HALIFAX, TUESDAY, APRIL 21, 2015

 

COMMITTEE OF THE WHOLE ON SUPPLY

 

3:09 P.M.

 

CHAIRMAN

Ms. Margaret Miller

 

MADAM CHAIRMAN: The Committee of the Whole on Supply will come to order.

 

The honourable Government House Leader.

 

            HON. MICHEL SAMSON: Madam Chairman, will you please call for the resumption of the estimates of the Department of Finance and Treasury Board.

 

            MADAM CHAIRMAN: We'll continue with the estimates of the Department of Finance and Treasury Board.

 

The honourable member for Hants West.

 

            MR. CHUCK PORTER: Thank you, Madam Chairman, it is good to have an opportunity today to question the Minister of Finance and Treasury Board on a couple of things - and I just happened to notice one of her staff there whom I'm fairly familiar with, and it might be kind of fun this afternoon to poke at George a little bit and see how it goes.

 

            Just a few things I want to talk about - the first one I'll go to is on education, universities, and lifting the cap - I guess we'll call it - that has been put on for a number of years and now with the ability for each university in the province to raise tuition to a level that they think would be acceptable or needed.

 

Having a daughter who just finished year number two at Acadia, I can tell you we all know the pain of education dollars and what the costs are, and I would say that most would agree all schools, including Acadia, which I consider to be a school in my backyard even though it's in a neighbouring constituency, a great school and it costs a lot of money to operate. I think most all appreciate that. I guess the question around it really is, was the idea behind this to accommodate the necessary labour fees - I know they were after some, the professors, increased labour costs, et cetera, and if not, what was the reason for lifting the cap on the university tuition dollars?

 

            HON. DIANA WHALEN: Madam Chairman, I appreciate the opportunity to talk to this. As we had said yesterday and the Leader of the Third Party had mentioned that the history is that we don't talk about other departments, at least about their individual budgets. I think the point you raise is an important one in terms of the overall budget that we're talking about here, and certainly on Budget Day I did speak to the media about the raising of the tuition cap. So what I would just like to say is just a few words about it to put in context.

 

            I notice that the honourable member opposite mentions his daughter - I think it's a daughter, a child at Acadia. My own daughter went to Acadia when they had what was known as the Acadia Advantage. Some people may remember that; it was an additional cost of $1,500 a year because they were one of the first universities to provide a laptop to every student and to start to really use the Internet and to make their classes very interactive that way. It was probably a good idea in the beginning, but by the time my daughter got there they had the highest tuitions of any university in Canada. So it sort of outlived its usefulness, the cost of laptops had come down so it was no longer an advantage, but they had a 10-year contract with the computer company so it continued on for a few more years.

 

Definitely in that instance our universities had, Acadia in particular, a pressure and they had a decrease in enrolment during that time, and I think it was because they had the highest tuitions in the country. It is a great institution, as are all of our universities; they all have a unique aspect. I thought I would refer to that in particular because I'm familiar with the cost of university and often the burden that cost can place on families, especially if you have more than one child at university at one time - it's certainly a big deal.

 

            One of the things that we mentioned to the media and in our notes in the lock-up and so on, with the answer to why the cap would come off, I think it's being called a reset; a one-year reset is really when it was originally brought in. I was in Opposition in the mid-2000s when it was a Progressive Conservative Government at the time - and you may have been a member at the time - when we were very much at the top of the country in terms of tuition and efforts were taken to bring us down into the average and we've stayed very much close to the average tuition ever since. That was the rebate that we gave or the bursary that all Nova Scotia students received direct to the universities at a considerable cost. It's over $1,200 per student that many students aren't even aware of. It's going back to the university in their name, against their tuition, to keep our posted tuition that we're asking from them, down.

 

It's a huge help overall and it has kept ours very low. The 3 per cent rise has kept it low in terms of how our growth is; it has kept us right within the norm for the country, which is where we would want to be so that we're still competitive. I know the Minister of Labour and Advanced Education talks a lot about how we remain competitive in the national scene.

 

            One of the points around the point in time when the universities were sort of reined in, if you like, and they weren't allowed to raise tuitions was that there was a disparity between different institutions. One example that was given to me was around the business program. If you took it at St. F.X. or you chose to take it at Acadia, there was a $500 difference in tuition because of where they were arbitrarily stuck at the time that this came in. We found that over time, the exact same program at two of our universities has a big disparity in price and that really, I believe, is what lies behind the need to allow a reset and sort of a rationale to bring it back into parity.

 

            MR. PORTER: So I guess just based on the reset, we'll call it, am I to understand then, and I guess students to understand, more importantly than me and other families, that the reset will balance out similar programs at university? We'll just use Acadia and St. F.X. and business as an example, or any school for that matter, is there some - I don't want to use the word "mandate" - but mandate to drive the idea that you just spoke of to balance these universities to similar costs in certain programs to share, like two or three schools who might share or offer the same kind of program?

 

            My daughter, as an example, is taking music. Yes there are other schools that offer it but Acadia is certainly world-renowned with those who have gone and been successful in music regardless of whether it is education, performance, or what it might be. Maybe you just want to elaborate a bit more on the reset piece. I just want to be clear, is this to level the playing field and make them all equal by way of the programing to give students - I don't know if it creates more options, but more options I guess - you know, maybe they want to go to Acadia, maybe they want to go somewhere else, but they're not going to pay any more because they have a preference for a school?

 

            MS. WHALEN: I think the important thing you're talking about whether it's to make them equal, I think it provides the opportunity for those universities that were disadvantaged by being behind in their tuition to come to a more level playing field because the costs are great and the universities are under a lot of pressure to continue to provide a high-quality education.

 

            It's interesting to note that your daughter is doing music at Acadia, that's what my daughter chose as well, so I guess that shows it is a good program there. My daughter majored in voice at Acadia which is, again, an important thing for learning and there are a couple of options in Nova Scotia for that program, as you would know. I can see your family are close to Acadia, you stayed close, but certainly St. F.X. has a music program, Dalhousie has a music program. Those are the two I know of right off the bat - and I think a new one is being set up at Cape Breton University or has been just in the last short while.

 

            The real idea is that, and the minister I know will speak to it - I don't know if she has had an opportunity to do estimates yet and perhaps you can go further with her on it - my understanding, and I think it is right, is that it's to allow them to be a little bit more competitive, to make up that shortfall that they feel they are under a disadvantage by having been honestly caught off guard many years ago when the lower rates were established and - rates were held back, let me put it that way.

 

So if they felt they were caught off guard and other universities had raised their rates prior to that, some of them, like in the case of business at St. F.X. that had not, this just allows a recalibration and hopefully it will come to - not that it will escalate a lot of the fees but there will be more of an equal weighting across the province when we're done.

 

It's certainly not intended in any way to diminish the number of programs or the choice that's available to students, and I would just like to perhaps paraphrase the Minister of Labour and Advanced Education because she said very clearly that students are very savvy shoppers, that they are very conscious of price, and that the universities will have to be careful about how they take this opportunity for this one year, because they will run the risk of out-pricing themselves and losing students.

 

MR. PORTER: I guess maybe that's a concern. There are a lot of people from all over the world, obviously, who attend our universities here in Nova Scotia. My daughter, yes very local, a few kilometres up the road, 30 kilometres or so, to go to Acadia each day and she was accepted at four different universities, as an example, and offered scholarships to each of them at some value or another and chose to stay at home even though Acadia costs a bit more. Some would argue perhaps quite a bit more than others and we often hear about Memorial in Newfoundland and Labrador - oh, it's cheap to go there.

 

When you actually do the math and the breakdown - and I'm not taking anything away from Memorial, it's a great school too - but when you do the math and your trips back and forth home, if you're going to do that and so on, we actually found, and maybe our math wasn't that good, but we actually found there wasn't a considerable difference by the time you paid your rent, whether you are on campus or off, and all of these different variables that go along with that, but to stay closer to home and to stay in the province, and hopefully to seek work in the province a little bit later on and also to go to a great school like Acadia, which is certainly world-renowned, as I said.

 

            So, having said that, a few minutes ago you talked about the portion that the government put up that a lot of people were unaware of, that $1,000 or $1,200 - is there no place on the financial documentation that the student would fill out when applying for school that states that's somewhere in the balance sheet? I know at the beginning of the year, in late August or September, and again in the new year, in December or January, we would get a balance sheet from Acadia, as an example, showing what the balance was owing. But I don't recall ever seeing anywhere on that document that government portion. Maybe it's there and I just didn't see it.

 

Would it not be advisable or should it not be mandated that we, as parents especially and the students, are aware that such a thing does exist so we know the real cost? And I will call it the real cost because if you add the overall tuition cost in you would multiply that by whatever it is each year that the government portion is being put out.

 

            MS. WHALEN: Some of the issues the honourable member is raising really should be brought to Labour and Advanced Education. I'm not sure how it's expressed in the receipts or whether the students see it as part of their cost and that it has been reduced. Obviously for government's point of view it would make a lot of sense that we make sure that students see it, recognize it, and know about the value, because we're putting in, literally, millions of dollars.

 

            Our support for universities is roughly $300 million for the institutions and about $300 million through student loans and supports to the students themselves, and that would include this bursary which was brought in - I believe you were a member when it came in, I believe it was under the Rodney MacDonald Government so that would have been when you were elected. It was a good thing because I remember being here and seeing Nova Scotia as a real outlier, just at the highest of the scale in terms of costs for university. With 10 institutions here of higher education, not including our community college, which is great but with 10 universities in our system, we knew it was important they be able to market themselves.

 

            Another thing that's quite remarkable about Nova Scotia is that we're the only province that consistently is a net importer of students. Although your daughter has chosen to go to school close to home, as many of our children do, she'll be surrounded by students from around the world, and also from across Canada, who come to Nova Scotia. We have more students who choose to come here than we have our students going out, which means we're a net importer of students. Something like 40 per cent of our student body are not Nova Scotians. That's a very important part to the viability and future of our universities - and another reason why they need to remain competitive.

 

            The other point I'd like to make around that bursary is that for Nova Scotian students it's over $1,200. Up until this year, the member and other members of the House might be interested to know, there was also an additional amount, not as great, but an amount that actually lowered tuition for out-of-province students. It was over $200 per student; I think less than $250 but I don't know the exact amount. It came to about $3 million in additional support that we were putting out for students who were not from Nova Scotia.

 

            That has been changed in this year's budget. I think it's important that we see that part of our aim should be to ensure that Nova Scotia taxpayers, who do pay the highest support to their universities per capita in the country because we're less than a million people, I think we look at tax filers are about 600,000 people and that's a big burden to be supporting so many universities and so many programs. What we want to do - we love the universities but we want to make sure the support is going directly to our Nova Scotian students which we have the greatest stake in their future.

 

            MR. PORTER: The reason I put those questions to you as the Minister of Finance and Treasury Board, someone who is really the overseer of all departments I guess and who would - I don't want to use the word "control" but dictate and ask - we've seen already where you, as minister in government, have asked certain departments, they've all had to feel the pain of this budget and I'm sure others and that is not new as we all know. Budgets are what they are and there are lots of good in budgets and also, each year, there are a couple of things that are seen as not so good.

 

            I want to move on to one of those now and that of course is a few questions on the Film Tax Credit. There has been a lot of discussion around this issue and there have been many questions put to you, Minister, in the House over the last week since the budget has been announced. There are a lot of numbers that we keep hearing about, I hear and I'm sure that other MLAs in the House hear, obviously from constituents and all Nova Scotians and some from even outside of the province with regard to the importance of the Film Tax Credit. I hear the Premier when he says nothing has changed but there is a change date of July 1^st, if I'm not mistaken at this point. I know that you're in discussion, obviously I've seen releases and I've heard from others as well in the industry that there are some positive things going on there and they're very hopeful that there will be some "common ground," as the Premier has referred to - and I think yourself as well - found for what is indeed a very important industry.

 

            Where I come from, in Hants West, Windsor, Hantsport, and around that area, we've had a lot of film work done there over the last number of years, I don't recall how many but there has been a lot and I remember in the 1990s working on a film as a paramedic at the time. They would hire a lot of different people, as you would know, and that movie at that time was Pit Pony; I do recall that because it was shot on my wife's grandfather's farm, part of it. It was kind of interesting. It's a big business. Even today we still see a great deal of film being shot in around Windsor and West Hants. In all honesty, I listened to all the back and forth and the discussion from all sides and I think about the people like the guy or the gal standing out there holding the flag to stop traffic when they're shooting that film along the roads and along the highways and so on, and other people who work in that industry are restaurants and hotels that are getting that spinoff.

 

I guess to that point, I know that the investment - you and I have had a chance to talk briefly on this last week - is $24 million. A variety of numbers have been tossed around about the spinoff. I've heard up to $150 million, but it's significant from what we understand. Are those numbers, as far as you as the minister in the department, are these numbers accurate in your opinion, of the spinoff value for the province?

 

MS. WHALEN: Madam Chairman, I did want to just respond to the honourable member's question. We did talk about this last week and I don't think you were here in the House last night when I touched on it as well in one of my answers. One of the things that I do want to preface, and I'll be saying again I'm sure, this afternoon, is to just let all the members know about the status of our discussions with Screen Nova Scotia who are representing this industry which touches a lot of different companies, a lot of different people. We have agreed not to talk about the details about what we're doing, not to sort of hypothesize or go off on any tangents, because we believe it's very sensitive at this point in time.

 

The important part I think is that they have kept very strictly to their agreement and that we can do no less on our part. Some of the questions I will be happy to talk about but I want to be very, very sensitive and cautious to what we do talk about here because it has been really a media blackout from last Friday. What had been discussed, and certainly we've had discussions with Screen Nova Scotia about the numbers, I hadn't heard one as high as what you said, the industry says something like $122 million was spent on productions last year. I believe they're using 2013-14 as a complete year spend.

 

We don't dispute that and I was saying yesterday, it's like having different yardsticks, they actually understand better because we've spent quite long meetings, there have been two long meetings with industry representatives. We're not disputing their numbers. The numbers that we use though are the amount of the productions that had support from the Nova Scotia taxpayer so that would be those productions that received a Film Tax Credit or that rebate that goes along with that support.

 

So if you took just those productions that were done here, the spend was $66.8 million. We know this because all the information comes back to the provincial Department of Finance and Treasury Board so that a cheque can be written after the fact for the eligible amount of support, and so we know directly that that was what was associated with those productions.

 

            The other things included in the larger number are things like sports programming or broadcaster in-house productions - that would be news, sports, and current affairs at CBC or Eastlink, and it also includes the value of the federal film tax credit which is federal money that matches our money; when the provincial money is given, so is a federal credit applied for. So it includes other things beyond the production that we've funded. That's really the reason we have a smaller number.

 

            We are not arguing with the industry about that, we're both agreeing that we have two different perspectives and we have used two different numbers that are equally valid; it's not a bone of contention with us.

 

            MR. PORTER: Thank you, Minister, I can appreciate the sensitivity around that and I don't want to delve into that or upset that at all. I'm just curious about the numbers. I guess that's why I asked the question, there have been a variety of numbers and I was kind of interested to see whether or not there was common ground found on what the real number might be. The other question around that would be, was there then a number of - we've heard a variety of numbers thrown around with regard to how many jobs are associated with that - are you able to talk about that or is it part of the sensitive area that we're not going into by way of this discussion this afternoon?

 

            When I talk about that, I'm talking about casual, part-time - is there a breakdown of how many full-time people work in the industry in Nova Scotia? Do we know from the films that have been made and the industry, how many part-time or causals they may bring on in the course of a year, an average number that works? You can narrow that down even just to FTEs, I guess, how some people do it, whatever you think is appropriate there.

 

            MS. WHALEN: In answer to the member's question, there are numbers that we have discussed with the industry and I think are accepted, again, that we're looking at the two different measures - the amount we support directly with the Film Tax Credit or the total industry. I think what's probably really important to note for everybody is that there's a great overlap and I think that's become very clear in the last little while that somebody could work on a film that was supported by the credit or they could also work on some other production that might have been in-house with Eastlink, or CTV, or somewhere else that is not. So what we know is people are mobile within the province and that the productions could use a lot of people at different times over the year. That's the nature of the industry, I hear that and I appreciate that.

 

            The numbers are taken from the Canadian Media Production Association, which is CMPA. It's really a recognized organization that gathers data and if you use their numbers - which is very valid - you would come to 1,140 direct FTEs. So, again, that would be your full-time equivalents for the year that are related to, I believe that would be to the $122 million complete production.

 

            MR. PORTER: So a few minutes ago you talked about $66.8 million in, I think 2013-14 was the year you gave. Is that number - and maybe it's not as simple as my equation I just wrote down here, I was thinking of dividing that number by the number of jobs and the percentage that would be paid out. But it's not a straight percentage, and I want to talk about that because I think there's a lack of understanding. I've had a number of calls on this and they asked, how is it 50 per cent to 65 per cent?

 

            So the 50 per cent is actually here in the HRM as I understand it. Once you leave the HRM you go out, 60 per cent may be in Windsor, where I come from, and the rural areas of Nova Scotia and there's an additional 10 per cent. But there's another 5 per cent based on   - is it a multiple making of movies or films of some kind? I'm just not too sure what the language around that is, but if you do three or four, is that how the other percentage comes in or is it based on the number of people you hire and where they're from and - I guess I'll just add to that before you answer - does it matter where the employee comes from who's gathering the percentage? I'll use this as an example: A seamstress is working on a movie in Windsor, lives here in Halifax, but she's doing production stuff for the movie being shot in Windsor. So how do you break that down by way of a percentage - is she a 50 per cent employee you're paying for, or 65 per cent, or 60 per cent?

 

            MS. WHALEN: Madam Chairman, the question is really around how it gets from 50 per cent to 65 per cent. It goes that way, again, as the member noted, if you're outside of metro. That's actually 30 kilometres from Citadel Hill, so the range around Halifax on the outskirts and sort of in that 100-kilometre radius, let's say, would be quite significant when we're talking about the rural additional, and that is 10 per cent. It doesn't actually have to be 100 per cent of your time spent in the rural area, but the substantial amount. We were just looking, and we don't have the exact figure here, but it means that the substantial amount of the filming and work is done outside of the city proper.

 

            The other 5 per cent, which can be tacked on as well, is for frequent filming. So if a production company has made more than three within two years you get the additional 5 per cent anywhere in the province, so you might stay local and have it be 55 per cent or you might go in that radius outside of HRM and get 65 per cent. Those are the three components and it is all labour-based. I think it's important and I know we get tossing numbers around and it can get a little bit confusing, it is based on the amount of labour in the production, not on the total spend, not on the other costs that might be involved in producing the film.

 

            MR. PORTER: Madam Chairman, I thank the minister for those numbers. So that's a pretty big role area of the province, obviously. You may have mentioned this and I may have missed it - can you break down the percentage of 50, 60, and 65? How many - and maybe you can, I'm not sure - how many of the productions would actually get the 65 per cent and the 60 per cent?

 

            MS. WHALEN: That's a very good question to know how it actually spreads out. We were talking because I know I did see a figure of the number of productions that got that full 65 per cent. It was eight productions and it was a very substantial amount of money in that, but we don't have the breakdown either by the number of productions over the total or the cost of those eight over the total. I think it would be a good percentage, but we just don't have it. What we will agree is that we can make that available to you and just show - and I think, again, when we're talking about it just 50 per cent is the base of that, so any production that received our support would have received 50 per cent of their labour cost covered. We can certainly let you know how many were at the 50, 55, or 65 per cent level.

 

            MR. PORTER: Madam Chairman, I want to move on a bit to this whole thing. How many other provinces in the country offer a tax credit - and I suppose New England would have some effect as well being somewhere in the eastern circle - I don't know, I'm only guessing. How many other provinces and what is our, I'm going to call our "area of threat" because we don't want an industry to leave - where would they go, what areas would they be? And do you know what the other provinces are offering for a tax credit, and how does that compare to what we do here in Nova Scotia?

 

            MS. WHALEN: We were still conferring, I've asked actually if my staff would send down - there is a one-pager that PricewaterhouseCoopers has that has tiny print but shows all of the jurisdictions in Canada on one page, and so I was asking for that because I have other information that has it all spread out. I do have a lot of information here that we could talk about.

 

            You're right, this is a competitive environment, and as was mentioned in Question Period today, I had said before we are the first province, I believe, to get it. One of the very first anyway in the 1990s and at that point that would have been a unique thing, but very quickly other provinces have followed suit. States across the United States as well, many of them, I think over 30 states have a credit, even though that's always a bit in flux there are still over 30 in that.

 

            In Canada, I think P.E.I. is not - they do not have a credit but we were just looking, Newfoundland and Labrador has one and their maximum is 40 per cent of labour. What's interesting when you go through all the different provinces is they have different measures, and different caps or different amounts of labour that they cover. Some of them cover a percentage of the total production rather than a labour-based one, which I stressed earlier. One of the difficulties then is that it's harder to compare from one jurisdiction to another because they are all a little bit different in where they are.

 

            I would definitely say that we have, when I go across this one it shows a couple of Canadian and federal grants that are available, or funds that are available. British Columbia is in the game since 1997 it says, and they have a production cap, an effective cap of 20 - very small writing again, 21 per cent on theirs.

 

            What I might suggest as well, after we have a little chat about this, is I get the one- pager and I provide it to you. I think for the purpose of our discussion the important thing to note is that it could be production-based or it could be labour-based and that that varies. Most provinces have a cap of some sort, whether it's a cap on total production or on the amount spent in that province as a way to kind of limit, I guess, the growth in it.

 

            Again, some of them are through the tax system like a refundable tax credit, which is what this had been and what it remains this year because I've said the $24 million remains in the budget for this year and up to July 1^st has no changes, but a refundable tax credit means it's similar. I might ask the member opposite, you'd know about the Volunteer Fire Fighter and Ground Search and Rescue Tax Credit. It's fully refundable, so when the fire chief says you qualify you get $500, it doesn't have any bearing on whether or not the recipient owes $500 in tax. That's just the way it is - it's refundable to the person.

 

            A non-refundable one is one that comes off its taxes owed. Many provinces have it as a refundable tax credit and then some others have set up instead some cultural funds, for film, that are set probably through an economic development or a business department. They actually could do it as a fund that has a certain maximum amount that government would allocate to film in a given year.

 

One thing interesting to note is when it is in the tax system there is no upper limit because as many people as qualify, for example, for the firefighters tax credit, if they qualify, if that number were to double or if that number were to go in half it would affect how much money you would need to cover it, or how much foregone revenue, what the cost is to Nova Scotia, but because it's through the tax system, if people qualify, then they are owed that money and we are obliged to follow through and keep our commitments. That means there isn't an upper limit the way there is on some provinces where they have a fund. There are a lot of differences and variations right across Canada. I think that virtually every province has some form. We know there have been changes in New Brunswick and Saskatchewan in recent years, which has actually curtailed their amount of money and curtailed the activity in those two provinces.

 

            MR. PORTER: Madam Chairman, thank you to the minister. A few minutes ago, when I asked about the number of FTEs, you talked about the CMPA - if that was the correct terminology - are they required to file or do they file everything to do with their industry - so they're filing how many people are working, I guess, and do they go right down to that person I talked about earlier, the flagger on the street, is that part of somebody filed in those numbers, or how does that work? How does the industry file numbers by way of - and I'm talking workers here, employees, you came out with a number of 1,100 FTEs working through the CMPA so how do they get to that number? Is that inclusive of everybody who does the biggest job to the very smallest job possible while making a film?

 

            MS. WHALEN: Madam Chairman, again, I'm just talking to my officials here about what is actually reported. Certainly I'm told that any eligible labour that had to do with the production would be so. I imagine if they were stopping traffic and paying somebody to do so, or paying a paramedic to make sure that the people on the set are safe or that they've looked after, health and safety, I would think that all of that would be considered eligible labour. I know that in this, every single person who has any role in the production and whose eligible labour cost is being calculated is submitted by the production company. Some of them are very long; I said up to 19 pages, basically a chart of names will be there. There are a lot of individuals who have large or small roles to play and I don't just mean acting roles but many roles on the set in supporting it. It can be a very long process and many, many names.

 

            I mentioned previously that there are a number of audits done of the productions. Yesterday I named three of them, but the fourth one is that the numbers that are submitted must first be audited so that company itself gives audited statements and then the Canada Revenue Agency audits them again and then the Department of Finance and Treasury Board looks at it, I don't know if we'd call it an audit but it goes through a good screening, and previously Film and Creative Industries did. So I imagine now NSBI will look at some of that role. We do want to try to work with the industry because there is a lot of scrutiny, no question.

 

Our numbers, to go back to the numbers you were talking about, they are, I mentioned CMPA which is the organization, the industry organization, Canadian Media Production Association to get the right name, they give figures for each province so that would be their - I don't know if it's an estimation, but I would say they publish them, it's their estimate of the size of the industry. And we don't count all of the people whose names are in there, one thing is that, as we said earlier, people might be in many productions in a year or work on many productions so their names would appear probably multiple times. I'm told that even in one production their names could be listed a number of times because it depends on the role they play - if they had a number of activities that they were filling, they might be at different rates or at different times, so they could be listed more than once in that hypothetical 19-page listing of names.

 

            That means that there are a lot of people, but we don't know how often they are repeated and we're using FTEs because it's a lot more than that in terms of numbers of people, let me put it that way. Here in the House we're accustomed to talking about full- time equivalents and as we know that could be one-third of the year that you worked so that would be three people and then become one FTE if they each worked one-third of the year. It's kind of an imputed number - it's not done by actually counting individuals. It's not absolutely precise then, but I think coming from the industry numbers from the Canadian Media Production Association, that would be a reliable number to use, and all of us recognizing that it's certainly a lot more people than that number alone.

 

            MR. PORTER: Thank you, Minister. I guess that's what I was trying to get at. I guess there is some agreement that the numbers are - I don't want to call them accurate because they're not, but they would be reasonable to start with at least and then there may be some variables in there obviously. I don't know what that number would be and you kind of answered it anyway. I was thinking about how you qualify and I realized the simple math is one-third, one-third, one-third if you work in multiple productions. Somewhere there must be a number that matches a reasonable number that says it equals one full-time equivalent.

 

            So this is a national number; they would give a national number for each province I would assume. I'm not sure if you have those or not, but I want to ask, how do we compare nationally to what it is we do here in Nova Scotia? I'm not sure if you have those numbers; take the time you need.

 

            MS. WHALEN: I don't have the numbers of employees or FTEs as we were talking about that might have been available through the Canadian Media Production Association. They may have a chart like that but what we do know is the percentage of the industry across the country. That does vary as you can appreciate, it bounces up and down. In 2004 when a study was done we were fourth in Canada at the time, fourth after the three big players, and what I can say is Ontario is very big; Quebec has the French language of course and is quite prominent for having French language productions as well so they're a large player; and British Columbia, which I would say has the geographic advantage, close to Los Angeles and maybe a weather advantage too, I'm not sure, but they're also prominent.

 

            Those three provinces make up over 90 per cent of the industry. It means all other provinces are sharing a smaller amount. I believe that we're fifth-largest. I think Alberta is larger than Nova Scotia today, but it just gives you an indication that there are three very large players and the credits are in place in other provinces, and the last figure we had was 2.1 per cent of the Canadian total production.

 

            It is worth noting again, as I said earlier, we wanted to be very clear on the numbers. We are not trying to play a numbers game here with members or with the industry at all. The production volume has increased across Canada and so Nova Scotia has had somewhere between 2 per cent up to maybe 3 per cent of the national production. Over the years it bounces up and down, but we do know we've had a credit for almost 20 years and the industry is expanding across the country.

 

            Some of that had to do with the low Canadian dollar for some years; that was an advantage. The high dollar might have impacted us in the last few years. We've been sort of in the same realm, somewhere between 2 per cent and 3 per cent of the Canadian average of all productions.

 

            MR. PORTER: Thank you, Minister, for that. I think even where I come from it is kind of obvious to note that there has been a bit of growth because we see each year, more regularly, more going on. We may not know exactly what it is going on, bits and pieces of films from big to small have been shot all over the province in different areas, so we know there has been some growth there, and that's a good thing.

 

I just want to bounce for a moment to the cap. You mentioned a cap a few minutes ago. There was a cap in Nova Scotia at one point - correct? Maybe you could just speak quickly to that and how or why - what that was and how or why that went away.

 

            MS. WHALEN: Thank you very much. As I said earlier the original credit was introduced here in Nova Scotia in 1994. I believe the first time there was any payout, it took several years before there was a payout for that or cost to the province, if you like, in actual dollars because it took a while for things to ramp up. We started at 30 per cent in 1994 and that stayed in place until 1998 - it inched up to 32.5 per cent in 1998. All along, we've had a cap - which was your specific question - until December 2010. And in December 2010 - from October 2007 to December 2010, there was a 25 per cent cap.

 

That was a cap on total production cost. Again, I've said, a lot of information is provided before the payouts are made so it would have been 50 per cent of the labour with the two additional components, if they qualified, up to a maximum of 25 per cent of the total cost of the production. In December 2010, which would have been under the previous government, the cap was completely removed. It was just strictly the labour component with no upper end for any given or individual production. That's the history of the cap.

 

            MR. PORTER: Madam Chairman, so no upper end; I guess I just want to touch on that briefly, so I'm clear. I'm no accountant and I think a lot of people, certainly outside of the industry and I think probably some in the industry, may not understand fully how complicated some of these formulas might be. With no cap, that doesn't mean it's an endless supply, I'm going to say that it just settled at the percentages, the 50, 60, and 65, it doesn't go over that? Actually you said $66.8 million - how does that compare to the $24 million investment? I'm a little confused on the number - is it $24 million in investment, or $66.8 million as you noted in 2013-14? I apologize - again, I'm no accountant but, I think for clarity, how do those two numbers relate?

 

            MS. WHALEN: Madam Chairman, again, a lot of numbers to be considered. I think at the bottom what the member opposite is really asking about is how firm that number is, the $24 million. In essence I think what you're asking is, is it capped; is there a finite amount that is set aside for this activity to support film? The answer is no, it's an estimate because it is happening through the tax system. As I said earlier, if twice that number of productions were suddenly to want to film here or they needed our location or the scenery or the history of Nova Scotia as a backdrop, or whatever that attraction might be, if the number spiked and went higher the Government of Nova Scotia and the taxpayers of Nova Scotia would allocate more money, we would have to because it simply means more people qualify.

 

            When you do something through the tax system you don't have the absolute assurance, you just are able to make your best estimate and estimate how many productions there have been or what you know to be. We do try to do good research about how many are in the hopper or how many have made the Part A application, which we do get to know about.

 

            There are two parts to the application. Part A is when a production company would come in and explain the project, how many people they expect to hire, and what the parameters are because they're putting together a production and arranging financing. So they come in with all of that and if we go over that and the powers that be say yes you meet the criteria, then they have a Part A approval and no money has changed hands yet.

 

            Part A approval is a guarantee that if they make the movie or the film or the production they will then be able to come back and we would then have a commitment to pay that money out. So we have some idea how much is in the hopper from the Part A application, I would say, and that helps us to make that estimate of how much money will be required in a given year.

 

The numbers have varied up and down, and I mentioned there are other factors. Our credit itself has been more than competitive, we've said that. It has not only kept pace, it has kept at the top for the country, but at the same time that's not the only thing that matters - it matters whether the Canadian dollar is attractive, it just matters about what's happening in the film industry and whether there is a demand for filming in Nova Scotia because people will also go where they have the right backdrop and support in the right facilities and so on.

 

We know it bounced up and down, it has changed, there is a growing pressure on it and it has been growing, but it's hard to predict from year to year. That means there is an element of uncertainty for budgeting and for taxpayers because you don't know how big it might be, but our obligation really is not capped in any way - if a production meets the criteria the production will get approval and it's that simple and that direct.

 

I know you can appreciate that some things we do in government you can't put your finger on, you can only do your best estimates about have you set aside enough resources. In this case it's very interesting to note we actually do need the resources because the dollars do go out the door, but in a lot of our tax credits where we do depend on actual when the taxes are paid, that one again is risky because you don't know how much is going to be paid and how much will be drawn down. It's hard in all of these tax credits to put your finger on the amount, and there is no limit whenever it's done through the tax system.

 

MR. PORTER: Madam Chairman, I'll say again - very complicated. You know you think about an estimate, as you will, of $24 million when in essence we spent $66.8 million in 2013-14, the bell curve, the up and down if you will, with production and however that might be, with no cap I guess I'm a little confused at how we estimate $24 million if we spent pretty near $67 million in 2013-14. You all figure those numbers in and you kind of explain some of that, that's fine.

 

It's hard to believe how quick an hour goes and I'm running out of time here but I did want to get a couple other things in. One, you seem to be in some agreement with the industry on the figure around spinoff, which is tremendous for our province. There used to be a figure kicked around - I forget what it is now but it used to be one in six, but what a dollar meant being earned and what the spinoff value of that was again and the economic driver in the province, all very important things.

 

A lot of people have asked the question of me and I'll certainly ask it of you: how did this all start? We've had this in place for about 20 years-plus now, is this something that has been around for a while, Minister, the idea of having to cut it back or is this something that we looked at and times are tough, we know that economically in the province - how did we get to the decision? I guess that is what I'm wondering - is this what your associates might have come to you one day and said okay, Minister, I think it's time we really looked at this seriously, it's a big deal, it's a big issue, it's costing the province a lot of money? I think, as you said, your term has been lucrative, et cetera, and all of these things considered, so I just ask if maybe you want to speak to that for a few minutes.

 

I would be interested to hear how it all sort of starts, that budgeting process, because there are many things in the budget, many things that are good. People want to support the budget. If you didn't have a budget - we're talking $10 billion, we have health care and roads and education and all these important things that are a part of any budget, those are good things - if we didn't have those we wouldn't be as well off in the province as we are even though it's tough times. We're still able to provide those great services and it's important to look at a budget from a broader perspective, not an issue-based thing, or at least that's how I look at it. It's not about one issue or two issues, it's about the entire package to say, is this something that we can support in Nova Scotia and when I vote on this thing, that's how I look at it.

 

Again, this is a great opportunity for me, and on behalf of the people I represent, to ask the question that I've been asked. Sure, I will ask, with the greatest respect I will ask, how did this all come about - how did it start and how did we get to where we are by way of that decrease, and where you're going?

 

            MS. WHALEN: Madam Chairman, the question is a very good one because you're right. All of this discussion, as important as it is, around each and every Film Tax Credit or digital media credit or tax on books or all the other things that have been outlined in the tax review or in previous studies, they are all part and parcel of the choices that we have to make as a government to support a lot of compelling needs. I've spoken a little bit in the Budget Address about the process that we underwent this year.

 

Last year when I stood before the House and we introduced our first budget, which was for a portion of the year - we'd only been in government since the end of October - we introduced a budget that was $278 million in deficit. We were borrowing $278 million to pay for the services of the many different kinds of programs and services that come through every department and are required by the public - and we all know the ones that are most near and dear: the education for our children P to 12, university education we talked about earlier, and our $600-plus million support in that area; and health, again, of Nova Scotians is paramount, that's a $4.1 billion portion of our budget.

 

            And, Madam Chairman, just to get through the budget, we last year tried to make sure that everything that was being done was being properly recognized and properly accounted for; that we weren't offering services that weren't funded - that had happened previously; that we weren't prepaying any costs to an earlier time period; and that it was being frankly and honestly reported and this was the cost of doing government and doing the services that we had agreed to do and had been agreed that these were necessary.

 

Immediately after that budget was brought in, $278 million in deficit, in the hole, we began a program review to look at all of our costs as much as we could, to start looking at every department to try to look at things that might be outliers; that might be more than we could afford; or to look at things that we thought there could be a different way of doing it. Could we consider another way to deliver this service, could a different level of government, a municipality, or federal government take over this role, or perhaps they're duplicating it? We found programs where there was a duplication of services and maybe we didn't need to be doing something that was already happening in that area, or being covered.

 

            Another area we looked at, and I could give specifics to some of this but you probably know - I think I can go beyond the hour, can't I? I think I can, if you're still willing to stay, to the honourable member. The fact was it was a long and drawn-out process and very rigorous, very disciplined. We started right away with the program review and began to look at things, and in fact that program review process had begun under the previous government. They had begun some of the work, they had ordered some of the work to be done. In fact, some of the analysis or at least the beginning of the work was already prepared, so we could get underway right away. There wasn't a delay, we were able to see what had been done up to the summer of 2013 and what had been looked at or gathered up.

 

            We began to look and we looked at 150 programs by the end of that. We have by no means done all of the programs of government but we've looked at a good number of them and had presentations and a chance to consider them. It was long and drawn-out but it was very important because we're trying to get a better handle on where the money goes that we have. We have a $10 billion obligation for monies and we are only collecting and bringing in $9.9 billion this year. We're still $100 million short of where we are.

 

            You know I've had people suggest to me that when you're looking at a new program, ask yourself: would you borrow money to do this program? That's where we are. Would you like to start a new program and borrow to do that? And remember, everything we do that we're borrowing is putting an additional burden on future generations. In 2012 the debt of the province was $13 billion and today it is $15 billion - that has been a $2 billion rise in three years.

 

            We have seen countless articles - there was a cover story by the Halifax Chamber of Commerce, in about 2013, that was featuring the then-Auditor General, Jacques Lapointe, who wrote about the crushing debt of our province at $13 billion, saying we have to do something. What lies behind all the difficult decisions that we have had to take is that we are trying to do something, we're trying to halt the slide and begin to pull ourselves out of this debt pit that we're in, to try to close that gap, to come back to a balanced budget and it is incredibly hard, because there is nothing that we do in this province that doesn't have some impact. Somebody somewhere, or a group of people really, really like it, and that's the same whether you're talking about a campground or a visitor information centre or manufacturing support or community libraries - you name it and it's very important and they all have some various level of importance.

 

            I'd like to quote - I know many of you have gone to see Ray Ivany at one venue or another, he has done a lot of public speaking in the last year and a half and I heard him speak and at the venue I was at he said there are no easy choices left, because guess what? They've all been tried. That is so true. He hasn't sat around the table at Treasury Board or looked at the kind of choices we have to make, but if you're an observer of this province you know there are no easy answers. When I did my round-the-province tour and I had eight public meetings and people sat at those meetings and they also knew there are no easy answers.

 

            People use terms like "our backs are against the wall," you have to do something - a lot of them were frightened of extra taxes, there's no question and they said get your own house in order, take care of your spending, don't bother me, don't raise our taxes. There's not an easy answer, to just say let's raise the HST. Guess what? That has been done. That was tried, it's good, and we have the highest in the country now. I don't think we have an option to raise the HST anymore. I think those easier choices have been taken and there are only hard choices and they don't have nearly the value.

 

            When the NDP raised the HST by 2 cents, just 2 cents, from 13 per cent to 15 per cent, that was almost $400 million in extra revenue. We know if we want to decrease it and that was an issue during the last election, all three Parties campaigned and spoke about decreasing the HST, 1 cent is $195 million - just shy of $200 million.

 

There are no choices before government today that are valued at $200 million that you could do with the stroke of a pen. Unless we want to go to 16 cents on our HST and I don't think the business community could handle that, I don't think that would be welcome in any corner of Nova Scotia. We have the highest, and it's a big burden on Amherst, Amherst is a border community that is competing directly with New Brunswick and they have a hard time competing on gasoline prices because of motive fuel which is also highly taxed in Nova Scotia, because of the HST differential, because of tobacco costs that are different.

 

We know on any number of factors we are at the top level we can go to for taxes, and we heard as well from all the people who came to our meetings that they don't want to see taxes raised. I said to them, we will look at maybe moving them around or shifting them or reallocating them or looking at more consumption and less income tax - there might have to be something like that, but we won't put the burden up. You know, as we look further, and this will be more down the road, when we look at tax changes we're going to endeavour to make it as revenue neutral as possible, so that people don't feel that there is more burden being put on the individual.

 

            What I heard time and time again was you show us that you're serious about controlling costs and then we'll work with you. That's what I heard, a willingness to work. I know there are very level-headed people here in the House, no matter which side you sit on, who understand this and I know there were members who were here today who were at some of those meetings. People want us to show that we will rein in the big costs that they see in government, that's just the bottom line and it does look like huge costs at $10 billion.

 

            In 1999 the government's budget was $5 billion, so it's twice as much as it was in 1999. I don't have all the figures in front of me about how many people work for government or how much it has expanded. Obviously they've got pressures on new programs; that has been a big part of the costs, introducing new programs. One of the things that I think is important for people to know is there are wonderful new programs that we could find by looking to other jurisdictions, to see what other people are doing for the people of their provinces or states and things that we'd like to introduce. I can tell you at program review and at Treasury Board we're saying no - no we are not in the position to start any new programs unless they can demonstrate that they're going to in some way return to the province more than we put in, or that they will in some way save money at some point. We can't start new programs because they meet a pressing need.

 

I often talk about child care because there is a lot of talk about young people. I think one of the most crushing costs for people is, if you're young and you're starting a family, the cost of child care. I'm sure that if you look back, think about the costs that you might have had if you don't have the luxury of having a parent who can stay home or having enough money from two parents, you're looking at about a thousand dollars, after-tax dollars, for an individual to put an infant, under 18 months, into daycare. That's a very huge after-tax cost, again.

 

To the honourable member, let's talk about the capacity of Nova Scotia, 50 per cent of our taxpayers earn an income in the lowest tax bracket, so when they get their personal exemption off and so on they are under $30,000 taxable income. That puts them in the 8.75 per cent taxable amount to Nova Scotia - but what a sad figure that 50 per cent of our tax filers are in that bottom level.

 

            If we could increase wages, if we could move people into higher tax brackets wouldn't that be wonderful if they could do it because legitimately our economy could afford people to move up that ladder. There has been criticism about the top tax bracket, which is the highest in the country. People who earn over $150,000 taxable income, we charge them 21 per cent provincially - remember that's on top of the federal amounts because people even in the bottom bracket are paying some federal amounts as well.

 

            We have the highest tax bracket in the country and there was a suggestion in the Broten review that we should lower that because it's an outlier, because it discourages people who might want to move here who have high incomes. I'm not going to comment on that today because we're going to look at taxes, but when I see that I think it's so sad that we don't have more people in that tax bracket because we have less than 10,000 Nova Scotians who earn that much money.

 

            So they are paying, if you look at how much money we get from that tax bracket and from the high levels, say over $100,000, we get a lot of our revenue from that group so the best thing that could happen in Nova Scotia is a whole bunch more people, again, find more opportunity or begin to earn more money, and that would be a great thing.

 

            I think we need to understand this is not a lot of poor-mouthing about where we are as a province; it's about what is possible and what you can do in terms of our obligations for core services, which we have talked about in the Budget Speech. It's about making sure our young people have the best education, the best start in life, and we have reinvested there so I hope when you go back and speak to your constituents you will point out that $17 million went in last year, about $20 million this year so we're well on our way to the $65 million reinvestment in education. We're not counting that against things that would happen anyway like increases in salaries for teachers. We're not doing it on the base amount; we're looking at new programming that will actually address the needs that are coming from the minister's action plan.

 

You know this year there was the report led by Myra Freeman, a big report to see what people think should happen in education, what are the recommendations. Well, you needed to put money behind that because how often have we sat here and seen great reports come in and no money put behind it to see it happen? There has been an acknowledgement that some things are worth putting more money in for - an extra million in mental health services. In the school system there is going to be more mental health services available, so it was part of the reinvestment there.

 

            So you go on about the real critical areas and that has to be the health of our population and a good start in life, education, and educational supports. Those are a couple of them, we know that our third biggest department is the Community Services Department and they have pressing needs as well. I can tell you it's not easy to ignore - we never ignore but to not be able to respond to those needs - so we should think of it, and I would hope that other members would think about it, that everything we're agreeing to spend, you have to ask yourself, would you borrow to do this, is this something that you would borrow for the future against? That debt for our children has gone from $13 billion to $15 billion today - it has done that in just three years.

 

If you look at our fiscal plan right now because this has been a difficult budget, because there has been austerity, because there has been an attempt to rein in and change the way we do business, and I mean that quite literally, the business department has been created. That's a pretty fantastic thing. It's a tough thing because we had to let some people go. We had to reorganize; it was a major restructuring. But the aim is to see that we give more support, more focus support to the business community, and that is really important.

 

            We've tried to look at the things that will actually spin off and help in the province's future, providing taking advice where we could, for example from the Ivany report that said a Department of Business would be more responsive to the needs of the business community that right now - and I'm sure the members have heard this, as many members have heard across the province - the business community will come back and say we don't know where to go. We know you have programs, what have you got to help me, we don't know where to go to look. There are too many agencies, there are too many different people, we're getting shuffled from one to the other and they weren't even getting the help that possibly was there. We want to make sure that it's focused and direct and that there is support for business.

 

            All of those tough decisions though, we tried to do it in a balanced way, we tried to look at what's best but we have to consider that we're still $100 million in debt and that even with the tightest fiscal control we would hope by the end of next year we'll be in a balanced position. That is the fiscal plan. It shows $22 million, but as I said yesterday, that can be blown away by just a bad winter of terrible snow and our snow clearing budget takes the $22 million. Even with your best estimates of what it will cost, the over budget, as you know, this year is in the $20 million range. As I say, it's very precarious and we're trying very hard to halt the slide.

 

At the same time one of the best measures you can see for that is a declining debt to GDP ratio and if you look at the projection going out because of the smaller deficits and the small surpluses you will see that it actually begins to stop and our debt will top out, if we can maintain all this fiscal control, at about $15.3 billion and it will stay there for the next few years until we can actually turn it down.

 

It's stopping the growth. I've just said it grew - I haven't done a percentage, but that's a pretty fantastic and fast increase, $2 billion in three years in the additional debt that we carry. Again, as a reminder, the cost to service that debt is over $800 million, it's approaching $900 million. It's almost the size of our Community Services Department.

 

So just some of those figures will give you an idea of the enormity of the problems that we are facing. I think that's the context in which this is happening. It's not happening in the context of mean-spiritedness, it's not happening because we don't recognize that there are many elements that make a good province and among those elements culture is very important, and I hope as well that all members will note that there is a $6 million fund that was set aside in this budget for all cultural activities. It's a cultural economies fund, $6 million which will allow a big increase in funding for sound recording, music, publishing, and some of the other areas of our cultural mosaic that are not well represented, not well supported - they are well represented, they're not well supported when you look at government support for the arts.

 

We want to ensure that those also receive a little bit more support; in fact, that would be considerably more than what they've had in the past and still maintain funding for the film industry, for animation and for digital. That is the aim and it's in that entire context of a lot of pressures on government - and those are not just on government, they're on the people of Nova Scotia.

 

            If we don't listen to the people who wrote us and came out and spoke to us and said you show us first that you're serious and we'll all pull together, we'll all be part of the solution, but you have to show us that you're really trying to curtail your own costs. And I think this budget has shown that and it has not been easy and there is not one decision that was made that was done lightly. They were all done with a lot of serious and difficult discussion and a lot of information provided and a lot of difficult choices to be made.

 

With that, Madam Chairman, I thank you for your time.

 

            MADAM CHAIRMAN: The time has elapsed for the member for Hants West. We will move to the NDP caucus.

 

The honourable Acting Leader of the New Democratic Party.

 

            HON. MAUREEN MACDONALD: I do not have a substantial number of questions left for the Minister of Finance and Treasury Board, but I can't help myself, having listened to the speech from the Minister of Finance and Treasury Board not to engage in a bit of debate about some of the things the minister has had to say.

 

            I've been in this Chamber for quite a long time with the minister. I know that she's a good person, she's a sincere person and she believes a lot of the same things I believe in. I've seen her fight for social causes, women's equality, programs that will address violence against women, many, many things that we would agree on, but we have some serious disagreements when it comes to our world view about both the finances of the province and the direction this government is taking the province in. I really feel compelled to address some of these things because my world view and how I see the options in front of us are certainly not the same as the minister has just outlined.

 

            I want to start by challenging remarks that the minister made with respect to the Ivany commission - a quote from Ray Ivany that there are no easy choices. Well this is true, there are no easy choices - about what though? The Ivany report is not about the province's budget and it's not about the budgetary choices in front of the government for the province. The Ivany report, I remind people, was commissioned by a previous government to look at the serious problems and challenges that our province faced particularly with respect to the depopulation of rural Nova Scotia.

 

            The Ivany commission was really about a decline in the rural population in rural parts of the province, the rural economy and the Ivany commission spent a great deal of time looking at issues around demographics, what the projected demographics would look like, what the labour market participation rates will look like based on those demographic factors and then came up with a number of recommendations to address - nowhere in the Ivany report are there recommendations to eviscerate the Film Tax Credit, nowhere in the Ivany report - in fact, one of the commissioners on the Ivany report had written a very strong and impassioned plea that this government in fact is going in the opposite direction of the commissioner's recommendations with respect to the future prospects and the economy of this province in a sector that offers great opportunity for economic growth and prosperity in this province as well as the demographic challenges we have.

 

            I have to say I do get somewhat annoyed - not somewhat annoyed, I get lots annoyed when I hear people using the Ivany report as cover for things that the government is doing when in no way, shape, or form is it any such document, any such document. That's the first thing I would say and I could go on at probably considerable length around that.

 

            Do we have challenges and is it easy to put together a budget? Absolutely not. I don't have a lot of experience; I was in the position for, I tell people, a nanosecond. The hard job was being Minister of Health, I have to tell you, and if there is anybody we should be feeling sorry for it is the Minister of Health and Wellness. This government and this budget have given him $33 million additional dollars for the health care system for next year. Well whoop-de-do, I can tell you how fast the health care system will burn through 33 million additional dollars - 33 million additional dollars in the health care system means a cut to health care.

 

Health care programs will be cut and we're seeing it; we're seeing it in spades - eating disorder programs, cut; mental health services, cut. The minister stands in Question Period today and responds to one of my colleagues about mental health cuts and he says oh, we're putting money into the education system, mental health programs in schools for kids is going to take care of that. Now, come on. How many months of the year are schools in session? We're going to tell families and parents and people you can't have any mental health disorders or problems in July or August, we're putting it into the school system? (Applause)

 

Oh, and don't have a problem over the Christmas holidays by the way, schools are closed. March break, oh, woops, schools are closed. Snow days, schools are closed. That's a fine mental health system.

 

Now I believe in investing in mental health programs in the school system, but I'll tell you right now it's no substitute; it's no substitute for investing in community-based mental health services and that's what this government in this budget has attacked and it's like they don't understand it. Oh, no, no. Duplication - oh there is so much duplication of service; we wouldn't want services to be offered in more than one location or from more than one department.

 

Investing in the education system isn't going to do a darn thing for all of those young adults in their 20s who develop schizophrenia - and that, my friends, is the age group. But we'll cut the Schizophrenia Association's budget and then we'll pat ourselves on the back because we're investing some money in the mental health in the school system and we'll say that that's going to do the trick. Well it's not.

 

The other thing that the minister hasn't talked about at all when she talks about the sorry state of the finances of the province and the tough decisions she had to make and why this is a tough budget on all of these health and community groups and the film industry - she hasn't mentioned the $200 million restructuring fund that's sitting there. This government has $200 million in a fund as part of the budget not allocated to anything. Future wage increases could come from that fund. I heard the minister say a 1 per cent wage increase is worth $50 million. My math tells me a 4 per cent wage increase could eat up the whole thing. That's unlikely to happen. It has never happened in the history of the province or certainly not for a very, very, very long time.

 

There is $200 million sitting in a restructuring fund unallocated. Previous governments have had a restructuring fund. You can't come in here and talk about the tough choices and the taking of the $30,000 from an eating disorder program when you have $200 million sitting in a fund unallocated and tell me that you need that $30 million - I don't buy it. I do not buy it and the people of this province will not buy it either.

 

            The minister had a lot to say about the difficult finances that she met when she came into the department. This government went on a heck of a spending spree in their first year of office; a heck of a spending spree. They don't talk about that but there are other people who have been here and know the finances of the province who are not impervious to these additional expenditures, this spending spree. I'm not saying that the expenditures weren't needed. I'm not saying that, but I'm saying that they were commitments that the government made to get elected and they cost money. They cost a lot of money - the settlement for the Home for Colored Children was $30 million; the MV Miner, we don't know what that's going to cost yet but that's going to be $15 million probably; and the Yarmouth ferry, that's $30 million and growing.

 

I could go on. So don't come into this Chamber and talk about the financial challenges and the tough choices you had to make when you cut small, tiny little organizations of thousands of dollars, when in your first year, year and a half, you added millions of expenditures.

 

            MADAM CHAIRMAN: Order, I would remind the honourable member to please address comments to the Chair and not directly across the Chamber. Thank you.

 

            MS. MACDONALD: Thank you for that reminder; I'm getting a little exercised and I need to calm down. But it's hard, it's really hard to be calm in the face of what I'm hearing and seeing. The Canadian National Institute for the Blind, probably the oldest charity in the country, rehabilitation services cut. (Interruption) If the member for Yarmouth wants to get up and say that's an appropriate cut, then I will yield the floor and let him get up and say that. Would you like the floor?

 

            MADAM CHAIRMAN: Order, please. The honourable member for Halifax Needham has the floor.

 

            MS. MACDONALD: Thank you very much, Madam Chairman. These are real people who provide services to people who really need them. I don't know if anybody here knows what it's like to lose your vision and lose your sight and then have to find your way through relearning how to cook meals, how to get to a bus stop, how to go to a grocery store and do your shopping. Who is providing these services to people who lose their vision? The Canadian National Institute for the Blind. That's who provides those services. That's what they do - and 30 per cent of their budget eliminated. I'm pretty sure that Ray Ivany didn't say that that was something that should happen.

 

            It is very difficult for me to sit here and listen to some of the explanations, to put it kindly, the explanations that members of the government are providing to the Opposition to justify the choices they've made. As I said, inside this Chamber and out, I get it, it's not easy putting together a provincial budget and there are very tough choices and I understand that. I understand it probably as well as anybody because I've been in that situation, but there are some choices that you make that aren't just number choices. There are choices that you have to make that go beyond just the kind of balance sheet that sits in front of you.

 

I listened to the minister yesterday talk about - I think in her opening remarks - how this government intends to follow a path that will lead to coming back to balance before they had intended. They are ahead of schedule. We could all be really happy about that, I think, I'd be happy about it if the little people of this province, the marginalized people in this province, weren't part of the equation of getting us there.

 

            I can take no pleasure in getting back to balance early, earlier than planned, knowing that we are leaving people behind, we are taking things away from people. The Department of Community Services is giving people who have had bus passes forever, disabled people, they're giving them $10 a month for transportation to buy bus tickets and they are to use them for medical appointments. If they can establish that they have more than 12 medical appointments in a month, they will get them a bus pass - 79 bucks.

 

So you're a young person, you've been diagnosed with schizophrenia, you are living in a small options home or you are living in your own one-bedroom bachelor apartment, and you're out in Clayton Park or Fairview. Your family lives in the north end of Halifax, and you go Sundays and have Sunday dinner and you use your bus pass to get there. Now, if you want to do that you're going to have to walk, hitch a ride, or stay home. That's a real healthy way to live, isn't it, if you've got a mental health disorder?

 

            What have we become as a society if we accept this, if we accept that that's what we're going to do to people to get back to a balanced budget so we can give probably the better-off a tax break? There's something really wrong with that.

 

            As my colleagues on this side of the House know, I haven't been feeling very well and I wasn't going to take much time; I was going to go home. I'm still going to do that but I do actually have one question, now that I've had my time to engage and respond to some of the things the minister has been saying. I do want to ask a question about the Nova Scotia Liquor Corporation. I want to ask about in the election the Premier made a commitment, I think there was a letter circulated that the Nova Scotia Liquor Corporation would not be privatized.

 

I'm noting that Ontario and I think B.C. are both in the process of moving beer into corner stores - I want to ask the minister, has she met with the corner store operators or any other lobbyists with respect to the privatization of the Nova Scotia Liquor Corporation, if any other people in the department have met with them, and what is the government's policy and ongoing commitment to that election promise that the Nova Scotia Liquor Corporation wouldn't be privatized?

 

            MS. WHALEN: I appreciate the discussion and the many ideas that the member opposite has put on the table as we go through this. I think she, perhaps as well as anybody, knows about putting together a budget and about the decisions that are made. I think there are many decisions made that she may have not been comfortable with, perhaps as a Minister of Finance herself.

 

            I would like to acknowledge that we've had a lot of things in common, as she began her comments as well. Over the years we've certainly seen eye to eye on a lot of different issues. I guess as a little digression, it's worth noting and I don't know if the women in the House know this, but there have only been 40 women ever who have sat in the House in all the years, in the 250 years that we've had representative government in Nova Scotia, and the woman at the moment who has sat here the longest is the honourable member for Halifax Needham, representing Halifax Needham. She perhaps is the longest-serving ever, I'm not certain of that, I believe that the member for Halifax Needham is the longest-serving woman member of the Legislature so that is something to be very proud of, so she has had an enduring and long and I think very varied role in the Legislature, so I appreciate that.

 

            I think it is important to note how much things have changed, because certainly when I arrived in 2003 we had six women. Today we have 14 women sitting, and six had been the previous high forever. It had been hit before, then we had fewer and then we were back to six, but we had never gone above six out of the entire Assembly. Having 14 women sitting here and for us to be here today with myself as Finance and Treasury Board Minister - and I am the second woman to be Finance Minister because the first woman is the member for Halifax Needham. I am very well aware of the history that we share; she has certainly been here significantly longer than I have. I have a lot of respect for the work that she does in the community, and I would also say that I know that she is driven by a keen interest in the welfare and concern for the people she represents and the people of the province.

 

            With that in mind, I feel that a lot of the decisions and the things that I spoke about are because I feel I have a commitment to all the people in Nova Scotia. I have to see that this province is stable and is able to grow and that we are able to provide a better future than what we've had, and the Ivany report that we've mentioned detailed very well, yes, the demographic challenges, but also the economic decline in Nova Scotia because of many other pressures that we are under. I think that it is important.

 

I think one of the things that's interesting around the Ivany report is how it seems to be able to be used for many purposes and many different points of view, and there is a quote for everybody in this report, and maybe the most encouraging thing is that the leaders, our Premier and the Leaders of both Opposition Parties, are part of a larger group looking at how we can take the good information and the goodwill, frankly, that came from the release of this report. The fact that it's had over a year of being still referred to and discussed, it's unlike other reports, it has not found a spot on the shelf where it is just gathering dust.

 

We can be sure that there's momentum, not just because government, and our government chose to move along with it, it was commissioned by the previous government and it's recognized by our Premier and by our government that there's a lot of good in this report, a lot of honesty. It speaks truth to all of us. It tells us like it is, it doesn't sugar-coat it, and it tells us what our challenges are. We need to listen to that and we need to take action. I think that that's clear on all fronts.

 

The demographics - there's no question, they're a big part of it, but demographics, unfortunately, translate back into the finances of this province. The population base, the income level, the number of people in the workforce as opposed to the number of people who might be retired or not working, that all has a direct bearing on our ability to pay for the things that we have to pay for and that we're obliged to pay for and that we want to pay for. Do we want to see everyone who needs one have a bus pass? Yes. I don't know the details of the specifics to what the member is referring to but obviously, yes. Would we like them all to have a telephone? I'm sure the member opposite has had the opportunity to talk to people where a telephone is not considered a necessity when you're on assistance in Nova Scotia unless you need it for medical emergencies, because you have some outstanding medical issue that might require you to need one.

 

In a regular state of affairs, you don't even get a telephone. You talk about isolation - yes, there is isolation when you don't have any resources and it's tough and, I bet you, the minister, when she was Finance Minister, the member opposite when she was Finance Minister, would have wanted to increase the budget so that they got telephones and that other things were done because there was a retraction of services during the previous four years in the same aim to get control of finances, in the same aim to show a balanced budget by the end of a mandate. There is a parallel; it is not lost on me. It's not a secret. There is a parallel that our government came in with a deficit year and that we're aiming to get to a budget surplus and that we want to get there before we get far into this mandate because that's not a reliable balance. We want to be in a position where we have sustainability, where we have some resilience built into the budget. Those are important things.

 

Before I leave the Ivany report I would just like to make note for the members opposite that this report, as I said, may speak to many people with many different interests, but the last of the 19 goals that are in this report - and I had to get the copy out so I could get it correctly - it is under the title of Fiscal Health, and many of these if you go through, are not the job the government. Goal 19 is the last one.

 

Many of the goals are considered goals for others, for our business community, for perhaps municipalities, for others to help us get there. One of the messages that is clear is that to turn this province around it is not just the government that can do it, we need to work together with all of our partners. That's one of the things that I was impressed with a year ago when I did my pre-budget tour, with how all over the province different groups were meeting - financial executives met and when I spoke to them they were channelling issues around the Ivany report. They were meeting as an organization to say, how can we be part of this? School boards were doing it, and municipalities were doing it under the leadership of their mayors.

 

            A lot of organizations were asking, how can we be part of this? That's the impressive part and as I said it's still here, it's still being worked on, we're trying to advance it on a larger level. I don't sit on the committee that the member opposite does sit on but there is the oneNS Coalition that's working on many of these goals.

 

            One of them speaks to me directly. One of them is Goal 19, it is entitled Fiscal Health and it says that "By 2024 the Province of Nova Scotia's net debt to GDP ratio, which was 36.7% for the year ending March 31^st, 2013, will be 30% or less." That's the goal, it's laid out, and it is a hard number. I said earlier the debt to GDP is the ratio that really determines our fiscal health in the province and that's why it's under this title, Fiscal Health.

 

            It shows how big our economy is in relation to our debt that we carry. Of course, if you have a very active economy, a large economy, you can carry a higher level of debt and still have a decent ratio as you go forward. There are a couple of provinces that have higher ratios than we do: Quebec is one of them, Alberta's is practically zero, and I think Saskatchewan is 5 per cent. We were, certainly at this time when the report was written, 36.7 per cent and a stated goal, a goal that we can achieve is to get that down to 30 per cent.

 

            As I said earlier, with the debt having risen by $2 billion in a short period of time, in three years, we had a lot of work to do to stop adding to the debt. What adds to our debt and how does it grow? Well it grows every year that we run a deficit, every year that we have to borrow money to pay for the services that we've committed to in the budget that we're all looking at here; every department's spending, all of the different agencies, all the grants that go out the door - and the member opposite, former minister, mentioned about those grants and she said they're small grants.

 

            It's important to note that collectively they're hundreds of millions of dollars if you look at all the grants in the Department of Health and Wellness, the Department of Community Services, Environment - I'm sure all departments. I think Finance and Treasury Board might be the only one that doesn't give any grants; I think everybody else has a constituency or a group or stakeholders that they support.

 

            We talked about duplication. I'm sorry to say we found four departments were paying for trail systems. Why wouldn't you consolidate and have one group instead of shopping around from one department to another? Energy helps with active transportation, Health and Wellness helps with active transportation, so did Municipal Affairs - and I can't remember the fourth, probably Environment. Everybody had a pot of money, big or small, to help with trails.

 

            I'm very involved with trails. People in this House know that in 2005 one of the first bills I introduced as a private member was to preserve the Blue Mountain-Birch Cove Lakes area, which is a beautiful wilderness area on the edge of Halifax, right behind Bayers Lake Business Park. Bayers Lake Business Park, we know, has not been developed in a very scenic way. It's not very beautiful - it's very concrete - it is not the most attractive. It may be an economic engine, but it's not very beautiful - but behind it there is 4,000 acres of Crown land that has over 30 lakes.

 

In fact, the canoeists and Kayak Nova Scotia love it because you can put your canoe in there and go around in a day and do a complete loop with some portages and come back to the same point - and you're within the urban boundaries of Halifax. That's pretty amazing. You can take a bus to get there. The mountain bikers love it, and I read that a new mountain bike store is opening up in Bayers Lake right near the Burger King because near the Burger King there is a trail called the Whopper Dropper and you can go through there and it's all for adventurous mountain bikers. They know it's a great spot to be.

 

            But the trails are important, and what I want to say is we appreciate the trails. We know you have to fund them, but is it wrong to look for duplication? Is it wrong to suggest that if you are a community organization and you want trails, that you know where to go to get access to trails, that you have expertise in one location, that you have the trail planners and the people who understand it best, who know that it is being evenly and fairly distributed. How do you know it's evenly and fairly distributed if you put it all in four different departments and let four different administrators look at how the money is spent? It is clearly duplication. It may be a small example but, again, I'm sure this adds up to hundreds of thousands of dollars when we add it all up. Perhaps someday there might be a question and we'll do just that.

 

            I go back to the fiscal health of the province, Mr. Chairman, and the goal is very clear. It's not dreadfully long, it says get it to 30 per cent for a debt to GDP ratio by the year 2024. Well I think I'll look again actually, there is a chart in our Budget Assumptions book which was prepared for this year's budget. It shows us going down to 33.4 per cent in 2018-19 and I think just a year or two further on, if you extrapolate that, we're at 30 per cent. We will be there if we stay the course and if we continue to be very mindful of where money is spent and how it is spent and whether it is core, really core services, core priorities, we'll get there.

 

            As I said in my Budget Speech, it has nothing to do with the beauty of 30 per cent of debt to GDP being our ratio as a province, it's no different than saying we want to be balanced. It's not simply for the purpose of saying you are balanced. That would have no meaning. Everything we do in a budget is about people. Everything is about the services that people need or communities need or organizations need to provide services. That is what is at the basis of a budget. It is not because we want to pay civil servants and have a big organization, it's because the civil servants we pay are doing important work. They are helping, they are helping in hospitals, that's why we're doing it.

 

            As much as we've sat through hours and hours of debate and discussion at Treasury Board and at Cabinet and in other forums and in program review, we always understand that at the basis of every one of the programs and every one of the services there is a vested interest and somebody is going to benefit. Sometimes that benefit is really remarkable, important, you could not do without it and sometimes you have to look and ask, is there another way?

 

            I went through, a little bit earlier, about program review and what we did, and I do not think it's something to scoff at; I don't think it's something to make fun of. I think it shows discipline, I think it shows responsibility, and I go back to what is our responsibility. Well the Department of Finance and Treasury Board feels the responsibility is to ensure that we get the best value for every dollar that we collect - the best value, the best return, that we support the aims and the important things in our province, but that we look for the best return and that we try to support every department and all their mandates and do it in the best way possible.

 

            I don't think there's anything wrong with that; I think that's our job. It may not always sit easily, it doesn't allow that you always feel comfortable with every decision because you know they are hard decisions. I go back to it - there are no easy decisions. The last one taken was raising the HST by 2 percentage points in a time when it raised $400 million. It was supposed to ensure a balanced budget; it was supposed to get us to a sustainable position. But it wasn't enough and it isn't enough because the pressures on our growing program needs are a lot. I've got to imagine that's where it comes from because the previous government couldn't do it even after they raised it.

 

            Maybe we should go to the labour pressures, Mr. Chairman. Maybe it is the labour pressures that caused that. The member opposite spoke about $200 million and she was talking about the restructuring fund which is just under $200 million this year. Well there's another $200 million and that's the amount of money that we put out there in our last labour mandate that was above the cost of living, that outstripped the cost of living.

 

            If the government had chosen to just try to keep it within the balance of what other provinces were doing, if they had looked and other provinces were settling for zeroes and ones, but no, we had 2 per cent, 2.5 per cent, and 3 per cent over a three-year period. Remember, that's not just for one area, that goes across government, really thousands and thousands. It's not just our 10,000 civil servants, it's all our public servants, it's everybody who works or gets the money ultimately from government. That would be people who are employed by district health authorities or the Nova Scotia Health Authority now; that's everybody who works in school boards; that's people who work for the Nova Scotia Liquor Commission because we did have a question on the Liquor Commission - or Corporation, I'm sorry, I'll get in trouble if I call it the commission. It also dates me, so I mustn't do that. It's a corporation, a Crown Corporation since 2003, but a lot of people still call it that. They are an arm's-length group with their own board, as you know.

 

            To get there every single organization that is government related gets that wage mandate - that means we added $700 million across the board to all these different departments that we're looking at in estimates. Every single department that has put their numbers in front of the members of the Legislature, and of that I think the members opposite are uncomfortable to hear that because, quite frankly, Mr. Chairman, $200 million was out the window above the cost of living to the better for everybody.

 

That's great, but we are now $100 million in debt; we're borrowing $100 million to pay our way. We are saying that there were tough choices made, we're talking about organizations that had funding reduced or we're talking about people on assistance who   don't have the support that we would all love to give them. Why is that? Because, I'm sorry, it is dollars and cents at the bottom of the day, and at the end of the day we have to have the money to pay for the services that we're doing, and any new programs that are marvellous and would be just the best thing since ever, the real game changes that people like to bring to us, well they can't happen until we have a surplus and there's money to add those new programs.

 

The members opposite are disingenuous to even suggest that it's somebody else's fault. They laid the groundwork for the finances of this province to be in the position they're in. They could have protected the province, they could have protected the taxpayers, but they chose not to, they chose what they thought was an easy choice. They raised the HST and the gave in to wage demands from across the board and that's left all of us worse off. (Applause)

 

Mr. Chairman, you can see that I also get a little hot under the collar when this comes up. It is the history of the province; it has been written by the Finance Minister before last and it is documented. This happened, it was done, and it was not done wisely. I feel that the goal that Ivany set out for us there is one part of it; Goal 19 is the goal that I am responsible for and the officials in the Department of Finance and Treasury Board are responsible for helping us get there, that is fiscal health for this province. If we have a fiscally healthy province that can afford to provide services and not borrow, we will be in a position to create the groundwork for a much better future.

 

If we don't do it, what is the drawback to continue to just go on the way we're going? Well, Madam Chairman, the difference is we understand that if you get out from under this we'll be able to create a different future, and if you don't we'll just continue to spin our tires to bring in year after year of deficits. (Applause)

 

Madam Chairman, there were a couple of questions in particular, other items that were mentioned. I talked about the restructuring fund, which really as far as I'm concerned equates to the amount of money that we should not have been spending every year in the additional labour costs. I think we should talk about some prudent things that were done by this government.

 

Let's look at last year's spending, we were talking about the restructuring fund and where the money goes. Well in the fiscal plan that you see before you and the forecast for this year just closed, the 2014-15 year, there is a $105 million or so in deficit - well that includes a very prudent amount of money that was put in for Boat Harbour. I know there are a number of members in this House who represent Pictou and I know they're on the other side of the House but I'd like to speak out and let the members know that there has been provision made for the cleanup of Boat Harbour, that there had been previous money and more money has been put in. (Applause)

 

That's an investment in the future, that's a recognition that previous governments knew it was coming, knew there would be an obligation, but didn't make any provision for it. It's in the past year. (Interruption) It is, but you have just seen it now in the forecast that was brought forward in the budget, and that forecast number includes $30 million more for the cleanup knowing that it's a responsibility, knowing that we make provision for it in advance. It has been done, and I think that's a tremendous investment and a tremendous thing for the future of that area.

 

We know the problems that exist in Pictou and we understand it. The Minister of Environment particularly understands it; it's close to home and he has visited it many times and he knows we have a commitment to the First Nations in that area, as well as all the people of Pictou County. I think it's really important and that should be really well noted that there has been provision made for important things.

 

The member opposite had spoken about what she called "wasteful spending" in the first year - well, I don't consider that wasteful spending. That's an investment, again, in our future and in our environment, in our past obligations. The pollution in that area began in the 1960s because of an earlier government signing away and saying we'll take care of the pollution - don't worry if you pollute our harbour, don't worry if you mess up our watereways, just carry on. That was an earlier government in the 1960s. Well, we've made provisions to try to make that right and this is, as far as we know, the right amount of money to do just that.

 

            Another thing that was mentioned by the member opposite was the Home for Colored Children. Well, what an embarrassment to leave that and leave a group of people that the previous government wanted to go to court, provision made to go to court - why not settle? (Applause) I'm sorry. I will say, the member opposite is questioning whether or not that was wasteful, she said she didn't say so. But she said it was a big spending year; a big spending year on items that had been neglected by the previous government for four years. Yes.

 

That's what I said last year in the budget, I said we're recognizing the costs of government the way they really are - we're not prepaying universities, we're not hiding fees, we're not changing the payment date for people on assistance, we're not playing games - we're showing it exactly the way it is. It showed a big deficit, it showed $278 million. Those are the costs of doing business, but it is hard to make changes and it's hard to turn the course of government, and some of those items, of course, are hot-button items or items of concern to us because we believe we've done the right thing and that's what the members can hear today.

 

            Being ahead of schedule by a year is a good thing. It is a good thing to get a year ahead of schedule to be at a balanced budget because the previous Finance Minister wasn't able to get ahead by a year and came into an election year to talk about the successes of their government with a tiny surplus that was not sustainable. Even if you knew it was done with the best intent, and I do work with the people who prepared that budget, I may have some different things to say about it knowing the rigour that they work under, but it's the same as I said about $22 million, it doesn't provide any resiliency. It doesn't allow you to weather the storms of what comes up, quite literally. If there is flooding, if there are demands - I talked yesterday about if the mink industry starts to lose money and you have to compensate or provide stabilization funding, as it's called, all those things can wipe out a $16 million surplus or a $22 million surplus.

 

            That's why it's a good thing to try to advance this as quickly as possible to get to the level where we are not adding to the debt and we've actually created enough of a cushion, enough of a surplus that you can be resilient. That's very, very important.

 

            One thing about demographics, before I go to the NSLC, and that is that the problems that we're facing with demographics are not unique to Nova Scotia. They are being felt around the world, and I was quite surprised a number of weeks ago to see in The Globe and Mail on the weekend an article that talked about Germany and the exact same things that we are talking about here in Nova Scotia. It was really a surprise to me. A much larger country, obviously many more people, but they were talking about the decline in their working age people. The title of the article was "What happens when you run out of taxpayers?" What happens when that number of taxpayers declines, and what happens when you don't have the numbers that are paying in today, approximately 600,000 people? How do you handle that when there are not enough people in that cohort, that age group of workers?

 

What we have in our province today is that in 2013 more people were over the age of 65 than were zero to 17. That's just the point of which we crossed. We know that there are more deaths than there are births. It means that there are fewer children than there are senior citizens and those children, zero to 17, we would expect would be the ones entering our workforce at some point in the next, say, five years or 10 years or after they get their training and experience in whatever it may be, the course that they are choosing.

 

            What it means is that we are obviously in a demographic challenge, but the very same thing is happening in European countries, it's happening in other provinces - perhaps we're a little bit ahead of the curve because of having a slightly older population. It's going to be a common thread and when we talk more about taxes and what we can do in the future about taxes, one of the big things is the underlying need to shift our taxes. We can't put all of the services that we need paid for on the backs of the working people, because there won't be enough of them and those who have stayed here and are working will have to have higher and higher taxes in order to continue to pay that same share of the burden of running the province. So we have to look at a way to rebalance and decide if there are not others who could pay.

 

            I think yesterday in the House the member opposite spoke about the wealth that is transferring hands and the older people in the province, I believe she was talking about them having more wealth, that the seniors are not - not everybody is living below the poverty line, let me put it that way, that there will be a huge transfer of wealth as people age and that a lot of people in our province have funds. So is it wrong to ask that they might pay a higher amount of consumption tax or pay in another way to provide for the province?

 

            Right now I don't know if the members of the House know, but our largest single component for taxes is personal income tax. It gives us somewhere around $2.1 billion for personal income tax, and the next closest is HST, which is under $2 billion. I'm just looking because I think there was a nice graphic about that - at any rate it actually shows us that personal income tax is the single largest way that we finance our province. So the working age population is very important and looking at demographics is important.

 

            It isn't just because we want to have a good, young population, a growing population, a place that welcomes immigrants, it's because we need people as well to just keep this province afloat and to help us with all the costs that go with it. This one actually doesn't show us where the money comes from, I don't think - yes, I guess it does, 29.1 per cent comes from income tax and from the federal government, 34 per cent. Now that is larger, but that is not our own source income. We talk about our own source income in a different category.

 

            The federal sources have shrunk. At one time, and I think going back to the late 1990s or early 2000s it was close to 50 per cent, I do believe. So we actually have a greater reliance on our own source income than we do from other sources.

 

            The other ones that are our own source income within the province: income tax is 29 per cent; tobacco taxes are 2.4 per cent; motive fuel is 2.6 per cent - those are consumption taxes, both of them; the HST, which is our largest consumption tax, is 17.9 per cent of all of our income. So quite a bit, more than 10 per cent less than what we get from our income tax section.

 

            In fact corporate income tax doesn't even show up on this wheel with everything, it has all other provincial sources, 14 per cent. Our corporate tax is something around $400 million, almost $500 million, that's small business and all corporations included in that. So $500 million from the corporations and small business, $2.1 billion from the people they employ, which is the most important source of our income. I just think you need to know that.

 

            The other thing I would like to touch on is that the member opposite again spoke about tax cuts for the rich. What a tired tune that is, to suggest that because Laurel Broten put it in her report that that is what people are going to do. I've already said we need more people in higher income brackets and we need to give them more money. That's what we really need as we go forward. We need them to pay the amount they are paying now because it contributes greatly to our bottom line. I think until there can be more fairness across the board, there won't be any change in that at this point in time. That's because we have priorities; you have to take things one step at a time.

 

            So I think what I'll do is go to the NSLC question, which was paramount in the few questions that were asked, and the NSLC question was, did I meet with anybody from the convenience store association? There is an Atlantic Convenience Store Association which, I think, many members are familiar with. They are quite organized and many of you would have been invited perhaps to put on a T-shirt and help serve there some day in May or something, one day a year - and I've certainly done that.

 

            I did meet with their representative, their executive director and I had last year as well, it's part of our pre-budget consultations. I meet with a lot of the different industry groups. Certainly they have mentioned this, they would love to see something like that, but their bigger question really was around tobacco and tobacco taxes and the concern they had for that.

 

            Our government has made absolutely no commitment to extend where alcohol is available. We're not looking at that; we're very conscious of the Department of Health and Wellness and their concerns about having good, strict controls on alcohol. We are interested in local craft beer and craft breweries. The impact is great. In many communities the wineries are growing, and we'd like to do things that support our local wineries but we're not looking at new avenues, new ways to sell it essentially. People will know that we have 105 Nova Scotia Liquor Corporation stores, some of them attached to co-ops or Sobeys and so on. In addition to that, there is also something like 60 agency stores, so small businesses in more rural or remote locations that are able to, under very strict guidelines, sell alcohol.

 

            We have those networks already in place. I think there is adequate coverage of the province. We do hear from some communities that would still like to have us look at agency stores, but right now our plan is to support the NSLC network of stores and the jobs that are important there and the communities in which they operate. Thank you.

 

            MADAM CHAIRMAN: The honourable member for Truro-Bible Hill-Millbrook- Salmon River.

 

            MS. LENORE ZANN: Thank you, Madam Chairman, and could you please tell me how much longer we have in our hour?

 

            MADAM CHAIRMAN: You have four and a half minutes.

 

            MS. ZANN: I just want to say thank you to the minister for her remarks, and I would also like to thank my own interim Leader for her remarks as well. I would like to point out that being somebody who has been in government now on the side in power and now in the Opposition, I have seen the challenges for a Finance Minister to try to balance budgets and try to come down with something that will help as many people as possible but try to balance the province's books.

 

            I want to point out that I am very proud of the fact that we've had two female Finance Ministers in a row and our Leader was the first female Finance Minister for the Province of Nova Scotia, which I think is a huge step forward and I really want to acknowledge that our Finance and Treasury Board Minister today is also a female and I'm very proud of that fact as well. If I'm going to be given four and a half minutes then I think that's the number-one point I would like to make.

 

We recognize on this side of the House how difficult it is. I'm sure if you asked our former two Finance Minister, Graham Steele, who is now no longer a member, also he had to go around the province and do the Back to Balance tour and it wasn't an easy fix; coming up with the HST was not an easy fix. But when he talked to people all around the province - and I went to many of those meetings - he did find that was the number-one thing that people chose as being the easiest thing for them to deal with, rather than raising their own income taxes and dealing with trying to provide more funding for the things this province needs in other ways.

 

            In fact, it was interesting that this government chose to keep that HST where it is because they recognize the fact that it is an easier way to put money into the province. For a tiny little province like Nova Scotia, we need as much help as we can get right now. I recognize those challenges, but in the same breath I have to say I was extremely disappointed to see this very quick, supposed fix of cutting the film and television tax credit down to 25 per cent, which is really not worth the paper it's written on; it will not help this industry grow.

 

            As far as I'm concerned, I believe the creative economy, the green economy and the knowledge-based economy of the 21^st Century is the way of the future. If we don't get on that train, we will be left far behind. So I think we need to do everything we can to try to bring that industry back on track and not to leave them in the lurch. As this government is pleased to say always about winners and losers, that they don't choose winners and losers - I'm going to say they have chosen some losers and the film industry is one of them.

 

            Again, I think it's so important for us to invest in our creative economy, to invest in the artists and the talent this province produces. Every single one of us can name, I'm sure, tons of people in our communities who contribute widely to the quality of life that we have and to the creative economy in a way that goes far beyond what most people would normally think of. When you really dig down into it, creative people are the ones who create everything around us that is worth living for.

 

            MADAM CHAIRMAN: Order, please. The time has elapsed. We will now move to the Progressive Conservative Party for the next hour.

 

            The honourable member for Pictou East.

 

            MR. TIM HOUSTON: Thank you, Madam Chairman. I thank the minister for her comments. It was interesting listening to some of the speeches we had. I did have a question about the Liquor Commission but I'm kind of afraid to ask you right now, but maybe I will anyway. Just a quick question on the Liquor Commission if I may - it has never been really clear to me if you can ship wine out of the province, so I would ask the question, can you ship wine out of the province and, also, can you ship beer out of the province? Something tells me there are issues around that and it's not quite clear to me.

 

            MS. WHALEN: Thank you. It occurs to me that the member might like to ask another question while we're looking for the answer to that one, just so that we don't waste time.

 

            MADAM CHAIRMAN: Actually, I would like to ask the honourable minister if she'd like to have a short recess or a short break - we're over two hours into our Supply - before we proceed?

 

            MS. WHALEN: We weren't expecting that, but I think if we could have a short break, just five minutes or so it would be good for all the members. Then we could perhaps have an answer for you as soon as we get back.

 

            MADAM CHAIRMAN: We'll resume in five minutes.

 

[5:26 p.m. The committee recessed.]

 

[5:34 p.m. The committee reconvened.]

 

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

 

The honourable member for Pictou East has the floor.

 

            MR. HOUSTON: Thank you, Madam Chairman. I don't know if we have the information on the Liquor Commission question. If we're ready for that one I would just ask the question about, just for some information, if you're allowed to ship wine and beer out of the province, or what are the complications that may surround that issue?

 

            MS. WHALEN: Madam Chairman, thank you for the short break; that was helpful for all of us. I do have the answer to the question that had been posed. We actually have a piece of legislation that passed here some time ago - I think it was under the previous administration - that is called the Importation of Wine Act. It is about importing wine from other places where you could actually import a case of it. For example, if you were in British Columbia and went to a winery and enjoyed the wine, you could have a case of it, or however much, shipped here. We have yet to proclaim it; there are some delays on the regulations to do that but we have got the intent to do that.

 

            The difficulty is that is only good for the importation, it's not good for the export because the receiving province has to have passed similar legislation. So the real difficulty is that we wanted to show leadership and I think British Columbia as well because B.C. has a big wine industry and a big wine-growing area. They were very fast off the mark to put the legislation in place. Nova Scotia has what we consider a very promising wine industry.

 

I've just asked, there are 18 wineries now in the province and more in the works, I hear, so it's a growing sector and it's becoming much more professional. There are over 600 acres, I'm told by the Agriculture Minister, that are grapes in cultivation for a wine industry and it's really doing well. We see it actually as a very promising sector.

 

            We want to show leadership to be one of the provinces that says yes, you should be allowed to import wine here so that we set the groundwork for other provinces to do that and, hopefully, our little wineries and bigger wineries will benefit when travellers are here and visiting those places that they'll be able to import. But it's still early days so it hasn't happened yet. The only provinces that have taken action are Nova Scotia and British Columbia. Manitoba allows it in their province, but only because the legislation they have in place for alcohol didn't prevent it. So they didn't have to make any change, they said it is fine, it's allowed here anyway.

 

            We really want to see other provinces do the same. I would expect that Ontario would, again because they have the big Niagara region and other wineries around the province, so it would be in their interest as well.

 

            You can go to New Brunswick and import what I guess is a small amount on your person, bring a small amount back with you, but you can't order - from here you couldn't place an order and have them ship it to you, that part wouldn't be allowed, so the rules are quite narrow.

 

            I'm speaking only about wine because beer wasn't included in this. The legislation we passed did not include beer or spirts.

 

MR. HOUSTON: I thank the minister for that; that is helpful, actually. I do want to pick back up on the Film Tax Credit, just a couple of questions here to clarify something in my own mind now that I've had a chance to sleep on our discussion from yesterday and whatnot. I was talking yesterday about the cost of the credit, the $24 million figure we used and I was asking, was there a calculation done as to how much of that comes immediately back in the form of personal income tax revenue to the province? I made the point that if all of that $24 million went to Nova Scotian taxpayers then some portion of that will come back in taxes right away. Even if all those taxpayers who received those wages were at the low rate - I used the figure that we'd probably get I think 10 to 15 per cent of that just kind of immediately in that. I heard you in your comments earlier say that would be 8 per cent, something at the low rate. It was in the context of another discussion but it wasn't lost on me that that point was made.

 

            I was saying that some of that would come back in personal tax revenue. The response was that from the department the analysis suggested that it was $6 million in revenue back to the province. That would have been HST receipts, personal income tax receipts, and the minister did offer to provide that schedule and I will get that in the fullness of time.

 

            In the context of that discussion there was a comment made that gave me pause for thought and that comment was that 25 per cent of the crew on the set need to be from Nova Scotia to qualify, to get in the door and even qualify for the credit, I guess. I took the comments from the minister to mean that once you were in the door with 25 per cent of the staff you qualified for the credit and then everything that went out in wages, some of that may go to taxpayers from other jurisdictions. I just want to make sure I understand properly that what actually takes place is 25 per cent of your labour has to be Nova Scotians. That gets you over the first hurdle to qualify you, and then you only get the credit, not on your full complement of labour but only on that complement that is Nova Scotia taxpayers. Again, I just want to clarify that the credit that's paid out is only paid on Nova Scotian labour, so it does only ever end up in the hands of Nova Scotian taxpayers.

 

The reason I want to make sure that I understand that is because it is an important point; I think it's important to me in my own understanding, and we have heard things like the credit is money going to other places like Hollywood or something like that. I just want to make sure that I understand it properly, that that's not the case. It's not the case that a production would qualify and they would get the credit on somebody like Brad Pitt. Once they qualified they would only get it on Nova Scotia labour, but the 25 per cent hurdle was to qualify them and then once they were qualified they only got it on Nova Scotian labour. I didn't want to be a stickler on that point; it's more that I understand that point.

 

            MS. WHALEN: Thank you very much and I appreciate why you would want to go back to this issue, because it is the most important crux of the whole argument, the benefits to Nova Scotia. What are the benefits? We've been talking a lot about that, but really to try to determine that they are a benefit for people here in the province, that is what we want our tax dollars to do, to leverage benefits for our own province the most and the people who are here. I think the biggest point goes back to what the member opposite raised yesterday, and that was the form that declares your residency. I think in your past life as a chartered accountant you would have done a lot of taxes - you probably still do your family's and others, but the question really is whether or not you're here for taxable purposes or whether you are going to pay taxes.

 

As the member had shown yesterday, the form that is filled out has three boxes you can tick. One says I'm not Nova Scotian; one says I'm Nova Scotian and I'm here on December 31^st - that means that they are going to file their taxes here in Nova Scotia; and the second box that says I'm Nova Scotian is a little bit more ambiguous. Perhaps you have the form in front of you. I've seen it but it's a little bit ambiguous, it says that for the purposes of taxes I was in the province in 2014 or during the production whatever year it might be, that one is a little less certain because you could have been here for tax purposes during the year and then not be here at the end of the year. In fact, this may not be your main residence, it might be one of your places of residence or what have you - and you may have spent a good length of time; you may have been here certainly for a long period during a production.

 

            I think that just leaves a door open for some ambiguity. That's all I want to say; it isn't a certain. In other provinces, because we talked earlier about what do other provinces do and how do they manage it, there is actually some information I might get for you if you would just give me a moment, Madam Chairman.

 

            MADAM CHAIRMAN: I would like to remind the honourable minister and the Opposition members to please direct comments to the Chair instead of across the room.

 

            MS. WHALEN: That's very important for the decorum of the House. Often in estimates it becomes a bit of a conversation, I know, and there's a good exchange of information. I always enjoyed it much more when I was in Opposition asking the questions more than - well, better than Question Period. It's not as heated, it's really more of an exchange of information and a good conversation, a chance to understand issues better. I do appreciate that.

 

            But I had been looking to see what the benefit was and how we define residency, that's really the key. The report I'm looking at here doesn't have it but I know it's not exactly the one I was looking at. There was another one that actually I had seen that compared that. Most provinces say that you have to be a resident as of December 31^st. That's the definitive thing about where you live and it might say I was a resident December 31, 2014, and I will be on December 31, 2015 - then there is no question; it's very clear.

 

            I think we could learn something by adapting some of the controls, perhaps, and the forms that are used in other jurisdictions. We already said, as I was speaking to the member for Hants West, that there are a lot of jurisdictions that offer tax credits and they have different criteria that they use and different forms and different methods. It would be an important thing to consider. I can't say for sure the exact numbers. I will go a bit to the formula that the amount used is below the 8 per cent because they consider personal exemptions and other tax exemptions and so it is diminished. Then there's, again, the spinoff factor which is used for all investments in Nova Scotia, which would capture hopefully all the HST and other costs.

 

            I want to go back again to what I said yesterday and I think it's important in the event that people in the film industry are listening, because we have agreed that we're not talking about any details of what's on the table in terms of how we can improve this both to meet the needs of the industry and to be respectful of the position of the province. There has been a really good environment at those meetings and a good exchange of information. I would say we came away with a better understanding on both parts - that they have an understanding of goodwill on our part, as well as their own goodwill working with us, and that's really important. I certainly don't want to quibble about some of these numbers.

 

            What I would say to you, which strikes me as what if we were wrong and it's off by 100 per cent, then our calculation is $12 million back in tax revenue still on $24 million. We've got a big gulf there; a big difference. We could talk about the elements of the formula but we're not arguing with the industry over that because this is a fiscal or a financial measure of taxes back.

 

I mentioned yesterday that just reading reports from other jurisdictions and other studies that are done on the impact, the numbers presented by government always seemed to come out as a pretty low return in tax dollars - not in return overall, not in return on social impact or quality of life for the fun that this brings - this brings a lot of fun to communities, it brings a lot of attention and a lot of enthusiasm. People are excited to see a film in their area and they're excited to have their area showcased, so it has elements that may have nothing to do with the tax dollars back to our province. I accept that and those are benefits and when I looked at our analysis it just says these are hard to quantify.

 

            It doesn't diminish the fact that they are valuable, that they are exciting, that they make us proud to be Nova Scotians - I've heard that from people, it makes them proud to be Nova Scotians when I see our stories told and so on. So I absolutely accept that and I want it very clear that the members on this side of the House and the members in our Cabinet and government appreciate that. There's an understanding that this is valuable.

 

            I've already said at some length why it's compelling for us to question everything that we're doing and I think people understand that, the members and certainly the member opposite, through you, Madam Chairman, I think as well appreciates it. I'm not trying to slice and dice these numbers or argue them. I think the important thing is that everybody knows that when these numbers came up - certainly we heard a presentation from the industry and our numbers were presented earlier, and we just agree that there is a different yardstick on a different measure of what comes back in terms of value to the province.

 

            I know the questions from the member for Hants West just recently were talking about the value being the $66.8 million, that's the amount spent in our economy so that is the amount that is spent and circulates, but it's not the amount that comes back in taxes, and I know the member opposite understands that ours is a somewhat rigid measure of tax value to the province.

 

            That is not at odds right now, and we are not fighting or discussing that. It's accepted that both numbers are valid and that our positions then move to where we can find good common ground.

 

            MR. HOUSTON: Madam Chairman, a couple of things. The first thing, I think I understand it to be the case that I was thinking that 100 per cent of the credit paid out is paid to taxpaying Nova Scotians, and I guess I'm hearing from the minister that maybe, maybe not. There is some ambiguity of whether that person was here for the production and maybe left and didn't pay taxes here even though they were here for that. Okay, I take that; I do take that point.

 

            The only other comment I would have is because I was asking those questions in the direct context of the immediately identifiable tax revenue, and that's the number you said is $6 million, so what if it's $12 million, and that's a good point, but I do think that that equation is lacking a significant, important piece of information, which is the overall spend in the province, even though the $24 million goes out and the $6 million comes right back in and is identifiable. I know at Pictou Lodge they had a production scheduled for the Fall and that production has now been put on hold; I think maybe all the rooms were cancelled. Well if those rooms were booked and the restaurants were busy, that does generate tax revenue for the province. I know it's hard to factor that in, but I do believe that it is something that should be factored in.

 

            My final question is on the Film Tax Credit and then we'll move on to a couple other tax issues, but my final question on that one has to do with the July 1^st date. On the face of it, knowing what I know and appreciating that there are many things about this situation that I don't know, including what's happening in the meeting - but knowing what I know it would seem to me that that would be an easy thing to move on, to move that date.

 

            Now because there is a certain amount allocated for this year, but I appreciate that the reason that that might not be such an easy move is because of the impact on next year. There are things in the hopper for next year and there are Part A approvals that have been granted for productions for next year, I'm guessing, and I'm just wondering, and it won't be an easy question to answer and it might be one you're not comfortable answering but I would have asked, has the hopper changed, given the budget? So there were things in the hopper, the budget came down, were there some immediate changes to the hopper where people said we are not going to film that production in Nova Scotia next year, we're not going to start it after July 1^st?

 

            The question would be, did you see an immediate change to the number of things in the hopper? If you're able to answer that I'd be interested.

 

            MS. WHALEN: The question, Madam Chairman, through you to the member was about the July 1^st date which is a critical date; it means that principal photography must begin by July 1^st. That's how it was described to me. So the production really has to get underway by July 1^st. Any of those productions would already have received their Part A, I would imagine - some time ago they would have - and what I'm hearing from the industry is it takes sometimes two years to develop a project. I talked about their long-term plan last night that many of them, the bigger companies, have five-year plans and are very active in seeking their next projects and lining up future years. What we are seeing are the projects that have been in earlier, received Part A, have their financing in place now and are at the point to be able to start filming by July 1^st.

 

Again, because of our climate, a lot of things happen in the summer - not everything. I'm told certainly not everything but a lot of them will be able to start, the ones that have Part A and that's the critical date for today, and I really don't want to speak about more of that.

 

            MR. HOUSTON: Madam Chairman, it wasn't that long ago when we used to talk a lot in this House about carbon taxes. I would like to try to reinvigorate a little of the carbon tax discussion this evening, but before we get right into the carbon tax, the minister mentioned in her opening comments, I think, about a tax working group. I had a question for the minister: how has that tax working group been assembled?

 

            MS. WHALEN: Madam Chairman, I just wanted to refer to the Broten report because I know that the member opposite has looked at that, and he attended some of the sessions as well - he was certainly at the session in New Glasgow. One of the recommendations - I just went to the back of the report, it's Recommendation 1.18 - the 18^th of the tax recommendations says to establish a tax working group. "The province should establish a Nova Scotia Tax Working Group - including government, academic experts, and tax professionals - to review tax policy and options and make recommendations to government on an ongoing basis." I am reminded that it's important to let you know that we have not adopted the report; we have received it and looked at it and looked for some value. The member opposite knows we have adopted the regulatory recommendations in the report, but there is still a lot that is up in the air that's being looked at.

 

            In looking at the recommendations I felt there was a great deal of value in us committing to creating a working group that will do exactly what I just read, the exact recommendation that it have experts who understand taxes, so our academics and government staff who work in tax, as well as tax professionals - that might be lawyers or accountants that understand it.

 

            In my travels around the province with the eight meetings that we had publicly, as well as some one-on-ones with smaller businesses groups, it was interesting that we did meet a number of people who understand taxes well, and certainly more than I do, who work in it every day, who understood some of the loopholes where things could be tightened up, where we weren't well administered for one reason or another. They were able to explain it because they know how they would advise their own clients, whether or not they would say incorporate, don't incorporate, or what level, the best way to draw your income, or whatever.

 

            They understand the ins and outs, the actual workings and as is their job a lot of people rely on them for good tax advice. I think some of them certainly indicated that they would like to help more and would be willing to participate if we were to go forward and have a working group. It's just early in the day to say what that exactly will look like and that was why I was reminded that a number of people have offered and said they would like to participate. We would have to decide more about what the scope of the group is. I would see it very much as a sounding board.

 

My understanding, and I think in the wording I used in the Budget Speech was that it would be a "group," really an advisory group to the minister and allowing me to seek wider input and maybe some better ideas as we go along. As members of the House know, we often have one perspective or we're working in a certain paradigm of concerns and it's good to talk to people who are in the outside business community or in the outside world who can also relate.

 

Now if we have people who work as tax accountants or lawyers they understand their clients, so I think they can represent well the interests of the business community and individuals who are taxed because they have a lot of clients and they would know just about every circumstance. So I would definitely see us relying upon them.

 

There is also the issue of revenue neutrality that we talked about with our taxes. That means, as I said earlier in response to the member for Halifax Needham, that we want to look at tax changes but we want to look at them in the spirit of revenue neutrality because I could go through the list, and I'm sure the member opposite could give me the list of all the highest taxes that we have in our array of taxes. We have, I already said, the highest HST, we have the highest single tax bracket in that group for over $150,000 income earner, and we tax them at 21 per cent - that's higher than any other jurisdiction. We have 16 per cent for our corporate tax, and the Broten review suggests that we bring that down because, again, tied for top place, I think, with P.E.I., but only one other place has 16 per cent for their corporate, so that's putting a burden on our corporate businesses.

 

In our province because the NDP lowered the threshold for small business that means any business over $350,000 in income - or profit I guess, it would be their profit line - if they're over $350,000, they go all the way for 3 per cent for small business suddenly into 16 per cent tax bracket for big business. Ours is the only province in the country with such a low threshold; everybody else is at $500,000. The federal government is at $500,000 to delineate between small business and corporations.

 

This is just the start, the tip of the iceberg, those few, and we could go on. I talked about the HST for consumption tax, again highest in the country. We just don't have a lot of capacity for moving our taxes and we want to do it in a way that's revenue neutral, that won't put greater burden on individuals, and that's what I heard at all of the sessions that we held. At every one of those eight meetings that were held publicly I moved around and sat at different tables, and so did our staff, so did my executive assistant. We all took turns to listen, making sure we spread out and listened to what was being said by different people, and they came from all walks of life.

 

I thought that was very impressive, Madam Chairman, at the meetings to see. I wasn't sure who would be attracted to come out and talk taxes. Would it be the professionals in the community? The business community I thought would definitely appreciate it. We know from CFIB and other groups that represent business they are very sensitive to taxes and increases in their taxes and the burden that they're under. I know from members of my own caucus, particularly the member for Halifax Chebucto is a great advocate for businesses and for the concern around the many taxes that they bear.

 

What came up time and again was that it isn't just our level of taxation, they may be at a 3 per cent taxation level for small business, but if you look here in metro where I'm a member and many other communities you will find that they pay very high commercial tax on their properties which adds to their burden, and they do pay fees not only to the government but they pay fees to other levels of government, to the federal licensing, or provincial or municipal licences. So they have a lot of other costs that are a burden to them, not just singularly the small business tax.

 

            That was another message that I heard loud and clear was even as we talk about taxes we need to consider the overall tax burden. That's something that I think the member opposite has spoken about as well in the past, about the tax burden and the tax-free holiday we have and at what point do we stop paying. It was mentioned recently in the House that at which point in the year do we stop paying taxes to various levels of government and start actually to work for ourselves. And so, again, Nova Scotia has a difficult time.

 

In terms of a little history for our taxes, the people of Nova Scotia, I think, are really very wise. They do understand the urgency of the situation we're in and the best example of that, and I'm not going to try to have a lot of rhetoric, but the very best example of that was the last election when three Parties were running for election and hoping to win the majority of the seats. Two of the Parties were offering to lower the HST; the government of the day, the NDP, said they would begin to roll back the HST 1 cent over the next two years, so 1 cent one year and another cent the next. I said earlier today that would have cost $195 million both years. Again, the surplus that the government was showing was $16 million, so it would have thrown the government into almost $200 million in deficit right away.

 

            Our position in the Liberal Party was that it wasn't doable; it wasn't achievable. I had run in a number of elections where those kinds of tax decisions are paramount to how people vote. That's very attractive to people when they go to vote to say which Party is giving me the best break, who is giving me a good deal? I've had people write me during elections, what are you doing for me, and they'll say, what is in your platform for me? Sometimes they're people who really don't need a whole lot. I had somebody write me and said my wife and I earn $100,000, we have no children, and we don't care about education, what are you doing for me in this Party platform for this election?

 

I don't know how other members would feel, but I think our job is to help people who really need a lot of help and to maybe minimize taxes and not try to harm people. But we can't be all things to all people and we can't, every election, ramp up with more and more goodies and more giveaways and more good things. That's how we got into this trouble.

 

            So taxes are a sore point for everybody, everybody wants to see benefits but in the last election, despite the fact that the Premier of the province, then Leader of the Opposition, took the stance that we could not afford to roll back the HST and we campaigned on that and we spoke to Nova Scotians, they understood that the situation is dire and needs a different approach, and they still elected 33 Liberal members to the Legislature. I thought that was a testament to the people of Nova Scotia that in this election that maybe they were aware of the situation, that maybe they had been participating in more forums in their communities, but they understood that we can't keep just spending and spending, that we now have to get our house in order, and seek that fiscal health that we talked about in the Ivany report.

 

I'll leave it at that. I think the member has more tax questions.

 

            MR. HOUSTON: Madam Chairman, I guess there will be a tax working group but it hasn't been established yet - that was my question: do we have a tax working group? So it hasn't been established just quite yet, and that's fine. That's all I was curious about on that.

 

Now the Broten report did talk a lot about - it was called a pollution tax in the Broten report, but I'm just wondering, has there been much work done by the departments since the release of this report in November 2014 to actually analyze the Broten recommendation around pollution/carbon tax? Has it been a focus of the department since November or is it something that the department has not focused too much on since then?

 

            MS. WHALEN: I just wanted to be sure that I had captured all the activity in the department, so we've had a chance to discuss that with my officials. One thing that is very important as we are looking for the lessons learned - what is happening elsewhere, what are the trends across the country? We've certainly been doing a national scan and had a look at what other provinces are doing.

 

            Within government we've certainly spoken a great deal with the Department of Environment. As the member opposite might know, Madam Chairman - I'm sure he does know - that at our public meetings around the province, I think at virtually every one, we had somebody from the Department of Environment. It might have been that Sydney didn't, I'm not sure, but almost everyone because we felt there would be questions and that the Department of Environment has people in policy there who are better connected to know what is happening in other jurisdictions and how they are approaching the issue of pollution and any kind of tax or cap and trade on carbon, so we felt that we should rely on those experts.

 

            I talked earlier about how our people who work for government are not interchangeable; we have a lot of experts in different areas and they are doing a great job. In Environment our own Minister of Environment was away just a week or so ago talking about climate change and climate action with other - in fact he was at a Premiers' meeting with the rest of Canada's Leaders in order to talk about what the other provinces are doing, so it's really important that we follow that.

 

            There is definitely a trend around the country but I don't have the information here in front of me. I think in the upcoming Ontario budget there may be something announced. They have been talking about making an announcement soon and there was a commitment made in the last election around carbon, so we may see something from there.

 

            Another big province, Quebec, has introduced a cap and trade system, so we know that there's a lot of activity around the country that is happening. Ontario and Quebec have actually signed an agreement? Okay - there, I've gotten up to date - Ontario and Quebec are both entering into the same agreement with cap and trade so they will be essentially putting a price on carbon in a different manner, so we're looking at that.

 

            It's a lot of information gathering. What I want to assure the member opposite is that from the moment we received the report we have been doing a lot of different analyses trying to understand where there are some things that we don't fully grasp. We won't be taking steps rashly to make changes that we don't understand the impact of - that is what is really important. Putting a tax on pollution is one of those ideas that is a big idea. I think it has a lot of discussion going on around the country.

 

            There's another group that the honourable members might be aware of called the Ecofiscal Commission, which is a national group that started up sometime in the last year; they are led by a professor from McGill University. They have regional representation, I believe Elizabeth Beale from APEC is representing Atlantic Canada or at least Nova Scotia on that board. They are a group of academics and people studying a lot of the issues that go around the economy and our fiscal situation, but it is looking also at the environment. It's called the Ecofiscal Commission and I think they will be publishing some papers around the subject of carbon tax or cap and trade or what the implications are. We're also monitoring that kind of academic study that's being done, so we are very much a part of those discussions.

 

            I wanted to mention that through the eight meetings around the province that was one of the themes coming out; there was always representation at those meetings from citizens who really made sure that they were there to remind us every time that it was important for us to look at the environment and that this was a measure that they supported. It would be, I guess, no surprise to the member opposite that often they were from environmental groups, from universities, they represented young people, and people who have a real interest in protecting our environment. I appreciated their feedback and their determination, there were different people but they did often represent some of the same groups and they travelled around the province to ensure that they had their people there that would come out, or others.

 

            There are quite a few groups with that interest. One of them certainly is the Ecology Action Centre and they have one of their staff members who works particularly on this kind of climate change, I think she's the climate change employee, the one who specializes in this. I have met her in my office as well as part of information gathering and pre-budget discussions and had chats with her as well. I know that the Department of Environment has been talking to their counterparts.

 

To sum it all up, it's a period of information gathering, understanding it better, and even in my introductory remarks when I talked about this I said we looked a lot at B.C. but we do understand that our economy is very different. The way we generate power is very different; we don't have a lot of hydro where British Columbia does. We need to understand how their success could be replicated and what it would mean because we're not going to see the exact same situation because we're two very different economies.

 

MR. HOUSTON: Madam Chairman, in your analysis and information gathering did the department run numbers on what the revenue might be for the Province of Nova Scotia if the B.C. model for carbon pricing was implemented here in Nova Scotia - was there any analysis that took the B.C. model and laid it over our situation and produced what type of revenue that might be? I was just wondering, as a general question, has that type of analysis been done - is it that level of detail that the department is looking at?

 

            MS. WHALEN: Madam Chairman, we were just reviewing actually, having a look at the Broten report as well to see where that was. On Page 54 there is a chart in the Broten report and it is a model of Nova Scotia adopting the B.C. sort of style of carbon tax, but what was described to me is that it is not fine-tuned; it doesn't consider all of the factors. If we were going to do - again, I think I spoke about how quickly this report had to be done. Eight months was pretty amazing to get it all done and a lot of support from our staff and experts in the department, but at the same time a lot of it could not be done, perhaps, to the depth that we'd like. That's why we have been busy trying to do more, particularly around the impacts on lower-income Nova Scotians and how any of this or this whole basket of changes would affect lower-income Nova Scotians.

 

            Page 54 gives probably an indication of how it would model, but it doesn't have all of the industries just exactly modelled the way it probably would be. To answer the member's question, we have not redone that at this point in time; it has not been done further.

 

            MR. HOUSTON: Madam Chairman, I know there was an analysis as part of the Broten report that suggested that it could increase provincial revenue by over $400 million. The question I had in my mind was had that analysis been fine-tuned and you answered that question, so I appreciate that as it's not really at that stage of analysis.

 

            In terms of how a possible carbon tax might affect Nova Scotians, I think the answer is you are not at this stage yet, but I want to ask the question, have you talked to stakeholders like Nova Scotia Power or have you thought about how it might impact the price of coal and maybe impact the potential for the Donkin Mine? The general question would be, in your review, in your analysis and, I guess, in your consideration of a carbon tax, are you at the stage where you are getting to that level of detail as to how stakeholders would be impacted?

 

I'm trying to get where you are on the assessment line of go, no-go, and it sounds like you are still towards the beginning of the assessment process. It's a very detailed process, I can appreciate that, and it's something you are thinking about but haven't really dug that deep into just yet. So maybe just some thoughts on that process.

 

            MS. WHALEN: The short answer to what the member is asking, Madam Chairman, is that we haven't had any discussions with Nova Scotia Power. The longer answer would be that the report itself does say that it wouldn't even affect power rates until after five years because we're looking at 2020 as the year that we will have hit our greenhouse gas emission targets, which are aggressive; in fact, finally something we're doing that is best in Canada, that we want to be best at, and that's setting the most aggressive targets and a very good result in hitting our greenhouse gases and that's a good thing.

 

            Some things that were done, some of those targets, some of the ambitious thoughts are good and they are still in place. I am reminded that they were introduced, I think actually the Progressive Conservative Government or a previous government could take some pleasure in this because the environmental - I can't even say it, they call it EGSPA - the Environmental Goals and Sustainable Prosperity Act, I believe that actually came in under Minister Parent when he was here in government and I was a member of the Opposition, so it was an ambitious Act to begin with and the targets were increased under the next government.

 

Today the good news is we are on track to hit those targets. I think that's really good news because a lot of Canadians are used to hearing about things like the Kyoto agreement and targets and whatnot which we didn't hit and the country didn't hit. We're doing very well in Nova Scotia.

 

            The point of it, as it relates to taxes, was that the Broten report recognized that particularly the power generator, Nova Scotia Power, is very busy hitting those targets and doing things to reduce greenhouse gas emissions. When they do that there will be less pollution to tax, and that's a good thing. So let's not even talk about it until they get to that point - and that point about Nova Scotia Power is some way off.

 

            Just as a small point of interest that I found really interesting was in discussions generally around a pollution tax, I was told that Nova Scotia Power actually in their out years - they do long-term forecasting - they actually have attributed a certain cost to carbon in their long-term outlooks. They are recognizing, I guess, from their discussions with other jurisdictions and so on that a price at some point will come but they have no idea what to attribute, so I don't know what level they have estimated or what they've put into those long-term financial projections or even at what year they put it in.

 

I think if you're talking to them you may find they have recognized that at some point that will be a reality, not just here but in all the jurisdictions that they are active in. That would be Emera, the parent company, which is active in other jurisdictions.

 

            But to speak to how we're approaching this right now, I think the important word about all of this is that it's a bit "premature" for us to be talking to any of the companies or power generators or people who create a lot of greenhouse gas only because we haven't thought about the framework and the approach, and even government's approach. I said earlier the Broten report has not been accepted lock, stock, and barrel. We think there's a lot of good research in it, a lot of challenging ideas, and I can assure you there are ideas in here that had we been writing this we probably would have hesitated to put in because they are challenging; they're politically challenging.

 

            That is precisely why we asked somebody at arm's length from government to come in and do it because we knew somebody should look at this with an open mind and look for the best ideas to move the province forward and give us their best shot at it. I think that people have read this, and I know some economists that said it's the best report they've seen on taxes that has been done in any jurisdiction in Canada.

 

            It's a bold report, and it did do what I asked of it in the terms of reference. But it has some challenging things and that's why I said in the speech earlier that we have a lot to look at and study further. So it is premature at the moment to be engaging with any of the other sectors. I would mention, it's not just power generation, there are other sectors that would be particularly - any manufacturing sector, transportation sector where they're moving goods and transporting goods across the province, that would have an impact. I'm only naming a couple, but it would have to be something where we look at it sectorally and get a much better idea about the impact and who's even here in the province who would have a particular interest. We need to do a lot of homework to get ready to have any further discussions.

 

            MR. HOUSTON: On a scale of 1 to 10, with 1 being not something I think about very often and 10 being something that prevents me from sleeping, on that scale, how concerned are you about an increase in interest rates in terms of what it would do to the province?

 

            MS. WHALEN: The question was well-phrased: on a scale of 1 to 10, how much do not only myself but maybe our deputy and senior officials, how much do we lose sleep over this? Number one is it's very well managed in our province. We have a large debt, and I talked quite a bit tonight about it being at $15 billion now, but we're really well served by the staff and the executives we have who work in that department and manage our debt.

 

            One point that is of interest is we have very little floating rate debt so we're not exposed on the day-to-day fluctuations, and on that side we're very controlled. That's good because it means we wouldn't see immediate impacts if there was a sudden spike in interest rates. On the other hand, we know that interest rates are historically low. I don't think any of us would have ever imagined that we would be in a time when they are that low for buying a house or mortgaging your home. Even the Bank of Canada director - the Governor of the Bank of Canada who tries to use the interest rate to stimulate the economy, he got it as low as you can go, really. We're down to almost zero, so it's really a time when the risk is all for it to go up, and that is a concern.

           

Again I mentioned how well managed we are. One thing we've been doing and I have a few success stories which I think are worth noting, we've been trying to take our debt and lock it in for longer periods of time at these low, low rates that we've got right now and the opportunity is there. I wanted to mention a couple of them, I think you would find it interesting, Madam Chairman, and the members opposite, about protecting against the rising interest rates. I have a couple of notes - we've issued more than $2 billion of 50-year and 30-year bonds since January 2012, so that's $2 billion out in 30-year and 50-year bonds.

 

            Half of the outstanding market debt - that's bonds owed by investors - is now locked in for 15 years or longer. We have also controlled short-term and other debt that resets with interest rate changes, so that's another thing. During the past fiscal year we issued about $1.1 billion of long-term debt for terms up to 30 years. So again, that long-term view, trying to ensure that as things come due, we are locking them in because we are refinancing a lot of our debt all the time; we're locking it in.

 

            It says here that we saved $15 million in 2014-15 gross debt servicing costs because interest rates were lower than we expected a year ago and because the fiscal situation had improved. Again, as we keep our province in a good fiscal - getting our fiscal house in order, maintaining our control over spending, all of that reflects in our bond ratings and they have been stable. Last year's budget, even with the large deficit, we didn't get any change in our bond ratings, they stayed stable, and that helps to protect us as well from the upside. If they changed our bond rating, our debt would become less reliable and our costs would go up. So that's another reason to be really careful on the control of spending and sending all the right signals to the financial markets, that we are a province that is taking good care of its financial resources.

 

            MADAM CHAIRMAN: The time has elapsed for the PC caucus. We'll now move on to the NDP.

 

The honourable member for Truro-Bible Hill-Millbrook-Salmon River.

 

            MS. LENORE ZANN: Madam Chairman, it's nice to be able to rise to my feet again after my first four and a half minutes. Again I just want to thank the Minister of Finance and Treasury Board for answering all our questions here today. I know it's a little tiring but obviously there are many questions that we have, specifically this particular year because of a lot of the actions the government has taken and decisions they've made which are controversial, to say the least, and which many of us are very concerned about.

 

            I know she mentioned that the government wants to create a fiscally conscious province and I know that our government did try to do the same thing, which is why our whole theme was "Back to Balance" and which is why the then-first Finance Minister went all around the province, as I said, and did the very first Back to Balance tour ever. We found out a lot of things.

 

It was interesting attending those meetings because of course everybody is a finance critic. It's like everybody is an armchair director or everybody is an armchair politician, or everybody has their ideas about what you should do. One of the things I thought that Mr. Steele did at the time was to develop a thing online where you could balance the budget yourself and see where you would save money. The whole idea was well, if you're going to give money here, where are you going to cut? I think a lot of people who did that exercise found out that it's not as easy as one would think it is, and there are many industries that are affected by small things.

 

For instance, when on one particular day the Premier found out that one of the biggest pulp and paper mills of the province was closing, or was going to be closing, he was faced with a terrible decision. It was also the same day that he found out just half an hour before that our federal Leader, Jack Layton, had died and so not only did he have to deal with the grief and shock of that but half an hour, 40 minutes later he had to go in front of cameras and deal with the situation with one of the biggest pulp mills closing. It's not easy.

 

            Shortly after that we found out another one was closing. So what do you do? Do you save those jobs? Do you save 1,200 jobs or do you say well, let it close; the pulp and paper mills, the pulp and paper industry is dying, it's a dying industry, just let it go. What do you do? It's very easy to say for armchair directors and armchair politicians to sit at home and say, oh, well that was a terrible decision and interestingly enough at the time, the media, somebody who wrote for the media at the time but is longer there, thought that he had blown it and that the pulp mill was going to close and so she wrote immediately what a loser he was for not getting up fast enough on his feet and saving that industry, but in fact, at the eleventh hour he did manage to save the industry and make an offer to that industry which would keep them going.

 

For several days after that, we didn't hear much from that particular media person - she probably felt a little embarrassed at jumping the gun and then she never really backtracked, but I do know that I was in Economic Development Committee meetings where it was pointed out to us that if you let that particular factory, plant die, it didn't just affect the 1,200 or so immediate workers, but it also affected every little mom and pop operation across the province that delivers wood to that operation, therefore it was a very large, significant amount of Nova Scotia's GDP that would in fact be affected.

 

            I know that these decisions are not taken lightly and I know that the Finance and Treasury Board Minister is a very principled person and through all of the dealings with her over the years, I have great respect for her and I know how hard she works and I know that it's not easy. When you do make a decision you do get attacked and you can't make everybody happy. But I do have to say that when you look at different governments and you see where they spend their money or where they shave off the money and where they cut tells you what the priorities of that government are. One of the things that I have noticed that while cutting a lot of these programs for Health and Wellness, Community Services, and the film and creative industries, these particular cuts are small, but they are devastating for the people in this province who need this help and who are relying on this to keep their industries alive.

 

For instance, under Health and Wellness, the Community Grants program, which is part of the Together We Can mental health strategy, they've cut Self Help Connection; the Eating Disorders Nova Scotia, the three-year $49,000-a-year grant has been reduced by 23 per cent and this affects the group's ability to continue to provide peer support for those impacted by eating disorders; and education for adults like guidance counsellors and teachers, sharing accurate up-to-date information with the community.

 

Also the Split Rock Learning Centre Association in Yarmouth, that grant has been reduced by 23 per cent; the Free Spirit Therapeutic Riding Association in Berwick, a grant of $30,000, reduced by 23 per cent; Immigrant Settlement and Integration Services in Halifax, a grant of $73,000, reduced by 23 per cent; the Schizophrenia Society of Nova Scotia, a grant of $60,000, reduced by 23 per cent; the Alzheimer's Society of Nova Scotia, reduced by 23 per cent; Chebucto Connections in Spryfield, reduced by 23 per cent; and St. George's YouthNet Society, reduced by 23 per cent.

 

            Then we have Community Services, the Discretionary Grants for the Canadian Mental Health Association; the Canadian National Institute for the Blind; the Deafness Advocacy Association of Nova Scotia; Feed Nova Scotia; the Metro Food Bank; Heartwood Centre for Community Youth Development; Nova Scotia Association for Community Living; Nova Scotia Council for the Family; People First - People First, I can't believe that you allowed them to cut that; and Youth Voices of Nova Scotia Society.

 

            All of these are about people and as far as I'm concerned we should be about the people and every second word that I've heard from the government since sitting in the House and since I've heard about the budget is private enterprise, private enterprise, private enterprise. We also know that we're going to be looking at, the government is looking at privatizing the home care support workers now and that whole organization, the VON; it is going to affect so many people.

 

            We know that one of the first protests around the House this year, or last year, were the home care workers. These are the oldest workforce in Nova Scotia, mainly all women, and they make not enough money to do the kind of work that they do, and they were asking for a $2-a-day raise. Instead of getting the $2-a-day raise they were told no, we're not going to give you the raise and, also, by the way we're going to legislate it so that it's illegal for you to strike because you're essential; you're an essential care worker.

 

            Well I'd like to say if they're so essential, why not give them the $2-a-day raise? I mean, if they're that essential then please give these people the respect and the financial help that they need.

 

            During the election the government talked all the time about people, people, people, and they made so many promises to so many groups, and yet over and over and over again these groups have been disappointed and they're in shock. Now I know that the members on the other side criticized our government for many decisions that we made, and some of those I agree with. I agree that they were mistakes, but we also did so many very, very good things and I was proud to be part of that first-ever NDP Government.

 

In fact I was actually looking, recently I came across some information that it just reminded me again how we opened the first Collaborative Emergency Centres that provided 24/7 emergency care and same or next day appointments, and eight of them were opened and then ER closures during that time were reduced four years in a row. Why isn't this government investing in more Collaborative Emergency Centres? We know that there is a crisis in the system.

 

The NDP also launched the first-ever strategy to help Nova Scotians and their families who are living with mental health and addictions. I remember the Health Minister at that time over and over and over again talking about that and yet now we see cuts. The NDP fair drug pricing plan - I was so proud of our Health Minister at the time, that was the woman who then became our first female Finance Minister, she was the Health Minister for three years and during that time she went toe to toe with the pharmaceutical companies and brought generic drugs in Nova Scotia down from 85 per cent to 35 per cent. That is huge; that is huge. I just remember being so proud of being part of a government that would actually do that for the people and the seniors who need it so desperately.

 

We also reversed drastic cuts to the children's dental care that had been made by the previous Liberal Government, and we increased the age for children's basic dental care from 10 to 13 and we were planning on extending it to age 17. I note that this government is not going to be extending it to age 17. Personally I think that dental care should be part of health care, period. There are so many seniors in this province who cannot afford dental care and it makes you sick. As an MLA I'm sure many of you have had some of the same situations that I've had where people come when they're in desperate need, where they have to have dental surgery done which costs the province thousands of dollars - and we all know that you can get sick in your stomach from bad dental and oral hygiene. Again I think that basic dental care for all is something that should be looked at.

 

We also recruited more rural doctors; we hired more nurse practitioners; and ambulance fees were waived for low-income Nova Scotians and for seniors with mobility issues. This is looking at people, everyday, ordinary people who need the help, who want to know that they have a government that actually cares about them. I feel that a lot of those people right now are hurting and feel that they are not being listened to and that their cares are not being taken seriously.

 

            We also expanded newborn screening tests to include cystic fibrosis, sickle cell anemia, and also eight other conditions. We brought the emergency room to people with the RESTORE program so that paramedics could administer clot busting drugs to patients having a heart attack instead of waiting and arriving at the hospital and dealing with it. We expanded Lucentis treatment and that was a big issue when we first got into government, Lucentis was not covered and we ended up covering that. We did balance the budget. It's interesting because only three other provinces at that time were able to do so and for the first time ever in the history of Nova Scotia, our first NDP Government managed to get a triple A credit score.

 

I think that is huge and we got no credit for it; in fact, at the time, in the media, that piece of news was buried, say, on the 14^th page of The Halifax Chronicle Herald in a tiny, tiny little piece. I thought it should have been on the front page of the newspaper; that is huge. That's why we're able to get low interest rates, because we have a good credit rating.

 

            Many economists would say that austerity budgets don't work, and that in fact we should be investing at a time and investing in more infrastructures and investing in people because interest rates are low. While interest rates are low, they say that is the time to borrow. Austerity budgets aren't necessarily the way that people should be going and I think it is interesting that this government has chosen to do that.

 

            We also increased minimum wage four years in a row. That was despite Opposition pressure to limit the increases. And we established Arts Nova Scotia; we brought back the Arts Council in Nova Scotia which had been decimated by the former Progressive Conservative Government nine years before. I remember the Premier, he was then the Leader of the Opposition, standing on the front steps of this Legislature saying to a whole crowd of artists, we're just one election away from bringing back the Arts Council, and guess what? We did. I'm proud of that. I'm also proud of the fact that we passed status of the artist legislation to acknowledge the importance of our artists and to show that we are listening to them. The other thing that we did, we improved the Film Tax Credit to make us a much more competitive province than the rest of Canada.

 

            As the Finance and Treasury Board Minister now has alluded to, there are three other provinces that have better tax credits than we do. We are the fourth province, but if we continue on this path right now we will no longer be the fourth province, and for a tiny little province like Nova Scotia, whether she wants to argue semantics about whether we're the fourth largest or the fifth largest, I have to say, I'm proud of Nova Scotia. I've lived in Hollywood, I've lived in New York, I've lived in Chicago, I've lived right across Canada and I chose to move back here to Nova Scotia because we have a thriving community here.

 

I think if anything was proven by this whole exercise, the rally and all of the letters and all of the blogs and the Facebook posts and the tweets and everything else shows that we have a thriving and passionate creative community and we need to save that community, we need to support that community, and we need to keep them here. As we know, we have an aging population. We have a rapidly aging population - 1,000 Nova Scotians turn 65, I believe, every week. Is it every week? Every month? I think it's every week. But anyway, it's huge.

 

            We know that we're not alone in this; Japan has a rapidly aging population as well. Many other places do. We have to keep in mind that we need to invest in our youth; we need to give our youth reasons to stay here; we need to give the youth reasons to move here. I can tell you right now that the creative economy is the way to do that as well as the green economy. We've heard the Ecology Action Centre people talking about the green economy and to see their faces light up and the excitement that comes in their eyes when they talk about this and they talk about a vision for the future of Nova Scotia. That is the vision that I believe in and that's what I want to see for this province. I don't want to see us going down the same old tired road that so many other governments have done over and over and over the years and, I'm sorry, but it just doesn't wash.

 

We need to think differently, and that's what the Ivany report was about, it's about thinking outside the box. It's not about colouring inside the lines, it's about colouring outside of the lines and, in fact, adding some pieces and changing the picture. That's what we have to do, and in order to do that you need creative people, you need people with imagination and passion and vitality. That's the kind of Nova Scotia that I believe in and I think we have all the pieces that we can create that beautiful place for all of us to grow old in and for our daughters and sons and our grandchildren to grow up and enjoy for many years as well - if we do the right thing.

 

            The last thing I want to talk about is the 10-year plan for agriculture, our home- grown success. Under the NDP we started having more and more farms where everybody else in the country was losing their farms. We were putting our money where our mouth was with many of these different programs.

 

We also made changes in investments, too, ensuring that the lands formerly owned by Bowater were not sold to foreign interests, which was a distinct possibility. We were starting to create community forests and a centre for cleaner energy, bio-energy and forestry innovation. These are exciting things - and guess what? They attract young people; they attract young people who want to work in those industries.

 

            The other thing we did was we made sure that every pre-school age child with autism got the help they needed. We invested $8 million in that program, help that was previously available to only half of them. We also started the Early Childhood Development Program.

 

            Now that I've been in government and now that I've been on both sides of the House for a little while, I see how governments tend to take the good things that the last government did and then put their own stamp on it and say that it's their own idea. (Interruption) Yes, we did the same thing; every government does that and I think it stinks. I think it is wrong; I think that we need to start giving credit where it's due. Where you guys do really good things, I think it's time for us to give you credit too. For instance, the Home for Colored Children - good on you, it's about time. Yes indeed, I agree that you did the right thing there, be very proud of that.

 

            Boat Harbour, I think it's wonderful, I think it's about time. That has been going on for 60 years and the First Nation people - 50 or 60 years, Northern Pulp, right? The First Nation people in Pictou Landing have been dealing with that issue and trying to tell people and bring the attention of people to the problem. To me this is environmental racism. Our province unfortunately has had a history of racism, as do many other places. It's time for us to address these wrongs of the past, so again I say kudos to you.

 

But again, when a government has done something good, let's say so. That's what people want to hear. They don't want to hear people bickering and fighting over deck chairs on the Titanic. They want to hear people say yes, good on you, you did a good thing. And guess what? We're going to improve this. We're going to work together and we're going to improve things; we're going to improve life for the everyday, ordinary Nova Scotians and not just for the very richest of the rich. This is why some people are very concerned about the concept that we are constantly hearing: private enterprise, government doesn't invest, doesn't do anything with business, it's up to the private businesses.

 

            This sounds like a very Republican idea - actually like the Republican Party in the United States and that really scares me because that's more right-wing than even the Prime Minister in Canada with what he has been doing. We know that he has been doing a lot of damage for our brand around the world, including our incredibly beautiful forests and our waterways, taking away all of our protections. Again, I say that it's time we start giving credit where credit is due and we acknowledge the good things that different governments have done.

 

            I also want to mention the cyber-safety program and the Cyber-safety Act, the first one that was ever introduced here in Nova Scotia and in fact the first one in Canada. I know first-hand how important that is and I know that that particular cyber-safety squad, that unit, has so many cases right now that they can barely get to all of them. It's not just the young people, it's also seniors - seniors are being cyber-bullied and are cyberbullying.

 

            A lot of people are new to this whole Internet, you know, older people are new to it, they're still figuring it out. In fact, the bullying and the harassment and sexual harassment that goes on online is a huge issue. Sexual assault on our campuses is a huge issue and one out of every five young people who go to college are attacked and they are sexually assaulted while they should be focusing on their studies and enjoying their young life. Many of them drop out because they don't have the supports there to help them. Again, I think that these are the sorts of things I would like to see this government focusing on.

 

            We also extended the moratorium on gas and oil drilling on Georges Bank indefinitely and I'm really proud of that as well. We also made it illegal to be mining for uranium and we also got rid of cosmetic pesticide use, something that I know Prince Edward Island is right now in the throes of because the cosmetic pesticide kills our bee population, and in Prince Edward Island that's huge because without bees you don't have any potatoes, you don't have anything, which is why I think, again, kudos to the former government for doing that.

 

            We also thought as government that it was very important for us to protect 13 per cent of our province's land, which exceeded the United Nation's goal of 12 per cent land protection. We built the future of forestry with the creation of community forest. We started to do that, and we wanted to enhance all the natural parks because we wanted to protect 13 per cent of our province's land for the people. The people own that land, the people of Nova Scotia; that's an amazing thing.

 

            We also invested in local food campaigns, farmers' markets and, as I said, help for new farmers. One other thing that we did, which I asked in estimates the other day, was we invested $750,000 in a breakfast program, a provincial breakfast program for children because we all know that it's very difficult for kids to learn on an empty stomach and, sadly, there is too much poverty in Nova Scotia - way too much poverty and many kids are coming to school hungry. I don't think it should be up to charity, the charity of teachers and parents to have to run around and try to do little fundraisers to be able to pay for kids so that they have food in their stomachs so that they can focus on their studies and they can grow healthy. I think a country and a province needs to focus on the health and the education and the creativity of its children, because those are the roots and the seeds of the future.

 

            One other thing that we did that I'd like to also mention is that we reduced poverty by 18 per cent in the four years that we were in government. This particular government now has not increased income assistance in the last two years; in fact they've frozen it. So between the bus passes that are hard for people to get, between the frozen income assistance, between all of the cuts to the many different programs that help the very poorest of the poor and the people who need it most, persons with disabilities, I'm glad to see that there is money going into that, but there is so much more that we can do.

 

Transportation, public transportation, transportation in the rural districts - why are we driving people out of our beautiful rural districts, we need to bring them into the rural districts. What better way to do it than through the creative economy? Tatamagouche is an excellent example of that, they've got the Creamery Square there, and they've got a brilliant little museum, state of the art, they've got two stages, an indoor stage and outdoor stage and a fantastic farmers' market - that community is thriving.

 

            Another reason why that community has started to thrive is because they became a learning community and they also had a television series called The Week the Women Went, which attracted much attention around the world. People wanted to come to Tatamagouche, Nova Scotia, and see it for themselves. And in Salmon River, which is part of my riding, we had Hockeyville there. They were lucky enough to win the Hockeyville contest and become Hockeyville, and, again, that put us on the map.

 

            Now, I'm proud to say I'm the MLA for Sunnyvale as the Trailer Park Boys are in fact my constituents when they're in character for their show - and I don't want to lose it; I don't want them to go to New Brunswick. We want to keep them in Truro. We're very proud of those boys and we're proud of the show that goes all around the world and puts Nova Scotia on everybody's television set.

 

            Again, my colleagues here, Haven affects Chester, Call me Fitz affects Wolfville, The Book of Negroes helped with Shelburne and Birchtown, and this summer there is going to be The Book of Negroes tourism tour where people can come and see all of the various points, the history of the Black Loyalists of Nova Scotia.

 

            I do have one more question actually for the minister which is what kind of financial, did she really look at the books to see how much this industry is worth to Nova Scotia, to the economic spinoff of our tiny little province? Not just the direct jobs but the economic spinoffs for every one of these little communities because that's what I would think you would need to do if you were going to cut something as important as our Film Tax Credit, which I believe the government is now starting to realize why it's so important and why it means so much to so many people.

 

            Before I turn it over to the minister I just want to point out that in Australia, where I was born, our golden years of film that put Australia on the map were when we had a Social Democratic Government, led by Gough Whitlam, who invested in our film and television community there. That's when we had a ton of movies and television shows that came out, like Mad Max, Road Warrior, The Chant of Jimmie Blacksmith, Picnic at Hanging Rock, The Wave, Crocodile Dundee - until Crocodile Dundee came out my accent back then wasn't very cool but it came out and, all of a sudden, "That ain't a knife, this is knife," became the popular saying in my school.

 

            That show and those movies helped to put Australia on the map and make people want to go see all those dingoes, kangaroos, wallabies, and crocodiles. And we can do the same here in Nova Scotia. So let's get with it, let's get on the train, let's get on the clean green train for energy, for our creative arts and culture, and looking after the people who need it most, so that we have a very robust and healthy society here in Nova Scotia.

 

            With that I would like to ask the minister, what did you do to look into the economic spinoffs and how much money was actually created for our domestic product here and the spinoffs in all of the little communities across Nova Scotia before you made the decision to change the film and television tax credit?

 

            MS. WHALEN: I appreciate having the member for Truro-Bible Hill-Salmon River - did I get it all? It's a big one.

 

            MS. ZANN: Truro-Bible Hill-Millbrook-Salmon River.

 

            MS. WHALEN: Millbrook-Salmon River, there you go - a long title for that riding.

 

            I appreciate the comments that she's raised and the enthusiasm and, I know, dedication that she brings to her job and I would also like to commend her for having had a career in the arts and in film, which is not an easy thing to achieve to be successful and to be able to do that exclusively, and to make that your career is a real accomplishment. I understand that no matter which areas of the arts you're in, it's very hard to make that a full-time career that pays the bills and looks after your life.

 

            I know particularly in front of the camera it's a big job to do, so I appreciate that and I know she has had experience around the world - we've had the chance to talk about it at different times - in Europe, in Scandinavia, and you said you lived in Los Angeles as well. I appreciate that and I appreciate her comments about Australia as well. I'm not sure but the member opposite does know that I lived in Sydney, Australia, for two years, had the opportunity to see a number of films that were made there and appreciate the quality of the work that they did. Again, they have a unique culture, quite isolated when you think of the place they are geographically in the world and they celebrate it. They're not a large country, not even as big a country in terms of population as Canada and yet they have really well-known writers, storytellers, and artists.

 

            I appreciate that and that would certainly be something that would be great to take as a model for any country. It's an interesting place to live and I was privileged to have the chance to be there.

 

            I would mention they also have a lot of different rules around labour and minimum wage and holiday times. When I introduced the idea of an extra, a single extra holiday in Nova Scotia, I'm sorry, but the former Premier wasn't interested in moving on that. I think he might have been sympathetic, I hope he was. In Australia when I started to work there in the 1980s there was a four weeks-a-year holiday for everybody. It was my first job. I was not from there, I get a new job, four weeks, thank you very much, holidays per year. I couldn't believe it. It wasn't with government either, it was in the private sector. They had an $8-an-hour minimum wage at the time that I lived there, in the 1980s, so you can imagine how that compared to our minimum wage.

 

            So a very different culture, very different economy and some things that I felt were very good. As I say, four weeks annual leave doesn't even take into account how many days they would have had for national holidays and state holidays. I can't tell you the number of that because I don't remember exactly, but I know that Nova Scotia had the fewest in Canada and I'm pleased that we have added one more day to that list. We now have six holidays, plus the special Remembrance Day Act.

 

            Again, we said we will acknowledge what good things happen under different governments and certainly that's just one I'd like to mention because the member opposite does know that I've raised that with four different Premiers and the current Premier said, yes, let's do that. I think there was a lot of evidence that it was a good thing to do and certainly, why did I think of it? One reason was that I've lived in other provinces, I've lived in other countries and I know that you don't have to have the fewest holidays to be productive, that productivity has a lot of elements.

 

            I think the members of the House know that I do understand some of the nuances around things - they're not always black and white, it isn't just that there's a cost to business, which I acknowledge, but there's also a benefit to the people of Nova Scotia to have that extra holiday. A lot of people do not get the holidays that government workers and others get, a lot of people are really held to the minimum - minimum wage, minimum standards in workplaces, and it's up to government to make those changes. I mention that because it is important.

 

            Also, I'm watching the time; I know there is not too much time left, I think you said 7:16 p.m. I did want to mention though, a number of speakers today have talked about the need for or they mentioned certain cuts or reductions, and the member opposite had just mentioned the cuts, the idea that a number of health and other grants had been cut by 23 per cent, but I think that has been missed as well in the discussion and I'd like to mention just a few of them.

 

            There has actually been under just Community Services $4 million extra going out in grants to organizations and I think it is something that would be of interest to the members in the House as well just to know that there's a lot of different organizations on this list: the Elizabeth Fry Society has $63,000; SHYFT, which is something that would be well known to people, it's a youth program, it actually was not funded under the NDP, it was cut and the funding here is $350,000 for SHYFT; the Whitney Pier Youth Boys and Girls Club has extra funding here; the Family Service Association; Alice Housing; the Nova Scotia Native Women's Association; and the Colchester Sexual Assault Centre has extra funding.

 

            I'm just trying to go through - Lea Place Women's Resource Centre, there are all the women's centres and transition houses; I see Bryony House, a $148,000 increase. These are all increases. As I say when you come to the end of it you'll see a lot of funding, a lot of women's funding that had been neglected for years under successive governments. So women's centres and transition houses, the funding for sexual assault, our strategy and for the sexual assault centres - those are all really important as well and I know that the members opposite would appreciate that.

 

            Some of these are literacy - I saw Phoenix House, for Phoenix youth programs, one certainly was for literacy here as well - oh, Richmond County Literacy Network gets increased funding. In total the amount is $4,088,600 additional funding. I just think that needs to be noted. The funding in some of the other organizations does not diminish the work that they do and it doesn't say that the work isn't good. The funding has not been eliminated; it has been reduced. One would hope that in coming budgets we'll be in a different position as well. It recognizes, because it's still getting funding, that we see value in the work that organizations are doing.

 

As I said earlier, if you count up all of the grant programs in all of our departments it's in the hundreds of millions of dollars. A lot of the work that is being done is not within government, it's money going out the door supporting other organizations. That is something I just wanted to mention as we're going through a little bit on this.

 

            I was pleased that the member opposite as well talked about the Back to Balance tour under the Finance Minister, the first Finance Minister under the NDP Government. I had attended a couple of the sessions that were in the metro area and I did understand that many of the same themes were being discussed there as were discussed in my recent tax tour around the province and the discussions that we have around the pressures on our government. As I said, the outcome of the Back to Balance tour was increasing the HST, that option, as I said earlier today, isn't available to the government.

 

We have recovered, if you like, the 2 cents that the federal government had left. Under the NDP we went back to 15 cents, which is what we were used to, on the dollar, taking more money for the province. That option is not available now, as I said before, there are not easy choices, and there are a lot of difficult choices. The same could be said for last year when we had the graduate retention rebate and looked at that and looked at the evidence of how well it was working and recognized that it was not doing what it was intended to do.

 

            I talked yesterday about how sometimes there are great tax ideas that we might raise as private members or as perhaps it comes in in an election campaign, that something looks good but when you actually look at it and measure it, it doesn't serve its purpose. One of the suggestions in the Broten report on taxes was that when you introduce a new program - it might also have been in the Economic Development Studies that were done by Tom Traves and others - that when we looked at how we could do economic development differently, I think that's where it came from, when you bring in a new program there should be an automatic five-year review, so no program gets in place that people think is there forever. It has to show its worth; it has to be measured.

 

That was one of the suggestions for new programs. I've said already that we don't introduce very many new programs because we just don't have the capacity, but anytime programs come into place they should always be set on a path where you are going to review them to see if whether or not they are effective and whether they meet the aims that people had in mind when they were brought in. I'm sure no government brings stuff in that doesn't have a deadline. They don't bring things in that don't have some use. They are addressing a need and they try to introduce a program that meets that need.

 

            I think that's true for all governments and with that - not yet? I felt my time is up. I'm sorry; I thought my time was up.

 

As I said, when we introduce new programs, we should all ask ourselves, why are we doing this? What need does it meet? We should see if it is actually a good way to address that need. It's only natural that if you look at the same program 20 years from now, it may be entirely different. Look at the technology changes. Madam Chairman, you can just see yourself how technology changes, how we never would have imagined using Facebook or having cellphones that would give us our emails just a few short years ago, that you could look up locations and restaurants and what's the closest tourist attraction. You can plan.

 

            We have to keep pace and we have to review our programs as they are introduced. In that regard, I think it's important that we note that will be an ongoing plan for this government, certainly no new programs are coming in for business, for individuals, or any other thing that we don't review periodically on a regular basis as we bring them in. So I would hope the members of the Opposition would watch for that and hold us to it. What happens is, things are adopted, they become entrenched, everybody feels that they must have them, that they are essential, that they can't change in any way - and the fact is we have to be able to review and assess. We will use the best evidence that we have and that has been done in the past. I said that this year's budget with all the difficult choices, there was a lot of time spent on each and every decision and a lot concern shown for each one.

 

I only have to go back to the number of civil servants who actually lost their jobs on Budget Day. This is not something that I sleep lightly with. That earlier question from the Opposition was how worried am I about interest payments and so on - there are a lot of things to worry about, but I certainly worry about the individuals who are directly impacted, whose families are impacted.

 

            Just to go back to the member's question about the Film Tax Credit, it's really important to note - I'd like to reiterate - that there is goodwill between Screen Nova Scotia and the representatives who are at the table. There are good discussions underway. I think we can find common ground because I think there's a willingness and I think the best thing I ever heard said was that we've certainly said we want to see an active industry in this province and want to ensure that the benefits are for Nova Scotians, but we know that they will be if we can just make sure that there's an ongoing industry.

 

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

 

The honourable Government House Leader.

 

            HON. MICHEL SAMSON: Madam Chairman, I move that the committee do now rise and report progress to the House.

 

            MADAM CHAIRMAN: The motion is carried.

 

The committee will now rise and report its business to the House.

 

            [The committee adjourned at 7:16 p.m.]