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MR. CHAIRMAN: Order, please. Good afternoon, everyone. Welcome to the estimates of the Department of Energy.
Resolution E6 - Resolved, that a sum not exceeding $21,817,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Energy, pursuant to the Estimate.
MR. CHAIRMAN: At this time I'll ask the Minister of Energy to make his opening comments.
The honourable Minister of Energy.
HON. RICHARD HURLBURT: Thank you, Mr. Chairman, and colleagues. I'm very pleased to be here to represent my department. As you know, I'm still fairly new in the Department of Energy. I was appointed there in late October and it has been a steep learning curve and I'm still learning, so bear with me.
First of all, Mr. Chairman, I would like to start off by reiterating the government's priorities and how Energy and Conserve Nova Scotia will help meet those priorities. The priorities are to educate, to compete, protecting our environment, better roads and infrastructure, safer and healthier communities, and shorter wait times. Revenues from our energy sector help support these initiatives. Offshore revenues are the third largest source of government-owned funding and are invested in our schools, our roads, and our hospitals.
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In the current fiscal year, royalties from the Sable Offshore Energy Project estimated at about $513 million this fiscal year. Since 1998 we have seen more than 8,000 person years of employment, and $2 billion in exploration and development since1996. Protecting the environment is a major direction for the department of Conserve and I will speak more about that issue in a few moments. Creating wealth, and efficient and effective regulations are considered to be the necessary underlying precautions for all of government's priorities. The Department of Energy works with individual companies, businesses, associations, other levels of government, and learning institutions to market the following: our resource potential, our competitive business climate, and our trained and educated workforce.
Regarding our resource potential, we need to attract investment to our province. Investment attraction is important with respect to the offshore oil and gas, as well as renewable energy. We are operating in a global environment. The scope of investments, especially for offshore gas and oil, means hundreds of millions of dollars in exploration stage, possibly billions in development stage - Deep Panuke production platform, a $700 million project. The department works to create conditions that make investment attractions take place in our province.
I would like to mention two recent examples the department's initiatives have resulted in real wins. The Offshore Strategic Energy Agreement, the province, allowed EnCana to move forward with Deep Panuke, outlining companies' commitments to Nova Scotia. Our renewable energy standards are generating more than $1 billion in investment in Nova Scotia, as well as helping to protect our environment. We anticipate 750,000 tons of greenhouse gas to be displaced by 2013.
We realize that we need more companies drilling here, and I would like to talk about what we're doing to get drilling rigs in our offshore. We're working on a four-pillar approach, and these pillars include: new petroleum geoscience, new policy development and implementation, increased regulatory efficiency, and enhanced promotional efforts. Our work is being implemented in close co-operation with Natural Resources Canada and the Nova Scotia Offshore Petroleum Board.
To give you a sense of what we are doing, I will talk briefly about efforts around petroleum geoscience. Our research shows that exploration companies want more geological certainty before investing hundreds of millions of dollars. Following the lead of other jurisdictions, we intend to try to provide that certainty through new studies in areas such as acquisition of new seismic data, repossessing the older seismic data, and construction of the new GIS database. These are only a few of the areas that we intend to focus our geoscience research.
Premier MacDonald's Government has set up to $25 million aside from the Crown share settlement to advance our interest in geoscience and offshore marine
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research. We are helping to develop new policies and improve existing policies to make our offshore a more attractive place for exploration and investment. We work closely with the regulatory CNSOPB - Canada-Nova Scotia Offshore Petroleum Board - and the federal government, to develop new policy ideas such as low-cost entry bid systems for the offshore, market Nova Scotia oil and gas opportunities to global investors through trade shows and one-on-one presentations, make key improvements to our offshore energy regulations, and make changes to outdated regulations.
Companies are also showing interest in our onshore natural gas, our coal-bed methane and shale gas. Presently, we have seven companies active in Nova Scotia with eight exploration or production agreements. We expect to see six to eight wells drilled in Nova Scotia this year and three seismic programs to be completed.
In 2007, Stealth Ventures signed Nova Scotia's first onshore coal gas production agreement. The company has made a significant find of coal gas or coal-bed methane, also known as natural gas from coal, very pure natural gas. Stealth says it has spent $15 million in exploration phases in the Springhill area. Triangle Petroleum, the parent company of Elmworth, is planning to drill six of the eight wells expected this year in the Kennetcook area. Triangle has found what it believes is a significant find of shale gas and the company has announced its interest in applying for a production agreement.
More recently, Alton Natural Gas Storage announced plans to build a storage gas project in the province and is considering plans for the second gas pipeline to the United States. We will also be announcing the successful proponent for the Beech Hill block of land in the Antigonish area, and the company and bid will be made public in the very near future. Wealth is created through knowledge of opportunities available to Nova Scotians.
An important focus of the Department of Energy's plan is to inform stakeholders of initiatives and opportunities in the energy sector. In the offshore, these efforts will be improved by funds of up to $25 million for geoscience initiatives. In 2008-09, we will continue to build an increased understanding of our onshore and offshore petroleum geology and the public, private and academic sectors, by promoting and facilitating research and development, technology innovation, and performing geoscience research within the department.
The majority of Nova Scotia's heating, transportation and electrical needs are met through the burning of fossil fuels. Mostly, we burn oil for transportation and heating and we burn coal for electricity. This has an effect on our air quality and health, and contributes to our climate change. To reduce this impact, the Department of Energy is working to develop policies and regulatory requirements that encourage the use of cleaner energy resources and technology.
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Today I am going to speak about one policy initiative, our work around renewable energy. With world-class average wind speeds and the highest tides in the world, renewable energy has great potential to play a larger role in electricity generation in Nova Scotia.
Thanks to our government's renewable energy standard, we have mandated an increase in the amount of green energy in our electricity. By 2013, utilities in Nova Scotia will be required to generate an additional 10 per cent of their post-2001 electricity generated through renewable means. This will also mean 20 per cent of electricity will be generated through renewable energy by 2013.
Thanks to government, this will mean an additional 500 megawatts of clean power; 100,000 homes powered by clean power; 750,000 tons of greenhouse gas displaced from our air; and $1 billion in new investment in Nova Scotia's economy. On the ground, it means the number of wind turbines in Nova Scotia are expected to grow from 40 to over 300 in the next five to six years.
Of course, there are challenges with wind power - it is variable, meaning that if the turbine stops turning, backup sources of power need to be on standby to ensure that the systems keep operating. And I never said the wind stops blowing. (Laughter)
That is one of our challenges. If we want to add more renewables to our system, wind energy is a mature technology but is variable. We have our Wind Integration Study looking into this issue, and I expect the final report to be released very shortly.
[2:30 p.m.]
Tidal energy is more predictable than wind. That's one of the reasons we are actively looking at the tidal energy resource. We have a tremendous resource and we have promised $5 million towards demonstrating tidal energy devices in the Bay of Fundy. There are a number of environmental hurdles to clear before devices go in the water, but tidal is a promising energy source.
To help us better understand the public and scientific issues surrounding tidal, government provided OEER with $250,000 to conduct a strategic environmental assessment. This SEA is now complete and the report delivered to my office. My department is preparing a response which is intended to be ready on June 2, 2008.
We will continue to provide expansion opportunities under the Sable project, Gas Market Development Fund, as the Department of Energy is responsible for the program and its rules. Funds continue to be available through Heritage Gas for residential conversions, as well as a larger project such as the Capital Health project and the universities in Halifax. Minister Baker announced in his budget address a $1 million
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contribution from the fund for the Saint Mary's conversion. These larger conversion projects enable Heritage to build out its distribution and then economically serve smaller customers.
Again, as more natural gas becomes available to Nova Scotia and large, industrial oil furnaces are replaced, we are able to burn a cleaner fuel source and improve the quality of our air and the health of our residents. Energy efficiency is yet another way that we are helping to protect the environment in Nova Scotia.
As minister responsible for Conserve Nova Scotia, government's energy efficiency agency, I am pleased to be here today to highlight some of the agency's achievements. With a staff of 13, Conserve Nova Scotia has helped more than 300,000 Nova Scotians make energy efficiency a part of their lives. You might say that a staff of 13 is quite small, but Conserve Nova Scotia's accomplishments to date have been truly great.
But we can't take all of the credit ourselves. We have many partners throughout Nova Scotia who have helped us along the way. Through organizations like the Nova Scotia Home Builders Association, Clean Nova Scotia, the Ecology Action Centre, S.H.E. Consultants, ACAP Cape Breton, Nova Scotia Power, Metro Transit, the Halifax Regional Police, and Natural Resources Canada, just to name a few, we are able to help even more Nova Scotians learn ways to be energy efficient at home, at work, and on the road.
This year our budget is about $10 million. It will reflect our continued level of investment in energy efficient programs in Nova Scotia. This budget will allow Conserve Nova Scotia to continue its focus on providing Nova Scotians with practical, meaningful and affordable solutions to help them make better energy choices, use energy more effectively, reduce their energy consumption, and reduce the effects of Nova Scotia's collective energy use on the environment and its climate.
This year, Mr. Chairman, Conserve Nova Scotia will build on the success of the existing programs to help our province have one of the cleanest and most sustainable environments in the world by 2020. Protecting the environment is a key priority for this government and will remain the key priority for Conserve Nova Scotia in the coming year. Conserve Nova Scotia's mandate is to create a culture of energy conservation in residential, transportation, commercial, industrial, and government sectors.
Energy efficient opportunities in Nova Scotia residential sectors are abundant. Nova Scotia has some of the oldest housing stock in Canada. To help homeowners and Nova Scotians make their homes more energy efficient, we will continue to invest in programs like Nova Scotia EnerGuide for Houses, EnerGuide for New Houses, and residential energy affordable programs.
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Last year, more than 4,500 Nova Scotians participated in the Nova Scotia EnerGuide for Houses Program. That means that more than 4,500 households in Nova Scotia will be conserving energy and saving money this year and for years to come. With the provincial rebate of up to $1,500 combined with the federal rebate of up to $5,000, homeowners can access up to $6,500 in government rebates for making their homes energy efficient, Mr. Chairman. But the savings don't stop there.
These homeowners will also be playing an important role in the reduction of greenhouse gas emissions in our province, participating in Nova Scotia's EnerGuide for Houses Program, and making the recommended upgrades to their homes can help homeowners reduce greenhouse gas emissions by as much as 4.6 tons every year. With last year's participation alone, this will result in an annual reduction of greenhouse gas emissions by about 20,000 tons.
Mr. Chairman, the Nova Scotia EnerGuide for Houses Program helped create winning conditions for homeowners in our province and in our environment. The EnerGuide for New Houses is another program that will receive continued investment in the year ahead. The program is an essential component of Conserve Nova Scotia's "80 by 11" legislation. Conserve Nova Scotia's "80 by 11" program will help ensure that all new houses built in Nova Scotia meet a certain energy efficiency standard by the year 2011. That energy efficient standard will be an EnerGuide rating of 80.
An EnerGuide rating of 80 corresponds to the energy performance standards for an R-2000 home. To help encourage homeowners to participate in the EnerGuide for New Houses Program, Conserve Nova Scotia is offering a rebate to offset the cost of the initial audit of the building plans if the home achieves an EnerGuide rating of 77 once it has been built. That's a $250 value, Mr. Chairman. If homeowners build an EnerGuide 80 rating, we will provide an additional $500 incentive. That's a $750 value in addition to the permanent energy saving the homeowner will enjoy year after year.
Mr. Chairman, I'm pleased to report that several builders in Nova Scotia are already building to the EnerGuide 80 rating. Some builders have reached as high as 86. The Habitat for Humanity house that was built last summer also scored an 86. I might add that I just built a new home and I made sure it met the EnerGuide of Nova Scotia. It's through these builders that we will help transform our new housing stock to some of the most energy-efficient homes in the market.
Mr. Chairman, Conserve Nova Scotia is committed to helping all homeowners make their homes more energy efficient regardless of their economic situation. That's why we are going to continue to invest in our low-income homeowners in Nova Scotia. Through our Residential Energy Affordability Program, also referred to as REAP, we are helping low-income Nova Scotians take control of their energy costs and reduce their annual home energy bills by as much as 30 per cent.
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On average, Conserve Nova Scotia has invested about $5,000 in labour and material for every REAP home and at no cost to the homeowner, Mr. Chairman. To date we have helped more than 300 low-income Nova Scotians through REAP. This year we are going to build on the success of the first 305 REAP homes by offering the program to more low-income Nova Scotians. The residential sector in Nova Scotia also includes a considerable number of multi-unit residential buildings. To help multi-unit residential property owners in Nova Scotia make their buildings more energy efficient, we are partnering with the federal government to offer the EnerGuide for Multi-Unit Residential Buildings Program in Nova Scotia.
Mr. Chairman, this program will allow qualifying multi-unit residential building owners in Nova Scotia access to federal and provincial rebates of up to $9,500. This investment will not only help the property owners save energy and money, but we can also help stabilize rental prices for their tenants as well. In addition to the residential sector, a part of Conserve Nova Scotia's mandate is to promote energy efficiency in the transportation sector. To date Conserve Nova Scotia has invested more than $1 million in efficient programs and projects for the transportation sector.
This year Conserve Nova Scotia will continue to invest in transportation programming. Through a variety of programs and initiatives we're helping Nova Scotia drivers learn ways to save money on fuel and reduce their greenhouse gas emissions. Our Drive Wiser Program is a public education and behavioural change program designed to help Nova Scotians be fuel efficient. The goals of the program include educating Nova Scotians on their environmental and financial benefits of fuel-efficient driving behaviour, and proper vehicle maintenance and changing the driving behaviours of Nova Scotians. This year the Drive Wiser Program will maintain an important part of Conserve Nova Scotia's transportation portfolio. We will continue to educate Nova Scotia drivers through province-wide partnerships with driving schools, automotive dealerships, and other industry groups.
Mr. Chairman, given that the transportation sector represents 37 per cent of the province's energy use, this year we are planning to expand our portfolio to include programming for the commercial trucking industry. Consulting with organizations like the Atlantic Provinces Trucking Association, as well as the Nova Scotia Automobile Dealers Association, will help shape this program.
At Conserve Nova Scotia, investing in the transportation sector is not limited to drivers. We also need to continue investing in commuters. Nine communities in rural Nova Scotia have recently launched their greener transportation projects that we help fund. Our continued investment in these types of projects will be a great complement to the $3 million funding that was announced by Minister Baker's Budget Address last week for an incentive program to help municipalities provide public transit in unserved and underserved rural areas. In the coming year, Conserve Nova Scotia will also focus
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its efforts in helping Nova Scotia businesses and the commercial/industrial sectors reduce their energy use.
This year, we will continue to promote Smart Lighting Choices, Conserve Nova Scotia's commercial lighting program. Smart Lighting Choices has been very successful since it launched last November. To date, more than 60,000 high-performance, energy-efficient T8 lights have been sold in Nova Scotia. These lights can help reduce energy by as much as 40 per cent compared to the conventional fluorescent lights.
We have partnered with the Nova Scotia Community College campuses and school boards province-wide to help them upgrade their lighting and improve energy efficiency in their buildings. We have also worked with our own government to improve energy efficiency of government-owned and -managed buildings province-wide.
We are also committed to helping small businesses in Nova Scotia reduce their energy use. That's why we're partnering with Nova Scotia Power to launch a small-business direct install program this year. This program will be part of Nova Scotia Power's larger strategy to reduce the demand for electricity in Nova Scotia. Our government's energy-efficiency agencies were pleased to partner with Nova Scotia Power on this important project, Mr. Chairman. Helping government be more energy efficient is another area that falls under Conserve Nova Scotia's mandate.
Rethink is a behavioural change program designed to increase government employees' awareness about energy use in the workplace and encourage greener choices at work. I am pleased to report that last year the Departments of Finance, Transportation and Infrastructure Renewal, Economic Development, Fisheries and Aquaculture, and the Nova Scotia Gaming Corporation have all committed to participating in Conserve Nova Scotia's Rethink Program.
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Mr. Chairman, there are now a total of eight government departments and agencies and about 750 government employees making environmentally conscious decisions at work. We are planning on further expanding Rethink this year to at least three more government departments. We will also continue to play a pivotal role in the implementation of the government's Green Fleet policy.
Mr. Chairman, thank you for the opportunity to share with you some of the great things that Conserve Nova Scotia has achieved over the past year. We are gaining ground in helping Nova Scotians achieve energy efficiency in a number of sectors, and we look forward to reaching more Nova Scotians and achieving even more milestones in the coming year. I thank you.
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MR. CHAIRMAN: I thank the minister for his opening comments. If I neglected in my opening comments, I welcome all staff here from the Energy Department and, of course, the honourable member for Richmond, who has joined the estimates. At this time I will pass it over to the NDP caucus.
The honourable member for Cape Breton Centre.
MR. FRANK CORBETT: Mr. Chairman, welcome to the minister and his staff. Once again, it's good to see you. I'm going to say a few opening words and then we'll get into some questions, if that doesn't hurt the minister's sensibilities.
First of all, by and large, most of my questions today, Minister, will be around exploration and the offshore, and a few questions around energy conservation. My colleague, the member for Halifax Chebucto, will carry the ball a little bit more on the Conserve side, so I'm sure you're waiting with bated breath for that.
MR. HURLBURT: I can't wait.
MR. CORBETT: Just a few opening remarks. One, I've always been, since the creation of Conserve Nova Scotia, a fan of it. I've stated publicly what my concerns are about how some people were appointed over there but, nonetheless, that shouldn't get in the way of being supportive of it.
I hope the minister has learned by some of the mistakes with the free CFLs that were distributed through just two stores in all of Nova Scotia. I hope, through your wisdom, that mistake isn't repeated. I think, in essence, it was a good idea done in a wrong way. I believe that it made absolutely no sense for someone from Yarmouth, we'll say, to travel to Halifax-Dartmouth to get a free lightbulb. But I'm sure you'll be mindful of that.
The idea of clean energy is one that is very near and dear to me because I live less than two kilometres from the biggest coal-generating station in this province and one of the larger wind farm projects, all on the same site. So it's a bit of a contradiction when you look at the two of them but, nonetheless, we'll talk about those later - the idea of, particularly when we talk about the coal-generating stations we have, obviously how to make them more efficient and cleaner.
In my first round of questioning, I really want to talk about exploration. We hear more about forfeitures than we hear about exploration. How much was forfeited this year in licences?
MR. HURLBURT: Mr. Chairman, through you to the member, I want to thank you very much for your kind words. I think that I'm a very fortunate minister to have the
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dedicated staff that I have in all three of my portfolios: Energy, Conserve, and Military Relations. Staff are very, very dedicated and they want to do what's right for all Nova Scotians. Hours mean nothing to the staff of all of my departments.
To the lighting situation that you raised earlier, that was a partnership agreement with Conserve and I don't apologize for that, I just wish more people had come onside and partnered with the department more. But I will say that we were fortunate here - approximately a week, week and a half ago, we had the federal minister in and he just announced the $5 million for the carbon storage project we're looking at here, through Dalhousie and other universities, to look at carbon storage here in the province. I think that's a great, great step in this province and it's good for our universities to get up to speed on the carbon storage.
But to answer your question, the forfeitures for this year were $108.8 million.
MR. CORBETT: Are you expecting anything like that again this year coming up?
MR. HURLBURT: No.
MR. CORBETT: What's your guesstimate then?
MR. HURLBURT: We can't predict, that's up to the individuals who have the licences. But there are very few that we expect for the current year.
MR. CORBETT: So if everyone cashed in, we'll say then - Minister, let me put it this way. If everyone cashed in, where are we at this year, the ones who are eligible to cash in this year?
MR. HURLBURT: It's very unlikely - there will be very few this year. It would be in the single digits if there were any forfeitures in the upcoming year.
MR. CORBETT: This $108 million, where did this revenue go?
MR. HURLBURT: It was consolidated . . .
MR. CORBETT: In the consolidated funds. Is there any talk with your government that it would go anywhere else other than consolidated funds?
MR. HURLBURT: No, it went to the consolidated revenue. As I'm sure the member's aware, Premier MacDonald made the commitment from the Crown share of a $25 million trust account for the offshore.
MR. CORBETT: Well, we'll spend that when we get it.
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MR. HURLBURT: Okay. Stayed tuned.
MR. CORBETT: Stay tuned. The reason I ask that - and I'm especially asking it from the perspective of groups like OTANS, who feel they're entitled to a share of that, if you will. So you don't necessarily agree with their position on that money, when that's returned back to government, that some of it should be directly tied to these projects?
MR. HURLBURT: I can say, Mr. Chairman, through you, that I feel I have a good dialogue going with the OTANS group, they know I'm open and I'm frank. I work with them and they understand - you know, I don't hide in the mulberry bush. We made a decision with the forfeitures and they're very pleased with the Premier's commitment to the $25 million. So I can say that every member of OTANS and the new chairman - as a matter of fact, I met with them on Sunday - you know, they're very excited about that.
MR. CORBETT: So you don't expect that they'll be knocking on your door for a share of the $108 million?
MR. HURLBURT: Well, sure, everybody would like to have $108 million, I'm sure every department would like to have $108 million, but the $108 million is now gone. It went into the consolidated revenue stream for the past year, but I want to look at the future, Mr. Chairman. I think that we have great potential here in this province in our offshore and our onshore. I think there's great, great potential here and we have a very dedicated staff. I think the key to it is also getting the data, but it's also marketing the product that we have here. That's part of my job and the job my staff, and if I may add, I think all MLAs from all three Parties have been very supportive in that initiative and have worked with my department in the past and I'm sure they'll work in the future.
MR. CORBETT: Let's not talk about the past or the future, let's talk about the present. What's going on in the offshore exploration-wise today?
MR. HURLBURT: As the member knows, we have the Sable project that's ongoing, we have Deep Panuke that's coming onside, and there are hopefully some new projects. We have 10 exploration licences out there now.
MR. CORBETT: From a very personal perspective, you know, we had a fairly large court challenge around who owned the Laurentian Sub-basin.
MR. HURLBURT: That's right.
MR. CORBETT: While we lost the major geographical size, if you will, it was reported by the minister of the day that we got the smaller chunk but we got the sweet piece. So what's happening on that sweet piece?
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MR. HURLBURT: The offshore board is working actively on the licences in that area and we hope to in the near future.
MR. CORBETT: Minister, when we're talking "near future" can you give me a timeline on that?
MR. HURLBURT: In all likelihood it looks like they would activate the licence this year.
MR. CORBETT: Well, that's good news.
MR. HURLBURT: Now, I hope you're not going to hold my hands if it goes to January 1, 2009.
MR. CORBETT: You know me better than that, Minister. (Laughter) I'm rather hurt. I want to go back to the $25 million trust fund from the Crown share of the offshore research to the two agencies that are tied to your department. What kind of research is going to be done with that money and what would you be trying to find out with this research?
MR. HURLBURT: Yes, $20 million of that was earmarked for getting the data through OETR - I apologize for all of these abbreviations, I'm still in the learning curve of my department - and I think marketing, as I mentioned in my opening remarks, is a key component to our offshore and onshore gas and oil.
MR. CORBETT: Interesting. Can you put some meat on that one? When you say marketing, it's more than putting an ad in the trade magazines.
MR. HURLBURT: That's right.
MR. CORBETT: Can you explain in-depth a bit on that then?
MR. HURLBURT: Absolutely. Mr. Chairman, since I've been in this portfolio, I've done a fair amount of travel; I've been to Venezuela, I've been to Trinidad, I've been to Houston. We have to get out to the world and market what we have here but what they're telling us is they want more up-to-date data because exploration is very, very expensive today. So what we are planning to do is to get that up-to-date data for the companies so when they come to Nova Scotia, they'll have that at their fingertips.
MR. CORBETT: So I guess when we look at it, part of the good news is Deep Panuke, I think we all agree on that but, again, the forfeitures always come up as a problem. It's always good when you can put over $100 million in the coffers but there's a problem, I think, when those types of forfeitures are coming back. Is the province trying
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to find out why, is that an industry standard that you see people putting that up for licences and they're coming back in forfeitures? Is that the industry norm, or are we at a spike here in this province?
[3:00 p.m.]
MR. HURLBURT: Mr. Chairman, this is sort of a cycle, you know, they grab the land leases and some companies, they go elsewhere to put their capital investment in and they surrender their leases, and then it will be picked up by another company - and it's all around the world. It's not unique to Nova Scotia, it's all over.
MR. CORBETT: I don't want to put words in your mouth, Minister, but what you're saying is that this thing will go around, there will be years of forfeitures, there will be years of flat, and then it will go up again. But you're confident that there will be other people to come in and pick up those licences, is that what you're saying?
MR. HURLBURT: Mr. Chairman, what I feel is that I have a very, very dedicated staff. We're going to get the new data, we're going to get the geology, the information that's required by exploration companies, and we're going to go out and market the Province of Nova Scotia. That's my job, it's the job of my staff, and that's why we are putting this funding into the two organizations - we're going to get that data and we're going to go out and do our marketing for our province. I think there's great potential in this province, not only offshore but onshore. It's our job to get out there and promote that. I fully intend - I've done it since I've been in this department and I'm going to continue to do it as long as I'm in the department. I suggest that every member, they have an opportunity, it's their job also.
MR. CORBETT: You're talking about information gathering, and I guess there's a saying that every time there's a hole sunk that even the ones that don't pan out, you learn a whole lot about the geography of the area and so on. Is this information widely distributed or is it proprietary information, by and large? Is there a problem within industry of that information not being shared?
MR. HURLBURT: There's a confidentiality agreement that's put in place and we have to adhere to that. Until that time frame is expired, that is private information held by the company.
MR. CORBETT: So do they expire at different times?
MR. HURLBURT: Yes. If I may add, Mr. Chairman, to the member, I know he wants this information and I want to give as much information as I possibly can. That's why we're trying to accelerate this and the funding that we're putting in place now with
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the trust is to get that information out there as fast as we can, to accelerate it. I think that's what we need and it will help us market our province.
MR. CORBETT: I'm going to skip over here a bit. The coal-bed methane, the exploration you mentioned in particular is in the Springhill area, am I right?
MR. HURLBURT: Yes.
MR. CORBETT: A natural fit may very well be the Cape Breton coal fields. What's going on in those coal fields?
MR. HURLBURT: We have an ongoing agreement with Xstrata to look at the coal-bed methane in the area and that's going to be advancing in the upcoming year.
MR. CORBETT: I guess I don't understand the answer, the ongoing discussions with Xstrata, is Xstrata doing anything other than Donkin?
MR. HURLBURT: It's the Donkin coal, but it's also the methane that's in the Donkin coal seam.
MR. CORBETT: I guess my broader question would be the larger coal fields, you've got three or four different large seams, and two of the largest would probably be the Harbour Seam and the Phalen Seam. Is there any activity on either one of those larger seams, which are much larger than the Donkin?
MR. HURLBURT: No one has come forward yet, but we'd be happy to entertain it if somebody wanted to come forward, by all means.
MR. CORBETT: I bring that up, Minister, just because the largest coal seam on Cape Breton - and I may be wrong but I'm quite sure I'm not - is the Phalen Seam. The Phalen Seam is interesting because it runs like a horseshoe, inland, if you want to look at it. Its two points are under the water but the largest part of the Phalen Seam basically runs up and down through the Town of New Waterford and comes back out through Reserve, Glace Bay, that way. So I'm just wondering, that seems to be a very large tract of coal that - I'm not here today advocating surface mining, but coal-bed methane more so.
MR. HURLBURT: Mr. Chairman, all of the coal seams are not natural for methane, but we would definitely look at that and I will offer today that I will definitely get back to the member. We'll do some investigating on that point and I'll get back to the member.
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MR. CORBETT: You mentioned a bit about - I guess my mind is wandering to the Lingan area now that I'm talking about the Phalen Seam - carbon capturing. I know I'm bouncing around a bit here and you're quite excited about it, but the only place that I'm aware of in Canada that's moving toward any kind of large-scale carbon capturing is Saskatchewan. What do you see coming out of this money going to Dalhousie for exploration and so on? How do you see the storage working in Nova Scotia?
MR. HURLBURT: That's what the funding is earmarked for, to do a study to see if we can store the carbons. So that's what the research is all about, that's what the $5 million investment is there for.
MR. CORBETT: A minister in your government from another department was touting that we would put it in coal mines, but I would think to give it to the geological experts, but that would not be a wise decision, I don't think, because you have other problems that would be buried with that coal. Is it safe to say that it's something your department is not looking at?
MR. HURLBURT: It's safe to say that my department is supporting Dalhousie University and other universities here to do the research and feed the research back to my department.
MR. CORBETT: On another issue about what some people would call clean coal technology, there is another system. Instead of carbon capturing, it's called oxyburn, which is where you introduce oxygen on the front end of the burn. I think Mobil is one of the big touters of this and, from what I understand, it makes the fuel burn hotter, therefore almost zero emissions. Is the government looking at that technology maybe through NSP?
MR. HURLBURT: None of the projects mentioned are commercial yet. We're monitoring and working with Nova Scotia Power to see what the right avenue is to go for Nova Scotians. This technology is not commercial yet that you're speaking of. We're waiting for this data to come back from Dalhousie under the carbon storage. That's where we're focused now and I think we wanted to get the technical advice from the experts on carbon storage and that's where we're at today.
MR. CORBETT: It's interesting because there is a test burn site, I believe, just outside of Buffalo, New York, using this technology. From what I'm led to believe by the experts in that field is that's a technology that could come on stream quicker than carbon capturing and it eliminates the actual problem with storage. I guess that's what I'm asking you, Minister, do we have to forsake one for the other? I don't think so.
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MR. HURLBURT: It might be technically feasible, but is it commercially feasible? We're not sure yet. We have to have more information to advance a project like that.
MR. CORBETT: Again, I guess we could say that carbon capturing isn't done really commercially on any real scale.
MR. HURLBURT: That's why we want to get the information.
MR. CORBETT: I guess we're saying the same thing in some ways, but I guess we shouldn't forsake one over the other, is all I'm saying.
You talked about the wind sector and what that means and I think if I copied it down here right, you see going from 40 to 300 turbines in the next five to six years. In that aspect, the energy created, are we looking at keeping that for Nova Scotians or are there any restrictions on exporting that?
MR. HURLBURT: The government set some strict guidelines for Nova Scotia Power to meet and they have targets and they have to meet those targets. I would suggest that they're going to be doing everything in their power to get greener energy in our province by 2013. They have 2010 and then they have 2013 targets to meet. They put an RFP out, I think it was for 120 megawatts, I believe was the number, and they've now increased it to 240 megawatts of wind power to date, I believe.
MR. CORBETT: I understand that, but I guess the question is, Minister, that green energy, if you want to call it that, is that going to be energy that's used for Nova Scotians or is that energy that's going to be exported and we're still going to be left here with . . .
MR. HURLBURT: What they're contracting for is for power for Nova Scotians.
MR. CORBETT: So they're not going to export that green energy?
MR. HURLBURT: Well, they have targets to meet and I would suggest that they have to meet the guidelines that were set forth by the Government of Nova Scotia. To do that, they need all of this wind power and hopefully, in the not-too-distant future, we're going to have some tidal power here in our province, which I think is great for this province.
MR. CORBETT: I don't disagree with that in a lot of ways. I'm not telling you anything you don't know, Minister, that there are areas of Nova Scotia that aren't exactly doing a jig that wind turbines are going up in their backyard. I would think overall that would be a much better sell, when we're introducing these things, that Nova Scotians
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would be much more agreeable to this if they knew this is Nova Scotia energy and not for Bangor Hydro.
[3:15 p.m.]
MR. HURLBURT: It's a percentage of their sales for Nova Scotia and it is generated for Nova Scotians, by all means. Part of your comments was it's not always feasible or communities won't accept wind-generating turbines in their community, that's why we partnered with the Union of Nova Scotia Municipalities to have an independent report on wind power for the province and that report is now with UNSM.
MR. CORBETT: Do you see any value then, Minister, of having - and I know this is not your department and it may not be a fair question to you - provincial regulations around turbines, basically around offsets on properties and so on? Do you think that would make an easier sell for us as a province, that everyone has the same rules when it comes to those types of questions?
MR. HURLBURT: Mr. Chairman, I think that question would be answered better by the municipalities that would be involved in wind turbines. We partnered with the municipalities through the union to have the study done and the study is now in the hands of - I'm sure that all municipalities are not going to adopt everything that was in the study. Every municipality would have some unique differences, but that's entirely up to the municipalities.
MR. CORBETT: So you believe - we'll call it the Jacques Whitford Report - that we're better off with each municipality coming up with their own rules?
MR. HURLBURT: What the study has done is given them a template for the municipalities to look at, to assess and see if that template would fit within their jurisdiction. Maybe all jurisdictions it won't, one shoe does not fit all, but at least they have a template of something to work with and to start from. They can expand on it or whatever they see fit for their municipality. You are going to have unique areas that maybe wind generation will not work for, whatever the reasons are.
I agree with your statement that Nova Scotians have to know even more so, maybe we have to be more clear with it, that the wind-generated power in this province is for Nova Scotians.
MR. CORBETT: Let's move over to your home retrofit, on the Conserve side. You said 300 homes, which . . .
MR. HURLBURT: It was 305.
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MR. CORBETT: Okay, 305, which is not really a whole lot of homes.
MR. HURLBURT: Well, Mr. Chairman, I think that's a great, great first step. We're going to expand on that again this year. We just put an RFP out for 200 more homes across this province, so I think that's a great, great step in the right direction.
MR. CORBETT: We'll agree to disagree.
MR. HURLBURT: You still have to live within your means and I'm sure the member understands that. We have a budget within our department, which I'm sure the member will probably support when we go back over the way, but we had to start and we did start and we started and we were fair to all Nova Scotians. It wasn't in one region versus the other, there was a number and it went across the province. I think that's a first step and we're going to build on that.
MR. CORBETT: Now, in your opening comments you talked about the age of the housing stock in this province, which is, like most of us, getting older. The reality is too, it seems, except for those who live in these older, more aesthetic homes, but a lot of the time, people who are of modest means economically tend to live in the types of homes we're trying to reach. They're often on fixed incomes or at a job that doesn't pay as much as we'd like to see it being paid. Is there serious partnering with you and the Minister of Community Services, and the like, to target these types of homes and these types of consumers?
I'm usually frustrated dealing with Community Services around housing issues because part of their mandate is through CMHC so they have national guidelines and sometimes, oftentimes, when seniors need restoration work done on their homes and if, because they make a few dollars more by way of pension, sometimes, the infamous line that comes out of CMHC is, you're over-housed. Although, this is the old family home, their kids grew up there, they have three bedrooms instead of two bedrooms. Are you looking at those types of problems when you're looking at retrofitting these homes? The reality is, the folks are going to stay here, we're looking at the overall good of the province - we're looking at them staying in their own home, but we also want to make that home energy efficient. Are those types of talks going on between you and the Department of Community Services, and can you elaborate on that a little bit?
MR. HURLBURT: I can say that I'm very proud of the way Conserve Nova Scotia has conducted the first 305. They've consulted with regional offices of Community Services to pick individuals that are on a low- or fixed-income situation. That's how we have picked the homeowners in the different regions. It has not been dictated by politicians and it has not been dictated by here, in Halifax, at central office. It's been working in conjunction with my department, the people who have been awarded the contracts, working with the regional offices of Community Services. I have not heard
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of anybody complaining about it. I think it's been working very, very well. Is there room for more? Absolutely.
MR. CORBETT: I guess though, at the end of the day, you look at what comes out of the pipe - have you had time to go back and look at these 305 homes and do a post-retrofit exam?
MR. HURLBURT: Mr. Chairman, the only information we have to date is the final audit and some of the inspections that have been done. For the first 305 homes that have been picked randomly by different regions, it was over $2 million invested and this year we're predicting 200 more homes and it's $1.6 million in our budget for this year.
MR. CORBETT : I appreciate that information and I kind of appreciate that the project is so new that it's hard to get solid, hard data. So I'm assuming, then - maybe wrongfully, but I hope I'm right - what is your plan to track these homes now that they've been retrofitted and to find out that it is working for all Nova Scotians?
MR. HURLBURT: When the individual homeowners sign up for the program, we get the right to the information and it's too early yet to get the data for the last heating season, and absolutely, we will be tracking that to see the benefits that the homeowners are getting from the program and what the taxpayers are getting for the program, through our greenhouse gas emissions.
MR. CORBETT: So how will that follow-up work? Will you be going back to those homeowners and saying, these are your energy costs in 2007 and here are your energy costs in - we'll just pick a date - 2009? Do you see yourself going back into the field and discussing that?
MR. HURLBURT: What we intended to do, Mr. Chairman, is we have the data of the energy costs for that homeowner prior to the audit and the actual work being done and then the final audit. We will gather the information from the last heating season and compare it, to see if we're meeting our targets that we were setting out to do for those individual homeowners. We're tracking information - if that's what the member is asking - we are tracking the information.
MR. CORBETT: I guess to bring a bit more clarity to it to the minister, is there also an education component with - you know, besides we've sealed, made the house tighter and put better windows in it, more insulation, but there's another component, we'll say. I think one of the big problems when you talk to electrical consumers today is - I guess some people refer to it as Stantum power, you know, the coffee pot is on all night with the LED light and the same with the instant-on television and so on.
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Is there an ongoing educational program, as you entered into these partnerships with these homeowners, does that kind of give you the foot in the door to say, you know, here's the broader spectrum of goods as it relates to energy conservation, is that a real thrust and how much energy - pardon the pun - do you put into that?
MR. HURLBURT: Mr. Chairman, I think since I've been in this department and I think one of my first meetings with the staff of 13 at Conserve, I said I believe the key to success in this department is education, I firmly believe that. I believe that we have to educate our youth and our youth will educate the adults. I go back to the same story - and I'm sure you've all heard this but you're going to hear it again - that when they introduced the seat-belt law in this province - and I was probably one of the biggest ones to abuse that seat-belt law - when my grandchildren would get in the car and if I would ever put that vehicle into gear without putting my seat belt on, they were the first ones to tell me.
So I think that part of our job is to educate and it's to educate all Nova Scotians but I'll tell you, where you are going to have the biggest impact is educating our youth and they're going to educate maybe the people with more white hair. But absolutely, we are educating homeowners now on buying appliances, to buy more energy-efficient appliances.
When your cellphone charger is still plugged in, did you know, even though your phone is not plugged into it, it's still using energy? You did know that? Do you leave it plugged in?
MR. CORBETT: I'm going to say yes. (Laughter)
MR. HURLBURT: No, but seriously, just little tidbits like that. I think what we have to do is get more fact sheets out to homeowners to get them to understand, and as the cost of energy increases, people want to be more aware of ways to conserve energy.
MR. CORBETT: All of those things I agree with, Minister, but I guess what I'm asking is, is there a direct plan to follow up with these homeowners and keep an ongoing line of education open? Is there a plan and what does that plan look like?
[3:30 p.m.]
MR. HURLBURT: Mr. Chairman, the first round was more focused on the homes; in the next round we're incorporating, you know, the low-flow shower heads, the lighting, the appliances and yes, we are tracking that and we are going to provide some feedback on ways that we can be more energy efficient in these homes and all homes in Nova Scotia.
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MR. CORBETT: Okay then, a lot of people who live in the older housing stock, and the retrofits are driven on income levels, so do you see yourself like New Brunswick that provides more up-front money and interest-free loans? Are you there and do you see that as a good . . .
MR. HURLBURT: Mr. Chairman, I think a grant of $6,500 is better than a $10,000 loan, providing that the individuals meet the targets that they are trying to gain and if you're helping individuals, especially low-income earners in this province, to be more energy-efficient homes, to me, a grant of up to $6,500 is worth a lot more than the $10,000 interest-free loan.
MR. CORBETT: You may be right but I'm talking about up-front costs because, again, you can give them $1 million grants but if they don't have the financial wherewithal to enter the program, the barrier is the barrier. So don't get me wrong, I'm not saying walk up and down Main Street throwing buckets of money on people's porches, but what I am saying is that through the assessment, we understand you could assess people's needs, and is easing the up-front costs an alternative that you're looking at?
MR. HURLBURT: Mr. Chairman, we are negotiating now with a financial institution that's all across this province and we are looking at some very, very attractive low-interest loans. If the project costs $12,000 - and I'm only using hypothetical numbers here - and they need the additional $6,000, there will be a mechanism there that we are trying to incorporate now with a financial institution in the province at a very, very good rate.
MR. CORBETT: I would think, like the SLAP loan, or something like that, or the SLAP program? I may be missing something here, Minister, so talk slower. I want to make sure - I guess my concern here is that people with modest and very modest incomes are not barred from entering this program because they do not have the front money. Unless I'm hearing you wrong, you said in excess of the grant, they can also, after the fact, get a prime-plus-one type loan. These are my numbers but I'm talking more about those who may be barred from getting into the plan because they really do not have the financial wherewithal to get in.
MR. HURLBURT: What we're looking at now is the financial institution that's looking at people who want to do an upgrade to their home, lower income. We're talking prime rate on these individual loans that will be offered. Now you're talking another issue of people who can't afford a loan. Is that what you're asking me?
MR. CORBETT: What I've been asking, I guess, in my last three questions is just that I don't want to see people barred from getting these programs because they can't start the work first to get the grant and then some financial institutions are sometimes a
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little leery about putting anything toward a mortgage. I can go back to the Small Loan Assistance Program that's put out through Nova Scotia Housing and that raises many concerns with people on modest incomes because oftentimes they're then asked to get some legal work done to get the property updated so everything is legal and, again, that's a front cost. I guess that's my worry that if people are of a very modest income, how can we get them in there?
The program works for everybody; if you help people to repair and retrofit their home, that's a good thing. You get in there and we save energy, which is probably a better thing, so it's a win-win. I would like to find out if you've explored all of the options of let's make sure that nobody is barred from accessing these funds if they meet the criteria and the biggest problem is that they don't have the financial wherewithal to buy the windows up front, let's say.
MR. HURLBURT: I hear what the member is saying, Mr. Chairman. I understand there are some individual homeowners in this province who maybe cannot afford a loan but I think we're being very open, we're trying to help them get a prime rate at a financial institution. We're offering up to $6,500 in a grant. We're also helping them out with their audit and we are working with Community Services on special needs for some of these individual homeowners. Do we have a fix for all? Absolutely not. Are we going to live within our means? Absolutely we are. Are there ways that maybe we can enhance the programs? By all means.
To the honourable member, I will take his suggestions and see what we can do within the department. I'm not committing to it but what I am saying is definitely, absolutely, we don't want to see anybody fall through the cracks, but we also have to live within our means and we have to have a program for all Nova Scotians.
MR. CORBETT: I appreciate the minister's answer, Mr. Chairman, and I bring those forward as that, suggestions. I appreciate that, and as I said earlier in my statement, I don't expect you to run up and down Main Street throwing buckets of cash on people's front porches. I understand that and I believe in being prudent with taxpayers' dollars, but I also see the social side of it, you know, that we can do. All I ask is that every option be explored there and see if it can be done.
Minister, you and I have talked about people who purchased before the fact and before the program was out, and we realized sadly enough that they were kind of out the door and it was too bad. They did everything kind of right, but the problem is they did it too quick. But, you know, that's kind of a tough lesson to learn when people are being forward in their thinking.
Just let me change gears a little bit more. The EcoTrust fund from the federal government . . .
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MR. HURLBURT: If the member would allow, Mr. Chairman.
MR. CORBETT: Sure.
MR. HURLBURT: I would like to - maybe we can have some discussions over at my office. You know, I appreciate your input on this and if there's a loophole and if there's a way that we can help more individuals out, I definitely want to look at that and I would suggest maybe the member could come over to my office and let's sit down and have some more dialogue on it to see if there are ways that we can enhance the program that's already existing. If there is, we'd definitely look at it.
MR. CORBETT: Thank you for that invite and I'll take you up on it, Minister, I appreciate it. The EcoTrust fund, there's what, $40 million available to Nova Scotia?
MR. HURLBURT: It's $42.5 million, in total.
MR. CORBETT: On the refits, what does that mean, how much of that's going to be available for refits, you know, probably to help deal with the rising cost of fuels?
MR. HURLBURT: Mr. Chairman, those funds are not for residential. Is that where the member is asking . . .
MR. CORBETT: Yes.
MR. HURLBURT: No, that fund is not for that, it's to partner with municipalities and it's for technology.
MR. CORBETT: Can you explain - like when you say "technology"?
MR. HURLBURT: The fund is there for helping underutilized technology that's there, or maybe new technology we're not aware of yet, and I'll give you an example. For the tidal project, you know, funding went into that through the EcoTrust. So that's what it's for, and the other portion of it is for municipalities to partner with - and I think there was an announcement today? Okay, stay tuned.
MR. CORBETT: I'll stay tuned.
MR. HURLBURT: But remember that fund is joint between - the administration of that fund is through Environment, the Environment Minister does have the signing authority. Now, myself and my staff, we go over all of the applications and we sign off but the administration of that is through the Department of Environment.
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MR. CORBETT: Okay, maybe I should be more direct. Are there any federal monies that the province can tap into to help Nova Scotians with rising home heat costs?
MR. HURLBURT: The $5,000 for the energy refit of homes that we've already been engaged with now and we're going to keep going into the future, that fund is there now.
MR. CORBETT: Is that federal funding?
MR. HURLBURT: That's federal, the $5,000 is federal, and we top up with $1,500 from the province.
MR. CORBETT: I've only got a few minutes left I would suspect, Mr. Chairman, I would suspect three or four minutes anyway. I just have a few questions on Donkin - just how much time?
MR. CHAIRMAN: You have about three minutes.
MR. CORBETT: The Donkin project, Minister, I know you've been around that file in a couple of different capacities. I believe you were there when it was reverted back from federal leases to provincial leases, I think that's correct?
MR. HURLBURT: Yes.
MR. CORBETT: So I think you would know the project fairly well. Have you been talking to the Xstrata people, where they are with production, and any expectations that you're aware of?
MR. HURLBURT: We had an update last month from Xstrata. The coal does not fall under my jurisdiction, just the coal gas, and we have an agreement with them now for the gas.
MR. CORBETT: Just the methane?
MR. HURLBURT: Yes. The other segment of that would fall under Natural Resources.
MR. CORBETT: The actual coal itself, so you would have no input into any negotiations or any view with Nova Scotia Power?
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[3:45 p.m.]
MR. HURLBURT: No, that would not fall under - with Nova Scotia Power re Donkin.
MR. CORBETT: So explain a bit then, with the methane side of that project, where are you with that? What are you expecting to get from it?
MR. HURLBURT: We have an agreement with Xstrata, they're looking at it to see if it's feasible and if they can extract the gas, if it would be financially feasible for them to do that. That's our agreement . . .
MR. CHAIRMAN: Time has expired for the NDP caucus.
The honourable member for Richmond.
MR. MICHEL SAMSON: Thank you. I'm looking at Revenues By Source, Schedule 1C on Page 1.15. Under Consolidated Fund Revenues, Provincial Sources, I'm looking at Offshore Licences Forfeitures. For the forecast for 2007-08, I'm seeing $108,808 - am I correct in saying we had $108 million in forfeitures during the last fiscal year?
MR. HURLBURT: Yes, that's right.
MR. SAMSON: That's the jackpot, isn't it? We've never been that high before, have we?
MR. HURLBURT: No.
MR. SAMSON: So that's $108 million of revenue that was not accounted for in the budget that was presented last year? Those are additional revenues that weren't accounted for at all, are they?
MR. HURLBURT: Well, they were not planned for. I think that question is for the Department of Finance. We also had $400 million in royalties last fiscal year.
MR. SAMSON: Okay, of that $108 million forfeitures, how many licences does that actually represent?
MR. HURLBURT: It was approximately 13 licences that came back to the Crown.
MR. SAMSON: How many licences are still out there?
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MR. HURLBURT: Ten.
MR. SAMSON: There are still 10 out there. Of those 10, how many are active?
MR. HURLBURT: All 10 are active.
MR. SAMSON: Okay, I guess maybe, let me be more specific. How many of those 10 are actually currently under development and producing?
MR. HURLBURT: Mr. Chairman, we have five production licences out there now and we have 10 exploration licences out there now.
MR. SAMSON: And out of those five production, how many are actually in production?
MR. HURLBURT: All of them.
MR. SAMSON: All five. When is the last time the Province of Nova Scotia issued either new production licences or exploratory licences for the Nova Scotia offshore?
MR. HURLBURT: Mr. Chairman, the last was three years ago but we have a call for a bid now for two blocks and that closes in June.
MR. SAMSON: So three years ago, that would have been 2005?
MR. HURLBURT: Yes, approximately.
MR. SAMSON: Or was it 2004?
MR. HURLBURT: Approximately the Fall of 2005.
MR. SAMSON: How many were issued at that time when those licences were approved?
MR. HURLBURT: Mr. Chairman, approximately two went to Canadian Superior and I think it was in the Fall - we will get the information for the member to make sure on the dates and the time, but we're estimating it was in the Fall of 2005.
MR. SAMSON: So we have 15 licences right now that are issued for the Province of Nova Scotia's offshore.
MR. HURLBURT: Five in production and three in exploration, yes.
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MR. SAMSON: I'm wondering if you could tell me, back in 1999, how many licences did we have in the Nova Scotia offshore?
MR. HURLBURT: Mr. Chairman, in 1998 we had approximately 10 and in 2002 we had approximately 59.
MR. SAMSON: In 2002 we had 59.
MR. HURLBURT: Yes.
MR. SAMSON: So we've gone from 59 down to 15 in the last six years.
MR. HURLBURT: Yes, that's 59 down to 10 exploration licences.
MR. SAMSON: Exploration licences.
MR. HURLBURT: Yes.
MR. SAMSON: And the production has always stayed at five, hasn't it?
MR. HURLBURT: That went from three in 1999 to five today.
MR. SAMSON: The numbers speak for themselves, Minister, companies are leaving Nova Scotia's offshore. What plan or vision do you have to turn that around?
MR. HURLBURT: Mr. Chairman, the vision is Premier MacDonald's announcement of the $25 million investment into the offshore through the trust agreement. We want to gather more data, the geology, and put the information out. The key to it is marketing the product we have, but we want to get up-to-date data so that we can go out and market it. That's why we go to the trade shows and we go all around the world marketing what we have here in our province.
MR. SAMSON: If you get the $25 million to do the research and everything you've said, you're still looking at years before you're going to have all that geoscience information ready to go. I guess the concern is that every year the Minister of Finance comes in with a budget that, in essence, any surplus or if it's balanced has been as a result of the failure of our offshore. That's not a criticism of you, but it's the reality. That's unfortunate because the last thing Nova Scotians should be seeing is this revenue coming in because their offshore is not working and people are leaving the offshore.
It has been three years since we've last had a company express an interest in being able to and wanting to pick up one of the licences in our offshore. I know you
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indicated that there's a new offering that has gone out and we haven't had any takers yet. Of those 10 existing exploratory licences, is there an expiry date on those?
MR. HURLBURT: There is an expiry date on them, but we're working very hard with the companies that hold the licences to get some exploration out to the blocks that they have licences on now.
MR. SAMSON: And if they don't? The licences are good for how long, is it five years, 10 years?
MR. HURLBURT: They're staggered, they're not all in the same time frame, but some of them will expire this coming year, absolutely.
MR. SAMSON: On average, once they're issued, what period of time do they have before the licence would expire?
MR. HURLBURT: The maximum they're allowed is nine years, but the average is five years for a licence.
MR. SAMSON: It's five years, so when you say five years, is that something imposed by your department or by the end of five years they're abandoning, paying the penalty and getting out? I'm not clear which one it is. Is that something you're imposing or is it just on average, after five years they're walking away? Which one of the two is it, or is it both?
MR. HURLBURT: Mr. Chairman, the board sets the guidelines for the licences but they have up to five years to do a drill and if they do a drill, then they can be expanded to the nine years.
MR. SAMSON: Okay. So by the five-year mark you at least have to have had a drill on that and if you don't, then you've forfeited your right to keep it?
MR. HURLBURT: Yes.
MR. SAMSON: If you've done a drill then you have nine years after that?
MR. HURLBURT: No, a total of nine years.
MR. SAMSON: A total of nine years between drilling, okay. How many wells were drilled in Nova Scotia's offshore in the last year?
MR. HURLBURT: There were no drills in the last year.
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MR. SAMSON: Not one?
MR. HURLBURT: No.
MR. SAMSON: How many were there the year before that?
MR. HURLBURT: Mr. Chairman, there was one the year before that.
MR. SAMSON: Needless to say, that's disturbing news, only one two years ago and none last year. You indicated you expect six to eight wells this year, who's going to be doing that drilling?
MR. HURLBURT: Mr. Chairman, the six wells that we're talking about this year are onshore, and we're expecting the Deep Panuke project for next year.
MR. SAMSON: So the six to eight you were referring to were onshore. As far as the offshore, do you have any commitments for any wells being drilled for the 2008 year?
MR. HURLBURT: As it stands right now there are no wells to be drilled this year, but we are working very diligently with a company to hopefully have a well drilled this year.
[4:00 p.m.]
MR. SAMSON: And that's a concern because if we're going to be putting together this geoscience and everything else, I'm not sure how we're going to do it if no one is drilling wells. Let me ask you this question, the $25 million you've talked about, the trust agreement, to go toward the offshore for science information and everything else, is that just going to use past data or are you actually looking at new drilling to be able to put all of that information together? So is it new information or is this just a matter of putting together the information we already have and put it at a company's disposal in a bit more friendly format than what they probably have today?
MR. HURLBURT: Mr. Chairman, we are gathering all of the current data that we have to date and putting it in a new format. There may be new data that's needed and that will be implemented at the time.
MR. SAMSON: But I guess that new data would only be if you have some new drilling, which right now you don't anticipate any for 2008 at this point?
MR. HURLBURT: The new data that we're talking about would be seismic. If we need new data it would be seismic data.
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MR. SAMSON: Okay, so that means you would go out there, the province would pay to send someone out there to get that data for us, is that correct? Or would you be relying on the data that's been collected from other companies? No one is out there so I'm not sure where that would come from. So we would have to pay for the seismic work ourselves, is it?
MR. HURLBURT: Mr. Chairman, yes, and with the forfeitures also came the data from the companies that had the licences. We're collecting all of that data and putting it together and if we need more data, other countries have done this and it has been very successful in other countries, so we're looking at that now.
MR. SAMSON: On our best-case scenario, Minister, when would that data be ready? If you were given that $25 million tomorrow and said okay, Minister, here's your $25 million, get it all together in the format that you want to have it together, what is the best-case scenario of when that actually would be available?
MR. HURLBURT: Mr. Chairman, at the moment we have the funding in place. We will be gathering that information and consolidating and putting it together in the next 12 to 18 months.
MR. SAMSON: So 12 to 18 months is your projection right now of when that will be available?
MR. HURLBURT: Yes.
MR. SAMSON: You've made mention that as a department, and yourself as minister, you are doing your best to market our offshore and market Nova Scotia. I'm curious if you could give us a listing of what efforts have been done in the area of marketing and I think you've mentioned going to other jurisdictions to promote Nova Scotia, if you could tell us exactly what you've been able to achieve since you've taken over the portfolio?
MR. HURLBURT: Well, Mr. Chairman, through you to the member, you know, since I've been in this portfolio, I'm not an expert in the offshore gas and oil but I'm on a steep learning curve and I realize that you have to market your product. That's why we need the new data. We're gathering the data and that's going to take some time, but in the meantime we are still going to trade shows and working. We've been from London to Houston, to Scotland, to Alberta, to Spain, you know, promoting our province, and our offshore and onshore gas and oil sectors. We are working very closely with OTANS, promoting the expertise we have here in our province with the services.
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Mr. Chairman, that's what I feel my job is and I intend to keep doing my job, but we need the new information to really do the proper marketing that I see for the future of Nova Scotia.
MR. SAMSON: You've just mentioned London, Houston, Scotland, Alberta, Spain. Have you personally attended, as minister, each one of these conferences?
MR. HURLBURT: No, they're on the schedule for the upcoming events. Since I've been here, in my short stay, I've been to Trinidad, I've been to Venezuela, I've been to Houston, talking to the gas and oil companies, and marketing our province. I may add that, you know, hopefully we're going to have some success in the very near future with some of these endeavours.
MR. SAMSON: But in the last three years, unfortunately up until now, we haven't really had any success, have we?
MR. HURLBURT: Well, Mr. Chairman, I don't want to be contradicting the member here but I think that, you know, some of the pieces of the puzzle take a lot longer. You're not going to have companies come in here and spend hundreds of millions of dollars and they're not going to do it at the snap of your fingers. I think it's a longer process. We are working and I have a very, very dedicated staff. As a matter of fact, we have a lot of our staff in Houston right now promoting our province, and our onshore gas and oil also. So I think that we will be bearing some fruit in the very near future and I hope to have some announcements, hopefully in the new year.
MR. SAMSON: When you say the new year, do you mean 2008?
MR. HURLBURT: Yes, 2008.
MR. SAMSON: Not 2009?
MR. HURLBURT: Well, I meant our fiscal year.
MR. SAMSON: One of the frustrations for Nova Scotians, it's one thing to talk about the developments taking place in the North Sea and other areas. One frustration is that we just need to look next door to see what's happening in Newfoundland and Labrador, whose offshore is booming - there's no better way of saying it. I, like most Nova Scotians, am left wondering what's wrong with us because it's one thing to say they're far away and there's no interest in natural gas or in development in the Atlantic Ocean off Canada, but Newfoundland and Labrador continues to move forward.
Now, I realize some will say that they have oil and we have gas, but when I look at your royalties, natural gas ain't such a bad thing these days either. So that whole
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argument of, well, oil is this much and natural gas is only this much, that doesn't work anymore, because the price of natural gas is such that it again begs the question, why aren't offshore companies coming here knowing the price of natural gas and there's no indication that it's going down anytime soon? So, I guess, what would you offer to Nova Scotians as an explanation of why Newfoundland and Labrador seems to be continually growing in their offshore? I guess the safe word to say for us right now is that we're stagnant.
MR. HURLBURT: Well, I still sort of disagree with the member. I don't think we're stagnant. I think we're going to be seeing some great things in this province in the very near future. I think, as energy costs are rising, oil is almost $125 a barrel today. Newfoundland, hat's off to them, I salute them, they've done a terrific job and I think that's great. But I see Nova Scotia having a great future in the offshore and the onshore gas and oil. That's what I can say to Nova Scotians, that I am very optimistic that we're going to have some real activity here in the near future. My staff is very dedicated to making sure that happens.
MR. SAMSON: One can only hope that your optimism is well placed. It is in the best interests of our province that that takes place, but I'd be remiss if I didn't point out to you that your predecessor Ministers of Energy gave the exact same speech each year in estimates. Unfortunately, the numbers speak for themselves - it's not a criticism, it's the reality. The development is not taking place, but anyway, one can only hope that you will be making the announcements you've indicated you hope to be able to make.
The Sable Offshore Energy Project, could you give us an update as to how many more years we expect production of that offshore project to continue?
MR. HURLBURT: Yes, that project will probably go until approximately 2018, in that area. But I would also like to add that next year a rig will be coming back for EnCana. That's going to help our offshore gas and oil here in the province. It's very, very difficult to get rigs now, they're in huge demand all over, and that's what the companies are telling me.
I met with Petro-Can in Trinidad and what it's costing for exploration today, the numbers are just staggering, what they've invested already in Tobago, and they haven't brought one litre of oil or gas from the ground yet. But it's a significant investment, so it's only fair that we gather the data and present it to the companies to prove to them what we have here in this province.
MR. SAMSON: You mentioned Sable will go until 2018. Do you actually - or maybe Finance has it - have the royalty projections from Sable to 2018? Has that already been worked out? Or is that not something you have?
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MR. HURLBURT: We don't forecast, but this year will be approximately $514 million.
MR. SAMSON: I guess my question is, do you have the forecast moving forward or no?
MR. HURLBURT: Yes, we have that internally and that's for negotiating with the company. By all means, we have that information internally.
MR. SAMSON: But that's not something you're prepared to share with this committee.
MR. HURLBURT: No.
MR. SAMSON: Okay. Back to Newfoundland and Labrador. You mentioned hat's off to Newfoundland and that's great, but I guess it doesn't go to the question of why they're having so much success and we're not. Can the minister give an indication of what, in his view, is the reason Newfoundland and Labrador is doing so well and we're not?
MR. HURLBURT: What we're seeing today, the benefits of discoveries they had from the 1970s - last year I think they had one exploration well. But, you know, I just met with their Premier and their minister three or four days ago and they're very optimistic, you know, looking at the future potential of gas and oil in Newfoundland and Labrador, but who would have ever dreamt five years ago that oil would be at the price it is today and who knows where it's going yet. I think that's going to help us here in Nova Scotia. It's going to help us attract new investment in our province but, again, we need that data and that's where we're focused now, gathering that data.
MR. SAMSON: Is that a new revelation for your department, the need for this data, because I guess it begs the question, why haven't we been doing that for all these years? Is it just now that we've said, okay, hold on now, we really should get this data together, or have previous ministers been unsuccessful in obtaining the funds or the government's attention to do this? I'm just curious that there's such a focus on it now - not that it's a bad thing - but I'm wondering why that wasn't a focus all along, or has it been and previous ministers just didn't have any success?
MR. HURLBURT: We're competing today on a global market, as everybody in this room is well aware. I just mentioned Petro-Can, what they told me that it has cost them to date in Tobago for their exploration that they've done there. So what we're seeing and our marketing tool is having the data at the fingertips for the companies to come in here and do their exploration. If we had that data for them - and by no means am I criticizing any previous minister, everybody has a different focus. My department has
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been focused on this and we are hopefully going to be successful when the Crown share of funding comes through to put this $25 million and get the information we need and get it to work.
MR. SAMSON: I guess my question is that previously when ministers were doing the marketing and everything, what did they have to offer, if they didn't have this data, other than we're nice people and come see us? Did they have more information than that because I certainly agree with your argument about the need for data but I'm just curious, what were we using before to attract companies if we didn't have this information which you've pointed out is so vital for us to have at our disposal?
[4:15 p.m.]
MR. HURLBURT: Mr. Chairman, we partnered on the project with ACOA last year and the report back was that we need to better understand our geoscience, you know, that's what the report came back. We're very fortunate with hopefully the Crown share coming real soon, we'll have that funding, and we can start to work on gathering this data and getting the information out there.
MR. SAMSON: So I guess it just goes back to my question, what were we offering before when we were trying to attract companies to come to Nova Scotia if we didn't have an understanding of the geoscience and that, what tools were we using previously?
MR. HURLBURT: Mr. Chairman, we had several wells drilled by 2002 and the data we had from that but now we want to gather the geology, the geoscience, and have all of that data to better market the product that we have.
MR. SAMSON: The EnCana project, is that still on track?
MR. HURLBURT: Yes.
MR. SAMSON: At what point do you expect to see work start on that project?
MR. HURLBURT: Well, yes, the project is underway now. They've been letting contracts out as we speak and a company, Shaw, just got a beautiful contract from EnCana and we're expecting the rig back here next year.
MR. SAMSON: One of the criticisms that has been made about our offshore is the lack of onshore companies able to service the offshore. Has your department done anything in that regard to promote or help or try to establish better onshore services for the offshore industry, for the benefit of Nova Scotians?
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MR. HURLBURT: We are working with our service providers in the gas and oil, and marketing worldwide. But with our agreement with EnCana, a portion of that will be Nova Scotia content, by all means. We have state-of-the art companies working here in Nova Scotia in the service provider. When I was in Trinidad, Venezuela, everybody commented on the quality and calibre of companies we have here in Nova Scotia in our gas and oil.
MR. SAMSON: So you're satisfied that we have all of the services we need here in Nova Scotia and there's no need to try to encourage more services to keep the business here in Nova Scotia? Is that what I'm to take from that response?
MR. HURLBURT: With the scope and the scale of where we are today, but as we grow in our gas and oil, there will be a need for more - a fair amount more.
MR. SAMSON: Okay, I'm curious. Is that something you see your department as playing a role in working with these companies, or is that something that should be with NSBI or with Economic Development. Do you play a role in that or no?
MR. HURLBURT: I think we have a very, very important role to play in this. But there's also partnering with other agencies and the federal government and other departments of the provincial government. But I think we're doing very, very well under the service side now and the trade mission I was on in Trinidad, we left there and I think three or four of our companies signed contracts as service providers. You know, Nova Scotia is known globally now.
MR. SAMSON: What efforts are being undertaken by your department on the training side of making sure that we have the proper trained and skilled labour to service our offshore here in Nova Scotia?
MR. HURLBURT: We have a number of areas we are working with the training through investment with the Nova Scotia Community College, CBU, the scholarship program with Pengrowth - I may add, I was at my first one of those here in the Red Room a few months back, very successful - and we're working with Dalhousie on a geology course in Trinidad. There are a number of programs and, absolutely, we're working on and we're partnering with the Department of Education.
MR. SAMSON: You just mentioned a geology course in Trinidad or for people from Trinidad?
MR. HURLBURT: It's Nova Scotians going to Trinidad to understand the geology and training. When I was in Trinidad, I didn't have the opportunity to meet with the professor and students, but we had 14 students there when I was there.
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MR. SAMSON: Fourteen Nova Scotia students?
MR. HURLBURT: Yes.
MR. SAMSON: I want to change topics a little bit here. I had a gentleman come to see me, he's originally from the United States, but he bought a place in Fourchu. I'm not sure if you're familiar where Fourchu is, but it's in Richmond County.
MR. HURLBURT: That's in Nova Scotia?
MR. SAMSON: In fact, it's right next door to Gabarus which is where our good Speaker hails from, born and raised in Gabarus, but Fourchu is down along the shore of Cape Breton Island. It's a small community, fairly rural, and this gentleman started being interested in wind technology and started up a small turbine on his property. It was discovered that this actually was a place that would be good for wind development, so he met with members of the community and the community was very excited about the prospect of being able to get electricity from a wind turbine in their own community. They've certainly bought into the idea of being green and finding alternate sources of energy.
So when he came to see me with great enthusiasm about how did he go about getting government permission to be able to put a turbine in place and be able to sell directly to the residents of Fourchu through a co-operative that they would be forming, unfortunately, I had to burst his bubble and tell him you can't do that. The Government of Nova Scotia does not allow you, as a wind producer, to be able to sell directly to consumers. Needless to say, he was quite disappointed and I know that the residents of Fourchu are extremely disappointed as to why this cannot be done.
This was a recommendation, as I'm sure the minister knows, that was made back in 2003 through the Electricity Marketplace Governance Committee; Recommendation 51, renewables to retail, was for your government to allow alternative energy producers to be able to sell directly to consumers. My question to you is, as the new Minister of Energy, why does your government continually refuse to allow individuals such as this and communities to be able to put up these wind turbines and provide it directly to the consumers in their area?
MR. HURLBURT: Mr. Chairman, through you to the member, as I mentioned in my opening remarks, we have a study on wind power in the province that hopefully will be available very, very soon. We're looking at that to see what we can integrate into the current systems that we have to see what the capacity is. Until I have that, I'm not going to make a commitment here today of something that I can't live up to. So I want to get that study and look at the study and see what the system can handle.
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MR. SAMSON: Is this the study that started back in 2006?
MR. HURLBURT: July 2007.
MR. SAMSON: July 2007. Okay, because in the winter of 2006, your predecessor indicated that the government was looking at this and doing consultations and trying to come up with a plan so that legislation would be brought in, in the Spring of 2007. That has not happened. Minister, this recommendation was made to your government in 2003. It's five years later and you're still waiting to find out how much the grid can handle? Is that your response five years later?
MR. HURLBURT: Mr. Chairman, the original renewable energy standards were at 5 per cent; we're now at 10 per cent. That's why we've engaged this study; I need that information and my staff need the study back to see what the system can handle. We'll definitely look at it. I understand the frustration of the member. I've had, since I've been in this department, several municipalities in and talking to me. I've engaged dialogue with them and I have committed to them to have ongoing dialogue. Also, we need the information so that we can make good decisions based on the information.
MR. SAMSON: Okay, help me out here. Five years after the recommendation was made, what exact information do you need to know that's going to allow you to decide whether the energy producers can sell direct to consumers or not? What is it that you're still waiting for?
MR. HURLBURT: As I said earlier, we've doubled the renewables that we want. We need to know what the system can take. That's why we've engaged a study, we're waiting for the study to come back, which will be in our department very soon. We will go through the study and make some decisions and present the findings to government.
MR. SAMSON: Who is doing the study?
MR. HURLBURT: It was under an RFP and it was awarded to Hatch Energy.
MR. SAMSON: And how much are the taxpayers paying for this study?
MR. HURLBURT: It's a total of $361,000.
MR. SAMSON: Not million?
MR. HURLBURT: No. (Laughter)
MR. SAMSON: We could have finished the estimates, there would have been no need to continue this process any longer. (Laughter)
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[4:30 p.m.]
When you say "soon" can you be more specific? When do you expect that study to be done?
MR. HURLBURT: Mr. Chairman, through you to the member, I mean very, very soon, I'm talking days. In the very immediate future we're expecting to have that.
MR. SAMSON: Will this study allow you once and for all to make a decision on whether alternative energy producers can sell directly to consumers without having to go through Nova Scotia Power? Is this the study you've waited five years for and the magic information that will finally allow your government to make a decision on that?
MR. HURLBURT: I'm not going to preempt what's in the study, but I hope the study is going to give me the information and tools I need and my department can assess and we can make a recommendation to government.
MR. SAMSON: I know I don't need to tell the minister this, if you've had municipalities and that in, it's extremely frustrating as a government to be telling people to use alternative energy sources, to conserve and everything else, only to be told when a gentleman - and I've given you an example and he's just one. I've had a number of them in Richmond County who want to be able to show the residents exactly the benefits of this by them being able to get the power directly. Right now, the only thing that stands in the way of being able to do that is your government and it has been that way for five years since you've had that report.
Your predecessor, Mr. Dooks, was telling us this was under discussion and anytime now we'd have a decision, and unfortunately he's off to another department and no decision has been made. The only recommendation I can make to you at this point is as soon as you have that report, I would certainly hope that you'll be in a position to be able to make a decision on it one way or the other, before too long, and that we don't have to wait years before being able to see that.
Minister, one of the other issues I wanted to raise with you - and you've probably heard me raise it in the media - right now the bulk of energy production that's taking place in Nova Scotia is in the Strait area, in Guysborough County and Richmond. Yet, as we speak, there is not one representative of your department located in that area. It's a frustration that the municipalities have expressed, I've expressed on a number of occasions, and the residents of the area have expressed.
We don't expect you to move your entire office down there, but the fact that I've asked this of your predecessors, Mr. Clarke and Mr. Dooks, even one employee who can be there to meet on a regular basis and be there to address the concerns of the
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community. Are you prepared to make a commitment that your government will at least start the process of establishing a permanent presence in the Strait area through the Department of Energy?
MR. HURLBURT: Mr. Chairman, it's ironic that the member brings this up today because I was speaking to my staff as early as yesterday on this exact issue. I believe that we have a great tool in our province and it's called our RDAs and they're working very well but to the member's ask, I can tell the member that I am looking at that right now, at regional staff, to see what the needs are - and I'm not talking only Richmond or the Strait area, I'm talking around the province. Maybe we need regional field staff around the province. I am definitely looking at that. I've asked my staff to come back to me with their recommendations, but I have my own feelings on it and I think the member can relate to my remarks where I feel on this because I do feel that we need more staff in my department and I think that we need more staff out in the field also.
MR. SAMSON: Well, my only hope is the minister can put his feelings into action because this is something that I've asked for in the last number of years and each minister has been sympathetic, but to date there's still no presence there. On that, as far as the Keltic Petrochemicals project is going, to your knowledge, is everything falling in place for that project to continue to move forward?
MR. HURLBURT: It definitely is still going through its process and, you know, I'm optimistic with that project. I think it has the right stakeholders and the project is going at the proper stage that it should be going in the proper time frame.
MR. SAMSON: Is your department in any current discussions with Anadarko regarding the Bear Head project?
MR. HURLBURT: Mr. Chairman, through you, I don't think the Minister of Economic Development has been up on his estimates yet, and I'm not trying to pass it off, but I think that file is still under the jurisdiction of NSBI. But a direct answer is no, there has been no . . .
MR. SAMSON: When you've had the opportunity through your staff and yourself to attend these conferences selling Nova Scotia, are we still talking petrochemical and liquified gas for Nova Scotia when we're going out, or have we just dropped that from our list of reasons to come see Nova Scotia?
MR. HURLBURT: Yes, absolutely.
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MR. SAMSON: So I guess outside of NSBI, is your department playing any role in the promotion of the Anadarko project and looking for a new company to come in and establish a liquified natural gas facility there?
MR. HURLBURT: Mr. Chairman, through you to the member, you know, yes, I did have discussions with one company on the Anadarko site. Again, and I do not want to be stepping on anybody's toes, you know, NSBI is naturally the lead on the file but we are working in conjunction with NSBI and I did raise it with a company in Trinidad.
MR. SAMSON: Is NSBI also responsible for the Keltic Petrochemicals project, are they the lead agency on that as well?
MR. HURLBURT: No, no.
MR. SAMSON: Who is?
MR. HURLBURT: Mr. Chairman, if I may just for clarity, the land of Anadarko was owned by NSBI and I think the member is aware of that. That's why they are the lead on it and the other file he has mentioned, that's a private consortium that's advancing their own project and we are there with them to support them and work with them as they advance their project.
MR. SAMSON: When you're travelling on these trade shows and conferences through Energy, is there a representative from NSBI that joins you on those as well?
MR. HURLBURT: From time to time, yes, absolutely.
MR. SAMSON: Because that's my question - when we're going around, do we have someone speaking up for the Bear Head site? It's terribly frustrating because when you look at all of the difficulties they've had in the U.S. in bringing in these liquified natural gas projects, we had a facility there ready to go and everything, and it's market conditions and supply that ended up killing the project. It wasn't local opposition, it wasn't environmental opposition, it's extremely frustrating because the community bought into it, the community is still bought into it, it's waiting there, it's got all of the potential - my only concern is, who's pushing for it right now?
The fact that it is NSBI and not Energy does cause me a bit of concern because of everything you said, the reasons why you go on all of these trade shows and the promotion and everything, my only concern is, who's doing the promotion for that site and is there any means of finding a supplier and finding a new company to take over that site? I would encourage the minister, it's a gem just waiting for everything to fall into place. Everything that stopped these projects from going to the U.S. is not an issue at
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Bear Head. The environmental concerns, local opposition, everything else, it's not there. We just can't find a supply to bring it in.
It has tremendous potential and I just want to make sure the minister has it on his radar screen and encourages his staff, even though it's with NSBI, if you're doing promotion, don't forget to mention to them, by the way, we've a perfect spot for you if you're interested in bringing in liquified natural gas.
I know I only have a few minutes left, but one of the - I didn't know this because I thought it was a former minister, but you're the Minister responsible for Military Relations?
MR. HURLBURT: Yes.
MR. SAMSON: Do you have a staff to go along with being the Minister responsible for Military Relations?
MR. HURLBURT: Yes, a big staff. One.
MR. SAMSON: Who is your staff in the Office of Military - is there an Office of Military Relations?
MR. HURLBURT: Yes. He's over at IGA and it's Tim Dunne.
MR. SAMSON: Okay. Let me raise an issue with you. I was going to raise it in Question Period and I may still have the opportunity to do that, but I'm curious whether you are in a position to respond. I'll try to explain as quick as I can, maybe you've heard of this before.
Apparently the military has this rule that the commanding officers of cadet corps have to retire when they hit 65. We have a situation with the air cadets down in St. Peter's where their previous commanding officer, Charles Peter McManus, was forced to retire at 65 - although he was more than happy to continue operating as commanding officer. Now we have a new commanding officer and he's now being forced to retire. He's still in great health, is more than happy to continue doing it, but he's being forced out because of this age restriction of 65.
As you know, here in Nova Scotia, we've passed legislation to remove that restriction, although I think it only gets proclaimed next year, 2009. Right now they're about to lose that corps. It's because of the fact the federal government, through the military, is sticking to their guns and saying he's gotta go at 65 and there's no commanding officer ready to take over. As the Minister responsible for Military Relations, are you in a position to lend support or even look into the rule that's being
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used here that could potentially see the loss of a corps that just celebrated its 35th Anniversary, continual service in the community of St. Peter's through the air cadets?
MR. HURLBURT: I will commit today that I will take this under advisement and if the member would share with me some more information - outside, after - I would love to have the information and I definitely will do some investigating and get him an answer to that.
MR. SAMSON: There are a number of newspaper articles on it, I'll be more than happy to get them to the minister. The way I'm looking at it is that if we can get both the minister and even through resolution of the House, to have unanimous support of the House to call upon the powers to be to review that. I would imagine that will be an issue for a number of cadet corps that we have throughout Nova Scotia. What a shame that we'd see cadet corps having to cease operations because of the rule of 65, when we have people who are more than happy to continue operating as commanding officers.
MR. HURLBURT: Mr. Chairman, how much time does the individual have before he has to retire?
MR. SAMSON: I can try to get those details, but apparently they've been served notice that when he turns 65 - I don't think he's turned 65 yet - at that point he'll have to resign as the commanding officer of that unit. These cadet corps can't operate if they don't have a commanding officer. That's one of the challenges because a commanding officer requires a lot of time and for the most part, down home, it's been people in their retirement that have taken on the duties - fortunately for us, they have given up their time to do it.
For someone who works, it's extremely difficult to balance a schedule because I think these cadet corps meet two to three times a week. It's quite an extensive commitment. I'll get the information to the minister and if he can look into it. It's a rule that I think no one has really paid attention to before, but it's a big problem for us and it would be a shame to lose that corps because of that rule.
MR. HURLBURT: Would the member be able to have that information here at the House on Monday?
MR. SAMSON: Probably, yes.
MR. HURLBURT: You wouldn't have it by tomorrow, I'm thinking the weekend?
MR. SAMSON: Probably - if not by tomorrow, I'll commit to having it to the minister by Monday.
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MR. HURLBURT: If you get me the information, then we'll do our investigation and maybe if the member could meet with me after, we'll set up a time on Monday and I'll have staff - my one staff - with me and we'll go through the process and see what we can do.
MR. SAMSON: Sounds great. My last minute - is there anything we can do to get our offshore going? I think it's fair to say you have all-Party support to do that. It's in all of our vested interests for us to hopefully one day table the same kind of budget that was tabled in Newfoundland and Labrador, that we can offer support to our poor cousins in Ontario as well.
MR. HURLBURT: I thank the member for his questions and also for his support. I may be the minister, but I think we all have a part to play and I appreciate his comments.
Mr. Chairman, I wonder if the members would mind a two-minute break. (Interruption) It's called a "Baker break".
MR. CHAIRMAN: Okay, we'll have a two-minute recess.
[4:45 p.m. The subcommittee recessed.]
[4:48 p.m. The subcommittee reconvened.]
MR. CHAIRMAN: The honourable member for Halifax Chebucto.
MR. HOWARD EPSTEIN: Thank you. I just wanted to let you and the minister know that my colleague, the member for Hants East, and I intend to share the next hour. He would like to start, so I'll just pass it over to him and then I'll take it up when he's finished.
MR. CHAIRMAN: The honourable member for Hants East.
MR. JOHN MACDONELL: Thank you. I want to thank the minister and his staff for allowing me an opportunity to ask some questions. I won't take too much time, I'm thinking. My constituency comes up against the Bay of Fundy with Cobequid Bay and Minas Basin so my question is really around tidal power. I see in your business plan, it says:
"The Department of Energy recently partnered in a study regarding the potential of offshore renewable energy generation in the Bay of Fundy. In conjunction with stakeholders, this potential will continue to be evaluated through an integrated process of regulatory
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development, strategic environmental assessments, research and pilot project(s) prior to any commitment for large-scale commercial development."
Can you outline exactly what's happening with regard to this statement as far as any evaluation that's going on?
MR. HURLBURT: I appreciate the member's interest in tidal power. I think we have great potential here in our province, providing we can protect our environment and protect our fish habitat. I think those are two key elements - you know, it's green energy and we have to look at that.
I just got the report from SEA and I've made a commitment that I will respond by the first part of June to that report. That's where the file is right now. The report just came in.
MR. MACDONELL: Tell me a little bit about the report. What was the process in generating it and timelines?
MR. HURLBURT: We've been a year, we've had public consultation on the process. We engaged OEER to do the study for us - it was $250,000. That's the process that we've had to date. SEA now has put their report into me and we are digesting it, but I made a firm commitment to that committee that I would respond to their report - I think it's the first week of June, if I'm correct.
MR. MACDONELL: Who's SEA?
MR. HURLBURT: Offshore Energy Environmental Research, Acadia, CBU, St. F.X. and Nova Scotia Energy.
MR. MACDONELL: Okay, could you say that again, please?
MR. HURLBURT: It's Acadia, CBU, St. F.X. and Nova Scotia Energy.
MR. MACDONELL: So they were all responsible for input into this report?
MR. HURLBURT: Yes.
MR. MACDONELL: Can you tell me about the consultation that occurred?
MR. HURLBURT: There were approximately 12 meetings around the province and then there were a number of private meetings with stakeholders. I think it was approximately 12 public meetings that they had. I think tonight, as a matter of fact,
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there's a meeting in Cornwallis - was it tonight or was it last night? It was last night. There are public meetings with the report that was tabled.
MR. MACDONELL: Did this involve representatives from the municipalities, RDAs, or do you know?
MR. HURLBURT: They have input through the public consultation, absolutely. Yes, they were at the round-table discussions. I know that they were in my home community. I wasn't there the evening that they had their public meeting but I know that the municipalities and the town, the RDA, the chamber of commerce, there were a number of people out to the public meetings.
MR. MACDONELL: But they just went because it was public. Were particular organizations invited, I guess that's what I was . . .
MR. HURLBURT: It was advertised, yes. There were approximately 25 people at the round-table meetings that they had and the UNSM, for example, was there. In Parrsboro, for example, they were definitely at the table also.
MR. MACDONELL: How did you determine who would be part of SEA, like the universities and so on? Did you pull names out of a hat? How was it decided who would participate in that role?
MR. HURLBURT: It was a group that was set up - you know, the Offshore Energy Environmental Research group is what they're called. It's an association that was formed by the groups that I mentioned earlier. They have a wide range of input into the research and the information that we wanted. They are very credible and they've done a great job, to my knowledge. I know the public meetings that they've had around the province have had good attendance and they've had good feedback.
MR. MACDONELL: I was just curious if every one of these particular - say the universities, Acadia, CBU, whatever, if they brought a particular bit of expertise on some area related to tidal power or environment or whatever.
MR. HURLBURT: For example, Mr. Chairman, through you to the member, Acadia has been studying tides for decades now and we had the dean from Dal prepare the reports. So I think we have good, critical people on the committee. I'm not taking, you know - I'm just sure the member is trying to get an understanding of who is on the committee and their role and their input.
MR. MACDONELL: That's really where I'm going. I'm just curious why someone was there and someone wasn't, basically.
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I'm curious in terms of jurisdictional issues, if a project was to go forward, what's the relationship between Nova Scotia and New Brunswick as far as the Bay of Fundy and who says what, or whatever?
MR. HURLBURT: Mr. Chairman, I can tell the honourable member that I think within a week I'm meeting with the Minister of Energy from New Brunswick. I think that we have - because we're from two different provinces, we have the same common goals. The bay is divided between the two jurisdictions and we've agreed to work co-operatively together on this venture.
With the federal Minister of Natural Resources, we made the $5 million announcement here a week ago with Dal about carbon storage. He is very, very excited about the potential tidal power here in our province and he's very, very committed to this. I met with the Minister of Fisheries and Oceans, Minister Hearn, on the file. Both departments are very, very committed. We want to be cautious. As I said earlier, we want to protect our environment, we want to protect our fish habitat but if we have a potential here for Nova Scotians, let's capture that potential that's out there.
MR. MACDONELL: I'm not sure that I got an answer to my question. So I'm curious, is there a line drawn in the sand when the tide is out as far as where New Brunswick has jurisdiction?
MR. HURLBURT: They cost shared with us on this study. Yes, that's right, there is a boundary.
MR. MACDONELL: Well, that's kind of where I'm going.
MR. HURLBURT: I haven't found that yet, I haven't been out there yet, but there is a boundary down the middle of the bay.
MR. MACDONELL: Okay, great. When you're talking to any of the New Brunswick ministers, if you could just inform them the highest tides in the world were measured in Hants County, I would appreciate that. (Laughter)
The Department of Energy has established three strategic directions that it will focus on to deliver its mandate - they're listed here. The last one - "Create a better business climate through effective and efficient energy regulation and operations." - do you have any notion of what that means or what it will look like?
[5:00 p.m.]
MR. HURLBURT: Mr. Chairman, to the honourable member, I have witnessed new technology first-hand. I just visited Norway and saw their gas and oil productions
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that they have over there and the technology and the science that they have. We want to revamp our rules and regulations to adapt the new technology that's out there to make it more productive for the exploration companies that want to come here to do business in our province. That's one of our four pillars. You said three, there are four pillars to our plan and that's one of our pillars, absolutely.
MR. MACDONELL: I want to encourage down this road of looking for alternate sources of energy and ways to mitigate climate change and to improve the environment as much as possible. So, yes, any direction that you can go that's beneficial that way. I'll be interested, as time goes on, to see what comes out of this report and what the recommendations are.
I have some other questions but I think they're probably too far, without some other groundwork as far as where the industry might go and what happens in other jurisdictions. But I'd be interested to see how this unfolds and what the benefits could be for communities as that happens.
MR. HURLBURT: Absolutely. Mr. Chairman, if I may, to the member, I will commit to the member here today that I will make sure that he's included in the report, my response to the report. I'll make sure that the member has a copy of my response to the report and that's going to be, as I said, I made a commitment that I will have that out the first week of June and I will live to that commitment.
MR. MACDONELL: I want to thank the minister. I just want to make a comment, because my critic area is agriculture, so I would encourage the minister to think about alternative energy as an income source for farmers, actually, in this province and whether that can be through wind energy or methane production or whatever, but definitely they could use some help improving the bottom line, so energy production might be a possible way.
I think if you can stay in touch with the Minister of Agriculture on this and see what avenues are available, it would be some way to offer incentives for that part of the industry. Maybe you've already done research in that regard, but it's just an area that I think is worth looking at anyway.
MR. HURLBURT: I think, Mr. Chairman, that energy is on everybody's minds today. Protecting our environment is naturally on everybody's mind in this room and in Nova Scotia. I think that collectively we, through a thought process, had to keep looking at new technology that's out there, and it's not just the Department of Agriculture and the Department of Energy - we're all connected and we're all trying to do the job for Nova Scotians. I think that every MLA in the House of Assembly has an important job to play and because we have different coloured flags, that doesn't mean that we're not - our thought process on some of it, I think the blue flags got a greater thought process.
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But seriously, I really believe that we all have a role to play and protecting our environment is key, but also looking at new technology and for energy, it's a very important step, I couldn't agree more. The farming community, through the agriculture, they are having hard times and if there are ways that we can help support them, we'll definitely be there with the support.
MR. MACDONELL: I want to thank the minister and, Mr. Chairman, I'm going to hand over to my colleague, the member for Halifax Chebucto. Thank you very much.
MR. CHAIRMAN: The honourable member for Halifax Chebucto.
MR. HOWARD EPSTEIN: Well, thank you very much. Minister, I actually thought that I might spend all of my time talking about Conserve Nova Scotia with you but before I enter on that discussion, I might focus with you on another aspect of the department's mandate, which, of course, is the energy production side. There was one aspect that really caught my attention when I was reading the business plan. In case you have it with you, I'm actually looking at Section 3.4, which is called Energy Supply. I'm looking at the business plan for 2007-08.
MR. HURLBURT: What page, member?
MR. EPSTEIN: Well, you know what? They're not numbered in the copy I have, it's Section 3.4. It's titled Energy Supply, at least in the version that I have.
MR. HURLBURT: We don't have a 3.4.
MR. EPSTEIN: I wonder if we're working with different versions. I have the 2007-08 version, perhaps there's a more modern version, is there? (Interruption) Oh, you have a 2008-09, good for you.
Well, I'll just read it to you and I'll tell you what this has to do with. Actually my focus here is the Sable project and I'll tell you what was said here. It's the Sable project that I'm interested in. If you look at the bottom of the page - I gather you've got a copy of last year's business plan in front of you now - if you look at the bottom of the page it talks about how the Sable project started to produce at the end of 1999 and how we're now looking at a forecast peak this year - or I guess 2007 was the forecast peak - and then kind of going over the page, it talks about projected revenues from the project.
What I wonder really about this, first off, is what is the current projected year for exhaustion of the Sable fields?
MR. HURLBURT: It's approximately 2018, the projected exhaustion of the well.
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MR. EPSTEIN: Okay. Can I ask what the source of that projection is? I'm a little puzzled; originally, when the project was going through environmental assessment in 1997-98 and the company at that time was talking about its long-range projections, it talked about a 25-year project and then it pointed out that if there were compression on the line, which, of course, has taken place, that the life expectancy of the project could come back significantly. At one point I remember them even talking about the possibility of exhaustion by 2011, or 2013, or 2014. I'm wondering about the source of 2018 projection at the moment.
MR. HURLBURT: Mr. Chairman, through you to the member, Exxon has to submit their estimates to the board annually. We are privy to that information.
MR. EPSTEIN: That's the CNSOPB.
MR. HURLBURT: Yes. Price and the annual production, everything has a factor in the production out there. So that's where we are today. Their projection now is 2018.
MR. EPSTEIN: Even though I have last year's business plan, is it still the view of the department that production has now peaked and we're now looking at it trailing off?
MR. HURLBURT: It's projected that it will be steady for this year and we'll determine at the end of this year the forecast for the next current year. That's how the process goes and the company has to put their projections into the board annually.
MR. EPSTEIN: I'm not meaning to be overly gloomy, Minister, but the situation seems to be that we have one producing field and we're well into its productive life.
MR. HURLBURT: I'm sorry, member, I couldn't hear.
MR. EPSTEIN: I'll wait until the door is closed. I was just observing that the situation in Nova Scotia seems to be that we have one producing field, the SOEP project . . .
MR. HURLBURT: Five.
MR. EPSTEIN: SOEP, I know, has five wells but is that what you're talking about, or are you talking about something else?
MR. HURLBURT: Five fields.
MR. EPSTEIN: Okay, it's one project. We have one project that was approved back in 1997-98 and it's that project that is ongoing for which production has peaked and
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which is going to be exhausted apparently by no later than 2018. So that situation hasn't changed. I was there at the environmental assessment, the combined environmental assessment and National Energy Board hearings. I spent a full year at that in 1997 and it was fascinating. The point is, we haven't really changed our situation since then. I'm just wondering if that's still the correct understanding of our offshore. No matter how much we might market it or encourage exploration, we don't have any more, except this one producing project.
MR. HURLBURT: Mr. Chairman, through you to the member, we have Deep Panuke that's coming on stream by 2010.
MR. EPSTEIN: And what's the projection for that?
MR. HURLBURT: It's approximately 700 billion cubic feet of gas.
MR. EPSTEIN: Another minister was a little reluctant earlier to talk about total projected revenues, but is there a projected revenue to the province from that field?
MR. HURLBURT: We have our projected royalty over the life of the project of $200 million to $400 million.
MR. EPSTEIN: All right, but the projections for Sable are somewhere between $1.5 billion and $2.5 billion.
MR. HURLBURT: Yes.
MR. EPSTEIN: Okay, so an order of magnitude difference.
MR. HURLBURT: Absolutely.
MR. EPSTEIN: What I also wondered about this was if you can tell us what amount of the royalties that have come in so far from Sable has gone towards the province's debt.
MR. HURLBURT: Mr. Chairman, through you to the member, since March 31, 2005, the net debt has declined by a total of $1.1 billion. In large part, this decline was due to the receipt by the province of $830 million in the up-front payment under the offshore offset agreement. We would not have had the payment if we hadn't had the offshore. We are negotiating, as the member is well aware, on the Crown share and that's going to have a significant impact.
MR. EPSTEIN: Okay, I know at this point we have the potential to engage in a long discussion about how this should be accounted for, but I have to tell you what's
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bottom line for me, which is, prior to the start of production in the Sable project, our debt was already at about $12 billion and if all of the money that had come in by way of royalties from Sable had gone on to our debt, then we would be significantly below that. But we're not. It's clear that not all of it has gone on, it's clear there has been a different set of arrangements, and of course it's all complicated by the negotiated arrangements with the federal government. But it hasn't really significantly improved our financial position the way I think it was hoped that it would.
[5:15 p.m.]
I look at a contrast with where Newfoundland and Labrador has just moved in their most recent budget which, blessings on them, they are able to pay down, I think, by in excess of $1 billion dollars, their debt.
MR. HURLBURT: Absolutely, hats off to them.
MR. EPSTEIN: I think, from having been in a much worse position, and with a smaller population base, they're now in a better position than we are in terms of overall debt. Good for them, but I worry that we may not have been as great beneficiaries as we might have been from these projects. Anyway, it will be an ongoing debate and that's the nature of my worry about where we've been with the offshore so far.
Having said that, I want to move on to something else.
MR. HURLBURT: Mr. Chairman, if the member would allow, absolutely, I'd be happy to respond to that statement.
MR. EPSTEIN: Sure, I would like to hear the minister's comments.
MR. HURLBURT: In 1999, when our Party took office, as the member knows,
we inherited a huge debt, we also had a huge deficit that we had to get under control. We got that under control, we have a debt reduction that we are fast-tracking, and we have tabled seven balanced budgets in this province. We have a pay-down plan on our debt.
So I think we're going in the right direction, but I understand where the member is. Sure, everybody wants more, but we also need services in our province for the people we all represent. There's a really fine balancing act here. We have to find that balancing act, and that's exactly what we're doing. But my job, as the Minister of Energy, is to promote our offshore and our onshore gas and oil. I can tell you, one of the key pillars of my stay in this department is marketing our province. I think we have great potential here, we need to gather our data, and get our data so we can do proper marketing.
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MR. EPSTEIN: Okay, I'm going to leave that, but thank you. That leads me to my first point, really, which is the mandate of the department. It's a peculiar mandate, because as the minister just said, there's a heavy emphasis on marketing of our energy products. Of course, in marketing, you want to sell as much of your product as you can.
On the other hand, also tucked into your department is Conserve Nova Scotia where you're saying to people, buy less of the product. It's a more nuanced situation than that, but it's (Interruption) If you wanted to respond to that point, I'd be happy to hear it. I mean, Conserve Nova Scotia is part of your mandate.
MR. HURLBURT: Absolutely and I'm very proud they're a part of my mandate. They're doing a tremendous job.
MR. EPSTEIN: Well, this is good. I'm glad to hear that.
MR. HURLBURT: I don't think it's unique to Nova Scotia. I think every Energy Minister in Canada has an important part to play here and they are doing that. I can say, since the conception of Conserve Nova Scotia, they've fulfilled their mandate to date and they're advancing it even more so and they're doing it with a very minimal staff.
MR. EPSTEIN: I don't think the mandate is impossible, by any means. I just think it makes for some difficulties.
In any event, I'd like to start first with the idea of what it is that Conserve Nova Scotia is all about. It sounds as if the mandate is to try to promote energy use reduction and it doesn't seem to be limited as to its sector. The description that appears in the budget documents is that it's a provincial government agency with broad responsibility for promoting energy efficiency, and that has to do with all energy sectors: residential, commercial, industrial and transportation. Unless that's changed, it sounds to me as though there's an ample program in front of Conserve Nova Scotia.
Again, I'm looking at what seems to be the previous business plan which talks about global climate change. It seems to me that very clearly Conserve Nova Scotia is tied into that environmental objective; that is, it seems very much focused on the problem of global climate change. It's a serious problem and it's right to look at it.
Again, because I'm looking at last year's business plan, you might correct me if the department has a different view, but last year it said quite specifically, "To seriously address climate change, emissions reductions in the order of 50% to 80% are needed over the long term." This is in Section 3.2, which is Climate Change. There's a general discussion there about the objective.
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What I first want to ask about is, since this document talks about this kind of reduction of greenhouse gas emissions - those are big numbers, 50 per cent to 80 per cent and it goes on to cite the National Round Table on the Environment and the Economy talking about reductions of 60 per cent. The minister would be aware that the provincial legislation that came in last year, the Environmental Goals and Sustainable Prosperity Act, talks only about a 10 per cent goal for reduction.
MR. HURLBURT: Yes.
MR. EPSTEIN: Yet, your department, including Conserve Nova Scotia, presumably, is generating information that, in my view, correctly points to much more aggressive targets as being achievable, realistic, possible and, in fact, necessary.
In Question Period last week, I asked about the 10 per cent goal and I asked whether the government had any thoughts of changing it, given that there's now commentary from lots of sources that suggests the 10 per cent below 1990 levels by 2020 is really much too little. The answer I seemed to get was, no, we're not thinking of changing our goal and, furthermore, this is an aggressive goal.
I have to say, I see something of a disconnect between that answer and the standard set in the legislation and what seems to be, I think, very sensible observations in the business plan of the department. Can you help me think about this?
MR. HURLBURT: Mr. Chairman, through you, the numbers the member just read, those targets were for 2050 but our immediate goals are for 2010, 2013 and 2020, and we're committed to meeting those goals. The long-range target was for 2050.
MR. EPSTEIN: I understand that some of those numbers are for 2050 but there are other studies since then that are suggesting that perhaps we don't have that much time. That's the issue, that's the question, so that's what leads me to be worried about this.
What I wonder is whether there's any chance that the government might revisit the 2020-minus-10 standard.
MR. HURLBURT: Mr. Chairman, we're at 27 per cent now and to achieve 35 per cent by our targeted date, those are our goals and we're going to live to those goals.
Mr. Chairman, I really believe that each and every one of us and each and every Nova Scotian has a part to play here. You know, you might not think a small part, just the activity of brushing your teeth in the morning, leaving the water running, well, it's a small part, but if everybody plays a part there it's helping us meet our targets. The key to meeting those targets - and maybe the member will not agree with me - I firmly
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believe it's education. I think that's where we really have to be focused, on educating Nova Scotians.
MR. EPSTEIN: Can the minister tell us what would be the ultimate measure of success? I see, for example, a phrase here in the sentence that I read before, "To seriously address climate change . . .", and then it goes on to say - and I read you this - ". . . emissions reductions in the order of 50% to 80% are needed . . .", and so on. I understand your point about this was the longer term and that's 2050 and so on, but what would it mean to seriously address climate change? What does the department have in mind when it's thinking about a minus-10 per cent level, or perhaps a more aggressive level in years after that? What does the department have in mind?
MR. HURLBURT: Well, as I'm sure the member knows, climate change is now moved over to Environment but our department has a very, very important part to play, through Conserve, and that is educating, working with Nova Scotians to be more energy efficient: Drive Wiser; helping small business; Green Fleet; having greener buildings as we move ahead with our capital investments here in the province, to make sure our new buildings are more energy-efficient, and working on existing buildings. We are doing that now with Transportation and Infrastructure Renewal and our renewables, Mr. Chairman. We're working with our wind here, we have approximately 40 turbines now in the province and we're projecting within five to six years to have around 300 in this province, and our tidal power - as we mentioned with your honourable member next, I think we have great potential here.
It's not going to happen overnight and as I said, we have to put the safeguards in for our environment and for our fish habitat and to the tidal power and that's paramount. As we work through the process, you know, I'm fully confident that we will meet our goals and exceed our goals.
MR. EPSTEIN: I'm sure the minister's staff knows this but here's generally how discussions go on about global climate change. What's trying to be avoided is an increase in overall average temperatures of a rise of 2 per cent and what is seen generally as underlying that is a measure of CO2 intensity equivalents and it's measured in parts per million. If it rises to the order of something like 500 parts per million, CO2 equivalents - it doesn't mean CO2 only, it could be methane, it could be other things - then that's about an 80 to 95 per cent likelihood that we'll see the 2 per cent rise that is generally seen as being disastrous.
What I'm pointing out to the minister is that the 10 per cent below 1990 levels, even by 2020, isn't going to get us anywhere near that and it's a really tiny contribution to what it is that needs to be done. That's why I was asking about the more aggressive standards.
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Since the minister brings up some particular examples of, say, buildings, I wouldn't mind asking him about buildings because I have a concern and I really want to point out something to the minister about buildings. We happen to be sitting about a block away from an empty hole in the middle of the downtown that is the former TexPark site, just about a block and a half south of us. I'm going to tell the minister a small story about the proposed buildings for that site.
MR. HURLBURT: What was the name of the project, Twisted Sisters?
MR. EPSTEIN: Well, Minister, some people used the term Twisted Sisters, I never did myself. I sometimes refer to it just as the TexPark or United Gulf proposal. It seemed to me that it was maybe a little prejudicial to talk about it as Twisted Sisters, and Twin Towers always seemed, in light of 2001, an unfortunate term as well. But I think we have in mind the same project.
Okay, so here's what goes on. The HRM has jurisdiction over deciding about whether a project like that goes ahead. I was involved in objecting to that project, I did volunteer legal work on an appeal to the URB and on a court case that we ultimately lost. The project has legal authority to go ahead if they want to. My point is that I was thoroughly immersed in the process and what went on with respect to this building.
[5:30 p.m.]
One of the things I thought about in that process was, here's an empty site, in the middle of the downtown, and what about the energy side of that building? What policies come into play when a developer comes along and says, I'm thinking of building two 26-storey towers, or whatever it is that they're proposing for the site; what thinking is evident on the part of the developer, what thinking is evident on the part of the municipality?
The policies that HRM has in place with respect to thinking about energy are laughable. They basically don't have any energy-efficiency policies that really apply to a new building like that. They have, in their municipal planning strategy, which is the basic policy document that guides this kind of decision, one section about environment. In fact, I'll pass you a copy because I made a copy of it, I went back and looked at it. They have all kinds of policies but there's a policy about environment. Now, do you know when that policy went into the municipal plan? In 1978 and it really hasn't been changed since 1978. That's 30 years of learning about environment and learning about energy efficiency and coming to grips with such important problems as global climate change. You will find nothing in there really about global climate change or really much about energy efficiency.
When the staff wrote their report about this building, they didn't talk about energy or energy efficiency or anything about the environment at all because it simply wasn't
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in their mandate, unless they were prepared to be really aggressive in their reading of their own policies, to say something about it.
I combine that set of circumstances with current knowledge which we have out of our universities, which you were praising earlier. Professor Larry Hughes from, I think, the Computer Science department at Dalhousie, who has taken a very strong interest in energy issues, wrote in the last year - and you can go to his personal Web site and get his paper, although he published a kind of less technical version of it in the newspaper last year, in which he talked about energy efficiency in sort of medium and high buildings. He essentially pointed out that you get your maximum energy efficiency at about five to seven storeys and that after that you lose energy efficiency and, in fact, you lose energy efficiency big time in terms of the heating and cooling of buildings.
I understand that there are a variety of policies at play when an entity like HRM sits down to think about what it wants to do with that empty space, but for them to completely overlook what seems to me to be part of the mandate of an entity like Conserve Nova Scotia, seems to me a complete disconnect between what it is that the province says it's interested in achieving and what our largest urban entity is actually doing on the ground. They're not even thinking about these policies, they're not putting them into play.
As far as I can see, there's no one in your government who is yelling at HRM and saying, buildings are an important part of how we achieve energy efficiency, why isn't your municipal planning strategy up to date, why aren't you moving on something like that? In fact, I'm sorry to tell you that we hear different signals from your government and here's one of the things we hear from your government. We've heard the Premier say downtown Halifax should be full of a new financial centre and companies that are big financial companies aren't going to move here unless they have whacking great office towers that they can move into and put their names on the side of. Minister, I have to tell you, that's a big disconnect between what seems to be the mandate of Conserve Nova Scotia, the very sensible mandate, in light of a serious global problem and what comes out of your government.
I'll give you other examples, and that's the worst one for buildings, but here are a couple of examples from Transportation and Infrastructure Renewal, which is also on the list of areas in which we can achieve energy efficiency. Recently, a provincial government agency, the Bridge Commission, which reports to the Minister of Finance, came up with the completely ridiculous idea of building a third bridge across the harbour, and if you don't like a bridge, they said, we'll dig you a tunnel, it will only cost $1 billion.
Now, the province appoints, I think, the majority of members on that agency, it certainly reports to the Minister of Finance - I know this, I was a member of the Bridge Commission years ago when I was a municipal counsellor. It's structured so that there
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are some municipal people on it, but it's, I think, largely a provincial entity. Well, that's nuts! It's completely nuts because what it essentially says is, we have an idea about ways to get more and more cars going back and forth onto the Halifax peninsula and over to Dartmouth and Eastern Passage. Minister, I have to tell you, that's the wrong policy, it's not the right policy and there's a disconnect there between what seems to be the stated mandate of Conserve Nova Scotia and a provincial government agency that should maybe know better.
I find it incredible that this goes on and that there doesn't seem to be any response from the provincial government. I don't think I've heard anyone stand up, any Cabinet Minister stand up and say to the Bridge Commission, what on earth are you talking about? Encouraging car traffic is not what we're all about here, something different should be going on.
These aren't the only examples - I'm going to go back to the Premier again. The Premier, free-associating perhaps one day in a speech, decided that he would like to say that it would be a good idea to run trucks up the rail cut, all through south end Halifax and through my constituency in west end Halifax. Well, of course, people aren't very happy there, people who live beside the rail cuts, but in many respects that's only one of the problems with that. The chief problem with it is that it essentially says, we're going to continue to emphasize truck traffic in terms of moving containers, rather than to say the whole shift should be onto more energy-efficient rail traffic when it comes to our port, which is one of the big drivers of our economy here.
We want our port to thrive, we want lots of containers to be coming in and out, we want that to happen, but there's an energy-efficiency dimension that could come into play. So I understand the Premier might have been thinking about the possibility of keeping trucks off of these small streets that we have here, Lower Water and Hollis Streets and I agree completely, I don't think it's a good idea to have all that truck traffic going up and down these small streets. I think there's a traffic congestion question, I think there's a safety question, I think there are all kinds of problems with it, noise. I mean all of those things, these streets just weren't built for that kind of heavy truck traffic. But what was completely missing from this was an energy dimension so, again, this is highly problematic.
I understand I've touched on a lot of points, but I actually do have a question for you and I'll move to that on transportation. Can you tell me what's going on with the California emission standards that was referred to? Is that something within the mandate of Conserve Nova Scotia moving towards that with respect to vehicles? Is that in the mandate when I read that transportation is part of Conserve Nova Scotia's energy scope? Is that going to be part of Conserve Nova Scotia or is that someone else's responsibility?
MR. HURLBURT: Mr. Chairman, I could really get into a debate here now, but first of all I want to make it very clear and have it on record that I don't think my job here
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today - I'm here to defend the estimates of my department and I am not here to dump on HRM. I think they have qualified staff and elected officials and the member can cast his vote the way he sees fit in October when the elections come up, the same as they will for us as MLAs.
I really believe that we have a mechanism in this province that is working very well and if the member has issue with the municipality, he can go through the UNSM and work through them and through the Minister of Service Nova Scotia and Municipal Relations, which I happen to have been a former minister of. I know that there's ongoing dialogue and they have regional meetings and if you have an issue with your city, here in HRM, I suggest the member bring it up there or bring it up to the minister responsible.
Again, I am not going to dump on HRM or I'm not going to dump on any municipality. I think everybody is trying to do a balancing act. You talk about the Premier's statement about having towers here in HRM, they want the economy to grow here in HRM, I want it to grow, Nova Scotians want it to grow. To have that you have to have the facilities to house the industries that want to come to our province.
You talk about a trucking industry, Mr. Chairman, I have yet to see a truck fly and when I see a truck or a pig fly, then I'll look at it. Right now we have to have a route and we have to have a safe route for trucking. Everybody in the HRM, on the peninsula, has been concerned about trucking going through the heart of the city, so we have to find a mechanism. What the Premier has said is if he can help out through Gateway, he is there and he will support and work with HRM. I don't think the member was trying to mislead what the Premier said, that's what the Premier said.
We have the program here in the province and Conserve has been very instrumental and that's the Drive Wiser program that we have here in the province, educating drivers. We are working with the nation and trying to come up with one standard for our whole nation and I think that's where we have to go; instead of having a mishmash, we should have one standard. What California is doing or what any state is doing, what I want to do is what's right for Nova Scotians and what's right for Canada and that's where we are. I intend to keep working with my colleagues in other parts of the country and with our federal colleagues to make sure that we come up with the proper standard that everybody can adhere to in the Province of Nova Scotia.
I'm sorry if I'm on a bit of a rampage here, but I don't think my job here is to talk about HRM, my job here is to talk about my estimates and the programs that we have. I'm very, very proud that Conserve Nova Scotia, in a little better than a year, has reached out and helped over 300,000 Nova Scotians to be more energy conscious and efficient in their homes, in the way that they drive, what they do, and we have implemented over 50 programs in a little over a year with a staff of 13. That's a track record that I'm proud of and I'm proud of my team.
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MR. EPSTEIN: Thank you, Minister. One very specific initiative with respect to using less energy that is now being discussed actively in Nova Scotia, and will go forward, is what's known as the Demand Side Management Plan that has just been put into force by the Utility and Review Board. I'm sure you're familiar with the discussions there. The idea is with respect to electricity use and that various measures along the lines of education, and other inducements that the minister might be happy with, should be mandated. A good part of the current discussion is what entity should be responsible for the administration of the DSM programs that are going to be required.
At the moment, the URB has decided that Nova Scotia Power itself will, on a temporary basis, take charge of the DSM programs. What I'm wondering is whether the minister is expecting that one of the possibilities that will come forward is that Conserve Nova Scotia will be the entity that will take charge of DSM programs. Is it within the contemplation of the minister that administration of the DSM programs for electricity consumers will be administered by Conserve Nova Scotia, or does the minister not intend that Conserve Nova Scotia be involved in that?
[5:45 p.m.]
MR. HURLBURT: I'll be totally honest with the honourable member, I have looked at that, that Conserve do the administration of that. I have not made any decision yet, but Dr. Wheeler's report, as the member asked me in Question Period the other day, the report is at my department, we're doing our analysis of that report and I'll make that known very soon. I think what the report is saying is to have an independent party. I'm not saying that's where I'm going but I'm looking at it right now.
MR. EPSTEIN: Thank you. Do I have maybe two minutes left? Oh good, in that case maybe I can focus on a favourite issue of mine, why don't we talk about clotheslines for just a minute, Minister.
The minister may recall that I introduced a bill, I think, sometime last Fall or last year, a provision of which would be to nullify any restrictive covenants that might exist in property subdivisions that prohibit the erection of clotheslines. I think the bill never went ahead and I reintroduced the same bill, or some version of it, just last week. At the time there was a lot of favourable, I thought, publicity about the clothesline issue in the first bill. I had rather hoped that the government might come in with a version of its own, but I haven't seen such legislation. I'm wondering, has the minister had any thoughts about the possibility of nullifying restrictive covenants that would work to prohibit the use of clotheslines? I know there are other things in the bill, but it's only that particular item I'm asking about.
MR. HURLBURT: Thank you, Mr. Chairman. To the member, I'm not making light of this. I own a property in Florida and that restriction is on my property in Florida, I can tell you. To our knowledge, we are working with the UNSM and to our knowledge
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there are no restrictions to date in the province and there are no bylaws in any municipality.
MR. EPSTEIN: It's not actually bylaws that would be nullified but it's restrictive covenants set in place by . . .
MR. HURLBURT: Do you have an example, member?
MR. EPSTEIN: There are several. In fact, when my bill came in, I got e-mails from people around the province who had encountered this. I think Melville Heights, just beyond the rotary, is an example and at one point - I don't know if it still is - the Westmount subdivision had such kind of restrictions. There do seem to be a number of developments that were built in that way with those kinds of restrictive covenants and people are kind of chafing a bit. So they do exist.
MR. CHAIRMAN: The time has expired for the NDP caucus. At this time I'll recognize the minister to close the debate on his estimates.
MR. HURLBURT: Mr. Chairman, I want to thank the honourable members, I appreciate their comments and their concerns. I think we all have concerns but we have to deal with them head-on and we have concerns with our environment, with energy costs and that. I don't take lightly some of the comments that have been made here today. I think that we all have to work collectively together to make our province - it is number one but we can make it even better.
With that, Mr. Chairman, I would like to move Resolution E6.
MR. CHAIRMAN: Shall Resolution E6 stand?
Resolution E6 stands.
On behalf of all committee members, we wish to thank the honourable minister and his staff for their co-operation and the information provided.
We'll take a short recess.
[5:52 p.m. The subcommittee recessed.]
[5:55 p.m. The subcommittee reconvened.]
MR. CHAIRMAN: Good afternoon, everyone. We will begin the estimates of the Department of Fisheries and Aquaculture. I welcome all of the minister's staff and all the honourable members.
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Resolution E10 - Resolved, that a sum not exceeding $7,463,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Fisheries and Aquaculture, pursuant to the Estimate, and the business plan of the Nova Scotia Fisheries and Aquaculture Loan Board be approved.
MR. CHAIRMAN: We will ask the minister for his opening comments.
The honourable Minister of Fisheries and Aquaculture.
HON. RONALD CHISHOLM: Mr. Chairman, I am pleased to come before you today to talk about the Department of Fisheries and Aquaculture. I have with me tonight Assistant Deputy Minister Greg Roach on my left here; Deputy Minister Paul LaFleche has joined us; Weldon Myers, our Director of Finance; and we have Celeste Sulliman in the back there, our communications person. So I am pleased to have these staff people with me tonight as we go through our budget estimates.
Nova Scotia Fisheries and Aquaculture industries are key contributors to Nova Scotia's economy. In 2006, the export value of Nova Scotia fish and seafood products was close to $1 billion with our products exported to more than 86 countries worldwide.
In 2008-09, departmental priorities will focus on three key areas: sustainable resource management, industry growth and development, and responsible governance of fisheries and aquaculture industries. Several specific priorities include leading the development and implementation of a coastal management strategy for Nova Scotia, addressing eco certification, and increasing market and promotion of local fish and seafood products. These priorities will address the challenges facing fisheries and aquaculture industries and we will continue our hard work on international competition, the business climate in Nova Scotia, and environmental pressures.
This government recognizes the importance of our coastal areas and resources to our economy, our environment and our heritage. We are committed to having a coastal management framework in place by 2009 and have included $200,000 in this year's budget to move this initiative forward.
This framework is the first of its kind in Canada and will ensure that we have a more coordinated and strategic approach to coastal management in Nova Scotia. The framework's main principle of sustainable prosperity requires a balance of economic, social and environmental needs, and we will undertake a series of strategic activities out of the framework, including a sustainable coastal development strategy and a first-ever state of the coast report that will inform Nova Scotians. As well, we will be engaging Nova Scotians in this process. Although the budget for the framework sits with the Department of Fisheries and Aquaculture, this initiative was developed by the interdepartmental Provincial Oceans Network, which includes representatives from 12
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different departments and agencies. We are pleased to bring this framework forward, which will position Nova Scotia as a leader in coastal management.
Economic and environmental sustainability along our coasts requires us to invest in a new way of doing business, one which takes into account all interests and uses to make good decisions for the sustainability and the prosperity of Nova Scotia. This year marks the second year of the government's buy-local campaign - Select Nova Scotia - and that's designed to promote local food products here at home. This year the government will invest $350,000 in the campaign and hire a staff person to work on the initiative year-round.
[6:00 p.m.]
More than 60 companies, including 10 seafood companies, have registered with Select Nova Scotia and are able to use the Select logo and other marketing tools for their own promotions. More than 100 companies have used our collateral material such as banners, t-shirts, tote bags and stickers, and since the Select Nova Scotia campaign began last year, there is rising support for buying local products and an increased perception that Nova Scotia-grown food is of higher quality than imported foods. In the span of six months we saw an increase of 13 per cent in the number of Nova Scotians who see local as critically important in their purchasing decisions and a 7 per cent increase in the number of Nova Scotians who regard Nova Scotia-produced food as being of higher quality than imported food. I believe, Mr. Chairman, this is outstanding.
The Department of Fisheries and Aquaculture has developed a trade development strategy that focuses on diversification, branding, the coordination of trade roles, strategic alliances, market research, and maintaining presence in the strategic markets such as the United States. As we all know, the United States continues to be our biggest export market and the Department of Fisheries and Aquaculture maintained its presence at the world-famous Boston Seafood Show earlier this year.
In terms of market diversification, the department is committed to expanding opportunities in the European Union. The department had a strong presence at the European Seafood Exposition last month - one of the most important seafood shows in the world. We also explored the opportunities in Germany and the Czech Republic as well as several other European countries. As well, we have continued to promote growth of the aquaculture industry which is one of the main goals of my department and I am very proud of the role that aquaculture plays in our province. I believe a viable, well-managed aquaculture industry is key to ensuring strong, self-reliant rural and coastal communities for today and into the future.
Do you know that world-wide aquaculture now accounts for 45 per cent of our food fishery and by 2015 that number is expected to exceed 50 per cent. To me, that
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figure alone speaks to the importance of the aquaculture industry around the world and the many opportunities available for aquaculture in the Province of Nova Scotia.
There is great potential for our aquaculture sector in the province. We already produce a range of products, including salmon, mussels, oysters, halibut, cod, trout, clams, abalone and marine plants. We are home to one of the world's largest marine plant product manufacturers. We have a large base of aquaculture workers with 75 per cent of aquaculture workers under the age of 40.
Here are some other facts and figures that I think are interesting and very relevant. The value of aquaculture in Nova Scotia in 2007 was $47 million. I wish that probably could have been $147 million. The Province of Nova Scotia exports more seafood than any other Canadian province. Aquaculture employs over 900 people within our province.
As you can see by these figures, aquaculture is important to our economy and the well-being of our communities. I would like to add that the pursuit of aquaculture development in Nova Scotia has and will continue to be undertaken in an environmentally sound and sustainable manner.
My department's Environmental Monitoring Program actively monitors the environmental performance of aquaculture sites in Nova Scotia and will continue to do so. They will take action to limit any potential negative effects. I truly support aquaculture development in Nova Scotia and hope that the industry continues to thrive and grow as we move into the future.
My department is also committed to ensuring succession in our inshore fisheries sector. That is why we are working to set up a program that will finance fishing licences for first-time entrants into our inshore fisheries sector. Access to capital is a priority for our young fishers who want to acquire licences. This new program will help first-time entrants and current licence holders who want to buy licences for new species, to access the capital they need to purchase licences.
In the past, this has been very difficult as financial institutions have not been willing to provide the necessary capital since the licences cannot be used as a legal collateral by the lender. In 2008-09 my department will work to get the lending program established and it is expected the first loans will be available beginning April 1, 2009.
I am also pleased to say that the fishing season has once again gotten underway in Nova Scotia. Aside from being the chosen sport for almost 100,000 Nova Scotians, I would point out it is the single biggest drawing card to get people involved in outdoor physical activity, which is important from a health perspective. I am also pleased to tell you that the sales from angling licences in each of the last two years have increased. This not only adds to the economy of the province, but it means about 6,000 more people are enjoying outside physical activity.
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I am also pleased to bring the department's Adopt-a-Stream program to your attention. This year, it is celebrating its 20th Anniversary. This program is co-managed by our five provincially-based angling organizations and is administered by the Nova Scotia Salmon Association. It supports volunteers actively restoring fish habitats across the province and involves about 20 organizations each year. In the past 10 years, one million square metres of fish habitat have been restored through this very valuable program.
As many of you know, last year we assumed ownership in the operation of the Margaree Fish Hatchery, which was formerly operated by the Aquatic Development Association of Margaree. The department is currently completing the details around this facility and we are looking forward to integrating it into our operations at Fraser Mills and McGowan Lake to continue to support a growing recreational fishery.
In closing, I would like to reiterate that the Nova Scotia fishing and aquaculture industries are key to our provincial economy and very important to our rural and coastal communities. These sectors provide employment and career opportunities that enable Nova Scotians to work in traditional industries, train in Nova Scotia, and live in our coastal areas. The Department of Fisheries and Aquaculture is an active partner and a responsive leader in these industries.
I thank you for your time and I look forward to the questions any members may have.
MR. CHAIRMAN: Thank you for your opening comments. Questions will begin within a few seconds and they will conclude at 6:27 p.m. for estimates for today in the subcommittee, and that will be followed by the Law Amendments Committee.
The honourable member for Shelburne.
MR. STERLING BELLIVEAU: Mr. Chairman, it's certainly a pleasure to be here. First of all, I want to thank the minister for his presence tonight and, Mr. Minister, I understand that you have been somewhat under the weather of late and I want to recognize that. I also want to recognize the minister's staff. The deputy minister and the minister's staff, I have worked a number of years with these people. I don't want to get into giving out their birth dates but it has been a number of years. (Laughter)
I also want to recognize the Liberal Fisheries Critic, the member for Digby-Annapolis. I, too, and the member, we have worked on a number of committees across Nova Scotia, in the tri-counties in particular, and I'm very reluctant to call this gentleman a member of the Opposition because I think that we share a lot of common beliefs when it comes to our fisheries. I truly feel privileged and honoured to be part of this discussion tonight.
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I think a lot of people can anticipate the first question I'm going to ask. Actually, it was part of my election platform two years ago and one of the issues that I feel - I've asked this question for decades now and I can date this back to the mid-1980s, is the access to capital and the requirement for the loan board to take this seriously. I have to be impressed with the particular paragraph, and I'm going to read it, from the Fisheries and Aquaculture book:
"The Department will also implement a new lending program aimed at providing capital for independent fishermen who want to purchase fishing licences and are new entrants to a given fishery. This new program will help young fishermen get into the fishery and facilitate succession in this important resource industry."
To me, that's a powerful statement. It's a nice statement after you've worked so long and dealt with this issue but I also was told, Mr. Chairman, a long time ago by an old fish dealer in our community, and it's a good saying: Paper will not refuse ink. I can literally print anything on paper, but actions speak louder than words. So if we can get this particular paragraph into action, we have done something for Nova Scotia.
To me, I took the opportunity to look at the expenses of the department, especially the loan board, and I noticed over the last few years that basically 0.1 per cent of the overall budget is directed toward the fisheries and if you look for the loan board, my observation is that there's basically less than $1 million there allotted to the loan board to have access to capital.
If I could have the pleasure, Mr. Chairman, to pass out a couple of these particular flyers - and hopefully the member for Digby-Annapolis can receive one - I think you will observe on there, this was without giving free advertisement to this particular company, this is a free brochure and it highlights a number of licences, enterprises that are for sale in the tri-counties. If you look through that, you will observe that a majority of them, or the average licence, including lobster or whatever, is roughly in the range of $0.5 million. With the enterprise included, you're looking at a considerable chunk of change. One enterprise, the point of sale, can be as much as allotted in your department.
Again, I go back and I do some background-information checks and I talk with the local regional DFO and I ask the question, what is the average amount of licences that transfer hands each year? A general ballpark figure is somewhere around 10 per cent and I know a lot of these licences, Mr. Minister, are within families so there's actually not a big amount of money that's changing hands, and maybe banks or the loan board aren't involved, but my first question to you is a scenario that if there are 20 or 25 applications coming from southwest Nova Scotia, the average being $1 million for a licence, on your desk over a month or two months' time, is there going to be enough money in this pot to successfully apply to the application's request?
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MR. CHISHOLM: Well, I guess the quick answer to that is yes. I mean right now we - and I guess maybe I should start out by saying, you know, one of the first meetings that you and I had after I became the Minister of Fisheries, as well as with the member for Digby-Annapolis, you know, you fellows made it quite clear about the issue of loans for licences and after some of those meetings I guess what had happened, what transpired after that, I asked staff to go back and come up with some scenarios that we could go to my Cabinet colleagues with to see if there's some way we can initiate a program for loans for licences. There are a lot of issues, I mean there are issues with DFO that will have to be considered.
So staff did that, you know, I guess over about six to eight months, a year, they reviewed everything and they came back, made a presentation to myself. We, in turn, then went to my Cabinet colleagues and made the presentation to them and, you know, here we are, it is part of our budget this year and we are saying, as a government, that we are implementing a loan for licences program.
[6:15 p.m.]
What you see in the budget is not the money that's allotted for the loan board, basically that's the staff costs. The Fisheries and Aquaculture Loan Board administers about an $88 million portfolio that they use for their boat licences and with this program here, I guess over the next five years we anticipated, or were thinking about, probably a $75 million portfolio. So, yes, that will be there.
Also, for that program, in this coming budget, if it's passed - and I guess I should say that I'm going to probably need the help of both of you guys to get our budget passed, you know, so we can move on with this program and get it done. But anyway, I expect that as soon as we get the budget passed - and I did meet with the loan board yesterday morning, had a great dialogue with them for about two and a half hours, and the commitment is that over the next year, as they have their meetings, they will be updated at each meeting as to where we're at with the program and get their input into how the program should be implemented.
I look forward to the discussion with you, as well, as part of the process as we go along, any ideas, any concerns, anything that you want to bring forward, definitely. But as you will see in our budget this year, there is $100,000 that we have put aside to start the implementation of the program, which will allow us to hire a full-time person who's knowledgeable in the area, and we will get the policies and the regulations all in place, I anticipate, probably by early January there's a possibility that we can be accepting applications, with probably April 1st as a target date to start putting loans for licences out.
So there is quite a bit of groundwork that still has to be done in order to get the program set up and get it set up properly. But like we said, we estimated over a five-year
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period, we'd probably need about $75 million for that program and that will be part of the loan board's budget.
MR. BELLIVEAU: I'd like to take you in another direction. I just want to familiarize you with one of the resolutions that was put on the floor today, and I have to admit publicly that I was surprised. I'm talking about the resolution dealing with designating cusk not on the endangered species list. I was actually startled that we heard a no - and I'll let the member from your side publicly announce that - but I was shocked this didn't go through. I'll read the resolution just for the record:
"Whereas the Nova Scotia lobster industry is the single most important source of revenue for a great number of fishers across Nova Scotia and the Maritime Provinces; and
Whereas the Committee on the Status of Endangered Wildlife and the Species at Risk Act Committee, have raised the concerns of fishers across Nova Scotia of the potential listing of the cusk as an endangered species; and
Whereas such listing of cusk under the Species at Risk Act would have a devastating effect to the lobster industry in South West Nova and great economic impact because of the potential for closure of some lucrative fisheries grounds;
Therefore be it resolved that the House of Assembly support fishers in our rural communities for requesting further review before the cusk is named an endangered species."
Now, Mr. Minister, I followed this - there will be three points I'm going to put here and I kind of put this out as a challenge because this is going to have a devastating effect on the tri-county lobster fishermen. Again, I emphasize this is a major industry right across Nova Scotia.
My first point is, the science they took to gather this at this particular point is very questionable by fishermen. They literally went out and did the science through a dragger and everybody knows that cusk will not capture with a drag. Fishermen all know that. The consultation process was flawed. If you go into my office in Barrington, you will look and see a blackboard and I had on it a cusk meeting the first week of the lobster season in 2007, when our fishermen were putting traps out, the very first one or two days, and this was the day they scheduled the meeting in New Brunswick. I'm saying we had very poor representation at that meeting.
If you believe all of the science, if you believe everybody had been fairly consulted, if you understand the fisheries, the importance of it - and the point that I'm
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trying to make is the major point, the economic impact that decision is going to have on our fishermen. To me, I can't emphasize that enough. Whatever happens here in the next week or two, Mr. Minister, and my colleague, the member for Digby-Annapolis, I think we need to take that message very loudly and clearly to the federal minister. I envision an economic impact.
The point being, you're going to have major disruptions of fishing paddocks. Fishermen fish in that deep water in the winter months and there's an incidental catch of cusk in these traps. It has been historically documented, fishermen have said - and this is a by-catch, by the way - if this fish is captured, when it comes to the surface, it dies. We all know this. The fishermen have said, we can't release it, but DFO is saying, you are forced to release this. The fishermen say, we'll give it to a charity - for instance, the IWK would be a nice charity - we'll bring this in and we'll let the processors, the plant workers in southwest Nova Scotia benefit from this resource and we'll not be wasting it.
None of that can happen because it's not a common-sense approach. What I'm saying is, if this was implemented, you would be driving that particular fleet in on half the fishing ground. You will have a major disruption in that particular lobster fishery, I can't emphasize it enough. I just want to echo that to you because I think we have time, Mr. Minister, to make this statement loud and clear to the federal minister before August, if I'm correct, in getting this information that this committee is waiting for.
So my point is, to support those comments that I said about the major economic impact it's going to have on southwest Nova Scotia, we need to recognize that and we need to echo that statement to the minister. I'm asking for your comment on it.
MR. CHISHOLM: Well, I guess we do know the issue. We've challenged the science right up at all levels, right up to the minister's level and we will continue to do that. We do know the economic impacts if this happens. So your point is well taken about going to the federal minister. We've been there. I know my staff, at their meetings, at the federal-provincial level, have brought it forward as well. I have also brought it forward at the federal-provincial ministers' meetings. I do expect that Minister Hearn will probably be in the province sometime early June and that will certainly be on our agenda. If it's possible, we'll try to set up a meeting that the three of us can be at to discuss that issue.
I know it's of grave concern down in southwest Nova Scotia as it is anywhere. The way I understand it, I guess, it will basically close a lot of the lobster ground and that's one of our most lucrative species right across the province. The lobster industry, I believe right now export sales, if my memory serves me right, is around $400 million a year for the Province of Nova Scotia. So it would be a major impact if this does, in fact, take place. So we are working aggressively to see that it doesn't happen and will continue to do that. We hear you and we'll certainly make our views known and fight the battle.
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MR. BELLIVEAU: Well, just to close on that topic, I've put in for a late debate on that topic and I'm hoping we will have unanimous support of the House within this session.
MR. CHISHOLM: Just before you go on there, that resolution, I have to apologize, I must have been out of the House when that was read today. I would like to have a copy of that and I will talk to the colleagues on my side of the House. I don't see any reason why that resolution wasn't passed. I don't know who said no.
MR. BELLIVEAU: Well, I'll let the minister make that public but I was approached by a member of your Party and I think it would be wise for him to bring that forward. But it would be interesting to me - and this is the key point - that if you have all of this information that I just zeroed in on, the three points, I would think it would unanimous and I put in for the late debate and we'll go from there.
MR. CHISHOLM: Okay.
MR. BELLIVEAU: If I could just pass them to my colleagues - again, I want to try to get a copy to the member for Digby-Annapolis.
I kind of want to take you in another direction, if I could. You talked earlier about the aquaculture enhancement program and, Mr. Minister, I know that you have visited the Scotian Halibut hatchery on Cape Sable Island and I believe there's also a grow-out in Woods Harbour, my home turf. I have to say that I'm really impressed with that facility and the potential of the halibut enhancing the wild fisheries. I've been a fisherman all my life and I know the importance of - again, I just talked about the lobster fishery, we are so dependent on that one species. We have to kind of recognize - I literally built my house raking Irish moss back in the early 1970s. I did not depend on lobster fishing and we kind of had the opportunity to diversify to all of these other species. Now we're so dependent . . .
MR. CHAIRMAN: Order, please. The time allotted for the estimates debate today has expired. The Subcommittee on Supply will resume tomorrow.
[The subcommittee adjourned at 6:27 p.m.]
