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HALIFAX, THURSDAY, JULY 6, 2006

SUBCOMMITTEE OF THE WHOLE HOUSE ON SUPPLY

2:00 P.M.

CHAIRMAN

Hon. Mark Parent

MR. CHAIRMAN: I want to welcome you to the estimates in the Red Room. With the concurrence of the Liberal critic, who will be back in one second, we can start. We're going to call upon the minister and perhaps, Mr. Minister, you could introduce those who are sitting with you, and then you could start with your opening remarks.

Resolution E1 - Resolved, that a sum not exceeding $38,840,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Agriculture, pursuant to the Estimate and the business plans of the Nova Scotia Crop and Livestock Insurance Commission and the Nova Scotia Farm Loan Board be approved.

MR. CHAIRMAN: The honourable Minister of Agriculture.

HON. BROOKE TAYLOR: Thank you, Mr. Chairman. I would like to introduce to you, and to members of this committee, Rosalind Penfound. Rosalind is the Deputy Minister of the Department of Agriculture. Good afternoon, Rosalind. To my left is Weldon Myers. Weldon is the Director of Finance. They join me today as we go through this budget. I would note that Weldon was very kind to assist me over at the Department of Natural Resources; he's responsible for several departments. We're very fortunate as a province to have these people and some of the Department of Agriculture staff people with us here today. They do a tremendous job behind the scenes for the most part, so I just want to thank staff for coming in today.

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It is my pleasure to be here and talk about the Department of Agriculture and some of the things that the department does. As you are aware, this is a new department for me, although over the years I have had the opportunity to become quite familiar with the concerns of the agriculture industry and the programs of the department - and I would emphasize "quite familiar". As you are fully aware, agriculture is important and essential to the economy of our province. This industry has prospered because of the people who work in the fields and the people who bring their products to the market.

The department is structured to best service the needs of the industries through three service areas, as well as a centralized policy planning, communications and the Nova Scotia Agricultural College. As well, AgraPoint International Incorporated is an alternative service delivery operating at arm's length from the government. It provides technical advice to the industry and is managed by an industry-led board of directors - I would like to emphasize that it is an industry-led board of directors. I've mentioned the importance of our industry to the economy, and you need look no further than at the employment stats.

Mr. Chairman, I know that you are very aware of the importance of the agriculture industry, as you represent Kings North. I appreciate, over the years, your support. I know that the two critics for the NDP and Liberal Party are very sincere in their efforts to support the industry, and the men and women and the families that are out there every day.

The agriculture food manufacturing industry employs 14,000 people; another 50,000 are employed in food distribution and service industries. Farm cash receipts for 2005 have been projected at $455 million. The agri-food sector, including processing, contributes $922 million in value added to the provincial gross domestic product.

Now I would like to give a brief overview of the department's business plan as it relates to the services and programs funded in this year's proposed budget. And, Mr. Chairman, I will try to be brief.

One of our goals is to provide for sustainable resource management through environmentally and socially responsible development of the agriculture and food industries. To do this, we will work with industry to develop new strategies for the disposal of SRM - that's specific risk materials - deliver environmental farm plans and deliver climate change initiatives. Another goal is to promote industry growth and development through effective business risk management. We will do this by delivering business risk management programs, strengthening the provincial insurance products to include coverage for more crops and livestock, risk splitting and catastrophic loss.

Another goal is to provide the environment for competitive agriculture and food businesses. To do this we will support the Atlantic BioVenture Centre at the AgriTECH

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Park; implement marketing strategies for commodities such as pork, horticulture, tree fruit and wine, and organic produce; address market access and supply chain needs of regional food producers and processors; encourage participation in Brand Nova Scotia and the Taste of Nova Scotia; capture value-added market opportunities; provide training on the new nutritional labelling initiatives; promote tracking and tracing systems, which is very, very important; develop a foreign investors plan; and provide lending programs to encourage investment in the agriculture and agri-food industries.

It is also essential that we provide for responsible governance through an orderly development of agriculture and food industries. We will accomplish this by enhancing animal health and disease prevention efforts; implementing the foreign animal disease educational support plan; continuing to develop and implement livestock health legislation; expanding the accreditation of department laboratory services; working with the Department of Health Protection and Promotion, and the Department of Environment and Labour to evaluate environmental health issues; and develop interdepartmental strategies for responses to adverse natural and man-made disasters.

The Nova Scotia Agricultural College is an important and unique part of the department. Our goal for NSAC is to provide for education and lifelong learning through teaching, research, community services and youth development. To do this, we will develop new academic programs that respond to industry needs; implement a plan for recruiting and retention of students; and develop a Ph.D. program in agriculture.

I have highlighted just a few of the programs and services we support in the 2006-07 budget. This budget demonstrates the department's commitment to the agriculture industry and its employees. We will continue to provide important programs and services to our producers. This year's budget will see services, program delivery, staff and operating abilities remain intact. The new opportunities the department will explore are very exciting.

In closing, I would like to reiterate that Nova Scotia's agriculture industry is a key component of the provincial economy, and very important to our rural communities. The industry provides employment and opportunities that enable Nova Scotians to work in traditional industries, train in Nova Scotia and live here. As you have heard, the Department of Agriculture is an active partner and responsible leader in Nova Scotia's agriculture industries.

Mr. Chairman, with that, I would thank you for your time and look forward to questions and concerns that honourable members may have.

MR. CHAIRMAN: Thank you very much, honourable minister. We know your commitment to agriculture and we look forward to good things from you. We'll now turn it over to the NDP critic, and you have an hour for questions.

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The honourable member for Hants East.

MR. JOHN MACDONELL: Thank you, Mr. Chairman. My understanding is I'll be using 50 minutes and one of my colleagues, I believe the member for Pictou East, will be using the last 10 minutes.

I want to say right off the start, Mr. Minister, congratulations on your portfolio. I envy you, you're where I would like to be, I think. I know from where you come, I know where your house is, right next to the Middle Musquodoboit Exhibition Grounds. So I'd like to know, for a guy who grew up in a rural community, heavily based on agriculture, what is your vision for the industry in this province?

MR. TAYLOR: It's an excellent question and, John, I would perhaps let you know, in case you haven't been aware, that not only do I come from a very rural community - and yes, I'm quite sure you do know where I live. In fact, I think the Department of Agriculture was kind enough to assist you with helping the exhibition grounds and 4-H barn, so I just want to confirm that you certainly do know where I live, because that 4-H barn is right behind our family home in Middle Musquodoboit.

[2:00 p.m.]

John, I grew up on a small dairy farm out in Chaswood, which is just a stone's throw away from where I live today. Back several years ago, especially during the 1950s and 1960s, before the whole bulk system came into being, we shipped milk in the old milk cans. Each and every morning we had to yank them out of the cooler, put them on the back of the tractor and take them down to the milk stand on the side of the road. I think it was at that time Taylor's Transfer that came along and picked them up. That's just a little background, I know you're asking for the long-term vision.

I've had an opportunity - and I know you have, John, because you're very dedicated to this file - to watch the agriculture industry grow and evolve. There have been highs and there have certainly been some lows. But I guess what I would like to see is a province where agriculture not only can sustain, but it must enhance. I'd like to see our different commodities all be very successful and be very successful in the long term. Like you, I recognize that especially the cattle producers right now and the hog sector, the horticulture folks, they're having some difficulties, and the fruit growers - I mean, you could name any commodity and they all have issues and challenges. But I find that those right now have an especially difficult time.

I'd like to, as Minister of Agriculture, and I think our government shares this vision, we would like to provide in our role as a department, the ways and means that these commodities can, in fact,

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in our role as a department, the ways and means that these commodities can, in fact, not only be viable but they can be passed on to young people. Right now, young entrants have a heck of a time, especially taking over some of the dairy farms in the Province of Nova Scotia.

So, John, I guess generally, I'd like to see Nova Scotia's agricultural industry further enhanced. I don't want to see us go back in any way, shape or form. I believe that in many aspects we are leaders, we're leaders across this country. I've been told by a couple of my colleagues - and I wasn't aware of this - and I'm very proud of the fact that we were the only province east of Alberta that made direct payments to the cattle producers relative to the mad cow disease.

I think that's very significant, not significant from a monetary point of view, but it's significant in that the government highly prioritizes that life-blood industry in the Province of Nova Scotia. So my vision would be to see less farms grow up in alders and weeds and more young entrants be able to take over, regardless of the commodity. I think we can work - and in our most recent platform, we have committed to more research and development and better marketing initiatives. I think through that, we're on the world stage and my vision is that we continue to be there, but to be there as an important and successful player. That's going to take government intervention, I don't doubt that.

MR. MACDONELL: Thank you. I also want to thank your staff. I know they probably don't have a choice in terms of being here, but I have always appreciated their turnaround time in getting back to me, trying to field any questions we might have.

I have a couple of things, one in particular to my constituency only because I'm mindful of the short amount of time we're going to deal with estimates in this department. I thought I had a copy of a letter I had sent to your predecessor on the turkey licence for free-range. I have constituents who have applied - this would have been their third year - but I think they didn't get a licence this year. I never got a response on that correspondence - I actually got a copy a few days ago from my office, but I can't find it in my briefcase. I'll get a copy and bring it to you sometime after estimates, and see if you could track down a response for that.

MR. TAYLOR: Could I just for clarification, did you say the family had the licence for two years?

MR. MACDONELL: They had one, I believe, for two years and applied again this year and didn't get one. I think for them, this business of these free-range licences is a bit of a problem because you can't plan. You couldn't go to the bank and say, we'll be raising this many next year because you wouldn't know that. This is something that I've dealt with other ministers on, it doesn't really seem to change much. I would suspect

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the rest of the industry probably feels they're giving up this quota even though it's not a quota per se.

I'd like the department to look at perhaps drafting legislation to have a free-range component and have completely separate legislation for the Nova Scotia Turkey Marketing Board, so that when an actual allocation is given, it's not seen as we're giving this to you. It would come directly to a completely different board that deals with free-range, whether it's turkeys or chickens or whatever. In that way, we can actually look to kind of grow in that sector of the industry. I won't spend a lot of time on it today, only that I'll bring it to your attention again when I find my correspondence on it. But as of the other day I didn't get a response, or didn't seem to have one in my office on that.

The other issue I'll just raise, because I'm not sure you've dealt with it - I know I raised it with the Honourable Ron Chisholm - the Orchard Renewal Program. Some of the producers who are not members of the Fruit Growers Association felt the administrative fee they were being charged was excessive. They felt that a solution to this would have been for the department to administer that program. Maybe it would allow for people who are members of the Fruit Growers Association or not, but if they were in orchard production, they all should have access to these dollars.

I'll raise that with you, but I think that horse has probably left the barn by this stage. But it is one for the future, I would like the department to think about perhaps the angst of allowing commodity groups to administer these programs that are taxpayers' dollars with a little more of a level playing field would make them appear to be much fairer anyway. You may have some background on that, so if you want to comment, that will be fine.

MR. TAYLOR: John, this isn't a put off or a short shrift, as you appreciate, I've just been barely sworn in a week. I haven't had a lot of opportunity to engage in some serious briefings, but from what I do know, the department has in fact started the process of facilitating a meeting between those who are outside the Fruit Growers Association, bringing them together and hopefully there will be - I know it's very important to the critic with the Liberal Party as well - bringing those two sides together to see if some resolution can be worked out.

I've heard from a good source that the fees seem to be quite a bit more than the members of the association. It's not lost on this department, but just the same, we do in different aspects of life have associations that work extremely hard. We have to be mindful of the good work they do and there seems to be - sometimes when it appears, maybe there's a misperception, but it appears as some people wanting the benefits of an association, a program, and it doesn't matter if it's the trucking association or the Farm Registration Program or perhaps in this case, but that's something that I don't have

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enough information on. I know the good staff here does and we will take that under advisement.

MR. MACDONELL: I'm one of those people who listened to their presentation when they came to me and thought it was a good program. So I'm not here to muddy all over the fruit growers.

I think, in terms of any of these organizations, it's a question of the carrot or the stick. If they're advocating for a good program and they get it from the province, then they're the ones whose membership fees have helped finance the organization to be that voice, then there's probably no better way to draw people who are somehow disenchanted - or for whatever reason - have not been members or were and left, to draw them back by offering the program to them at the same fee rather than charging them more, almost as a punishment for not being a member. Some of that is their own politics of the organization and they'll have to deal with that.

For politicians, I think it comes down to the question of if they're getting this province's tax dollars, taxpayers' money, then if you're a member or not you're probably an equal participant. So in that regard there probably should be a little more equity in the distribution. I'll leave it there.

MR. TAYLOR: John, as I say, with all fruit growers, whether you're in an association or not, like I said, we will try to get you something on that, and perhaps an update. As I said, our understanding is now that the two sides are going to meet, and the department's facilitating that and, hopefully, maybe there can be a resolution reached.

MR. MACDONELL: I want to ask you, there was a statement, I believe, made by the Premier during the election campaign about 10 new people going to the department. My impression was these were for Extension Services. So I'm not really clear what their role is and I'm not clear as to why there seems to be a shift away from the AgraPoint model - or I think it is, maybe it's not, I'll let you explain what it is. So now we have AgraPoint, and now we have additional staff in the department. Also, the only booklet I have with me is the Nova Scotia Estimates Supplementary Detail. This wasn't in the budget when the budget was first brought to the House. I'm curious as to where that might be, what page and what line item and how much of a change that's going to be. So could you fill me in?

MR. TAYLOR: I can certainly understand your concern with that. I do know that it doesn't show up in this year's budget, but the monies will be allocated in the 2007-08 budget. However, the department has not determined the types of positions that the support workers will actually take. In fact, I've had some very, very informal discussions with the Federation of Agriculture and I've had some discussions with the Premier, as

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well. I can assure you that before these new employees are put in any position and at any place, it will be done with consultation with the federation and industry.

As much as I'd like to say they're going to go here, they're going to go there, I can't today. I know there's concern out there. I know you're at the head table at the agriculture forum, it was raised at that forum over in Dartmouth back on June 5^th, or whenever it was.

They will be budgeted for next fiscal year. The positions haven't been determined at this point, and it may be - I just say may be - that we would want to revisit that to make sure that those folks are placed in positions that are the most supported by the Federation of Agriculture.

[2:15 p.m.]

MR. MACDONELL: I'm not clear. So what is your intention of when those positions will actually be filled? Are you saying not this budget year at all, or after January, or Spring of 2007?

MR. TAYLOR: The preoccupation now, obviously, is to get the budget through the Legislature. I know our Party's election platform promised the 10 new agriculture support workers. The Speech from the Throne mentioned that, but at this particular point I can tell you that they will be budgeted for in the next fiscal year. I can't say there may not be some developments previous to that, but at this particular point, as you pointed out, they're not in the budget. I don't want to mislead you or the farming community out there to think they would be placed this fiscal year. They may be, but we have to have that dialogue with the federation and, then, of course, we have to look at some of the bottom lines in the department.

MR. MACDONELL: So the Premier's comment, was that wishful thinking on his part?? If he hadn't contacted, if he hadn't spoken with the federation, if he hadn't kind of outlined what roles these people would have, how did he come up with the number 10? Why wasn't it 12 or eight? Any notion of where that came from?

MR. TAYLOR: To be fair to the Premier, people in some parts of the province have complained that their ability to access specialists, or specific programs or things of that nature, is difficult. I'm not sure those complaints are legitimate, but I know the complaints are there so I give them credit for bringing those concerns to our ear. I think the Premier listened to those concerns and subsequently committed to 10 support workers. Now, that is a pretty general term and I think that what I'm hearing from the Premier is that we do have an opportunity, or at least I will as long as I'm Minister of Agriculture, to discuss with industry how those people can be best placed. I think it's a promise, yes - we know it's a promise, but I can assure you that it's a promise that will

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be kept, there's no doubt about that. I can't commit here today to say they will be on the ground in this fiscal year, but we will work to that end if there are funds available to do that.

MR. MACDONELL: Thank you. I would say it's anything but a general term, it's a very specific term. If you say 10, 10 is pretty quantitative. Anyway, I'm interested to see where this goes, I'm a supporter of putting services back in the department so I would be keen to know how this develops with input from the federation. I guess it's the odd appearance of kind of going down two roads in service delivery that we seem to be doing. I'm just curious about what kind of analysis ever happened, or how the Premier actually ever came to the notion that we need people in the department as staff and then came up with a number.

For a couple of years now I've been asking ministers for a price list of services offered by AgraPoint. Looking at the memorandum of understanding, I think probably services that are offered to the department are pretty clear and I think you can get a price tag on those things. But I notice in the memorandum of understanding, if I read it correctly, there's a clause there that kind of indicates to me that AgraPoint is not bound to give information on the private farm. If it's dealing with government we'll see those numbers because the government will be spending, or the services that it would provide to the government - I'm hoping that the government is not spending much over the $2.2 - but when it comes to the private farm operations, the way I read it, they don't have to necessarily indicate that. I'm wondering if I'm reading that memorandum of understanding correctly, that AgraPoint doesn't have to make that information . . .

MR. TAYLOR: First of all, I think it's fair to say that AgraPoint is a unique service delivery model, I think we would both agree on that. My understanding, after referring with the deputy, is that many of the farmers are reticent to have some of that private information given out. If there's mutual agreement then it would be disclosed, but if the farmers and their families don't want to give out information because, as you know, there's a fee for that service and they're paying for it, so we don't feel that the government has too much status regarding that particular concern.

MR. MACDONELL: Well, that really wasn't what I was asking. My understanding of AgraPoint is it is a Crown agency and you're the shareholder. All I was looking for was a price list. What are you offering to the private sector? What are you charging for it? I wasn't looking for names or what Mr. Jones paid on a bill. I have not been able to get it in two years. I was just curious if such a thing existed, as then I would have quite a bit clearer understanding of what services they were giving and what they were charging.

MR. TAYLOR: I'm sorry and I did misapprehend your question there, but my understanding is that the fees do vary depending on the nature and the complexity of the

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project. I would like to think that they are consistent, I obviously didn't have an opportunity at this point to make that determination, but they do vary and I understand that they're fair from one farm to the next, but it does depend on the nature and complexity of whatever the ask is.

MR. MACDONELL: That makes lots of sense to me that it would vary from farm to farm depending on what you were asking, but somebody must be sitting down and figuring out what that bill would be. Therefore they must be basing that on certain criteria, so I'm assuming the criteria and how they charge must be available. That would really be all that I would be looking for - how much an hour. If part of that is not based on an hour kind of subjective thing, because of this particular job, we would assume that it would be the same for a similar job for somebody else. I'll leave that with you.

MR. TAYLOR: You know it's something too, there may be some reason or rationale to maybe suggest to the board of directors just a request. I know they talk about the prices varying from - I know this is general - $400 to $1,000 a day. Just the same, you want something specific and I think we could make that request.

MR. MACDONELL: I guess for me my next question would be, aren't you curious? You're the shareholder in this so aren't you curious about the public's perception on these fees and wouldn't you like to know? Wouldn't you like to have a sheet in front of you and say gee, what do these guys charge? I'd want to know if I was minister.

MR. TAYLOR: Well, perhaps I'm maybe a little more confident than you are that the prices are reasonable and fair. I haven't and the department hasn't had a great number of inquiries from farmers complaining about the prices that are charged. I don't know if you have or not.

MR. MACDONELL: I don't think anybody knows what they are. I don't think there are a lot of people getting a lot of service from them to be calling, to be honest. If we're going down the road of hiring people back into the department, that's sending one message, that this form of service delivery may not be working. If we're sending another message that we don't really know what they're charging the private sector, I think that's a bit worrisome for any minister, especially when he's the only shareholder for the company. I guess my last question would be, does such a price list exist and if so, can you get it for me?

MR. TAYLOR: Again, I will reiterate that we've heard the fees are consistent with industry standards out there but, like I suggested, maybe as an avenue to bring that to a resolve, we could undertake to ask the board of directors if there is a schedule.

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MR. MACDONELL: I would think that maybe you might want to tell them, but if you want to ask them first that would be a polite thing to do. I think for me, trying to get this information for a couple of years and not being able to see it yet, this kind of makes me wonder.

MR. TAYLOR: Like I said, I consider AgraPoint to be part of that whole agriculture industry out there. I'm the first to admit that it is a unique service delivery model, but I want to be very careful that I'm not asking for information that may be privileged. I understand where you're coming from, that it shouldn't be. I know that the farmers, when they make a request of AgraPoint, receive an estimate of what that particular billing is liable to be and based on the lack of calls that we received, nobody's complaining. I feel that a reasonable approach would be to go to the board of directors with that concern. Am I going to go and have that on the desk tomorrow? No, I'm not going to do that, but I would make a polite request that they would try to provide us with a schedule if they have such a thing, if they don't, maybe they can work one up.

MR. MACDONELL: I would say that I would appreciate that, I could live with that. I guess what I can't live with is if you don't get it, that would cause me a great deal of concern. I would just find it difficult for an organization to get $2.2 million of taxpayers' dollars, that the sole shareholder would be a Minister of the Crown for this province and that he can't get some schedule of fees that they charge. I can't see how that would be privileged if it's not providing information of a particular operation or anything like that. They must have some way they figure out how they charge Mr. Jones or Mrs. Smith or whoever.

MR. TAYLOR: Again there may be something there that's relative to the rates. I would trust there is and I will make the request, but I feel it would only be appropriate ,where it's perhaps a small diversion from whatever tradition may be in place, to go through the board of directors. I know it's not lost on you that the board is made up of industry. I'm not sitting here saying no. The fees vary from $400 to $1,000 a day and they are consistent in the industry, but if there's something more specific then we will get hold of it and we'll ask for it.

MR. MACDONELL: I would really appreciate that and I don't know how we would know that they are consistent within the industry, we never see what they are. I'm going to take you at your word on that and hope to hear back within two years that you will have that. I would certainly be hoping that when the House sits in the Fall that maybe you would have something for me on that. Mr. Chairman, I want to be sure that I leave time for my colleagues, so how am I doing?

[2:30 p.m.]

MR. CHAIRMAN: You have half an hour left.

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MR. MACDONELL: Okay. You made some really interesting comments in your opening speech. You mentioned climate change, initiative, industry growth and industry risk management - you talked as though industry growth was going to be based on industry risk management. I'm wondering if that's the route or the track that your department intends to go, that programs will really be more around the risk management side because number one, I think we're weak in that area and number two, I wouldn't want to see any initiatives for growth in the industry to be based on that. I would like to see them based on market and market share and ability to capture as much of the consumer dollar as possible down to the producer. Those would be the things I'd like, so can you explain what you meant by industry risk management in terms of industry growth?

MR. TAYLOR: I guess maybe you may have taken that a little bit out of context. I think it's important that we do have risk management programs and, based on the last three or four years, it certainly has driven home the message of how important those programs are. There are a number of initiatives taking place regarding CAIS that I'm pleased to see because like you, I've heard from people in the industry that perhaps that stabilization program is not serving them as well as it could. I didn't mean for you to come away with the impression that we were going to leave things to the federal and provincial governments to look after the needs of the agriculture industry.

I think programs can be reviewed from time to time and be amended to better assist the industry, along with government initiatives. In fact, as you know, the federal government has committed, I think it's $1.6 billion to the agriculture industry in Canada. I understand that they are - now this is relative to the mad cow disease - they're coming back and calculating, or at least recalculating the inventory. It's a federal program, but I would hope that it will subsequently assist our farming community down the road as they move along.

The deposit, as you know, was waived, or whatever, relative to the CAIS program. There have been some other initiatives because I think finally the feds are listening to some of the alleged shortcomings, or real shortcomings of that program.

The work is underway to actually simplify that whole process. I don't want to just zero in on that program because that's sort of more or less corroborating what you have said, but it's very important. You know, government too, outside of that and through a long-term strategy and good planning on behalf of the farming industry, should probably lead the way. There will be times, and history has proven that they are extremely vital, whether it's crop insurance or CAIS or any number of programs, the province does pay its share. I know members in the industry, or at least some, do complain from time to time that these are federal programs. Well, you know, again as I said in the House - or perhaps I said here earlier - we were the only province east of Alberta to actually put money in the hands of farmers regarding mad cow disease. I'm very pleased with that.

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MR. MACDONELL: And I'm not going to knock you for that. I think the farmers needed support at that time and I applaud the province if they came with something of their own when the feds didn't seem to be meeting that need.

I guess when I think of, if you're talking about industry growth and I've made the comment of industry risk management. I think the province should have a risk management program. I think that somehow it should be tied - in across all sectors. I think it should resemble something similar to the old pork risk management program, which I believe had a contribution from the producers and a contribution from the province and a contribution from the processor.

I think I would be a little more keen to see the province's obligation more minimal and I would like to see the retailer offering some support in this regard as well. If a hog producer gets $140 a hog and Sobeys sells it out of the display case for $400, you would tend to think that there is probably a little more in that display case that should go back to the producer, especially if he's saying, well, I needed $160, with that I could have made money.

If your notion of industry risk management is somehow a program that will incorporate participation by the producer and yet gets them the value they need out of the retail sector or through the value chain, then I would applaud you and I would recommend that you go that way. Some of the things you said here were supply-chain needs. You said, to provide a competitive environment. I have to ask, what do you mean by that? Where do you see your role or the government's role in providing a competitive environment for the industry?

MR. TAYLOR: Well, the Department of Agriculture and this government do encourage long-term growth in agriculture. In the agri-food industries there are a number of programs that the department and this government delivers. The Farm Investment Fund, the Technology Development 2000 Program, the Agri-Food Industry Development Program, promotion and awareness, and there is the New Entrants to Agriculture Program. Like I acknowledged earlier, perhaps it should be looked at, but it's certainly of great assistance.

These programs are industry development programs and they are outside of risk management. So is the government doing a lot, and a good job of assisting? I believe we are trying our very best to assist the industry with, as you know, limited resources. There are a significant number of programs to help our agri-food industry.

I, too, believe that we have to work to find a way to assist our producers in realizing a bigger return. Many people have mentioned, and may have mentioned to you and, I'm sure, to colleagues to my left, that the retailers are doing quite nicely, thank you. Again, I think it's something we certainly have to look at and work at. I know that the

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pork and cattle commodities, the cattle producers have some strategies that would involve some assistance from the different sectors.

MR. MACDONELL: When you listed a number of programs, did you say agri-food as a program? Can you explain to me what that program is?

MR. TAYLOR: The funding in the last budget for Agri-Food Industry Development Program was $457,903. My understanding is that's to assist folks who are keen to value add some of our agricultural products. There may also be some other initiatives that are supported by that fund. Again, I trust you will appreciate, I'm barely minted in this portfolio, but I will take it under advisement.

MR. MACDONELL: I can appreciate it. I have been the Agriculture Critic since 1998. I don't know all the programs. As a matter of fact, I don't think I have ever sat down more than once with any of the department staff to kind of get briefed on some of the programs. I think that federal programs, just trying to keep a handle on those, when they kept changing, was, I found, a fairly big challenge. At some point I wouldn't mind having some members of staff kind of take a little time, if they could, with me, to go over some programs and what's offered and what they mean.

I would like to know how you measure success of these programs. It would seem to me that the average age of farmers in the province is increasing. Someone told me the other day that it was 58. I didn't realize it was quite that high. The number of farmers seems to diminish from administration to administration. So what are we using as a yardstick to determine the success of these programs and whether they are actually meeting the needs of the industry or helping to slow down the bleed and increase the number of farms? At least if we went for five years and nobody left the industry, I would call that a fair success.

I know there are a number of factors, if you're in the supply-managed commodities, it's a different world than non-supply managed. Anyway, I would just like to know, how does the department evaluate the successes of the programs they offer?

MR. TAYLOR: I would think that there are a number of ways that you evaluate the programs. I mean whether it's by way of an annual report or from practical experience, not just in the farming community but in the teaching profession, something that you know a little bit about too. The demographic is such that there are a number of people going out and moving out. I know I was speaking with a couple of young farmers in the Musquodoboit Valley, farmers you know well. They are a young couple and they were very pleased to apply through the Farm Investment Program for some assistance relative to a water supply for their cattle. They were very grateful that they were able to get that type of assistance. So I would say just in that very limited context, that particular program in that particular case was a success and worked out very well.

[Page 15]

The deputy minister has given me some other information here regarding new entrants, if I can for just a couple of minutes. Rural Nova Scotia communities and the NSFA worked with government to develop a program to assist new entrants into the agriculture industry; $600,000 has been budgeted in each fiscal year since 2000-01. Some of the activities are: 47 applications were approved in 2001, for a total of $601,150 which was paid out to the new entrants; 55 applications were approved in 2001-02 and the money paid out was over $870,000; 47 applications were approved in 2002-03; and 30 applications were approved in 2003-04 and nearly $0.5 million was paid out. Those are just some examples of new entrants. I commend each and every one of those folks and their families and the people before them. It is a major concern, the sustainability of the family farm.

[2:45 p.m.]

MR. MACDONELL: Your deputy may have the answer on the tip of her tongue. I'm curious as to how you determine whether that was enough, and you can say well, it's never enough. Is there any way of knowing, in comparison to other jurisdictions or targets, do you have targets for new entrants? You know, we want x number of new entrants by such-and-such a date, how do you determine - I'm assuming that you're getting more applications than you have dollars for, I would think you would, I would hope you would, that would be a nice thing to know. So anyway, I guess, how did you come up with those amounts? How do you determine whether they're meeting the need?

MR. TAYLOR: There is, I guess with the Federation of Agriculture, new entrant packets. We do have the information from the other provinces, for comparison purposes. The department does go out and monitor and work with the applicants. If they happen to be with the Farm Loan Board, it's quite obvious that you could easily discern from a financial perspective, I guess, as to how they're doing - or you pretty well could, because of the information they require. That program is administered, as you know, through the Nova Scotia Farm Loan Board.

MR. MACDONELL: I guess just a couple other issues and then I'll turn it over to my colleague. I just want to raise the issue - and I'll assume you're not unaware of the higher level of callback on some of the case funding, I think transition funding is what it was referred to, in particular cattle producers that I'm aware of, but I guess I would like you to be a voice around the table whenever ministers meet on this issue. It does seem to be a bit out of whack. I think it's about 30 per cent for Nova Scotia, but about 5 per cent generally across the country if I'm not mistaken, so I think producers do need some kind of help on this.

MR. TAYLOR: The department and certainly - well, this minister now, I've had some people bring that concern to me too, the issue with the overpayment. For those around the table who may not know what that overpayment is, it was based on the

[Page 16]

estimation as to what your losses would be when they did the reference, your reference year, which is based on five previous years and then I think they knock off the bookend years, then they would make up the difference. Some of the projections, I guess, were allegedly not as - yes, they were off a little bit and now the poor beleaguered farmer is finding out that, well at least they were initially, they were being asked to make that payment back to the federal government and through the work of provincial ministers, I would submit, and the graciousness of the federal government, they did agree to put the brakes on all that until the recalculation is done, which will take place by January 1^st.

But just the same, I will take your advice and do plan on being as vocal as I can be when given the opportunity, and maybe take an opportunity - I know the previous minister, Ron Chisholm, sent a two- or three-page letter to federal Minister Chuck Strahl complaining about this, and we have to do all we can along those lines. I don't know what your solution is, but it's pretty hard to come back to somebody after you have given them a payment to help them through what really is a hard time and expect them to fess up and make up the difference. But, yes, I am aware of it and probably can become and will become much more, hopefully, informed.

MR. MACDONELL: I think that probably all we can hope for is that the federal government - and I wrote the federal minister as well on this - would be for them to arrange some type of repayment that's not too painful. I think that's maybe the best we can hope for.

MR. TAYLOR: That's great, and I'm sure you would have sent them along a letter as well. If they are required to pay back, which probably they will I'm sure - we all remember the folks who were devastated by way of Hurricane Juan in the woodlots and where the tax structure changed. I know Opposition Parties, the government, and everybody appealed to the federal government of the day to just let them, you know, spread the pain out a little bit. We were met with a categoric no; categorically we were told no.

MR. MACDONELL: The last thing I want to raise is did AgraPoint open an office in P.E.I.?

MR. TAYLOR: To my knowledge there isn't an office open in P.E.I., but there is an employee who works out of P.E.I.

MR. MACDONELL: And do you think that Nova Scotia taxpayers should be paying for that person to work in P.E.I.?

MR. TAYLOR: Well, my understanding is that there is work being carried out and the people who are requiring - I think it's a female - those services. The reason I point that out is that she's doing, I understand, a terrific job, and it isn't creating any

[Page 17]

difficulties. In fact, not only isn't there an office there, she's working out of her home. So my understanding is that it's working well. I am aware of that, yes, but that's what I've been told.

MR. MACDONELL: You didn't answer my question about Nova Scotia taxpayers, you know, this coming out of the $2.2 million?

MR. TAYLOR: Yes, I just point this out, again I want to emphasize that AgraPoint is run by a board of directors that is industry-led and, you know, what we're hearing is, actually, it's probably saving the taxpayers some money in that the fees are coming back to the province. She's working out of her home, and the location seems to be, actually, an asset in certain cases.

MR. MACDONELL: So she is making more money than she's costing, I guess is what you're saying. How would you know that? It seems to be difficult to find out fees and fee schedules, so what kind of extrasensory perception do you have that gives you this information?

MR. TAYLOR: Well, it seems like you've come right back around to where you started on this particular question. She doesn't just do work on P.E.I., she works in Nova Scotia, as well. The fees, all the fees, are coming back here. Again, the specifics, I'm sure that information is there, but your point isn't lost on me.

MR. MACDONELL: Thank you. I appreciate your time and your staff's time very much. I'm going to just turn over the last few minutes to my colleague, the member for Pictou East.

MR. TAYLOR: Thank you.

MR. CHAIRMAN: The honourable member for Pictou East. You have five minutes.

MR. CLARRIE MACKINNON: Thank you, Mr. Chairman, Mr. Minister, senior staff, I must be very quick. I had a number of concerns that were raised during the election campaign and since. In Pictou East, if I may just stay on the local level, because that's why I wanted the time, there is a diminishing number of farmers, and those farmers feel that they are getting a diminishing amount of attention that is tied in with their decreasing numbers. One of the concerns is that the agricultural industry of Pictou East and all of Pictou County is now served by Antigonish County, I understand. Is that correct?

MR. TAYLOR: I understand there is an employee in Antigonish, there are two or three in Truro, and those folks serve the whole province. I know many years ago, over

[Page 18]

in the beautiful Musquodoboit Valley, we used to have, actually, an Agriculture office, which was very handy and helpful to the local farmers, but the government of the day decided at that particular time that it was a shrewd move to close that office down. Do you know what? We have found - and this has been our experience - that the farming community has been able to access the necessary people out of Truro, usually. While it seems in our area it doesn't matter where the folks live, with the department, it's more important to get the service, and the service is being delivered. Your point, again, is well taken.

MR. MACKINNON: Well, from my background, I believe very strongly in a field- service component in agriculture, for sure. How many agricultural reps are there in the province? Very quickly, because I don't have much time.

MR. TAYLOR: There are agriculture resource coordinators and there is (Interruption) You're trying to hurry me along, aren't you?

MR. MACKINNON: Oh, no, no.

MR. TAYLOR: It's your time that's ticking. There are actually six, Clarrie.

MR. MACKINNON: And that compares with how many in the past years?

MR. TAYLOR: In past years, it's probably about the same until AgraPoint came on stream.

MR. MACKINNON: Another concern that has been expressed to me is that there are a lot of dollar components in Ottawa, and some people wonder, how successful has the department been in tapping these dollars and assisting Nova Scotia farmers in getting every available dollar from Ottawa?

MR. TAYLOR: Well, I can tell you that when there is a federal-provincial program relative to the agricultural industry, or relative to any industry, especially our resource-based sector, this province is very, very aggressive. While I don't have a dollar figure, I can tell you that, in fact, we get criticized a number of times when we actually engage in the federal-provincial program and perhaps don't do something that's perceived to be more provincial in nature, but we're very aggressive. In fact, this government has established an office in Ottawa that will better assist us to take part in federal-provincial programs, and I would encourage you, as a new member, when you're given the time and you take that Ottawa trip, you go up and encourage the federal folks to be as kind and generous to Nova Scotia as they can be and we'll do our part to assist on this end.

[Page 19]

MR. MACKINNON: Mr. Minister, it's not just the department in Ottawa that I want to delve into, it's also the department in Nova Scotia. So I hope the offer is available for me to get over to your department very quickly and find out what you're all about. Some farmers have indicated that the awareness of the programs is so vital, to become aware of them as quickly as possible and to get the assistance that is necessary in going after various programs, and I think that relates back to some of the field service people and so on.

Another question, I know I probably only have seconds left, could you perhaps give me a general idea of the total dollars in departmental salaries contrasted to the total dollars in direct grants to the agriculture industry of Nova Scotia?

MR. CHAIRMAN: The time for the NDP caucus is up, but I will allow the minister to answer that question.

MR. TAYLOR: We have noted that question and we will get you the information. We'll send it off to you in writing as quickly as we can. Thank you for your questions.

MR. MACKINNON: Thank you.

[3:00 p.m.]

MR. CHAIRMAN: We will now turn to the Liberal caucus. You have one hour.

The honourable member for Annapolis.

MR. STEPHEN MCNEIL: Mr. Chairman, I'll be sharing my time with the member for Kings West. Mr. Minister, congratulations, welcome to your new department, and I might say congratulations on your convincing election win. As well, I want to extend a thank you through you to your staff for the work that they've done, not only with me but with the other members of our caucus, when the issues around agriculture have become important in our area.

I just want to do a follow-up on one of the questions you had just mentioned with the member for Pictou East. You had said that you were being criticized or are criticized sometimes when the department and the province go alone to try to find a solution to agricultural problems here in Nova Scotia. Who would criticize you and in what way?

MR. TAYLOR: Perhaps I maybe overstated that, but I do know that it hasn't been lost on this government and this member, and this minister now, that there has been a lot of criticism about the CAIS program, but there have been a lot of adjustments that have taken place to CAIS that have made it - certainly from my perspective as minister - more user friendly. But, initially, that of course as you know is a cost-shared program. A

[Page 20]

number of farmers were asking us to see what we can do to bring at least the administration of the program closer to home. That program is administered out in Winnipeg. We are working towards that end with our Atlantic counterparts to see if some effort can't be made along those lines.

It seemed, initially at least, that people felt - I'm not saying this is right or wrong - but a number of farmers felt the CASE program was more a program to financially assist them in a way that really was beyond the stabilization program that it is. It's purely based on your loss. As I said, those initial concerns, I've heard loud and clear and I think you've heard them loud and clear.

MR. MCNEIL: Most definitely. I've heard it not only from my constituents but around Nova Scotia. I just want to be on record, at no time would I criticize your government or any provincial government in Nova Scotia who is taking the lead. Frankly, some of these federal programs do not respond to Nova Scotia's agricultural community. They don't take into the fact that most of our farms are mixed commodities. They appear, from my vantage point, to be geared towards many of the larger Western farms, single commodity farms.

As a matter of fact, I think I may have been on record a few times as trying to encourage the former minister and the minister before that to go it alone because the community was hurting that badly. Any time you want to step forward outside of the federal government program, you can count on me to help you out. I'll just put that on record.

I'll just draw your attention to Page 3.1 in the Estimates Books where it talks about the department itself. There is a decrease in the budget, I want you just to explain that to me if you would.

MR. TAYLOR: Yes, Stephen, when the departments were separated - I'm referring to a Summary of Budget Changes between 2005-2006-2007. Are we talking about the same?

MR. MCNEIL: I'm looking at the Estimates Book, Page . . .

MR. TAYLOR: I apologize, I'm just getting myself back on track, as you can appreciate, I'm only barely a week into this job, but I do have a summary of those changes and how we went from 2005-06 budget to the 2006-07 budget. The difference that is there is the consequences of salary adjustments, energy cost adjustment, university grant adjustment, the farm income support program adjustment, paid in 2005-06, lab services, other miscellaneous increases, i.e. mileage and transfer to the Nova Scotia Fishery Loan Board. There was a position there that went to the Department of Finance, and the department as well, I understand, made a prepayment to the federal government

[Page 21]

and when you do the math with these adjustments - some came out and some went in - the budget is basically the same. There was a prepayment - we had $1.5 million - and that money went into the Agricultural Policy Framework, which covers a lot of different programs. A prepayment was made.

MR. MCNEIL: So the budget reduction that appears to be here in the estimates has nothing to do with the separation of Fisheries and Agriculture?

MR. TAYLOR: When I mentioned earlier the transfer to the Department of Fisheries and Aquaculture, that figure is over $4.5 million.

MR. MCNEIL: There is also a reduction in staff of about 60 people. So the only people in your department - there were only 60 people in the Department of Agriculture and Fisheries who actually worked in Fisheries?

MR. TAYLOR: I am just confirming what you are saying, 60 people went . . .

MR. MCNEIL: Well there is a reduction in staff; you had forecast it last year at 519, it was actually . . .

MR. TAYLOR: The 60 employees are so-called "fish people", they are with the Department of Fisheries and Aquaculture. There are some services that are shared. With the creation of the Department of Fisheries and Aquaculture, 64 positions were transferred.

MR. MCNEIL: Just so I am clear, and I think this is what you are saying, under the old department, out of 514 people who were working there last year, 60 of them were dealing with fishery and aquaculture issues? The rest were dealing with agriculture issues?

MR. TAYLOR: I guess I would say that is correct, but there are people who are with the Department of Agriculture who work with the Department of Fisheries and Aquaculture in terms of marketing and promotion and development and trade and things of that nature.

MR. MCNEIL: Just so I am clear. They would be your employee, though, they would be an employee of the Department of Agriculture. Where in the budget would there be a cost or a benefit, I guess, where would the resource be coming from when those employees of yours are working for the other minister? Or is the Department of Agriculture going to cover the cost of these employees working in the Department of Fisheries and Aquaculture?

[Page 22]

MR. TAYLOR: Okay, the 64 employees who went to the Department of Fisheries and Aquaculture are paid from the Department of Fisheries and Aquaculture budget. The other employees have been budgeted for and are paid through the Department of Agriculture.

MR. MCNEIL: So what would these employees be doing when they go to the Department of Fisheries and Aquaculture? I guess what I am wondering, is your department funding - and the agricultural community, I assume, would expect that your department would be solely looking after agricultural issues, and that if part of this budget is being used to pay for employees working for the Department of Fisheries and Aquaculture, I don't think the industry would be overly happy about that.

MR. TAYLOR: Well, yes, as you know, the departments have just basically been separated. It is completed. However, there were a lot of "fish people" who came to the Department of Agriculture when they initially merged a few years back. A lot of the work done by both departments has a common interest, like food safety, and inspection, and promotion, and things of that nature. I think even you would admit that it would be probably in the best interest of food safety in the Province of Nova Scotia if the Department of Agriculture facilitated those employees, and that's what the case is today.

MR. MCNEIL: I'll just ask you this then - and I recognize you're new to the department - over the next period of time could you give me a list of the people who are working in your department doing work for the Department of Fisheries, and the time that's being split, could you undertake to do that, and let me know?

MR. TAYLOR: The deputy has indicated that she would be happy to meet with you to address some of these concerns. Again, I trust you do appreciate that this has basically just happened. In 2002 when the fishery employees, or the department, came over to the Department of Agriculture, the budget was I think around $7 million. The budget out of this department is $4.5 million, but . . .

MR. MCNEIL: I do appreciate that, but you also would have to understand that the industry would want to know that this is just not an optics issue, where the departments are being separated and the fact that people working in the Department of Fisheries are actually still in the Department of Agriculture, being paid under a budget which has actually been decreased - and is that an actual true number that you're spending on Agriculture or has that number actually lowered and we're playing, well, optics a little bit, and moving the numbers around?

So that's why I'm concerned about that, because that was one of the issues that was brought to my attention from the industry. It said it's one thing to have a separate department, but if it's not going to be funded properly - so that's why I'm looking for some written confirmation of the employees, what they're doing and, the ones who are

[Page 23]

working for the Department of Fisheries who are being paid by your department, what percentage of their time is being spent on fisheries issues, and is there any money flowing from the Department of Fisheries to help offset that? I don't see that in the budget. So I appreciate being new, but I would just like a commitment from you and the deputy that that will be forthcoming.

MR. TAYLOR: Well, look, we will undertake to get you that information, but again I do want to say that a lot of the concerns, I guess, related to the food industry are common and a lot of the work is shared between the two departments - you don't have to go out and duplicate what you're doing in the food industry, they are related, but we will try to be more specific along those lines.

[3:15 p.m.]

MR. MCNEIL: Thank you for that. I notice under Senior Management - it's on Page 3.3 of the Nova Scotia Estimates - if the departments have actually separated, I don't see a big reduction in the cost of Senior Management. So, are we sharing deputies, how is that working?

MR. TAYLOR: Senior Management does at this particular time reside with the Department of Agriculture.

MR. MCNEIL: Just so I'm clear - your department is covering the cost of some of the Fisheries employees and, I assume, since there's no reduction, or very little, in Senior Management, you're also covering the cost of the Deputy Minister of Fisheries. How do we respond to the agricultural community and say what has been the benefit to them about the separation - where's the benefit to them in the department? It looks like you're going to cover the costs of the Fisheries Department.

MR. TAYLOR: Well, you know, I would just say with all respect that the Premier and this government has established two departments. I understand there are some concerns, and there will be some initial concerns with senior management and the sharing of employees.

We have undertaken to get you that information in a more specific way, but it should be emphasized that we can in fact, and have at this point, provided the agriculture industry out there with our undivided attention, and we will work closer, I believe, with the industry. I think to my knowledge all three caucuses supported a separation of the departments. There will be some issues that are common - I don't think there is any doubt about that - and there will be a further reviewing of this whole evolution. I don't think even you would suggest that we come in with an axe and just separate the two and say here, you go your way. There will be a transition, and we are in that transition period.

[Page 24]

MR. MCNEIL: I guess what I am saying, Mr. Minister, is you don't have to come in with an axe - I am not suggesting anything of the kind. What I am suggesting is the numbers should be true. If your deputy is spending part of her time at the Department of Fisheries, it shouldn't be in your budget, it should be in their budget. If your employees are spending part of their time in the Department of Fisheries, it should be in their budget, not in yours, because that comes, quite frankly, out of your ability to provide services to the agricultural community of Nova Scotia.

MR. TAYLOR: Well, first I would say that I don't believe, in fact, I know - and I can't speak for the Department of Fisheries and you probably will have some questions for the Minister of Fisheries in time - on good confidence that the agricultural industry doesn't want us, I wouldn't think they would want us to go out and spend more money on senior management, and I don't know if that is what you are suggesting here today, what I am saying is that any time I have needed . . .

MR. MCNEIL: No, I'll tell you, let me be very blunt about it. If your deputy is spending part of her time in the Department of Fisheries, then that part of her salary should be in the Department of Fisheries, and the money you are going to save should be spent on the agricultural community and the farming community of Nova Scotia. I am not suggesting at all that you should be spending more on senior management.

Let me be very clear about it, if she is spending part of her time on Fisheries issues, then let the Minister of Fisheries pay for that portion of her salary, and the money that you save there, put in programs for the agricultural community and for the benefit of the agricultural community. That is what I am saying - but I take it that you are going to forward that to me and I look forward to that.

MR. TAYLOR: I just want to make sure you understand that at least to this point I have never had to wait a minute to have any conversations with the deputy minister, so Agriculture is being extremely well served. As you know, the same as I know, all the funding for everybody, including us, comes out of the consolidated fund.

We are in a transition period; there will be more changes down the road, I am certain. We will get you that information and I think once you see that information you will understand because of, more especially the food industry, that the direction we are going will make a lot of sense.

MR. MCNEIL: I appreciate that and I look forward to that. And I will be on the record - I have not waited for the deputy to get back to me, either. It is not a question of the deputy's attention to Agriculture, it is a budget issue.

AgraPoint - it seems to be an annual question around here and I think both of us, the NDP Critic and myself, seem to enjoy that issue, it comes up a lot. Did I hear you

[Page 25]

correctly, that you are going to get a fee structure, you are going to ask for a fee structure from AgraPoint?

MR. TAYLOR: Yes, I made that commitment to the member for Hants East, that we would approach the board of directors, because it is industry-led, and ask if they have a fee schedule that we could share with the Opposition Critics.

MR. MCNEIL: I will go on record - rarely do I hear a farmer complaining of the service they received from AgraPoint, but what I often hear is, it is hard to figure out, one farmer seems to be charged one amount and other farmers charged something different. This seems to be where the biggest issue is coming in. I think it would be important for you, as the new minister, to find that information out. I think that would quiet a lot of issues that are going around right now about AgraPoint and the fact of abolishing it and everything else. People have been happy with the service they've been receiving from it, by and large, but the issue has been around the fee issue. So I would encourage you to strongly ask for it as you move forward.

During the election campaign, as it was mentioned earlier, you talked about 10 extension service workers being added to the department. Would they be doing similar work that AgraPoint is doing?

MR. TAYLOR: That's a fair question. I think I indicated earlier that we have committed to speaking with the Federation of Agriculture to better ascertain their views regarding the positions to make sure that whatever we do would be supported by industry. I would think - in fact, I will commit - that we won't place any of these workers without consultation.

MR. MCNEIL: If it's the decision of the department to have these workers brought into the extension service part of the department again, and you're going to perhaps take over some of the stuff that AgraPoint is doing, will you be cutting that $2.2 million yearly payment to them?

MR. TAYLOR: It wouldn't be my plan to cut that $2.2 million to AgraPoint.

MR. MCNEIL: Maybe if you begin to do some of the work that they're doing, it wouldn't be?

MR. TAYLOR: Right now, with all respect, it seems fairly hypothetical, because you're saying, if. As you know, the specialists are with AgraPoint, and with the Department of Agriculture, I suppose you recall our six Ag Reps as more generalists, but when you want specifics on the farm, most folks are going to AgraPoint.

[Page 26]

MR. MCNEIL: That's a fair point, Mr. Minister, and I will look forward to hearing more about the 10 employees you are going to be hiring and what their role will be in the delivering of services.

During the campaign, the Premier announced an interest forgiveness loan. Was that just forgiving interest to beef farmers?

MR. TAYLOR: My understanding is that it was targeted at the cattle producers, and the department has made a $2 million Ruminant Loan Support Program available, and it's put in place over five years, $2 million per year. The farmers who have borrowed on that program have an opportunity, through an application process, to have the interest relieved. In other words, the government will make those interest payments for 12 months, provided they're approved by the Nova Scotia Farm Loan Board.

MR. MCNEIL: Why would the Farm Loan Board have to approve what Cabinet would be approving? If you are going to pay the interest on a loan, as long as they get their money, that is really all I think they would be interested in.

MR. TAYLOR: No question, the interest relief program was approved by Cabinet but the farmer still has a process to follow, and I understand that it is fairly simple.

MR. MCNEIL: I'm sorry, I didn't hear that.

MR. TAYLOR: There is a process in place, and my understanding is that it is by way of a very simple application. I don't know about you, but we haven't had anybody complain who has made application for interest relief. They are very pleased to engage in that.

MR. MCNEIL: I guess I must be living in the only part of the province where they are complaining. They weren't complaining about the fact of the interest relief, they were just complaining about the fact that that program was just not enough and it wasn't going to work properly and a whole number of things, but that is a topic for another day, it is another issue.

It was brought to your attention earlier, the Nova Scotia Fruit Growers Association and the Orchard Renewal Program, and you spoke about that. There were a couple of issues around it. One was the administration fee that members were paying and non-members were paying. There was a substantial difference, there was a density issue planting. There were two or three components to this program. I wonder if those components were developed in the department or whether the fruit growers developed those components?

[Page 27]

MR. TAYLOR: Yes, the fruit growers did develop those components and they did consult with the department.

MR. MCNEIL: I wonder if that is going to be the practice of the department now, to write the cheque to the different commodity groups and say you develop the program.

MR. TAYLOR: We have a specific agreement in place with the fruit growers and there are accountability mechanisms in place, and it is based on a lot of research.

MR. MCNEIL: So would somebody in your department have signed off on the administration cost the fruit growers were charging to non-members and the one they are charging to members? It is doubled, quite frankly, it is 15 per cent for a member and 30 per cent for a non-member. Your department basically is giving the fruit growers a hammer to hold over the heads of the people who were not happy.

[3:30 p.m.]

MR. TAYLOR: Are you speaking specifically of the Honeycrisp Orchard Renewal Program?

MR. MCNEIL: Yes.

MR. TAYLOR: Well, you know, I can tell you that government, industry, fruit growers and the research community are working together. This is an exciting new economic

opportunity, and I think renewal of our agricultural sector requires a lot of creative solutions. I commend the fruit growers and the association, and we certainly are doing what we can as a government to support those who are outside the association, but the majority are members.

MR. MCNEIL: Unfortunately, Mr. Minister, this is dealing with taxpayers' dollars and you're sending it out to the Fruit Growers' Association which, quite frankly, if each member should pay a 15 per cent administration fee, that's fine, I'm not arguing that. I think what the question from your department should be to the Fruit Growers' Association is what are you doing for a non-member that you have to charge them 30 per cent? We can debate this and we can sit here and say, well, they're doing all these other marketing things. That's up to the fruit growers, quite frankly, to go out and convince those farmers to belong to their organization. It's not up to government to give the fruit growers the tool to whack them over the head, and that's exactly what they're doing with this program. They see this as an opportunity to force fruit growers who do not want to belong to the association, to join. That's not the role, and it shouldn't be what the program is about.

[Page 28]

MR. TAYLOR: Like I indicated earlier, we have facilitated a meeting with the two groups. We're hoping they can work out their differences. Again, as I told the member for Hants East, there are a lot of people outside of different associations and memberships, and this and that and the other thing, who want all the benefits and sometimes you have to be fair, and we're going to be fair with the fruit growers.

MR. MCNEIL: Not to let this program take up the time, but that's not your role, quite frankly, to determine whether or not someone should belong to the Fruit Growers' Association. That is up to the Fruit Growers Association to go out and convince the farmer. The issue is whether or not they should be able to take taxpayers' dollars. No one is questioning whether a non-member should not have to pay an administration fee, the question is, why are they having to pay double, 15 per cent to 30 per cent. That's the inequity, that's the unfairness of the program. Let the Fruit Growers' Association go out and convince the producers to join, not the department. It's taxpayers' money.

I guess what I would be looking for from you and from the department is there would be some assurance that the next time money is being handed out to do a program like this that the associations have to come forward with the criteria prior to implementing this program, because you're telling me somebody in the department hasn't signed off on this or didn't sign off on it prior to it being implemented, you left it up to the fruit growers. What I'm looking for is, when you are going to use taxpayers' money, that that association needs to put in front of your department the criteria that it's going to be to belong to that program. Can we get that?

MR. TAYLOR: Not to be difficult with the honourable member, but it seems to me, if my memory serves me well, and I believe the principle is somewhat the same with the Federation of Agriculture, which I support and you support, in fact, I think you brought a bill into the House supported by government that, in fact, the monies would remain with the people who are in the Federation of Agriculture. I think you sponsored that bill. The principle of the Federation of Agriculture, at least one of the principles, is that the members that join up can engage in the program. The membership stays with the Federation of Agriculture.

The Nova Scotia Fruit Growers Association has done a lot for the industry in the Valley, and we recognize that there are some members outside of the Nova Scotia Fruit Growers' Association, but we're encouraging them to meet with the Nova Scotia Fruit Growers' Association and, in fact, we're working to bring the sides together. It's clearly a case of being fair. You're saying here today that we should come in unilaterally and demand that they reduce the fee, to pay the same as those who are in the association. Is that what you're asking us here today?

MR. MCNEIL: No. Let me answer all of what you have just said. First of all, yes, you're very correct, I did bring a bill into the Legislature that would allow the fees that

[Page 29]

are coming back, that are being paid into the federation, to go directly to the federation or your department, not be returned to the producer. You're very correct, I did that. Every one of these non-members that we're speaking about, the fruit growers, belong to the federation. So they have paid their fees.

What we're talking about today is a program that you've given public money to, not fees that are coming from the farmers, it's public money. You have sent it down to the Fruit Growers' Association and you said to them you have the ability now to charge non-members 30 per cent. The non-members are not saying, we won't pay an administration fee, give me why they should pay double? All I've asked from you today, quite frankly, is before you administer taxpayers' dollars in the future, at least can somebody in the department look at the criteria that they're going to use to administer it, because you're telling me today no one looked at what the regulations would be around administering that money.

MR. TAYLOR: I can't predict the outcomes of the meetings between the two groups, but I can tell you that over the past 10 years of programming and strategic developing and planning for the overall industry's vitalization and for production research and marketing, the Nova Scotia Fruit Growers' Association has done a lot of work. Their members have funded many of the programs and provided the foundation for this new exciting apple. So we want to be fair with the Nova Scotia Fruit Growers' Association and I know that honourable members on all sides of the House want to be fair to them and, again, that's why we've asked the two sides to get together and sort out their differences, and they're going to do that.

MR. MCNEIL: So I guess, is the answer to my question, when you disburse public money to a commodity group to run a program, your department will not want to know what the criteria are going to be on how they're going to disburse that money? Is that what's being said today - you're not prepared to make that minor move forward? You know, this has obviously been one of the flaws in this program because nobody in your department has signed off on this orchard renewal program, and what it would . . .

MR. TAYLOR: You're incorrect. We have a detailed agreement; we have signed off; and we have accountability mechanisms in place.

MR. MCNEIL: So, in other words, your department okayed a 30 per cent fee to non-members. Okay, because that's maybe where all this - I misunderstood that. So your department was authorizing - because that's not what I got in the previous conversation - your department has said to the Fruit Growers' Association, you have the right to charge 30 per cent for non-members in administration?

[Page 30]

MR. TAYLOR: No, I said we have signed off and we still recognize there is some difficulty between the two groups. We have signed off. They are going to sit down and discuss the issue further but to answer your question, yes, we have signed off.

MR. MCNEIL: One of the issues that has been facing a lot of the agricultural farms and families has been what the cost of what they've been receiving for their product, and not being able to make a living - there doesn't seem to be any correlation between the wholesale price and the retail price of agricultural products in Nova Scotia. I'm wanting to know if you have any ideas on how we can bridge that gap, to ensure that when the food dollar is divided up the people who are producing it get their fair share?

MR. TAYLOR: I certainly share the member's concern regarding the divvying up of fees and monies to ensure that industry gets their fair share. Previous to my becoming minister, the department entertained some proposals from some of the commodities so they can eventually receive a bigger share, and we're committed to that end.

MR. MCNEIL: Your department supplies funding to the School Milk Program. Has that funding stayed the same this year, have there been any cuts in that?

MR. TAYLOR: It's the same.

MR. MCNEIL: I believe you also provide a grant to the 4-H organizations around Nova Scotia, has that stayed the same?

MR. TAYLOR: Yes.

MR. MCNEIL: What's your relationship with the exhibitions that happen around Nova Scotia, do you also provide them with a grant?

MR. TAYLOR: We do supply some funding to the exhibitions.

MR. MCNEIL: Has that stayed constant this year?

MR. TAYLOR: Yes, it has.

MR. MCNEIL: You mentioned in your earlier remarks around environmental plans that are taking place in the agricultural community. I will use a program, the liming program that you have. I'm just musing out loud about this and you can tell me whether you think it's a good idea or a bad idea. That is one of the things that happens that is a benefit to all Nova Scotians, not just a benefit to the agricultural community.

[Page 31]

I'm wondering if there has been any movement from your department, discussions with Department of Environment and Labour to help maybe enhance that program? We know in the liming program, for example, it's a"running behind, keeping up" type of thing. Has there been any discussion with the Department of Environment and Labour to help support that program because of the benefit to all of us? It's not just a benefit to the farmer and the agricultural community, it's a benefit to all Nova Scotians.

MR. TAYLOR: Honourable member, as you're probably aware, Mosher Limestone resides in Upper Musquodoboit, in the MusquodoboitValley. I know that for many years I was very fortunate, as a member of the trucking industry, to haul limestone all over the province. A good deal of it went to Cape Breton and a lot of it went to the western parts of the province. In fact, one time, through a river restoration project in Yarmouth, we took many, many tonnes of lime down and it certainly helped bring the pH level to an appropriate level.

The department, at this particular time, has an employee seconded to the Department of Environment and Labour to look at commonalities and different issues. It's certainly not lost on this member the values and benefits of applying lime. Mosher's motto is, for land's sake, use lime. In this case, water too, right?

MR. MCNEIL: Exactly. I'm going to turn the rest of the time over to the member for Kings West. I just want to thank you for giving me the opportunity to ask a few questions and I look forward to arguing with you a little bit more and perhaps maybe helping move the agricultural community forward. Thanks once again.

MR. GLAVINE: Thank you very much. I recognize the chairman. I welcome the minister to his portfolio and the first time to be doing estimates of this department. My colleague, the member for Annapolis, was dealing with some of the detail on the estimates. I guess I'll pick up on a few more of the themes that have been running, the last several months, in my riding in particular - starting off at one of the largest agribusinesses in the Valley, that is Larsen's, and the future of the hog industry.

[3:45 p.m.]

Since the new year, Larsen's has lost about 75 of its long-serving, most-valued employees because of the uncertainty around the future of Larsen's, which is really more reflecting the future of the hog industry. One of the key components to its future is having a viable hog industry. Pork Nova Scotia has presented a three- to five-year restructuring plan. I'm wondering, at this point in time, is the Department of Agriculture wholly, partially or in what manner endorsing that restructuring program?

[Page 32]

MR. TAYLOR: Thank you, honourable member, and welcome to the debate this afternoon on Supply. I want to say good day, if I might, to the chairman, the member for Cape Breton West.

We are continuing, and this minister is continuing to work with Pork Nova Scotia and work with the industry. We helped them - at least the department did, more especially previous ministers - to work up that strategy and we're going to continue working with them. There are a number of "asks" in that proposal. I believe it was submitted last September, if I'm correct, and I think over the last six months it was $2.8 million that the Province of Nova Scotia put into that very important industry.

MR. GLAVINE: I certainly do appreciate government support and the infusion of dollars when they were needed. Currently the future of Larsen's is based upon increasing hog production - currently sometimes at around 2,800 to 3,000 a week - going into the plant it needs to get up to 4,500 hogs, and because of the price structure and the number of months when production exceeds market dividends it leaves the industry with not wanting to make those kinds of investments for the future, to increase their herds and build new barns. The most recent hog grower who lost his farm to a fire echoes the kind of uncertainty for the future as to whether to rebuild or not. We're talking about a considerable number of jobs in the Valley and in other parts of the province.

This short-term help that has been given has been much appreciated, but are you able to look at the three- to five- year period that Pork Nova Scotia is outlining to give a definite plan with a long-term timeline? This is what these producers are wanting; this is what they want to see now, in fact, budgeted for the next number of years in order to restructure the industry.

MR. TAYLOR: Well, this is a major concern, and I know it's a big concern for the member who is placing the questions. We are working and will continue to work with Maple Leaf Foods as well as the industry. I know that the board of directors of Pork Nova Scotia put together, with government's assistance, a government industry steering committee to oversee a two-year plan. We're giving that plan every consideration we can, consulting to and fro, but there are some obstacles along the way and I think if you look back you can clearly see that the industry has required, on average, a couple of million dollars each year to sustain.

At this particular time we're looking at that long-term strategy and we realize and recognize that there are some short-term issues that are very timely. This minister will, once the budget process is completed, certainly try to take time for a number of initiatives, but really to give this a lot of attention. I know you've approached me informally about getting together and discussing some things and I would suggest that this is probably at the top, or near the top of your list.

[Page 33]

MR. GLAVINE: Not having a lot of time remaining here, I was wondering if you could provide just a little piece of detailed information, that is whether the apple growers that were affected by the hailstorm last June or early July received any compensation or support from the provincial department.

MR. TAYLOR: There were some producers who actually received some help through the Crop Insurance Program; there were others, unfortunately, who did not.

MR. GLAVINE: I raised that question because while it only affected six or seven producers, in some ways it magnifies the lack of faith that farmers have in the department. Your predecessor came to the Valley, he is on AVR tape and in The Berwick Register as saying he would provide support beyond crop insurance and beyond the CAIS program to give help to those farmers. We all know that CAIS, and crop insurance in particular, never goes the distance to help those farmers. Two or three of those farmers have been hurting this Spring to bring their orchards up to the kind of level, because we only have the best producers left, in terms of the apple producers now in the Valley.

I had that point made very strongly. During the campaign I visited every single farmer in the riding and that was the kind of sentiment that I certainly had presented to me. I think that is a part of re-establishing good faith with the Department of Agriculture, that when a commitment is made that it is honoured, it is supported. It is somewhat the same way when my colleague, Mr. MacDonell, alluded to the number of farmers who are continuing to leave the industry. I think they certainly now do look to the department for strong leadership and for support. We will see a number of beef producers who will fall by the wayside once again this year - that was an area that certainly was brought to my attention and to our critic's attention, that the cow/calf unit, certainly on our beef farms, needed some support if they are going to have sufficient dollars for herd replacement and for some renewal.

I am wondering, in that particular area, whether or not there is any plan, any prospects for the beef industry. I know that there certainly hasn't been, again, the same follow-through to get our beef in the institutions that I think could be part of revitalizing the beef industry. It is one of those industries, in terms of agriculture, where beef can be raised in all 18 counties of Nova Scotia. I know this will be one of the challenges the minister will be facing, and I am just wondering initially if there is any kind of plan or perspective that you have.

MR. TAYLOR: We have been speaking with the cattle producers, and of course we are working with the Federation of Agriculture, recognizing that that commodity is hurting - that crisis, which was an international concern, certainly has left a devastating effect, an impact on cattle producers in the province.

[Page 34]

It is certainly not lost on this minister - and I can't speak to what a predecessor may have promised, but I can promise you that at the earliest opportunity, I will be discussing this further. We have a strategy that has been submitted from the cattle producers, we are looking at that, but as well we do recognize - I certainly do, and I will impress on my colleagues, and I trust I will get lots of help from Opposition Parties - how important this sector is, and we will commit here today to do everything we can to look at a program.

I will try my very best to do something in the short term - I can't guarantee that, I don't want to be on AVR saying that, I am just telling you that this minister will work as hard as he can with my colleagues, and a number of my colleagues around this table know that it is something that is not lost on this government. Premier Rodney MacDonald, and the government, is concerned and we will work hard.

MR. GLAVINE: With just a few minutes remaining, that is a positive and optimistic note perhaps on which to end. I certainly welcome the minister to come to the Valley and meet with some of the farmers who have made a fine living from agriculture in the past and who now feel marginalized, under-appreciated and under-supported by this government. There is no question, it's no secret the farm community supported me very strongly because I've been a good voice for them. I know this minister is a straightforward, straight-shooting individual, and I certainly hope you will pick up the cause of agriculture.

I do have one other final little question - Kings County is currently going under a major review of their land base and, in particular, development use versus agricultural use for Kings County. It's a very big issue, and it's one in which we can be very shortsighted. We need to think down the road for three, four, five generations from now, in my view, to protect some of what is one of the three best farmland bases in the country. I'm just wondering, is the government looking at all at the possibility of an agricultural land bank, something that may in fact spark a bit of hope for future generations?

MR. TAYLOR: I guess the short answer is that we are looking at that with Service Nova Scotia and Municipal Relations, and the Federation of Agriculture. It is something that is being looked at, and it's not just in the Valley, there certainly is a big concern in Colchester County with issues around land use and municipal planning strategies. It's something, I think it's safe to say, that we haven't made any bold, progressive steps on at this point, but it is something that we're very mindful of and are looking at with the federation and honourable Minister Muir's department.

MR. GLAVINE: Thank you, and thank you, Mr. Chairman.

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MR. CHAIRMAN: This concludes the time for the Department of Agriculture. Could we have a motion to conclude consideration of these estimates?

MR. KEVIN DEVEAUX: A small point of order, Mr. Chairman, if I may. I'm not sure if the minister wants to wrap up and then we could have a motion.

MR. CHAIRMAN: My apologies, Mr. Minister.

MR. TAYLOR: Mr. Chairman, first of all I would like to thank my honourable colleagues for their questions this afternoon. I do apologize, at this particular point I'm probably not as informed as I should be. I certainly will do my very best in the future.

[4:00 p.m.]

As well, I had a chance to speak with the critics just previous to us coming in here, and I'm very pleased - I point this out for the honourable member for Cole Harbour-Eastern Passage - that they extended the goodwill that I extended to them by being brief in my opening statement.

So I do want to conclude my comments by just simply saying thank you. It is a very important industry in the Province of Nova Scotia; in fact in many of our communities it is the lifeblood. Again, thanks at this particular time. There are lots of challenges out there, and I look forward to working with members on all sides of the House.

MR. CHAIRMAN: Shall Resolution E1 stand?

Resolution E1 stands.

Resolution E41 - Resolved, that the business plan of the Nova Scotia Harness Racing Incorporated be approved.

MR. CHAIRMAN: Shall Resolution E41 carry?

Resolution E41 is carried.

We will take a break for five minutes, until the Minister of Economic Development arrives.

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

[Page 36]

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

MR. CHAIRMAN: I would like to call this committee back into order. We'll start with opening remarks from the Minister of Economic Development.

Resolution E26 - Resolved, that a sum not exceeding $60,115,000 be granted to the Lieutenant Governor to defray expenses in respect of the Office of Economic Development, pursuant to the Estimate.

MR. CHAIRMAN: The honourable Minister of Economic Development.

HON. RICHARD HURLBURT: Mr. Chairman, I thank the committee members for the time. As you know, I've only been the Minister of Economic Development for a few days, and I hope that you will bear with me as I rely a great deal on my staff here today to answer your questions. I can tell you that the staff, in the short learning curve that I've had, in Economic Development are very dedicated to the province and to their positions at Economic Development. So I rely on them heavily today to find me the information that the members want.

I would like to begin a few brief remarks. The budget of the Office of Economic Development for 2006-07 is estimated at $60.1 million. That's an increase of $14.8 million from last year. While that may look like a significant increase, it is really just a payment of investments authorized in previous years. The increase reflects the investments authorized through the Industrial Expansion Fund. For every dollar invested through the IEF, we are seeing a return of $3. The fund is creating and maintaining almost 2,500 jobs in the past year.

Last fiscal year, the province authorized $58 million from the IEF. Three investments account for the vast majority of that amount; $19 million for the Credit Union Loans Program, which provides loans to small businesses in this province; $10.8 million for Michelin, Waterville plant to produce a new type of truck tire; and $13.5 million to Ocean Nutrition Canada to help build a new production facility in Dartmouth.

The Office of Economic Development recognizes the importance of helping to develop the rural areas of the province. OED works in co-operation with 14 regional development agencies. These are the agencies that lead economic development at the local level. OED supports the agencies with an investment of $1.75 million each year. OED has reallocated resources from within its organization to the Community and Rural Development Division. This division has a budget of $7.8 million for 2006-07, and an enhanced focus on rural economic activities.

The Minister of Economic Development is also responsible for five agencies. These agencies have one thing in common. They all help grow our economy. Nova

[Page 37]

Scotia Business Inc., InNOVAcorp, the Trade Centre Limited, the Waterfront Development Corporation Limited, and the Nova Scotia Film Development Corporation. Each of these agencies continued to contribute to the economy of this province.

Nova Scotia's economy continues to perform well. Our employment rate is up, our unemployment rate is down. In fact, Nova Scotia has the lowest unemployment rate among the four Atlantic Provinces. We continue to have challenges, and many are basically beyond our control and not unique to Nova Scotia. Even with these challenges, we have seen strong economic growth in our economy over the past five years. In April of this year, after extensive consultation, the Office of Economic Development released the government's updated economic development strategy. Opportunities for Sustainable Prosperity looks at new ways to be competitive in a rapidly changing global environment.

OED has led the process toward a new export development strategy, which identifies actions that will help companies wishing to enter the export market. OED is also responsible for government's procurement and is committed to working with Nova Scotia suppliers to help them access business opportunities and to be competitive. Nova Scotia is a great place to do business. Many of our cities and towns have been recognized as excellent places to locate a business. Nova Scotia has proven that sustainable jobs are critical to our growth.

With those few opening remarks, Mr. Chairman, I'll open up the floor to have discussion. I would like to introduce my staff here. I have my Deputy Minister of OED, Paul Taylor, and Joyce MacDonald, Director of Financial Services.

MR. CHAIRMAN: The honourable member for Halifax Chebucto.

MR. HOWARD EPSTEIN: Mr. Minister, thank you for your introduction. You sound perhaps fairly optimistic about the future of the province. I wish I could share that general view with you. It's not that what you said is entirely inaccurate, I think it just may not be complete. I think there's another agenda at work that I hope you and your officials are giving some thought to. Having seen your deputy at the Economic Development Committee and on other occasions, I know he'll be familiar with some of the concerns I have. I want to put them on record with you, my hope being that you'll turn your mind to them as well.

[4:15 p.m.]

The chief worry, of course, has to do with what you mentioned about exports. We're a peculiar economy throughout Canada, but also, of course, in Nova Scotia in that a huge amount of our economy is oriented towards exports. A lot of that, of course, is reliant on the United States and its market. Canada as a whole, Nova Scotia along with that, is geographically proximate to the largest and wealthiest market in the world, so

[Page 38]

naturally it's no surprise that we turn our minds and our efforts toward dealing with that. The difficulty, of course, is that there are reasons to be apprehensive about just how robust the American economy is going to continue to be.

I wouldn't want to leave here today without asking that you and your colleagues turn your minds very seriously to where we're going to be over the next few years if the United States economy goes into a very deep recession. I think we're all aware of some of the fragilities that are associated with the American economy. There's a huge balance of trade deficits that the United States runs, its federal government is running large budget deficits every year, it's involved in military activities abroad that are extremely expensive, there's a low savings level for many homes, a lot of people have taken on huge amounts of debt during times when interest rates were low and housing prices had gone up, they took that out in terms of home equity loans, so there are reasons to be worried.

I, for one, have a lot of faith in American ingenuity, and I hope it's not misplaced in the end, given how tied we are to them. I think it behooves us here to turn our minds to the problem of what happens if the American economy really does turn out to be going through an extremely rough patch for an extended period. Canada doesn't have a big domestic population. That means we don't have a big domestic economy of our own. We're big producers of natural resources, but we have to sell those somewhere. We've managed to be a very rich country for a very long time by being tied to the United States, but I do have serious worries about just how long that can go on.

Although I have other more detailed points I want to turn to, I started with that because it's the number one worry I think we all should have about the position of our economy here. I wanted it to be the main message I left with you, the main thought I generated for you. It's a serious worry, and I just don't see, in any of the talk or any of the documents that come from your department or any other departments in our provincial government, that there's much consideration being given to what happens "if". We're a very dependent economy, and that's something we have to be concerned about.

I don't know if you want to make any comments on this. If you do, I would be happy to hear your comments, otherwise I'll just move on to some specifics.

MR. HURLBURT: Mr. Chairman, I would like to respond to that. I live in a rural part of this province, and my end of the province relies heavily on exports. Naturally the rich fishing grounds in my home community and surrounding communities of southwestern Nova Scotia, we rely heavily on exports to the U.S. We also have other great trading partners. I can use the example of Iceland. We have a plant in my home community for salt fish that they import and export out of my home community.

[Page 39]

We have to look globally today, and new export strategy is dealing with that. We're not relying 100 per cent on U.S. markets, we're looking globally at where we can export our products from this province. It's not falling on deaf ears, member. I do hear you, and, yes, our department is very aware of this, and we are dealing with it as we speak.

MR. EPSTEIN: Thank you. That's helpful. I encourage you to take your thought and try to actualize it. Canada as a whole and Nova Scotia in particular continue to be hugely dependent on the U.S. market, and I have to say I haven't seen a huge amount of solid evidence of serious global trade focused here. One example that might begin to move us in that direction, of course, is our port, but that's a transit facility. It's fine, it does produce jobs and work, but it's a transit facility. It's mostly a way into the North American market, meaning mostly the American market, for goods imported from elsewhere.

I would like to move along to a series of questions I have about job investment and various announcements that have been made by your government over the last few years. Let me hand you a paper that I've generated. What I've put together here, Mr. Minister, is a collection of the announcements that have been made over the last four years, essentially three and a half years, that includes part of this year. It has to do with amounts of money that the government has offered by way of subsidies to various companies in order to try to either create new jobs or attract jobs.

This is in line, you'll see, with what it is that you mentioned. You talked about investments in creating or attracting jobs here. I've heard successive ministers in your department talk with pride about what it is that the department has achieved. I noticed that you mentioned again today, the spinoffs for the economy but I wonder if you could help me and help Nova Scotians understand what seem to be some odd aspects of this.

You'll see the tables show the number of jobs that are either being supported or hoped to be created and the number of dollars that the government was prepared to put into the creation of those jobs and basically, it's around $60 million each year that we've been looking at. As a matter of fact, we're above that number already, only part way, I think, into this year. What is striking is the huge variation in the amount. You'll see that my figures generate an average of about a little over $24,000, per job, but the variation is enormous.

If you look on the front page, you'll see that Michelin, for example, the amount per job is over $127,000. That's only matched, I think, back in 2003, by the software company, Novellus, which was up around $100,000, a job. The amounts seem to go all the way from that large number down to - well you can see right under Michelin - the consolidated fast freight and the software company that follows there. There's about a $1,400, $1,600, per job. There are some of them where it's $5,000, and so on. Some of

[Page 40]

them are $10,000, $20,000 and $40,000. It's a very peculiar arrangement. So the first thing I wondered is, whether you had any comments for us about the range of dollars that seems to be out there, in terms of job creation? How is it that we end up with such an enormous range of dollars per job?

MR. HURLBURT: Thank you, Mr. Chairman, and through you to the member, you know, he just passed this document to me, but I can tell you, the investments that the individual is showing me, is showing that the government has not concentrated in one area. We've been spread across the province, and it's what opportunities happen in what community. Per job, the payroll tax return is approximately 16 per cent, which I think is a real good return, but it's the issues. If it's an outlying area in rural Nova Scotia, the circumstances are different. That's what it is, and it's for long-term sustainable jobs in our province.

Mr. Chairman, there are four pages here of different investments and that's between OED and Nova Scotia Business Inc. If you look at the document, which, Mr. Chairman, you don't have the opportunity to look at yet, there are, 100 per cent, all across this province, job opportunities that the Office of Economic Development and Nova Scotia Business Inc., has had the opportunity to secure for Nova Scotians, and I do not apologize to anybody for secure jobs and manufacturing jobs for Nova Scotians in this province, for sustainable jobs, long-term jobs.

MR. EPSTEIN: Mr. Chairman, I wasn't actually asking the minister about the geographic spread so much as I was asking about the dollar spread, and I was wondering, again, if the minister had anything that he could offer by way of explanation. Was he saying that the 16 per cent figure that he mentioned had something to do with the amount? I don't think I quite understood what he said about 16 per cent?

MR. HURLBURT: The payroll taxes back to the province is approximately 16 per cent, but these numbers, Mr. Chairman, that the member has tabled here today could be due to high technology too. You had to add that into the cost, per job, but they're sustainable jobs for this province.

MR. EPSTEIN: The difficulty I have, entirely apart from the variation in the amount of dollars, is understanding and explaining to the companies whose owners call me and ask why it is that they're not able to access this kind of government support? Now, it's clear, as a starting point, that the government really couldn't be in the business of offering payroll rebates to absolutely every business in the province that came along and said that it was either going to create or retain a job by threatening to move somewhere else. Clearly it couldn't be done - and I don't know the minister's experience but I know that I get business people calling me on a regular basis asking why the government is funding their competitor and, if the government is in the business of being a bank, how do I get to be involved in this?

[Page 41]

They ask why it is that a company like Michelin, which doesn't exactly seem to be going broke and having serious cash flow problems so far as I'm aware, how is it that a company like Michelin or even a company like RIM which, Lord knows, is not having cash flow problems, or Oxford Frozen Foods which, again, is a highly profitable business, how is it that these businesses are qualifying for the government to come along with public dollars and support them? Now, I could well understand that you might feel that you had no choice if a company that's already established here is suggesting to you, well you're in competition with some other jurisdiction, we're thinking of expanding and maybe we'll expand somewhere else, you might think if that's the game that's being played, maybe we've got to play it, but I've never heard a Minister of Economic Development sound apologetic about this.

I've never heard a Minister of Economic Development stand up and say we hate spending these dollars this way, but we got beat up on and we have to do it if we want the jobs. Whenever I hear these announcements, I hear these kinds of announcements as if they were the most wonderful thing in the world, as if there was no downside to it - as if it was great, as if it should just kind of roll along - and I find this puzzling, and business people who call me find it puzzling, and I don't know what to say to them except that this is weird. I do see the government as occasionally being beat up on because of the pressures of how it is that the game is played somewhere else, but I don't hear the minister say that.

I'd like to invite you to say that, if that's what you think, so that I could at least tell someone who calls that the government feels that sometimes this game is not so wonderful, because most of the official speeches I see say something quite different - or is that not your view?

MR. HURLBURT: Mr. Chairman, first of all, let me reiterate that the staff at OED are very dedicated to securing and maintaining jobs, and creating new jobs in this province. Each individual case that comes into our office is case by case, and I can assure the member that there are a number of provinces in this country of ours that would love to have the Michelin plants in their province, but we have them here in the Province of Nova Scotia and we're very proud of that.

[4:30 p.m.]

I can take this a little bit further. I can expand on it in my own home community. We have Register.com in my community, creating 320 jobs and going up to approximately 500 jobs, I think, in total. That company is expanding and they're on a payroll. They're creating the jobs and maintaining the jobs. Then they get their payroll rebate.

[Page 42]

Mr. Chairman, I can tell you that I was on the plane to New York to lure that company to our province and to my home community - it has been very, very beneficial to my community, and the spinoff from the dollars the people earn in our community is unbelievable. The car lots flourish; the restaurants flourish; the grocery stores; real estate - 320 new jobs in my community that we never had before Register.com was there, and with the hopes of going up another 200 jobs. But it's case by case and our government and this department deals with them case by case. Michelin is a prime example, for this province, with the plants and the employees that they have in this province. We want to maintain those jobs and enhance the jobs and expand the jobs.

MR. EPSTEIN: Mr. Minister, I don't know that I'm any further ahead, having been told that it's assessed on a case by case basis. I don't know if any of the people who call me up are likely to feel much further ahead if I just say to them it's on a case by case basis.

As I've read some of the Economic Development documents that came out of the province over the last few years, it sounded to me as if there was now some hesitation on the part of the government from actually picking sectors. It sounded as if, instead of some earlier thinking in which, say biotechnology, or a couple of other sectors for particular emphasis, it sounded to me as if there might be a bit of a backing away from this. If that's the case, if it's not sector based, what does on a case by case basis mean? Can bakeries or corner stores come forward or are they just ruled out right away? Is there any point in a small business coming and saying here we are, we're thinking of moving to another province or here we are we might need a little temporary help, let's come forward?

We are all aware of the famous example last year of the Snair's Bakery, I don't think we have to push that one too far, but it's highly problematic- and I don't know that the criteria there, that people know that if they meet it they are going to be able to come forward. I don't know if you would care to elaborate on the notion of what's a case by case basis.

MR. HURLBURT: I can assure the member that the doors of Economic Development are open and we look at every case that comes in through our doors. We want to maintain jobs in the province and expand jobs in the province, that's why it's on a case by case basis. Each segment of our department has different criteria. Nova Scotia Business Inc. has different criteria than we do at the Office of Economic Development. The key here is that this government and this department wants to maintain and enhance jobs in this province and attract new jobs to our province. We will stay and do file by file to work to see that we can do that for this province and for Nova Scotians.

MR. EPSTEIN: Minister, perhaps I'll move on to another aspect of this but before I do can I just ask about one particular company? I saw the Order in Council in

[Page 43]

which there was authorization to deal with a company called L3. Unless I missed it, it seems to have been lost in the shuffle. I don't think there has been a formal announcement or have I missed that? Is there some reason why that hasn't been announced although I think it has been approved by Cabinet many months ago, perhaps as early as January? I know we were all a little busy during May but I would have thought something might have happened since then.

MR. HURLBURT: Mr. Chairman, through you to the member, I can assure that member that there will be an announcement on L3. Out of respect that there was an election that took place, as I'm quite sure the member knows, L3 chose not to make any public announcements until after the election and there will be an announcement forthcoming.

MR. EPSTEIN: Okay, interesting, I just didn't know whether it dropped off the table somehow. Moving along to the suggestion you made that it's sustainable jobs that you're interested in, I'd like to look at what has been the centerpiece of job creation under your government and that has to do with call centres. You've pointed out that there has been an increase in employment around the province and it is certainly the case that call centres have been a crucial part of the strategy that the government has pursued. I've seen figures that have ranged anywhere from 30, 40 or up to 50 per cent of the new jobs created over the last four or five years have been in call centres in Nova Scotia. I have to say I'm no longer sure what the exact number is but it's currently considerable.

To take your point about sustainability, what I'm wondering is whether there's a strategy for retention of these jobs? I think I've been saying around this table for about seven years how fragile a sector this is. The worry, of course, is that because these are jobs that are at the other end of a telephone, they could be located virtually anywhere in the world. Increasingly, we're seeing that they are being located anywhere in the world.

The newly robust economy that we're seeing developing somewhat in India becomes a big competitor for us there. India, of course, has a large and in part well educated population that speaks English, they are able to perform a lot of the call centre functions. I know their own sector of call centres is developing, I know some American companies are actually developing call centre companies in India or buying existing ones and developing and expanding those.

They're clearly a big competitor for us, all of which, as I said, makes this sector fragile. Indeed when I look at what it is that the call centre companies have done in Nova Scotia, they've tended not to purchase land themselves, they've tended to rent buildings which makes them even more mobile so I'm worried about the fragility of this sector. I'm wondering what, if anything, you can tell us about how it is that Nova Scotia is going to retain these jobs and if the idea is that we may not retain them, if we're going to find ourselves like Liverpool, losing a company, and it turns out that this is an interim strategy

[Page 44]

for communities that were in need of the jobs. I certainly don't want to be misunderstood on this, it should be clear that those communities certainly have benefitted from getting those jobs but I'm focused on your term about sustainability. It's not a new term, it's the title of the government's latest Economic Development think piece, Opportunities for Sustainable Prosperity 2006.

The idea of sustainability is clearly linked to the hope that these jobs and the industries that they are associated with them will be long-term - if not forever then at least long-term - even five to seven years. Although it's a good transition move for a number of communities, it's not quite the same thing as being really long-term. I'm wondering if you have any thoughts to help us understand the question of sustainability when it comes to the call centre sector. Minister, I see that there's a note to editors that the Premier is to announce a business expansion - I think that's going to be on July 13^th - L3 Communications, so here we are.

MR. HURLBURT: See how quick we are.

MR. EPSTEIN: There we go. What a quick response. Thank you very much. Okay, call centres.

MR. HURLBURT: Mr. Chairman, through you to the member, what has attracted call centres to our province has been the payroll rebate. That has been very instrumental in helping us secure some call centres. I must say and I want to give the credit where the credit is due, it's to our dedicated workforce that we have in this province. We have a bilingual workforce in major parts of the province and the workforce is extremely dedicated to their jobs in this province. That's what is helping maintain the jobs, making them sustainable and companies wanting to come to our province. That's what has happened.

In my own home community, Register.com started out and has expanded already. They're there for the long haul and they're doing a great job for our community and the employees are very dedicated to the company. We're trying to increase the value of the product here in our province. You mentioned in your remarks there about Liverpool, I can assure you that there are companies now looking at Liverpool very seriously. I had discussions with Nova Scotia Business Inc. as early as last evening on this file and they know of the workforce that's there, same as they do in other parts of this province. We will have something in place, I'm quite sure, in a very short time frame, for that community, and we're looking at other communities. Maybe a smaller site for the Shelburne area, for example. These people are here in this community because of the dedicated workforce and the bilingual workforce that we have.

MR. EPSTEIN: Mr. Minister, I think frequently of my time in Grade 3. What I remember is sitting with my classmates and being forced to recite the two-times table and

[Page 45]

three-times table and the four-times table, and the teachers drilled it into us. They made us recite it time after time because repetition is the basic teaching. You keep saying things time after time and that's when people learn them and integrate them, and retain them. This is why I've asked about call centres every year, I think, around this table and made the same points. I'm afraid I don't feel all that comforted knowing that we have a talented workforce here, even a talented, and in some sectors, bilingual, workforce here.

This doesn't seem to me to get at the basic problem of the underlying fragility of the sector. There are lots of places in the world where that kind of function could be performed. That is a call centre function, and we're going to be out-competed in terms of the wage scale. There are many other nations where people have the level of education that's required, or can acquire it, by training on the job. There are many nations as well where they have the language abilities. They have the knowledge and will compete with us on price, and that's the trouble with this sector.

It's not like a mine where if a foreign company comes in and runs the mine, well, you know, the mine is still here. It's not like forestry where the forest is still here, and it's not like fisheries where the fish are still here. It may be problematic enough to have some of our basic natural resources foreign owned, but at least they're still here. That isn't the case and companies are not tied down when it comes to call centres. They're mobile. That's what I meant by fragile before. They can be anywhere and before they came here they were somewhere else. And where they were before they were here was in some state in the United States, for the most part and then they left and came here.

I don't see that the dedication of our workforce, no matter how admirable, and no matter how true what you say is, in the end, going to do it for us. I guess what I should ask really is whether concentrating on the call centre function is still the intention of the Office of Economic Development and NSBI, or have we passed beyond this? Are we still looking at call centres as something that we want to continue to draw to Nova Scotia? Is this where the job growth is going to be, or is it going to be somewhere else?

[4:45 p.m.]

MR. HURLBURT: Mr. Chairman, between the Office of Economic Development and Nova Scotia Business Inc., we are always looking for different industries for our province that will match communities and the work force in those communities, but there has not been a major announcement in three years on a call centre in this province, but we are upgrading the . . .

MR. EPSTEIN: What was RIM?

MR. HURLBURT: Mr. Chairman, the RIM project is a support project here for their own worldwide network that they have. It's their own company.

[Page 46]

AN. HON. MEMBER: It is an internal call centre, is what it is.

MR. EPSTEIN: I don't think my point disappears just because it is an internal call centre. It is a call centre. I mean it is a fancy call centre, well-paying jobs, educated people, all of which is available elsewhere in the world and probably at a better price. I am glad they are here, it is wonderful that they are here. What I am worried about is this question of how long they will be here. Is it really the case that it is going to be sustainable, or are they going to be here for a while and then after six years they will find a better - meaning less pricey - place to be and they will be off. I don't know. Got new troops, maybe there is an answer.

MR. HURLBURT: Mr. Chairman, I still want to go back to my home community and Register.com. When I went to New York and met with the executive of Register.com, any given day 20 per cent of the workforce did not even call in, alone not show up to work. The dedicated work force we have in this province, we should be very proud of the workforce we have in this province. That news is spread all around, all across the Eastern Seaboard just from Register.com being in little old Yarmouth, stating that the dedicated workforce and other companies that may want to look at our communities as a place to open business.

MR. EPSTEIN: Okay, thanks. Could I move on to another topic. I would like to ask the minister about a particular situation that is highly problematic at the moment and that has to do with Stora Enso. I wanted to direct your attention to the situation at Stora Enso and I wonder, really, whether you can give us an update? Is there any change in the current state of play, which I understand to be that the mill is not operating and there has been a vote on the collective agreement but that power rates are still an issue, at least according to the company. Is that the essence of the current state of play?

MR. HURLBURT: Mr. Chairman, through you to the member, I think he is well aware that the labour dispute has been settled with the workers and the union and the management and that the power rate is going to the URB in September some time. That is about all there is to report. It was raised today, I think, in the House in Question Period and it is the same answer as it was this afternoon.

MR. EPSTEIN: Okay, what I was really asking was whether there are any other factors that we ought to be aware of at the moment.

Can I ask what involvement, if any, your department has in this? Is this a matter that your department is taking a role in?

MR. HURLBURT: Mr. Chairman, through you to the member, my department coordinated the government effort to come up with a solution for the Stora Enso situation

[Page 47]

on the provincial perspective. It was led by my deputy and we did come up with a solution on the provincial side for the Stora Enso issue.

MR. EPSTEIN: Could I ask you, minister, if you are of the view that if the Stora Enso proposal with respect to electricity rates that it has just now filed with the URB, were to be accepted and implemented by the URB, would the mill reopen? If so, would the whole of the mill reopen?

MR. HURLBURT: Mr. Chairman, through you, I wouldn't want to speculate what the decision of the URB will be or what the company's decision will be after they get the response from the URB. So that is kind of hypothetical and I can't answer that. How can I answer that for the company or being presumptuous and thinking what the URB is going to do.

MR. EPSTEIN: What isn't hypothetical is that there are 600 or more jobs on the line, that is an important employer not only in a region but in the whole of our province.

The reason I ask is that it is not clear to me that the company has actually promised that if its position on power rates is accepted, that it will continue operations. It seems to me that the company has not frankly said what criteria it will apply in order to determine whether there will be continued operation of that plant, either in whole or in part.

What I am asking is whether you have heard differently? Has the company said at some point that if it is successful in getting the power rate that it has now said publicly it is after, that it is going to continue to operate?

MR. HURLBURT: I am sorry, I didn't . . .

MR. EPSTEIN: Oh sure, I was saying that so far as I am aware, the company has not actually said that having settled the municipal tax issue, having settled the collective agreement and if it finds that the official position which it has filed with respect to power rates at the URB is resolved in their favour, that they will definitely continue to operate that plant. I know they have raised all these different factors and they settled two of them and the third one is still outstanding, but unless I missed it, I haven't heard them say that for sure if they get what they want on power rates, that they are going to continue. I am wondering if either I have missed it or you have heard representations that say something different, or is it just an unknown?

MR. HURLBURT: Mr. Chairman, through you to the member, I can tell him that the executive of Stora Enso told the Premier of the province that if they could restore a satisfactory agreement on the labour and the power and the taxes, that they would reopen that mill.

[Page 48]

MR. EPSTEIN: Well, that will be interesting. I have to say that I don't often find myself on the same side of issues with Nova Scotia Power but I have to tell you that I don't think power rates, in the end, are really what this dispute is about, the same way that I didn't think in the end that the collective agreement was really what this is about. This is a question of global supply and demand in the pulp and paper market. I think those are the overriding factors and I think we are just as exposed to losing those jobs, even if the URB rules in Stora Enso's favour. We'll see.

Can I ask specifically around Stora Enso, whether it is the position of the government that they are no longer putting any money on the table, that the deal about land leases was the extent of it, that is really what it is that the government's financial involvement is likely to be, is that right?

MR. HURLBURT: Mr. Chairman, we had numerous discussions with Stora Enso and, as I mentioned earlier, led by my deputy, we came up with a product that they accepted and the government accepted and we are moving ahead. There is now one outstanding issue and that is the power. We are just waiting for the URB to come back with the results of their decision and then we are in hopes that that decision will be favourable and the company will be able to deal with the decision of the URB and get that plant up and running.

MR. EPSTEIN: Mr. Minister, I want to be clear that I am not encouraging you to put money on the table, except for the possibility of looking at helping employees who might be displaced, to make a transition if necessary, either a transition to a new owner, if there is going to be a new owner of the plant, or to some other line of work. But in terms of an ongoing subsidy for the plant in order to try and keep it going that way, I understand why the government wouldn't want to do that. Can I ask about Shaw Wood, and can you just tell us whether there has been any development with respect to that company and the 200 jobs that are about to be lost this month?

MR. HURLBURT: Mr. Chairman, I can assure the member that Nova Scotia Business Inc. has been working with the company and with the local community in looking for maybe another tenant for the building. If we can't make something work with Shaw, we are looking for another tenant for the area. That is a beautiful facility. It's all upgraded and updated, and we are working with the community, as I said, to see if we can attract a new company to the area.

MR. EPSTEIN: Mr. Minister, I'll tell you something interesting that came to my attention when the problem with Shaw Wood became public - that is after they told their employees that they were going to close, and it's this - it turned out that only about 5 per cent of the wood that they were using in their manufacturing was Nova Scotia wood. The rest of it came from Ontario, Quebec, New England. I was astonished. (Interruption) I'm sorry, am I being corrected on my figures? No, okay, fine.

[Page 49]

I was astonished to find that it was only 5 per cent of their input that came from our forests, and I wondered why it was that we seem to be having essentially, I would say, the signs of problems in our forestry sector. It's not that pulp and paper wasn't predictable as a prominent sector. I think it has been recognized for a whole variety of reasons for a long time that international competition was going to cause us some difficulty, but even here, for whatever reason, we didn't seem to have the necessary quality of wood to go into it.

Is there anything you can say to help me understand why it is that here in a province where we have forests and a forest industry, people who work producing and cutting trees, why it is that when we have what we all desire, which is a secondary manufacturing facility attached to one of the primary industries, why is it that the input is only 5 per cent ours? It would be as if we had, I don't know, a fish processing plant and a cannery, or a pie-making facility, and they were bringing their apples in from somewhere else or importing their fish from somewhere else. I mean I found that astonishing. What was the problem? Was there some reason why it was only 5 per cent of the input?

[5:00 p.m.]

MR. HURLBURT: Mr. Chairman, you know, global competition is growing every day and we're trying to stay in the marketplace. Poland, you know, secured the contract that the Shaw company had, but going back to the fibre issue, that was a requirement of the end product that they needed and apparently they were getting it at a better rate, as far as I can tell, outside of the province. That would be a question I guess we would have to pose to the company.

MR. EPSTEIN: I guess what I was wondering was whether it was price or quality and, if it's price, given the transportation factor, I would have thought that it must be a very significant difference in price if we were getting out-competed there? Do we know?

MR. HURLBURT: I really believe, Mr. Chairman, that it was the specs of the material that they were asking for and they were getting it outside of the province.

MR. EPSTEIN: Does this mean that we didn't have the quality woods for veneer left in our forests?

MR. HURLBURT: Well, I'm not going down that road, I can't answer that. Maybe you should ask the Minister of Natural Resources that question. I can tell you that it was the specification, you know, for the end product with IKEA, I think it was.

MR. EPSTEIN: No, I'm not questioning IKEA's specs or what it is that they need for their product. Clearly, they're a successful international company that has done very

[Page 50]

well for a long time. The question that I was left with, really, was whether we have so oriented ourselves in terms of how our forest industry has been managed over the last number of years that we're really looking at producing wood for pulp and paper, and, to a lesser extent, for some lumber purposes, that we've neglected the potentially higher quality woods that would generate the veneer. If you don't know the answer, then I'm happy to pursue it elsewhere. That, I have to say, is my worry, is that is one of the things that has happened in our forestry for some time.

MR. HURLBURT: Well, Mr. Chairman, if I may, I was just told that the end result, the company that was acquiring the finished product wanted harder fibre than we can grow here in Nova Scotia, and it wasn't available here. That's why they were bringing the fibre in from outside.

MR. EPSTEIN: Okay, I have to say I'm not convinced that this is related to, say, climate somewhere else. I think the problem has been that we've so oriented ourselves in our forestry to pulp and paper that I think we've just missed out on the opportunity of what we've all said for many years we're looking for, which is value-added secondary manufacturing, and we just don't have, I think, what it is that's needed now. Anyway, as you say, perhaps something for the Minister of Natural Resources, although I've also raised this with that minister from time to time.

Mr. Minister, can I move to a couple of things that struck me when I was reading earlier this year the new Opportunities for Sustainable Prosperity document that came out. I guess some of this was actually also repeated in some of the budget documents that came out this year. It is the Nova Scotia Government Business Plan. I was struck there by some of the same talk. The point I would like to talk about for a minute has to do with a sector of the economy that isn't tied to natural resources but has to do with our knowledge-based industries.

Of course, InNOVAcorp is the entity that's often looked to as being part of our key here, of course along with our universities. So I'm wondering if you can tell me anything about the idea that I read about of cluster development that seems to be part of the government's business plan? If you have with you the government's business plan, this is on Page 53 and following.

MR. HURLBURT: Mr. Chairman, an anchor tenant is the key that we're looking for, if we can find a company as an anchor company, the spinoff from that company will spark other companies to come in for the anchor tenant to feed off the smaller companies. That's what we're spawning out there for you.

MR. EPSTEIN: So the Woodside Knowledge Park that's referred to here, Ocean Nutrition is already there, yes. Are they not the anchor tenant, or is there someone else that you're looking for?

[Page 51]

MR. HURLBURT: Absolutely, Mr. Chairman. That is one example and that's what we're talking about, creating that type of environment in as many places as we possibly can in our province. But, other companies will feed from the anchor tenant, that goes without saying.

MR. EPSTEIN: We're blessed in Nova Scotia with a lot of universities, including many that have graduate schools and we are well placed, I think, to develop our knowledge industries. I think we're well placed to encourage many of our young and new graduates, both with first and higher degrees to stay in Nova Scotia. I hope that will be the case. Certainly, given the fact that we have so many universities, that we have so many well educated people here, they can start their own businesses and thrive. I hope that will happen.

What I didn't see and what wasn't clear to me was the extent to which, either through InNOVAcorp or through any branch of the Department of Economic Development, work is being done with our universities in order to either promote commercialization of their research or to focus some of the graduate schools on the possibilities of this. Is this something that the department has been involved with and if so, can you give us some examples?

MR. HURLBURT: This is a real learning curve for me, also, so I appreciate the members having patience with me. We invest $5 million into research in our universities yearly to help our province and our students in doing research for economic growth, job creation in our province.

MR. EPSTEIN: I was actually aware of the $5 million. I have to say, of course, the main granting agencies for university research are federal agencies; NSERC, SSHRC, and so on. I'm encouraging the province to think about taking a more active role either funding research or funding research that has commercial potential or is actually at the point where it is moving towards commercial potential. This surely is the role.

I'm not suggesting that the government should be picking the areas in which people do research. What I'm saying is that if research is of a sort that actually moves to the point where it seems to have some commercial potential, that the provincial government, in the interest of local economic development, think perhaps about making some funds available at that point by way of seed capital, some encouragement in order to try to retain the innovation that is being generated in the universities so that the folks stay here.

I guess what I'm asking is whether this has come up for discussion or whether this is the intention of where the Department of Economic Development is going to be moving?

[Page 52]

MR. HURLBURT: Absolutely, we're now trying to assign an MOU with the universities. Our commercialization fund was a pilot project and right now in Cape Breton we have a project with InNOVAcorp and it's to secure the funding for here and to create the research here within our province to make sustainable jobs here in the province.

MR. EPSTEIN: This is good news. Is the MOU going to be with all the universities, or just Dalhousie as the main graduate university, or will it extend across the province? (Interruption) Oh, yes. The answer I'm being given is with the Committee of Nova Scotia University Presidents. Thanks. Big help. Thank you, Mr. Chairman, I'm finished for the first round.

MR. HURLBURT: Mr. Chairman, I would just like to respond if I'm allowed to one of the questions the member had as to RIM. I just want to let the committee members know that RIM is investing $23 million in capital here in the province.

MR. CHAIRMAN: Thank you, Mr. Minister.

The honourable member for Cape Breton South.

MR. MANNING MACDONALD: Thank you, Mr. Chairman. First of all, I'd like to welcome you to your new portfolio, Mr. Minister. Having been a former minister of that department, I call that department the department of damned if you do and damned if you don't. I certainly see some familiar faces here with you today and I think that's a testament to the type of civil servant that you do have working in that department. They're excellent professionals and I certainly don't have difficulty with the role they've been performing - some of them have been with the department for many years. I think you're also very fortunate to have the fine deputy minister that you do have and he's a public servant that I think we all appreciate, notwithstanding the fact that some days are better than others in that particular role in the public sector.

One thing that bothers me about this department is it continues to be called the Office of Economic Development. It's a real bone of contention with me; the removal of the ministry title for that department is something I think should be revisited. I believe it's one of the engine departments of government and deserves a better fate than to be called the Office of Economic Development. If you have any pull with your boss - I'm talking to you now, Mr. Minister - perhaps the Premier might want to revisit that designation for that department at some point in the future.

Also, I think there are a number of issues here that I'd like to get into in the remaining time that we have today, and I believe we have until 5:50 p.m. The other statement I would make to you, Mr. Minister, is that this is a department that if you do nothing, you'll never get in any trouble. This department has been suspect a few times

[Page 53]

about some of the grants and loans that have been given out, and I think the reason for that is there have been some policy changes, I guess, over the past few years. I suppose if the uncertainty or the suspicion of the role of the department of Economic Development is somewhat criticized, it's because the criticism has been developed by your own government over the past few years.

I will just refer you to a couple of statements here from The Daily News, October 19, 2000, John Hamm said: We intend to get politics and bureaucracy out of the way, let businessmen make business decisions and create opportunities for prosperity.

[5:15 p.m.]

Another one in 2000 he said: The consensus was to remove politics from handing out loans, clearly what people want is business decisions made by business people and that's what we providing with this framework today.

In other words, the stated policies of the day were to get out of the business and let the private sector grow the economy in Nova Scotia. I think if there's an uncertainty or an uneasiness with the role of the department today, it's created by the government itself in those statements.

Again, for example, the Speech from the Throne, October 7, 1999:"Nova Scotians know that government cannot invent jobs, nor do loans and grants often buy jobs of lasting value. We have learned that lesson in the past and need not learn it again in the future."

I guess the question would be asked, what's different today than the Speech from the Throne statements and your own mission statement of the government of the day, which was the Hamm Government? I believe there's a confusion in the role of the government because of those statements, and the clear message that Dr. Hamm gave was that we're going to do business differently in Nova Scotia and we're not going to depend on the public sector to create jobs, we're going to put the climate out there for the private sector to create those jobs.

Well, I suggest that very little has changed and I can recall making a statement in the House myself on it that we've gone from one department of government giving out loans and grants, now we have two sections of the same department giving out loans and grants, and I refer, of course, to NSBI. NSBI - and I'm not sure whether anybody is here representing NSBI today, I would have thought perhaps the deputy or the CEO might have been here, but he isn't. If there's somebody here, perhaps at a later time you can advise me who's here, because I do have some questions about NSBI.

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I guess the question I would ask first of all, Mr. Minister, in light of the stated mission statement of the Hamm Government and with great fanfare coming in to start a new beginning in Nova Scotia to let the private sector deal with loans and grants and to put a vision there for them to do that in the province, why was NSBI set up and why is the Department of Economic Development still involved in giving out loans and grants?

Maybe I'll leave that there. That's a lot to chew on, Mr. Minister, starting off.

MR. HURLBURT: Thank you, Mr. Chairman, through you to the member. First of all, I want to say thank you very much for your kind words for my deputy and my staff. I find myself very fortunate to have the staff that I have to work with. Our title is the Office of Economic Development. I can assure you, member, that I'm a minister who is a doer. I intend to work with my staff in this department and with all the tools we have within all the agencies in my department that are under my mandate, to work with them to enhance the environment, the economy in our province. I know my staff is in tune with me and they want to work with me to make sure that happens.

The Office of Economic Development has, as I say, five agencies that we work with. Nova Scotia Business Inc. is - they have a track record since they were formed in this province. They have a real good, strong track record in the province. The member asked me if there's somebody here from Nova Scotia Business Inc. There are people here from Nova Scotia Business Inc., and Pat Ryan - Pat is in the back, so we do have representation here from Nova Scotia Business Inc., Mr. Chairman.

MR. MANNING MACDONALD: I always consider Pat to be a member of the old guard over there. That's fine.

I think the problem is, and I'm not saying the direction the government is going in is wrong or it's misguided, all I'm saying is there's a confusion out there, Mr. Minister, about the role of the department versus the role of NSBI. It was the stated intention of the government, and certainly you weren't the minister at the time, but it was the stated intention of the government that the Office of Economic Development was reduced to an office because it was going to be involved with planning only in the future and that NSBI was going to look after the business side of loans, grants, developing the economy in terms of public funding of various enterprises.

Now we see we have NSBI doing that function, but we also have the Office of Economic Development when it's, I suppose, appropriate or convenient, they're doing the same thing because you've got a situation here where you've got two arms of the same government department dealing with the public and dealing with public funds and there's a confusion out there as to the role and the accountability of NSBI, for example, in terms of the public.

[Page 55]

The public knows very little about NSBI and yet NSBI has quite a healthy budget and as far as their budget goes, in regard to the amount of money available to them, I think that they are only scratching the surface. I'm saying that if we're going to continue to go down that road, then I think we have to strengthen NSBI in terms of giving them a mandate, and I believe that the Office of Economic Development has to get back to its stated mandate of research, of setting the climate in Nova Scotia for the future and providing a plan.

The reason I say that it's important to provide a plan for the future is that the member for the NDP was talking earlier about call centres, and you and I both know, Mr. Minister, that the call centres aren't going to be here forever - technology is going to change. I'm just wondering, it is changing and some of the objectives and the aims and the direction we've been going in is somewhat short term and I would hope that somebody in your department is looking at a long-range plan to strengthen the economy, post-call centre era in this province - and also post-Stora.

I'm a firm believer that Stora, if they don't go today, or this year or next year, then there's something else that's going to happen in a few years that's going to force Stora out. World prices, like the member so correctly talked about before, is one, and the other one of course is the Canadian dollar and their ability to compete, and the high cost of doing business in that particular industry here versus the cost of doing business elsewhere in the world. Those are just a couple of examples of where I think a long-range planning strategy should be employed here to offset those sure losses in the future that are going to happen in Nova Scotia's economy, particularly in rural Nova Scotia - and I say that because I consider everything out of HRM to be rural Nova Scotia.

HRM is doing fine, and you mentioned the statistics before regarding employment in Nova Scotia - you are quite correct, the economy is good here right now, but unfortunately it's better in HRM than it is in the rest of the province. So those are a few things that you might want to comment on, as to what strategy you are putting in place to offset what surely is going to happen in this province in the future regarding those industries I talked to you about.

MR. HURLBURT: I can assure the member that our offices, the tools that we have - and let me give you an example - to attract Ocean Nutrition to our province . . .

MR. MANNING MACDONALD: By the way, Ocean Nutrition is a favourite one of mine.

MR. HURLBURT: Well, the tools that we used for Ocean Nutrition, it was jointly with the Office of Economic Development and InNOVAcorp and Nova Scotia Business Inc., the tools that we had to work with and we work co-operatively to put the package together to make sure that we had that company here in our province. There

[Page 56]

might be mechanisms that we need for a company in Richmond, in Victoria, whatever, and Nova Scotia Business Inc. might have the tool for that one company that wants to locate there, or it could be the Office of Economic Development, it could be InNOVAcorp, but we have the tools to work with and we work co-operatively within our department.

I hear the member, his concerns about the Office of Economic Development, but I can assure the member that we work with the 14 RDAs across our province in rural Nova Scotia to enhance the climate in rural Nova Scotia, to attract and sustain companies that are there already. The Opportunities for Sustainable Prosperity 2006 booklet, that touches on where we want to go into the future with this province, and the Office of Economic Development is a lead.

MR. MANNING MACDONALD: Mr. Minister, there are a number of incentives that could be brought into being in this province in order to help your department along, and I'm wondering if there are conversations being held or some strategies being developed interdepartmentally, because we have a situation here where there's going to be a tremendous labour shortage in this province in the next decade or so. We know that, the baby boomers are all retiring and there's a need for qualified people to take up the slack in jobs in Nova Scotia.

It's an odd thing for me to sit here and say that we're going to have a shortage in the workforce in the next decade or two, but that's the reality we're going to have because our young people are leaving. I'm just wondering, have you had any discussions with the Department of Education and the Department of Finance, and other departments, about providing incentives for post-secondary education for students to relieve them of debt on the basis that they would continue to live and work in Nova Scotia and contribute to the economy? It seems to me that in this regard Nova Scotia is lagging behind some other jurisdictions in trying to keep our best and our brightest home.

One of the ways to do that is to relieve them of tremendous burden of education costs and provide an incentive to these students to live and work here in Nova Scotia. We're going to need the best and the brightest here in Nova Scotia in the next decade or two to do the kinds of jobs that we take for granted that are being done now, but the people aren't going to be there to do them in the future.

MR. HURLBURT: Mr. Chairman, I can assure the member that we are working with the Department of Education, and all other departments in this province, to make sure that we have the right environment, to make sure that there's a good working environment here for our youth when they come out of the education system. I can expand a little more on that. With the investments that our government has put into the community college system in this province, and in some areas, we have to get back to the basics.

[Page 57]

I can go back to my background as being a small contractor in my home community. I looked at the operators who I had in my company when I retired from my former company, and their hair was a little bit whiter than mine. I told my boys, you know, you have to make sure that you have a workforce coming up to fill these voids. The Nova Scotia Community College put on some training seminars for equipment operators - I'm only using that for an example - but we have to get back to the basics and our community college systems, I believe, for tradespeople also.

To answer your question, yes, we are working with the Department of Education, and the Office of Economic Development, absolutely.

MR. MANNING MACDONALD: I think it's very important that we realize, number one, if there's going to be a problem and number two, if there is a means out there, that we can solve it. If departments are willing to get together to decide jointly that here's the best way to go, let's keep our students here by providing the climate for them to stay here and provide some relief from the horrendous debt that students are incurring here and have to go out West to get jobs not only to live, but to pay this debt off. We have very high tuition costs in this province, but let's turn it into a positive, if we can.

I say, Mr. Minister, at the same time, we've been talking to people in your department and the deputy about new ways of creating jobs in Nova Scotia, manufacturing jobs in Nova Scotia. It has been a frustrating experience to talk to entrepreneurs who want to do that because of roadblocks. I'm not going to get specific because I don't think it's correct that I would get specific on different jobs here, but the deputy knows the kinds of jobs we've been talking about, particularly in areas like my own area which is experiencing high unemployment. That didn't happen yesterday, the high unemployment was there a long time ago, but it has been exacerbated now by the fact that we have the steel plant gone and the coal mines gone.

I have to tell you, we have relied heavily on what I class as secondary jobs in the call centre industry in Cape Breton. I have often made the statement that there are so many call centres down there that they must be calling each other looking for business, because it seems to me there are thousands of jobs in the call centre business. Two things worry me about that. One is, government was right in employing the payroll rebate system. If you will recall, that payroll rebate system was implemented in the MacLellan-Savage years, particularly the MacLellan years. One of the gentlemen formerly in the department is the guy who we might remember, Francis MacKenzie, who was one of the lead agents in bringing the payroll rebate system into Nova Scotia, along with his deputy at the time, who I believe was Bert Loveless.

[Page 58]

[5:30 p.m.]

At that time, we were criticized for that, but it was a measure that we had to put in place in order to prop up the employment numbers to get the economy moving, to get money moving in the province. To your credit, I think, in your government, you've kept that going.

I recall the first one, for example, was Convergys, one of the huge ones that came in and they set up in Dartmouth, and it was a huge boom to that area at the time. I'll tell you, I believe it was more than 800 or 1,000 jobs or something at that time, which was huge. I can remember talking to the CEO of Convergys, which was a subsidiary of ITT in the States, and the meeting with the lady whose name is Monica Mehan, who was the CEO at the time. She assured me that it was such a success in Dartmouth that they were going to put a second one in Sydney. I said great. But a funny thing happened on the way to that event, we didn't get any further than Truro. After the government changed, the second one went to Truro. That's strange how that happened, it never did get to Cape Breton. I can tell you that I laugh about that because that's the pure politics of the time - anyway, it ended up in Truro, and it's still benefiting Nova Scotians.

But there are other challenges, Mr. Minister, in terms of the call centres. I think that we have to realize - and again I can't emphasize this strongly enough - that the days of massive jobs in call centres are fast coming to an end. Again, you're talking about competition, you're talking about competition with Stora and you're talking about competition with other major employers in Nova Scotia. Look at the competition in the call centre industry. Look at what's happening in the Third World, look at what's happening in Asia in regard to the burgeoning call centre industry over there. They can operate call centres anywhere in this world. You never know, when you're calling now looking for something, where the hell you're calling and who you're talking to - you can call somebody to get your phone fixed and they're in Duluth, Minnesota. That's the kind of world we live in today.

I think the main focus of your department is how are we going to replace these jobs? Are we going to do it by getting more call centres, or different types of call centres? Are we going to do it with manufacturing, new initiatives to be able to compete - like your deputy and I have talked about on a couple of instances - or are we going to try to keep our brightest and our best here once they graduate from university by providing incentives for that? How are all these things going to come into play? I hope you have a plan for that.

Let NSBI do what they're doing. NSBI is providing a good service out there to try to put the proper business climate in place to encourage businesses to locate here and stay here. That's fine, but what I'm saying is the strategy has to be long term, and I'm just wondering if you're turning your attention to that, because it is a problem.

[Page 59]

MR. HURLBURT: Mr. Chairman, there were a number of questions there. Let me start off by saying, again, as the member knows, I'm from rural Nova Scotia. I really believe in every segment of our great province. My intention as the Minister of Economic Development is to be working with the communities. We have staff working with the RDAs, but I want to expand that. My goal is, when the House rises, to start travelling this province, working with boards of trade, chambers of commerce, our RDAs, and our community leaders. I'll be in your riding, member, to look at different ways.

There are opportunities within our communities that maybe we have a blind eye to. I can tell you that in my home community I've heard it being criticized for a number of years - our fishermen are going out in the rough seas, catching the fish, bringing it in, and we're shipping it out. We should be doing processing in our own communities, as much as we possibly can, doing value added. Expand it even a little further - we have the new mine site in Yarmouth County. They have a rich resource there. We have to look at opportunities - and I'm only using this for an example for all members here, and I'm sure there are examples in every riding - that are there, instead of putting that on a barge and shipping it down the New England coast. We should be looking at opportunities to do manufacturing within our own rural communities.

I'm very focused on the rural communities in this province, as I am here in HRM. I will be doing a lot of extensive travelling with my staff to see if there are avenues out there and the means to enhance our communities, and working with all members and all communities to see what we can do to enhance the economic viability of those communities.

MR. MANNING MACDONALD: Mr. Minister, I think what you've just said makes a great deal of sense. But I still think the confusion is there with NSBI - I think NSBI should be continuing its role of dealing with the business loans of this province, and where they make sense and have some long-term viability that they're entertained, and where they're not then it should be set aside because, and I quote your own previous Premier saying that some of these industries you just can't keep propping up. They have to be viable.

So if NSBI is able to be strengthened and continue that role to provide jobs, I don't have any difficulty with that. What I would hope is that your department would be involved in a major way in planning the future economic direction of this province, rather than getting sidetracked and getting under the gun on some loans that were of questionable value and that kind of thing. I think it doesn't do any good for your department, and it detracts from the main purpose of what I think your mission statement and your mandate should be, and that is to give Nova Scotians the kind of encouragement that we do have a long-term plan for the economy in Nova Scotia, and set it out.

[Page 60]

If we don't, we're going to find ourselves right back where we were years ago when the unemployment rates were 17 per cent and 18 per cent, except for HRM, because the private sector has done very well in HRM, and it's feeding on itself here, but attention, like we've mentioned a few times, should be placed on rural economic development, developing the rest of this province. You're right, fisheries is an important part of that and so is, for example, the Donkin Mine in Cape Breton, of which you've been very supportive. Those types of things, I think, can create good, long-term jobs with good salaries, and some of the short-term measures we have now are less than credible in that department.

My point is, Mr. Minister, and you might want to comment on it, can we define more clearly the role of the Economic Development Office and NSBI so Nova Scotians can be confident that NSBI is out there dealing with business now, dealing with loans, and the Office of Economic Development is dealing with planning the future economic direction of this province? If we can get that confusion set aside and a mission statement determined, then I think Nova Scotians would be much more comfortable.

I'm a personal believer that your department should be expanded, and so should NSBI. Either that, or we should get out of the business, because you can't do business from an empty wagon. You have people in other jurisdictions who are sometimes beating you to the punch because they have more money to deal with or they have more expertise or they have more people out in the field. I think if we're going to compete, then let's compete. I think we have to set a direction here. We have to define what you guys are doing and what NSBI is doing. There shouldn't be this inter-mixing of half the loans coming from your office and half coming from NSBI, and when it doesn't make good business sense at NSBI, then perhaps it's shifted sideways over to your department to deal with.

That's going to take some good strong decisions on your part. You're a businessman, you're a very successful businessman, so I think you appreciate what I'm telling you. Let's not get the Office of Economic Development sidetracked with battling questionable decisions by the department in public, but rather leaving it up to the professionals at NSBI and you guys get on with planning. That's where I feel the office should be going in the future. I just wonder if you want to elaborate a little bit more on whether or not that's the right road, you feel, to go down.

MR. HURLBURT: Mr. Chairman, I hear what the member is saying, but each agency within the Office of Economic Development has different tools and different mechanisms, and a different mandate for the way they use those tools. I just used an example with Ocean Nutrition. There are three agencies that use those tools. I believe we need all the tools we can secure at our fingertips to enhance the economic climate in our province.

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You zeroed in on one little issue that's very near and dear to me, and that's Donkin. I did, I put a lot of time in on that file when I was in the Department of Natural Resources. I'm so glad that we have a company there that is trying to develop that. You know, instead of waiting for the development of that, that is going to be forthcoming, but we should be looking at maybe there's a widget that we need to build that they'll be using daily in that mine, that we can be looking at a little community outside of the Donkin area. That's where I am, and that's what I'm looking at, opportunities that we have in rural Nova Scotia.

I know we have the expertise - they're here in this room today and I have more people back at our office - we have the expertise, but we have to work it with the communities and with the community leaders in all parts of this province. I am telling you, I am focused on that and I intend to work on that to see what we can do in this province.

MR. MANNING MACDONALD: I think perhaps along with that, again I refer back to some discussions that I think should take place between various departments, particularly yours and the Department of Education, when you talk about Donkin Mine, and you're talking about growing the economy, and you talk about the need to keep our best and our brightest - I'm thinking of engineering graduates in Nova Scotia who are leaving for work when there could be work in areas like the Donkin Mine for professionals - but the incentive to keep them in Nova Scotia has to be out there, and I believe, as you know, one of the things we pushed in the recent election was the fact that we should be giving incentives to students to stay and work in Nova Scotia.

I don't mean 10 per cent off their tuition - that's just playing politics with the issue - I'm talking about a meaningful incentive to reward students and to pay them back for every year they work in Nova Scotia, to invest in these students. I think we can do that by getting together with the Department of Education and realizing that we need these people to grow the economy in Nova Scotia.

We can't do it and the people in this room can't do it. It's going to be our young people over the next decade or two, and we don't want to lose them to somewhere else. When you come out of university with $60,000, $70,000, $80,000 worth of debt, you have to go somewhere, and if we could provide the incentive to say you work here, you help us grow the economy, we need your profession to work in Nova Scotia, we will forgive part of that and we will invest in you. I think that's something that your department could be very valuable in trying to convince the Department of Education and the Cabinet of Nova Scotia that this is the way, let's help out our young people in a meaningful way in the future.

You don't need to comment on that, except that one of the ways I think we can grow the economy in the future is to keep the people here that can do it for us and, in

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order to do that, we have to provide some incentives, and I think that's one of the ways we can do that. We're going to lose them to other jurisdictions - we're going to educate them in Nova Scotia and then we're going to lose them to other places.

The "carrot" is not there to keep them in Nova Scotia, and I think it has to be. The desperation is there for them to go out and make enough money to pay off their student loan; well, we should invest in paying it off ourselves if they want to work here in Nova Scotia and contribute to the economy.

Anyway, Mr. Minister, if we can really define the role, because I think the role of your department is going to change. I think your people, through the kind of expertise you do have - and you're very fortunate there - is going to have to come up with a plan to sustain the economy here over the next couple of decades. If we don't think past call centre jobs next week or the week after, or bringing 200 jobs into a community that last only as long as the incentives are there, then we're going to be back talking about this issue time and time again.

[5:45 p.m.]

I think that would be unfortunate, because we do have the resources out there, as you correctly stated, in the fishery, in the Donkin Mine - in manufacturing, that could be really highlighted in Nova Scotia if we turned our attention to it because there are manufacturing interests out there that can be done in Nova Scotia, and I don't think we've worked hard enough to pursue them. We've been working on a couple - as I said, I've been talking to your deputy about one in particular, which would be a very good industry for Nova Scotia. We sort of get bogged down when we talk about these things because of different rules or bureaucratic snafus, those types of things, and I would hope we can fast-track some of those in future.

A lot of these companies don't need much in the way of incentives, what they need is a government that's interested in promoting jobs in the province and doing what they can to keep the company here over the long haul. That's the kind of stuff we should be looking at. The traditional things we've been doing are great, but call centres are not going to do it in the future in Nova Scotia. We're going to be losing a lot of our workforce and we have to retain the young people in this province. I think that's the key right there to growing the economy in Nova Scotia.

I guess my point and my last question to you would be - I think I'm running out of time - if this department wants to signal something to Nova Scotians, signal to Nova Scotians that we're embarking on a new direction in Nova Scotia of putting a plan together that will grow the economy in Nova Scotia and using the means that are at our disposal to do so, support for students to stay here, like I said earlier, and I can't emphasize that enough.

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The students are graduating in our institutions and they are leaving because there's nobody out there telling them to stay in Nova Scotia and work in Nova Scotia and we'll provide an incentive for you to do that. That's not happening. That is a tragedy, really, because I know bright students, I know engineering students, I know doctors who have graduated in Nova Scotia and have left. I think an investment in relieving them of the massive debt with the proviso that they work here and contribute to the economy in Nova Scotia, then I believe we'll be light-years ahead of other jurisdictions if we embark down that road before somebody else gets the bright idea to do it. I think we have to do that, Mr. Minister, because we can't just continue to roll along on call centres. They are important as a stop-gap, but they aren't the future in Nova Scotia. Unfortunately, some of the big industries we have here aren't either, and I have mentioned those before.

MR. CHAIRMAN: Mr. Minister, before you respond, I made a miscalculation on the time, so you have another seven minutes, so we go to 5:57 p.m.

MR. HURLBURT: Thank you, Mr. Chairman. I concur with what the member is saying about our youth. I think we have to get focused on our youth in this province. I have three sons and a stepdaughter, and I want to see my children be able to find suitable employment here at home in our own province. We have grandchildren. I'm kind of spoiled, I want to keep them close by so I'm allowed to spoil them, that's a grandfather's job.

I'm not making light of what the member is saying here. I will take that under advisement. I will be having some dialogue with the Department of Education and my own staff to talk about ways and means we can promote this, and what we can do to advance it to keep our youth here in our own province to work.

There are numerous challenges within the province but with the team we have in all departments - and I want to echo again my department - we have a strong team in the Office of Economic Development, and they are very dedicated and want to help advance the economy in this province. We will be making recommendations to my Cabinet colleagues, I know in the near future, because I have some ideas of my own that I want to advance.

Reaching out to the communities, I firmly, firmly believe that reaching out to the communities and getting the communities more involved and the economic growth in our communities, looking at issues that maybe have been there and they have just turned a blind eye to it, maybe we can advance and help that community to develop something, for example, the Donkin Mine, or what have you. I think that's my role as a minister, and I know it's my staff's role, and we will be advancing that at every opportunity we get. I will be relying on all my colleagues in the Legislature to work with us on that issue and to advance it all across this province.

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MR. MANNING MACDONALD: Thank you, Mr. Minister. We have a two-pronged problem here. On the one hand we have a population that's aging and needs more services and more care, and we are facing a shortage of nurses in this province, we are going to have a dramatic shortage of nurses, so we have to put a plan in place to keep those people in Nova Scotia as they graduate from universities. I believe the department has a role to play there in trying to make sure these jobs are picked up by young people graduating, not only engineers, not only nurses but doctors, as well, and other professionals in this province.

I think that perhaps the direction - you're right, you do have a very good department in terms of the expertise of your people, but I don't think the status quo is an option anymore in your department. I think you have to think out of the box. I know you said earlier that you agree you should be finding more and better ways to grow the economy for the long term in Nova Scotia, and let NSBI look after the daily business of giving loans and grants out to businesses where it's warranted and where a solid business case can be made from doing so.

I think that's important - people have to have confidence, if you're dealing with public money, that there is a strong business case each and every time. I believe that NSBI for the most part, and I've said it publicly, aside from one or two loans that I wasn't too particularly excited about, most of the time NSBI has done a good job in this province, but its mandate is somewhat clouded, because there seems to be a tale of two departments here, where both parts of the entity are dealing with loans.

I would hope that in your department perhaps the status quo would not prevail and there is a serious attempt by your department to get other departments of government onside with you to try to grow the economy in Nova Scotia by using the resources that we have - bright young people who are graduating. We need these people to work in this province, because if we don't do something in the next decade or so we're not going to have enough workers here in this province, they're going to be gone. The population is aging and I think your department should be sitting down with other departments and looking at that problem, because it is going to be a problem - it's starting to be already.

Let me just wind up today by saying, Mr. Minister, that your department has to be given the tools to do the job in that regard too. I've seen somewhat of an erosion of the department over the past decade or so. It bothers me a little bit because I think we have to ask ourselves, are we really serious about doing something here in Nova Scotia other than playing kiddie bar the door - like if there's a problem next month, we'll solve that problem, and then we'll move on to solving another problem? I think that the long-term strategy for developing the economy of Nova Scotia seems to be missing.

If your department does nothing else, I think you should sit down with your people - and I said they're good people - to come up with some kind of a strategy using

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the other departments of government as an ally in really trying to take a long-term view of the economy of Nova Scotia and a long-term direction in bringing the unemployment numbers down, particularly in rural Nova Scotia and in my own area of Cape Breton, which is part of rural Nova Scotia, the same as Yarmouth is.

I believe, as I said before, that the economy of HRM is looking after itself. It's feeding on itself and it's continuously growing - you just have to look in any direction when you leave this building and you can see that, but once you leave the 30-mile radius of this building you start to see the problems, you start to see the problems with infrastructure, with roads. The further east you go the worse the roads get, so it's kind of hard to develop the area if you don't have good basic infrastructure. Those are the things, along with the promotion of keeping our young here, also the promotion of providing better infrastructure is vital if we're going to promote our icons, for example, throughout the province to get more people to come in here. I always often said - the chairman would appreciate this - perhaps they should spend less time digging up rocks at Louisbourg and more time selling the ones they dig up.

We've got a national icon down there that nobody goes to see because we don't promote it. There's an old fort called the Alamo that has millions and millions of visitors every year and, literally, the economy is propped up by that one place called the Alamo. We have Louisbourg, in Cape Breton, which has more history than the Alamo would ever have - and we should have a battle there every Friday between the French and the English to bring tourists down there, instead of a few archaeologists around chipping away at rocks, and locking the doors at six o'clock in the evening. Those are the things we could promote if people and government would get together and look at our icons in Nova Scotia and say this is the way to grow our economy.

I can point to cultural icons down in your part of the province as well that I think are being underutilized. They do provide good jobs and they provide the reason for tourists to come here to Nova Scotia and spend their money.

I think what I'm saying is, your department should broaden its mandate to take a look at all these things and let NSBI deal with the business of day-to-day loans and all that kind of stuff. I thought that was the original direction we were heading after the Speech from the Throne of 1999, but I think we've got somewhat sidetracked in that.

MR. CHAIRMAN: The time for estimates has elapsed for today. The member for Cape Breton South still has seven minutes left if he chooses to use that tomorrow when we begin. Are you going to use that?

MR. MANNING MACDONALD: Yes, I will be here.

[Page 66]

MR. CHAIRMAN: So tomorrow when we start estimates, we'll ask you back again, Mr. Minister.

Thank you. We are adjourned.

[The subcommittee rose at 5:56 p.m.]