HALIFAX, TUESDAY, APRIL 14, 2015
COMMITTEE OF THE WHOLE ON SUPPLY
Ms. Margaret Miller
MADAM CHAIRMAN: The Committee of the Whole on Supply will come to order.
The honourable Government House Leader.
HON. MICHEL SAMSON: Madam Chairman, would you please call Resolution E2.
Resolution E2 - Resolved, that a sum not exceeding $114,143,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Business, pursuant to the Estimate.
MADAM CHAIRMAN: I now invite the Minister of Business to make some opening comments and if he wishes, to please introduce his staff to members of this committee.
HON. MARK FUREY: Madam Chairman, I appreciate the opportunity to stand in the House today to present the first budget for the new Department of Business. The budget and department signal an entirely new way of doing economic development in Nova Scotia.
Before I begin, I would like to introduce those who are joining me today. Bernie Miller is the Deputy Minister of Priorities and Planning and the acting deputy minister of the new department. As you know, earlier today the Premier announced the appointment of Catherine Woodman as the new Deputy Minister of Business and she will commence her official duties on the 25th of May. Also with me today is Darlene O'Neill. Darlene is with the Department of Finance and Treasury Board and is the director of Financial Services for the Department of Business.
I would also like to introduce representatives from our agencies and Crown Corporations who are here with us today and they are in the gallery. Laurel Broten is the president and CEO of Nova Scotia Business Inc.; Patrick Sullivan is the CEO of Tourism Nova Scotia; Stephen Duff is the president and CEO of Innovacorp; Shelly Parsons is the controller with Trade Centre Limited; Colin MacLean is the CEO of Waterfront Development Corporation Limited. They are also joined by members of their staff, should we require their subject matter expertise in the discussions today.
Nova Scotia has the dubious distinction of having the worst-performing economy in Canada for the last 20 years. We have continued to spend more, with no improvement in economic growth. Report after report from expert panels and commissions echo the same themes. Donald Savoie's report says there are too many people running around the province saying they have a mandate from government to do economic development; while all were well-intentioned, it wasn't working.
Tom Traves concluded that we need to clarify the roles of the various departments and agencies, conduct continuous evaluation and develop appropriate governance models. Of course The Report of the Nova Scotia Commission on Building Our New Economy, the Ivany report, as it's known, said that Nova Scotia needs nothing short of transformation with leadership from government and changes in governance structure. The report resonated with Nova Scotians from across the province and in all walks of life. It did so because Nova Scotians know the time for change has come.
We have heard it over and over again in the economic development reports dating back dozens of years, from leaders in all aspects of business and from all Nova Scotians: if we want a different future, if we want to thrive and just not survive, we have to start doing things very differently. It's now or never and we have to start that right now.
For economic growth the commission also said that the game changer was not in new and bigger programs but in greater integration and better coordination. Last week we announced the bold new approach to business and social enterprise growth in this province. For too many years cheques have been written to keep businesses alive and it hasn't worked. If businesses can't survive on their own, we have to ask the tough questions - is it really a good business model? Can it compete or is it time to move on to something that can succeed?
Nova Scotians and business leaders have challenged government to ask itself the tough questions, to take bold action that will improve Nova Scotia's failing economy. To get there, our focus has to change. What if we invest in expanding our trade and reaching more customers in foreign markets? What if we focus on supporting start-ups? What if there were more venture capital partnerships? What if we go down a new path with the private sector leading the way?
The answer - we'll be in a very different and much better place than we are today. Transformative change like this has to be supported by major structural change. Madam Chairman, the One Nova Scotia Commission recommended one very specific change and I quote, "We believe there is significant value in re-organizing business-related programming within a new department with a new minister and a crystal clear mandate to support all aspects of business expansion in Nova Scotia. We believe this clarity should extend to the actual title - the Minister of Business."
Madam Chairman, we have heeded that advice. Last Thursday's budget created a new Department of Business with one crystal clear objective, to make Nova Scotia the most competitive and business-friendly environment for economic growth in Canada.
Government has a role to play to clear the way for private sector, to maintain a policy and regulatory environment that supports and attracts business, to remove obstacles, red tape and disincentives. That is the purpose of the Department of Business, to provide leadership and direction, to align policies and programs and to focus on enabling growth and innovation. The department will be small, efficient and responsive.
Before I go into detail about what the new department will do, Madam Chairman, I would first like to focus on what it will not do. It will not deliver front-line programs and services; it will not manage programs, loan portfolios or funding to businesses as has been done in the past. These functions will be put in the hands of the appropriate arm's-length, private sector-led agencies and Crown Corporations.
As you know, Madam Chairman, the new Department of Business has resulted in the elimination of the former Department of Economic and Rural Development and Tourism. Through this move we reduced the size of the department and eliminated many positions. I want to be clear that this is in no way a reflection on the work of those individuals. There were many good people in ERDT doing challenging work and I want to acknowledge and thank them for their service to Nova Scotia and the commitment they made to driving the Nova Scotia economy. The changes we had to make were the result of a structure and strategy problem, not a people problem.
Madam Chairman, I'll now give you a quick overview of some of the structural changes so members know where programs have gone. Programs for student employment and workforce development, such as the new Graduate to Opportunity, Strategic Cooperative Education Incentive, and Workplace Innovation and Productivity Skills Incentive, known as WIPSI, are moved to the Department of Labour and Advanced Education. Programs that support regional economic and community development, such as funding for the new Regional Enterprise Networks, or RENs, C@P sites have been moved to the Department of Municipal Affairs and Communities, Culture and Heritage.
Trade Policy and International Commerce has been moved to Intergovernmental Affairs. The Aboriginal Community Development Fund moved to the Office of Aboriginal Affairs. Responsibility for the Yarmouth ferry moved to Transportation and Infrastructure Renewal.
Programs that support innovation and start-ups, such as the popular Productivity and Innovation Voucher Program and Early Stage Commercialization Fund, are moved to Innovacorp, along with the mandate for all equity investment and Direct to Business Support moved to Nova Scotia Business Inc.; this includes five trade programs that will be consolidated into one streamlined international commerce program, the Small Business Development Program, and oversight of the credit union Small Business Loan Program.
NSBI will also now have the mandate for Film and Creative Industries. As part of NSBI, Film and Creative Industries will be together with the rest of the business sector.
In addition to the new $6 million Creative Economy Fund to be developed in consultation with industry, businesses in the film and creative industries will have access to a wide range of supports that will enable them to focus on international exports, expansion and growth. They will also be able to access the new Invest Nova Scotia Fund, which I will speak to in a few moments.
Another important structure change, Madam Chairman, is that the Nova Scotia Tourism Agency is now a private sector-led Crown Corporation known as Tourism Nova Scotia. Tourism Nova Scotia will work with industry to double tourism revenues to $4 billion annually in 10 years, aligned here with a recommendation from the Ivany report. As a Crown Corporation, the board will have decision-making power and control over their budget, allowing them to respond more swiftly to market conditions and opportunities.
Finally we announced our plan to rationalize our non-resource land holdings by creating a flexible and new entity with a mandate to: sell surplus land and return it to productive private sector use; to keep land that could support sector development and innovation or incubation sites; manage land that is contaminated or has environmental issues and challenges. This new entity will work with the private sector.
We've talked about the things that the new Department of Business won't directly do. Many are asking - what will we do? The Department of Business is an entirely new entity with a new mandate, representing a fresh approach to economic growth. Its mandate is to lead and align all government efforts to expand business and social enterprise growth in Nova Scotia. The new department has a budget of $114 million and will have 36 staff in total. This includes $59.9 million in funding transfers to Crown Corporations and agencies including NSBI, Innovacorp, Tourism Nova Scotia, Trade Centre Limited and Waterfront Development Corporation Limited.
The Department of Business must continue some previous work until it winds down. This includes $37 million for the Jobs Fund to manage prior commitments. It also includes $5.7 million for ongoing commitments under the former Capital Investment Incentive Program. This leaves an operating budget for the new department of approximately $54.2 million.
The new department will achieve its mandate by focusing work in three core areas: business strategy and planning; strategic projects and investment; and operational leadership coordination and alignment. The department will also house a new Office of Regulatory and Service Effectiveness, which will implement the regulatory recommendations in the Nova Scotia Tax and Regulatory Review.
Through this new office we will aggressively pursue regulatory reform to reduce red tape, to streamline services and to harmonize regulations with New Brunswick. We will also remove obstacles and increase regulatory predictability, something businesses have told us is essential in allowing them to make investments in our region.
I mentioned earlier the department will focus its work in three key areas. The first objective is strategy and planning to improve the quality of the overall business environment in Nova Scotia. A large part of this work will be related to the regulatory reform. It will also involve developing and implementing a private sector growth plan in support of education and research, entrepreneurship and start-ups, and key sector development. This plan will be developed in collaboration with other government departments, other government agencies and levels of government, universities and the Nova Scotia Community College, as well as the private sector.
The second key area of work is strategic projects and investment. The new department will promote economic and cluster development in areas where Nova Scotia has a competitive advantage. It will ensure that attention and resources are focused on those sectors that offer the greatest opportunities for economic growth in Nova Scotia. This will include establishing entrepreneur-led centres for business incubation and innovation, advancing research and development partnership between business and post-secondary institutions, and making venture capital more available.
As an example, we can look at the purchase of the former Canadian Coast Guard land on the Dartmouth waterfront to create an ocean innovation centre. The global market for ocean-related goods and services is valued at $3 trillion and Nova Scotia, with our connection to the ocean and existing infrastructure, has a significant competitive advantage. Government, industry and post-secondary institutions will collaborate to develop this new centre where ocean technology research and private sector marine businesses can work together to drive more investment, commercialization, exports and growth for this key sector.
We will also work with the new Invest Nova Scotia Board. This private sector-led board will fund projects with broad regional and sectoral benefits. This budget initially includes $2 million to start work in the upcoming year.
The third area of work is operational leadership, coordination and alignment. The new department will lead in coordinating and aligning the work of the many provincial departments, Crown corporations and agencies with a mandate for economic development in Nova Scotia around common agenda for growth. The department will also build stronger relationships with the private sector and the various other organizations, associations and levels of government involved in economic development. Madam Chairman, we need to work together more efficiently to adopt a team Nova Scotia approach that will make the best use of our collective resources.
The work of the Department of Business begins immediately. We will be meeting with key stakeholder groups to talk about the department and its mandate and how we will work together to grow our Nova Scotia economy. The programs that moved to other departments and agencies must be supported through the transfer. Day-to-day work and key files from the former Department of Economic and Rural Development and Tourism will be reassigned or closed out.
We must also hire staff, Madam Chairman. The Department of Business has a core staff of 15 today, which will grow to 18 when we are fully staffed. As I indicated earlier, a new deputy minister was announced today. Another eight more staff will be assigned, seconded, or hired for the work of the Office of Regulatory and Service Effectiveness, as well as the Chief Regulatory Officer to be hired in the next short while.
There is also work required to update various Acts and regulations. We have set up a detailed transition process and teams to carry out this work in an orderly manner. During this time, Madam Chairman, we may not be able to answer every question. We know there will be issues that arise and we know there will be gaps to fill. We commit to working to address those as quickly as possible.
Again, Madam Chairman, I want to emphasize that we are operating now, as we speak, but the new Department of Business, along with the Office of Regulatory and Service Effectiveness, will be fully operational by July 1st. At that point the department will be entirely forward-focused, pursuing its own strategic goals, plans and projects in a new way, with better outcomes for all Nova Scotians.
Madam Chairman, I am excited to be part of the Department of Business and to work with the outstanding group of employees who we find in that environment. We have huge potential and I believe, collectively, the opportunity to partner and collaborate for a brighter future for Nova Scotia.
After two decades of slow economic growth, our province hovered on the verge of significant prolonged decline in our standard of living, our population and in the quality of our public services. With collaboration and concerted action, we can reverse this decline. We have listened to the advice of experts. We have listened to business leaders and we've listened to Nova Scotians. They believe we can't afford to wait any longer. We cannot continue to do what we have been doing for decades.
Madam Chairman, quite simply the time for change is now. I believe that the creation of the Department of Business and its related structural change is the absolute right step at this time for Nova Scotia. I ask the honourable members of this House, following appropriate discussions, to support this inaugural budget. At this time I welcome questions from my colleagues on the opposite side of the House.
MADAM CHAIRMAN: The honourable member for Kings North.
MR. JOHN LOHR: I would like to begin by thanking the minister for those remarks and noting that yes, this is the inaugural moment of this Department of Business. I would like to echo his comments in our appreciation for the ERDT staff who had been let go and realize that it is a major upset in the lives of many individuals and we appreciate the work they've done.
Now we begin with a new department and a new budget and there are many questions which arise from that. I realize that possibly the minister cannot answer them all but certainly we will be looking for a number of answers to our questions. I hope I can say that some of the comments the minister has made already, some of it sounds a little bit like boilerplate but I hope we will see positive change going forward in the business climate of Nova Scotia and that we will be able to create more business opportunities for Nova Scotians.
To begin, when we look at the budget on Page 4.5 of the document here, my first question is, there has been a substantial increase in the costing of senior staff and I believe there are six full-time FTEs there. I just wonder if the minister could explain the logic of that increase in senior staff funding.
MR. FUREY: Madam Chairman, I wonder if may ask for clarification. Are we talking about the senior management component, on Page 4.3, or are we talking about the Regulatory and Service Effectiveness office?
The positions the member has referenced - a total a salary of $940,000 - are six positions: a deputy, a corporate strategist within that office. They are not operational, they are excluded classifications and they will provide the leadership and oversight to the new department.
MR. LOHR: Thank you, Mr. Minister. I notice on the previous page, on Page 4.2, that the total funded staff for the department is 36. I wonder if the minister could provide an outline of where those 36 staff will be located in the province.
MR. FUREY: Madam Chairman, to respond to the member's question, the 26 positions within the Department of Business will be located in Halifax - I'm sorry, 28 positions - and the eight regulatory positions, we have not yet determined where they will be located. That is the joint announcement between the Premier of the Province of New Brunswick and the Premier of Nova Scotia, that will run that Regulatory and Service Effectiveness Office and we have not yet determined where they will be based.
MR. LOHR: The regulatory service is going to run in conjunction with the Province of New Brunswick? Is that what I hear you saying? We're going to share that service with New Brunswick - is that correct?
MR. FUREY: The Premier had made a joint announcement with Premier Gallant the end of March and the objective there is to drive a regional economic initiative that benefits not only Nova Scotia but our partners in New Brunswick.
MR. LOHR: If I turn the page on the document, the eight full-funded staff FTEs of the Regulatory and Service Effectiveness Office, that's what you're talking about, that will be shared with New Brunswick?
MR. FUREY: The eight positions are actually budgeted within our budget. New Brunswick will be assigning their own FTEs to that joint initiative.
MR. LOHR: I realize you may not be able to comment on New Brunswick but presumably if Nova Scotia is putting $1.47 million into eight funded staff then New Brunswick would be putting something similar in, so both provinces would be equally funding this new role?
MR. FUREY: The agreement between the two provinces is we will staff the office to achieve the intended outcomes. I can't speak for the actual FTEs that the Province of New Brunswick has allotted for that initiative at this point.
MR. LOHR: Yes. I'm moving in a different direction in my questions but I would like to continue to just drill down in that. Can you shed some light on what the role of that Regulatory and Service Effectiveness Office will be and maybe explain how it makes sense to share that with New Brunswick when clearly we do have, although similar, I'm sure also different regulatory environments?
MR. FUREY: The arrangement there is captured in an MOU that the two Premiers had signed in late March. Really, the objective there is to find program modernization to harmonize regulations between the two provinces and to really focus on red tape reduction, to find efficiencies that enhance the economic opportunities not only between the two provinces but to start that methodology throughout Atlantic Canada.
MR. LOHR: I'd like to thank the minister for that answer. I guess I didn't see that in this. I presume this Regulatory and Service Effectiveness Office would be focusing mainly on the regulatory and service effectiveness environment within Nova Scotia but you're saying that office is going to work in conjunction with New Brunswick and try to deal with interprovincial issues? Is that what you're saying?
MR. FUREY: The objective there is to reduce the impediments we face as a province, to enhance red tape reduction in Nova Scotia and, as I indicated earlier, to harmonize regulation and legislation between the two provinces.
MR. LOHR: So will the new branch or the new part of your department also be looking at circumstances where there are, for instance, like with Ben's Bakery, where in New Brunswick they are offering payroll rebates to attract a business out of Nova Scotia, will it be looking at situations like that?
MR. FUREY: The purpose of the office, recognizing the point of the member's question, there are four key areas or objectives: streamline services, of course; enhance services between the two provinces; to remove the barriers that prohibit trade and economic development; and to create a climate that fosters that economic environment that allows these opportunities to take place.
MR. LOHR: Having been a farmer in my previous career and done a fair bit of trade, by times, with Newfoundland and Labrador, I'm wondering if there is any effort or any intention in this office to work with - and actually I do believe Newfoundland and Labrador is an important trade partner with us - if there's any intention to work with the Province of Newfoundland and Labrador in this?
MR. FUREY: In January at the Council of Atlantic Premiers there was an agreement to eliminate trade barriers in Atlantic Canada. The MOU and the partnership between New Brunswick and Nova Scotia is the first step in that initiative. The objective obviously would be to include P.E.I. and Newfoundland and Labrador as we go forward.
MR. LOHR: I would like to just revert to the number of staff. You said - I believe the document says a total of 36 funded staff, of which six of those 36 staff are senior management, is that correct?
MR. FUREY: Yes, that's correct. Those six senior staff are in the Department of Business.
MR. LOHR: So if I can just summarize the numbers, you've told me then there are eight staff who are in a regulatory - and maybe I haven't got that really totally straight in my mind - which you said you do not know where they will be located but we'll be doing it in co-operation with New Brunswick. There are eight staff in Regulatory and Service Effectiveness, so 36 minus eight is 28 and then six of those 28 staff are senior management. I'm just wondering about the logic of that, Mr. Minister. If there are six senior management staff for what looks to be 22 full-time equivalents, I'm just wondering if that ratio of senior management to staff is really not quite senior management heavy.
MR. FUREY: To the member's question, there are six positions in the senior management team. There's the managing director, two corporate strategists, administrative support, a senior policy advisor and there will be a receptionist as part of that senior management team as well.
MR. LOHR: Thank you. I'm just wondering, I know that in your opening remarks, Mr. Minister, you spent a fair bit of time telling us where different components of ERDT and different responsibilities would now reside. I'm just wondering if you could tell us what you see your department carrying on that ERDT carried on.
MR. FUREY: Madam Chairman, if I may go back to the member's previous question for a little bit of clarity first, that senior management team is intended to support the entire department; it's not restricted to that office itself, and at the same time it is intended to provide leadership in the alignment of economic development and initiatives across government so the alignment of those departments will become an important part of that group, as we move forward in the Department of Business.
To the member's question specific to ongoing responsibilities from ERDT, obviously there are strategic projects in the development delivery of project management and ongoing oversight of those strategic projects is important. Invest Nova Scotia, obviously, is the liaison with the department and continuing with that relationship. That's going to be an important part of the continuation of services. Industrial regional benefits, and to build on relationships and collaborate exploring opportunities with industrial regional benefits, will be important and the temporary delivery of management of programs until the Crown Corporations are transitioned or outsourced to ensure that there is continuity in the short-term, to either to continue in placing those responsibilities or, in some cases closing files.
MR. LOHR: Okay, I'm just wondering - what Crown Corporations will the Department of Business continue to have responsibility for?
MR. FUREY: To the member's question, there are five Crown Corporations that will be retained under the ministry of the department but certainly arm's length. Nova Scotia Business Inc. will continue to function as a Crown Corporation; Tourism Nova Scotia, as I indicated earlier in my comments, is now a stand-alone Crown Corporation; Nova Scotia Innovacorp, which the member is probably familiar with; the Waterfront Development Corporation Limited; and I spoke earlier about the Coast Guard property that falls under their responsibility, the new land component; and of course the Trade Centre Limited are the five Crown Corporations that my department will have oversight of.
MR. LOHR: If Invest Nova Scotia was a Crown Corporation maybe you could explain to me the relationship between your department and Invest Nova Scotia.
MR. FUREY: Invest Nova Scotia is independent of government. The former Jobs Fund was transitioned to Invest Nova Scotia, totally independent of government. There's no Cabinet interference. It's a separate board. They make independent decisions that are intended to support sector development.
I believe they have a meeting scheduled this Friday - their board, and some regulatory framework to be finalized. In this budget we've just approved $2 million but I do want to emphasize that the old Jobs Fund no longer exists and that Invest Nova Scotia is that separate entity.
MR. LOHR: Just so I understand, I've been looking at the Crown Corporation reports which you mentioned, although I realize Tourism Nova Scotia just became a Crown Corporation, so if I think ahead to next year at this moment, which department will be looking at - presumably Invest Nova Scotia will still show up as a report in the budget deliberations for us to ask questions about - which department will have responsibility for Invest Nova Scotia?
MR. FUREY: The responsibility for Invest Nova Scotia will be with the Department of Business. They would be independently audited in the work they do over the course of the year, capturing the fiscal year period would be reported at the same time Crown Corporations are reported.
MR. LOHR: Just help me understand this, Invest Nova Scotia - I think I heard you say - was not a Crown Corporation and it is independent of government, can you let me know exactly what is Invest Nova Scotia then?
MR. FUREY: I thank the member for the question. I did a little bit of research earlier myself because, as the member knows, I am new in the role and quickly trying to catch up. I had gone to their website earlier and I will just read from the content on the website.
Invest Nova Scotia is actually a fund and it's controlled by an independent board as I mentioned earlier. It's made up of both business and community leaders and the board invests in projects that advance Nova Scotia's economy by providing economic development incentives for sector development and economic diversification, workforce skills for competitiveness, applied research and development of pilot projects.
So it's a separate fund, not a Crown Corporation but the reporting mechanism is aligned with Crown Corporations.
MR. LOHR: I believe I heard you say - correct me if I'm wrong - that there was $2 million for Invest Nova Scotia, I think I heard that a few minutes ago. Could you show me what line that shows up on?
MR. FUREY: The information that the member is looking for is found on Page 4.4 under Programs and Services in the 2015-16 Estimate; the Invest Nova Scotia Budget is rolled up into the $46.632 million entry.
MR. LOHR: Of that $46.632 million, $2 million would be Invest Nova Scotia's money. Can I ask the minister what the projected budget for Invest Nova Scotia is for this year - is it just $2 million or does it exceed $2 million? Where is the expectation in the budget that Invest Nova Scotia will eventually end up?
MR. FUREY: The allotment that we have provided for in the budget this fiscal year to get Invest Nova Scotia started and functional is that $2 million.
MR. LOHR: I realize I'm asking the minister to speculate but where do you see that budget heading in future years?
MR. FUREY: As I indicated, the budget is set at $2 million and aligned with the mandate of Invest Nova Scotia, based on provincial government priorities at the time, any additional requests for funding would have to come back through Cabinet based on criteria that meets the mandate of Invest Nova Scotia and obviously the availability of funding.
MR. LOHR: But presumably the vehicle for that funding would continue to be the Department of Business?
MR. FUREY: That's correct.
MR. LOHR: So if we can, again, circle around this whole question, Invest Nova Scotia is not a Crown Corporation, it is an independent board but in fact the funding for Invest Nova Scotia will be funnelled through the Department of Business. So, in fact, ultimately the Department of Business is responsible for the activities of Invest Nova Scotia. Correct?
MR. FUREY: The Invest Nova Scotia fund, for clarity, will not provide assistance to individual businesses. I just want to touch on the mandate for a moment. Instead it will focus on sector and regional economic diversification. Any future budgets would be determined based on experiences and outcomes that are achieved in due course or as they pursue their work.
MR. LOHR: Thank you, Mr. Minister. Previously in the House, I believe as recently as a week ago I think I asked the Minister of ERDT if human resources staff for Invest Nova Scotia would come out of the ERDT and the answer was yes. My question is, will the Department of Business provide human resources and staff for the Invest Nova Scotia board?
MR. FUREY: To answer the member's question, staff in the Department of Business would provide administrative support to Invest Nova Scotia, processing of requests that come through Invest Nova Scotia, but the board itself is independent of the department. We're really providing administrative support to Invest Nova Scotia.
MR. LOHR: I'm just wondering if the minister can shed light on how the $2 million will be spent by Invest Nova Scotia this year and what portion of that will be administrative costs for Invest Nova Scotia?
MR. FUREY: The $2 million is available to Invest Nova Scotia to support projects that are presented through or from Invest Nova Scotia. Little to none of that money would be used for administrative purposes.
MR. LOHR: I realize this would be speculative for me to ask this but can you shed any light on what sectors Invest Nova Scotia would be investing in and what sort of work they would do? I'm just curious.
MR. FUREY: Madam Chairman, to the member's question, there are a number of potential opportunities that sector initiatives could access Invest Nova Scotia. I mentioned earlier the purchase of the Canadian Coast Guard site and Waterfront Development Corporation. Ocean Technology is an example.
I also talked earlier about the alignment of economic development initiatives across government departments. The fund could be used to support any number of industries, sector initiatives - I'll use the wine industry as an example - multiple opportunities that could access those monies.
MR. LOHR: Would it be fair to say that the mandate or the exact role of Invest Nova Scotia has not really yet been articulated?
MR. FUREY: I'll just read the mandate of Invest Nova Scotia for the benefit of the member. I think it's important to recognize that Invest Nova Scotia differs from the Jobs Fund in that it will not provide assistance to individual businesses, instead focusing on sector and regional economic diversification; promising pilot projects, as I mentioned earlier; high opportunities in rural Nova Scotia, our traditional sectors; a competitiveness and trade promotion; and an economic infrastructure.
MR. LOHR: Earlier this year at an Economic Development Committee meeting, the then Deputy Minister of ERDT, Simon d'Entremont, when asked about the mandate of Invest Nova Scotia said something to the effect of it's this broad and the board of Invest Nova Scotia is sorting that out right now. I wonder if it's the intention of the new Minister of Business to allow the board to continue to sort its mandate out or will the Department of Business provide the mandate for Invest Nova Scotia - or do you see those comments in another light?
MR. FUREY: Just to further respond to the member's question, the Invest Nova Scotia Board, as everyone knows, was based on recommendations from Dr. Tom Traves in his report on economic development. The board has the flexibility it needs to respond to the opportunities that would have lasting or positive effects on our economy without Cabinet approval. The board is accountable to government under the legislation that provides oversight and that's referred to as the Accountability in Economic Development Assistance Act.
MR. LOHR: I would like to ask, when was the board established - how long ago?
MR. FUREY: The Invest Nova Scotia Board was established in October 2014.
MR. LOHR: Can the minister give us examples of what the Invest Nova Scotia Board has done so far?
MR. FUREY: To the member's question, the board has had regular meetings since Invest Nova Scotia was established in October 2014. I know this Friday they have their next meeting scheduled and I hope, if time permits, I'm able to join them for at least part of their meeting. The board really has been waiting for budget approval and the amount of money that has been identified in this budget will facilitate their ability to pursue the mandate that we spoke of previously.
MR. LOHR: Have they articulated how they intend to go about their mandate? Have they made any statements of that nature?
MR. FUREY: I think it's safe to say, in the meetings that they've had to date, they are still in the planning stages - the options and opportunities that the board could pursue and I think the most critical piece of that is the identification of funding in this budget to support future initiatives.
MR. LOHR: Just to summarize this topic of Invest Nova Scotia, all things being equal hopefully, you, Mr. Minister, will be here one year from now and I'll be here one year from now and I'll have the opportunity to question you again on the activities of Invest Nova Scotia. Not to put too fine a point on it, it's not a Crown Corporation, in fact it's part of your department, even if the decisions they make are independent. The funding comes through your department and you will answer questions next year about this board.
MR. FUREY: I do want to clarify it, although it's not a Crown Corporation, it is a fund independent of government, run by a board of directors and is created by its own Act. The authority they have lies within the Act. There's a reporting mechanism to government but for the member's benefit, the board makes decisions totally independent of government.
MR. LOHR: But funding for Invest Nova Scotia does come through your department, Mr. Minister?
MR. FUREY: That's correct.
MR. LOHR: I just want to ask about the start-up date for the Department of Business. What would be the official start-up date for this department, the Department of Business?
MR. FUREY: The department, as the member would know, came into being on Budget Day, April 9th. I had the opportunity, yesterday, to meet with the acting deputy minister and the staff who have been identified to work in the Department of Business.
There is a 15-day transition period - 15 working days, three weeks - where the new department and staff will look at the continuity of work from the previous department and ensure the movement of responsibilities to appropriate departments.
The next 30 to 45 days will allow the leadership within the department to complete the staffing actions and the placement of additional resources to the point that the department is fully functional and staffed by July 1st.
MR. LOHR: I'm just wondering, in the meantime the staff at ERDT are largely gone and is business development in the province on hold until July 1st? That's my question.
MR. FUREY: The transition of the department - and I mentioned in my opening comments - those responsibilities, and I'll use the Yarmouth ferry as an example, have been transitioned to their department of responsibility, Nova Scotia Business Inc. taking on a large part of those responsibilities.
I do want to speak - the member referenced the staff and employees. Obviously there is support being provided to the former employees and the present employees of the Department of Business. There's still some activity by staff in the department to access their former worksites and personal property to complete that particular piece in transition.
We're very sensitive to those circumstances and we've engaged both our Human Resources staff, our Public Service Commission staff, as well as employee assistance staff to ensure that the experiences of the former employees of ERDT, as well as the new employees of the Department of Business, are recognized and the inherent sensitivities to the circumstances that have taken place.
That has been the most important piece of this transition for me. It was my reason for meeting with the new staff as early as was possible. We did that yesterday and I simply want to share with the member that the present staff continue to work and represent the people of Nova Scotia through the new Department of Business, and that work will continue.
MR. LOHR: Yes, and I thank the minister for that answer. I do understand that the human side of this is not something that is easy to deal with and I appreciate him dealing with it.
I'm just curious about the - I know that in the beginning in your comments you laid out where a number of the files of ERDT were going. Obviously the Yarmouth ferry is with the Department of TIR but there would still be a number of active files within ERDT that were being worked on that have not spun out to some other site. I'm wondering what is being done with those active files at the moment?
MR. FUREY: Two pieces to respond to the member's question: the transition that I spoke about has taken place. We have a transition coordinator identified in the department and under his leadership, and with the work of the present team, those files that the member has asked about continue, so that work continues.
The placement of those responsibilities to other departments has taken place as well. So the primary focus of staff within the Department of Business, as we speak, is to continue with the services provided to those clients who have open or ongoing files.
MR. LOHR: I thank the minister for that. I wonder if the minister could outline what resources are being provided for those staff from ERDT who have lost their jobs, in the transition for them to whatever new career they come to - what is the province doing for those staff?
MR. FUREY: Madam Chairman, again as I mentioned earlier, with the support of Employee Assistance and our Human Resources office and the Public Service Commission, cognizant of the collective agreement components, those have been triggered so there's ongoing support to those individuals who have experienced the conclusion of that department.
I know staff are working with them very closely, as recently as yesterday, with that support in the office, a particular location available to staff to inquire of the department, and for those who have questions relative to these circumstances. That same support is available to our members, the employees who are in the new Department of Business, recognizing that the sensitivities around that workplace and the strong work relationships that existed, certainly some impact on those employees who remain. So that support is there to ensure that both former and present employees have experienced what I would consider, under difficult circumstances, a transition. I know with the work done within the Public Service Commission, the Minister of the Public Service Commission may, in fact, be able to expand on those circumstances to benefit the member and his question.
MR. LOHR: I'd like to thank the minister for that answer. It has been reported that the rent of the space occupied by that staff is some $70,000 a month and that the province is in a long-term rental agreement with that space. I wonder if the minister can enlighten us on how that space is planned to be used.
MR. FUREY: I think the first step we will be undertaking in the department is to consolidate all of our resources in the Department of Business on one floor - through Internal Services, who are responsible for property - to determine the needs of other government departments and the opportunity to relocate in that vacant space, to ensure that we have maximum use of the space. I believe the lease, I read it somewhere in the last couple of days, and forgive me for not having the exact date, the lease expiry is sometime in 2018. We have an opportunity, through space usage survey with Internal Services, to relocate other government departments to that space as well.
I know in Service Nova Scotia and Municipal Affairs we have a lease expiry coming up in our present facility. The opportunity to relocate departments certainly remains and we would aspire and commit to finding the opportunities to use that space to advantage without incurring or minimizing the expense to government.
MR. LOHR: I would like to thank the minister for those answers so far and I realize I have 10 seconds left, so thank you.
MADAM CHAIRMAN: The honourable member for Chester-St. Margaret's.
HON. DENISE PETERSON-RAFUSE: I would like to congratulate the minister on taking over a new portfolio and I believe that, from what I know of this minister, he will give his all and work collaboratively with everyone here in the House. I do want to say that I think he was a brilliant choice for this particular position in the government. I hope you think the same way after I finish questioning you here.
I would like to start - I know it's difficult because this is a new portfolio - to do a little focus on ERDT because of the fact that department really had quite a role in terms of rural Nova Scotia. I'm very concerned about rural Nova Scotia, being a person that has been brought up in rural Nova Scotia and has lived and breathed what it's like to live in a small community and see our aging population and see the unemployment levels and the attempts that we have to make together in a collaborative fashion to move forward, like the Ivany report talks about.
I think the one very important thing that I got out of the Ivany report was the fact that there is no magic bullet, however, we have to realize and understand that we do have resources and businesses that already exist that we need to be focusing on and supporting so they can expand. For whatever reason, we always think that there's something behind door number 1 or 2, when we already have those resources in our community. I hope the Department of Business will look at it in that manner.
Can the minister table a list of all the positions that were in ERDT that have been eliminated, what those positions were, and the functions of those positions?
MR. FUREY: I thank the member for the question. Certainly my colleague on the opposite side of the House, being a good resident of the South Shore of Nova Scotia, certainly appreciates my fondness of rural Nova Scotia. I was fortunate to come to Nova Scotia in 1980 and the largest part of that was living in rural Nova Scotia and I certainly value the advantages of that experience. I want to assure my colleague that rural Nova Scotia is equally important to me in our efforts going forward.
The member spoke briefly about the Ivany report and I think it is important to recognize that many, if not all, of the economic goals within the Ivany report allude to or focus on rural Nova Scotia. I think it's fair to say that - I indicated in my opening comments and I've said it publicly - there is a great opportunity for high potential growth specifically in rural Nova Scotia and a focus on rural Nova Scotia, some of our traditional industries and sectors but also other opportunities where we have young people who have some great, bright minds, who are innovative and creative, and really drive entrepreneurship.
I've had the good fortune, over the last couple of years, to watch my son pursue a small business and, although he's located in Halifax, I certainly recognize the challenges that he and his business partner experienced in their early initiatives. Often when I look at the material we have seen over many years, and the opportunity to drive small business, how challenging that is, whether it's rural Nova Scotia or our larger centres.
My colleague also mentioned existing businesses, their presence in rural Nova Scotia, and how important that is to small communities but also the opportunity for those businesses to expand and inherently employ additional people with a focus on rural Nova Scotia. I certainly recognize the member's focus on rural Nova Scotia and I want to assure her that, as we work together going forward, our efforts will realize benefits to our rural communities.
To the member's question specific to those positions that were identified within ERDT, I don't have the list here with me but we will certainly compile that list and make that list available to the member.
MS. PETERSON-RAFUSE: Thank you to the minister for that. I'll follow that up, can you provide a list of those positions that have been transferred to the new Department of Business?
MR. FUREY: To the member's questions specific to those positions transferred to the Department of Business, certainly we will make that available. I think it would also be valuable to the member, we'll provide the positions that have been transferred to other departments and/or agencies. I think that would be valuable.
I would like to expand on a previous answer specific to small business in rural communities. One of the important parts is to create a climate where those businesses can expand and support the rural communities to a greater degree. The Department of Business also is the lead department for business grants for both rural and urban centres and I think it's important to your early comments about the collaboration but more importantly the alignment of services available.
I had the privilege to speak with Mr. Bill Black earlier today and I've spoken to a number of media agencies around the development of the department and there is some concern expressed about the ERDT resources that were in rural Nova Scotia and are no longer there. It's important to recognize the additional roles and responsibility that will fall under NSBI and the presence they have in rural Nova Scotia, so that opportunity to align with NSBI.
Also for the member's benefit, part of the budget process transferred the rural economic networks, the former RDAs, Rural Development Agencies, to the Department of Municipal Affairs. The RENs in that budget of $1.8 million have been transferred to municipalities and I can tell you, with the experience I've had with municipal units across the province over the past year and a half, I personally don't believe there could be a better fit than to have and engage our municipalities in that private sector development of our economic environment to the benefit of their communities. I know that is near and dear to the member's heart. We believe those resources and the alignment of those resources will be of benefit to rural communities.
There are a number of departments that are touched at the community level as well, as the member knows. In Lunenburg County we have natural resources within our community, fisheries and aquaculture sites and employees, agriculture offices and when we talk about departmental alignment and a focus on the core objectives of economic development and the strategy within government, these are all touch points for us at the community level to support those initiatives going forward. We will certainly provide the information the member has requested and we'll provide additional information that I believe will be helpful. I know the member and I will have an opportunity to speak into the future around these very circumstances.
MS. PETERSON-RAFUSE: Thank you to the minister. I wonder if the minister can also table a copy of the business plan that has been created for your new Department of Business, and along with that the communications strategy that would be attached to a business plan because it would be vitally important to have - as you know, you are the Department of Business and what is the first thing that you're asked for as an entrepreneur when you want to create or develop a business? The first thing the banks will say to you is we want a business plan.
It's usually the thing that many, especially on a small business level, have a struggle with because people say, I have that in my head and I know this is what we're looking at doing. So could you please table the business plan that has been created in order to make this move? I would suggest that you would not make a major move of this nature if there was not some type of business plan in hand along with a communications strategy that enables us to see how the connect with all these different departments will be.
That's going to be a huge challenge in a bureaucratic system to ensure that people that might have gone to ERDT for a particular grant program or question or support will now have to identify those different departments. If I had a question with respect to Aboriginal Affairs, if it was a funding program you would need to be able to sort that out, whereas before it was almost like a one-stop shopping in going to ERDT. I would think there would be a communications strategy that is attached to the business plan plus another communications strategy that links these departments together and how you are going to reach the people of Nova School to allow them to know what department or where they should go to have their questions answered. I guess I have probably two or three questions in one, I apologize.
MR. FUREY: Thank you to the member for the question. To follow up, the couple of pieces that are important, and I think probably will address the two or three part question that my colleague has presented, the business plan is laid out within the Statement of Mandate that we have published and we can certainly provide the member with a copy of that. The communications plan has two components. There is a communications plan as we know it but also within the Statement of Mandate, the opportunity in there to communicate what the department's priorities are over the course of the next year and we are certainly able to provide that to the member.
I would also reference the new department website that provides links to those areas where Nova Scotians would enquire. I'll use the example that the member presented with regard to the Department of Aboriginal Affairs and Aboriginal funding. That program has actually been moved to the Department of Aboriginal Affairs where we believe it is best suited and positioned to serve the needs of that community. If you go on the website you will see the links and the availability of that program. I know just recently I believe the RENs, the Regional Economic Networks I mentioned earlier, transferred to the Department of Municipal Affairs.
These steps have been taken to really emphasize the member's point about how important it is to communicate with Nova Scotians on these changes and find efficiencies that in many ways make the transition seamless. That's our objective and anything we can do to enhance that by sharing information with the member, and certainly any recommendations or suggestions that the member may have as to how we can improve that, the member knows very well, we will certainly attempt to address any of those concerns.
MS. PETERSON-RAFUSE: Thank you for the explanation and I realize the mandate is somewhat of a business plan but I know - and you would appreciate this too - that a real business plan has specific targets and time frames that those targets would meet. I wonder what the targets are for your department in terms of your new Department of Business. Part of the mandate is to encourage businesses and corporations in the province to take the lead in terms of developing employment and creating economic stimulus.
Within that you would have targets of what businesses your department is seeking out to have relationships with, discussions with. Are they corporations of a certain size? Is there a number of small businesses that you will be approaching within the year? What are those numbers and targets?
MR. FUREY: The Statement of Mandate actually contains the performance measures within the Department of Business, and as I mentioned earlier the economic development goals contained in the Ivany report really have become our checklist to focus on and the priorities within the department so our annual priorities align with the economic development goals within the Ivany report and the ability to measure those objectives and those achievements become very apparent.
I'll make reference to a couple of examples for the member's benefit. As we know, we've talked in the past and the Ivany report has identified a target for business to increase exports by 50 per cent by 2025 and 4,200 new business start-ups per year. The department priorities with the ability to measure are aligned with the Ivany report and we believe the best business model to go forward in achieving the objectives that have been presented to us through the Ivany report.
MS. PETERSON-RAFUSE: Are the 4,200 business start-ups province-wide? Do you have measurables for different areas within the province, say, for example, that Cape Breton, there's a target amount of start-up businesses that you are looking at as a benchmark? Are there so many on the South Shore? Are they in Halifax? Where would those be in the province, minister?
MR. FUREY: Mr. Chairman, a very appropriate question that the member has presented. I mentioned earlier the importance of identifying and recognizing those areas of high potential. The example that I use when I travel and speak, not only around Municipal Affairs but now the Department of Business, is the agriculture sector and the growth we've seen, particularly in the Valley.
I know the member is familiar with recent studies in the quality of soil on the South Shore and the drumlins and the opportunity to grow that industry further. I've engaged that sector myself and have had extensive discussions with the minister on how we can drive that particular sector in rural Nova Scotia.
In some ways when I talk about the alignment of government, there are department initiatives that we could pursue. I know the Minister of Natural Resources has engaged both our fisher community and our angler community. I've shared with the minister discussions I've had with those in the forestry sector that see opportunities for growth.
The member may be aware of a biomass initiative in Bridgewater at the Nova Scotia Community College. These are all discussions and opportunities that remain available to us and they really come through those departments. So the objective in the Department of Business is to align those initiatives to ensure that the focus and the objective is consistent with government priorities.
The other piece of that that I think is important, because it does represent any part of Nova Scotia, when we talk about sector development, whether it's ocean research that could be based anywhere here in Halifax or anywhere along the Eastern Seaboard of Nova Scotia. We have thriving communities, the Municipality of Guysborough and the Goldboro initiative, the Municipality of Richmond and the Bear Head initiative, the Shell and BP exploration announcements; we both know that there's tremendous opportunity for our communities in coastal Nova Scotia to benefit from those.
I think the best example really is a transition and conversion of the old Bowater site to its present status of extending the opportunity for innovative and creative initiatives. I know there have been a number of announcements there that really give me hope and optimism for these communities that in spite of the unfortunate experiences they've had, continue to provide a very optimistic and progressive approach.
I've been fortunate in my travels around the province to engage municipalities. In many cases they are leading or partnering in these initiatives. I couldn't be more optimistic about the opportunities in the future for rural Nova Scotia.
MS. PETERSON-RAFUSE: Thank you very much to the minister. I know he has a passion for it and he will certainly keep his eye on rural Nova Scotia. I would like to follow up on that question with, what measurables will you have in place in order to identify that the work of the new department is actually having an effect on these new business start-ups? You talked about many that you're excited about and that was before the department was created. As we know your government has talked about creating the winning conditions.
We do have a lot of businesses over the years, many businesses that have succeeded in the province that did not receive any support from government whatsoever that has been able to do it on their own. They have been able to find out the formula that they need so I think that it is important if our tax dollars are supporting a Department of Business, there needs to be a quantitative, measurable target in order for us to know whether that is because of the work of the Department of Business or is that because of the fact that this particular business had the right formula and knew what they were doing.
It's very important for us to be able to show the people of Nova Scotia that this is an investment of their tax dollars and it really has made a difference. What benchmarks are you going to be setting up in order to be able to tell people of Nova Scotia, yes, because of our involvement, these number of businesses actually were created or these businesses have succeeded because of having a Department of Business in the Province of Nova Scotia?
MR. FUREY: I couldn't be more pleased with the comments of my colleague when she really talks about the success of businesses in the communities across Nova Scotia because there are many businesses that are successful without government support. To be quite honest with all of my colleagues in the House, that is the climate that we want to create, that is the attitudinal shift that we want to see where entrepreneurs are not dependent on government but they are moving with strong business plans and they are moving business initiatives that are successful without government.
But that takes government's participation. Government has a role to create that climate, where we get out of the way and we allow these entrepreneurs and we allow business leaders to drive the business development and the economic opportunities in their communities. I think that is the objective regardless of which Party is in government, that we can find efficiencies in the disbursement of taxpayers' dollars and through that attitude, through that methodology, change the culture of dependency on government so that young entrepreneurs are prepared to take the risk, they're prepared to secure the funding they need and they're prepared to commit to the work they do to see these types of successes.
The past measurements have either been absent or were measuring activities and not outcomes. I think the member is really focused on the outcomes, as are we. That really starts with the economic development goals that are contained in the Ivany commission. We're going to dissect those or stretch those so that we identify, within those goals, annual achievements or progress that is important to the member's point.
With each of our Crown Corporations we will have outcome agreements where we anticipate and expect to see so many new businesses, start-ups a year, as the example. The Ivany report and the subject-matter experts and business leaders who were engaged and participated, believe we can double our start-ups over the next 15 or 20 years. We want to be able to measure those so that we are seeing progress and in the absence of progress, what are we doing wrong? Let's put an analytical lens on that and if we have to change that plan or that strategy, I believe that's appropriate.
I had a good friend say to me a long time ago just do the four Es. Some of my colleagues have heard me talk about the five Ps, well I'll share the four Es with you, from a policing environment: education, enforcement, engineering and evaluation. I think the most important part, and the lens I'm going to put on the Department of Business because it is important that we achieve outcomes, is evaluation of the steps we've taken. Quite honestly, whether it's in discussions with my colleague or responding to questions in the House, be prepared to share those challenges and when we have to change course because we're not achieving our objectives, then we will do that.
That opportunity to evaluate, to measure those outcomes and evaluate those outcomes, is going to be very important going forward. I certainly will keep a close eye on those objectives.
MS. PETERSON-RAFUSE: I'm very pleased to hear the minister talk about measurables and evaluation, I think that's where there needs to be much more focus. It's very difficult. Sometimes we don't like to evaluate what we're doing because it makes us accountable. I'm very pleased to hear that you believe in the evaluation process and I'm sure you also believe in the fact that evaluation is an ongoing process, it's not just at the conclusion of a project or an initiative; it has to be built into the whole process going forward.
I wanted to also ask the minister if he agrees with the fact that there will always be certain types of sectors or businesses in our province that will need some support from government to give them a competitive edge. Does he agree with that?
MR. FUREY: I think that really is the structure of the department and the roles and responsibilities of our Crown Corporations, recognizing the old environment. We've spent hundreds of millions of dollars across every government, every Party in this Legislature, with no recognizable progress or outcomes. For 20 years we've been the worst performing economy in the country, in spite of those efforts.
The new model in the Department of Business is very much a strategic department, much leaner, a more responsive team that can lay out the strategies and the policies and align departments. I think when I look at the Crown Corporations and the opportunities that exist there, to the member's question, how important that entrepreneurs who do need support have those entities or resources to go through, quite appropriately. The member mentioned earlier, the understanding of the business plan methodology and how important that is to preparing ourselves for future business development.
I certainly agree with the member that yes, we have those who are very successful upon their own initiative with little or no money from government but we have to recognize that if we're really going to expand the economy in a much larger, broader way, recognize that there will be times that these types of support, through the appropriate programs and criteria, are available to entrepreneurs both within Nova Scotia and those who choose to relocate to Nova Scotia.
MS. PETERSON-RAFUSE: Madam Chairman, now as you know, this is a particular issue that's vitally important to me and it always has been, as a person who has grown up in rural Nova Scotia and has seen the difference that this particular industry can make to the local economy. I'm just wondering, does the minister believe that the film and television industry is a business?
MR. FUREY: Yes, absolutely. I look at many entrepreneurs. I know them, I've met with them and I continue to meet with them during my constituency days. These are individuals who are operating small businesses, certainly recognize that they are literally in every community across Nova Scotia. I think the member and I are on the same page in this area.
MS. PETERSON-RAFUSE: Thank you very much to the minister. I want to get an insight from the minister if he believes that the film and television industry is a specialized field that needs specialized knowledge and experience in order for it to be successful?
MR. FUREY: I think when we talk about the film industry or animation or fitness training facilities, whatever the business initiative may be, given our experiences of the past where - and I mentioned it earlier - hundreds of millions of dollars into the Nova Scotia economy with little or no progress. We have to be careful, recognizing that there are those entrepreneurs who can start their business with little or no government money.
To the member's previous question, recognizing that some people will need support and those mechanisms are there through existing programs and criteria. We don't want to create a dependency on government so the cultural shift that I referenced earlier in one of the member's previous questions I think is really an important component of our go-forward in the Department of Business. Recognize that the cultural economy exists and has an opportunity to grow.
One of the commitments we've made in this budget is the commitment to the Creative Economy Fund, $6 million that I think is, in my view, intended to address the very points that the member has presented in her question.
MS. PETERSON-RAFUSE: Minister, can you highlight to me the experience - I know that now we have lost the film and creative industries, those staff who were specialized in that industry and were able to act as informational support to the industry within Nova Scotia and on an international basis, to be able to draw the interest of those companies to come here. As I've said in this House, it's not just about the dependency on government, it's also the investment level, that if you are investing $24 million and you are receiving $130 million-plus a year, I don't know what investor would tell you not to go forward with that investment.
I am quite baffled in the mathematical calculations that have been done by our government in order to say that that's not a good investment. Those dollars will not be here otherwise so we'll lose probably over $100 million that is coming in annually. I live in a community where I've seen how that works, right down to the individuals who - I had a gentleman come to me on the weekend and he said I rented my house out for a week for Haven to be filmed. I got $6,000.
The building supply in our little community has received thousands and thousands of dollars because they would need supplies for production and sets and so forth.
The other thing we've seen in our community is the fact that it's - as you know, for a small business one of the challenging issues is your revenue base coming in and flowing and not being caught up into your product. Then what happens is if your investments are in your products and you are not selling those products, you can go out of business pretty quickly.
With the film industry, they pay on time and they usually pay up front, so it's a very good formula in terms of success for small business. We have seen it. As I mentioned, those who were supporting that industry in our province have lost their jobs.
I'm wondering, can the minister highlight for me, because I know now that the creative industry has gone over to NSBI, can the minister tell me and highlight basically the resumés, the experience and knowledge of all those who work in NSBI in relation to the film and television industry? What experience and knowledge do they have about that industry to be able to support it in the future? Thank you, minister.
MR. FUREY: I think just a point of clarification and then certainly to the point of the member's question, some misunderstanding and confusion in some discussions but I want to say that the film industry tax credit remains. The delivery of funding in that program has changed but $24 million remains in the 2015 and 2016 budget and the Creative Economy Fund, plus an additional $6 million for a total of $12 million, is identified for the 2016-17 budget year.
As I talk to people in the industry, they acknowledge that there's a need for change and it's how we achieve that change. I think in these circumstances, and I'll be specific to the Creative Economy Fund, we believe that is an important fund for the creative sector, whether it is film or publishing, animation, music, arts, crafts, and that fund is transitioned to NSBI, to the point of the member's question.
With that, I can't speak for the existing employees within NSBI but to the point of the member's question, we recognize that in order to administer that fund you have to have subject matter expertise. With the transition from the previous department to the new department and the placement of programs, responsibility and resources to support those programs, there are three staff who have gone from ERDT to NSBI. Their subject matter expertise is in film, in music and tax within the tax environment within that cultural community.
MS. PETERSON-RAFUSE: Thank you, minister. Beyond the expertise to actually administer the film and television tax credit, does the minister believe that he has a clear understanding of how the film and television industry actually works, in terms of their production schedules and so forth?
It's not the type of industry that can make a quick turnaround decision; they plan months if not years in advance. Therefore, in those planning stages they have to do everything from identifying, of course, the funding right down through to what street they're going to use in your community and how they're going to communicate to the neighbourhood that Queen Street is going to be closed today because we're filming Haven.
It's a very detailed industry. It needs a lot of lead time. Negotiations can go on for months, if not years. I mean we probably have all heard, when we've seen a movie in the theatre, we're almost thinking that it was just put together the year before and sometimes it has been four years in the past that that movie was even shot. That's how long the production schedules can be.
Therefore, the concern is with still having some money in the budget, as the minister did mention, that it doesn't go beyond that. Therefore, the decision for this industry to lose the funding that was available and having that sense of commitment that as the minister knows - I didn't make it up, it's recorded in newspapers, it's recorded in audio - the government had said they would commit to 2020 for that industry.
There was a sigh of relief from the industry because they knew that they could plan because that's how far ahead they need to plan. I would just like to ask the minister, what kind of financial analysis was done by the government to actually project what is brought back to our economy? As I've mentioned over and over again, we're looking at about a $24 million investment to get $130 million back.
There's certain scientific data analysis that can be made, consultation and collaboration with the industry, and we do know that the industry itself says that was not there.
I do notice that in the minister's mandate and in the mission it talks about - this is what's going to be different, that there's a need to collaborate with the business community. As the minister said, the film and television industry is a business. So right from the get-go, unfortunately for our minister here, we have a crisis in an industry that is a business and the mission of his department is to have collaboration.
Also, the mission talks about promoting strategic sector development. Of course this is a sector within itself in the Province of Nova Scotia. I would like to ask the minister, if he does know, why would we create a mission for a new Department of Business and then right from the start of the budget we have an industry that relies on collaboration with the government? We have an industry that is a strong sector here that we took 20 years to invest. We can lose that within a minute or 22 minutes, it's pretty scary.
We know that This Hour Has 22 Minutes is packing it up as we speak and there are others that have already come out. A $12 million production in the little Village of Chester where I live, there's about 2,000 people in Chester; I think the municipality has about 10,000. So what a $12 million production means to rural Nova Scotia, I don't know where else you would find that for the investment that the government and previous governments have made.
For whatever reason, there was a belief in that from your Party two years ago - how that changed. I do realize, minister, that there are priorities but that's what they're called, priorities. I do realize that there are hard, hard decisions to be made. It's not an easy job for any one of the government members. I think if we're going to be logical, sensible and business-oriented, which I know this minister is and I believe that's the reason the minister has received this portfolio, I can't understand why the decision has not been made to support this investment because what you are saying is there are businesses that we'll still always need to support in our economy to make it.
We do know that this gives the industry a competitive edge. You talked about competitive edge and it's in your mandate talking about competitive edge. So why are we picking on this particular industry that is already established? It gives us an opportunity; it flows over not only in a business sense, it gives us pride in our province.
I talked during Budget Estimates to the Minister of Communities, Culture and Heritage and what it means to be in Nova Scotia, to be a Nova Scotian, to be able to promote our history. It all just connects so well together. The tourism aspect, as I mentioned when they had a party at the Fo'c'sle Tavern in Chester, and that was for Haven, there were people who specifically flew from Germany and England just to go see the cast of Haven.
I think all members got an email from a couple from Ontario who said they planned a trip to the Village of Chester to see where Haven was being produced and they had an opportunity to meet some of the actors and actresses. They also planned to come back this August.
The messages that I'm hearing from the government, from a business and an economic sense, really doesn't make sense to me, so can the minister comment on that, please?
MR. FUREY: Before I respond to this present question I just wanted to clarify something. I think I may have inadvertently indicated earlier that there were resources moved from ERDT to NSBI. Those resources were actually moved from the Film and Creative Industries component to NSBI. I didn't want to leave the Legislature with any misinformation.
To the member's point, I had the privilege this morning to actually participate in a meeting with the leaders of the film industry in Nova Scotia, including animation, and I certainly recognize the complexities of the industry. Those were valuable discussions for me.
As the member knows, the film industry is very much present on the South Shore and I certainly engage those in the industry and over the past couple of weeks have had additional discussions with those from the industry who articulated their concerns and their observations.
I think to the meeting this morning, one of the things we identified is that the Film Industry Tax Credit, as it was in the province, was the most generous in the country. When you look at the financial circumstances of our province, we recognize that we have significant challenges to overcome and the need for government to recognize those challenges and also that all Nova Scotians recognize the need that we all have to contribute to righting the ship is so important.
It was a very collaborative session this morning, listening to those within the industry and recognizing that we have challenges going forward. I think we really have an opportunity to overcome some of those challenges. We've committed to meeting with the film industry leaders again this week.
MADAM CHAIRMAN: The time has elapsed for the NDP. We will now go back to the Progressive Conservatives.
The honourable member for Kings North.
MR. JOHN LOHR: I just recognize that you've been at this for two hours now, so if you'd like to take a short recess?
MADAM CHAIRMAN: Absolutely. We'll recess for five minutes.
[5:39 p.m. The committee recessed.]
[5:44 p.m. The committee reconvened.]
MADAM CHAIRMAN: The honourable member for Kings North.
MR. JOHN LOHR: I would like to ask some questions of the minister also about the elimination of the Film Industry Tax Credit and in particular Film and Creative Industries Nova Scotia, which I understand has been eliminated and I believe I heard you say that three staff from that had gone over to NSBI, correct?
MR. FUREY: That's correct, three staff transferred with expertise in tax, music and film.
MR. LOHR: My question is, will NSBI offer the same services that the Film and Creative Industries Nova Scotia offered?
MR. FUREY: To the member's question, not precisely. Those three resources certainly provide expertise and support within the new environment in NSBI but the intention is to offer that broader support of the NSBI business model with the placement of those three resources to continue to support the creative industry.
MR. LOHR: Film and Creative Industries Nova Scotia offered trade mission support for the industry. Will NSBI continue to do that?
MR. FUREY: Specific to the circumstances that the member shared and posed in his question, obviously one of the responsibilities of NSBI is to support the export of goods and in these circumstances both the film and creative industry would be part of that.
MR. LOHR: So that is a "yes" to continue to support trade mission support?
MR. FUREY: That's certainly one model that has been used in the past and it may be a model that NSBI chooses to incorporate going forward. Those are the decisions I would leave with our leadership in NSBI and their ability and mandate to drive exports. In these circumstances I think we've got a great opportunity to continue to export our creative film industry in many forms.
MR. LOHR: I know there has been mention of the $6 million fund and I'm just wondering if the Department of Business will be administering that $6 million fund.
MR. FUREY: The Creative Economy Fund that my colleague has asked about will actually be established and administered through the Department of Communities, Culture and Heritage. The development of the program within that fund will be established in consultation with the industry.
MR. LOHR: I'm wondering if you could shed some light, Mr. Minister, on the process of decision-making to cut the Film Industry Tax Credit. My specific question is, was NSBI consulted in the decision-making on that process?
MR. FUREY: Again, if I may correct myself in response to a previous answer, I indicated that the fund was going to Communities, Culture and Heritage, the fund is actually going to NSBI. I did want to clarify that for the member's benefit.
To the member's question, was NSBI consulted in this process, I do want to qualify that the Film Industry Tax Credit is not cut. The Film Industry Tax Credit remains with a 25 per cent refundable component to the industry and the opportunity for the remainder of that 75 per cent, based on taxes owed. I do want to clarify that the Film Industry Tax Credit remains.
To the member's question, the Creative Economy Fund was redeveloped within the Department of Finance and Treasury Board and there was consultation with NSBI at that time and subsequently now the fund within NSBI.
MR. LOHR: I guess I'm curious to know - and I realize I'm starting to maybe delve into an area of Cabinet confidentiality - but I'm wondering if, in the process of deciding whether to make changes - not cut, I recognize your point - make changes to the Film Industry Tax Credit if NSBI was consulted?
MR. FUREY: Not that I'm aware of.
MR. LOHR: I'm looking at the Crown Corporation Business Plans and in the opening comment, the note "Message from the Chair and the CEO", partway down it says, "Attract and grow high-value investments from domestic, national, and international companies to expand Nova Scotia's opportunities in key targeted sectors such as financial services, information and communications technology, ocean technology, aerospace and defence, and creative industries, . . ."
I could go through - there are a number of other places in the annual report by NSBI that references creative industries. I'm just wondering if you could enlighten me as to why your government would make such important decisions about the creative industries without consulting with NSBI, clearly a player and having a clear mandate to promote the - and I could go on and go through the document a little further, the various places. They have a clear mandate to promote the creative industries from the government, I'm wondering why you would not have consulted with them on this.
MR. FUREY: For the benefit of the member, I wanted to clarify that we consulted with NSBI in the consolidation of the Crown Corporation but I'm not aware of any consultation with NSBI specific to the decision around the changes to the Film Industry Tax Credit. The Film Industry Tax Credit is distinctly different from the Film and Creative Industries piece.
But to the benefit of those in NSBI, the present CEO, in the Tax and Regulatory Review which she authored, recognized that the Film Industry Tax Credit was a very generous credit to the industry. Those circumstances certainly formed part of our decision-making process. To the member's question, I'm not aware of any discussion with NSBI specific to the changes to the Film Industry Tax Credit. We believe there is significant knowledge around the industry within NSBI as we speak.
MR. LOHR: Thank you minister for that answer. Just to further read from that message from the Chair and CEO of NSBI, the three key areas, No. 3 would be to: "Establish Nova Scotia as an international jurisdiction of choice in which to invest, work, and do business." I believe the Film Industry Tax Credit, for that industry anyway, I believe it did that. Another thing, if you were to go further on in that document, Page 46, "Focus on Our Strengths", one of them being our creative industries. Page 48, "Attract and grow high-value investments from domestic, national, and international companies to expand Nova Scotia opportunities in key targeted sectors . . ." including the creative industries.
So, all throughout the annual report of Nova Scotia Business Inc. there is reference to the creative industries. For example, Page 52, "Nova Scotia Business Inc. will work with its partners to build awareness, outside our borders, of key sectors in Nova Scotia, such as financial services . . . and creative industries." There are a number of different places in this document, again, Page 53, "Build on Nova Scotia's strong base of creative industries by helping them thrive in Nova Scotia and expanding the exports of our creative industry's goods and services into new markets."
I would suggest to the minister that Nova Scotia Business Inc. should have been consulted on the changes to the Film Industry Tax Credit and should have been aware of them, and certainly has a very strong mandate as from their annual report to see creative industries prosper in Nova Scotia. I wonder if the minister would comment on that.
MR. FUREY: I just want to go back to comments that I made earlier when I separated the Film and Creative Industries Nova Scotia Inc. and the consultation with NSBI at that time, versus the Film Industry Tax Credit, and no consultation that I'm aware of with NSBI specific to that decision.
To the member's point, for government to recognize the role that NSBI has, that was the sole purpose in creating the Creative Economy Fund and placing that with NSBI for their administration, to continue to support the creative industry, consistent with the mandate of NSBI that the member has identified.
MR. LOHR: I'm just wondering about the timing. At what point does NSBI take over the activities of the Film and Creative Industries Nova Scotia? Obviously one has stopped and the other starts, I'm wondering about the files and the timing of that. How does that all work?
MR. FUREY: I mentioned earlier in my opening comments about the transition period that the department has undertaken. In my meeting yesterday with the acting deputy minister and the transition coordinator and staff within the department, that transition that my colleague has referenced is ongoing. I indicated in my opening comments that transition period will continue for 15 business days, three weeks. That is ongoing as we speak.
MR. LOHR: I wondered about that. I believe all of that added up to July 1st, if I'm not mistaken. I wonder if, in the meantime, that is a fairly large gap for the film and creative industries to have, in a sense, no service. Could the minister address this gap in time and does he believe this hurts the industry?
MR. FUREY: The member's point, and obviously a concern of his, is certainly recognized. I just want to break that period down again. The initial 15 days is for purposes of transition and that is to focus on the priorities within the department, those ongoing files that need immediate attention. I spoke with individual staff members yesterday who are moving specific files. The member made reference to that official formal date of July 1st where the Department of Business will actually be up and running with all positions staffed.
Obviously a period of some 30-plus days there, the 45 days the member is referencing, Nova Scotia Business Inc. is not going to wait for that period. The transition and direction of the new Department of Business is independent from NSBI and the placement of the Creative Economy Fund within NSBI allows NSBI to continue to do their work in support of the creative industry.
MR. LOHR: Thank you. I wonder if you could shed any light on any directive you may have given NSBI on the management of that $6 million fund or how it will be utilized.
MR. FUREY: To the member's question, I have full confidence in the leadership within NSBI and the staff. I haven't provided any direction to the leadership but for purposes of the Creative Economy Fund, as the member questioned, that fund is due to go into effect April 1, 2016, and government has committed to consultation with the creative arts community, creative industry, to ensure we leverage as much as we can to the advantage of the industry and the application and disbursement of that fund.
To the member's question, I have not provided any direction but there is a period where NSBI will engage the industry, to ensure those monies are used for the appropriate purpose in driving that particular community and the industry that they advance.
MR. LOHR: Just to be clear, and I think I heard you correctly, the $6 million fund does not show up in this year's budget but is a commitment, by your government, for next year and it would show up in next year's budget for 2016 - is that correct?
MR. FUREY: That's correct.
MR. LOHR: I want to draw you back into the budget now. I had asked about this number of $46.632 million which is on Page 4.4, Programs and Services. I believe you've said that $2 million is going to Invest Nova Scotia. I wonder if you could break down the remainder of that very large number for us. Some departments have smaller budgets than that and have it all laid out and that number is just there. Could you break that down?
MR. FUREY: I do have the information that the member has asked for. The budget itself is $46,632,000; $750,000 of that to salary and benefits for six FTEs; $613,000 for operating; $45.3 million for grants. I will break that down for the member.
The Nova Scotia Jobs Fund is $37.6 million for ongoing commitments that the previous Jobs Fund had experienced from previous governments. I indicated earlier to the member, and I do want to qualify, there is no funding approved by this government in the Nova Scotia Jobs Fund envelope. I indicated to the member earlier a $2 million commitment to Invest Nova Scotia Fund and $5.75 million in capital rebate programs, so we are honouring those previous commitments.
For the benefit of the member, I think he realizes the Nova Scotia Jobs Fund closed last Spring.
MR. LOHR: I hesitate to ask about the exact details of the Nova Scotia Jobs Fund but I wonder if you could provide me - I'm sure you would have a schedule of declining balance so you would know what your obligations were for the Nova Scotia Jobs Fund next year and next year. Could you give me an approximate idea of when those commitments will have been fulfilled and how much we would expect to see next year's budget and the following year's budget and how far out that Nova Scotia Jobs Fund commitment goes?
MR. FUREY: To the member's question, I think it was two-part. He is inquiring of the information relative to the Jobs Fund. We are not able to release the details of specific accounts but certainly we are prepared to share with the member what information we can. I think that was the first part of his question.
The second piece, the life of the Jobs Fund, as we speak today that fund goes out for a period of some 28 years, based on previous commitments of previous governments.
MR. LOHR: I thank the minister for that answer. I had written down five years thinking you would tell me the schedule for the next five years but you're telling me the Jobs Fund commitments go out 28 years. Could you confirm then that we would expect - I would assume the commitments would decline over time? Is that correct or in future years would that Jobs Fund commitment be more than $37.6 million in some years?
MR. FUREY: We don't anticipate any longer term. We believe that 28-year period exists in its present circumstances. I think that can fluctuate at times but the 28 years appears to be a pretty clear time frame.
MR. LOHR: I wasn't anticipating spending much time on this but I just want to ask, do you have a ballpark figure of the government's commitments for 2016 on for the next 28 years? What is the government's commitment there that has been made in the Jobs Fund - the total dollar commitment?
MR. FUREY: To the member's question, we have a plan for the next five years. We don't have that information with us as we speak, the actual dollar value to that five-year period, but it's certainly information that we are able to source and provide to the member.
MR. LOHR: Suffice to say that it's a considerable amount of money, I presume. I guess what I wanted to ask about the budget there for that department is just to confirm then that there's - I believe what I heard you say was that, in fact, of this current government's actions, there is $2 million of spending in there and basically $44 million worth of previous commitments. Would that be correct - or approximately?
MR. FUREY: I think about $43 million in future commitments.
MR. LOHR: I would like to move on and talk about the Crown Corporations. I know that as of the budget we have a new Crown Corporation - Nova Scotia Tourism Agency. My first question really is, I know that it shows up in a line item of $22 million, and the other Crown Corporations we were provided, or they are available online, documents about their annual statements, but there were no statement or documents provided for Nova Scotia Tourism Agency. I'd just like to ask the minister why those documents weren't provided.
MR. FUREY: I don't have the information readily that the member is asking but Patrick Sullivan, CEO of Nova Scotia Tourism Agency, is in the gallery so we could bring Mr. Sullivan down to the floor for the purpose of supporting me in responding to the member's question.
MR. LOHR: Meanwhile, I can ask you a question that you may be able to answer, not Mr. Sullivan. I just want to confirm that your department, the Department of Business, is the department that is responsible for the Nova Scotia Tourism Agency Crown Corporation.
MR. FUREY: Yes, that's correct.
MR. LOHR: Mr. Minister, have you met yet with the Nova Scotia Tourism Agency about their mandate and their future plans?
MR. FUREY: No, I have not. I had a brief opportunity to speak with Mr. Sullivan earlier today. That's the first contact we've had since the Department of Business was announced. Over the next number of days I am in the process of meeting with each of the heads of the Crown Corporations to further broaden my knowledge of their mandates and how they fit into my area of responsibility.
MR. LOHR: My previous question, which started this conversation, was just the fact that the other Crown Corporations have annual reports and they - I guess not the report back but the report going forward about plans and activities and budget and that was not provided for Nova Scotia Tourism Agency. I just wanted to ask the minister about that. Why were those documents not provided?
MR. FUREY: I apologize to the member for taking a little longer to source the information. The statement of mandate referred to is actually on the website as we speak. The business plan - Nova Scotia Tourism was not previously a Crown Corporation, they were part of Economic and Rural Development and Tourism. That was rolled up into the ERDT Budget.
Now that the Nova Scotia Tourism Agency is a Crown Corporation, there are certain requirements and expectations of them. That includes the business plan and a number of other business matters that the Crown Corporation would be expected to follow. That's the reason why that documentation isn't submitted with the new Department of Business Budget Estimates.
MR. LOHR: Correct me if I'm wrong, but to summarize what you are saying: just because of the time frame and the changes from one department to another, there wasn't time to develop those documents but I assume that those documents will be made available, that plan will be made available at some time in the future.
MR. FUREY: The reason they weren't provided is that Tourism was part of a previous government department. Now that they are a stand-alone Crown Corporation, all of those requirements fall in place and going forward, all that material will be available and certainly presented in future Budget Estimates.
I do want to make a correction. I think I might have referenced that that information was on the Department of Business website; it's actually on the Nova Scotia Tourism Agency's website.
If I may at this time as well, Madam Chairman, I just want to make a correction to a comment I made earlier when we were talking about the Jobs Fund and the go-forward commitments. I wanted to ensure that the member understood those were commitments of previous governments, not go-forward commitments of this government. Those are certainly a responsibility of this government but commitments made by previous governments.
MR. LOHR: I'd like to thank the minister for that answer and yes, I did understand that, that you were talking about commitments. I was under the impression that the Capital Rebate, $5.57 million was also commitments of previous governments, would that be correct, too?
MR. FUREY: To the member's question, the components of the capital rebate program, were initiated under the previous government and most of those decisions were made under the previous government. There were two initiatives that were undertaken by the previous government that we were committed to continue so there are two where we actually approved the funding for those initiatives.
MR. LOHR: I would like to jump back to the Nova Scotia Tourism Agency. I'm wondering, Mr. Minister, if you could say some things about what we would normally expect to find in a document about plans. What is the overall plan for the Nova Scotia Tourism Agency going forward?
MR. FUREY: To the member's question, we have a tourism strategy here that I am prepared to share. The member is certainly welcome to this copy. Going forward, obviously, I indicated earlier the need and requirement for a business plan. Within the tourism strategy they have articulated targets and objectives and outcomes. They have completed annual reports in the past, Spring 2014 was the last one; they are presently in the process of completing an annual report now.
I loop all this back into the economic development goals of the Ivany report where the objective to double tourism over the next period of time obviously is a target that the new Crown Corporation will be focused on.
MR. LOHR: Clearly there is a fairly specific business plan already for this year, presumably with a budget of $22,618,000 I believe the number is. I'm just wondering if you could enlighten me as to the part of that budget which is spent on staff and operations.
I understand that in the Tourism department operates on regional funding and I expect there's funding to promote Nova Scotia itself so I'm wondering - what is the breakdown of the regions and funding that is going to each region, funding to staff and funding for the overall promotion of Nova Scotia itself?
MR. FUREY: We don't have the numbers for staff available with us as we speak but we'll certainly source that information for the member.
What I would like to share with the member is we don't break out that funding in those areas that the member identified: staff, operations, marketing and by region. The largest portion of funding for tourism is actually spent outside the province, in marketing and promotions, in Quebec, Ontario, western Canada and most recently the Eastern Seaboard and predominantly Boston. I take great pleasure, Madam Speaker, in sitting and watching a Boston ball game and in the digital screen behind home plate, Nova Scotia and our provincial flag and our website certainly recognize the efforts of those within the tourism sector who have done a marvellous job in promoting Nova Scotia to our neighbours west and south.
I am hearing great news about bus tours that are booked for the Yarmouth ferry, comparing those to numbers from last year, we anticipate a significant increase in tourist traffic via Yarmouth and our good neighbours from the south.
MADAM CHAIRMAN: The honourable member for Kings North with less than two minutes.
MR. LOHR: Less than two minutes, okay. Will the Tourism Agency continue to be housed in Windsor?
MR. FUREY: To the member's question, we presently have a five-year lease in the Windsor office and I'm not aware of any discussions at this time to change those circumstances.
MADAM CHAIRMAN: A correction, your time will be going to 6:44 p.m. We didn't take into account the break.
MR. FUREY: That was my question, I didn't realize the break was costing me, that might have changed my attitude toward the break.
What I was wondering, I know that the Tourism Agency does work with regional interested parties and I think, for instance, I believe it was called Southwest Nova, there was a sector. I'm just wondering if that model is going to continue in partnership with, for instance, in my case in the Annapolis Valley, with the Annapolis Valley Chamber of Commerce, if going forward those types of partnerships will continue?
MR. FUREY: Madam Speaker, to the member's question, those partnerships that the member has spoken of are broken down into three components: events, the regional VICs, and marketing. There is no change to the funding for any of those components.
The marketing piece is an application-based process where the agency will provide funding up to a maximum of $35,000 on the commitment that the partner contributes 50 per cent as well. I'll use the Annapolis Valley Chamber of Commerce as an example: they would be able to apply for that funding, based on that criterion, for purposes of market.
MR. LOHR: I would also like to ask about the - and I believe the Doers and Dreamers Guide is no longer being printed. Maybe I'm not correct about that, maybe it is still being printed. I would like to ask, if that guide is not printed, is that information available online? I know some organizations are still interested in copies, will there be some copies of that guide available?
MR. FUREY: To the member's question, the Doers and Dreamers Guide is still being printed, over 300,000 copies in fact. There's certainly a reduced distribution but they are available through any one of the Nova Scotia Access facilities, which I'm proud to say falls under my responsibility in the area of Service Nova Scotia, or any one of the 57 VICs that presently exist around the province.
I think one of the components of this subject is the online access that we're finding many of our travellers and residents are utilizing to their advantage. I use the comment in many of my discussions that technology really is the world we're living in and we see a significant transformation from one of an analogue government to a digital government and how important that transition is. Those circumstances certainly play out in the marketing of Nova Scotia through the Tourism Agency and the opportunity to use that online service to our advantage.
But to the member's question, the Doers and Dreamers Guide is still available and as I indicated earlier, through our Access Centres or any one of the 57 VICs that presently exist around the province.
MADAM CHAIRMAN: Time has elapsed for the Progressive Conservative Party. We'll now move forward to the NDP.
The honourable member for Chester-St. Margaret's.
HON. DENISE PETERSON-RAFUSE: I know that the minister was just talking about tourism and, as we know, tourism is one of those sectors in our province, very much like the film and television industry, that brings attention to the province and generates economic stimulus right through from the very large business right down to the tiniest business, even a one-person business.
I'd like to ask the minister - he made a comment about the monies being spent, tourism dollars that are being spent outside the province - can he give us some examples of where that money would be spent? Who is the recipient of those dollars?
MR. FUREY: To the member's question, there are multiple mediums where we're using media to promote and market Nova Scotia. Some of the more common obviously are TV and paper ads; some of the outdoor digital displays; I mentioned earlier the digital display behind home plate at the home of the Boston Red Sox, the name of the stadium slips my mind at this time, those types of digital ads; certainly Google and social media; all avenues and opportunities to market Nova Scotia.
MS. PETERSON-RAFUSE: Can the minister provide an estimate of how much is spent on an annual basis on those outside mediums?
MR. FUREY: The marketing budget fluctuates. Probably the best way to break it down is about $3 million spent in Canada and $2 million spent predominantly on the Eastern Seaboard with a focus on the City of Boston. If the member desires to have further breakdown of that, we could certainly source those numbers by region and share those with the member.
MS. PETERSON-RAFUSE: Would the minister also be able to provide us with some information on other economic investments that are made in other parts of the world, whether it's the U.S. or China, in terms of what it's costing us to make those international trade investments, whether it's going there to meet or going to trade shows, whether it is beyond media in terms of investing in outside businesses? Is there a figure he can supply us with?
MR. FUREY: I apologize for the delay in gathering that information for the member, but to the member's question, we are expending about $300,000 in the U.K. environment and another $250,000 in Germany, which really are, if you look at some of our partnerships or friendships, alignment with our international neighbours, Germany and the U.K. are predominantly, as you know on the South Shore, a strong German presence.
Those are the monies that are expended in those areas. I think some additional information for the member that would be helpful: we also partner in the Atlantic Canada Tourism Partnership with our neighbours here in Atlantic Canada and we also work within the Canadian Tourism Commission, obviously to market and promote the province in the broadest way possible.
MS. PETERSON-RAFUSE: Would the minister have the dollar attachment to those partnerships, what it is costing us in terms of being involved with those different organizations you just mentioned?
MR. FUREY: The Atlantic Canada Tourism Partnership is a three-year agreement so we are contributing $720,000 per year for a total of $2.1 million over the three-year period, but the feds top that up to the tune of 60 per cent so it is, I believe, a $21 million fund that we contribute a little over $2 million to, over three years.
MS. PETERSON-RAFUSE: Thank you to the minister. Do we have a statistical analysis of what dollars those investments are bringing back to the Province of Nova Scotia?
MR. FUREY: The follow-up work that the agency does is actually pretty extensive. They do a monthly release of the number of visitors, the number of hotel rooms that are purchased as well as the spend of our visitors. They also do an extensive visitor exit survey and every three or four years they do a tourism impact study, so a tremendous amount of data coming from those analyses and the work that the agency has been doing.
MS. PETERSON-RAFUSE: So we don't actually have a dollar figure to attach to the investment that we are making in terms of promoting our province outside of the boundaries of our province? We just went through a list of what it cost but are we seeing a return for our dollars? Do we know that?
MR. FUREY: I'll provide the member a little bit of history. In the 10 years preceding or up to 2012, we saw a decline in our tourism traffic. There was a shift in the strategy where monies expended internally were now expended externally. That visitor erosion flattened in 2013 and this past year the industry has seen a 1 per cent increase in visitors and a 3 per cent increase in accommodations and that's the most significant increase in accommodations in the tourism sector over a period of 13 years.
MS. PETERSON-RAFUSE: What I would like to bring to the attention of the minister - and I know his knowledge and his expertise to take over this particular role in our province as being the Minister of Business - is that there would be a connection with the fact that we, as a province, have for many years invested dollars outside of our province to companies in other parts of the world that do not pay taxes here. I'm drawing the line to make that connection that our Premier said the very same thing about the film and television industry - those tax dollars were being spent outside. His information, which I personally believe is misinformation, is saying that those tax dollars are not being spent here.
Therefore it is part of business practice, as we just established, that monies must be spent outside to foreign interests if we are going to bring, internal to the province, economic development and stimulus. That is no different than the argument to be made about the film and television industry, the fact that those companies that receive the tax credit for job creation - because that's the focus of it - come here and they hire a provincial production company and those companies that are international have the means, financially, to be able to, with our help, provide that competitive edge to be able to hire our film and television production companies here to film big productions like Haven and The Book of Negroes. There is a long list of the history in Nova Scotia of those major movie productions. As I mentioned, Magic Rock, Jim Henson, had planned on coming and we're looking at losing that production here.
I just want to make the point that if we're going to tell the people of Nova Scotia that it's wrong to invest dollars in an international company that comes in here and supports our provincial industries, which supports our local industries, if that's wrong how is it not wrong that we are investing in companies outside, to promote ourselves nationally and internationally? To me it's the same thing.
Also, the argument may be made that it's a different amount of money but I think you have to continue that argument to look at, as the minister said, when you evaluate you evaluate all along the process and then you make sure you do a final evaluation. We know the final evaluation with the film and television industry is a $24 million investment for $130 million back, on an annual basis.
I would like to ask the minister then, the government recently invested $22 million in the RBC and would the minister be able to tell me how many jobs that particular investment of $22 million will bring to the Province of Nova Scotia?
MR. FUREY: Certainly a fair question from my colleague. Let me speak to the RBC initiative first and I'll backtrack to the Film Industry Tax Credit.
The $22 million that my colleague has referenced is a payroll rebate initiative with RBC and the numbers of employment opportunities, I believe in that arrangement, is up to 500, so RBC would not receive any of that money until they achieve those targets. The Film Industry Tax Credit, as presented, provides a 25 per cent tax credit up front and allows for recovery of the remaining 75 per cent based on taxes owed.
When we look at the RBC initiative, it equates to about an 8 to 10 per cent tax credit, compared to the 25 per cent Film Industry Tax Credit, which demonstrates how favourable that Film Industry Tax Credit has been. Even with the adjustments in the application of the Film Industry Tax Credit program, it is still a very favourable funding model compared to the RBC initiative, which equates to about an 8 to10 per cent tax credit.
MS. PETERSON-RAFUSE: I guess I would follow up with the minister in the fact that we know RBC is a very wealthy corporation, very wealthy. I would also like to make the point that the investment in the Irving shipyards was the same type of investment. It was payroll rebate and those targets needed to be met. It was not just a cheque written to the Irving Corporation; it was based on very much the same if not an identical type of program that we have offered in this province for many years, based on those targets.
The other aspect is I don't think the RBC, if I may say, needs a competitive edge in the banking world. Whereas in the film industry it is so competitive that to have a favourable 25 per cent investment, I think needs to be weighed with the fact of the return. I believe that's what is missing in the picture here. I don't understand why. I have to bring it back once again to the fact that if I went to my financial planner and I was able to afford a $24 million investment and he or she said to me, Denise, you're going to receive $130 million for that investment, I think I would be jumping for joy with that type of return.
I know the minister - two questions in one here - says that the RBC investment will result in 500 jobs. I want to ask the minister, does he know how many jobs are created by the film and television industry on an annual basis?
MR. FUREY: I thank the member for the question. In discussions with industry representatives this morning, they have used the number of 2,300 jobs within the film industry, the film sector. So to the member's question, I have some familiarity and understanding as a result of a number of discussions I have had with people in the industry but most recently this morning with the leaders of that industry.
The other piece that I want to speak to briefly is the member's reference to the $24 million investment for $130 million return. When you look at the return to the province, the return is not $130 million because that does go into other areas. The return to the province actually is about $15 million in tax revenue. I know that's a point that we have disagreed on in the past but I think it's a point worth mentioning.
The other thing that I want to mention specific to my colleague's comments, I respectfully would like to correct the member as she referenced the Irving initiative. The Irving initiative was not a payroll rebate, but was in fact a Jobs Fund expenditure.
MS. PETERSON-RAFUSE: The minister just provided some detailed financial information on the return of the film and television industry. Can the minister table where that analysis came from? What type of research was done by our government, who did that research? Was it done within the Department of Finance and Treasury Board? Was there independent research to confirm that these are actual figures? My other comment to the honourable minister is the fact that the $15 million tax return is what the government is seeing coming back into its ledger.
The unfortunate part is there doesn't seem to be the realization that the remaining - if it is $130 million that the industry says - that the remaining $115 million is going into our local economy. That money is being put into our community. I guess I'm not quite sure why the government doesn't get that and is investing in other areas to try to stimulate the local economy.
We just talked about tourism dollars to increase tourism to the province, which is wonderful, because of the fact that those dollars go back into the local economy; they go back into a business like, in Chester, the Mecklenburg Inn, just the same as Haven did. When they were in Chester they were spending money at that very bed and breakfast. I got an email today from the owner who can't believe that this decision is being made.
I wonder, from the minister's side of things, could he table all the, every bit, of financial analysis that was done about the film and television industry, who did it, when it was done and where they got their research information from?
MR. FUREY: I again thank the member opposite for the question. The research specific to those numbers was conducted within the Department of Finance and Treasury Board. I'll make a request to the Minister of Finance and Treasury Board to source that information and share what we can with my colleague.
The other thing that I just want to go back to, we all in this House understand and Nova Scotians understand the investment. Some would suggest that the RBC initiative is an expensive venture. Well, spending taxpayers' money is an expensive venture in many areas. What I do want to share with the Legislature and with all Nova Scotians is that the $22 million investment is securing those jobs in a payroll rebate format with the RBC and is spread proportionately over 10 years, based on their ability to meet employment targets.
The investment in the Film Industry Tax Credit is $24 million annually. I think that's important that we all know the value of the RBC investment. I'm not minimizing the investment in the Film Industry Tax Credit, but many are using the RBC initiative as a detractor when in fact the RBC initiative, as I said earlier, equates to about an 8 to10 per cent tax credit, if you want to parallel, compared to the 25 per cent tax credit within the film tax environment.
MS. PETERSON-RAFUSE: I guess both of us probably did very well in our high school years on the debate team because I have to come back at you. We can't lose sight that the investment of the $24 million results in 2,300 jobs annually, and as the minister just said, the Royal Bank investment - which I'm not against - is 500 jobs over 10 years. That's a good investment, but I think it's a better investment that the film and television industry were providing $24 million, 2,300 jobs annually, and on top of that what we have to remember is the very thing that the Department of Business has in their new mandate and mission statement, to create the winning conditions in our province to encourage business development.
I would debate the fact that we have 2,300 jobs a year from the film and television industry, most of those jobs are young people, and that is part of the winning condition that we are trying to provide in our province and market. That industry is a young, vibrant industry. It's an industry that moves around and I think that's part of the problem for those who are recommending that changes be made the way they were to this tax credit, which has created, after 20 years, a vibrant industry that is really taking off. There's proof of that, there's proof of that in terms of The Book of Negroes, in Haven, Inspector Gadget, believe it or not, being produced here.
We have the Trailer Park Boys and one thing I would like to mention even about the Trailer Park Boys, if you realized this, when you're doing the financial analysis and you look at what else it brings to us is that Netflix actually picked up the last two seasons of the Trailer Park Boys. How many millions of people use Netflix? When you go and you hit the icon for the Trailer Park Boys on Netflix, they always have subtitles and those subtitles give a little information on that show. Go and try it on Netflix and guess what you'll see in the subtitle - the words Nova Scotia.
You cannot pay enough for what that does in terms of encouraging tourism to the Province of Nova Scotia, what it does to put us on the world stage, and that's what it's all about. We want people, we have proof, there is so much proof here and I believe unfortunately - the government created a new Department of Business to encourage business to come here and you're going to use the same philosophy and the same reasoning of using Nova Scotia tax dollars in the same manner as what happened in the film and television industry.
I do not understand where you're making a different statement when the fact is that you will be working very hard as a minister to identify sectors that need to have government support, not only financially but in terms of creating that winning environment. What is not a more winning environment than having the world's attention on this little province because of shows like Haven, which is a Stephen King production; like having movies, The Book of Negroes; (Interruption) Call Me Fitz, that's right, too, up in the Wolfville area. We could go through our province and we could identify the strength that this industry brings to this province and it brings us this strength in a number of ways: under Tourism, under the Department of Communities, Culture and Heritage.
In Budget Estimates I actually asked the Minister of Communities, Culture and Heritage and he said how important it is for us to promote ourselves as a province, how important it is for us. If you want to have the winning conditions and if you want to change the attitudes of Nova Scotians, which was a prominent part of what the Ivany report was saying, we need an attitude shift and the government has said that over a number of times. What creates an attitude shift more than a very young, vibrant industry that keeps our youth here; a young, vibrant industry that puts money into the local economy and right into the hands of those people whose doors our government members knock on and they receive financial benefits from that industry being in their community?
What more do we want? We have, exactly like the Ivany report said, we have a perfect storm here, in terms of an industry that took 20 years to get to that point. (Interruption) I know that the member opposite said that The Perfect Storm was a good movie. Well there won't be any more here.
The fact is you have to realize this is not an issue that you can go back on in two or three years because after 20 years of investment, the restart for the industry here will not happen. We have examples in New Brunswick where the industry dried up and they are trying it again; Prince Edward Island, the industry totally dried up. Now look how beautiful Prince Edward Island is and how popular Anne of Green Gables is and their film industry, there's none there because they made the same disastrous decision that is going to happen under your watch.
I know this minister - because I know this minister - knows what I'm talking about. I do realize that he is in a very difficult position. He has a new portfolio and I really appreciate the answers he has given tonight. I think they have been very fair and to the point but I would actually like him to really think about the fact that he is standing there, as this new minister, to create business and we have that business in our province already and it's called the film and television industry. Thank you very much, Madam Chairman.
MADAM CHAIRMAN: The honourable Minister of Business, one minute left.
MR. FUREY: Thank you, Madam Chairman. I do want to thank my colleagues for the questions and the dialogue that we've had this afternoon. I appreciate that input.
MADAM CHAIRMAN: Shall Resolution E2 stand?
The resolution stands.
The honourable Government House Leader.
HON. MICHEL SAMSON: Madam Chairman I move that the committee do now rise and report progress to the House.
MADAM CHAIRMAN: 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 7:25 p.m.]