do you see this as a growth opportunity in your industry?
MR. CORNELIUS: Yes, actually one of our members is getting into ecotourism with his Christmas tree lot. They started it last year, I think, the information that I have, and they're finding that it's working out really well. That is another source of income for the producers because there are a lot of people who do go out to the U-cuts and get their Christmas tree. I know that you only have to travel on Highway No. 103 and you see Christmas trees coming on the roofs of vans and cars and in trunks and sticking out the back window and everything else. So you know they've got to be getting them from somewhere.
Living out in the area where I do and close to New Ross, with the Ross Farm Museum, of course, there's a lot of people from the metro area who come out there. They do, they do come out and pick a lot of trees and it is a valuable source of income. Actually I was contacted by the Halifax paper for choose-and-cut operations. They're going to do a spread on that, actually, coming up in the near future. So it is a good source of income. It gets people out and I know for a fact that you could increase sales dramatically with that kind of operation.
MR. LACEY: I'll just follow up on that and it's not just Highway No. 103, it's Highway No. 102.
MR. CORNELIUS: Sorry about that.
MR. LACEY: We have a U-pick and it has grown about 20 per cent a year. It is a major part of our operation and we have 80 acres of treed lots, allotted just to that to give the variety to that and it's a big part of it. It is off Exit 9 of Highway No. 102.
MR. BARNET: I just want to say my family, we actually enjoyed it. It was sort of a day outing. I guess we were somewhat surprised there weren't some additional marketing opportunities taken advantage of, you know, like hot apple cider and that kind of stuff. We also had a hard time actually finding the place. We drove by, back and forth. We actually narrowed it down. We would go back one way and the guy would say, oh, just go a little bit further and finally we found it. But to me it seems like there is some additional potential there in terms of trying to have value added to just simply going out and cutting your own tree, making it more of a day trip, an experience, and I just see some good opportunity there.
MR. GIFFEN: On that point, because I would just mention two things. One, the council maintains on its Web site continuously a list of all the U-cuts available in Nova Scotia, the address, location, name of the lot; and secondly, we are currently just getting some final design work done and working with the Department of Transportation but we do hope, whether they will make it by this year or not, but certainly before the next season there will be highway signs on the major Highway No. 102 and Highway No. 101, et cetera, to direct people to the various U-picks, yes.
MR. BARNET: Just two points, Mr. Chairman, if I may. One is there is growing concern with the public about the use of pesticides. How does this affect the Christmas tree industry and has the Christmas tree industry looked at, I guess, "organically-grown trees" and marketing that component of trees?
MR. LACEY: Pesticides are expensive, for one thing, and we've already discussed the margins. The only time myself, as a grower, would use it is to protect my investment. I have 200 acres of Christmas trees. It takes me 10 to 12 years to grow a seven-to-eight foot balsam fir for market and you've got to protect that industry. You've got to protect that. So
the only times that we would use it for protection and it goes back to what we were talking about, monitoring. If we could do things to prepare for that, whether it be green or otherwise, that if that was there in place, sometimes these rush-out methods, you know, the last straw could be prevented, I guess. It is just sometimes, like if the province is going to be hit with a massive balsam twig aphid explosion this year, nobody knew it was coming because there are no monitoring systems for it. So what's the first thing you've got to do if you see your needles starting to curl on your tree? You've got to protect that. So the first thing you go with whatever is going to do the job, whether it is the soap, or Di-Syston, or whatever. You have to use it. As a consumer you want that nice, green tree, no damage on it.
MR. CHAIRMAN: Perfectly shaped, yes.
MR. LACEY: That tree now in homes is the centrepiece of the house decorations and people are unbelievably fussy when they are coming to pick a tree. So it is just like that apple in the grocery store. You want that perfect apple. You don't want any holes in it. You don't want any blemishes on it. So you have to protect it. We talked about the labour part of it. I welcome you to come out any time to cut bushes away from Christmas trees. Then you will understand what we're saying. Things aren't always practical on the labour, but if we can get away without using it, oh, yes, you know. So we are developing ground covers so that it would limit certain kinds of competition so we won't have to go there.
MR. CORNELIUS: Herbicides, pesticides and spraying are very controversial subjects and, in fact, research and we're going the full circle. We're coming back again and if we have our specialists in place in there and our technical advisors, then we as producers know that maybe we don't have to spray. I know it is getting very touchy and a lot of these Christmas tree lots are located close to a water source. They're located close to homes and we have to take that into consideration too. Manual weeding is great, but it's very labour-intensive, as everybody knows.
[10:00 a.m.]
MR. BARNET: My final point. With respect, Mr. Chairman, I just want to go back to something that Mr. Hendsbee brought up and that was the issue of marketing Nova Scotia as Nova Scotia trees. We have seen in the past where other jurisdictions have used branding to enhance the value of their produce - and I am talking about Alberta beef, Florida oranges, California wine - to me it would seem that it would make perfect sense that the tree producers come together to work with a common branding, be it some recognizable symbol of either Nova Scotia or the Christmas tree or the combination of the two to enhance the value and the recognition of your product, so that when a consumer, no matter where they go in the world, particularly North America along the coast, is looking for a Christmas tree, they are easily able to identify a Nova Scotia balsam fir Christmas tree.
To me it would make perfect sense that the association work toward some kind of uniformity in that, it is not necessarily one producer's logo, but that it is a logo that identifies the brand of trees. It is more of a comment, I guess. If you want to expand upon that, as whether or not the association looks at that as something that you can move towards or not.
MR. LACEY: I think so. We have great debates within our council between promotion and marketing. A lot of times, I can't see the difference. Promoting the product and actual selling has to be on an individual basis. As an industry, we try to promote Nova Scotia balsam through the Washington tree, through the Boston tree, through trade fairs, even our local exhibitions and things like that. Yes, I think that is an excellent suggestion if we can everybody on board, and believe me a lot of politics are involved on the council and it has to do with brokers of various sizes, and George can verify that. We have to protect business interests people have developed over the years with the people coming on board, in how to get that product out. So it is a balancing act, but I quite agree that we could brand our trees without interfering with that, and whether it is just a Nova Scotia flag or a little emblem on the tags, I don't know, but that is a good suggestion.
MR. CHAIRMAN: Thank you, Mr. Lacey. I will now recognize Mr. Langille.
MR. WILLIAM LANGILLE: A lot of questions I had have already been asked, but you say that there are 500 permanent jobs in the Christmas tree industry and I believe 2,500 jobs seasonal, which would probably be for a length of about two months. The 500 jobs that are permanent, now would most of these be jobs by people who own their own Christmas tree land and use it as a supplement to their income, or how are you arriving at this number of jobs?
MR. LACEY: That is the problem we have with some of the statistics. There is no hard-core way to get some of it, but we are quite comfortable with the 500 number. Myself, for example, I will have four people full time, except for when the snow is deep and then they are off because they can't do the work, and as soon as the snow is gone they are gone too. I alone have four. As seasonal jobs, they go from April right through to December. All during the summer, I will have 16 or 17 people working for me. Right now, I will have 10 and that can fluctuate. It depends how close my loading dates and stuff will go. But I think the season numbers, it is not just two months. I would say it goes from April through into December.
MR. CORNELIUS: It is a hard thing because a lot of the exporters have crews, contractors who will work in the woods for maybe six months of the year and they pull them out for a couple of months for the Christmas tree industry or whatever. It is forestry related because actually they are employed year-round in the forestry industry, but they may be working at one sector and then in the fall when Christmas tree time comes around, they bounce them into that. That is where you get the larger exporters because they have their crew right there. Some do have employees year-round, a small crew year-round for shearing or whatever.
MR. LANGILLE: Also, getting back to the problem with the border, or we don't have a problem yet in regard to Christmas tree exporting, but you are anticipating a problem. I believe it won't happen this year of course, but it will probably be in place by next year. You will probably be able to get clearance prior to the border crossing and I think that this will be something that will be discussed in length. I believe it is probably already on the table for people who use the border in that fashion and others.
I just want to ask you something. You said, in your opening remarks that we also continue to have concerns over the suggestion by Agriculture Canada to have, apparently for convenience sake, all of Nova Scotia declared a gypsy moth-infected area as opposed to only the western part of the province, as is presently the case. I would like you to expand on what Agriculture Canada means for, convenience sake.
MR. LACEY: Okay, I mentioned earlier that basically the infestation of the gypsy moth came from the ferries and some blow winds from Yarmouth, and continued infestations are from our tourist industry. So Agriculture Canada has mandated to eradicate pests that are harmful to the Canadian economy, i.e., the beetle. They didn't do that with the gypsy moth; they monitored it. So now it is halfway up the province - and I might, for the record, say there has never been a gypsy moth egg mass found on a Christmas tree. They do not like Christmas trees, they like hardwoods. If you ever did happen to find one, it just got tired from going from one tree to the next tree and decided that is where it is going to lay it's eggs.
We also have a large lumber mill or forestry industry in this province that transships logs back and forth. So they are being lobbied from that aspect of it, to quarantine the whole province so they don't have to do self-inspections for moving the logs from that part of the province to this part of the province. So if there is an all-quarantine, everything moves freely. You don't have to worry about that stuff. So it is convenient for the lumber mill industry and the pulp industry, they are lobbying for the infestation. We can't agree with that as an industry, even though we are involved with the other part of the industry. It is too easy to blanket the province as infested.
What that means is, for example I had inspections done on two loads yesterday for Puerto Rico and El Salvador in a non-quarantined area. So I am great and it makes the inspection easier. The inspector said great. So they just go and do their job. But the thing is that we are being lobbied by other larger industries. They have it classified as infested. So that is a battle that we are having.
They have a lot less inspectors now. The guys are just run off their feet and what we propose are field inspection structures, fee structures for field inspections. The way they do it now, they do it on a per-load basis. So I will have four or five loads going out and they will come and do one load or two loads and then two days later they are back to do another, if you can get them. It is downsizing on the federal level to the point that the inspectors can't service. My understanding is the other day the fellow had another inspector in tow with him
and he has to be in training for two years before he is allowed to inspect trees himself. I think anybody with an entomology course can identify the stuff we are looking for. I don't think he has to have, for example, two years of training before he can check what is on a Christmas tree.
MR. LANGILLE: My last question would be, when you mentioned the southern United States, and I believe you mentioned Georgia, which probably will take you into South Carolina and so on . . .
MR. LACEY: The Carolinas, yes.
MR. LANGILLE: . . . about growing the pines in three years and then being able to sell them, it has been my observation that if a person wants a pine tree, that is what they will get; if they prefer a balsam fir, that is what they'll get. Has this really impacted your market? I believe you also indicated that you could probably sell as many trees as you produce. Is that market out there? Could you just expand on the southern pine and artificial trees, if that has really impacted the Nova Scotia balsam fir.
MR. LACEY: I think, as I mentioned earlier, that the talk that I gave to the Forest Products Association is the same report that's coming out of the United States, that the Christmas trees are changing to short-needled trees from long needles, and that is your pines to your firs. They are moving back towards a traditional tree. I feel that the Virginia pine is not a real concern.
Our real concern is artificial trees. Artificial trees are probably 60 per cent of the Christmas tree market. It is all imported. The money that you spend on that tree goes out of the country. It is artificial, non-renewable. It fills your landfills; in two or three years they are ragged and you have to go buy another one. There is some concern now, they're doing free testing in the States on arsenic in artificial trees. It's a real source of competition. We have a natural product, a renewable resource. It brings revenue into this province, i.e. American dollars, so we're not circulating money, we're creating it. This has to stop.
The other thing we are concerned with, along with the artificial tree, is the so-called fire regulations that some apartment building owners have. The regulations they are dictating to their tenants are not what the fire marshal's ruling is. We have all kinds of data to support that statement. We're in the midst of trying to put a study together. It's probably going to cost about $1 million to do the testing for what toxic materials are coming off artificial trees versus real trees. We are concerned about when a Christmas tree catches fire, what actually catches fire? Did the lights catch fire, did the wrapping under the tree catch fire? Then the tree burns, of course, once you have a source.
There are all kinds of concerns about how it is being perceived and how the legislation or the Fire Marshal's Office information is being interpreted to the apartments. For example,
all the new apartments, I don't know for sure, but if the landlord says you can't have a real tree in your apartment, my God, look along Chain Lake, if all those people weren't allowed to have a real tree. That's a lot of product. That is an another area that as Canadian and NCTA group we are lobbying for that.
Again, I can't say it enough, an artificial tree is exactly that, it's artificial. It's a non-renewable resource, and the money goes out of the province, and it is non-recyclable. Our product is everything opposite to that.
MR. CHAIRMAN: Thank you, Mr. Lacey. I think we have quite a few wanting to ask questions. We will turn to Mr. Boudreau.
MR. BRIAN BOUDREAU: Thanks for coming, gentlemen. It's a very informative presentation you have. I have to admit I don't know that much about the Christmas tree industry, but I am learning here this morning. I appreciate the fact you took time out of your busy schedule to come here. In regard to your presentation, you indicated the cuts last year resulted in the specialists and the funding being cut. Do you have all that reinstated?
MR. LACEY: Yes. I must say that the Department of Natural Resources was very attentive when we presented our case. We came in and met with the government a couple of times, and to be fair to the deputy minister, I believe he was not fully aware of all the information. I don't take that by what he said but by the expressions on his face when the discussion on the facts of the case was made. That has since been turned around, and we have pretty well everything we lost except for maybe some grants for the Washington tree and that type of thing. What we're trying to get is the Department of Tourism to kick in because we are promoting this beautiful province of ours, and we're promoting this and we're promoting that, and Tourism Nova Scotia should be kicking in. We're talking to people in Washington, and they have huge coverage from that.
MR. GIFFEN: They are now.
MR. LACEY: They are now?
MR. GIFFEN: They did the Boston tree.
MR. LACEY: Yes, but the only reason they paid us for the tree is because we sent them a bill. (Laughter)
[10:15 a.m.]
MR. GIFFEN: They have indicated they will be supporting it this year.
MR. LACEY: Okay. I didn't know that. That's great. It is quite a bang for the buck. I think it was $5,000 for the promotion and everything else that goes down there. We had the Premier there and everything.
MR. BOUDREAU: Just a comment on that. I would imagine there are a lot of groups out there, a lot of industries that would be eager to obtain your success recipe. Your negotiation ability must be extremely well because . . .
MR. LACEY: Well, when you lose everything, if you get anything back it's a success. Quite frankly, if you look at that entire DNR budget cut across the board, the bulk of it was in our area. We lost everything. So when you take something, whole, from one area and spread it over, then it doesn't look so bad, but if one entire section is decimated, it was pretty critical. They said this job that I was in wasn't that much, and all of sudden it gets -anyway.
MR. BOUDREAU: In regard to your tree itself, when you plant the seed - I know my colleague, the member for Lunenburg, is a chicken grower, and to grow chickens is really delicate, to make sure they're healthy and that . . .
MR. DONALD DOWNE: You don't plant them, Brian, we don't plant them. (Laughter)
MR. BOUDREAU: I wonder if you could just sort of take us through the process from seed to nourished tree.
MR. LACEY: Our company, ourselves, we don't buy any more product. Again, part of the reason is the economics of it. Right now what we do is just pull and plant from our own land, our own genetics from our own land, because that tree was made there, it grows there, it is the best suited for that. I could take a seed source from the Lunenburg County area and plant it at home. It may not grow very well because it is just enough change that it may not do well. What we do is just pull and plant.
There are people who do plant and go through that cycle. Again, by the time you get to the seven-foot to eight-foot marketable tree, you are looking at 12 years probably, easy, investment on it. It probably costs $1,000, probably $500. When you are looking at our margins, as I stated earlier, they ain't that great, so you do whatever you possibly can to avoid the extra input costs, and that is what you're doing.
MR. CORNELIUS: We're extremely lucky in our area, speaking for Lunenburg County, with regeneration. We get natural regeneration like crazy, and that's a plus because that means you don't have to replant or buy seedlings. That is the best stock, because if you have good seed stock and you get natural regeneration your tree will produce a lot quicker. Theoretically you could plant a seedling and it could stay dormant for four to seven years before it would start growing, where with natural regeneration you will see your growth rings
every year. We are quite lucky that way, down our way. I don't know about up in Antigonish, I am not familiar with the soil type or whatever.
MR. LACEY: But that's a problem that they're having in other parts of the country and in the States, they are trying to emulate the conditions for the balsam fir in their states or their provinces. There are people in northern Saskatchewan trying to grow Nova Scotia balsam fir. There's the same people trying to grow it out in Minnesota. They are really having a hard job growing a good, quality product because of the frost or the drought conditions and it is native here. So what better advantage could we have.
MR. BOUDREAU: I know the forest industry, which is a different type of industry, similar perhaps in some ways, but your industry doesn't have the environmental oversight that the forest industry would?
MR. CORNELIUS: It is a renewable resource. Actually, it is one of the few industries that is like that because we just keep regenerating and there is no pollution or no clear-cut. Everything is just coming back, which is good.
MR. BOUDREAU: Was your group ever consulted by other associations such as the forest industry? Is there any dialogue going on there? Perhaps your association will have helpful hints or helpful direction to the forest industry because it is similar in nature.
MR. LACEY: We have representation on forest products, for example. Personally, I am involved with the Nova Forest Alliance and the Model Forest program that they are trying to do, representing agriculture. So I still have my input. We also have a Christmas tree rep on that. When we talk about other items in the environment, we are asked for input, yes. That is the short answer.
MR. BOUDREAU: I know in Cape Breton where the Christmas tree industry is just starting to grow a little there and I think some individuals are trying to get it off the ground. Does your group assist areas like that?
MR. LACEY: The Cape Breton area had an association there and, to be quite frank with you, once the Devco money disappeared, so did your industry. So they had an industry there. They had an association there and we continue to invite anybody who is there to come down to be part of the industry. We can only do so much to get them there.
MR. BOUDREAU: When we talk about shipping, shipping must be a major issue if you are from the Valley or you are from Truro or Antigonish or wherever. Do you receive any assistance for transportation?
MR. LACEY: This is as real as business gets. No, there is no support for that in there. Quite frankly, we wouldn't really want that. What we want is R&D support in that and
marketing expertise that we have in the World Trade Centre. I have used translation services in the World Trade Centre for doing legal business translation from Spanish, for example. Those are the kind of things that we have to have access to, to promote our industry.
MR. BOUDREAU: I am a little concerned, too, about an issue my colleague from across the floor brought up in regard to the insect pests. Does the federal government consult with your group in regard to this issue?
MR. LACEY: We have a representative, Greg Cunningham, as you all know. Again, downsizing, he has got to deal with us and deal with everything else that is coming at him. Part of our problem is that we do not know what the final sanitary requirements are going to be until basically before the season starts. We have been really pushing him to get a clarification and really we have a statement this year that there will be no changes on the line for the gypsy moth line, for example, this year. But that is no guarantee they won't move next year. For us, it is year to year. We really don't know.
I will give you a perfect example. We are trying to push markets into Mexico. Richard Lord, for example, down there, he is in a quarantined area. He knows that if he wants to sell trees down there, he has to have Mexican inspectors come up and do the inspection, which he has to pay for. Myself, if I want to try to put trees in that market, I don't have to have them inspected because I am in the quarantine-free area. But you have to have these guys up here in July or early August and we don't get a ruling until September, just before the season starts. If you added customers, then you would be, quite frankly, out of luck with moving that product this year. So that is a real advantage for keeping the line where it is.
MR. CHAIRMAN: Mr. Boudreau, did you have a quick one?
MR. BOUDREAU: No, it is okay. I'll come back.
MR. CHAIRMAN: Okay. We will try to get back. Mr. MacDonell.
MR. JOHN MACDONELL: I will try not to have anything that requires too long an answer. I am curious, Shawn, if there is any other parasite that is a problem. It seems to me that last year I had a discussion with Alfred Scothorn that there was a mite or something . . .
MR. LACEY: Pine scale?
MR. MACDONELL: Maybe. So does that not seem to be a problem entering a market because of that this year?
MR. LACEY: If you want to ship trees to Bermuda, it certainly is a problem. You can't do it. It seems like it is an issue with the other countries that we are shipping to. The main reason is they had a forestry in Bermuda of high value for furniture, apparently. The
pine scale got in there and wiped them out. Now they have re-established that industry so there is zero tolerance. I have had inspectors on their hands and knees for an hour or an hour and a half looking at all the trees before they found one. If you have ever seen a pine scale it is about the size of the head of a pin. That killed the deal. That is how intensive their search was. There is some question whether it was politics outside the province and I know there is certainly politics involved with shipping trees to Europe and they told us, quite frankly, that is what it was. We couldn't ship a tree there unless you took all the bark off it. If we did meet the requirements for the final sanitary certificate on that one, they put another one in there that would do the same thing. But they are using final sanitary issues as trade tariffs, trade barriers.
MR. MACDONELL: I am curious to know then, the gypsy moth, I am assuming when we talk about the fact that some of them come in on tourist traffic, probably that is from the United States. So then, how widespread is the moth in the United States? In other words, those areas where Nova Scotia Christmas tree growers would want to access American markets, would they be going there where there is no moth evidence as well? So that would be a stickler for the Americans to have the moth come back.
MR. LACEY: You are not even allowed to have open trucks and are not even allowed to drive through states that are considered infested into non-infested states. I will do that when they say non-infested. The way to get around a bit of that is you don't see nearly as many trees going now because they are all in vans and that is one way of getting around that.
MR. MACDONELL: I am wondering, what is the perception of the American supply? What does the American Christmas tree industry look like? I am just thinking about the P.E.I. potato problem last year when the Prince Edward Island crop that would have been exported was about the same as the surplus in the American crop. So I am just wondering if you were envisioning any problem with the fact that the American supply of trees is very healthy and that you could run into stalls or politics in preventing your trees entering the market? Any idea whether that is . . .
MR. LACEY: I don't believe that is the case because, traditionally, we have had north-south trade for as long as . . .
MR. MACDONELL: There was north-south.
MR. LACEY: Yes. So we have always had that. Basically, Christmas trees are a zero tariff, about as free as you can get; zero rated.
[10:30 a.m.]
The other thing is, remember we're dealing with our traditional Christmas tree, balsam, the smell of Christmas trees. We're dealing with an Anglo-Saxon population, basically. The other thing that they're finding in the United States now, somebody of Muslim descent that came here, they didn't want to buy a Christmas tree, but the second and third generations are here now and they're buying trees because it's an American thing to do. So, basically, that market is expanding. They wouldn't buy our trees unless there was a demand for that product, it's as simple as that. They have a big enough population that they could probably support themselves in that, and we don't. In order to sell something, somebody has to want it. They want our product and I can't see that being a problem. Potatoes are a little different because they can be self-sufficient.
MR. JOHN MACDONELL: That's the point, I guess if they're not self-sufficient or have a surplus then they're not going to want to keep you out.
MR. LACEY: The American market could probably be self-sufficient. They probably could be if they really wanted to be, but they don't want to be because they want our balsam fir.
MR. JOHN MACDONELL: Is there still Operation Realtree?
MR. LACEY: Yes.
MR. JOHN MACDONELL: There is. I am wondering about the fire marshal's regulation versus the landlord's regulation. Is any of this driven by the insurance industry?
MR. LACEY: It very well could be. I sort of alluded to the point, when you do have a fire, was it the lighting that caught the tree on fire? Was it somebody playing with matches, for example, and got the paper underneath the tree going most of all, it probably is hardly ever that the tree ever catches fire by itself. (Interruption) I will give you an example. Here in the shopping mall - I believe it was Mic Mac Mall - there was an artificial tree, somebody tried to light that one time. What was the report? Christmas tree fire. It didn't say it was an artificial tree; but, that's what we're dealing with in the media. The other thing we have a real concern with is the ATV, the one they do every year; well, what wouldn't burn if you blew it up with a blowtorch? (Interruption)
MR. MACDONELL: Quite often politicians get branded by the same Christmas tree label, don't say artificial or real. I am wondering about the comments around Brand Nova Scotia or trying to identify a Nova Scotia product. I certainly would think in the local market that if someone gets the contract to supply all of Wal-Mart that at least it would seem that it would be important if you could identify that that tree didn't even come from Nova Scotia; I think a lot of people would be going to buy their tree there, that that might be a concern, sometimes you're surprised. I certainly think when it comes to agricultural produce, I think almost nothing is identified as Nova Scotian, it all says local. I think local is defined by
anything that can get here in 24 hours, which is a long way away. That's one of my pet peeves. I know with agreements between the provinces, we're trying to reduce barriers to trade, et cetera, that this is probably one of the ones that might be a stickler when New Brunswick wants to get product in here or Nova Scotia wants to send something to Quebec or whatever. Certainly I think at least to allow the consumer to make a choice, that if they were aware it was a Nova Scotia product compared to a product from Maine, for example, I think a lot of Nova Scotians would certainly want to support the Nova Scotian industry. Thank you.
MR. CHAIRMAN: Thank you Mr. MacDonell. Bill Dooks, you're next please.
MR. WILLIAM DOOKS: Thank you, Mr. Chairman. Gentlemen, it's nice to have you here this morning. Just a couple of quick questions. What percentage of your industry would be family-based business? Is it started in the family - you know what I mean?
MR. CORNELIUS: More like 75 per cent or 80 per cent family-based.
MR. DOOKS: So, mostly a family-based business. Do you associate that business with other farming produce or cattle? Does a farmer usually have a Christmas tree farm on the side to help the cash crop?
MR. CORNELIUS: Some do. I think originally the Christmas tree industry started as sort of a by-product, when they started to cut a few trees and they started to ship them, then they got into making a few dollars here so we'll continue on and we'll improve our Christmas tree lots. I think that's where the major spinoff comes from, it stayed in the families, it's passed down from father to son, and that's the biggest problem I can see in the industry now, that maybe some of their sons or daughters are not picking the Christmas tree industry up because it is so labour intensive, and let's face it, the money is just not there.
On the other hand, we have some bigger players in the market like Kirk's, for instance, an American company and some other independent growers and exporters, they have large tracts of land in Nova Scotia and they're getting more prominent all the time. Well, look at Sobeys and Superstore, the little grocery stores are going by the wayside; you never know.
MR. DOOKS: Do you see the industry subdividing the parts of their land off and selling their Christmas tree farms? Is there a turnover?
MR. LACEY: That's the problem with this industry. We're not producing as many trees as we used to. Last year we had a real good marketing year and the comment was if Nova Scotia had an order for another 50,000 trees we couldn't supply them. Because when these people go, for the large part, their land grows up. There is some land being taken over
when they're adjacent to a larger parcel, but I know people in my area that if it went out of trees a lot of times it would go to blueberries or just grow up for pulpwood down the road.
MR. DOOKS: The big question for me is, who finances the operations? If you have five full-time employees, ten part-time, the employees cost a lot of money.
MR. LACEY: Our line of credit at the banks.
MR. DOOKS: And they're happy to do that? There's not much of a struggle to get financing for a crop?
MR. LACEY: Well, we have other equity besides Christmas trees. Nobody in their right mind would lend you money on Christmas trees. My business, we have a fairly large dairy farm and our company also carries a New Holland tractor dealership, so there's lots of equity there to carry the operation.
MR. DOOKS: In partnership with your other businesses?
MR. LACEY: Yes. When I do my business plans, I try to work them as'stand alone' operations, enterprise each one out. From my operating line, I have to depend on the other divisions to carry that through for the harvest year from now through, and sometimes I have made no money. You have to look at, did you increase your equity? Did you change a piece of land that was worth $100 to $1,100? Or, do you count your inventory increases that year? Are you building? Unless you're a larger company, a lot of us . . .
MR. DOOKS: So it would almost be impossible for a person to start as an independent to finance the operation on the resource that would be available in five years.
MR. LACEY: You're going to start from scratch, then you start from a bare piece of ground and you're looking at 10 to 12 years investment. You will get trees before that, but before it's full production, that's what you're looking at and who can do that? What bank will do that?
MR. DOOKS: But basically, we could produce more markets to produce more? That's good news.
MR. LACEY: That's positive.
MR. DOOKS: It's better than having too many and not being able to ship them.
MR. LACEY: That's not a problem.
MR. DOOKS: Thank you for answering my questions.
MR. GIFFEN: Practically all of them are related to other agricultural products or to other wood-type products.
MR. DOOKS: What about some of the big ones, Kimberly-Clark are they involved in Christmas trees or any of these . . .
MR. LACEY: They used to be but they let their land grow up to be fibre.
MR. DOOKS: Yes, thank you.
MR. CORNELIUS: Rule number one, you never give up your day job when you are in Christmas trees.
MR. LACEY: The other thing is, a lot of people take 5 or 10 acres as a hobby, and 10 acres is not a hobby.
MR. MACDONELL: I know.
MR. LACEY: Yes you do, don't you John.
MR. CHAIRMAN: I would like to wrap this up about 10 minutes to the hour if I could because we do have some housekeeping matters to deal with. There are two on the list to ask questions to the presenters. Don Downe, would you like to ask a couple of questions?
MR. DOWNE: Thank you very much, Mr. Chairman. I am happy to see we have made a support for a letter to go forward because I suggested that's what we should be doing to reaffirm our export eligibility.
There are two other issues I want to go back to. Number one on this entomologist, in the meetings that I went to and heard speak not only affecting the Christmas tree industry, but affecting all of forestry, and because we're not doing the accounts properly, we can't use biological processes in regard to treating those infestations that we do have periodically. We have to end up using a chemical spray, a pesticide or whatever to deal with it. Then of course the whole issue of March, we don't know whether or not our specialists will be actually able to be resecured. Realizing that the minister has the ultimate final decision, I would like to move that the committee, in support of the Christmas tree industry in Nova Scotia - you can't dictate to the minister, but to say that the committee unanimously supports the continuation of the Christmas tree specialists in the province, number one. Secondly, that a higher priority be given to the entomologists in the province so that in turn, the $1 billion forest industry that we have, including the Christmas tree industry, is not going to be put in further jeopardy. I would move that motion, if I could have the support of the group.
MR. BOUDREAU: I second the motion.
MR. LANGILLE: Could you explain the motion again?
MR. DOWNE: The motion is just a matter of writing to the minister to affirm to him our support as a group for the continuation of the research, the Christmas tree specialists that we currently have, for future years. Secondly, that the department put more emphasis on the entomologist requirements for the Province of Nova Scotia. That is what the motion is basically about. We have a current member and a former member of the Department of Natural Resources who understand all too well what retaining is.
MR. CHAIRMAN: We have some speakers on the question.
MR. BARNET: First of all, I think it is somewhat unfair to ask us to support that motion at this point in time without having proper advice from the department. I certainly understand what you are saying, but I would like to have some input, at least from staff at the department, to determine whether or not this is the appropriate direction to go. Without advice from them, I can't support it.
The second thing is, no one has said, particularly government has not said, that there is going to be any end to the use of the specialists in the upcoming year. That is just someone surmising that that is part of the upcoming program reductions. That is not at all the case. I know of no evidence to support that. So, frankly, at this point in time, I wouldn't be comfortable supporting that. I would like to hear some advice from staff about what direction they intend to go with the department. Maybe what you are saying makes perfect sense, but without having at least some additional input, I can't support it at this time.
MR. LACEY: I agree with most of what Don has said, but I do want to reiterate that we have had a really good working relationship with Dan Graham, Deputy Minister, and his directors for budgeting to allow us to dictate the direction of funding that we wish to have. So maybe the motion may jeopardize the relationship we have a little bit there. Dan has personally, again, you can't dictate to the minister, we understand that, but he personally assured us that that position will be reinstated after proper competition for the position, which they have to go through with the unions and stuff. But what he has told us and assured the council is that the specialists will be maintained. But Don is right. That position is going to be gone in March and it is going to be put up for competition. So I just want to be very careful as to how the committee would accept that because I feel we are getting a good working relationship with . . .
MR. CHAIRMAN: That is precisely what I was going to say. That is my understanding. This whole issue of tree specialists came up, I believe, last year and our caucus certainly understands the importance of this position and so does the department and Mr. Graham.
MR. DOWNE: Just to clarify, it is merely a recommendation to the minister. Actually, the working relationship between Dan Graham and the Christmas Tree Council has been positive. Brian Gilbert is another case in point. There has been a good working relationship. All this recommendation is doing is reiterating what is being said. There is a concern about March 31st and about the entomologists. The concerns are there and I think the issue here is just a recommendation to the minister. It doesn't mean he has to follow it.
MR. CHAIRMAN: I want you to all understand too that the copy of the transcript goes to the department, so all these concerns that we are speaking of right here are going to fall on the lap of the deputy minister at any rate. He will be aware that the concern was brought up at the table.
[10:45 a.m.]
MR. HENDSBEE: Mr. Chairman, I had a couple of questions that could be related to the topic of the motion, but I would like to ask the questions first and then get on with the other.
MR. CHAIRMAN: We are on the question. If you want to speak to the question, you can speak to it.
MR. HENDSBEE: I would wish not to speak to the question. I was hoping to ask my other question because it is somewhat related to his question. Anyway, I will just ask my questions and then we will deal with that question on the floor when we get towards the end of our business. Could you tell me, gentlemen, how many members presently are members of the Nova Scotia . . .
MR. CHAIRMAN: No, just one second please. I thought you were going to speak to the question that is on the floor. We have a motion that was moved and seconded.
MR. HENDSBEE: Could I ask that the motion be read back? There is one particular word in there that I am worried about.
MS. MORA STEVENS: The motion, basically, without having gone to the transcript, is to write to the Minister of Natural Resources to affirm the committee support of the continuation and the extension of the Christmas tree specialist within the department past March, and the second part of the motion is to show more emphasis on the entomology requirements of Nova Scotia.
MR. HENDSBEE: Mr. Chairman, just in regards to the word I have a problem with in there is "support" in regards to it because this would probably put the infringement upon the minister that this committee is asking the minister to maintain that service. We don't know what the departmental adjustments will be in the future budgets. Some of the questions I was
hoping to ask these gentlemen would be related to the continuation, or perhaps an assistant for entomology services and everything else.
MR. CHAIRMAN: I would like to put the question to the floor. The question is on the floor if someone would like to . . .
MR. MACDONELL: I think that in supporting the motion, it doesn't detract from what Mr. Lacey said. It is really only that the committee is supporting the department, to show their support for the specialists, which seems to be the direction that the department is going.
MR. CHAIRMAN: Could I speak to it then too, if I could, please, from the chair, with your permission. The issue of entomology: I have in the past hour requested that the Clerk call Eric Jorgenson in the Shubenacadie office, requesting that, and this is one part of the business we will deal with later, he would agree to appear before this committee. We thought it would be fairly timely and he has, in fact, agreed to that, although he has some commitments in November. He will be out of the province for part of that time, but I thought that we would have him in, with your permission, again, early in January or later in January, when we resume activities in the new year.
MR. HENDSBEE: Mr. Chairman, I would make a motion to defer the motion until after we have that opportunity here.
MR. CHAIRMAN: Well, first of all we have a motion on the floor and we have to deal with that motion.
MR. HENDSBEE: I can also make a motion to defer until we have that opportunity to hear from the specialists and everything else.
MR. DOWNE: The chairman hasn't had the say yet.
MR. CHAIRMAN: So it would be my suggestion that at least the motion, in part, with agreement of the mover, be put off until we have Mr. Jorgenson.
MR. DOWNE: Mr. Chairman, Mr. Jorgenson, I don't have a problem with that. If January is going to be the issue, if we can make sure that he's going to be there in January, I would then move simply that we support the first part of the motion and I will retract the second part, but I want to go on record as saying that the entomologist issue in the Province of Nova Scotia is an acute issue. It needs to be addressed and by your word of saying that he will be here in January, for that reason I will retract the second part of the motion if the seconder is in agreement with that. (Interruptions)
MR. BOUDREAU: What is the motion?
MR. CHAIRMAN: So now we'll have the motion read again, please.
MR. DOWNE: That the Christmas tree specialists continue to be retained in the Province of Nova Scotia.
MR. BOUDREAU: I will second that amendment.
MR. CHAIRMAN: Would you read that again, Mora, please, just reaffirm the motion.
MS. STEVENS: It was for the committee to write the Minister of Natural Resources to confirm their support of the continuation of the extension for the Christmas tree specialists within the department.
MR. CHAIRMAN: You heard the motion. Would all those in favour of the motion please say Aye. Contrary minded, Nay.
MS. STEVENS: That was a tie. I had two, two.
MR. DOWNE: Let's do it again. Raise your hands.
MR. CHAIRMAN: The Ayes again, please. Mr. MacDonell, I didn't hear a response from you.
MR. MACDONELL: I responded.
MR. CHAIRMAN: Those opposed, Nay. Then I shall . . .
MR. BOUDREAU: A recorded vote, please. (Interruptions)
MR. DOWNE: I was going to say, are we going to ring the bells. This is a practice for Thursday, is it?
MR. HENDSBEE: Mr. Chairman, your decision, please.
MR. CHAIRMAN: The Chairman voted Nay and it is duly noted.
The motion is defeated at this time.
MR. HENDSBEE: Mr. Chairman, if I could, just a couple of questions quickly. (Interruptions)
MR. CHAIRMAN: No, I did suggest time would be up at 9:50 a.m.
MR. HENDSBEE: We did start five minutes late, Mr. Chairman, I think you could extend the meeting. Anyway, I just want to make a ruling though that a motion of deferral does take precedence on that thing and we could have dealt with that earlier, but also I just wanted to ask a quick question. We didn't know how many members are on the Christmas Tree Council. (Interruption)
MR. CHAIRMAN: There you go. Thank you, gentlemen, for a most interesting presentation. The letter to Paul Cellucci will go out right away because I certainly feel, and the committee definitely agrees, that it is paramount that the shipments are not held up this year. The tax regime in the U.S. is a big concern, but how to fix it is the $64 million question, I guess. The other issue of good quality labour, because of the importance of this industry, the Christmas tree industry, in the province, I think, is an issue that has to be looked into in greater depth and perhaps we will do so at a later date. Again, thank you very much. As you see, it was a most interesting presentation and, keep in mind that this is a rural group that we have before you here today. We understand the importance of the industry and we also understand the importance of the entomology section of this department and the tree specialists. Thank you very much.
Please, the members are not to leave yet. We will just say good-bye. Gentlemen, we have the report to the House of Assembly. Everyone should have had a copy of that for the past number of weeks.
MR. BOUDREAU: I move the acceptance of the report.
MR. CHAIRMAN: The acceptance of the report has been moved. Is everyone happy with that? Have they decided to suggest they want to put changes forward or has that been handled? (Interruption) So the report has been moved and seconded. Then we have the sign-up sheet here for submission. So we'll all sign that, is it agreed? I will pass that along.
Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
We'll pass that along then and the other issue that I would like to bring to your attention are presenters for the upcoming next couple of meetings. We have called Eric Jorgensen. He has agreed to come. So I would suggest, if possible, that the Chicken Producers Association of Nova Scotia be brought in for November 27th.
MR. DOWNE: Of December?
MR. CHAIRMAN: Of November, and that would be our last session if all are agreed to that, and then the first session of the new year we have Eric Jorgensen in and he has agreed to do so.
MR. LANGILLE: The chicken farmers of Nova Scotia.
MR. DOWNE: Yes.
MR. BOUDREAU: I'll make the motion if a motion is required.
MR. CHAIRMAN: Motion, okay.
MR. HENDSBEE: May I ask, would that also include cross records of ACA Co-op?
MR. DOWNE: If I may, Mr. Chairman, just to clarify the point for my colleague, the honourable member for Preston. The chicken producers, we would be talking about the industry overall, what's happening provincially, regionally, nationally. What the issues of WTO are and they will also talk about marketing. They will have a general understanding of what's happening in the processing facilities. Some of the members of the board might very well be shareholders in ACA Co-op, but if you want specific issues on ACA Co-op and their situation economically, or whatever, then you need to have them in specifically. It would be a separate issue.
MR. BOUDREAU: Question.
MR. CHAIRMAN: The question has been called. Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
We stand adjourned.
[The committee adjourned at 10:59 a.m.]
