HALIFAX, MONDAY, APRIL 18, 2011

 

COMMITTEE OF THE WHOLE HOUSE ON SUPPLY

 

5:02 P.M.

 

CHAIRMAN

Mr. Alfie MacLeod

 

MR. CHAIRMAN: Order, please. The honourable Government House Leader.

 

HON. FRANK CORBETT: Mr. Chairman, we will continue the estimates for the Department of Health and Wellness.

 

MR. CHAIRMAN: The honourable Minister of Health and Wellness.

 

HON. MAUREEN MACDONALD: Mr. Chairman, I want to thank you for the opportunity to discuss the budget and the priorities for the Department of Health and Wellness for 2011-12. Over the past few days, I've received a number of thoughtful, important questions from members of the House and I've been glad to have the opportunity to address a number of important issues.

 

Health services account for a significant portion of government's annual budget and, as such, warrant a full and detailed discussion, and I believe we have touched on many aspects of the health care system. I hope that I have provided insight into the many changes underway in our health care system under this government. We have touched on the improvements we want to see under the new Department of Health and Wellness in 2011-12.

 

I want to take this time to recognize the employees at the Department of Health and Wellness who are working with us, who help make these changes happen. I also have huge appreciation for those health care workers and managers within our health care system. This past year, I have had the opportunity to visit many of our hospitals and clinics; to visit ERs, to see first-hand the kind of quality care that is being delivered every day in Nova Scotia.

 

 

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I have met many fantastic health care providers, such as the nurse practitioner in Tatamagouche and the very keen doctor in Pugwash, who spoke positively about the collaborative care practice and his and the community's vision for the future. I've listened to board members in Lunenburg who are open to change in their community.

 

We have inherited a difficult challenge when it comes to emergency rooms. However, I believe we are turning the situation around. We all know change is difficult, but there are so many people open to trying new ways as we head into 2011-12. Dr. John Ross has inspired many people across Nova Scotia with his report on how we can improve the system. His observation that the ER was the canary in the coal mine in our health care system certainly struck a chord with me.

 

We know there are challenges in the system, with wait times in orthopaedics that are too long, with some of our aging facilities needing repairs, with patients wanting and deserving the very best treatment. In his 26 recommendations, Dr. Ross found issues from the ER and beyond and has set us on a path of change. The Better Care Sooner plan, our response, is a significant blueprint for the next three years, and we are committed to implementing it. I appreciate the positive comments from the Leader of the Progressive Conservative Party, who is the member for Cumberland South, who was in Parrsboro when we announced our first collaborative emergency centre.

 

This year, as we open four collaborative emergency centres, we know that if investment is needed we are prepared, as we have dedicated $3 million through the Emergency Department Protection Fund to ensure we will have the needed investment to address this important work. This year, we will also work with our district health authorities as Nova Scotia becomes the first province in Canada to implement emergency room standards.

 

In this 2011-12 health care budget there is also money for autistic children; there is money for nurse practitioners; there is money for our ERs; there is money for the electronic patient record; there is money for nursing home beds; there is money for our DHAs; and there is money for Pharmacare and seniors, who will not see their payments go up. I believe it is also important to reiterate that our plan to live within our means is reasonable and will not result in reckless cuts that would hurt our economy or needlessly burden families. I believe that this year's budget for the Department of Health and Wellness is making the right investments to provide better health care for Nova Scotia families.

 

We talked over the past few days about the need for a strong emphasis on disease management and wellness, so as I said during the debate, we will ensure that our merged department will benefit from the best advice and brains from within our new department.

 

I've heard the concerns raised by members over the course of these health debates. Our staff have made note of them, and I will follow up with those members. I also want to take a moment to acknowledge the great dialogue we had on a number of important primary health care issues, including midwifery, wait times, and the important issue of health human resources.

 

In closing, we look forward to the year ahead as we improve access to more primary health care services in communities, receive the province's first mental health strategy, and bring stability to our ERs. I would also like to thank my staff for their support over the past few days: Deputy Minister McNamara and Linda Penny, the head of our financial services. I know these debates can sometimes be less than stimulating, particularly for people who know the minutiae much better than I ever will.

 

Mr. Chairman, I want to thank you and before I take my seat, I would like to move the estimates of the Department of Health and Wellness.

 

MR. CHAIRMAN: Shall Resolution E11 stand?

 

Resolution E11 stands.

 

The honourable Government House Leader.

 

HON. FRANK CORBETT: Mr. Chairman, would you please call the estimates of the Department of Energy.

 

Resolution E6 - Resolved, that a sum not exceeding $30,462,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Energy, pursuant to the Estimate.

 

MR. CHAIRMAN: We'll take a short break so that the ministers can change out and get their staff into place. Try to do it as quickly as possible, please.

 

We now stand recessed for a short period of time.

 

[5:11 p.m. The committee recessed.]

 

[5:16 p.m. The committee reconvened.]

 

MR. CHAIRMAN: Order, please. I will now invite the minister to make some opening comments, if he so wishes, and also to introduce his staff to the members of the committee.

 

The honourable Minister of Energy.

 

HON. CHARLIE PARKER: Thank you, Mr. Chairman. It's certainly a privilege to have the opportunity here this afternoon to speak about the Department of Energy to my colleagues here in the Legislature. I want to introduce my staff who are with me here this evening. To my left is our Deputy Minister, Murray Coolican, and on my right is our director of Policy, Planning and Priorities, Bruce Cameron. From time to time we may be switching around if there's a third member whose expertise may be needed, but I'll be relying on them if, after my short talk, we have a few questions from anyone. I particularly appreciate having their support here. This is my first time as a minister to have the opportunity to do estimates. It's interesting, it's challenging, and I'm looking forward to the process.

 

I want to start off by giving just a brief overview of the department so that everyone will have a better understanding, I hope, of what it is we do in the Department of Energy. The department is relatively small from an employee standpoint. We actually have less than 50 people working in the department right now. But I can tell you that there is important work being done in the department that is critical in Nova Scotia in meeting our environmental and our renewable energy targets and in the sustainable development of our energy resources to the maximum benefit of the people of this province. This includes long-term energy price stability and it also includes economic benefit for creating jobs, new industries from our abundance of natural resources here in our province.

 

I've only been in the department, as you may be aware, for a few months. It wasn't very long before I got into the department that I realized perhaps how little I knew about energy and its potential and its importance, but I've come to realize that it's multi-faceted and there are certainly many important things going on in the Department of Energy. It has been a learning experience for me in a good way. The initial weeks I recall there were a lot of briefings, a lot of updates, meeting a lot of people in the department and outside. I almost at times, I suppose, verged on information overload, but I was surrounded by great staff that helped me along the way and really helped me to get up to speed.

 

I'm pleased to be here this evening and to be part of the energy transformation that is taking place in this province. I want to share with you where we are as a department in terms of that transformation and in distancing the province from its nearly total reliance on imported fuel sources.

 

First though, I want to spend a little bit of time explaining our mandate about our different lines of business within the Department of Energy. The mandate of the Department of Energy is to deliver maximum economic, social, and environmental benefits from the development of the energy sector, and we do develop, establish, and manage the province's energy policies. We provide advice and implement policies and programs dealing with natural gas transmission and distribution throughout the area. We deal with electricity generation, transmission and distribution, and refined petroleum products, and certainly also more and more emphasis on renewable sources of electricity.

 

We work on benefit plans for major energy projects to build the local capacity and the capabilities that are critical to attracting future investments, and this ensures that our companies and our workers are able to compete for local business and for employment opportunities. We work with our companies and our partners to promote investment in the energy-related capabilities of Nova Scotia. We also provide advice on the development of policy, legislation, and regulations for the exploration and development of the province's offshore and also our onshore petroleum resources.

 

We administer the granting of petroleum rights and coordinate regulation of the exploration, the development, and the production activity. Now, you may be familiar with the CNSOPB - the Canada-Nova Scotia Offshore Petroleum Board. It regulates day-to-day petroleum activity for our department, but we are the stewards of onshore and offshore geological knowledge, promoting and marketing Nova Scotia's onshore and offshore petroleum potential around the world, really, to oil and gas companies throughout our planet. We forecast and monitor the financial results and fiscal implementations of petroleum exploration and development, and certainly we also administer, audit, and assess royalties from our petroleum programs.

 

That's just a high-level view of what it is we do at the Department of Energy. Building our renewable energy sector, diversifying our energy mix, and making the most of the opportunities in our offshore and onshore are certainly the priorities of the Department of Energy. This is balanced by a commitment to approaching resource development in a sustainable way that helps us meet our environmental targets and assist Nova Scotians to be part of the solution by using energy more wisely.

 

As I mentioned, it's really an energy transformation that we're in at this time, and the department is working to move the province down the path to a more diverse and more secure energy future, the direction for which was outlined in the 2010 renewable energy strategy that came out last April. Our government's vision for the province's energy future includes developing our renewable energy sources, getting Nova Scotians involved in community-based renewable projects, and also working with our neighbours in Atlantic Canada in expanding and enhancing the transmission system.

 

Securing our energy future means reducing our reliance on imported fossil fuels and the very volatile global market. Our current situation makes us extremely vulnerable, if you can appreciate that the price increases or supply shortages are making the status quo not an option. Nova Scotians want energy stability, and to do that we need energy diversity. We've laid out a long-term vision in our renewable electricity plan to keep electricity bills in check over the long term and to meet our environment standards and targets. Our energy diversification approach will create good jobs by encouraging participation by communities and by municipalities in building local, renewable projects, and most of all, we are securing our energy future.

 

All of that requires planning. It takes a vision to make this happen, and the department is currently undergoing a reorganization, or a review, to better reflect the change in energy priorities of our province. We're going to do this while still meeting the budget reduction targets of 3 per cent this year, 1 per cent next year, and 1 per cent the year after - the 5 per cent total that almost all departments are undertaking. This is part of the government's commitment to living within our means and restoring fiscal balance to the province.

Mr. Chairman, we recently advertised in our department for three new executive director positions to reflect that change in structure within our department. Our focus is on renewable and sustainable agenda as we also continue to pursue the economic development opportunities that are presented by our onshore and offshore oil and gas sectors. So I mentioned our department is being reorganized into three divisions: the first one is the Renewable and Sustainable Energy division; secondly, Business Development and Corporate Services division; and thirdly, the Petroleum Resources division. The executive director for the new Renewable and Sustainable Energy division will continue implementation of the Renewable Electricity Plan.

 

We're entering into a high activity phase now that the foundation has been established in our Renewable Electricity Regulations that were enacted here by this House in November of last year. As a result of that, Mr. Chairman, we're going to need some new staff. Our full complement last year was established at 56 positions, although only 46 of those were actually filled. This year we're estimating that our requirements will be 62 positions. To enable us to hire new staff and to meet our budget reduction targets we went back and started with a clean slate. We started that process with protecting our core legal responsibilities and made sure we that we kept our lights on - I should say highly efficient lighting in the Department of Energy - and then we started to build it back up.

 

When we finish we're able to do all the important things and still spend less within our budget. In order to do that we've trimmed travel to focus on the department's core priorities that have been established for the year. We're cutting down the use of external consultants and research grants. Rather we are enhancing our in-house expertise by strengthening our management teams and providing more opportunities for our specialized experts to progress and keep working in the public sector. We have a lot of expertise within the Department of Energy and it makes every sense that we use that to the maximum - so less consultants, more expertise within the department.

 

Our two offshore energy research organizations, OETR and OEER, have at least a year or two of work in front of them allowing us to scale back funding for new research and development until such time that we can review the results of the current research project and to establish new priorities. Our new reorganization and our focus on core priorities laid out in the Renewable Electricity Plan will make life better and more affordable for Nova Scotians. Mr. Chairman, we believe that our plan will stabilize electricity prices while creating jobs, stimulating economic growth, and improving the environment.

 

We've set some of the most aggressive renewable electricity targets in the world, making us leaders in our approach to renewable energy development and I'm sure these will be familiar to everyone. We have a regulated target of 25 per cent of our energy supply coming from our renewable sources by 2015 and just last week we announced our intention to legislate a further target of 40 per cent by 2020. That means that by 2020, not only will Nova Scotia be a leader in the world on projecting renewable energies but we will have the equivalent of 500,000 homes running on renewable electricity.

 

Mr. Chairman, we have a plan on how to get there. Our transformation to a cleaner energy future based on renewable energy sources will require some up-front investment, and we've been very open and clear on that. Certainly developing renewables may be more expensive initially, but in the long-term it will stabilize prices by protecting Nova Scotians from volatile fuel prices and the future cost of carbon. Developing renewable sources of electricity and using electricity wisely is the best option for stabilizing electricity prices over the long term while meeting emission reduction targets. We expect those capital up-front costs are going to be in the range of 1 per cent to 2 per cent per year on our electricity bills in the short term, but after that, as you would know, the price of renewables is constant. So it's a short-term cost, but many long-term gains to be had here. We expect the implementation of the renewable electricity plan will generate $1.5 billion in investment in Nova Scotia and will create somewhere between 5,000 and 7,500 person-years of employment.

 

An important part of the plan, as I mentioned earlier, is encouraging communities to participate in renewable energy projects. Greener local projects will help reduce the province's overall dependence on coal and will generate community participation in innovative economic development partnerships and opportunities. As many of my colleagues are well aware, Nova Scotia introduced the first community feed-in tariff, better known as COMFIT, in the world last year in our renewable electricity plan. The community feed-in tariff encourages participation of small community-based power projects at the distribution level, and that creates local jobs and certainly the spinoff in the local economy as well.

 

These community projects can include wind, biomass, in-stream tidal, and run-of-the-river tidal developments. The COMFIT allows for broader participation in renewable energy, resulting in projects that both benefit and are rooted strongly in our communities. It supports the goal of gaining a greater independence from volatile conventional fuel sources. It demonstrates government leadership in sustainable energy use, and it establishes us, as I mentioned, as a world leader in renewable energy.

 

The URB, the Utility and Review Board, have been working on this. They have had hearings and they're set to set those tariff rates that will apply to different technologies very shortly. One of the benefits of the renewable feed-in tariff project is that once the rates are set, it provides greater electricity price stability for ratepayers in the province than relying on fossil fuels or oil or gas. So this is part of our long-term plan to stabilize energy prices for Nova Scotians, and I believe it has wide support in the community and in our province.

 

Just a little earlier this month I had the opportunity to sit down with Toby Couture. He's a consultant and an expert witness for the Ecology Action Centre, and he recently presented at the URB hearings. He's a former lead analyst on feed-in tariffs for the U.S. Department of Energy. He was interviewed on CBC Radio a short time ago - and he told me the same thing when I sat down with him - but he says firmly that our COMFIT program is a step in the right direction.

 

Actually, I have a quote from his CBC interview, Mr. Chairman, and I'll table that if the members opposite so wish. He said: "I think the interesting thing is you're going to see a lot of these developments happening by communities and at the local level. So it really provides an opportunity for more Nova Scotians to get involved and to look at what projects could potentially be developed in this area." I'll table that at the end of my talk here.

 

Community-based renewable projects also provide for local supplier development. There's a large supplier chain, and it provides opportunities for manufacturing here in the province as well. One of those companies in the supply chain is Seaforth Energy, and Seaforth is certainly expecting that our renewable electricity regulations will help build its wind turbine business, both locally and around the world. Its president, Jonathan Barry, recently had this to say, and I'll quote from him as well: "The ability of Nova Scotians and businesses to participate in community energy will help us to scale up our operations, research and development, and manufacturing, and will make us more competitive globally."

 

As I said, there's widespread support for the COMFIT program. Our approach and investments in core areas are making a difference and making life better for Nova Scotians.

 

I want to take a minute and talk a little bit about our tidal energy initiatives. In that field we are adding incentives to the tidal industry in the form of small- and large-scale feed-in tariffs to encourage further research and development. Nova Scotia's Bay of Fundy, as we all know, is considered by many to be the best site in the world for tidal power generation, with over 100 billion tons of sea water flowing in and out of the bay on every tide. I'm told that that amount of water is more water than is contained in all the rivers of the world, so it has huge potential for tidal energy. We're on the leading edge of some exciting developments there.

 

Tidal energy may become a key part of Nova Scotia's future energy mix. We are considered in Nova Scotia as an international leader in in-stream tidal energy development with our demonstration projects in the Bay of Fundy.

 

As you would be aware, we currently have four partners in the Fundy Ocean Research Center for Energy project, perhaps better known as FORCE to many. Those four partners are Nova Scotia Power, Minas Basin Pulp and Power, Alstom, and Atlantis. Each of those companies has other partners with them that are working hard to develop tidal energy here in our province.

 

One tidal device has already been tested in the waters of the Bay of Fundy, with that technology currently being evaluated. There are three more technologies scheduled to be tested with devices in the water in 2012; when fully developed, new in-stream tidal technology has the potential to generate 300 megawatts of green, emission-free energy in the Bay of Fundy. That's enough energy to power 100,000 homes in this province, through subsea cables that will be connected directly into the provincial grid.

Mr. Chairman, I think Nova Scotia truly has a powerful story to be told overall - not just in tidal power, but in other renewable energy as we are diversifying and securing it for Nova Scotians.

 

I want to take a minute to talk a little bit about the Lower Churchill project and its potential on really adding considerably to our energy mix here in Nova Scotia. A large part of that is our partnership with Newfoundland and Labrador to develop the first phase of the Lower Churchill projects at Muskrat Falls. This historic agreement between Nalcor Energy and Emera will see clean electricity flow from the $6.2 billion project to and through Nova Scotia.

 

In the process of that, 10,000 jobs will be created during the life of its construction right here in the Atlantic Region. Those jobs will mean that people can stay here in the region; they can build a life here. They don't have to travel out West or somewhere else to find work, and they will be contributing here to our tax base. Their children will be attending our local schools and income tax will be paid, so we will be building a stronger economy right here in Nova Scotia, in Atlantic Canada, and certainly it will be helpful to our whole country. It's a project that is national in scope. It has been referred to as a nation-builder, and I certainly believe that to be true.

 

Once electricity flows into Nova Scotia in 2017 via the subsea cable into Cape Breton, it's going to land somewhere near Lingan, I understand, and will bring more power to Nova Scotia. It will also be of benefit to New Brunswick and Prince Edward Island and beyond.

 

This power will help us achieve our renewable energy targets, with the overall project resulting in a stronger, more reliable transmission system here in the Atlantic Region. Really, the project is a perfect example of the importance of working with our regional neighbours to build a stronger region and, in the process, build a stronger Nova Scotia.

 

One thing I learned when I first had the privilege of becoming the Minister of Energy was the importance of working with our neighbours in the region. One of my first duties a couple of weeks after I became the minister was to host a meeting of the Atlantic Energy ministers. That was held here in Halifax, and I had the opportunity to sit down with Minister Skinner from Newfoundland and Labrador, Minister Leonard from New Brunswick, and also Minister Brown from Prince Edward Island. As Ministers of Energy we worked in fostering this spirit of co-operation on energy issues, particularly on strengthening the region's transmission system that will benefit all four Atlantic Provinces. A strengthened transmission system will assist all of us in Atlantic Canada in developing renewable energy projects, in securing a future diversified energy supply, in stabilizing our energy prices over the long-term, and certainly in meeting our environmental targets.

 

As I mentioned, we've been working closely together with our provincial counterparts and with the federal government on the Atlantic Energy Gateway initiative - AEG, it's sometimes referred to - but the initiative is a way that we have a mutual interest in maximizing opportunities for collaboration on research and development and, as I mentioned, strengthened electricity transmission.

 

As part of that initiative under the Atlantic Energy Gateway, we've undertaken a number of studies to determine what the best way to go forward would be. Some of those studies are underway now, others have been put out for an RFP, and others will soon be heading in that direction.

 

I just want to mention the five different studies that we have initiated as Atlantic Canadian provinces in this initiative. The first one is a systems planning and operations study. Secondly, we're going to be looking at financing of the renewable energy electricity generating projects. The third study will be regional clean and renewable energy market opportunities, to see where the product can be sold. Fourth is the supply chain, to see what support is there from suppliers to look at clean energy. Finally, the fifth study would be on research and development challenges and opportunities. The results of those studies will be an important part of provincial and national energy policies and planning that are inclusive and responsive in moving forward as provinces, as a region, and as a country.

 

We're all connected here in Atlantic Canada; we all rely on each other. If one province succeeds, we all succeed, and also it will make a stronger Canada. We commend the federal government for recognizing the importance of our region, for funding the Atlantic Energy Gateway initiative, and for the commitment during this election campaign of all the federal Parties that are supporting the development of the Lower Churchill project.

 

I want to turn for a minute to energy efficiency. We've heard a lot about that over the last couple of years, and we're pleased in the Department of Energy to be the leader in energy efficiency projects in our province. We've partnered with our federal partners on that as well. The recent announcement that the EnerGuide for Houses Program might be renewed is certainly encouraging. As you know, Mr. Chairman, the federal government cancelled that program last year, and although we as a province continued on with that - we provided a $1,500 rebate - it lost some of its momentum when the federal part of it was gone. So, like I said, it's encouraging to see the recent announcement that it may well continue.

 

Reducing energy consumption will help us meet our future energy needs and will keep consumers' electricity bills in check. Our government is committed to funding energy efficiency programs and to assisting Nova Scotians in reducing their monthly energy bills. Through Efficiency Nova Scotia we're going to continue to fund energy efficiency programs and then we're going to have a particular emphasis on low-income Nova Scotians, including those who rent - not just homeowners but also renters - and there's some development work being done on the rental side.

 

So by becoming more energy efficient, certainly, Mr. Chairman, the savings are real. Low-income Nova Scotians participating in the Residential Energy Affordability Program can save up to 30 per cent on their energy bills and that can translate to about $150 a month. So those are real savings for those who, perhaps, most need it. So we're making life more affordable for Nova Scotians.

 

You can see from the Budget Estimates that funding for efficiency programming in Nova Scotia totals $18.4 million this year and that is actually, you may note, about $4 million lower than the budget for these programs from last year. The budget adjustment is based on unspent funds that were in there from previous years. Last year's budget was based on an estimate of the program demand but the budget now has been adjusted to more closely reflect the reality uptake in the EnerGuide Program, in particular, and again that was because there was less incentive from the federal government. It lowered demand but we think that's going to change. When the federal government cancelled its portion of the EnerGuide rebate, fewer homeowners participated in the program and that left a large surplus. So it appears that the federal portion of the program may be reinstated, but it will take some time for the program to ramp up to its former level.

 

So we are continuing, as I mentioned, Mr. Chairman, with the provincial portion of the EnerGuide rebate, and we're asking Efficiency Nova Scotia to give us some advice on new program designs that are less dependent on federal government decisions and provide the best return for our investment. Efficiency Nova Scotia, as you know, is arm's length from government, but they're continuously working on new programs and new ways to provide efficiency programs in the province.

 

The 2011 budget, in energy efficiency, we are going to focus on rebates and incentives for energy efficiency upgrades for low-income owners and renters, as I mentioned, for existing homes, for new residential or new construction homes, and also increasing the use of low-cost, solar hot-water heating. So we want to give priority to and focus attention on Nova Scotians most in need and those who will most benefit from the monthly savings on their electricity bills that energy efficient upgrades can provide.

 

I just want to take a moment, Mr. Chairman, to speak about some of the programs that are under Efficiency Nova Scotia and that are currently being offered. I mentioned earlier the REAP program, or the Residential Energy Affordability Program, and it provides energy efficient upgrades to low-income homes at no cost to the homeowner. Simply, if they qualify, somebody comes in and audits the situation and then recommends what should be done. The work is done and inspected; again, there's no cost to low-income Nova Scotians for that. REAP provides energy and greenhouse gas emission reductions, financial savings for the homeowner, and also a more comfortable home to live in.

 

The program is a direct installed program that permanently upgrades the energy efficiency of a low-income home - again, at no cost to the homeowner. Upgrades typically would include things like insulation, or draft proofing, just to save money on heating or electricity costs. The REAP program started in 2006. It was a pilot project at that time and about 105 homes were upgraded that first year. But since then the program has grown and it's expected that more than 1,100 homes will have been upgraded by the end of the last fiscal year, on March 31, 2011.

 

The EnerGuide for Houses Program is another program offered now through Efficiency Nova Scotia. It's partly administered by Natural Resources Canada. This is a rebate program whereby existing homeowners contract an energy auditor to complete the initial audit and then the energy retrofit of the home is based on the recommendations of the energy audit company. The work is done and a complete final audit has to be done within 18 months of the initial audit; then the homeowner can apply for the rebate. We hope that once the federal government reinstates its portion of the program, uptake will return to previous levels. I believe the previous rebate from the federal government was $5,000, the provincial grant was $1,500, so there was a $6,500 grant there for homeowners that really helped and encouraged homeowners to take advantage of the programs.

 

We also have a program to encourage Nova Scotians building new homes to make them as energy efficient as possible. The EnerGuide PerformancePlus program encourages Nova Scotians to build their new homes to as high a standard as possible in order to reduce the consumption of non-renewable fuels and decrease energy costs. Of course, new homes will last for 70, 80, 100 years, or more, so the energy savings are there year after year.

 

Rebates are offered to June 30, 2011, to offset a portion of the cost of energy upgrades. New houses offer a huge opportunity to reduce long-term energy costs for a modest cost. The savings will continue, as I mentioned, over decades, over the life of the building. Rebate values, there are different levels of $3,000, $5,000 or $7,000, and they are based on the final EnerGuide rating of the completed building. Presently we have 434 PerformancePlus applications as of March 31^st of this year.

 

We're also promoting the use of solar hot-water heating through Efficiency Nova Scotia for non-electric hot-water conversions. Current year funding is expected to be $1 million and that's going to be split roughly 50 per cent on the existing program and 50 per cent on the Halifax Regional Municipality's program, or HRM. Here they have a new on-bill financing initiative where the projects are carried out by HRM-approved installers and the cost is recovered through the property tax bill.

 

For residential solar participants the current rebate is $1,250 and for residential solar water heaters, it's $500 for residential air heating. Solar water heaters are able to supply between 40 per cent and 60 per cent of the residential hot water needs. The best savings come to those who are using electric water heaters. Electrically heated homes are eligible for an additional $1,250 through the demand side management program. For commercial solar, the current solar rebate for air heating and water heating panels is 15 per cent of the capital costs up to a maximum contribution of $20,000.

 

We're also providing funding to Efficiency Nova Scotia for education and innovative program design. Programs we currently have were developed a number of years ago and do not adequately address the government's priority for helping lower income families. For example, the REAP program helps those who have a low income and own their own homes. Presently there is no program for low-income renters and landlords that serve that end of the market. I know Efficiency Nova Scotia is working on developing some new programs in those areas, using new models and new approaches, and we look forward to when renters and landlords will be able to take advantage of those programs.

 

In addition, there's a continuing need to make people aware of the programs available and how they can make a difference through their own actions, just through simple things like insulating your attic or basement, or insulating the whole home makes a difference. We also understand the importance of another initiative - sustainable transportation - in meeting our emission targets. Our budget includes $2 million for work on sustainable transportation initiatives to be developed in consultation with stakeholders and projects solicited through a RFP process. Another $180,000 is allocated for development of codes and standards and related policy work associated with energy efficiency. An example of this would be work on Building Code updates addressing energy.

 

Another program now administered through Efficiency Nova Scotia is our Ice Rink Energy Program. We recently had a short debate here in the House on that topic in particular with the BAYplex facility in Glace Bay and it's a program that is rolled out in different areas of the province each year. The majority of Nova Scotia's arena and curling rinks are now at least 40 years old and struggling with high energy costs, overdue building repairs, and the need for upgrades to aged lighting and mechanical systems. I'm very familiar with the rink in my community in Pictou and I know that all those criteria would fit, as do most of the hockey and curling rinks around the province. Arenas know they have cost-effective opportunities now to reduce their energy use but often lack funding and technical support needed to turn those opportunities into actual projects, and that is where the Ice Rink Energy Program will come in.

 

The Ice Rink Energy Program was piloted at eight Cape Breton area rinks in 2009 and since 2010, 28 more arenas and curling rinks were upgraded in the Highland, the Valley and Tri-County regions being retrofitted. This year our focus is on Halifax and the Fundy region. We work closely in that program with the Recreation Facility Association of Nova Scotia, as well as with the Department of Health and Wellness and also Nova Scotia Power. Under the program each facility is required to pay at least 20 per cent of the costs of the upgrades themselves and on-bill financing from Nova Scotia Power is possible to help these recreational facilities to finance their share of the project cost. This program also leverages additional retrofit funding from other agencies.

 

Mr. Chairman, I've given you an overview here in the last few minutes on the Department of Energy and I just want to end with a couple of specific points that are in the Budget Estimates. Our Budget Estimate for 2010-11 was approximately $35.9 million and the budget for 2011-12 is estimated at $30.5 million; that's a decrease of about $5.5 million. As I mentioned in my previous remarks, we've reduced the base budget by about $1.2 million to meet the government's overall budget reduction targets, to get us back to balance and living within our means. We also have about a $4 million adjustment to reflect the reality, as I had also mentioned earlier, of the lower uptake of the EnerGuide for Houses Program; the federal government cancelled their rebate program last year. As a result of that we ended the year with a surplus and have, therefore, adjusted the budget for the program moving forward.

 

Finally, the last $300,000 decrease in this year's budget over last year is from the expiration of the federal Community Trust program. That program allocated funding to help communities adjust to change in economic conditions and that program now has ended. So with those few brief remarks, Mr. Chairman, I want to thank you and the honourable members for their attention and interest here in the Department of Energy and I, with the able assistance of my staff here, will do our best to answer any questions that any member may have on the Budget Estimates. Thank you.

 

MR. CHAIRMAN: The honourable member for Dartmouth East.

 

MR. ANDREW YOUNGER: Thank you, Mr. Chairman, and thank you to the minister for his remarks. Over the next couple of days I guess we're going to go through many of the things that you brought up. Let me just first say off the bat that I recognize that the overall departmental budget has decreased from estimate to estimate but it has actually increased from forecast estimate and I prefer to deal with forecast estimate because it's actually what you spent, not what you estimated spending. I don't think there's - you have what amounts to pretty much a real number and that has actually increased, that hasn't decreased, so I don't view that as a cut. It's a cut in the Budget Estimate year over year but it's not a decrease from actual spending. I think that's a very important distinction because we've seen that in the number of departments and I know there have been some questions.

 

It's not where I'm going to start, I may not get to that until tomorrow, in fact, but there are a number of issues. You've raised a number of issues and there are a number of very important things going on in the energy field with government and in Nova Scotia. I think you're aware there are a number of issues we're concerned about, as well, that I would also like to talk about. I'm not going to speak for too long before getting right to questions because I think it's more valuable to have the questions and get your feedback on that.

 

Some of the issues that I did want to talk about over the next couple of days are: the issue of community feed-in tariffs and what defines community and the challenges that we're already seeing in the hearings here; the challenges the board has raised and the challenges that have been seen elsewhere in the country; whether you're going to be considering changes, as a result, some of the omissions from that; some of the issues related to the offshore; and I think you can probably reasonably expect we're going to be discussing how biomass fits in with the renewable energy strategy at some point along the way.

 

Let me say right off the bat that I think it seems on the face of it to be a wise move to partner Natural Resources and Energy with the same minister. It strikes me as something that fits well. I'm sure there are others who would disagree with me but I think that there's a natural fit and I think you probably already found that some of the issues you're dealing with on a daily basis probably overlap between the two departments. So I do want to recognize that I think that probably makes a lot of sense.

 

Somebody passed me a note to tell me that some folks up in Inverness have tuned in to watch because they're interested to hear what you have to say about fracking. I might as well start there so that they don't have to watch Legislative TV all night, because I'm sure that there are other things - somebody told me there's a hockey game on tonight where the Bruins are going to lose again. (Interruptions) For the record, that was just to see if the former Minister of Energy was paying attention and he was. He certainly was once the name "Bruins" came up wasn't he?

 

Anyway, I would like to start with the issue of fracking. As you know, both in your term as minister now and previous to your term as minister, I've been involved in this issue for a year and I know there are many people who have been involved in it long before I was. We are aware that there is fracking that has been done in the province. There are two companies that have indicated, in fact - I think their exact words are - they may proceed with fracking this summer.

 

Now, I recognize that requires a permit, or at least as far as we know they don't have an open permit, and I would ask that you correct me if I'm wrong on that, so they would have to come to you and apply for a permit under the industrial approvals process. My understanding of that process, and I stand to be corrected of course, is that they have to meet the conditions outlined in the permit process and if they meet those conditions, then you are obligated by law to issue that permit and if you chose not to issue that permit, in the absence of a moratorium, they can challenge that in court and have the permit issued, much like a building permit in some respects.

 

So given that this review process has begun, or is starting to get underway, should you be approached with a request for a permit to conduct fracking operations this year - and obviously the two most likely would be in Hants County or the Lake Ainslie area - if indeed that happens, what is your department's approach going to be to a permit request, if it comes up? I know there are none before you right now but the question is if it comes forward.

 

MR. PARKER: Mr. Chairman, I look forward to our discussion over the next couple of days as we talk about energy issues and some of the exciting things that are happening here in the Department of Energy with renewables and in our oil and gas industry and so on. There are lots of topics, lots of issues that we'll have the opportunity to talk about.

 

You mentioned natural gas production in our onshore and we have no applications at this point in time for hydraulic fracturing, nor do we anticipate any over the next period of time, or at least during the period of our review over the next number of months. Within the Department of Environment and within the Department of Energy we have some real expertise, people who have been involved directly in oil and gas exploration and in hydraulic fracturing activities. Our mandate really is to make sure that the oil and gas industry conducts itself in an environmentally responsible way and that the rules and regulations are there that are absolutely safe.

 

We've had conversations with the very few exploration companies out there that are active in the province right now. All indications are that there will be absolutely no applications during this calendar year or into 2012 for any activity that might involve fracking. I think we're fortunate in Nova Scotia that we're on the front end of the issue. Unlike other areas there has been a lot of drilling going on and where we have no applications for hydraulic fracturing and very little exploratory activity, it's a good time to look at it.

 

Somebody mentioned that in the Province of Quebec they no longer allow hydraulic fracturing or for any new exploration, and that is true, but they presently have 31 exploratory wells where this process will be allowed, so in some ways it's not really a moratorium. It may be on new activity but they're going to continue to allow that activity on those 31 projects.

 

Our role in the Department of Environment and the Department of Energy is to work with Nova Scotians and try to get the best possible regulations and rules in place that will protect our environment, protect our drinking water. The very last thing we want to see is any damage to either one of those, so we're constantly reviewing and monitoring our rules and working with other jurisdictions across North America, reviewing the best practices that are possible out there and seeing what they're doing. If necessary, in our internal review, we'll bring in outside experts, whether it's on groundwater or any particular aspect of a drill.

 

Presently we're working on the scope of that review. If Nova Scotians have some ideas on what they feel should be studied or should be looked at to make the regulations and environmental protection as strong as possible, we would welcome that. In fact on our Web site we are advertising, both in the Department of Energy and the Department of Environment, how Nova Scotians can get engaged in that process and I would encourage the honourable member to pass it on to anybody in the province, or in his own particular constituency, that has some good ideas on the scope of the study that should be looked at.

 

I think that will be ongoing for about another month and then the actual study will get underway. Also, of course, Mr. Chairman, Nova Scotians will have the opportunity to make recommendations on the final report before any regulations would go forward. So if on the front end they can determine what's going to be in the scope, what will be studied and on the back end, I guess after the study is complete, Nova Scotians will have that second opportunity to get involved and participate before any final regulations are drawn up.

 

So again, Mr. Chairman, to the honourable member, the last thing we want to see is any damage to our environment or drinking water, and we're going to work to make sure that we have the very best practices in place for that full protection. If companies can't live with those regulations or they can't support it, then they're not going to be allowed to do activities here in our province.

 

MR. YOUNGER: Mr. Chairman, that was a lot of information there from the minister, and I appreciate that, but it didn't answer the question, which is that I appreciate your department does not anticipate receiving an application, but if they do, if you do receive an application this year - and let me tell you, there are two companies out there today that are saying they will not rule out making an application. I have absolute faith that your staff are telling you the truth, that they honestly believe an application won't come forward, but for the purpose of their shareholders, the two companies in question have stated on the record that they absolutely will not rule out making an application for this year. Should an application come forward, how are you going to handle that?

 

MR. PARKER: Mr. Chairman, again, as I reiterated a few moments ago, we certainly don't anticipate any applications coming forward, and as I mentioned, we have no applications at the present time. In the Department of Energy we've had conversations with the few companies that are involved in our exploratory work in the province, and we feel very confident that there will not be any applications coming forward during the period of our review, which probably will run into early 2012.

 

MR. YOUNGER: Mr. Chairman, I'm going to ask the question again and I'm going to keep asking it, because the answer that keeps coming back is, we don't anticipate getting an application. I appreciate that, and I do believe the minister - it's not that I don't believe the minister. I believe and I trust that he sincerely believes he will not receive an application. However, in the event that one comes that you are not anticipating, are you going to refuse to issue the permit or not?

 

MR. PARKER: Mr. Chairman, I guess where I come from, when somebody gives their word - maybe it's a handshake, or maybe it's a sincere, frank discussion - and they say they're not going to do something, then I believe them. We've had frank discussions with the companies that are involved in our exploratory work onshore. They're saying there will not be any applications coming forward, and we take them at their word that they're being trustworthy and honest. We just have to take them on faith.

 

MR. YOUNGER: It's going to be a long hour. I don't think that these companies are necessarily lying to you - that's not what I'm trying to suggest - but as you well know, there are other companies that make plays for some of the shale gas exploration rights. Companies get bought out all the time. Tomorrow one of those companies could be in the hands of another company which you have not spoken to and could make an application. Really, all we want to know is, your department has chosen not to put a moratorium in place for new applications for fracking, and I appreciate that that was your decision to make and that you've done that on the basis that you don't anticipate receiving - and you've talked to them, you believe them, and I believe that. That's fine. It doesn't mean that it won't happen.

 

So all I want to know is, and the thing that has not been answered is, if an application comes forward, whether from one of these companies - because things change, they get a new CEO, they get new shareholders, a new board, or a company buys it out. How will you handle that? From my perspective, maybe there's a mechanism to refuse that that I'm unaware of, but at the moment I'm not aware of any mechanism that you can refuse it if they meet the conditions of the industrial approval process.

 

MR. PARKER: Well, Mr. Chairman, who knows what's going to happen tonight or tomorrow? None of us control the future. To speak about how possibly a company could change hands, a lot of that is hypothetical and we can't - we just deal with reality. We deal with what is here right now, and we're dealing in good faith with companies that are in our onshore natural gas play. We'll continue to do that, but I really can't deal with hypothetical situations.

 

MR. YOUNGER: The whole fracking review is about a hypothetical situation. That's why we're doing a review, and certainly we agree with doing a review, because of the hypothetical situation that an incident could happen. I think the goal of all of us, although we may have different views, is to prevent an incident from happening.

 

I'm going to move on, because I'm not going to get an answer to that. I think it's a very critical question and I think that one of the reasons you are losing faith on this issue with Nova Scotians - and I'm being copied on a lot of the letters to your office, as are some other members, so I know what they're saying - one of the reasons they are disappointed is because they don't know what will happen in that hypothetical situation, just as they are concerned about the hypothetical situations if there's an incident.

 

We know we've been very fortunate in Nova Scotia; with all the fracking done so far, there hasn't been an incident that I'm aware of. I think that we are dealing with hypotheticals, so I think that to use that as an excuse to not say how you would deal with a permit application that would come is disappointing - certainly disappointing to me, and disappointing to many other people.

 

So staying with fracking, since I don't think I'm going to get a straight answer on that - as proposed, your review says - and perhaps you're proposing to change this, but on the review document it suggests that it's primarily dealing with groundwater issues. Obviously groundwater issues are very important, but they are by no means the only issue when it comes to fracking. For example, the U.S. Government has expressed public concern recently that companies are not publicly disclosing the chemicals they use in the fracking process.

I'm wondering what your position is as minister, whether it is the same as the U.S. Government position, that they are moving toward legislation that would require companies that frack in Nova Scotia to disclose the chemicals that they are using in the fracking process. I'm just wondering what your position is on that, as minister.

 

MR. PARKER: Mr. Chairman, the honourable member mentions that there has been a whole lot of fracking going on in the province, and that is incorrect. There has only been one company in the Hants County area that has undertaken this type of work, and I think they had three different wells where that activity occurred. As I said, we're fortunate that we're on the front end of this issue, and now is our chance to look at the issue and determine what the right way to go is. That's exactly why we've set up this review within the Department of Energy and the Department of Environment, to try to make sure we have the best possible rules and regulations in place, the best practices possible to protect Nova Scotians.

 

As the honourable member mentioned, groundwater protection will be one of those issues that we look at. We have a lot of expertise, certainly very much in the Department of Environment, on groundwater knowledge, but again, if need be, we would call in an outside expert to get further advice.

 

I had the opportunity when I was away last month to Oklahoma to meet with the Ground Water Protection Council that looks after groundwater protection throughout the United States. I believe the gentleman's name was Mike Paque, and we had a good talk about protecting groundwater, in light of drilling for oil and gas. It was certainly helpful to get his input and his knowledge.

 

You also mentioned the chemicals that are used in the process. I've heard different numbers on the chemicals that are used in the hydraulic fracturing, but that will be part of our scope; that will be part of what we will be looking at. That's why we've set up this review: to get the best possible information. Should it be made public, well, that will be determined by the review and, again, best practices from other jurisdictions. If it's determined that that's the direction we should go from our review then that's a regulation that will be considered.

 

MR. YOUNGER: In terms of the number of wells that has been fracked your department may be giving you inaccurate information because while it certainly isn't lots - and if I used that word, I apologize - it has also been used in Pictou County in exploration for coalbed methane within the past five years, and that has been widely reported in the media both lately and at the time it was done. I assume your department would be aware of that but I guess that would still be onshore gas, coalbed methane, possibly a slightly different process but one that has the same concerns.

 

You've mentioned Oklahoma a couple of times and I'm interested to know, I'm not suggesting you don't have good reason for this, but why Oklahoma in particular. I'm sure there must be a reason why that was the place that you felt it was best to go look at the regulations for. The reason I ask is because we know on the extreme end of one scale is the Pennsylvania experience and I recognize that that's an extreme end. Then on the other end you have situations that have been both good and bad in Texas. In fact, I was on vacation in March and I happened to meet a gentleman from Texas who has fracking being done on his ranch and it didn't go well. But then I also spoke to someone sitting right next to him who it went very well on a different part of Texas. But I just wonder why Oklahoma and not one of these other locations, or even New York for example, which is very close to us and is currently looking at a ban state-wide.

 

MR. PARKER: The trip to Oklahoma was certainly an eye-opener for me. I had the opportunity to go down with one staff member from our Department of Energy and it was a quick trip but it was, I think, quite worthwhile. I had the opportunity to meet with the regulators there. They have a very strong regulatory system in place that if companies can't follow the regulations they're not allowed to drill.

 

As I also mentioned, I met with the Ground Water Protection Council, and it was good to get an environmental perspective on how those operations could mesh or how they could fit together to protect water but also allow economic development in the oil and gas field. Even though we were only there for a day or two, we got a pretty well-rounded view from the regulatory, from the industry and from the environmental points of view. In addition, Oklahoma has about 100,000 wells drilled and has never had one single problem with hydraulic fracturing, so that's a pretty good success rate.

 

If opportunity allows, if I have time to go to another jurisdiction, New York or Pennsylvania, I'd certainly welcome that opportunity, but on short notice Oklahoma was available and as I said I learned a lot about the natural gas industry in that state.

 

MR. YOUNGER: Thank you for the explanation, minister. Mr. Chairman, I guess one of the reasons why I wondered about Oklahoma - and I hope you will take the opportunity to look at other areas - is obviously it sounds like they've had a good experience. One of the challenges in Nova Scotia will be the geology. I had a chance to meet with some geologists in Cape Breton a number of months ago. One in particular at his office talked about how it could be done properly, and this could lead me into discussion about the review process.

 

One of the things he pointed out was that the geology in Nova Scotia and the Appalachian Basin is somewhat different than the western U.S., where you would have been in terms of the risk profile. I should note right off the bat, the geologist I'm referring to - and the name I can dig out later, I don't have it in front of me, but I wish I did - is based in Sydney and he talked about the issue. He believes that fracking could be done safely, so let me state right off the bat that this isn't somebody against it but his concern was around well casings, pressure casings, and he felt there weren't the same requirements in some of the western states because of the differences in geology here, and some of our differences in geology probably benefit us at the same time and some might be a risk.

 

That brings up a question for me in terms of the review process. I do not dispute that there are many very highly intelligent people in your department who know fracking probably better - certainly better than you or I, minister, and probably better than many Nova Scotians. However, before this review was announced I saw - and I'm sure you did, too, and perhaps you signed off on them or the deputy signed off on them before they went out - letters from staff in your department to concerned residents defending the fracking process as safe.

 

What we have in place is, we haven't had an incident and so forth, which listen, we haven't had an incident, so it's fine, but the concern by certain members of the public, and I don't think either one of us could determine whether this is a large majority or not, but certainly a concern that has been raised is that your review is going to be done by people who are walking into this with the bias that it's fine the way it is and if we have to tweak some things, fine, we'll do that to satiate public concern. But they're going into it from a position of already having written letters to people saying they believe the process is safe.

 

Why would you not have this process led by somebody not from the industry, not from government, but one of two options: either somebody much like when Bob Fournier did some work previously for the government - and I'm not suggesting he is the right person in this case, because obviously he's an oceanographer - but a geologist from a university, or somebody who would at least be seen to be independent of this process? That was the process that the department used with the Natural Resources study, Bob Bancroft and the others who led that, and I think there's a lot of merit. So I just want to know, why is this being led by the department, when some of those same people have already written letters defending the process, instead of someone who is seen to not have a stake in this?

 

MR. PARKER: Mr. Chairman, before I come to the direct question, I did neglect to mention that in Oklahoma I had a chance there to meet with the regulators. Part of that regulatory process is the oil and gas commission, or Compact Commission, and Nova Scotia is a member of that commission. Actually there are 37 jurisdictions in North America that are oil- or gas-producing states or provinces, so we have a very good quality network there on the regulatory side through that commission and through our partners in the other parts of Canada and the United States. I just wanted to mention that before I forgot.

 

Our mandate in the Department of Energy and in the Department of Environment is to protect Nova Scotians and to make sure that the oil and gas industry is regulated as fully as necessary and as required. It's really a mandate requirement on both our departments to make sure that the oil and gas industry is fully regulated and obeys the rules. As you mentioned, we do have a lot of expertise in both departments when it comes to gas and oil and also in environmental expertise. It's good to draw upon that but that doesn't mean it's the only expertise we'll use.

 

As I mentioned, at any point in time, if the scope mentions a particular aspect that we want more information on, or need clarification, or just draw upon their knowledge, we can engage university professors, or environmental engineers, whoever might be required; the scope of the review allows us to go anywhere that's required to get the expertise and the knowledge that we need. No doubt we'll be doing that in conjunction with the knowledge and expertise within our own departments.

 

MR. YOUNGER: Mr. Chairman, I thank the minister. Do you not agree though, from a public perception, that regardless of the recommendations - the recommendations that this review may bring forward may be the very best recommendations in the world, but because they're being done internally, by involving people who have already written defending the process to residents of Nova Scotia, do you not have a concern that even if you bring forward the strongest and best possible recommendations they will not be accepted by a majority of those who have concerns about this process, just because they'll be seen to have been biased in favour of this from the start?

 

MR. PARKER: I believe that in many ways we have the best of both worlds here. We have all the knowledge and expertise and years of experience within the Department of Environment and the Department of Energy, plus we have the ability to go outside and gain any further additional expertise that may be required, so it's a benefit to have both of those onside. In the end, our goal is to get the very best regulations, the very best rules that will protect the public, protect our environment, and protect our drinking water. As I mentioned earlier, if companies can't live up to that mandate, they're not going to be allowed to undertake activities on the mainland of Nova Scotia or in Cape Breton.

 

MR. YOUNGER: I think we're going to respectfully disagree on the process. Obviously, nonetheless we'll still submit comments, and you can rest assured that as you asked earlier, I have passed on the information to people so that they will get involved. Just because I don't think it's the correct process does not mean that I'm not going to encourage people to still get involved in what I do see as a flawed process.

 

I may come back to fracking later - in fact, I no doubt will - but I did want to spend a bit of time on the other big topic which ties in with your renewable energy plan: the biomass issue. Since the electricity plan was announced, I have expressed concern about the issue of the number that was used for biomass. It started at 500,000 tons, and I know that you have reduced that amount to 350,000 recently. That's certainly a good step. However, I remain concerned about forest-based biomass being included in the renewable energy plan.

 

We can spend some time going through some of the studies on this, but for example, in 2008 the journal Science noted that carbon neutrality as it relates to forest biomass is almost non-existent. In fact, they had looked at it and said - I'm sure that you or your staff are aware of this - when you look at carbon neutrality, especially when it comes to forest biomass, you need to take the carbon stock that's built up from plants, and it's grown, and then how that's released and what time it comes back. Actually, you talked in your remarks about coal, and it takes 21 years of burning biomass to get ahead of where you would have been on coal. Until you burn biomass for 21 years, you're actually putting less carbon in the atmosphere, burning coal for that same amount of time.

 

When we're trying to reduce greenhouse gas emissions, it seems to be a bit of a false argument to go in that direction. You're no doubt aware that Massachusetts recently had a study done by the Manomet Centre for Conservation Sciences. They had a very similar target on forest biomass in their renewable energy plan. They've now pulled back from that in terms of non-waste biomass, and in fact, they found that the greenhouse gas impact for biomass, when the Massachusetts Department of Energy Resources studied it, was so significant that it was not worth including in a renewable energy plan.

 

What they've done as a result is they didn't have a feed-in tariff; they had incentives, but a feed-in tariff is essentially a kind of incentive. They've pulled back the incentives for biomass as a result, because they don't want to encourage people to go that route. They have compared it to - actually, even for cogeneration heat biomass there's a 20-year carbon payback versus other fuels; 90 years when you compare it to natural gas.

 

The Conservation Law Foundation in the U.S. looked at the same studies and the same results, which was done over a period of time, and noted that, ". . . Massachusetts cannot produce very much new energy from forest resources while also protecting the health of our forests . . ."

 

The other day you saw 54 organizations that tended to agree with that statement, including the Woodlot Owners of Nova Scotia and a number of others. I guess what I need to understand is why this remains part of the Renewable Energy Strategy when, increasingly, the evidence is pointed towards the fact that this, in fact, does not reduce carbon emissions, even including comparing it to coal. I'm not advocating for continuing to burn coal, we'll get to where I'm advocating for later.

 

It now appears, on balance, that most of the evidence suggests that biomass from forest sources is not carbon-neutral and has such a long payback that we should be focusing on other alternatives or, alternatively, looking at things such as agricultural biomass from marginal farmlands and so forth which, of course, would be an added incentive for our farmers who are struggling as well, so I'd like to know what your position is on that - it's something I raised when the energy strategy was brought forward - to see if you have a difference of opinion from the previous minister.

 

MR. PARKER: Mr. Chairman, the use of biomass has been in Nova Scotia for decades, really. I happen to burn wood in my own home and about 100,000 Nova Scotians continue to burn firewood or fuelwood to heat their homes. That has gone on for hundreds of years in this province and I suspect we'll continue to do that.

 

We've also had a number of sawmills and pulp mills that have been burning hog fuel and other products for heat and for energy production. Brooklyn Energy on the South Shore has been at it for a long time. Northern Pulp in my area of the province has been using black liquor and hog fuel to produce power there for their facility and there have been some smaller projects, like St. Francis Xavier University and so on, that burn wood products to produce power and heat, so it's nothing new in that regard. Biomass has been used for a very long time within this province.

 

There has certainly been a debate over the carbon reduction. There have been different scientists who say one thing and then another expert will have another opinion on it, so maybe the jury is still out on that, but many countries around the world are recognizing it as carbon-neutral. We await further information or expertise on the actual impacts of that but it is certainly recognized internationally in that regard.

 

You may remember, Mr. Chairman, the Wheeler report that came out a couple of years back. Dr. Wheeler recognized the importance of biomass as a renewable for electricity and we certainly moved forward with our plan, based on what Dr. Wheeler had recommended.

 

The other advantage, of course, of using a firm power source like biomass is that it is firm, it is there all the time, unlike some other forms of renewables like wind or tidal that are up and down, so in many ways the use of biomass can balance that out and can provide a constant supply of electricity to help offset the intermittents that are from other renewable sources.

 

In Phase II of the report from the strategy on forestry, it was recommended that we have a cautious approach and so, not through this department but through the Department of Natural Resources, the modelling was looked at to try to determine what would be a cautious approach and the goal of 500,000 tons was set from a sustainable forest use - that that's what it should be.

 

We've looked at our modelling again and we recently looked at an economic impact study, and it was determined that just to be cautious, to be extra cautious, to be ultra cautious, we reduced our total by 30 per cent down to 350,000 dry tons. That includes the project that was already approved at NewPage in Port Hawkesbury. We did that by taking out the cogeneration with Nova Scotia Power, and they were informed that was our plan moving forward, so it leaves a balance for NewPage and other projects in the province. NewPage will use about 160,000 dry tons of biomass from sustainable forest harvesting, and that leaves a balance of about 190,000 dry tons from other sources.

 

So I think we're being extra cautious, extra conservative in our goal and again, based on what Dr. Wheeler told us, based on internationally accepted standards and the fact that it can replace intermittent power from other sources, as long as we're careful, as long as we're cautious and as long as we make sure that the harvesting is done from sustainable forestry, it will help us down the road to reaching our goal of 25 per cent renewables by 2015 and towards our goal of 40 per cent renewable electricity by 2020.

 

MR. YOUNGER: Respectfully, to suggest that the current science suggests that biomass from forest sources is carbon-neutral, in my view, is a little bit like saying there are scientists who don't believe in climate change. Almost all of the science, at the moment, questions carbon neutrality over a short period of time. Even the most optimistic science suggests that you're looking at a 10- to 15-year window for most forest sources - and obviously it depends on the period and type of forest and the age of the forest. Obviously it's different if you're cutting an old-growth forest in the main river watershed or cutting from managed sand. Repeatedly there have been and many jurisdictions have now - while I don't disagree that there's biomass going on in the province and there has been, and I'm not suggesting that you pull back on that. We're talking about adding additional biomass and calling it renewable energy.

 

You referenced Europe, and while it is true that there's quite a lot of that in Europe, some from Nova Scotia - wood chip sources I might add, which I don't know if that's included in that biomass total that we're allowed but I'm sure my colleague, the member for Kings West will get into that in Natural Resources. But many of those European countries, or at least some of those Europeans countries, while they're continuing to allow the construction of biomass plants, they're not allowed to be considered renewable energy. There is a difference.

 

It's no different than taking natural gas and putting in a natural gas plan and using that to balance off wind, which may make a lot of sense despite the fact that that's still a fossil fuel. Likewise biomass, in certain circumstances, may make sense for some of the very reasons that you mentioned. Brooklyn Energy, as you mentioned, is burning biomass, but let's remember that Dr. Wheeler was a management professor and was essentially putting together an economics report on what would make sense economically. He was not looking at sustainability; that was not his expertise and he never pretended that was his expertise. He was looking - and he held hearings and so forth and having attended a few of those myself, there was not widespread support.

 

The natural resources study draft, my understand in talking to the people that wrote it, their recommendations in terms of what they meant by "abundance of caution" was the NewPage one has been approved, but don't allow any more until you've done the rest of the studies. By the calculations you just offered us, it would have had a cap of 160,000 tons, so enough for the NewPage project.

 

I don't know whether this needed additional ones for Brooklyn Energy or how the existing ones would work out, but no more until the forest strategy is determined and frankly, from my view, until we determine this carbon-neutrality issue. I don't understand why you're talking about this report when the final draft hasn't been released, when the very author stood outside this Legislature last week and pointed out that their words exactly meant nothing past the NewPage one until the rest of the work was done. Yet even with your cut to 350,000 tons - I applaud you for going that far - you still have an extra 190,000 tons there. The two don't mesh for me.

 

What I'd like to know is, why did you not hold it at 160,000 tons, enough for the NewPage project, until after the Department of Natural Resources completed and released the natural resources study?

 

MR. PARKER: You reference Dr. Wheeler, and certainly he did good work and he had quite a task ahead of him, but he wasn't working alone. He had other experts, other knowledgeable people working with him, and he had some people who were experts on sustainability. It was his report, but really it was other expertise that went into that report, so it wasn't entirely one man's opinion. It was a collaboration of different knowledge that came through that one report.

 

We could talk all day about the carbon neutrality and, again, that depends on who you talk to, whether it's considered to be carbon-neutral or not, but there are different opinions coming forward on that at this point in time. We in the department are constantly monitoring and seeing what's out there. Part of the mandate of the department is to make sure we get the best knowledge, the best information available to us, and go forward using that information.

 

I know I'm probably straying into a little bit of the Department of Natural Resources here in my answer, but I seem to have a commonality there. Really, biomass harvesting is a by-product of good forest harvesting. We've set a goal of a 50 per cent reduction in clear-cutting in this province within a five-year period, and if you manage your forests properly, we'll be getting away from clear-cutting. We'll be getting into a lot more selection harvesting. The goal of that type of forestry is to allow young, healthy trees to mature and to grow better, so in order to get to that point you have to go into the forests and clean out undesirable species, trees that are crooked or have a sway in them, that aren't going to meet standards for logs or pulpwood or stud wood or firewood.

 

Really, you're making the best use of the forest by letting immature trees grow into better-quality specimens. You're maybe harvesting the mature trees, taking out the best logs, the best veneer logs, the best stud wood or pulpwood, and the lower quality might be firewood, but it could also end up as biomass. That's helping your forest to grow better. By letting that young ash tree or red spruce have some clearance around it, you're getting rid of what's bothering it so it can get more light and can grow into a healthy tree. Biomass is really a by-product of good forest management.

 

MR. CHAIRMAN: I'll just remind the member for Dartmouth East that when he is talking, he is to talk through the Chair to the minister and not refer to the minister as "you."

 

The honourable member for Dartmouth East has the floor.

 

MR. YOUNGER: I apologize for that oversight, Mr. Chairman. The minister mentioned that you did an economic analysis that resulted in the decrease from 500,000 to 350,000 tons. Can you tell me whether there was a scientific or sustainability analysis done at the same time, or was it solely an economic analysis?

MR. PARKER: Again, perhaps we're in the territory of the Department of Natural Resources, but I can answer the question of the honourable member. The process we went through in the Natural Resources Strategy was detailed, long and involved, and included a lot of public consultations. Phase I was public meetings in the various communities around the province. I had the opportunity to attend a couple of those and that really established the values that people thought were important in the process and that was compiled into a report.

 

Phase II was a panel of experts who looked at taking that same information and compiling it into recommendations. On the forestry side I think we had the Bancroft-Crossland report and we also had the Jonathan Porter report. A lot of good, valuable recommendations came out of that. Phase III now is within the department to determine the final stages here of the Natural Resources Strategy.

 

Out of that Phase II there were a lot of - like there was a social study and the environmental values. Those were already done in the four areas that were studied in the Natural Resources Strategy and that being forests, parks, biodiversity and minerals. So a lot of the social and environmental values were already brought forward there through Phase I and Phase II and, as you may know, Madam Chairman, just before the end of last year there were a number in the forestry side and six strategic directions came forward for forestry, like no clear-cutting, no whole-tree harvesting, no public money for herbicides and so on. So the biggest impact of that, probably, was the no clear-cutting and what impact that would have on the forest industry in Nova Scotia.

 

That's why it was commissioned: we had the environmental information and we had the social information; we didn't really have the economic information that was required, so we contracted to get some input on that from four different companies and the one that was selected was Woodbridge Associates. They have a lot of knowledge and experience in the economic side and they came back with a number of recommendations. Based on that, we decided to lower our biomass cap by 30 per cent and it really gave us an impact or idea on how that would affect the forest industry and the important jobs that are associated with them around the province. So that was why that particular economic impact study was done.

 

MR. YOUNGER: Madam Chairman, through you to the minister, I apologize if I drift a little bit into Natural Resources. The release came out from both Natural Resources and Energy so it's hard to determine sometimes which department exactly took the lead on changing that number.

 

Madam Chairman, I would appreciate it if any information that the minister has, scientific studies, sustainability studies, or the economic analysis that was done to support this, if he would be willing to table that in the House, either now or during the Natural Resources estimates - I'm not sure which department it's under - we would certainly be appreciative of that. If he's able to do that, it would give a better understanding of how those decisions were reached in terms of the biomass caps.

When we look at that Renewable Energy Strategy which includes this biomass amount, as well as wind and a number of other things, we noted at the time that solar was left out and geothermal was left out. I'm sure you're well aware that in both cases we have one of the best solar regimes in Canada, maybe more than that, but definitely one of the two best in Canada. It has been suggested to me that we get the sun at the wrong time of year but I know a lot of people who actually run solar quite effectively throughout the year, including a number of solar companies. And geothermal was left out, and I think we all pretty well know that geothermal is very, very active in Nova Scotia.

 

One of the things that a number of years ago the department recommended was allowing small-scale geothermal to be distributed between neighbouring properties without having to worry about some of the regulatory hurdles. So I'd like to know why solar and geothermal were left out of this strategy, or largely left out - in fact, geothermal isn't even mentioned at all in the Electricity Act; solar is - in the amendments brought forward last year, and what plans you have to correct that, since we know that perhaps later today we'll be discussing the Electricity Act amendments.

 

MR. PARKER: Madam Chairman, these are good questions and we're constantly looking at our renewable policy. In many ways we're leaders in the world on our COMFIT program, and the first jurisdiction in the world to set up a community-based feed-in tariff system.

 

The solar heating - there is a program for that in Nova Scotia, as you know, but we've not looked at it at this point for electricity, simply because in other jurisdictions it has been very expensive. I think in Ontario it is somewhere around 80 cents, is the rate, and that's far beyond what we're looking at for affordable rates for Nova Scotians.

 

Geothermal is something that, again, we're constantly looking at and monitoring, but it's - none of this is ruled out, and if circumstances change or if we get other models that we can look at around the world that are acceptable, then absolutely we're going to review and look at it again and see what is possible. Of the two, maybe solar has the most potential, but until the rates come down and are affordable for Nova Scotians, it's not something that we can look at at this time.

 

MR. YOUNGER: Madam Chairman, I would disagree with the minister on that, because the evidence presented to the board over the recent weeks would show that solar could have been done in Nova Scotia for cheaper than the rate now being proposed in the COMFIT hearings for tidal.

 

The minister is correct that the Ontario rate was around 80 cents, but he's probably also aware that that has now been reduced or they are looking at reducing. I'm not sure what stage they're at, but the solar industries in Nova Scotia actually presented evidence before the board indicating that they could have done the COMFIT under a rate 5 cents cheaper than what is being proposed for tidal.

 

I disagree, respectfully, with the minister on that reason for it being left out of it. On the geothermal, I would say that's probably - the issue with the geothermal is not so much getting it in the COMFIT. That would have been good, but I'm sure the minister is aware that there are a number of projects in Nova Scotia, including here in metro, and that one of the limitations is you often end up with excess heat or cooling energy that, under current regulations, cannot be easily or cannot at all be transmitted beyond the property boundaries, and that's problematic.

 

This probably will be my last question, because I think I have a minute and 30 seconds left, or thereabouts. (Interruption) A minute and a half, there you go. This will probably be my last question until we talk again later, Madam Chairman. So I know that was the argument for not including solar in the COMFIT, but the fact is that the evidence presented to the board was that it could actually be done cheaper than what we're now looking at for tidal and what very well may be approved in the next couple of weeks by the board. For that reason you would have had to keep tidal out of it too.

 

The element with geothermal is it's working very well, and it has been working well here for a good 20 years - well, since I remember them building the Purdy's Wharf Towers. So the question is, all that requires is a change to the regulations or the legislation to allow easy distribution across property boundaries on the geothermal side. They don't even need a COMFIT rate. They just need that regulatory change.

 

That will obviously be my last question in this round, but I'd appreciate hearing the minister's answer.

 

MR. PARKER: Madam Chairman, I know the time is short for this question, but we're working on the tidal aspect of the energy because we want to build our industry here. We have the greatest resource in the world in the Bay of Fundy. Our job is to harness that tide and to use it for renewable energy in the province.

 

We're constantly looking at other jurisdictions. It is still an 80 cents rate in Ontario - for those who have it on their roof now, that's what they're paying. We don't want to get locked into those very high rates. We have an opportunity; if we can build it at a lesser rate then certainly we will, but we're constantly looking at how we can best improve the system.

 

MADAM CHAIRMAN: The time allotted to the Official Opposition has now expired.

 

The honourable member for Cape Breton West.

 

MR. ALFIE MACLEOD: Thank you very much, Madam Chairman. Before I start I want to congratulate the minister on his position and hopefully we'll have some very profitable dialogue as we move forward. It's good to see the two staff members who are here with him tonight.

I wonder if the minister could give us an idea of just where things are as far as the Lower Churchill Falls project is in relation to Nova Scotia and the discussions that may or may not have taken place regarding using it as part of the renewable energy's numbers for the province.

 

MR. PARKER: Madam Chairman, I thank the honourable member for the question. I'm sure we will have a fruitful dialogue over the next hour or so in this process. The Lower Churchill project is really quite transformative. It's an absolute opportunity for us, as Atlantic Canadians, to put Canada on the map. It's all about building our country and building our nation, and it shows that we can co-operate together for the benefit of our citizens.

 

This project has been talked about for years. I understand Newfoundland and Labrador has been trying to develop this project for going on 20 years now. Finally our Premier and former Premier Williams of Newfoundland and Labrador got together and made that vision a reality. In conjunction with Nalcor and with Nova Scotia Power or Emera, it is now becoming a reality that we will have renewable energy from Muskrat Falls, from the Lower Churchill by the year 2017 and we'll be bringing green, clean hydroelectricity into Nova Scotia that can also be used by our neighbours in New Brunswick and in Prince Edward Island and beyond. It has a tremendous potential to, as I mentioned, put Atlantic Canada on the map.

 

It's a huge project, it's about a $6.2 billion investment and Emera has invested in that, I believe a 20 per cent stake in building the hydroelectric plant in Muskrat Falls. They have responsibility also for the Maritime Link, which will be running from, I believe, somewhere near Cornerbrook, coming all the way down and then across the Strait and landing in Cape Breton. In return, that will give a renewable source of energy at a stable price to Nova Scotians for a period of 35 years, with the option to renew that at the end of that period of time.

 

It's going to create a lot of employment, there's going to be a huge construction project, maybe 6,000 person-years of employment during the construction that will benefit Nova Scotians. I'm told that in total it may be as many as 21,000 person-years in Atlantic Canada, and our neighbours to the west will also benefit on the supply chain and maybe direct employment for some of their residents. Quebec will have about 12,000 person-years of employment in the project and the Province of Ontario will have about 11,000 person-years of employment.

 

So it's a huge project, you may even call it a mega-project, but it shows the value of co-operation with our neighbours, with private industry and with the public utility. It's going to really transform our energy projects here in Atlantic Canada and bring clean, renewable energy this way. It's part of our goal to reach 40 per cent renewable by 2020.

 

As you know, just last week we introduced legislation that will allow that to count towards our renewal because it is a renewable source of electricity, it is water coming over the falls and it will be there forever once the capital infrastructure is in place. So overall it's a great benefit to Nova Scotia and to Atlantic Canada and to our country, and we're looking forward to its arrival in 2017.

 

MR. MACLEOD: I wonder, of the 6,000 person-years that you mentioned - that there would be potential jobs for Nova Scotia - if you could go into a little more detail. What type of jobs are they going to be? Where is the location of those jobs going to be? The biggest part of what I understand that's going to take place here in Nova Scotia is the transmission line. How do you equate the number of person-hours as jobs to Nova Scotians in this project?

 

MR. PARKER: Madam Chairman, 6,000 person-years of employment is a major infrastructure development for our province, and Nova Scotia Power and Nalcor are partners in this project. As I mentioned, the 20 per cent investment by the Nova Scotia company in the project in Labrador were working on an agreement with the Province of Newfoundland and Labrador - a memorandum of understanding on exactly the number of jobs and the location for those. I understand there will be lots of opportunity, because Newfoundland and Labrador also has a lot of construction going on during the same time period here in their offshore, and a number of those construction workers will be required for that project. We're hoping there will be enough trained tradesmen to be able to do the job.

 

There will be transmission, as you mentioned; there will be the generator plant in Labrador and then different stations along the way, including in Lingan, which will provide employment. The Maritime Link is to be built by Nova Scotia Power, and that's part of the agreement they have with Nalcor. That project covers a good portion on the mainland of Newfoundland, and then the subsea cable that will come over as well. It's going to require lots of skilled tradespeople, and I'm confident that there will be lots of opportunity for Nova Scotians to be employed in that project.

 

MR. MACLEOD: Madam Chairman, of the amount of electricity that will be transmitted across this line coming through Nova Scotia and then being moved on to other parts of the continent, how much stays in Nova Scotia and can be used in Nova Scotia in this deal?

 

MR. PARKER: There is a contracted amount that is coming to Nova Scotia for that 35-year period at a stable price during that time. I believe it's going to be somewhere between 8 and 10 per cent of our total power needs at the time. That will be approximately 25 per cent of our renewable goal of 40 per cent by 2020. I think the amount is 1,000 gigawatts of power that will be coming here to the province for use under that agreement, and with the opportunity to negotiate for more if Nova Scotia Power so wishes. But there is a minimum amount. I think it's about 1,000 gigawatts in total.

 

MR. MACLEOD: Minister, you keep referring to Nova Scotia Power, but I do believe you mean Emera. Emera is actually the company that has signed the deal. Nova Scotia Power, as I understand it, is not the signee and it would not be the one that would be constructing the power transmission lines.

 

The question I have is, have you or any of your department had any contact with Emera or Nova Scotia Power as to the capacity of the line that will be coming from Lingan through the rest of the province and the amount of power it will be able to transmit?

 

MR. PARKER: Madam Chairman, we're constantly in contact with Nova Scotia Power and with Emera. We meet with them on a very regular basis in government and in the Department of Energy. My understanding, though, on the legalities of the ownership is that Nova Scotia Power will end up as the legal entity that owns the project, but Emera is the parent company so there's certainly an interrelationship between them. The second aspect of your question was around (Interruption)

 

Oh, the transmission capability, yes. I understand there is a pretty good capacity there now, all the way from Cape Breton through the mainland. The weakest point is really going to be when we get to the New Brunswick border and there is certainly going to have to be upgrades to move it further on through that province. I'm not sure the exact transmission capability. I can get that information for the honourable member but I'm told it's quite good and certainly, if need be, if that section needs to be upgraded, I'm sure it will be, but the real challenge is going to be through the New Brunswick section.

 

MR. MACLEOD: The reason I asked that question, Mr. Minister, is that, indeed, my understanding from discussions with people at Nova Scotia Power is that there is an issue with the transmission and that issue is at the Canso Causeway because there's only the one line that comes across the Canso Causeway and at that point it has cut down on the amount of transmission that can actually be here. On Cape Breton Island where about 80 per cent of the power needs of the province that is produced comes across through that, and then once it comes on this side of the causeway, it separates and goes in two different directions to allow for distribution around different parts of the province to make sure that there's always a line that's available to get to Halifax and to other parts of the province.

 

However, one of the things that's taking place because of this bottleneck is a number of wind projects that have been talked about for Cape Breton Island have not been able to come to fruition because of the lack of capacity, or at least that's what Nova Scotia Power tells the proponents, and these are projects that are quite (Interruption) Yes, mega projects as well, $600 million plus in some cases for people who want to come in with private money to develop wind farms on Cape Breton Island, which would help the renewable resources that you keep talking about and the goals that we need to meet. Yet we seem to have this bottleneck.

 

So I'm wondering, what are we doing as a province and a government to ensure that this bottleneck is removed not only just for Muskrat Falls but for any other potential projects that might be there and investments that might be made by private individuals into wind farms in Cape Breton.

MR. PARKER: Certainly you're right, honourable member. I guess the weakest part of that transmission line is at the Canso Causeway where Cape Breton joins the mainland of Nova Scotia. I know in the Department of Energy we've had some discussions on that and Nova Scotia Power is looking at it, and certainly it might be timely. When the Lower Churchill work is being done here, that's going to allow for extra capacity for other renewable projects whether it be wind power, biomass, or whatever else may be produced in Cape Breton, to allow that to be generated and come for wider distribution. I know it's being looked at and I think there will be some benefits, indirect benefits I suppose, in that respect, of the Lower Churchill project and it will allow for transmission of other power sources in the province.

 

MR. MACLEOD: I think it's very important, minister, to not only recognize that there are possibilities but we have to ensure, as a province, that this ability and capacity is there when it comes across the causeway or wherever the weakest link is, so to speak, because the opportunities for power generation on different forms of generation on Cape Breton Island are significant and we need to be sure that this project, as it goes ahead, allows for that extra transmission.

 

I think it's fair to say that if they were to just have to increase the power transmission on spec that wind generation was going to take off in Cape Breton Island, it would never happen. But the reality is, where we've got this project coming from Newfoundland and Labrador with Muskrat Falls, it would be an opportunity that we as a province must push to make sure that extra capacity is built into the system, so that indeed, if there are other projects that may take place somewhere in Newfoundland and Labrador or wind projects that take place on the Island of Cape Breton, we have that ability to get the capacity across.

 

We need to get some kind of an assurance, as a government and as a province, that this is indeed what's going to take place, so that we can have as many doors open as possible and at the same time meet our sustainable goals in having renewable energy. I would hope that the minister would commit that he and his department and his government would be going to make sure that they're going to do everything in their power to insist that there is extra capacity here.

 

MADAM CHAIRMAN: I apologize for the interruption, but I'd like to suggest, if the minister is agreeable, that perhaps before answering that question we should take a five-minute recess to allow staff, the minister, and members to stretch their legs.

 

Would you like to answer it first? Okay, that's fine.

 

The honourable Minister of Energy has the floor.

 

MR. PARKER: Thank you, Madam Chairman. I think I'd better answer it before five minutes is up or I may well forget what the questioner asked me.

 

I fully agree with what the honourable member is saying. This really is an opportunity to help develop our renewable electricity industry further, whether it's wind projects or whatever else it may be in Cape Breton. It's timely that the Lower Churchill deal will allow extra transmission capacity, and that in turn may allow other generators of electricity to come on board. We just have to be careful in building that capacity - is it the generator of the electricity that's paying for the upgrade, or is it the ratepayers, or some combination thereof? We just have to make sure it's fairly balanced, and I'm sure the URB would wisely decide on what the best way to go with that would be. So with that, Madam Chairman, perhaps we'll take our short break.

 

MADAM CHAIRMAN: Thank you. We'll stand recessed for five minutes.

 

[7:17 p.m. The committee recessed.]

 

[7:23 p.m. The committee reconvened.]

 

MADAM CHAIRMAN: Order, please. I now call the Committee of the Whole House on Supply back to order.

 

The honourable member for Cape Breton West has the floor.

 

MR. MACLEOD: I want to thank the minister for the answer to his last question, and to point out that I'm not interested, nor are any Nova Scotians interested, in passing on any extra cost to the ratepayers. However, it would seem to me that if there is a time to build extra capacity, it's when they're already doing a project, because it would be cheaper to do it at that time rather than to try to add capacity at the outside end. The other part of that is that there might be some value in the department talking to some of these people who have talked about wind projects and the investments they have to get a better sense of whether or not they're still willing to move forward.

 

There have been two projects that I'm aware of in my constituency, Cape Breton West, that have been put on hold because they were told by Nova Scotia Power that the capacity wasn't there to move their product. That in itself is disturbing, because if we're trying to set goals to have more renewable energy, we have a monopoly in the province of who supplies power, and yet when we have people who are willing to spend their own hard-earned dollars to make something happen, the projects seem to come to roadblocks. I'm just wondering if there have been any discussions with the power producers of this province as to how we can be more friendly to those that are here to provide capacity, other than what comes out of their system.

 

MR. PARKER: I guess if a developer out there wants to bring their idea forward, they can apply to the URB to see if they can get permission to move it forward. Part of that application might be the necessity of upgrading the transmission line. An individual project is looked at on its merit and, again, it has to fly from a business model case. I'd be interested in hearing more about the two projects that the member is talking about.

MR. MACLEOD: Maybe after we're through estimates we will sit down and I can bring in a couple of the people who have talked about this and you could meet them. I know that would be appreciated by them. Earlier, when you were doing your opening remarks, you talked about our transfer away from fossil fuels and the use of fossil fuels and the goals that have been set to make things more renewable here. I wonder if the minister can give us an idea of, if the goals are met for 2015, how that will impact coal-fired generation in this province.

 

MR. PARKER: Our goal certainly is to get off of fossil fuels, whether that's coal or oil, and try to replace that with clean, green energy. We've been working on that. Our goal is to reach 25 per cent renewables by 2015 and, as recently announced, a 40 per cent goal on renewable electricity by 2020. We're already reducing our dependency on coal in particular. One time, coal was produced here in Nova Scotia. There was a lot of coal mining activity in Cape Breton Island and in Pictou County in the Springhill area. It was the major source of our electricity production, but we know there are problems with burning coal. We know there are problems with CO₂ emissions and mercury emissions and so on, and we've been reducing the amount of coal-fired electricity in the province over the years.

 

Just for your information, in 2007 about 75 per cent of our electricity was produced by coal. By 2008 that was reduced to 72 per cent, and it's gone down; in 2009 about 68 per cent, as renewables are coming up - wind power and biomass and hydroelectricity. Today we're down to about 64 per cent, so we're heading in the right direction. In time, you'll see some of those coal-fired plants being taken out of production as more and more renewables come on stream.

 

MR. MACLEOD: It is my understanding that even in Nova Scotia's own plan we will have coal-fired generation for another 25 to 30 years here in the Province of Nova Scotia. There would be no way that we would be able to replace that amount of generation with renewables. I'm just wondering if that information is correct, or if you have better information than that.

 

MR. PARKER: As time goes by, we're going to become less and less dependent on coal as a source of electrical generation, and we already are. As I mentioned, we've gone from over 80 per cent down to 64 per cent of our generation today, but over the next number of years, absolutely, coal is still going to be an important source of electrical generation in this province. At some point, those plants will no longer be economic, and the federal government has mandated that at some point they have to close for emission control reasons. So as we work toward that goal we're going to have more renewables, more natural gas, and eventually you'll see coal plants being closed, but certainly in the short term, they're still going to be here and be an important source of electrical generation.

 

MR. MACLEOD: That being the case, when you talked earlier about fossil fuels being imported, fossil fuels being a problem because of price fluctuation, the reality is that the coal we bring in to Nova Scotia now from the offshore, a lot of it is what they call brown coal, the BTU quality, the value of it is a lot less than what we have seen in years gone by. We have a project in Donkin with the potential of a 30-plus year supply of good quality thermal coal. I'm wondering what the department's position is on the development of the Donkin Mine as a source of material to produce energy here in Nova Scotia.

 

MR. PARKER: Madam Chairman, certainly we recognize the importance and the value of the Donkin project in Cape Breton. Xstrata has done a lot of work and research on that and in conjunction with their Nova Scotia partner, 25 per cent interest in Erdene. So it already has a good Nova Scotia base to it and we recognize there's lots of coal there, it just has to meet the requirements.

 

Can we get away from imported coal? Well, that would be a great if we could. Right now our coal is coming all the way from South America. There's some history of how that is mined and how it gets here, but that makes it expensive, the transportation cost alone to come here. Of course our oil is coming from halfway around the world as well, in many cases, although some of it is from Newfoundland and Labrador as well.

 

Can we get off of fossil fuels? That's our goal, that's why we have a very strong renewable goal to reach 25 per cent by 2015 and 40 per cent by 2020 and see where it goes beyond that. As I mentioned just now, we're not, in the short term, going to be able to get off those fossil fuels. Our goal is to keep replacing them as time goes by.

 

The Donkin coal has potential, although I understand there might be some issues there with the mercury content perhaps being higher than - we're trying to get away from the mercury in our atmosphere and we have to be careful how we balance that. There may be some potential, I understand, to use that coal if it is washed or refined in a certain way, that even some of the power plants in New Brunswick would be interested in that, so that's a feasible option that might be available.

 

We're continuing to work, and I know there are discussions between Nova Scotia Power and the Donkin proponents to see how it can best be used in this province or in our neighbouring province.

 

MR. MACLEOD: Madam Chairman, the minister is right, there are some questions about mercury, but also I think it's important to point out that right now Nova Scotia Power spends a considerable amount of money removing mercury from coal products that they are already using. One would have to think that if that coal was replaced by Cape Breton coal, Nova Scotian coal, there would be an offset there that would take place.

 

Also, the washing of the coal would help reduce, to a degree, some of the mercury content and, of course, the sulphur and ash content. That, along with the coal that is in Stellarton, which comes out of the ground at around 1 per cent sulphur, would allow for some mixing and again, we would then have a product that came from Nova Scotia, is used by Nova Scotians, is mined by Nova Scotians, and that we're paying taxes here in Nova Scotia. You would also have a Nova Scotia company dealing with a Nova Scotia company, so there wouldn't be the fluctuation in the dollar as much as there is now.

 

The reality is that as much as we want to get to renewable energy, and we all do want to get there, people will be upset the day that they go to flick on their switch and there are no lights in the south end of Halifax. We need to be able to make sure that we find a way to at least utilize a Cape Breton/Nova Scotia product and at the same time get a benefit for all Nova Scotians who consume electricity.

 

I believe there has to be some work done by the government and by the Department of Energy to make sure that, indeed, we have an opportunity to use a Nova Scotian resource. One of the things that has taken place as well, with the dredge project that's being lined up for Sydney Harbour - and again, the government has put a portion toward that - is that will allow for Nova Scotia Power to take in larger ships with a full load rather than a partial load, as they are now, so it will help stabilize the power. But the end goal here should be that, if we're going to be burning coal, we should be burning Nova Scotia coal, and the government should be doing what it can to support that. So I would like to hear your thoughts on that.

 

MR. PARKER: Certainly that would be a wonderful goal if we can. As you know, in the past we had many active coal mines in Cape Breton and on the mainland that supplied our electrical generation for many decades, but as coal mines closed down or they weren't economic, we have no producing underground mines at this time. There are a couple of strip mine operations - one in Stellarton, as you referenced - and all of that coal is going to Nova Scotia Power, so it is creating jobs here in our local economy. But the problem remains that the mercury content is still higher on the coal that's left, generally speaking, than what we're importing from offshore. That doesn't mean that the technology doesn't exist or couldn't exist to try to bring that down and to purify it or to wash it out somehow. Technology is constantly changing.

 

Again, I know there have been discussions between Nova Scotia Power and the Donkin proponents, and it's really two private companies here that are working with each other to try to see what is economically viable for them. Our job in the province is to monitor environmental air quality and make sure that the standards are being met, and also to promote economic development as a government. It's a balancing act between the environment and economics.

 

If the technology can be found - and again, discussions are ongoing - I'm hopeful that maybe a way can be found to use Nova Scotia coal in the short term. Again, our long-term goal is to replace fossil fuels, but we know that's not going to happen overnight and there will still be a need for fossil fuels. The argument you make, honourable member, is feasible as long as the environment can be protected.

 

MR. MACLEOD: I find it interesting that the minister says the coal that's coming from offshore has less mercury in it than the coal that's here, because there's nobody that I've talked to up to this point that's ever been able to show us the science to prove that. So it would be very interesting if the department could supply us with that science to show us that, indeed, the offshore coal has less mercury in it than our onshore coal. It would also be interesting to see because the BTU value of the offshore coal is much less, and you'd have to bring in more of it than you would have to use of the Cape Breton coal or of Nova Scotian coal, because the BTU value of the coal in the Donkin Mine is somewhere around 2,000 BTUs higher than the stuff that we're bringing from offshore.

 

In a former life, before I had the good fortune to be able to become the member for Cape Breton West, I actually did the testing on the coal that came out of the Donkin Mine when I worked in the lab at the Cape Breton Development Corporation. I would really like to know where the information has come from to say that coal from offshore is of lower mercury value than what is here, and I would like the minister to share that with the House, if he could.

 

MR. PARKER: If the honourable member has some information that he could share with the Department of Energy I would certainly be interested in getting that, but we rely on information from Nova Scotia Power - their mercury or socks and knocks information, pollutants that might be in the coals. But we're told by the company that they're able to access coal with lower mercury content from offshore than they can get from the province. So that's where that information is coming from, but if the honourable member has some additional information that proves otherwise, I'd certainly be interested in seeing it.

 

MR. MACLEOD: The minister talked about different issues when it comes to coal-fired generation. I believe, as many people in this province believe, that it is very important to turn to green energy but it is also very important not to turn our backs on a supply that we have here in this province, which could create employment, which could create stability in supply, which could create a number of well-needed jobs on this island, and I think it's incumbent on your department to keep in discussions with Nova Scotia Power and with Erdene and Xstrata as to the possibilities of coal-fired generation.

 

I would encourage the minister and his department to stay on top of that file because, at the end of the day, it could create a number of jobs that are desperately needed in my communities as well as a stable supply for the province. Is there any way that the minister could give us an indication of how he would be able to continue working with Nova Scotia Power and Xstrata?

 

MR. PARKER: I guess I mentioned earlier to a previous member the importance of the correlation here between the Department of Energy and the Department of Natural Resources. As minister of both those departments, I guess there's a reason for everything, and in the grand design of things it's probably good that both departments are under one minister because there is a lot of overlap here. Certainly with my hat on as Minister of Natural Resources I have met, and our department personnel have met, with Erdene just recently, and we've had contact with Xstrata as well, over the time, and we're working hard with both those companies in trying to help them develop their mine project with their natural resources interest.

 

There's an overlap with the Department of Economic Development. I know that there has been some discussion there and we want to promote the Donkin Mine. We want to see it move forward, it's our mandate in the Department of Natural Resources to see natural resources developed and provide the good jobs the member is talking about, and we're working hard to see that can happen. It's a matter of the marketing and where that product is sold after it's developed but our job is to not only see the mine move forward, that's in DNR, but I suppose in the Department of Energy it's to see how that project can best be used for producing electricity.

 

MR. MACLEOD: There has been some discussion about oil exploration in the Lake Ainslie area and people have concerns about their fracking process and where that will take us as a community and as a province. I'm just wondering, minister, if you could explain how many complaints you're getting from the communities in Nova Scotia regarding fracking and where people's concerns lay with fracking, if you can tell us how many different communities you're hearing from as this being a major concern.

 

MR. PARKER: I don't have a track on the exact number of e-mails, letters or phone calls - I suppose mostly e-mails, it seems to be the modern way of communication these days - but we do reply to each and every one of them that comes at us. Some I've talked to on the telephone and some I bump into on the street in my home riding. So they're from around the province, but certainly a number from Inverness County, as was mentioned by the honourable member from the Lake Ainslie area.

 

I understand the concern. People don't want to see their drinking water polluted. They don't want to see their environment damaged and our job is to try to ensure that doesn't happen. That's the last thing we want to see happen. We're being extra cautious to make sure that the very best regulations are in place. As I mentioned in reply to an earlier question, we're working on a review to get the very best possible rules and regulations in place and the environment, water, and people's health will be protected, but our job is to get the facts, to get the best science that's out there, and make sure that those are turned into regulations that do fully protect our environment and protect people's backyards and protect their way of life.

 

If we can't meet those standards, then we're not going to allow companies to carry on activities around natural gas but there are many jurisdictions in North America, in both Canada and the United States, that do have strong regulations in place. Most of the problem has occurred with poor drilling practices, where the column that goes down through the aquifer, down through the drinking water, is not tight enough and not enough cement around the casing to protect the drinking water. The concern that has been expressed to me in almost all the e-mails that I've got is around hydraulic fracturing. Well, that occurs deep below the aquifer, it occurs a kilometre or two underground, well below the drinking water aquifer. So, again, the problem has occurred, occasionally, in some jurisdictions where the drilling practices have not been good going through the aquifer.

 

As I mentioned, in the State of Oklahoma I visited 100,000 wells drilled and not one single problem with hydraulic fracturing. In some jurisdictions it has been with the aquifer where the poor drilling, by casing problems, has caused the difficulty. So how many do I get? I don't have an exact figure on it but we continue to be concerned with Nova Scotians, if they have a concern - so do we - and we're going to try to find a way to mitigate that by getting the very best possible practices put in place.

 

MR. MACLEOD: Minister, when you did your opening remarks, you talked about four different parts of what your department does: sustainable and renewable energy, business development, petroleum exploration, and I think - was there one more?

 

I wonder if the minister could just give us a breakdown of exactly what takes place in sustainable and renewable energy. You talk about the fact that you've realigned your department. You went from 56 staff, of which you only had 46 positions filled, and I'm curious as to how indeed the department could operate. It says it needs 56 positions and yet it could operate on 46, you do a realignment, and now we have 62 employees. So how do we get from 46 to 56 to 62, and will the current 62 that you say you require with this new alignment be filled with people in those positions?

 

MR. PARKER: Madam Chairman, last year our total amount of employees was supposed to be 56 but there were a number of vacancies that were not filled. When those positions are needed, that causes difficulties in not having the proper people on staff to do the work that's required. That meant more going out for extra people from outside, consultants, or other expertise as required. If we had the right people in the positions, then that wouldn't be required. We would be able to do it in-house and it probably would be less expensive.

 

As you saw, our budget numbers are reduced this year even though we're asking the staff to be complemented up to 62, but the Department of Energy is a relatively new department in Nova Scotia. It's only in the last 10 or 12 years, I believe it is, since the department was formed and it has been growing as electricity generation is changing. We're getting off of fossil, as was mentioned. We're looking at more and more renewables and there is more and more emphasis on energy efficiency. We've done a lot of work in that regard over the last number of years and that's a growing aspect. It's important that we put an emphasis on that.

 

On the non-electric side we have a number of programs we're working with to help Nova Scotians save on their energy bill. Through Efficiency Nova Scotia, on the electric side, they have a mandate now to help in that aspect. There have been a number of transformative things in the Department of Energy. I mentioned earlier about the COMFIT program. We're the first jurisdiction in the world to put in a community feed-in tariff system and that takes extra staff. We're building up all the time in new and more areas.

Natural gas is a reality now in the province. More businesses and homes are being serviced by that. We've got more interest in exploration on land and we've got some exciting things happening in the offshore as well. There is more and more demand on the Department of Energy. We're going to have a smaller budget overall, but we're going to need more staff to carry out some of those programs and if we are fully ramped up in our staff, that will require less consultants and perhaps less travel as well. I hope that gives a little bit of explanation as to why our numbers need to be up, but cost savings to the department overall.

 

MR. MACLEOD: I understand that the complement has to be up. What I don't understand is you had 56 in your budget, you only had 46 people. You say you couldn't find people to fill those positions and now you've raised it to 62 positions. I'm wondering, by putting a higher number that needs to be filled and you couldn't meet the old number, how are you going to fill these positions now?

 

MR. PARKER: Certainly in the Department of Energy I think we have some great staff. They're very qualified, they work hard. We have an example of a couple here with me this evening who are dedicated to their jobs and provide good leadership within the department. It takes time to fill positions, to find the right person, to go through a process to get the best-qualified people for a position. Maybe it's a specialty job as a geologist or hydrogeologist or somebody on the business side that we need that expertise, that knowledge. We want to get the best people to do the job that's out there. Even though we were understaffed by 10 people last year, those who were there took up the slack and they did a good job in bringing forward policy and initiatives on renewables and on good energy policies for Nova Scotia.

 

We just know as we're growing and we're getting into more and more renewables, more and more exploration of our natural resources, we need more staff, we need qualified staff. If we have those then we're going to have less need to go out and hire consultants at more money than what perhaps a good-quality staff person could provide.

 

MR. MACLEOD: There is no question, Nova Scotia has some of the finest civil servants in all the country and I would put them up against anybody, anytime, anywhere. However, you had a complement of 56, you could only fill 46, and now you want 62 and you can't fill the . . .

 

MADAM CHAIRMAN: Order, please. I'd just like to remind the member that while the Committee of the Whole is a somewhat more relaxed atmosphere, it would be more acceptable for you to present your questions and statements through the Chair. Thank you.

 

MR. MACLEOD: I think that's a very wise ruling, Madam Chairman, as it was made by the chairman who was in that Chair before you, and I respect that and I certainly will go towards you.

 

The question is, of course, Madam Chairman, you have a budget of 56, you could only fill 46, and now you have 62. We have very competent people, as the minister was very careful to point out, and he's quite correct. I can't understand, if we need these people, we have the money in the budget, why is it that these positions have not been filled? We had 56 that were supposed to be there in the last budget year and only 46 of them were filled. So the question is if we can't find them, what are we doing to find those people, and what are we doing to find the extra people that the minister says he needs in his budget? Well, I have another question after but I'll let him answer that and then we'll come back to that.

 

MR. PARKER: I'm glad to hear of the member's confidence in our civil service and you're right, we do have some good, excellent-quality people in this department, as we do across government, and I'm glad the member is recognizing that. But sometimes positions become vacant, it can happen pretty quickly, because people are coming and going in government departments all the time. Sometimes that money is used within the department if there's a vacancy, perhaps for other good reasons, and it also takes time to find the right people for the right job. It takes time to go through the process, to advertise, to interview, and hopefully get a qualified individual who can fill the role or the responsibility that's advertised.

 

It wasn't that we couldn't fill them sometimes, maybe the timing just wasn't right to fill it and sometimes you hold off filling a position awaiting a department initiative. But no question we're moving into new and more areas and exciting things in the Department of Energy, and we just want to make sure we have the right people to fill the right positions.

 

MR. MACLEOD: It's interesting, the minister says that sometimes they might be able to be filled but they weren't and maybe the money could be redirected in other areas. Then the question has to be, an obvious question is, if indeed you didn't need 56, was the 56 the number that you used so that you could take the monies and put it into different programs, and why would that be? Why would it be that if you had the opportunity to fill a position that you said you needed within your budget and the opportunity came to fill it and as the minister said, he has had the opportunity to do it and didn't, why would that be?

 

MR. PARKER: This position is going around and around here, but basically we have some good programs within the Department of Energy. We are fully committed to filling those positions that we've identified and sometimes it takes time to find the proper person for the position. As ongoing programs develop, sometimes you have to wait until the parameters of that new position are fully identified and that we can best get the right person at the right time. But are we committed to it? Absolutely, we want to get the best possible people to work in the Department of Energy as we do now.

 

MR. MACLEOD: Well, there's no doubt in my mind, Madam Chairman, that the minister is committed, but the question is still if you are indeed budgeted for 46 people and you do not hire the 46 people, why is that? Why is it - the minister's words, not mine - times have come up when we could have hired somebody and we decided not to because we used that money in other programs?

 

Is this a way of padding the budget so that there's an opportunity to do other things that are not a line item? Is that what is going to happen with the 62 positions that have now been created for this department? Are we going to see this happen again and again, that the people there in positions are going to be asked to do extra work because they are taking the funds of other people that are supposed to be employed within that department and use them in other areas?

 

MR. PARKER: Madam Chairman, some of this is about timing as well. When somebody leaves the department, maybe they're going to another department, perhaps they're staying within our own department, but it's a timing issue, to adjust, to look at job descriptions and determine the best way to go. We're actually reorganizing our department right now under three main divisions. That doesn't happen overnight. It takes a certain amount of time to make sure that the structure is proper, that the type of position we want to advertise is correct, and that the characteristics we're looking for in an employee are best described or best advertised. It's about getting the right people for the right position at the right time.

 

MR. MACLEOD: Well, it's interesting, we have a department with a budget, 56 people; 22 per cent of those people are not hired. The department still is functioning, how can that be? Yes, I understand there would be times when people would leave and move on to different positions. I understand there are people trying to better themselves all the time, but when 22 per cent of your department - let's say even 20 per cent of your department - is not there, how can that be? How can a department function when 20 per cent of the staff is missing?

 

The question is how does the department function when you have 20 per cent of the people missing, how can you allow, as the management of that department, for people to be able to move on and not have somebody ready to replace them?

 

MR. PARKER: As the honourable member himself said, we have a great Public Service in Nova Scotia. They are working hard, but when we are short-staffed, it certainly puts extra pressure on those who are left behind, doing extra work, having to take on more responsibility and time; I guess that has a bearing on people. They are working beyond their capacity at times but again, they are going the extra mile in providing good help and good service to their department and to Nova Scotians, and we're thankful - that they'll pick up the slack as required.

 

In the Department of Energy, at the present time, we do have 10 positions under competition. They are out there, they are being advertised and we'll see what comes back. So those people are soon to be hired so that will make it a little easier for those who are out there - so soon to have some more good people in our department. Thank you.

 

MR. MACLEOD: Well, Madam Chairman, it didn't take long to finally get to the real answer and I want to thank the minister for finally getting around to that. Now you say you have 10, that'll bring you up to 56, but you actually now have told us in your new budget there are 62 individuals, so there are still some people missing here.

 

Again, I would like to know, what is going to happen to those other four positions, or is that the new padding?

 

MR. PARKER: You know when you get ready for estimates, you wonder what kind of questions you're going to get and constant questions about the number of employees and our dedicated staff, that's great, we're glad to talk about them and they're all doing great work. We'll soon have 10 more qualified people in the department to assist with many of the exciting programs that we have in the Department of Energy that will help us reach our goal of 25 per cent by 2015 and 40 per cent by 2020, so it's exciting to get some new staff on board. The average over the last year was 46. That fluctuated up and down, but we're only going to be about four positions short, as the honourable member mentioned, and as those positions are identified and responsibilities are laid out, then we'll be able to move forward with adding more new people to the department. We're getting close to our allotment.

 

We feel it's necessary to provide good energy programs for Nova Scotians, and we have a transformative initiative in the Department of Energy to really change the basis of our electricity production and energy efficiency programs. I'm sure that our new complement of staff will help us reach that goal.

 

MR. MACLEOD: I want to thank the minister for his answers tonight. My time is just about at an end, so I want to thank him, but we'll probably be back with a few more.

 

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

 

The honourable member for Dartmouth East.

 

MR. ANDREW YOUNGER: Thank you, Madam Chairman. Could you tell me what time we wrap?

 

MADAM CHAIRMAN: We will wrap Committee of the Whole House at 9:13 p.m.

 

MR. YOUNGER: Okay, so I'll get the full hour in. I knew we had moved around there a bit. (Interruptions) I heard that. I'm glad that the honourable members on the opposite side are happy that I'll get the whole hour in and be able to ask questions.

 

I'd like to start by talking to the minister a bit about the transfer of Conserve Nova Scotia to Efficiency Nova Scotia. First of all, we see from the budget forecasts that from the actual amount that his department spent for 2010-11, the departmental budget will actually go up this year: exactly $101,000 over what they spent last year versus this year. One would have expected a decrease with the removal of Conserve Nova Scotia - well, that is what was promised by the former minister last year. Could the minister please explain that discrepancy?

 

MR. PARKER: It would be easier if the honourable member could perhaps refer to a certain page in the Estimates Book and where he is getting this number.

 

MR. YOUNGER: Sure, my apologies. On Page 9.1, if you look at the total departmental expenses - and this would be Page 9.1 in the detailed estimates. I'll just give them a second to find that, and when they've found that, I'll tell you which line I'm looking at. It says Energy at the top and it starts with your mission statement. On the bottom there's a chart there that says, Departmental Summary, Total - Departmental Expenses.

 

MR. PARKER: I want to make sure I'm on the same page here. We're on Page 9.2, is that correct?

 

MR. YOUNGER: Page 9.1.

 

MR. PARKER: Page 9.1. Your question, again, was around the 2010-11 forecast. I think it's $30.361 million and the estimate is $30.462 million for this fiscal year, so it's a difference of about $101,000, as you mentioned.

 

MR. YOUNGER: What I wanted to know is it would appear that the departmental budget is increasing $101,000 over what was actually spent; we can get into why that might be in a minute. Last year it was our understanding that the costs of Conserve Nova Scotia would be pulled out of there, which should have resulted in a decrease. Maybe I'm reading this wrong, but it strikes me that this should have resulted in a decrease in your total departmental budget even before any cost savings or anything else.

 

MR. PARKER: You're right. The difference here is around Conserve Nova Scotia. If you notice in the top line for the forecast for 2010-1l, it was $14.599 million. As you know, Conserve Nova Scotia is gone, it's history. It provided many good programs, but all those programs have now been transferred to Efficiency Nova Scotia which is an arm's-length agency from government.

 

On the non-electric side we still have programs that we continue to roll out, through Efficiency Nova Scotia, through a memorandum of understanding that they will provide some of those programs or continue with programs that Conserve Nova Scotia had. You'll see the bottom line there, $18.4 million; those are some of the programs that are on the non-electric side that had been through Conserve Nova Scotia and are now through Efficiency Nova Scotia. It just happens to work out to be $101,000 in the difference but it's six of one and half a dozen of the other, I would say.

 

The programs were offered through Conserve Nova Scotia, they are now offered through Efficiency Nova Scotia. Of course Efficiency Nova Scotia is doing a lot of other good programs on the electric side, through ratepayers who are paying for that, but on the non-electric side we have a number of good initiatives that I mentioned in my initial remarks here this evening. Those energy efficiency programs were new homes or existing homes or low-income Nova Scotians, renters and so on.

 

I don't know if that totally answers your questions but it does - some of the differences between Conserve Nova Scotia and Efficiency Nova Scotia.

 

MR. YOUNGER: Madam Chairman, the minister partially sort of answers the question and I probably need to explain it a little bit better. What I'm concerned about is, and I recognize that there are some other programs here and so forth, last year when the minister - it's probably a little over a year ago, I think it was probably December 2009, if I remember correctly - it was announced that Conserve Nova Scotia would get rolled up.

 

I understand there might not be a complete roll-up at this point but the minister at the time indicated that the costs associated with Conserve Nova Scotia's electrical side, anyway - because obviously I do understand the oil side and so forth - would result in a net saving to the department, because otherwise what you end up having is taxpayers are actually paying more. It was promised that taxpayers wouldn't end up paying more by the time you took the DSM charge and what they would be paying for in the department, yet what it appears is that a department that actually should have gone down in spending is going up, even though part of the mandate is now funded through an independent organization outside of the tax base. I'm just trying to understand why that has happened because it should have been an easy saving for government, since the money was coming from somewhere else.

 

MR. PARKER: Madam Chairman, this whole thing can be a bit complicated. Conserve Nova Scotia was winding down. There were certainly some costs in that regard to finish up that particular program. There were certain federal programs that were being offered that we administered through Conserve Nova Scotia and, like I said, some additional costs in the wind-down stage as much as anything.

 

Then, as we moved forward with Efficiency Nova Scotia, there are some new and different programs that are being anticipated and some new initiatives. Most all of the programs that were under the previous agency have moved forward into Efficiency Nova Scotia. Those were good programs that Nova Scotians wanted and they continue to support. We're excited by the prospects that the federal government may come in, again on the efficiency for homes, with a grant program. It was announced earlier and I think all federal Parties would support that initiative.

 

So as we move forward, there's probably going to be more take-up of programs and more need, of course, as always, with fossil fuel increases, to look at efficiency. A penny saved is a penny saved, I've heard mentioned in this House before, so the best dollar we can get in fuel reduction is in proper efficiency within our homes, in particular.

 

MR. YOUNGER: Thank you, minister. I don't disagree with many of the things that you said there. I guess what I'm getting at is I would have expected to see in this a decrease of - say if we take out $14.6 million administration costs in 2010-11, subject to the final numbers but that's the forecast, and so you're dropping to $1.8 million for administration and, if I understood you correctly, a lot of that money was in Conserve Nova Scotia. So right off the bat we should be looking at roughly a $12 million savings on your departmental budget without even looking for any cost efficiencies and not saying the programs wouldn't be offered because obviously they're offered by Efficiency Nova Scotia, and I agree that there are some important programs there, but those are now not funded by your department, they are funded by the DSM rate.

 

So what it appears, and if I'm looking at it wrong, I apologize, Madam Chairman, but if I'm looking at it correctly, what it appears is that that $12 million has disappeared into the department somewhere because I know there were oil programs and solar programs and the federal matching programs. Those were there before and if I understand you correctly, those will continue forward. There wouldn't be a significant increase, so what should have shifted was the administration of Conserve Nova Scotia, and the cost of the programs that they are currently delivering on the electrical side should have all been shifted out of the tax base and funded by the DSM charge. Otherwise, the commitment that there would be a savings to this department roughly equal to the operation costs of Conserve Nova Scotia last year don't seem to have panned out.

 

MR. PARKER: Madam Chairman, you know, as we rolled from Conserve Nova Scotia into Efficiency Nova Scotia, there are a number of good programs there that we carried forward and that's good. That's what Nova Scotians were looking for. The money that's mentioned there, the $14-plus million is not for administration. It's just that most of the money that was in Conserve Nova Scotia and that money has now moved forward. It wasn't all used up and a good reason for that was the federal program had stopped on energy efficiency for homes and that reduced the demand for that program. Obviously there was a surplus there because all the money was not used, but it has been moved over now to Efficiency Nova Scotia.

 

We're very hopeful that with all Parties supporting that initiative it will become reality, that we'll have a new program from the federal government and there will be more pickup, more take-up on energy efficient programs in the homes in Nova Scotia. We have one of the oldest housing stock in Canada here in Nova Scotia and that's partly because of our settlement patterns. We were one of the first provinces to be settled and a lot of our housing stock is quite old and energy inefficient but we're hopeful that that money will be taken up this year as the federal program matches or helps with the program. So it looks like there's a surplus there - there is - and that's being transferred now to Efficiency Nova Scotia.

 

MR. YOUNGER: Madam Chairman, to the minister, I don't necessarily have a problem with that surplus being transferred to Efficiency Nova Scotia, to those programs, and I agree with you, I'm happy to see all three federal Parties support that eco-efficiency program. I think that is an important and valuable program.

 

Maybe I'm better at coming at the number in this way: last year, how much did it cost Conserve Nova Scotia for its operations? What was the total budget associated with Conserve Nova Scotia - only the stuff that would now be covered by the DSM charge. Not the oil and all that. Is there any way to figure that out? If there's not, maybe if something has to tabled later, that's fine.

 

Let me just add, Madam Chairman, what I'm trying to get at. I'm trying to find out why the departmental budget didn't go down when electricity and administration of electricity programs went to Efficiency Nova Scotia, because in the press conference a year ago that's what was said would happen.

 

MR. PARKER: I'll try to answer the honourable member's question. The budget line, as you see there, for Conserve Nova Scotia is $6.977 million, and that's an accurate reflection of what was spent. On the electric side, certainly, that is all recovered through ratepayers, so the actual budget cost was $6.9 million. Obviously there's a surplus, and with federal support hopefully a lot of those extra dollars will be taken up in good eco-efficiency programs.

 

MR. YOUNGER: I'm going to move on to a related item. I may ask later, because it still baffles me that the departmental budget - I understand the transfer of the surplus, and I think that makes sense, 100 per cent. I certainly support that. I just don't understand how the departmental budget could have gone up when you've gotten rid of a division. That makes no sense. Certainly one of the things that was promised last year - I think "promised" is probably the wrong word. One of the things that was suggested when this announcement was made was that this would be neutral to taxpayers. What would happen is they were paying it on their income tax and they'll stop paying it there, but they'll pay it on the DSM charge. There was supposed to be a savings.

 

What this appears is that everybody's paying it twice, or it's a net increase, what people are paying as a result of this electrical efficiency charge, and they're actually paying a higher amount than what was spent in the department last year. That's what I'm trying to understand, because I don't see where the department has picked up any additional responsibilities, and yet they've gotten rid of a responsibility, which is Conserve Nova Scotia.

 

Maybe we can answer it this way: what has the department picked up in terms of responsibilities or scope that would result in the departmental budget going up from what they spent last year - not from the estimate, but from what they spent? And not only gone up, but also gone up in light of losing, effectively, a division, which is Conserve Nova Scotia.

MR. PARKER: We're all trying to get to the same goal here. We're all trying to get the lowest possible cost for consumers, for Nova Scotians, and if that's through energy efficiency programs, that's great. That's certainly one important way to tackle it. If we can get off of imported coal and oil and get on to more renewable, that's another way to tackle it to try to get the best rates for consumers.

 

We all have budgets in our own homes to meet, and for some that's a real challenge. That's why we're trying to make programs out there that will fit all different aspects, whether it's new homes or existing housing stock or programs for low-income Nova Scotians or renters. On the renewable side, we know there's a little bit of extra cost now - maybe a 1 per cent or 2 per cent increase in the capital cost - but once we get there, then it's a flat rate that should be held for a long time that will benefit Nova Scotians by a reliable, steady price that will be good for years to come.

 

On the energy efficiency side, last year was a bit of a different year, I suppose. We phased out Conserve Nova Scotia and like I said, there were some additional costs involved with that. We're moving forward into Efficiency Nova Scotia. A lot of those good programs were retained, and that's a good thing, and there will be new types of programs. The Department of Energy is working with our partners at Efficiency Nova Scotia to try to scope out how we can best move forward with new initiatives, new programs, whether it is in our housing stock, commercial or industrial applications, sustainable transportation, or whatever else we feel will help save money for Nova Scotians.

 

I guess if there's something that's unclear there, honourable member, I can commit that my department will get you the information and make it available to you, maybe give you a breakdown of exactly how Conserve Nova Scotia closed out and how we're moving forward with Efficiency Nova Scotia.

 

MR. YOUNGER: I appreciate that, minister. Let me ask just one more question related to that. I'm not really sure why it's booked to this year but it doesn't really matter why it's booked. The surplus of $18.4 million is going to be transferred to Efficiency Nova Scotia, which is fine, we talked about that. Should we expect - because that's one heck of a chunk of your budget - that next year's departmental budget would be, since you've stated in these questions that that's basically the surplus, and we see where the surplus shows up, you had budgeted $23.4 million for Conserve Nova Scotia, there's only $6.9 million spent, which left you $18 million and change as a surplus, which you're going to transfer - or I guess they're going to manage it for you in some way. I guess the question is where do we expect that number to go? Is that going to result in a budget next year of $12 million, when that is out, or is that going to be a recurring charge in future budgets?

 

MR. PARKER: Well, that's the budget that is proposed, the $18.4 million. I can't really speculate on whether the budget is going to be passed. That's certainly what is proposed but we'll have to wait and see what the vote may hold. If you look in the estimates, the forecast from last year, the $14.5 million, that is gone to Efficiency Nova Scotia and that's history, so it's there now. I really can't speculate on whether the budget amount would be passed or not by this House.

 

MR. YOUNGER: I think it would be quite a news story, Madam Chairman, in Nova Scotia, if this budget didn't pass, with a majority government. Let me just throw that one out there, so I think you can probably safety speculate. It would be nice, and I know this certainly isn't a criticism of this government, this is just the way it has been done for many years in the province, but it would be nice to see the municipality go the way that the federal government has done now in a lot of municipalities, in sort of five-year forecasting of where you project those numbers to go, so we can actually look at where you are trending.

 

Certainly there are very few governments now that are doing it this way, which is fine. I know this is the way, traditionally; it's certainly not a criticism. What I would like to know is, I met, and a number of our staff and members met, with Efficiency Nova Scotia a little while ago. One of the concerns they had - and I'm sure they've shared this with the minister - is that in order to provide roughly equitable programs to the oil heat, wood heat, any of the non-electrical heat areas or non-electrical consumers, would be in the tens of millions or hundreds of millions of dollars, to provide equitable programming to what they're going to be able provide on the electrical side because they're funded through the DSM rate.

 

They obviously could not speculate on what the plans of your department might be, but they did raise that as a concern as they were, as you can imagine, already getting calls from people asking whether there were programs available to help them insulate their house and so forth. I know you have some money here. I recognize that it's about $18 million, if I read it correctly, which is a good start, but obviously that as a percentage - as Mr. Crandlemire pointed out - of those who use it, it's a very tiny portion of that energy-user group compared to the energy-user group on the electrical side that they'll be able to serve. I'm just wondering what your departmental plans are, long term, in dealing with that gap.

 

MR. PARKER: You're right, there is a great demand for people to try to become more energy efficient and that's great. We got people interested in their programs and we heard here the other day in the House, the ice rink energy project for BayPlex and there's a strong interest there in ice rinks. There is strong interest in all our programs that we presently offer, so that's good. The public is engaged and they know if they can save money by taking advantage of some of these programs, then that's our mandate, that's why we're here.

 

Would we like to do more? Absolutely, but we know we only have so many dollars to work with. We know that we have to get back to balance in this province. We have to live within our means. Perhaps when we get to the point in 2013 that we are back to balance, we will have more dollars for good programs like this.

 

MR. YOUNGER: I assume the goal of the department or the government is to try to reduce reliance on electrical generation, to reduce the amount of electricity used in the province, as well as shift what electricity we do use to renewable sources. We can debate what's renewable and what's not, but that's not where I'm going at the moment.

 

Does not having a program so heavily focused on electrical generation encourage new homeowners and people doing conversions to switch to electrical heat options because there are more programs available than choosing alternate sources? The example I'll give you is - I hope that we can agree that if you were to build a home or subdivision with geothermal heat, for example, at the construction stage is a very efficient way to go. It's not terribly cost effective to do that in a retrofit but it is when you first build a place. However, if I know, as a builder or as a homeowner, that there are programs available on the electrical side - and when I look at the Efficiency Nova Scotia plans long range, there are new building programs and all kinds of things - does that not encourage people to instead choose to go electrical when, in fact, we want to reduce the reliance on electricity generation in the province?

 

MR. PARKER: You talked about electrical generation and electrical consumption in this province. I think we're heading in the right direction, we're succeeding. The amount of electricity consumption is going down and that's because we are getting more and more people to take our programs seriously, to insulate their homes and to get away from fossil fuel uses. They're starting to use alternatives and they're starting to become more energy efficient in their homes. We're taking a step towards that and as our programs continue to unroll and allow more energy efficiency to take place, there's going to be less demand for electricity.

 

Of course, new homes are being built today that are extremely energy efficient; a rating of 80 or 82 or even as high as 86, I've heard. So really, when you get to be that efficient, maybe you no longer need a heat source that is relying on electricity or other sources, so that's a good thing. As homes are built and they become more and more efficient, there's going to be less need for electrical generation or other means of heating that home.

 

MR. YOUNGER: Madam Chairman, I would be interested to have the minister table information that shows that electrical usage in Nova Scotia is going down because Nova Scotia Power's estimates tabled with the Utility and Review Board projects energy usage in the province to increase over at least the next eight to nine years and Efficiency Nova Scotia has tabled the same information, and so no decrease until after that. So I think the total electrical generation in Nova Scotia is on the increase and not the decrease as far as I'm aware. If the minister has other information, I would be interested in seeing that.

 

I don't disagree that the homes are getting more efficient and that's a good thing. I encourage the government programs that can help encourage that, including new regulations on homebuilding and so forth. However, I also think that we should be encouraging them not to use electric heat because we know that that's highly inefficient. Regardless of how efficient the house is, it's still very inefficient to have an electric baseboard heater in your house versus other options such as geothermal, even high efficiency natural gas is better. So it really just gets to the point, is the minister concerned that by having the funding programs and the support programs so disproportionately targeted to electricity that it makes it difficult to encourage people to actually move away from electricity into other sources because of the limited programs?

 

MR. PARKER: Madam Chairman, we're all interested in trying to save on our electric bills here and that's really what the programs in the Department of Energy are offering. Through the EnerGuide, PerformancePlus is the program for new homes and some of them, like we mentioned, are getting very, very efficient, towards the high 80s in energy efficiency. That encourages Nova Scotians to build new homes, or to buy new homes that have that type of rating within, to the point where you probably don't even need a furnace anymore. There's not much need for it because it's so tight, it's so efficient that a little bit of electrical generation for the coldest days will help, but you wouldn't need to invest in an expensive furnace any longer because it's just not needed.

 

Like I mentioned, we were offering good programs for existing homes and, hopefully, the federal government is going to step up to the plate and add that to our program, as well, so that will encourage a whole lot more people to take advantage of that type of program. Low-income Nova Scotians, that's really the key to get them off older housing stock and filling up the oil tank too often, that program is free if they qualify. We're working towards getting a program for renters, or that landlords can participate in, that will allow those folks also to take advantage, rather than spending all their money - whether it's their own or whether it's through a Community Services program - that will constantly be owed, to fill up the oil tank. If the apartment building or the housing stock is better insulated or more efficient, then that's going to be good for the renter, good for the low-income homeowner, good for Nova Scotia, and that's what we're working toward.

 

We're constantly looking at new programs and new ways to help Nova Scotians become more energy efficient, and that renter's program is one new direction that we're heading towards and I think will be of great benefit to our province.

 

MR. YOUNGER: Madam Chairman, I'm certainly happy to hear of a program for renters, and we'll be interested to see how that rolls out. I'm also interested to see one of these houses the minister has talked about that you only need to turn on the heat once in a while, without a furnace, because I think we're a little ways off from having houses that can actually have the thermal mass and retain the heat. In order to do that you would require either a very large thermal break with concrete, which would probably be cost-prohibitive under today's economics, or you might be able to do it with an electrical-thermal storage unit. The problem with that, of course, is that it has its own limitations and relatively high cost if you need to have it kick in during non-peak times.

 

I'm sure we're getting to that point, but we can have some cold days. I would say my own house is a fairly energy-efficient house, but I can tell you that the furnace still needs to get kicked on, and I certainly use a lot less oil than most other houses.

 

I might also point out that we're standing here in the Legislature and they're all incandescent bulbs around us, as far as I can tell. This might be a good place to start changing some of the light bulbs.

 

I wanted to ask you about carbon dioxide emissions as it relates to that. You've talked a lot in your opening remarks about greenhouse gas emissions, and I'm wondering what your projection is, in terms of Nova Scotia's greenhouse gas emissions for this year. I don't want to randomly pick a couple of years because I don't know which years you would use, but say, for example, 2015 and 2020, where would you project those to be, including any economic growth that might come out of the jobs program?

 

MR. PARKER: Just before I answer your question there about the greenhouse gases, I want to mention a couple of little points that we already talked about. One was the amount of electricity that is being consumed in the province. Again, my understanding is that that is going down, and I'll bring some of that information tomorrow, maybe, for the honourable member's attention. I'll table that or I'll make sure that the member receives it.

 

As far as energy-efficient homes, the technology is always changing, and as I said, the numbers are going up higher and higher all the time, into the high 80s. I understand there are at least a couple being built in the Dartmouth community at this time that are totally energy-efficient, zero cost to operate, and perhaps when the time allows, when those are open for public viewing, honourable member, we can have a tour together and we can have a look at those homes. I understand they are zero cost to operate for heating.

 

On the greenhouse gas emissions, we've set an aggressive target by 2020 and I understand we are on target to reach them. Those really fall under the responsibility of the Minister of Environment. I understand there is probably going to be an announcement on that tomorrow that will give us more details. As far as I know, we are on target in that regard.

 

MR. YOUNGER: Just to backtrack there on the electricity consumed in Nova Scotia, I think you might find that on a per capita basis it is going down. I'll be interested to see the information that is tabled, because the document tabled with the URB by Efficiency Nova Scotia and the one tabled by Nova Scotia Power shows an increase over the next few years and then a decrease after that. I'll be interested to see it. It would be very exciting to see that, if that is in fact the case.

 

Thank you for noting that that's the Department of Environment; I'm not sure where these fall sometimes. My question relates to that - and this will fit in with your renewable energy strategy and why I ask the greenhouse gas question, although I'll get the details on the numbers from the Minister of Environment later.

There are very few things widely accepted by industry and government and environmental groups on greenhouse gases and energy production. One of the only ones I can think of that nobody seems to argue with is that the world needs to reach a peak at 2015 on greenhouse gas emissions, primarily from energy production, if it's to prevent certain potentially catastrophic environmental changes, and then have a decrease after that. There's a whole bunch of charts and studies which I'd be happy to bring in. Even the oil industry will tell you that's sort of the magic date in the world. A lot of the targets in the renewable energy strategy talk about 2020 which is, of course, after that point.

 

I realize we're just a small province in the entire world so we're not going to solve the world's problems, but I'm wondering what we are doing to ensure that - because most of this, I don't know what the percentage is but most of this is going to come from electrical generation because of the coal mix that you referred to in your opening remarks. What are we doing to aggressively ensure that our renewable energy strategy matches what they'd be trying to do in the Department of Environment, I hope, to have those emissions stop increasing by 2015 and actually start going the other way? And I realize this does cross two departments but I'm asking the energy side of it.

 

MR. PARKER: Climate change is something that's a reality, it's here. We're starting to see effects of it; the relationship to greenhouse gases is pretty strong. We're doing our share, in Nova Scotia, to reduce our greenhouse gas emissions and try to do our share to alter the climate change that is occurring. I think we do have a balance between our greenhouse gas emission caps and a renewable energy strategy. I think they are in sync, I think they are coming together.

 

We are seeing a decline in the amount of greenhouse gas that's being produced; already we're seeing that decline. No question, our electrical generation of coal is a big factor in that and we're working hard to change that. We're getting onto renewables and we're getting to use hydroelectricity, wind power, biomass, tidal power and in-stream electricity and so on. We're already moving in the right direction. We're going to be getting off coal - "dirty coal" as it's called - and that will help reduce our greenhouse gas emissions as we move forward with more and more renewables.

 

MR. YOUNGER: I see we've progressed to the Clerk taking photos in the Legislature now, I guess that's so the staffers don't have to do it anymore.

 

MADAM CHAIRMAN: No, that's not exactly what's happening, but thank you very much.

 

MR. YOUNGER: I know, I just like giving the Clerk a hard time because nobody ever picks on him in here. (Interruption) We only have about 16 or 18 minutes left.

 

I'd like to change gears and talk a little bit about the COMFIT. I think we can agree feed-in tariffs have worked in certain areas and haven't worked in others, and there are pros and cons to each one of these models. Participating - unfortunately not as closely as I would have liked because the House session went in - but in hearings over the past couple weeks, one of the things that has come up is the fact that the way the legislation was worded, either on purpose or inadvertently, was such that the board has realized it can only really consider the economics of an industry. If we take a look at the below-50-kilowatt wind - and I just use that one as an example - the board really has to look at the issue of what makes a project below 50 kilowatts economically viable, what rate will make that economically viable?

 

What appears to have been missing from the direction to the board - and the board commented on it, not in a big way, but some of the other interveners actually commented on it much more extensively - was that there's no discussion about at what point the rate gets unsustainable. The minister and his department previously have commented that, for example, they didn't go with solar because they were concerned it would be 80 cents and that would be unsustainable. Well, the evidence presented to the board is that it probably could have been done for 59 cents to 60 cents, which is obviously less than the tidal rate.

 

When they looked at the 50-kilowatt wind as an example, they realized that it would have to have a reasonably high rate of feed-in tariff - and the board will set a rate. I don't know what that rate will be; obviously they have recommendations from Synapse and some others, but I'm wondering whether the department feels that it erred in not including something in there around economic sustainability. What we have created - if you talk to Nova Scotia Power, they will say that if somebody goes and builds a tidal or a wind or whatever, they'll have no choice but to accept that into the grid and pay whatever the feed-in tariff rate is. They will have no ability to look at that and say, well, we can deliver the department's renewable energy goals cheaper by buying energy from this large wind farm instead of choosing the biomass project, or instead of choosing the small wind farm. They will just have to take it if it's put on the grid.

 

I know they've come to your department and they've come to us and expressed concern about that, that they're basically going to be forced into not necessarily choosing the best renewable option for ratepayers from an economic point of view. Do you feel that it was an error to not include something like that in either the regulations or the legislation?

 

MR. PARKER: Nova Scotia is a leader in the COMFIT process, and really a leader in the world. We're the first jurisdiction anywhere to bring in a community feed-in tariff system, and we're trying to find a balance here, I guess, between small independent producers and larger projects. There's room there for both. The residential electricity administrator will look at the rules and regulations around the larger projects, but the small COMFIT - and those are going to be good for communities. Those are going to be good for a group of individuals who want to come together to support a small wind project, or maybe it's a biogas type of operation from farm operations, or it could be an Aboriginal project; municipalities can be involved. There are lots of different options here to build capacity, especially in our rural communities, but it really could be anywhere in Nova Scotia.

 

Whether it's on wind or biomass or tidal or in-stream or whatever, it's an economic development tool as well. It will bring communities together, and bring entrepreneurial spirits together to use their creativity and their dollars to try to fit into the COMFIT formula.

 

Very shortly our department will be coming out with a COMFIT guide that will provide more information on the process and how they can best move forward, but in the meantime the URB has been delegated with the task of coming up with the rates, and they're basing that on the best economic information they have. Certainly the hearings were just recently held, and a number of technical people with expertise were witnesses there and gave information on the best way to move forward. That's the job of the URB, is to bring in the best technical people who are available to provide advice in helping to set those rates. A system is never perfect, but to this point we've done the best we can with it in the department. The whole process will be reviewed in 2012, and if there's a better way to move forward, we'll certainly look at the new evidence and new ways of doing things. But in the meantime we'll await the URB decision.

 

MR. YOUNGER: Well, Madam Chairman, as the minister well knows, the board can only look at the rates and set rates under the regulations established by Order in Council and by Cabinet, and they're doing that and they will do that. I have faith that they will do that within the regulations, but my question is not whether they can set the rate. It's interesting, I think if you look at the projects that are tentatively proposed under the COMFIT, I would consider very few of them to be truly community, and I guess it depends how you define community. They'll certainly have community backing and have investors, but they're mostly backed by large companies, in some cases multi-national companies, either as a delivery agent for it, or whatever, and that's fine. I don't even necessarily have an issue with that.

 

My issue is that the board has been tasked with setting rates, is going to set rates by their own admission, based on what does it take to make a certain type of energy source economically viable, which goes against the government's own comment that solar shouldn't be included because they felt the rate would be too high when, in fact, all it would have taken was to say that the board needs to not only include what it takes to be economically viable, but whether a particular energy source is economically viable at all. That has been the argument that has now come up from a number of interveners on the below-50-kilowatt wind, for example, who are suggesting that it may not be economically viable, at this point in time, to produce wind from the smaller kilowatt turbines.

 

The fear has been suggested that because there is a premium on that particular category of wind, that you may end up with a whole lot of 49-kilowatt turbines in order to generate the higher feed-in tariff rate and then you have Nova Scotia Power who will be forced, under the rules, to accept that, whether they want to use that or not, whether they have a lower-cost renewable alternative.

 

Nonetheless, what they'll be stuck with is a situation that the ratepayers will pay for a decision that will get them renewable energy - I don't dispute that - but will not get them the best renewable energy at the best possible price. Whether it becomes an economic development tool, we'll see. Some of them will and some of them won't, but even the ones that will, let's not forget that this will be an economic development tool on the backs of the ratepayers who will ultimately have to pay for this rate when there may have been less expensive alternatives. Renewable energy - we're only talking about renewable energy - but less expensive renewable energy alternatives available to modify the rates.

 

Earlier in his remarks, the minister did say that he was concerned about rates, yet the regulations around this don't seem to suggest he's concerned about rates when there was an option to say, yes, we're going to have a COMFIT, but we're going to have a COMFIT for these types of projects, but there is a limit. The way it is structured at the moment, there is an incentive for every neighbourhood, in their backyard, to go out and build one of these things to try to make money. There was plenty of evidence presented to that basis at the hearings, so it's just a concern.

 

The minister says it could be reviewed in 2012, but we may already have some projects that people are paying for and I'm wondering why we wouldn't review this now since it has been raised by numerous interveners, and even raised by the board, as a concern that it was an issue that they couldn't look at because the regulations didn't allow them to consider it.

 

MR. PARKER: As I mentioned earlier, Nova Scotia is a world leader in the COMFIT program and we're bravely going where no one has gone before. We can't be Luddites and just sit back and do nothing. We have to be innovative. We have to have a new way of doing things, and this government is leading by example in that we're getting a number of exciting new initiatives out there. Yes, there are some caps on the number of projects that can go forward, but we have to start somewhere and we're trying to develop our wind energy initiatives in the province, tidal energy, these are renewables and they're well worth pursuing.

 

I think we're on the right track. The URB will regulate it and make sure it's done at a fair and equitable rate for all. You mentioned that 2012 is not that far away and if there are adjustments or new initiatives that can be brought in, then that's why we'll have that review at that time.

 

MR. YOUNGER: Thank you, minister. I actually think - see, to say that we're not going to be Luddites and sit around, I actually think it's - I don't think you could use Luddite on either side but I think that's exactly what you're doing, or what the minister is doing. In fact, by doing it the other way, and by having the community feed-in tariffs structured so that the board considers the economics of a project, would actually spur innovation in this province in green, renewable-energy development because people and companies - much like LED Roadway Lighting, which has done some amazing work, world-leading work, and the reason they've been able to achieve some of that is because they are looking for a system that works but is also a lowest-cost alternative in that particular field they're in.

 

Instead, there's no incentive in this to find something that is efficient and innovative that can then be sold around the world. There's no incentive in this to say, let's encourage the most efficient renewable energy we can find so that not only will we benefit from it here in Nova Scotia but if you truly want an economic development option, then you have an industry that will prosper here and sell that technology and those patents around the world. That's not structured into this COMFIT. In fact, what is structured into this is let's do as little as possible to get the highest rate possible.

 

In fairness, Madam Chairman, I know that was not the intent of the department and I'm not trying to suggest that it was. What I'm suggesting is that we know now that has happened and we know that has happened outside of the political realm. We know that from evidence presented at the hearings, that that's a risk, so there are experts in the field, experts in this industry, who are saying to us there's a problem and we can fix this and we can fix it before the board makes a decision.

 

It would have been good to fix it before the hearing started, obviously, but what we're talking about here is saying instead of having people chase the cheapest way to build something and get the highest price, let's have them chase the most efficient renewable energy at the best possible price, at the best benefit to Nova Scotians. That's not what this COMFIT does, the way it is structured. They are good things in this COMFIT but that's not what this does and that's the missing cog in this wheel, where we could have many LED Roadway Lighting companies all over the province doing some really amazing things on renewable energy, and not just building things but actually innovating.

 

Hopefully we all recognize that the long-term economic potential of Nova Scotia is in innovation as much as it is in the manufacturing because it will always be cheaper to manufacture something in China or Indonesia or Mexico. Innovation is where the money is at and innovation is where we can really be leaders. I don't believe that - COMFIT doesn't encourage innovation. I just wonder what the minister is planning to do to address that issue.

 

MR. PARKER: Thank you, and I'll come around to the innovation aspect in a second. The job of the URB, as I mentioned, is to set the rates and set the right rate that's going to work for the COMFITs and really, if it does work, then a lot of the economic spinoff and development, as I mentioned, whether it is with municipalities or Aboriginal communities or a group of local entrepreneurs, it is going to build community economic development; it's going to allow for rural communities, whether it is in Guysborough County or Cape Breton or Cumberland, anywhere in the province, real spinoff can occur in our rural communities. So once the rates are set and the COMFIT guidelines are out there, I think you're going to see some economic development activity taken up on the small side, and on the large side there's going to be economic development spurred as well.

 

You talk about innovation, you talk about new ways of doing things - I think the renewable energy field is rapidly developing in Nova Scotia. There are lots of wind projects and tidal work going on - biomass, in-stream tidal, and so on - that are creating economic development opportunities throughout our province.

 

I mentioned Seaforth Energy in my opening remarks. Now, they're expecting the renewable electricity regulations will help build their business. They're in the wind turbine business, as the honourable member probably knows, in the small, under-50-kilowatt machines that can be used for small-scale production. I did quote Jonathan Barry, their CEO, and I'll mention him again. He said, "The ability of Nova Scotians and businesses to participate in community energy will help us to scale up our operations, research and development, and manufacturing, and will make us more competitive globally."

 

So that's just one company that has mentioned it's going to help them compete. It's going to allow them to expand. It's going to allow for more innovation and more development within our communities. I know there are others out there, but that's just one company that's going to see some benefit in the manufacturing and research side and in the sales and marketing of their product. It will help communities out there as well, as they are able to take advantage of some of this technology that's available to them.

 

MADAM CHAIRMAN: The time allotted for the Official Opposition has expired.

 

The honourable member for Argyle.

 

HON. CHRISTOPHER D'ENTREMONT: Madam Chairman, it's a pleasure to stand and ask questions a couple of moments before we expire. We've got about 10 minutes to go or so. (Interruption)

 

MADAM CHAIRMAN: Seven minutes.

 

MR. D'ENTREMONT: Well, not expire. I'm going to expire if I have to listen to the member for Dartmouth East much longer. Phew! He asked a lot of questions about a whole bunch of things.

 

Two questions that I'm going to basically revolve around - one will revolve around Georges Bank and the moratorium, and the next issue will be in and around the Wedgeport and Comeau's Hill area. Apparently there's a test tower for windmills going up, and I wonder if you have any details on that.

 

So the first one is Georges Bank. We were very happy; most people in my area were very happy with the moratorium to make sure that no more exploration/drilling will be done on Georges Bank, because of course we look at that area as being a very special area - a spawning ground, a very productive fishing ground. So I'm just wondering from the minister whether he has had any conversations in and around the Georges Bank moratorium, maybe what some private businesses are sort of thinking of that, because we really haven't heard from those groups. I'm just wondering how that's all starting to shape up.

 

MR. PARKER: Thank you, honourable member, it's good to have you with us on board here tonight. I'm sure you'll have some interesting questions, if not tonight, then another day.

 

Georges Bank, as we know, is one of the richest fishing grounds in all the world. It has sustained southwest Nova Scotia and many of our fishing communities for generations. I guess that's why a moratorium was put on, on both sides of the border, both in Canada and the United States. We've had a moratorium there since about the mid-1980s, I believe, and we've extended it since then. As far as I know, we've extended it recently to - 2021, is it? I believe somewhere in that range. From the provincial point of view, we're strongly behind that moratorium, and federally, there's an election campaign on right now, and two weeks from now we'll know what the results of that might be. We'll have a better chance to discuss that with our federal partners, whoever that might be.

 

MR. D'ENTREMONT: Madam Chairman, I take it from that comment from the minister that we still have to have the companion piece of legislation come forward from the federal government in order to match up with the provincial legislation, because we know that that did not exactly extend to all parties included. I can tell you, again from discussions that I've had, from fishermen - fisherpeople, fishers - individuals in southwest Nova Scotia, that this has been very well received, and not just from my area but I know from the Minister of Fisheries' area, this has been very well received in that area. Maybe as a second snapper to that one, how are the discussions with the federal government on that, more specifically on coming up with the matching or companion legislation that needs to go along with that as well?

 

MR. PARKER: We've had discussions over the years with our federal partners and they respect our position that there is a moratorium and that it is a very valuable fishing ground. But really, until this federal election is over, it is going to be difficult to have discussions in any meaningful way with anyone, but on the other side of the election we'll be able to sit down with whoever is in charge and decide the best way to go. At this point, in the past they've respected our position and we look forward to working with the new government after May 2^nd.

 

MR. D'ENTREMONT: I'll move on to my second item because I know we are getting there. Windmills in Wedgeport, I guess is how I'll preference this one. On top of this great hill, in between the communities of Wedgeport and Comeau's Hill, there has been an installation of a test tower to measure the wind potential on top of that bluff. I'm just wondering if you had any discussions with any companies about that piece of property in that area. I'm also wondering what that process might be. If somebody is interested in a piece of property or in an area, how would they go about getting a wind farm installed in that kind of area?

 

MR. PARKER: I'm not familiar with that particular project in Wedgeport but we certainly encourage wind development in our province. There are a number of interested parties, I understand, around the province that would want to move that forward. I understand we will be calling for bids, later this year, on new wind power developments and I would encourage the folks in your community, if they want to put that forward, that would be developed through the regulatory agency, the administrator, and they can move their project forward at that time.

 

MADAM CHAIRMAN: Thank you. The time allotted for consideration of Supply for today has elapsed.

 

The motion is carried.

 

[The committee adjourned at 9:18 p.m.]