HALIFAX, THURSDAY, APRIL 11, 2013

 

COMMITTEE OF THE WHOLE HOUSE ON SUPPLY

 

1:39 P.M.

 

CHAIRMAN

Ms. Becky Kent

 

MADAM CHAIRMAN: Order, please. The Committee of the Whole House on Supply will come to order. We will continue with the estimates for the Department of Education and Early Childhood Development.

 

The honourable Minister of Education and Early Childhood Development.

 

HON. RAMONA JENNEX: Madam Chairman, I wish to thank the honourable members for their questions. A debate such as this is an essential part of democracy. If I have committed to an honourable member to get an answer to a question that I did not have on hand, I will table the answers at a later dates. I would also, again, like to thank Mr. Frank Dunn and Dr. Alan Lowe for assisting me and I would also like to thank the staff back at the department who helped and quickly responded with answers and at this point to thank them for their hard work on behalf of every child in this province. They do a fantastic job. Our staff always work diligently.

 

I would like to thank the teachers who guide our students in learning and help ensure they become good citizens. In addition, there are principals, specialists, administrative staff, curriculum experts, custodians, bus drivers, mechanics and many, many others who work together on behalf of our young people. An education system is a success when everyone is working together in a collaborative way to ensure our children succeed.

 

Madam Chairman, the funding for school boards in 2013-14 will rise by $3.3 million. Some members opposite have said that school board funding will fall and they are wrong. We are investing $1,047 million for the 2013 year for our children. Per student funding will rise by 3 per cent, or $300, to $10,762 in the 2013-14 school year. This is the highest it has ever been. Boards will be able to hire 170 new teachers this year and we don't anticipate that a permanent teacher anywhere in this province will lose their job.

 

Madam Chairman, we are presenting a budget that closely matches spending to enrolment declines, provides boards with funding to maintain the current level of high quality and to fund the new and expanded programs outlined in Kids and Learning First. Education funding has been protected and increased. Three school boards, including Halifax, Annapolis Valley and CSAP will see increases in funding. Remaining boards will see decreases in funding, but to protect regions experiencing significant enrolment decline, the decrease was capped at 1.5 per cent. The cap was reduced this year.

 

In order to achieve these caps, the boards that hit the cap received $13.5 million in additional funding. In the past few years school boards have had to manage their wage and inflationary cost increases. That does change with this budget. Boards will no longer have to manage wage increases. Government is providing the total funding to cover wage settlements.

 

There seems to be some confusion, Madam Chairman, so I will repeat, boards no longer have to manage wage increases. Boards will still, like all public sector partners and Nova Scotia families, have to manage the cost of inflation. Government recognizes there are challenges in meeting inflationary costs so we have assisted boards in other ways such as changing pension rules to reduce financial pressure, launched a shared services project and revised the school board funding formula.

 

Madam Chairman, we have made it very clear that special needs education must be protected and we have increased funding to $141 million. We have also increased our funding for students with special needs by $3.7 million. In the past two years we've increased this important funding by $16 million. With this year's funding boards will be able to hire 24 more psychologists, speech language pathologists and program specialists to help our students with special needs. The funding for teaching assistants was also increased, resulting in funding for 15 additional positions, and we have done this while tabling a balanced budget.

 

I would like to commend my colleague, the Minister of Finance, for the work she has done to table a balanced budget with a small surplus, Madam Chairman. This budget shows we have turned the corner on the provincial finances but, at the same time, we have protected our special needs funding and increased overall funding to school boards. This shows that we returned this province to balance in a careful and measured way, using a step-wise plan that delivers the vital services our students need.

 

This Chamber has heard many times about the major challenge to the public school system, significant enrolment decline being a major one. On the first day of school this past September there were 2,300 fewer children in school than there were the year before. When the school bell rings and the classes resume this September, there will be 2,300 fewer children. This is the 42^nd year of enrolment decline. We have more than 30,000 fewer students in classrooms around the province than 10 years ago. That is the equivalent of 30 full, large high schools missing in our province, but over the last decade, more and more money was being spent on education, even while the number of students was in steep decline and the test and achievement results of those who remained improved very little, in many cases not at all, and in some areas declined. This could not continue. We had to meet these challenges head on.

 

We re-balanced school board funding with $23 million reduction over the past two years. This was to reflect that our classes now have far fewer students than five years ago. It also reflected that our class sizes were the lowest in a generation. It reflected the fact that while the number of students in this system declined, the number of teachers did not decline. We also sought the advice of education experts, including Dr. Ben Levin, and came up with the Kids and Learning First plan to move confidently and successfully towards a new path.

 

In the Speech from the Throne and in Budget 2013, a renewed focus was announced for the department. We are now the Department of Education and Early Childhood Development. Research shows the years from birth to age six are the most important in a child's development. Our children deserve the best possible start in life to help them to develop to their full potential. We heard from community members, professionals in the child care sector and the Early Years Advisory Council that we need a more integrated and accessible approach to providing Early Years programs and services.

 

With the Department of Education and Early Childhood Development, we're making a strong commitment to parents, families and children to do just that. This year we have budgeted $1.2 million for our youngest children and we will integrate provincial programs and services for children and families, establish three Early Years Centres, and offer free comprehensive screening of children at age 18 months and 36 months.

 

The concept of Early Years Centres is exciting. We will establish three Early Years Centres across the province that will provide support for young children and their families at the accessible location in their community. These centres build on the highly successful SchoolsPlus model being used in schools and will help bring seamless access to regulated child care, early learning programs, early intervention and parent education. We are also working with the McCain Foundation on our Early Years efforts.

 

It is an exciting time ahead for the Department of Education and Early Childhood Development. Over the past year we have begun or expanded 39 initiatives of our Kids and Learning First plan, including expanding Succeeding in Reading, introducing a new Math curriculum, and keeping class sizes low by having a class cap. We will continue to implement the plan to ensure every student succeeds.

 

Thank you, Madam Chairman. I will now take my place.

 

MADAM CHAIRMAN: Shall Resolution E5 stand?

 

Resolution E5 stands.

 

We will take a brief recess.

 

[1:49 p.m. The committee recessed.]

 

[1:52 p.m. The committee reconvened.]

 

MADAM CHAIRMAN: Order, please. The Committee of the Whole House on Supply will come to order.

 

The honourable Government House Leader.

 

HON. FRANK CORBETT: Madam Chairman, would you please call the estimates for the Department of Economic and Rural Development and Tourism.

 

Resolution E4 - Resolved, that a sum not exceeding $130,060,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Economic and Rural Development and Tourism, pursuant to the Estimate.

 

MADAM CHAIRMAN: The honourable Minister of Economic and Rural Development and Tourism.

 

HON. PERCY PARIS: Madam Chairman, I want to say thank you for the opportunity to speak about this year's budget for the Department of Economic and Rural Development and Tourism and the important work being done by the department. I'm pleased to introduce several people who are here with me today. I'm joined to my left by Deputy Minister Simon d'Entremont, and to my right, Darlene O'Neill, our Manager of Financial Services.

 

I'd also like to welcome senior staff from our economic development agencies who are in the gallery today. I would introduce Mr. Stephen Lund, President and CEO of Nova Scotia Business Inc., Colin MacLean, president and CEO of the Waterfront Development Corporation, Scott Ferguson, president and CEO of Trade Centre Limited, Stephen Duff, our new CEO of Innovacorp and Carolyn Horton, acting CEO of Film and Creative Industries Nova Scotia and another new CEO who - I don't know if Lisa is with us today but also Lisa Bugden, who will join us as the new CEO of Film and Creative Industries Nova Scotia and also Patrick Sullivan, Nova Scotia Tourism Agency.

 

Of course, as much as I'd like, our entire staff can't join us today in the gallery but we do have a number of them here. ERDT is served by dedicated and hard-working people in branches that include: Investment and Trade, Regional Planning and Development, Productivity and Innovation, Procurement, Policy and Planning, the Nova Scotia Gateway Secretariat and of course we're supported by Finance, Human Resources and Communications.

 

Not very long ago Nova Scotia was facing a very bleak economic future. Now our great province is starting to turn the corner. We are putting 20 years of slow economic growth behind us and looking forward to a future of unprecedented opportunity. As I travel Nova Scotia and talk with young people, with business owners and with families, I feel a renewed sense of optimism and energy. Nova Scotia is indeed starting to turn the corner and we are doing the work to keep the economy growing and moving forward.

 

In 2012 Nova Scotia reached a record high level of employment and welcomed one of the most significant weeks in job creation in the last decade when IBM and PROJEX announced they would create nearly 1,000 new jobs in Nova Scotia. JobsHere, our plan to grow the economy, is helping hundreds of small businesses get started, expand into new markets, make productivity upgrades, and train employees now and for the future.

 

Preparations to make the most of opportunities like shipbuilding, the Maritime Link, record offshore exploration commitments, and a renewed and innovative forestry sector have gained momentum and they are moving forward. By working together and making smart, strategic investments, the province is helping to create good jobs and growing Nova Scotia's economy.

 

In 2013-14 budget for Economic and Rural Development and Tourism is approximately $130 million. This is a decrease of $57 million over the 2012-13 departmental budget. This decrease is primarily due to a $44 million reduction in the Nova Scotia Jobs Fund. These one-time funds were invested in strengthening the forestry industry last year, helping to support thousands of jobs and helping grow the economy in rural Nova Scotia.

 

The department has also found administrative and efficiency savings and streamlined processes to better support small businesses in Nova Scotia. As you can see, a great deal has been accomplished over the past year and there is much to look forward to. Nova Scotians have plenty to be optimistic about. This budget will help us advance along the path forged through jobsHere, a path that has seen businesses become more innovative, businesses become more productive, and businesses become more competitive; a path that is cutting red tape and helping small businesses more easily access programs and services that will help them hire, innovate and grow; a path that is helping us make the most of the unprecedented opportunities that are in front of us.

 

We will continue to give young people better access to skills and training programs so they can make the most of the opportunities that are coming our way. We will continue to make smart strategic investments in businesses, businesses that are committed to creating good jobs here in Nova Scotia. Nova Scotia is starting to turn the corner and we will keep that progress moving forward. Thank you and I'm happy to take any and all questions.

 

MADAM CHAIRMAN: The honourable member for Glace Bay.

 

MR. GEOFF MACLELLAN: I thank the minister for those opening comments and appreciate the fact that he left lots of time for us to have some conversations about this year's fiscal budget and what the direction of the department is. I would also like to thank all staff who are here from ERDT; Simon and the other representatives in the gallery today, ERDT of course, NSBI, Innovacorp, the Secretariat, the RENs that are doing great work on the ground in respective communities.

 

Certainly there are points where we disagree and things that we challenge. I'm certainly comfortable in the positions that we've taken and I've taken on particular investments. With all due respect, I know that those individuals who support those decisions are doing it for the right reasons and we're trying to grow the economy. Certainly this will be a respectful exchange and a respectful conversation about the direction of the ERDT so I do thank those staff members and those individuals for being here today.

 

I just want to open up - the minister talked about the reduction in the budget and with a lot of that, the $46 million, being allocated for the forestry strategy that was last year. I just will quickly, before we get into some of the line-by-line, I want to ask a few questions about the forestry sector and some of those allocations. My first question is, were the monies provided for the forestry sector in 2011-12 entirely allocated or are there elements of this year's budget that will continue to go to some of the forestry investments?

 

MR. PARIS: The bulk of those reductions in the forestry sector is gone. There will still be some smaller amounts that will come out in the week and in the year ahead.

 

MR. MACLELLAN: Can the minister explain the $23 million envelope that was provided to Resolute? Can the minister explain what part of the budget from last year was carried over to this year - the $23 million will be coming from or came from?

 

MR. PARIS: As everybody knows, with respect to the forestry sector, it was one of those hiccups, if I may say, that occurred in the Province of Nova Scotia that was very unfortunate and certainly one that wasn't predicted. By the time we became aware of what was truly going on in the forestry sector, we knew that, certainly in the case of all of the companies and organizations associated with the forestry sector, we would have to make some investments. We've made some investments in all of them, but maybe to different degrees.

 

Certainly Bowater, as we all know now, is no more. With the innovative help of Innovacorp playing the lead, we are turning the Bowater site into a Centre of Excellence. I think the member opposite is well versed in the investments that we've made in NewPage, Port Hawkesbury, and that with our involvement the direct and indirect impact that we've had, there were in the vicinity of 1,400 jobs, and all indications to date thus far is that Port Hawkesbury NewPage have been quite positive - $23 million was under the line of Bowater but that $23 million, as I'm sure the member is well aware, that Bowater transaction didn't move forward but we were ready and prepared that if all the t's have been crossed and the i's dotted in our efforts to save Bowater, it would have been a $23 million investment.

 

MR. MACLELLAN: Just for clarity, was the $23 million actually applied to and provided to Resolute and if so what were the details of that funding?

 

MR. PARIS: That $23 million that I referenced was money that was set aside, that was ready, that was going to be invested into Bowater. All of that money has been returned to the government coffers. It wasn't money that was spent. The member may not know but certainly one of the things I do have to say, and I think it's not predetermined that I say this, but I think in our dealings with Bowater, in my humble opinion, the potential buyer of Bowater I felt - I walked away from my meetings both with staff and with the potential buyer feeling very very good about the honesty that they entered those negotiations with and how they dealt with staff, and I should say in general how they dealt with the Province of Nova Scotia.

 

MR. MACLELLAN: The minister mentioned Port Hawkesbury and Stern and I know this is a bit of a loaded question, or probably there are lots of layers to it, but would the minister provide some information on the breakdown of the deal, and of that funding that has been allocated for Stern in Port Hawkesbury. What line items will that money flow from and what is the time frame for that allocation to Stern?

MR. PARIS: Most of the money that went into NewPage Port Hawkesbury came from the Forestry Infrastructure Fund and that is administered through our Nova Scotia Jobs Fund. I don't know if the member opposite wants some detail on the value of that investment. One of the things that we always take into consideration as part of the equation when we make determinations, there are a number of things and certainly I must add, and I'm sure that the member opposite is also aware, that when we were making the investment in the forestry sector, it seemed like it was a moving object. There were many moving parts of it and obviously there were some days when we felt pretty good and then there were other days that were pretty sad days that we were feeling the brunt of and we didn't necessarily share all the information with taxpayers and certainly with the media.

 

I've got to say, the forestry team that was put together by government, like all government employees, there were long hours, there were all-nighters that were pulled and when we finally did do the deal with Port Hawkesbury NewPage, if you remember, things kind of shifted even in the last 12 hours. It was one of those deals that was on again, off again, and then on again. I think that came as a result of good, diligent work on behalf of the province by the staff.

 

Part of that money that has gone forward in the forestry sector - of course there is training money involved in that mix. There is a forgivable loan. A line of credit is also involved. The line of credit, if I recall, is $40 million and if I'm wrong, staff will certainly correct me and we'll let the member be aware of that.

 

There was a training allowance in there for $2.5 million that was going to assist employees to be better trained. One of the things that I'll say here is that our government has invested a lot of money in training. When you look at, whether it is through the Jobs Fund or whether it is in the forestry sector, we've made significant investments with our funding. Obviously there is a forgivable portion of that loan but again, as with our forgivable loans, there are milestones that have to be met before you can receive the forgiveness.

 

MR. MACLELLAN: The most recent deal, the components of the loan are $14.7 million repayable, $2.5 million forgivable and the refinancing from a previous loan, I think in 2009, for $5.4 million. Would the minister provide information in sequence, generally speaking - again, I know you don't have these very specific details - a general breakdown of what the requirements are for that repayable $15 million, what are the expectations for the $2.5 million forgivable and, of course, what are some of the concepts and the components of that refinancing portion of the loan?

 

MR. PARIS: Madam Chairman, the total amount for Northern Pulp, as the member said accurately, is $17.2 million. That's new financing that includes $14.7 million, which is a repayable loan, and the $2.5 million, which is the forgivable loan. Forgiveness is contingent on a couple of things: one, installation of new equipment; two, that Northern Pulp has to reach certain numbers and both numbers, not only just wage, but also employment numbers, they have certain targets that they have to meet before they receive any type of forgiveness. We've also agreed to refinance $5.4 million, which is also a repayable loan.

 

MR. MACLELLAN: I honestly don't know how this works from a public-dollar perspective and how we refinance these things. What does it mean when you refinance to the tune of $5 million from an existing loan? What does that look like? Is it a percentage or is it an interest rate? How does that breakdown work, if you wouldn't mind?

 

MR. PARIS: When we make our assessments and we do our analysis, even before we get into the objective of paybacks and whether or not we're going to do a loan, whether it be Northern or any other company, especially in our department when we're talking about millions of taxpayers' money, we do a very thorough analysis and it's vetted through many members of staff. They provide me with analysis on the number of jobs it's going to impact, what it means to the economy of that certain area, whether it's rural Nova Scotia, the impact it has on that community, the impact it will have on the rest of the province.

 

We are very thorough on doing the analysis, both with direct employment and indirect jobs. The money that the member is referring to - we have just been joined by Jeff Larsen who is one of our experts and Jeff will correct me if I'm wrong - that $5 million that you're referencing was paid back and then a new loan was worked out. I think that was a loan from 2009, then we worked out a payment schedule of how the loan will be repaid. Before we do any of that, a thorough analysis is done about the whole situation and we move on from there.

MR. MACLELLAN: Just for clarity, this has nothing to do with the ability to repay. This is a loan that is closed out for simplicity, so the existing loan from 2009 and then with this new investment that you want that off the books, so to speak, you clear that out and then you are working with one loan via Northern Pulp?

 

MR. PARIS: I appreciate the questions the member is asking and I want to make sure that we all have a clear understanding of some of the intimate details before we move forward on something else.

 

First of all, there were a couple of hundred jobs that were impacted with respect to Northern, on whether or not they were going to exist. That's certainly part of us moving forward. Also involved in the analysis, we also looked at the issue around air quality. I think everyone who is familiar with Pictou County and with Northern Pulp, there was an air quality issue that has existed there for many years. I've now been involved in government for seven years and I can say this to the member, those air quality issues certainly existed long before I got involved in politics on the provincial level. Part of this is about the natural gas line going into Pictou and about improving the energy sources for Northern Pulp and to improve the air quality for the residents who live there.

 

Our goal is, as always, about job production, about the benefits to Nova Scotians. The loss of 200 jobs in rural Nova Scotia is a heck of a lot more significant than it is in Halifax - not that Halifax would bear the loss of 200 jobs, but the impact is greater in rural Nova Scotia.

 

MR. MACLELLAN: I've been to Northern Pulp and it's certainly not dissimilar to many of the big industrial operations. It seemed like cash and assets were kind of the thing that strapped them down. I'm sure this provides a new opportunity for those individuals. They have a product that is viable and it is coveted on the market, so we certainly wish them well.

 

The minister mentioned the natural gas capabilities, which is not only good for Northern Pulp but it is good for the region, as many of the community assets can access that method of energy. Also - and this isn't verified - but from what I understand, Northern Pulp may be considering an expansion in the future and that seems to be on the table.

 

The minister talked about the $46 million reduction in the global budget for ERDT is directly linked to the forestry strategy. Having said that, if there are additional projects or investments that the Government of Nova Scotia is going to look at, will that just come out of individual streams or will there be another injection to support the forestry strategy going forward? With a one-year investment and a one-year pocket of money, it seems like a short-term injection, where some of these operations, if they are going to be viable, may come looking for additional support. So could the minster comment on the forestry strategy moving forward?

 

MR. PARIS: I thank the member for that question. I'm going to try and be as brief as I can but also give some detail about the forestry sector that maybe the general population may not take into consideration when they consider it.

 

When we talk about the forestry sector, one of the things that often we forget about and we don't take into consideration are the associated jobs that are involved in the forestry sector. It's more than just logging, more than just cutting down a tree. It's more than just hauling trees to the mill. It's about stumpage, about trucking, about those direct and indirect jobs. We know that probably in the forestry sector alone, we're talking well over 2,000 jobs that are associated with the forestry sector, counting direct and indirect employment. The supply chain is one that we can overlook and for the forestry sector for the supply chain, the greatest impact is going to be in rural Nova Scotia. We certainly can't lose sight of that.

 

For those over 2,000 jobs, the investments and the return that the province would get, one would be payroll. I'm going to take a calculated guess here, we are probably looking at $15 million alone in payroll from those over 2,000 jobs.

 

When I talk about a $15 million payroll, I'm not including Port Hawkesbury NewPage, that's just Northern. Also we have to take into consideration that of those over 2,000 jobs, that $50 million, some of that is going to go towards tax revenue, which gives us that added money that we need for infrastructure money and for all those expenses we have that come from the public purse to make life better for Nova Scotians.

 

MR. MACLELLAN: Madam Chairman, I'm going to switch gears now a bit from some of the files. We'll come back to some of those major investments in a bit. I just want to spend a little bit of time looking at some of the line items in the budget. If I could draw the attention of the minister and staff to Page 6.3 under Senior Management, I want to take a look at the first line item that stands out, which is Communications. Communications is over budget for estimate to forecast by about 65 per cent, give or take $150,000. That seems like a pretty big blip. Then the estimate for this year again is $873,000. Could the minister perhaps explain? It's a pretty significant cost overrun under that department for Communications, particularly when I know that in Grants and Contributions, this department provides Communications Nova Scotia with about $0.5 million for special projects and investments.

 

Given all that, that is a lot of money to be over the budget for Communications so I'm just wondering if the minister can provide an explanation.

 

MR. PARIS: Again, a very important question and I'm only too happy to answer this one because the Communications Department at ERDT is in close proximity to the minister's office and I spend a lot of time with them, just because of the activity that goes through the department.

 

We had the expenditure and why that does increase is that we've increased some programs. We've added programs to the department and one of the things that we want to make sure, when we add programs at ERDT is that the general population, the public, the business community know what it is that we have to offer. We had the jobsHere campaign.

 

One of the things, if I may elaborate a little bit and you might have heard me talk about this during Question Period or during other presentations, is that it has been my humble opinion that in the past, governments may have been good at implementing new initiatives but I think that one of the things that I've traditionally criticized governments in the past of doing is not letting the public become more aware of what was out there for them. I often reference the offshore industry, even when the offshore became onshore. When we got involved in offshore many years ago, what I recall very vividly is that we had to recruit from outside of the province and then when the offshore came onshore, I think we found ourselves in the same boat.

 

What we wanted to do and we did do is make sure that Nova Scotians were aware of the jobsHere strategy, what opportunities lay ahead as far as programs and initiatives that we were offering through our department. That did bump things up a little bit for us from a communications perspective.

 

MR. MACLELLAN: Under that Communications line item, can the minister provide a breakdown of the marketing mix for that line item? Is it television commercials, pamphlets, radio ads, those types of things? If possible, of that $150,000 over budget, can there be a specific link to what that amount of dollars was spent on?

 

MR. PARIS: Under that campaign, we did a lot of advertising. We did a lot of ads - again, the jobsHere strategy was part of it - letting folks know, letting the general population and public know what is available and giving companies and businesses the heads-up on what they have to do to grow their businesses, about the opportunities that lie ahead.

 

The member opposite is probably asking for more specific, more intimate detail than that. If he's looking for the amounts of money that were spent on television ads, print media, et cetera, what I can say is, staff are here and are certainly listening very attentively and that really intimate detail may require a little research by staff. I will say that staff will make that available, if not today then before the end of the day tomorrow, for the line items when it comes to what has been spent or allocated individually. I don't have that information; I can elaborate on the reasoning and the purpose but the intimate detail would have to come more directly from staff.

 

MR. MACLELLAN: If that is at all possible, could the minister provide - and the staff that he's referring to - could they provide a breakdown of how many staff are associated directly with Communications? How many positions under ERDT are responsible for that?

 

As well, what is produced in terms of information and ad copy and the like, is that produced in-house or would that be something that's contracted out, so I guess a breakdown of the job descriptions, generally, for those who work under Communications with ERDT?

 

MR. PARIS: I can say to the member, through you, that some of that detail we do have. When it comes to staffing, numbers around staffing are very easy - and we're talking our Communications department, I can give you the number of staff that are involved. There is a staff list of seven employees that work in our Communications section.

 

One of the things, and I think - I don't think, I know - I've heard the Opposition Party, both Parties in fact, comment during Question Period that if nobody knows about the initiatives and the programs that you have, then not everybody is going to apply. One of the things that we want to ensure is that everybody knows. Certainly one of the things that we've done along with the advertising campaign, we even piggybacked on the advertising campaign by streamlining some things for businesses.

 

A good example would be on our web portal. We have five buckets that now house somewhere in the vicinity of 40-plus programs. In years gone by or even months gone by, for the business operator who had to go in to the web portal, if he or she were searching anything, it may take them forever to find it so what we've done is we've simplified the route for them, made it that much easier thus eliminating some red tape.

 

I provided the member with the number of employees that we do have and again I'll just reiterate for the benefit of the member, for the more detailed stuff, the more intimate stuff, I'll rely upon staff to make sure that we get that to him.

 

MR. MACLELLAN: Just looking at the Office of Minister and Deputy Minister and the Office of Associate Deputy Minister line items the Deputy Minister's looks a pretty flat estimate forecast to this year's fiscal year estimate, but the ADM looks like it's underspent by $100,000 and is budgeted for an additional $200,000 for this fiscal year. Would the minister provide rationale why the distinction is there? Is it simply salary, is it a shifting of responsibilities or is there another reason why there is a bit of a shift there?

 

MR. PARIS: For that department, for that office, in the past it was an office that was truly underfunded. We've got an associate deputy minister who has been with us now for a period of time, who wasn't there before. The difference would be mostly and mainly around vacancies, vacancies that did exist and maybe possibly now don't exist. Also one of the things that we've done through our budget deliberations within the department, and I wish I could take all the credit for this, through the deputy, through the associate deputy, and through staff themselves, we have been making really strong efforts on being more efficient. To get back to balance we wanted to make sure that ERDT was making contributions towards that goal and this was another way that we could do it.

 

MR. MACLELLAN: I'm looking at the NS Gateway Secretariat line item, the final line item under Programs and Services. Budget estimate last year was $1.4 million now down to $557,000 which is a significant drop - came in extremely under-budget, and now is diminishing by a little less than $300,000. What were the functions of this office; what are the functions of this office, and what is the rationale for such a shift downward in the budgetary line?

 

MR. PARIS: Madam Chairman, we've had vacancies in the Nova Scotia Gateway Secretariat that we haven't filled. We've repositioned the initiative towards the Jobs Fund. We made some strategic changes within the alignment of the Secretariat. We still feel that we can function at a very efficient and effective high level to achieve the goals of the organization. Again, it's around efforts on our part, on the part of ERDT, around efficiencies and to still maintain a high level of effectiveness, and in many cases become more effective and deal directly with things.

 

We recognize, and we know, and I as minister, that the Gateway initiative is an important part of our move-forward strategy. The Gateway initiative is an important part as we look at trade. I'm sure the member is aware that the Canada-European negotiations have been ongoing. I don't know how much I can say about that without jinxing it. I'm reluctant to say they're near completion because I've been hearing near completion for a number of months now. They're getting close to being completed. As Canada moves toward completing and signing off on that agreement, the Gateway Secretariat will play a very pivotal role not only now, but certainly into the future of Nova Scotia. The Gateway Secretariat is very instrumental.

 

One of the things that I've said, and I'll reiterate very briefly now, is that in the big picture, and I wouldn't want anyone to misinterpret this, but in the big picture, the global picture, Nova Scotia is a very small place. I've been fortunate, I guess, to travel to many parts of the world, as the Minister of Economic and Rural Development and Tourism. One of the things that I have found out is that when you mention Nova Scotia, a lot of places around the world don't know where it is. You mention Canada, they're alright. You can talk about Toronto, Montreal, and they'll have the idea that these are places in Canada. Many places, when we put up the banner, Nova Scotia, misinterpret it as another city. They don't know that it's a province of Nova Scotia.

 

The Gateway is very instrumental in making sure that the word of not only where we are but who we are, gets out there, along, of course, with our tourism sector and all those other things. One of the things that I have found out, I think I probably already knew this, I'll rephrase this, it has been reinforced in my mind, even though people may not know exactly where we are, when we get out there, they know how well we can compete and lead in the global community. For those that do know us, we are greatly respected.

 

MR. MACLELLAN: Just to get some clarification on the NS Gateway, I'm listening to the minister and naturally I don't have the intimate understanding of the Gateway Secretariat and how it functions and those things specifically that it does to support those endeavours that the minister mentioned, however, the budget dropped from last year's estimate to what the estimate will look like this year is just above one-third.

 

I certainly take the minister at his word that they are important initiatives and they do great things all over the globe and the functions that are provided are certainly worthwhile. I guess in light of that, how is it that the budget is reduced by one-third and that line, that sector, that sub-department, if you will, is still required or expected to perform the same functions with one-third of the money.

 

Now if it's sunsetting and it's moving into a different direction or of it's becoming part of a bigger piece of the ERDT puzzle then that's one thing, but if things are remaining the same and it's being dropped to almost one-third of the budget that was estimated last year, then it seems like there are things being reduced.

 

What are the reductions that account for this drop in the budgetary line? Is it staff? Is it programs? Is it travel? What would account for such a significant drop?

 

MR. PARIS: I will elaborate just a little bit. What we've done with the Gateway is in our Back to Balance efforts, we certainly streamlined things. One of the things we did when I talk about streamlining is we moved four positions and by moving those four positions, that didn't make us any less effective. As a matter of fact, I think it probably worked in the opposite way. We've become more effective, more streamlined and I would include some administrative savings in there as well. The member opposite, through you, Madam Chairman, mentioned a number of things and I would say probably all those things that he mentioned, with the administrative savings, with condensing the number of positions, moving those positions to other units, mostly all the things you mention make up part of those savings that we've experienced in our efforts to get back to balance.

 

One of the most notable things that I, as minister, like all members of Cabinet, and I'll put it in the mildest of terms, we got very clear instructions from the top that this was going to be a back to balance year and that we were to do what we could, where we could and do it in a way that wasn't going to damage the brand and in a way that was going to be more efficient.

 

We have now, and he was here earlier, we have the MIPO, our major initiative, which is taking over some of the responsibilities of the Gateway. When I look at the Halifax International Stanfield Airport, we made an investment there in their runway. The lead on that would have been Gateway. So Gateway is a vital part of our go-forward. Even when it comes to attracting new companies or new initiatives to the Province of Nova Scotia, we rely heavily upon Gateway. Gateway works very well interlocked with Nova Scotia Business Inc., which of course is our flagship of that organization, out there championing Nova Scotia all over the world.

 

You heard me say earlier about how small Nova Scotia is in the global picture. Well, it's with the help of Gateway, NSBI, companies like LED Roadway Lighting, companies that are out there doing business with the global community because you can't find anybody better in the world to do business with than Nova Scotians. It's through all those efforts, a combined effort that is finally going to put us on the map so when you go to Mumbai, India, in the years ahead, no one is going to be asking you where Nova Scotia is; so that when you go to China, somebody is not saying Nova Scotia, never heard of it.

 

The future business of Nova Scotia is going to be in China, in Brazil. Too often Nova Scotians think of doing business with New Brunswick and with Prince Edward Island, Newfoundland and Labrador, and with the rest of Canada. Those business links are important but the real business and the real competition that we have is in the global community. I trust that before estimates is over I'm going to anticipate a question that the member is going to probably, at some point in time, going to ask me about those relationships and what we are doing to build on those so that Nova Scotia can become more known.

 

MR. MACLELLAN: In terms of specific staff members, how many were there under the Secretariat 12 months ago, during the 2012-13 fiscal year versus what the budget is indicating will be the number of staff for this year moving forward?

 

MR. PARIS: Twelve months ago there were nine designated spaces for staff at Gateway. Of those nine designated spaces, five of them were vacancies. Today we have three people at the Gateway.

 

I've mentioned MIPO and what we've done - this is part of the efficiencies that we've done. I just want to speak again to the collective co-operation that we see within ERDT with NSBI, with MIPO, with Gateway so that we don't do any duplication or we don't do things three times. We are more efficient now because of the interlocking exchange and working relationship between those sections of our department. It was nine, five were vacancies 12 months ago, and now we have three.

 

MR. MACLELLAN: My final question, on Page 6.3 under Senior Management, in relation to what the minister just stated, and it involves the FTEs and the number of designated staff. I'll only ask this once for fear of duplication. We could do this, basically, through all the lines so we'll figure it out now. If you look at this section in particular, the estimate from last year was 22 positions, actual or forecasted turned out to be 14, and then the estimate moving forward for the fiscal year is 16. If you look at most of the subgroups within the ERDT budget, it is the same path. A certain number come in way under FTE projections and then back up the following year.

 

Basically if you look at this without having a feel for what the departmental budgets operate, in terms of staff, it would look like there were eight positions that were unfilled, essentially. Why does this take place? Is this a budgetary manoeuvre, if you will, to create space for staff? What is the purpose of being so under projection in terms of staff and then it rebounds for the next estimated year. Again, I'm just asking this because that is the pattern of the FTEs and it would be nice to have that clarity as we continue with the line by line.

 

MR. PARIS: Through you, Madam Chairman, to the member for Glace Bay, what we've done at Economic and Rural Development and Tourism is we have reorganized. We have reorganized to create greater efficiencies within the department. Also with that reorganization there were vacancies and we certainly have moved some out. Part of that reorganization became necessary under the jobsHere strategy. I know the member for Glace Bay has heard me talk about the jobsHere strategy a number of times and before estimates is over, he'll probably hear me mention it a number of more times.

 

Again, it's reorganization in not only the start-up of the jobsHere but the whole implementation of the jobsHere strategy. You could chalk all of that up to just a complete reorganization of ERDT and some of those vacancies have been moved out of the department all together.

 

MR. MACLELLAN: Just a bit of a challenge on that point to the minister, certainly the efficiencies are not a departmental or a governmental issue for budget and the budget process, it's for all private sector, public sector, and for anyone who puts together a budget that's always a factor. I understand that rationale without question. However if you look at the estimates for the 2013-14 fiscal year, almost all of them return, roughly speaking, to the estimate from last year. If you're finding efficiencies, and I'll use again that first line, but you can use any line for the funded FTEs through the ERDT budget, it goes from 22 to 14 and then back up to 16 so efficiencies are one thing but if you're moving in an efficiency direction that seems to contradict that path.

 

It would be the same for Policy and Planning, 28 down to 23, for this year coming it's up to 30. Take Investment and Trade, 37 down to 25, which is a big drop in FTEs, back up to 44 this fiscal year. That pattern doesn't really suit the rationale of efficiencies so if the minister wouldn't mind, would he explain why it goes back up for 2013-14.

 

MR. PARIS: I can explain this so that it makes sense. When you look at 2012-13 the 22, and then when you look at 2013-14 the 16, that certainly indicates the reduction and the member is pointing out the 13.9 that was 2012-13. Well there were vacancies in the 2012-13 year, which accounts for the lowness. When we talk about the reduction, we were on our way back to balance and so maybe that is where the confusion is lying. There were vacancies in that middle year that certainly wouldn't be indicated here so it is all around the vacancies.

 

One of the things that I've noticed that is consistently from budget to budget, year after year after year, is that through ERDT - and I don't know if the other departments are like this or not - we have vacancies that sometimes, because of the process, and I think it's a government process, whether we fill vacancies or not, sometimes it can take a very long period of time. It is not uncommon in government to have vacancies around for months and months.

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

 

The honourable member for Cape Breton North.

 

MR. EDDIE ORRELL: Madam Chairman, if you guys need a short break, I'm okay with that, if you need to recharge for a second. If not, I can continue on.

 

I'll start off with the question that the honourable member for Glace Bay just finished off with. I see here the full-time funded staff on Page 6.3 is 22, you've actually used 13.9, which is 14, so that is eight staff in the difference. Next year you are forecasting that you're going to need 16 staff, which is a decrease of four from last year but an increase of three or four from - or two, I should say, two and a half, from actual that was used this year.

 

I guess my question is, if you used only 14 staff this year, did the job in the department get done effectively?

 

MR. PARIS: Madam Chairman, I've got to take pause here just for a minute, if I may, and the pause is about staff. The member, though you, is asking how effective we were. I've got to say, and I'll go on record as saying this, if there are any ministers listening they may disagree but I think - I don't think, I know - I'm the luckiest minister in government. I say that because even with deficiencies, when it comes to FTEs, I can stand here in my place and say that the individuals who worked at ERDT are second to none. They do whatever has to be done to get the job done. That sometimes means working extended hours, not complaining, that when I do my walkabouts around ERDT and I think - I don't think, I know - I can call practically everyone by name. They're happy to be there. Something that I've said consistently, public servants are probably the most misunderstood people in employment in Nova Scotia because what I see are very hard-working, dedicated individuals who go that extra mile to get the job done.

 

I thank the member for asking that question because I don't think we boast enough about civil servants who deserve much of the credit, as we move forward in the Province of Nova Scotia.

 

MR. ORRELL: Madam Chairman, I appreciate that answer, Mr. Minister. I do understand how hard civil servants work. I know in a previous life I had, we had the same problem if somebody was off. I guess my biggest question is, if they did the job with 14 last year, and they did the job well and effectively, and I like that, that's great, I appreciate that, why do we need two more for next year to do the job again?

 

MR. PARIS: Thank you, Madam Chairman, and again, this is a wee bit of a reiteration of what I said to the member for Glace Bay. I wouldn't want the member to get too caught up in the FTE numbers in the 2012-13 year. As I mentioned, there were some vacancies there. We have a complement of staff now that we feel are necessary to do the job as we move forward. Without a doubt, ERDT staff have a huge responsibility on their hands. As optimistic as Nova Scotians may be about the future, they are relying, to a large degree, on ERDT to play a real leadership role as we move Nova Scotia forward as a province and strengthen our economy. If during - I've got to make sure I get the years right - 2012-13 with the 22 FTEs, and the 2012-13 down to 13.9, most of that is accounted through vacancies that weren't filled, and certainly in 2013-14, 16 FTEs. Also, through the previous year, we had that transition period. We were transitioning into what we have now and we are pretty comfortable with what we have now.

 

MADAM CHAIRMAN: Thank you. Before recognizing the honourable member, I'm going to remind members of the committee to keep the chatter down a little bit. It is becoming a little more difficult to hear.

 

The honourable member for Cape Breton North.

 

MR. ORRELL: Minister, I appreciate that answer, but I guess my question is, you budgeted for 22, you only needed 14, the job got done effectively. Next year you're saying that you're going to need two more to do the job. Either you overinflated your estimate for last year, you underused your staff for last year, or you are inflating your budget again for this year. My question is if it is done with 14 one year, how come we have to go with 16 again the next year?

 

MR. PARIS: Well Madam Chairman, my response, my answer, is basically the same. Four positions were moved out during that 2012-13 year, and again, through the great work of staff. When I go to the Treasury Board, sometimes it is hat in hand, but I've got to demonstrate to the Treasury Board - I've got to justify the budget. When the Treasury Board asks me for reductions in a back to balance year, then it's also incumbent upon me to do what I can, and my colleagues within the department, to make sure that we make our contribution to that goal.

 

Simply put, the 13.9 FTEs in 2012-13, we did it. Those were vacancies and also where some individuals had been moved out of the department. Again, my response is the same. It was through the dedication and hard work of good public servants.

 

MR. ORRELL: Maybe I could rephrase the question a little differently. How did you go to the Treasury Board and justify needing two more when you did the job with two less last year?

 

MR. PARIS: Basically my answer is the same. It is not as if the department couldn't use the complement that it has now, and that is a complement of 16. I want to be very clear on this. When I went to the Treasury Board - if the staff at 13.9 had kept up the pace that they were currently at, we would have had more vacancies and the question would have been, that 13.9 could have been 12, it could have been 11. The pressures that were building on staff, in order for us to put forward an agenda as prosperous and as bold and as innovative as what we've got under the jobsHere strategy, the complement that we have now with FTEs is the complement that we need to do the job without unnecessarily burning out our staff at ERDT or making them work those extended hours every day that some of them have done in previous years. I don't know what I can say that (Interruption) Thank you.

 

MR. ORRELL: Thank you. That's the answer I have wanted to hear now for two years when I've asked those questions on full-time equivalents. You just couldn't do it because the staff couldn't handle it for an extended period of time.

 

I guess my next question is, does the money from fewer staff this year go back into the general budget for the ERDT or is it used in another department for funding staff?

 

MR. PARIS: The savings that we experience as a result of that is those savings are used in a couple of ways. One, they would contribute to our efforts to get the contribution that we had to make to government to get back to balance. We could have transferred some of those savings to other areas. I can't say that there is one particular area that it went to but certainly the overall riding factor for the department, first and foremost, was getting back to balance.

 

We understood, I understood, how important it was for us to get back to balance. I understood because it was impressed on me, certainly at every Cabinet meeting, every time Cabinet got together, at every meeting that I went to Treasury Board, regardless of what I was going for, there was an emphasis that was certainly placed on all of us and certainly that I felt. Other ministers probably felt the same obligation that I did. The number one priority for our government was to get back to balance for this fiscal year. I was happy that ERDT was able to make a contribution to that goal.

 

MR. ORRELL: Thank you for that answer. I'm going to change gears a little bit if it's okay and I'm going to the line by line budget estimates. I'll give you the page number of where I'm getting the questions from just to make it a little easier to look it up. On Page 6.4 under Regional Planning and Development, the 2013-14 estimate is $5 million or 50 per cent over the 2012-13 estimate and the 2012-13 forecast. I wonder if you can tell me why there was such a large increase in that line item.

 

MR. PARIS: A good question and I hope I've got an equally good answer for you. The change was that certainly we had some changes. ERDT has undergone some changes. One of the most significant changes is tourism. Tourism was transferred in. Tourism at one time was a stand-alone and became part of Economic and Rural Development. There is also the Visitors Services which certainly added to that, which would include 71.9 FTEs. That includes visitor information centres, call centres, the Tourism Accommodation Act, maintenance. Signature resorts was another $4.1 million, more like $4.2 million, I think it was $4,190,000.

 

The most significant move would have been with the Tourism Agency. When it transferred in, the cost associated with that would have been close to $10 million. We felt that Tourism, as a stand-alone, and Tourism with Communities, Culture and Heritage wasn't the right mix in the area of promoting tourism. We thought that tourism would be better served if it were in with Economic and Rural Development because a large part of tourism is about rural economy. Tourism is a $2 billion industry in the Province of Nova Scotia, which makes it one of the most important industries that we have in the province. I think we in tourism employ in the vicinity of 24,000 to 26,000 jobs. Most of those jobs are in rural areas of the province so again, that's a very important part of our economy and it's a huge contributor. That's where the difference is.

 

MR. ORRELL: So Tourism wasn't part of the Economic and Rural Development and Tourism budget last year? Is that what you said?

 

MR. PARIS: I think the member for Cape Breton North may be aware of the Nova Scotia Tourism Agency. That is completely new. That has come under our watch and with that has come some expenses. In order for us to do that, there was a cost associated with it. We've done a number of things now where we think that the Nova Scotia Tourism Agency, part of it - I know if the member for Hants West were here he would probably have a smile on his face - as we are transferring the agency to Windsor, not the entire agency but the largest bulk.

 

The Nova Scotia Tourism Agency is a new identity. It's a new brand. It's going to better serve Nova Scotia and I'm sure the member has probably heard me respond during Question Period, although I don't think we've gotten a whole lot of questions around the agency relocating to Windsor and I think maybe that's because the member for Hants West is a member of your Party and I think he was at the announcement and I don't think anyone could have wiped the smile off his face that day. As many people know, Windsor has come under some hardships, like other communities in rural Nova Scotia, so anything to assist. The Nova Scotia Tourism Agency is the biggest reason.

 

MR. ORRELL: The staff increase on that same line item went from 32 to 96.7. Can you explain to me why there is such a large increase there?

 

MR. PARIS: Mr. Chairman, through you to the member for Cape Breton North, one of the things I mentioned is that we transferred the visitor information centres and the call centres. I think that the number I mentioned was 71.9 FTEs. That accounts for a large cluster of the increase in the FTEs. There's also the tourist accommodation maintenance that would have added to those FTEs. That's where the numbers are coming from, all related to tourism, that great economy.

 

MR. ORRELL: If we move now to Investment and Trade and the 2013-14 estimate is $45 million or 46 per cent less than the 2012-13 estimate and the forecast. Can you explain to me why there is such a large decrease in the Investment and Trade?

 

MR. PARIS: To the member from Cape Breton North through you, Mr. Chairman, most of that money, $44 million - actually $44.4 million and some change - was through the Nova Scotia Jobs Fund that went into the forestry sector. We recognized how valuable the forestry sector was to the economy in Nova Scotia, especially here in Nova Scotia in the rural economy. We made those investments. In Northern alone the direct and indirect jobs that would be impacted were in the vicinity of 2,000 jobs. That meant payroll of $15 million which translates into more tax revenue for the Province of Nova Scotia, not to mention those other benefits that the loss of those jobs would have impacted on the grocery store, the car dealership, the whole supply chain. That's where the bulk of that money went.

 

There were some investments that we made. The PIP, the Productivity Investment Program, forgive me if I use acronyms every now and then - I'll try not to use them. Certainly the productivity and investment was another one that was an investment that we made that we've had in the vicinity of 10,000 employees who have benefited from that and 400 Nova Scotia companies. The majority of those companies that have benefited from the PIP initiative are small to medium size business owners. Those are the kinds of investments that we've made that will count for the difference.

 

MR. ORRELL: You say $44 million was put into the forestry section and I heard you tell the honourable member for Glace Bay earlier that all that forestry money wasn't used. Can you tell me why that forestry money wouldn't have been used because I know a lot of it was used in training while we were dealing Stora/ NewPage, or Stern. I heard from a few of my constituents that when they applied for the training they were told the money was already used up for training but then we see here that it hasn't be used. Can you explain that to me please?

 

MR. PARIS: I do recall the previous hour talking about the forestry sector and mentioning some monies that did come back. One of the things that the member from the Liberal Party asked me and we were talking about was when I was referring to some of the money that wasn't used, we were talking about Bowater. The question that was asked was if all that money had been returned and my response was it had all been returned because that transaction with Bowater didn't go through.

 

The $2.5 million, which was part of the Port Hawkesbury NewPage transaction targeted for training, that money was allocated to training for Port Hawkesbury NewPage employees so they could learn and become experts in operating the modern equipment. One of the things that we had to realize and that I would like all members to realize and certainly the public, is that Port Hawkesbury NewPage is the most modern facility in North America, bar none. We and the new owners wanted to make sure that staff were proficient at operating the up-to-date equipment that they had.

 

Any time we invest in training for employees, we see that as a bonus and that was part of the agreement. As the member is aware, when it comes to the forestry sector there were and are a couple of things that were going on. Now when I look back at it, when it comes to the forestry sector, it's hard to keep it all straight because it's all blending into one now. There were Northern Pulp, Port Hawkesbury NewPage, and Bowater and all the money that was at one time designated for Bowater was returned to the province.

MR. ORRELL: I guess my question was, when NewPage closed there was money set aside for the woodcutters to keep a supply of wood available and for training for people who actually worked in the woods. Some people who cut on Crown lands got the money for training and to improve skills to be used in the woods but the people who were cutting on private land, some weren't able to access that training or that money that was available. If the money wasn't used, is that money going to carry over to this year and will those people who didn't get that training at the time be available to get some of that training?

 

MR. PARIS: Through you to the member for Cape Breton North, it's my understanding that - you're asking me the question and I appreciate that - Natural Resources had been handling that and I'm certainly not equipped. It's a question I think that would be more appropriate to the Minister of Natural Resources. That's coming under his agenda.

 

MR. ORRELL: I see the Minister of Natural Resources wants to get up and answer it now. That would be a first in here, he'd actually want to get up and answer a question.

 

Operating costs are down $54 million, or 38 per cent in the 2013-14 estimate from last year. Where is that money going and why are those costs down?

 

MR. CHAIRMAN: I'm sorry, I believe the minister had a problem hearing that question. Would the honourable member for Cape Breton North please repeat it?

 

MR. ORRELL: On Page 6.2 operating costs are down 38 per cent or about $54 million. Can you explain that decrease for me?

 

MR. PARIS: To the member for Cape Breton North - I'm going to go back to that $44 million because it's part of that, also there was money with respect to Waterfront Development Corporation. There was also the Signature Resorts money, and also Productivity and Innovation. Most of that would be around WIPSI, Workplace Innovation and Productivity Skills Incentive. There was the Research Foundation and there were also a little over a million with respect to investment in trade. There were some strategic initiatives, which, when we talk about monies, weren't huge amounts, but certainly they add up.

 

Also, under those strategic investments would be things like the Team West and the Nova Scotia Association of Regional Development Authorities, the RDAs. There was the work that we did on the web portal.

 

I mentioned earlier the work that we did on the web portal of providing more streamlined, better access, eliminating red tape for Nova Scotia businesses. That accounts for the reductions.

 

MR. ORRELL: I probably heard part of this answer already, but I will ask again and pardon me if you have to give me the same answer. I'm just looking at your total department funded staff, down to 225 this year compared to the 291 estimate, but back up to 274 next year. We talked about the number of jobs being less this year, almost 40 jobs, and are going to be increased back up to 274. The question I'm going to ask, on the line above it says, "Less: Staff Funded by External Agencies". What external agencies would have been funding staff in the Department of Economic and Rural Development and Tourism?

 

MR. PARIS: To help you so you're not thinking about déjà vu, no, you haven't asked that question before. The two positions that you are referring to are with the resorts, one is at Keltic Lodge and one is at Digby Pines and those are the two positions. If I'm not mistaken, I think both of those positions are in the area of maintenance. I'm getting the affirmative from staff so that is the answer to the question.

 

MR. ORRELL: If we slide over to Page 6.5 - Innovation and Learning Programs in 2013-14 are estimated to increase by 14 per cent or $3 million over the 2012-13 forecast. That seems like a large increase. Staff increased by four when the department operated with six fewer staff in 2013. Why is there such an increase in staff?

 

MR. PARIS: The difference is, no matter how you cut this, we are still down. As I explained before, there were vacancies in the 2012-13. It was also a transition year. We were transitioning into what we have now. I'll just move forward a little and maybe I might be able to save a little time here for the member. When you look at the numbers, and I can see where there might be some confusion and a logical step would be it has gone from 24.5 down to 18.8 and now you're up to 23.

 

Again, in that middle year, where there was a down in the numbers, it was a result of vacancies, FTEs that weren't on the payroll. There was a transition period that was taking place within ERDT and that will account fully for the numbers. What we have at 23 is the complement of FTEs that we deemed necessary and appropriate without over maximizing our staff because in that middle year, when you look at those numbers, and the logical question is how did you do it with so few? I said in the first hour that I'd like to say that I pulled up the slack but that wouldn't be the truth. It was as a result of staff, a dedicated work group at ERDT who are intent on one thing and that is getting the job done.

 

MR. ORRELL: The Nova Scotia Jobs Fund is $42 million less in 2013-14 versus estimates in the 2012-13 forecast. Can you tell me why there would be such a large decrease this year for the Nova Scotia Jobs Fund?

 

MR. PARIS: Again, the biggest chunk of that money is the $44 million, that one-time, huge sum of money that we've invested in the forestry sector. We did a really thorough analysis of the forestry sector and what it meant to Nova Scotians, particularly those in rural Nova Scotia, those direct and indirect jobs, and we made that investment on behalf of Nova Scotia taxpayers to save literally thousands of jobs, direct and indirect, to keep that facility up and running with an eye towards profitability.

 

One of the things that we always look at is sustainability and we know that in rural Nova Scotia in the forestry sector, as we've experienced, we had to come in and be of assistance to the sector in order to save those jobs. And again, the goal not only for them but also for us, is around sustainability, and the future, I trust, looks brighter today than it did six months ago and a year ago.

 

MR. ORRELL: So can I ask the question? If this year the Nova Scotia Jobs Fund won't be able to spend nearly as much money because the budget now is $44 million less, so if we have that kind of a budget this year, I guess we can hope that someone doesn't get in trouble, because we won't be able to use that much, is that the only budget we would be able to use for that?

 

MR. PARIS: Mr. Chairman, I guess my immediate response to the question is I think the member for Cape Breton North and I can agree upon one thing for sure; let's hope that we don't have crises like we've had in the last couple of years, especially what we've had to deal with in the forestry sector. You know, things do happen and sometimes things happen that are beyond anyone's individual control. It is just the nature of the economy being whatever it is, or whatever it was, or whatever it's going to be.

 

We always hope for the best but we do things based on good analysis by staff, strategic investments, and we are looking in the Jobs Fund, we still have $30 million that will be available for this year. We have PIP, which is going to be another $25 million. I don't think there would be a member in this House who would disagree with me, there are just some of those things that I guess you don't like to deal with, but they are a reality of life and we've had some of those.

 

We came through very tough times here in Nova Scotia, as other jurisdictions around the world have. It has been a tough four years with everybody working hard. We entered government at a time when we were going through a global recession, the worst recession since the Great Depression. I'd like to think that the hard times are over. We've got a lot of things to look forward to in the future, and it's a matter of everybody pulling together and part of it is keeping our fingers crossed as well.

 

MR. ORRELL: Under Trade and International Competiveness Programs, the budget there came in at 17 per cent under budget from last year. Can you explain to me why that happened, or how it happened?

MR. PARIS: What we have is a large part made up of temporary vacancies, so there have been savings there. We've also had program savings. Some investment managers have been transferred and there have been operational savings. This comes back to, in part, part of our effort to get back to balance, the request coming for us to do our part to achieve the goals. Strategically we've done things. Part of this was we were also finishing up that transition period under the jobsHere strategy so there were some initial costs which were up front. It is fair to say that we are quite pleased and quite happy that, as the Department of Economic Rural Development and Tourism, we could make our contribution to the government to get back to a balanced budget.

 

MR. ORRELL: The increase in estimate of about $1.2 million compared to what was used last year, is that because people came back to work, can you explain that for me please?

 

MR. PARIS: The result is because we have launched, and are launching, new programs at ERDT and also filling some vacancies. Those are the two streams that account for that budget line.

 

MR. ORRELL: Under the Major Investment and Project Office, it more than doubled to $736,000 in the forecast versus the estimate. Why so much over budget compared to the last year?

 

MR. PARIS: In response, the answer to the question is that we now have some new programs related to the offshore, I shouldn't say programming but initiatives related to the offshore and to the Irving bid. We have to make sure that we've got the individuals in place so we filled a number of vacancies. Also you've heard me talk before about FTEs and about vacancies, well now we've filled some of those vacancies. As a result I think four have been transferred in. In order for us to take advantage of the opportunities that now are in front of us, we want to ensure that we've got the right individuals in the right places to do that.

 

MR. ORRELL: So is that why the estimate for this year is up over the actual forecast from last year?

 

MR. PARIS: Yes, that is correct.

 

MR. ORRELL: The Procurement staff was actually five less than the 2013 estimate yet again, the estimate for 2013-14 calls for an increase of four. Do we need those extra four if we got by with 26 the last time? Is that the same idea?

 

MR. PARIS: Mr. Chairman, I think the member for Cape Breton North will be very pleased with the answer to that question because one of the things that we are doing through procurement is we are modernizing things. By that I simply mean that we are being more strategic in how we purchase things, as a province. We're doing it in partnership with other jurisdictions around Atlantic Canada. Also, there are temporary vacancies that are part of making up that number.

 

MR. ORRELL: I'm almost ready to switch over to the tourism side of it but I'm going to ask a question on the Ships Start Here program. Could I get - and I probably have it already or had it before - how much money did that program actually cost? I guess we thought it was deemed necessary at the time but we seem to think it wasn't. How much money did the Ships Start Here program cost when we ran it last year?

 

MR. PARIS: Mr. Chairman, I certainly don't want to give out any false information, especially to the member for Cape Breton North. I'm going to give you an estimate but, at the same time, even with an estimate, don't hold me to this because I'm going to make a request to staff to get me a more accurate figure.

 

I don't have that in front of me but if my memory serves me correctly, and heaven knows, never depend solely on my memory, but if my memory serves me correctly, the amount we set aside for that campaign was somewhere in the vicinity of $300,000. What I will do is I will request that staff get that number. It's four o'clock today but by sometime tomorrow I'll make sure that you get that accurate number.

 

I think for some reason, I don't know why, but the figure of $316,000 is coming into my head.

 

MR. ORRELL: If we're getting that information, Mr. Minister, I wonder if we could get the breakdown on where and how that money was actually broken down and spent during that campaign so we will know how much was spent on advertising, or signage, or employees, or whatever. I wonder if we could do that if, at the same time, we could get that breakdown as well?

 

MR. PARIS: Do you know why I was having difficulty with that is because staff - I'm asking you the questions now - staff just indicated to me that that didn't come out of last year's budget and so that is why I was struggling a little bit with the answer to my question. But regardless, it was the year before that, it was a couple of years ago but I will still get you the numbers and a breakdown of where the money was spent, and I think what you're looking for is whether it was print media, television ads, et cetera - we'll do that.

 

MR. CHAIRMAN: Honourable member for Cape Breton North, you have less than a minute.

MR. ORRELL: If I have less than a minute left then I'm just going to ask a few general questions or make a few statements I guess, Mr. Minister.

 

I heard, when you were answering a couple of question when you were talking to the member for Glace Bay you were talking about developing relationships and spending money on international trade and maybe we're going to look overseas to develop trade missions, and the bulk of our business will be done overseas and overseas trade. I guess my biggest thing is we, in Cape Breton, have an enormous resource in coal in the Donkin Mine area and I know we hear daily that we're trying to get off of coal and we're trying to make sure that we use a cleaner source of energy and so on and so forth, then we read in the paper that China opens a coal-fired . . .

 

MR. CHAIRMAN: Order, please. The time allotted for this segment has expired.

 

The honourable member for Glace Bay.

 

MR. GEOFF MACLELLAN: Mr. Chairman, if the minister and the department would like a short recess to stretch their legs that would be okay with me.

 

MR. CHAIRMAN: We will take a short recess and come back at the earliest convenience.

 

[4:02 p.m. The committee recessed.]

 

[4:08 p.m. The committee reconvened.]

 

MR. CHAIRMAN: Order please. We will continue with the estimates of the Department of Economic and Rural Development and Tourism.

 

MR. MACLELLAN: I'm just going to take a little break from the line by line and move to some more of the general file conversation, just some things that have been important to Nova Scotians, some of the investments that have been made with respect to ERDT and job creation initiatives.

 

The first one I'd like to talk about is one that's certainly familiar to me, and the minister - we've traded questions and answers many times in the House, and that would be with respect to DSTN, the Trenton wind turbine manufacturer. As I've said many times, there was DSTN and Brad Murray, they were witnesses at the Economic Development Committee a while back, probably about a year and a half ago. I remember specifically the business plan with respect to the manufacturing, and the plan and all those sort of components of the business model were particularly sound.

 

The thing that was glaring and really stood out in my mind at that time was the fact that there was a soft market for those wind turbines - and that is probably putting it lightly.

I remember Mr. Murray, who was very cordial and very optimistic about the plant and the prospective markets, and he said when things turn around in the northeast U.S. and if we gain access to Quebec and Ontario markets which, as we know, are pretty much protectionists so they've been kind of ruled out by way of provincial legislation in those provinces.

 

Certainly we can debate back and forth in this Legislature about good investments versus not so good ones - and I think this one would probably fall into the latter. I know the minister is optimistic about the general prospects of that plant and I know they've retooled or they were in the process of retooling, and we learned that after some pretty bad news in terms of the market that they hoped for, and certainly in terms of the employee numbers. I think the last number we had in a report was in the range of less than 50.

 

My first question would be a two-parter- what was the rationale for supporting DSTN, and is there any allocation in the current budget year that will still be going to that Trenton facility?

 

MR. PARIS: The member for Glace Bay is correct on a couple of counts. First, the market for wind turbines did go soft. I can remember when we looked at the possibility of DSTN, and I remember this very well, a company that was very well positioned, one of the largest shipbuilders in the entire world, certainly within the top three, when we finally connected with them and we talked about DSTN coming to Canada, to Nova Scotia, they were interested in wind turbines.

 

When they toured the plant, I was there, and we were all very, very optimistic. The wind turbine business did go soft; however, having said that, DSTN does have new contracts and for the member's information, through you, Mr. Chairman, I would just like for him to know that the workforce at DSTN right now, today, is at 73. It did take a little dip there for a while, but now it's back up to 73.

 

DSTN has done some things strategically that hopefully are going to stand them in a better light, not only today, but in the future. Again, I mentioned some new contracts that they have, they are diversifying and I can't stress enough that I think I have to bring in the Asian culture in general, culturally about losing face - DSTN, as a partner, they don't want to lose face. They are putting their best efforts forward and trying to make DSTN work - not only for them, but also for Nova Scotians.

 

They've hired a new CEO, they've opened up - and the reason I mention the hiring of a new CEO, I think that's important because the new CEO comes to the table with a whole set of skills that will fill a void - maybe it might be more in the way of a personality void that certainly may not have existed. I'm searching for words here because I don't want to say anything offensive, but we're very happy with the hiring of a new CEO.

 

DSTN has opened an office in Halifax; they feel that strategically a Halifax office will better position them to be more global when it comes to contracts and networking and those sorts of things that businesses have to do. They also have new certifications.

 

After DSTN opened, going there I think I only spoke to one individual who was "red-sealed" and the problem that they were having around red seals was getting the certification, and that it is rather difficult - there was nobody locally who was in a position that could do the certification for those people. My understanding is now there are some new certifications.

 

We've booked over $2 million for DSTN in this fiscal year and that money is contingent upon them reaching certain milestones - as some people would call, certain targets. We are optimistic about DSTN; we still feel that DSTN does have a future. It's one of those ones that not only here in North America but around the world, you can open up any newspaper, I think, on any given day and you can read something in it about wind turbines, about somebody being upset or against the wind turbine being located in their general area, but I think that's all going to come back.

 

MR. MACLELLAN: Two, I guess somewhat related, questions with respect to DSTN. Firstly, I guess the assumption that I was operating under and thinking about was when the announcement and we got the information that there would be retooling or adjusting some of their operations, I probably assumed, and maybe it's not accurate, that they were moving somewhat away from the wind turbine production into oil and gas fittings and those types of things, and as a general sort of breakdown the minister stated that they are increasing employees, they have some new orders on the books - is the lion's share of their operation still going to be in the manufacturing of wind turbines, and to what extent is the retooling oil and gas? Also related to that from a financial perspective, the $66 million that was originally committed to DSTN - has that been exhausted and the $2 million for this is a new envelope or is that part of the original $66 million?

 

MR. PARIS: I'll answer the last question first. There is no new money going to DSTN; any money that DSTN receives will be part of that original agreement. The one about DSTN and about the market and what share of the market will it get - I'm the Minister of Economic and Rural Development and Tourism and, yes, we are a shareholder, we have ownership with respect with DSTN. I would strongly suggest that their markets will be dictated by the business climate. I wouldn't want to say that they are going to solely be dependent on wind turbines or any one thing.

 

There was talk at one time that DSTN was going to have some discussions with the Irving shipyard and see what value they could be to Irving shipyard in the $25 billion contract that Irving received. I think in all sincerity - and I don't mean this in any way to be one of avoidance on my part - when it comes to whatever market DSTN is going to be pursuing, I don't know if I'm in a position to accurately respond to that. I think that's more their business and it's one of their business decisions. So the larger part of that answer should come directly from them.

 

I trust that makes some sense.

 

MR. MACLELLAN: One final question with respect to DSTN - has the department or the government, or the minister himself, has there been any indication of an expansion or a further retool that would require additional public funds? I know we're the minority owner, I assume it's 49 per cent, has the majority owner requested additional funds for any type of expansion or movement with the operations?

 

MR. PARIS: I think I heard the member say this is going to be your last question on DSTN, so before we end the questions on DSTN, I just want to make sure the member for Glace Bay has some assurances around DSTN and the potential, the possibilities with DSTN. A couple of things I would like to say and, hopefully, make the member feel more at ease - first, DSTN is the only manufacturing facility that the second largest shipbuilder in the world has in North America. I think that gives us some sense of security.

 

The other thing, which I've already mentioned, being the second largest shipbuilder in the world is also reason for us to be somewhat optimistic, and the fact that DSTN is not only diversifying, but they're looking at other areas where they can market themselves. As it stands right now, there is no money today or tomorrow that has been earmarked - nor have there been any conversations coming from DSTN around future monies or related to expansion or new business ideas or anything of that nature.

 

MR. MACLELLAN: Thank you, Mr. Minister, for that answer. I'm going to briefly ask a question with respect to Irving, the minister just mentioned that and I thought it would be a good segue. Just a bit of a qualifier - we all know the impact of Irving and the importance of the ships contract, and I know this stuff gets lost in the politics sometimes, and to have one of the members of the Irving family publicly make statements about it certainly adds interest to the file.

 

From the beginning, and again there are political undertones to this always, but I don't think anyone in this room, or anyone in Nova Scotia, would be against the Irving ships contract, I know how ecstatic I was and I know members of all Parties in the House were actively on Twitter during that day - it was a celebration for all of us and I don't think that can be overstated, it was a big thing. Being a Glace Bay boy, I have all the faith that the Irving project will take place and the ships contract will affect people that I represent and people that I care for and love and are connected to it. I think it's a good project.

 

Of course, it is a big thing for Halifax, for the region, and for the province. I guess the question that I have and have asked before, and I'm honestly looking for the answer - maybe I'm missing something and this may appease my mind - the minister mentioned a couple of times that the investment of the $300 million, $260 million repayable . . .

 

MR. CHAIRMAN: Order, please. The chatter is getting a little bit on the loud side, and I believe the minister is having trouble hearing the question. So if you have some conversations you'd like to have, I'm sure you could have them in the anteroom.

 

The honourable member for Glace Bay has the floor.

 

MR. MACLELLAN: Thank you, Mr. Chairman. From what I understand, those public dollars are committed to the infrastructure on the shipyard, and some of the refitting and the building of the shipyard. My question is a simple one, and again, maybe I've been missing this the whole time, and this may be the point where it's clarified in my mind.

 

If that $300 million was critical, as the minister and the government say it was, I don't understand why this couldn't be a loan, and it could be an interest-free loan, the terms could be obviously negotiated, the government was in negotiations with Irving confidentially. I certainly understand two things - number one, there could be no part of the Irving proposal that went to the federal government looking for money. That's a no-brainer; if you're looking for a large contract in the range of $25 billion, you can't ask for support to get there on one hand. And, secondly, if you factor in what it would cost for a commercial loan to leverage this kind of money, that becomes a cost factor for Irving, and that may make them less competitive.

Those two points I certainly understand, so I guess, in a nutshell, why couldn't this have been a loan versus a grant?

 

MR. PARIS: Mr. Chairman, through you to the member for Glace Bay, I'm happy to rise in my place and talk about the $25 billion contract with Irving, and I hope I can answer all of the questions that he raised.

 

First of all, Irving entered a competition for a contract that was going to take place over 30 years. And the member for Glace Bay, in asking this question, I think he has a grasp on the cost to Canada - he understands that part of the equation. When Irving approached the Province of Nova Scotia, the request was, basically, it was summed up in just a few words, and the few words were "we can't do this without you" - meaning without the government. When they approached us and we started doing the analysis on this, on the Irving shipyard, it didn't take long for not only myself, but for the Premier and my colleagues, to realize that here was an opportunity in front of us and that for every $6 that we, taxpayers, invested, we were going to earn a return of $100.

 

So, financially, that part of it made sense, and that part I know that the member for Glace Bay fully understands and can appreciate that the $304 million that's part of this enormous package for Irving includes loans in there.

 

When the member for Glace Bay talks about the ability for Irving to do this without the province, Irving didn't have that ability. No bank would be willing to be involved with Irving at that amount of money, with the interest rates that would be involved with millions and millions of dollars. And I don't know if the member for Glace Bay has a banking background or not, I certainly don't, but as a layperson it wasn't hard for me to understand that the best partner for Irving would be the Nova Scotia Government, would be taxpayers.

 

We always have to be conscious of the fact that this was a competition. This was a competition that Irving was entering into and there was no guarantee that Irving was going to win the competition, come in second, come in third, or not place at all. So when we rolled up our sleeves with Irving, we made an agreement with Irving that, look, if we want to get this contract, if it's important enough to Nova Scotians to get this contract, well we had better roll up our sleeves, do it right, and leave no stone unturned.

 

The last thing that we wanted to happen was not to win this contract. We didn't get involved in this initiative to come in second - we got involved in this initiative to win. The $304 million that we did, part of that is a loan that's fully secured, it's in the $44 million. There are targets - listen to me talking about targets - there are milestones to be met, for Irving to get, to earn forgiveness on portions of that money. We must remember, in order for Irving to earn forgiveness on any portion of that money they have to meet the milestones - no money is disbursed to Irving until the milestones are met, which means taxpayers are never out money.

 

Over the life of the contract, we are investing millions for billions and the $2.9 billion is what taxpayers of Nova Scotia are going to receive in tax revenue, $2.9 billion that otherwise we wouldn't have. That's going to be more money for schools, for education, for community services, for all of those things that we try, as governments, in making life better for Nova Scotians.

 

Again, I reiterate, we didn't enter this competition to come second - second place was not an option for us. So for 30 years, at the peak there will be 11,400 jobs that are going to be created in the Province of Nova Scotia. Already, since Irving has signed probably a month ago with the federal government, they're starting working on the yard - that's a huge step.

 

We knew when we got into this that the actual cutting of steel was going to be years out. We knew the first priority would be to get sign-off on the design; then we have to do the yard prep. One of the things that I've asked my constituents who talk about oh yeah, you're giving to Irving - in my riding we have a business association and they asked me to come to one of their lunches, which I eagerly went to, and of course on the agenda was Irving, and they were upset. I walked into that meeting and they were fairly hostile - not against me personally, but against the investment that we would make in Irving to get this contract. When I left, every one of them said that they would have done the exact same thing, that this contract, now that they understood it, now that they understood that this wasn't what some individuals and some media have called a corporate giveaway,

 

It's nothing like that; in fact, it's the furthest thing from the truth. This is an investment. I would ask anybody who, whether they be a student, a business person, a politician - the opportunity to invest $6 and if I promise you $100 in return, I don't know anybody in their right mind who wouldn't do just that.

 

I know I've gone on for a little bit about Irving, but I do have a passion about this one, so I hope I'm answering the questions. And I'm sure that if I've missed something, the member will bring it up.

 

MR. MACLELLAN: I do again agree with largely everything he just said in response to my question, but I just want some clarification on the specifics. He mentioned a couple of times about the winning bid and we didn't want to come in second, and I can guarantee that anyone who was on-line or watching on television felt the same way, so certainly those emotions were shared for all Nova Scotians - and Atlantic Canadians for that matter.

 

Again, I want to try to get clarity. What I'm struggling with and what the questions have been to me and, I think, to a large extent people are asking, as the minister mentioned in his own riding - $260 million is forgivable; $44 million is repayable - if that $304 million in its entirety was repayable, would this have impacted Irving's bid? In other words, if this is a cost factor and this supports the Irving bid, if this was entirely repayable to the taxpayers of Nova Scotia, would this have changed anything in terms of finishing first or second?

 

MR. PARIS: Rest assured, if that $304 million was not part of this package, Irving would not have gotten this bid. The member or no one in this House has to take my word for it - all they have to do is ask Mr. Irving. And I can quote Mr. Irving directly, who said "If it hadn't been for the Province of Nova Scotia, we would not have won this bid."

 

The member has the numbers down to a science - $44 million fully repayable, the $260 million - I heard the members say that is forgivable, and I just want to stress that it is earned forgiveness. So before Irving receives any monies related to that $260 million, they have milestones that they have to reach before they get any of that forgiveness. It's an earned forgiveness and, again, before I take my seat, I will say that if it hadn't been for Nova Scotia we wouldn't have won that contract. We're a better-off province as a result of winning the contract - now our obligation is that we've got to get the best possible benefits out of that $25 billion contract in every area of Nova Scotia, from one end of the province to the other. That's why we made that investment with the Duke University study.

 

You know, Cape Breton is a large part of Nova Scotia and when I say from one end of the province to the other, we certainly recognize the value and the opportunities for Cape Breton and all regions of the province.

 

MR. MACLELLAN: I'll ask this one more time, just in a different variation and then I'll move on from this particular point.

 

My final question for the minister and for the department is if the $304 million, and again, I will take your word for it and I'll take the word of Jim Irving and everyone who is involved - the $304 million on behalf of the taxpayers of Nova Scotia was the dealmaker and, if that's the case, then naturally the benefits and the long-term spinoffs will be important - if the $304 million was entirely a repayable loan, with zero interest, or a small interest or the taxpayers of Nova Scotia recovering those interest costs, if that entire amount was a loan and none of it was forgivable, would Irving still have won that ships contract?

 

MR. PARIS: I will say through you, Mr. Chairman, to the member for Glace Bay that before we reached conclusion with Mr. Irving, the Premier, Mr. Irving, certainly the skilled team from ERDT, we had negotiated over a period of time and I can tell you this, in all honesty and all sincerity, there were times that I, as minister, was nervous about whether or not we were going to be able to pull off this deal.

 

This wasn't a case of the Province of Nova Scotia going into a room and saying to Mr. Irving, here's $304 million, this is where we're going to slice it up and then take it or leave it. I can say to the member that this was a series of tough negotiations. Mr. Irving knew exactly where the Irving company had to be, the position they had to be in to earn this contract. We negotiated with them and, in turn, they negotiated with us and we came up with the best possible scenario that we could for the taxpayers of Nova Scotia.

 

I know the member for Glace Bay appreciates this - I heard him say it, he's happy that we got this contract, he sees the benefits of this contract. Again, when we arrived at the $304 million, it wasn't something that we did fly-by-night; there was a lot of conversation, a lot of late nights, a lot of sleepless nights, then, of course, even more so after the bid was submitted. But this was the best package we could put together and I will say this, that if we had not put this package together as it is now, we would not have gotten that contract.

 

MR. MACLELLAN: I'm just going to finish off the Irving conversation with some, I guess, quasi-technical questions about the funding - I'm also a layperson so we'll probably be at the same level. The $260 million, is that entirely - and this is just for clarification for my own purposes - is the $260 million entirely for the shipyard upgrades? That's number one, and related to that, just to understand - working backwards, I guess - if it's not entirely for the shipyard, can you just break down the $260 million versus the $44 million and also, where is the Irving commitment reflected in the 2013-14 budget forecast?

 

MR. PARIS: Madam Chairman, welcome to the Chair. The $260 million is 100 per cent for capital upgrades; the $44 million is designated for the value proposition. One of the things that the federal government has done when it comes to procurement is around the value proposition, I think, particularly when it's related to military contracts. And so this is a stipulation that they have. And so the answer to two questions, the answer is total yes to both of them - the $260 million for capital investments, and the $44 million for value proposition.

 

MR. MACLELLAN: Thank you, Mr. Minister. I'm now going to switch gears again - if we could just go back to a little bit of the line by line, if that's okay. I'm going to turn your attention to Page 6.4, Regional Planning and Development, and just a general question to start off. It looks like, and just for accuracy, Regional Development and Regional Planning have been moved to Small Business and Regional Development Programs, similar allocations of monies from last year's budget. So I'm just wondering, could the minister comment on sort of the old mechanism versus the new, and what's the distinction between the initial line item title versus what's there now? So it's Regional Development and Planning versus Small Business and Regional Development Programs line items.

 

MR. PARIS: What we've done in ERDT is we changed the way that we do things. We are, I guess I can say, for all intents and purposes, new and improved. So we have moved to a priority based agenda as opposed to what we've had in the past. So, simply put what it is, it's a reorganization. It's all part of that reorganization that we talked about that we've done within ERDT and, again, it's based more now with respect to priorities as opposed to the old way of doing things.

 

MR. MACLELLAN: I wonder if the minister could just talk about - if you notice the funding, the number of FTEs, as we've seen the pattern, the estimate to this year's forecast is higher but then it takes a real significant jump to the point where obviously that looks like a complete reorganization to 97 positions as the estimate for the 2013-14 fiscal. So I'm just wondering if the minister could comment on some of the - naturally a lot of those positions that are from the original Planning and Development will be moved into the Small Business and Regional Development, and there is also that Visitor Services and Signature Resorts line, so if the minister could comment on that.

 

MR. PARIS: The reason why those numbers reflect that is under the reorganization we moved in the visitor information centres so that would have involved either 71 or 72 individuals - I think it's 72 - there also would have been the contact centre, and there was another movement there as well and I just can't remember, I had it a couple of hours ago because the member for Cape Breton North asked the same question and for some reason - maybe it's getting late in the day - I've lost that number, but it would have been very, very insignificant, the bulk of the people were - the deputy just passed me a note, the resorts I think there were two or three people that were involved, it was two and what I recall I said, and I will reiterate, it was the Digby Pines and Keltic and they were maintenance individuals.

 

MR. MACLELLAN: The line with Signature Resorts, $7 million, could I ask the minister just to elaborate on that number - is that operational, is it upgrades? And the member for Cape Breton North may have asked that already but it's the final line item on Page 6.4 with respect to the Signature Resorts. I just want to get a feel for what that looks like, obviously that's an important allocation of money for all the Signature Resorts, certainly it hits us home in Cape Breton, so if the minister wouldn't mind a little bit of a breakdown just on how that money is allocated.

 

MR. PARIS: Obviously, I'm going to say, the member for Glace Bay has taken out a comb and gone through the estimates page by page. The number and what you're looking for is that is an accumulation - in other words there were a number of things that make up that number and it's just not the resorts. We have to bear in mind that part of that is visitor information centres and services, information and reservation service. We have the distribution centre, we have quality services, and part of it is resorts - and resorts are even less than $2 million, it's closer to $1.9 million than it is $2 million. The rest of the money is made up by those other items I just mentioned.

 

MR. MACLELLAN: Can the minister provide a bit of a general breakdown on the $1.9 million, is that direct facilities, is that spread across all the resorts, is there sort of priority projects - what is the breakdown for the $2 million in this year's budget?

 

MR. PARIS: For the member for Glace Bay, the money for the resorts was shared with all the resorts - it wasn't one resort, but it was shared. I don't know if the member recalls this or not, but some time ago we set aside in a budget $3.1 million for the resorts. The member may remember that there was quite a conversation, when I first became minister, about the state that the resorts were in. I was concerned that over the last number of years the resorts were getting old, they were getting tired, and they hadn't received a whole lot of attention.

 

When I toured the facilities and staff toured the facilities, it was validated and confirmed that we needed to make some investments in those resorts because they were starting lose their Signature status, and, on top of that, damage the Nova Scotia brand. So we've invested equally, pretty close to equally, in all the resorts with renovations and upgrades - even some little things, which all add up when you start talking about - and I'm sure the member may not be old enough, but I can remember the 21-inch bulky TVs (Interruptions) but just an upgrade like going into the flat screens. We were having tours that would come to a Signature resort and have these bulky TVs - this is not what they paid for.

 

The carpets needed upgrading - even things like draperies. What we didn't want to do is we didn't want to enter into a competition with other local operators. The Signature Resorts at one time were a stand-alone. They lost some of their glitter and we were simply trying to put some of that glitter back into our Signature Resorts.

 

MR. MACLELLAN: I'm going to move to a different topic and one that's certainly of great importance across the province. I know that the RDAs, now RENs, they're keys in the communities, and what I've always sort of considered with the RDAs, now RENs, is the fact that these are the - what I like to think of as the experts on the ground. They're connected to what's happening on the ground with respect to economic development and immigration, of course, and some of those issues that hopefully provide information to the municipalities and to the province.

 

As we know, the REN review panel put together a pretty extensive list and extensive report with recommendations, et cetera. Two questions that I can mix together in the interest of time - number one, has the department finalized what recommendations they're going to apply to the RENs and, secondly, how does that change - what is the funding relationship and has that changed for those regional development networks?

 

MR. PARIS: RDAs and RENs - as we make the transition from RDAs and into RENs, there are a number of things that I want to be clear on. First of all - and I think we're all well aware of this - the federal government has eliminated their involvement from a financial perspective, which simply means that maintaining the status quo is no longer an option. Donald Savoie made a suggestion to reduce the size of the RDAs. Through consultation, and through the Union of Nova Scotia Municipalities very much playing a lead role, we came with forward with the RENs. The Province of Nova Scotia is a 50/50 partner and funding partner with the municipalities when it comes to the RENs. That was one of the questions that was asked.

 

Another question that I heard from the member for Glace Bay was to the effect if everything was carved in stone - quite the contrary. We've met with municipalities. We've had some consultations with the all the stakeholders. We understand there may be some tweaking to what we end up with. We can't say, simply because we don't know where that's going to end up, yet but certainly we are in a position to sit down and deliberate and talk about anything. Nothing related to the RENs is carved in stone.

 

This is not, and I want to make this clear, this is not the Province of Nova Scotia saying to the municipalities or saying to anyone, this is what you're going to do. This has been a very collaborative approach by the province and again a reiteration that the Union of Nova Scotia Municipalities has very much played a lead role. So the second part to your question, nothing is carved in stone. We're willing to sit down and talk things out with the Union of Nova Scotia Municipalities.

 

I know there have been some rumours. Right now for me they're only rumours until those municipalities impacted or affected come to me directly or through the deputy or through anyone in our division, that they want this changed or that changed or they want to be in this area or don't want to be in that area. Nothing is off the table yet. Everything still remains on the table and we will continue to do this in a collaborative way to get the best effort forward.

 

We all want the same thing, regardless of what your political stripes are. We all want the same thing, we want strong, viable communities in Nova Scotia and we hope the RENs are an exercise in doing just that.

 

MR. MACLELLAN: Obviously with the federal government out of the equation and with the province and the municipality being the sole funders or the partner funders for the RENs, there are going to have to be some changes. I'm just trying to get a feel because again, I know the impact CBCEDA has and I know that the RENs, the six regions and what were the RDAs, they've had their impact.

 

Certainly now there are going to have to be changes because of the financial implications. Of course I think that as the model changes, based on the panel and based on what we know, things have to be more innovative and probably streamlined. I know there are a lot of different projects that are being undertaken by the development agencies, with immigration, with job creation, cultural development, those types of things, there are all kinds of aspects that they had their hands in.

 

My question to the minister is - and he alluded to the fact that there are a lot of changes and we don't know what the changes are, even who is going to be in which region and those types of things and it will trickle down to what the new mandate is, what the staff reductions look like, if that comes into play. My question is, who is shepherding in these changes? Who is the person or the people or the organization within his department that are shaping what the RENs are going to look like and what is the reporting structure for that process as we finalize the new generation of enterprise networks?

 

MR. PARIS: From an ERDT perspective, we are very much engaged in the process. Our regional planning and development division is a very large part of moving forward and let it be known that the Deputy Minister of ERDT is very much involved, a very key part of it.

 

I want to be clear that I don't want anyone to be under any misconceptions here. We are the province, we are a stakeholder here. The leads in this are the municipalities and I think that it is important for me to stress that. We do have a division that is playing a key and vital role. Some of the RDAs - I'm sure the member will be aware of this - are in final stages of windup and anxious to get going. They're all at different stages but I would say that every week that goes by, they are getting closer to the finish line. We are confident that when this all comes out, we'll be very happy and satisfied that this has been an effort that's had involvement from everyone.

 

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

 

The honourable member for Cape Breton North.

 

MR. EDDIE ORRELL: I would like to talk a little bit about the Tourism Agency, not necessarily tourism. As we all know, Nova Scotia has some beautiful tourist areas: the Bay of Fundy, the Cabot Trial, Cape Breton Island in general and some national historic parks like Grand Pré and so on. We know how valuable an industry that is to our province and we want to make sure we keep driving that industry forward because of the people it employs and the amount of money it brings to our province.

 

I notice in the Nova Scotia Tourism Agency, under the line Office of Chief Executive Officer and Administration, there's $550,000. Can I ask how many people are employed in that department with that money?

 

MR. PARIS: The number of employees under that line item is FTEs 39.2.

 

MR. ORRELL: That is the number that came over with the agency from the old tourism sector of ERDT. I know the new funding for the new Tourism Agency and the board bring a wealth of experience to that department and I want to commend the department for picking a board that should be able to do a great job in handling that.

 

Under Product Development, we've got a $1 million budget. I guess the question is, what areas and what products are going to be developed or is it just to develop the tourism industry in general with that budget money?

 

MR. PARIS: That line item - and I look at the book - would be salaries and benefits and operating costs. We have individuals from our department who work with tourism operators throughout Nova Scotia. They help tourism operators in the area of promoting their product or products. They help in a variety of ways so that's all associated with that product development. We have people who - seven individuals, seven FTEs - we help operators to reach the marketplace. We help them with new experiences for the tourism: how to improve on their products, how to make their product better. That would include how to make your destination or your operation that much more attractive to the visitor. Those are all around what we call, destination developments, so that we can increase the value of that destination experience for the visitor to the Province of Nova Scotia.

 

MR. ORRELL: Would I be correct in assuming that if the local tourism operator in, I'll use Yarmouth or Cape Breton, are looking to develop their product - say a bed and breakfast or a spa that would be catering to tourists that come into the area and those areas - would they contact that department and get into the system and have them assist them with developing their product?

 

MR. PARIS: Yes, that's exactly it. We would be of great assistance and we would also do some selling as well because, as the member for Cape Breton North I'm sure is well aware, we've got this thing that a lot of people refer to as the tourism bible of Nova Scotia, the Doers' and Dreamers' Guide. We also recognize that as popular as the Doers and Dreamers was or is, there is also on-line now. Things have changed, not only the way individuals do business but also in the industry of tourism, so we've got to make sure that our tourism operators are educated and know what's out there, and educated in the way of how to reach certain markets.

 

We are there to assist. You heard me earlier talk about some staffing things and I would take a risk and say I haven't seen anybody more dedicated to their job than those individuals in the Tourism division. Talk about going the extra mile for people, they do it.

 

MR. ORRELL: Is there going to be money in any of these budget items that is going to go to staffing local tourist bureaus or tourist information huts that you would see on the side of the road? Is there going to be money involved in the budget that would be provided to staff in some of the local communities around the province?

 

MR. PARIS: In answer to that question, first and foremost, the VICs that are run by the government, by Tourism, we staff those ourselves. We also contribute money to tourism associations. Now I can't say for sure 100 per cent but I would suspect, I don't know how you would like to slice and dice this: if we give money to a tourism association and if some of that money goes to fund a visitor centre that is run by the municipality, then I guess you could say we contribute. We give money to tourism associations around the province. They may in turn give some of that money to visitor information centres but certainly we do fund the ones that are owned by the Province of Nova Scotia.

 

MR. ORRELL: The $8 million that's allotted for marketing and the $4.8 million for sales and partnerships - could you tell me approximately where we're doing most of our marketing or sales and how we're approaching that? I know I see the new TV commercial that's out. Are there other plans around marketing and development and are there certain target areas that we're trying to get to this year that may be of most benefit to the Province of Nova Scotia?

MR. PARIS: The member for Cape Breton North will be pleased to hear this. Certainly our priorities do change and when our priorities change, they are based on market strategy analysis that we do. I'll give a good example - and I know you're going to be happy to hear this - we are investing more this year in Quebec than we have in previous years and a lot of that is focused around Louisburg. Because of the anniversary that Louisburg is celebrating this year, we've reproduced the Doers' and Dreamers' Guide in French, and English, so we are doing more of a strategy in Quebec, certainly in Ontario. Ontario and Quebec will receive the bulk of our marketing strategy.

 

We are doing less marketing in the Maritimes than what we have in previous years, again more concentration on Quebec and Ontario. We are doing more marketing in the United Kingdom and also in Germany. One of the things that I can say about the Quebec market is that our indicators have seen that we are up with respect to our hits on-line from Quebec. I think the increase is as high as 25 per cent, so we think some things are paying off.

 

Germany has been a pretty good market for us. When it comes to some of the overseas marketing that we do, we do that in partnership with the Atlantic Canada Tourism Partnership. We also know that because that is a strategy that we can do, save some money because we're doing it in partnership with our neighbours and still we know that we have the Halifax Stanfield International Airport, which is the largest international airport in Atlantic Canada. Even if anyone who is coming from overseas wants to go to Prince Edward Island, they've got to come to Nova Scotia. We're doing all right, I think, in the marketing.

 

Something I think I should stress, when it comes to tourism - and tourism is a tough business because there is so much competition. When you think of tourism you think of the centres that attract so many visitors: London, England; Paris, France, these are two of the larger European tourism attractions in the world. What our analysis is saying is Canada - and when I say Canada, I should also mention that with the Canadian Tourism Partnership too, they are involved in some of our tourism strategies. We've got so much to offer here in Nova Scotia and in Canada; we can do just about anything anybody else can do, minus the lineups. We've got a huge attraction for tourism.

 

We now are exploring cultural tourism. We've made great inroads in the area of cultural tourism. Traditionally we've done a lot of work with respect to the Scottish market, for obvious reasons. I think it's fair to say there are some sectors of the human race that we've ignored and maybe we've forgotten about our connection to the Acadians, to the Louisiana folk. Maybe we've forgotten our connection to the African American population, which has a deep-rooted connection with the birthplace of those of us of African descent, which is Nova Scotia, for Canada. We are making great inroads in African American tourism, which is a $53 billion industry that we're trying to tap into. All we want is just a piece of it.

 

We know that once individuals start coming, and we've seen them starting to come, that we are going to grow that industry. I was starting to say - talking about tourism being a really tough business to be in, it's because there is so much competition. What we're doing when we advertise stay vacations, we've got to stop and think that while we're advertising stay vacations, vacation-at-home, other jurisdictions are doing the very same thing. Our friends to the south have been advertising for Americans to visit America before they visit anywhere else. We do recognize tourism as a huge contribution to our economy and we're going to do whatever we can to ensure that it makes a contribution and then some.

 

MR. ORRELL: I'm glad to see you are going to promote what beauty and attractions we have almost naturally. It's something we don't have to go out and manufacture and maintain. Some of our beaches and areas in the province are beautiful and we know that.

 

We talked a little earlier about your visitor information centres and the ones that are provincially funded. I asked the question last year, and I'd like to ask it again this year. The visitor information centres that are provincially funded, are they in areas that are classed as gateways? If they are - we talked last year about the possibility of getting a designation as a gateway for North Sydney where it is the home for the Newfoundland ferry that comes from Newfoundland and Labrador. From what I understand there is extra money available if it's classed as a gateway to help promote the staff and building, as you talked about earlier.

 

MR. PARIS: I was trying to remember the answer I gave you last year. I just sent for a copy of Hansard. We have tried in the past to be very strategic about where we locate our VICs and I think probably we've got some - I mean, the one at the Halifax waterfront is a well-utilized one. Obviously the one in Amherst, on the border between New Brunswick and Amherst, is one of our high visibility ones and one of our most frequently visited centres.

 

At one time we used to - and to be honest with you, I've got to check with staff - we used to have somebody on board the ferries coming from Newfoundland and Labrador. (Interruption) I've asked staff to check to see if we still enjoy that same luxury.

 

One of the things that I will say when it comes to VICs, we are always looking at ways to improve not only our brand but improve on getting the message out there to our visitors and to our potential visitors. Certainly the fact that we are having this dialogue this evening will certainly create some activity - I know it's 5:30 at night, but certainly with staff.

 

I mentioned in a previous answer to one of your questions - to the member through the chairman - that we give money to tourism associations and certainly Destination Cape Breton is one of our partners that we work with very closely, as we do with all of the associations when it comes to strategy marketing of tourism, whether it be in Cape Breton or anywhere else. That's why we have those tourism associations.

I'm glad I stood up a little longer - I just got a little e-mail saying that practice that I mentioned earlier, about the ferries and having somebody on board, we continued with the partnership with Destination Cape Breton to provide tourist information on the Newfoundland and Labrador ferry, so we still do that.

 

MR. ORRELL: That practice has now moved to kiosks. At one time they used to have two people on board the ferry - one funded by Newfoundland and Labrador, and one funded by Nova Scotia. The person from Newfoundland and Labrador worked from the North Sydney side to the Newfoundland and Labrador side, and the person from Cape Breton worked from the Newfoundland and Labrador side, and they promoted tourism that way. Now, from what I understand, it has gone to kiosks and signs, which could be the way of the future, I suppose. I'd really like to sit down and look at the possibility of putting that other back on, because I think personal contact would be more desirable for some people coming across on the ferry than actually having to look at a kiosk. Anyway, we won't get into that today; that's to do another day.

 

I started to talk earlier about the development of Donkin, and the Donkin coal mine and the potential of approximately, I'm told, 300 to 600 jobs within the mine and, according to the spinoffs, how many that would be. We started to talk about relationships and how the province has gone out and developed relationships with places like China, and we talked about Mumbai, India, and so on. I'm just wondering, in the discussions with places like China where they are opening coal-fired generating power plants, has there been any discussion about the possibility of our coal being used over there as a way of developing our economic status in Nova Scotia?

 

MR. PARIS: Before I respond to Donkin, I just want to go back to the ferry operation and tourism. What I said is that we continue to work with Destination Cape Breton. Certainly I will put this out - through you, Madam Chairman, to the member for Cape Breton North - that if at any time if he wishes to discuss tourism with Patrick Sullivan who is the head of Nova Scotia Tourism Agency, the fact is that we can make that happen. All the member has to do is put forward the request and it will happen. I know Patrick would be upset with me if I didn't put that invitation out there.

 

Donkin - I want to be careful when we talk about Donkin. First of all, it's not my business to talk about the business of another company so I don't want to breach the protocol of confidentiality. We are willing, as a province, to sit down and talk to just about anyone - whether it be around coal or anything that has to do with employment in the Province of Nova Scotia. Donkin, in the past, has been the lead - not of the Department of Economic and Rural Development and Tourism, that has been under the guidance of DNR and so all I can say is that, as minister, my department, our department, is willing to talk about jobs with anyone. If we are not the right person that the company or the individual should be sitting down with, we will guarantee you that we will point that company, that business or that individual in the right direction. I trust I'm answering your question as best I can.

 

MR. ORRELL: I guess I'll just change gears a little bit here, Mr. Minister. We talked about the shipyard contract earlier; the member for Glace Bay was asking some financial questions. The question I want to ask is - we understand that the shipyard contract and the $25 billion that it's going to bring to our local economy is going to be fabulous for our province and I don't think there's a member in this House who doesn't agree with that. I've heard numbers of 1,000 jobs created at the shipyard in its peak. The biggest question is do we know how many jobs have been created at the shipyard so far? When will that actual peak production hit? I know we're not supposed to start production until 2015, I think, but have there been jobs created so far? If so, when is the peak expected to be?

 

MR. PARIS: Right now at Irving shipyard there are over 1,000 employees. I want to be cautious and I don't want to say something that might, at some point in time, come and bite me because when it comes to this contract, we are bound at the hip to the federal government. Having said that, it's kind of hard for any one of us to make a prediction about the future, when a large part of it depends on someone else.

 

Anyway, having said that, I'm going to attempt to make a stab at it. We're at 1,000 people now, that's a $300 million construction cost. I would predict that that number is going to continue to grow; at what rate, I don't know. It depends on, I would say, how many work days they can get in.

 

You asked the question - when will this peak? You threw out my number, 11,500. The peak for that is we're probably looking at 2020, 2019 before we realize that's the peak. That's years out, but take into consideration this is the year 2013-14, the years go by pretty quickly. All in all it's a good investment. It's a huge investment and I think we all agree that we are a better place as a result.

 

MR. ORRELL: I guess my question would be, of the money that Irving is going to be getting from the province, do we know when that money will be distributed to them or has it been distributed already? If it hasn't been distributed already and it's going to be distributed over the next year or two, is that money coming out of this year's budget or will it come out of future budgets?

 

MR. PARIS: To date, there have been no disbursements of funds to Irving. The $260 million, that disbursement could possibly start within the next couple of years. I'm sure the member is aware that $260 million is based on meeting certain milestones. Irving has to first reach a milestone and they are aggressive milestones, certainly from our perspective.

 

The $44 million for disbursement will be solely based on projects coming in. I say very respectfully, through the chairman to the member for Cape Breton North, it's very difficult for us to be very precise in our predictions. This is a process that the federal government has control over more so than Irving or than what the province does as far as timeline goes. Those are the best projections we can make at this point in time until things become - I'm not going to say clearer - more definite, as we move into the actual finishing off the capital costs and getting into the actual cutting of steel.

 

MR. ORRELL: Where I was trying to go with that question and lead-up to it was that if that money hasn't been drawn, you say none has been drawn on yet, and this year we see a flurry of activity in and around the shipyard and they're going to need that money or they're going to request that money, we went from $70 million and we used $44 million of it and we have about $29 million left for crisis or something that may happen, and God forbid we hope that doesn't happen, we were talking earlier about if they do decide they need that money this year and we don't have enough, where are we going to get the money that we're going to use for that?

 

MR. PARIS: I hope I can explain this so it makes some sense. The $260 million is earned forgiveness so it's not going to flow. Irving has to earn forgiveness for that money to be expensed. In the world of accounting that money will be expensed on paper and the $44 million is a repayable loan. Here again, we have the financial means to take care of any obligation that we have with respect to the Irving commitment and it will actually flow over . . .

 

MADAM CHAIRMAN: Order, please. The time allotted for consideration of Supply today has elapsed.

 

The honourable Government House Leader.

 

HON. FRANK CORBETT: Madam Chairman, I move that the committee now rise and report its progress to the House.

 

MADAM CHAIRMAN: The motion is carried.

 

We stand adjourned.

 

[The committee adjourned at 5:47 p.m.]