HALIFAX, TUESDAY, APRIL 20, 2010

COMMITTEE OF THE WHOLE HOUSE ON SUPPLY

2:26 P.M.

CHAIRMAN

Mr. Gordon Gosse

MR. CHAIRMAN: The Committee of the Whole House on Supply will now be called to order.

The honourable Government House Leader.

HON. FRANK CORBETT: Mr. Chairman, I would like to call Resolution E20.

Resolution E20 - Resolved, that a sum not exceeding $23,506,000 be granted to the Lieutenant Governor to defray expenses in respect of the Executive Council, pursuant to the Estimate.

MR. CHAIRMAN: I will now call on the Premier for opening remarks.

HON. DARRELL DEXTER (The Premier): Mr. Chairman, it's a pleasure to be here today in estimates. In fact, I've been in the House of Assembly for a dozen years now and I don't think I can ever recall the Premier's Office being called in estimates. (Interruption) I said I can't recall. My friends opposite are saying that it was called during Russell MacLellan's time, but I think at that point it was in the Red Room as opposed to in the main Chamber.

Before I begin, with me today are Greg Keefe, who is my deputy in the Premier's Office, and Judith Sullivan-Corney, who is my deputy responsible for Aboriginal Affairs and for Intergovernmental Affairs, which are two of the additional portfolios that I carry with me as the Premier of the province. Also be aware, Mr. Chairman, that in addition I have responsibility for Military Relations. In that regard, it's a great pleasure to have the privilege to serve in all three of those portfolios, being as they are important ones for the specific interests that are noted in the department but also for the people of the province.

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I would just like to comment for a second on the Premier's Office and its operations. We have an extraordinarily busy office. Of course, it looks after the day-to-day operations of government in many respects. I can tell you that one of the things I've learned since being in the office is just the tremendous level of dedication that comes from the Public Service in support of the Premier's Office. Daily I'm the beneficiary of an extraordinary amount of work that comes out of the departments in the way of background information, in the way of the kind of diligent execution of their various portfolios, the support that I get for the various aspects of the Premier's Office, which can change virtually daily. As you can understand, as I said, one of the things that we deal with in the Premier's Office is Intergovernmental Affairs. So that in and of itself has a broad range of topics that we can be involved with.

On one day, Mr. Chairman, we're dealing with the other Atlantic Provinces, either individually or through the Council of Atlantic Premiers, then we're dealing with the New England States, oftentimes through the New England governors, but sometimes through the Council of State Governments, which is an organization that I've proudly been a part of over many years.

[2:30 p.m.]

I can say that just recently, although I went to the last one, the SEUS CP Conference, which involves the southeastern United States and eastern Canadian Provinces, it just took place in Mississippi, the Minister of Economic and Rural Development was there on my behalf because the matters here in the House, of course, made it impossible for me to be able to attend. This is a very important organization; it's a relatively new one on the Intergovernmental Affairs side, mainly because of the amount of work, the amount of trade that we undertake with southeastern United States.

Of course, on broader trade issues, we were involved just recently on issues in Washington, Mr. Chairman. We were able, there, to have the opportunity to meet with many of the governors in the United States, but not limited to that. In fact, we met with the head of the Environmental Protection Agency, Lisa Jackson; we met with Mr. Wellinghoff who looks after FERC in the United States; we met with Tom Vilsack, the Secretary of Agriculture. We were able to pursue the business interests of the Province of Nova Scotia, having the opportunity to meet with officials at Lockheed Martin, also with a number of other businesses that are looking to do either new work in Nova Scotia or additional work.

So you can see that in each one of these cases, whether it's Intergovernmental Affairs or Aboriginal Affairs, which is to me a completely fascinating aspect of the work we do, trying to build a consensus with Aboriginal people, and to try to advance many of the interests that they have in respect to bettering the lives of Aboriginal people in the province. This is actually an exciting new opportunity because many of the Aboriginal bands here in the province are doing exciting new things in economic development, which I think are ultimately not just going to benefit the on-reserve people but also, more generally, the people of the province.

As I mentioned, I also have the privilege to serve with Military Relations. All these departments, I hope to get a chance to talk about more fully as the individual estimates are called but, of course, matters with respect to Military Relations are of particular interest to me simply because I had the great privilege to serve in our Armed Forces. I spent some time, Mr. Chairman, on the West Coast serving in a couple of capacities through the training squadron there at Esquimalt, but also as the command information officer for Maritime Forces Pacific. I think what's interesting, of course, and I realize this is just a function of age but - many of the people that I went through the new officer training centre with are now in offices of authority in the Canadian Navy. A good friend of mine was the commander of the Toronto, he's now a commodore, still working, I believe, in Ottawa. One of the fascinating things for me was during the trooping of the color, I realized that the parade commander that day was a person that I gone through basic training with in Chilliwack. It is a function of age but it is also a handy thing ,when you're serving in a particular office, to actually know many of the people who are in the command structure.

I must say, the co-operation that I have received from all elements of the Armed Forces, and the welcome that I receive whenever I go to any of the Armed Forces events is always outstanding. We have every reason to be proud of the tremendous work that continues to be done by our Armed Forces personnel.

I'll go back now just to talk a little bit about some of the things that we found when we came into government. I've said many times that government was on an unsustainable path and that we cannot simply sit back and do nothing. Expenses were rising faster than revenues. Our debt is too high, driven by a lack of financial discipline. The interest on debt will soon be more than $1 billion per year. The reality is that as a new government we have a responsibility to simply clean up the mess that we found, and I believe that we have undertaken the difficult and hard work of getting our finances back to balance.

It will ultimately mean not just this year, but over the coming years, many difficult decisions. The Minister of Finance set forth in his budget on April 6^th - and of course this is what we are discussing here in this committee - but it outlines a four-year plan to move the province back to financial health. The Opposition has been critical of not coming back to balance this year and, as I've said before, it was not a question of being able to do it, you could have gone back to balance this year. What it would have meant though, is it would have meant very, very deep cuts in the civil service, in the services that are made to the people of the province. For that reason, we decided that we would actually take the advice of the economic panel, take the advice of Deloitte & Touche when they said the better choice was to do this in a way that was going to be sustainable over the long term.

It's a four-year plan back to balance but it's not meant, of course, to end in four years or to be only four years. It means it returns us to financial fiscal discipline so that the province can move forward in a way that is responsible, that recognizes the limitations we have, that recognizes we have to supply a certain level of services to the people of the province. This budget makes balanced choices to increase revenue, to pare down expenses, and to grow the economy.

This budget, our first, came after extensive consultations. We empanelled a group of economic experts who delivered a very valuable report. The Minister of Finance, I think he is to be congratulated for his willingness to travel the length and breadth of this province seeking the wisdom of the people of Nova Scotia. This was an unparalleled consultation process that took us to many communities which are not usually consulted in this process. In addition to the Back to Balance sessions, the Finance Minister also received many written submissions which he made a commitment to read every line of. He met with many individual groups in addition to the ones who came out to the Back to Balance sessions.

There could be no debate or any doubt about the kind of undertaking the Minister of Finance took under the Back to Balance process. It was thorough, it was exhaustive, it reached out to the people of Nova Scotia in a way that no government before has and said we want to hear your collective wisdom because we intend to follow it. That's what we did. We are taking the first steps on the road back to balance.

We've outlined the plan that is smart, strategic and steady. I don't mean to suggest that little has been done so far, but we were waiting for this budget. In fact, just the opposite has happened. Government, as promised, began an expenditure management initiative last year that will see savings of up to 1 per cent across government for non-essential spending. We plan to look at every expenditure in government and ensure it is needed and being delivered appropriately.

As outlined in the budget, we plan to save the taxpayers of Nova Scotia $772 million over the next four years through careful expenditure management. Last month we told government departments to end March madness, the practice of quickly spending unspent funds just before the end of the budget year. Instead, those unspent funds would go toward paying down the debt. These are the right decisions for Nova Scotians. These are the types of decisions that Nova Scotians can expect from this government.

We will continue to take this approach, for example, more than 60 per cent of our expenditures are given to third parties. We will work closely, as I mentioned in Question Period today, with our school boards, our district health authorities and municipalities to find savings where it makes sense through streamlined administration, through shared services and through technology.

Salaries also form a large part of the provincial budget and in order to take a balanced approach to getting back to balance, we'll reduce the size of the civil service by as much as 10 per cent over the next four years. We're not going to do that by cutting and chopping jobs, instead this will be a prudent and careful reduction that will rely on attrition and voluntary departures, not layoffs. Right now reducing spending does not go far enough to return Nova Scotia to balance.

The budget restores the HST to its historic level of 15 per cent. This was not an easy choice but it was a solution that we heard over and over again at the Back to Balance consultations. Nova Scotians said they didn't want an increase in the HST to negatively affect lower income families so we have instituted the affordable living tax credit and the poverty reduction credit. Something I'm particularly proud of our government for doing is that no longer will seniors who receive the guaranteed income supplement have to pay income tax on it. This was something that remained in place over the course of the last government. People would often come to me, particularly at tax time and they would say, if the federal government recognizes this is the money we need in order to be able to live on, this is the guaranteed income supplement, why do we continue to pay tax on it? That will no longer be the case.

The provincial portion of the HST will no longer apply to children's clothing, to children's shoes, to diapers, and to feminine hygiene products. Last year we cut the provincial portion of the HST from home energy costs. The tax relief will continue, putting $84 million back into the pockets of taxpayers. For the first time in 10 years we will increase funding to transition houses and to women's centres. These are just some of the ways that we are helping to make life better and more affordable for families in this province.

Getting back to balance goes hand-in-hand with the ability to deliver the critical programs and services that Nova Scotians need and want. This government will provide better health care, will make life more affordable, will create jobs, and will grow the economy. As to the latter two points, last year the government created good jobs by investing some $724 million in capital funding in roads, schools, hospitals, and housing. Many of these investments brought additional funding from the federal and municipal governments. The budget proposed for capital investments this year is some $710 million. This is the biggest two-year capital investment in the province's history. We know the program is having a positive impact on the economy. Our stimulus investments alone will create some 7,000 person-years of employment. That's why we are continuing to invest in projects around the province. These projects will vary from highways and bridges to energy-saving renovations at our schools, to a children's camp, and to rebuilding the Windsor Curling Club.

[2:45 p.m.]

My government continues with year two of the housing stimulus plan. We will spend $128 million to build affordable housing units and upgrade existing ones across the province. As the recession ends, our capital stimulus efforts will also, but government efforts to grow the economy and create jobs will not. We've already made significant investments to create hundreds of jobs. Our green economy investment with Daewoo in Pictou County is just one example. In this budget we have cut the small business tax by one-half of a percentage point. That is the first cut in over 15 years. We realize that it is an important signal to the small business community that we understand the challenges they are facing in the new economy and that we intend to do even more when we get back to balance. We recognize the importance of small business to the health of Nova Scotia's economy, and this cut will put millions of dollars back into the hands of small businesses.

One key small business is the family farm. We are working on a 10-year strategy that will support the success of this vital industry. We are also completing forward-looking strategies for our aquaculture industry, and also our forests, minerals, and parklands. Government will soon release a five-year plan to pave provincial roads across Nova Scotia.

Marketing and promoting this province's primary industries will increase in a smart and coordinated way. We will show the world that Nova Scotia should be the first choice for business. People will also learn something we already know, that this province is a great place to live, to work, and to raise a family. We want the world to come to our doorstep.

Nova Scotia is also the gateway to the world. Halifax offers the closest all-water connection to North America for ships crossing the Atlantic. It connects businesses to North America's vast transportation network with quick, cost-effective access to major markets. Government continues to give close attention to the Atlantic Gateway initiative. For example, we have been to Vietnam, which is rapidly growing as a hub for container traffic, to talk about synergies. We are identifying other opportunities to make the gateway a reality.

Speaking of coming to Nova Scotia, we are looking forward this year to a visit by Her Majesty the Queen and the Duke of Edinburgh this summer. I am sure Her Majesty will be pleased by the warm welcome she will receive from Nova Scotians. It has been some time since the Queen has been able to visit Nova Scotia and it will, I am sure, generate great pride and great excitement.

This is not the only major celebration this year. As you know, and as I mentioned earlier, I spent some time in the Navy, and therefore I am looking forward to the celebrations around the 100^th Anniversary of the modern Navy. There is no need to expound on the importance of the Navy, both today and in the long history of Nova Scotia. Needless to say, celebrations will be a time for all to pay tribute to our sailors.

As promised, I introduced a bill on April 12^th that will establish the first Saturday in November as Sea, Army, Air and Navy League Cadets Day. The cadets are a group of wonderful organizations that instill such values as leadership, citizenship, and community in thousands of Nova Scotia youth each year. Although it was a long time ago, I can remember the time that I spent in cadets, and I think the cadet corps are particularly important in the rural areas of our province, where for many young people they represent an opportunity to participate and to learn valuable skills that serve them well in later life.

I'll change tack now to our efforts outside the province. Government will continue to approach our intergovernmental opportunities in a strategic way. We will pursue our priorities with the federal government, both one-on-one and collectively, through the Council of the Federation. The Council of the Federation will be meeting this year in Winnipeg. I'm looking forward again to the co-operative relationship that exists among the Premiers of this country as they look to formulate policies and to advance positions that are beneficial not just to the individual provinces but to the country as a whole. We take positions in order to try and influence not only our collective activities but the activities and policies of the federal government. It is a very important aspect of the work that I do.

Our provincial partners in Atlantic Canada will continue to be a focus of our efforts. Our government will continue to make strategic efforts in the regions that hold great benefit for Nova Scotia. I've often said that I believe the potential of the aggregated population of 2.3 million people in the Atlantic Region is greater than any single province and that we need to find more ways to co-operate. We need to find more ways to integrate the business models that we have so that potential investors, in looking at Halifax or Moncton or Charlottetown, will say this is a region that knows how to work together and we want to do business in the region. I've said this before, but I'll say it again: I believe that success in the other parts of the region is just as important to Nova Scotia and to Halifax as success in Nova Scotia and Halifax is to the rest of the region.

We will seize emerging opportunities in the Caribbean, in the E.U., in Vietnam, and India. For example, the trade mission to Vietnam last year was a resounding success. We signed a memorandum of understanding with Ba Ria‑Vung Tau Province that strengthens our ties with that country's economic engine. Other agreements forged by the missions involved education and transportation sectors. It also signalled that Nova Scotia is ready and willing to be a competitive force in the world market. To wrap up my comments around trade issues, we will make sure that Nova Scotia's voice is heard in the upcoming trade talks with the European Union.

I mentioned the green economy earlier. Government sees many challenges but also many great opportunities in climate change.

Just before I leave the European Union talks, I was pleased just a short time ago to meet with the Ambassador for France and with the Consul General. I want to express to you, and of course through you to the rest of the House, that this was a great opportunity to hear the position being advanced, with respect to the trade talks, with the European Union and what the diplomats see as some of the exciting opportunities that will exist for the province in trade with France. I must say, I was certainly pleased to receive those entreaties from the French Government.

Nova Scotia's leadership in the green economy, green technology, climate change and environmental sustainability will mean a better tomorrow. Government has taken ambitious environmental steps; for example, by 2015 Nova Scotia will get 25 per cent of its electricity production from renewable sources. Hard caps are in place on greenhouse gas emissions in the electricity sector. Our green businesses have tremendous potential to grow our economy and create highly skilled, well-paying jobs. Government has championed the green economy at such places as the Copenhagen climate change talks and we will continue to do so. Nova Scotia's LED lighting, carbon capture and tidal energy technologies are attracting attention from around the globe. Government is taking action because a cleaner, green Nova Scotia benefits us all.

I want to talk now about the number one concern of Nova Scotians, health care. Nova Scotians tell us that improving health care is vitally important. We agree and as I said earlier, our efforts for savings are not geared toward reducing critical services but improving them. To make those improvements, we need to make some necessary changes to the overall system. For example, a good, hard look at our health administration is necessary. My government will redirect some of the funds spent on administration back to front-line care. We need to increase accountability and transparency in our major health capital projects to ensure that we are getting value for our money.

A new drug unit will examine ways to reduce the cost of prescription drugs, something that I know is important to this House, is important to Opposition members. They have raised this matter with me on a number of occasions. I'm sure they're happy to know that we are looking very hard at the way that we can reduce these costs, not just to the province but also to ordinary consumers. They will know that there is now, this year, an opportunity as many of the brand drugs will be coming off their patents and therefore will be subject to becoming generic drugs. This represents the opportunity for considerable savings for the province in prescription drugs. This is something that we are pursuing with great vigor because it means a substantial difference to our costs. It also means that the flexibility or the ability of government to do other things it might like to do in this particular area is also enhanced.

Mental health and addiction services will be revamped through a new mental health strategy. All are part of my government's efforts to ensure health care dollars are being used wisely.

The health care system needs to be more responsive, more effective and more efficient. Dr. John Ross delivered an interim report to the government on the province's emergency rooms. It made for interesting reading and we're eager to see his final report and recommendations. To that end, we have set aside $7.8 million in this budget to improve emergency room services in the province. We will also spend $1.3 million to reduce surgical wait times. Government will also make targeted efforts such as increasing long-term care beds by some 360, expanding the hours of the Cobequid Community Health Centre, increasing the availability of radiation therapy in Halifax and Sydney, and adding five additional digital mammography machines.

Mr. Chairman, before we leave the long-term care sector, as you may know, this is something in which I have had a long interest in my time in this House; it is an important aspect of our government's plan. As I said, we're going to expand the number of long-term care beds by some 360, but you will remember that it was through the efforts, not just of myself but of many people, particularly caregivers across the province, that we were able to convince the previous government, the Hamm Government, to change the policy with respect to long-term care and no longer to put those costs or flow them through to the individual.

[3:00 p.m.]

I would comment on this because, Mr. Chairman, the outpouring from so many people across the province as a result of that change was quite remarkable; the number of letters, the number of e-mails, the number of calls that came into our office as a result of that change was really quite gratifying. I think there were an awful lot of people out there who didn't want to bring attention to this particular policy of government simply because they didn't want to bring attention to their own personal situation, but once the change got made so that you weren't in the position of having to essentially give up everything you had worked your life for when you went into long-term care, they came forward and said that this was an important initiative, that this was something that they didn't really believe would happen in the end, and that it was a matter of perseverance by so many people that eventually made it happen.

Mr. Chairman, my government will also use our health care professionals to their full capabilities. Government will put more nurse practitioners into the province's nursing homes to give seniors better support and pharmacists will soon be able to do injections. Nova Scotia families tell us they want a better health care system. They also want their health care dollars to work as hard as possible. My government will be proud to do both. I believe that the budget introduced by the Finance Minister is fair and responsible. It is a plan that makes the right decisions to ensure that this province gets back to balance.

As the Economic Advisory Panel said, there are only three ways to get back to balance - to reduce spending, increase revenue and to grow the economy. We have taken their advice and we have done all three, but not recklessly, not without a plan. We have taken an even-handed approach to changing the unsustainable course of this province in getting back to living within our means. The next few years will offer some difficult challenges for all of us. My government will continue to make the right decisions for Nova Scotia families.

This is really the point, Mr. Chairman. The reality is that we came to government at a very difficult time. We came to government finding that the finances of the province were not as they had been presented. We came at a time when the world was experiencing an economic recession like has not been seen in many years, but we have taken on those challenges. We have said that a responsible government doesn't simply ignore what has happened; it accepts that things are sometimes different than you would have liked them to have been, but you address them through the tools that you have at hand.

We are doing that, Mr. Chairman. We're doing it by responding to the aspirations of Nova Scotians through the back to balance process. We looked at what the available opportunities were for us to get back to balance. Nobody likes to see tax increases, but what we do know is that we have to have enough revenue to be able to support the services that you need to provide.

Mr. Chairman, we made sure that the vulnerable people in this province were protected from any changes in revenue and provided them with, in fact, additional income to improve their lives. Those people are better off as a result of this budget. The province is better off as a result of this budget, and will be better off as a result of having a multi-year approach to getting the province back to balance. I look forward to answering the questions of the members opposite. Thank you.(Applause)

MR. CHAIRMAN: The honourable Leader of the Official Opposition.

HON. STEPHEN MCNEIL: Mr. Chairman, I want to welcome the Premier to the budget estimates and to also welcome his staff and congratulate them on the work they're doing for the people of our province. I know it's in very difficult circumstances that you're asked to be public servants, to fulfill your obligations. So I just want to put on the record that Nova Scotians appreciate you giving up the time that you give up, that no one sees, on behalf of all of us. So I thank both of you for that work that you're doing.

I listened with great interest to the Premier. I had the opportunity to travel the province with the Premier in the last general election. Quite frankly, we've had a very spirited conversation about that, since, and I believed then that the Premier was misleading the people of this province. As I've listened to his remarks today, I believe he simply just hasn't caught on to the fact that Nova Scotians have understood that.

He's here suggesting that prior to June 9^th there was no way that he could understand what the finances of this province were and, do you know what, Mr. Chairman, I would probably agree with him. I would suggest that's probably accurate and all the more reason why you shouldn't make a reckless promise of being able to balance the budget when you don't know the facts; all the more reason why you shouldn't promise you're not going to raise taxes when you don't know the facts; all the more reason why you shouldn't promise you're not going to make cuts when you simply don't know the facts.

What we've seen since that time has been a government that has been trying to find a way to manipulate the views of the people, find something to hide behind, to run from, and try to get away from every commitment. We're often told to look at the work that Deloitte, the report that had come out, had mentioned, and the work that Deloitte was doing. Interestingly enough, if you look at the parameters that were given to Deloitte, it says what would happen if the Province of Nova Scotia continued to spend at 6 per cent or 7 per cent with revenue at an all-time low?

Mr. Chairman, I don't believe anyone in the general election, even Nova Scotians, believed any government could continue to spend at that rate. So we all knew there was going to have to be changes. So I'm not sure why you would ask Deloitte to continue to give projections at 6 per cent or 7 per cent when you knew you weren't going to be spending at that and you knew that Nova Scotians didn't expect that, and that revenue was at an all-time low.

The reason for that is that the government was looking for some cover. The government was looking for a way to justify breaking those commitments to the people of this province, commitments they knew full well they could not keep, commitments they knew full well, when they campaigned, they couldn't keep, and instead of standing in front of the people of Nova Scotia and saying we misled you, instead of doing that, taking ownership of the mistakes they made, they find cover. They're looking for someone else to hide behind.

What's interesting is when they reached for Deloitte, they talk about the revenue projection of a $1.4 billion deficit, they stopped short, though, of talking about when Deloitte said, we don't believe you should be prepaying any bills. What do they do in their first budget? They prepay universities to a tune of around $350 million in advance, money that the people of this province had to borrow, money that the people of this province began to pay on before they had to.

All of these things continue to irritate Nova Scotians, quite frankly. I had the opportunity yesterday to be in Truro. I spent part of Friday in Victoria-The Lakes, I spent Saturday in Glace Bay, part of Sunday in Richmond County and Truro. I spent all day yesterday in the Truro area, meeting with different organizations and talking to them about the future of our province. What is interesting that I got at just about every meeting - interestingly enough, not the Liberal meetings but all the other meetings - there was a common theme - I thought they were going to be new and different. What was new and different? I thought they would tell us like it was, instead they've been looking for cover at every direction. It's only 9, 10 months, how quickly Nova Scotians have caught on to the deceit that was put before them in that general election.

We talk about the work of the economic panel and I want to thank them for the commitment and the work that they have done on behalf of the people of Nova Scotia. It's interesting enough to know that we spent approximately $100,000 to realize that government has two options in front of it, raise taxes and cut services or grow the economy. Who would have ever thought that? I wonder what would be the other option. I wonder if there's any other option and we had to spend $100,000 to get that advice. Why? Because we needed some political cover, we needed something to hide behind, we needed something to defend the decisions we were about to make, because we couldn't blame it on the previous government. That record was getting tired, getting scratched. (Interruptions) It certainly is.

When you look more recently and you look at the first budget that was introduced by the NDP Government of the Province of Nova Scotia, the deficit is $488 million, $350 million roughly was a prepayment, $80 million for land. It's getting pretty close to a balanced budget. Even Deloitte suggested that perhaps the books were balanced when you got them. Your first budget was in deficit and your second budget is in deficit.

Then we go on a road show with the Minister of Finance and it's interesting to hear the Premier say it's the most extensive consultation that any government has ever done with the people of this province. Well he called every group in the Province of Nova Scotia that would be asking for money and he invited them to the meeting. What school board is not going to ask the government for more money? What hospital board is not going to ask the government for more money? What union leadership is not going to ask the government for more money? I have yet to hear of one. So to avoid making some tough decisions, we create a very controlled environment. The Minister of Finance gets an opportunity to stand up and address the crowd in his own I-know-best attitude and say to the people, well if you don't want that, what if we raise the HST by 2 per cent to 15? Well, I guess the people if they say, perhaps, but if you say to them, should we buy land or increase your taxes? When did we have that conversation? We should have.

The Premier and his Minister of Finance talks about, we only moved the HST back to what it used to be. I'm sure the Premier is smart enough to know that at that same time it was 15 per cent in New Brunswick and in the other Atlantic Provinces, except for Prince Edward Island. It's deceitful to tell the people of Nova Scotia, in my view, we're just putting it back to where it was because you've taken it out of the context of before.

The Premier is shaking his head. I can tell you there are many Nova Scotians shaking theirs as they go around and they look and listen.

We had a promise of keeping every emergency room open. Dr. Ross has been doing his utmost - Dr. Orange I think he was referred to - doing his utmost to go around the province to reassure communities that government will not be closing their emergency rooms. I'm looking forward to heading to the Valley tomorrow night, Dr. Ross will be holding a public meeting with the people of the Annapolis Basin area which will take in the Annapolis Community Health Centre and the Digby health facility. We're looking forward to him reassuring those people that not only will the emergency room not be closed, but the hours won't be reduced, that he will keep that commitment of 24/7 emergency rooms promised during the election campaign.

[3:15 p.m.]

I'm sure the people of the Basin area will remind him it's not his responsibility to find political cover for this government. It is his responsibility to assess those and find a way and, in my view, to help work with regional health authorities to find alternative access to health care for those who are entering emergency rooms who shouldn't be there. That's it. The Premier and his government and the Minister of Health have already committed to the 24/7 commitment to the people of this province.

I listened as the Premier was talking about his budget. There are a few things in it that quite frankly we would support. The fact that seniors earning the income supplement won't be paying taxes, is a positive thing. As we know, when the federal government increased basic personal exemption and Nova Scotia held theirs, there were many Nova Scotia seniors who were put back on the tax roll. They were put there because the Province of Nova Scotia wasn't keeping pace. The fact when you don't pay federal tax means you can't use those receipts that you're holding on to to reduce your income tax in the Province of Nova Scotia. We would support that. It's a positive thing.

The Premier knows that since I've been in this House I've talked about the issue of poverty and poverty reduction and how important it is that we, as a province, begin to face up to the amount of children in this province who are living in poverty for all kinds of reasons. There a social and moral responsibility for us, but also, quite frankly, we will not be able to meet the labour needs going forward if we continue to leave a great number of young Nova Scotians behind in not reaching their full potential.

When you start looking at many of these tax changes, the poverty reduction credit is to a family whose income is less than $12,000. Well, before we rejoice and suggest that it's going to be the saviour for those living in poverty in the Province of Nova Scotia, it may be a good start but it's a far cry from addressing the real challenges facing many low- income Nova Scotians.

He has talked about the Affordable Living Tax Credit for those Nova Scotian families with an income below $30,000, it's a start and we'll acknowledge that. Really, what's unconscionable is what happens after this. We start talking about a new tax bracket and we're going to eliminate the surtax. I have a problem with this. The problem is the fact that this government gave me a tax break, this government gave the Premier a tax break and they gave anyone making over $83,000 and $214,000, $215,000 either a tax break or status quo.

Yet a family in my constituency or in any other part of this province making $34,000 it's said, too bad, you're on your own. Don't qualify for any help, we appreciate you paying the extra 2 per cent of HST and somehow try to find a way to survive. Yet, we get a tax break. Where's the justice in that? Where's the social justice in that? How does that make sense? How can that be right?

I can tell you, as I look across from here, I know many of your constituencies are no different from mine. You have people coming into your office looking for help to meet the basic needs of living, and some of them have an income of over $34,000 a family. You're going to say to them we've done all we can, good luck, thanks very much, we appreciate the extra 2 per cent. You can also say to them, by the way, the front bench got a tax break and so did the Leader of the Official Opposition. You can even put my name in there to somehow justify it. Quite frankly, I don't know how we can rationalize to Nova Scotians that that's right. How is that right? It isn't.

On top of that, we then start looking at the high income earners in the province and say we're going to tax you even more. A doctor, whom we don't have enough of, we're going to say we're going to take taxes from you, but by the way, we're not going to put it in the provincial revenue, we're going to use that money to give us a tax cut, thank you very much. How does that make sense? Who in their infinite wisdom was sitting around some table rationalizing this piece of public policy? I wonder which Cabinet Minister said we need a tax break? I know most of them, and I would say not very many of them, but I would have thought that when someone pointed it out, they would have said, do you know what, that's not right, that's a mistake and we're going to correct it. Instead, all they did was somehow try to say we're doing some political points with it. I'm not sure that's how Nova Scotians are viewing it as I've been travelling the province.

I listened with interest to the Premier talking about long-term strategy around long-term care. It has been a positive thing for the Province of Nova Scotia that we began to cover the costs of long-term care, and I will say in this House it was something that was led by the Premier - the Leader of the New Democratic Party at the time - that it would be that we would pay for the long-term care costs in nursing homes. That has been a positive change for Nova Scotian families. Interestingly enough, I think at the end of the day all Nova Scotians were in support of that, but long-term care is one way of providing service to seniors in our province, those who are vulnerable, those who need help.

We had promoted very heavily a caregiver allowance, one that was adopted by the previous government, one that was ridiculed by this government last Spring in the House, saying it wasn't a program that would work for some and wouldn't meet all the needs of those who needed it. Yet when we've asked for the new program, there isn't one. They're continuing to work with the old one to roll out a caregiver allowance program. Mr. Premier, I would suggest to you that the time is moving on very quickly and there are many Nova Scotians who need your government to respond in a positive way to help support those caregivers who are looking after a loved one at home and needing your support.

There was much fanfare. Many Nova Scotians believed that we in this House were going to keep that commitment and that that program would be available to Nova Scotians. We had supported the original program. Your government in the Spring was very critical of it. When your first budget came out there were lots of questions in this House around that, and many times your government stood up and said we were going to have our own program and we're going to introduce it. Well, we're waiting, and Nova Scotians are waiting for that. I would encourage you to move toward making sure that happens sooner rather than later.

This is an exciting year. I know the Premier mentioned a number of times about some anniversaries, some exciting firsts. I'm looking forward to the Queen coming as well. I'm also looking forward to the Queen coming as well, and I'm also looking forward to the 400^th Anniversary celebration of Membertou's baptism which will be taking place in the riding of Annapolis. I think there will be an announcement coming up tomorrow as a positive recognition of the First Nations community in the beginning of our relationship, their beginning belief in faith and Christianity, and their connection with mainstream religion here in the Catholic Church in the Province of Nova Scotia, and I'm looking forward to that.

Before I begin to ask some budget questions, I want to also acknowledge the work that was done, and will continue to be done, by the government around the issue of Africville. For too long this issue has been one that has been very divisive, one that has been wrong. There's no other way to put it - it has been scarring to families, it has divided families, quite frankly in my view, all because of short-sightedness, a level of prejudice on behalf of the people at that time. It is one that I want to congratulate the Premier on for allowing us to begin the healing process surrounding this issue, and I want to thank and congratulate the people of the former community of Africville for their perseverance. This has been a long struggle for them.

With that, I would like to ask a few questions around the estimates. I noticed, and I listened quite attentively to the amount of travel that has taken place. I asked you earlier today some questions around expenses of people in your office. So in the spirit of continuing on with that, I will ask - and you mentioned about the eastern state governors, and I know on Friday there was some talk here about a taxi receipt which was explained, but I want to give you an opportunity, I want to talk about that particular trip that you took to Burlington.

I assume and I believe that perhaps your wife was with you, which is a positive thing, and I think all Nova Scotians would be grateful to hear that, that she was on vacation. Your family, like many families in this House, gives up a tremendous amount of time so that you can fulfill your duties to the people of the province, and it's nice to see that she gets the opportunity to travel with you some.

On that same trip though, I think you drove from here to Vermont, which is approximately 716 kilometres, so it's 1,432 roughly - there was a claim for 2,374 kilometres. Also in that same claim there was a taxi chit that you drove from Vermont - I guess you took a taxi from Vermont to Montreal to catch a flight to that meeting - then to Saskatchewan and then flew back from Saskatchewan to Nova Scotia. I'm assuming that those expenses include your trip home, or perhaps, could you explain the discrepancy in the mileage if it's not on the trip home?

THE PREMIER: The only claim that would have been made would have been for the mileage on the way there. I'm pleased to ask my staff to have a look at that, but the only claim that would have been made would have been for the cost of the travel from Nova Scotia to Vermont. From Vermont to Montreal - we were going on to the Council of the Federation - we looked at every option that was available to be able to make that travel. There was no bus available, and I even had a look at the train schedule because there is a train that goes through there, but there were none that you could get that would go in the appropriate time in order to get to Montreal. We could have flown, which was actually the most convenient thing to do, but it would have cost more than to have a taxi - it was I think somewhere in the vicinity of $600 or $700. It probably wouldn't have attracted attention like a taxi does, but it does actually cost more if you proceed in that fashion. So we used that in order to get to Montreal in time to get the flight to Regina.

[3:30 p.m.]

Unfortunately, when we got to Montreal the flight to Regina was grounded because there had been a lightning strike at the airport - no, that's not quite right. I think we flew from Montreal to Toronto - that's right - and when we landed in Toronto there had been a lightning strike, so we sat on the tarmac I think for a little over two and a half hours. We were eventually off-loaded in Toronto, but all the flights out of Toronto to Regina were either cancelled or delayed, and so I ended up in the airport in Toronto, I think until something like two o'clock that morning.

I wasn't alone. I was there with the Premier of Prince Edward Island and the Premier of New Brunswick, both had found themselves in the same situation. A little while later we were joined by Premier McGuinty from Ontario, so the four of us sat in the airport I think until about two o'clock in the morning or so and then eventually Air Canada put a flight back on which we were lucky enough to get on because we had to then sign up standby in order to get on that flight.

I think we arrived - it has been awhile now, so don't hold me to these actual time frames - at the airport at something around four o'clock in the morning Saskatchewan time, is my recollection. We did manage to get to the hotel. Unfortunately, as you'll also note in some of that, although we made it there, our luggage did not make it there. So I had for the Council of the Federation meeting the next day a pair of jeans, a pair of sneakers, and the shirt I was wearing. So that, of course, made it very difficult to take part in the next day's proceedings.

Outside of this House the member for Argyle raised questions about the purchase of certain items while I was in Regina and I want to assure him, and assure yourself, that the next day, I think at 9:50 a.m., I found myself standing outside the doors of the Bay in Regina, along with one of the other Premiers, and looking for reasonable attire to be able to attend the next day's function, not knowing if we were going to be there for one day or for two days.

I think in the course of that I purchased a couple of pairs of pants, a couple of shirts, those sorts of things, and then went to Moores where - I know I'm taking you on an excursion through my shopping trip, but to Moores where I bought a suit coat. (Interruption) I know, I know. Well, I just wanted them to know, it's about an expense and what happened was initially those expenses got submitted. As soon as I realized they had been submitted, we withdrew them and sent the expenses to Air Canada since it was their fault that the baggage didn't arrive and, unfortunately for me, those have never been paid, but we continue to pursue them with the airline.

I'll let you get on to the rest of your questions.

MR. MCNEIL: Thank you for that . . .

AN HON. MEMBER: Travelogue.

MR. MCNEIL: Yes, travelogue, Premier, but the question I asked you was the travel from here to Vermont. As you just said, you went one direction and then you took a taxi to Montreal, then you flew to Saskatchewan. What I'm wondering about is why are the taxpayers of the Province of Nova Scotia billed 2,374 kilometres for a round trip from Halifax to Vermont?

THE PREMIER: Perhaps you could just send it over to me, I'd be happy to have a look at it.

MR. MCNEIL: I will do that, Premier.

Mr. Chairman, the next question that I have is the issue around the IBEW conference you did in Prince Edward Island. When you went there, I'm assuming you gave a speech. As I look on the Web site, your staff laid out a couple speeches you gave in Toronto, and I was wondering if they would be so kind and you would be so kind as to table the speech that you gave in Prince Edward Island so that we would get an opportunity to see that. The IBEW also said it's standard practice that they invite Premiers to their conferences. I would ask you, were you joined by the Premier of Prince Edward Island as well as the Premier of New Brunswick? They covered - or there was no claim I guess for accommodations, but you had billed for a flight over there. Did you not stay overnight or you just left here, flew there and flew back? Perhaps you would give us some indication around that trip.

THE PREMIER: Sure. I'm happy to have my staff find the speech that I gave and would be pleased to table that - either table it or forward it to you, as you desire. We did stay overnight, and it may be that those costs were covered by the conference. Again, I can have that responded to for you of course, the flight cost of getting to the conference and back.

I think their tradition is to invite one of the Premiers each year, but I'm not sure, and you would have to talk to them about that. I know that I did get a message from Premier Ghiz that he was not able to make it, but just sending me along his best wishes for a good conference and a good experience in his province, and that's the only contact that I would have had.

When I go to one of the provinces of another Premier, even if I'm only there on personal business - I travel frequently, for example, to New Brunswick because my sister lives in Lincoln, outside of Fredericton - I make it a habit always to tell the Premier whose province I'm going into that I'm going to be there, so that they are not surprised if they hear reports of me in downtown Fredericton for some reason. It's a courtesy that you tell the other Premiers that you're going to be there.

MR. MCNEIL: I think that is a great practice that you would notify them - and I hope that you fill your tank up in Nova Scotia before you go into New Brunswick, and buy anything that you may need in the Province of Nova Scotia. We wouldn't want that to become part of Question Period as we go forward. (Interruption) Well, some might, Mr. Premier, but you know I wouldn't.

I look forward to reading that speech, I look forward to seeing it, the one that you had given to your brothers and sisters in arms in Prince Edward Island, so I'm sure it will be inspiring.

You also gave a speech at the Empire Club, I believe, in Toronto. You were joined there by, I believe, just two staff members, I believe your chief of staff and maybe your director of communications were with you on that trip. There was a breakfast for three. I'm curious as to who had breakfast, was it the three of you or did you have breakfast with some others that was for $106.53?

THE PREMIER: Mr. Chairman, to tell you the truth, I don't recall who I would have had breakfast with that morning. I know that there were, of course, many people there, we didn't just go for the speech at the Empire Club, we had other itinerary while we were there. We took the opportunity to fill as much of my calendar as I could. I was pleased at that time, also, to be hosted by Frank McKenna, for the purposes of meeting many of the business people in Toronto who do business with Nova Scotia. I also met with other individuals who may not have been covered off in that, who were looking to do business in the province. So, it may have been, and I don't recall, I can try and find that answer for you, but it may have been that that was a breakfast meeting with some other people.

MR. MCNEIL: I look forward to the answer, Mr. Premier, because at that same trip, you and one of your staff also claimed a per diem. As you know, that is inappropriate, so I would look forward to seeing if you could find out who you had breakfast with and whether or not the taxpayers of Nova Scotia also paid a per diem for you at the same time.

I'm curious, you had a following trip, actually one to Copenhagen, I believe you had one staff member with you. I'm curious as to why it was important to take your director of communications and chief of staff to Toronto to the tune of roughly $3,000 to do that meeting?

THE PREMIER: Well, Mr. Chairman, it was an opportunity for me as the Premier of the province, essentially, in the opening days of my government, to introduce myself to the Toronto investment community. I was there to give an important speech to the Empire Club. There were many meetings that were taking place at that time and we thought it was best to use the time that I had to coordinate as many of those meetings as I could.

So, in some of those meetings, my chief of staff would be with me, because he would be the appropriate person for that particular meeting. In other meetings, my director of communications would be there for one thing or another. Or he was there to specifically oversee the set-up and the arrangements for the speech to the Empire Club, to ensure that there was an appropriate communications plan for what we were doing while we there. We felt that this was a great opportunity for us to speak directly to a community that does a lot of business in the Province of Nova Scotia and we wanted to make sure that that was done as effectively and efficiently as was possible.

MR MCNEIL: Thank you for that, Mr. Premier, I recognize that it is important for the Premier of our province to go, the question was around the number of staff and I appreciate your remarks to that. I would encourage you to continue to seek the advice of Frank McKenna, as you go forward, (Laughter) to try and govern our province. But also seek investment outside our province. It is one of the ways that I believe we can grow the economy.

You and I had a number of discussions about renewable energy and I'm sure we'll have a few more as this debate continues on about that. But I do think it is important and we're just looking for some clarifications on some of these details. So I look forward to the response.

You also did another speech in Toronto, I think it was with the Killam analysts and institutional investors. There were actually two receipts for this trip. There was one billed to the Premier's Office, it was a receipt for the total, for air fare, hotel room and per diem was $888.31, there was also one, the same one billed to Intergovernmental Affairs, for a grand total of $1,757.08, why would that be divided, why would that be split between the Premier's Office and Intergovernmental Affairs?

[3:45 p.m.]

THE PREMIER: Well, I don't know the answer to that question. I would just ask my staff about it. It may be that Intergovernmental Affairs were supporting a staff person who went with me on that trip so part of that would have been billed to Intergovernmental Affairs and the other part of it would have been billed to my office for my travel.

MR. MCNEIL: We happened to have seen that particular one. I'm just curious about the trip that you did with the Empire Club, the trip to Prince Edward Island to speak to the IBEW, and whether or not there were staff that went with you that were billed to other departments. Whether or not there are other costs associated with that trip that perhaps don't show up in the Premier's Office?

THE PREMIER: Well, we have given you all of the expenses as they pertain to this. If they were billed in Intergovernmental Affairs, they would shown up in Intergovernmental Affairs but they wouldn't have billed elsewhere.

MR. MCNEIL: I appreciate that. I guess what I'm asking you is, that's the trip where you went to Toronto and spoke there, that you divided your travel up between two departments. What I'm asking you is, and I spoke to you about your trip that you took to the Empire Club and we identified that your chief of staff and your director of communications who were receipted to your department, was there any other staff that would have been receipted to another department?

THE PREMIER: It would be the same.

MR. MCNEIL: Thank so much for that. I want to acknowledge that taking staff is not something that we're frowning upon, I'm just looking at some clarification on that. As well, I was pretty critical of our trip to Copenhagen, quite frankly, I felt that the province - and I was critical here - I felt that it was important that we, as a country, were represented by our national government who were there, talking about what we would do as a country when it comes to the issue of carbon and how we're going to deal with it. I felt that our time, your time and the government's time, would be better spent here dealing with the issue that is before us. The fact that we burn so much fossil fuel to generate energy in this province and how we're going to build an energy corridor to deal with the issue of putting renewable energies on line and making sure we have access to them. We can harvest all the renewable energy we like, but if we don't have the capacity to move it around our province or in and out of our province, it would be for naught and it won't solve our issues of getting ourselves off fossil fuels as you talked about today here in Question Period.

But I noticed in that trip, you didn't have your director of communications with you, you didn't have your chief of staff, you had your political arm with you, from your office in Matt Hebb. I'm wondering why you would be taking the political view from your department and not your director of communications or, quite frankly, your chief of staff?

THE PREMIER: Actually, I think you're confused about that. The person who travelled to Copenhagen with me was my chief of staff, Mr. O'Connor. The Copenhagen trip was an important one for this province. I certainly wasn't alone there. The Premier of Manitoba, Mr. Selinger; was there, as was the Premier of Quebec. The interesting thing about that, of course, and what most people may not realize, is that the Copenhagen Conference, although it was an international gathering of states who look at the protocol in this regard and are looking to come to an international agreement, the reality is that there are two other things that take place at the same time, and that is that there is a meeting of all the sub-nationals throughout the world.

So these are states, provinces, other jurisdictions, that although not national in scope are the ones who actually end up with the task or the burden of implementing whatever agreement ends up being taken. For example, many of the states in the United States, and most notably Mr. Schwarzenegger from California, were there as well, because they are the ones, we are the ones - frankly, the provinces are the ones who actually end up implementing the protocol. We're the ones who end up with the responsibility to ensure that the targets are ultimately going to be met.

This comes back, and you're quite right, to something that I talked about a little bit earlier in Question Period. The protocol is important because ultimately the Province of Nova Scotia will end up having to deal with the fallout of the decisions that are going to be made in other jurisdictions.

In our case, at a time when the federal government - and this is not my opinion, but this was what was happening at the Copenhagen Conference - at a time when they were having a very difficult time, each day they were being - I guess "castigated" is the best word to use, or "criticized," and winning what at that point were called the Fossil of the Day awards. The Province of Nova Scotia and some of the other provinces who were there were actually winning awards from an alliance of environmental groups who were there to represent the pan-Canadian environmental movement.

So I was very pleased to be in a position to be able to actually accept an award on behalf of the province for the hard caps that we've put in place on greenhouse gas emissions. The Minister of Environment was there, and he was able to receive an award from that same group as well. So the story that emerged out of Copenhagen was that although people were not necessarily enamoured with the work that was being done by the federal government in relation to the protocol, they were very happy with a lot of the work that was being done by the provinces, who ultimately are actually responsible for reducing greenhouse gas emissions and additional things.

The other thing that many people don't necessarily realize about what was going on in Copenhagen is that Copenhagen was also, I think, to that point the largest single marketplace for new green technology through the Green Expo that was taking place at the same time or concurrent with the Copenhagen Conference.

We had an opportunity. We were travelling there with businesspeople from Nova Scotia, and of course, it's difficult because I can't give up information with respect to the individual businesses and their agenda, but I can tell you this: we had an opportunity with some of the businesspeople who were there, on their behalf and with them, to meet with some of the largest institutional investors in Europe. These are people who are interested in looking at the technology that is being developed in this province for the purposes of renewable energy, and who are willing to make investments in that technology - not just to create renewable energy here, but for the purposes of being able to take that technology and allow it to be exported to the world.

The purpose for being there was not a uni-purpose visit. It was a visit that was aimed at doing a number of different things. We apply this model to each one of the trips that we do, as we discussed with the trip to Toronto. We attempt to do as much business as we can possibly put into a trip in the time that we are there, mainly for reasons of efficiency, but of course if we can get that done then it cuts down on the number of trips that you have to make or the amount of time that you have to spend. We actually spend a fair amount of time mapping out the itineraries while we're in places to allow us to be as efficient as possible on behalf of the people of the province. I expect that this is probably what past governments did as well. I don't know, and I think until you're in that position, it's difficult to realize just what kind of support you also need to be able to do that. I see you have another question.

MR. MCNEIL: I appreciate that. When I was going through your expenses, I felt like I was in a viewing of Up In the Air, so I do apologize for getting your trips mixed up. You're correct, it was your chief of staff who was with you in Copenhagen, it was your political arm who was with you in Vietnam. I will save that conversation about that trip at a later date. I do want to talk about this trip to Copenhagen, and I appreciate the fact that businesspeople were with you, being exposed to green technology and opportunity to expand their business. I think that's probably a legitimate conversation to have, about whether or not it's a decent trip, but to suggest that the Province of Nova Scotia is going to determine the stance by our federal government regardless of how many Premiers were there, Premier - I think the people of this province would have been better served to have you in this province and your government in this province dealing with the real issue that's facing us.

The fact of the matter is, we have a real challenge here in the fact that most of our energy is produced by the burning of coal and fossil fuels. The Daewoo project that your government hangs onto as its success story - which has $60 million of Nova Scotian money in it, $10 million of federal money in it, and it's a $70 million public investment to do a $90 million deal - doesn't send one kilowatt of energy to the people of Nova Scotia. It doesn't improve our footprint.

The only thing that we know for certain is that if the company loses money, we're on the hook for 49 per cent. Even the company suggests if they make money, there probably will be no profit for anyone because they're going to pour it back into the company. We put $70 million of public money into this great green energy deal and the total cost is $90 million, and there's not one kilowatt of energy to the people of the Province of Nova Scotia. How is that improving the footprint? What happened in Copenhagen to create that kind of a climate change?

I watched with interest as the deal in New Brunswick was going on with Hydro-Quebec, and as you know, I'd been encouraging the previous government and I've encouraged you about creating a conversation with our Atlantic Premiers about an energy corridor, to build a connection between our provinces to make sure that the renewable energy that we have access to - we're very fortunate as a region, Lower Churchill, the Bay of Fundy, and the great wind potential that is here - that we as a region have an opportunity to take advantage of that, to create stable energy pricing. Every business will tell you that one of their concerns going forward is energy pricing. The opportunity there is, though, to create stable energy environment around renewables and creating that energy corridor which would connect us to Newfoundland and Labrador, connect us to New Brunswick, as well as Prince Edward Island, and also give us access to the Eastern Seaboard, so any excess energy that we may have we could ship into the United States to bring that revenue back into the province to reinvest.

As it stands now, there's a huge possibility that if we do not do something around the corridor in being able to move that energy, the Bay of Fundy will end up in New Brunswick because the system is there - the Premier can shake his head, it's the reality. We have stood by and, as you know, we have a connection between New Brunswick and this province that will bring in about 300 megawatts - Lingan itself is a 600-megawatt energy production, and if something happens to Lingan, we can't bring enough energy in to meet our own needs, so how can we move energy out? New Brunswick figured it out; New Brunswick is bringing energy in from the United States - that's how they're shutting down Point Lepreau. When they get Point Lepreau up, they'll start moving energy. It's a wonderful opportunity.

[4:00 p.m.]

I'm not saying this to be critical - I think it's an important way for us as a province to really spur on a renewable energy sector. You don't need to go to Copenhagen; you can do it right here. You can invest in the people of this province; you can work with the private utility that's here. I had an opportunity to meet the Premier of Newfoundland and Labrador, to talk to him about this particular issue, and I think it's important that they recognize that we are their way out. We are the province that will give them two options to move their energy in and out of Newfoundland and Labrador into our province and into New Brunswick and the Eastern Seaboard, where they want to go.

It also gives us an opportunity to have access to clean renewable energy. As you know, there's huge wind potential. I know I've heard the member for Cumberland South talk extensively about geothermal, and one of the things he talked about around the issue and the jail being located there was the cost of running it would be reduced because of the geothermal potential that's there. There are a whole host of renewable energy options in our province.

But you don't have to take my word for it, Premier, speak to the energy producers in the province - not just Nova Scotia Power, they're one, an important part of our solution going forward, but speak to the energy producers in the province. We do not have the capacity to move energy. We can capture it all we like, but we don't have the capacity to move it and we need to begin to move and start focusing at the same time as we're talking about capturing that energy, building that highway so to speak, that energy highway that would allow us to move energy in both directions, that would allow us not only to ship out any excess energy we may have, but would allow us, if required, to purchase energy to come in to make sure that we're going to meet those caps that you're talking about in a way that will not drive energy costs through the roof, to really affect the homeowners.

So it is important as we look - and your trip to Copenhagen and the Daewoo project that you're talking about as our issue around energy, those things do not affect our footprint - if you want to have a real impact on the footprint of our province we need to focus on an energy corridor and connecting ourselves with our neighbours in Atlantic Canada to look at this issue, as one region, on how we can move energy around so that our economy can also take advantage of that issue of secure stable energy pricing here and give us access to not only our own renewable energy but that in our two neighbouring provinces.

The other important piece that's being looked at - we talked about all the stimulus investment that has been going on and people have been talking about and I challenge you, I don't know if you could find another project, in terms of an energy corridor with the federal government being part of this conversation and our province and the utility, or even just the private sector, that would put more dollars into our economy in an immediate way and leave us with a piece of infrastructure that would allow us to stabilize energy pricing and grow our economy. It's not going to give us cheap energy - you never heard me say that - but what it will do is it will stabilize our energy pricing.

I listened with interest to the question that was posed to you today. We have to get away from the idea that we're not going to go to renewable. We have to go to renewable energy - everyone knows that idea. The reason for that, though, Premier, is because we need stable pricing. We need stable pricing.

Whether we want to acknowledge it or not, oil is not going to stay where it is, but, Premier, you're in the position to make the difference. You're in the position to actually build the energy corridor, to expose us to that renewable energy. You're in the position to open up the market, to allow renewable energy producers to sell directly to customers, not them, they already had their chance, and Nova Scotians said no thanks. You're in the position to make a difference when it comes to ensuring that the economy of this province, that the businesses in this province are exposed to secure renewable energy and we need to do it in conjunction, not in isolation but in conjunction, with our neighbouring provinces.

We want to be exposed to Newfoundland and Labrador. We want to be exposed to New Brunswick as well as the Eastern Seaboard. There's a real opportunity for us to bring new capital into this province. I see I'm getting my nod from the chairman, but, Mr. Premier, I would be curious to hear your thoughts. I will reference the fact that I sent over that expense claim that I had around the trip to Vermont and, as well, your thoughts around the renewable energy piece.

THE PREMIER: On the expense claim, I'm asking my staff back in my office to have a look at it for you. Yes, well, there are a number of things that I wanted to deal with because over the course of your introduction and this, you touched on a number of things and then you moved on to expenses. So I think I should be able to address a number of them.

So I'm going to start at the beginning and I'll end where you ended. In the early part of your first representation you talked about the Deloitte report and you talked about that you knew you couldn't continue to spend at the rate that you were going to continue to spend, at 6 per cent or 7 per cent, but that actually represented what was actually happening. The reality of spending was that it was continuing to increase by some 6 per cent or 7 per cent. So what Deloitte was actually doing was they were looking at what the actual experience of the province had been in relation to its report and I think that, of course, is a perfectly reasonable thing for the report to have done, if you continued on - and they said this - if you continued on the path that you were on.

It also, of course, recognized that revenues that were in the budget, the natural gas revenues, the royalties, were being treated as if they were somehow income that was going to be on a sustainable basis, which they were not. Mr. Chairman, the Leader of the Official Opposition talked about the last election campaign, but it was the Leader of the Opposition who said, during the last election, that he was going to spend some $527 million more over the next number of years, $189 million of it which would be a recurring amount, and yet in his plan he could produce no way that it was going to be paid for.

So, Mr. Chairman, I'm just responding to what the Leader of the Official Opposition said. He went on to say that if you look at the last Progressive Conservative budget, it was getting pretty close to balanced. Well, the Progressive Conservative Government did not have in it one single cent for the university or education, the post-secondary sector - not a penny. Now, how could a budget that doesn't recognize a $350 million or $360 million liability, possibly be balanced?

Now, you know, for the life of me, Mr. Chairman, I have no idea how that would be a reasonable thing to say or, you know - he says how else could these things go - we can reduce spending, we can increase taxes, what other opportunities were there, what other things can you do? Well, the same could be said with respect to the Liberal platform. They had nothing in there to explain how they were going to pay for $189 million worth of additional spending. Then he was critical of the policy of the government purchasing property in the province. He said that this was not something that the government should be doing, but the reality is that the choice to purchase was based on the fact that the property was being sold. So the question is, do we allow that money to fall, potentially, into foreign hands, or do we go forward to meeting the targets of government, which I understood that the Leader of the Official Opposition endorsed, and the previous government endorsed, in terms of getting to a particular percentage of the province being held in the provincial government's hands.

So, Mr. Chairman, I'm not sure that the people of Nova Scotia see this as - when I heard the member for Cape Breton North talk about it as purchasing dirt - well, I don't think that's the kind of enlightened view of these things that the people of Nova Scotia take. I prefer to think they take a much longer view at the importance of the Province of Nova Scotia actually owning some of the province and preserving it for the generations to come.

Some of this property that was purchased was recreational property, which will continue to allow Nova Scotians to use that for traditional purposes. It's important, particularly down in the chairman's neck of the woods, this would have been important for people there. I hear his criticism but I'm not sure that he's reflecting accurately the sentiments of the people of the province, that's all I'm saying. I'm not - you know, these are the political differences. These are the political choices that get made and, again, I'm not saying this just to be critical of the Leader of the Official Opposition or the Third Party, I'm just saying that these are the kind of attitudes that we have toward things in government.

Then, Mr. Chairman, he went on about the whole question of the tax break. Well, the reality is that everyone is going to pay the same amount of tax because it's the HST and it's broadly applicable. When he's talking about the reduction of the surcharge, it means, of course, that those people will pay the same tax that other people will pay up to the $150,000 mark, then the fifth tax bracket will come in. They're paying the same tax as everyone else because it was a surtax. So he knows that is the case. He also knows that the amount of money that was used was specifically used so that we could set off the increased costs for lower income Nova Scotians because the reality is consumption taxes do hit them the hardest. So, therefore, it is only appropriate that we make sure that they not be worse off, but in fact, be better off.

The last thing was the whole conversation around energy producers, and he started off by talking about the Daewoo deal. It didn't seem to dawn on the Leader of the Official Opposition that, in fact, on the same day that Daewoo signed the joint partnership agreement with the province, they also signed a memorandum of understanding with Nova Scotia Power to investigate the whole question of renewable energy in this province. So, Mr. Chairman, that goes to exactly the point that I think he was trying to make, which is that it's important that we have an actual strategy around renewable resources in this province, and soon the renewable energy strategy will be in place. Some of the things he's talking about now are some of the things that we are actively working on.

He should know that with respect to the energy corridor question, this is something that has been almost a constant source of conversation and work between my province and New Brunswick and Newfoundland and Labrador. This is something I have raised at (Interruption)

I'm not sure what that's a reference to, but our province is engaged every single day; we have been engaged in trying to ensure that this becomes a reality because we absolutely agree that we need to strengthen the regional power grid in this province. I haven't stopped there with respect to this.

[4:15 p.m.]

When I was in Washington, I met with Mr. Wellinghoff, the head of the Federal Energy Regulatory Commission in the United States, for the purpose of trying to understand exactly how they viewed the transmission corridor and their objectives through the United States. I met with the Senator for Naval Analysis, that may seem like an odd one, but they have a great interest in tidal energy. In fact, they wanted to meet with us because they have naval bases around the world where, if they could find an energy technology that took advantage of in-stream tidal, they would be very interested in that technology.

They are absolutely interested in the project that we have going on in the Bay of Fundy. I met with them with proponents from Nova Scotia, some of the proponents who are there for the purpose of exploring and creating that technology that will be the next generation - I guess I can use that in both ways - the generation of electricity, but the next generation of technology, which will be important for this province.

I discussed these matters with Senators Shaheen and Collins. I discussed them, as well, with Governor Baldacci. I also had the opportunity to discuss the whole question, and I know this is something that the Leader of the Opposition has not been too keen on, but I also had an opportunity to discuss with Governor Deval Patrick, their interest in Massachusetts being able to receive potential renewable energy either from Churchill Falls or from the Bay of Fundy.

These have been broad-based discussions that look at the region as the potential for a comprehensive energy grid. I can say this, I think, fully cognizant of the challenges that are there, this is part of unlocking the potential for the region over the years to come, having a comprehensive strong energy position in the region.

One of the things I've been trying to advance through the Council of the Federation has been the whole notion of smart-grid technology. I've been, and I think others have as well, trying to advance the notion that if you're looking at stimulus spending, one of the things that you could do is invest in smart-grid technology, which would strengthen the overall energy grid and leave behind an asset that will ultimately pay off for the entire region. I have been advancing that proposition wherever I get the opportunity.

The Leader of the Opposition should know that when we were in Copenhagen, the people he was talking about, the people here who want to produce energy into the grid, were exactly the people who were with us. They were the people who were there saying we want to find that new technology; we want to find the investment; we want to find the opportunities to take advantage of that in the Province of Nova Scotia.

So, there was no better place, believe it or not, at that particular time, there was no better place on earth to be than in Copenhagen with all of those people who are there advancing the very best technology in the world. We were there with the people who are going to make a difference in this world. I have to say, we were getting very, very positive feedback everywhere we went.

People look at the Bay of Fundy, they look at the resource that is available to us in that Bay, and they are astounded. When you tell them that you have 50-foot tides, when you tell them that you have 100 billion tons of water that comes in and out on the tidal cycle, they see that as the kind of project that they want to be involved in. That's why I'm always pleased whenever I can go and support the companies that are advancing this technology, whether it's Nova Scotia Power, or Minas Basin Pulp and Power, or any of the other proponents who are involved in this enterprise.

I think that in the long run - as I pointed out in the question that I had earlier today - I think that in the long run, securing our energy future through renewables is not just going to be reducing our own footprint as you have said, but we are going to be able to produce enough renewable energy to make a difference in the broader marketplace. I believe we can reduce our own footprint, we can become a leader in these technologies, but we can also have technologies that are capable for export and we can actually be an energy exporter.

There are a number of different things we can do with the Province of Newfoundland and Labrador, and I think I've managed to keep a pretty good relationship with the Premier of Newfoundland and Labrador. He is obviously looking for what is in the best interest of his particular province. I don't have any problem with that, I think it's a good thing to see a Premier out supporting and promoting the particular assets that they have in the province. That's what I try to do wherever I go in the world.

I try to make sure that people understand the tremendous opportunity that exists in the Province of Nova Scotia, the tremendous opportunity for investment, the tremendous opportunity for commerce, the tremendous opportunity that exists in our ports. These are the assets that we have, this is how we create additional wealth. This is how we create additional economic activity.

I'm fully supportive of my colleagues in the other provinces when they move forward to undertake this kind of economic activity, because as I said earlier on in my speech, I believe that a win in other parts of the region is also a win for Nova Scotia. If we strengthen New Brunswick, if we strengthen P.E.I., if we strengthen Newfoundland and Labrador, then Nova Scotia receives a benefit from that.

After all, we're a part of the Confederation. We don't send back the equalization payments. We participate as a partner in our Confederation and that's why I attend the Council of the Federation meetings, as I did in Washington, because I think it's important that our voice be represented there. I know in that regard, with the Washington trip in particular, we had the opportunity to be at the White House, to meet with senior advisors to the President of the United States to get their views on where Congress was going with things that are potentially substantially affecting our province. These are important things for us to be at. I realize they all have a cost to them. They have a cost in terms of my travel, they have a cost associated with my staff being there, but they are absolutely necessary. I know that in my conversations with past Premiers that they look at it the same way, that it is simply what you have to do in order to properly and appropriately represent the interests - and not just represent, it's to properly promote, protect, and defend the interests of your province.

I'm not sure where we are, if the member has another question.

MR. CHAIRMAN: The honourable Leader of the Official Opposition's time has expired on this round.

The honourable Leader of the Progressive Conservative Party.

HON. KAREN CASEY: Mr. Chairman, I welcome the opportunity to put some questions forward to the Premier and I welcome his staff here today. I expect that answers that he doesn't have, perhaps they'll be able to generate, or at least we will get those given to us at another time.

I just want to say that when the election was held on June 9^th and the people of Nova Scotia made a decision that they wanted a change of government, I believe I was one of the first people to say to the Premier that I congratulated him, I wished him well with the government. I knew that there were some tough decisions that any government would have to make and I knew that Nova Scotians had given him the opportunity to make those tough decisions, to provide leadership, and to move the province forward. I was cautiously optimistic that that would happen.

During the campaign we certainly had heard some promises that I believe now were designed to make Nova Scotians feel good, but the Party campaigning at that time knew full well that they could not fulfill those promises. They could not deliver on those promises, and it did not take long for my hope, I guess, to disappear, and the same with Nova Scotians.

There are 52 of us here in the House. We are elected by the folks in our constituencies and we are asked to come here and be their voice. I believe everyone in this House takes that responsibility seriously. It became very obvious that some of the 52 were being asked what happened. What happened to the promises that were made? What happened to the commitments made by the NDP? What happened to the whole host of promises that had not and still have not been delivered?

As an MLA, I think we have a responsibility, both in our caucus and in the caucus of the Official Opposition, to raise those questions on the floor of the House and to ask the questions that Nova Scotians are asking. It's very discouraging, I can tell you, when you go back to your constituency. As MLAs, we're being asked to answer questions of this government, because people are discouraged, they're disappointed, they have felt misled.

The Premier had a wonderful opportunity to provide leadership in the province, has a majority government - and not all leaders have been given or will be given the opportunity to lead in a majority government. As disappointing as it is that the promises have not been kept, I'm disappointed, I guess, that the Premier didn't seize the opportunity that he was given because it was a golden opportunity. Nova Scotians, I think, are acknowledging that that has been an opportunity missed.

When you look at the campaign literature - and we've all seen it many times, Nova Scotians have seen it and Nova Scotians have not forgotten what was on it. During the campaign, some of those promises have now become questions and from questions they've become concerns.

What happened to the genuine leadership that the Premier promised? What happened to the integrity and the credibility that people believed was there and expected would translate into good decisions? What happened to the ability of the Premier and Cabinet to set priorities and to make good decisions? What happened to the commitments around some of those major issues that face Nova Scotians every day? The emergency room closures would be one that comes to mind. The promise that there would be 24/7, there would be no closures in those 35 emergency departments around the province.

[4:30 p.m.]

As a Party in Opposition, the NDP had all the answers and went into the campaign telling Nova Scotians that they had the answers and they would deliver. Ten months later we continue to have emergency room closures and, in some cases, at a more staggering rate than they were prior. People are looking at that and saying, wow, we feel a little let down here. When is this going to happen?

One of the, I guess, quick solutions or what they believed would be a solution was to hire a consultant. Again, hiring a consultant to give the Department of Health information they already had. Nova Scotians see through that because they believed when the Party was in Opposition that they had the answers. When they voted for them to form government they've realized that they did not.

I believe - and I've said this in the House - that Dr. Ross is very credible and well-respected and this is not a criticism of Dr. Ross, it's a criticism of the process. Hiring a consultant for $100,000 to take one year to collect data that already existed in the Department of Health is not sitting well with Nova Scotians who are in those communities and who continue to see their emergency rooms closed. That's one, only one.

Another promise that was made was that there would be no increases in taxes. That didn't last long. I will be speaking a little bit about the Back to Balance and I may as well do it right now. When it was announced that the Minister of Finance would be going out to speak to communities to consult, I was again one of the first people to go out and say, I congratulate the minister, I hope that Nova Scotians will participate in that process. I fully expected that the minister would listen but it was not long after the process began that it became very obvious that the process was flawed.

We had staff attend all of those sessions. We heard the same report from all of them. They talked about the style in which the meeting was held, the manipulation of the results when people did get a chance to speak. I understand that one person from each table was given a very short period of time in which to express the thoughts from the table.

We had MLAs who attended some of those sessions because they were interested in what the local issues were and they were interested in what Nova Scotians had to say. They went there to listen, they did not go there to participate and they did not participate. However, we know that members from the governing Party had MLAs at those sessions, sat at the table, fully participated, and Nova Scotians understand that had a great potential to influence the discussion at the table.

Not only did MLAs go to the session in their own constituency, but they went to several to make sure that influence and that voice was at the table. So the process was flawed from the get go. What could have been a wonderful opportunity for Nova Scotian voices to be heard, was flawed. They did not feel, at the outcome, that their voice was there; their fingerprints were not on the results that came out.

So, the whole business of trying to get Nova Scotians participating and being part of consultation became a mockery. We have a Minister of Finance who has set up a process to give him the results he wanted. The result was to justify what would be in the budget and that is a hike in the HST.

It is like asking someone, not do they want to take any medicine, it's how much do you want? So people were left with choices and questions that would give the Finance Department, the Finance Minister, the information that he wanted.

We have a commitment made by the Premier during the campaign that he would honour all previous commitments made by the government. (Interruption) That's right. That, again, people who had supported our government saw this as a Party that would come in and would honour those things that Nova Scotians believed were right. So, they voted for the government that would honour those commitments.

Again, they're asking the questions, they're shaking their heads. Did we not understand correctly? Did we not understand the Premier to say that he would honour those commitments? Because, daily, we're finding that they are not. You can take the correctional facility in Springhill; you can take the Boat Harbour cleanup; you can make a whole list of commitments that have been made that have not and, in fact, some ministers have said, will not, be kept. So the whole notion of trusting that this government would deliver on previous commitments; trusting that they would deliver on the promises made during the campaign; trusting that the whole process of consultation would be fair and open, have left Nova Scotians feeling betrayed, and they are coming to us, as MLAs, and saying what can we do?

As I said, the golden opportunity that the Premier had, he still has, and that is to provide leadership with a majority government in this province. But people are, daily, losing faith that will happen.

At those Back to Balance meetings, we've heard this before, we know that partners in education were very active, very vocal and were present at those sessions and their message was very clear, that in order to maintain programs that were currently being offered in our public schools, they would need a 3.6 per cent increase. They thought they were heard. Then the budget comes out and they recognize that not only is the percentage there to maintain existing programs, but it falls short of any dollars to expand. We've heard in this House, today, in Question Period, we heard it last week with a resolution, we've heard the Minister of Education say that they would be expanding programs, in particular, to accommodate programs for students with learning disabilities.

We have recognized in this province that our public school system is not able to meet the needs of those students in our public schools. It was our government in 2004 that accepted designated special education schools as an option for which we would provide tuition support. That was an acknowledgment and I have no problem acknowledging that. I think we should be proud to acknowledge that we could not do it, but we did provide an alternative with the Tuition Support Program so those kids' needs would be met.

It was this minister and our government in 2007 who accepted recommendations on a special ed review but refused to accept a recommendation to discontinue that, recognizing again that we could not leave these students without the appropriate supports that they needed. So, the Tuition Support Program was continued and it was extended and parents who wanted their children to be educated in their own home community, with their own friends, with their own peers recognized that if that could not happen then they appreciated the Tuition Support Program.

It was the minister at the time who called for a review of the Tuition Support Program. That was shared. The results of that were shared by the minister last week. The one disappointing thing in that was that the program will become a three-year program and there was no mention of any additional dollars going into programs in public schools, which is the whole reason why the Tuition Support Program was founded in the first place.

So the partners in education who want the best for every student in this province, and I believe the Premier and his government want the best for every student in this province. But decisions like that, that fall short of providing the supports so that can happen, are not sitting well with the education community and they're not sitting well with the parents of students who have some learning disabilities.

So, when we talk about a commitment to provide appropriate and adequate programing, it is hard to accept that statement when you see the actions that don't support it. So, we have not enough money to continue existing programs in education. We certainly don't have any to expand. So the message that is being sent to those families and to those kids is, well, I guess you're not that important. I hate to think that this government would say that. But if they are not saying that, then one of the questions that I will be looking for an answer to is, if you're not saying that, where is the money going to come from to expand those programs in public schools that are so desperately needed? Because there was no evidence of it in the budget. There was no reference to it in the report that was accepted and all of the recommendations were accepted by the minister. There was no mention of it there. So, again, Nova Scotians are left with more questions than answers. A lot of frustration and a lot of disappointment.

One of the other commitments that the government made, that the NDP made during the campaign was that they would not raise taxes. Of course, the Back to Balance was the first indication that there was no intent to honour that.

It is interesting, but Nova Scotians do see through the strategy and it all comes together very clearly and it is all very easy to see. When this government came into power they knew what the revenue streams in this province were. When they made the commitments during the campaign, they knew the costs of those programs. No one can tell me that the current Minister of Finance, who was the Finance Critic, and the current Premier, who was the Leader of the Official Opposition, were not paying very close attention to every dollar that was spent, to every source of revenue, and to every expenditure. I know that they would see that as very much their responsibility as Opposition.

So having said that, I find it very difficult to accept the statement that they didn't know the situation, and I want to talk in particular about revenue. We know - everyone in this province knows - that revenue streams in this province were on the decline. When you have expenses related to programs either staying stable or increasing, and when you have declining revenue, it's pretty obvious you have a gap. This is stuff that people know - the average Nova Scotian knows, a lot of them know - but it's definitely something that those who are now in government know.

[4:45 p.m.]

I want to share, if I can - and the lighting here is bad, so I will have to do this - but anyway, I want to go back to the fiscal overview in 2007. The reason I'm doing this is to make sure that everyone in this House and everyone who is listening understands that the information that the government needed and said they didn't have was readily available starting in 2007. It was available in this House. It was available to the general public, and people do not buy the fact that we did not know. In 2007, the Nova Scotia fiscal overview, and I will read it:

"Federal figures released in late January indicate a decrease in Equalization payments for Nova Scotia for 2007-2008. Nova Scotia is unlikely to find other revenue sources to offset slower growth in federal revenues. Nova Scotia tax levels are already among the highest in Canada, so any increase in taxes would further compromise our competitive position with other provinces and jurisdictions. Another consideration is the downward trend in other revenue categories that may continue into the next fiscal year. For example, natural gas royalties have dropped recently due to lower market prices."

In August 2008, in "Nova Scotia Issues Budget Forecast Update," then-Finance Minister Michael Baker said:

"While the budget results are positive for the year so far, changing economic factors may affect future results . . . The rising cost of energy and the changing international economic conditions pose risks for the next forecast."

Then we go to January 2009. "Toward A Greener Future," from the Department of Energy, states:

"Production of natural gas, a cleaner fuel than coal, has made a major contribution to our economy. Revenues from the Sable Offshore Energy Project account for nearly one-tenth of the provincial budget this year and a significant share of our GDP. However, production from Sable has peaked . . . and royalties from that project will decline. Deep Panuke is the only other Nova Scotia offshore project moving into production, and its total gas and royalties are expected to be much smaller than Sable."

Then we go to March 2009, from the Fisheries Department, "Economic impact of the Nova Scotia ocean sector" It says: "The decline in revenues in 2006 is due to a drop in production and weaker natural gas prices."

So my point is, starting in 2007 the message was pretty clear about the revenue streams in this province, and for a government to come in and say that they did not know and to base their decisions on a lack of information is totally misleading, so my question to the Premier is, why did you ignore that information that was available in 2007, 2008 and 2009?

THE PREMIER: Well, thank you, Mr. Chairman. The reality is that over the course of that time the government of the day was continuing to increase the level of spending; they were continuing to tell the people of the province that budgets were balanced, that they were going to continue to be balanced into the future, that the province could withstand these changes that were taking place, in fact, as was, I think, pointed out, on numerous occasions in the last months of those years, were actually making very large, one-time expenditures in order to try and use up the money that they were using. I remember the Leader of the Opposition referring to it as March madness.

Mr. Chairman, the reality is that those were the kinds of things that were going on in the government of the day. There was an increase in the spending levels. I can remember being down and standing outside the scrum and saying, it's very difficult to criticize the government for putting in place these expenditures. There's a long line of people who have particular projects and very worthwhile things that they want done and it's not an issue of whether or not the projects are good ones or that the particular initiative deserves, or is worthy, of support. Of course they would be. The question was whether or not, over the long term, they were sustainable.

What always came back from the government of the day was that this was a sustainable progress that was being made on whatever the issue of the day happened to be. So it wasn't a matter of ignoring these matters whatsoever, it was a matter of looking at what the government was doing on the day. So we knew at that time that, for example, things like the - especially in the last year - we knew that because they did not include the whole question of the memorandum of understanding with universities, that essentially artificially made the books look balanced.

They weren't, in fact. I will have to say that is why that budget failed and why the government of the day failed, simply because people just didn't believe that budget. In fact, all of the things that had built up until that time, I think, caused people to say, this is a government that has just lost its way. It doesn't really understand what it is that the people of the province are looking for in the way of leadership and ultimately led to the election of June of last year.

Mr. Chairman, the question the member has asked about the commitments that were made, she should remember that taking the HST off home electricity was an important - in fact, I think, perhaps the largest on a financial basis - of the commitments we made. That was capped immediately. We implemented the new home rebate, which was a commitment that we made. We ended the practice of having to give deposits when you went into long-term care facilities, something that affected the lives of seniors and their families in this province. We put in place the manufacturing and processing tax credit. That was a commitment that we made through the election campaign. That was kept.

We said that we would move to a new, renewable energy standard where we would have 25 per cent of our energy in the province coming from renewables by 2015. We said that we would reduce the size of Cabinet. We did that.

We said - I mean this is the odd thing about this, we get criticized because the member says we're not keeping our commitments, well our commitment during the campaign was to put in place a provincial advisor with respect to the emergency rooms in the province. If we didn't do that then we wouldn't be keeping our campaign commitment but we are. So we put in place Dr. John Ross in that position. He is undertaking the actual work that needs to be done, the difficult work of meeting with all the district health authorities, examining the situations in the various emergency areas funded by or supplied with services by the various emergency rooms in the province.

This is important and good work that will underpin a better emergency health service in our province. We're keeping these commitments, we said that we would put in place an emergency room protection fund, that is what we're doing in this budget. This budget fills the commitments that we made to the people of Nova Scotia.

The reality is that we found in government a whole list of things - when we got into office - that were so-called commitments that were made by the former government that had no business case. They were not endorsed by the Executive Council and were simply either made through political expediency or without any forethought as to how they were going to be paid for. Of course you cannot continue to fund those kinds of initiatives, that's not what the people of Nova Scotia elected us to do. They elected us for the purpose of ensuring that they got good government and that is what we're here to do.

She talked about the funding of schools in the province. Well, the reality is that most of the money that the Government of Nova Scotia has actually goes out to other organizations. They go out to the school boards, they go out to the district health authorities, they go out to municipalities. In this case, the money that went out to the Department of Education was an increase in the amount of funding over last year. Yes, it was not what they were asking us for but we said, we are going to sit down with you and we are going to work through how we go about ensuring that we are supplying the best possible service for young people in our province and that's what we're doing. We're working with school boards in order to ensure that that happens.

Mr. Chairman, I understand at this point in time you were prepared to take a break, is that correct?

MR. CHAIRMAN: Thank you. At this point, we will take a short recess to allow certain things to take place and we'll be back as the members come back to the Chamber.

[4:57 p.m. The committee recessed.]

[5:06 p.m. The committee reconvened]

MR. CHAIRMAN: I will call the Committee of the Whole House on Supply back to order.

The honourable Leader of the Progressive Conservative Party.

MS. CASEY: Mr. Chairman, I would like to go back to a comment that the Premier just made with respect to budget. I believe, if I heard him correctly, he said something about a vote on the budget. I would like to remind the Premier that the budget that we presented was not voted on. In fact, legislation that was introduced prior to was voted on and that takes me to a place I would like to go and that is that particular legislation. As you may recall, the legislation that we introduced was intended to allow offshore dollars to be redirected to operating dollars in a short period of time during the downturn in the economy.

That was kind of the gist of the legislation and that legislation was defeated and that forced the election. I find it a bit ironic that not long into their mandate, this government introduced similar legislation except, Mr. Chairman, the new legislation went far beyond the legislation that we had proposed. In fact, it opened the door for uncontrolled long-term spending. Not only did it allow for the redirection of dollars, but it was unlimited dollars for an undefined period of time. That legislation also took away the importance, and actually it took away the requirement to present a balanced budget.

It also took away the wording which would have caused a deficit from one year to become the first charge on the next year's budget. So it opened the floodgates for what we see happening which is uncontrolled long-term spending. So if we want to talk about legislation, the legislation that was intended to help get this province through a couple of difficult years was reintroduced in a much broader and perhaps a more reckless way. So my question to the Premier would be this, with the new legislation (Interruptions)

MR. CHAIRMAN: Order, please. The chatter in the Chamber is getting a little high and it's hard to hear the member.

The honourable Leader of the Progressive Conservative Party has the floor.

MS. CASEY: So my question to the Premier is this, with the new legislation which allowed for those particular spending practices to take place, how is that in the best interests of Nova Scotians and how is that an example of good financial management?

THE PREMIER: Mr. Chairman, obviously, the reality of what had occurred in the previous government was that, as the Deloitte report pointed out, they had put in place a series of program expenditures and increases that were unsustainable for the province. It was necessary, therefore, to be able to deal with the legislative requirements in order to address the difficulties that had arisen as a result of the decisions that were made by the previous government.

The member is right, it is ironic in this sense, just before she sat down to ask her last question, she asked why it was that the government wasn't spending more money in education and why wasn't more money in place to fund more programs? So on the one hand they say this spending is unrestrained when, in fact, the opposite is true. In fact, there is an expenditure management initiative underway that is designed to curtail spending and to impose some discipline on the finances of the province. So that is what is actually happening and, indeed, what the member is instead asking is why aren't you spending more?

Now that is perhaps a contradiction that the member opposite can explain. I certainly can't understand it. You can't really have it both ways. You either deal with the expenditures that you have, you deal with the budget you have, you deal with the revenues that you have, or you just continue to spend on the track that the previous government was on. Which, as was pointed out, created something in the order of a $1.4 billion deficit within a few years. That's obviously not the track that this government wants to be on.

Since I have the floor at this point, Mr. Chairman, I want to table - this is not with respect to this member's question - the remarks that I made at the IBEW meeting that were requested by the Leader of the Opposition. I also wanted to note for him that I had an opportunity to ask my staff to check on the kilometrage charges that he asked about with respect to the Burlington trip. They did that and I must say I have to thank him for this because the reality is that inadvertently they had claimed both ends of that kilometrage charge which should not have been done. It's unusual, of course, that somebody travels one way and then travels back another way so that's why that happened. I wanted the member to know that the $485.72, which is the difference, I will ensure is repaid this evening so that there can be no mistake about it, and I want to thank the Leader of the Official Opposition for bringing that to my attention.

MS. CASEY: Mr. Chairman, I would like to just comment on something the Premier has said with respect to spending and I would like to remind all members of the House that the balanced budget that we presented, at least four of those, which included spending that the Premier is now so critical of, were budgets that he supported. So I don't think it's fair to say that we can't support any spending when, in fact, the budget that he supported included program spending of which he is now very critical. So I think we need to make sure that we understand that.

The other thing that I would like to mention is the Deloitte report and, you know, a lot of people have talked a lot about what was contained in the Deloitte report, what it did or did not say, and what part of it was or was not respected by the government. One of the things that came out of that, which was of particular interest, spoke to the comments that had been made and the allegations that were made that the previous government - that would be our government - "cooked the books."

I'd like to refer back to the Public Accounts Committee meeting January 20, 2010. At that time, Shannon MacDonald and Bill Hogg of Deloitte, the same auditors commissioned by your government to review the province's finances, agreed that the previous government did not "cook the books." In fact, during that Public Accounts session, some very interesting information was disclosed. My question to the Premier is, do you agree with Ms. MacDonald's assessment when she said that the previous government did not "cook the books"?

[5:15 p.m.]

THE PREMIER: Well, what they did is they presented the information - I don't think I would use the expression cook the books, was that a reference to something I said? I'm not sure where that came from, but what they did is they presented information in a way that led people to believe that the expenditures in one year did not exceed the amount that was coming in in revenues. That simply was not the case.

As I pointed out, the last budget that the Progressive Conservative Party brought in before their defeat held nothing in it for post-secondary education in the province, some $360 million that had been prepaid in the previous year. We simply felt that did not represent an accurate reflection of the expenses and revenues for the province.

MS. CASEY: It was taxpayers' dollars that this government used to commission the Deloitte report. It's because they were looking for some advice. So the advice was given, but the advice appears not to have been respected.

For example, let's talk about prepayment of universities. It's true that our government, when there was a surplus at the end of a fiscal year, prepaid the university funding for the upcoming year. This current government was advised not to do that and part of the rationale for that advice was because they would have to do it on borrowed money. This government chose to ignore that advice, they prepaid the universities with dollars that we did not have. We as a province did not have.

Again, part of the rationale for that is to artificially inflate and create a deficit which would make a good message out to Nova Scotians that we just cannot possibly balance the budget now even though we promised we would do it because we've just artificially inflated the budget. So my question to the Premier is, why would you use taxpayers' dollars to commission a report and then act contrary to the recommendations?

THE PREMIER: The situation was simply this, there was a memorandum of understanding that represented the initiative for the previous government. We felt they should accept responsibility for the decisions they had made. What they attempted to do, instead, was to remove university funding from the last year of their government to make it appear as if this was a balanced budget when that was not the case.

What we did was we placed that back into the budget so that it would accurately reflect the costs associated with that budget year, knowing full well - we've said this and we've said it now - that the result of that is that in the next budget year, that's not going to be there. We accept that's the case because of the way the prepayments were done.

I would point out that the way that the prepayment was done was so that it was appropriately discounted for any interest that would accrue, because the benefit of having that money early went into the university. That actually is a recovery that is made by the government for the early advance of that money, which means that that's not something that has to be covered in this budget year. So it nets out against any interest paid.

MS. CASEY: Mr. Chairman, one of the comments made by the Premier was speaking to spending, and how can you on the one hand ask a government to spend money and on the other hand be critical of where they get the money to do that? My concern with the 2 per cent increase is that it appears that this was only one option that this government looked at, and in times when there are difficult financial decisions that have to be made, one would expect that the Finance Minister and his staff would look at a variety of options that might be considered to bring that revenue and expense line closer together.

It's unfair for our Party, or any other Party, to criticize unless we have some other options, and so I guess when we sought some advice from some economic advisors about increasing the tax, which appeared to be the way this government was going, it's very clear that their message was an increase in the HST will do nothing to stimulate the economy. We recognized that part of the reason we were in a financial difficulty was to do with the revenue stream and it was to do with the revenue in the province. The tax increase does nothing to stimulate that. That's what people were telling us. That's what people in the Department of Finance were saying.

If you're going to put less disposable income in the pockets of Nova Scotians, if you're going to take away the competitive edge that we had here - which did attract some business to our province - if you're going to take that away and you're not going to stimulate the economy - why would you raise the tax by 2 per cent if it did nothing to stimulate the economy, if it took disposable income away from Nova Scotians, and if it took away the competitive edge?

THE PREMIER: Well, in fact, Mr. Chairman, the province continues to be in an enviable competitive position with respect to other provinces. The reality is that the Economic Panel was pretty clear in their advice to the government. What they said is that you have to look at all of the measures that are out there in order to be able to deal with the significant structural - and I want to go back to repeating this - this is a structural deficit that is in place. There are, from time to time, deficits that take place as a result of recessionary pressures, so governments are going along in planning their budgets, and unexpectedly, or perhaps in a more profound way than might have been anticipated, a recession hits that drives down revenues.

Most provinces are able to contain their spending or able to look at ways to be able to deal with that over a period of time and get themselves through normal recessionary pressures. In our case we had two things taking place here. We had the normal recessionary pressures, and when I say "normal," I don't know that there's anything normal about the kind of economic downturn we had after October 2008, but recessions are part of the cycle of the economy. So it was a normal recessionary cycle in the sense that you can foresee those happening. It was probably deeper, and in fact was deeper, than some of the other ones that we have seen but, in addition to that, there was a structural problem that had been built in as a result of the decisions that had been made by previous governments.

So we took the view that you had to deal with this with a broad-based approach. You have to look at all of the things that you are doing. You have to look at the investments that we have made on the economic development side, things like the Daewoo announcement we made which is a very significant one for the province. You have to look at the expenditure management initiative that's already underway and, yes, you have to look at the revenue side as well. That's what was recommended by the Economic Advisory Panel and it is, of course, the advice that we followed.

MS. CASEY: Mr. Chairman, we sought advice from the economists and from the business community and also from the staff within the Finance Department One of the messages that we heard which I would like the Premier to try to explain, or I guess not explain, but let me know what part this played in the decision making, was that they were predicting that there would be a natural 2 per cent growth forecast for revenue in this province, a natural 2 per cent increase in revenue. That information came directly from one of the Finance Department's staff. So what part did that play in the decision to look at increasing revenue in this province- a natural 2 per cent growth in revenue?

THE PREMIER: Well, when you're considering how you're going to go about addressing a structural deficit, of course, you would look at all of the economic factors. You look at economic growth, you look at the revenue growth that's going to take place, you look at what the built-in increases and expenses are. For example, the previous government would have signed a series of contracts with either businesses or unions, for that matter, that included cost escalators in them to recognize contract provisions. So you look at all of those things in determining how you are going to frame up your future budgets. Of course, you don't ignore one aspect over another.

MS. CASEY: Mr. Chairman, I think everyone agrees that it takes or should take a number of different strategies in order to bring about the desired result. One of those, of course, was to increase taxes which is something that this government campaigned against. We now have that, and we've gone through the whole list of broken promises, commitments that were not kept. However, I want to ask a question about growth in the Public Service. It's my understanding that over the past 10 years the growth in the Public Service went from 9,900 to approximately 10,000. So it's my concern that we are now seeing a growth in the Public Service at a time when we are in a financial crisis We are asking taxpayers to pay an additional 2 per cent. So why would this government be looking at one of the largest increases in the Public Service in the last 10 to 12 years, at a time when we are in financial restraints?

THE PREMIER: Mr. Chairman, I'm afraid I don't know the answer to that. In fact, I understood you to say that that took place over the last 10 years, the increase from 9,900 to 10,000, is that what - maybe I misunderstood the question?

MS. CASEY: The information that I have, and I will certainly clarify that, is that over the course of those 10 years the total increase did not exceed 10,000 positions and that we are now looking at an increase in that number. The number of public servants will be increased - is that correct?

THE PREMIER: My understanding is that that increase in that number is a result of the conversion from casual to full-time and, as I understand it, that was a decision that was actually made by the previous government prior to the last budget.

[5:30 p.m.]

MS. CASEY: Mr. Chairman, I want to go back a little bit to the 2 per cent and the impact that that will have on families. I know that this government has said that they will help families with the cost of children's wear and other things that would be exempt, but my question to the Premier is this, what statistics would your department have had with respect to the average family income in Canada in 2009?

THE PREMIER: We get information from all available sources. Of course, the Department of Finance monitors from the federal government through Statistics Canada and whatever the usual sources are for this kind of information. It's part of the normal flow of information that comes in and out of the department.

MS. CASEY: Perhaps I could ask the Premier if staff could get the information that the Finance Department used with respect to what was the average family income in 2009, and then I would also like to ask the question, what percentage of that, by statistics, would go toward taxes?

THE PREMIER: Well, the member is asking for information that would not be readily available in the Estimates Book or in the materials that I have, but I'm certainly pleased to have the department get that information for her, and I can table it as soon as I get it if she likes.

MR. CHAIRMAN: The honourable Leader of the Progressive Conservative Party, a short snapper.

MS. CASEY: Perhaps I can share with the Premier the release of Monday, April 19^th, from the Canadian Press. It says, "The Fraser Institute's annual Canadian Consumer Tax Index calculated that taxes ate up 41.7 per cent of the average family's income in 2009." So my question is if the Finance Department knew what the average family income was, if they knew that approximately 41 per cent of that was going to taxes, what impact an increase of 2 per cent would have had in the take-home pay of those families?

THE PREMIER: Of course, we did calculate what these would mean for average individuals, and I think that was actually contained in some of the budget documents that have already been tabled. What we attempted to do in this budget was to make sure, for example, that those people who would be disproportionately affected by an increase in the HST - those with the lowest incomes - actually had revenue that offset any impact to them. So that is why we put in place the Poverty Reduction Tax Credit, that's why we put in place the Affordable Living Tax Credit, that is why we undertook to remove the HST from the essentials that we set out in the budget, and importantly, it is also why, in the last budget, we took the HST off of what is, of course, one of the most important things that people have here that they need for their day-to-day life, which is home energy. We're acutely conscious of the impact that taxation has on the incomes of average families.

MR. CHAIRMAN: The time for the Progressive Conservative Party has elapsed.

The honourable Leader of the Official Opposition.

HON. STEPHEN MCNEIL: Mr. Chairman, during the questions coming from the Leader of the Progressive Conservative Party, there was a question around commitments that had been made by the previous government. That topic has been talked about a lot during Question Period. At that time, more often than not, the rationale coming back from ministers and from you, Mr. Premier, has been that the commitments have all been kept except for ones that were more like promises - there was really no paperwork, couldn't find the paper trail to go with it - but during your response to the question from the Leader of the Progressive Conservative Party, you said that there were some decisions that were made based on the fact that you just didn't feel that you had enough money.

So I wanted some clarification on it, because during the election campaign you had committed to keeping all the promises that the previous government had made, whether it was the Springhill jail or any of a host of other commitments that they had made, and during Question Period the only time you backed away from that has been when you said there was no paperwork - we couldn't find any work being done on those projects, they were just made in thin air. But today you alluded to the fact that there were some commitments that were actually made concrete - and maybe I misunderstood that, so I'll ask you to clarify - that were actually finalized in the departments, plans to go forward, that you backed away from.

THE PREMIER: Well, I don't think that is what I said. I said that there were things that we found while we were in the department that amounted to, can I say, back-of-the-envelope promises, which really had nothing underpinning them. They had no Executive Council approval, they had no business plan, there was nothing in them - which is essentially what I said before about these kinds of commitments. I think it is always incumbent upon us to look at these and to determine - I mean, if things are so profoundly wrong that they can't withstand an appropriate analysis, then of course I don't think they should be supported either.

I've certainly taken, whenever I've had the opportunity to try and just simply apply to these decisions what I think are the principles of good governance, is the decision that is being made in the best interest of the province? Is it sustainable? Does it meet the needs of the system? In other words, the one that the member for Cumberland South often refers to is the whole question of the Springhill jail. Well, we looked at the impact of that decision on the correctional service, and it is clear from the correctional services perspective, there is a better option that will better serve that system and ultimately the people of the province. So those are the kinds of criteria that have to be applied to these kinds of decisions.

Of course, we want communities to be able to rely on the commitments that government makes, but we also want to ensure that when a government makes or undertakes an initiative it meets some very basic criteria with respect to the overall financial health of the province.

MR. MCNEIL: Mr. Chairman, I'm still not sure whether or not - I mean, you started out by saying that there were back-of-the-envelope kinds of deals and then you moved into saying that, even if the deal was done and you didn't think it to be in the best interest of Nova Scotians, you weren't going to keep it. That is far different from what you said during the election. I would ask that you submit a list of those back-of-envelope deals that you discovered when coming into government, projects that were committed by the previous government that you feel you weren't willing to support.

THE PREMIER: Mr. Chairman, I think we have mentioned these over that period of time, one of them the Minister of Agriculture talked about, with respect to $2 million we found in that department, but I'm happy to review those and to forward them along to you.

MR. MCNEIL: Mr. Chairman, I appreciate that. Mr. Premier, I have questioned you a number of times in this House on Bar Society fees, we have had a number of Question Periods. I was wondering if you would, from your Minister of Justice, table a copy of the cheque that the Province of Nova Scotia would have written to pay those fees?

THE PREMIER: I can attempt to see if that is possible, sure.

MR. MCNEIL: I very much appreciate that, thank you. On February 17^th, there was an announcement made that there was going to be a change, four senior members of the Public Service were going to be moving into new positions, I think as associate deputy ministers and there were three assistant deputy ministers who would then become associate deputy ministers, is that correct?

During that announcement there was talk about the three assistant deputies who would be moving in with no change in salaries and then there were the additional four who would be moving in and taking on these responsibilities, there is the executive director position in the Office of Policy and Priorities was one of them; the executive director of Employment Support and Income Assistance, assistant to the deputy minister; senior corporate policy analyst at the Office of Policy and Priorities, as an associate deputy minister. Was there an increase in those salaries with those positions that they had taken on and if so, how much?

THE PREMIER: The four new ones who were appointed would have moved onto the salary scale for the position in which they moved into, so there would been an increase for those.

MR. MCNEIL: Mr. Premier, would you commit to identifying what that would be, what that change would be from their previous salaries to the increases?

THE PREMIER: I am happy to supply you with that information.

MR. MCNEIL: Mr. Chairman, as we're reviewing people who work in your office, we have the director of community relations, which is a military advisor for community relations; Aboriginal Affairs, you have a community relations officer; a special assistant to the Premier; director of communications and you have another director of community relations, so you have two directors of community relations one is Paul Black and the other is Shauna Martin. I wonder if you could explain why you would have two in that position and what the difference would be?

THE PREMIER: Thank you, they simply divide up the community relations function and pursue them independently. These are all positions that existed in the previous administration in one form or another and so what we did was re-organize them so that we had an opportunity to actually reach out to the various stakeholders that do business with the Province of Nova Scotia and carry out that kind of relationship work that is necessary in order for the government to do its business. So in the case of Mr. Black he is in charge of a specific set of functions that deals with various stakeholders and Ms. Martin would be in charge of another group of those stakeholders.

MR. MCNEIL: Well, maybe you could explain, you have two directors of community relations at $85,000 and yet you have one person who is the community relations officer, so you have two directors for one staff person?

[5:45 p.m.]

THE PREMIER: Well, we have community relations officers who also have very specific areas of responsibilities, for example, the one with respect to Aboriginal Affairs. It wouldn't only be Aboriginal Affairs, they would have primary responsibility for that but they would also do other things, as would the one for Military Relations. So they're all doing that kind of work. The senior positions, though, the directors' positions are the ones who are carrying out the direction of their work but also at a senior level communicating with senior stakeholders either at other levels of government or businesses or other groups in the province.

MR. MCNEIL: Mr. Chairman, all of those contracts expired on March 31^st, I can tell when I see them around here they were renewed. I am just wondering if they were renewed at the same salary or whether there was an increase in those salaries?

THE PREMIER: I can check that for you, I believe the answer is no, I will check but I think the answer is no.

MR. MCNEIL: If the Premier wouldn't mind making available the salary of his chief of staff as well as his principal assistant. I would assume that these contracts would be the same as the other people who are working in his office, they expired on March 31^st and they would have been renewed. Would he give us whether or not there was a change at all in salaries and benefits to those employees?

THE PREMIER: I understand, of course, the member's interest and I am certainly willing to supply him with that information.

MR. MCNEIL: While you're at it, I have read off to you a list of positions that are in your office. I can give you a copy of the ones that I have and would ask if you could confirm that that's it or whether there are other people who are working in the Premier's Office and their contracts as well?

THE PREMIER: If you forward the list to me, I am happy to receive it. As far as I know, we have supplied all of that information in the past and I would be happy to do it again.

MR. MCNEIL: Thank you so much, Mr. Chairman. On September 14, 2008, there was a Jim Houston who was reassigned to your office as a special advisor community relations at a salary of about $2,717.30 bi-weekly plus vacation pay. The terms of employment for this individual was from March 31, 2010, so I am wondering if he was still employed and what are the conditions of his employment?

THE PREMIER: I just received the information that the member was looking for and I can tell him that there were no salary increases in the renewed contracts that he asked about. Mr. Houston was assigned to the Policy and Priorities office and he works in that office.

MR. MCNEIL: Would you be able to let us know whether or not there was a change in the terms of his employment, whether or not his contract has changed? I know he had been reassigned to another department.

It was also noted that there was a Richard Starr who was being paid by the Premier's office at around $52 an hour plus 4 per cent vacation pay as a special advisor in Community Relations from November 2009 until February 19, 2010, inclusive. What would he have been doing?

THE PREMIER: As the member noted, there are two directors there, Mr. Black and Ms. Martin. Mr. Black was off on maternity leave, and Mr. Starr filled in that position for the period that he was away.

MR. MCNEIL: I first of all want to congratulate Mr. Black and making sure he's taking on the responsibility of being a parent and congratulating him on that. Again, you're right, over the next number of years his hair will probably become as gray as mine as he goes forward.

Would the Premier mind letting us know what the amount of that contract was when it was finally paid out to Mr. Starr, the number of hours he had actually worked, and what the details were around it?

As well, the Premier knows at the end of the year there were a number of contracts that expired. There were a number of executive assistants whose contracts had expired as of March 31^st. On July 20, 2009, there were five executive assistants who were hired by your government with the salary base I'd believe to be appropriate for the jobs they were doing. Then, a short six weeks later on September 1^st, all five of them had a raise, a pay increase. What was the increase for, for the five of them? I could give you the list, I could read it off to you, but I think it would be better if you . . .

THE PREMIER: If you can send that list over to me, I'm happy to have a look at it. I don't know that that was the case, but I don't know that it wasn't the case, so I can't tell you. What I can say is that we - trust me - of course were going through the process of getting all the executive assistants in place for the various ministers at the time and ensuring that the appropriate contracts were in place for them. It may have something to do with that but I'm happy to find out the information for you.

MR. MCNEIL: I would appreciate that. I also noted, and I knew a number of those names, people that I would have been in contact with when they were not working on the government side. As you look at that list and get the information, I'd be curious to know what information had changed for the government in six short weeks that would have required those pay changes, if you wouldn't mind letting us know.

To go back, as we mentioned earlier about one of your senior policy advisors, Mr. Black had worked for your caucus office for some time and then he left and went back into the private sector, working I believe, with McArthur, Thompson and Law - is that accurate - prior to the election campaign. When Mr. Black ended up signing a contract with your office, he came from the caucus office to your office. When did Mr. Black rejoin the New Democratic caucus office and then turned back into the Premier's office?

THE PREMIER: I'm sure I can find out for the member what the exact date was, but there was a period where he left MT&L and came back to the caucus office prior to the last election and then came from the caucus office over to the Premier's office.

MR. MCNEIL: Earlier today in Question Period, I also asked you about Shauna Martin, who works in your office, and her contract also is one that is not a new contract. It would have started from an employee coming in. It was one where she was seconded from the New Democratic Party caucus office into government. When did she start working for the caucus office, to then end up in the Premier's office?

THE PREMIER: Again, we brought in people to the caucus office as our budget allowed. Shauna would have been one of those people. She had been in my office in 2003-04, came back for a short period of time prior to the last election to do the kind of work she had been doing, including research work, that sort of thing.

MR. MCNEIL: I would ask that you provide that information to the House, first of all when she started working for the caucus office, what her roles and responsibilities were. I think it's very important, as you know, the conversation today was about the taxpayers of this province moving her back to Nova Scotia. This contract said she did move back here to work for you as Premier. She moved back here to work for the New Democratic Party in the caucus office.

THE PREMIER: Right.

MR. MCNEIL: Well, the people who work in my office work for me, the Leader of the Liberal Party, and the people who work in yours, I would assume today, they're working for you in the Premier's office. I think it's important that we get an idea of when she arrived, what her roles and responsibilities were here, and what that contract looked like that would have been signed. I see they will forward to you the information that we had talked about.

Also, could you tell me what her role would have been during the election campaign?

THE PREMIER: Well, she would be caucus staff over that period of time, supplying the same kind of services that she did prior to the election being called.

MR. MCNEIL: I'm sorry, did the Premier say she wasn't working on the campaign and she was supplying information to what would have been the regular operation of the caucus, or was she, as a caucus employee, working in the campaign here in the province?

THE PREMIER: She would have been filling the usual role that she would have been filling as a member of caucus staff. You've asked for a copy of the roles and responsibilities and I'm happy to provide that. I can't tell you off the top of my head.

MR. CHAIRMAN: I see that we are fast approaching the moment of interruption. Maybe, in the thought of time, we could recess so that there would be no break between the question and the answer and that would be a better flow? Or, if you have a short snapper, we'll do that.

MR. MCNEIL: A short snapper, the Premier talked about March madness and the ending of March madness, something he alluded to that I had spoken about for a number of years. Your government put in an additional $75 million in the Industrial Expansion Fund in March. How is that different?

THE PREMIER: The Industrial Expansion Fund, of course, is used for the purposes of funding economic development initiatives in the province, over the long term. It's not used in the fashion of year end spending for particular projects. It goes into a fund, which is then used to support economic development initiatives in the province.

MR. CHAIRMAN: Thank you. We are now approaching the moment of interruption. The Committee on Supply will recess until 6:30 p.m.. We now stand recessed.

[5:59 p.m. The committee recessed.]

[6:30 p.m. The committee reconvened.]

MR. CHAIRMAN: I will now call the Committee of the Whole House on Supply back to order. The honourable member for Kings West.

MR. LEO GLAVINE: I'm pleased to have an opportunity to ask the Premier a few questions this evening. One of the areas in terms of the budget - in terms of planning, in terms of announcements to date from the Department of Education - I have certainly found wanting. I think I'm reflecting the view of a lot of Nova Scotians.

As I've examined, I guess probably through my years as a teacher and school administrator - as I've looked at jurisdictions that have really moved ahead to provide a better quality of life for their citizens, to make the kind of advances of a modern society, they have used education as one of the cornerstones, one of the pillars, to accomplish that. We all know that school boards across Nova Scotia are required by the Department of Education to have plans approved, set goals, action plans, and to try to achieve those.

I've also talked in the House, in the early years - as you know, Danny Graham was a strong proponent of having a summit on education, of getting all of the key stakeholders together who would be able to make some visionary statements - or at least long-term plans. I'm wondering about what your government and the Department of Education have in terms of future plans in the Department of Education for Nova Scotia?

THE PREMIER: I want to thank the honourable member for the question. Obviously, if you wanted more detailed questioning with respect to the estimates of the Department of Education, the person to ask would be the minister. From a general overall policy perspective, we see education as a key component to the success of the province - not just for the individuals, although that is every bit as important to us as the broader picture, but it is fundamentally important to the economic future of the province.

Having well-trained, well-educated, highly skilled individuals in your labour force - especially when you're facing what we're facing, which is a shrinking labour force - your ability to attract companies to come into the province or to grow the companies who are here is very much going to be dependent on the skills, very much dependent on the educational attributes of your workforce. It is, without doubt, an important aspect that will be pursued in government policy.

I would point out that, for example, one of the things we were able to do as a result of this budget is to announce the 250 additional seats with the community college. These are going to be flexible in the sense that they're not going to necessarily be tied to a particular trade. If over a two-year period they're needed in one area, they can be used there, but then the seats could be moved to another campus or another program. They won't necessarily be tied to a particular program. We're working with the leadership of the community college to ensure that those are used to best maximize the benefit, both to the individual and to the province as a whole. Right now, in addition to that, of course the Minister of Education and the Department of Education officials are working with the various school boards around the province to try to determine how they can best deliver the services that are required throughout the province.

There's no question, there are going to continue to be challenges in that regard and one of the issues, of course, is how do we get the province back to a financial balance because if you aren't able to do that then, in the long term, you harm the ability of the province to be able to deliver exactly those services and you can get into what is essentially a spiral, which will just harm the overall prospects of the government - I should say, of the province.

MR. GLAVINE: Going back to my premise of making those big investments in education and while you have heard me speak in the House as being a strong proponent of working towards the 12 per cent land preservation for future generations and a real legacy of any government, perhaps at this time putting nearly $80 million, perhaps if we had taken just half of that and invested in education, in fact, the dividends for us now, and in the long term, may have been much greater.

I take a couple of areas, for example - if we take a look at the Nunn report, which is being used across Canada, aspects of it being integrated into school systems, and yet we've made only a small bit of progress in this regard. While this may be an Education question, it's also a Justice question, it's a Community Services question, I'm just wondering again, what is your government going to do with those recommendations? It's an overarching document, which can change behaviour of students and set them on successful paths through their high school, late teen and early adulthood years. We know the price when we don't invest now.

We're so far away from daily physical education in our schools. We just had a wonderful late debate here, but one of the real deficiencies of the school system in Nova Scotia is that our students do not have enough physical education. Part of that problem, where there isn't an outlet, often shows up in junior high. This is where Nunn was really working to attack the problem. I'm wondering, is your government going to give strong attention to moving the Nunn report forward in a full manner?

My personal belief is that we actually chose the wrong path in the first place. I felt that education, where we have our children, captive audience for seven hours a day, should in fact have taken the lead. However, we choose differently in our province. I would like a comment, Mr. Premier.

THE PREMIER: Well of course the Nunn report, the recommendations there, too, are with the various departments and of course they are attempting to respond to those. I'll just take the member up on the one item that he did specifically enumerate with respect to physical activity and giving young people something to do. That is one of the reasons why, in the last election campaign, we talked about the importance of the Lighthouses Program and making available those grant monies on a community basis, where they could decide where that money could be best spent in order to open, whether it's a school gym or a community centre, or design a program that would engage young people in the community. Therefore, do exactly what I think it is that you're proposing, which is to try to give them a constructive outlet for their energy, give them a constructive manner of engagement, both from an activity level but also with their peers. Because one of the things that we want to do is to be inclusive so that you're building the sense of community among the young people.

Oftentimes what happens, these young folks who find themselves in difficulty become isolated from their peers. They don't have the kind of relationship that helps them grow as an individual. So part of the reason for this was to try to reach out to those young people and bring them in and try to find programming that would actually engage them. So that was certainly part of the plan that we saw and it's part of what we're looking to do.

On the early childhood education piece, of course, I was pleased to see the Minister of Community Services just the other day announcing a program with respect to early childhood education that has been very well received. I couldn't help but read the comment of Ms. Densmore who was one of the beneficiaries of that particular program and how enthusiastic she was about the opportunity that it was giving her and her child to be able to participate more fully in society.

MR. GLAVINE: Mr. Chairman, I guess perhaps, I hope to get the opportunity, if we aren't questioning the Premier for too long, I hope we will get to Education and I will be able to drill down on some of those areas with the Minister of Education. One of the areas that has really formed the basis of a lot of financial policy and public policy around the financing of the programs in our province was really some of the things laid out from Deloitte. I'm wondering, Premier, if you saw that as a review or as an audit because we know that there was a lot of talk about doing an audit after your government took office.

THE PREMIER: Yes, that's quite true and, in fact, a lot of times reviews and audits are used interchangeably but they're not the same thing. In fact, this was a review. The process of an audit would have been far more expensive and, obviously, would have taken much longer than was desirable. So this was a review that, within the parameters of the contract, we looked at where the province was from a financial standpoint and what we could expect to see over the coming years if we continued down the path we were on.

MR. GLAVINE: Mr. Chairman, I'm glad to hear the Premier say that it was a review because you did print over 400,000 pieces of campaign literature telling Nova Scotians, in fact, that you would do an audit. During the campaign the media recorded over 1,000 times that you had said, in fact, there would be an audit. I don't know whether you have but I've put it in my logbook as the first of a string of broken promises. I felt also that Deloitte really did set the record straight when they came to the Public Accounts Committee in January or early February of this year and said that - worst case scenario - the province was $51 million in debt. Not this doomsday scenario that had been painted all along and, in fact, the books were in much better shape than they expected.

So now we've gone down a path that I think is a self-fulfilling prophecy of the NDP and that is to create themselves what they had pointed out the former government was going to do and that was end up about $1.4 billion in debt in three years time.

[6:45 p.m.]

Now, as you have mapped out, a four-year plan and if it unfolds as some of the people in the Finance Department and the advisors that you have counted upon, we will add $1.4 billion to the debt. I don't understand, Premier, why you didn't make tough decisions this year. You've gone to raising taxes, but you really have not held spending, we feel, to the extent that Nova Scotians were actually expecting.

So why are you on a course and a plan to put the province in an additional $1.4 billion of debt? This is going to be a legacy for your children and our grandchildren. Additional debt when you finish your mandate in three years.

THE PREMIER: I have to assume that's just a rhetorical question because you'd have to ignore what Deloitte actually said in their report as to the financial path the province was on. They weren't on a path to a $1.4 billion increase in debt, they were on a path for a $1.4 billion deficit. And, considerably more than that in terms of debt over that period of time.

I hear what the member is saying and we have been through an expenditure management review, we're having success with that. But we pointed out all along that when you do an expenditure management initiative, it has to be sustainable over the long term. In fact, one of the things that happened in the past was that governments did come in, they made very thoughtless, short-term cuts that ended up costing the province far more over the long term as a result of that.

If you're going to go through an appropriate expenditure management initiative, you want to look at it as sustainable over the long term. In other words, so that at the end of three years, you're not going to have to make some expenditure that's essentially going to wipe out the gains that you've put in place. The idea is that the service delivery models will change, the amendments that will be made to programs, the way in which things will roll out is done in such a way that they're actually sustainable over the long term. We want to make sure we're able to continue to provide the service that the people of Nova Scotia want - whether it's in education or in health care or, for that matter, in Community Services or any of the departments - and meet their needs.

The simplest response to this particular question is to simply ask the member, since we're in estimates, where in the estimates of the Province of Nova Scotia would he cut? Which programs would he take out of service? How much would he cut? How much would he cut from the Department of Education? How much would he cut from the Department of Health, if he knows what the specific line item is, is he going to cut a particular program through the IWK? Or is he going to cut something in Education? It's easy to stand and say, you should have cut more, you should have cut more deeply. It's harder, of course, to say to the government you should have cut this particular program, you should have found those monies in this particular department. That, of course, becomes much more difficult.

MR. GLAVINE: I actually thought I had an opportunity to make a few suggestions to the Minister of Finance during the staged 24-stop road show across the province. But on that particular evening he came to the microphone and made a very specific statement that I would not be coming to the microphone to speak on that particular evening so I'm still hoping that your Minister of Finance will be open to those kinds of questions when we have estimates on the budget.

The question that is going to need to be answered by your government during this term - we all know now that the HST is, not so much that it's so unpopular, but many of our finance people across Nova Scotia, our business people, have talked about other ways in which revenues could be made and also have offered some very sound suggestions on where expenditures could be cut. That being said, I think during your mandate, the federal government will raise the GST, it is just a matter of time. If that becomes a reality - I know it's speculation now but I think with the kind of debt the federal government is building up, it is a matter of time - would you review a 17 per cent HST if that comes about during your mandate?

THE PREMIER: This is the current estimates of this financial year and I'm not going to speculate about something that might happen in the future. Of course, anything of that nature that should happen, we would deal with it in those budgets, but part of what the member said, when he stood up, was that he's hopeful to be able to make some of these suggestions in estimates. Well, these are estimates, I'm here and I'm ready to listen to what the member has in terms of the types of cuts and departments that he would like to see cut, I'd like to hear that.

MR. GLAVINE: Mr. Chairman, I guess in my six and a half years here, I have found estimates a time to drill down on ministers, drill down on departments and find some answers to some of the questions that require to be asked. You can be sure that if the Minister of Finance wishes to engage in some dialogue, I'm more than willing, but I'm not anticipating a quick call or notice. He hasn't been listening to the Chamber, he certainly didn't listen to Deloitte, and he's written off the CFIB, so I'm not expecting a call on dialogue any time soon.

The last question, and this is one of the ones, like the Poverty Reduction Strategy, not the Poverty Reduction Tax Credit, we know that's a little blip in a moment of time to give that momentary assist, that's not part of what should be a Poverty Reduction Strategy. As I said in one of my first questions here in the House, that will be one of the areas that your government will be judged on. I know what I heard for seven years while you were in Opposition, about how you were going to change the whole numbers on poverty in our province.

The other area that I'm getting a sense now in e-mails and conversations is that you have hung the middle class out in this budget and this is the direction now of this government. Those between $30,000 - roughly $34,000 - and $80,000 of income will pay the price on footing the bills that you have put in place to help some other areas of Nova Scotia. This is the bulk of Nova Scotians, working class families that you had talked about, committed to for years, and in a very short time what will be your plan to assist the average Nova Scotian, the over quarter of a million working class families that were expecting a little bit of a break?

THE PREMIER: Well, the very first thing we did was implement the policy of taking the HST off home energy, that was one of the very first things we did, that puts tens of millions of dollars back in the hands of people right across the province in all income groups; we put in place the home building rebate, which I would say probably the majority of those people who are in that would have been middle class, probably young middle-class people looking for their first home. It is working families who will have the advantage of the removal of tax from children's clothing, children's footwear.

Mr. Chairman, all of these, of course, go to helping in that regard, but the most important thing that we can do for everyone in this province, particularly the middle class, is to make sure that we have a province that is financially sound, one where we're not looking to future generations to pay for the expenses of current times. That's why it is that we feel it's so important to get the province back to balance and to get off of what was an extraordinarily unsustainable path. This is the great benefit that we have to achieve. We have to achieve it because the alternative is to not be a very attractive place for young people to come and stay and put down their roots. I mean it's one of the reasons why we have implemented the graduate retention tax credit - another thing that's designed to try to make sure that young people, when they graduate from either community college or other post-secondary institutions, that they're able to stay here in the province.

These are measures that are designed to try to balance off the good things we want to do to help all families, middle-class families included, against the need for the province also to be on a firm financial footing. Yes, it's difficult. Yes, these are tough decisions. Yes, we wish we were in a position where our revenues were actually exceeding our expenses, because if that were true, then there are many things that we would be able to do - invest in education. We would be able to put money into community services. We would be able to lower taxes. Those would be all possible if our revenues exceeded our expenses, but they don't. In fact, the opposite is actually the reality.

In fact, now we're in a position where the expenses of the province far exceed the ability of the province to pay them with the revenues we have. So that means that we have to make these kinds of decisions and, frankly, we have tried to learn from the mistakes of other governments. We watched what happened under the former Liberal Government when 1,500 nurses were paid to leave the health care system; when 1,000 beds were closed across the province. We want to learn from those kinds of short-term thinking and mistakes. We watched much of what was done in the early years of the Hamm Government, and I was here, and I remember the protests outside the House.

So we took the advice of the economic panel. They said you should look at this as a multi-year planning exercise; that you should look at expenditure management that's done over a number of years; you have to look at the questions associated with economic growth and you have to look at the questions associated with revenue. We're doing all of those and we're doing it in the most reasonable, most effective and efficient manner that we can. Thank you.

MR. CHAIRMAN: The honourable member's time has expired on this round. There are approximately six minutes left.

The honourable member for Cape Breton North.

HON. CECIL CLARKE: Mr. Chairman, I'm pleased to join in the estimates debate with the Premier and I do extend a welcome to his officials who have joined with him this evening. With six minutes, it's a start, I guess, or a preamble to some further discussion that we can continue with when next we commence with committee and estimates debate.

[7:00 p.m.]

Mr, Chairman, I've heard a lot from the Premier and his Minister of Finance and other statements that have been made with regard to the actual position and how an artificial number of $1.4 billion was set and it's materialized and has been repeated and put into everything from the Back to Balance process that was undertaken. I can spend lots of time - my Leader spent time highlighting just a few of the faults and flaws of that process that doesn't give an accurate and isn't the consultation that the government said they did. It was a window-dressing exercise to try to, basically, come out with an outcome that they already had decided what the outcome was to be. They just had to find a way to get to that in processes around the province.

Without dwelling on that, I do want to go back to the discussion with regard to the Deloitte report because that is often used as a baseline, whether that is by the panel, by the Minister of Finance, by the Premier, his Cabinet, other viewpoints and the Back to Balance road show that the Minister of Finance did. What I do know is that you have to go and look at some of the root causes, so we start with the campaign commitment, made by the now Premier when he was campaigning, to undertake an audit. That audit was to look at the books of Nova Scotia, so he could get a clear picture, as he had indicated, of where things really were.

Then quickly after the election, the language started to shift, because then it was going to be a financial review. But the auditors that were hired was Deloitte and they will clarify in technical language what it is but the political commitment was an audit and it was to be thorough in getting to where the numbers would be.

Then you look at the criteria that was given to Deloitte and very clearly the blinders were put on. They weren't allowed to look at the numbers, look at any changes, look at any modelling, other than to take the numbers of the May budget that were presented by the previous government, the Progressive Conservatives, and use those numbers wholly. So nothing was to change, no assumption of change for an election that the Premier now was a part of precipitating and changing how those very numbers and assumptions would be. Because an election changes what the financial assumptions would be.

So we had Deloitte, who were put in a box to begin with and, not allowed to move beyond certain parameters and certain assumptions. But I also think, Mr. Chairman, when you look at the fact that even Deloitte themselves have indicated in their report that there was no verification process established with the expense or revenue projections from the departments or agencies of the government - Deloitte when they were in this Chamber for Public Accounts as was referenced by the member for Kings West, were very clear that, indeed, when an election was precipitated unnecessarily, the books were balanced. In fact, he said $51 million but I believe, for edification, it probably was, I think they said $53 million when they took over in July in terms of the deficit that the Deloitte representative clearly understood.

When it was basically brought forward - a lot of misconceptions about were the books cooked? Those terms were used in this House, that the books had been cooked and it was asked of Deloitte, sitting, actually, in the chair where the Premier is right now, the representative and she clearly said, no, they weren't. But they can only do what accountants and consultant firms do, is go off the information that they were provided, produce a report as requested. What we have is a process that has been flawed right from the get-go. Because we have Nova Scotians that the New Democrats were telling that the books weren't in order. Yet, when they get into government, they have to try and hire consultants and spend more taxpayers' dollars to try and basically legitimate their assertions, later to find out that that was not the case, so that they could try and discredit and find a way around the financial mess that they, themselves, are creating.

Because there is a real dichotomy, Mr. Chairman, of where the Premier has been, because I've heard the government pat themselves on the back for all these great things they have done and at the same time have walked away and said, well, that was not our budget, that was the past government's budget. Yet, at the same time, they would go and put us into a deficit.

The reality is, we all know that the Minister of Finance went, on the last day of the fiscal year, to add the Education prepay because he wanted to make sure that somehow in there, in what they claim to be their first budget, they wouldn't be showing an over $0.5 billion deficit, they could be in the $220 million and show that would be the difference.

So that is the part of the manipulation of the numbers and the process around here that would form the basis as we continue to go forward and ask questions in detail of the Premier, but for him to say that the assumptions they've had are correct, we have seen flaws from the get-go of the commitments to the audit and we'll follow up when next we convene.

MR. CHAIRMAN: Order, please. The time allotted for debate in Committee of the Whole House on Supply has now expired.

The honourable Government House Leader.

HON. FRANK CORBETT: Mr. Chairman, I move that we do now rise and report progress.

MR. CHAIRMAN: Is it agreed?

It is agreed.

The motion is carried.

[The committee adjourned at 7:06 p.m.]