HALIFAX, FRIDAY, APRIL 22, 2016
COMMITTEE OF THE WHOLE ON SUPPLY
Mr. Gordon Wilson
MR. CHAIRMAN: The Committee of the Whole on Supply will come to order.
The honourable Government House Leader.
HON. MICHEL SAMSON: Mr. Chairman, would you please call for the resumption of the estimates of the Department of Transportation and Infrastructure Renewal.
MR. CHAIRMAN: The honourable member for Sackville-Cobequid.
HON. DAVID WILSON: I want to thank the minister and his department for providing us with some of the information we asked about last evening under his department.
I want to quickly go back just to get some more clarification, to make sure I understood what the minister indicated. It was in the estimates, when I asked about Page 2.6, under the Estimates and Supplementary Detail around the increase of the TCA cost. I believe the minister indicated that it was $51.4 million, which is roughly the increase we see in the budget.
Was money forwarded to the province from the federal government in order to cover the costs of the convention centre? I need to just clarify if I'm correct on that. I'll see what the minister's response is.
MR. CHAIRMAN: The honourable Minister of Transportation and Infrastructure Renewal.
HON. GEOFF MACLELLAN: To answer the member opposite's question, that is the case: it is for the convention centre. We have the revenues that are allocated and allotted for the budget items for Transportation and Infrastructure Renewal. We have one related to the cost-share revenues for municipal highways and bridges, and cost-share for the federal programs, so Building Canada and the WTC, the convention centre.
The allotment for municipal cost shares is $1 million. The cost-share for Building Canada, for the estimates, is roughly $21 million. To confirm for the member, the federal share of the convention centre is $51.4 million. Again, that is recognized as a revenue under the Department of Transportation and Infrastructure Renewal, but located as central revenues for government.
MR. DAVID WILSON: Thank you for that clarification. I don't know if it was just getting late last evening. A little bit of clarity helps a lot.
I think I ended off, and we ran out of time. I want to move to Page 22.13 in the budget document, talking around Maintenance Improvements and Programs and Services. I want to talk about the line item around Ferry and Wharf Amortization; $900,000 was spent last year. We looked at this year's budget, and it has increased by about $500,000, so I believe it's $1.4 million, maybe $1.5 million.
I'm just wondering if the minister could give us a little more detail than just what's in the line item around Ferry and Wharf Amortization - what detail, if he can - and indicate to us and to Nova Scotians what's involved in that and why an increase of about $0.5 million?
MR. MACLELLAN: Mr. Chairman, through you to the member opposite, the amortization amount on that particular line item is reflective of the new ferry that will be added to our fleet for the Digby Neck run. That's part of that amortization that we expect to be in use as of October, so we've reflected it here in the budget. That is the amortization amount for the Grand Passage at Digby Neck ferry.
MR. DAVID WILSON: I would assume, then, that if the ferry was coming online this month, that figure would be much greater. I believe that's so.
I want to just skip back one page to Building Project Services. Under Building Project Services, the estimates for the Executive Director line item have more than doubled, from $232,000 last year to $482,000 this year. Can the minister explain that jump in the cost on that Executive Director line item?
MR. MACLELLAN: To answer the member's question, it's related to yesterday. There was a question about a decrease of two FTEs at a particular line item. One went to this particular item in the budget, so it's for the professional services under that. So the question from yesterday was related to the programs and services for senior management. One went to Policy and Planning, the other went to this group. That's reflective of the salary for professional services for that particular management group.
MR. DAVID WILSON: I appreciate that. I guess I should have looked at my notes a little better.
I'll now go back to Maintenance Improvements, just the next page. I noticed that under Bridges, estimated, there was about $81,000 estimated to be spent last year. We've seen over $300,000 spent, and I wonder if the minister could give us some details on what that cost increase was for.
Then also, if he can in the same answer give why there's no line item in this year's budget. Has that moved somewhere? I'm just looking for some clarification on those figures that we see on the line item around Bridges, which is under Programs and Services of Maintenance Improvements.
MR. MACLELLAN: To the member opposite, that line reflective for Bridges is anything related to non-TCA. The threshold for TCA is $250,000, so any work that is below that for a bridge - bridge repair, bridge maintenance, anything addressing a bridge that would be non-TCA related, so it wouldn't be that capitalized expense - shows up on this particular line item. It is reflective of the things that we have to do outside the TCA budget for bridges.
MR. DAVID WILSON: Thank you for that. I know it's a small figure in reference to the overall budget, but it's more than tripled, I believe, maybe even more. Are there some details that the minister could give us to indicate why that happened and what projects they were for? If he could provide it later.
Then the second one, and I know I'll have to ask that again, because I think . . .
MR. MACLELLAN: Mr. Chairman, that line item obviously goes to small repairs, anything that would have to be done in an emergency situation - for example, for any of the 4,300 bridge structures that we have. If you break that out over the number of bridges, this is a very, very small - always significant, of course, but very small pieces of a project. The big things that we have to do on bridge work, which many members of the House have required, obviously that's a TCA spend.
Again, over 4,300 bridges there are probably a number of very small things we have done that are related to this line item directly, but we are going to endeavour to get that list for the member so he can see a breakdown of that allotment.
MR. DAVID WILSON: That leads to a second question, then. If it's for those types of emergencies that they need to clean up, why is there no budget for this year for that?
MR. MACLELLAN: Mr. Chairman, to the member opposite, there is also money related to those types of non-TCA expenditures that happen at each of the district levels. Through our planning and the process here to come up with the numbers, it was determined that we could just try to do a lot of these things through the district budget. This would probably be reflective of it, and looking at the increase from the $81,000 to the $334,000, it could be things that are over and above what would be at the district level. It could be those additional expenditures that would have been requested from the respective districts for some of the over-costing of these very significant but very minor and direct repairs that would take place on the bridges.
MR. DAVID WILSON: Thank you. I appreciate that. But as we saw in last year's budget, it was more than three times what they put in there. Even though it's a small amount, we're still looking at - I think it was $300,000 - I lost my page now - over $300,000.
What happens if those emergencies happen next year? I know they're trying to say that they will deal with it within the districts and the budgets that they have, but the government presented a surplus in the budget this year. Was there any request from outside the department to eliminate funding that shows up like this, that is unbudgeted for? No matter what the level is, it's three times what was budgeted. Was there a request that you eliminate that so that those numbers don't reflect what work has been done in the province and in the districts? Or is the minister saying that this was something his department, his financial advisers and deputy, and himself looked at and said, well, we can eliminate that from the budget?
To me, it looks like you're trying to take potential costs that we saw in last year's budget, that were not budgeted for, off the books. I wonder if the minister could respond.
MR. MACLELLAN: Thank you. It is a reasonable question for clarification. The member would know this, and he would expect it of our government, just like when he was at the Cabinet level.
Obviously, anything that is required to be addressed as a short-term emergency crisis situation will be addressed. As the member would know from being with those decisions, you find the money and you do what you have to do with the line items after the fact. Just as a point of clarification, too, on Page 22.7 we have a Bridge Maintenance line that is $10.2 million. When you look at Bridge Maintenance, that is not capital work - that is not TCA - but the bridge maintenance and operation, the districts get a total of $10.2 million.
Again, this particular account that the member is looking at under Programs and Services, that is a line item that is centrally held. We sort of hold that here, and then we get to divvy it out if there is something over and above, if it is over some required expense. We get to make that play. As we talked about yesterday, there are always contingencies and there are different opportunities.
Look, at the end of the day, with all of our over 4,000 structures, if there is something that has to be done, it's done immediately. Safety is never jeopardized or put on the back burner to financial realities. We do what we have to do to fix our roads and fix our bridges, particularly in an emergency or crisis situation, so we're going to do that and figure out the budget work later.
It wasn't something that we've ever really spoken about in terms of eliminating it. It's just part of the different overlap of how we handle bridges and treat bridge emergencies and bridge situations as they arise.
MR. CHAIRMAN: The time has expired for the NDP. We will now revert to the Progressive Conservative Party.
The honourable member for Inverness.
MR. ALLAN MACMASTER: It's good to have an opportunity to ask some questions to the Department of Transportation and Infrastructure Renewal today. Mr. Chairman, certainly there are many issues important in the area I represent, but few achieve as much attention, in terms of phone calls to our office, as roads. We have a lot of roads in Inverness County, a lot of old roads that perhaps aren't travelled so much anymore, but they are still travelled by some people.
There's a lot of demand for roadwork. I know I issue a lot of communications on roadwork. I hope the minister doesn't take any of that personally, because I certainly have to sometimes add volume to the concerns we receive and draw attention to them.
If anything, I'd like to see the minister and the department gain more resources for the work they're doing. It's certainly a priority for people in my area and something that I think is a core function of government and something that gives people something tangible from government that they see every day.
Mr. Chairman, I'm going to start out. My first question is on the capital budget threshold. I know projects have to reach a certain threshold to be able to make the capital list. There are roads that are now worthy of not just maintenance but reconstruction, because they're getting old and perhaps there hasn't been the kind of maintenance done to them that they really have needed over the last number of years.
Has there been any change at the department in terms of its policy related to this budget, which would allow some of those roads to make the capital list if they don't meet - I believe it's a $500,000 threshold?
MR. MACLELLAN: I certainly expected I would see the member for Inverness up in estimates with respect to his roads. I will say this in sincerity: there's a few areas, regions, and MLAs that get a significant bulk of requests. The member has been respectful with our department not only at this level but at the local level. He's got a good relationship with Gerard Jessome, the district director; Steve MacDonald; and everyone on the way, all across the local staff at TIR.
I can tell you that I'm very much aware of the volume that the member gets because I get a lot of the same people, individuals, and groups contacting me as well. I dare say that the member for Inverness does hold the line and tries to explain the processes and the financial constraints as best he can, but that pressure comes from him and obviously he's got to put some of that on Transportation and Infrastructure Renewal. He wouldn't be doing his job if he didn't do that. We do recognize that.
There are members on all sides of the House who experience the same thing. The member has had me up for a tour, and he could spend 10 times what we've spent in the one day, showing me some of the challenges across his very vast constituency. We certainly do recognize that, and because of the challenges there, some of the maintenance deficit that we have, we do our very best to get some of his priorities completed and continue to move on down that list.
With respect to the thresholds, really, there are a couple of different aspects of it. There's obviously the TCA - so the capital allotment, what has to be spent for it to be a capital project, and the other, of course, is based on volume: 500 vehicles per day for a road, 250 per day for a bridge. They are the thresholds that we live by in terms of formal application or access to capital spending. Those haven't changed to this point. There are always other considerations that are given, as the member would know - the impact on community, the importance of a corridor, how it impacts on businesses and schools, access to health care. All those things play a role as well.
There are a number of different discussions taking place with the federal government vis-à-vis Building Canada, and that's something that has been ongoing, about the volumes. One of the things that we struggle with in rural Nova Scotia, many places across the province, is the fact that roads are important - they're critical arteries, obviously - yet we don't meet that threshold because the traffic counts just aren't there. It's something that many of the municipalities and UNSM brought to our attention in a united manner to bring to the feds about softening and easing up on some of those thresholds so that we can get access to the capital money.
Really, as the member alluded to, you can do patchwork, and you can do maintenance and try to fight that fight year over year, but really the answer for a lot of our roads is resurfacing, when that's the case, but ultimately, sometimes it's digging right to the roadbed. That can be very expensive; it's a big capital outlay. That's one of the things we're looking at, still in ongoing discussions. Nothing has changed at this point.
The other part that I think is important, and it will be a continuing discussion for Bruce and me and our team at Transportation and Infrastructure Renewal, is the idea of capitalizing gravel roads. I know the member has many, and it's a significant part of his challenge as well. Having the ability to access funds vis-à-vis the capital plan for some of these gravel roads would be paramount for us to be able to address things more quickly. It's an annual challenge to tap the operational funds of TIR when you spread it out across the four districts, so sometimes we've got to look at different ways to do that.
In many cases, for MLAs of all stripes, gravel roads are a priority. It isn't just about the paving and the repaving; it's addressing those gravel roads as well, that connect communities.
The thresholds are as they are at this point. But we're looking at that, and we certainly identify some of the challenges with being so restricted in accessing the capital money.
MR. MACMASTER: So if I understand, there's really no change in the policy for this year. Is there any flexibility? I'll raise a couple of examples.
One is the Deepdale Road, which the minister will be gracious enough to visit with me next Friday. It took me a half-hour to drive that road a couple of weeks ago. It was funny, Mr. Chairman: the Trans-Canada Trail crosses that road. I took a photo of the road with the trail in the background, and I almost took my car on the trail because it was much better.
I say that in jest, but I know that for people who are travelling it every day, it's incredibly frustrating. Also, people have concerns, if there's elderly people living on the road, if there's a need for emergency vehicles and that to make it across the road. It's hard to believe the shape it's in right now, but I know the minister will see it first-hand.
That is one example of a gravel road. Is there any flexibility in this year's budget, over and above the typical amount of maintenance dollars allocated for Inverness, to address a situation like that?
MR. MACLELLAN: I think that the short answer is that there is very little flexibility. There could be some, and obviously it's the urgency and that emergency situation that the member talked about. If there's a pressing medical requirement and we have to get better access to a road of that nature - Deepdale Road being an example - then we do that at the district level. I can identify the member's priorities and fight to get those addressed.
We have our own sort of system inside of TIR. The Deepdale Road is a great example. Again, there was significant pressure to the department directly, but to the point that the member brought to the floor during Question Period, not only to ask me to get there but also to explain to the House, for the record, some of the issues that are being sought after and hopefully being addressed from the department.
The interesting part is - so we go through the process, talk to the local officials. That particular road had been graded in the last couple of days, which is a good thing, and the residents are happy that at least there's a short-term address. I don't mention that to celebrate that we do great work - I think we do great work, but that's not the reason for bringing it up. The reason why I mention that is because - as I've said many times, and I'm sure I said it to the member in estimates last year - one of the issues is that because of the broad expanse of our roadway network, 23,000 kilometres in total, a lot of times the reality is that we are reactive because that's the best we can do.
So the Deepdale Road, when people step up, they organize groups to get together and communicate with their MLA, with the government. That's when we really kick into gear and take a look, and that's why people do come forward. There's an example of, because we had people on the ground there, to get out there and see what the reality was, when the ground presented the opportunity to get a grader in and do some of that work, at least in the short term, we did that.
That really goes back to the member's question: is there flexibility? Obviously the overall umbrella budgets are what they are, and they are pretty static, but when there are opportunities and when there are really pressing needs, then obviously we do our very best. We look at this from an experience perspective, from our understanding of what can be done in the short term that's cost-effective. We're all human beings just trying to help people fix the roads, so those people on the ground - Steve and Gerard and others who are with TIR in Inverness - just try to help out, one road at a time.
The flexibility is limited, but when those requests come forward, we always take a look and see if we can address the most urgent needs.
MR. MACMASTER: Mr. Chairman, I appreciate that there's not a lot of flexibility, but one of the concerns is that the budgets for maintenance are so small that they are only able to cover the bare bones of maintenance for the area for roads. I think of another example: in East Margaree, there's a problem with the slope beside the road; there's subsidence, and it has been like this for a number of years. I think it poses a safety risk, potentially, but it also looks really bad.
I know people have posted photos of this section. I'm sure the minister is familiar with it. When they see year after year that it is not getting addressed, it causes a lot of frustration. I believe the local Transportation and Infrastructure Renewal staff who would like to fix it have the choice of, do we fix that and avoid providing the bare maintenance needs of other roads? It's a choice where so far each year they've been unable to divert resources away from basic maintenance to fix this problem, because it would cost a significant amount of money to fix.
I guess my concern for the minister is that we are entering a new year, with a new budget, and we may be in the same situation again. Can the minister offer some thoughts on that or perhaps even specific to that situation, where there is that East Margaree Road in that condition, if that would be something the department could look at in terms of some special consideration? Thank you.
MR. MACLELLAN: I can speak specifically to East Margaree. I had four emails last week on that particular roadway. I did talk to Steve MacDonald about it. The four emails were from four different people who took four different images and angles of their own perspective on this, so it gave a good sense as to what's required there and the magnitude of that slope fail.
I agree with the member that obviously safety is paramount, and that's number one about the issue, but again, we're talking about one of the most scenic places in our province. The key aspect of the aesthetics and what these areas represent, as you have tourism traffic rolling through there - and of course those roads get a whole lot busier during the summer. Although the volumes aren't extremely large on that particular road, it's still an issue.
In response to some of the emails and some of the pressure we received from the community, Steve got out there and they took a preliminary look. They did increase some of the safety markers, and did a little bit of just cleaning up some of that area. We're now doing an assessment and are conducting a survey for that particular slope to see what the cost estimate would be and how we could possibly address that.
Again, that's something that was brought to our attention by the community, by the representatives in the area. We're going to have a look by way of the survey to see what exactly is going to be required and what that cost will be, and then we'll move ahead on the plan. Hopefully we can do something there, as we certainly appreciate the community's thoughts on this. It's something that we've got to do our best to address.
MR. MACMASTER: I'll move a little further along in the Margarees to a bridge, the Cranton Bridge. We know the government has recently replaced the Crowdis Bridge, which is a beautiful structure, and people are very happy about that.
There are three main crossings along the Margaree River in that area. One of them is the Cranton Bridge. It's still a good bridge, but I believe there is maintenance required for that bridge on an ongoing basis, particularly because when there are higher water levels in the Margaree River, you often get debris coming down against that bridge.
A lot of people in the local community - including a number of organizations, almost 20, whether they're business or non-profit organizations or the fire department - depend on that crossing. They've been very vocal about trying to keep that bridge open.
Of course, to keep that bridge in operation, it does need to be maintained. I know the minister offered some commitment to do that last Fall, during Question Period. My question is - I'm just wondering, are there any maintenance dollars allocated for that bridge this year?
MR. MACLELLAN: The member is now on a topic that I learned so much about over my two and a half years here at TIR. It's interesting, and you have an example yourself. We talked about a couple of things that are related to this particular issue - 4,300 bridge structures that we have to maintain, and a little bit below 10 per cent have been identified as being concerns that we have to address in the short and medium term.
The member also talked about the volumes and the thresholds and what's logical from an engineering and from an infrastructure perspective, and what doesn't have to be addressed and should be just removed from the inventory. On paper you can talk about bridges and that, look, there are a number of different crossings in Margaree and a number of different crossings in St. Benoni, so maybe this bridge is excess and we don't need it. That's easy to do on paper. When you get in the community, it's a much different story.
When those conversations were taking place, I went down with the member to look at the Crowdis Bridge. It wasn't complete at that point, but it is now. That's a tremendous piece of infrastructure. Then the concern from the community became, okay, so we've got the new bridge, and that means that the government is going to close the Cranton Bridge. I heard the stories, the specific impacts about fire services, about some of the small businesses down there in the area, and how it would really impact those particular stakeholders and would have a greater impact on the community.
For me, I guess the most interesting part was how communities embrace those bridges. It's not just about access. It's about what they mean for the historical legacy of the communities, and Margaree is no different than the St. Benoni Bridge, the Cranton Bridge - very similar in the community's regard for maintaining them.
With the Cranton Bridge, we did make that commitment to the community that we would maintain it, albeit we would probably have to keep weight restrictions on it and just continue to do the repair work to keep that bridge strong. As the member said, it's a good bridge, but certainly requires some work. We have committed to keeping that bridge open.
There was some work done. My understanding is that it is now open, with restrictions. So if the member can confirm that, first of all, and secondly, was there anything specific that the community is looking for that he's hearing on the ground that should be addressed by way of the short-term operational work?
MR. MACMASTER: Mr. Chairman, the bridge is open, but with a weight restriction. I can't recall if it's five tons or 10 tons. The concern, I guess, is that people are afraid that if there's not activity and if there's not maintenance work being done to the bridge - and we have a lot of people who take interest in this bridge in that community. They will even go down and examine the footings of the bridge. They have some opinions on that.
I think that highlights an opportunity for the department in terms of consultation with communities. I know that people working in the offices are busy, but sometimes people can offer suggestions. Not everyone is a highway engineer, but I know that in that particular instance, suggestions have been offered about the bridge in terms of protecting the footings so that it reduces the actual maintenance cost over the long term.
The bridge is open, but the concern remains that if those footings are not protected, the next time there is a major flood in the area - which will happen - the debris will possibly take that bridge out, and then there's no bridge. People realize how difficult it will be to lobby myself and the department to get a replacement bridge there.
I'm glad to have the opportunity to put those comments on the record, and also to remind the department of the feeling in the community that the department will make an effort to keep that bridge open.
I have another question, Mr. Chairman. That is on the RIM budget. I know from looking at the budget documents we received that we can't always drill down into the real specifics. I know that's a budget that's crucial for maintenance. I wanted to ask if the minister could provide some details on the RIM budget for this year. Has it gone up? Is it the same? I'll let the minister comment.
MR. MACLELLAN: Just to close the loop on the Cranton Bridge, the weight restriction is five tons. That's where it currently is. We are looking at upgrades to get it to a higher weight, so the member can report that back to the community.
Again, to his point about it's a reasonable concern, a natural concern that the presumption would be that we're going to open it for now and just sort of let it fall into the water, so to speak, and then we don't have to deal with it. I can tell you that's not the case. Because of the clear, pressing issue of safety with all our bridges, if they're open, we've got to keep them to that standard. Again, with the weight restriction being five tons, clearly for the stability we're going to have to look at upgrading that weight level.
We are in that process now and again, as we said, there's absolutely no plan to just ignore it and let it deteriorate to the point where you have to close it. That's not the case. I want to tell the member that for the record.
With respect to the RIM budget, we've held the line on that. It's $16 million in total. I know the member talks about where it would be if it was indexed from back in the days when his Party was in government. I do appreciate that. RIM is an important budget when you look at some of the maintenance paving and how that is divvied out to the districts, and then some of the larger pavement preservation allotment that's held centrally. We do that from the department here. They are critical investments.
We increased it two years ago - it was $15 million, and we put it up to $16 million. Again, that's a $1 million increase for RIM, but that gets eaten up in a hurry, to say the least, when it comes to the types of endeavours and the types of projects done under RIM. So it is $16 million, up from $15 million when we came into government, but we've held the line so far this year.
MR. MACMASTER: I'll simply say that I'd love to see more money in the RIM budget. I know the minister knows that, and hopefully my communications are perhaps impacting the opinions of his colleagues as well. Perhaps they will be supportive when those decisions are made around those budgets in the future.
I have one other set of questions here - it might only be a couple. This, Mr. Chairman, involves truckers. I can appreciate the goal of the department in trying to keep costs down; the lower the cost on roadwork, the more projects can be completed. One of my concerns - and I have commented publicly on this - is for the truckers and the need to ensure that local truckers are treated fairly to keep them in business, because they do provide competition.
Dexter Construction is a very successful company, and we can't blame them for being successful. They're following the rules and they do great work, but I know that if you have a dominant player in the industry and you start to see local truckers getting out of the business because there's no reward in it for them, that can cause problems. That can cause prices to go up.
I think it potentially inhibits - one thing Dexter's has is a lot of their own trucks, so they can bid lower on projects, knowing that if they create situations where local truckers are not going to be interested in doing the work with them, they can save money by using their own trucks. Then you get a situation where Dexter's has a competitive advantage over other contractors because they have a lot of their own trucks. Yes, the province gets lower prices for a while, but over time, as competition declines, prices could go up. I guess my point, Mr. Chairman, is that I'd like to see truckers treated fairly.
I'll raise a couple of issues. I'll raise an example: there was a project in the Port Hastings area on Highway No. 105. It was about 14 kilometres of pavement there. It was a big job. That represented for local truckers - one local trucker told me that would have been about $20,000 of his annual income. That's a pretty significant chunk of income, and he lost out on that income.
Now, by their own choice, the truckers made this decision, but they face situations where they might be sitting and waiting for an asphalt plant that broke down. They'd be sitting around for three hours and they wouldn't get paid for that. So they get in these situations - also situations where they're getting paid by the hour when they are collecting under the milling machine, which I guess is when they're removing the existing pavement to prepare for the new layer that's going down.
They are getting paid by the hour, not by weight. You get situations where trucks - there's no scale there, so the trucks, if they are heavier, you could have situations where they might not be able to brake as quickly. I'm not a trucker, but I know those trucks are heavy and it's not like using a car to brake and stop.
I guess, Mr. Chairman, I want to raise the concern and ask the minister if he has any thoughts on that. Is it something that the department has discussed?
MR. MACLELLAN: Mr. Chairman, I certainly do have a lot of opinions on it, and I can share some thoughts. This is one that I've taken a keen interest in exactly because some of the issues that the member discussed in his statement.
We have an 80/20 rule in Nova Scotia. It's only ourselves and New Brunswick that have it. What that means is that 80 per cent of the work for truckers on projects has to be done through TANS, the association that really represents all the local truckers, for the most part at least, that would be doing the very road-building work that the member talks about.
Talking on both sides of this, with the road builders and with TANS, my impression of what I've seen is that the 80/20 rule isn't working for anybody. It doesn't work for truckers; they're not happy with the rates they get, and that's a more than reasonable concern that they have. The second part of it is just what the member said about the bigger players having the ability to sort of freeze them out and make decisions and move on and do things with the orders of trucks that really impact the small truckers' ability to get to those jobs and to make that all-important income during the summer months when these projects are taking place.
On the other hand, you would get an argument from some of the road builders who would say, we need the consistency, these things cost money, and if we're not productive with the trucks when they're coming and going, then we lose time and we lose money, and that's why we have to find our own trucks and contract out the best we can, getting as many trucks there.
So if TANS is not happy and the road builders aren't happy, what happens is we're in the middle, which is the exact place we don't want to be. We don't want to be trying to figure out what makes sense for either side and who is right and who is wrong in individual situations.
When I say this, I want to be very careful for the record: if there's a way for us to enhance the 80/20 rule that is to the benefit of the truckers and to the benefit of the road builders, then that's really what we're looking at. We've got a committee that talks with both sides. We all meet together to discuss some of these things. If there's no buy-in from either side, then we're not going to pursue it, and the 80/20 will stay in place.
We've been given an indication on both sides, I think, in fairness - and I don't want to speak for road builders or for TANS - that there definitely is some concern. Movement in either direction with things like rates would help, but obviously truckers would want some level of protection and knowing that they can get the jobs in Port Hastings. That's important as well.
One of the things, when you talk about the larger players, it really is an issue of productivity, because that's ultimately where the profit comes from. In some cases, if a company is doing work far away from their home base, so to speak, then they need local truckers to make that money. Even if they have their own fleet, they're not going to take them from metro and have them in hotels and doing that work on the road, away from their homes, as opposed to just hiring the local rigs that are down in particular areas.
All these things are moving parts. It doesn't seem like the most efficient system that we could have, but again, right now that is the status quo. We've made no commitments whatsoever to make any changes, unless TANS are full-stop supportive of that, and we wouldn't make those changes.
When you look at the communities - I've had this conversation not only with colleagues on all sides of the House but in particular many times with the Premier, about TANS and about the impact in the rural areas - the rural communities for local trucks and how they keep the family businesses and small operations that keep going, so we've got to do our best to support them.
In any event, when you're building roads you need trucks. There's no question about that. The member talks about the fear of a monopoly, and that's something we have to watch for as well.
There are two sides to the argument. We're trying to moderate - and by "argument," I mean the road builders and TANS are in a little different place on what the result of this 80/20 is. I think they're both talking to us and working in good faith to try to figure out what the common solution would be. That's where we want to end up.
I do hear the concerns. I've heard them many times before. The inefficiency of this entire 80/20 system is why we're so intimately involved. We want to get to a better place, so we are listening to those concerns. I've heard them a number of times and we're working toward that with Bruce and another engineer we have at the senior level, Peter Hackett. We're working with TANS to try to figure out what they would like to see and how we can make that improvement benefit the system. If we have a more productive, more efficient road-building operation, not only are TANS happy, the road builders are happy. Ultimately that will lead to better prices for the government, and we can pave more. That's really what we're trying to get to.
MR. MACMASTER: I appreciate the minister's comments. That's certainly positive for the truckers, hopefully. We want contactors to be treated fairly too. I wouldn't want to suggest being unreasonable. They are only doing a job that we're asking them to do.
It was strange to see when that happened - and there was a bit of fallout, I think, between the truckers' association locally and the Dexters, in that instance. We did see a pile of trucks arrive, called the Red Army, I believe. The Red Army arrived in Port Hastings - and it wasn't during the Cold War.
They arrived, and I remember the night. I think I was coming back from playing hockey and driving by, and I saw all the trucks at a local hotel. Mr. Chairman, it was disappointing to see that, because I know it meant a lot to the local truckers to have a large contract like that in the area.
I'm going to stop at that. I'm going to turn my time over to my colleague, the member for Northside-Westmount.
MR. CHAIRMAN: The honourable member for Northside-Westmount.
MR. EDDIE ORRELL: First, let me take the opportunity to thank the manager of TIR in the Sydney area who I deal with, Mr. Gerard Jessome, and Roy MacDonald, who we have a lot of dealings with. Both area supervisors that I deal with, Danny Laffin and Sheldon Fiander, have been very good to deal with. There's a lot of challenges on the roadways (Interruption) That's not the minister, he's the Minister of Energy. They've both been very good to deal with, and any time I call, they are very open to any suggestions and don't have any problem coming with me to look at a situation to make sure we understand exactly what is going on and come to a solution for the residents who I deal with in the Northside and Westmount.
I just want the minister to know that, if he can pass that on to them whenever he gets a chance. I know their job is difficult, and I know that they don't have the money all the time. It doesn't take much to be nice, but they're always good to deal with and explain the situation if anything is to happen.
Before I get into roads and highways, I just want to clarify with Transportation and Infrastructure Renewal: my understanding is that most of the capital building goes through your department. With the school closures lately on the Northside and in the Westmount area, they're talking about combining two schools into one and having a new middle school built on the Northside.
My understanding is there has been an application in to have that middle school built now for a couple of years. I'm just wondering where that application would go when it comes in - if it goes to your department or to Education and Early Childhood Development - and what would be the procedure of getting that on the capital list to see that that school would be built, so that the businesses and people on the Northside wouldn't have to be in a great turmoil when those schools are closed?
MR. MACLELLAN: Mr. Chairman, I do appreciate the member's comments on the local staff who he deals with. I think the feeling is certainly mutual.
Sometimes the men and women who represent Transportation and Infrastructure Renewal bear the brunt of the frustrations when they pull up to a tough road or a difficult situation. They get the anger that is supposed to be reflected to the government and the people who are making the decisions. Sometimes those folks who are there every day on the ground, just doing the good work and carrying out the functions of TIR, bear the brunt of that.
I know that the member has a positive working relationship with our team in Sydney River and across the eastern district. I appreciate those comments, and the crew there will certainly hear that he said that.
With respect to the infrastructure, the member is correct. We do handle all the functions of infrastructure for government. But although a lot of the preparing, the preparation, the design, the time put into the functions of getting a plan put together, and the actual construction do take place under TIR, the respective departments have a process for getting those projects into the Department of Transportation and Infrastructure Renewal.
Simply put, we're the builders. When the decisions are made, when there's a final commitment to a particular build, that's when the engineers and the public works and the design teams at TIR take over.
That's something that we've transitioned to in the last year and a half to two years. It took place in silos prior to that. Education and Early Childhood Development would have their own infrastructure people, Health and Wellness would have their own infrastructure people, and we'd work back and forth by general communications, but it wouldn't be a coordinated effort. We've really streamlined that. They're the things that people, quite frankly, aren't that concerned about in the public, but they do matter for efficiency.
When you look at a lot of these large-scale projects, the timeline and the budget are really what matter, and that's what people ultimately hear about - this is over time and this is over budget. Those are the problems we're trying to eradicate to the best of our ability, hence the reason those functions came directly under the shop of TIR. It's certainly a good move. Thank you for the one clap from the member behind.
That's to answer the general question. To get into the specifics for the member, the process ultimately flows down from the school board. So the school board has made that recommendation, and it will go to the Department of Education and Early Childhood Development. They have a process of their deliberations whereby they look at each region and figure out what the requirements are. Obviously, there are business plans and proposals that become part of that.
That function - obviously the key one - is through the Cape Breton-Victoria Regional School Board in our particular instance, but then it would go to the Department of Education and Early Childhood Development. They would make their call, and again, as the builders, we get the final request and then we take over in terms of site development, the design plan work that goes in, and then the work for the final construction. That is when we become part of that process, but until that point, really, it is the school board first and then the Department of Education and Early Childhood Development.
MR. ORRELL: Mr. Chairman, I will move on from that capital cost in the schools. That is a concern of the individuals in the area: that they are going to have to be on a bus for some time. The businesses in the local economy suffer if the school is moved out of the area and kids do not go there for lunch or buy their supplies in the store that is there.
You just answered the question a minute ago that the RIM budget this year is held. If the RIM budget is held, what effect would the other costs - the cost pressures, wages and salaries and fuel and repairs - have on the ability to use the RIM budget and/or hire some people to put that RIM budget into effect? I know back when I was first elected, they used to be able to hire a student in the summer to do some of the brush and grass cutting on the sides of the roads. That has kind of gone by the wayside.
The reason I ask that is, when people exit the Newfoundland ferry, there are a couple of nice little grassy areas that are on the way out of the highway, and the first thing they see when they get into the province are these two areas. Over that last couple of years, for whatever reason - but usually it is lack of manpower and/or the ability to get to it because other things, potholes and ditches and stuff, are taking priority. As a way of saving some money, if we could hire a couple of students to do that - and this is the first thing some of the tourists see when they get off the ferry - I think it would be very beneficial.
I guess my question is, could money be made available to allow that to happen?
MR. MACLELLAN: Mr. Chairman, to the member, the RIM budget does include the salaries of those who would be connected to the types of work that the member specified - the brush cutting, the mowing, and those types of things. We can't apply student positions to those functions because of the union mix. They are CUPE shops and CUPE functions, so we can't put students as part of those responsibilities and duties.
The students that we do hire - we do take on a significant number of students in the summer season - for the most part, they are inside the office work - a lot of giving engineering experience to students and those types of hiring. I think there was a practice of using students a number of years back, as the member identified, but because of those collective agreements, we are no longer able to do that.
MR. ORRELL: Mr. Chairman, I thank the minister. I guess the reason I was asking that is we talk in here about some apprentices and some apprenticeships and the government doing some hiring. I would hope that your department - probably one of the biggest departments - would have mechanics, would have engineers, would have all kinds of different professionals that could be used as the training ground for these young individuals, and hopefully, as these people retire and through attrition, we would be able to bring these people on board to maintain that high-quality care.
I know the winter works program that has been over and above in the last number of years had some great operators over the years, but as the time frame that they could get or the weather or whatever has gotten either worse or better, and if they go away to get a job, they do not come back, because they can't handle the costing of their own household on a part-time job and unemployment. I guess that is why I was asking.
I guess my next question would be that, compared to the last couple of years, we have had a relatively good winter. In talking to a couple of people in the department and a couple of the area supervisors, I'm hoping that the budget, say, for salt would have been down this year, and the amount of plowing that had to be done would have been down.
I guess my question is, if that budget doesn't get spent in the winter, can that budget get rolled over into the Spring budget or the RIM budget or whatever other budget line it would take to allow the people who maybe underspend in the winter part of it to use that in the summer?
MR. MACLELLAN: To the member, we certainly would love to have the opportunity to carry over budget, as in terms of being under budget for a winter. That would be wishful thinking, to say the least.
What happened last year - we actually would have tracked to be under budget for the season that just ended, but because we had such a heavy snowfall and there was such a large draw on the expenses related to our equipment, we carried over about $7 million from the previous year. So the previous year was a whopper; we were in the $80 million range for snow and ice treatment and removal. Carrying over to this budget, we would probably have been a few million under budget, but because of the storms very late in the season that carried into the next fiscal year, on the books we are about $3 million over what was budgeted for the season that just ended.
We almost always end up in that situation where we're hitting the budget or we're over, because of some of the realities of the late season. Now, obviously with this year hopefully we won't see that as we do this budget estimate process next year, but as usual, we'll wait and see to determine what Mother Nature brings us.
To answer the question directly, we can't carry those over. There is a tie-in between our maintenance programs in summer and winter, but if there is underspending of that nature, we can't carry it over. It's seen as being under budget, but we don't get to allocate those funds elsewhere. Then we go through the process again for the next fiscal year.
We wouldn't have the opportunity, if there was a surplus, so to speak, in a line item that we could carry it over. That's not the case.
MR. ORRELL: I guess my question would be, if there was a surplus there, would it go back into general funds or general revenues or would it stay with the Department of Finance and Treasury Board? If that's the case, there's no real reward for any of the departments to be under budget or to spend less so that they may be able to use it in the Spring.
If we had that kind of reward system - it would be great if we could do that, because then sometimes they wouldn't spend the money foolishly. If it was going to be a decent sunny day and they could get away with a little bit of salt instead of pouring the salt on, knowing that they could use that money in the budget later on, it would be something that we could use to try to save a little bit of money as we went along. It would allow the area supervisors to make a judgment call and do that so they could get that. If it goes into the general coffers, I can't see that happening. Maybe that's something we could look into.
MR. MACLELLAN: Thanks for that question. As I mentioned in the previous answer, there is a relationship between the summer and winter maintenance. So if one is lower, the other can be higher. That's the key to it.
The member mentioned the incentive. What the incentive would be for the department to underspend and keep low is that it impacts the next season's budget, so that would give us the opportunity. If we do have a good winter and we are underspent - if that ever happens - then obviously we'll have the ability to address that in the summer season and allocate that part of the budget to there.
There is incentive. It wouldn't just be to spend up the budget and have it gone, that sort of March madness that we've heard about for so many years in government. That wouldn't be the case. We've got to spend what we have to spend, and that's the reality, particularly when you're talking about plowing and salting and de-icing and those things. But if there is an opportunity for us to keep the costs efficient, it would impact the budget for the next year, by way of the average.
How we allocate the budget is a five-year historical average. That's how we figure out what it will be for the next year. When you have a heavy season, obviously that lifts the average, and if you don't, then that will be reduced, which means there's a positive impact for the summer portion of our maintenance plan. So there is incentive to do that.
Again, when we talk about gravel roads and brush cutting and shoulder work and that roadside maintenance in particular, that's where we would really see the advantage of being underspent for winter.
MR. ORRELL: Moving on to highway or road resurfacing, I know last year we had a little problem with rutting on Highway No. 125, and there's another section or two along there that are having the same difficulty. I hear from a lot of people that it's the big trucks, but if you watch the trucks when you're driving, it's not their tires that are in those ruts. It's the car tires that fit in them. The truck tires are either dual or they don't fit in there. Rumour has it it's from studded tires. Rumour has it it's from the aggregate that's being used. The section of highway is not that old.
I guess my question would be, have there been any studies done on what might be causing that rutting, and what the cost per kilometre to pulverize that area and resurface it would be? Young people, especially, who are travelling back and forth to Sydney to university may not be the most experienced drivers. They're going to community college. Will those areas be looked at and repaired before the wintertime comes, especially if it's going to be a rainy season where they get into that and have some trouble?
MR. MACLELLAN: The member would know very well that I've heard many of the same concerns from residents in the area and that we have done some work to address some of the sections for the rutting. There is still one area in particular that we're monitoring right now and that we're looking at. It is a concern, there's no question about it, when you get into the rainy season and as the roads are pounded by the studded tires. That is a concern for us.
The good news is that it isn't the roadbeds. The good news is that it's restricted almost entirely to the issues with paving. We do have to do some more work there and make sure that those roads are as safe as possible. We are monitoring closely. I don't know if we have anything specific by way of a particular study for that, but we are keeping a close eye on it, and we know that there's more work to be done.
I had this conversation about three days ago with one of our other senior engineers, Peter Hackett, who is from Sydney and is familiar with the area. Between him and Gerard Jessome, they've kept a close eye on that. We certainly don't want to see any alarming or increasing concern with the road issues there.
As the member would know as well as anyone, the volume of traffic, the amount of people heading into Sydney from the Northside - the hospital, the university, of course - we've got to have that road tip-top and as safe as can be. So there are those remaining issues that we're going to address. It's something that we're going to keep an eye on, without question.
MR. ORRELL: While I'm still on the topic of studded tires, the last couple of years, we've had an issue with the weather that hasn't allowed people to get the studded tires off as early as they could before the end of the month. I've spoken to the minister already about extending that time. We had snow forecast as early as Wednesday this week, so the mechanics and the garages in my area haven't taken any studded tires off. They're booking into the end of next week.
I'm hoping the minister will have that same conversation with the Minister of Municipal Affairs to make sure that we can look at possibly extending that a week or two. The mechanics have said they just physically can't handle the volume of people who are going to start coming in now that the sun is out and the warmer weather is starting to hit. They're concerned more about their customers being fined for not having the tires off, so if the minister could have that conversation with him as well. (Interruption)
The minister said that that should be the case, so just keep an eye on that. I'm not concerned about the mechanics being overworked as much as the people not being able to get them off.
I'm going to switch gears a little bit now to the situation with the railroad in Cape Breton. I know the minister has been working very hard. He has had a task force, and he has been dealing with previous federal government officials, municipal officials, and people in his own department. We've come up with some solutions, but I know the ultimate thing to keep the railway is to have traffic on it.
I wasn't overly impressed with the way Genesee & Wyoming came in and raised the fees and didn't even think about the subsidy that was offered to the railway for the last 10 years. I know at the URB hearing the railroad did admit that that railway system with the subsidy wasn't losing any money. But now that that has gone, they've jacked the rates up enough that the people can't afford it.
There were 300 jobs, especially in my area, from four or five different groups of people who use that for supplies, that could be in jeopardy. We know that for each railcar it takes up to five tractor-trailer loads of goods to make that equivalent to one trailer load, which is an added cost to the people who use the railroad.
I guess my question is, if any of these companies faced a challenge, could there be some kind of assistance to try to force Genesee & Wyoming to do something about it? I know that's probably not the case - they're a private company - but if that money was available in a subsidy to them, could it be available in a subsidy to the people who use the railway at that time to help with their trucking issues?
MR. MACLELLAN: To the member, obviously the situation involving Cape Breton Rail and Genesee & Wyoming - not that we're not united on other things when it comes to the Island, but certainly on that one, it has been great that we've worked collectively. While we brought forward the legislation that addressed the issue of abandonment and discontinuance, it was the members on all sides of the House who really supported that; in particular, the members for Cape Breton were really united in that effort. That was a good thing, and that was step one, as the member identified. There was a whole host of activities and things we've been involved with, with respect to Cape Breton Rail.
I think that through the advisory committee, through the work that we did with the MRAC association and the group, we've gotten ourselves to a good place in the sense that the future is clear. Really what we need to do to have that rail sustainable and have that level of traffic that pays the bills - and not only pays the bills from an operational perspective but allows for that significant injection of capital that will be required to carry an increased measure of traffic that would be associated with container port development - we are still looking at that opportunity. That's still on the table.
For me, the discussions have now focused with the Port of Sydney looking at what happens with the container port and where we're getting with some of those announcements. Just like Milford and Halifax, the Sydney officials, Marlene Usher and her team, are really focused on where they're going to go. There's no question that having that rail line as an option is paramount for that business plan for the Sydney Port development.
With respect to Genesee & Wyoming, I've made this public, so I can say it for the record of the House as well: to this point, as of today, Genesee & Wyoming has had the opportunity to apply for abandonment as of April 1st. They haven't done that, so that's where we're at. We're still in the discontinued stage of that process.
I have a meeting early in May with the president of G & W, Louis Gravel, so we're going to talk about some of those issues. Every time we talk we have very candid discussions. Some of the things that the member raised about the local companies that utilize the service and how this has impacted them are a very important topic on that agenda every time we talk, and it will be again in May. We have to wait and see where they are with respect to their future.
They haven't given the notification that they are going to file for abandonment, so we'll have to get that sense. I'm sure Louis will give me a better idea when we have that conversation in May.
With respect to the private sector operators, there's no question that there has been some pain felt there and they've had to make arrangements. Just like entrepreneurs and small businesses across the province and across the country, Mr. Chairman, they've reacted and responded in a way that protects their business interests. They've adjusted their model. They've done things and made decisions that really picked up the slack when they lost the rail option for the delivery of the goods that they need for their business. They've done significant work. We'll continue to work with them and ensure that we're putting all options on the table.
I'm very proud of the abandonment piece that we have in place. There are going to have to be a lot more conversations about Cape Breton Rail on the whole as we move forward. We're certainly not finished with the conversation. We're going to have to keep working together on the port development side and of course continue to watch closely on what happens vis-à-vis the abandonment process.
MR. ORRELL: As we all know, railway is essential to development of a port. An operator who could come into the area would not even look at us without the possibility of a port.
I do commend the minister for the amount of work he has done in trying to maintain the railway there and putting the legislation in place to make sure that the railway would have to go through a number of different options before they can actually pull the track up. Hopefully that would never happen.
MR. CHAIRMAN: We have a request for an introduction. I would ask the NDP if that is favourable with them.
The honourable member for Lunenburg.
MS. SUZANNE LOHNES-CROFT: Thank you, Mr. Chairman. In the east gallery, I would like to introduce to my colleagues here in the House Mayor David Walker from the Town of Bridgewater. Welcome, David. (Applause)
MR. CHAIRMAN: Time has elapsed for the Progressive Conservatives. We will now revert to the NDP.
The honourable member for Queens-Shelburne.
HON. STERLING BELLIVEAU: Thank you very much, Mr. Chairman. It is certainly a pleasure to return to the Department of Transportation and Infrastructure Renewal and the Budget Estimates. Again, I want to welcome the staff and the minister's colleagues, and I want to emphasize the opportunity to ask pointed questions directly to the ministers and the staff.
Yesterday, I kind of finished on some short snappers. There are a number of questions. My colleagues said, can you do another 30 minutes? And I said, I can do 30 hours on the Department of Transportation and Infrastructure Renewal and questions regarding constituency issues, and the issues especially in rural Nova Scotia. I want to emphasize that this is one of the top five files, I believe, in rural Nova Scotia constituency offices.
One of the opportunities, or lack of opportunities, yesterday - and I'm glad I have the time today - is that in Liverpool there is a museum, Mr. Chairman, through you to the minister, named Perkins House, which has been on the Department of Transportation and Infrastructure Renewal's radar for a couple of years. I know that the community and the Perkins House committee are anxiously waiting for the reply from the minister today.
That particular museum has been closed in the 2015 tourist summer, area, or time for that to be open. There is discussion about when that is going to be looked at to be upgraded and some structural work done to that museum.
So my question through you, Mr. Chairman, to the minister: Perkins House Museum in Liverpool is slated for some restructuring and upgrade. Can the minister give the House an update on Perkins House Museum?
MR. MACLELLAN: Mr. Chairman, to the member opposite, I do appreciate him bringing the Perkins House Museum to the attention of the House and of our department.
There is a Building Services envelope that does exist. It's $13.5 million on the whole, which is administered through Transportation and Infrastructure Renewal. We can cover a lot of ground with that $13 million, but just like our highways and our budgets for roads and bridges and the like, there are always pressures and priorities that we have to establish.
I don't know specifically where Perkins House sits. I have heard conversation about it in the House from that member, and we have talked about the museum envelope on the whole, but I don't have specific information with respect to the particular project that the member is referring to. We will do some exploratory work and get back to the member.
MR. BELLIVEAU: Just for clarification, my understanding through media and press releases from TIR in recent years is that Perkins House was scheduled for celebration, particularly in summer 2016. My understanding from previous media announcements was that this work was to be done in time for the tourist season of this particular summer.
Again, I'll ask the minister to clarify that. I understand that he may need time or his department, but my question is, can he get that information back to the House and this particular member before the end of this session?
MR. MACLELLAN: To the member opposite, we certainly will do that. I just got a note as we were sitting here, as well, in reaction to the question, that there is work slated for Spring with respect to the drainage system. Any time we're looking at that type of project, obviously, there's something - it's part of somewhat of a look at the concerns for Perkins House.
Again, we confirmed through one of our officials that there's some drainage work happening right away once we're ready for the Spring. Obviously, that's part of a bigger plan. I will absolutely endeavour to get that back to the member so he can relay it to the people in his community before this session is over.
MR. BELLIVEAU: I appreciate the minister's response to the question. I just want to go in a different direction. Yesterday, I believe in the minister's response or his introduction, he talked about toll highways and the eight sections or corridors - I may not have the parliamentary title right here.
My understanding, Mr. Chairman, through you to the minister, is that there is extensive consultation being done as we speak. I heard the minister say that if the public says no to toll highways, it's something that will not be pursued by this government.
I'd like for the minister to revisit that comment and give an update on the evaluation of where those consultations are and when the public will have an opportunity to have access to that information.
MR. MACLELLAN: To the member opposite, I truly, genuinely appreciate the opportunity to repeat our position on this particular topic. I had the conversation here at estimates with the Leader of the Official Opposition about some similar things that the member brought up and what he sees with the public consultation and the process.
First and foremost, we haven't done any public consultation yet. There are two phases to the feasibility study.
The first one is understanding the engineering capacity, so the engineering report on what's required for those eight corridors, what the capital look would be, what the grid would look like, the number of kilometres. It's 300 kilometres in total for the eight corridors, but obviously the specific work within eight areas is part of that engineering analysis.
The second phase, which is where we are now and are hoping to finish up in the next couple of weeks, at the latest, would be the financial modelling, which for Nova Scotians, for anybody, is really what matters: how much you're going to pay, what the fee would be, how the user fee would be broken down. That's the second phase of the study, which is of equal importance, and that's really what Nova Scotians are going to be concerned about.
On the public consultation part, when we have those two pieces put together, we're going to embark on a community consultation process. We're looking at about 12 meetings across the province. We'll do that in a relatively short time frame; we're probably looking to finish all of those by the end of June, if the schedule permits, but shortly thereafter if not.
We want to do this quickly. We want to get the information out there and have people understand what exactly we're looking at. That's the public consultation piece.
Outside of those 12 meetings, there will be opportunity for social media or calling in to the department. I'm sure every MLA will get calls on this particular matter. There will be an opportunity for people to give feedback on both sides. I'm sure there will be mixed feelings and strong emotions to one side and strong support on the other. That's what we're hoping for.
To answer the more important question - and this is what we talked about yesterday with the Leader of the Official Opposition - the big piece about our direction on this - and I want to be very clear, so again, I appreciate the opportunity for the record. When New Brunswick was talking about their toll grids and their toll highways before their budget that they tabled a little while ago, their whole issue was about infrastructure and how they could create revenue to address some of their deficit.
That is not where we are at all. We have tabled a budget that we believe in. It's a surplus budget, so this is not about revenue sources. This is not about finding money. This is about creating a safer 100-Series Highway grid, adding 300 kilometres of twinning to the infrastructure, to the network we have now. That is what the focus is. This is not about money; this is not about revenue. The whole idea of this is that we get a full and fulsome response and understanding of what Nova Scotians want us to do. That's what the member heard me say, and that's what I am repeating here.
We want to know if this is a yes or if this is a no. We will present information on eight corridors that involve a tolling mechanism that really impacts every single nook and cranny, every region of this province. That's what will be presented. We'll give opportunity for Nova Scotians to provide every chance of feedback, every word that they want to provide, every comment, every piece of opinion. We want it, and we encourage that.
Anyone who is on either side of this debate, we want them to come forward. This isn't about getting an answer one way or the other. We are absolutely neutral here. Our answer is to get the yes or the no. If people agree, they are going to come forward and they want to see this done; if the answer is no - and I am sure there will be an effort to keep the status quo - I can proudly say that we have a very robust capital plan.
What we have in place, $220 million, how we spend on new construction resurfacing - I would put it up, per capita, to any other province in the country with respect to the level of investment that we make in our road corridors, our infrastructure, our highways, and our bridges. That is important. We will keep on that path.
If it is a resounding no and Nova Scotians absolutely are fundamentally against this idea, then that's where we are going to be, and we will go back to the plan we have in place. We are happy to do that. I think it is a responsible thing to look at this and get that answer once and for all, and that's what this is all about. We have to get to a place where we're confirmed on what Nova Scotians want us to do.
You look at the highway grid that we have, and there are all kinds of troubled areas. Bruce Hetherington talks about Highway No. 103; Joe MacDonald talks about Highway No. 104; issues with congestion here in metro; mobility problems; safety concerns all through Cape Breton, Antigonish County, and all the way up to Halifax; and of course Highway Nos. 103 and 101. This is a common thread with our regions: there isn't enough twinning and we're not doing it fast enough.
I talked about some of the numbers, but when you are looking at 300 kilometres of highway, that is a significant investment. It will literally take us decades. We went through an example yesterday: anyone who has been through Antigonish County will notice the vast improvement of that particular area with Phase 1 and Phase 2 of the Antigonish work that was done there. That is 16 kilometres, Mr. Chairman - 16 kilometres. It took 10 years from start to finish, and it is still not finished. It will be completed before this calendar year ends - 10 years to complete $160 million.
Look at that in the context of 300 kilometres of what we're looking at in this feasibility study. We just won't get there. We're inching along, and that's okay. If that's where Nova Scotians want us to live, then we more than accept it if that is the direction from the people who put us here. We're okay with that, but when you look at timelines, when you look at the overall investment, we have to have an alternative funding model if we are going to go with large-scale 300 kilometres of twinning. It is just that simple.
So the answer is that we absolutely want to hear from Nova Scotians. They will decide this for us, and then we will have a clear direction. Every time there is a major concern on our 100-Series Highways, we will know that Nova Scotians are committed to the current capital plan or they want us to embark on a large-scale development that will happen in a relatively small amount of time and will have involvement from the private sector in some P3 form.
We don't know the answer. We're not going to try to prejudice that answer in either way. We are staying neutral on that, and I certainly look forward to getting to those 12 meetings and to understanding what people on the ground truly feel about this opportunity. We are not talking about the economic development pieces or any of the other mobility portions of this. For us, as a department, this is clearly strictly about safety and increasing that safety component to our 100-Series Highways.
MR. BELLIVEAU: Just continuing on a theme of twinning highways, I appreciate the work on the Antigonish corridor, that twinning. It is a very beautiful piece of road. I agree with the minister.
I know that every member, regardless of where you come from across the province, agrees that the priority may be on the most-travelled route that the MLA or the member drives on. That would be Highway No. 103 for me. I frequently drive Highway No. 101 and Highway No. 104, but to me, Highway No. 103 - and I hope to be on that corridor here in the next few hours, but the work needs to be done here. I want to bring attention to that particular highway.
As we leave the city, we're on a twinned highway, Highway No. 103, and we get near Tantallon, Exit 5. My driving skills have taught me to be on full alert because when you leave that corridor and go into a one-stream highway - again, I probably don't have the engineering terms for that - but you leave the twinned highway and come into what I determine is a bottleneck. I literally turn my radio down. I'm a frequent listener to many of the satellite radio stations, and I enjoy that. But I know that I have to pay attention in the next three or four exits. I'm dead serious on this one, because the traffic flow is noticeable. I think people made reference to that as a deadly part of that particular highway and the seriousness of it.
What was interesting in the earlier reply by the minister is that - we talked about looking at toll highways, and I'm talking about twinning now - there's great engineering review. This is the question I'm asking: I would like to know if the engineering people in TIR are taking that particular concern seriously. To me, that's something that needs to be addressed along with the consultation on toll highways. Is there engineering, or can you update us on the design or what's being done to twin that corridor, the bottleneck, as we move from Exit 5 or Exit 6 in Tantallon?
MR. MACLELLAN: The answer is absolutely yes. We are doing surveying and some of the engineering work between Exits 5 and 6. As the member would know all too well, there's the Ingramport Interchange, which for us was a major commitment as part of our government as we made the transition into government in 2013 and got under way with that project. That was the first one in my experience that was part of the partnership agreement with the federal government. Again, that was one interchange that was in the range of about $20 million, so you get back into the significant capital outlay required for these types of endeavours.
The member mentioned the bottleneck in that area, the corridor. We're talking a lot about thresholds; it's the theme today. The threshold for vehicles per day is about 10,000 for twinning. We're close to that range, obviously, as you come out of metro, so that's why there's such a focus on that particular piece from Exit 5 to Exit 6. Ingramport is about halfway through that, so you provide that interchange opportunity there in Ingramport.
Where this all comes together and I think is part of these conversations - and the member for Argyle-Barrington asked the question in QP about Highway No. 103 - what you do on one portion of it really impacts the other, to the point about the bottleneck. When we look at twinning - so in the corridor study, the section on Highway No. 103 that's focused for feasibility is all the way to Bridgewater.
How that would affect the rest of the corridor is significant. As you go down a twinned highway - or you go down any highway - the opportunities to exit and get off that highway clearly change the volumes. Then as you get further south down the coast and you get to Bridgewater and beyond - Shelburne, where the member lives - there's a little bit of a decrease in traffic volumes.
That's when you look at some of those short-term measures which are part of our everyday capital plan when we're doing project work. There are short-term and medium-term measures that we can do to enhance safety. Then we continue to look at intersections and overpasses and things that are along that entire section, all the way down to Yarmouth.
It is a key consideration for us. There is a lot of work and significant investment required on that corridor. Again, I think the purpose and the value of the feasibility study, Mr. Chairman, is that it gives us some clarity on how we're going to do this, with respect to the twinning, which gives us clarity on what happens for the rest of that corridor, all the way down the southern shore of Nova Scotia.
There is significant work being done. Regardless, that engineering and some of that groundwork is being completed between Exit 5 and Exit 6, because that is a priority for us, for our government, as it should be. We're diligent in putting that information together.
MR. BELLIVEAU: What I was trying to get to - and again, I apologize; I don't have the engineering terms here - but the Ingramport exit, or that new design, is basically sitting there idle. I know it's in preparation for the roads to be constructed and to meet up with that interchange. I understand that.
My question is trying to understand - we've established that we know there's a bottleneck there from Exit 5 Tantallon out. I guess the public's interest is, how far from that exchange will the twinning of the highway continue toward Bridgewater? That's my question. I think, basically, if it's not designed properly, the bottleneck will simply be extended by a few kilometres.
MR. MACLELLAN: The explanation is exactly where we see the value in the feasibility. Again, it goes from Exit 5 all the way to Bridgewater, which, in totality, would be that entire corridor and would address all those issues in that area.
Again, if we're not pursuing that option for the twinning through the feasibility study, then we would do it one piece at a time. It wouldn't be piecemeal in the sense that any time you're building a specific area - so you're doing one section, and obviously it would feed into the next section - it wouldn't be piecemeal in that effect, other than the fact that we've got to design and build it one piece at a time.
Just as an example, from Exit 5 to the Ingramport Interchange is about 10 kilometres, give or take. The total estimated cost at this point - and they are very rough estimates, the estimate class is a little bit - it's not super tight at this point, but we're in the range of about $70 million for just that 10-kilometre section. Again, that's where the significance of the investments are. That's why, when we're looking at 300 kilometres in total, we've got to have some kind of financial plan to get that done in a reasonable time frame.
That's one example when you talk about that. When we're having those community discussions on Highway No. 103, we can use numbers like that to suggest that 10 kilometres is $70 million. So as much as we want to get done - there are fiscal constraints that every province and every jurisdiction deals with, and $70 million is a lot of money. Is it worth it? It absolutely is. There's no question, just like the investment we made in Ingramport is worth that money.
If there's a wish for an accelerated timeline to get all that twinning done, that's exactly why we looked at that feasibility. We'll let Nova Scotians tell us what direction they would like us to go in.
MR. BELLIVEAU: I like the line of questioning. I want to tell the minister and his staff that, again, maybe it's my driving habits, whether good or bad or not, but usually when I drive through an overpass or under a bridge - especially an overpass - I try to do a personal inspection of that overpass.
I think the minister knows where I'm going, because we've seen news media where concrete slabs can fall on the travelling public. I'm always paying attention to see if it passes my visual inspection.
First of all, my visual inspection is - and again, I want to confess that I am not an accountant. I know there are a number of them in this room who confess to have that profession, and I'm not going to challenge that.
My observation is that, in my view of the budget, the bridge maintenance is down a considerable amount. I have $700,000 underlined here, and I'll leave that for the minister to evaluate, but if there is a lesser value dealing with bridge maintenance, I am concerned when I go on to that overpass. My senses may be higher in the future.
For the travelling public, I think any time you see less money spent in bridge maintenance, that would be one of the things the public would be interested in knowing: that these structures are sound, that the travelling public has confidence in these structures.
My question through you, Mr. Chairman, is: spending is down in bridge maintenance, and I know overpasses probably would fall under that. Can the minister reassure the travelling public that they'll have a safe driving experience?
MR. MACLELLAN: I would certainly take this opportunity to reassure Nova Scotians that we don't substitute anything for safety. With respect to the bridges, the budget, there's about $10.2 million that's allocated through the districts for this specific endeavour to address those issues as they come up. Obviously there's an operational side to those investments, and then, of course, the TCA, the capital budget for bridges. There are things that we have to do. Those replacements and those major repairs are something that are part of our annual budget, and we do them to the best of our ability.
Again, there are deficits in things like some of those maintenance issues on gravel roads. We've talked about a lot of those, but at the end of the day, there's absolutely nothing we would do to jeopardize the safety of our bridges. We have an extremely robust system for having our engineers on the ground looking at those bridges and structures, doing the type of stress tests and requirements to absolutely ensure that all components of the bridge are safe.
The member talked about the visual inspection. I appreciate that he's not an engineer or an accountant; nor am I, so I have to rely on those people who are. They do great work to that effect.
One of the challenges - we've seen that there have been a number of specific cases when I've had to talk in the media about situations with respect to the aesthetics of a bridge and simply how it looks. That sometimes gets synonymous with the safety and the integrity of the bridge, and a lot of times that's not the case.
Out in the district of the member for Sydney River-Mira-Louisbourg, there's a train bridge that has a wooden decking. That bridge is as solid as you could possibly imagine a bridge to be. There are no structural issues, and there haven't been for a number of years. The only real maintenance work required is in the wooden decking itself. But to sit back and look at it - I mean, it's a train bridge. It looks the part, and it's extremely old, but that doesn't in any way question the integrity of it.
In a lot of cases with highway overpasses, if there are issues with the concrete or anything happening with the structure, people get concerned - and rightly so, because not a whole lot of us are bridge engineers who understand the difference between something that is an extreme concern and a foundation issue versus something that just doesn't look like it's in tip-top shape. That becomes the challenge: explaining to people and ensuring that we would never, ever jeopardize safety and we're going to spend every dollar that's required to make our bridges safe.
That's always going to be the plan and the strategy coming out of the Department of Transportation and Infrastructure Renewal, regardless of who is in the minister's chair. I know that was the case when the member was a member of Cabinet during his time in Executive Council.
So that's where we are, and we'll continue to make safety paramount over everything else, including the fiscal envelope.
MR. BELLIVEAU: Mr. Chairman, I want to return to a topic I raised yesterday, through you, regarding the federal Liberal infrastructure funding. Prime Minister Trudeau made an election commitment of $20 billion. To me, that number is a large opportunity to address a number of infrastructure needs across Canada.
I also know that the Minister of TIR, our Nova Scotia minister, pledged to address the MV Miner on Scatarie Island and to address that by trying to get federal dollars to clean that up. I endorse that. I endorse the initial cleanup in a protected area, and yesterday I raised that there are other derelict vessels across Nova Scotia. In particular, there is one in Shelburne, as we know, tied up there. It has had a fire; it sank at the wharf. There are derelict vessels in Bridgewater - a number of them - and there are something like 400 of these across Canada.
I had an opportunity to raise this question yesterday. The point I was trying to get to is that the Minister of TIR made a commitment to the MV Miner. Well, the MV Miner sits in Shelburne Harbour today, maybe under a different name - maybe under a different name on that vessel. But there are roughly 400 MV Miners across Canada. To me, there's $20 billion there in federal funding and opportunity.
Again, my question to the minister is, how can the Nova Scotia public be reassured that the minister is going to Ottawa and having this discussion with his colleagues about reimbursing his MV Miner and being reassured that that money or the possibility of that money can come to the MV Miners across Nova Scotia? I am asking the minister to respond on his effort to address this particular issue.
MR. MACLELLAN: Mr. Chairman, I do appreciate the question and the topic of derelict vessels. I am more than proud of our efforts with the MV Miner. We made that commitment when the previous provincial government - where the member was a member of the Executive Council - and the Harper Government said "no" blatantly. There was no question about that.
I guess one of the things that is a reality of these derelict vessels is that there is a different approach for the federal government depending on the situation. How it impacts from an economic perspective, how it impacts from an environmental perspective, in my opinion - and was my opinion from 2011 until we finally had that bulk carrier removed from the shores of Scatarie Island - was that these derelict vessels impact both. They certainly impact the environment, the levels of asbestos and diesel fuel that were remaining on the MV Miner even after the feds put their process of removing those - apparently, which obviously did not happen; that is a concern - and they impact the fishery.
As the member and I discussed yesterday, there are very, very lucrative lobster fishing grounds there off Scatarie Island, in particular that northern shelf of the Scatarie Island where the MV Miner was located.
It is a concern for us. I will repeat what I told the member yesterday. It was absolutely unacceptable that Canada's shipping laws that govern these types of salvage operations and moving a vessel from a dockyard in Montreal - in this case across the Atlantic Ocean into Turkey - can be done by a shell company whose only activity, its only mandate, is this one project, and then they move on.
When a towline breaks and these vessels end up on a coastline, whether it be the north Pacific or on the Atlantic coast here, in our case, with beautiful Scatarie Island, it is a significant issue. The fact that there is no liability, there is no insurance, there is no accountability on the owner of the steel, on the owner of the tugging company, on anyone involved in these projects - when a large bulk carrier that has a significant value of steel is liquidated and sold off for scrap, somebody is making a lot of money.
If that is the case and these vessels get there successfully, then it is a private-sector operation and they make their money. In situations like with the MV Miner on Scatarie Island, they do not. Everybody disappears, and the people left holding the bag are taxpayers. They are Canadian taxpayers, and they are Nova Scotia taxpayers.
In light of that, I was shocked to learn that there were so many gaps in Canada's shipping laws. What we did in response to that, over and above the specifics of my concern in Cape Breton Island with Scatarie Island and the MV Miner, was we addressed that through our own means.
But on the larger scale, to the member's question, we went directly to David Emerson, who was conducting a CTA review - a Canada Transportation Act review - to update and modernize components of that. One of our biggest suggestions - our biggest plays and our biggest presentation - was on that very fact of how we allow these vessels to hit our shorelines and just be left there. For me, there's two issues. One of them is related to the removal itself and who pays for it once they get there.
For me, the travesty of all this is that most of these shouldn't be there in the first place. They no longer have any owner; they have no responsibility for them because of the lax laws that allow them to be tugged, or the towlines break, or somebody docks it there and disappears. Who's left holding the bag, and who's left with the responsibility of the eyesore, the economic impact, and the environmental impact? The specific communities that are identified. The member mentioned both Bridgewater and Shelburne, and I don't disagree with that.
With respect to how the feds deal with that moving forward - look, the previous government was Conservative. It's now Liberal. I could care less about what stripe is in Ottawa at that moment. This is about having accountability in really critical laws. The Canada shipping laws would certainly be classified as being critical for our country and the protection of our communities.
We've made that effort. We truly hope to see in the final discussions that there is not only some investment on the removal side by the feds, but also in the legislation to tighten it up so that somebody has to pay the bill when a towline breaks and the MV Miner lands on the Scatarie, and the 400 other examples of that very thing across the country.
MR. BELLIVEAU: Just a heads-up to you, Mr. Chairman: I have one more question, and that will conclude my questions. Then I'll turn it over to our PC colleague.
My last question is a great segue; actually, I'll use the minister's terms he used in the response to the last question. The segue is: "left holding the bag." I make reference to that terminology because Nova Scotians are left holding the bag on the previous Nova Star. I know this question has been raised in this House in the last few days.
My understanding is the Premier is scheduled to meet with the creditors, 216 of them, on May 4th of this year. My question to the minister is, I know that this falls under his department. To me, there was a lot of money spent on that Nova Star, and there are a lot of people who are disappointed who are going to be in that room on May 4th.
I was taught at a very early age that you pay your bills. I know that the financial burden on some of these small companies is something that I would think they're going to be teetering on whether they survive or not, and I don't take that very lightly. But I do appreciate - I think that the minister said that he may be at that meeting - and this is a chance to clarify that - and the Premier.
I'd just like to get some understanding about this meeting on May 4th, if the minister and the Premier are going to be there and if there's any indication that can be allowed here to know that those creditors may be receiving payment on something that they have done for the Nova Star. On that, I'll turn it over to the minister. Thank you.
MR. MACLELLAN: To the member opposite, it wouldn't be prudent for myself or the Premier to be at the May 4th meeting. That's a creditors meeting, so I'm assuming that's official through the creditors process and being aligned with the particular operation. The consultants would be handling that whole bankruptcy process. That's for the creditors themselves.
Again, I was part of the commitment from the Premier that, if there's a meeting that's being requested from us, we would have a conversation; we wouldn't shut the door on anyone having a meeting. We'll work with the Premier's Office on that.
Look, we haven't officially been asked to have any kind of conversation so far. I would assume, like the member would, that that may be forthcoming. That will probably happen after the May 4th meeting. But we'll wait and see, and if creditors want to talk to us, then there would be no reason for us not to have those discussions.
I want to go back to what the member opened that final question with, and that's about what he was taught. I think most of us were taught the same thing: that we do have a responsibility to pay our bills. That, fundamentally, is part of the reason why we are with Bay Ferries now.
We keep coming back to the Official Opposition talking about walking that line of supporting the Nova Scotia ferry, but saying that we have the wrong agreement. Despite what the Leader said yesterday, they have been critical of Bay Ferries - there is no question about that - and how they have managed this whole process.
The fact of the matter is that we had the relationship with Nova Star - $13 million was put out for 2015. We fulfilled that obligation. We did have a general recap and summary of their balance owing, their payments that they were making, but we don't have a list of creditors. At that time, we wouldn't be following the process of who they were paying.
At the end of the day, the functions of government that are our massive budget - we have all kinds of relationships and agreements and contracts with private-sector operators, who in turn have subcontractors. The best example of that exists here at TIR with our highway projects, and we do not specify how that money is given out once the exchange is made. We made every payment that was required of us in the contract with Nova Star.
I would certainly add that the whole way through, Nova Star were telling us two things: that they were succeeding and the market was growing - that obviously did not turn out to be the case - and that they were on stable financial grounds because they were an operation outside of what they had with the Nova Scotia ferry. I do not know if that was the case; I can't speak to what their other business operations were.
But at the end of the day, we are responsible to the agreements that we sign. That is where we are with Nova Star. Clearly we have moved on, and we are proud of the relationship with Bay Ferries, and I'm sure we'll talk about some of that agreement over the next few days of estimates. But at the end of the day, we have done what we had to do, and now it becomes the conversation about how we maintain this service and stabilize this service for the people of Nova Scotia.
It was a tough process. As I said to the member in absolute sincerity yesterday, no one in this House, no one anywhere, has a monopoly on caring about private-sector businesses. When you hear those stories - and I said this in my comments last night, that I had no idea about the creditor list, who was owed what and how many there were, until I read the story in the media like everyone else. So for me, I woke up to that story on social media and read it and understood what was being reported and taking that as fact, and it is awful.
In any situation, any indication that a creditor is not being paid by any company for any reason is a tough thing. The member's comments about some operations, particularly small- and medium-sized entities - they operate on a razor-thin budget, and when they are not paid in accounts receivable, it hits their bottom line. There is no question about that. We have to be stewards of the tax dollars. Therefore, we appreciate the fact that when people make agreements, they get paid and they provide the services that they are supposed to render. We get that.
Looking at that list - I know the member has brought the "paid the piper" resolution many times, and that is a reasonable request to bring in terms of the impact that that relationship had on that particular small business. At the end of the day, we fulfilled our obligations to Nova Star, but when the creditors - if they do come calling looking for information, looking for our position - then clearly we will be fully engaged to sit down and have that discussion.
The Premier made that commitment. I make the same commitment on his behalf or separately, whatever this group would want, but we've done what we had to do. Again, back to the overall story, the reason we're with Bay Ferries today is that we had significant problems with the previous operator. This bankruptcy and the impact on creditors is more of that legacy for Nova Star.
MR. CHAIRMAN: Thank you. I believe the NDP have indicated that they have completed their questioning for this period.
I would offer the minister at this time, if he is interested, a quick break.
We will take a five-minute recess.
[1:14 p.m. The committee recessed.]
[1:20 p.m. The committee reconvened.]
MR. CHAIRMAN: Order, please. I call the committee back to order.
The honourable member for Colchester-Musquodoboit Valley.
MR. LARRY HARRISON: Thank you, Mr. Chairman. I just want to take a few minutes to go over a few roads and a few other things as well.
I want to start off, though, by saying that I really appreciate the job. It is not easy. I am only one corner of the world, and I know there are a lot of others that you folks have to look after, so I certainly do appreciate the task.
Like others, I try to talk to the area supervisors every so often. Guy Deveau and Basil Pitts are mine, and I try to meet with them once a month or once every couple of months just to have an idea of what is happening and what could happen.
What I would like to do is have a look at a few roads. They are all gravel roads. Every one of them that comes into my office are gravel. I have even talked to the grader operators, and they say they really do not have anything to grade anymore. It is down to rock bottom. I don't know whether you want to just talk about - I've been here and I've been listening to all of your answers, and I know we're covering old ground again, but I would just like to tell my constituents something that is positive in all of this mess.
MR. MACLELLAN: Mr. Chairman, I appreciate the opening comments from the member opposite. I can say this without reservation: that member is a true gentleman, and I think he is a model for a lot of us in here to emulate his style. He is always respectful and appreciates the overall system, and I can certainly understand why he is so popular with the constituents he represents.
We always appreciate this opportunity, and we know that he gives his all for his region. We appreciate the work that he does and that he is advocating for his people. We recognize that, and Guy and Basil sing his praises as well when we talk about that member. It's all good things, and we're happy to have him here.
With respect to gravel, it is probably a repetition of the answer that the member has heard before, but it is a struggle. As we discussed with his colleague, the member for Inverness, there is an element of reaction that when we get calls on particular gravel roads, they become urgent situations, and really, that's when we get to employ the greater work, the gravel work, any of that urgent requirement and urgent attention that is necessary. That is how we have handled this.
The member made the statement about how they are now grading dirt and there is not a whole lot of gravel left. Obviously, that's an experience that many have across the entire province.
Part of the conversation we're having internally, that I did share with the member last week for his question in QP, is that looking at capitalizing these roads would really give us a little bit of extra opportunity to treat them and deal with them. As the member knows, a lot of the work that's done with the gravel roads exists entirely in our operational budget. If we were able to add these gravel roads to the capital program, that would give us much more flexibility, but with flexibility comes increased allotment. Having that chance to add some of these major arteries for rural communities that are still gravel would be something that we want to look at.
Again, for whatever reason, the winter wasn't as terrible as we had last year, so we probably didn't anticipate the amount of problems that we would have with our gravel roads. There were some really urgent situations across all regions of the province this year, for whatever reason - if it was a combination of the temperature and then the precipitation that we had - but at the end of the day, we do our best to address these needs one at a time.
The issue of not having enough gravel and getting down to the dirt is one that we hear about from all four regions that TIR has under our jurisdiction. Looking at the capital option is probably something we could do to address the urgent need to enhance the gravel program.
MR. HARRISON: I just wish people had some understanding of that. People are looking at the system now as they did the old system, where if a road needed to be done, especially - let's say the Progressive Conservatives were in power, and a Progressive Conservative came up to the member and said, "I need my road done," it would probably get done.
I had one guy phone me the other day, and he said, "Look, my road needs work. It needs not much more than two or three loads of gravel. If the department doesn't want to take it on, how about if I order the gravel and have it put on, and then just send you the bill?" He was dead serious.
That's the way they're approaching it, and sometimes I think they look at me and say, you're not aggressive enough to make sure these roads are done. I know that they all can't be done. I don't know how much can be done on each given road, even on sections, because obviously some sections are worse than other sections of the road.
One of the ones, of course, that I told you about before is Pembroke Road. Even those who don't live on the road, in Upper Stewiacke they all agree that that is the one road that needs to be done. Even though their roads are bad, they're still saying that Pembroke is the absolute worst. I know it doesn't get the traffic, but the people who live there, their cars are really taking an awful beating. I went over it the other day just to see if what they were telling me is true, and it is. You can't even avoid the potholes; there are just so many.
Enough of that, because I know you know. You've heard. I'm sure what can be done hopefully will get done.
A couple of other things I want to bring up: one is the caverns that are going to be built in Alton, the Alton storage caverns. There will be a lot of salt coming out of that. I don't know whether you've looked at that or not, at a possible use of the salt that might come out of that. Instead of going back into the bay, maybe it can be used in a more positive way.
MR. MACLELLAN: Just to address your previous comments, the final wrap-up on the gravel roads: when you said that about the gentleman who wanted to put his own gravel down and send us the invoice, Bruce Fitzner cringed and said we'd get a lot of invoices if that was the case. It would hit our budget one way or the other.
I'm with you on the political realities of years gone by, and I'm thankful that we're not there now. You know what? The reality is - not to offend anybody, but people will still make that suggestion. This road has a lot of one stripe versus the other, so why don't you do this instead of that?
We just don't have any time for that. The amount of reaction and negativity you would have from that age-old approach is just dated. There's no room for it. With the amount of stretching that we do with the budget, if we tried to operate in that fashion, it would be a nightmare, and no one would be served fairly and appropriately. I'm glad we're not there anymore.
I can appreciate that some people say that you're not aggressive enough, but I think having that relationship with Guy and Basil is what's important. It is about stressing the priorities, and I'm sure that you have, as all members have. Sometimes you can't make that case.
That's where I really feel for guys like Guy and Basil. They have to answer within the constraints of their own budget, and then they look to us to say, give us more for the member and see if we can do something else. Really, when it comes to that, it is case by case.
Did you say Pembroke Road? Yes. If that's one that we should be focused on, we will get word down to our officials there, and maybe they can just see what work they can put into that. We would certainly do that.
With respect to not avoiding potholes, again, that is a challenge for all regions of the province. Your colleague, the member for Inverness talked about a road that took him a half-hour to get down last week that should take 10 minutes. We do see that. Again, that is something that we try to react to and get the local TIR officials on the ground to do what they can in those situations.
On your point about Alton Gas, I did have that conversation with a representative from Alton Gas. This was probably about a year and a half ago, and his reaction at that time was that it seemed like a good idea in theory, but they produce enough salt in a day that we would require in a year. The issue became about quantities. We thought that was a great idea - if we could just take that and apply it to the roads, then we would have a much better solution. That would clearly be economically beneficial for us as a department.
So we did check into that. I checked into that personally, and it is a volume issue. They produce way more than we would need even for an entire winter.
MR. CHAIRMAN: Thank you. I'd just like to remind the members to address each other by their proper position and not use "you." Thank you.
MR. HARRISON: Thank you, Mr. Chairman. Minister, I spent about two months in Portugal back around the year 2000. You have no idea what it is like in southern Portugal. It is a poor cousin to Spain. The roads are just littered with animals and garbage and so on.
Driving in here today, because the snow's gone and it is nice out, I was just looking at the amount of debris on the highway and on the secondary roads. How does that get handled by the department? Or is that another responsibility?
MR. MACLELLAN: Mr. Chairman, through you to the member, we do a significant amount of cleanup on the highway, but a lot of ours is focused on would-be impacts on safety. If there is something on the road, if there is something that's debris that is part of the corridor, then obviously we have to address that immediately.
There is a limited amount of activity as it relates directly to litter. Basically, when the local trucks are in the area, they will clean up what they can, but with other functions and other duties that they have to get to, there is a limited amount of that. We rely on those specific situations where there is something on the road and we have to address it - and also, of course, the Adopt-A-Highway plan, which is extremely successful in some regions of the province to make sure that the highway is clean.
It is an issue. As always, we'd love to do more, but we do what we can with the crews when they're on the ground. It is part of their function, but when they do so much, they have to reallocate their time elsewhere. So they grab what they can and they move on.
MR. HARRISON: If I were a lot younger, I would like to go right up the highway from Brookfield to Halifax and just clean up all the stuff, but I'm not.
Adopt-A-Highway is a good plan. In my area in Brookfield, they really do a good job at it, for sure. I like to be a part of that too, picking up the garbage. Anyway, I just didn't know whether there was an alternate way of doing that. You see in the States where they will get crews out - maybe have been people who have been incarcerated, to go out and do some of that work. I didn't know whether that plan was even thought of here as a means to get it done.
MR. MACLELLAN: I'm not sure if that's something that the Department of Justice has considered or not. You know, we always think about how we could make application and have groups that are organizations across the province participate in the Adopt-A-Highway program. Brookfield and that area is one example. It's usually pretty tidy there, and it's a model that I'm sure others follow, but it's really scattered within the regions of the province.
Any time we would have an opportunity to look at a program through the Department of Justice, it would obviously be a benefit for us, but that has to be weighed by other departments and other decision makers. But we are always looking for new opportunities. If there was a way to add people and personnel to our litter cleanup programs, then we would do that.
MR. HARRISON: Those are the questions that I had. We just keep going over old ground, and there is no point to that.
God bless. Keep up the good work.
MR. CHAIRMAN: The honourable member for Pictou East.
MR. TIM HOUSTON: Thank you, Mr. Chairman. I thank the minister and his staff for being here today.
The member did get me thinking about something. Is there a budget for road cleanup, or is it kind of a by-product of other projects that might be happening?
MR. MACLELLAN: There is a budget. It is a pretty modest one, and it is under that envelope for roadside maintenance. So there is technically one that's allocated, but really, as I said to the previous speaker, it's part of roadside maintenance. When the crews are in areas doing cleanup and there is something related to safety, they will collect what they can. With the limited amount of time during the summer, they'll clean up sections and areas that have to be cleaned up, but for the most part, that budget doesn't address all the concerns we have for litter across the province. That's why we rely on organizations like Adopt-A-Highway to participate.
MR. HOUSTON: Mr. Chairman, I'm just wondering if the minister could say what the budget is. I don't know if he can pull it out, but what the actual line item is.
MR. MACLELLAN: The entire budget for roadside maintenance, which would include litter, brush cutting, and mowing, is $3 million. We would have to get further detail on the specifics of what the litter envelope would be in itself. We can get back to the member on that one.
MR. HOUSTON: Thank you. If the minister could get that, it might be interesting.
Now, I know there has been a lot of chat about gravel roads. One time in this Chamber, in Public Accounts, we had a discussion of what was a "gravel road" and what was actually a "dirt road." Some people who think they live on a gravel road might actually live on a dirt road.
There is a lot of confusion around this topic, in my mind, specifically as to when - I know if I call and say, this road does not have much gravel on it, or it needs some gravel, nine times out of 10 it will come back that, well, it doesn't meet the criteria for gravelling.
I'm just wondering, what are the standards that the department has as to when a road does require gravel?
MR. MACLELLAN: Related to the gravel on the member opposite's question, obviously the key part of road maintenance, in a perfect situation, is the grading. The standard for grading is three times a year. That's what we aspire to hit for our gravel roads, and then, when we identify specific problems, we grade. Then there are specific issues related to lack of gravel in a particular area on one of those roads - we would bring gravel in and address those areas.
That is what is done as the maintenance piece, but as an overall re-gravel, a new application of gravel, there is no specific standard. It is done at that local level. With the obvious input from MLAs, stakeholders, and residents - people who live on the road who are impacted by the condition of the road - they would get that to the local TIR staff, who would make an assessment. Basically, those decisions and that outlay of gravel are done at the local level.
MR. HOUSTON: Thank you. I wonder if the minister can tell us how much budget is available for gravel this year - exclusively for gravel.
MR. MACLELLAN: The allotment for gravel is found under the RIM budget overall. There is $16 million for RIM - about $2.5 million in tender and in-house gravel, so it is $2.4 million and change; $1.9 million would be in the gravel ditching, and that would be under tender; and there is about $500,000 that's gravel patching, and that is in-house.
Then, as well, as we mentioned about the grading, when there is a particular spot, that would be done just as part of the district's budget. That would be over and above that $2.5 million, but at the end of the day, under RIM, it works out to be about $2.5 million.
MR. HOUSTON: Thank you. On the maintenance budget available at the local offices, do they have complete discretion over how they spend that, whether it is on gravel or brush cutting? Do they have complete discretion over that?
MR. MACLELLAN: Yes, they do.
MR. HOUSTON: First off, how much is that maintenance budget for the local areas in aggregate? And then the minister might be able to explain a little bit about how the total amount is distributed amongst the various offices.
MR. MACLELLAN: The number we have - I don't know, the member may have to clarify this, just to get specific and drill down - but the overall number for summer maintenance is $60 million. That is broken down for the four districts, per kilometre. That is basically how it is allocated. That is the overall summer maintenance budget.
MR. HOUSTON: Okay, thank you. I appreciate that. Would you be able to say how much goes to the northern region, like the area that encompasses Pictou East?
MR. MACLELLAN: It's roughly 25 per cent. It just works out that it's a quarter of that overall budget, but we can get more specifics for the member if he wants to see those.
MR. HOUSTON: Thank you. I appreciate that. Then on the RIM budget, which I understand is about $16 million in aggregate, and about $2.5 million of that would be for gravel, can you break the $16 million into the other buckets? Like, if gravel was one bucket, what would the other buckets be, and how much would be in them?
MR. MACLELLAN: I'll go through the RIM components for the member. Pavement patching by way of tender is $3.5 million. Pavement patching in-house is $77,000. Shoulder gravel - I excluded that number when I said $2.5 million; I didn't include this because it's shoulder. Shoulder gravel by way of tender is $1.3 million. Shoulder gravel in-house is $9,000. Gravel patching by tender is $1.9 million. Gravel patching in-house is $464,000. Brush clearing by tender is $281,000. Brush clearing in-house is $745,000. Ditching tendered is $1.18 million. Ditching in-house is $71,000. Steel guardrail work by way of tender is $80,000. Timber - so wood on bridge structures for guard rails - is $300,000.
Just to break that down, the pavement preservation is $6 million of the $16 million, and the total excluding pavement preservation is $10 million, so that's where you get your $16 million - $6 million and $10 million.
MR. HOUSTON: I wonder if the minister would be able to table that, or a version that specifies RIM.
MR. MACLELLAN: Sure, there it is.
MR. HOUSTON: If somebody is driving down a gravel road that they feel is in rough shape and it causes some damage to their car, there's a process where they can submit a claim to the province. Is that through the minister's department?
MR. MACLELLAN: I'm not familiar with the internal process of how exactly that works; it's insurance and risk management. But I can tell you, I hear lots of the requests and complaints that come through. People who are impacted by that type of situation contact us first, and then we push it along to Bruce Langille, who's the executive director for insurance and risk management. It actually doesn't fall under us. It's under Internal Services.
MR. HOUSTON: Does the department have an estimate or some assessment of how many kilometres of gravel roads really need gravel, and what the infrastructure deficiency is on gravel roads? I can tell you that there are many, many gravel roads that could not just use some gravel; they kind of desperately need it.
I know the local areas and the minister himself and the whole department are constrained by budget issues, but I wonder if there has been some kind of assessment done as opposed to a complaint-driven thing; if the department said, this is how many kilometres of gravel roads we have in the province, and this is the last time X per cent received gravel, so therefore a certain number should be due gravel now?
MR. MACLELLAN: In total, we have 8,000 kilometres of gravel road. In his own experience and expertise on this, Mr. Fitzner figures probably about half of those would require gravel. I know the member was here for some of the conversations about the capitalization of some of this work. There has never been a full-scale injection to upgrade and try to catch up on some of the deficiencies here with the infrastructure for gravel. In the 30 years that Bruce has been here, it has basically always been one year at a time. It gets down to the local priorities and the local requests that come in. There has never been a full-scale injection. I think that putting the gravel roads piece into the capital plan may give us an opportunity to do that. That's the reason for exploring that.
MR. HOUSTON: What is the department's rule of thumb as to how much it costs to gravel a kilometre of road? What is the cost per kilometre, just on average? I know there is going to be a whole range of different scenarios, but rule of thumb.
MR. MACLELLAN: About $80,000 per kilometre.
MR. HOUSTON: Is there going to be a move to look at maybe capitalizing some of that? Is that something the department is looking at? I think the criteria had to do with shoulders and stuff too - the main impediment to allowing the capitalization of that. But maybe if you can, just for my own benefit, say - is it likely that these types of amounts will be capitalized going forward, and when would you see that starting to happen?
MR. MACLELLAN: Obviously there is a financial component to having gravel roads added to the capital plan, but part of this is in the process, through the Department of Finance and Treasury Board and the Auditor General, of having a different TCA class - a different capital asset class - so there would be some very specific administrative changes that we would have to make. That is part of the process as well. Then it becomes a decision about how we put more into gravel roads by way of the capital plan.
I just would add, for content and background, that this has been a discussion for a number of years. But again, from my very brief experience here at TIR, this has been the toughest year. I am hearing it from all sides of the House, without question. That has really spurred on this conversation and this increase in effort to try to figure out what we do with gravel roads, and I think the numbers that we're talking about right now indicate that.
With half of them requiring a significant investment, we are looking for a new way to get at these gravel roads and do something significant that will increase the safety of each of those 4,000 kilometres of road that require that attention.
MR. HOUSTON: Thank you, and I appreciate your optimism. If 4,000 - and this will be a rolling thing, so you have 8,000 kilometres of gravel roads, and 4,000 are kind of due now. How long should a road last before it needs to be re-gravelled? Is there a rule of thumb? Maybe 10 or 15 years?
MR. MACLELLAN: The rule of thumb would be eight to 10 years from the day it is gravelled or re-gravelled. We are back into that cycle of requiring a full-scale gravel upgrade.
MR. HOUSTON: I just want to put myself in perspective. If there are 8,000 kilometres of gravel roads, how many kilometres of paved roads would there be?
MR. MACLELLAN: About 15,000. Our total inventory is 23,000 kilometres, so it's in the 15,000 range.
MR. HOUSTON: Thank you for that. Now, on the toll roads - I am going to speak specifically about Highway No. 104 through Barneys River. I know that there was a safety study done there, and some feedback was provided, and I think there were some improvements made to that stretch of highway.
Maybe the minister can speak briefly to the improvements that were made, and then an assessment of whether or not it is too early to say whether the improvements are having an impact or what the expectations might be.
MR. MACLELLAN: It's probably too early to make the assessment on. We haven't done an increased - another study to see what exactly has been impacted. The majority of it has been with respect to sight lines, and looking at the signage, size of signs, and some rumble strips was some of the key stuff coming out of the gate.
What the safety study included were things like the speed issues, speed reduction, and what would sort of be the medium-term conversations and decisions around that. The immediate decisions were on signage. Mr. Fitzner believes there might have been some rumble strips done through there, but we can go back and get a full inventory for the member. I know that's one particular interest for his constituents, so we can do that.
MR. HOUSTON: I appreciate the offer, and I would accept that, to get a list of what was done.
In terms of the speed-reduction element - lots of people say that it's not roads that are unsafe, it's people that are unsafe. I wonder if there is any kind of coordination between the department and maybe the Department of Justice to get them to allocate more budget for speed enforcement through that area or if the minister can share anything with us, what he might know about increased enforcement or how that might impact his budget.
MR. MACLELLAN: The Road Safety Advisory Committee is the body that does a lot of our direction on policy. They certainly make suggestions, so that includes representatives on a whole host of areas, from the department and municipal partners to law enforcement. One of the target areas specifically is Barneys River, that whole corridor, which is very difficult to navigate at the best of times, and seems to always be hit with a weather system even when it's nice along the rest of the highway. There's always precipitation there, regardless of the season you're in, so that is a particular concern for us.
There's really two elements of it. The enforcement is a key one, and as we've seen, in every study that I've been able to look at, and all the very sad collision reports and fatality reports we get, speed is so often a factor. Much of the time it's speed and a combination of other things, so it's speed and impairment, speed and distracted driving. Of course, going too fast for conditions is always a big part of that, so it is a common conversation that we have within our own department and again, vis-à-vis that RSAC, who have law enforcement representatives.
We do look at specific areas. Given the study along Highway No. 104 and the serious problems there with accidents and fatalities - of course, things are never the result of one person's efforts, but I can honestly say, and I know he's a friend of the member's, that Joe MacDonald has done tremendous work. He's a genuine guy, and the tragedies he has seen as a member of the volunteer fire department really impact the motivation and the work that the department has done, so that's a big part of it.
Speed is a significant issue, and when we talk about the - when we open this door with the toll feasibility and we look at that corridor, which has been a key driver in all of this, we'll talk about some of those other surrounding issues during that very public debate. Speed will be part of that, and anything else we can do to address highway safety will come up at that point.
MR. HOUSTON: I echo the minister's nice comments about Joe MacDonald. He's a super guy. I can't imagine what those members of that fire department have experienced over the last 15 or 20 years.
In terms of twinning that stretch of highway, I believe that in the past - it's not a new thing; it has been looked at in the past - I wonder if the minister is aware of how many times the department over the years has done feasibility studies on twinning. I believe I've heard that there were times when they actually mapped it out and costed it out.
I don't know if the minister has seen any of those studies, although they would probably be very dated by this time, but I wonder if the minister knows how many times an actual study has been done, and maybe what's the furthest any of those studies progressed? Was there actually a plan at one point?
MR. MACLELLAN: According to Bruce, there have been a number of surveys, and we did the safety study through that corridor. There have been different looks at different times. I think it's fair to say, honestly, that it's probably a result of some of that public pressure, and that spans all three Parties and governments with respect to this particular area.
While there have been surveys and different considerations for safety, there hasn't been a full-scale assessment, so this feasibility work that we're doing is really the first of its kind for that area. We don't have the final numbers, so I couldn't give the member a number.
I can tell him with absolute confidence, and this is coming from me based on what I've learned over time, that this will probably be among the most capital-intensive requirements. This will be expensive. There's no question. As the member knows, you've got a waterway, you've got the mountain range, you've got the rail line, and you've got the highway zigzagging through those mountains. It's going to be a very significant price tag to cut away a corridor there, to look at that twinning. That's the information.
When we talked last night about the engineering report and the financial modelling for these conversations, that's exactly the detail I think people expect. You don't go out and just try to sell the philosophy of twinning and tolling and say yes or no; you've got to give them the specific information.
The member's question about specific studies and capital - this will be the first time that has been done through the department. We'll look at what that final number is when it's available, but it certainly will be significant.
MR. HOUSTON: Just in terms of that, I've heard it could be $200 million. Is it too early to say? Is it in the order of magnitude of hundreds of millions? If we could just have some kind of sense.
MR. MACLELLAN: We are still refining the numbers, so I wouldn't be able to give an echelon. Again, this isn't the department's response, but for me, it's going to be significant. I can honestly say I wouldn't be shocked if it was in that range.
MR. HOUSTON: Presumably if this project were to go ahead, and there's obviously a lot between here and there - (a) would it be twinned, and (b) would it be twinned and tolled? - obviously there's a discussion that I appreciate hasn't taken place yet. But if this stretch of highway were to be twinned, would it qualify for any of the federal infrastructure money, to your knowledge?
MR. MACLELLAN: The answer to that is yes it would. As we discussed with the caucus's Leader last night, there's an element to the feasibility that will give us the ultimate direction on where we're going to go, so depending on the result of that, that will really give us the direction on how we would apply it and make application to Building Canada, to the federal government, for a cost-share from our federal partners. That will take place regardless.
Again, it impacts how we submit projects and what the overall package is, depending on the ultimate result and the feedback from the feasibility plan. But in any event, any project of this magnitude - and it will be a significant magnitude - we would look to the feds for some help.
MR. HOUSTON: Under Building Canada, are you bumping up against any deadlines - internal or perceived or real or otherwise - that you would say, look, if we want to do this under the new massive infrastructure program that the federal government is talking about, then we are going to have to make an application by X date? Is there any sense as to what that X date might be?
MR. MACLELLAN: The answer is no, there would not be a specific date. We have submitted the suite of projects under the feasibility study to P3 Canada for a screening. That was the requirement in case there was a suggestion that Nova Scotians supported that whole project.
P3 Canada came and met with us about a month ago. They are very understanding and appreciative of the fact that we've got to go through our public process before we give them any indication. Once we get through those discussions and that overall public debate, then we would still have a year and a half, give or take, to come back to the feds to indicate our intentions. We are in the new Building Canada with the new government, but we're still accessing, and part of the applications we've already submitted are tied into the previous Building Canada, so there's a significant amount of lag time between when those funds are announced, when we make application, and when we actually withdraw the funds.
MR. HOUSTON: I appreciate that. Can you give any sense as to the internal timeline for public consultations, presumably over the next few months, and then analysis of results, probably a few months? Can you give any timeline as to when the department would expect to be able to have a real discussion with Nova Scotians about what they see should happen here based on what they know at that time?
MR. MACLELLAN: One of the things that we have endeavoured with this feasibility study is to not let it drag on. We want to get the information out there, packaged so that people can understand it, so that it's accurate, and so that it gives a fair account of what could or should happen, or what won't, depending on the reaction of Nova Scotians.
We are hoping to be into those public consultations. We've identified 12 that we would conduct, and we have spotted about a six-week window. We would like to have all 12 of those done by the end of June, and probably take into the summer to continue the public discussion. Obviously there will be a significant amount of feedback coming in through social media, through contact with MLAs, and through contact with all levels of government representatives. But at the end of the day, as we've said many times, we want the answer, yes or no. When we get that answer, that is when we will consider.
There's no reason to drag this on and let it get stale and have it come up again over the next number of years. We want to know once and for all what the wishes of Nova Scotians are, and then act on them. I think it's fair to say we would like to know exactly what direction we'd be going in probably in total by the end of the summer or early Fall.
MR. HOUSTON: Thank you. That is a pretty reasonable timeline. I appreciate that.
Before I leave roads and talk about boats, I do just want to - I meant to get a sense - in my office, I've made a list of the roads that people called about for gravel just in this last week: Mountville Road, Browns Mill Road, White Hill Road, Lamont, Chance Harbour, Brookfield, MacKay, Gray, Wilfred MacDonald, Piedmont, Centredale. I know probably most rural MLAs in here are getting that number of calls on roads, too, and obviously by some people who are pretty irate.
I meant to get a sense of whether the minister feels that this is something where we could make the changes and regulations to get some capital projects going on gravel roads - just a gut feeling from the minister, knowing what he knows as to whether - because I can't think of many other ways that people will get some help on the roads. I think that's pretty much what we're down to. There are too many roads that need something - it's going to take a massive project. What is the minister's sense on that type of a project, whether that could happen maybe over the next two years, or what he feels?
MR. MACLELLAN: If we are going to get that as part of that capital envelope, then those roads would be subject to the capital plan just like all other projects that exist on that list now are. Chances are there wouldn't be an influx of new money for gravel roads in this fiscal year, but again, given the fact that we've increased our attention to this - the member just listed off 10 roads and, as he stated, every member in here could probably give me a mirror list of roads in their riding that they would like to see re-gravelled and treated in a hurry - we are going to continue to look at it. It's something that really has stepped up even this year since the Spring thaw. We will work on it quickly, and if there is an opportunity to get it on the capital plan, then it could be for next year's government capital list. We will wait and see how the whole process progresses.
MR. HOUSTON: Just a final curiosity on that - if these could be classified as capital projects, would that possibly open it up to Building Canada funds for gravel roads? Presumably they're not eligible for federal funding at the moment - I guess they're probably not eligible. Maybe the minister can clarify that. But then could some changes internally maybe help them be eligible?
MR. MACLELLAN: I wouldn't foresee that being the case. They have never had local roads as part of it. It has always been roads of national significance, so the major 100-Series Highways are their focus. Even for us - as a collective of Atlantic ministers, we've advanced some projects like the Cabot Trail. We'd like to see even something like that get on the list for federal Building Canada. If we're struggling to get extremely important economic, tourism-related corridors like the Cabot Trail on the list, I think it would be tough to try to push for those local roads, so I can't see that being the case. I think when it comes to the local roadwork, we'll probably be going it alone for quite some time.
MR. HOUSTON: Thank you. I do have some questions about the Yarmouth ferry situation. The first thing I am still curious about is that tickets are for sale at the moment, but I don't know that there is any kind of a port agreement with Portland. Maybe the minister can give his thoughts on how it is that we are selling tickets on a route that we hope will happen, but I guess might not?
MR. MACLELLAN: I'll try to maintain the same points that I made to this question last night with the Leader of the Official Opposition. I understand the political realities of it and the public interest in all of these aspects, but when you look back at the entire process from where we had four proponents come forth as part of our open process to obtain a new operator, given our experience with the Nova Star, the reality was that there would have to be decisions made and things would have to progress.
It's an afterthought now, but I certainly remember the amount of growing pressure and concern from many people about the fact that we didn't have an agreement and we didn't have a vessel. That has been replaced by the conversations about the negotiations and the contract that we have. Meanwhile, for the number of months since the negotiation resulted in Bay Ferries and Mark MacDonald being the successful applicant to have that relationship with, there has been work being done. Mark is well experienced in Portland. He has a very good relationship with Jon Jennings and the main people on the ground at the Portland terminal.
All of these discussions about what would happen with the terminal, what would happen with the Nova Scotia ferry, when it would land, the departure and arrival times, the issues with Customs - all of those components were considered long before we got to this point of agreement.
I'll maintain that I am saying small "c" conservative with Mark MacDonald. He is very conservative in the sense that he would never over-promise and under-deliver. I think that is a cliché that fits Mark to a T. He understood the political pressure with the vessel, with the operational decisions, with the ticket sales, with all of those things. He certainly understands the pressure that he will be under and we will be under as we get into this sailing season. Things like schedules are paramount to the model. For Mark, he put that work in, that diligence, and he's got it to a place where if he's selling tickets on a service, he believes that that's going to be the schedule, and he's pretty adamant about that.
But having said that, to the point, just like any government process - especially when it's elected officials, and we have that provincial Cabinet process as well - we can't speak about the City of Portland. Nor would I ever accept speaking about the provincial government, the provincial Cabinet, as a rubber stamp.
Obviously there's diligence associated with this. These are elected counsellors, an elected mayor; they've got their processes to go through. Clearly, like any asset in any arm's-length organization, Crown Agency, that we deal with as a province, there are procedures, and there's a vested interest that the taxpayers have that connection vis-à-vis their elected people.
Part of their agenda coming up for their meeting - I believe it's next week - is to discuss some of these operational issues related to the Ocean Gateway Terminal in Portland. Part of that is the schedule. I wouldn't want to speak ahead of that process and suggest that it's a done deal. So I'll let the people of Portland, the democracy of Portland, make that decision.
Based on what we've learned, based on what we know with Mark and how he operates, we're feeling confident about that result, but we really can't say until the final vote is taken at the Portland city level. Once that decision has been made, we'll be accountable to explain our process and the impact on us, but at this point, we just have to maintain that they'll participate in that process as planned, and we'll wait for the result.
MR. HOUSTON: I seem to recall that for the first year of the Nova Star, they were late that season because they couldn't sell or market, in my recollection, to U.S. clientele in the absence of a ship and a port agreement. If there's not a port agreement in place right now, I'm wondering if this route is being marketed to U.S. clientele, or is it only being marketed to Canadian clientele as we sit here today?
MR. MACLELLAN: I certainly can't speak to the first year of the Nova Star; I'm not exactly sure what the components of that start-up were. I know that from a marketing perspective, social media, without question, Bay Ferries are marketing to the larger U.S. market as well. I don't have specific details on their marketing plan. Again, as we've said many times, that's part of that operational aspect that we leave in the very capable hands of Bay Ferries and their partners that they use for marketing endeavours.
Back to the question about the schedule and the agreement with Portland - look, we require a terminal agreement here with Yarmouth as well. They are the things that I will say, time and time again: that we've got full confidence in Mark, and they understand the pressing need to have all the components in place by the time the sailing season begins. We trust and are very confident that they'll do just that.
MR. HOUSTON: I just found in my note here - there's something called FMC bond regulations. I seem to recall that was in the news a few months ago. It's not particularly relevant to the department, but the theory is what I think is on my mind.
There was an airline that started to sell tickets, and then they had to withdraw selling tickets because they didn't have all their paperwork in place. I'm just wondering if the department has satisfied itself that that's not the case here. I know they've obviously put some trust in the operator, but I'm sure there are a few tick marks that you have to make before you can sell tickets. Has the department asked the operator if all those tick marks have been put in the boxes, or are they just trusting that they are?
MR. MACLELLAN: Just information for the House and for the member opposite, the $2 million FMC bond was part of some of the requirements in the U.S. It was strictly focused on the fact that there were cabins on the Nova Star. Obviously, there is an internal reason for that, but with the new Cat, Bay Ferries doesn't have those cabins, so they weren't required to put up that FMC bond.
Again, with respect to the question about having faith in Mark versus what we require: Mark MacDonald and Bay Ferries have been more than upfront about what's required, in terms of information and in terms of where they have to be. It's Mark who has been diligent in the specific details of what has to happen and what order it has to take place in. If there is ever a question about where my confidence lies with Bay Ferries and Mark, it's the fact that they've identified very early on.
Back in the Fall, when we established the agreement with Bay Ferries, the focus was on ticking those boxes, to use the analogy of the member opposite. It becomes about the vessel, and I had communicated publicly that it wasn't an easy market to find a vessel. Any vessel wouldn't have done. So there were suggestions that there would be a vessel here and a vessel there available. That was sort of floating out there in the ether, but that was never the case. For Mark, it became about getting the vessel that fit this service. With the Cat, he believes that that's the right model. We support him on that.
When we are looking at all the operational aspects, there is an element of communication. He is very upfront and forthcoming with us on all of those aspects, and there is a level of reporting that he does. We obviously require reporting, and we obviously want to feel comfortable where he is, but he truly is the expert here. He knows what it takes. And again, there's a lot on this for him. He wants to succeed; he wants to see this work. That's why we are confident in the fact that he'll be diligent and he'll leave no stone unturned and no part of the detail will be excluded.
MR. CHAIRMAN: Time has expired for the Progressive Conservative Party. We will now revert and rotate to the New Democratic Party. (Interruptions) We will continue with the Progressive Conservative Party.
The honourable member for Pictou East.
MR. HOUSTON: Thank you, Mr. Chairman. Just on the vessel choice, I don't believe that the Cat model was the model that was initially proposed - although that's the model that everyone believes in now, they didn't when they put their proposal in.
My question is, of the four - I think there were four proponents that responded - did any of the respondents actually have a vessel, or were all four saying that they would get one at some point?
MR. MACLELLAN: Yes. Of the four proponents, the only operator that had a confirmed vessel was the Nova Star, which was the operator of record at that point.
MR. HOUSTON: Okay, thank you. The Bay Ferries proposal was for a cruise-style journey as well, was it not? It wasn't for a high-speed Cat initially, was it?
MR. MACLELLAN: The original proposal that they had submitted was for the traditional cruise type, but with the proponents, excluding the Nova Star, there was a range of what the model would look like.
Without question, when talking about the submission itself, it was the cruise-style ferry, but because of some of the business aspects of the service and what Mark seemed to be focused on in terms of importance and market development and what would make sense, it became the Cat that was the best choice for Bay Ferries. Again, that is where we are today.
MR. HOUSTON: Does the department have a Plan B, should Portland council vote against allowing the Cat to use that terminal?
MR. MACLELLAN: Again, I'm going to ride the line of speculation here; I'm really quite fearful to be interjecting and adding comment to a process that is taking place through a mayor-in-council in the jurisdiction that is our partner on this particular Nova Scotia ferry service.
There has been absolutely no indication that we would be concerned. I know that can be viewed as "so there is a level of uncertainty," and there is, because that process has to take place. They have to have a vote. They have to understand what the details are. Again, I have immense respect for that process and any process with municipal governments and how those decisions are made.
I want to say this for the record, and the member has heard me say this before: nothing that Mark MacDonald has ever said to me has proven to be inaccurate or misleading, and that's where the trust comes from. It isn't a blind trust because I hope it works; it's based on his experience. If you look at some of the comments that he's made in previous times about the service, everything that he has suggested really has come to fruition about what it would take to re-establish the market, about the level of investment that would be required.
I look back to the days when he had a relationship with the PC Government, up until 2009. The contract was very similar. I said this to the Leader last night: I don't say that to go out there and make this a narrative of comparing their contract with ours, but the numbers are similar, and the terms are similar. I say that because that, to me, speaks to the level of credibility and integrity of Mark MacDonald. When he identified this contract, these terms, it was based on the operational cost, it was based on what was required for start-up, and it was based on what they would have to do in Yarmouth with respect to the terminal.
He's been up front and forthcoming about all of the components of the business model that are required. With respect to his operations, with respect to who he is, I take his word for it.
Again - not to prejudice the process that has to take place through the democratic system in Portland - we have full confidence in what Mark has told us to this point.
MR. HOUSTON: I'm just wondering if the minister can shed some light on - the applicant submitted a response with a cruise-style ship and probably some estimated budget numbers, I'm sure, as part of that process. Then at some point in time, it became obvious that, well, can't do a cruise style, going to have to do a high-speed Cat arrangement, I guess it turned out to be.
Did the department at that time say, well, maybe we should open this up again now, if we're going to go a different way? What was the process that happened in the department, that somebody said, I'm going to dramatically change my response and go a different route? How did the department react to that?
MR. MACLELLAN: Again, for me it goes back to the style and the upfront philosophy that we've had from Mark and Bay Ferries. When we began the negotiations and started talking about what this would look like, it wasn't necessarily that he was hard and fast to the cruise ferry. It truly became about the best available vessel that was out there that we could access in time for the sailing season. That's really what the focus was.
Over time, as we went through the discussions about the ferry, a lot of the aspects of the Cat model itself became very important for us. One of those - and I think for me, arguably it would be the most important component of the Cat model - is the fact that we get traffic on both ends of this daily route staying in Yarmouth or staying in southern Nova Scotia. I think that was the key part of it, and that made sense for Mark's model with respect to Bay Ferries and how they would do this.
The reality was, in the science of this and how we got to the point, there were a lot of different discussions and different elements in this over time, from the Fall to where it got to the point where we actually announced the vessel. Mark has a significant network - I would say as good as anyone's worldwide, with respect to international brokers to find out what ships were available, what cruise ferries were available, and what high-speed services were available. Through that diligence and that effort, he got linked to the senator from Maine and this U.S. Navy option.
When Mark began to look at the details and understand what kind of product he was looking for and what would make the most sense for the Nova Scotia ferry, it became that Cat service, that Cat ferry itself.
That became the process, which, of course, we were asked about. We didn't have a full complement of information, because that's what we said we would do: let the experts do what they do. That's why we had Mark leading that for us. There was never really a requirement for the department to be involved in that, because this is Mark's game, and this is what he does best. That developed over time through conversations with Mark, but he was comfortable that the Cat service would be the best, and he stands by that today.
To answer the question from the member, we were a part of this with Mark. There was never an indication where we forced on him what the model would look like, and that would include the vessel itself.
MR. HOUSTON: Thank you. The cruise model and the high-speed model are dramatically different, and there is an impact, especially in the contract that came at the end, where taxpayers were on the hook for all the financial responsibilities. When you have a high-speed model, you sacrifice onboard time and onboard revenues.
When the model switched from a cruise to a high speed, which it did at some point - I can appreciate that you were working exclusively with somebody at that point who has a lot of industry experience, but given that the department didn't, they were at a disadvantage. They didn't have that same knowledge and experience.
Did the department speak to any other experts and say, look, if we move from a cruise to a high speed, what should we be considering? Obviously it was in the interest of that operator who only had one vessel available to pitch that vessel. I'm just wondering why the department never went, well, hold on a second here, the game just changed dramatically. In the absence of internal expertise, did the department consult with anyone and say, what does this really mean to us?
MR. MACLELLAN: Mr. Chairman, to answer that, I think in looking at Mark MacDonald and how he has approached this, I wouldn't say - and I wasn't involved in the everyday discussion, that period when the vessel was decided. I was pretty close to that, but obviously, he had a very close relationship with the senior staff.
A couple of things: I certainly wouldn't categorize it as Mark ran out of options on finding a cruise ferry and went to the Cat. It was more about when this vessel became available and he got wind of it and started looking at some of the numbers. The member talked about it in the past - just the fuel alone, and what it means for the fuel expense. That's one.
Then, of course, the 13 hours across, versus five and a half - all of those things are part of a marketing plan, which is the product. They become important.
I don't think there was a flick-a-switch where Mark had said at any point, we cannot find a cruise ferry, so now it's Plan B. That really wasn't the case. The overall process was, let's find the right ship, and at a point in time, a certain intersect, the Cat became that right ship. That is really where it came from, with respect to this vessel.
I will tell the member something, and I think that this is an important thing to appreciate. I know that there has been a wide variety of different opinions and perspectives about what would work here, but when you really look back, the Cat of 2009 carried about 78,000 passengers and required a subsidy of $7 million.
I think it's pretty fair to say we would enjoy both of those numbers at this point if the Cat was still in place. I know there were a number of things from the market conditions that would have changed between now and then, but the reality is that that was the level of performance when the service was cut. Four years of dormancy basically kills a market, and you're starting over.
So we come back. We start over with Nova Star, part of an agreement that was made by the previous government, which carried on through us - no question about that. But I would argue - and again, this is my personal opinion, that probably reflects a little bit of where we are with the department - that the fact is that it's hard to make a case for the cruise ferry, given what we have seen. We were at a point where we paid $13 million last year, but to get to the end of the calendar season would have been significantly higher than that, as you are seeing with the results of the creditor response and the fact that Nova Star is now bankrupt. That's calendar year 2015. Then you've got the winter fees, the charter fees that were required to get us to this year. I don't have a specific number, but it would have been millions and millions and millions of dollars just to get to the 2016 sailing season for Nova Star, then put the subsidy back on the table to get through 2016.
We take the criticism, and we managed the conversation about the Nova Scotia ferry as best we can. I can't imagine what would be coming not only from the Opposition but from the public had we been into tens of millions of dollars to Nova Star just to get from last year to this year and then start the season over again. With the cruise ferry model, I think, looking from my own business understanding and my education experience around it, it would have been a tough model.
Without question, it wasn't making the grade at 60,000 passengers, which is two years of data that we have: 59,000 the first year and 51,000 in the second year. I think that's part of the equation.
One of the things we've been talking about and that has been the focus of a lot of the questions as we led up to the point where we had the agreement and therefore had the vessel was about the marketing impact of not being able to get out there early. If you look at our experience with two years of Nova Star, they said that the season was tough with 59,000 passengers in year one because they didn't have enough time to market, but they had the full year in year two to market that same service that they said they just didn't have the time to get out the door with, and they had 8,000 less people take the service.
We can get into discussions about what would have been the optimal business model and what things they did right and did wrong and the decisions they made, but at the end of the day, when you look at cruise versus Cat, we know the experience we had with the cruise ferry for this Nova Scotia ferry over the last two years. Now we've got a seasoned operator who has run the Cat, who has done pretty well by way of numbers, looking back to 2009, who wants another shot at it. He's put this together, and we believe in him.
Again, one of the big discussions that took place around this whole conversation was about the name of the vessel itself. The conventional wisdom is that there are issues and assumptions around the old Cat, and oh my God, what's happening here? Number one, the decision to name it the Cat was Mark MacDonald's and was Bay Ferries', so we didn't have influence on that, and we didn't want influence on that. But when he said that, the reaction is kind of, you're taken aback a little bit because of that history. He would remind us of two things. Number one, the history wasn't all that bad, given where we've been in the four years of dormancy, then Nova Star, and where we are today.
But secondly, there is a significant marketing draw to the name "the Cat" in the U.S. We want Nova Scotians to take this, Mr. Chairman; there's no doubt about it. We want them to experience the Yarmouth to Portland run, this Nova Scotia ferry. It's a great service. Portland's a great city. We want to encourage every Nova Scotian to take that run, but predominantly, we need Americans to come here and spend their disposable tourism income here in Nova Scotia. That's what this is all about. If the Cat gives us that brand equity that gets us to a better place quicker, then I think by all means we've got to look at that and ensure that we're capitalizing on that marketing effort.
Again, back to all the technical details of the operational model, Mark MacDonald and Bay Ferries have made decisions. When you strip away all of the history and all of the things that have happened, I think they've made some pretty good decisions. When the dust settles on this, I think we'll be in an area of good performance. We need Americans here. This is going to help double our tourism, which is a focus that we have. At end of the day, I believe the Nova Scotia ferry will have a significant role to play in that endeavour.
MR. HOUSTON: I do want to touch on a couple of things. But before I do, I wonder if the minister has a sense of how many tickets have been sold so far, just in the first couple of weeks. Do you have a sense of the response?
MR. MACLELLAN: No, we don't at this point. That's a question I'm sure we'll get often: what are the up-to-date ticket sales? Now that we've established the agreement - we've got the vessel, we've got the model, and Bay Ferries are clearly doing their thing - I think we really need an opportunity to let this thing succeed and let the service and the whole offering that we have vis-à-vis Bay Ferries unfold. I would expect that we would do an update as we get into the season, probably mid-season, but at this point, we haven't asked for any update on tickets. I don't have a number that I could share with the member.
MR. HOUSTON: We know the operator was negotiating for the operator; that's what companies do. We know that the department really doesn't have the same expertise as the operator would. I'm still curious if the department turned to any experts in the industry and said, help us negotiate this, or what do you think about this? The operator was negotiating for the operator. Who was looking out for the taxpayer to make sure they got the right deal? Was it just the department?
MR. MACLELLAN: The answer to that is yes. We didn't have outside help in terms of that negotiation, but I will again state this for the record: this is where we rely on Mark MacDonald. There was no impetus for him to get involved in Bay Ferries other than that he always said it was something that was missing from the Bay Ferries complement, that Nova Scotia to Maine ferry service. He does believe in this. There is risk, there is additional effort, and there is a lot of work that has had to go into this. He understands now the level of pressure and the level of scrutiny that he is going to be under, not only our government but for Mark MacDonald - his company, Bay Ferries, but Mark MacDonald personally. He's committed to succeeding in that.
With respect to the deal - and I know that the suggestion is that we got hosed and he is a great negotiator and he really took us on this one. I fundamentally am happy to have this chance to stand here today and say that I don't believe that's the case.
I look at two things. Number one, the process that we followed by way of going through those operational expenses, the start-up costs - all those things that are packaged in the agreement, the deal, that is very public - and he identified what costs were required, what the level of operating subsidy would be. I can certainly tell the House that there was no operator coming forward that saw an immediate profit in the Nova Scotia ferry service. There would be a level of subsidy required regardless of who is making the decisions and who is government at the time.
I believe that when you go item by item, Mark MacDonald was more than fair. He understood the pressure that we were under. The costs are the costs, and his management fee was built into that. They are receiving a management fee for operating the service.
One of the things, again, that was striking to me: we are not getting into the comparisons, but the last deal that Mark had was a Cat. It was Bay Ferries, and it was with the previous Progressive Conservative Government. The levels were very similar: the overall annual subsidy level at that time was $9 million, of which Mark took $7.1 million. He didn't access it all, because he didn't need to take it all; he accessed at what he needed.
That, number one, is a testament to his credibility that, conservatively speaking, this is what the subsidy is going to be. It did not hit that level, so he was under that - and not only in the fact that he made that decision and that was his play to government, but if the agreement is similar, then $9 million per year, which is more or less what it is for us on an operating basis now for the first two years of this agreement.
It speaks to the fact that it did not matter who was here and it did not matter who was there. Mark MacDonald believes in Bay Ferries. He believes in the Nova Scotia ferry service. He believes in our historic and important economic and transportation link from Nova Scotia to Maine. That's what this is all about for him.
I don't believe that he made any efforts to take anything over and above what was required for operational, and I am very proud of the senior staff that we had as well as my role in this. I think we got to the best possible place. With the performance measures and what's going to happen over the next couple of years, time will tell.
MR. HOUSTON: Thank you. Presumably by not accessing the full subsidy, there was a bonus or something like that. I'm sure it probably suited - he has run a company. He has run a company to try to make money, and hopefully, as I am sure, his shareholders want him to try to make as much money as he can.
In this case, he is going to run a route for a management fee. I don't know, but I suspect that pretty much every ferry operator in the world would like the deal that he has: you get a management fee, and you have no downside risk outside of an asteroid. We heard at one point that it might create some downside risk for him, since this - at least in the years we know about - is all about a management fee.
Is the minister able to tell us what the management fee is? We heard at one time he was going to try to talk to Bay Ferries to see if they were okay with it being released. I wonder if the minister can tell us anything about the management fee.
MR. MACLELLAN: In response to that, I would say that the member is right. Mark MacDonald does run a company, and that company exists to operate ferries. In this particular example, the management fee is the portion that goes to Bay Ferries, and as I said many times, the rest is operational, so there is a fee for the service he's providing.
It's not dissimilar to the Northumberland run, which - I'm not sure if it's in the member's riding or not, but it's certainly in his region in Pictou. It's a significant run that is heavily subsidized. We also have Marine Atlantic, which is not Bay Ferries, and which is subsidized to a staggering amount; I know the member for Northside-Westmount is very concerned about the future of that because of the economic impact it has in his area. And of course, we have the Digby to Saint John run, which, again, has an impact on both sides of our border with our provincial sister New Brunswick.
With respect to the operations, that is what he does. The management fee is part of that. When we talk about the management fee, the request from Mark - and again, there is freedom of information and protection of that information. What has been asked of us is that we don't release that management fee, because, as the member said, he does run a company. It is the other two runs he has in Nova Scotia; he also operates ferry services elsewhere, Trinidad and Tobago being one of those key spots. I'm assuming - again, taking his word for it - that there is a professional and competitive reason why he does not want that number disclosed. That was the request he made.
There is a FOIPOP process. Luckily for me and rightly for us as government, we don't get to impact or participate or even know what is happening there. I assume that the member probably made a FOIPOP request. I really don't know that. I am assuming others may have, but I'm not sure.
There is no fundamental reason why we wouldn't release that, for us. It's in the number. If the management fee is part of the operational number that we have put out year over year, there would be no reason for us to shy away from that. The reality is that this is about respecting the wishes, respecting the fact that it could be protected by way of the FOIPOP rules.
I truly don't know that; that is a function that runs through the department that I have nothing to do with. I don't even know who submitted it, if anybody submitted it. There is no reason for us to keep that low-key, because it's part of the fees that we are paying vis-à-vis operations anyway. It is out there. Nova Scotians don't know the specifics on what part of that operation is for fuel and other things, and the fee is part of that operational allotment that's given out on an annual basis. We've got that agreement for two years.
MR. HOUSTON: I don't have a signed copy of the funding agreement, but I do have a copy that says "this funding agreement made as of March 24th." Is that the day it was signed? I am seeing maybe somewhere in that range. Okay.
In the whereases of that agreement, in the fourth whereas, it says that under this funding agreement it is necessary for the province to advance $6.4 million U.S. on or before March 31st. That has to be a record, for a province to turn around that kind of money inside a week, but I'm wondering what the significance of March 31st was and why that was so close. Presumably the work wouldn't have been done on the retrofit by then, I wouldn't have thought. I wonder if the minister can shed some light on that.
MR. MACLELLAN: I know how the member sees this, because I heard his opening comments in reaction to the budget, and I know that the suggestion - not to presume what he's going to say, but is that the initial payment to Bay Ferries was done to get it under the operating year of March 31st. I am assuming that's where you're going? I'm not going to try to assume. That is what it is. Okay. Thank you.
The reality is that we haven't done anything to impact when this money was paid out. This was not part of the corporate agenda for our budget. There was no consideration of that at any time. I'll stake my reputation on that.
What this was, as we got closer to the agreement with the U.S. Navy on this particular vessel, the Cat, we were getting an understanding of what the financial requirements would be. Obviously, that's part of the construction and the building of this contract. When we got to a point where Mark and Bay Ferries had to make a payment to the U.S. Navy - the number, the funding, that the member referred to, is in U.S. dollars. Transfer it to Canadian dollars and it's about $9.1 million.
That is for the retrofit of the Cat, so to get the Cat ready for this season, he had to advance that money to secure that project. The vessel was hauled from Philadelphia down to the Carolinas to get that work done at a dock there. That had to be done when it had to be done. Mark invoiced us, and we made that payment so he could get this thing signed off and ready to move.
Really, at the end of the day, the overall allotment we've given for this deal is what it is. We talk about the interest of Nova Scotians and what they're concerned about. I would never think at any point that, in the grand scheme of the Nova Scotia ferry conversation, Nova Scotians would be concerned about which fiscal year one of the allotments was paid out in. At no point was there any effort on our part to put it in the previous fiscal year. That's when he invoiced us. That's when we paid.
Clearly, we wouldn't be fooling anyone if we suggested that there wasn't a serious push on timeline, just generally with the Yarmouth ferry, the Nova Scotia ferry service in the run from Yarmouth to Portland. We would have announced the vessel months earlier had we had that opportunity, and had all this retrofit done at the earliest possible opportunity. Then we wouldn't be having this discussion about the fiscal year end and how this impacted our decisions in the budget.
I can tell the member unequivocally that that was never part of our motivation. We paid the bills that we agreed to. Mark's moving this vessel. It's down getting that retrofit now. That's where we are.
Obviously the $10.2 million for the operating season is reflected in this budget because that's what we'll pay out in 2016-17.
MR. HOUSTON: The amount that was booked in last fiscal year was $13.1 million. I know $9-point-something million of that was to do with the retrofit, and the rest was presumably some kind of start-up costs. What were the other start-up costs that make up the $13 million?
MR. MACLELLAN: The remaining $4 million were in these areas: the delivery of the vessel, vessel certification, computer equipment, the promotional system, and the reservation system getting done, as well as the work that we had to do at the dock.
MR. HOUSTON: The reservation system and the computer system - can you just shed a bit more light on how much they are, what those cost?
MR. MACLELLAN: The line item is computer equipment, and it's $80,000. When I saw "computer equipment" - I'm just going off the fly here - I included that as reservation system. Obviously, they have their own built-in reservation system, but I just included that as part of computer equipment.
MR. HOUSTON: The bulk of the $13.1 million has to do with the actual vessel, I guess. Did I hear at one point that that's - we are obviously paying that to fix up a U.S. Navy boat. Does that come off future lease payments?
MR. MACLELLAN: It does. That investment in the vessel is in lieu of two years of charter payments. Doing the easy math, that's about $4.5 million per year, which would be the charter payment that we forego because we're making the one-time injection of $9 million in the vessel to have it ready for the season.
MR. HOUSTON: Would it be just the $9.1 million that is in lieu of charter payments, or would it be closer to the $13 million?
MR. MACLELLAN: Just the $9.1 million.
MR. HOUSTON: I believe charter payments are probably an annual event - they are. Okay. So the $10.2 million that's in the budget this year - would it be fair to say that the actual cost is $10.2 million plus $4.5 million, which would be the charter amount that should have been or is rightly associated with this year, it just happens to be prepaid? Or would you say that this $10.2 million - is it fairer to say that the operating element of that is closer to $6 million and the rest would be the charter payment? I wonder if the actual cost per year is really closer to $15 million, almost, as opposed to $10.2 million.
MR. MACLELLAN: Yes, essentially that's it - the number that we've allocated for Bay Ferries for the first two years of this contract. By way of that, we've got two years of charter payment that goes in lieu to do the retrofit to the vessel. Whatever way you slice it, that aggregate number is for the first two years of the agreement. You've got the start-up that we're discussing now, and then those two years of operational payments. You can really total it up in any way you like. At the end of the day, the start-up payments are what they are, as we discussed. Then you have the operational, which is $10 million, and then next year I think it's in the range of $9.5 million.
Start-up is out of the way, which was already allocated by way of the budget, then the $10.2 million for this year, and then we move in the next year.
MR. HOUSTON: Thank you. I guess what I'm struggling with is that the start-up isn't really a start-up. It's actually a prepayment of charter fees, which are going to accumulate year after year after year. It just so happens that for the first two years they said, pay them now and we'll give you some credit against the work that has been done.
I know in our caucus we've used some rough rule of thumb, that it's a 10-year contract and it's $10 million a year, so it's a $100 million thing. But we were probably undershooting that. If the charter fees are a few million dollars a year, too, if they are $3 million or $4 million a year, and you times that by 10, then maybe we would have been better off to not take $10 million and times it by 10. Maybe we would have been better off to take $13 million or $14 million a year and times it by 10 for what a rough rule of thumb might be.
I'm just wondering if a better representation to taxpayers might be $33 million for the first two years. That is pretty much all recurring. At one point I thought, well, maybe the $9 million retrofit is not recurring, but that wasn't a good way to look at it, because it's in lieu of charter fees, which are recurring.
That bothers me. To be honest, it bothers me that what we have in the budget for $10 million this year - $10.2 million - is not a fair representation. The actual cost for this year would be $10 million plus a charter fee. It so happens that we paid the charter fee already, but that doesn't mean that it's not an actual cost associated with this year.
I don't know if the minister can maybe respond to that.
MR. MACLELLAN: I would respectfully disagree with that. The member talked about how he would represent that to the public. He has his opportunities to do that, and I'm sure he will. But from my perspective, these are the true reflective costs.
We are forgoing the charter fee to put $9 million upfront into the retrofit. That is spent on the vessel. If the member wants to talk about how if we didn't do that, we would be spending it on the charter fee, that is the case, but that's not what's happening. What's happening is we're spending $9 million upfront, which has been allocated for the vessel.
The second part of that - again, talking about doing the math and saying it's this much over 10 years - to me, this very exercise, this particular component, stresses the point that we've been trying to make. This is a 10-year agreement and relationship with Mark MacDonald. There's nothing fixed, in terms of the financial realities of the relationship with Bay Ferries and this vessel, past two years. It's $10.2 million operating this year, and it's $9.5 million operating next year. Then our obligation in terms of the fees that we pay - we begin a new conversation.
We go back to Mark after that second year, and we look at what the aspects are. Of course, the charter fee for that vessel is one aspect of it, but what are the other operational components? No one here in this room - not Mark MacDonald, not the member opposite, none of us - can predict what any of those things are going to be.
Again, that's back to the market performance. We've set this on 60,000 passengers because that's what we've just seen. The revenue will be reflected in the market performance. I know that everyone likes to look at it and say, what if we don't meet 60,000? Well, that's obviously a discussion that we're going to have to have. But what if we eclipse that? What if we have a tremendous season in 2016-17? Then a conversation begins anew again.
The point is, we've committed to the Nova Scotia ferry for 10 years - no question about it. There's no way anyone can predict what those financial realities are until we get into that season. We are starting at a point of 60,000 passengers, and we hope and assume that will be the baseline. But what we really want is 70,000, 80,000, and 90,000. We want it to grow.
We want that. This caucus wants that. Nova Scotians want that. Mark MacDonald wants that. That's the point we have to get to, and that's the place we have to be.
After the first two years of operation, the slate is clean. Where we're at on the vessel, where we're at on the operations, where we're at on the market performance, the marketing, the administration, the relationship with Portland - they're all back on the table. This is a two-year deal with respect to the funding. Set aside the $10.2 million and the $9.5 million for operational in 2016-17 and the next year, and then we're into the costs associated with getting that vessel, which is the preferred vessel for us.
That's the relationship. We are hard and fast on that. This is how we broke it down during the announcement. This is how we broke it down in every conversation I've had with media. I've been out in front of them talking about these very things.
If the member sees it differently, that's fine. With respect, that's the way he can see that. But from my perspective, what he just said hammers home the point that after two years of a relationship, we'll know where the market is, and we'll know where we're headed. Then we have to have a conversation with Bay Ferries, with Nova Scotians, and with our tourism operators about what the future looks like and how we make the financial arrangement from that point on.
MR. HOUSTON: I don't believe all bets are completely off after two years. You have a 10-year contract, and you're going to have to renegotiate a deal with that specific operator. If you don't, there's going to be a cost, and that cost is going to be three years' management fees; we don't know what they are, but presumably they're in the millions, I would say - just my guess. It's not really all bets are off, and I hope the minister understands why Nova Scotians are curious.
It's not just me. I hear from many Nova Scotians who say, have a 10-year contract; we would be led to believe that it really only covers two years, but it's a 10-year contract. Don't know what the vessel would be after two years, maybe four.
What is the arrangement with the U.S. Navy? Could the U.S. Navy terminate the use of the Cat vessel after year two? Or is that exclusively in the hands of Bay Ferries up to year four?
MR. MACLELLAN: To answer the questions, that's in the hands of Bay Ferries; that's not the military. We do have that assurance that that is our option from the Nova Scotia ferry side.
This is probably where the member and I would fundamentally disagree. This is where I see the value in the relationship with Mark MacDonald. We stand behind the fact that the financial relationship, from year three on, has to be negotiated basically every year, but the fact that we have this operator in place gives me great comfort, quite frankly.
I know where the member is at with Bay Ferries, and I'm sure people he is hearing from, but I can tell you that I've got a long list of letters from people I'm hearing from who not only support the service and what it means for Nova Scotia but support that particular operator.
Back to the virtues of what I see in Mark MacDonald, I can tell you that when it gets into year three and year four, I don't believe we have a shark that we're dealing with. I believe we have a partner. I believe Mark is going to play a role in getting the best in the best interest of Nova Scotians, getting the best vessel, the best relationship, and the lowest possible subsidy, and of course, he's going to have his fee built in there.
I would tell the member too - again, not getting into their contract. It was long before his time, and it was long before mine. They did have the same contingencies in the contract that they signed with the Progressive Conservative Government, that should that relationship be severed by anybody - not just their government, but by the next government - there would be a financial payout. That's pretty standard. Again, I will say this for the record, and the member can use it any way he wishes, but I believe that Mark will be our partner because he wants to make this work.
Two years of market performance, all those indicators that will show the level of performance and success - the member will know, I will know, all Nova Scotians will know. That's at that critical point where we decide, okay, so what happens next? Where are we with the vessel, where are we with the operations, where are we with the relationship with Portland, how is that working, how are the terminals, how are our tourism operations, what is the feedback they are hearing? All of these things are starting over, and again, the 10 years with Mark MacDonald gives us assurances.
I will say this. I have said it before. I believe we've got the best operator we have access to, and I believe he's in it for the right reasons. That is why I am so confident in the 10-year agreement, but again, the financial components of this deal are back on the table at the end of year two.
MR. HOUSTON: I guess the issue I have on that point is that they're not so much back on the table. I mean, I look at the contract, and it's pretty clear that the agreement is for 10 years. It's also very clear that during every single year of the agreement the province is going to pay the cash deficiency for the year and is going to pay the management fee.
To me, that's pretty black and white. That doesn't seem like there's a lot of "let's have a discussion about where we go from here." That seems like an operator is going to come to the province and say, here is the boat I'm using, and here is how much you have to pay. Where is the province, where is the taxpayer protected in that? I guess that's my concern. Maybe we will disagree on that for right now.
I am curious about the winter work element. At the moment, this agreement covers a summer sailing season. It doesn't really speak to what happens in the winter. If Bay Ferries were to take this vessel down to their route in Trinidad and Tobago, as I think the minister said, for the winter and make a pile of money on it down there, and meanwhile, the province has paid all the costs of the thing, is there anything in the contract that would allow the province to participate in the upside that may come from using this vessel in the winter?
MR. MACLELLAN: There are some provisions in the contract related to that. It basically stipulates that any benefit that would be derived would be impacted by way of the provincial subsidy. In other words, we do have a vested interest in profit coming from the utilization of this vessel. Of course, we would have to agree to the relationship, so whatever Bay Ferries would be doing vis-à-vis winter work, we would have to agree to it, and of course, the U.S. Navy would as well. But then there is a provision in there that we would have a vested interest in how those revenues would impact us. Of course, that would mean a lower subsidy. That's obviously what we would be looking for, and that would be part of that agreement should Bay Ferries utilize the Cat for winter work.
MR. HOUSTON: I would just ask if the minister can point me to the clauses that are being relied upon for that assessment.
After that I'll pass it to my colleague, the member for Kings North.
MR. MACLELLAN: There are a number of clauses related to that particular question. The two that the member would be interested in are under 4.0, BFL Covenants; it would be subclauses (m) and (n).
MR. HOUSTON: Thank you.
MR. CHAIRMAN: The honourable member for Kings North.
MR. JOHN LOHR: It's a pleasure to ask the Minister of TIR a few questions. I want to ask questions local to Kings North or of concern to Kings North.
One of the concerns we have is that a lot of my constituents drive Highway No. 101. I know there is a survey under way, and you're looking at toll roads to some extent. I brought up the section through Windsor-Falmouth in the House before, which is quite a dangerous section, in terms of just minor improvements to improve safety in that section. We did ask in the past for Jersey barriers.
I just wonder if you would comment, Mr. Minister, on what things have been done - just small things, I know - to improve safety through that Windsor-Falmouth corridor.
MR. MACLELLAN: I always want to remind members about in that area - because I know it has been a particular concern, and it has always been a request, the Jersey barriers at the centre line. We've checked that on a number of occasions, but from an engineering perspective, it's just not possible based on the geography through that area.
As we've had many conversations in the last couple of days about the impact and the safety aspects of twinning, separating the oncoming traffic would be a critical thing. If we could do that, we would, but because of that terrain we just can't do that.
Some of the short-term efforts that we've made on this particular corridor have been automated speed radar, increased size of the signage, centre-line rumble strips, and also centre-line reflective paint to give an indication at night of where the centre line is. Those have been some of the short-term measures that we've taken on that particular section of Highway No. 101.
MR. LOHR: I do appreciate those changes, and I drive that road almost every day, so I see those changes.
There's one more change that I would like to request that you make right now. Through that section, even where there is rumble strip and just two-way traffic - not three lanes, but two-way traffic - there are still two or three passing lanes there. It's simply a matter of, when you paint the lines again, to paint out the passing lanes. They are right underneath the intersections, the Falmouth intersection and the most northerly Windsor intersection. There are actually passing lanes there, right on the rumble strip.
I've never seen anybody pass there. Nobody in their right mind would pass there. But they're still there. It could be painted out. It's just a simple change, and I think that the value of painting it out - besides the fact that I've never seen anybody pass there - would be that it gives somebody who doesn't know the road a false sense of safety. If they see a passing lane, they think, oh, there's a spot I can pass. But in reality, it's very fast head-on traffic.
So I would like to request in your painting plan this summer that you paint out any oncoming traffic passing lanes in that Windsor-Falmouth corridor. It's only a couple of minutes to wait, and you've got good passing lanes on either side of it, so it shouldn't be necessary.
MR. MACLELLAN: Obviously if that's something we can do that makes sense to the extent that the member just described, then we'll take a look at that. We'll get word down to our folks in that area to look at just that.
Just for when the member gets back up, a couple of points of clarification: he said if they were painted, people would pass there, or they wouldn't, because it's too dangerous? You're saying they won't do it now?
MR. LOHR: I've never seen anybody passing there, but they're there.
MR. MACLELLAN: Okay, so the lanes are there. Secondly, have you gotten any feedback from our local TIR staff about that, or is this the first time you've brought it? Is there a reason they said we couldn't do it, or are you just bringing it to our attention today? If you could tell me.
MR. LOHR: I think I brought it up a year ago here, but I'm not sure that you really understood what I was saying. I think you thought I was referring to passing lanes on either side of that section, so it hasn't been - I have brought it up before, but I'm not sure what I was saying was really understood. This is in oncoming two-way traffic right underneath two intersections; the lines are still there to allow passing.
MR. MACLELLAN: I'll certainly buy that. It's not a stretch for me to not understand what somebody is saying, so I'll take your word for it.
In all seriousness, the reason why I asked that is just that you have never been given an indication from the local engineers or local staff there, whether it be Steve or anyone else, that it couldn't be done? That's my question. I think the member is stating that he hasn't. That's good. We'll check that out.
MR. LOHR: I think we were angling for Jersey barriers all along. This is certainly less than a Jersey barrier. But I do think that the small improvements you've made - the radar sign signals to people coming that, oh, I'd better check my speed - are fairly effective. I do appreciate the small changes. I realize it's a massively big question of how to twin that whole area, and we do appreciate that. I think that this further small change could be made this year.
I would like to discuss another issue that is not just particular to my constituency, but is something called Z-class roads. I know the minister is aware of them. We have one community just north of Kentville called Meadowview. It has been there for 50 years or more, and it was immediately adjacent to the town dump. The town dump has been moved, fortunately. The roads that are there - nobody has really ever paid a lot of attention to Meadowview or tried to fix it up. There's one road in particular, Mr. Minister, called Tupper Road. It's about 300 metres long. (Interruptions)
MR. CHAIRMAN: Order, please. I know we're getting near the end here. The member for Kings North has the floor.
MR. LOHR: Tupper Road has about 12 or 13 homes on it, and the total assessment would be over $1 million for those 12 or 13 roads. It's a 300-metre-long road. It's a shortcut to the hospital. It's a Z-class road, a dirt road. There's no ditching, but it's very sandy there. That's why that location was chosen for the town dump years and years and years ago: it was a big sand hill.
Your department, which we really appreciate, plows those Z-class roads in the winter, and we struggle to get one grading of those Z-class roads in the summer. I can understand why you shouldn't be doing anything to Z-class roads. I understand that. But this Z-class road goes way back in history, and these people have felt like second-class citizens some of the time.
The reality is that they do pay the same taxes as everyone else; they just have these land-ownership issues where each resident owns a small piece of this road. I know you can't tell me right now that you're going to fix Z-class Tupper Road, but what I would like to ask is, is it possible that we could have a committee struck for Z-class roads, to look at them and try to find some way to deal with them, rather than us simply being told that the department is going to not service Z-class roads anymore? I don't think it's a suitable solution . . .
MR. CHAIRMAN: Order, please. Time has elapsed for today's session of Committee of the Whole on Supply.
The honourable Government House Leader.
HON. MICHEL SAMSON: I move that the committee do now rise and report to the House.
MR. CHAIRMAN: Is it agreed?
It is agreed.
Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
[The committee adjourned at 3:22 p.m.]