HALIFAX, TUESDAY, APRIL 16, 2013

 

COMMITTEE OF THE WHOLE HOUSE ON SUPPLY

 

2:48 P.M.

 

CHAIRMAN

Mr. Alfie MacLeod

 

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

 

The honourable member for Hants West, you have about 12 minutes left.

 

MR. CHUCK PORTER: It is good to be part of the estimates here this afternoon and I welcome the minister back, and his staff. I'm sure that in 12 minutes we won't have a lot of time to barely get started here but we'll have another round after the Liberal caucus has their hour.

 

I wanted to get into this and there is a lot to talk about when we think about energy in the Province of Nova Scotia, where it has been, where it's going, or where it's projected to be going and why it's going. Minister, I know that I've said this before and I'm sure all members of this House, regardless of the area they represent, run into similar discussions, questions, and comments regarding all of what has taken place in the last few years with regard to future energy needs, resources, and where we're going to get that.

 

They will all state similar cases, I know in my office we deal with people - and I've mentioned this to you before in Question Period and outside of that - we deal with people on a regular basis who struggle with their energy costs, their power rates, and it doesn't matter if it is everyday residential customers or business customers. We all know about the larger industries that have struggled throughout the province in the last couple of years and things that have been tried and investments that have been made to help them through tougher times.

 

It's the same thing. It's the ever-increasing cost of energy in this province, and in all honesty, everyone is looking for the best long-term solution when it comes to energy and they base that on so many things. We hear about outmigration and people going to work, still living here but working elsewhere, earning money in Alberta for example, being gone a month or three weeks or whatever the plan might be. It really depends on where you're at out there, whether you're in Fort McMurray or somewhere else, it doesn't really matter. There are a variety of different companies that are doing a variety of different plans and models that work for them and for the people that they hire from Nova Scotia and other eastern provinces here in this country.

 

They're all thinking about how life could be better and they base that on, one, their income obviously, that means everything to them. They have to be able to provide for their families. They have to be able to pay the bills. They have wants and things that they need, and there are things that they would like to have as well, and they take all of that into consideration. You know, I'd like to buy a new car, they think about that. They think about remortgaging, mortgaging their home, or buying a new a home, a young family especially.

 

They're realizing, not just now but it has been - it has certainly gotten tougher. It has gotten tougher to live in this province. It is getting more expensive to live in this province and the energy issue and the debate around it. Now, minister, you've travelled the province on your - I was going to call it a "back to balance tour" but we'll call it whatever it was you called it, and I'm sure you'll clarify the right language when you have an opportunity to do so. I certainly don't mean any disrespect to whatever the tour was called. It just slips my mind at the moment. You travelled the province.

 

You have done a provincial tour and you've claimed that you've talked to a few hundred people, over 500 people I think you quoted in the House, maybe last week in Question Period at one point. There are nearly one million, a little less than one million people who live in this province; there are about 425,000 households or so. There are a lot of ratepayers, there are businesses. I'm not telling you anything you don't know, I know that, but reminding you of the number. You travel around and say that people seem to be okay with the plan or accepting of the plan.

 

I'm going to raise this issue and the travelling around the province because nobody that has come into my office has said, you know what? We're pretty content with where we are. Not one person has ever said that to me. As a matter of fact, when they are coming in, they are coming in with a power bill. Unfortunately, what happens in this province is they'll come in with that power bill and it will be their disconnection notice, or final disconnection notice because they've been struggling through those two, three, or four months and they've been wondering what they're going to do. Then when they get that one that says "Final Notice" and the date is on it, they're in panic mode and they don't know what to do.

 

Somebody says go see your MLA, so they come in; that's okay, we work with them. Fortunately, over the last number of years, we have had a relationship with Nova Scotia Power. We can pick up the phone and call them and we can attempt, and a lot of times we are successful, I might add, in working something out, finding a plan that will work to help them. But it doesn't really help them, it just puts it out further and it puts it off because as we're helping them and as we're negotiating with them, the new bill is being calculated and it's coming too. It's not easier, it's just extending it out and it's trying to help them work through that.

 

There are many of those. It is surprising actually how many of those there are. I know what I see. I know I'm not the only one. It's just not possible that I'm the only member of 52 in this House in the last number of years who has dealt with this; I know that's not possible. I don't know what the numbers are at Nova Scotia Power. I've even asked the great people we work with there who have helped us through this situation on many occasions what the real numbers are that might come in the door trying to negotiate final notices, cut-offs and things like that, but I'm sure they are pretty high. I'm sure it has to be pretty high and I think that's only getting more difficult, based on what they tell me.

 

I'll go up the street and I'll talk to business owners, small-business owners, and we've all got them. I've got a lot of small businesses in the Town of Windsor and throughout the rural municipality of West Hants and in Hantsport. We've got a lot of them. It's doesn't matter where we go, it's the same thing when you talk about their needs. My job is to go and see them and to talk about what their needs are, what's affecting them, and how we can make Nova Scotia business successful, how can we make living in this province affordable for them, can we make it any better and what are things that they want.

 

It's consistent, you've heard it numerous times not just from me, from many, you've heard numerous times and the message is consistent. Energy plays a role fortunately, or unfortunately, in our province - more unfortunately, I guess, when we see the cost continue to rise. We know that it has gone up over the years. We know that it just went up another 3 per cent in January, and we know it's going up another 3 per cent next January, in 2014. God knows after that what it will be.

 

Part of the problem is when we talk to them, we try to instill hope. We want to instill hope in the Province of Nova Scotia, and I think the government wants to instill hope in the Province of Nova Scotia, too, and I think any government that has ever been there has wanted to do that. I think that they've all wanted to make the province a better place to be. They want people to stay here, they want to work.

 

We boast about creating jobs, you stood on your feet in this House, minister, numerous times and talked about jobs that are going to be created, the many and thousands of jobs that are going to be created in this whole energy sector, although people struggle to see where those jobs are. I'm sure we'll get into that discussion and more of that debate and back and worth as we move forward today. They wonder about that, but more importantly they wonder how we are going to be able to stabilize rates. They hear quotes about 35 years and they hear quotes about the fairest, the cheapest energy rates in the province, and there has never been an answer on what that really means; what is the figure?

 

They don't go out and buy that car that I was talking about a few minutes ago and they don't talk about mortgages and starting families and all of those things that are affecting their lives every day, without knowing there is a value that goes with that, there is a cost. Can I afford the car, can I afford the mortgage and the home that I want to live in in Nova Scotia, and can I afford to put food on the table?

 

I can tell you that where I come from, unfortunately, there are lot of people unemployed. We lost 150 people, roughly, at Fundy Gypsum over the course of a couple of years when they were laid off and shut down. We lost 135 in Hantsport recently, I know that you are aware of those numbers so we're dealing with a lot of things, and one more stressor on top of that is another increase come January of increased power rates, and these people are homeowners, these people have lived there for years. They are contributors to the tax base, they are people that shop locally and spend the money that they have. They want to live a certain lifestyle, you can't discredit them for that; that's all fair and there is nothing wrong with that, that's reasonable. That's how we as people think and how we live, but we have to be able to afford to live within our means. Lots of people get themselves caught up and get outside of that.

 

One of the things, unfortunately, that contribute to that is the stress of some of the everyday things that go along with trying to live in this province, one of them being high energy costs. I talked a couple of minutes ago about what they do, they get the bill and it is whatever - it doesn't matter what the figure is. When I see them, generally we're up to around a couple thousand dollars and some I've seen as high as $3,000 where they're threatening to cut them off and they are now in panic mode, they don't know what they're going to do. Those people are now in a real bind and they are saying, how are we supposed to stay here?

 

These people, by the way, are not people who are on social services - not that I discredit them in any way - these are people that are working every day, these are homeowners who are trying to make the bills, who are trying to purchase food for their families, who are trying to enrol them in baseball and keep their kids healthy as an example, or soccer, or hockey if they can afford to do so, and all of those things, or just take part in everyday activities after school that are normal that a lot of you would be aware of. All of that has a cost associated with it.

 

I can tell you that those are everyday people in our province in all of our constituencies, Mr. Minister, that you deal with, too, and I know that you do. I know that your colleagues in the government caucus do, I know that the people on this side of the House, the members here do. I know that it's not just me dealing with these issues. At some point, Mr. Minister, we have to probably "divulge" - that may be the right word that I'm looking for here - what the real cost of this is. It's great for you to stand on your feet and say "fairest, cheapest, long term", and we're going to get more into that "35 years is a long time."

 

People are going, wow, 35 years, 50 years, or whatever this might end up being, and they think about the deal that was already created over there in Newfoundland and Quebec and they look at that and all of this stuff - there are a lot of facts but they only see the high-level stuff. A lot of people don't dig really deep into it - maybe they need to dig more and maybe they need to figure out what is best, but they need to do that based on facts. So far there are facts that are missing, a lot of facts, but most importantly the biggest fact is the cost. It's almost like we're afraid to betray that cost or to let it out because we don't want to scare anybody further away. Maybe the cost is - we'd like to think that it's reasonable and if it's the fairest cost then we should do it, we should tell people.

 

It doesn't matter what we as politicians think, it doesn't matter at all what we in this House - it doesn't matter to us. It's the people that we represent that we're supposed to be worrying about and we're questioning about and that matters. Those are the everyday people; those are the small businesses in my community that just lost jobs that I care about, that I want to make sure stay there.

 

MR. CHAIRMAN: Order, please. The time allotted for this round of questioning has expired.

 

The honourable member for Dartmouth East.

 

MR. ANDREW YOUNGER: I'm going to try to pick up from where we were yesterday. We're trying to go through some of the issues that you raised in your opening statement. I'm hoping to have some time to go through some of the budget issues, which hopefully you will be able to explain as well. I guess they're all related to the budget.

 

Minister, you had talked about the biomass facility in your opening statement and you also talked about the idea of reducing the cost. The minister will be aware that the Utility and Review Board found they could not approve the biomass facility unless the government ordered it to do so. They found it was not required to meet the environmental targets and would add an additional cost to ratepayers. In their decision they stated that unless the minister required that this facility be brought on-line, they would not be able to approve it.

 

It is my recollection, I think it might have been the deputy or somebody from your department; I don't want to say the wrong person. I did write the board saying that it would be required that the biomass facility be required to be operated. At the time it was understood, perhaps incorrectly, that it would require legislation to make that happen and I'd just like to know whether that has been done now by regulation or whether there is legislation forthcoming to make that happen.

 

MR. PARKER: I certainly welcome the opportunity here again to have an open and frank discussion on energy issues with both the Progressive Conservative caucus and the Liberal caucus. While I didn't get an opportunity to respond to the honourable member for Hants West, I'm sure we'll have an opportunity, before the afternoon is out, to look at some of the issues they feel are important. I welcome the opportunity to discuss issues here with the Energy Critic from the Official Opposition. I just want to take half a second to introduce my staff here with me today. On my left is Deputy Minister Murray Coolican and on my right is Remi MacDonell, our manager of Financial Services with the department.

 

The honourable member mentions the biomass facility; of course, that project is moving right along - it's under construction, coming towards completion, and it is expected to be open sometime this summer. That biomass facility will produce electricity that can be used on the open market and by the mill there as well. Also, it's producing steam that can be used by the Stern Group there at Port Hawkesbury in their operation to produce supercalendered paper. It's a double use of the biomass product.

 

There are regulations that have been established within the Department of Energy and in consultation with the Department of Natural Resources. The basic premise on the use of biomass from our forest is that the highest and best use still applies. The good quality logs or stud wood will go for those purposes. When you come down the supply chain into a lower value or lower quality wood, that's what will end up as biomass fuel. That could be stems that are crooked, diseased, or for some reason they don't meet a higher grade. Principles of good forest stewardship still need to apply and that will be monitored carefully. I know one of the regulations that is in place is ensuring that good quality wood does go to a hardwood lumber mill or used for making fine quality hardwood products, whether it's furniture, flooring or whatever; it would not be used for biomass production.

 

The honourable member asked about the regulations, and certainly changes will be coming forward on those regulations before the facility opens sometime in mid-summer. We're working on those at this point in time and those will be available over the coming months.

 

Certainly that renewable electricity policy or plan that we have in the province, part of that is biomass, part of it is wind, part of it is tidal, and part of it is other sources, but biomass, of course, can come from not only forest fibre but from farm waste. There is a lot of research being done right now on hay or grass pellets to use for energy production. We have a lot of COMFIT projects that are underway that look at some of these other sources. I know there is some strong interest in using animal waste such as from cattle. More recently, you may have read about the possibility of using mink waste as a biomass source.

 

There is a lot of potential, but there are rules and regulations that have to be followed and they will be strictly monitored to ensure that the use of that biomass is done properly. I hope I've been able to answer the member's question in that regard.

 

MR. YOUNGER: I guess the minister did answer the question that those regulations are coming, but maybe it would be helpful if the minister could try to focus on the question and not all the other peripheral issues. We might be able to get through more of this in a more efficient manner, which I know would probably please him and his staff as well.

I guess the question becomes - and we can have a discussion about other forms of biomass after. I am aware of those and very supportive of some of the ones that he mentioned such as switchgrass and Miscanthus. In fact, I've visited a number of the test trials at the Agricultural College.

 

As it comes down to the Port Hawkesbury mill, I guess there are two issues that I would like to hear the minister address. One, I heard the minister state that it will only be the low quality fibre and so forth, which was, in fact, the original plan, although that is not what the Stern mill now says or what Nova Scotia Power says. I'm sure that the minister must have seen the RFP that went out from Nova Scotia Power to supply this biomass facility. It will now use virgin material. So we don't get into a debate of what Nova Scotia Power may or may not do, let's accept that they will, in fact, ship the higher value logs to other mills and we'll see if that happens.

 

The original intent on the biomass plant - and I've had the fortune of having been briefed at the Port Hawkesbury mill under the old plan and under the new plan. Under the old plan, it was all going to be waste material, either waste material from the processing of the supercalendered and other papers they make there, or it was going to be waste material such as what you talked about, some stems, crooked stems, the exact things that the minister spoke about. The RFP that Nova Scotia Power put out to supply that facility actually calls for virgin timber and calls for virgin timber in quite a significant quantity that was never conceived at the time.

 

I would like the minister's reaction to that. I would also like his reaction to the second part of what I asked before. He answered one part but not the other part, which was that he's talking about the lowest and fairest cost for electricity, but the board has said that this project does not meet that. That is why, under the regulations as they existed - and they would only approve this if the regulations were amended, which is why, as the minister has admitted, the regulations are now being amended to - I guess it will meet the conditions because they will be required by regulation to run it, so they have no choice. But the board could not approve it without the change of regulations, that's in their decision. It's why your deputy had to write a letter to the board saying that those regulations were done.

 

I'm trying to get at what the minister's thought process is in this. On the one hand, he is trying to achieve the best in terms of environmental and energy and in prices, when on the other hand the board determined that after the switch of the mill, this does not meet that condition and it required a regulatory change to require the mill to do that. The change of regulations to require this mill to move forward does not seem to match - well, it doesn't match Natural Resources stuff either, but we'll discuss that when you come back up in a different portfolio - it doesn't match the lowest cost issue. The board has said that and that is why you have to change the regulations. I'm trying to understand the rationale behind continuing - it's done now, and I get that - but why at the time was it determined that you would still move ahead with that?

 

MR. PARKER: Mr. Chairman, I'm trying to figure out which minister I am right now, because we are getting quite a few Natural Resources questions here, but I guess there is certainly a strong interrelationship between both the portfolios.

 

The biomass facility is regulated both under the Department of Energy and certainly with strong input from the Department of Natural Resources. Of course, the cap on the actual amount of biomass that can be used has now been reduced from 500,000 dry tons down to 350,000 dry tons. That's province-wide and certainly the Port Hawkesbury facility is part of the total amount of the 350,000 dry tons.

 

There are strict rules in place through the renewable energy plan that have to be followed. As we talked about, the highest and best use is certainly the overriding principle on that. The honourable member mentioned good quality logs to ensure that they do go to a local mill such as B.A. Fraser; Finewood Flooring; Murray MacDonald, M.R. MacDonald Holdings Ltd.; or Groupe Savoie, certainly one of the larger hardwood mills in the area.

 

There have been a number of agreements signed between the Stern Group and some of these hardwood mills, and others are still being worked on and arranged. It's important that those good quality maple or birch or ash logs be shipped to these hardwood facilities so they provide good jobs in the region. It really helps the whole regional economy in the supply chain.

 

Again, the principle is that the highest and best use of those good quality logs are going to the mills that require those products, and lesser quality items or stems are going towards the biomass facility. As I mentioned earlier, that could be stems that are crooked or stems that are diseased, just not suitable for making furniture or flooring or whatever the use might be.

 

Part of the principle here, in keeping with the natural resources strategy, is that good quality forestry includes selection harvesting, where often some of the lesser-value stems will be taken out and allow a young tree that's maybe six inches in diameter at breast height to continue to grow. Those stems that don't look like they have much potential to grow, they're too crowded, they thin them out and that is part of selection harvesting. It's also part of pre-commercial thinning. It allows certain trees that are strong and healthy to grow, and the less desirable ones are cut out and those ones will end up in the biomass pile.

 

I think overall it's a win-win. When we do things right it helps our forests become stronger and healthier. It's creating good jobs in the regional economy in the meantime and it's ensuring the best quality product goes to sawmills where it can be value added into further production. As I said, it's a win-win in the whole supply chain.

 

Again, we're working on the regulations here to finalize those before the facility is up and running this summer. I would say stay tuned, there will be a chance for input as we draw up those final regulations.

 

MR. YOUNGER: I don't want to drift too much into the harvesting practices. We'll have an opportunity to discuss that later today or Thursday. I will just say that the issue really comes down to, and an issue the government has not given an answer to, is the fact that on the one hand they claim to be trying to achieve the lowest cost energy, meeting the environmental regulations, but in this case it was actually ruled that this project did not meet that and the regulations had to be changed in order for that to happen. I wish I had the decision right in front of me but essentially, in a nutshell, the board said this was not an economic project for ratepayers.

 

The minister can talk about good jobs and so forth around harvesting for biomass, but I can tell you that's not what we're hearing in the field. In fact, we're hearing the opposite; this is taking away opportunities because of the volume to which this has increased for harvesting of biomass. In fact, myself and the member for Kings West both talked to many harvesters who now find themselves, because of that decision, in a position where they're actually at a disadvantage versus the opportunity that existed before.

 

We met with a lot of hardwood manufacturers who are now having more difficulty accessing that hardwood. That's something we'll talk about in your other portfolio, in terms of the access issue. I want to separate the two just for the sake of you having the correct staff here to be able to address the harvesting practices. On the side of the cost, the board ruled that it was an uneconomic project for ratepayers. It didn't make sense, financially, for ratepayers and that was the only reason. If it did make sense, they would have approved the project. Instead, they said if you are going to require the project to go ahead by regulation, we will let it go ahead. I'm actually surprised to hear the regulations haven't been changed yet to require it, since it's coming on stream.

 

One assumes that your department has given a letter of guarantee or something to Nova Scotia Power so that they are not at risk of opening it and your department changing their mind. Maybe, as I say, we'll have a chance to get into the harvesting later, but could the minister tell us whether they have given any kind of guarantee to Nova Scotia Power that the Government of Nova Scotia will change the regulations before that plant opens?

 

Anything can happen. If there is an election and there happens to be a change of government in that time, if there's a change of position of the government, there are a lot of things that can happen. The minister is aware of that. Here we have Nova Scotia Power that has now taken over a biomass plant, is opening it and we now find out the regulations actually haven't been changed in accordance with a board order, which is a little bit of a surprise. To be frank, I assumed that they probably would have been changed immediately when that board order came out. What guarantees have been given to Nova Scotia Power that the regulations will be done and in the case that the regulations are not done to allow that and therefore ratepayers can't be charged that amount - which they can't be unless the regulations are, under the board order - what penalties, if any, has the province agreed to to reimburse Nova Scotia Power for any failure to amend those regulations?

 

MR. PARKER: We've made a commitment to diversify our energy portfolio. For too many years we relied on just one single source of fuel, which was coal. Before that previous governments relied for far too long on costly imported oil. Today we have a plan to get off of one single source, or one single fossil fuel, and truly to diversify our energy portfolio. Biomass is certainly a part of that.

 

Whether it's a cogeneration facility at Port Hawkesbury, both electricity and steam are being produced there, we're diversifying into wind energy, both small projects of the COMFIT program and larger projects through the Renewable Electricity Administrator program. We have a number of large wind farms in the province now supplying up to 36 per cent of our energy on a good day, a number of COMFIT projects that are now coming on stream that will help get us off of dirty imported coal. We know that will still be part of the energy mix. Tidal energy is also a very important part of our renewable electricity plan.

 

There is a whole mix of things. Natural gas, as I mentioned in Question Period, is a part of our mix now and we have both the containerized natural gas that can be trucked to the customer, to an industry somewhere in the province, as well as the pipeline expansion into Pictou County and beyond. There is a whole diversity of energy sources, including the biomass that the honourable member has referenced, but as far as the biomass facility there will be amendments to the regulations coming forth in a timely manner. We've made that commitment to the Utility and Review Board, those changes will be forthcoming and we plan to keep that commitment. Stay tuned and those regulations will soon be forthcoming and be in place to ensure that we have a sustainable biomass industry and also a sustainable energy mix for this province.

 

MR. YOUNGER: I'll ask the question again because it wasn't actually answered. The question is has a guarantee been given to Nova Scotia Power to ensure - because that is very much directly a budget question. If a guarantee has been given to them then there would have to be an allowance made in the books for a default on that guarantee. It's a very straightforward question. Has a guarantee been given to Nova Scotia Power that the regulations will be amended in accordance with the board ruling?

 

MR. PARKER: As I just reiterated, we have made a commitment to the URB to change the regulations as required, to ensure that we have everything in place to protect ratepayers in this province, to protect the forest industry for sustainability. The letter that was written by my deputy here is assurance that that will occur. It is a full commitment to the board, and then of course the board has to make the decision on how best to move that forward, but be assured that the commitment is there to change those regulations.

 

MR. YOUNGER: The minister should be aware the board has already made a decision on this and the board said the project was uneconomic and was not financially viable for ratepayers unless the government ordered it, which is why the letter was written. If I understand the minister, he is saying that the only commitment that has been made is the letter to the board. Given that those regulations have not been amended - and I'll be honest, I actually thought he was going to tell me yesterday it has been amended and we're moving ahead, it has been opened but they haven't been, which then creates financial liability for the province in the event that that changes. Given that we are now into another fiscal year, what amount has been recorded on the books as a potential liability in the event that the regulations are not amended?

 

MR. PARKER: I've already mentioned, Mr. Chairman, we've made a commitment to the URB to change the regulations as required, and that is in writing from the Deputy Minister of Energy. Beyond that, there is no further commitment.

 

MR. YOUNGER: It's funny to listen to the government talk a lot about Generally Accepted Accounting Principles and all that sort of thing around the budget, and it's all above-board. When you have a liability like that that has not been fully enacted, you would generally record that on the books as your potential liability in case it doesn't happen.

 

Yes, it might be something that then you can say that will disappear down the road in a few months when it disappears. But that's pretty standard practice and so I'm surprised that the government hasn't recorded that. I guess we will move on.

 

I will also say that I've heard the minister and also his ministerial assistant say the same thing previously - I can't remember the minister's exact wording about being single-source coal. Nova Scotia has never actually been single-source coal. Nova Scotia has actually had a very large amount of hydro and actually most of the electricity in Halifax for many years was generated by hydro and some of it continues to be generated by hydro.

 

The minister should be aware of this, of course, because even outside of metro the government recently enabled Nova Scotia Power - Emera, I guess - to purchase one of the hydro plants that had been owned by Bowater. It's a little bit strange for the minister to stand up and claim the only source of energy in Nova Scotia was coal, which is what he just said, when for well over a century there has been a reasonably significant hydro usage as well. I'm sure the minister has been to the Wreck Cove site in Cape Breton, which is actually one of the largest hydro facilities in the Maritimes - obviously not in Atlantic Canada, because you get into Churchill Falls and stuff.

 

He stands up a lot and says that and I think every time he does, somebody associated with those hydro plants tends to send me an e-mail, and I'm sure to other members, saying, does he not know we have hydro plants in this province and have for over a century? Granted, they are not a huge amount and I certainly support some of the move away, but to try to misrepresent the energy mix in the province is a bit unfortunate.

 

The other one the minister talked about in his opening statement was where some of the programs to switch people to wood stoves, which you can get - some of that would be through Efficiency Nova Scotia. Some of that is funded through the electricity rate drawn on electric heat and some is funded through other sources or through the oil program. The minister has, I believe the number is $14.5 million, he's proposing to transfer to Efficiency Nova Scotia for non-electricity efficiency programs. Before I get to the next question, to ensure that I have the background correct on that, does that also include some of these conversions on the wood/pellet stoves to allow people to switch from oil heat to that source? Is that only available to electric heat customers?

 

MR. PARKER: I'm pleased to rise again and talk a bit more about these issues the member is raising. I mentioned earlier - I wasn't particularly mentioning that our total energy source was coming from coal or from oil or any other fossil fuel. About seven years ago our energy source was about 85 per cent coming from fossil fuels. Most of that was coal or petroleum coke or a hard fossil fuel. We've worked very hard to bring that down. Today below 60 per cent of our energy is produced from coal. Projecting out to 2030 we'll be down to about one-third of our energy coming from coal and more than 50 per cent will come from renewable sources including the very things we have been talking about: wind energy, tidal energy, sustainable biomass, and other sources.

 

The honourable member references our heritage hydroelectricity in the province. Certainly, as it was mentioned, for many decades we've had hydroelectricity and it has been mentioned in our renewable electricity plan as - we call it heritage hydro because it has been around for so long whether it's in Cape Breton, on the mainland, in eastern Nova Scotia or in southwestern Nova Scotia.

 

About 10 per cent of our energy has come from hydroelectricity, and of course we have a great opportunity now with hydroelectricity from our neighbour in Newfoundland and Labrador and the opportunity there to bring in clean, green, renewable energy that will add to our renewable source. It is local in the Atlantic region and it's green and it's going to provide for more efficiency and really a more reliable source of energy. We do rely on the hydroelectricity that is produced here in Nova Scotia, up to about 10 per cent of our electricity in the past has come from that source. But we're changing: we're transforming our energy sector into more diversification.

 

I just wanted to make note of that and I believe the honourable member was starting to talk about Efficiency Nova Scotia and some of the great programs that are available there to small businesses, to homeowners, and to industry. Really the best way to not have to build a new power plant, a new coal or natural gas plant is to wisely use the energy that we are producing, and that is why we have so many great programs for new home builds, for existing homes, for small businesses, for ice rinks, on it goes, to help Nova Scotians save energy, and that's the best dollar that they can spend in the energy field.

 

I believe the member's question was around the - I'm trying to remember exactly what it was now - at any rate the answer is yes, it is included in our budget of $17.5 million last year and I believe it's a conversion from oil to wood and that's part of the energy efficiency program.

 

MR. CHAIRMAN: Would the honourable member from Dartmouth East allow an introduction?

 

The honourable member for Truro-Bible Hill.

 

MS. LENORE ZANN: Actually, on the note of clean, green, renewable, and constantly accessible energy, I would like to say we have a wonderful group visiting us today, here in the House, from Edmonton. It is the Edmonton Youth Choir. They have Susan Farrell, Cherie Larson, and Adam Robertson who are their chaperones. Please stand up so we can see you and welcome you. Also, their tour guide is John James. I would like you to have the honour of the applause of the House. Welcome to Halifax, to the Legislature. (Applause)

 

MR. CHAIRMAN: Thank you very much and we welcome all our guests to the gallery today.

 

The honourable member for Dartmouth East has the floor.

 

MR. YOUNGER: Maybe if the minister doesn't give such a long preamble he might not forget my question by the time he gets to the end of it next time.

 

The issue I want to ask him is that his government and his department are funding support to move from oil as a heat source to pellet stoves at the same time that the federal government has issued a model bylaw for municipalities to regulate pellet stoves and wood stoves because of the problem with air quality, asthmatics, breathing issues and particles in the air. I guess from a practical point of view the government has decided to fund this to reduce the consumption of oil as a heat source and is replacing it with a source that the federal government has only recently come out and said that they wish to bring in stricter regulations around air quality. I wonder if the minister could explain that disconnect.

 

MR. PARKER: I, too, want to welcome the Edmonton choir group that's here. I believe Ms. Farrell has a Pictou connection so most welcome to have you here; I've heard lots of good things about you, so welcome.

 

To come back to the member's question about wood stoves, certainly a lot of Nova Scotians rely on wood energy in this province. One estimate I heard not too far back was somewhere like 100,000 Nova Scotia families burn wood in this province. Traditionally, for decades, for centuries, really, Nova Scotians have a history of going out to the family woodlot and cutting their winter supply and drying it either in the woodlot or bringing it home to store it to dry. It's a very important source of energy for many families in this province.

 

Over time regulations have changed and today the standards are much higher for environmental protection of the neighbourhood. I know there are CSA standards that manufacturers have to meet, and I know there's another standard, it starts - I can't remember the exact acronym, but the standards are constantly changing. It is important that when the stove is installed that it's meeting those standards, it's part of the code set out by the federal government that you have to have those standards in your home.

 

I know a few years back I had the opportunity to replace my wood stove. It was manufactured by Acadian Woodstoves in Pictou County. It was time for a new one. I researched the market and there was an installer in the New Glasgow area that had the very latest in the standards. It's very energy efficient, it burns less wood, and it's actually cost saving. A number of Nova Scotians now are doing the same thing and they're taking advantage of the Efficiency Nova Scotia programs on a variety of heating sources, and certainly replacing the wood stove with a more efficient unit is part of that.

 

But, again, they have to meet the federal standards for environmental compliance, and that is exactly what's being done. I don't have it right here with me, but I think Terry Punch was one of those people we've referred to in the past. Mr. Punch, of course, is a well-known genealogist in the province and he replaced his unit that he had previously with a more modern and efficient wood stove, and he saved more than $600 a year in his heating costs. Year after year, that's a significant saving.

 

Probably there are other members here in the Legislature who perhaps also burn wood at home, the honourable member for Digby-Annapolis being one of them, and the honourable member for Yarmouth. It's a good source of heat that has traditionally been used, but the standards are changing and the appliances that we use in our homes have to meet all those federal regulations.

 

MR. YOUNGER: Thank you. It doesn't really answer the question. The question was, it's not about whether wood or pellets can be a good heat source or whether they're cheaper at the moment, I don't dispute that. In fact, I've often looked at getting a wood stove myself. It's not really even about whether it's a good choice. It's the question that the provincial government is funding a program to encourage people to change it, at the same time the federal government has now distributed to all the municipalities a model bylaw that's well over 100 pages long, to control the emissions because of complaints to Health Canada about particulate matter in the air as a result of the use of wood stoves and pellet stoves.

 

It just seems like the federal government is trying to address an issue that has been raised as a concern by Health Canada or to Health Canada, and they've obviously seen it to be a significant enough concern that they have now drafted the model bylaw for municipalities to adopt - and I actually have no idea why they think it should be regulated at the municipal level, but so be it, they've obviously determined that. On the flip side, the provincial government is going out and saying change your oil furnace for wood or pellets or whatever, without - and if you look at that program, while the minister is correct insofar as it obviously has to be a federally approved device - and probably the Department of Labour here too, I would assume - it has met all the appropriate certifications - CSA, whatever else there may be that you have as a certification on a wood stove. It is almost a certainty that it would not meet any of the proposed regulations in the model bylaw.

 

It sounds like the minister's department isn't talking to the federal government and may not even be speaking to the province's own Department of Environment who apparently had input on the model bylaw. That is the disconnect I'm trying to get at. I'm trying to understand - obviously somebody comes and proposes this program; it has decided to fund it. It's an electricity program. That's easy it's dealt with the Utility and Review Board and they decide whether they're going to fund or not. This is funded through a grant from the minister of - last year $17 million and this year $14.5 million. I just want to understand how that disconnect happens.

 

It seems like there are two levels of government that are now advocating things that are at odds with one another.

 

MR. PARKER: I'm certainly working with our partners in the federal government and partners at the municipal level. It is part of what we do at the provincial level, we have to coordinate and work together. As I mentioned, the standards are constantly changing and we certainly liaise with the federal Department of Natural Resources and the federal Department of Environment and the guidelines are set, the standards are constantly being raised. That standard is always increasing and something we're working to try to meet.

 

Certainly we work with our municipal partners, too, and they have the right to establish bylaws on the various topics; that's the role that a municipal government undertakes. Some municipalities have even gone as far as passing bylaws on certain days when the wind is down and the smoke from the chimneys, rather than going up through the atmosphere, it's coming back towards the ground. There are certain days that they issue an alert that you're not to have your fireplace going or your wood stove, but that's their prerogative, that's what they have the authority to do.

 

I'll undertake to find out what I can about the bylaw issue and to see how best we can work with our municipal partners in the best interests of our citizens of this province. The primary focus of the Efficiency Nova Scotia program is to save energy and whether from burning wood or burning any fuel source, the whole idea is to cut down on the amount of the fuel that is being used and to reduce the energy use. That's why we have programs around insulation, or pipe wraps, or low flush toilets, or aerators on the taps, a whole variety of programs that are often free to the homeowner; it's just a matter of registering with Efficiency Nova Scotia.

 

They have other programs that have rebates available on new home construction or upgrading existing homes. There are a number of programs, but really the whole focus is to reduce the amount of energy. If that means a more efficient appliance in a wood-burning instrument, then that is meeting the objective. But I will undertake to look at the bylaws and see what we can find out there.

 

MR. YOUNGER: As it happens, I have a copy of the model bylaw at my constituency office that I would be happy to make a copy of and drop in internal mail to the minister or drop it off so he can look at it. It's not a matter to me about whether they're bad or good or people should switch, it's really a matter of making sure that - the minister talks a lot about coal in this province and we have the federal government changing regulations and it just strikes me as here we go again with something else, where somebody goes and changes the regulations and one not talking to the other.

 

I'd like to ask about another apparent disconnect and this is actually on the hydro side of things. It would relate to the Maritime Link project but it doesn't necessarily have to be specific to that. The minister I'm sure will be aware that there are an increasing number of U.S. states now which do not count hydro energy from dams over a certain size as green energy.

 

There are a few that do, and if the minister requires I can get him a list of all the ones that don't because there was a major article that came out just the other week that actually listed them all. Churchill Falls is one that they were talking about where there are states that require energy, they are going to bring in energy from Churchill Falls but it won't count towards their green energy targets because it's not considered green and that is based on a number of studies which have pointed out that the concrete mass and the number of years associated with the carbon footprint and everything makes it a non-green project.

 

I'm going to say right now - I've tabled that information previously in this House but I can get it for him again. I understand there is a debate and that there are some places that choose to count it as green energy and there are some that don't, and that is a policy decision. In this province the minster chose - in fact, I think it was his predecessor - the government chose to amend the legislation to specifically count imported hydro as green energy and I would like to know what went into the decision making to decide that imported hydro would be counted toward green energy targets, whereas the majority of North American jurisdictions - I don't know the numbers outside of North America - have decided that imported hydroelectricity should not count toward green energy targets.

 

MR. PARKER: Certainly we've been blessed here in Nova Scotia for more than 100 years with our own sources of hydroelectricity. Certainly on the Mersey it has been there for a long time, Wreck Cove in Victoria County in Cape Breton, also on the Eastern Shore, and a few other places around our province. That has been an important heritage hydroelectricity that we have been able to harness for decades, really, in this province but we realize we are at the limits of our hydro potential and there are just no more rivers or waterfalls that can be harnessed in any great respect. There is some potential in run-of-the-river hydro, I guess you'd call it. With new technology some of that can be harnessed but really we're reaching the outer limit of what is possible there.

 

Through the foresight of this government and the Government of Newfoundland and Labrador, we saw the real hydroelectricity potential on the Lower Churchill River in Labrador. It's hydroelectricity that's available coming over the falls that can be harnessed and with modern transmission can be sold to the whole market in eastern North America. We're on that link; the Maritime Link will bring us clean, green, renewable energy.

 

We as a province have determined that, yes, it is green energy. I know some jurisdictions have said that, absolutely, it is green energy and others have not, as the member has pointed out. This jurisdiction, this province, has said it's a once-in-a-lifetime opportunity to bring hydroelectricity, a green source of energy, to our province. It is part of our renewable electricity plan and part of our energy mix to provide the lowest, fairest rates for Nova Scotians.

 

The other factor, and perhaps why we made that determination, is that I understand the environmental footprint of the Lower Churchill, in comparison to some of the other major hydroelectricity projects in Quebec, for example, is actually quite small. It is somewhere in about 10 per cent of the area that would be flooded compared to James Bay and some of the other large hydro projects in the Province of Quebec. That is another factor in determining that it is a green energy project that we can support and it's a very important part of our renewable electricity plan for this province.

 

Overall it's providing us an opportunity to again provide the cleanest, greenest energy to Nova Scotians, to provide price stability, to provide efficiencies of service and really to be a cornerstone of our renewable electricity plan, because once it's here it's going to allow us the opportunity to balance out some of the intermittent sources of energy that we have, like wind power and like tidal power that aren't always available to us but, of course, the hydroelectricity will be flowing all the time, 24 hours a day and will be available to balance out some of those intermittent sources. We're quite convinced that it is a green source of energy and a very important part of our energy mix as we move forward in this province.

 

MR. YOUNGER: I'm beginning to wonder how much the minister actually knows about the project. It's not a 24-hour project. The contract is for 7 a.m. until 11 p.m. so it is not actually 24-hour delivery from the Maritime Link. That is actually very specifically in the contract and there are good reasons for that, which Emera has gone over. The other issue is not - it's my understanding that the flooding may be part of it, and I've tabled the research studies in the last session of the House so the minister can easily get them if he wishes to look at them, but the issue is not actually about the flooding, in terms of whether the project is green, although I know we've heard from Sierra Club and some others that it's actually about the massing of concrete and the carbon emissions emitted during construction with the concrete.

 

The minister is probably aware that the Muskrat Falls project, for example, is actually already under construction. In fact, in a briefing I had by Nalcor a month or so ago in Newfoundland and Labrador, we were going through the slide show of pictures of just the day before and the work that was underway at that time. I think the question was really around - I don't dispute the minster, other than the run-of-river, there is probably no other hydro opportunities here except possibly as storage for backup on wind and things like that. There certainly is no large-scale hydro in Nova Scotia, and I agree with that and the minister. The question was really around - the minster said that they had made a decision that it would be green and count towards the green targets. That doesn't sound like a terribly good rationale that we just decided to do it.

 

There are states and provinces that have gone through considerable discussion about whether it should be considered, and counted, as green energy or not. You can make arguments on both sides of it, and I don't dispute that fact. But what I'm trying to find out is the decisions that went on here and the rationale here to decide that that should qualify as green energy. That strikes me as being a fairly significant question when part of the province's argument is that it will deliver good green energy to Nova Scotia and will help meet the targets that the government has set because if we were in certain other jurisdictions in Canada and the U.S. you might provide the energy, but it wouldn't count towards our green energy targets for two reasons: (1) because it's large-scale hydro; and (2) because it's imported power. The minister's department may have very good reasons for why it felt the regulations and the legislation should be amended.

 

The minister will recall that at the time of that legislation - I believe he was Speaker at the time - I actually raised concerns about this very same issue then and didn't really get an answer. I spoke about it at the time at the press briefing to say that somebody needs to explain why this is being counted. There were other people who are not with political organizations; in fact, some of the very same organizations the minister has said he has consulted on other things were there to speak against it, such as the Sierra Club and the Ecology Action Centre, to say it may or may not be a good project but it shouldn't count towards the green targets because of the carbon footprint, and so forth, in terms of the construction.

 

I encourage the minister to get the studies that were tabled here in the last session of the House talking about that issue. I just want to understand what the rationale was and what the thought process was, understanding that there are jurisdictions that have decided it in both ways. This government has decided that it should count and I think that we at least deserve to know why the government decided that it should count. Just thinking that that will help us reach the target faster really isn't a good reason, in my view. There actually has to be a scientific or some sort of basis behind that to say why we would do that.

 

Other jurisdictions have gone through that process and decided one way or the other. As I say, they have decided on both sides of that fence, they have decided either way, and I would like to have access to that information.

 

MR. PARKER: Certainly this is an issue that some jurisdictions believe firmly that it is clean, green, renewable energy, and others, for whatever reasons, have decided that it is not. I think in Canada, most of our Canadian provinces that have hydroelectricity certainly support the premise that it is a green energy. Newfoundland and Labrador obviously has agreed to that. Other producers of major hydro, such as the Province of Quebec, have certainly labelled it as green energy, and the Province of Manitoba would be another one. They're blessed with much hydroelectricity, much more so than Nova Scotia or New Brunswick. Some provinces are very fortunate to have a large source of hydroelectricity.

 

In our federal government, too, it is mandated that hydroelectricity is a green source, that it meets the environmental, federal regulations; it meets the greenhouse gas requirements for much-reduced pollution standards. Coming back to Hydro-Québec, I know our Premier had talked with the former Premier there, Premier Charest, about potential in that province, and certainly Premier Charest, at the time, had lobbied hard into some of the jurisdictions in the United States and said this is a green source of energy and it should be counted as such.

 

But you know, sometimes there are other reasons that jurisdictions will maybe balk at that idea and sometimes it is related to local politics. If a state in the U.S. has some local source of energy that they want to promote, or want to push, energy that's coming outside their jurisdiction from outside their country, you know, is "imported", they may have a political reason why they would feel that even though we believe it's good, clean, green energy, they may be opposed to it because it may hurt some local industry in their state.

 

I know the former Premier there had lobbied hard to the governors to try to allow that to be considered a renewable source of energy. Sometimes politics gets mixed up in it and people are protective of their own turf, their own jurisdiction, and want to ensure that it's their own local source, whatever that might be. Maybe it's coal. It's produced in abundance in some U.S. states, and maybe they're trying to protect their local industry and their local enterprise. There are a variety of reasons.

 

The other reason, of course, I mentioned earlier that there is a small footprint in Labrador where Lower Churchill River is being dammed to provide this hydroelectricity and in comparison to other major hydroelectric projects - there's a new one that's being contemplated in the Province of Quebec - and it's actually a much, much smaller area that would be flooded. I'm not saying that there aren't some impacts, but in comparison to some of the others, it's as little as 10 per cent impact, compared to other projects in that province.

 

Like I said, there are a variety of reasons this government has decided that it is clean, green, renewable energy, and it will provide stable electricity prices to Nova Scotians here for 35 years and really will be a source of energy that is going to open up the market and allow us to look at other sources of energy from other jurisdictions. We may be able, because of an improved transmission, to bring energy in from New Brunswick, or perhaps from the Province of Quebec, or maybe even from New England. It opens up many opportunities for us to - and because it is a clean, green source, it is part of our renewable electricity plan, and really will provide many future opportunities. Thank you very much.

 

MR. CHAIRMAN: Thank you. The time allotted for the Liberal caucus has expired.

 

The honourable member for Hants West.

 

MR. CHUCK PORTER: Mr. Chairman, does the minister, and/or his staff, need a couple of minutes, or are you guys okay for a bit? It's no problem if you do.

 

I want to pick up on something you were talking about a few minutes ago, which was the hydro. I think you might have briefly mentioned it there and that was the tidal. Where is the province with regard to tidal? I know there has been a fair bit of investment and interest in my area, down the Minas Basin. I haven't heard much about it in the last little while and I'm just wondering if the province is investigating any of this in any kind of deals, working on anything. Where are we going with tidal? I think we could all probably agree there is a wonderful opportunity out there. Whether we're able to ever get hold of it the way that we need to, to manage it and be able to harness that energy, is yet to be determined.

 

When we look at big projects and big money like we are going to spend in Newfoundland and Labrador and that they are going to spend, and where all this might or might not take us and what those costs might or might not be, I'm just curious. Where is the province when it comes to tidal creation and generation for years to come?

 

MR. PARKER: I welcome the honourable member. I didn't get a chance to respond to the first round when you were on your feet. It is good to have the opportunity to have this dialogue.

 

The honourable member mentions tidal energy and certainly we're blessed here in Nova Scotia with huge potential in our tidal energy field. That's because we have the Bay of Fundy with the highest tides in the world - up to 50 feet at times in the difference between high tide and low tide. Certainly worldwide we're recognized as one of the very few areas on our globe that has that huge potential for tidal energy.

 

Our research and work is well underway here in Nova Scotia. There are a couple of other areas in Scotland, Ireland and Korea that are trying to develop their tidal potential. A lot of the same players are active there as they are here. As the honourable member would know, we have our FORCE project in the Minas Basin, in the upper end of the Bay of Fundy there near Parrsboro. We have three consortiums there that are working to develop their proper type of technology and machine and enter into the water. We're not expecting one this year, but I think in the next year or so there will be at least one of those tried and see what potential it has.

 

The first project that went into the water was between Nova Scotia Power and their partner. Obviously, they learned some lessons from that and there is maybe more force there than they realized. When they took it out of the water, the blades were pretty well torn apart so there's much more potential there than they first thought. We have the potential here in Nova Scotia. On the first round we probably have about 300 megawatts of energy produced out of the tides, and probably in time, as much as 2,500 megawatts.

 

The power that is produced there will be a great help to Nova Scotians because it is a renewable source and it's just a matter of getting the technology down right. Probably one of the greatest benefits of the tidal energy is the technology that will be developed. In time we'll have the opportunity to export that technology worldwide, to other areas where there is this potential - in Great Britain or Asia or wherever. While the energy is important and we can use that both locally and to export, the technology that goes with it will really be of benefit.

 

The other big benefit to tidal energy is all the industry, the backup and the local resources to support the industry, whether that's a wharf in Hantsport, in Parrsboro, in Digby or wherever, it may be services that can be provided to the industry, accommodations or food services, engineering or other technological services. I know the Maritimes Energy Association is working hard to work with our offshore and our renewable energy, including tidal. There is huge potential for local spinoff, jobs in the local economy that can go along with that.

 

I mentioned we had three consortiums there. They are testing their equipment and are ready to enter into the water. The cable is ready to be laid to provide that electricity coming off the water and onshore. We'll be calling for a fourth call for bids and we'll see what other interest is out there. We feel confident that there is.

 

I should also mention that the URB is in the process now of determining what will be the rate, what these companies that are doing this research and when it goes commercial, what they will be paid for their energy. That is the job of the Utility and Review Board, to set down and determine what exactly it will be. That has to be fair to the industry but it has to be fair to Nova Scotians who will be consuming this power. It's a developmental process and at some point it will become commercial but initially during the development process there will be a FIT - a Feed-In Tariff rate - that will be determined to be fair.

 

Just as we've done on the smaller tidal projects on the COMFIT process, there are a number of small companies that are developing smaller scale energy projects not only in the Bay of Fundy, especially in the Digby Neck area, but also in the Bras d'Or Lakes in Cape Breton. That rate, the small COMFIT rate has been set at about 65 cents per kilowatt hour. That is high compared to other renewable energy, but it's a rate that will allow for the development of the industry on a smaller scale. In time that will come down and we're looking forward to the URB determining what the rate will be for larger projects such as those that are presently in the FORCE project in the Bay of Fundy.

 

I hope I've been able to answer at least some of your questions.

 

MR. PORTER: I guess what I was getting at there is it has gone quiet in the last little while, the discussion around tidal, and people are starting to talk about it again based solely on getting down to the wire on the Newfoundland and Labrador project and they are starting to think about other options that might exist. Over the last number of years there has been a fair bit of discussion about the Bay of Fundy and what's been going on out there. The potential out there is certainly believed and I know from working with Minas Basin, with whom I know you're familiar, they have had some investment down there with regard to the energy side of their business. I've been dealing with those folks for quite a number of years now and have seen some idea of what they plan to do out there or what they could do or what might work and some of the options.

 

When I think about the investment that we're looking at making in Newfoundland and Labrador and what the costs are, or costs that we're not yet aware of, I was curious. Are these guys who are out developing, are they coming to government and saying we think we need this amount of money from the Department of Energy? What's the actual involvement with the department and the potential for tidal, we'll call it - given that we're not there yet - through the development phases? Where would you see it if it were, in fact, producing some energy? Where is the department's involvement or does it strictly all go to the URB and the department has nothing to do with it? How does this work and would we be - I guess this is a multi-part question - what is the investment in this and have we even looked at an investment in this, to try to create what you often refer to as the fairer, cheaper, transparent - whatever language you want to use - fairest rates for Nova Scotians?

 

MR. PARKER: Our role as a province is to encourage investment and encourage development of new technology, which hopefully will lead to development of a brand-new industry in this province. It is really an industry that is developing and is really in the early stages. Like I mentioned earlier, there is research being done in other parts of the world, but really Nova Scotia and this part of our country is recognized as one of the leading potential energy sources for tidal. We're trying to set the framework for development. The federal government is co-operating with that, as well, and has helped participate in establishing the FORCE project in the Minas Basin, near Parrsboro.

 

We are putting the regulatory framework into place and we're working with researchers, with academics, with universities, and working with industry that has developed their own technology. They all have different ideas on what they think is the best system to harness that energy that is under the water. Some are looking at technology that looks something like a big airplane engine that rotates or brings in the energy. Others have what almost looks like a windmill that is on land, except in this case it's under the water. There is constant research and effort being done to see what is the best type of unit that can best bring that energy out of the water and onto the land to service our province and beyond.

 

Really, as a government, a lot of our energy is going into setting the proper regulatory framework and setting the guidelines that will allow this to move forward and really bring benefits to Nova Scotia - industrial benefits and jobs for Nova Scotians. We can be a world leader in this industry and we're in the right place at the right time to make it happen. Our job really is to be an initiator, to allow this process to move forward, and in time I think people will be coming to our doorsteps to see what we have here and to see how we've done it and allow it to move forward into other parts of the world. We'll be exporting technology and continuing to provide good jobs here for Nova Scotians.

 

MR. PORTER: You mentioned a few minutes ago in your first round of answers, after my question about the potential for one-day 300 megawatts, and then you went up to 2,500 megawatts, potentially. Can you tell me what percentage of the energy use that would be for Nova Scotia - the 2,500 megawatts, I'm referring to?

 

MR. PARKER: Certainly, 2,500 megawatts is a huge amount of energy but the studies indicate that is what is possible from the Bay of Fundy. That's actually more than all the energy we use right now in Nova Scotia. Right now we're using somewhere around 2,200 to 2,300 megawatts, in that range, and so that gives us the opportunity then to export. It allows us the chance to make money by selling it to other jurisdictions.

 

Again, as I mentioned earlier, one of the greatest potentials here is not only the power that we can export, it's the technology and maybe the units that will best work in that very fast-running water in the Bay of Fundy. Whatever is decided as the best type of machine - maybe it can be manufactured here. Perhaps it could be manufactured in Windsor or in Hantsport or wherever the nearby units will be used. It's going to have huge potential for jobs and for opportunities here for Nova Scotians - not only the actual physical units but all the expertise, I guess you would say, that would go with it. We could have technicians, scientists, and others who would be called upon for their advice and their ability to service those units and to provide technological services to other companies around the world.

 

MR. PORTER: Yes, I'm aware of the figure. Correct, it would be more than we're using today. This is going to lead me back into the Muskrat Falls, as I'm sure you've probably already pictured here to some degree. When I asked you in the first round and you came back with an answer that said basically next year sometime, maybe we're hoping for something. We know that somewhere in the probably not too distant future, the near few years ahead, because of the work that has already been done in this field, the work that will continue to be done and the technologies, I agree with all of that, that's all good stuff, we have an opportunity, there is great potential, I agree with that.

 

We have the ability to be leaders, without any doubt in my mind. We would love to see jobs being created in the Valley as part of this whole opportunity, if you will, for years ahead. With that in mind - and I guess these are some of the things that I think about - with that potential even in mind, knowing full well that's not too many years out, the ideas around this, the potential, the ideals, the potential right now that already exists, here we are thinking about a Newfoundland and Labrador deal that is going to be 35 years or more in length. A lot is going to change, I guess, is what I often think about this.

 

A lot has changed in 35 years. When we think about technology, when we think about the world in general, when we think about energy, when we think about lots of things, the world has changed a lot in 35 years. There is nothing that would make me think it's not going to change again, probably quite significantly, in other 35 years. In a lot less period of time than that we have a great potential sitting out there in the Bay of Fundy for huge amounts of energy that would more than supply Nova Scotia and the ability to even sell, and then some.

 

I guess that's part of my issue with locking us into a long-term deal when we've got other things that we can potentially be working on and thinking about. What happens to the 35-year deal? We know somewhere - I've heard a lot of discussion: well, it's front-end loaded or back-end loaded. You could pay a lot in the front end. You could pay a lot in the back end. That's all well and good. We still don't know what the costs are, at least today. Nobody outside of your department . . .

 

MR. CHAIRMAN: Order, please. I'm having a real job hearing the speaker. If there are conversations that can be held outside that would be great.

 

The honourable member for Hants West has the floor.

 

MR. PORTER: It just seems to me there is a lot of potential, when we look at our options at least, call them what you want, that tidal piece is a huge option and it is not something new. It's really something that has been talked about for quite a few years and there have been people involved in it. It may take a few years. It might take us another five or 10, who knows how many years? But there is a potential that this could be something very good for this province. If we're locking into a deal with Newfoundland and Labrador with - we'll call it - a fixed cost of some value, it almost seems to me that we would try to slow down the opportunity for the tidal or why would you bother? Why would others look at it? Let's go to this, I will quickly ask you this question and if you can, not too long an answer - just for the record, what percentage of Muskrat Falls energy is going to come over and supply Nova Scotia, what will our opportunity be there?

 

MR. PARKER: Again, as I mentioned on an earlier point, we're blessed here in Nova Scotia because we have so many good homegrown sources of energy that we can tap into. Tidal certainly has a huge potential and as years go by, it is going to be even more important both on the small projects and the larger energy potential. Wind energy and tidal energy are both what are considered intermittent sources of energy because the wind doesn't blow all the time and the tide is not always coming in.

 

One advantage of the Muskrat Falls or the Maritime Link project is that that energy is firm. It's always available as we want it and it will help balance out those sources. So if the wind is blowing strong on a particular April then that's great, we're getting the energy from it; if it's not then the Maritime Link can provide the firm source of energy to balance that out. The amount of energy that will available to us is really in two sections: one is the 35-year agreement that Emera has with Nalcor to provide somewhere in the range of 8 per cent to 10 per cent of our power needs through that agreement at a guaranteed stable rate for 35 years. In addition to that Nova Scotia Power will have the opportunity to buy other energy at market rates, whatever that can be negotiated at.

 

Often those market rates are set in New England at the price of natural gas, and the advantage we have is that we're on the transmission grid before you get to New England so there are no transmission charges going through Nova Scotia. There are no transmission charges through New Brunswick or Maine or Massachusetts, or wherever. We have the advantage of the natural gas price and they've been traditionally quite low, as you know, over the last number of years. Whatever that price is set in New England, minus the transmission cost, so it may be very reasonable landing in Cape Breton and that is what is available. There is 8 per cent to 10 per cent at a fixed rate and then the opportunity to buy additional power at market rates.

 

MR. PORTER: Thank you for the clarity, just for the record, on those points. We are going to be very reasonable and we are going to say - well, the first thing I want to say is there has been a lot of discussion in this House and outside of this House, this Chamber, on Muskrat Falls, as you well know, comments back and forth, and we've been clear on a couple of things.

 

One of those things is that - and maybe you might argue with this - it would be hard to be critical, in some ways, when you don't know what the cost is. This might be a great deal. It might end up being something of great value and based on the scenario you just gave, with the option we've got of 8 per cent, and I'll be generous and say 10 per cent for easy math, the most you are going to get over and above that, you might be able to pick up another 10 per cent. When you look at the numbers, we could even be more generous than that. If you picked it all up, the maximum is 500 megawatts or so, so you would still only pick up 20 per cent of your energy just for the province, if you took it all. If you were able to purchase it all, you still couldn't pick up the entire amount of what you could even come close to in other areas of development - i.e. the tidal and that long-term investment.

 

Again I come back to - we talk about the homegrown products here, the idea of putting people to work, the idea of R & D and development here of energy and tidal. You have already talked about the wind and some other opportunities that are there. We know that there are issues with wind. We know the costs aren't cheap and we know it's got to be backed up, people say 30 per cent of time, with other generation. They all have their issues, I guess is what's fair to say here.

 

I'm kind of stuck on why we wouldn't be looking at that long-term investment of what we're asking for and a long-term type of agreement with this stronger, what would appear to be the better potential for Nova Scotia, which is that work out there in the Minas Basin, in the Fundy waters. Why wouldn't we be investing in Nova Scotia, not in another province, especially in the long term, and locking ourselves into an agreement? Are there other options? Until we have a cost, how far are we going to be along until you sign on the dotted line to finalize things before we know the cost?

 

MR. PARKER: Certainly we're not putting all our eggs in one basket. For too long we relied mostly on coal, or mostly on oil and today we're diversifying our market and tidal is an important part of our energy mix in this province, and perhaps as we move forward it will be even more important. We don't necessarily know the total capital cost that will be involved in that industry but we do know it has tremendous potential for energy and for technology in this area of the world.

 

On the Muskrat Falls project we have much more solid answers on the cost of the project. It has been estimated it is going to cost $1.52 billion for the Maritime Link portion of the project. The study that has been done by the Power Advisory, Mr. John Dalton said, very clearly that it's the best option to provide the lowest, fairest prices for Nova Scotians, and he based that on his years of experience as an expert in the electricity field. He has to back up his evidence before the Utility and Review Board, but he said very clearly in his research that it's about more than $400 million less expensive than Hydro-Québec's option; about $1.5 billion less expensive than using a combination of natural gas and wind; plus it's the best option to meet the federal greenhouse gas regulations; plus there's a number of other advantages on diversity and stability and so on.

 

So the URB will determine if is it right for Nova Scotians, if is it right for ratepayers in this province. They will test the evidence of Mr. Dalton, and of Emera, and a whole lot of other experts that will be called to testify, and not only testify, they'll have to defend what they're saying. Interveners will have the opportunity to question them and look at their records on whether their information can stand up to scrutiny. Emera has filed the application in January of this year and according to their estimates and their research, they are saying the cost will be about $1.50 a month to the average Nova Scotian ratepayer. It sounds tenable that that's a reasonable rate - $1.50 a month for the average Nova Scotian ratepayer.

 

MR. PORTER: What math did Emera use to get to the $1.50 a month?

 

MR. PARKER: Well, again, that's why we have a public Utility and Review Board. Their role is to test the evidence, to hear what the applicant has to say, why they feel what they are putting forward is reasonable and just. That is why we have experts like John Dalton who will be presenting his evidence. It will be cross-examined and fully questioned by all the interveners. That's the role of the Utility and Review Board, to decide whether it's fair and right for Nova Scotians.

 

I can't answer for Emera. They've got their own research and their own information, but they'll have to fully defend it before the URB and all the interveners that are there, and in the end the chair and the members of the URB will have to decide whether this is right for ratepayers or not. If it is, then we'll have the lowest, fairest rates for the people of this province. If it's not, it is the role of the URB to determine that.

 

I should come back, Mr. Chairman, and honourable member, you had mentioned about the amount of energy that's coming through the Maritime Link into Nova Scotia and we mentioned it was about 8 per cent to 10 per cent of our needs, under the 35-year stability rate. There's also additional market rate energy. The actual amount of energy that's being produced in Muskrat Falls, I believe, is 824 megawatts. Translated a different way, it's about five terawatts of energy being produced at that site. Of course you lose a little bit through transmission because it doesn't all get to the end of the line.

 

On a rough basis, the contract for the 35-year proposal is about one terawatt of energy that will be coming to Nova Scotia. Newfoundland and Labrador have said they'll need their energy for about two terawatts, or about two-fifths of that energy, and that leaves about another two terawatts, or 40 per cent of what's being produced, for export, market opportunities, and certainly Nova Scotia will have that first opportunity, because it's landing right here on our shores, to negotiate for that energy, minus the transmission costs, as I mentioned. The price is set in New England by the natural gas prices.

 

The other thing I'll mention, too, is that this is only the beginning on the Lower Churchill. There is also the Gull Island project that's between Muskrat Falls and the Upper Churchill, and I think that will produce about 2,200 megawatts of energy. That, too, in time will be available for export. There's lots of opportunity to provide power to Nova Scotia from the Lower Churchill, and the Upper Churchill even, after 2041, and for export through Nova Scotia and beyond.

 

MR. PORTER: I'm familiar with the Gull Island project and the geography there and so on. I guess there is a lot of debate around that, as well, and what was supposed to be over there, and depending on who you talk to in Newfoundland and Labrador and who you talk to from Newfoundland and Labrador who now lives in Nova Scotia, perhaps. There are a variety of comments, issues, call it whatever you want. There are people who have lived right over in that area who are very familiar with this project, and there are varying opinions on all of those.

 

You mentioned the Dalton report and what he compared it to. The Dalton report never talked anywhere in there to Hydro-Québec and he's on the record as saying he took an educated guess. How is that possibly something that we could write 35 years on? It would be interesting to see, when he does come to try to defend that, if that is in fact the case - I wish I had it in front of me to table, but I don't - I don't know how that would stand up very well when it comes to the URB. Hopefully they will take it into consideration - and I'm sure they will, knowing the folks over there - but an educated guess, if that's in fact what it has been, is far from adequate when we're talking about 35 years.

 

On that very thing - and I want to come back to the 35 years - again, this may work, when we find the price to be - educated guess or otherwise - it might be something of great value for Nova Scotians. I'm not disputing that. I'm disputing the fact that we don't have all the facts to make that judgment today, and there is a lot missing.

 

Why the 35-year deal? Why couldn't it have been a five-year, options to renew? There are all kinds of ways that contracts are written, both long- and short-term contracts. There's any variety of mechanisms and things to add in, call it whatever you want. Were other options looked at, other than just this 35-year, sign on the dotted line, this is the deal, or did that all have to do with the front-end loaded or back-end loaded and the finances of the whole thing and what the rates might be and the funding? Can you speak to that a little bit and maybe clarify some of the points I've addressed there?

 

MR. PARKER: Certainly John Dalton, Power Advisory is a recognized energy expert on the electricity markets. He has done research for many decades. He has been a called-upon expert for various governments in eastern North America. In fact, he has done work for this government; he has done work for the previous government back to the year 2000. He has worked for governments of all political stripes here in Nova Scotia and he has worked for other governments in Atlantic Canada and also in New England, Vermont, and other states there, so he's recognized for his expertise. He has developed a proprietary computer model that looks, hour by hour, at the cost of energy over years and over decades.

 

Actually, for his report that he came up with in January, he had modelled out the electricity costs right through from 2017 to 2052. That's a 35-year period, and based on his knowledge and expertise, he's stating clearly that this is the lowest-cost option for Nova Scotians. It's also the best alternative to meet our greenhouse gas emissions and the federal coal regulations. He's recognized as an expert and when he appears before the Utility and Review Board, he is going to have to clearly defend his report, his assumptions, and his conclusions of what he has come up with.

 

Interveners will be very carefully cross-examining him and asking him all kinds of pointed questions on his evidence. He lives by his reputation and he has to defend it and if he wasn't able to, what would his prospects be for future employment? It has to hold water, as they say.

 

You asked about the 35-year commitment or investment. Utilities such as Emera and Nalcor are in the long-term business here and often their capital investment is amortized over a very long period of time, often over decades. To make that investment they have to clearly know the parameters and outcomes, year by year, of how it's going to develop and their payback period over that period of time.

 

The only other thing I'll mention is we're going to have the opportunity here not only to get the contracted price of 8 per cent or 10 per cent of our energy for 35 years, but we're going to have the great opportunity to also buy energy at market rates - not only from Muskrat Falls, but with the improved transmission system it could come in the other way. It really puts us in an energy loop here. It could come from New Brunswick, if they have reasonably priced power, or from Maine or the Province of Quebec, wherever.

 

It's putting us in an energy loop and it's really providing a win-win for the ratepayers of this province.

 

MR. PORTER: I guess a couple of things, minister, on your last statement there a moment ago about being able to be in the energy loop and maybe buy energy coming the other way, that's great, but you're still buying energy in a 35-year deal at a set price in the Muskrat Falls deal.

 

Forgive me, it doesn't seem to add up that well to me and, again, until you know the price, what you're actually dealing with and you can compare it to your other options, west coming the other way, backwards on the loop, I think your struggle to make the argument and win it, at least in the minds of some - people aren't interested a whole lot, they want to know what the costs are. I think it would be an easier sell if you knew what the costs were. If you told people, this is what we think, and by the way, we're going to be able to write you a deal for this figure, for this long term - and you're looking for buy-in, you've been trying to sell this thing for quite a while. You have a lot of folks up in arms over it because they don't know whether it's good, bad or indifferent. I think some clarity around it would be more . . .

 

The other thing I wonder would be, talking about Mr. Dalton and his report, he lives on his reputation and he has done this and he has done that - well, that's fine, no discredit to Mr. Dalton, but has he ever been asked to do a report on the Minas Basin, Fundy waters, on tidal? Has the province said, okay, you seem pretty reputable, this is something we believe in; we're willing to sign on the dotted line for 35 years because you say these are the fairest, cheapest rates for Nova Scotians - why don't we ask him? If he can provide a model for 35 years on Muskrat Falls, why can't he provide a model for us here on a homegrown success project in Nova Scotia in the Bay of Fundy?

 

I'm curious, has anyone ever gone to him and inquired and said let's talk about tidal, show us the model on that and what is the potential for costs there? Then we really do what might be a pretty significant comparative analysis. Mind you, they are a little different: one will potentially provide you with 2,500 megawatts of power, which is more than you need, and the other will give you, at best, 10, 15, or 20 per cent - I'll give you an opportunity to speak to that.

 

MR. PARKER: Again, the honourable member has touched on a number of issues here and again, I'll repeat that it's eight to 10 per cent of the project. Emera has contracted for 20 per cent of the energy, for 20 per cent of the cost. The cost is estimated to be about $1.5 billion.

 

You mentioned Mr. Dalton. He's certainly a recognized expert in the electricity field. He has looked at the cost for other options, I should mention. He looked at the hydro electricity from Quebec. He estimates it will be about $402 million more expensive. He looked at natural gas and wind right here in Nova Scotia; he has estimated it to be about $1.5 billion more expensive. He has looked at the Muskrat Falls project and he says it's the lowest-cost option of all those that he has looked at.

 

I'm not sure of his expertise in tidal. It's certainly a developing field; it's a developing technology, but you may be on to something here. Perhaps he has expertise that could be tapped into as well. I thank you for your idea.

 

MR. PORTER: You've referenced - and just for clarity I'll ask this question - more expensive than this and more expensive than that. Are you talking more expensive than the development of other projects or that already exist? Where are you getting the more expensive than Hydro-Québec, the more expensive than this that you just named? Are you talking about the development of something else in comparison or are you talking about the actual cost to supply? Hydro-Québec, as an example, already exists. Swing it back through west, there's some talk about that from others in the House, but I'll use it as an example - or buying from New Brunswick or buying from somewhere else. Those comparative analyses that you are referencing - compared to what - more expensive than actually what? I'm just looking for the clarity on what you're referring to.

 

MR. PARKER: When Mr. Dalton did his comparisons, he had to take into account his future estimates of not only the cost of the energy itself over that 35-year period and try to determine, based on his proprietary model, what he felt that would be, but also had to take into account the investment in the infrastructure. Right now the infrastructure doesn't exist to bring any large amount of hydroelectricity from Quebec. Yes, it's true that Emera or Nova Scotia Power buys a little in the peak season when it's available, but it's very small in the big picture, just to supplement what's required, on a cold winter day, but really the infrastructure is not there.

 

His modelling is looking at both the cost of the energy over that year-by-year period, plus the cost of the infrastructure to develop it through Quebec and through New Brunswick and into Nova Scotia. Based on all those figures, he has come up with an estimate that it's about $400-plus million more expensive than the Lower Churchill project through the Maritime Link. To develop the infrastructure, to build new wind farms, a new capacity here and the transmission upgrades that would be required, those projects would be about $1.5 billion more expensive over the lifetime of the 35-year contract.

 

MR. PORTER: I want to move on. I'd like to talk about Efficiency Nova Scotia for a few minutes. How much money has government invested through your department in efficiency this year compared to last?

 

MR. PARKER: Efficiency Nova Scotia is a very important component of our energy plan here in Nova Scotia. It allows Nova Scotians to actually save money on their energy costs by a variety of programs for small businesses, homeowners, new home owners, and even apartment dwellers now can take advantage of the efficiency programs. Actually, last year Nova Scotians saved enough electricity, through the efficiency programming, to power about 16,000 homes, so that's quite significant. I'm sure in your riding you've heard of people who have taken advantage of the programs, whether it's CFLs, insulation around their hot water tank, pipes, low-flow shower heads, or aerators on their taps - all kinds of valuable programs that people are taking advantage of.

 

You asked the question then about the cost year to year. Last year, in 2012-13, the cost was roughly $17.9 million. As you see in the Budget Estimates this year, it's around $14.5 million.

 

MR. PORTER: I guess my first question would be, when you're trying to balance the budget you need to find savings wherever you can and cut back wherever you feel you need to, so $3 million out of the program - which I agree is a good program, we do have a lot of uptake on it. One of the things we are finding going through the process now is time frame. It seems to have slowed down a bit. It seemed that when folks were filling out their applications, when the assessments were being done, it was going a little bit quicker earlier on. That might be because money has been dropped from the investment of the program, I don't know, I'm only surmising that.

 

When we think about energy, energy costs, I heard you mention a little earlier on about the education piece and trying to reduce the amount of energy used and not be wasteful of energy. We've talked a lot about that at Public Accounts and we've had good discussions around that and we think there is a lot of value in teaching not only our kids, but everybody. It's a lot easier to start young and work your way up because they tend to have done well and they've helped show us the way in some other areas.

 

I think the program is a good program for Nova Scotians, one that we know a lot of people, a lot of households do take advantage of it and it's a multifaceted program with lots of good stuff in it. I'm not sure why you've dropped about $3 million or so out of it, it's a shame to see that going down, at least not holding stable but I'm sure you could explain the reason for that. I guess it will be 14 or so, you said, this year going forward?

 

I'm not sure if you quoted the number of households or users - you might have and you can let me know what that was. I was interested on what the uptake was. I know where I come from there is a fair bit but I'm curious about the numbers. I think when we were in Public Accounts back a while ago, we had asked for some brochures and information to be sent to my office as the local MLA. We did get that so I want to thank your staff who did do that for me and I assume for others at the same time, the packages likely went out to all the offices and they're well used.

 

Can you speak to why the drop in the budget and how many households are taking part in that and maybe on that, what the $3 million drop might mean to the decreased number of people being able to access the program?

 

MR. PARKER: I am pleased to hear the honourable member's support for the Efficiency Nova Scotia program. It certainly has been of great benefit to many Nova Scotians, particularly low-income Nova Scotians and that is where we are putting on a stronger emphasis all the time on those programs. Even though there is a reduction in the total budget year to year, none of those low-income programs will be impacted by that and, in fact, we are probably gearing up even more in that regard. I guess part of the reason for fewer dollars, you are right, we're certainly trying to live within our means and that has been well stipulated by this government. We are working toward more efficiency within the program. I guess as it has geared up, there has been more uptake of the program.

 

We've reached a critical mass in the programs and that allows us to be more efficient. It takes less administrative cost to administer the program because it is well underway and there is enough volume to get a better buy on supplies and a more experienced workforce as we go year to year. Compared to the old program under Conserve Nova Scotia, I think we're much more efficient. Again, there will be no impact on the low-income programs that we provide to Nova Scotians, in fact a lot of people have taken up the opportunities that are available to them and I, as you probably do in your riding, have had different people call my office asking how to contact the program. I heard my neighbour got a whole number of new lights, a hot water tank improved, and so on; I want to take advantage of that, too, so we direct them toward Efficiency Nova Scotia.

 

I do have a couple of statistics here. Last year homeowners retired a total of 7,976 old refrigerators, appliances, freezers, and air conditioners. Rebates offered on efficient products resulted in 274,610 products purchased; 8,700 LED lights were distributed through the LED campaign; homeowners completed energy efficient upgrades in 28,397 homes resulting in an average annual savings of $182 per household; an estimated 12,000 of the 28,397 households received the residential direct install services - and those were low-income Nova Scotians, roughly 12,000 of the 28,000; and we increased services to low-income households, including 1,326 homeowners who received building upgrades like wall and attic insulation, as well as air sealing.

 

I can make that available to you if you wish, honourable member. Perhaps I'll ask the Page to copy that because I'd like to keep a copy, as well, and then we'll make sure you get a copy of it. The Efficiency Nova Scotia program has been very popular. It has been taken up by not only homeowners and low-income folks, there is even a program now for renters.

 

I just want to mention quickly here, there is one resident in your area, honourable member, who has taken advantage of the program and that's a small business, the Windsor Auto Supply Ltd., in Windsor. Jerry is the manager there and he's had some old and inefficient lights. He called Efficiency Nova Scotia and they replaced the ballast and installed new T8 lamps and LED exit lights. He's estimating that he'll save 20,000 kilowatt hours of energy per year, so that translates into dollars for him; plus, he has much brighter, more attractive store. In fact they liked it so much that there are, I believe, six stores in that supply chain through the Annapolis Valley and they've all taken advantage of the energy efficiency programs right down to Berwick and beyond. Maybe I'll table that, Mr. Chairman, and it will be available for the member to have a look at as well. You're probably familiar with that particular local business.

 

MR. PORTER: Yes, I'm quite familiar with that operation and that's why I was saying a bit earlier, there are some really good opportunities out there to be accessed and I guess that's why, when I think about the budget going down, $3 million is a significant amount of money coming out of that line item.

 

If we are talking a lot about the reduction strategy and trying to educate people more and use more efficient lighting as an example, especially the business community which pays different rates, as we know, and pays a lot of money out each year, you spoke already to the savings that those stores will potentially have, not only in one year, but in the years ahead. Those are good savings all the way through. That's a good thing and the more of that that we can do - if we're going to put money into programs and we have it, then we should be putting it into things like that. I support those wholeheartedly and I know that the business community does, and I know those folks who have been coming in and doing them with their homes, and whatever the other examples are that you mentioned there, are all very supportive of that as well.

 

Again, like I said, I'm a little disappointed that we're seeing a cut in that, but at the same time understanding you're probably under the gun, if you will, to try to manage the best you can with the money that is there. I think people understand that too, in all honesty; taxpayers understand that philosophy as well.

 

I haven't had a chance at all to get into natural gas. I know you're probably aware, in Hantsport we'll soon be trucking natural gas to a facility down there. I often think about a great opportunity that exists for a pipeline down that way. I think about our rail line that is seldom used anymore. The Windsor to Windsor Junction line is an example, which somebody is seeking out right now, trying to buy. I know that there will be a lot of issues around that because I'm almost sure the province has some rights there. If you look back at the old Statutes from the 1800s, which we are doing and have been doing, I think you'll find that there is something there, but what an investment where you already have that in place. You wouldn't have issues with leases and getting through properties.

 

You can just imagine how difficult we've seen it in other parts of the country. The one that always comes to mind is the one running down through the United States, the issues they've had with pipelines and so on. What an opportunity, if you think about growth in the years ahead in a place like Windsor, West Hants and onward, even as far as Hantsport, Wolfville and some of those areas where we see so many people leaving rural Nova Scotia and coming closer all the time to the bigger areas like Halifax. We've seen it in Pictou and your area, the benefits that that will have.

 

I'm certainly hopeful that there will be - whether it's this government or future governments that will be looking at the opportunity for natural gas into the future to get down there because those are huge cost savings when it comes to energy, especially in the business community; we've seen that. Has anyone talked about the expansion down that way? What is the future of gas in this province as far as you're concerned and your government, as we go ahead in the years ahead and to expand it in other areas? We're already over in Pictou County, what about the west? What about down home way; what are the opportunities? People are very interested; they want to know where we're going.

 

MR. PARKER: I just want to briefly touch on Efficiency Nova Scotia. Again, no low-income programs will be impacted, and it is efficiencies really that will probably allow about the same amount of work to be done on multi-year programs and because we have hit that critical mass, we're going to have much more chance to continue the good programs.

 

The honourable member mentions natural gas. I guess this year the roll-out of containerized natural gas on the trucks that will deliver to the Minas Basin and Shaw Brick and other industries, there is more and more interest from other large industry in this province. That really is the base to establish getting more natural gas into an area, once people get used to it and have it available. I think that will open up opportunities for a pipeline and maybe once people are accustomed to it as a clean fuel source, then that will create more opportunity. If it comes to Hantsport and people are used to it, then you are going to see more opportunities for natural gas and maybe in time the pipeline will come down to that end of the Valley.

 

I don't know what my time is here, but I know it is drawing down.

 

I know that natural gas is coming now to Pictou County, and there are other markets in Colchester and the Valley and beyond that have real, real potential. We have a natural gas study underway at this time looking at the supply and demand and, really, the whole landscape of natural gas in this province. So there is huge potential and it's really 35 to 40 per cent savings on average for homeowners, for businesses, and it is well worth pursuing.

 

MR. CHAIRMAN: Thank you. The time allotted for the Progressive Conservative caucus in this round has expired.

 

I would now suggest that we take a five-minute recess.

 

[5:00 p.m. The committee recessed.]

 

[5:08 p.m. The committee reconvened.]

 

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

 

It appears there are no further questions, so I'll now recognize the honourable minister for closing remarks.

 

The honourable Minister of Energy.

 

MR. PARKER: I'm pleased to bring the debate on Energy estimates to a close. I certainly want to thank my staff in the Department of Energy, our very hard-working staff, and people will recognize them across government as just that.

 

Certainly here in Nova Scotia we're working very hard on our energy transformation and a full diversification of our energy sources in Nova Scotia as we move away from coal and on to many other homegrown sources of energy that we're blessed with here in Nova Scotia.

 

So, Madam Chairman, I want to say thanks to everyone in the Department of Energy.

 

MADAM CHAIRMAN: Shall Resolution E6 stand?

 

Resolution E6 stands.

 

We'll take a very brief recess and then we'll be calling the Department of Natural Resources estimates.

 

[5:10 p.m. The committee recessed.]

 

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

 

MADAM CHAIRMAN: Order, please. The Committee on Supply will now be called to order. We will be debating the estimates of the Department of Natural Resources.

 

Resolution E15 - Resolved, that a sum not exceeding $85,072,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Natural Resources, pursuant to the Estimate.

 

MADAM CHAIRMAN: I will now invite the Minister of Natural Resources to introduce his staff to the members of the committee and make some opening comments if he so wishes.

 

The honourable Minister of Natural Resources.

 

HON. CHARLIE PARKER: I'm pleased to have a few minutes here this afternoon to talk about the 2013-14 budget for the Department of Natural Resources, and I certainly welcome this opportunity to speak about our department and its many responsibilities and accomplishments, and in a moment I'll provide some of the highlights and challenges of the past year.

 

First of all, Madam Chairman, let me introduce members of our department who are with me today. On my left is our Deputy Minister, Duff Montgomerie, and on my right is our director of Financial Services, Remi MacDonell. Also in the gallery is a number of our staff from the department, so I want to welcome them as well. We're looking forward to answering all of your questions as we go along.

 

The employees of this department are recognized in all parts of our province and are, as you know and as members would know, our numbers increase in the department in the springtime, as they do every year, and as we prepare for our busiest times including our fire season which we're into now, our provincial park openings which will be occurring soon, and certainly fishing season is upon us, as well, and right though to hunting season in the Fall.

 

Members of the House of Assembly, especially those who represent rural areas, as many of you do here in the Legislature, recognize the importance of the role that DNR employees play in our communities and in the lives of Nova Scotians. DNR employees carry out important work whether it's on the front lines of a forest fire or behind the scenes surveying and managing Crown forest and protected lands, perhaps in helping Nova Scotians understand and learn to live with the various species of wildlife found here in Nova Scotia, or perhaps getting prospectors in front of the people they need to know and to see and help grow Nova Scotia's important mineral sector.

 

From the day-to-day activities of DNR employees who work to make a difference in our lives and to the many responsibilities in the broad mandate of this department, I believe Nova Scotians know that the natural resources of this province are in very good hands with biologists, foresters, geologists, surveyors, and many other technological and professional staff who strongly care about ensuring a sustainable and prosperous future. As a department, Madam Chairman, we will continue to deliver the wide range of programs and services needed to implement the innovative new approach to natural resources management in our province that we call The Path We Share, and of course that's the province's Natural Resources Strategy. We're working closely with our stakeholders and partners to collectively manage our natural assets for a more prosperous future.

 

Among our geological resources, the related responsibilities there, our role certainly includes a number of things, implementing policies and programs to help ensure the best use of the province's mineral or groundwater and geo-heritage resources, collecting and managing geo-scientific information and monitoring compliance with regulatory requirements, and administering the mineral rights tenure system and mineral royalties in the province, and also in promoting and understanding of the risks that geological hazards may pose to Nova Scotians.

 

But also, certainly, DNR has many responsibilities related to our forests, particularly on Crown land, but also on private lands. And those responsibilities would include forest management planning and research, developing and implementing strategies that support and contribute to sustainable forests, maintaining the provincial forest inventory, providing data on the province's forest resources, monitoring primary forest production, coordinating extension programs and support for forestry sector development, and delivering programs to protect our forests from fires and from pests and various diseases, and also in promoting and implementing policies and programs to support the conservation and sustainable use of our wildlife populations, habitats, and ecosystems here in Nova Scotia.

 

Madam Chairman, our park-related responsibilities would include the planning, designing, developing, and operating more than 120-plus camping and day-use parks and natural area parks and park reserves, in addition to supporting facilities on Crown lands, various trails, and other outdoor recreational opportunities. The department is also responsible for approximately 1,200 kilometres of abandoned rail corridor, and for beaches designated under the Beaches Act and, as well, stewardship and outreach activities are undertaken to provide accurate natural resource-related information to Nova Scotians, to help them make more informed decisions and choices with respect to the conservation and use of our natural resources.

 

More than one-third of the province's land base is administered and controlled as provincial Crown land and protected areas. So in addition to managing this land, the department administers inland submerged land and also submerged lands along the province's coastline. The Crown land and protected areas administration responsibilities include enforcement of laws and policies, management and development of resources on Crown land, maintenance of Crown boundaries, protection and conservation of land through designation and agreements, and administering Crown land licences to timber and other resources. It also includes investing in silviculture on Crown land in order to work toward forest sustainability, maintaining a network of access roads, the acquisition, leasing, and disposal of interest in our Crown lands, licensing of campsites and authorized activities, registration of Crown land titles, clarification of interests in unacknowledged, ungranted lands and, finally, control and management of lands records.

 

Our trail and off-highway vehicles-related responsibilities include overseeing Crown land trails on Crown land and those running through protected areas, creating trail development policy, and certainly working with partners to establish trail networks. Off-highway vehicle-related responsibilities include establishing and monitoring safety and training standards and requirements, and monitoring issues around off-highway vehicles as they arise. DNR's enforcement-related responsibilities include achieving compliance with all the Acts that are administered by the department, and promoting a better understanding of resource and Crown land protection issues and concerns. Activities include directing the development, coordination, and implementation and delivery of departmental resources law enforcement and compliance programs.

 

I'll take a minute, Madam Chairman, to talk about our Natural Resources Strategy and where we are with that. We continue to work to establish a sustainable balance in the forest sector - a balance between the sector's economic and environmental health, as well as a social balance, which considers the interests of the workers and the families that rely on this renewable, traditional industry.

 

The strategy is about doing things differently to spur opportunities that support our economy, our social well-being, and our natural resource stewardship and sustainability. The implementation of the strategy is a role that we take very seriously here in the Department of Natural Resources.

 

To give you an update on the strategy - DNR has aligned resources to deliver 32 actions that are outlined in our Natural Resources Strategy and Action Plan. The work to implement this important strategy is going very well. It will mean better and more sustainable management of our natural resources. The strategy is improving management of Nova Scotia's forests and woodlots, and will also make it easier for prospectors and exploration companies to make new discoveries here in Nova Scotia.

 

As planned, the 18 specific actions were started within the first 12 months of our 10-year strategy, and other timelines are starting after the strategy's first year, including developing rules related to whole-tree harvesting and biomass use. The completion date for those two actions have been extended to redirect resources to other urgent challenges that were faced in the pulp and paper sector over the past year.

 

The strategy is also focused on biodiversity, on forests, on geological resources and provincial parks. In the past year, we've met several commitments to support each of those efforts, including helping design measures to assess wind energy projects that consider ways to increase protection of biodiversity such as migratory birds and moose; and also launching a province-wide consultation to make the provincial park system more sustainable.

 

It also includes a new mineral incentive funding program to help enhance and promote mineral exploration and development. The strategy includes distributed funding to support silviculture treatments and road access in the small woodlots, and also completing a pilot project on alternate uses for Crown land. Our government will continue to measure and report on the implementation of the Natural Resources Strategy.

 

I want to take a minute to talk a little more specifically about forests. This certainly has been a challenging time for forestry and it's really in a transition period, but truly also it's a time of opportunity. It's a time that calls for careful management to adjust our forestry practices and protect our forestry jobs; it's a time to stay focused and to stay informed.

 

In his speech at the Forestry of the Future Forum, the Premier had this to say: "People working in forestry know that their industry needs to change. The status quo is not an option. Forestry jobs and opportunities are as much a part of our future as they are of our past."

 

As a woodlot owner myself, I know how important that is and I certainly respect the integrated nature of our forest industry. The importance of our woodlot owners is also addressed in The Path We Share. The Natural Resources Strategy continues to provide helpful guidance in managing our forests for a sustainable future. With this strategy in mind, our government has taken several key steps to support forestry through the challenges that we have today and to help it thrive into the future.

 

I'll take a minute to talk about the pulp mill at Port Hawkesbury - now known as Port Hawkesbury Paper. When that hard news first hit about the troubled mill at Port Hawkesbury, it certainly was a tough time for everyone. There were pressures there on that mill from world trade issues and a decline in the paper market, and certainly increases in competition and their costs, but the province acted swiftly in the face of some very stiff challenges, and working with close consultation with those in the industry, we brought forward a quick response to help balance employment with market forces, to balance jobs in the economy with a sustainable forestry of the future. But our efforts were driven by what makes sense for families and communities and people who work in the sector across the province and for the economy of Nova Scotia. We found options and worked those opportunities to their utmost.

 

All along we had in mind the more than 400 Nova Scotians who work in harvesting, silviculture, trucking and roadwork, and all those working at the plant and at the Strait - I think it's a total of around 1,400. We understand woodlot owners, the industry, and government, we all had a part to play and we all need a future in forestry that is economically and environmentally sustainable.

 

As we negotiated, government continued to put forward financial support through the Forestry Infrastructure Fund to ensure that woods workers and mills that receive wood through that fund would continue to function. We also kept the mill in "hot idle" and truly it was a transitional time. We needed an agreement that, Madam Chairman, would honour the province's Natural Resources Strategy, that would allow room for the new ecosystem- based approach to forestry that we are fully committed to, and we needed an agreement that was fair for Nova Scotia and kept as many jobs as possible. Truly, in September of last year it was a happy day indeed when we were able to announce that the province had negotiated a fair deal with the buyers of the mill, Pacific West.

 

The workers returned at full capacity, the idle mill went back into operation, and woodlot owners and other forestry workers again had a buyer for their product. Today Port Hawkesbury Paper is a going concern, they are producing supercalendered paper for the world, and actually it has been surpassing initial production and quality targets and purchasing most of their wood from private landowners.

 

We have a new forestry utilization licensing agreement with Port Hawkesbury Paper and I just want to speak a few minutes about that, and about the significant transformation there in our forest industry. A few months ago our government signed a Forest Utilization License Agreement with Port Hawkesbury Paper and we're very proud of this agreement and what it represents here in the province. At the time of the announcement, which was back in November 2012, we released the details of the agreement, and while previous government withheld details of agreements from the public view, we value sharing those details with everyone. This way we are honouring the hallmark of transparency in managing Nova Scotia's natural resources and this is a commitment of the province's Natural Resources Strategy, The Path We Share.

 

The agreement is very good for Nova Scotia's forest; it is good for businesses like sawmills; it is good news for the environment; and it is good news for our First Nations people, the Mi'kmaq. I believe it is truly a model for future licence agreements between the province and other forestry companies. While the old Stora Act may have met the needs of a previous era, our licence agreement with Port Hawkesbury Paper reflects our government's work to transform our forest industry in this province.

 

That transformation involves increasing the wood supply from private landowners, third-party certification of forestry practices like FSC, it includes ecosystem base management of forest lands, and it includes reducing clear-cutting and improving sustainable harvesting. So these are significant items in the agreement that I believe are some of the highlights and I'll just outline those to you at this time.

 

In our new licence agreement with Port Hawkesbury Paper the province now has control over the land, but under the old Stora Act the company's agreement was required for using or doing anything on the property. Under our new agreement the company is required to make good utilization of the harvested wood and they are required to offer to produce and sell sawlogs to sawmills; under the old Act the companies had no obligation to supply the sawmills at all. Our agreement recognizes the Aboriginal and the treaty rights of the Mi'kmaq, whereas before the Act provided no recognition of Mi'kmaq rights.

 

Port Hawkesbury Paper must maintain its Forest Stewardship Council certification, or FSC certification, on the licensed lands during the life of the agreement, but the Stora Act had made no provisions for certification of any kind. All roads on the licensed lands are now deemed to be public roads, open to the public and for use by Nova Scotians - and before the roads were treated as if they were privately owned by the company even though it was a public resource. The company must now support implementation of our Natural Resources Strategy, but under the old Stora Act, the predated 2011 strategy, that didn't apply.

 

We've ensured that no harvesting can occur on areas under licence or under consideration on the 12 per cent protected land and that those that do proceed to designation will be removed from the licence without any compensation to the company - under the old Stora Act the province would have needed to compensate the company with new land to replace those designated lands. So we have an agreement in which the province can withdraw or restrict the forestry on the licensed lands if it can meet its supply obligation from other Crown lands - of course, the former Act failed to address this.

 

Also, Madam Chairman, we have a strong emphasis moving forward working with woodlot owners or private landowners in this province. One of the messages that we've been sharing with stakeholders in our forest and the forest industry is that there has never been a more important time to focus on the way that we use our woodlands in this province. That message was heard loud and clear at our three annual woodland conferences this Spring. They are important forums for learning and networking among owners of small private woodlots in this province and maybe some of the members had the opportunity to participate in some of those woodland conferences.

 

I know I had the opportunity to attend the Western Woodland Conference back about a month ago, I think it was in early March, in Auburn, in Kings County. I know the honourable Minister of Transportation and Infrastructure Renewal had the opportunity to attend the Eastern Woodland Conference in Port Hawkesbury, and I believe the honourable member for the Eastern Shore attended the Central Woodland Conference in Stellarton.

 

Those are important forums for learning and for networking amongst owners of small private woodlots in this province. I guess as a woodlot owner myself I had the opportunity to grow up on a family farm and around a woodlot and I know the opportunities and the pleasure that comes from working on your own personal property. That personal experience certainly has given me, I believe, a pretty good insight into that aspect of being a small private woodlot owner and that important component in the forest industry.

 

Certainly we must focus on our woodlot owners and maximize opportunities for these traditional Nova Scotia businesses to enhance a sustainable supply of our forest resources and services and other opportunities to continue that traditional rural livelihood and to protect the key environmental services that woodlots provide. As a government we provided support to woodlot owners in a number of ways, and to help meet their strategy goals the province has announced more than $8 million worth of programs so far. Some of those funds are helping sustain woodlot owners' operations and that support included funds to access and upgrade woodlots roads. Since last summer our government has invested $1.5 million to improve woodlot access, with about half a million of those funds directed into western Nova Scotia.

 

It was also important that people in western Nova Scotia, where the Bowater mill closure had the greatest effect, would receive the support. Last June we expedited $1.5 million in funding for silviculture initiatives to help private woodlot owners improve operations in southwestern Nova Scotia. This investment helps bring positive change in our forest sector, and we're also helping the environment and also improving our economy.

 

I'm excited to tell you about 18 outreach projects that have been designed to help small, private woodlot owners. And these projects will focus on increasing education and awareness of sustainable practices among woodland owners and forest workers. And the projects include some important topics, including an introduction to best forest management workshops, an introduction to forest ecosystem classification, management for specialty products such as tone wood and other non-timber forest products, hardwood management demonstration and management planning, using global positioning systems in woodland management, and youth engagement in forest restoration and silviculture. There's a whole variety of educational programs for small private woodlot owners.

 

Another challenge, Madam Chairman, we faced in 2012 was also the result of world market pressures, and of course I'm talking about the Bowater project on the South Shore. The Bowater mill in Liverpool presented a huge problem that government tried to resolve. Market forces in newsprint made the mill's operation untenable, and it became clear that Bowater mill would be closing its doors. Certainly that was a difficult time for workers and their families and for the communities along the South Shore, and for the whole economy of Nova Scotia. And we were facing not only an injury to our economy, but also the potential loss of resources of the largest block of privately owned land in the province, especially if it were to fall in the hands of a foreign buyer.

 

Again, Madam Chairman, our government stepped in to stand for Nova Scotians and to protect our economic interests and to control these important forestry and natural resources assets. And the Premier announced in December that the province had finalized a deal to purchase, from Resolute Forest Products and The Washington Post, the Bowater Mersey Paper Company Limited shares for $1. And that purchase includes assets that totalled more than $150 million - and it included 555,000 acres of land, it included Brooklyn Power, and it included the former site of the Bowater Mersey paper mill and the wharf that went with it. Also, there were some other assets included: fiber inventory, cash and investment tax credits that totalled about $2.7 million.

 

So this announcement by the Premier on behalf of the province was about people, about the future of the province, and about Nova Scotians gaining control over their own economic destiny. And it was about breathing new life into the forest industry. Buying the Bowater lands at a fair and reasonable price was an investment in our future; it was also an investment in our environment. With the purchase of the Bowater lands, we committed to establishing a planning process to help determine how best to manage the now 1.5 million acres of Crown land in western Nova Scotia, while keeping in mind the effect on the whole provincial picture.

 

Those western lands need to be managed in a way that considers forestry operations and fibre delivery throughout the whole province, and we are committed to do just that - and we've actually just completed a series of nine open houses and four stakeholder consultations in western Nova Scotia, and I'm sure perhaps some of the MLAs here in the House tonight were able to attend some of those public sessions in the western part of our province.

 

To create economic opportunity, the former Bowater mill site will be home to a centre for cleaner energy, bio-energy, and forestry innovation; certainly innovation is the key to our forestry of the future, and this centre in Liverpool will attract private investment and drive innovation in the forestry industry. The agreement with Resolute also would transfer the Brooklyn Power plant - it's a 30-megawatt biomass generating station - to the province, and in turn the province has entered into a purchase and sale agreement with Emera, for them to purchase the Brooklyn Power plant for $25 million, and that will protect ratepayers, protect jobs, and provide a clean energy source.

 

The Brooklyn energy plant is also part of the province-wide supply chain in forestry used in residue that would otherwise have no economic value. The Bowater land purchase was another successful outcome for Nova Scotia in a turbulent year in forestry.

 

Now just before Christmas, Madam Chairman, our government also opened the door to community forests in Nova Scotia. Community forests is another step toward the sustainable and balanced forestry of the future that we all seek. The notion of community forests is also included in the provincial Natural Resources Strategy. The strategy, as you know, was developed through extensive consultation across the province. It tells us that things have to change in Nova Scotia when it comes to the forestry; the status quo is no longer an option. The collaborative approach of community forests, I believe, is an attractive one for Nova Scotians because a community forest is essentially land that is managed by a local government or community group truly for the benefit of the entire community. The Premier said recently that the community forest must be a working forest.

 

The vision is for communities to be involved in the decisions about how their forests are used, not just consulted but truly engaged and ingrained in the decision-making process. So we've opened the way for anyone or any group to step forward to explore ways to establish and operate community forests on Crown land throughout the province. Interested parties are invited to provide a detailed request for proposals for one or more pilot community forest projects, but beginning in southwestern Nova Scotia. The province has also explored an opportunity for a Mi'kmaq forest initiative with the Assembly of Mi'kmaq Chiefs. We will work collaboratively with the assembly to ensure that interested Mi'kmaq groups and entrepreneurs have opportunities to be involved in forest initiatives.

 

The benefits of community forests are actually quite numerous. Community forests are created and managed for a range of uses including timber production, alternative forest products for tourism, for recreation, for habitat production, and for educational programs, to name just a few. Certainly they can benefit local communities by providing resources to community projects which help them to create jobs and support families and the local economy. The community forests concept is one way for a strong forest industry to add to the growth and prosperity of the entire province.

 

Madam Chairman, I mentioned earlier about the ecosystem approach to forestry, and certainly we need to put this in place across the province so that we have a sustainable forestry down the road. We need to let each piece of land tell us what type of harvesting should take place on it, because every piece of land is unique in itself.

 

As I said, this has certainly been an eventful year in forestry in Nova Scotia, which has led us to a comprehensive planning process, particularly on our western Crown lands, as I mentioned earlier. Together we have sailed through some rough waters and we've hit the storms and suffered losses, but I think as a province we've also regrouped and reset our sails as we continue to navigate through.

 

Contractors are back to work, certainly in the woods and particularly in supporting Port Hawkesbury Paper. The biomass and energy production is coming along quite well at Nova Scotia Power's new generating facility. New wood fibre-based technologies and products are being looked at. I think we have a promising future. There is now a steady growth in demand for lumber across North America, so we believe that there is always going to be a good future for forestry in this province.

 

I want to turn now, Madam Chairman, to the mining industry and our potential in that regard. The mining industry has been an important part of Nova Scotia's history and it continues to be an economic pillar in the province, especially in the rural parts of our province. Nova Scotia certainly has an abundant opportunity and, really, a competitive advantage over many other jurisdictions in Canada. And there are reasons for that, of course, and one is that we have a very diverse geology here in Nova Scotia. Also we are very strategically located on the North Atlantic here along the Eastern Seaboard of North America. We also have a well-established infrastructure here in Nova Scotia, including seaports, railway, and an extensive road system. We have great air connections, and of course, we have three-phase power throughout the province - all that helps our mining industry.

 

Also, we have a very strong regulatory one-window process that provides clarity and timely service to mining companies doing business in our province, and that includes a streamlined environmental assessment process and a very effective consultation process also with our First Nations people, with the Mi'kmaq - and of course we have an educated and skilled workforce. Last, but not least, we have very skilled expertise within the Department of Natural Resources in the Mineral Resources Branch, where we can continue to provide important services to the mineral industry and to government and to the general public.

 

I believe that we've worked hard to show the world that Nova Scotia is open for business, and we're backing this up with financial incentives to support exploration and additional investment in our province.

 

The Government of Nova Scotia implemented last year, in 2012, a Mineral Incentive Program, which was designed to assist prospectors and exploration companies in the search for new minerals in our province and to find new discoveries and to advance projects closer to production. I'm pleased to say that program, which was valued at $700,000, was a great success and we actually had 29 grants that were distributed throughout the province for new exploration and mineral development in our province.

 

To further support the exploration and the province's commitment to the mining industry, the Registry of Mineral and Petroleum Titles is being updated and modernized. This new system will give industry the ability to stake a claim here in Nova Scotia from anywhere in the world simply by using the Internet, and it will modernize the province's process for mineral claim staking and will certainly create greater administrative efficiencies for both industry and government with a more timely and secure service. I'm pleased to report the new on-line registry will be operational before the summer.

 

I just want to give you a little update on the state of our mining industry here in Nova Scotia. I believe the stage is set for the mining industry to achieve greater prosperity and make a more significant contribution to our economy. Today there are several advanced projects that have potential to grow the mineral sector in Nova Scotia. One of those is Resources Appalaches - they're working towards reopening the gold mine in Dufferin, Guysborough County. The company plans to be in production this year, 2013.

 

Also, Atlantic Gold's Touquoy Gold Project in Moose River Gold Mines has received environmental assessment approval and a mineral lease. They will represent the first surface gold mine in the province.

 

Selwyn Resources has received environmental assessment and industrial approval for a mine expansion and is working towards reopening the lead zinc mine in Gays River, just north of metro. We currently have 11 operating mines in the province; those would include operating mines for salt, gypsum, limestone, and coal. In 2011, the value of mineral production in Nova Scotia actually reached more than $130 million. I'm confident of a recovery in gypsum exports as the U.S. housing market rebounds; there is also continued interest in potential development of aggregate quarries for export markets here in our province.

 

Mineral exploration crews are searching many areas of the province, and currently there are 34,000 active claims in good standing in Nova Scotia. There are also several encouraging exploration projects for gold, rare earth elements, base metals, and industrial minerals that have the potential to diversify and to help grow our mineral industry in this province.

 

I'm going to take a minute, Madam Chairman, to talk about lands and Crown lands here in Nova Scotia. As I've already mentioned, this was a landmark year for Nova Scotia, as government acquired 555,000 of prime land from Bowater. We're moving forward to determine how best to manage this newly acquired land as well as the 1.5 million acres of Crown land in western Nova Scotia. When our government came to power less than four years ago Nova Scotians owned less than one-quarter of the provincial land, and today we can proudly say we've moved well past one-quarter; in fact, Nova Scotians now are in control of roughly one-third of the land base of this province. We've added 800,000 acres to the provincially owned land base in the past four years. These lands are important to our future, so whether you're a forester, hunter, hiker, or camper, our lives are certainly richer for having those lands owned by the province.

 

Beyond land purchases our government delivered on a promise last year to enhance access to our province, and we now have a new legislative tool called the Community Easements Act to empower community groups, municipalities, and the Mi'kmaq to preserve access to the lands that are traditionally used for community purposes. By paying landowners for the right to control how the land is used, a community easement can allow groups to preserve things like agricultural land, community access to places of interest, working forests, scenic views, wetlands, and woodlots. These easements may also be used to conserve lands with cultural significance or archaeological sites. The Easements Act lays out particular conditions about land use and those conditions remain attached to the property in the future even if the land is sold, so it runs with the land.

 

We made a commitment to preserve our land when we took office in 2009, and beyond our many land purchases we extended that commitment, further preserving Nova Scotia's access to and enjoyment of the province's natural beauty - and this is just another example of how the province is making life better, I believe, for Nova Scotia families in every region of our great province.

 

Madam Chairman, I have a few more notes I want to read here, but I do know it is getting close to the moment of interruption, so if you wish, I'll adjourn for the moment and we'll pick up after the moment of interruption.

 

MADAM CHAIRMAN: Thank you very much. We have reached the moment of interruption.

 

[5:58 p.m. The committee recessed.]

 

[6:32 p.m. The committee reconvened.]

 

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

 

The honourable Minister of Natural Resources with 18 minutes left.

 

MR. PARKER: Thank you, Madam Chairman, and I am pleased to pick up where we left off before the interruption. I have a little bit more I wish to tell the House regarding the Department of Natural Resources, and then we'll open it up to comments or questions from other members of the House.

 

These are the 2013-14 estimates for the Department of Natural Resources. I previously spoke about forestry and mining, and another very important part of the Department of Natural Resources is parks. Our provincial parks are truly beautiful spaces that contribute to the quality of life for families throughout the province. I know people love their parks in Nova Scotia. The parks help create jobs and help grow the economy. They provide educational opportunities for students and provide places for relaxation, and are a chance to reconnect with nature. They're home to a diverse variety of species of plants and animals.

 

Nova Scotians and out-of-province visitors continue to take advantage of our provincial parks for their attractions and activities. We all know that in our own constituencies we have favourite provincial parks - personally, in my riding, the Salt Springs Provincial Park; Green Hill Provincial Park, with a great look-off over the countryside; Rushtons Beach Provincial Park, near River John; and also Caribou Provincial Park, which is a camping park located on the Northumberland Shore. I'm sure other members here have parks in their ridings. They're great places to go to camp, hike, or fish, or just to enjoy nature.

 

Our research has reaffirmed that Nova Scotians are using our parks more than ever to visit and explore the scenic sites for the nature-based experiences that they provide. Our reservation system for our parks continues to exceed expectations. The computerized system allows us to note that there were more than 58,000 overnight stays at our provincial campsites during the 2012 season. That's up almost 7 per cent from 2011. The number of reservations continues to climb upward, with an increase of 12 per cent in 2012 compared to 2011, and with more than 18,000 tourists taking advantage of the service this past year.

 

That trend is continuing during this new fiscal year. In fact, on the opening day of the reservation system - that was April 2^nd this year - we saw a 37 per cent increase in the number of reservations for that 24-hour period compared to a year previous to that.

 

In December, our government announced new and extra funding for our provincial parks system. Above and beyond the regular operating budget for our parks, government is committed to an extra $1 million a year toward major improvements in our parks. That is new funding, and it will be $1 million annually as we move forward. That new money will be used to develop large projects in our provincial parks, such as constructing new washrooms or administration buildings. The new funding will also go toward redeveloping some of our camping parks.

 

In addition, the province has made separate investment commitments to projects along the South Shore - certainly in relation to the Bowater mill shutdown there - and will help to support the economy in southwest Nova Scotia.

 

A major redevelopment of Graves Island that was valued at $1.5 million is underway and will provide new and improved services to campers, as well as the local community that uses that particular park on a frequent basis. In addition, improvements started last Fall at Rissers Beach, Sand Hills Beach, Summerville Beach, and The Islands Provincial Park. Those will all be completed in the upcoming months.

 

We're especially proud of the new trail experience added to parks at Port L'Hebert. It was a pocket wilderness formerly managed by Bowater, and I've had the opportunity to visit that particular park. It's right on Highway No. 103, near the border between Queens and Shelburne Counties. It's a beautiful little walking area that takes you downhill toward the water and then back uphill as you come back out, but it's a nice rest stop along the way - maybe a 20-minute walk if you're wanting a break from travelling along the highway. That is an area that will be a new provincial park as we move forward.

 

Government has listened to the people through extensive parks consultations held all summer and into last Fall. We have over 120 camping, picnic, and beach parks in our province. I know many people truly love the park experience, so we're improving our parks for Nova Scotians and for future generations of Nova Scotians. We're certainly proud to be putting the extra support toward our province's parks.

 

I want to take a moment to talk about our Parks and Protected Areas plan. Just over a month ago, we released a draft Parks and Protected Areas Plan with our colleagues from the Department of Environment. With those consultations underway, Nova Scotians now have a chance to comment on the plan. The plan describes which lands are proposed for protection and which type of management is proposed for each type of property.

 

The proposed plan identifies four new properties that will be added to our provincial parks system: Petit-de-Grat in Richmond County; Port Bickerton in Guysborough County; New France in Digby County; and, as I previously mentioned, Port L'Hebert in Queens County. In addition to that, we have 12 existing provincial parks that will see an increase in the area, most notably Cape Chignecto, at Blomidon, and at Cape Smokey - all beautiful areas of our province to see and explore.

 

Sixteen park properties are proposed for transfer to Nova Scotia Environment as either wilderness areas or nature reserves for effective management of land and associated resources; 80 park properties would be transferred to the Crown land management program. These properties do not match the parks program objectives, and we believe they will be more effectively managed as Crown land - and importantly, public use and access will not change on those lands. Our public meetings on this have just wrapped up; however, we're still inviting public comment on our Parks and Protected Areas plan, and will still take public comment up until May 1^st of this year.

 

I'm going to wrap up here shortly, but finally, I just want to put a plug in for our special Natural Resources initiative and invite all members of the House and the general public to come to an upcoming event. Our department is holding an open house in Shubenacadie on June 1^st and June 2^nd - not that far away now; just a little over a month and a half - and it's really going to be a great opportunity to talk to others about the importance of our natural resources and to celebrate it at the same time. So that is the Department of Natural Resources open house at the Shubenacadie Wildlife Park on June 1^st and June 2^nd. I hope that all members will have the opportunity to drop in and bring your families.

 

I'm proud to be involved in that, as I am proud of our many accomplishments within the Department of Natural Resources. DNR is a great department. I'm privileged to be the minister of the department, and I look forward to working with our partners to build a better future for Nova Scotia through responsible and sustainable natural resources management.

 

I'm going to stop there, Madam Chairman, and I'll certainly be pleased to hear comments or questions from other members here in the Legislature.

 

MADAM CHAIRMAN: The honourable member for Kings West.

 

MR. LEO GLAVINE: I'm pleased to have the opportunity to ask some questions and probably a few comments along the way. I want to welcome Deputy Minister Montgomerie and your financial adviser - or financial person - Remi, to the debate and to estimates.

 

I do have some very specific questions around estimates, so I wanted to start off on Page 17.4. There are a number of variances, and one is in Renewable Resources Administration. Last year's estimate was $1.648 million; the forecast was higher at $1.702 million. The estimate for next year is considerably lower at $1.356 million, so I'm wondering why there would be that kind of change and variance. That's Page 17.4, Renewable Resources Administration.

 

MR. PARKER: I welcome the honourable member to the discussion here this evening. I'm sure that over the next number of minutes or hours in the days to come we'll have some interesting conversation.

 

The Renewable Resources Administration estimate for this year coming is $1.356 million, as was indicated, and that is down from what we spent the previous year. My understanding is that's just administrative efficiencies, part of the government's role to meet the 311 principles in government where every department was asked to sharpen their pencil and look at administrative efficiencies. That's exactly what has been done there.

 

MR. GLAVINE: I'm wondering if in that $300,000 change, would that involve some staffing changes to your department or at the resources administration level?

 

MR. PARKER: My understanding is that that is for professional services - about a $300,000 difference for studies or information that would be required. It's not salaried staff reductions. It's simply in the professional services that would be required.

 

MR. GLAVINE: Under program development, again, there's a difference from estimate to forecast - down by $193,000 - but in the estimate for 2014, it is considerably higher at $6.255 million - quite a difference from the estimate from last year. Why is it so much higher for 2013-14?

 

MR. PARKER: As the honourable member can understand, there are some things that go up year to year and some other things that go down. Both are true here in this program development budget. First of all, there is money taken out of there. It was transferred to regional services, and if you look further down the page you will find regional services (Interruption) Okay, it'll show up on a separate page, I guess. There's about $3.2 million there that was transferred to regional services, so that's taken out, but also added to it is more than that to make up the difference.

 

It's really all about our new initiative with stronger emphasis on forestry and forestry renewal and dealing with some of the challenges we had in the past year. There's some additional money to develop the Mi'kmaq economic capacity in the forest industry. Moving forward, we have a Forest Utilization License Agreement with Port Hawkesbury Paper that was previously announced. I think it was $3.8 million for sustainable forestry on those Crown lands.

 

Some other initiatives on private lands around research and innovation and support for private woodlot owners, and just various educational outreach programs are included there; a little bit for our 12 per cent land initiative and some of the work that is ongoing there to complete, and some miscellaneous, but I think it's about $6.1 million that has been added to that budget. If you subtract the $3.2 million that was transferred to regional services, the difference there is outlined on that second line.

 

MR. GLAVINE: There may be some similar comments or inclusions in your next response. In terms of reforestation, it was estimated at $572,000, but the actual was much higher at $838,000. That's almost $300,000, which is a significant difference from estimate to actual. Could you provide an explanation for that?

 

MR. PARKER: That additional increase is primarily due to the new activity on the lands associated with Port Hawkesbury Paper. It's under the Forest Utilization License Agreement, and there is about $266,000 that was added there for reforestation on the Port Hawkesbury lands. That's primarily the difference: reforestation work on the new Crown land that's under a licensing agreement with Port Hawkesbury Paper.

 

MR. GLAVINE: This year the estimate goes back down, so I guess you would say this year an estimate of $561,000 is more in line with the amount for reforestation that you have year over year. I guess that's the case.

 

Having just acquired the Bowater lands - and we know that some of them were in reasonably good shape, although there was some extensive cutting over the last five-year period. I know that there is a plan for silviculture in that area this year, and I'm wondering, do you talk about acreage? Do you talk about the number of trees that you will be planting? I'm just wondering how extensive that work is on the Bowater lands which are now Crown lands.

 

MR. PARKER: I don't have a figure specifically on the Bowater lands at this point in time, but of course, as you know, we're undergoing the western Crown lands planning process. There are a number of public meetings held around the province on what Nova Scotians think is the best use of that Crown land. We have some responsibility to make sure that good silviculture practices continue there.

 

I'll undertake to get that information for you. I don't have it right at my fingertips, on the actual dollars that we're spending, but again, it's going to depend on whether it becomes lands under management with a forestry company or if it becomes community forest or it becomes part of the 12 per cent process. There are a variety of uses for the land. We're still working through that process and determining where it's all going to end up, but I'll undertake to get as accurate a figure as I can on the silviculture side.

MR. GLAVINE: I think that is an important question to be asking during estimates on the budget. Some of the smaller companies that do reforest, do silviculture work in the province - one in particular that I refer to, North Mountain Woodlands, that has been in this business for 30 years - are essentially saying that pretty well all of the stock that's at Stratford is being directed to the Bowater lands, and right now they are looking like they're going to be out in the cold this year.

 

I'm wondering if there is going to be less for the small woodlot owners, the companies that have done a great job, when year two comes along and there is a need for the planting to take place. It is critical that some of those areas get replanted and be part of the cycle that some of these woodlands have had - a pattern - over the last number of years. At this point it is relating to the estimates; it is a concern; and I'm wondering how the minister sees the disbursement of reforestation dollars, because it is important that all parts of the province receive some distribution.

 

MR. PARKER: This government recognizes the importance of good silviculture in our province. There are a variety of programs that fall under silviculture, from pre-commercial thinning to proper selection harvesting and crop trees, but sometimes it's necessary to replant, as well, just on a straight plant basis, or a fill basis, but the importance of silviculture on Crown lands and on private lands - this government has put a lot of investment into proper silviculture over the last three or four years, through the Association of Sustainable Forestry on private lands and on Crown lands as well, from one end of the province to the other. Owning a million and a half acres of Crown land in western Nova Scotia, we recognize the importance of setting the example and following up with the good work that Resolute or Bowater did on their lands over the decades.

 

I'm not quite familiar with the particular contractor you've mentioned, North Mountain Woodlands, but I'll undertake to find out what's going on there. I do know that we have a full commitment to FSC certification on many of our Crown lands under licence and maintaining that standard. So we'll check that out, and I'll get the information for you. I should also mention - you mentioned about the Bowater silviculture investment, and it's somewhere between half a million and three-quarters of a million, in that range.

 

MR. GLAVINE: Thank you very much, Mr. Minister, and I appreciate that. I do have to add one little point: this company that has been around for at least 30 to 35 years may actually have had a name change. I'm familiar with some of the areas on the North and South Mountains that they reforest, and some of their old signage is still up, but the company may be under a new name, so you and I can continue that discussion.

 

As you talk about moving from - almost the singular way in which we cut our forests was through clear-cutting, and you're talking about a demonstration forest. I think that's very, very important for all Nova Scotians to realize, that there is a forest where good practices can actually be observed. I'm wondering, can you tell Nova Scotians today where some areas are that are seeing selective cutting, some restoration of the Acadian forest? I think the two go hand in hand, and I'm wondering if we can point to areas of the province where that transitioning is taking place.

 

MR. PARKER: Well, thank you, and again, I mentioned that we're trying to set the example here. We are the stewards of the Crown land, the resources that we have in Nova Scotia. We have a Forest Utilization License Agreement with Port Hawkesbury Paper on the eastern lands in this province, in Cape Breton and Guysborough, Pictou, and Antigonish Counties on the mainland, and those seven eastern counties. Those lands are under FSC certification, which is considered by some to be the gold standard of certification and sustainable forestry management.

 

There are some contractors who have been working there with Port Hawkesbury Paper, and some of them we had in the woodlot last winter - a year ago now - working on some practices on using present forestry equipment to look at alternate harvesting methods - not clear-cutting, but other - selection harvesting and shelter wood cuts - to try to maintain a canopy on the forest floor. So in the eastern region, there's that example through Port Hawkesbury Paper, and also in western Nova Scotia, on the Bowater lands. Again, Resolute or Bowater have been good stewards of their land, and FSC certification is part of that.

 

That's another area that you'll find some well-managed woodlots. They're looking at alternate forestry cutting practices, and I know there are a number of private woodlot owners around the province who take real pride in their woodlands and have for generations. I think of Wind Horse Farms on the South Shore, who have done a super job for generations in managing their lands sustainably, and who look at selection harvesting on an ongoing basis.

 

Under the private lands agreement that we have with the Association of Sustainable Forestry, a good portion of that funding is going toward the treatments for partial harvesting, and we're encouraging that under Category 7 of the standards of silviculture and treatment techniques that are available. More and more we're looking at private woodlot owners as being the key to sustainable forestry practices in this province. They really are the key to the success of the Natural Resources Strategy, The Path We Share.

 

Fortunately, there is more and more uptake, and it's all about education, about showing woodlot owners that there is a better way to do things rather than clear-cut your forest. It brings an instant return, but that's it for maybe three generations. More and more woodlot owners are environmentally involved and want to sustainably manage their land. We're also working with the Nova Scotia Woodlot Owners and Operators Association, and they have a demonstration woodlot at Otter Ponds here in HRM.

 

There are lots of good examples, and I know that list is growing all the time. We're very pleased that that transformation is now occurring within our forestry industry. There is truly a good future for forestry in this province.

 

MR. GLAVINE: I was going to ask a little bit further along about Category 7. Category 7 is critical to the Acadian forest and some restoration projects that have been undertaken, especially by the small woodlot owner. That seems to be an area where they can find a niche industry as they rebuild some of the hardwoods and have that true mixed forest that was the traditional heritage forest of Nova Scotia.

 

What percentage of silviculture and reforesting would now be going into Category 7?

 

MR. PARKER: My understanding is that Category 7 - that's selection harvesting and trying to find that alternate harvesting method rather than clear-cutting - receives somewhere between 35 per cent and 50 per cent of the funding. That has been increasing over time. At one time it was very small, but now we're up to somewhere close to 50 per cent of our funding going toward that treatment method.

 

MR. GLAVINE: That is an encouraging note, and I'm pleased to hear that. It's a category that I've been talking about for a number of years, as the former Natural Resources Critic. I think we were hearing at some of the community meetings the need for having a good funding level for that category.

 

Under planning and research, the estimate last year was at $744,000, and the actual turned into $812,000. Was there a specific project that was meant to bump up in funding? It is quite a bit higher for the next year at $964,000, so is there a specific area under forestry planning and research that would accommodate both of those changes?

 

MR. PARKER: You're correct in that planning and research is up a couple hundred thousand from this year, but the forecast is $150,000 or so. I do know that about $50,000 of that was under our new 12 per cent initiative. I think the full-year funding is probably $100,000, but half of that was in last year and half of it is in this year, so there's about $50,000 there. That doesn't cover all of it, though, does it? There's some additional - I guess there are also some staff who were transferred from other divisions into planning and research, so that should make up the balance.

 

MR. GLAVINE: Forest inventory was estimated at $1.923 million last year; the actual was $1.605 million. Again, I'm wondering why the difference there. It's estimated higher to be at $2 million in the next fiscal year.

 

MR. PARKER: I guess the forecast is down there in that category because of vacancies that are temporarily unfilled. I think that's around $318,000, so that accounts for the decrease last year.

 

MR. GLAVINE: I'm interested in knowing a little bit of the scope of work that forest inventory would be carrying out. I believe that one of the real deficits in our province around forest inventory is having an annual allowable harvest. Many jurisdictions now have gone to an annual allowable harvest. They know the pattern of growth over a 50-year cycle, or perhaps even longer, based on our soils and climate. We can do pretty sophisticated inventories of our forests.

 

I'm wondering what forest inventory - what some of the work actually is, and why our province hasn't considered an annual allowable harvest. I think it would provide a great deal of assurance to people, because again, when people take a look at the amount of clear-cutting we've experienced now for a couple of generations, there is this feeling when you talk to people, and also when you talk to people who work in the woods.

 

In fact, over the Easter weekend I went down to East Dalhousie and went around Armstrong Lake, Lake Torment, and came back in six to eight inches of snow - to my surprise - on the fire road, which was actually in pretty good shape. That day, I talked to one man who has worked in the woods - he said 32 years. He said that first when he started - or certainly he remembered as a young boy that his father would need about 18 logs for a cord of wood, and today it's usually 50 or more that you're getting to make up a cord, because you're cutting a lot more of three-, four-, or five-inch stock. I'm wondering what really happens around forest inventory. Why hasn't our province looked at an annual allowable harvest?

 

MR. PARKER: I certainly agree with the honourable member. It's important to keep track of what we have; it's our inventory; it's our Crown supply or even private supply. It's what we own as a province or - not necessarily what's on private land, but as a forest resource. It's important to know what's out there. We recognize the importance of the annual allowable cut, and our Natural Resources Strategy mentions or refers to the importance of getting a proper handle on the resource so that we know better what amount we can harvest on an annual basis.

 

To that effect, this past year we've hired two additional modellers who work strictly on forest inventory. They work out of the DNR office in Truro, so that's added to our complement of forest professionals who can, through air photo interpretation and on-the-ground sampling and other means, get a handle on what is out there as far as volume of trees and species of trees. That's an important part of it.

 

We've also been looking at various methods around harvest tracking, what is being cut. We had a small study done on what some of the methods are, so that we can track the harvesting out there. It ranges from everything from accurate and up-to-date satellite photos to equipment that's installed right on a processor or on a machine in the woodlot that's cutting on a daily basis, that can determine exactly the volume and the species that they've got. It's modern technology that is available to us, and we've been piloting some of that work on the Port Hawkesbury Paper Crown lands in eastern Nova Scotia.

 

It's a combination of things, but we recognize the value and importance of knowing what inventory we have and then better tracking that we don't overharvest on any particular year or period of time, and keep track on an annual basis exactly of what is being cut out there. We're working toward that modelling and getting a better handle on it all the time, and it's vital that we continue to do that.

 

MR. GLAVINE: I have a few other questions along that area. Some of my recent travels out south, both along the Aylesford Road and Highway No. 10 - I'm wondering if there is a requirement by those cutting on Crown land or private woodlots. Does there have to be a buffer between the cutting and the road? We're seeing a lot more open areas from the road, and that's something that I've had tourists talk about in the past. I guess it's not what they expect in "Canada's Ocean Playground" when they move inland and they're starting to look at some of our forestry area. It's detracting, but probably when he's cutting in an area, the forester is going to say, I need to get every last stick.

 

I'm wondering if there is, and if not, if there's a good reason that we should be taking a look at buffers.

 

MR. PARKER: I just want to come back to the annual allowable cut before answering your last question. In recent years there has been far less wood harvested in Nova Scotia, partly because the mills have been down in Bowater and Port Hawkesbury and so on. Last year, there were approximately four million cubic metres harvested in this province, and that's down considerably from previous years that were as high as seven million cubic metres. There's less pressure on our woodlots. Again, that's partly because of the mill situation and interrelated to sawmills around the province.

 

We have in this province the code of forest practice, which guides good, sustainable harvesting practices in this province. Part of that is regulations we have - you're not allowed to cut so close to a stream, and also we have the wildlife clumps regulations and the watercourse and wildlife regulations, in that regard.

 

As far as roads, though, I don't believe there are any restrictions. Of course, you can't cut on someone else's property, so roads often have a distance from the centre line of 33 feet or sometimes 50 feet, and sometimes more than that. That's public land, if it belongs to a transportation route, so you wouldn't be able to go right down to the ditch to cut trees. You'd have to respect the other landowner, which in this case happens to be the Crown, who owns the road.

 

Other than that, I'm not aware of any restrictions on a distance from a road other than you have to respect the property line.

 

MR. GLAVINE: In terms of FSC and the importance of the stewardship principles and practices that are inherent with that requirement in some cases with the use of FSC, do we have an idea at this point of the percentage or numbers of the private woodlot owners that are seeing the value in moving toward that practice? Also, are we at this point seeing any relationship in terms of selling our product into the marketplace as a requirement of any of the retail and wholesale industry?

 

That could be an advantage for us, because there is definitely stronger interest, as we know, in that practice. I wonder if we're seeing some gradual increases with private woodlot owners, and can they see the tangible results of embracing FSC?

 

MR. PARKER: As I mentioned earlier, the FSC - Forest Stewardship Council certification - is in many ways recognized as a gold standard for certification, although there are other certifications out there. SFI is another one that's recognized by industry and by others. There are some additional ones as well.

 

Often demand for a product is driven by the customer, and if the customer demands FSC-certified paper or lumber, whatever the case might be, it makes good business sense for the company to meet those standards so they can better market their product or better sell the item on the open market or on the world market. I think most businesses are attuned to their customers' needs and want to meet the standard they expect. It makes it easier to sell the product, in some cases, across the globe.

 

We, as a province, have been encouraging more FSC certification. We've been working with the Nova Scotia Landowners and Forest Fibre Producers Association group based out of Port Hawkesbury. They've been working with private landowners to have more lands certified under the FSC certification, so that's supported partly by our government's programs under certification, and that's ongoing. I understand they have a number of landowners signed up for that program in the seven eastern counties of Nova Scotia. As I said, both Port Hawkesbury Paper and Bowater are supportive of the FSC and are continuing to have those standards met on their lands.

 

There's a lot more interest and a lot more stewardship by private woodlot owners that want to see their lands sustainably managed. We're encouraging that as a government, because it makes every sense, and in the end it makes it easier, I believe, for companies that have those certifications to sell their products.

 

MR. GLAVINE: In terms of FSC practices, suitable forest practices - and we now know that there is a different arrangement, a new arrangement, with the Port Hawkesbury mill lands - will those lands be providing some of the stock for the new biomass, the 60-megawatt plant that will be at Port Hawkesbury, or will it be a combination of the Port Hawkesbury lands, Crown lands, and the private woodlot owner? There will be a significant requirement there, and I would think Natural Resources has developed a plan for where that stock will come from.

 

In general terms, I'm wondering about the framework that Natural Resources sees as to where the requirement will be provided over a 30- to 50-year life cycle of forestry in that area. A 60-megawatt plant is considerably large. It's not the model that some other countries and jurisdictions use, so I would think that in relation to trucking some of the wood fibre, the wood stock, for the biomass electrical generation plant, there must be good inventory and also some oversight on how that will be provided.

 

MR. PARKER: We know that Port Hawkesbury Paper buys from both their own lands and the Crown lands, but they're also buying from private sources.

 

Just as an aside, the FULA, the Forest Utilization License Agreement that was there - they had to buy at least 200,000 tons from private sources, from private woodlot owners, and they have about 400,000 tons that they can harvest sustainably off their own lands or under licence. However, I understand they've been buying about 40 per cent of their fibre needs from private land, so that's encouraging. That's helping the small woodlot owner to market their products.

 

As far as the biomass, we have regulations under the Renewable Electricity Plan and standards under the code of forest practices, but the overriding principle has been around the highest and best use of the wood fibre. It makes every sense that a good-quality log, hardwood or softwood, would go to a mill to be sawed into lumber. Perhaps a hardwood log would make fine furniture or flooring. That's part of the regulations under the Renewable Electricity Plan, that they have to prove they are separating the wood and the better-quality logs.

 

It makes business sense too. It's much more valuable to get the higher price out of a good-quality log rather than shipping it off for biomass. Really, biomass is a way to help sustainably manage our lands, and the lower-quality wood is what will end up as biomass. If it is stems that are diseased, crooked, or not of sufficient quality for other uses, then that's what will become the fodder for biomass.

 

Nova Scotia Power operates a biomass facility, and they put out an RFP looking for product. I know that Port Hawkesbury Paper has made an arrangement that they will provide some of that feedstock to the facility, and I'm sure they'll be buying from other sources as well. Again, the principle is that biomass is almost the waste product from good forest management, and it allows the good-quality products to go to other uses.

 

MR. GLAVINE: Just one related question to the biomass plant in Port Hawkesbury is the Emera plant - the former Brooklyn-Bowater Plant, the 30-megawatt. Of course, that was once very much an integrated operation because of the mill and the waste material that would go into the biomass plant. Is that feedstock coming from sawmills, or is it just straight chip material that's coming from off both Crown lands and private lands? I'm just wondering what kind of a transition the Emera Brooklyn plant has gone through in order to provide the feedstock, because, as you know, it was part of the integrated Bowater Oakhill plant that we knew of along the South Shore.

 

MR. PARKER: Part of the transaction on the Bowater situation - we heard loud and clear from Nova Scotians that they wanted us - as government, as a Crown, as the people of the province - to own those facilities, including the 555,000 acres of land. The transaction also included the mill site at Liverpool and the Brooklyn energy facility. That still belongs to the Province of Nova Scotia. It has not been transferred to Emera yet, and until it is, we as a Crown own that property. The plan is to turn it over to Emera in due course, but the fuel source is really part of the integrated supply chain in the forest industry in southwest Nova Scotia. The hog fuel, or the sawdust, or the waste from sawmills in the region supply that biomass facility, and continue to do so under government ownership.

 

MR. GLAVINE: Mr. Minister, one of the mills that was integrated into that system was the Oakhill mill. When that closed and the equipment was moved into Quebec, with having been owned by Resolute Forest, did we lose that percentage of lumber as part of our Canada-U.S. agreement under the trade agreement? Did that percentage that was produced in Oakhill move to Quebec with the equipment and with the rights? I'm wondering what transpired as a result of that loss in Oakhill.

 

MR. PARKER: The whole transaction - involving Bowater assets, including the land and the other assets we talked about, the Liverpool and the biomass facility - was complicated, but the Oakhill sawmill transaction was not part of that. Because of the softwood lumber agreement, we could not include that. Otherwise, we would have violated the agreement with the United States, and we didn't want to jeopardize our sawmill industry here in the Maritimes at all - including not just Nova Scotia but other provinces as well. Resolute made the decision, in time: they're going to close it, and the equipment, as you said, was shipped out.

 

But the fibre still is here, the woods are still here, the opportunity is still here, and other sawmills in the area have had some opportunity to pick up supply and to increase their businesses - like Freeman's, in the southwest region, and others, I'm sure. But while there's a loss there in the Bridgewater area, unfortunately, it's just the nature of the softwood lumber agreement that we could not violate. It did create opportunity for other sawmills, but nothing has been transferred out of province except the assets of that lumber mill.

 

MR. GLAVINE: I just have one or two other questions around our forestry and lumber industry. I know it's just part of your ministry, but as you said in your opening remarks, it has been a significant part of the past year, the past couple of years, in terms of the changes that are going on.

 

Is there any significant pattern, or even some little improvement in the past year, in terms of our lumber? As we all know, anything that has value added is the direction that we need to be going in. Are we seeing some positive developments in that area? Paper, unless it's very specialized, such as we have in Port Hawkesbury and in Northern Pulp - the future of newsprint is pretty dismal, so lumber and associated products are really where we need to be going. Are we seeing some positive development in that area?

 

MR. PARKER: I'm pleased the honourable member has raised this issue. Being in political life, we always have to be optimists. Part of our role is to lead by example. Personally, I'm always looking at the glass as half full, and there are better days ahead.

 

We've gone through some tough times in the forest industry over the last year or two. The loss of Bowater had a huge impact on workers and their families and communities along the South Shore, and that industry, the newsprint, was just not able to survive. On the other hand, that creates opportunities for us to look at alternate markets or harvesting techniques, and community forest is something that has come out of that. That's a chance for communities to be involved and have a real say in their resource and how it can benefit their own local community.

 

We're in that process right now, of going through the expressions of interest. We had seven different community groups in that area that have expressed interest in one format or another, and it will soon be going through a request for proposals to further develop that idea, and to set up a model forest or two, probably in the southwest Nova Scotia region.

 

Overall, and again, Port Hawkesbury Paper has been - the phoenix has risen from the ashes. We have a very vibrant mill operating there in Port Hawkesbury - probably the best supercalendered mill in the world. I think all the people in the eastern region are quite optimistic about the future of that mill, and I'm quite optimistic about the prospects in that region.

 

That's integrated in the supply chain. They're providing product to hardwood mills like Groupe Savoie, B.A. Fraser, Finewood, Murray MacDonald, and others in the region. On the softwood supply, as well, other mills are benefiting from that. Also, you referenced the lumber market - prices have been depressed over the last few years, but there's every indication that there's going to be a rebound in lumber prices. There's a growing demand in the United States, partly due to slow markets there for many years that are starting to rebound now, and due to unfortunate incidents like Hurricane Sandy - that did a lot of damage, but that's going to create a real opportunity in the housing rebound in that area.

 

There are a lot of positives, and we're building the forestry of the future. I'm very optimistic that there is a really good future for forestry in this province.

 

MR. GLAVINE: With the hour passing very quickly, I may ask to come back as the Natural Resources Critic. I got into it this evening.

 

Forest protection was higher in the forecast. The estimate was $2.2 million, but the actual was $2.7 million. What is the reason for the increase? Also, I hear that there will be a loss of some of the fire towers - the observation towers - this year. Is that the case or not? It's probably part of that rumour or actual that may take place.

 

MR. PARKER: Hardly time to answer your question adequately. I understand fire suppression was the reason that there was an increase last year with a hot, dry Spring and summer, and that spent more resources on it. We are transforming our fire service. There will still be some towers available, but we're also relying much more on aerial surveillance. It's proven to be effective in other jurisdictions, so we're going to have a combination of aerial and on-the-ground towers in various parts of the province.

 

I think my time is about up. Thank you.

 

MADAM CHAIRMAN: The time allotted for debate on Supply has elapsed.

 

The honourable Government House Leader.

 

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

 

MADAM CHAIRMAN: The committee will now rise and report its progress to the House.

 

[The committee adjourned at 7:37 p.m.]