HALIFAX, THURSDAY, APRIL 8, 2010

SUBCOMMITTEE OF THE WHOLE HOUSE ON SUPPLY

2:45 P.M.

CHAIRMAN

Mr. David Wilson (Sackville-Cobequid)

MR. CHAIRMAN: Good afternoon, everybody. I'll now call the Subcommittee of the Whole House on Supply to order. I welcome everybody back. We'll have some opening comments from the minister and then we'll go right into the questioning on the estimates for this year.

Resolution E1 - Resolved, that a sum not exceeding $60,879,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Agriculture, pursuant to the Estimate, and the business plans of the Nova Scotia Crop and Livestock Insurance Commission and the Nova Scotia Farm Loan Board be approved.

MR. CHAIRMAN: The honourable Minister of Agriculture.

HON. JOHN MACDONELL: Thank you, Mr. Chairman, and I'll say hello to my colleagues from the New Democratic Party and my colleagues from the Opposition, it's nice to see you again. I want to introduce some people from my staff who are here and I would like to introduce some, but they're not here, so I'm assuming that they'll show up at some point. Anyway, the director of Finance, Weldon Myers, is to my left; Mr. Bob Mosher, manager of Financial Services behind me; and the cheering gallery, some other members of my staff who are paid - probably not enough - to try to make me look good. Hopefully, there will be a couple other members of my staff coming along.

I'm really pleased to be with you today as Minister of Agriculture. The last time I was before you, it was just a few months after becoming minister. I'm pleased to report that over the last six months we've been working very hard to grow the sector, create and maintain jobs for Nova Scotia, and make sure agriculture in Nova Scotia is vibrant and sustainable.

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We continue to work on our commitments to make life better for the people of Nova Scotia and provide genuine leadership that's on the side of Nova Scotians. Our government is working hard to create a bright future where young people have the opportunity to stay, live and work in the communities they grew up in.

Agriculture is a significant contributor to the economic and social fabric of Nova Scotia. I think sometimes the point I try to make with my staff and my colleagues is that we are the other Economic and Rural Development Department. I think we're not necessarily perceived that way. I think that when my colleagues in the Opposition question the minister in the House, it's around sustainability of issues in agriculture, and I know that these issues are creating jobs and wealth, but I think we tend to expect agriculture to have a more family and social context and, quite often, questions are around the impact of families in rural Nova Scotia. I'm joined to my right by Deputy Minister Paul LaFleche.

In 2008 we reported that the agricultural sector had contributed upwards of $1 billion to the economy and we continue to see consistent progress. As you know, the industry reaches well beyond our provincial borders, with many of our products exported throughout the world. Together Nova Scotia's supply-managed sector is dairy, poultry and eggs, which accounted for close to half of all production in the province. Dairy is the single biggest sector at roughly a quarter of the overall industry. Horticulture, covering a wide range of products including apples, blueberries, cranberries, greenhouse and nursery products, potatoes, and vegetables and honey, continues to make up a significant part of the industry as well. Fur, mainly from mink farming, is one of the fastest growing agricultural sectors in Nova Scotia. It currently represents over $64 million in farm cash receipts.

I have to say that if we had been doing these estimates, even two years ago, and you were to ask what the two largest agricultural receipts were, I would have said blueberries and mink, but I think all members are aware of the impact on the blueberry sector. It certainly doesn't have the same numbers as it did two years ago.

The Department of Agriculture is committed to helping Nova Scotia's agriculture industry become sustainable and profitable for the long term. Agriculture is undergoing rapid change globally, nationally, and here in Nova Scotia. The sector is facing new demands and pressures but also seeing opportunities. As long as we remain dynamic, open and innovative, we will be able to deal with the challenges we are facing.

Government's role is to help set a course, a clear direction, and support a way forward so we're successful in our attempts to tap into opportunities for growth. That's why we need to take a focused approach to foster an environment in which Nova Scotia's agriculture and agri-food industry can grow, create jobs, and revitalize rural communities. That's why we have developed a 10-year strategic framework that will guide the priorities and policies of the department. This strategy is an important element in our work because it will establish a conscience direction and help create conditions for long-term economic growth in our province.

Intended to guide the work of staff within the Department of Agriculture, the strategy sets out a vision for the future of agriculture in Nova Scotia and identifies the outcomes in achieving that vision. The vision of a Nova Scotia with vibrant economies is inextricably linked to an agricultural industry that sustains itself and contributes to the values of Nova Scotians.

Agriculture is about more than growing food, it's about who we are, how we work, and how we live. We want to ensure that agriculture is an innovative industry, that it is able to compete in the marketplace and is supported by government investments that are focused on growth and development. The Department of Agriculture will release this framework as a means of embarking on fundamental changes, changes that support an industry that seeks to prosper in the best interests of all Nova Scotians today and into the future.

One of the points that I had tried to impress on my staff, in drafting this strategy, was that we want this to be based on success, we want it based on profitability. In most recent memory, obviously with the hog industry and with the beef industry, it was purely the inability to get the value you needed out of the value chain, the inability to make money, and was really causing the demise of those two sectors.

If we are going to secure communities in a sustainable way, it has to be on the basis of their ability to make money. That's what we're hoping, that whatever governments can do - and to a point we're limited - programs that we invest in with taxpayers' money has to try to lead those sectors to profitability. That's not to say that we can take, probably, the best example in a supply-managed sector - which we indicated is about half of the industry - in this province as far as farm gate receipts. You can have two dairy farms side by side, they both count on the same income coming from the dairy for the per litre of milk, but under two completely different management styles, or business decisions that one makes compared to another, one could be losing money and one could be making money. The fact that you can secure a reasonable price doesn't necessarily secure success. Hopefully, with proper extension, and people in the department who can advise producers, that we can help keep more of them in business.

You will hear more about this strategy over the next few months, but allow me to say this strategy articulates government's commitment to the future of the industry. I'm pleased to tell you about some of the actions of the department since I was last before you.

It has been three years since the department launched the Select Nova Scotia, Buy Local campaign to promote awareness in consumption of Nova Scotia agri-food and agri-seafood products. The ongoing campaign includes a range of development activities including print material; newspaper, radio and television media; and a consumer-focused Web site. Select Nova Scotia is still going strong.

Under the Select Nova Scotia umbrella, the department has initiated a number of new projects to encourage Buy Local. For example, in February of this year, Select Nova Scotia promoted and sponsored IncrEDIBLE Community Suppers in over 30 communities throughout the province. It was a great success and we are prepared to do it again. When we say supper, sometimes it was breakfast, but 30 different communities - people in different communities organized 30 of those, which we helped sponsor. I did get to two of them and they were a great success, really appreciated.

I have to tell you that Select Nova Scotia and the Buy Local campaign is, I think, the single most revelation that I've had. I know in Opposition we pushed for a Buy Local campaign but I have to say that I am amazed at how it has caught on and how even at the retail level, retailers pay attention to this. It has offered some opportunity and opened some doors for producers to get product into places that they otherwise might not have easily been able to do.

As well, we are in the planning stages for this year's IncrEDIBLE Picnic. You probably remember, we got rained out last year. We are looking at ways to make this year's picnic as weatherproof as possible.

Over the past six months I have been meeting with retailers about getting local products into stores, recognizing the value of the pork, beef and sheep sectors. Working together, a steering committee was struck in July 2009 representing these three red meat groups. The Department of Agriculture and the Federation of Agriculture were invited to participate as ex-officio members. The department supported the examination of a shared service delivery model and funded a consultant to investigate options. The consultant developed the governance business and implementation strategy for the proposed agricultural services organization. This organization would bring together the red meat sector under one umbrella, with a mission to provide greater efficiencies and effective administration and professional support to the red meat commodity boards.

We continue our efforts to make it easier and more convenient to buy local foods in the province through our Direct Marketing Community Development Trust Fund. The direct marketing fund is a three-year, $2.3 million program that provides funding to support growth and development of the agri-food industry's direct marketing sector. The fund has helped make local products more accessible, identifiable and readily available to Nova Scotian consumers. To date, almost $1.7 million has been committed to projects across the province.

Supporting the development of the local food systems, which includes everything from farmers to consumers, will improve access to local foods for consumers throughout the province. As you can see, this kind of investment will develop the connections between rural and urban food systems and supporting marketing initiatives. It complements the province's food marketing programs, Select Nova Scotia, and Taste of Nova Scotia by promoting the variety and quality of food that Nova Scotia has to offer. On that note, Taste of Nova Scotia continues with strong branding, quality standards, and international and domestic marketing to promote Nova Scotia as a food destination and a supplier of quality food products.

The department is collaborating with researchers and innovators from around the world to place Nova Scotia in the forefront of agri-food innovation and attract foreign investment. In January, our government announced $5 million in provincial funding along with $2 million from ACOA for the Atlantic Centre for Agricultural Innovation in Truro. The centre will be a state-of-the-art research facility that will connect the work of Nova Scotia's agri-based researchers, producers and processors. It will contribute to long-term, sustainable economic growth for Nova Scotia and the region.

The Nova Scotia Farm Loan Board is a long-standing Crown agency, which has been serving the industry for many years. The board is presently consulting with industry, government, financial institutions, and both the public and private sectors to find its best fit in servicing the agricultural sector for this new era of growth and development.

The board is reviewing its mandate and business processes to ensure relevancy and service delivery in this fast-paced business environment. Over the last year, the Competitive Transition Analysis Group - a joint initiative of the department and the Nova Scotia Federation of Agriculture - consulted with industry on programs and services needed to support competitive transition. We asked the industry what they need to be competitive and we got answers. We heard ideas about how to get new people into the industry and suggestions on how to support innovation at the farm and industry level. We are working to align ourselves with industry and go forward with the programs that will have an impact.

[3:00 p.m.]

There is a lot of work to be done, but together we can do what needs to be done to make the industry stronger. We will continue to work on developing and implementing ways to transition agriculture to an industry that is independent and sustainable with appropriate intervention by government. This government understands the need to work collaboratively with industry by partnering with Nova Scotia's farm community to seize new opportunities to move the sector forward.

The new federal-provincial-territorial Growing Forward agreement commits $14.74 million in federal funding and $9.83 million in provincial funding to Nova Scotia's agricultural industry throughout the next five years. The agreement outlines three overarching strategic outcomes: a competitive and innovative agriculture and agri-food sector, a sector that contributes to society's priorities, and a sector that is proactive in managing risk. For some of the projects under Growing Forward and the impact that the programs have on communities, these programs and initiatives are underway.

The Department of Agriculture recognizes that the future of the industry is contingent upon our local companies being able to do business better on finding ways to build on their products. First I would like to mention that the new traceability pilot project funding was provided to one farm to buy a traceability system for use in their strawberry operation. It is a bar code system with each employee having a unique bar code attached to their name.

Each employee is identified in the system, each flat of strawberries also has a unique bar code. The system is able to provide information on who picked the flat of strawberries, when they were picked, and what field they came from. It increases accountability for product quality throughout the system and has reduced administrative burden. One of the real positives of this project was not only the ability to trace product, but the labour savings that resulted from being able to do the payroll in one-tenth of the time.

We're also helping to create market opportunities by investing in innovation and new opportunities. For example, a berry farm was awarded funds so they may produce a quality, high-bush blueberry juice product as an alternative to other pure and from-concentrate juices. We awarded funds for greenhouse technology commercialization to further enhance and integrate approaches to coordinating all greenhouse mechanical systems and processes.

This innovative technology, designed and developed in Nova Scotia, will drastically reduce the energy required to produce high-quality greenhouse vegetables year-round. From the technology side, we are supporting the development of a proposal to examine and adopt the most efficient pouch-packed technology for wild blueberry juice. This will help gain competitive access to new market opportunities in the European Union.

There is a growing awareness and demand for organic food, especially organic milk. We're working with a local co-operative that is preparing a proposal for a local organic milk value chain in Nova Scotia. We're supporting a project that will evaluate improved genetics for sustainable cropping practices. In a two-year period, that will assist with the development of new cultivars better adapted to Nova Scotia farmers. It has the potential to provide more options for farmers, and improve farm profitability and competitiveness.

In the apple industry we are assisting with a project that will evaluate mechanical blossom and fruitlet thinning in Nova Scotia apple and stone-fruit orchards. This technology could reduce the largest expense incurred by growing stone fruits on a commercial scale. And the list goes on.

As we continue to grow the diversification and innovativeness in the industry we're looking at ways to move the maple industry forward, we're diversifying and expanding fresh-fruit crop and products, we're helping to improve genetics in cereals by working with the Soil & Crop Improvement Association of Nova Scotia, and we're evaluating new fungicides for their control in cereal diseases. We continue to explore new ways to improve crop production and improve on farm competitiveness. Also, a new technology that may increase our ability to produce locally-grown nursery trees is being evaluated so that we can remain competitive in that market.

Through the Strategic Infrastructure Fund we are helping companies expand their processes. Across Nova Scotia we are working to expand process capacity to meet growing demands for our value-added products and developing new product lines. We're helping businesses grow into specialty and export markets. We are supporting the commercialization of innovative greenhouse technology. We continue to invest in product and quality development by supporting the agri-food industry's efforts to develop new and improved value-added products.

I realize I have repeated words like competitiveness, diversity, adding value, accessing new markets, or improving marketability, and that's because we are committed to working with the agricultural community to ensure the industry is sustainable. We are committed to creating good jobs and growing the economy by helping farmers and agri-businesses seize opportunities. As we do this we maintain our commitment to food safety.

Food safety specialists and meat inspectors employed with the Nova Scotia Department of Agriculture protect the public health by conducting food safety education, inspection and enforcement in food establishments. In fact, our food safety specialists and meat inspectors were recently awarded the Certified Professional - Food Safety designation by the National Environmental Health Association. We're proud of the good work they are doing to keep Nova Scotians safe and healthy.

I'd like to focus now on some specific sectors. Over the last number of months a lot of attention has been directed to the beef industry and rightly so. It's an important sector and we want to work with Nova Scotia cattle producers to improve the competitive position of the industry. Focusing on industry strengths, we've been working at the potential for producing corn silage, grass silage and pasture-finished beef.

Nova Scotia's growing conditions are very good for producing these crops and they hold the potential for producing a differentiated, finished-beef product that is highly valued in the marketplace. We are assembling the best forage and pasture research team in Nova Scotia to develop a production management system that is both sustainable and profitable for the industry.

During this sitting of the Legislature we will bring forward new legislation for the future progress of the province's mink industry. Over the past 15 years the mink sector has grown and expanded. Mink is one of our fastest-growing agricultural sectors at the moment, generating between $64 million to $80 million annually.

Last year the department formed a working group with members of the Nova Scotia Mink Breeders Association executive to develop a framework for new legislation. The proposed legislation is comprehensive in covering all the significant issues facing the industry.

Nova Scotia is also a New World wine region. When you think of great wine-making regions in Canada, Nova Scotia is quickly earning a place for itself on that list. Our province's wineries make a variety of high-quality wines from 100 per cent Nova Scotia-grown grapes and fruit. According to the 2007 figures, the value of Nova Scotia wine production is well more than $17 million.

Nova Scotia grape growers and wineries have built a first-rate reputation through the quality of the products they sell. Our long Fall allows our grapes to ripen slowly, increasing their flavour intensity. Nova Scotia wineries are winning international awards for their beautiful wines. The grape and wine industry in this province has immense potential for growth and development, based on both domestic and international sales. This sector also has a belief in its future and in government partnership.

The Departments of Agriculture, Tourism, Culture and Heritage, Economic and Rural Development, and NSLC, as well as the federal government, are working together with this sector to accomplish managed growth and development. They have a vision: 20 wineries and 1,000 acres under wine by 2020. Improved regulations will encourage Nova Scotia's grape industry to grow and develop farm winery businesses. We are working with the industry to make this happen.

The tree fruit industry also has a vision and belief in its future. They are embarking on a second five-year strategy that involves government participation through marketing, development, new products, innovation, technology transfer, and orchard renewal.

With all that being said, it's not hard to see how and why agriculture is an integral part of the fabric of our rural economies. There are hard-working people in communities all across this province who are invested in making sure we continue to thrive. Many of these communities are challenged by an aging and declining population. This is more pronounced in some rural parts of the province.

Since rural communities are feeling the impact of this trend, we want to continue to address the availability of new entrants to take over and work the farms. To this end, the department continues to promote career opportunities and encourage new entrants into agriculture. We recently launched an initiative to promote career opportunities in agriculture and encourage new entrants. Think Farm, as the initiative is called, includes a Web site presence with information for new entrants such as credit opportunities, farm business development and innovation support, educational resources, and other topics.

A few weeks ago the Premier and I met with the president of Young Farmers. Our young farmers told us they want to create a vibrant economy in our rural communities. They, too, are concerned with sustainability and want to work with government to help ensure businesses can succeed. Our young farmers are talking about transition and looking at ways to stay ahead of the game.

Part of our job is to work with partners, not just in industry but within the provincial government as well. The Department of Agriculture continues to work with other departments to increase the efficiency and effectiveness of dealing with our stakeholders and clients. The common objective is to make it easier for clients to access the services, programs and information they need. The single-window delivery system, called the Service Delivery Improvement initiative, will do just that.

The SDI committee is a department committee formed in 2009. Over the past year the committee has commissioned a client satisfaction survey, supported the redesign of the department's Web site, and volunteered to partner with Agriculture and Agri-Food Canada on the AgPal initiative. The client satisfaction survey will invite all NSDA clients to tell us how they are communicating with the department now, how they would prefer to communicate with the department in the future, any difficulty they have experiencing and accessing information, how well we are delivering our programs and services, and how we can improve the delivery of our programs and services.

In keeping with our strategic priorities, we are working on ways to build and effectively deliver better regional services to the farmers of this province. We are also in the process of combining the Agricultural Resource Coordinators service section, or ARCs. ARCs are the front-line eyes and ears of the department. Located in five regional offices, they deliver extension and outreach programming to farmers, agri-businesses, and rural community organizations in partnership with other government and industry service providers, 4-H clubs, and other rural organizations.

Organizations like 4-H, for example, are really important as they deliver rural leadership extension and outreach to youth programs. We must continue to look at how we can build on leadership initiatives beyond 4-H-aged youth as a means of strengthening our rural leadership capacity. These and other community organizations are providing agricultural education, awareness programming, and resources to agricultural industry events, schools, and the public.

In anticipation of this new service delivery model, we hired an agricultural transition officer in 2009. We are in the process of hiring additional agricultural transition officers who will be located strategically across the province to deal with identified and emerging industry issues and opportunities. They will work closely in partnership with all stakeholders to support industry competitiveness and grow the rural economy.

The new Regional Services section has staff located in five main regional offices and several smaller field offices working on local, regional, and provincial challenges, and opportunities for sustainable agricultural growth. These regional team clusters have been created to address these challenges and opportunities. Each team is currently working on a work plan with targeted outcomes and effective partnerships. New networks and efficiencies are developing among all stakeholders as a result.

I also wanted to mention what we are doing in tandem with other departments to seize today's opportunities without compromising our tomorrow. Agriculture is not just about food products, but also about other products we can grow. Energy projects, for example, are becoming part of our business too.

[3:15 p.m.]

As we work to balance a strong, competitive economy with a healthy environment and thriving communities, we are recognizing more opportunities in this sector. The development of grass pellet manufacturing and use is anticipated to have particular benefit to interested farmers and where considerable underutilized land exists. Research of combustion technology is continuing at the Nova Scotia Agricultural College. If the testing results show that grass is a suitable feed stock for briquetting or pelleting, it will open up a new market for hay production in rural Nova Scotia.

The members may not know that the engineering building at the Agricultural College has been heated with grass since the Fall or partway through the Fall. I think the challenge for us is to ensure that it's generated here because that came from Prince Edward Island, as I understand it, but we think there is a lot of potential there.

Most of the province's beef, dairy and sheep farms already have all the equipment that is necessary to produce hay; therefore, the cost to diversify is incremental in nature and will reduce the per unit cost of growing hay both for feed and for fuel. The department is currently investigating the feasibility of harvesting this grass for manufacturing grass pellets on a commercial scale. This initiative may produce a product that could be suitable as an alternative heating source for homes and light industrial plants. If projects like this can work, it means that we have been successful in the development of new products that help reduce greenhouse gas. This project aims to open the door to economic development in rural communities in Nova Scotia.

In closing, I am optimistic Nova Scotia can build a strong environment and agriculture economy in this province. This government's priorities are to ensure that agriculture in this province contributes to long-term prosperity and growth and to make sure that this growth is used to secure a bright future for all Nova Scotians. Our goal is a future where our farming communities are thriving and producing food for consumers in Nova Scotia and elsewhere, a future where farm businesses are profitable and sustainable. The sustainability of agriculture and the rural lifestyle is important to our province, it plays a significant role in the province's overall economic and social landscape.

Agriculture continues to be the heart of many of our rural communities and it supports many people throughout the region. We want to support Nova Scotia's families, create more jobs, fuel economic growth, and continue to build pride in our province. We will continue to work hard for the people of Nova Scotia to make this future come to fruition. Thank you for the opportunity to address you and for your time.

MR. CHAIRMAN: The honourable member for Kings West.

MR. LEO GLAVINE: Thank you, Mr. Minister and staff, for the opportunity to ask some questions relating to the budget, and of course all that whole wide area that agriculture entails in this province.

I asked a question in the House just a day ago in terms of the strategic framework, the agriculture strategy and, again, what I'm hearing from farmers is that it's a work in progress and you said "soon". I don't so much perhaps need to have that nailed down as, is this a strategy primarily having the input and the working of the department? I'm wondering where the farm community will have an opportunity for consulting. I know that the strength of the Land Review Committee that the minister set up has been in hearing from Nova Scotians, there's no question about that. I attended the session in Berwick, which was the largest attended session. The evening had to be brought to a close after about three hours, there was just so much interest, intense and passionate positions that were being put forth.

Talk to any of our members of the farm community and they're very passionate about what they do and they like to have a say about where things are going and how things are going. I'm just wondering how that strategy is being mapped out and, again, a second run at, how far along is the progress chart?

MR. MACDONELL: I'm really pleased to answer this question. It's my hope - and I think it's the intention of my staff who are working on this - that before the Houses rises actually this Spring, I'm kind of expecting that I'll have that before me or relatively close to that time. I made a commitment to the Federation of Agriculture that I would not deem it as a completed project until they saw it and had some input.

There is a component here I want you to be aware of that the department had a working group with the federation - I'm thinking it was CTAG - that looked at transitioning the industry. It was kind of a separate process from development of a 10-year strategy. I want the member to be aware that a lot of the issues that were raised through that dialogue with the federation and department really have, when overlaid where the strategy was going and some of the issues on competitive transition framework, they matched very well together.

I feel that we - even though we didn't approach them to say, give us input on the strategy - the input they were giving us on their industry, we incorporated in the strategy. That's not going to be the final word, we intend for them to see what we come up with in a strategy. If they think there are ways that they could tweak it or that we could accept their tweaking, we're kind of leaving ourselves open-minded to do that.

MR. GLAVINE: I am pleased to hear that the input of the farm community, even through the federation - because we know within the federation that the current president is very knowledgeable about the agriculture field generally, and perhaps more specifically Kings County and market gardening.

One of the areas that was very loud and clear, I know during the land review session that I went to - which ties in with what the minister is saying about the future direction - has to be around profitability in the industry. I certainly believe in some investment in the industry, as well, but profitability has to be looked at in all of our sectors.

One of the things that came out, and it was probably expounded the best by Greg Webster - and Greg, as you know, is a big market gardener in the Annapolis Valley and a very strong advocate for the industry and takes some very strong positions. Of course, like many there, they basically were saying, we wouldn't be talking about protection of farmland if farming was healthier in Nova Scotia, if there was greater viability and so on for the industry. With that being said, he also referred to needing to get more income from what they produced. He has read the Kelco document a number of times and he feels that the strongest premises in that document do have great value.

The minister did say he was going to take it down. I know you didn't say you'd give a report but that you would give it a solid look now that you're a minister because I didn't look up, over the last week, the very favourable comments that you made in Opposition about Kelco and the place that it could have. I am miffed as to why we don't at least try a sector, just do a pilot on a sector - it works or it doesn't work. I fail to understand why we would not give that a try and I'm just wondering about the minister's comments, please.

MR. MACDONELL: Mr. Chairman, I'm going to ask the member to just be a little clearer on what he calls "a try" because it's not clear to me exactly what he wants us to try, so if he could clarify that.

MR. GLAVINE: I think when farmers are talking about if they could have the farm-gate receipt just come up a little bit higher, so if we take beef, which we now know is in second place behind the hog industry as a dying industry in Nova Scotia, we'll see exits this year, there's no question about that. If we are only producing 12 per cent or 15 per cent, and if we have 1 cent a kilogram more on every kilogram of beef sold in Nova Scotia - whether it's boxed beef from New Zealand, western beef, U.S. beef - and that money is put back into hopefully achieving this grass-fed, almost an organic product, that we could find a niche area here, a market, again, with the right head of beef, one that's better for our climate.

We have great variety in Nova Scotia now, just by the fact that we brought in different breeds for interbreeding and trying to improve the herd and so forth - if farmers had a little more to sustain them through this period, as has happened, for example, in a few other areas with the same concept. When we had Sobeys into caucus to deal with this issue - and I spoke out about legislating a percentage of store shelf for local products in the big retailers - we also bounced that idea off them as well. It's one which they can implement pretty easily, actually, with coding today. If it's even 1 cent or 2 cents a kilogram more from the food chain, I think it would go a long way to sustaining and hopefully growing the beef industry, and that's the one I look at right now.

MR. MACDONELL: The Kelco report had found pillars and I can only remember three, but one was strategic investment, one was public or environmental goods and services, the other one was - I think the direction you are going - a return on investment. I think they were talking like 30 per cent, if I'm not mistaken, but it was to cover those costs that the industry has that they cannot get out of the value chain, which was the traceability, the food safety and those costs.

I'm not necessarily saying that I'm terribly opposed to the idea. I would like to think that it could possibly be a fallback position, if it's not possible to get the price out of the marketplace otherwise, because obviously this would be something that could not apply to the supply manage sector. Those foods - milk, eggs and chicken - would not fall under this category because they have a method of getting their cost of production out of the value chain.

I don't know if you would remember the old pork risk management program, where the producer paid, the packer or the processor paid, and the government paid into a fund. I've often thought that probably that was a fund that should have been funded by the retailer not by the government.

[3:30 p.m.]

We've actually put people to work on trying to establish if there is a mechanism in the value chain to achieve greater cost efficiency for producers and we don't have that. It seems like everything I say to the member is, I'll have that for you soon, but certainly we're doing a study to determine whether a kill line in Nova Scotia for beef would be an appropriate thing to invest in. We don't have a federal kill line for cattle, so there's an example of something that might make our ability to market to the retailers something that we could more easily do.

Two things that the cattle industry needs, I think, are a kill line in the province and a price - if they could get that price out of the value chain and this would be through some negotiation with whichever plant. We only have one federal plant, if we were going to keep it federally, that could do that and they haven't really shown that they are overly interested in this because the province isn't going to build it and run it. Somebody in the private sector would have to do that and that means they'd have to make money. I see it as a necessary piece of infrastructure.

If it would appear to me that there was absolutely no way that we can improve the prospects of cattle producers by going down that road, as you've indicated, of a grass-finished, healthier, unique premium product that producers could sell to the stores or restaurants, or wherever. Then probably to look at, if it's possible, to get some additional value out of the value chain would be something to consider. It's not my first place to go, but I didn't ask my staff to crunch some numbers to see what the possibilities are for the pure purpose of giving them something to do. I really wanted to know what the potential was and if we could more easily or with more difficulty go down that road.

All that analysis has yet to be done, it is something I seriously think about and would like to see what the numbers look like, to see what the possibilities are to do that. I would really like to try to interject, in the value chain, in another way to try to actually get the price for the producer first. That way, those costs that I indicated that the Kelco report actually referred to, which was the traceability, the food safety, those types of costs seem to get borne by producers but never get expended out by them. That's actually what Kelco was referring to, so that's a fairly reasonable request in that regard.

MR. GLAVINE: Mr. Chairman, just to look at the budget for this year: $750,000 will go to the agriculture industry revitalization strategy and $250,000 is slated for the beef industry. How exactly will that be spent in terms of support and development of the industry to at least try to maintain what we have?

MR. MACDONELL: Mr. Chairman, that $250,000 was over two years, so the first part was 2008-09, so there would be part of that for 2009-10. I mentioned in my speech around the pork, beef and sheep - we're working on a red meat strategy with all three of those commodities so we're hoping to invest $300,000 to get that nailed down and then going. Part of that $250,000 would have been spent in the previous year.

MR. GLAVINE: In terms of the remaining $500,000, how is that going to be spent in terms of other industries?

MR. MACDONELL: I think you're a year out in your number.

MR. GLAVINE: Well, there's $3 million that's coming over the next three years, right?

MR. MACDONELL: Two.

MR. GLAVINE: Over two years?

MR. MACDONELL: Yes. For the beef buy-down, interest buy-down, so there's $2 million over three years.

MR. GLAVINE: Yes, so the remaining - is it $500,000 that is remaining?

MR. MACDONELL: On that, the beef buy-down allocates about (Interruption) I think you're referring to the agriculture revitalization program.

MR. GLAVINE: That's right, yes, that's industry revitalization.

MR. MACDONELL: We spent $250,000 on beef and $500,000 on pork.

MR. GLAVINE: So $500,000, all of it went to the pork, that's what I was wanting to know.

Moving forward then, over the next four years, according to the budget, the province will invest an additional $3 million, that's about $750,000 a year. The budget doesn't really tell us too much detail there, so I'm just wondering how the $750,000 is going to be distributed through the industry.

MR. MACDONELL: You're saying $3 million over four years.

MR. GLAVINE: Yes.

MR. MACDONELL: What line are you looking at?

MR. GLAVINE: I don't know. I don't think I actually have that copy right in front of me.

MR. MACDONELL: Do you have a title for it?

MR. GLAVINE: No, I don't, all I have is the part for the Select Nova Scotia, but I was just wondering where the remainder of the $750,000 per year - because there's $3 million over four years. I've sent to get it.

MR. MACDONELL: Are you talking about the Strategic Infrastructure Fund, perhaps?

MR. GLAVINE: That's probably what - no, it didn't refer to the fund, unfortunately, in my notes here.

MR. MACDONELL: Okay, we can get back to you.

MR. GLAVINE: In terms of then - there's going to be $350,000 for Select Nova Scotia to promote the benefits of local. I'm just wondering why you - as you stated in your opening, very pleased with how beneficial this has been to the agriculture sector, to healthy, fresh, nutritious food, all of those elements. Was there a need perhaps to take a look at even a stronger investment in this area? That's one of the areas that I know where, in fact, we've seen some farmers like Lloyd Evans - we've seen Lloyd get out of the hog industry and invest in market gardening, invest in a farm market, and actually sees himself with a viable future. I'm just wondering, why didn't we perhaps continue a little stronger down that road?

MR. MACDONELL: Yes, a good question because I've got to say, I think in my speech I indicated how impressed I was. Actually, I don't think I realized the impact the Buy Local campaign was having with consumers and with retailers. Actually, I guess, probably what we try to do is use somebody else's money. We have the Community Development Trust Fund and we invested $2.3 million over three years for retail markets in communities. That was kind of another part, farmers markets and so on that we try to promote Buy Local and help establish local marketing opportunities. Yes, I think that indicates how much we'd like to do it and probably at a time when we were all asked to find some expenditure management, then that made it very difficult to expand your spending.

MR. GLAVINE: I see that is one of the places where further investment can make a pretty strong difference in our agriculture sector. I guess then the next part of the question would be, do you plan to use that $350,000 differently than the previous government? Are you going to divide that up in any different way? Are you initiating anything new through Select Nova Scotia or is it steady as the program moves along?

MR. MACDONELL: No, I think it's our intention to keep promoting it the way it has been promoted. I think my staff are continually looking at how to get the best bang for our buck, so initiatives like the IncrEDIBLE Picnic and so on. I don't think we can claim the Atlantic - Co-op Atlantic had the Eat Atlantic Challenge, if I have the right name for that, where I actually challenged the ministers from the other Atlantic Provinces to see who could get the most names on a petition for sponsoring that they were going to buy local on one particular day. That was an initiative of Co-op Atlantic, which we really were keen to help support. So whether it's the IncrEDIBLE February or the IncrEDIBLE Picnics we try, as much as we can, to raise awareness and continue with the program.

I think it's in the stores for them to do their displays, that's voluntary, but we certainly have gotten the impression from them that they see it as a really significant marketing tool. There is some interest on promotion of Eat Atlantic but even the stores found that if you could identify the farmer down the road as where you got your milk or you got your produce and you had a picture of him in the aisle, they found that far more effective. So I think they're very keen.

[3:45 p.m.]

One thing I want, before I get away from the Select Nova Scotia money, is there is still $600,000 from that $2.3 million in the Community Development Trust Fund, so that's to be spent this year.

I'm going to say that I'm not going to deviate too much off course on the Select Nova Scotia. We're going to try to increase consumption around Nova Scotia for local product and we still work - I met with the people from procurement about two weeks ago and so we still work hard at trying to come up with ways, under the Agreement on Internal Trade, that we could do things that would make it easier for local companies to access contracts and be able to apply to government and get more local products in our institutions.

I want the member to be aware that this is not the big money-maker that some people might think. If you're going to be competitive, you've generally got to be at low cost and we don't want low cost in terms of going back to our producers, but this is an avenue that they can make some money, as much as we can open that up and make it kind of friendlier to local, we work at that as well.

MR. GLAVINE: One of the areas you've touched upon is that identification, whereby you can identify at the local farm market that this came from a farmer adjacent to the market or in the county and so forth. It brings me around once again to labelling, because as we know, in the big retailers, we have a whole smorgasbord of labelling and a number of ways of looking at labelling. For example, bringing in Mexican tomatoes, packaging them in Ontario, and classifying them as a Canadian product, I mean, we get that all the time and sometimes we're able to trace those things and confirm that is the reality.

I believe very strongly that if we have a Buy Local Atlantic, or as soon as we put that Select Nova Scotia on a product - and especially now with the greater education, the greater amount of thinking local for our future food security - there is a whole climate which says, look, maybe it's going to cost me even a few cents more, but I am going to make the commitment to buy local. We know, and the minister knows, and he works with families that have made a tremendous, conscious effort, year-round - no longer just in season - buy as much local as possible.

I'm wondering, where do you see labelling going in Nova Scotia, or in a Maritime context, to give the farmer greater visibility of his product?

MR. MACDONELL: Well, I think, for sure, for any of those producers who would feel they'd have a competitive advantage, even through Select Nova Scotia, we try to be helpful. I think we have the stickers for Select Nova Scotia and the application of that is purely for those who would have to think about being exporters, obviously. They have a product of which we cannot consume at all in this province.

I definitely think there's an advantage there. I think that when you go down this road, you open up the other door, which means you have to be willing to let the other guy's something in. It's kind of like one of the final nails in the coffin of the hog industry nationally was the COOL legislation in the United States, Country of Origin Labeling, which was definitely deemed to have had a negative impact on Canadian pork. As much as I am a promoter of identifying it as local, as identifying it as Nova Scotian, once you tend to move outside your border and want to enter other jurisdictions, then you have to be willing to allow the same.

I think we should try to be as flexible as possible. I have had conversations with producers who really were interested in not just Buy Local, but they were interested in Buy Local Atlantic and they wanted to have some way to identify their product in the marketplace. They felt that the large retailers who sell to more than one jurisdiction would find that far easier, although in conversation with the retailers they weren't heavily pushing it. I think they found the local immediate area, if you could sell that in Nova Scotia as Nova Scotian, that had a greater marketing advantage than, say, bringing something from another jurisdiction. Although, if that's where they could only get it then that's where they would get it.

MR. GLAVINE: In terms of the growth of farm markets, which is direct pretty well from farmer to retailer, I'm wondering, do you have any statistics on what has happened in the last three to four years since Select Nova Scotia has had a fairly aggressive campaign?

MR. MACDONELL: I think we probably do, but I don't have them here. My staff will do a little research to find out - I'm not sure, actually, I'd be curious myself now that you raised the question. To indicate at the start of the Buy Local campaign for three years now, what of significance has that done on - and you're talking more specifically farmers markets, but yes, I'd be interested in that myself.

MR. GLAVINE: Just to move to an area that's a little bit related to that. I often hear in my area - and perhaps the minister may be more familiar with getting some feedback around the province in terms of the backyard abattoir, the small, unlicensed, uninspected abattoir. Again, sometimes I hear from an Oulton's and so on, so obviously it cuts into the business for one thing. But in a climate of great consciousness of food safety, I'm just wondering if the minister has any information around that; is there any plan to perhaps deal with it, or does he think it's fairly well controlled?

MR. MACDONELL: Mr. Chairman, a really interesting question, I have to say. My first exposure to slaughter houses would have been when my father took his cattle to a gentleman in Elmsdale who had a little building with a cement floor and running water. I have to tell you that if I was to take a beef there today - although he's 97, so it would probably preclude him doing it, but if he was - I would not give a second thought to the quality of the job, the safety of the food. Now, I would not be retailing that, necessarily, I'm probably thinking for my own family purposes.

For some years I raised my own chickens and turkeys and if I didn't kill them myself, I had them slaughtered by somebody else. It wasn't an inspected facility at all so I'm not particularly squeamish about that, but because I'm not doesn't mean the rest of the world is not.

In Nova Scotia I've got to say that we are kind of ahead of the pack when it comes to provincial inspections and it doesn't exist in New Brunswick. So there is kind of a national look being taken on inspection and in beef in particular. I understand the concerns of the established, inspected facilities that might feel backyard facilities would be taking business from them. I have to say that I'm not keen to move to shut down backyard - I mean you can kill beef on the floor of your barn if you're going to use it yourself. When you look at what the potential for business is for inspected facilities, because they can go into restaurants and they can go into the retail or retail food sectors, they have so much more access to market that the backyard people just cannot do.

I hear this on occasion about the threat to business. I don't know that it's all that substantial. I have to tell you that if you were raising turkeys for your use and maybe for your neighbour, if you have to travel 20 kilometres to get them slaughtered, you're really glad to have somebody close by who is willing to do that - and it's not inspected and I have travelled that distance, believe me. It's not a big flag for me or my department. Food safety issues are always significant for us and even when it comes to farmers markets, who is there, what they're selling, whether there's refrigeration and all these issues around these products are all important things for us so that the consumer is protected.

I understand the call of the people who have inspected facilities, they built them to a standard, they invested that money. One of the points I have to make is, in those facilities we pay the inspectors, they're covered by the province and we try to encourage as many non-inspected facilities. As you might expect, there would be the kind of very small backyard shed, not doing any significant amount of business and then there might be still those uninspected facilities that are doing a significant amount of business. So if it looks as though they're thinking they might want to grow that industry or they might move into other opportunities, we are big-time promoters of inspection. We try to get them within the system and try to do that in a way that the investment is appropriate but not overwhelming.

As much as we can have people in the inspection system we prefer that. Otherwise it's a question for us around enforcement, of making sure that you're not trying to sell into markets that your facility does not allow you to go, and that all takes time and energy and money to do that as well. I don't know if I answered your question or not.

MR. GLAVINE: Yes, I was wanting an overview but also when I hear in my own riding about a few of these facilities, just wondering if the department has any eye at all toward perhaps getting them to change over, or hears from people who use them. As you said, very often there's a long history associated with these smaller operations so no, that's fine.

[4:00 p.m.]

Very topical, of course, and yet to have its report is the Land Review Committee. I was just wondering whether or not the minister has had any updates on the work of that committee and, again, what seems to be the time frame for reporting? It's a very critical issue, as the minister knows, in certain parts of Nova Scotia, and in particular the Annapolis Valley in the riding that I represent. I'm just wondering where things are with that review committee.

MR. MACDONELL: If I'm right, I think I'm expecting the report in May. I want to make it clear, there probably hasn't been much that has been topical and urgent and necessary in my department that - I have gone out of my way to keep my distance from the committee. I wanted to make it quite clear that this committee was to have free rein to do its work and it was not going to be encumbered by the minister and his views. We're really looking for answers, which was the reason that we engaged them, and I'm as eager and as interested to find out what the recommendations might be. If it turns out that I'm wrong I'll correct myself, but I'm thinking the month of May is when I should have a report.

I know I did have a briefing note that listed the meetings and the locations that they attended. It seems to me that outside of eight or whatever that were around the province for public input, I think there were two or three where they met with the Union of Nova Scotia Municipalities. I'm trying to think of another group that, although they were public, they were not public as in open to anyone. There were a couple of bodies that they wanted to meet with to get some input on that. Hearing from Nova Scotians in the broadest way was what we wanted to do, and then take all of that information and apply it into sensible policy.

MR. GLAVINE: I was wondering, at least as a preliminary to getting the report, whether or not there has been any discussion within government - and perhaps within Cabinet - in terms of setting aside any funds to protect lands. The idea of a land trust, land banking, that seemed to be fairly prominent in some of the presenters in the session that I attended. We know in this province that the Nova Scotia Nature Trust, for example, is an organization that has done very well in terms of private investment to hold onto such lands.

This could very well be one of the areas where government may have to have some partnership as this committee could make such a recommendation. Has there been anything preliminary at least at this stage?

MR. MACDONELL: No, I can genuinely say to the member no, there hasn't been anything preliminary. I think the only road we have ventured down is we made a commitment around a community land trust. I think that's still in the process of being fleshed out, whether or not that will be the appropriate avenue to address all of the issues. It's interesting that you mentioned land banking, I think that's something that was done in Saskatchewan, only to find out they were land poor - the government, I think, wound up owning a lot of land.

I guess after spending $75 million in buying land, it's pretty hard for me to try to make a case that is something you shouldn't do. If we were to buy land - we tend to always think in terms of forestry land - but it still becomes a Crown asset, it belongs to the people, whether that's a road we would go down or not. I think for me in particular, because it's actually kind of joint between me and the Minister of Service Nova Scotia and Municipal Relations, we'll see what the recommendations are.

I don't think I want to say that there's anything that's off the table, as I said earlier, I try to keep my distance and not influence the committee and then keep an open mind for what they bring forward.

MR. GLAVINE: Was there a budget established for this committee and I was wondering, what was that budget?

MR. MACDONELL: We definitely spent money for them to do this, so I'll see if I can find a number for you. We'll get back to you on that, definitely.

MR. GLAVINE: Just to go back to a topic that got talked about very briefly around the beef strategy and where we could go in the province. We also had the Interest Pay-Down Program, the $2 million, and the deadline for that, of course, was March 31^st. I'm just wondering, what criteria did farmers have to meet in order to qualify for that program?

MR. MACDONELL: We had it administered by the Federation of Agriculture. I did know the criteria. I'm thinking they had to be farming for six months - I think they had to be a beef farmer for six months, was one. Since we were not lending the money, we were only paying the interest for possibly three years, they had to have a business plan that really passed muster with the bank, or the lending institution that they were going with. I did have another component of that program in my head and I just lost it, but it will come back. They had to pay their levy to the Cattlemen's Association and if there's more to that, I'll try to find it for the member. But just off the top of my head, those are the things that come to mind.

MR. GLAVINE: Mr. Chairman, it's probably too early to talk about the take-up of that program.

MR. MACDONELL: No, you can.

MR. GLAVINE: How many farmers - do we have an idea of the number of farmers?

MR. MACDONELL: I do. I can't remember the actual day because the information was given to me a week or so ago, so I'm not sure how old it is, but I guess a week or so ago was the end of March. There were 133 applications, if I have that correct, 60-ish were processed and I think five were not approved, but I think the 60-ish were approved. That took up about $300,000-some of a possible $600,000 in interest buy-down. I can't think of what else I can tell you but, anyway, those numbers - I'm pretty sure I'm close.

MR. GLAVINE: To stay with the beef industry, where is Nova Scotia, your government now in particular, in terms of current support, or future support, for the beef plant in Prince Edward Island, because that's a province - and also farmers buying hooks for the beef plant. We've made a pretty substantial investment in the Maritime beef plant. I've had a tour of the place and realize it's a wonderful, modern facility, but making it economically viable has been a real challenge.

I'm wondering if you could update where the Province of Nova Scotia is in relation to the Maritime beef plant, especially since I know one of your basic positions for moving the industry forward, perhaps, is to have a stand-alone, Nova Scotia, federally-inspected beef plant. I'm just wondering, where are we vis-à-vis the Maritime beef plant?

MR. MACDONELL: Yes, good question. I'm not particularly interested in building a beef plant in Nova Scotia. I'm not keen to go there at all. Our interest was to find out what the economics were around the potential for investing in a beef kill line. Now we have one federal plant here that kills hogs and sheep, but they don't kill beef, and that's Tony's. We haven't got the numbers yet, but we're investigating them. If it turns out that we think this is a doable thing, but they don't think they want to do it - they're a private business - but the advantage for us would be to think that the industry would have more options if it had a federal kill line.

I've talked to Minister Webster in P.E.I. on occasion, I have quite a good relationship with him, a very likeable, easy-to-work-with individual. We've had a couple of discussions on the cattle industry. The P.E.I. Government has not approached us, and has shown no indication of any interest to approach us, on us putting any money into the plant in P.E.I. I know there are people in Nova Scotia, cattle producers, who are quite keen to see it make money, really, to know that its future is secure, and we are of the same view. It offers, actually, what should be a real opportunity for cattle producers.

Some of the issues around why it doesn't seem to have been able to take off better than it has, I don't know all of that. As far as we're concerned, jurisdictionally, it's kind of out of our hands and the minister there hasn't indicated that he expects, or intends to expect, us to be offering, in any way, support financially or otherwise, other than the commitment that was made by the province some time ago.

Anyway, I think our concern, as the minister for the industry in Nova Scotia, is what infrastructure might be lacking to help kick off our industry in a better way, and I see a kill line as part of that. What I'm hoping is that by the time we get the information around what the cost is of that and what the potential of it is to enhance any particular company's business and the industry - because the other component of that, which I can't overstress is, we want a price. We don't just want a kill line, we want a price for producers, and we'd be really interested in helping define that product and put people in extension to help producers.

[4:15 p.m.]

We talk a lot about our grass advantage and we talk about grass-finished beef. There are some producers who are very much down that road already, but there's a big part of the industry that is a little more concerned: they're used to a grain-finished animal. So if we're going to promote this, farmers not only have to become good beef specialists, but they have to become forage specialists. They have to do a lot more on the grass cultivars and what would be the best for them to grow and how to grow it.

I see the department having a role in that and I think you and I have talked probably on other occasions, even in terms of a 10-year strategy, it has to have those components of extension. When I mentioned about the $5 million to the innovation centre in Truro, that research side is a whole other area along with what we can do with the Agricultural College.

MR. GLAVINE: Madam Chairman, I'll just say I think I have a couple of minutes to finish up with.

MADAM CHAIRMAN: A couple of minutes, yes.

MR. GLAVINE: That plant still currently is very important to the Nova Scotia beef industry as a place to weekly send cattle. In your discussions with the minister, did he give any indication of its current status and viability, knowing the problems that have plagued since the very beginning?

MR. MACDONELL: Only insomuch as not an in-depth discussion of the plant. I think if my memory is correct, this Fall or past Fall they laid off some workers, so I think all of those things kind of gave signals around how busy they are, their ability to get cattle and so on.

My deputy tells me it has secured funding from the P.E.I. Government for 2.5 more years. I'm assuming that was quite recent? Last summer.

MR. GLAVINE: I know that at least is some comfort to the Nova Scotia beef farmers who invested there personally and need to have that until some other contingencies come along and some other possibilities, if Tony's does become a reality . . .

MADAM CHAIRMAN: At this stage I would have to advise that the time has elapsed for the Liberal caucus and we will now be moving on to the Progressive Conservative caucus.

The honourable member for Victoria-The Lakes.

MR. KEITH BAIN: Madam Chairman, I'll just be asking the minister a couple of questions then turn it over to my colleague, the member for Hants West.

I have a beef producer in my constituency and about three weeks ago he called me and told me a story that there was a loan support program that was out there. He told me it provided financial assistance to 96 beef producers and that the program was converted to a Transitional Assistance Program grant, which forgave the loans that were issued. I guess where he was going on this was that because they were in this program, those farms that borrowed from the bank were not eligible. I'm just wondering, could you enlighten me on this whole program?

MR. MACDONELL: I was hoping that you could enlighten me. I never heard tell of it, so can you back up? You were saying that they had their loans written off as a grant?

MR. BAIN: The Ruminant Loan Support Program. According to what this person said, he said the program provided financial loans to 96 beef producers and the program was then converted to a Transitional Assistance Program grant, which forgave the loans that were issued.

MR. MACDONELL: I know that when I was in Opposition, before I became minister or before we had the election . . .

MR. BAIN: And it might have been at that time.

MR. MACDONELL: I don't know if there were 96, but I know that some of the cattle producers got loans and then the previous government wrote those loans off. I don't have a lot of cattle producers in my constituency, but I do have some and the only time that one of these gentlemen - even through BSE, all of the bad years, this gentleman never called me, but he called me about this. He was livid, he said he would have borrowed money if he knew it was going to be written off. That wasn't us.

The program on the interest buy-down that we have is still what it is, that I referenced with the member for Kings West. As far as the program about having loans written off, it was before my time.

MR. BAIN: Could I request, Mr. Minister, that I could get from your department some of the history of the program that might be available, so that when I speak to the individual I could better explain it to him, because I don't know what I'm telling him.

MR. MACDONELL: Sure, that's possible - or I hope it's possible. My information indicates the loans were from Minister d'Entremont and the write-offs were from Minister Taylor. Anyway, we'll get you what we can get, sure.

MR. BAIN: Just one other question before I turn it over to my colleague, the member for Hants West. The cost of fertilizer - when we met with a group from the farming community in the Boularderie area, one of the things that always comes up is the ever-increasing cost of fertilizer and constantly increasing in large leaps. Is there any consideration given to providing some assistance to these farmers on the cost of fertilizer?

MR. MACDONELL: I'm probably not the keenest supporter on a fertilizer subsidy. My worry is around if the farmer actually gets the advantage of it. On some of these programs, I can think of the tile drainage program, probably land clearing would be another one, but in some cases the cost of the job goes up by the subsidy. So it flows through the farmer and they don't necessarily get the best advantage of the program. That doesn't mean that I would be opposed to looking at it.

We campaigned on a Soil Amendment Program. Although we've adjusted the rates for fuel for hauling limestone, we're still developing a more comprehensive program on soil amendments because now we have wood ash and I'm not sure whether biosolids would be part of that. Anyway, I don't necessarily look at fertilizers as a soil amendment, but I'm not going to say no to the member on that, we'll take a look. I want him to be aware of my reservations around making the best bang for the farmer's buck, that he actually has a program that gives him an advantage rather than the advantage going to somebody else, and that might be difficult to develop. Anyway, I'd be interested in looking at that.

MR. BAIN: Thank you, Madam Chairman, if I can I'll turn my time over.

MADAM CHAIRMAN: The honourable member for Hants West.

MR. CHUCK PORTER: Thank you, Madam Chairman, and thanks, minister, it's always a pleasure to have the chance to run a few questions by you.

I was kind of surprised in the Budget Address on Tuesday, why we didn't see more about the 10-year plan. We talked about it last Fall here - or last whenever it was - the last round of Budget Estimates. You talked quite extensively about a 10-year plan but we've not really seen much about it and I'm wondering why there wasn't more discussion in the Budget Address.

MR. MACDONELL: The plan is getting pretty much fleshed out, I have to tell you. I'm kind of hoping by the end of this month whether we hit that target, but really quite soon. I've had good people working on that over the winter. I don't know if you were here when I mentioned to the member for Kings West but we made a commitment that we would let the federation have a look at that before we decided it was a done deal, just to see if they wanted to have some input. I also mentioned that it hasn't been done completely in isolation of them. We had a committee in the department that worked with the federation on an industry transition program and so there was some of that that actually dovetailed very well with where we wanted to go with a 10-year strategy.

I guess I could scold the writers of the Budget Speech or whatever but there is a lot of this yet. It's not complete and I'm not sure that I want it for public digestion yet without kind of having the federation have a look at it. All that will hopefully happen, I'm hoping it will happen before we rise here, but whether I hit that mark or not . . .

MR. PORTER: I'm just kind of curious, I would think this is a fairly extensive document and is the plan to roll this out in pieces or will this be all on the table at one time by way of a report to the House, or how will that go?

MR. MACDONELL: I'm thinking it probably should be a document that's reported to the House but I'm not sure of the mechanisms of the House about whether that's something that can be done - Tabling Reports, Regulations and Other Papers, I'm thinking. It would come out in a lump, it won't be piecemeal, in order to appreciate the broader context of it, you'd want to have it all. There will be parts of that that will be more direction-oriented or vision-oriented and would give an indication of where we want to go, probably in terms of policy and extension and whatever, but with a mandate for flexibility or to be a fluid document.

It's a 10-year strategy so if we get six years into the strategy, are we not planning on the 11^th or 12^th year? It's got to be kind of a moveable item. Certainly to give us enough to indicate to Nova Scotians and to the industry where we hope the industry might be in 10 years, and that's in terms of all of the issues around food production or energy production that we can capitalize on our advantages.

The one thing that we can't nail down is what the uptake will be. I mean, farmers are private citizens, they're business people and entrepreneurial. We hope that actually from this and from the input from the federation that we have an eye on what programs we might need to have in place that would be incentives to help them move into different areas or advance the areas where they are.

MR. PORTER: Is there any of this plan, this strategy, given its fullness? Obviously it's going to be an enormous undertaking, piece of work, requiring any legislation as we go through the process.

[4:30 p.m.]

MR. MACDONELL: I would find it hard to believe that looking out 10 years, we wouldn't be thinking of legislation. If you think about presently, before this sitting rises, we're hoping to introduce legislation for the mink industry. I think, depending on who is where at what time, over time we might need legislation on a particular item in four years that I'm not thinking about right now, but we want flexibility in our vision to say, if we need to go there, we should. As far as lining up for you a number of pieces of legislation that might occur over the next time frame, I can't do that.

MR. PORTER: That's why I asked, 10 years is a long time. Certainly, a lot changes just simply by technology and things that come along in any industry, including the farming industry. Then we have budget issues, dollars and cents, and again, with a 10-year, very extensive plan, ministers change, governments change, as we've seen, and so on. How realistic is probably a concern that will be asked by many and hopefully it's very realistic - and I'm not saying that it isn't but I'm kind of curious - how realistic is the thought 10 years out - even five years is a long time - but how realistic is it to think that we can meet the goals that you're trying to set within a plan, certainly, respecting that I have no idea what is in the plan at the present time?

MR. MACDONELL: My only way to respond to how realistic it is would be how unrealistic it would be to enter these early days of the 21^st Century without a plan. The fact that I think I want to try to emphasize is that the document has to have some fluidity because, as you've indicated, 10 years out there is a long time. We want it to be something that recognizes that we have to have the potential and possibility for change. As things come over the horizon, or we think they're going to come over the horizon, we can plan for them.

If I was to try to lead you to believe that I think we're going to hit the mark every time on every issue, then you would know I don't have any credibility. As much as we can indicate to Nova Scotians and to the industry that we are supportive, number one, that we see in order to move the industry in the direction of profitability, which is a cornerstone of the plan, that these are the types of extension services, research, innovative investment opportunities that we need to be able to back up with funding.

As much as we can put that there, we may not be able to nail down every kind of good idea that's out there, but we'd like to be able to have a template that prepares us. If somebody walks through our door and says, I'm interested in doing this, what's the possibility of a program to do it? If it passes muster, that's something we could do. We may not have thought of that as something to put in a plan, but the flexibility to be able to help him should be in the plan.

MR. PORTER: I'm glad to hear that just totally based on some of our earlier comments, a lot changes in 10 years, with ministers and so on. Your ideals could easily change with changes of ministers and so on.

A quick look at the budget. I did notice $5.4 million seems to be cut in the 2010-11 budget, is this part of the $772 million savings that the Premier and the Minister of Finance are projecting? Where does this come from?

MR. MACDONELL: Are you referring to this year's estimate versus last year's forecast?

MR. PORTER: I believe that's where it came from, I don't have it right in front of me. I just quickly noted it, but that's probably it, yes.

MR. MACDONELL: So if I have this right, the Farm Loan Board provision for bad debts was $5 million.

MR. PORTER: It does say, too - I'm just looking further at my notes here - the Agriculture Services component is actually seeing a marginal increase of $380,000. How is that going to be spent?

MR. MACDONELL: I'd be glad to answer that: salary increases.

MR. PORTER: Grants and Contributions from your department are down to $19.7 million from $21.3 million. Where will this impact be felt in the farming community and who will miss out?

MR. MACDONELL: Some Community Development Trust Fund money went from us to the Department of Economic and Rural Development, but we still control that money. The other part of that was the previous government prepaid some funding from the Strategic Infrastructure Fund, so the number made it look higher than it would have in the previous year.

MR. PORTER: You're saying then that there is no difference in dollars? I'm not sure that I follow.

MR. MACDONELL: In effect, there is an increase - not that they're the same - of $1 million in beef money, the interest buy-down money, which we're sending to the federation.

MR. PORTER: You talked a few minutes ago about wage increases and that was referencing the $380,000 that I asked about. The government talked about a 1 per cent wage increase for all government employees this year. Although with some recent deals announced, Nova Scotians have not been convinced that your government actually means what it says. Salary costs in your department this year are increasing from $33.6 million to $35 million. Are there any significant bonuses that are being paid out as a result of the $1.4 million difference?

MR. MACDONELL: No changes in bonus structure since the Progressive Conservative Government, those increases are as a result of collective agreements. A lot of that was forecast from vacancies from the year before.

MR. PORTER: I'm not sure that I'm following - $1.4 million versus $380,000. There was a difference in the numbers I quoted from $33.6 million to $35 million, the difference is $1.4 million, and it had to do with salaries and a question about bonuses. There were no changes there you said, no extra bonus money.

MR. MACDONELL: The only salary increases in 2010-11 were casual conversion costs at the NSAC and that was $700,000.

MR. PORTER: Just moving on then, 4-H, will they see the same level of funding in the coming year versus last year, do we know?

MR. MACDONELL: The same level with adjustments for collective agreement increases.

MR. PORTER: Do you know what that figure is right off? I don't have it written, I'm just kind of curious what it is. I know there are a couple of shows, as per normal, coming up that are usually significant throughout the year.

MR. MACDONELL: I'm on it. Roughly the same, it's up about $50,000.

MR. PORTER: Thank you. Under Legislation and Compliance Services, $664,000 was spent on licensing and investigations in 2009-10. Nothing is slated for this year and the question, of course, would be, why?

MR. MACDONELL: Fish inspectors went to the Department of Fisheries and Aquaculture from Agriculture.

MR. PORTER: So just staff moving is enough to create that bit of change.

MR. MACDONELL: Yes.

MR. PORTER: Nova Scotia Farm Loan Board has had their funding cut by $4.9 million this year. Can you tell me a bit about that and explain why that is? It's a fairly significant cut.

MR. MACDONELL: We wrote off $5 million in debt.

MR. PORTER: From where?

MR. MACDONELL: From the previous year and mostly in hog operations.

MR. PORTER: The Nova Scotia Agricultural College, operations also being trimmed there, my numbers say $377,000. Is that correct and why?

MR. MACDONELL: About $360,000, yes.

MR. PORTER: And why is that being cut?

MR. MACDONELL: That was their share of the overall 1 per cent cut in efficiencies. They had to find that.

MR. PORTER: They had to find that. Based on the current fiscal situation of the government or that was a direction they were given?

MR. MACDONELL: That's the direction all departments were given.

MR. PORTER: Cut where you can.

MR. MACDONELL: Yes. Expenditure management, find 1 per cent efficiencies.

MR. PORTER: So does the $360,000 your deputy might have quoted there a minute ago equate to that 1 per cent? Is that what the efficiency is?

MR. MACDONELL: It's a reduction estimate to estimate, not forecast estimate.

MR. PORTER: I should note that the academic program at the Nova Scotia Agricultural College has actually been given an additional $311,000. Can you explain how this funding will be used, Mr. Minister?

MR. MACDONELL: The government ordinarily does a tuition buy-down through the Department of Education to the universities, but because the college is part of government, we do that from us to them.

MR. PORTER: The department's Farm Investment Fund took a hit in Tuesday's budget as well, Mr. Minister, by how much and why?

[4:45 p.m.]

MR. MACDONELL: It took a $300,000 hit from us as our share of the 1 per cent. And there was $300,000 from the previous administration, so it took a hit of $600,000.

MR. PORTER: And that, again - what did you call it, expenditure management? Was that the same . . .

MR. MACDONELL: Our $300,000, I can't speak for the previous - $300,000.

MR. PORTER: Okay, thank you, I'll try to keep up here. Richard Melvin, president of the Nova Scotia Federation of Agriculture, said that the federation views the Farm Investment Fund as a necessary tool for the farm community to invest in good and necessary infrastructure. He said that when farmers are investing, it generates a sizeable increase to the tax base of Nova Scotia's economy, and the reduction by 20 per cent of available funding will be sure to have a detrimental effect on the province's economic stimulus. How do you respond to that, minister?

MR. MACDONELL: The things that Mr. Melvin mentioned will still be funded. In trying to determine what, out of that, we might not fund to the same degree as the past, it really came down to blueberry land, clearing for blueberry land. With the industry presently where it's at, we figured that would be a place that could have the most reduced impact, purely because, even in our conversations with the blueberry producers, they said we don't need more blueberries; we don't need more blueberry land. As much as we can target the impact of that, that was where we're hoping to do it.

MR. PORTER: Thank you, minister. It seems this budget is certainly more about cuts than it is anything else, unfortunately, not only in your department but in a variety of departments, obviously. With the farming industry struggling as it is, and has been for some time, with a plan for 10 years of implementing something new - and we hope will be sustainable and so on - it seems awfully hard for me to get my head around that we're cutting in an area that we need to be giving and investing more in. How are we going to survive this year, because they may not be around for the 10-year plan that you're hoping to put into place?

MR. MACDONELL: I have to say I don't agree. The cut by us to this was $300,000. The previous administration cut $300,000 - that was your administration.

MR. PORTER: Yes.

MR. MACDONELL: We booked for $2 million over three years for the beef industry. We have booked for - made an investment of $5 million for the innovation centre in Truro. We've already - it won't be until the next year - $1 million for the 10-year vision, to move that out. So as much as I think we can always be criticized for cutting, I have to tell you, if our debt continues to rise, we're all going to have to give up money out of our departments to service the debt. If we can bring that under control, we have more money for programs. So in trying to do this in a way that had the least impact, I think trying to target a sector of the industry right now that really we're thinking won't be looking to use money, like for clearing for blueberries, so we think that we can still service those sectors that we have traditionally serviced and have potential for growth.

There's no getting away from it, we were told to find 1 per cent, to try to rein in our debt, and reining in our debt is a - otherwise we won't be able to support the sector.

MR. PORTER: I guess, minister, just to clarify it, I wasn't trying to be critical at all, I guess I was kind of more curious as to how you plan to manage this whole process. We both know - everybody knows - that there needs to be an influx of funding and some ingenious things and some magic, as I spoke about earlier, that they put into this 10-year plan for agriculture to survive, because if we don't, then in 10 years we won't have to sit here and talk about it because it won't exist anyway.

What I was getting at more is we've just heard a budget, seen this budget that Mr. Steele put through, and for the next three or four years we're talking about deficit budgets. That means that you're going to be looking for cuts every year, somewhere. How are you going to manage this program, I guess is what I'm getting at, minister? I'm interested to know, it's got to be difficult. You're developing a plan; how are you going to implement it with no money?

When you talk to the folks in the federation, and I do, I meet with them, they're going - it will never be enough. I think there will probably never be enough money, at least not in the near future, but what's out there right now - and yes, they're anxiously waiting for the 10-year plan, but they're also waiting on other things and they're not happy with where the previous government put in, and probably governments before that, and certainly the current government, they're not happy either with the investments that are being made. How do you, as minister, foresee us moving forward, in a positive light, with no money?

MR. MACDONELL: Well, we've booked money for the strategy, if that's what you're referring to. That strategy is not an entity unto itself; in other words, there will still be the Farm Investment Fund and we still have the Farm Loan Board, so as much as we can, we intend - and we'll prioritize like any department would - we'll put our money in places that have the biggest return for the industry, generally, as much as that is possible.

A lot of what happens with the Department of Agriculture is an individual-by-individual thing, when individual producers come to us. It's not like the dairy farmers in Nova Scotia come and ask us collectively for a big pile of money to do something, individual dairy farmers come to us to take advantage of a program.

We don't have extra money, but we're certainly not in a case of no money. I spoke at the Rotary Club in Woodville last week, and someone there in the crowd - someone I didn't get a chance to talk to but at some point in time I'm going to - indicated to me that there's going to be 1,600 acres of carrots planted in the Valley this year. He went out of his way to say it's not all doom and gloom, this is a good-news story.

I didn't know there were going to be 1,600 acres of carrots planted in the Valley this summer. So there are a lot of good things happening by a lot of people who are not necessarily tied to the government and programs, or there are people doing an awful lot with a little bit from government programs, but we tend to hear, mostly, about those sectors that are in trouble. To some point, I think there's a possibility of doing something. If you were to say, what can you do for the blueberry industry? I'd say I don't think there's much you can do right now, that government can do. Do I think government can do something for the beef industry? I think we can do it, but I think it will take us two years, anyway.

It probably seems quite easy for me to talk but I've got to say, when the next election comes around - I'm hoping when our anniversary comes around for this year that some of the things around the strategy - investigation into the value chain and where we might be able to get more dollars for producers, investigation of a kill line, whether that's a practical thing to be doing or not - that at least I'll have some of those answers. That we can actually say this is a road we don't want to go down or we can go down, but to have something to offer those sectors that need help the most. Some of the other ones are just fine. As a matter of fact, I think they would appreciate it if we just stayed out of their way and let them do it. That doesn't mean we try not to ignore anybody and if they're coming to us for help we like to see if it's possible. For some of them, they just want to inform you of what they're doing, they're not asking for anything.

MR. PORTER: You're right, we have some very successful pieces within the industry that work well. The apple growers have done very well over the last number of years. Unfortunately . . .

MR. MACDONELL: And with the help of government, with the help of the previous government.

MR. PORTER: Absolutely, that's all good, and you're right, there a lot that don't need help and that's a very good thing. The mink industry is doing very well. We do struggle in some of those areas like the beef and there doesn't seem to be too much by way of resolution. What I'm getting at is if you were asked to skim that 1 per cent this year and you keep being asked to skim that 1 per cent - it doesn't sound like a lot of money. But it is when you're trying to put a little extra, a couple million bucks being invested into that beef as an example - and we'll get to that in a little more detail - that's still money that's out there that right now you may be in the coming years asked to trim. It may not be there and we have to make sure . . .

MR. MACDONELL: We won't be asked to trim that. We made a commitment to that, we budgeted for it, we have the money for it, that's not disappearing.

MR. PORTER: That's good to hear and that's what I'm getting at by way of a strategy. Obviously I will assume that the beef is within the strategy and the success of the industry in those parts that are struggling to be maintained over the years ahead. It's good to hear then that the money has been put forward or will be there, at least planned to be there for the time being, and not going to be skimmed. I think that is on the minds of the farmers when they see cuts being made to the industry. They look at the agricultural industry as a whole and they go, I wonder how much we're going to lose. It's not just about one piece or another.

Just on the beef, while I think about that, there was an investment that you made of $2 million. Do you have any idea how many farmers that the $2 million has assisted?

MR. MACDONELL: Yes, I do. The last document I saw, which is a few days now so it may have changed a bit, there were 133 people that applied to the program, 60-plus were approved or have gotten through the process to be approved. I'm not saying the other 70 didn't. There were five that weren't approved. Roughly $600,000 per year over three years to come up with the $2 million for the interest buy-down, so roughly a little over $300,000, I think, in that number was used up.

MR. PORTER: With the five that were disqualified, can you tell us why they would be disqualified?

MR. MACDONELL: I don't know that. I'm not sure how much I can tell you because they'd be kind of personal, but as much as I can try to find out for you . . .

MR. PORTER: Sorry, maybe I can ask the question a little differently. How do they qualify?

MR. MACDONELL: We weren't lending them the money so they had to go to another lending institution, make a business case with them. It was for operating and they had to be in the industry six months in order to apply and be a registered beef producer. I think they had to be up to date in their levy to the cattlemen.

[5:00 p.m.]

MR. PORTER: So up to date in their revenue, just to clarify that.

MR. MACDONELL: In their levy to the cattle producers, they had to be paid up.

MR. PORTER: If you're struggling financially, and you're applying for this potential funding that's out there, I would think that it would be kind of difficult to be financially - how could you be up to date?

MR. MACDONELL: Well, the levy wasn't particularly onerous.

MR. PORTER: I guess that's where I was going with it. What does that equate to?

MR. MACDONELL: Two bucks.

MR. PORTER: It's only a couple bucks, that I didn't know. I guess I wanted to clarify. Was that a substantial amount of money that could hold them back when we're trying to give them money? It was a bit of a Catch-22 there. There have only been five then that have been denied that you're aware of to date.

MR. MACDONELL: Yes, like I say, those numbers are a few days old.

MR. PORTER: Sure, I appreciate that. Minister, right off the top of your head, would you recall how many beef producers we have in the province?

MR. MACDONELL: I'll take a guess. I've seen the number vary a little bit, but my first thought says 800, but I'm not sure if I'm out by 200 - I'm thinking it's in the 1,000-producer range but (Interruption) Oh, 1,200.

MR. PORTER: So about one-fifth then have applied for - maybe a little less than one-fifth - have applied for some assistance and about 50 per cent of them have been granted assistance. That's just very quick math so don't quote on the numbers. But of that 1,200, any idea how many of these folks would be struggling?

MR. MACDONELL: I can't answer that. Of the ones that we have at the Farm Loan Board, we have six or eight in arrears, but I can't say there are 1,200 at the Farm Loan Board and we have six or eight in arrears. I don't have the number of how many are at the Farm Loan Board because some of them would have borrowed from other lending institutions so we wouldn't know. We're thinking there are about 50 that are of a substantial size, 100 head or bigger, out of the 1,200.

MR. PORTER: That's what I was going to get to next, so you've answered that. I want to talk a little bit about buying local and within the strategy, is local mentioned? Have you got a definition of local? Because local right now is 24 hours, I think, being able to get here, which pretty much takes in a really big area. You can come from anywhere around the world in most of that time frame. I'm wondering if you can speak to what you see local as being. I've heard from a number of folks in the agricultural industry on what local means to them and the changes, or potential changes, that they're hoping for could be very helpful to them by way of their sales, of course, at farm markets and local chains and things like that, purchasing.

MR. MACDONELL: My executive director for policy is sitting beside me, Diane Kenny, so she'll quite quickly correct me. I'm thinking we didn't put a definition of local in the strategy, and actually, you may be surprised to find, unless this has changed - because I thought the same thing that you just said that it was anything you could get within 24 hours and that's not true. There is no definition. Actually, when I contacted the federal government to find out if they had a definition, they said, whatever you can get in your local area, so they use local in their definition of local. Certainly for us, when we talk Select Nova Scotia and Buy Local, it's Nova Scotian: Nova Scotia producers, Nova Scotia product. If you were in Amherst, I would think you might buy from New Brunswick or somebody from New Brunswick might buy from Amherst.

When you get to those borders it would be the same thing to make the assumption of somebody in Hants East might go to Hants West to buy something and vice versa. I would think that in your general area, if you're at that Nova Scotia-New Brunswick border, the people there because they live there, their association is with the neighbouring jurisdiction. Even though they know they cross the border into New Brunswick, but their pattern of, I'll go over to Fred's to do something is kind of the way they think. It would be different for me in Enfield to think about going to New Brunswick to buy cucumbers, maybe.

I think for our investment in programs around trying to get more dollars in the hands of farmers, for us it is definitely Nova Scotia is where we want to spend most of our money and put most of our attention. We don't want to be seen as raising barriers for our neighbours in significant ways and have them raise barriers for our own producers.

I mentioned with the member for Kings West around there is some interest by local producers about Eat Atlantic because they produce for a broader market, they're not just tied to Nova Scotia and they produce a volume. Look, if we were going to consume all of the blueberries produced in Nova Scotia, we'd all have to ramp up consumption considerably. These people who farm blueberries, they're in international markets and they produce a volume accordingly. The idea for them to think about selling locally is just a non-starter, they have to think on a much bigger scale.

There are lots of producers in the province who have the potential to fill some local market and a bigger local market that we don't come near. The beef industry would be an obvious one.

MR. PORTER: Just on that, Mr. Minister, I guess the export piece of that is that's a great thing. Apples, again, the same way, we export all over the place and that's all good. You're growing that much, you have a market, you are moving it and lots of those local apples are in our local stores. Even where I come from in Windsor, the Sobeys and the Superstores are carrying Mason's apples - they may be in a different bag, but they're carrying them. Without a definition of local it leaves the door wide open for stores like the chains to omit supporting the local farming industry.

They could walk right away from Nova Scotia, as an example - now, Mason's got a great deal going there, there's no question and that's wonderful, but if we're going to see more because that's where the opportunities are to market beef, whatever. I know you said the market is not there for beef, if we had a market for it they would grow it. We could grow it, I don't know what the volume is, but we're bringing it in by the truckload and we're buying it. I know that we would buy local if it were available to us, but one, it's not marked; and two, without the definition, how are we supposed to get some commitment? I'm not talking about a dictatorship, don't get me wrong. Within the chains, I think it's fair for them to be able to buy and get good prices and things like that. Although I don't feel at times we as consumers are being passed on the good prices based on what they're paying for it.

How are we supposed to support our local farm organization? If you talk to the farmers, they talk about buying local and supporting local. How are we supposed to support them if we're not opening doors for them? I think that definition is important to that.

MR. MACDONELL: The reason I know there's not a definition is because I tried to find one. The reason I tried to find one was because I thought I could write legislation to force processors and retailers to buy local.

After nine months of working on that, I met with the people at Intergovernmental Affairs. They said, why didn't you call us first because we wrote part of the interprovincial trade agreement. They said in Chapter 9there's a limiting clause that says you can't interfere with the flow of agricultural goods. I said thank you very much, I could have used that nine months ago, so I couldn't write legislation that forced buying local.

The other way to do this, and the member is right, I mean if you think about how we're going to spend taxpayers' money and try to promote local but yet there's nothing to stop that particular processor from getting apples or potatoes or something from some other jurisdiction, you have to be careful what you wish for because if you try to stop them from doing that, then they'll say we don't want Nova Scotia blueberries, which we know we have to export. A major component of that is to educate the public so that they walk into the stores and say, I want this. When the store managers hear that enough, they'll start looking for that local product.

Now the one thing you can't guarantee, I've always said look, if the stores are full of local product and farmers were broke, I don't see that as any advantage either. They have to be paid a reasonable price for what they produce. So as much as this is a slippery slope, to try to balance all of that, we think that the Select Nova Scotia program is working. As much as I can try to take credit for it, when we were in Opposition, pounded on the PC Government to do it, they did it. I have to give them credit for what they did because actually it's working. That was one of the big lessons I learned as minister, that this campaign has legs. People are interested in it and retailers are interested in it.

The Nova Scotia consumer is now a wiser consumer and they are interested in what the impacts are of their purchases, not only for their families but for the economy generally and for farmers. They are driving an agenda, so I see our role as to keep fanning that flame so that we can invest strategically, by offering programs and communication and advertising, as much as possible, that make people think about buying local at various times of the year. That was the reason for the IncrEDIBLE February and the IncrEDIBLE Picnic. Whatever other initiatives we can do - the local farm markets and try offering our assistance to them.

The bottom line in all of this has got to be that producers have to get a price they need for their cost of production. That's a far more difficult element of this, in order to secure but having a demand gives you a lot more leverage on your price.

MADAM CHAIRMAN: The honourable member for Hants West, I'll just inform you that there are five minutes left in your allotted time.

MR. PORTER: Thank you, Madam Chairman. Just a couple of things on that. You talked about forcing the chains, I agree with you, you can't force them. We wouldn't be able to turn it over for a number of years, the amount of a product that we would need anyway. Again, I'll go back to the price we're paying at the stores for fruit and veggies and meats. There's no bargain there. In my opinion, we should probably be investing it in our local farmers and buying that versus giving it to others.

Not to take anything away from them, I still think that they're going to be able to - no, they will need to be able to purchase beef from Alberta, they'll still need it. But if there was an incentive there for local farms in Nova Scotia to grow as much beef over a period of time as stores could handle - now, that would take a number of years to reach the limits that they could handle.

We see it now in smaller ways. Oulton's, for example, moves a variety of different meats and has for years, quite successfully. Their prices are generally better than some of the chains and they've had a clientele for years.

[5:15 p.m.]

I don't know, again, forcing it is not the issue but walking away from what local means - and I appreciate what you've been told by others and that you can't do this and can't do that. Can't is a word I don't like very much, it is having the will to do it and I appreciate, as well, it's a dicey thing to get into. I'm not talking about forcing people away and saying oh, well, we're not going to buy your blueberries. We want them to be able to export, just like we always do, but I think there's probably room to not only continue to export but to buy from local producers.

I appreciate that you need a price, I'm not sure, but can you speak more clearly on that? Has no price ever been given to you from the farmers who say, look, we'll supply it for this amount, or are they that much over the top from what we're buying it for now that we couldn't afford it?

MR. MACDONELL: That's a really complicated question but it's a really good question. I think what I'd like the member to think about, certainly in terms of beef, and I don't know if I can speak to - I probably could use pork as the same example, yes, I know I can. Look, the retail value in the display case doesn't have to be higher for a producer to get enough. You probably would remember as well as I that in May 2003 - May 24^th, I think, but I might be wrong - when BSE struck, the price in the store has never changed in all that time but the price to the farmer sure did.

I know I can't say on a finished carcass what producers would need. Actually, that's one of the things we asked the cattle producers, do you have a cost of production formula that would indicate if we were to establish a kill line, what kind of price would you need for AAA or whatever? We've never been able to get that. I think they're working on it, so if they get that completed we'd be glad to see it.

I know one gentleman told me that if he got $1.30 for finished cattle, he could make money. I don't know if everybody would say the same thing. If the cattle producers are able to come up what they would deem to be a cost of production formula for a finished animal going through a slaughterhouse, then that would be something we could use as kind of a basis for price structure.

We're assuming that if the guys who are finishing cattle could make money, that they would pass those dollars on to the cow/calf guys, so the money would move through the system. Presently good-quality, finished cattle are not getting the price they need.

Don't assume that the cattle we raise are not getting used, are not in the marketplace; they are, they're in the restaurants. Very little of it, I would say, is in the stores but the provincially-inspected plants in particular, because they probably do a variety of small places that smoke meat and do donair meat. Even a lot of animals that wind up being killed at the P.E.I. plant, they come back and they're used in Nova Scotia facilities in some way or another. There are live cattle leaving, they're going to hubs or wherever in Ontario, and some of that is said to come back in our retail stores, but the producer here didn't get any more for it. Probably got paid the cost of the freight for getting it there because he took a lower price. So our cattle are quite often used in Nova Scotia stores, restaurants, whatever, but probably not in the big retail stores much.

MR. CHAIRMAN: Order, please. The time has expired for the Progressive Conservative caucus.

The honourable member for Kings West.

MR. LEO GLAVINE: Thank you very much, Mr. Chairman. I wanted to start off, perhaps, in a few of the troubling areas of agriculture. As the minister is well acquainted with the average age now of farmers in Nova Scotia - I believe it's somewhere around 54 years of age, it's a much older demographic. Over each of the last 40 years, Statistics Canada is showing that the number of census farms is going down.

The big challenge will be farm succession, in fact, new entrants into agriculture, creating opportunities for young farmers. I'm wondering, is the minister including this piece in a 10-year farm strategy, in a 10-year framework? We must put our eye on the future here.

As I've gone around some of the farms in my riding, it's probably one of the most discouraging aspects that I hear voiced. Coming out of 25 years in the same school at West Kings, and having been involved with the education of farmers' children and now seeing what some of them are doing with their future, some of them have a tremendous love for the land and want to continue in their parents' footsteps. But I'm actually hearing it voiced now, do not take up farming. Move off the farm. We know that's a reality because all we have to do is look at the statistics. When the census is done in 2011, well, you can be sure the number of census farms will be down.

I have even seen, in Kings County, some young farmers in their 30s and 40s move to Alberta to farm. I'm finding it, Mr. Minister - and I know you can appreciate it, you are around the province and we're hearing different sentiments around this. Again, if they could make a good living from the farm, we know they would definitely be there.

When we take a look at farm debt of farmers in Nova Scotia, it is a very discouraging piece. That is why putting profitability out in front is so significant, so important and how we get there, and how we choose the kind of sector that can make us profitable while holding on to some of the tradition of the industry, one, I know, my colleague here from the Progressive Conservatives and I have alluded to earlier on, that's again on very shaky ground, the beef industry.

I'm more concerned with the industry overall, that we know inside the industry there are also positives, there's no question, in seeing some of the new sectors that are gaining some momentum. But overall, there is a little bit of a defeatist, negative attitude about the future and not the same encouragement of children to pick up life on the tractor, life on the soil, because of its uncertainties.

I know that several of the New England States - and I've taken a look at two: Massachusetts and New Jersey - have farm viability programs for young farmers where they connect the farmer to extension, to assist with marketing, and to the direct helps that they need because the hurdles are great out there. There are a lot of hurdles out there and I'm wondering, Mr. Minister, inside the strategy that will come forward, will there be a solid plank that can say . . .

The other thing which I haven't talked about yet - and perhaps the minister has read a document out of Laval University where they took a look at investment in agriculture and the jobs produced, and Quebec is a great example. There is a document that beef farmers sent along to me just recently, and the study is very profound, because the number of jobs created by the same amount of investment in agriculture compared to industry, compared to a whole range of sectors that they looked at, it had the best return of actual jobs created. I think we have to look at some of those things.

I'm really concerned about getting young, bright entrants, those who go off to the Agriculture College, because you can no longer finish Grades 10, 11 and 12 and expect to farm. We know there's a place for those who have challenges with their education, but the majority of farmers who are out there now, just to survive, they've had to be bright; they've had to be educated; they've had to be innovative; they've had to keep up. But what of the future with our young farmers? I'd like a comment, minister.

MR. MACDONELL: That's a good question. I want to refer the member back to my speech when we started here today about Think Farm, the process we have within the department. We're trying to direct people who are interested in farming, for credit opportunities, farm business development, innovation support, educational resources. Along with all of that, the experience part is a necessary component, but access to capital - I think we're going to have to take a look at the interest forgiveness part of what we now offer in the range of $20,000, I think, for a young farmer.

I worked on a dairy farm for a year, some time ago, but the farmer I worked for was a Dutch immigrant. He worked in the coal mines in Pictou County and saved enough money to buy a farm in Milford. He said that when you like the farm, you didn't like the price and if you like the price, you didn't like the farm. But he said there was absolutely no way for a young person to work today - the human life span wasn't long enough for you to work and save enough money to buy a farm. I remember while I was there, he bought a forage wagon, and I think he paid $19,000 for it - he said he paid more for that wagon than he did for the farm.

The issue around access to capital, number one, is one that we're going to have to address. I mean, it's obvious that the person would have to produce a business plan that you'd feel like lending them money, so I think it would be worth our while to make those terms as reasonable as possible.

I met with the young farmers organization here. I'm telling you, they are one energetic, dynamic group of people, and bright, and some of them are farming, some of them are on their own with their own operations. They are singing a really positive tune about the industry and what they would like to do in the industry. Some of them are going down similar roads, maybe not exactly the same as their parents, but have gained enough expertise and experience working on their parents' farms to be interested.

I've got to say, the things that we have going for us in this province as far as young farmers, to help young farmers, is the Nova Scotia Agricultural College, that's item number one. We have a fairly diversified agriculture, by some of the best-educated farmers in the country, and that's because of the Nova Scotia Agricultural College. I have to also say that diversification in farm operations is important for this province. I don't think putting all our eggs in one basket, or for any particular farm - so as much as we can encourage that, I think, we're not going to twist people's arms and say no, we want you to do this, this and this.

[5:30 p.m.]

Last Fall I got a call from a young gentleman in Ontario wanting to buy a Suffolk ram from me, so I started to quiz him on what he was doing. Anyway, he had an organic sheep flock. He had an organic milling operation where they milled grain - actually, I might have the name wrong, but I think the grain was semple, but I was unfamiliar with it - into a flour that they used to make crackers and whatever. He took the sweepings and the poorer quality grains and fed them to an organic hog herd that he had. He said hogs were one of the biggest money-makers on his farm. He had an organic milk herd which was dual-purpose shorthorns and he was using the calves for beef. He had as many chickens and turkeys as you could have without a quota for eggs and meat. I said, did you grow up on a farm, and he said no. He was 30 years old, had been doing this for 10 years, and he never grew up on a farm. That was the most intriguing part to me because we have very few people who were not raised on a farm who become farmers, although I do know of at least one other one.

I'm not sure that's the exact model that we want to necessarily pursue, but it was an indication of someone who saw opportunity and was able to get the funding to get him there. I think he had worked previously with Organic Meadow, which sells organic milk here in the province, so that was where he had gotten some of his background. It indicated to me you could have fairly diversified operations that were not tied to supply management that would offer some opportunity for young people.

As much as I don't think we'd want to be telling people what to do, I think there are those things that we can do when people come to us with a good idea, that we have some flexibility and programs in place that would help them down the road. I think for us, number one, if they have a good business plan probably the dollars are not the biggest obstacle. I think we would be concerned if we were going to use taxpayers' money to be helpful, that there's some level of expertise they would have, and that's our job in terms of the extension part.

Hopefully part of our 10-year strategy would be to identify the extension component that we've lost a bit in the department that we can replace that. It may take some time, but certainly to put those key components in place that would help young people and others maximize the programs and expertise that's around to avoid hurdles, rather than get around them.

MR. GLAVINE: Thank you, through that response being committed to young farmers and to the future of those who will produce our food in a commercial way. I think we're going to see some, what I call re-ruralization, as the price of food goes up and we'll see perhaps more small-scale ventures. I think even for those people, if we can have a good extension, a good education, a good information program available, because I still hear so strongly the merit of a good field worker, a good extension worker who literally makes his client almost like it's his farm - I want you to be successful and here's some good information.

I'm just wondering - I know the previous government had made a commitment to put a number of extension workers in place - where are those positions currently, and is your government going to continue that practice?

MR. MACDONELL: Actually, I think they are all in place and I think we're moving to those Agricultural Resource Coordinators - ARCs is actually what we call them - to have those strategically placed in five locations around the province, and in clusters, so that we don't really have one person alone necessarily representing an area. Anyway, I'll try to see if I can get some feedback on whether my thought on that is correct. (Interruption) Yes.

MR. GLAVINE: In terms of extension, we all know that research stations, in particular the Annapolis Valley, Kentville Research Station has always played a pretty prominent role and there is also, of course, a federal station there, as we know. There has been some talk about a review of the role of federal research stations, and I'm wondering if the minister at this stage has been briefed on any potential changes or where the current review may be in terms of looking at the future and the future role of the agricultural research stations.

MR. MACDONELL: Yes, I've got to say I worry. I see real value in the Kentville Research Station, and actually in the Nappan Research Station there, so because we don't have jurisdiction it concerns us. The deputy for the department had met with the federal deputy last week, and actually had a discussion around the Kentville Research Station and what the possible hirings might be, should be, or could be in that facility. I'm thinking for us, as far as advancing agriculture research in the province (Interruption) I don't have an answer, but at least we were able to engage them and have a conversation around it.

MR. GLAVINE: I see linkages with all those areas, the field workers, the research station, support for all farmers, but especially new entrants into farming, so they are connected pieces for sure.

One of the areas that may not be so much directly your area but could be very much more rural economic development, although we know the obvious tie-in because I've seen the number of acres, especially of peas, beans and so forth that were lost when Avon Foods closed. We know the manufacturing sector of the agricultural business in the Annapolis Valley has taken an enormous hit, whether it's the chicken, whether it's Avon Foods, Eastern Protein, Canard poultry, and now the kill floor at Larsen's. I'm wondering, are Agriculture and Economic Development exploring the possibilities of a frozen-food line of agriculture product, especially in relation to our market garden crops?

We have some farms that are doing extremely well, they've integrated farm labour from offshore and their farms have a real high level of productivity with first-class product that's going into Sobeys and Superstore. What about the connection to what I think has the possibilities of expanding agriculture in the province, and that is looking at what is - now we're no longer looking at the canning industry and in some ways we saw those jobs as an inevitability because we've changed over to the frozen product. I'm wondering, is there any exploration going on there between Agriculture and Rural Economic Development?

MR. MACDONELL: I'm going to say no. I guess one of the conundrums I find myself in, or find the department in, is around, when does it stop being a farm? Our mandate really with the Farm Loan Board toward agriculture is on farming operations. As much as we try to encourage value adding, there comes a line that we think we shouldn't cross, only because it opens up such a grey area for us - about, well, you did it for him, why don't you do it for me? - that we think probably the Department of Economic and Rural Development should take the lead.

When you mentioned Eastern Protein, that's kind of the Department of Economic and Rural Development's realm. We would be willing to help the farmer himself if there was an issue around - couldn't move chicken or can't move turkey and how that affects their farming operation for awhile as far as cash flow. If they have loans with us we can work with them and we like to think the Farm Loan Board is a fairly compassionate lender.

Now to get back to the other premise where you were going around any discussion about frozen food. I think that we generally don't - although maybe the deputy will say, no, I talk to the deputy at the Department of Economic and Rural Development all the time about this. But what we generally would do is if somebody comes to us and they want to do something in terms of that line, then we really would be interested - probably if they came to me I'd say, no, you probably should go to the Department of Economic and Rural Development and have them peruse a business plan and whatever.

I don't know if the member for Kings West was here when I made this comment earlier about speaking to the Rotary Club in Woodville. A gentleman there told me - actually just kind of told the crowd - that there will be 1,600 acres of carrots grown in the Valley this summer. I've got to say I never realized that and it was one of those good-news stories that I probably have a lot of, that I don't always hear about and I never even got to quiz him about who was going to process them. So when you talk about Avon Foods, the first thing that I thought about was there was 3,000 acres of product that they stopped growing because of the shutdown of that plant.

I think, whether it's freezing or whatever anybody can do around value added, we're interested. I have those conversations with the minister about investing in rural Nova Scotia and in the agricultural manufacturing side, but not necessarily about any particular one as far as encouraging freezing. If they think they can do something, I'm not sure if I care what, but if they can make money and create jobs we'd be interested.

MR. GLAVINE: I was wondering - as kind of an extension of what you've been talking about here - as you know, a significant percentage now of our chicken is no longer processed in the province, they moved to Nadeau in New Brunswick. I'm wondering if there are any developments there that could get them back into Nova Scotia. Is there any pressure from CFIA, for one thing, about the distance that these birds have to travel and the possibilities of creating at least a kill and chill plant for all of our chicken in Nova Scotia, which in my view has greater security for the chicken industry? When we look at some of the players there, they're big players and we know that they could easily raise chickens elsewhere so it has that circle back to the farmer here on this issue.

I'm just wondering, are these exploratory areas that we need to make sure that we can keep a strong and viable poultry industry? I know, minister, you attended their AGM and the growing part is very strong but if all production were to leave the province, it becomes a huge concern.

[5:45 p.m.]

MR. MACDONELL: Yes, that's an understatement. I have to say we worry a lot about the birds being taken out of the province and being processed out of the province. I guess our fear would be that producers and the company interested in building - there's talk of building a plant here - that maybe that won't happen.

We kind of had over time fairly open dialogues and the last conversation we had led us to believe that this had a very good possibility of happening. I think maybe a proposal now has gone out to the producers to get their buy-in, if they're onside or not. We haven't heard what the response has been so we're concerned. We certainly were hoping that because Maple Leaf at Canard was killing about 50 per cent of the birds and ACA was killing about 50 per cent of the birds, that now we might have the possibility of having basically 95-plus per cent of the birds in one plant and a much more viable scenario.

We haven't gotten the final analysis of where the producers are in this regard but you're absolutely right, our worry would be if the birds continued to be moved out of the province that eventually the quota will follow them and that would be disastrous. I think there's around 80 producers in the province. That probably meant that at ACA, Eastern Protein, 600 or 700 jobs. So if you look at the processing side compared to the farming side, we want the processing jobs. We don't know where they are with that but we're, I guess, cautiously optimistic that they would see hauling the birds as disadvantageous, additional costs, concerns around the condition of the birds.

The issue around CFIA, we've really had no indication, I think, directly with them. Actually we were told by another body that in other provinces - Alberta - that this distance is not significant compared to how far birds are hauled in other jurisdictions, which kind of surprised us. I think if they were to be hauled much further, into Quebec or something, I would think CFIA would have some issues with that.

Anyway, presently our hope is that there will be a facility in Nova Scotia that will process Nova Scotia birds and make those available to Nova Scotia customers.

MR. GLAVINE: Thank you. Just a bit of a different direction, not a lot of time left today. As you know, there's a provincial wetland policy and there have been some tensions there between the agricultural community and what the regulations and enforcement requirements are that the Department of Environment has as it impacts on drainage of fields.

Something that was very traditional on the Valley floor was, of course, to be able to use all your farmland, especially for pasture, and it was contingent upon the installation of drainage. Now some of those areas are being seen as wetlands and, therefore, not given permission to do drainage projects. I'm wondering if some of that has been resolved.

I recently met with a group in the Valley, very prominent farmers like Kees Langelaan, a Dutch farmer - he has two or three sons, a big dairy operation - and he was expressing the kind of concern concern that any additional farmland, as he ups his quota, he may have some difficulties with the adjoining lands because some of it would need to be drained. There seemed to be a few cases, classic kinds of cases, that could, in fact, impede him from doing a drainage project. I'm just wondering, has some of that been kind of resolved or are we going to have to live with newer, tougher regulations?

MR. MACDONELL: I think we're going to have to live with probably newer, tougher regulations. There has been a working group from the Federation of Agriculture that has been working with the Department of Environment. My last discussions with them indicated that they thought they had found that middle ground, that they would not add to the inventory. The present inventory on agricultural land is what the Department of Environment would go with, they weren't going to add to that.

I think the perception was that probably 1 per cent of agricultural land would fall into that wetland category. There was also, I think, the direction from Environment that they would not allow you - if you had land that had been previously drained and farmed and those drainage ditches were not maintained and it was tending to revert back to traditional natural wetland, it seemed that the Department of Environment was going to say that's gone, you can't use that again, but I think they've moved away from that. I think that you can rehabilitate that and use it.

My impressions of my discussions with those people working in this working group from the federation is that they were quite pleased with where they thought the Department of Environment was going on the farmland issue, so to this point I really haven't heard any kind of negative reaction that they weren't comfortable. It seems to me they were fairly comfortable with what ground they had gained, literally. So I think that is in an okay place but I haven't had any discussion for some time. My last discussion was that they were feeling much better than initially, when they first became aware of the policy.

MR. GLAVINE: Yes, it was in the Fall when I had this meeting. Of course now that Spring, early summer is here, then some of these projects will be again starting up, so hopefully they can be resolved and farmers not negatively impacted. They obviously have enough challenges without having to buy more land if they can't use some of the traditional wetlands and drainage, so that may be resolved.

There would be an application process that, in fact, would bring a farmer in contact with the environment. In other words, there has to be a plan drawn up for drainage. Is that how that process will work?

MR. MACDONELL: I can't explain that, actually, I don't think I even know that. If you were to drain a wetland that had not been farmed, that would be a permit process and I would think you would be in a significant uphill battle. What we're referring to is land that has been farmed, and I don't think you have to go see anybody about that, but I don't know that for sure. If it is not identified in the inventory as wetland, I think you're good to go.

MR. GLAVINE: I may have missed a different area, Mr. Minister, in your opening remarks you did have a pretty lengthy document there today. Staff had you well prepared, better than in the Fall, I must say. Anyway, what about the legislation around the mink industry? Is that coming in this session? Is that ready to go? I know you talk very strongly and positively about the mink industry, but as you know, some nerves were touched last year and environmental concerns brought forward. Again, having been at the AGM of the mink farmers and realizing the value of this sector and also the sector wanting to be proactive and do things in the right way - and I've had a chance to look at draft legislation - I'm wondering, is this coming forward this session?

MR. MACDONELL: Yes, it's our intention to bring this forward in this session. Actually, I haven't asked recently for an update, but since last summer our target was to have legislation ready for this Spring session, so that's still what we're planning.

MR. GLAVINE: Is there a considerable challenge to the industry in terms of the current patterns of farms that perhaps do need to change as we go forward? Is concentration, in fact, potentially an adverse, negative impact for them?

MR. MACDONELL: I think that it has the potential. Obviously, the more operations on a particular size piece of property the more chance for problems - all the more reason, I think, for the industry to do what it has done. I mean, they were very co-operative and interested in legislation, environmental farm plans. I think it's a matter of knowing that you have to have regulation for how water is handled, manure is handled, so that we reduce that environmental footprint and don't bother your neighbours.

Yes, I think that probably the greater number of operations in an area, the more they could take on a larger area, probably the less conflict, but you do what you do with what you have. That's the reason we're looking at writing legislation that improves their situation and improves the situation for the communities that are concerned about particular environmental issues.

MR. CHAIRMAN: Order, please. The time allotted for questions today has ended. We'll continue tomorrow morning with the estimates of the Department of Agriculture. Thank you and enjoy your evening.

We are adjourned.

[The committee adjourned at 5:59 p.m.]