HALIFAX, FRIDAY, APRIL 9, 2010

SUBCOMMITTEE OF THE WHOLE HOUSE ON SUPPLY

9:30 A.M.

CHAIRMAN

Mr. David Wilson (Sackville-Cobequid)

MR. CHAIRMAN: Order, please. We're going to continue on today with questioning the Minister of Agriculture on Resolution E1. We will continue with the Liberal caucus and you have 22 minutes remaining.

The honourable member for Kings West.

MR. LEO GLAVINE: Mr. Chairman, I am pleased to continue this morning with questions on the Agriculture estimates. One of the areas I know I had presented a question or two to the minister in the Fall, was around the IncrEDIBLE Picnic, which I think is another leg in the stool of promoting Buy Local and we all know that weather, et cetera, didn't go so well, caused it to get off the rails a little bit last year. I'm just wondering when you made reference to it in your opening, about some contingency plans, are you changing the date dramatically, looking at other venues, I'm wondering if you could just elaborate a little bit on that this morning?

I think it's a great way of introducing people to farmers, to their products, and getting people enthused in a little bit of a community celebration of what we can do around locally-produced and grown food. I want to see it be successful, and I just like to see where the minister is going on this IncrEDIBLE Picnic?

HON. JOHN MACDONELL: Yes, there is a bit of a difficulty, I guess, and considering that the last four summers have been kind of wet summers, it is a bit of Russian roulette trying to ensure that when you pick a date two or three months ahead that you're going to have good weather. I indicated yesterday that we tried to promote Select Nova Scotia in the off season, in February we had the Incredible Breakfast.

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For summer we are really keen to do the IncrEDIBLE Picnic, but we're exploring instead of doing a one-day thing, maybe we should do more than one over the summer and maybe we should consider some venues that are indoors as well as outdoors. We still run a risk on the outdoor events, but anyway, I think we're going to try to maximize what we can do to promote over a longer period and not necessarily put all our eggs in one basket.

That's still very much in the initial stages and where that will land, I'm not sure, but I think it's worth it for us to be exploring, to try to mitigate against the downside that we had to experience last year by picking a date and getting rained out, and then picking a rain date and getting rained out. I guess maybe we'll pick a sun date and see if we can get sunned out. We think there's great value in promoting the picnics, promoting local and we would certainly like Nova Scotians - we want to emphasize the picnic part, but we should prepare that we won't always be able to pick the day we want.

MR. GLAVINE: Just to follow up a little further, we know that it has had good success and it certainly enlightened people, even to crops that we grow in Nova Scotia, which they never dreamed were possible here, so it has been a wonderful education. I think it has helped to move the Buy Local movement forward. What about in terms of attracting other farmers, whether they be small scale or our larger market gardeners, are there efforts in conjunction with the IncrEDIBLE Picnic to do that as well?

MR. MACDONELL: Actually it's something we kind of toy with a lot. What we did, when we did the Incredible February stuff, we started that February 1^st, I think, at the Dartmouth Ferry Terminal. We had probably some of the biggest apple producers in the Valley there - I think we had three varieties of apples - handing out to people as they made their way to the ferry terminal.

To try to incorporate some of those larger operations and the bigger names in any particular sector of the industry is something that we would like to try to do as much as possible. Probably the thing that made it easier to get them in February, was because they were more easily available, they're quite busy in the summertime, but anyway, yes, that's something we would still try to consider. If they can find the time to be available we'd be really glad to have them participate.

MR. GLAVINE: I just want to move to another area that came in a bit under the issue around labelling yesterday, also a reference that we talked about, the Maritime beef plant and that is Atlantic co-operation. We know agriculture is small in the Atlantic Provinces compared to central and western Canada. I'm just wondering, in your short term in office, Mr. Minister, what initiatives, what discussions have you had with the other provinces? In terms of making a larger noise with the federal government where we can co-operate around marketing, labelling and perhaps regulations and that whole area? I'm just wondering if you could make some comments in that regard?

MR. MACDONELL: I haven't had a lot of discussion federally or with my provincial counterparts on that issue. When I think about my first federal-provincial-territorial meeting in Niagara-on-the-Lake last July, the agenda was fairly overwhelmed with business risk management programs, which traditionally don't seem to work for us in Nova Scotia. One of the points I wanted to raise with the federal minister, which I got to raise, was to ensure their support for supply management. That was a bit of an issue because there were some discussions then around the agreement on internal trade.

I've had one Atlantic Ministers meeting in Moncton. The Minister for New Brunswick, if you can believe, was sick at the time and he couldn't come, although his staff were there and the minister for Newfoundland and Labrador couldn't attend. It was Minister Webster and I, the minister for P.E.I.

It is my understanding that there is an MOU signed, at least in the Maritime Provinces, I'm not sure if it includes Newfoundland and Labrador. (Interruption) It does include Newfoundland and Labrador. It is an MOU signed basically around co-operation between the provinces, but also I think to have an open communication. If we were thinking of bringing in a program that we might have some discussion with the other jurisdictions around if they would be interested, what the impacts might be on them if we did this. Or, if they were to bring in a program they might ask us what the possible impacts might be.

Minister Webster and I had some discussion around this and he indicated that look, as much as we can try to co-operate and don't really want to be doing things that are disadvantageous to our neighbour, we still live in our own jurisdictions and we are responsible to our own constituents, our own taxpayers, so there will be those occasions when you may have to go off in a direction that you feel you necessarily have to go for your industry. He said, in those cases, we might only say, wish you luck.

Then as far as the labelling part, which I think was the initial part of your question, I think, unless the federal government does a national traceability type of thing, I don't think you'll find individual jurisdictions eager to go on that bandwagon and impose additional costs to your producers that those in another jurisdiction aren't going to have. Even the case of labelling costs - let's say to label in our federal plant, say the one at Tony's Meats or Larsen's, which doesn't slaughter anymore but still does processing - when you consider the cost of the machinery, or the investment in infrastructure, capital investment to allow you to do that, in our local plant we send through 10,000 items that are labelled. In a plant in Ontario, which spends the exact same money for the same mechanism for the labelling, they run through 100,000 items through the same machinery, so actually we have ten times the cost per item.

Those are some of the discussions that we have with the federal government. If you're going to impose things, you have to consider that on the volume basis we may have to pay more per item, and we'd like some consideration of that in terms of funding or offsets or some way that you can help our industry, because it's a smaller industry.

When we talked about Select Atlantic and that kind of labelling, yesterday, it's not our intent to impose it. It's our intent to be helpful for those entrepreneurs who wish to go down that road. You also have to consider for them, as much as we question and raise issues with the retailers around things that would help us decide, or design policy to try to get beef into local retail stores, what that should look like and if the province has a role in a program that would help us get there. To a point, it will have to be a processor that actually does that final negotiation with the retailer. They have to be able to supply what the retailer wants, at a reasonable price, a quality that they want and a consistency that they want.

As much as the province can help with programs that help the farmer and the processor get there, there's only so far we can go, the rest of it actually becomes private sector and they have to make their own arrangements. In some cases, that private sector retailer may not be interested in that branding, they might have their own.

[9:45 a.m.]

I know I'm making this a very long answer, but as far as conversations with the other jurisdictions, I haven't had them on the labelling, I haven't had that conversation with them, only because I wasn't sure that was necessarily our role to do that. I felt that it probably should come from the industry side and they could do those negotiations with their providers. That doesn't mean that we couldn't have a program that might be helpful, and I think Select Nova Scotia or Select Atlantic is helpful that way. It's one that I think should be driven from the other direction rather than from the government direction, and especially in a sense of - I think it would be fairly difficult for all three governments to do that.

I know one of the retailers indicated to me that the marketing Atlantic, they never saw it as a big advantage for them. Anyway, if that answers your question at all.

MR. GLAVINE: That helps in terms of meeting and dealing with the other provinces toward co-operation. I didn't need as long an explanation on labelling because we had most of that yesterday.

I was getting at the whole business of the Atlantic Provinces co-operating and working for some of the same goals in agriculture because we know that some of the programs designed both on the investment side and also those on the support side - when the industries do have down times and cyclical problems and so on - don't always respond very well to our Atlantic and Maritime circumstances. We all know that size of farm, size of the markets, all of these kinds of areas - I'm just wondering, in your first year, what you're hearing about AgriInvest and AgriStability as far as perhaps being a little more responsive than some of the old NISA programs and those that were traditionally part of the federal programs.

MR. MACDONELL: I might get Mr. Myers, to my left, to brief me on the AgriInvest. It's not coming to me quickly as to the difference in that program. The AgriStability one, my impressions are that it's no more user-friendly than CASE. I haven't encountered anyone who sees it as much different and I don't think it's as good as NISA, so it is an issue. I'll get a little briefing on AgriInvest.

For AgriInvest, it's cost-shared 50/50 between the government and the farmer. The government's share is federal and provincial, 40 per cent provincial, 60 per cent federal. For every dollar that the farmer puts in, both governments contribute to the other dollar that goes in. Then the farmer can withdraw the $2 or whatever amount is there, based on the top 15 per cent of your annual net sales. If there's an advantage to this, to me, it's that you get 50 cent dollars or completely matching dollars but you have the ability to withdraw those when you want. If you remember with CASE and I think with AgriStability you had to have some indication of your income, your T4 or whatever, and so you might have a problem in July, but you wouldn't have that end of year documentation about your yearly income for months later and therefore you had to survive before you could access the program. This AgriInvest is actually kind of a bank account, you put money in, the government puts money in, and you can draw that off when you need it. If there's any significant feature that I would see, it's the availability of those dollars, more quickly. I'm still not sold on the AgriStability as a very flexible program.

MR. GLAVINE: One of the areas, in case we don't get back into Agriculture, we're still negotiating here, I want to see if the minister has had any talks with Larsen's, in light of the kill floor being closed. There is a growing concern, obviously, around the fact the product coming into Nova Scotia travels through New Brunswick and the hub plant there; it's a Maple Leaf plant; I'm not sure if it's working at capacity; it does make some of the same product; so there is a concern now around the plant and the 350 jobs that remain there. I was just wondering if the minister had any initial conversations.

MR. MACDONELL: I hadn't, my staff had. They spoke with the consortium that was providing - P.E.I. hogs were going to Québec and we were talking with them to try to divert those hogs to the Larsen's plant in order to get a critical mass that made it worth sustaining that. We didn't win that argument. We worry about the jobs. Actually, our indications are that the processing is something they are still interested in doing, those jobs will stay, but I would share your same concern. If it was possible to have hog numbers that would keep that plant killing hogs, that would be a good scenario, but I think at this stage it's not going to be easy.

MR. CHAIRMAN; The time has expired for questions from the Liberal caucus.

The honourable member for Argyle.

HON. CHRISTOPHER D'ENTREMONT: Mr. Chairman, it's a pleasure to spend a few moments talking about agriculture, something I learned a whole bunch about when I was so lucky to be minister for a couple of years. I congratulate the minister, of course, again, on his appointment, and for really rolling up his sleeves and working hard within this portfolio, even though he does have that other Department of Natural Resources, I can't imagine the time it requires over there, too.

I just wanted to pick up in around, as you know, Argyle, Yarmouth County as a rule is not a really big agricultural area. Of course, the Yarmouth side of it does have some dairy, of course, Cook's Dairy, but we do have a growing number of mink farms happening in the area. I thought I would focus in a little bit there for a few moments.

As we move into those mink farms, we've had a number of contacts as of late, when it comes to manure management. I'm just wondering, maybe, to ask a few questions around the new manure management policy or guidelines that I think the department is working on, to see what those impacts are to those local areas and how the public consultation might be going on in those ones?

MR. MACDONELL: We're not necessarily concentrating significantly on manure guidelines. What we're going to do, we're going to introduce legislation pertaining to the mink industry. I think the member would understand, just from his question, that the direction of that legislation is around the environmental side. There was nothing that we could determine, in a conclusive way, that any problems around algae, or whatever water-quality issues in that area, were the result of anything being done by mink operations. We did feel that it had been an area that had flown under the radar for so long that there were practices that probably should be tightened up.

I want to make this point, the mink producers were very much on side with doing this. They were very helpful in discussions around what that legislation should look like, environmental farm plans and so on. Actually, one of the aspects of this was that for some programs in government, you would require an environmental farm plan, which they would get, but there was nobody going back to check to see whether the issues in the environmental farm plan were being implemented.

Basically, I think legislation that does some tightening up - and certainly we are going to be concerned around manure storage and reducing impacts on the environment, the same with any farming operation. I don't want the member to think that we were concentrating on manure storage as much as we're concentrating on the broad variety of environmental issues.

MR. D'ENTREMONT: Thank you very much for that, minister. Manure tends to be the one that we hear the most about because of its scent, of course. If we look at the building though - this is probably the challenge I see, and I'll talk a little more about the 3/40 in the river system and all that stuff after. It's still such a lucrative type of agriculture that you're having non-agriculture people get involved in it. If you take a pork farmer who had the buildings in the Valley, and they've decided to get into the industry or switch over, they do have a lot of that knowledge on manure handling, on animal handling, all this stuff. They're just basically changing a pig for a mink.

[10:00 a.m.]

There are challenges in taking care of those animals, husbandry is pretty much the same thing, but you're taking fishermen who are lobstering half the time and running a mink farm half the time - well, running a mink farm all the time and fishing half the time - so the same kind of background is not there to take care of these animals. What we're seeing, what I think I'm seeing anyway, is they're learning along the way. Somebody comes with a concern, they'll try to address it, they'll have to work with either the agriculture rep or whatever it is in order to try to get a certain issue resolved, but then another issue comes along and they've got to work their way through that one as well.

I'm just wondering, maybe within that scope, is there an opportunity for some better representation, agriculture reps, having a couple more specialists there to help some of these new guys out because that's where we're seeing some of our concerns happening?

MR. MACDONELL: Good point. I think one of the issues that we've identified in trying to develop our 10-year strategy is that we need more extension. We have an opening in that neck of the woods that we want to fill. We do have a specialist, a mink person down there, so I think, when we're looking it will be for someone we could use. I have to say the people we hire really have to be multi-taskers, but for sure, we are looking for someone for that area and that would be a credential, we would want them to be able to work with the mink industry and have some expertise there.

MR. D'ENTREMONT: I appreciate that one and actually it's kind of funny, I wasn't aware that we were looking for someone down there, so it's actually good to hear. I didn't know, is it that someone has retired? (Interruption) We're actually looking for a second one? That's even better because it is a large area considering where that person needs to go. The concentration of agriculture toward the Weymouth area is pretty substantial to take care of. I think a lot of the time would be taken from the Annapolis County line and it comes right around to Shelburne, so it is a large area to have to cover. I thank you very much for that because I think it would be very important to have that kind of representation.

Going a little further though, if we do look at that watercourse and here's why I think it's very important to have those guidelines set and having the new Act. I think we're looking at Fall at this point because I don't think there's an indication that we're going to have that brought in this session. (Interruption) We're hoping, wonderful.

Here's the problem with the whole water system, especially as you get into Lake Fanning and all that area up into the Carleton area, is the issue that they blame the mink, even though they don't know for sure, they blame it. The industry itself can't necessarily defend itself because it doesn't have that set piece of legislation or guideline to go back to and say listen, here's what we're doing, so this is the concern. If you had that piece you could actually combat the hearsay.

In my mind there are a lot of cottages along that area. I've said before, if you went and probably checked a lot of the sewer systems of those cottages you would probably find most of them have failed and are finding their way into that water system as well. I think by having that set straight, I think it will take a lot of pressure off the mink industry sort of as being the scapegoat in this particular case for that water system.

That water system, though, is going to be a challenge for a number of years. There are going to be a lot of people upset because I think this year, the YMCA had already made its decision not to run the YMCA because of the water problems that they had last year. There was a substantial amount of money that they had to spend to transfer the children from the campsite to, I believe, they were going to Ellenwood to go swimming. I wasn't lucky enough to have been to camp, but for those people who have been to camp, swimming and water sports are a large part of camp and that water system was just unusable. So good to hear and anything you can bring forward and let us see I would be very happy to look at it and provide my comments on it as well because it's such an important part of my area.

Moving on from mink - and I know I have a couple of members who do want to ask some questions as well when it pertains to agriculture. The supply management piece, I won't call it a criticism, but I do watch the other provinces, not all provinces have the same outlook toward supply management. The western provinces would like to see nothing better than to get rid of it, so you're always working hard to make that one happen, so it's more a piece of advice.

We worked really hard during the WTO back in Hong Kong, there was a movement afoot to bring down some of those tariffs, to try to bring it down. We worked hard, with Nova Scotia in the lead, with New Brunswick, P.E.I. and Québec, Ontario. Ontario was waffling a little bit because they never know which side of the game to play on, they're very centrist when it comes to agriculture. They want to be a western province, but they realize they're actually in the east. Ultimately, without supply management, without supply dairy, without supply management in turkey and chicken, we would be in a grave state in agriculture in this province. It would be just a bunch of moms and pops doing some weekend agriculture and that would be the end of it. My advice is to watch those guys, especially as you're sitting around your ministers' table.

I'm going to look at a couple of numbers because it is a shame to bring numbers people in and not actually ask them any budget questions, so I am going to ask a couple of questions. If we go to Page 3.3, I'm looking at my Estimate to Forecast, so basically what we're spending this year on the minister's office. If we look at the minister's office, we've gone from $710,000 to $723,000 is the forecast for this year, so we are going over budget this year. I'm just wondering what the over-budget might be attributed to.

MR. MACDONELL: I'm sure someone will tell me. I hear, it sure isn't the deputy's travel.

MR. D'ENTREMONT: No espresso machines or anything like that? The estimate was $710,000 in the forecast, so that means the spending is going to be $723,000.

MR. MACDONELL: We'll get back to you - $13,000, we'll find out.

MR. D'ENTREMONT: I know, I might be picky, but you bring in people with numbers, you know you've got to ask number questions.

MR. MACDONELL: That's what we're here for.

MR. D'ENTREMONT: My question then, if we look to Page 3.4, and again I apologize for estimates in Supplementary Setail, if we look at Programs and Risk Management, the estimate in 2009-10 was $14,381,000. We are forecasting that we are going to be underspent in that one so we're making the adjustment of $13,570,000, so I'm just wondering - Programs and Risk Management - why are we cutting that one down just a little bit?

MR. MACDONELL: We underspent in the Community Development Trust and we're moving it forward, hopefully.

MR. D'ENTREMONT: Perfect.

MR. MACDONELL: But I should tell you it's in Economic and Rural Development's budget.

MR. D'ENTREMONT: It has been bumped over, that's fine. My last question on numbers is, Licensing and Investigations, that is Page 3.5, Supplementary Detail. The estimate was $767,000 and this year there's no line item there, so where did our Licensing and Investigation folks go?

MR. MACDONELL: Fisheries inspectors have gone to Fisheries, they are not ours.

MR. D'ENTREMONT: But these aren't the food inspectors at all, so this is something completely different. Perfect. I'm going to give my time to - who wants it first? The MLA for Inverness, all right.

MR. CHAIRMAN: The honourable member for Inverness.

MR. ALLAN MACMASTER: Thank you for this opportunity and thank you, minister, for giving me the opportunity. On Cape Breton Island, I believe 140 of the 220 farms are in Inverness and Victoria County, so it's an important part of our economy, locally, in the area I represent, and I'm pleased to ask some questions today about the budget.

The first question I'll ask about is - I know for a lot of commodities that are grown in Nova Scotia, the farmers don't seem to get too much of the value for the product, and a lot of it goes to the exporters or the retailers and they seem to control that. I was reading a book before I ran for election - I haven't had any time since to read it - I was reading a book about Standard Oil that was owned by J.D. Rockefeller and other people who became very wealthy.

When the petroleum industry started in the 1800s, there was a lot of control held by Standard Oil, and they used all kinds of measures to squeeze everybody else out of the business and they made a lot of money. At one point they were taken to task for breaching anti-competitive laws. I wonder if the same isn't happening in the food industry. I realize that's a world issue, maybe it's not something that we can address directly here, but has the department ever discussed those matters? Do you have anything that you could offer on that?

MR. MACDONELL: I can offer something. First, I can offer to say no. I can say it's a thought that has crossed my mind but I perished it. My thought would be that without collusion- and I think you and I would both agree that the level of competition in the retail food sector is almost to the point of a monopoly, but it's not a monopoly. The margins are really fine. In order to make a case for anti-combines legislation against competition that way, I think is where you're going, I don't see without all the parties rigging prices that you could actually make a case. Because a single retailer, his competitors would try to undercut him. They pay more to get a product to keep it from a competitor.

I think that if there was a case to be made that way, it would have been made before you and I would ever have had this conversation but I don't see that as happening.

MR. MACMASTER: The one segment in agriculture in which there seems to be some protection for farmers is the dairy industry, through the quota system. Could you offer any commentary on that and if there has ever been any consideration to a system that would allow farmers to have maybe some more control over the prices because they are price-takers, farmers.

MR. MACDONELL: Well to a point I can only agree but the supply management is - the milk one is probably the easiest example, it is the chicken one that I can't explain to you. If it has been explained to me well, I missed it and I don't think it has been explained to me.

The Dairy Farmers of Nova Scotia, who are the marketing board for milk, they negotiate with the Natural Products Marketing Council. When they want a price increase they go to the Natural Products Marketing Council, which is the body that would approve that. They have a formula based on cost of production. So actually they truly can get their cost out of the marketplace, based on the power under legislation that formed their marketing board and allows them to go to the Natural Products Marketing Council.

[10:15 a.m.]

Even though chicken farmers in Nova Scotia also are a marketing board and under legislation, it's not as clear to me their ability, how they do that, whether it is based on a cost of production formula or not. I was told it wasn't but somehow they negotiate that price, which I don't clearly understand. So it's the other, the supply management sector, as your colleague had indicated, the member for Argyle, is a major component of the agricultural farm gate receipts in this province. Fifty per cent of the farm gate receipts come from the supply managed sector. It is the others, if you're a vegetable producer, fruit producer, hog producer, beef producer or sheep producer, lamb producer, you go cap in hand and you negotiate with who the processor is or the retailer.

That's not to say there aren't some good news stories in those other sectors. The two big ones that have not been good news are traditionally hogs and beef. If we need to go into more detail on those, we can.

Actually the model you raise around the dairy industry, they actually can get their price. The questions around whether one dairy farmer is making money and another one is not, is kind of on those business decisions. They both had a 50-cow herd and similar litres of quota and so on, so basically the same income. One buys that 90-horsepower John Deere and the other guy is still using that Massey 135, it could be the reason why one guy is closer to the wire all the time and the other guy is putting a little more money in the bank. It's those kind of management decisions that you make that separate one operation from another.

People who are making money in the non-supply-managed, they are particularly savvy in the sense that they've had to be able to convince their buyers that they can supply a high-quality product consistently, and convince their buyer to pay them a price that allows them to do that, and that is no easy task.

MR. MACMASTER: Just sticking with the price issue and looking at beef, I heard that the province only supplies about 6 per cent of our meat needs. A lot of that may be due because the farmers aren't able to get the prices they need to make it economical for them.

I recognize the retailers come into play here too because they require the farmers to provide certain levels of quality for the product and also for volume. If the farmers can't meet that, well they're not in the game. I just raise that as a point, I know you understand it already, but I just want to put that on the record, that is an issue for farmers, especially beef farmers. It's hurting their ability to supply our meat needs and hopefully over time I might even have some suggestions to improve that, but I don't have them today.

MR. MACDONELL: I do.

MR. MACMASTER: Really? Could you expand upon that?

MR. MACDONELL: You're right on the low volume and at some point you say, where do you enter that circle? Give me the price and we'll grow the beef and then we'll supply that larger demand. I don't know if you noticed - and I'm not sure if this is in a store in your neighborhood - if you go into some of the Sobeys stores, you'll notice there's a little wooden stand that has Case Van Dyk Blueberry Juice, it takes about that much space. This is a high-quality premium product that has a significant cost when you buy it as a consumer and that product is not in every Sobeys store. They pick the stores they want to have it in, and they know that he can't supply all of what they want, but they want it. That's item number one. If you've got something they want, they'll take it in a small amount to get it.

In my discussion with Sobeys - we know we can't compete on a western beef model, we can't compete with a grain-fed animal because there are train-loads of those coming from Alberta. What we have is what we refer to as a grass advantage in Nova Scotia and we would like to promote a grass-finished beef. It would probably be a smaller animal, the old British breeds, Angus, whatever. Even the people at Sobeys told us they'd like to have a smaller steak, because a steak was getting to be too expensive.

If you have grass-finished animals, you have 70 per cent less fat, 70 per cent less saturated fat, higher beta-carotene, higher oleic acid. We want to sell a healthy product and that to us is the thin edge of the wedge to get into those stores. What we said, since we can't do that ourselves, in other words, we're having this discussion to find out whether it's worth it, as a government, to have a program and a policy to invest in the extension work. If you're going to have farmers who are going to finish cattle on grass, they've got to learn about being grass farmers, not just cattle farmers. We need to think about what our extension capacity is to do that and what people we need to put in place to do that.

We also need a processor who is willing to enter that field. If none of the processors in Nova Scotia want to have this discussion with Sobeys, we can't do it. The government's not going to kill beef but we would be interested in helping to invest if someone's interested.

Along with the idea of the Case Van Dyk blueberry juice, our discussion was, could you give us a little bit of space in some stores for this premium product and if we can guarantee a price to a farmer that he can make money then that would be the stimulus for other farmers to get on board. Even the ones who would say, you're crazy, you can't do this, you can't finish cattle on grass but they would say, Frank Smith, my neighbour is making money; I'm not making money, I'd be interested in pursuing that. If they can make money they'd grow the industry. All we're saying is, we can't have a truckload or a tractor trailer load at Debert once a week for all your stores but let us into some of them. They were not necessarily put off by this discussion. They said, look, if you get some of this put together we'd be glad to talk some more.

I think that at some point it would have to leave us and someone in the private sector would have to be interested in taking this on. We don't have a federal kill plant for beef in Nova Scotia but we have a federal plant that kills lambs and hogs but they don't have a beef kill line. We're doing some number crunching to see, would it be practical to help them put in a beef kill line that would help kick off this project. They are someone who already 50 per cent of what they sell goes into Sobeys now so they have a doorway into that retailer. They may not be interested and then we'll have to see whether somebody else is interested.

We see that there are necessary components, some infrastructure, some pricing, some program for incentive extension. Surprisingly - this might seem like a new thing to us - we helped send the president and the vice president of the Cattlemen's Association to a grass symposium in Albany, New York this winter, which was purely about finishing cattle on grass. I have former neighbours of mine who are in Alberta now and they have a Charolais herd there and they told me that some Albertans were switching to grass-finished beef in a place where you have grain. They were just seeing it as a marketing advantage to selling this healthier product or trying to market it that way.

Those are my ideas toward it. This won't happen overnight but we're still on the kill line and whatever, we're still crunching numbers but we hope to have that done fairly soon and see if it's possible to be able to gear up something. I have to tell you - here's one of the glitches - the Cattlemen's Association recently supported a resolution to kill their beef strategy, which they had worked on with staff from the department on a grass-finished beef. So the Cattlemen's Association themselves voted that down in their recent annual general meeting.

MR. MACMASTER: Is there any possible reason why? Is there any speculation as to why they've done that?

MR. MACDONELL: I don't have that information. I talked to the former president who was quite disappointed, he changed jobs at that meeting.

MR. MACMASTER: It's an interesting industry because you have these entrepreneurs who are very busy growing their product and they don't have in their business model the dollars to sell the product and so they're dependent on those who sell it for them. I'm all for capitalism but sometimes you get situations where if certain players become too strong, you don't have capitalism anymore. You need competition so that people get a fair price for what they're growing.

On the marketing side, I know there's support within the department. Could you expand a little bit on that and if there are any changes this year or any updates to help farmers get their product to market and perhaps get a better price?

MR. MACDONELL: I don't think that we're changing. I think we're trying to go full steam ahead, as much as our existing programs will allow us. We try to put money into assisting in development of new products and value adding. We've tried to put money into farmers' markets so that farmers can have other avenues for marketing their product. Probably the value-added side, in trying to develop a slightly different product, I think we have programs in place that they could apply to that would help. But something innovative - we have $5 million booked for a new innovation centre in Truro at the Agri-Tech Park and so we're really hoping.

Some of the interesting things that farmers have done - right now we know there are more antioxidants in the pulp of a blueberry than there is in the juice of a blueberry, so the question is, what can you do with that pulp? Either you can extract those antioxidants and use in whatever way, or just use the pulp. There is someone who has developed a sunflower that has a natural insecticide. These are the types of things that we would like to be able to do the research on to determine - like, if we could develop an insecticide from a natural organic product, then a lot of issues around pesticide use would not be as big an issue environmentally.

There are a lot of interesting ideas that people have taken as far as they can take on their own, and they need government to be there to have the resources to do the work to take this a bit further. All our hope is that in doing this - and this comes back to your very first question, and this is the part that I can't necessarily guarantee - if it was possible to produce a pesticide from sunflower oil, and farmers grow X acres of it in the future for this purpose, then what's the mechanism that you have to ensure they get the price they need to make money to make it worth doing?

Unless that's done purely through the contract process, I'll grow it for you, this is what I need, and the person who wants to do the processing, or the company, takes some of the risks, like if we get a hail storm or the wettest year in 500 and this field floods, along with crop insurance, what other mechanisms? Farmers will have to become a little more savvy too in what they're willing to risk, they're willing to take, and is somebody else willing to take some of that risk.

[10:30 a.m.]

MR. MACMASTER: What about the issue of slaughterhouses? I know years ago they were much more common, you'd pretty much have one in the community, and that was a way for local beef to have a better market, an easier way for farmers to sell their product. Local beef is great, I've had it myself, my brother-in-law has some beef cattle and I've just had hamburger and it's just markedly better than what you buy in the store. Perhaps it's because it's fresh, perhaps it's grass-fed. Do you have any comments on slaughterhouses and what you see going forward?

MR. MACDONELL: My sister-in-law is from Mabou, so I can only speak to consuming the products produced in Inverness County, what good people it creates. We definitely see the value in those small local slaughterhouses. I was telling the member for Kings West yesterday that my father would take our beef to a small slaughterhouse where a gentleman, in his 90s now, used to do slaughtering for him. I would not give a second thought to issues of food safety. The place was clean, we never second guessed it and I think we never had an issue. What we do worry about is when - it's one thing if I take that home and put it in my freezer and it is for my family, or if you sell it from the farm gate. It's the worry about that product winding up in a third party, like going into Sobeys, we have our issues around that.

We like the idea of inspection. It depends on how far along somebody has brought their facility. You can kill a beef on the barn floor if you're going to use it yourself. I mean we don't say much in that regard. If you're going to start selling it throughout the community, if they come to your house to get it, they could still do that. Beyond that, if it shows up in the Co-op in Mabou, then we would have a problem with that.

For us, we realize we have a responsibility for food safety for the people and we cover the cost of inspection. If an inspector goes to an inspected facility, we pay for that, the facility doesn't pay for it. In a federal plant they pay for it.

We offer a service and for them it would be the cost of bringing their structure up to a particular standard that would meet the inspection standard. I think we try to work with people who have small slaughterhouses and say, we'd be interested in working with you to bring that up to a different standard. We try not to go twisting people's arms but we really worry. If they can make money on their kind of backyard slaughter facility and they're offering a service in the community, we're good with that. As long as it's clean and the product doesn't wind up in those places where only inspected products should be.

We recognize what the impact is on communities if you lose that little slaughter facility in your community, if you have to drive 30 miles to take a - I've gone that far, I think, to get my turkeys killed and I'm telling you, you notice it when the people who are doing it close to you stop doing it and I see that. All of these things have the component of educating the public. We have these conflicts between urban and rural. But if people raise a few chickens or turkeys in their backyard and get them killed and sell them to their neighbour, all that really does is help educate people that having agriculture in your community is a good thing.

We definitely, on the food safety side, we are concerned about facilities that we don't inspect but as long as they work within the guidelines that they're allowed, we're okay with them.

MR. MACMASTER: Certainly the stakes are high. If it comes to somebody getting sick from food, it's obviously not a good thing. Has any consideration been given to self regulation? In some industries there is - because the interest would be for the person who is doing the killing and providing the food locally, if it's within their interest to make sure that they are compliant with the rules that are set out by the department, that might save the department the expense and it might allow more of these slaughterhouses to develop. Would there be some consideration to look at that?

MR. MACDONELL: I think the criticism of that is the criticism that came out with the salmonella in Maple Leaf, that basically the inspection component had been - the federal government had backed off on their inspection component and it was more self-regulating within the plant and the private sector was doing more of that work. Then that comes back to protecting the people, it's in the best interests of the people to have their government do that.

On the small backyard facilities that you're talking about, they are self-regulating. In other words, it is only up to the good conscience and the ethics and the honour of the individual doing the work that things are clean and if he thought an animal was sick that he wouldn't try to market that. So in that regard, all of that is on his shoulders.

In the provincial inspection system, the taxpayer bears the cost of the inspection. You are right, there are those days, I mean we've had inspectors who drove from Truro or Halifax to maybe somewhere in Cape Breton to supervise the killing of three animals or something and drove back. So you might think that's maybe not the best use of resources and I think there is some thought that if you were to let the person who has the facility, even an inspected facility, train them, obviously we train people to be inspectors so there's no reason you couldn't train the person who is doing it. I'm sure they learn a lot when the inspectors come in and show them things that they have to kind of be careful of.

So it is probably not so much the cost as it is the responsibility. If anything was to ever happen, it still falls back on the government. I know as minister, I wouldn't want to be the person with the microphone in my face and say why did you do that? So I think as much as we can work with those, this is still a business decision, if you're going to build a facility and sometimes these happen with a slow evolution. They started with a facility in the backyard that wasn't inspected, just because they were there. They did a good job and their business grew and they wanted to try to get into other markets that they couldn't access because they weren't inspected.

They were willing to make the investment to make their facility an inspected facility. They carried the brunt of that cost but we can help them out with the other part of the cost, which is the inspector. I think for us, if they hired another person in their facility because they were inspected or two people, and created jobs, we'd probably see our responsibility of paying for the inspector as a good investment in rural Nova Scotia. It mitigates against any safety issues. So it's probably a win-win, as much as you could make it.

MR. MACMASTER: I have just two questions left. I see we have some young faces who have joined us in the audience today and I hope we're entertaining them a little bit. They look a little bit bored, I don't know. I'll try to spice up the question here. No disrespect intended there, minister.

I have two questions left, one of them is around hay. Some of the local producers in my area produce extra hay and they have the opportunity to export it to Newfoundland and Labrador. The Newfoundland Government offers a subsidy for truckers and the further away the truckers go for the hay, the greater the subsidy. Apparently the incentive exists now, that the truckers are leaving Newfoundland and Labrador, going to New Brunswick, picking up hay there, bypassing hay in Nova Scotia and taking it back to Newfoundland and Labrador. I'm just wondering if that has been a topic of discussion for the department and if there has been any discussion to try to alleviate that situation so that our local farmers can sell surplus hay.

MR. MACDONELL: An interesting question, I have to say. So the Newfoundland and Labrador Government pays the subsidy on the trucking, yes. I would say that we are not going to try to alleviate that. What we are going to try to do is we have a real interest in hay pellets for energy, to grow grass for energy. The way we'd like to see that done - although we'll work with anybody in whatever way, but my vision of how it would work best is that we would grow those types of grasses that you would feed the livestock anyway and if part of the crop gets rained on or whatever, that could be used to go into grass pellets and burned. Or, if they have extra crop they want to turn into grass pellets, my concern is around if we go to cultivars that are like switchgrass designed for grow for pellets but not necessarily the best varieties for feeding to livestock, we create a situation where it doesn't blend in easily with their other farming operations. Now if all you want to do is grow grass and keep no livestock, that's fine.

For these operations, they already have the baling equipment and the hay-making equipment, so they don't have to invest in new equipment, necessarily, to do this. We see real potential in grass pellets to heat a municipal building or an apartment building. We think to get this kicked off appropriately, it would have to be of a significant volume, you'd want a contract to heat a fairly large building. We know that you probably shouldn't try to haul the hay more than 50 miles from a farm to a facility that would make the pellets, so you could have a number of them around the province. Actually, we're heating the engineering building at the Agricultural College with pellets.

We're really interested in what farmers might be able to do with that extra grass. What I'm thinking is a real possibility is that people who buy hay for livestock would say, I can't buy hay anymore because so much of it's going into pellets, so the glass is half full. I can't see the value of the grass as a feedstock for fuel going that high that it would be that competitive, but it may. If oil hits $150 per barrel or whatever, then who is to say that the grass actually isn't worth some comparative value, but the question then will be volumes. There are so many thousand acres of fields that recently, if you looked around, there are people who didn't even make their hay in the last two or three years, it just grew up.

If the volumes are significant that would probably keep the price down, but I can see a lot of jurisdictions that might say, look, we have access to a really significant supply, we can cut our costs to heat this building by a certain amount, and it's worth investing in. No, we're not going to subsidize trucking hay to Newfoundland and Labrador, but we really would be interested in a program that would allow us to develop a grass fuel industry in Nova Scotia.

MR. MACMASTER: Just a short note on that. If the department ever was interested in talking to the government in Newfoundland, the government there might be interested in offering a subsidy, but making some kind of a caveat that if there's hay closer that they're not taking advantage of the subsidy. It might be a point worth bringing up.

MR. MACDONELL: It doesn't hurt to ask, that doesn't cost anything. We're meeting with them in early June, in St. John's, so I'll put that on my list.

[10:45 a.m.]

MR. MACMASTER: I have one last one, and I think what I'll do is read a resolution that had been submitted to the annual meeting for the NSFA. I'll just go ahead and read it here:

Whereas the Farm Investment Fund is the primary funding vehicle for on farm environmental projects; and

Whereas there is a requirement to participate in the Environmental Farm Plan Program to access assistance from the Farm Investment Fund; and

Whereas the Environmental Farm Plan Program recommends that concrete pads be used around livestock feeding station and manure handling areas to prevent runoff and contamination of surface and/or ground waters; and

Whereas these types of projects are not eligible for assistance under the Farm Investment Fund Program;

Therefore be it resolved that the Federation of Agriculture lobby the Nova Scotia Department of Agriculture, through its programs and Business Risk Management Division, to expand its funding assistance to include concrete pads around feeding stations and manure management areas for the protection of the environment.

For the record, has the department responded to this or are they aware of it or are there any plans to fund that? I'm not sure if you heard my question.

MR. MACDONELL: No, I didn't.

MR. MACMASTER: I'm just asking if the department was planning to fund that or if they considered funding concrete pads through that program.

MR. MACDONELL: I'm thinking that we're not at this stage. Actually, another one that one of my constituents raised with me was cattle mats, you know, comfort mats for dairy cattle in barns. They weren't covered under the Farm Investment Fund but they saw it as a health issue. In seeking our 1 per cent expenditure management, the Farm Investment Fund was a place that took a hit for us. Where we thought we could probably withstand it was to back away on clearing blueberry land in the coming year or two just because of the price downturn in the industry. Even people in the industry said to us, we don't need any more blueberry land right now.

My thinking is that we're not going there but the department actually sits down with the resolution committee for the federation and discusses those resolutions after and they report back at the next meeting. We have a dialogue with them on those things but presently - I might be wrong on this - farmers can fund, we would help them fund manure storage, which would usually be concrete through another program. Even if it was borrowing from the Farm Loan Board but we are a compassionate lender. As much as I know the direction of where they're going, I think we would probably try to aim for bigger ticket items to cover for them than that.

MR. MACMASTER: So they could include the pads within the bigger ticket items?

MR. MACDONELL: No, I'm thinking they would probably have bigger ticket items that aren't related that we would draw their fund rather than that. If you're someone who has been able to access the fund and took care of those bigger ticket items, then you've got these little ticket items that you say, well, if they would do this for me. I'm thinking we'd probably want to do things we can use to impact a commodity group in a bigger way than that.

MR. MACMASTER: Mr. Chairman, I'd like to share my time now with the member for Cumberland South.

MR. CHAIRMAN: The honourable member for Cumberland South.

HON. MURRAY SCOTT: Thank you, Mr. Chairman, and I thank the minister and his staff for being here today. I was in and out but I did hear some of the comments you made in responses to questions. They were actually some of the ones I was going to ask. I was going to say just jokingly, if the answers had been a little shorter we probably could have wound this off in the hour but now we're going to have to move into a new hour. I only have a few questions and I understand my Liberal colleague had a couple more questions as well and then we're going to move into Natural Resources so if you want to have your staff ready to make your change.

Just quickly, the minister would know that we initiated a program of instructing government institutions to buy and use local products throughout the province. We tried to - at least when I was in the Department of Justice, through the correction facilities, for example - tell them whether it was agriculture products, whatever, to buy and use as much local as possible. Are you aware of that program still underway and what kind of progress has been made?

MR. MACDONELL: I am aware that the program is still underway and actually I met about a week and a half, two weeks ago with Rick Draper from procurement to try to squeeze more out of the procurement system, to see what the possibilities are within our provincial agreements and if there are possible ways to do this, to get more volumes into our institutions. It strikes me that there was an issue around Justice. There was more flexibility around the correction facilities, and maybe you can answer my question, but it seemed to me that there was something about Justice that wasn't the same as hospitals. I can't remember specifically why that was, but it seemed to me that we had more potential to do more in correctional facilities and those ones that come under Justice than we did on other facilities, but I'm not sure why that is.

MR. SCOTT: Thank you, minister, and I'm really glad to hear that the government is pursuing that. I always felt there was tremendous opportunity and we'd lead by example in our own institutions where you can, and I understand there are issues that would prevent that from being as much as we would like.

I know I heard you mention earlier about, if I understand right, I think we're down to about half the farms that we had probably a couple of decades ago, is that . . .

MR. MACDONELL: I'll take your number. I'm thinking it's not. That would be a significant drop from a decade, but I don't know what the census numbers might indicate. We can get it, but it strikes me as being quite severe. I'm thinking it's not that.

MR. SCOTT: I guess I was just trying to make a point. I think the number was like 1,500 down to 850 or something, I just forget the exact - I guess my question was, what are your thoughts around or what is the department doing in regard to stopping the bleeding? I know it's a very simple question. It's going to be a very complex answer to it, obviously, or something would have happened a long time ago.

I've always said - my kids are probably in their early 30s, and I've said to them that I truly believe that one of the toughest issues their generation is going to face, that I didn't have to at their age, was food safety. I really believe in Canada, and we've seen some stories around products imported from all over the world - I'm not suggesting the food, but certain types of paints, certain types of products have been ingested by children, and we see a lot of food products from around the world coming in. We see companies moving from our country to other countries because the standards are a lot lower and they can pay a lot less money. I think one of the reasons some products are high in our country is because we demand a very high standard. When it comes to food and food safety, we should continue to demand that high standard. I believe that that generation coming behind us, one of the most serious issues in this country will be food safety. I'm just wondering what . . .

MR. CHAIRMAN: Order. The time has expired for your caucus. Could you hold the question? We'll now recognize the member for Kings West with a few questions - I believe he is not going to use his full hour - and then we'll go back to the Progressive Conservative caucus.

The honourable member for Kings West.

MR. LEO GLAVINE: Thank you very much, Mr. Chairman. Just to finish off, really, in an area that I've spoken a lot about over the last six or seven years since I came here, and that's the hog industry. I did mention Larsen Packers and its future earlier this morning. However, with just six or seven hog farmers of any size remaining, and five of those are committed to the isowean business - I know the minister spoke in support of the hog industry many times in Opposition. I'm just wondering about your commitment to hold on to those remaining hog farms. I see them not only as having commercial viability; I think once the numbers of sows are removed from herds across the country and we can get the price up closer to the cost of production again, but I see them as almost a stepping stone to the future, should there be a possibility of rebuilding any degree of hog industry in the country by having that many sows already available in the isowean business. So I'm wondering what programs are available and what level of support you are giving to that remaining hog industry.

MR. MACDONELL: Thank you, Mr. Chairman and I thank the member for Kings West. We are still interested in producers who are chasing a different model. We pretty well still - we haven't, I think, moved away. I think the view of the government is not dissimilar from the previous government in the sense that the grain-fed hog from grain hauled from the West is not something that is sustainable. So we are always interested in who is doing what that might be more sustainable.

I think the question for you and I both is how big or how small can that be. For some time I actually went to Pork Nova Scotia's annual general meetings and there was the gentleman there who spoke for the hog research institute in Prince Edward Island. I asked him, why couldn't we feed grass to hogs. He said, well they don't digest it well. I said oh yeah, how come? I said they are monogastric, the same as a horse and horses do quite well on grass. He said well yes, but a horse has a bigger gut. I said well a horse has a horse gut; a pig doesn't need a horse gut, it needs a pig gut. Anyway, I just left it at that and walked away.

Then I come to find out that while I had been minister - I've raised this a few times with my staff and had come to realize that there is actually someone in Nova Scotia who was grazing hogs. Actually that's the reason I thought about it, because I knew people who had weaned the little pigs from the sows and turned their sows out to graze. They weren't nursing, they weren't growing but they could digest enough grass or they were eating grass and that was all they got and they did quite well all through the summer and Fall. I knew they obviously weren't starving so they must have been able to do that.

Anyway, I came to find out that someone is doing this, grazing hogs and they reduced their grain cost by 40 per cent. So for us, the question is - actually I thought I saw something across my desk around a research project to do some research on this. My interest is not that hog producers turn hogs out to graze, it was whether on a more commercial model we could cut forages, the same as we feed cattle. Put them in a more commercial setting and reduce their grain costs. Because, through this downturn for the hog industry, if they had been able to reduce their grain cost by 40 per cent, even if they didn't get rich, but if they didn't go backward, if they covered their costs, would that have been enough to keep them?

I don't have all the answers on that. I'm thinking that one thing we should look at if we're going to bring back an industry is what are the alternatives in feeding that take us away from that western model of grain. But whether that is grass or something else, I'm not sure but I think there's some potential there to do that.

I can't say that we've come up with a program as an incentive but certainly for people who are doing kind of different things, you would know the Jim Lamb model, he is raising hogs but he is retailing them, those things. We've helped fund that and so any kind of slightly different ways that people are raising hogs, we are interested in helping them out. We're also interested in seeing what the potential might be for kind of a larger, more commercial industry to be able to bring that back. I don't have a clear answer, I only have more questions but I think I would like to pursue my questions to see whether there is actually some viable way to do that.

MR. GLAVINE: Thank you very much, Mr. Minister. I am heartened by keeping some remaining remnants of the hog industry. I thought I was in front of you as a student when we were getting the anatomy lesson there a moment ago. With that, I want to thank you for your clear, concise answers during questioning on the Department of Agriculture Estimates and I look forward to Department of Natural Resources shortly.

MR. MACDONELL: It wouldn't be the first time that people thought my answers came from a horse gut.

MR. CHAIRMAN: The honourable member for Cumberland South.

HON. MURRAY SCOTT: I guess what I was leading up to a moment ago was, keeping in mind that I think Nova Scotians genuinely agree that food safety is a very important issue, I think one way we can assure that is, obviously, having as much agriculture products produced right here in our own province where it's well regulated, a good inspection system and whatnot. As we see the demise of so many farms - and I was just saying to the deputy when you were out - I think it's like half in the last decade, if I remember right, the number was 1,500 registered farms down to 850 now, does that sound right?

Anyway, I guess my thought is, what are your thoughts around that and what can or should we be looking at, as a province, to turn that around?

MR. MACDONELL: Good question, it's kind of a two-pronged answer, I think. First of all, there used to be about 4,000 farmers by Census Canada, I think, or CRA, about 2,000 were registered with the Federation of Agriculture. There are about 1,200 beef producers in the province, so I know that to say 1,500 going down to eight is - but, you are right, it's a valid point. We worry about the numbers and actually I discussed with my staff early on whether we should set targets, we want five new farmers per year or 25 new farmers a year.

To get back to your issue on food safety, some of that is out of our realm because CFIA - for food coming into the country - is federal. That doesn't mean that we don't have a voice with the federal minister to say, look, when food comes in that makes people sick in this country that comes from other jurisdictions, we'd like to see stiffer regulations on that.

In our jurisdiction, grown in Nova Scotia, that's our responsibility. The worry that you raise is - and the reason I say this is two-pronged - I have a lot of confidence in our own people, in our own regulations and what we want to see for what's grown in the province. I have a worry more around the food security side and the way to maintain that, increase that, stabilize that, or secure that is on price. If farmers were profitable, they'd be growing the food, and that's one of the cornerstones of our 10-year strategy, we need farmers to be profitable, and then the issues around consuming closer and closer to 100 per cent of what we produce is taken care of in the natural economics of the system.

Now if you want to say we should move to more organic, that doesn't mean that we couldn't have more incentive, because farmers are interested in doing a variety of things. I see the safety part for food grown in the province is our responsibility and I feel quite confident in what we do. On the national level, we can be a voice to the federal people around stricter guidelines and I'm not even sure how you impose those. When the product shows up at your door, you might detect salmonella, but I don't know what other standard - are we going to say, we don't want it sprayed with this or that? Things that we've outlawed in this country, somebody else might be using it in another country, so for me that has always been kind of a worry. If we thought it shouldn't be used in our food, we shouldn't allow food in where somebody else might use it.

I don't know that I'm answering your question for you, but I see profitability as a major step toward food security. If farmers can make money - and you can see it in the beef and the hog industry. We consume a lot of beef and a lot of pork; it is somebody else's now, so if they could make money, we would be consuming theirs.

MR. SCOTT: Thank you, Mr. Chairman, and thank you, minister. That was exactly the point I was trying to get to, that if you buy a package of lamb on the shelf today that came from New Zealand - and I'm sure it was inspected somewhere along the line in New Zealand, and no disrespect to them, I'm just saying as an example - how do we know that the process used there and the inspection program used there is as rigid as it would be here in Nova Scotia? Do you know the answer to that?

MR. MACDONELL: I don't know the answer to that. CFIA should know the answer to that.

MR. SCOTT: Right. I guess I was just wondering if you knew the answer to - are there people actually in those countries that - how do we guarantee in Canada that we're getting safe product here in this country from other countries? Again, we've seen it with toys, we've seen it with paints that are used. I just think it's an issue that - maybe it isn't more of a national issue, but I just think that any consumption of food in our province, that there's some way to ensure that we are consuming good, safe products.

Mr. Minister, I guess the other part I'm wondering about is, if a young person came to you or your department and said that their family traditionally had been farmers and they are young and they want to get into farming, how would your department assist them? What kind of programs are in place to assist young farmers to get into an industry that a lot of people are getting out of?

MR. MACDONELL: Well, we have our Think Farm. I'm not sure that we offer quite enough yet. Our interest forgiveness is two years for a young farmer, I think $20,000; that is something we have to look at. The investment required to - now, if they're going into a dairy farm the investment required is significant, but they would have a little more security because they know the price they're getting for the product they produce.

If they don't know what they want to do, probably the best place to direct them would be to the things that people seem to be making money right off the bat. Obviously the mink industry, number one, they're making money, and grape producers seem to be doing well in the province. Probably two years ago I would have said blueberries would have been the place to send them, and if we had invested in them they would be coming back to us to say, I can't make my payments. So it is kind of difficult - I think one of the first things I would say to them is, if you're seriously interested then you should go to the Agricultural College. That's an institution that we help fund that has diversified our agriculture, has given us one of the best-educated farming communities in the country, and if they are not sure what they want to do, they should determine that first.

I would recommend that they go to the Agricultural College, take the time, invest the money to become more educated, to help them decide whether they really want to do this or what aspect of agriculture they might be interested in pursuing. Then I think they should mentor, go and work on a particular operation that is the type of thing that they think they would like to do.

The financing part, we're kind of there. We could probably work on better terms, I think, for interest forgiveness. Now, that's not to say that the person starting - because a lot of people start but they don't do full-time farming. They have a job and they start an operation and they grow it and they learn by the school of hard knocks. Having a fairly well-designed extension department, so that they had people who could advise them and offer assistance that way, I think would be an important component of this.

If they walked through my door and they didn't know what they wanted to do, then I could really only point them to the commodities and to the people - somebody might be in horticulture doing better than lots of other people in horticulture. It doesn't necessarily mean that they shouldn't still go into that but I would advise them to go talk to those people, work for those people. It's pretty hard to advise someone when they are not sure just what aspect of farming they want to go into.

MR. SCOTT: Actually we get a lot of people who come to our door looking for help in all different aspects but I actually asked that question because I was in a coffee shop in Oxford one night and a lot of the local farmers actually congregate there in the evening and, of course, talks are always around the agricultural community, what is happening and what is not happening.

It was interesting because one gentleman who has been in it for, I think, probably 35 years or maybe longer, his statement was, never mind doing anything to try to keep me in it, try to find ways to help encourage new people to come in. Because as we lose farmers, if there's not an interest by the next generation to come into the industry, it's only going to get worse. That was kind of his message, don't worry about trying to help him, try to find some way to encourage the young farmers.

Minister, with regard to the budget, I understand there's a slight decrease in your budget overall this year, can you tell me why?

MR. MACDONELL: Community Development Trust Fund money that we didn't spend. It is still ours but it has gone to Economic Development, kind of held there for us, and about $700,000, Fisheries officers who went to Fisheries and Aquaculture, from us.

MR. SCOTT: That would account for the full shortfall this year, would it, compared to last year?

MR. MACDONELL: Well there's a 1 per cent - I'm not sure, you're saying a shortfall so you're talking about . . .

MR. SCOTT: The difference, I'm sorry.

MR. MACDONELL: But there is a 1 per cent expenditure management that we try to find, about $550,000 and an increase for beef for about $1 million.

MR. SCOTT: About $1 million? Thank you. Thank you, Mr. Chairman.

The last question, I guess, and I don't think it would be - I don't normally in the Legislature or here ever raise individual names. But I can't sit in front of you today without raising the name of someone who I know you know very well and that is Kurt Sherman. Kurt Sherman is a farmer who unfortunately had a farming accident and lost a limb but instead of maybe trying to find something different to do in life or whatever, he loves farming, wanted to maintain his farm, climbed back up on the tractor and I use him as an example a lot of times. He faced many challenges but continues to want to still farm. In fact, Kurt, I think over the next week, probably by this time next week, the majority of his farm will be sold off, his land and whatnot. He had to make a decision around that, I guess.

[11:15 a.m.]

One thing he always said to me, and I think if I remember right I remember you over the years bringing this up in the House, was that a lot of times federal programs were designed for farmers out West, maybe worked well for them, but didn't necessarily help farmers in the east. Maybe someone has already asked about that and if they did, I apologize.

I guess two things I'm wondering, is there anything in this budget that would help those farmers like Kurt? I know there are lots of Kurt Shermans throughout Nova Scotia. Is there anything in the budget that is going to help people like that? The second thing is and the last thing, Mr. Minister, is there any way to try to work to align provincial and federal programs so that they are more regionally directed, as opposed to - if it was an easy answer, it would have been done by now and I know that. But is there anything that can be done to try to help so that when programs are designed provincially and federally they help farmers in our province as opposed to someone in western Canada?

MR. MACDONELL: Probably the answer to the second question is the answer to the first one. For the individual you identify, probably not much more, other than regular agriculture programs that he may not apply to. Certainly, since I know he's in the beef business and I think sheep as well and blueberries - I mean, who would have thought that beef and blueberries both. Two years ago blueberries would have been $1 per pound.

Anyway, I see not a lot. I mean obviously for his circumstance, if there were things in this budget or even prior to this budget that he would have deemed to be more helpful he'd be using them. Since I know a little bit about his personal circumstance but not enough to know why the interest buy-down wouldn't have been more useful to him. There was a meeting in February but I had the hernia surgery and couldn't make that meeting but there is something we refer to as the Newfoundland deal. It has been my thought that probably because federal programs don't seem to easily work for us in the east - certainly for us in Nova Scotia, there must be a component of money that the federal government would deem that if did work for us that we would draw down from the federal government.

My thought was, why not give us that money, let us design our own programs that would work better in our environment and whatever issues around accountabilities that they want to ensure that it goes to Nova Scotia agriculture in whatever way. As long as they know that it's not going to health care- if they want to give it to us for agriculture - let us design something that works more appropriately for Nova Scotia. My understanding is that that's kind of what Newfoundland has. I've asked my staff to draft that letter to the federal minister and say we want what we call the Newfoundland deal and at least bounce it off them to see what their response is. You're right, those federal programs generally don't work for us and we'd like to see if it's possible to get the same kind of dollars and create something that does work better.

MR. SCOTT: I just want to say thanks to the minister and the deputy and the staff for being here. Agriculture is across the province but I know in my area in Cumberland County it is very important and there are still a lot of people who have generational farms that want to see it continue. I just encourage you to continue to do all you can to help the industry in this province, it's well worth saving. Thank you very much for your frankness and that will be all from our caucus.

MR. CHAIRMAN: We will now take a five-minute break to allow the minister to bring in his other staff. We'll do all the resolutions that pertain to your portfolios at the end.

[11:20 a.m. The committee recessed.]

[11:39 a.m. The subcommittee reconvened.]

MADAM CHAIRMAN: I'd like to call to order our Subcommittee on Supply. We will now be introducing Resolution No. E15, the Department of Natural Resources.

Resolution E15 - Resolved, that a sum not exceeding $95,441,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Natural Resources, pursuant to the Estimate.

MADAM CHAIRMAN: We'll begin with opening remarks from the honourable Minister of Natural Resources.

HON. JOHN MACDONELL: Thank you, Madam Chairman, welcome to all members. It's a pleasure to move right from Agriculture to Natural Resources and to present the 2010-11 budget for the Department of Natural Resources.

I'd like to introduce some members of the DNR staff who are with me, the Acting Deputy Minister, Brian Gilbert; Weldon Myers to my left, director of Financial Services; Hugh Gillis stepped out, our strategy development coordinator; and Dan Davis, director of communications; and Executive Director for Forestry, Julie Towers is behind me.

The Department of Natural Resources has broad responsibilities relative to the development, management, conservation and protection of forests, mineral parks and wildlife resources and the administration of the province's Crown land. Many Nova Scotians are familiar with our programs and either use them directly or benefit from them indirectly.

The Department of Natural Resources employees number over 1,000 and these dedicated and professional individuals work in offices and parks in every corner of the province. We are responsible for implementing policies and programs that ensure the effective administration and operation of Crown lands and provincial parks. We are also responsible for the conservation and sustainable use of wildlife populations, habitats and ecosystems. We are responsible for environmentally responsible and sustainable exploration, development and management of mineral resources. We are responsible for the implementation of the forest management policies aimed at maintaining sustainable forest and ecosystems and the protection of those forests from fires, pests and diseases.

Although the province's resource sector is facing a number of significant challenges, there are also many opportunities. To be successful as resource managers, we need to deal with the challenges and prepare so that we are able to take advantage of the opportunities. To prepare for these challenges and opportunities, the department has undertaken the development of a comprehensive natural resources strategy. The Natural Resources Strategy 2010 initiative was announced in May 2007, as a three-year process. The decision to re-evaluate DNR's policies on forests, minerals and parks and to establish a policy on biodiversity is in keeping with the province's focus on sustainability.

DNR's new strategy is being developed in a new, more inclusive manner that is framed by citizen values and informed by the vast technical expertise found from both inside and outside government. We're nearing the completion of the strategy's second phase, the technical expertise and stakeholder engagement. Phase 2 was led by a citizen volunteer steering panel comprised of three distinguished Nova Scotians; the overseer four panels of expertise, each made up of three citizen volunteers with specific technical expertise in one of the focused areas, forest, parks, minerals and biodiversity. The four panels of expertise have sought technical expertise from stakeholders across the province in the four focus areas. Findings and recommendations for each panel of expertise have informed the steering panel's Phase 2 report on recommendations that in turn will inform Phase 3 when the Natural Resources Strategy 2010 will be written.

In keeping with the unique, inclusive and transparent nature of the Natural Resources Strategy development process, the steering panel will present its Phase 2 report directly to me and I will consult with my Cabinet colleagues. Very soon Phase 3 of the strategy process will begin and the strategy will be written. The Natural Resources Strategy 2010 project process involved a very different approach including a focus on stakeholder engagement and transparency that was new for DNR and government in general. For this initiative, DNR has changed the way it looks at and engages expertise and perspectives in the community, and the community is changing its perception of how DNR can operate as a convener of experts and citizens.

[11:45 a.m.]

DNR shifted its approach to relationships with citizens and other external stakeholders to one of more active engagement, and stakeholders were eager to enter into that conversation. By opening up the citizen engagement process beyond traditional consultation and by engaging in communication and practices that support horizontal government, this strategy process may have bestowed on DNR a sense of transparency and accountability that brings the department into closer alignment with what Nova Scotians value in government.

The process has clarified citizen values for DNR employees around the key strategy areas of forests, minerals, parks, and biodiversity; it exposed DNR to the vast amount of technical expertise existing outside its walls, and that expertise will be watching how DNR uses their information. The process exposed the department to the value non-DNR stakeholders can bring to its activity, both inside and outside government, especially when they are engaged as opposed to merely consulted.

This has been a very challenging year for Nova Scotia's mining industry. Nova Scotia is a world leader in gypsum production and our gypsum production has enjoyed steady growth for many decades. However, the collapse of the U.S. housing market has resulted in a more than 50 per cent reduction in gypsum production. All five Nova Scotia gypsum mines have experienced production slowdowns, shutdowns, and layoffs over the past year. The good news is that we will be one of the first to know when the U.S. economy starts to show signs of real recovery. When this happens, the U.S. will need gyproc for all those new houses and buildings, and our mines will be ready.

Staying on the theme of good news, I'm pleased to mention that the Canadian Gypsum Company recently received an environmental assessment approval for the extension of the Miller Creek mine near Windsor. The granting of the environmental assessment for this project is a clear statement that our government supports responsible mineral development. In terms of base metals, the sharp decline in lead and zinc prices in 2008 and 2009 led to the placement of the Acadian Mining Scotia Mine on care and maintenance. We are hopeful that the return to higher base metal prices will lead to the eventual reopening of this mine.

Production of other minerals in Nova Scotia, including salt, aggregate, limestone, peat, silica, and clay, have been less affected by the current economic recession and these commodities continue to contribute significantly to our economy. Despite the challenges facing Nova Scotia's mineral sector, there have been several recent developments that bode well for the industry's future. The Donkin Coal Alliance, consisting of partners Xstrata Coal and Erdene Resources Development, recently announced revised plans for the Donkin Coal Project. Xstrata and Erdene now plan to mine, wash, and export approximately 2.75 million tons of metallurgical grade coal per year once full production is reached. The current prices for the metallurgical coal project alone will double the value of the province's mineral production. The companies anticipate the project will directly employ 200 people with up to 800 associated indirect jobs. My department will continue to play a lead role as the project moves forward to production; specifically, DNR will continue to coordinate the one-window mine permitting process that acts as a single regulatory portal for the proponent.

Our mining industry is going for gold in Nova Scotia. The gold is now more than $1,000 or $1,100 U.S. per ounce and this has been a great thing for our gold mining sector. Explorationists are expressing considerable interest in our Meguma gold deposits and other gold environments throughout the province. We are hopeful that Atlantic Gold will soon obtain the final approvals for a project at Moose River and commence construction of the mine. When Atlantic Gold pours its first gold bar it will represent the first modern production of gold from a bulk surface gold mine in the province. I expect that when this happens it will turn some heads in the mining industry.

My Mineral Resources branch staff continue to work to support the mineral industry by conducting geological mapping and mineral deposit research and providing a wide range of client service activities. Staff in the Mineral Resources branch have spent the past few years preparing a series of leading-edge GIS-based geological resource atlas products to assist in evaluating the mineral potential of the province. The atlas will be released this Spring and digital map products will be available on our Web site for free download.

To sum up, Nova Scotia's mining industry is facing some significant challenges, like those of other jurisdictions. There are several projects on the horizon that have the potential to significantly increase the value of the province's mining industry. Our government is committed to supporting responsible mineral development as one of the pillars of the provincial economy.

I'd like to acknowledge another highlight in our Minerals branch. Late last summer, Dr. John Calder won the 2009 Provincial Geologists Medal at the federal Energy and Mines Ministers' Conference. This national honour recognizes his major contributions in the area of geoscientific research and geological surveys. Dr. Calder received the award for his many accomplishments, which include his leadership in the designation of the Joggins Fossil Cliffs as a UNESCO World Heritage Site. Dr. Calder has contributed significantly to geological advances in this province as an employee of the department for 31 years, and we are lucky and proud to have him.

In October our government made the moratorium on exploration and mining of uranium in Nova Scotia into law. We legislated this moratorium because it is what Nova Scotians wanted. We responded to the concerns that Nova Scotians have expressed over the mining of uranium in this province and have done so for nearly 30 years. This was one that the debate about Nova Scotia being in the uranium industry, I think, had been held some years ago, even before the McCleave Commission, but it was a particular concern to Nova Scotians because they always felt that by the stroke of a pen a minister could remove the moratorium. So at least now there will be a debate in the Legislature. If any government plans to change that in the future, then Nova Scotians will have an opportunity to have their say in that.

The new legislation contains three key elements prohibiting exploration for or mining of uranium in Nova Scotia, allowing mining of uranium that is encountered in the course of mining other minerals as long as the uranium is present in quantities less than the designated threshold value of .01 per cent by weight, allowing radiometric or other normal exploration techniques to be used in the exploration of other minerals.

This legislation sends a clear message to the mineral industry and all Nova Scotians regarding government's long-term intentions with respect to uranium. The concerns raised by Nova Scotians for decades, dating back to the McCleave Inquiry launched in 1982, remain the same, and they've told us the risk to their health and the environment and the potential for nuclear proliferation make uranium mining unwelcome in this province.

There will always be those who extol the virtues of uranium mining and they may make a strong case, but the people of Nova Scotia do not want to be part of the world's uranium economy. This government enthusiastically supports the long tradition of mining in this province - just not the mining of uranium.

Moving away from mining, I'd like to speak about the huge step forward our government took in our land protection plans by budgeting $75 million for large land purchases. Roughly two weeks ago we finalized our unprecedented Large Land Purchase Program, acquiring in this fiscal year more than 150,000 acres of land, equivalent to one and a half times the size of Kejimkujik National Park.

The Large Land Purchase Program was a highlight of our 2009 budget. It was established to enrich Nova Scotians' environment, boost the economy, and help the province reach its goal of protecting 12 per cent of Nova Scotia's land mass by 2015. The land will support wilderness protection, heritage conservation, tourism, recreation, community use, fishing, hunting, and potential Mi'kmaq uses. Some of the land will help protect jobs in the forest industry and support the economy in rural Nova Scotia.

In early February we got the ball rolling by purchasing 65,000 acres of J.D. Irving land in Annapolis, Digby, Yarmouth, and Cumberland Counties. Of the J.D. Irving land purchase, about half will support economic development, recreation activities, and potential Mi'kmaq uses. The remaining land has high conservation values and will be a focus of the environmental protection which could also develop into economic advantages.

I am happy to say Buy Back Nova Scotia, a coalition of 75 organizations representing hunters, fishers, paddlers, off-road-vehicle enthusiasts, municipalities, outdoor guide and tourism businesses, environmental protection groups and social organizations were quite pleased with this purchase.

Later in the month we purchased more than 9,000 acres of land from Wagner Forest Nova Scotia Limited, the most significant parcels were 22 kilometres of continuous coastline in the Bay of Fundy at Apple Head, Cumberland County, which was the largest piece of privately owned ocean frontage in Nova Scotia. A 950-acre parcel surrounded by Eigg Mountain-James River Wilderness Area in Antigonish County and a 237-acre parcel of old growth forest near Panuke Lake, Halifax County. Almost all of the $9 million purchase was acquired to help the province reach its conservation goals. The Ecology Action Centre gave a thumbs up to this land acquisition.

On March 1^st we were thrilled to announce details of the 55,000 acres of land we acquired from Northern Pulp Nova Scotia Corporation. It includes some exceptional natural land for protection which we were fortunate to purchase at a great price, approximately 60 per cent of the current market value, a saving of almost $10 million. The land purchase created the opportunity for Northern Pulp and the Mi'kmaq to work together to develop a benefits agreement in the areas of training, economic development, and employment. It also encourages the development of forest management protocols on land of Northern Timber and Northern Pulp that have potential or known archeological significance.

Most of the 55,000 acres will be allocated for protection while the remainder will continue to be used as active forest lands, licensed to Northern Pulp. Nova Scotians will have opportunity to provide input in the protection process and once lands are designated as protected, they will have the use and enjoyment of those lands forever. The vast majority of land we bought from Northern Pulp has been identified by the Colin Stewart Forest Forum Report as having high conservation values and information developed by the forum was used extensively by the team to select the parcels. The purchase includes lands which will help to protect water supplies, including the Town of Stewiacke and St. Andrews River water supply area. It includes large representative blocks of land in regions where there are currently no protected areas, and up until now, there was limited or no Crown land on which to establish them. There are also lands of significant ecological value next to existing protected areas and includes lands having outstanding features, like old forests, rare plants, and frontage along major rivers like the St. Mary's and the Stewiacke Rivers.

A few weeks ago we made our final large purchases of the fiscal year. The most significant include nearly $2.5 million for about 4,000 acres of land from J.D. Irving Limited in Yarmouth, Shelburne and Annapolis Counties and nearly 10,000 acres of NewPage land at Antigonish, Guysborough, Pictou, Inverness and Victoria Counties for $5 million. The jewel in that purchase is a parcel at Kelly's Mountain in Cape Breton which has cultural and heritage significance to the Mi'kmaq and the province. Chris Miller of CPAWS attended this announcement and was "over the moon" - that's a quote - with our purchases.

Nova Scotians have told us they want government to buy land for protection, community use and to address potential Mi'kmaq use. We have acted by seizing these opportunities. Increasing the province's Crown land base is good for all Nova Scotians, now and for future generations. Aboriginal interests, including traditional, cultural, heritage, conservation, and economic values have been considered in selecting these parcels. Future land use planning will take into account Aboriginal values in the purchased lands.

With all of the purchases we made under the Large Land Purchase Program, we expect that we will protect close to 9 per cent of the province's land mass, so we have a bit further to go to reach the 12 per cent goal by 2015, but we have certainly made a big step forward. Of course, final decisions on protection of specific parcels within the lands we bought this year will be made over the next few years through the province's consultative process, to reach the 12 per cent goal.

In coordinating these land purchases, I must acknowledge the dedication and hard work that was put in by the Land Services Branch, regional staff from my department, and the negotiating team which included staff from five other departments and offices - Environment, Finance, Economic and Rural Development, the Office of Aboriginal Affairs, and the Policy and Priorities Office. It was no simple task.

[12:00 p.m.]

From land purchases to our forests, we anticipate that the upcoming Natural Resources Strategy will guide the province and lead us toward continued and sustainable growth of the forest sector; sustaining a healthy, protected forest on all tenures; maintaining forest ecosystems and biodiversity; and supporting and promoting the economic, social, and other value uses of forest resources.

In conjunction with the Environmental Goals and Sustainable Prosperity Act, the department is working with Environment to prevent loss of wetlands while enabling forest operations, developing a water resource strategy, and organizing provincial groundwater information in a spatial database.

Some of the big issues facing the industry: the province is working to regulate and slow the spread of the brown spruce longhorn beetle. The brown spruce longhorn beetles are also being found further afield. Options are being undertaken to minimize disruption to wood movement. This government is giving serious consideration to increasing our use of forest biomass as a renewable source of energy, and there are many important questions regarding the sustainability and health of our forests that need to be answered before we proceed.

Because of the issues associated with increasing the use of forest biomass for energy, government is consulting with experts and doing exhaustive research before the policy is completed. We believe using biomass for energy can have a positive impact on the environment by reducing the province's reliance on fossil fuels and can help create jobs. The province is currently in the process of developing policy regarding harvesting biomass for energy.

Potential opportunities: biorefinery, integrating the existing pulp paper facilities and extracting higher value from the feed stock in the form of chemicals or fuels without compromising the base production. Torrefaction, the density wood pellets for ease of handling and increasing thermal output. Biofuels, developing liquid fuels from pyrolysis of wood fibre. At the Department of Natural Resources we aim to balance the many demands on our forests while providing the forest stewardship to ensure sustainability of the resource. The forests are our heritage. They are important economically and environmentally. With climate change and the shifting tide to bioenergy, the challenges of forest management have become more complex, which makes our job that much more interesting.

We continue to provide economic stimulus to our province through a silviculture program. The province and the federal government recognize the need for adequate funding to maintain investment in managing the forest industry hit hard by adverse market conditions. The total investment of $14 million brings jobs that our forest families rely on, and more will be created. It also means our rural areas will prosper in development. It means that the important silviculture work necessary to allow us to hit our sustainability targets will continue at a time of economic downturn.

We understand that silviculture is an essential part of not only sustaining our forests but in sustaining our forestry sector. That's why part of the province's funding will go directly toward additional silviculture treatments on private woodlot lands and provincial Crown lands. Investments like this are crucial to the future of our province's sustainability as a whole, and on behalf of the province, we are more than thrilled to be able to contribute toward this industry to ensure our forests stay vibrant for the years to come.

We celebrated a remarkable achievement just before Christmas when we received a report from the Colin Stewart Forest Forum at a ceremony in Province House. This report will play an important part in the government's approach to protect 12 per cent of Nova Scotia's land base by 2015. This was an unprecedented collaboration between large forestry companies and environmental organizations that worked as a team to produce the report. Members of the Colin Stewart Forest Forum volunteered five years and proved that environmental organizations and industry can work together in the interest of conservation and economic sustainability.

The forum is named for the late Colin Stewart, a well-respected ecologist and environmental advocate. I extend my sincere gratitude to the officials in my department who provided extensive support behind the scenes as the forum was developed and throughout the process. They will continue to assist government as they analyze this report and help us determine how this forum piece fits in the overall environmental goals and sustainable prosperity puzzle.

I am proud of my department's role in the creation of a new protected wilderness near the Eastern Shore of the Halifax Regional Municipality. This past September the province designated Ship Harbour Long Lake a protected wilderness area, which helps to protect the environment and give Nova Scotians a place to experience nature and a variety of the potential for new economic opportunities to the region. This designation is a great example of various groups working together to help benefit our province.

The Ship Harbour Long Lake lands are about 14,700 hectares and include stands of old forest, large wetlands complexes, raised bogs, and numerous wilderness lakes and waterways. These features provide habitat for rare and globally-endangered species and help sustain a traditional wilderness recreation in the area. The wilderness area will also help keep the air clean. Forests and wetlands are natural carbon storage systems and this wilderness area stores more than five million tons of carbon - the amount emitted by 950,000 cars in one year.

I am happy to say my department's Forestry Action Plan is helping landowners manage sustainable and healthy forests in southwestern Nova Scotia. In late October we invested $150,000 for the Mersey Tobeatic Research Institute, based in Queens County. The non-profit co-operative is using the funds to develop a guidebook for forest management to promote and access the feasibility of additional group certification.

In February of this year Nova Scotia hosted a two-day forest health conference, highlighting the effects of insects and disease on our changing forest resource. Panel discussion topics included socio-economic issues, the National Forest Pest Strategy, urban forestry, climate change, the environment, and tools of the forest. The conference was an innovative venture for Nova Scotia and highlighted the importance of insects and disease on the changing forest resource.

My department provides ongoing support to the Nova Scotia Christmas tree industry. The Christmas tree industry has been a sustainable, major contributor to our rural economies. However, the industry is being threatened by competition from both artificial trees and real trees produced elsewhere. To address this issue and ensure the survival of the important industry, Atlantic Canada growers have joined forces with researchers from the Nova Scotia Agricultural College and the University of New Brunswick to develop a comprehensive research and development strategy. A key aspect of this research is aimed at improving needle retention of balsam fir. Needle retention is key to the consumer acceptance of real Christmas trees.

This year the government has offered its support of the Nova Scotia Agricultural College Smart Christmas Trees and Technologies Initiative and has asked ACOA for its financial assistance through its Atlantic Innovation Fund.

As we do every year, our Christmas tree experts once again found a wonderful pick for last year's Boston tree. Throughout the year staff at Natural Resources from across the province joined in the search for that special tree worthy of this honour. Thanks to the Shatford family's generous donation, we were able to send a remarkable 15-metre white spruce tree to Boston. Since 1971, we have been thanking the people of Boston in a special way, by giving them a unique gift that represents our province. Each year we send them the biggest and most beautiful Christmas tree we can find. This tradition is about history, it's about gratitude, and it's about generosity of the holiday season.

Our provincial parks contribute to a popular destination for out-of-province visitors and Nova Scotians alike. Our research has reaffirmed that Nova Scotians visit and explore our provincial parks for the nature-based experience they provide.

Our reservations system has been a resounding success. The computerized system allows us to note that there were more than 50,000 overnight stays at provincial campsites during the 2009 season. Roughly 28 per cent of the reservations were made by individuals outside of Nova Scotia. The province has continued its commitment to ensure all visitors have a chance to enjoy our natural park settings by updating campsites. It continues to encourage the volunteer efforts of our campground house and Parks are for People programs that give visitors extra insights into the park and its surrounding areas.

Four parks will be improved this year due to the funding from the Canada-Nova Scotia Infrastructure Stimulus program. Laurie Provincial Park is undergoing an extensive renovation this summer and the camping park is closed for the season. Mira River Provincial Park, Whycocomagh Provincial Park, and Cape Chignecto Provincial Park will also see improvements this year.

In January, the province signed a Memorandum of Understanding expressing a commitment to work collaboratively with the federal government to establish a federal protected area on Sable Island, either a national wildlife area or a national park. Sable Island is an iconic piece of Nova Scotia's natural and cultural heritage and a place that deserves to be protected so future generations can appreciate it as we do today. This MOU provides a framework for the road ahead and will build on Nova Scotia's previous commitment to provide $100,000 per year toward the cost of maintaining a human presence and research platform on Sable Island. Once protected, Sable Island will be a significant and recognizable piece of Nova Scotia in the portfolio of sites that will make up our 12 per cent commitment under Nova Scotia's Environmental Goals and Sustainable Prosperity Act for protecting land.

Recognizing that this island is a critical piece of our offshore interests, Nova Scotia will remain committed to being an important voice in the management of the island as a partner with the federal government. A federal-provincial task force is currently working hard at assessing the conservation options that will form the basis of an informed public consultation.

In September, I was honoured to take part in the ceremony to officially recognize the lives and service of three Nova Scotia conservation officers who died in the line of duty since the positions were established 135 years ago. Family members of these officers were in attendance at the event in Shubenacadie. Since 1874, conservation officers - or game wardens, as they were originally called - have been protecting Nova Scotia's natural resources from misuse and harm. I hope that this memorial inspires Nova Scotians to learn more about the lives of the men whose lives were lost and the important work of conservation officers.

Last June 10^th, our department's firefighters were in Val d'Or, Quebec as a sustained action group to help control and extinguish numerous forest fires burning throughout the province. A team of 24 staff, including three safety officers, a sustained action crew of 20 wildland firefighters, and an agency representative were also sent to Kamloops, British Columbia in August to help control extreme fires. After having experienced two large fires within the past two years, Nova Scotians can appreciate the various resources required when fighting forest fires. We were pleased to be able to give back to those provinces who have helped us in the past.

When the province has a low level of fire concern, it provides an opportunity for resources to be lent to provinces in greater need. Nova Scotia has many trained personnel with wild fire experience and we will continue to lend our skills and knowledge in the future.

Last month my department announced we were seeking public input to revise provincial deer management zone boundaries to better manage the population and provide more harvesting opportunities. We hope zone revisions will help direct hunters to areas with the highest deer numbers. The existing zones are too large to achieve optimum hunting results, which have become a problem where numbers are high and deer have become a nuisance. We believe boundary revisions and subdividing a number of the zones will help address this issue and have asked for public input.

My department is offering hunters, the agricultural community, and the general public the opportunity to help guide us through this process. Interested parties are being asked to visit our Web site to view a map of current and potential revised zones or contact the department's wildlife division directly to receive the information by mail. We've been very impressed by the response, more than 800 on-line responses have been received in the past month. Of course, there are currently eight deer management zones throughout the province, introduced in 1998 to improve hunting opportunities. We hope to have new zones in place by the Fall hunting season.

In one of my first events as minister in June, I took part in the announcement of guidelines for the Mi'kmaq moose hunt in the Cape Breton Highlands. The guidelines - 10 years in the making - deal with a range of concerns related to the moose hunt, including safety, the establishment of a no-hunting time, rules for non-Natives who accompany Mi'kmaq hunters, the creation of community authority and hunting advisory groups, and hunter reporting regulations. Over the next couple of years, the Department of Natural Resources officials will educate Mi'kmaq hunters about the guidelines and continue to get feedback on them while exploring exactly how they could become law and how they would be enforced. We will continue to work with the Mi'kmaq community and other partnerships to ensure moose conservation and management remains a priority in this province.

[12:15 p.m.]

In July we financed more projects through the province's Habitat Conservation Fund, which is supported by hunters and trappers when they purchase the mandatory $3 Wildlife Habitat Stamp on all hunting licences in Nova Scotia.

Martens, piping plovers, and flying squirrels are among a number of Nova Scotia wildlife that will benefit from 12 projects funded by last year's total of $86,000. Since the Conservation Stamp Program began in 2001, about $860,000 has been directed toward wildlife conservation. This initiative allows hunters and trappers to help protect the province's wildlife habitats when they purchase their stamp, with the primary goal to help projects that protect and enhance wildlife habitats.

Nova Scotians also continue to support our Species at Risk Conservation Fund program by purchasing conservation licence plates. In August we announced that 13 projects would be funded with more than $80,000 as a result of these purchases. These projects address conservation concerns for the most threatened species of plants and animals such as wood turtles, long's bulrush, and the piping plover. Some of the research and stewardship initiatives aim to describe and protect habitat for more than eight species at risk along with monitoring an inventory for many more species that are a high priority for conservation.

Other projects address species like dragonflies, freshwater mussels, and rare plants that are being considered for legal listing under Nova Scotia's Endangered Species Act. This Conservation Licence Plate Program was established in 2002 by our Department of Natural Resources alongside the Department of Service Nova Scotia and Municipal Relations to raise awareness and provide support for species at risk.

In November, four additional American marten were released in the Whycocomagh Provincial Park as part of our continuing efforts to increase the population of this endangered animal. The American marten is an important part of Nova Scotia's history and we were pleased to be involved with this ongoing recovery project. The combined efforts of all the partners have made this a very successful program. Last year was the third of a five-year recovery plan with about 30 and 50 American martens being transferred from New Brunswick to Nova Scotia and a total of 76 transferred in the first two years. This recovery plan is helping to bring the population in Cape Breton to a point where it is self-sustaining. We have reached the last year for releasing martens and will spend the next two years monitoring the success of the project. Monitoring will help better understand their movement, activities, and population.

During the past year my staff, along with Feed Nova Scotia, the Nova Scotia Federation of Anglers and Hunters, Eastern Woods and Waters Magazine, and NovaScotiaHunting.com continued to support the greater needs of Nova Scotia through the Hunters Helping the Hungry effort. This program allows hunters to contribute deer and moose meat to Feed Nova Scotia simply by dropping it off at a participating licenced meat cutter. I'm pleased to say that more than 735 kilograms of meat was made available to Feed Nova Scotia in the 2009 hunting season.

In September, the Department of Natural Resources held its first open house for its employees and the public at the Shubenacadie Wildlife Park. The two-day event was a great opportunity for us to showcase and explain exactly what we do as a department and why our natural resources are so important. An open house helps everyone learn firsthand about our province's natural resources, and this is particularly important now as a new natural resources strategy is being developed. This open house was a great opportunity for DNR, for young people to explore unique career opportunities, and for Nova Scotians to learn more about the work we do within our department. Visitors had the chance to participate in active demonstrations and self-guided tours, to talk with staff at numerous exhibits, and to watch firefighting demonstrations and check out our fleet of helicopters. They also had the chance to learn about surveying minerals, hunter education, wetlands, parks, forest health management, wildlife, and much more.

Finally, I personally feel very proud of the work we've accomplished this year and I look forward to the year ahead. This year promises to be one of change and progress. In the coming months our province will have a new strategy for its natural resources. We are prepared for the challenge and we have a great team at DNR and we are looking forward to working with our other partners and stakeholders to build a better future for Nova Scotians through responsible and sustainable natural resources management.

MADAM CHAIRMAN: Thank you, Mr. Minister. I appreciate that. We'll now move on to the Liberal caucus, who will have one hour. The time is now 12:22 p.m.

The honourable member for Kings West.

MR. LEO GLAVINE: Thank you very much, Madam Chairman, and thank you, minister, for a fairly comprehensive introduction. Jean Laroche was here, and I said the minister has done everything but a deer count here this morning.

MR. MACDONELL: The buck stops here.

MR. GLAVINE: Did you miss coyotes along the way?

MR. MACDONELL: I did, actually.

MR. GLAVINE: We'll help you with the coyote question. I know you started off talking about the Natural Resources Strategy, and it is a document that got started roughly three years ago. We know that it is hopefully going to be a seminal piece of work that will really guide the next 40 to50 years for natural resources in this province.

One of the things that I would say really helped focus the off-highway vehicle study and report that was done was to actually have a little more filtering through a second round of selected public consultations. Has there been any thought given to that direction or is Phase 2 going before yourself and the Cabinet and then the writing of Phase 3 - is that pretty well set in stone, and how is that going to unfold?

MR. MACDONELL: That's pretty well set in stone, I would say. There has been a fair bit of public consultation on this strategy. It started with Voluntary Planning, which was entirely the opportunity for the public to make representation. Then even for the panels of expertise there has been public input because there were those - probably more so organizations but not exclusively organizations, who wanted to either send in or make presentation to the panels of expertise.

I would say that when the recommendations out of all of that, out of Phase 1 and Phase 2, come to me, which I'm thinking should be very soon - I was thinking the middle of April - I have one person charged with the task of the policy side, so that will be done exclusively within the department. The public part will have come to a close by then.

MR. GLAVINE: Thank you. That was really the only area around the strategy. Like many Nova Scotians - especially those who got out to Voluntary Planning and the panels, and there has been public discussion about many of the areas inside of the strategy, op-ed pieces, et cetera, so there is a very high degree of interest in this particular document - I look forward to that.

Just to get to some of the areas that have been dealt with, touched upon, since you became minister - on February 17^th you announced that the province had purchased 9,710 acres of land from Wagner Forest Nova Scotia Limited. It appears that Wagner will be allowed to clear-cut a significant portion of the land before the province hands over $9 million. I'm still a little bit confounded about purchasing the land after it has been harvested. Why wouldn't the province have looked at again, perhaps, a company to do selective harvesting, especially where some of it is coastal? I'm just wondering, why this particular decision?

MR. MACDONELL: Well, I guess probably, is the cup half full or half empty? We valued the piece at Apple Head to be extremely significant. I highlighted in the Colin Stewart Forest Forum, 22 kilometres of coastline able to be purchased by the people of Nova Scotia. The block is nearly 8,000 acres, I think, or maybe hectares, I forget which.

MR. GLAVINE: I was just wondering if you could clarify whether it is hectares or acres.

MR. MACDONELL: I can, at some point. As a matter of fact it is acres. So the issue around - I mean we bought it. In other words, we bought it before it was cut. It is not why are we buying cut-over land. We're buying it not cut but we're allowing them to cut it. Yes, it was one of those - they owned the land, we wanted to buy it, so you negotiate on the terms and this saved Nova Scotia taxpayers in the range of $1 million.

The notion of clear-cutting is not foreign to me. Anyway, I wasn't overly struck on the idea but I certainly wasn't going to let it be a deal-breaker. My staff came to me to say, this is an issue, what do you want to do? So really I made the final decision on that. It was far too valuable to miss.

We were thinking we would probably have to be in the $1,200 an acre range to get that piece of land, maybe more, and we got it for $900. If we didn't get it - although it is obviously owned by Wagner Forest Nova Scotia Limited - it runs the risk of somebody else having it. For the people of Nova Scotia, collectively they don't own enough of their own coastline, so it was something we could put up with. The forest will grow back and we'll manage how that grows back and it will be for future generations to come, until the end of time, so I think we were very lucky to get it.

MR. GLAVINE: I guess that is a plausible and reasonable presentation on the fact that yes, it's for the long term and we know that we need to look at forestry from a long-term perspective and also conservation of certain areas of the province for future generations.

I do need to say that having heard for six years about certain forestry practices in Nova Scotia, I felt it went against how, perhaps, an NDP Government would handle this. Even if it had been some clear-cutting in a traditional sense, selective cutting, but whole tree harvesting does produce a different forest recovery than leaving the tops and stumps, et cetera, we know that. In fact NewPage is now making it very clear about the biomass project they will engage in in Cape Breton and using 40 per cent of Crown land in Guysborough and so on, they are being very careful about making that distinction.

Wagner practices have not necessarily been around sound ecological or even good forest management. In fact, it is now a few New England States, once they get rid of their lands, they'll be done with Wagner because their practices haven't been that great. That was what really struck me. They're an investment company that uses forestry as the medium. They're more concerned about the return on pensions at Harvard and such places than how the forests of Nova Scotia will be treated.

[12:30 p.m.]

I think it's important to note that, to understand that, and for the province, in my view, to be very cautious with future deals with Wagner. That's what people in the industry are telling me. I was wondering who initiated this agreement, was it the province or was it Wagner?

MR. MACDONELL: I'm thinking it was us, since the piece of land - Wagner, I think, was one of the companies involved with the Colin Stewart Forest Forum. That was a parcel that was identified as significant in that process, so it was us who approached them about buying it. Everything the member says is correct. The issue is that in the absence of a policy - I think this will come back with questions around Northern Pulp as well, but I'm not keen to say to this company, you can do this, but not say it to another company. The strategy process hopefully will get us to that policy direction.

The indications that we have - one of the things we recognize, we didn't own the land. They were under no obligation to sell it to us, so it comes down to what will you put up with - price-wise, otherwise - to try to get it, and that's what negotiation is about. I think for us, yes, we introduced legislation to ban clear-cutting, so the member is right, things we've said in Opposition. Without a clear policy - and certainly there will probably be one coming forward through the Department of Energy on biomass before I get something done through the forestry side through the Department of Natural Resources.

People can only regard it for how they see it. I don't understand why they don't see the other half of the glass. They don't seem to recognize that, number one, the trees will come back. We'll own them, future generations will own them forever, and now we have this beautiful piece of coastline that's ours. If we hadn't gotten that, not only might we assume that those 2,000 acres would be clear-cut, but the whole thing could have been clear-cut and we might not have ever gotten it. I think this is a better scenario than us not getting it and having the whole thing clear-cut. I think having about a quarter of it clear-cut and the people of Nova Scotia owning it all is a much better arrangement than not.

MR. GLAVINE: What probably really stands out is the practice of how it will be harvested if it were, again, a selective process. We know now selective cutting is going on on some Crown lands and some of the harvesters are finding smaller equipment to use and it can be economical. Maybe not the same rates of return and so on, so I just wondered why, if this is going to be Crown land, we didn't use the precautionary principle and say yes, we want to buy the land, you can harvest, but here's the criteria that we're going to use. So I guess that's why it keeps coming up and I know I keep hearing from some people on this particular purchase.

Of course, the whole tree harvesting, minister - will that be addressed in terms of the provincial strategy?

MR. MACDONELL: Yes, it will be, and actually, when you referenced NewPage around whole-tree, that was me. I was pretty close to the writing of that consent agreement for NewPage, and condition number one, which was easy for them because they are FSC certified - no whole-tree harvesting. That wasn't necessarily an initiative by them, even though they are doing it; that was a condition set from my office, among other things, on that agreement.

MR. GLAVINE: Thank you, minister, I am pleased to hear that approach being taken. I'm sure we'll get to biomass later on. In terms of the first budget, in the Fall budget you had earmarked $81 million for your department for the purchase of land, and primarily most Nova Scotians figured you were setting your sights on the J.D. Irving lands in southwestern Nova Scotia; $75 million was spent. How was the other $6 million spent - or was it all spent - from last year's budget?

MR. MACDONELL: Madam Chairman, for the member, there was only $75 million for the Large Land Purchase Project. I think the rest - I can account for $5 million of the $6 million; I can work on getting you the other $1 million. I think there was $1 million from Environment, and I think there was $4 million in a fund that we used to buy land but not necessarily in association with a large land purchase.

Some mill owners had asked us - because of the downturn in the industry, there was money available for us to acquire assets of land and help out those particular operations. I think there was $4 million in that, so that leaves us a difference of $1 million. I'll see what I can do about finding you that.

MR. GLAVINE: The current figure came out at $75 million. That's what the budget is showing.

MR. MACDONELL: Yes, I'm trying to keep in my head the Northern Pulp, which was a loan, and the large land purchase, and the two amounts are somewhat similar. I'm thinking that the $75 million actually may have turned out to be $77 million, but I can't - I think I am correct, that it was closer to $77 million - $1 million from Aboriginal Affairs and I think the $1 million I mentioned in Environment took us to $77 million.

MR. GLAVINE: Maybe if the minister could provide a little breakdown in the coming days, to make sure we have that clarified, that would be appreciated.

There's no question that the purchase of the J.D. Irving lands and the land from Wagner, the coastal strip, is very significant, very important to the 12 per cent goal. Reaching that by 2015 is, indeed, very laudable, and I think all Nova Scotians and all governments have that kind of commitment.

I'm just wondering now if you could update where we are in terms of the percentage toward reaching that goal.

MR. MACDONELL: I think I can quite quickly, because actually my speech indicated 9 per cent; 9.6 per cent is what I was thinking was where we were, so I'll try to get that verified, but I'm thinking in my speech it was 9 per cent - 9.8 per cent, my deputy tells me, so we have some distance to go. If you consider what we spent, that is from like 8.6 per cent to 9.8 per cent, we have a challenge.

MR. GLAVINE: Yes, and of course if the minister couldn't provide that, I know the Ecology Action Centre could. They keep pretty close tabs on this area and I do applaud them for the advocacy that they've had to look after future generations. Having had the opportunity to fly over southwestern Nova Scotia, you start getting a sense of the need to do this in some of the areas that have had pretty substantial stripping of the forests take place in the past.

Just to reflect for a moment back on the $75 million, J.D. Irving - was that deal well along when you came into office? Do the department and yourself think that we got the best deal for Nova Scotia? I guess I heard from a source that there wasn't a big, long lineup for the land, and I just wonder, in the economic climate and so on, did we really get the best deal?

MR. MACDONELL: Yes, I think we did. The initial parcels that we got, because we bought some a little later, we couldn't really buy land; we made the overtures, but there was not really any give from Bowater. We had them in the loop of land we were interested in. I'm thinking that if they were interested in selling, the price was beyond where we could go and it freed up a few dollars, coming close to the end of our - getting close to the March 31^st deadline. So I think people in the department just picked up the phone to JDI and said, look, have you got more land that you're interested in? We've got money that we haven't spent. There were other parcels in JDI that were identified through the Colin Stewart Forest Forum, so they were fairly easy to deal with.

On those initial parcels that I think you're referring to, we thought we were fairly well treated. I think $600 an acre is the range that we came to. They were kind of the Buy Back Nova Scotia group; these were those parcels that they had clearly indicated they wanted.

Your question around had it started before I became minister, well, you would probably remember when we were in the House and there was an issue around when the province had approached JDI and they couldn't come to an agreement, I think in the range of $4 million or something and I can't think how large a parcel that was for. Not as much as what we bought, but anyway, it turned out they couldn't come to any kind of agreement on land. There were overtures made, prior to me becoming minister, for purchase of the land by the previous administration.

[12:45 p.m.]

I think it wasn't until we really put together our Large Land Purchase Project and put the funding in place to do that, we actually were able to really get into some hard negotiation on what was possible.

MR. GLAVINE: That was the driving area that I was wanting to get at. Of course, time will be the best judge of how that deal does work out for Nova Scotians.

On to the Northern Pulp land purchase that I had asked you a question about in the House. I know it's not as simple as a price on a piece of paper for X amount of land and so on. We're actually taking a look at a few of the legal parts of the deal that we didn't quite understand. I'm wondering if you could lay out the details here - with a little bit more time available to us - of the deal, $75 million for the purchase of Neenah lands for Northern Pulp.

MR. MACDONELL: I'd be glad to. I have it actually in my desk. Could I go get it?

MADAM CHAIRMAN: Could we carry on and perhaps get a page to get it? We're running quite behind, is there a chance we could arrange to have it? Perhaps the member could ask another question.

MR. GLAVINE: As a preliminary, this is probably where some of the political factors and realities may come into play, but the previous government made a deal with AbitibiBowater around $24 million for land - I think it was $24 million, I'm pretty sure it was around that - where the province purchased $24 million of land, some of it ecologically sensitive areas, close to the Tobeatic and that area. Is this more about subsidizing an industry that's truly in trouble?

Abitibi's future, in just a matter of the last few weeks, has weakened even further. It's now closed, I believe, at least for so many weeks. This is going to come out loud and clear very shortly. We had New Minas Pulp and Paper before us in Resources Committee just a matter of weeks ago, and certainly respect the viewpoint of Bill Towers on the industry. We're not going to have four pulp and paper mills in the province, possibly even within five years, let alone ten. Is this really a subsidization of the industry as opposed to true value for that kind of provincial investment?

MR. MACDONELL: Well, I think you're going down a reasonable road. The question is, are you giving money and getting nothing? So if somebody, because of a downturn in the industry - and whether that particular company or any particular company is feeling any pain, I can't speak to that. But if there are cash flow issues and they have an asset they want to divest themselves of and we have money that we could purchase it - where in another climate, a much stronger economic climate, they may not part with something that we would like to buy - then I consider ourselves at an advantage that there are these significant pieces that we could purchase, whether it's because of the economic climate or not, but something that would allow the company to move in this direction is where we would want to go.

Anyway, yes, I think the taxpayer has every right to wonder, are you trying to find ways to roll out money to help buoy up an industry or a company that might not otherwise survive? Maybe they could refer to the province as callous because we're taking advantage of them at a time when they could use money, but I think it's our job to work in the best interests of the taxpayer. I can't speak to the money of the previous government - but I think for us, because this was a company that we couldn't really negotiate a lot with on land purchases through this process - anybody who was willing, whatever they were thinking of for the future for their company or whatever, to let go of land that we deemed to be ecologically significant at a really reasonable price - look, in my area in 1999-2000, mills paid upward of $2,000 an acre for the timber on a piece of land. They didn't even get the land.

So if we were able to buy land for $300 an acre from Northern Pulp or $600 an acre from JDI and these were the pieces that we deemed to be ecologically significant - in other words they had a higher value than just the forest inventory that was on there, because in a year or two or three we might not have been able to ever negotiate. If we were to take what we bought now for $75 million and it became $250 million, you can really see the position we would be in to try to hit our target. I think that we were well advised to try to do this when we could.

MR. GLAVINE: Just to get back to my first question about the details of the agreement, do you have them available?

MR. MACDONELL: I don't have them. Could I go - I know I had them.

MR. GLAVINE: No, that's okay. We'll have another opportunity, so I'll just move past that. Again, I'll move on to some questions around biomass, and this, as we know, is becoming an everyday word in Nova Scotia, especially after the Wheeler report came out. Of course, one of the major premises or deductions of the report is that 15 per cent of our renewable energy can come from biomass. It's just a first overview question. I'm not sure if there's a lot of distinctions made around biomass, and also you happen to wear the hat of the Minister of Agriculture, as to whether or not it's directed solely toward forestry or biomass in general, and we're hearing a mounting and a growing number of concerns about the 15 per cent from our forests. I guess it's a case here where the application is now back before URB and this time directed stronger from Nova Scotia Power's determination to have a considerable stake in this development.

I'm just wondering, do you see the 15 per cent from the forests or the totality of biomass within the 15 per cent?

MR. MACDONELL: Yes, I think we'll separate the forest from the grass, not necessarily separate the forest from the trees. I can accept the number. I don't really have a problem with the 15 per cent. My issue is more around how we harvest it. I think that this is something that I would like to see either a woodlot or a company, that this is harvested either through FSC certification or no clear-cutting.

The issues around biomass, as we've seen them in the media - because quite often they were pictures of harvesting or Northern Pulp's harvesting practices, but that was not biomass going toward the 15 per cent. That was biomass for wood fibre for a pulping operation. As much as there's really no distinction - I mean, what you're doing to the trees is the same thing - that distinction was never made, because a lot of the issues around what you would read in "The Voice of the People" around biomass and harvesting, around the NewPage agreement or Nova Scotia Power, were taken in the context of what people saw in terms of the biomass harvesting that Northern Pulp was doing. People just took that all to be biomass and all the same type of issue.

In the agreement for harvesting on Crown land that NewPage - they have to impose FSC certification in their harvesting practices, which they do. They can't whole-tree harvest. They have a limit of 175,000 tons of material and they're not allowed to sell material. They're not allowed to harvest another 50,000 tons and sell it to other mills or whatever.

My department, and I think the two issues that I'm hoping that we will deal with first out of the strategy on the policy side will be around biomass and clear-cutting, so I'm waiting to see what recommendations come.

MR. GLAVINE: I guess just another little bit of move in this direction here, do you see this now as a bit of a hurry-up process, perhaps to get done before we actually get the natural resources strategy in place? This could, in fact, be putting the cart before the horse, if we're permitting Nova Scotia Power and NewPage to get in there with this project that may not have the best guidelines and the best cutting processes for sustainability. Fifteen per cent from our forests, as we know, is considerable. It's definitely going to require mechanical operations. The price is small woodlot owners are likely to be left out of the equation.

Is this a move now, before we have our Natural Resources Strategy in place, to at least get one big project up and running, the 60 megawatt venture at NewPage?

[1:00 p.m.]

MR. MACDONELL: No, I don't think so. Even if this project gets approval through the URB - and the jurisdictional thing I'm not clear on, because the URB said they didn't think that was the decision they had to make. I think NSP had made an obligation that they would go back to them. It would take about 18 months, I think, to get this project up and running if they decide that's what they're doing. So I'm hoping to have the recommendations out of the strategy Phase 2 - I was saying by the middle of April, but certainly soon, if it turns out to be the end of April. I'm not expecting it to take longer than that. I'm hoping that by June or early summer that we'll have a policy direction on this. I think we'll be well ahead of the project kicking off.

I think you also have to recognize that as the government, we can write regulation on harvesting practices and whether a mill has been here for one year or 50 years, they have to follow them. So whether this operation was to get up and running before we had policy, I think to a point is irrelevant. I think what my concern probably - and the reason we wrote that NewPage agreement as a template, certainly for any other considerations for large electricity projects that might use biomass, was that they should consider what requirement we put in place for the NewPage agreement. FSC certification and no whole-tree harvesting would be things that we would want to see in a policy around this use.

I would say that we feel quite confident that what we've written already, in the form of a template for that project, anybody looking or thinking about this should be mindful that this was what the government intended for their use on Crown land. Until we get our policy written and how it might apply to other projects or the harvesting of biomass or the use of biomass, we still have the legislative authority to make laws in the province and we certainly intend to use it.

MR. GLAVINE: In trying to see the big picture here, when I look at the pattern that is developing outside of Minas Basin Pulp and Power - which no longer uses pulp, they no longer use fibre - we see what has happened with Abitibi, the $25 million deal, the $75 million with Northern Pulp, a power project at NewPage - not to the same extent, but is this going to become our modern Sysco, where we're going to be truly seriously subsidizing and finding ways to keep these industries going? What will be the real price here on our Crown lands - especially in Guysborough County, where 40 per cent of the forest lands are Crown lands - and we're going to go in and strip forests for $2.50 a ton?

I was down recently and saw some yellow birch in those stands, 75 years old, that can have a real value of $250 to $300. I think there's some real, serious questions that the minister and his department need to look at before approval of a project on the scale of this. If we take a look at where the most successful areas have been, probably again the Scandinavian countries, where they have 1.5, 2.5, 5 megawatt operations, very sustainable, connected to small communities. Is this what's needed for the survival of NewPage, and are we prepared to let some of our Crown lands be potentially decimated by the mechanical, the clear-cutting operations - maybe not full-tree harvesting, but stem-tree harvesting? It's a big question here.

MR. MACDONELL: It's obviously a question that was bigger than my answer, because I thought I already went down this road to explain some of this, but I'll start over.

NewPage has a licence to harvest on that piece of Crown land already. They have. What they had to come back to government for was to get consent to use the wood for a different purpose, which was to burn it to create steam to create electricity for this project. In that request, in order to give that consent, there were some areas of concern I wanted to have addressed.

The question around setting a limit, so that we knew it was sustainable. We figured they could harvest 175,000 additional tons off that land, so we allowed them to do that. We wanted it done in a sustainable method of harvesting; we wanted a process that we thought would go toward reduced clear-cutting and appropriate clear-cutting. I'm hoping to see that the FSC certification, which is the highest forestry certification for harvesting practices - that NewPage will even move further to less clear-cutting. At least there's an auditing process and somebody who's watching to ensure that they follow the standard. That was important to us as well.

We told them absolutely no whole-tree harvesting in this operation. I was concerned because I thought our stumpage rates were too low. I forget whether it was 25 cents a cubic metre or 75 cents a cubic metre for fuel wood, and we raised that to $3.50. As a matter of fact, they were in a position that we paid them to do the silviculture treatments on that land. We traditionally had to pay them - our bill for paying them for the silviculture treatments was more than we got paid for the wood, for the stumpage. After they paid us for the stumpage we still owed them money.

I thought, that seems a little odd to me. So we raised the price of the stumpage to what I felt was more appropriate in the marketplace. Now that's not an issue. We don't owe them after the bill is tallied for the administration of the silviculture program.

We also would not allow them to sell biomass, so they couldn't harvest beyond the 175,000 tons and sell that to another mill or another operation. Also, when you talk about is this being done, we had no significant dollar change. We did buy a parcel of land - I think $5 million from NewPage on the Large Land Purchase Project - but I think if you're trying to make a comparison between this and Northern Pulp, there were no significant dollars beyond that that went to NewPage on this. As a matter of fact, if anything, they probably should have been paying us to get the consent.

I think there were some concerns. We recognize the downturn in the industry. We're one of the few jurisdictions in North America where we haven't lost a pulp mill. With that, that doesn't mean there's a possibility for the world to change, that the mill operation over the - we have an agreement for 25 years. So there's every likelihood the mill operation as a pulp mill could shut down in 25 years or at some point for a variety of factors, and so it was a condition that the Biogen operation could be a standalone aspect of that consent and that we would be willing to allow them access to the wood fibre if the mill was to shut down and keep the electricity-producing part of that going. As far as using this in a way to subsidize the mill, I think they recognized that it's just hard to know what the future might bring as far as pulp mill operations, but they wanted to ensure that the co-gen part still had access to wood in the future if anything did happen to the mill operation.

MR. GLAVINE: I wanted to spend my last minutes for this hour on a story that has come to light today. It was an area that I already alluded to when I asked the minister if he had covered coyotes in his preliminary remarks, but it was an area that I was going to on Monday night because, as you know, we've had a number of incidents now in the province. We've had a death in Nova Scotia, a tremendous number of sightings near schools, and today in South Maitland we have a report of a woman unhurt after a coyote attack. I'm just wondering what the government's plan is to deal with what's becoming now a more recent rash of coyote attacks?

MR. MACDONELL: Well, a very important and timely question. I have to say that for some time now in interviews and whatever by the media, the question has come up around a bounty on coyotes. I have always taken the position that previous bounties by us and by other jurisdictions really cannot - you can't eradicate the coyote. So the question of a bounty is, how practical is that? But I want the member to know that I've asked for information to at least examine the possibility of a bounty. I'm not thinking of it in terms of eradication, but I am concerned about the increasing frequency of these more brazen encounters, more brazen coyotes encountering humans, and I'm worried about those. If it was one every 10 years, we probably wouldn't be talking about this, but it has gotten to be a number of them in the past 12 months or recent months.

I guess my question to my staff was really, is it possible to change the behaviour of coyotes so they're more fearful of humans? Certainly some of them are not. So we're really just fact finding right now. I've asked for information to be gathered. We have been in contact with the Province of Saskatchewan, which has had a bounty in place since November. Their bounty was more on the agricultural side, I think - pushed more by farmers, probably losses to livestock and whatever.

[1:15 p.m.]

Then the other question that controls what politicians do was around budgeting for that and whether we even have the resources to reasonably go down that road. So a place where I said once I wouldn't go, I'm asking questions of my staff to get the information in place where I might have to make a case to do that. I'm not there yet, but presently fact finding to find out if there's a way to - it's difficult to target those specific animals, and if we could do that in an easy way, I would say that would be where we would go first, but I'm not sure you can easily do that. Obviously if you have trappers or whatever in the area where you have the incident, there's probably a likelihood you might get that animal. I'm asking questions, I don't have all the answers, and when I do I'll weigh what the options are and decide at that time. I want to do that relatively quickly.

MR. GLAVINE: In the Fall, the member for Bedford-Birch Cove had contacted you and the department around a number of sightings on school grounds, not in general neighbourhoods, but actually on school grounds. At that time we had asked if the department was preparing anything around an educational piece of literature for identification, for safely dealing with coyotes, if they're in the vicinity or cross their path and so forth. I'm wondering if any progress has been made in that area?

Young children don't necessarily make a distinction between a big dog and a coyote. I think all of those things now need to be given the strongest consideration, perhaps some live trapping, in areas of heavy population. Whether we go as far as a bounty will be something as well that, I believe, will need to be considered, in light of a much more aggressive animal.

Bob Bancroft, a biologist who has a great understanding of animal behaviour, has been talking about this issue and realizes that we seem to be dealing with a different animal than what existed when they first came to the province around 1977. I think the time has come for the department to map out a series of 1-2-3 steps around education, trapping, perhaps a bounty. I'm wondering what the next steps are for the minister and his department?

MR. MACDONELL: The department actually made three school visits to educate the students and provide information. There is a lot of information on our Web site. We're presently putting a publication together that can go out and we work with Parks Canada as well.

One of the things - when I discussed with the member for the area - I asked her about the lay of the land because I did see it as quite problematic to try to go in there with snares or traps. You can well imagine what the issues might be. To go in there and try to remove a problem animal is problematic.

As far as trying to address concerns in any particular area with information and staff from DNR and so on, we're there, I think, to try to raise awareness and offer whatever action they might need to take if they were to encounter a coyote.

MR. GLAVINE: With just a minute left, I know you've looked at the Birch Cove issue and got out to the school and the area to provide some assistance, but this is a provincial problem now. No longer are we talking about an increase in sightings. We're having an increase in incidents, and I think the time has come for something very concerted around an information bulletin, an information piece, really, to all Nova Scotians. If you're a walker, you take precautions, you have something with you to hopefully defend yourself, whatever.

MADAM CHAIRMAN: Thank you. At this point your one hour has elapsed and we will now turn the forum over to the Progressive Conservatives. We have approximately 15 minutes and we will be ending roughly at 1:35 p.m.

The honourable member for Victoria-The Lakes.

MR. KEITH BAIN: Madam Chairman, I would like to continue on the discussion with the coyotes. Mr. Minister, we've heard significant discussion on coyotes in the last while. We know of the attack in the Cape Breton Highlands, which ended tragically, and yesterday of the woman in South Maitland who was attacked. We learned today also that there was another attack in the St. Mary's Goldenville area where a man was sitting on his step and was attacked. People are being told not to panic, and they're being told by members of your department, but people are panicking. I guess we have to move relatively quickly on this and it's becoming more and more apparent that something has to be done now. I'm just wondering - the Nova Scotia Federation of Anglers and Hunters is one group, I know that they don't believe a bounty will work, but they have other ideas concerning trappers. Has any discussion taken place with those people up to this point?

MR. MACDONELL: Okay, well, let me get to your last question last. Since you raise the issue, I'll answer the member for Kings West with your question too. The issues that are raised - about two weeks ago, actually, we did put out information around what you should do if you have an encounter. I spoke to that in the media. I'm certainly not advocating that people panic. I think they want to be very measured and level-headed with these encounters. One of the things that I had indicated even a couple of weeks ago was they certainly should contact their local DNR office and speak to the professional people there. That should be their first line of contact.

The issue around anglers and hunters - they haven't approached me on this issue that I'm aware of. Before we engage anyone, I would like to complete my fact-finding process that we're engaged in right now around the necessity or possibility or effectiveness of a bounty and where we think that could go or not. Then the implementation of that - we probably would speak to a number of stakeholder groups that might have an interest, but I'm not there yet. I don't want people to be panicking. Since I don't know the circumstances of the issue that you mentioned, I have to say I am concerned, but unless you can provide more - I haven't spoken to anglers or hunters.

MR. BAIN: I realize that you want to do your fact-finding, and you mentioned a lot of attacks that have taken place over the past 12 months, but this is two within two days. It's pretty hard to tell people to relax and what they should be doing about this, especially if today's story is that a man was actually sitting on the step and was encountered by a coyote. It's pretty hard not to panic when things like that are happening. The general population is becoming more and more concerned too, and the longer it goes on, the more panic-prone people become. So I guess my question would be, your fact-finding and the urgency of things that are happening right now, how long do you expect before your fact-finding will be done?

MR. MACDONELL: I'm thinking by the first part of next week we should have enough information to know what we can reasonably do and decide whether or not there is much of anything we can do.

I don't know if the members would be aware, but generally we take 2,000 coyotes each year out of the population by the trappers of this province. That's a significant number. Along with that, we still have this problem. What seems to be in the forefront is the behaviour of the animals that seems to be different than perhaps it had been five years ago or 10 years ago.

Is there an intervention we can pursue that would affect that? They don't seem to be fearful of people, at least some of them aren't. I'm not sure how many coyotes there are in the province, but if there were 50,000 and we have 20 that are overly friendly, it would be nice to remove those from the population. The question is, how do you do that? Usually those are done by targeted efforts in a particular area and we can't always be sure we got that animal, but certainly by concentration in that area, you can.

I think, for us, it's a question of what's possible, what's practical, and to still allay the concerns Nova Scotians have. It may not be possible to do that but I think removing 2,000 animals a year on a relatively consistent basis, that is what we've been doing. It might be a little less this year just because fur prices were down at the start of the season.

Once my staff gives me all the information I've asked for, we'll have to come to some conclusion. Actually it may go beyond me because if it turns out we were to offer a bounty then that could have a significant price tag, so it might have to go beyond my department to try to do that.

MR. BAIN: You answered a question I was going to ask, if you had an idea what is the estimated population of coyotes.

MR. MACDONELL: Don't take my number as factual.

MR. BAIN: It's pretty hard to get a number, but just estimates. Another question is, your wildlife biologists, with the increase in the population of coyotes, have they provided your office with any special reports on those increases? Specific areas or where it might be occurring?

MR. MACDONELL: Actually nobody has indicated to me that there has been an increase in the population of coyotes. There has just been an increase of incidents. I'm not sure, we may have some census data that indicates that. Probably the best example would be if we had consistent fur prices over the past number of years and the catch of coyotes went up significantly, we'd probably say there must be a real bump in the population. I'm thinking, that just because of price levels at the start of this season, the numbers might be down.

I don't know that we have any information that indicates the population is up and if we do, I haven't seen it. I'm sure somebody will tell me.

MR. BAIN: I guess another problem is, it's not restricted to rural areas anymore. That's the biggest fear, I think, that's getting out there. I think our citizens have to be assured that the issue is being looked at and will be addressed in the very immediate term. I think they have to have some assurance on that. That's a comment from me, but I'd like your comment.

MR. MACDONELL: Well I don't know. I'd like to have information that would indicate we actually can address it, number one. If we were to take another 2,000 animals, would that address it or would we still have the same frequency of attacks. So, those are all questions that I need answers for and, presently, I don't have. I think there has certainly been a change in my attitude because there was a time when I said there wouldn't be a bounty, and there may not be one, but I am quite keen to analyze the potential benefit, upside or downside of doing that, to see if it could address the issues that we're facing because I do see a behaviourial issue with coyotes.

[1:30 p.m.]

I'm not necessarily relating it to population. In a natural world it would seem that if the population was to increase beyond the capacity of the land to sustain it, that either mange, or there would be some other disease component that would put it into check, naturally, on its own, which I think had happened with that population some years ago in the province. It had peaked and then fell back. So whether the population now, what level that is, I can't give you that. I think I'm one of the people who were kind of hoping that natural influences would probably address the population issue but it may not have gotten high enough yet for any of that to kick in. Anyway, even if that happened, would that address the issue we're facing? I'm not sure.

MADAM CHAIRMAN: The honourable member for Victoria-The Lakes, I would remind you that there are approximately three minutes remaining.

MR. BAIN: Madam Chairman, with the shortage of time, I'm going to move from the coyotes to moose. I just want to bring forward, since time is limited, I received a call from a constituent who wanted to put his concerns forward about the December hunt that takes place and it's in Zone 1 from Neils Harbour to Pleasant Bay. The concern that my constituent has is that a large percentage of does are carrying calves at that time and because the bucks have no horns at that time, there's no way to tell if you're killing a doe or a bull. I guess it's referred to as the nuisance hunt and because of the fact that I just mentioned about the does and the bucks, they're wondering whether or not you have any consideration of eliminating that nuisance hunt?

MR. MACDONELL: I'm not considering eliminating it. It's kind of the first time anybody has raised it. It doesn't mean I wouldn't consider it but presently, at first blush, no. I guess I don't know enough about physiology of moose but I thought bulls carried their antlers further into the winter than December, because white-tailed deer do, and it's usually after the new year sometime.

MR. BAIN: Madam Chairman, I'm just going by this . . .

MR. MACDONELL: What he said, yes.

MR. BAIN: Actually I think this person even does guiding.

MR. MACDONELL: Oh, yes, well, if he does guiding.

MR. BAIN: But anyway, it would be interesting to get some of the science on that, too.

MR. MACDONELL: I missed the question. They drop them in February or early Spring, not December.

MR. BAIN: Not in December?

MR. MACDONELL: No.

MR. BAIN: Okay, so that should eliminate that problem and I will inform them personally of it.

Very quickly, Mr. Minister, the deer licences, and now maybe I'll leave that one. I'm going to ask a quick question and it's more of an Agriculture or Natural Resources, whatever way you want to look at it. A levelling program for blueberry land, is that gone?

MR. MACDONELL: If it's not gone, definitely reduced. We did make a cut in the Farm Investment Fund and actually some of the comments from producers were, we don't need any more blueberry land because of the price right now. It's not worth doing.

MR. BAIN: So you have no plans to replace - I'm sorry, Madam Chairman - you have no plans to replace it with . . .

MR. MACDONELL: Oh, we may at some point. We were asked to find a 1 per cent reduction - expenditure management. This was an expense that we thought the industry really wasn't asking for. I have to tell you that presently, with the current price and not looking to have a significant change in the foreseeable future, that this was an area of service that we could withdraw because the uptake would be so minimal.

MADAM CHAIRMAN: At this point I'm going to have to interrupt. The time allowed for the Subcommittee on Supply has now elapsed. My understanding is that we will resume again on Monday, and at this point I'll adjourn our meeting. Thank you.

[The subcommittee adjourned at 1:36 p.m.]