HALIFAX, TUESDAY, APRIL 17, 2012

 

SUBCOMMITTEE OF THE WHOLE HOUSE ON SUPPLY

 

2:05 P.M.

 

CHAIRMAN

Clarrie MacKinnon

 

MR. CHAIRMAN: We will begin the Estimates of the Department of Energy.

 

Resolution E6 - Resolved, that a sum not exceeding $29,568,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Energy, pursuant to the Estimate.

 

MR. CHAIRMAN: The honourable Minister of Energy.

 

HON. CHARLIE PARKER: Thank you Mr. Chairman, we're thankful for the opportunity to have a few minutes or hours, whatever it may be, to talk about the Department of Energy and our estimates. I want to welcome the members that are here with us this afternoon. I'm going to have a few brief remarks and then afterwards I'll try my best to answer any questions that the honourable members might have but before I do I want to introduce a few of my staff that are here with us this afternoon. On my right is our Deputy Minister Murray Coolican; and on my left is Scott McCoombs, director of Electricity and Renewable Energy Technical Policy; behind me to my right is Dene Palmer, our manager of Corporate and Administrative Services; Remi MacDonell our Financial Services support; my executive assistant Danielle Sampson in the front row; and Nancy Watson our director of communications. I believe I have everybody.

 

As you can see from the budget information before you, the budget for the Department of Energy is relatively unchanged from the estimate, we came in roughly $400,000 below what we estimated a year ago and I'll speak in more detail about the specific numbers but first I want to provide some context around the work that our budget supports.

 

 

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You've heard me speak in the Chamber and other times about our energy transformation that we are undergoing here in Nova Scotia and we all know the reasons why that is necessary. Nova Scotians are tired of the effect that volatile fossil fuel prices are having on their wallets. Electricity bills - and I guess you can see it every two months - we know are rising and Nova Scotians want the government to pursue sensible, long-term alternatives. The actions that we are taking will diversify our energy mix, stabilize electricity prices over the long term, reduce greenhouse gas and other harmful emissions and ensure that we are using energy more wisely and create jobs.

 

This is not an easy job and it can't be done overnight but the decisions that we are making today will get us to where we need to be. Most importantly we want to reduce our reliance on coal; this is the bottom line on which our energy plan is built. Coal prices are the biggest driver in electricity price increases. The cost of coal has gone up 75 per cent in the last seven years and that's a huge hit by anyone's standards so the status quo is just not an option.

 

Having a broader portfolio of energy sources, including the development of local renewables and cleaner burning natural gas, we believe is our best and lowest cost option before us. The Department of Energy is working hard towards that end, this department is guiding the province's energy transformation and we are making great progress.

For us to achieve the task before us we needed to have priorities and a plan for getting there and our priorities, Mr. Chairman, cover six areas: to maximize the benefits of a diverse energy economy; move towards a cleaner energy economy; develop our offshore and our onshore petroleum resources; to be a global energy innovator; encourage socially responsible development of our energy resources; and finally, to strengthen our partnerships through strategic collaboration.

 

If we want to achieve what we have set out to do, we need a department that is aligned with these priorities. That's why we restructured the department last year, as outlined during budget estimates a year ago. We're now through that reorganization for the most part and with just a few positions left to be filled over the next few months, we're well into the job of getting things done.

 

I want to take a few minutes just to outline a little bit about what this looks like for each of our three branches. We have an effective organizational structure to allow us to achieve our core priorities. As I mentioned, we have three branches on the Department of Energy tree: Sustainable and Renewable Energy, Petroleum Resources, and Business Development and Corporate Services. Our staff resources in the Sustainable and Renewable Energy Branch are working towards the innovative transformation of our electricity sector and the growth of renewable energy in our province. This branch provides policy advice and direction on implementing provincial regulatory targets and promoting energy diversity, security and sustainability. Through the work of this branch, we are encouraging community participation in renewable energy projects through the world's first ever community feed-in tariff or as we know it locally, COMFIT.

Nova Scotia is unique in recognizing the key role of communities in renewable electricity generation. We are pleased with the enthusiastic response to the program and anyone from a municipality to a group of farmers can organize and apply for the COMFIT. The Utility and Review Board sets the rates up front, enabling small community-based projects around the province to go forward. We've approved close to 40 community projects under this program so far and the remaining 60 applications will be processed by late Spring.

 

I should mention, I had the opportunity yesterday to be in the Town of Guysborough and made a number of announcements there under the COMFIT program - very enthusiastically received. There were 10 different companies that were successful with their applications on yesterday's date and they're spread around from Cape Breton to southwest Nova Scotia. Again, as I mentioned, there was very positive reception of those initiatives, so we're quite excited about the COMFIT.

 

The Sustainable and Renewable Energy Branch is also developing the Marine Renewable Energy Strategy. This strategy will guide the development of our tidal and other marine renewable energy resources while protecting the interests of Nova Scotians and the marine environment. It provides the regulatory framework for Nova Scotia to be a leader in the development of technology and systems that produce environmentally sustainable and competitively priced electricity from the ocean.

 

As you all know, Nova Scotia is a world leader in tidal energy development with our FORCE program - Fundy Ocean Research Centre for Excellence. That's our tidal energy demonstration project in the Bay of Fundy in the Minas Basin. We also have our smaller scale tidal COMFIT projects being developed in Digby County and also now in Cape Breton.

 

We're also working on a cleaner energy framework that supports reducing energy consumption and ensuring that the energy that we do use is locally sourced and cleaner, thereby benefiting Nova Scotia's economy, our environment and our health. We're working to create a flexible framework that allows us to adapt as circumstances change in any unforeseen way. Environmental and economic prosperity really can go hand-in-hand, pointing us to a cleaner and brighter energy future.

 

Our plan for a cleaner energy economy includes the enhanced use of natural gas as well as more renewables in meeting our environmental goals. As you know, natural gas burns cleaner than carbon-intensive fuels like coal or oil and certainly costs less at this time. Natural gas is also a good choice for consumers and our work to date indicates that we should have a lot of it. We certainly want to develop our local supply and make it more widely available to Nova Scotians.

 

The second branch in the Department of Energy is our petroleum resources group. They're working on getting more local natural gas developed for local use. Currently more than half of the natural gas that is produced from our offshore - in fact, 54 per cent in the year 2010 - was consumed in Nova Scotia and New Brunswick. Natural gas consumption in the Maritimes is expected to continue to rise and we want to be able to meet that demand with our local product.

 

We have significant offshore and onshore oil and gas potential here to be tapped. We encourage the responsible exploration and development of these resources to achieve maximum benefit for residents of Nova Scotia.

 

The Sable offshore project, as you know, is still producing although it's in natural decline. We also expect to see the first natural gas from our third offshore project, Deep Panuke, sometime later this summer. This is very exciting for everyone involved in bringing that particular project on-line. It's an exciting time really for our whole offshore sector.

 

We have demonstrated to the industry that we have a good resource and oil and gas companies around the world are interested in what we have to offer. As an example, we only need to look at Shell Canada's exploration bid earlier this year for proof of this. Shell will spend $970 million exploring our offshore over the next six years. This will result in jobs and hundreds of millions of dollars that will be spent right here in our province.

 

With the super major exploration interest, the offshore is poised to join the Lower Churchill project and also, the Irving Shipbuilding contract is truly game-changing opportunities for our economy.

 

I would be remiss if I didn't take this opportunity to acknowledge the tremendous work of our staff in the Petroleum Resources Branch in helping to attract the attention of the oil and gas companies around the world. These knowledgeable and dedicated civil servants work hard every day to make Nova Scotia a more prosperous and attractive place to live and work. I certainly commend them for that. They have spent considerable time actually travelling the world and time spent away from their families since the release last year of the Play Fairway Analysis and the results, as we know, came out of that with the Shell bid. Some of our staff in particular have knocked on a lot of doors of the super majors to attract investment this way.

 

This work ethic and dedication certainly spans all of our branches in our department. I should mention that we have an engaged team in the Department of Energy of just under 60 employees who work hard to make exciting things happen in our energy sector. Truly the work never ends.

 

Lastly, I want to mention the third branch of our department is the Business Development and Corporate Services Branch. It's this group that ensures the province receives the appropriate economic return from the development of our energy resources. They work to ensure that Nova Scotia companies and workers have opportunities to participate in the local, regional and international energy markets. Also within this branch lies the responsibility for regulatory and strategic policy, which helps to shape and align the work of the department and move innovative ideas and initiatives through the government structure and processes. The entire branch supports the development of an engaged, empowered, diverse and accountable workforce. Certainly we want to maximize our development opportunities as we transform our energy sector into one that is greener, more diverse, more secure and more sustainable.

 

The work of this department is important for our future energy security, for electricity price stability, job creation, economic growth, environmental goals, et cetera, I could go on and go but there is a lot of important work being done there.

 

I want to talk next about our renewable electricity plan and I am pleased to report that we are making great progress in meeting our greenhouse gas and other emission reduction targets. The province met its renewable electricity target for 2011 and currently the province receives some 17 per cent of our renewable electricity generation from that source and I think we are very much on track to meet or even exceed our 2015 target of 25 per cent renewable electricity. We are well into the implementation of the 2010 renewable electricity plan.

 

As I said earlier, Mr. Chairman, I think we have no choice but to transform our energy sector. The federal and provincial emission caps are also driving this transformation. Rise in electricity prices are hurting all Nova Scotians as well as our industries. Electricity prices are not rising because of our renewable electricity plan as some would suggest, on the contrary, decreasing our reliance on coal and developing more local renewable energy sources is what will stabilize electricity prices for consumers over the long term.

 

So our plan moves us off of foreign coal and maximizes the economic benefits of energy diversity. In actual fact we're down from over 80 per cent electricity generation being produced from coal, today it is currently in the 57, 58 per cent rage. I think we have some of the most aggressive renewable energy targets in the world by 2020 renewable electricity generation will exceed the electricity generation from coal for the first time with 40 per cent of our electricity coming from renewable sources and that is going to be more than what we rely on coal which will probably be around the 35 per cent. So the balance of that will come from cleaner burning natural gas and certainly this is good for our province, good for Nova Scotia.

 

An important part of our renewable electricity plan is the development of the Lower Churchill Hydroelectric Project at Muskrat Falls in Labrador. This historic partnership between Newfoundland and Labrador and our province will assist us in meeting our future energy requirements. A minimum of eight to ten per cent of our total energy needs will come from this project, it provides us with access to clean hydroelectricity at a fixed cost for 35 years helping to stabilize the electricity prices over the long term and it will improve regional transmission infrastructure as well that will enable the development of other regional renewable electricity projects. It reduces greenhouse gas emissions and contributes to our renewables target and will provide Nova Scotians with opportunities for jobs as well as millions of dollars in contracts for local companies.

 

We are collaborating now with the Maritimes Energy Association on ensuring that Emera and Nalcor Energy provide Nova Scotia companies with supplier development information and there have been some sessions already held here in the province, in Cape Breton as well as here on the mainland. We also have an agreement with Newfoundland and Labrador to ensure that Nova Scotia workers and companies have access to opportunities. We believe firmly that no other option provides this level of benefit to Nova Scotia.

 

The transmission system between Quebec and Nova Scotia is near its capacity and importing more is not an option at this time without major upgrades. There is no business case to make those upgrades without long-term price stability and presently Quebec does not offer that to us. Nova Scotians can be assured that all options are and will continue to be explored for securing the lowest cost, clean reliable electricity. The project will be subject to a full review by the Utility and Review Board to ensure that it is indeed in the best interest of Nova Scotians. The board will have all the information required to do its due diligence.

The Lower Churchill project sets the stage for regional energy co-operation in exploring regional system planning and improved infrastructure and this is certainly the basis of the Atlantic Energy Gateway initiative that Nova Scotia participates in with the other three Atlantic Provinces and with the federal government. Through this initiative we are working to address key issues with the region's energy sector, this includes the economic benefits of regional system planning, market opportunities for renewable electricity, regulatory issues, and research and development opportunities.

 

This is intergovernmental co-operation at its best and we've had good co-operation working with New Brunswick, Prince Edward Island and Newfoundland and Labrador and we're working together to determine the advantages of co-operative management of the regions' electricity systems. This initiative will help show the path forward on regional energy opportunities and truly is serving as a model for work underway across the country to develop a national energy framework.

 

The initiative, Atlantic Energy Gateway, is funding a series of studies and workshops in the key areas. Some of those studies would include systems planning and operations, financing renewable energy electricity generating projects, regional clean and renewable energy market opportunities, supply chain development opportunities and finally research and development challenges and opportunities. So those reports, those final reports in those areas should be ready and available to us this year. By the end of the initiative's work plan we should have enough analysis to know whether co-operative management of the region's electricity systems make sense for us to pursue it further.

 

It certainly is exciting times in the energy sector in Nova Scotia and as you know where there are significant challenges there are also great opportunities. We're trying our very best to identify those opportunities and make them happen so that Nova Scotia is no longer at the mercy of global markets and foreign energy production.

 

I spent a fair amount of time just talking about some big picture items and I want to take a few minutes to talk about other things that will make a difference for Nova Scotians over the long term. As we move towards a cleaner energy economy we must remember that one of the most effective ways to do that is by using less energy. In the short term we are promoting energy conservation in each and every home and business in this province. We are making life more affordable for Nova Scotians by helping them reduce their monthly energy bills. Every dollar that is invested in energy efficiency returns more than $2 in energy savings.

 

We continue to fund energy efficiency programs through Efficiency Nova Scotia because it saves Nova Scotians money, it creates jobs and it stimulates the economy. We believe that it represents the lowest-cost option for reducing energy costs for Nova Scotia homes and businesses. The aim of energy efficiency programming is to lower energy usage and therefore to lower energy bills. Just as an example, a single family household that spends $5,000 on exterior wall insulation to save money and make their home more comfortable can get a $1,500 rebate from Efficiency Nova Scotia. On top of that they'll save $16,000 in energy costs over the next 25 years. That investment does even more than that; that $5,000 home improvement puts money into the pocket of the contractor that is doing the work and the retailer who supplied the materials. It's money that stays in Nova Scotia communities.

 

Just as an example one of the local maintenance companies that is working in my area of Pictou County is Trinity Maintenance and they have just hired on four new people over the last number of months because of the demand for their services and I'm sure they are buying lots of local insulation and other building supplies. What is important is putting some local people to work and it is saving money for a number of homeowners in that area.

 

Here's another example, the owner of a 2,000 square foot home who spends $1,500 to have insulation blown in their attic would receive a $600 rebate from Efficiency Nova Scotia. That will save money every month on their energy bill and will put $1,200 back into the pocket of the local contractor who did the work.

 

We've placed a particular focus on reducing energy costs for low income households. In 2011, Efficiency Nova Scotia provided free direct installs of energy saving improvements on approximately 5,000 low income homes and 4,000 Community Services apartments. The improvements included energy efficient lighting, tank and pipe wrap, aerator faucets and low-flow shower heads. These improvements lower energy bills for these homes this year, next year and truly every year thereafter. The payback of reduced energy consumption is apparently on every power bill they'll ever receive after that.

 

Efficiency Nova Scotia has been active on other fronts as well, certainly on the new home side with 1,000 customers availing of the Performance Plus Program in 2011. Also through the existing homes program, 1,500 building envelope upgrades were completed last year. In total, Nova Scotians saved 110,000 tons of greenhouse gas emissions as a result of the electricity energy savings that were achieved in 2011 alone. That's the equivalent of taking 20,000 vehicles off the road.

 

In 2012 Efficiency Nova Scotia's investment in energy efficiency upgrades will add a $40 million boost to Nova Scotia's economy in hired labour and in purchased materials. We also saved Nova Scotians 10 per cent right off the top as this government removed the provincial portion of the HST off home heating.

 

We all know that using less electricity and conserving energy are the best ways to reduce energy costs. For example, something as simple as putting a lid on a pot on a stove will end up saving money. This keeps the heat in the pot and allows you to cook food more quickly at lower settings. There are a lot of things that all of us can do that, when done together, makes a big difference.

 

Businesses can also save money this way. Here's another example for a local business from the Windsor area, the honourable member may be interested in this, there was a community theatre in Windsor, it's now saving more than $4,500 a year on their power bill and the local electrician made about $1,600 for doing the work. Another example, a nursing home in Arichat in Cape Breton is saving more than $10,500 a year on their power bill and the electrician took home about $1,500 for his services.

 

There's a chicken farm in Maitland that is saving almost $3,000 a year on its power bill and the contractor made about $1,500 installing that lighting on that farm property. Finally, there's a food bank in North Sydney saving about $422 a year and paid the local contractor $270. These are win-win examples of how an investment in energy efficiency can save Nova Scotians money and employ local contractors.

 

The ice rink retrofit program across the province has also been a great success. As an example, the community rink in Newport is saving $17,000 a year since it was retrofitted. On average the annual savings for individual rinks is often more than $10,000 a year, which is a significant impact on the viability of these facilities, particularly in the rural areas.

 

Since the ice rink energy project started in 2009, 63 skating and curling rinks have been retrofitted with energy efficiency measures totalling more than $3 million. In 2011, 13 ice rinks were retrofitted and all the remaining ice rinks should be completed in the province this year. Programs such as the ice rink program create jobs, they stimulate economic growth and, as I said, it's a win-win for all.

 

Mr. Chairman, I think it is clear that we are on the right path with the direction that we are taking and the initiatives to get us to where we need to be and we will continue to build on the interest in exploring our offshore as well as our onshore, to work towards a significant discovery that will transform our economy. We will work towards increasing the use of local energy sources and in being a leader in regional collaboration and partnership, research and development, marketing our oil and gas potential and in tidal energy development. We will develop a social licence framework to ensure that communities are fully engaged in resource development.

 

We know that our local energy resources can grow the economy, can create good jobs and provide energy security and stability in today's uncertain world and that is exactly what our plan is designed to do. I hope I've provided some context as to what the department does with its budget. I'm not going to go through all the individual numbers that are in the budget estimates I know those are in front of the honourable members and I'm sure that you might have some specific questions as we go along about the numbers that are in our estimates but I did just want to leave you with a few specific points.

 

As you can see, Mr. Chairman, our budget is largely unchanged. There are no program cuts and capital projects or job reductions over last year's budget. Actually our budget is down this year about $1.1 million from last year and I just want to explain that a few things are responsible for this. As part of the restructuring of our department in various responsibilities three of our staff in the Department of Energy were transferred to the Department of Economic and Rural Development and Tourism. Also we saved $84,000 from the salaries budget by eliminating two positions that have been vacant for more than a year and that was with instructions of the Treasury Board, of course, and as part of our back to balance approach. There is also $500,000 less this year in 2012-13 for Efficiency Nova Scotia as per the multi-year funding arrangement that was announced last year for the delivery of non-electricity efficiency programs.

 

While it appears on the surface to be a funding cut in actual fact it was the agreed upon funding arrangement announced in 2011-12 for this year. The remaining $93,000 in savings we found to do our part in bringing this government back to balance so it does not have an impact on any of our programs or initiatives. With the reorganization that took place over the last year we are now better structured to efficiently and effectively deliver upon our mandate and focus on our core priorities that I outlined off the top.

 

Finally you'll notice that there is a $200,000 increase for the Canada-Nova Scotia Offshore Petroleum Board - $100,000 which will be recovered from industry as we get 50 per cent of that back. So this increase is to support critical functions of the board such as health and safety and environmental regulations. We are committed to ensuring that our offshore regulatory regime remains one of the most stringent in the world. In Nova Scotia we have a direct line of accountability between our chief safety officer and the board at the Canada-Nova Scotia Offshore Petroleum Board. I know that we all agree that safety of our offshore workers is paramount and we are actively working with the board and with our federal partners as well as with Newfoundland and Labrador to review our regulatory structures and ensure that they reflect the best practices for safety.

 

Our total budget this year is just under $30 million - $29,568,000 to be exact. We've reduced our operating on our salaries budget by 4.3 per cent in two years, in 2011-12 and in 2012-13, to contribute to government's overall back to balance initiative. During this time we added a great new initiative that I spoke about briefly at the top - the world's first community feed-in tariff for renewable energy projects. We are living within our means and making great progress in developing more renewable resources of energy with initiatives such as this one.

 

I know many of the members around the table here today represent rural ridings, as I do, so I just want to take a minute to talk maybe in a little bit more detail about the COMFIT program and the communities that are involved in projects around our province. It's unique, it's a made-in-Nova Scotia program, encourages participation of small community power projects at the distribution level. As I mentioned a few minutes ago, yesterday we were in the Town of Guysborough and there are a variety of projects that are approved including wind and in-stream tidal from all areas of our province, from Cape Breton to southwest Nova Scotia. There are also combined heat and power projects that are eligible under that program, under the biomass program and Run of River tidal is also eligible.

 

The program overall allows for broader participation in renewable energy by encouraging innovative partnerships and opportunities, resulting in projects that both benefit and are rooted in the communities. It has been my pleasure to visit a number of communities over the last few months on almost 40 projects that have been approved to date. I had the opportunity to be in Tatamagouche about a month and a half ago and certainly a very enthusiastic community there that is committed to clean, green renewable energy. I think it will allow some spin-off into other areas of the economy. Not only are people investing money there in the Spiddle Hill project, but they're actually starting to develop subdivisions that will have clean, green energy, underground power lines and even sustainable transportation initiatives.

 

I had the opportunity there to test drive an electric car. We travelled around the village and then ended up at the charging station that they have near their new library. Like I said, it's building community capacity for clean, green energy - not only in electricity or power generation, but also in sustainable transportation. It's just great to see that community participation.

 

We've approved a number of projects around the province, including a combined heat and power project in Queens County; Cape Breton University - because, as you know, universities are eligible for the COMFIT program - has an exciting COMFIT project there in that community. The Town of Mulgrave has a COMFIT project. Grand Étang in Inverness County - of course the wind map shows there's a tremendous amount of wind on the western shore of Cape Breton and there are a couple of smaller wind projects there in that community. As I mentioned, Spiddle Hill in Colchester County; Lake Major in North Preston here in HRM area.

 

Digby County has some tidal projects underway through Fundy Tidal Inc. and Dana Morin has been the lead engineer on that project and they're very excited. I remember the day we were down in Digby in mid-December last year and the first announcement on the COMFIT program. The community is very supportive there of tidal energy and other green projects. Petit Passage also has tidal potential there.

 

The First Nations project we approved under the COMFIT program was in Millbrook near Truro. It's great to see the KMK also involved because one of the projects we announced yesterday in Guysborough was for the KMK, but this particular one in Millbrook is a wind project just on the boundary of their lands. There's excitement and it's great to see First Nations participation in our energy projects here in the province.

 

The Municipality of the District of Chester had a project we approved there in early February. It's out on their landfill site halfway between Chester and the Annapolis Valley, so it's isolated from most residences and again, there has been strong support for it.

 

Avondale and Barneys River in your riding, Mr. Chairman, Northumberland Wind Field, they have a large number of investors, strong community support for their projects and a couple of their projects have been approved. I know they have some more in the queue under application, as well as in Wedgeport, Digby County.

 

The Town of New Glasgow has participated in a small wind project, I think it's 50 kilowatt wind near their water source in Forbes Lake in Pictou County. Watts Wind Energy in New Minas is an approved project under the COMFIT; Ketch Harbour here in this area and Bayswater. So there are a whole lot of community-based projects that have been approved. These projects really offer a variety of eligible projects, different groups involved, from municipalities, not-for-profit, development associations, a number of community economic development investment funds that people can invest in and use towards their RRSP as a local investment, so that's a win-win to keep the money in the Province of Nova Scotia. As I mentioned, the Mi'kmaq Band Council, the universities, the Halifax Regional Water Commission here in HRM and so on.

 

I could go on and on and speak about the benefits of the COMFIT community energy projects but I'm sure members might have a few questions for me as we go along.

 

The most popular projects on COMFIT have been wind but we've also seen two in-stream tidal projects - I believe it's three now, with yesterday's announcement, a biomass project. I just want to take a minute, Mr. Chairman, to commend our COMFIT coordinator, her name is Krystal Therien and she has worked very hard with community groups and citizens around our province and has helped move those applications forward. As I mentioned, almost 40 of them have been approved now and we expect all those applications will be approved by late Spring.

 

This program supports the goals outlined in our renewable electricity plan of gaining greater independence from volatile conventional fuel prices and it demonstrates Nova Scotia's leadership in sustainable energy use. Community renewable electricity projects will create employment and economic benefits in our communities. These projects will use local contractors and purchase from local building supply dealers, so it's a great benefit in rural Nova Scotia.

 

Projects also reduce greenhouse gas emissions, help the province in meeting our environmental obligations and a system providing Nova Scotians with a secure supply of clean energy at more stable prices.

 

Mr. Chairman, I am going to wrap up my opening remarks. I hope you had a chance to get a little inkling of what challenges and responsibilities are within the Department of Energy. As I mentioned, I have my deputy and others here at your disposal to help answer any questions so I would certainly welcome any comments or questions from any of the members. Thank you very much.

 

MR. CHAIRMAN: Thank you very much, Mr. Minister. The minister's opening remarks were 44 minutes, we have three hours and 16 minutes remaining in our time frame for today. I will call on the Liberal caucus for an hour of questioning.

 

The honourable member for Dartmouth East.

 

MR. ANDREW YOUNGER: Thank you, Mr. Chairman, and thank you, minister for your opening remarks. They were a little bit longer than the 20 minutes that the NDP House Leader committed to yesterday but I guess that's part of the running out of the clock that has been going on.

 

MR. PARKER: Sometimes I get long-winded.

 

MR. YOUNGER: That's okay, I'm sure he passed on the message of the agreement that was made. Anyway, there are a number of issues I want to cover but first, you had said that salaries had gone down but that's not actually reflected in the budget estimates tabled by the Finance Minister. In fact, it has gone down from the budgeted amount from last year but the budgeted amount isn't terribly relevant, it's the actual amount that's obviously the most important.

 

On Page 8.2, Salary and Employee Benefits have gone - they were almost $4 million - $3.993 million last year - and they are shown at $4.939 million, which is actually $1 million more, it's not 4.3 per cent less as you suggested. I see that it is down slightly from the budged amount but, as I say, obviously you were able to achieve savings last year reducing that to $3.9 million. Can you explain why your salaries and benefits would be $1million higher this year?

 

MR. PARKER: Thank you honourable member, it's good to have you here with us as I'm sure we will for the next hour have a few conversations. The budget amount within the department, as I mentioned, was down by slightly over $1 million in total and there are a number of vacancies that were in our department last year. As you know, we reorganized, a significant reorganization within the department and we came up with three branches, as you know.

 

I think there are about 10 FTEs that were down from the previous year but, as I mentioned, some of those were vacancies. There were actually three people transferred to the Department of Economic and Rural Development and Tourism and one position that was done away with through our share of getting back to balance and we're just now starting to get back up to scratch and to fill some of those positions that were vacant over the past year. I'm not quite sure if I answered your question but we'll keep on it if need be.

 

MR. YOUNGER: I thank you for that. I guess the point I just want to raise is last year you spent $4 million, we'll round it up, it's at $3.993 so that might as well be $4 million. This year you're suggesting spending almost $5 million. I recognize that it is a reduction in the budget and I recognize that there are FTEs that are moved around. I just think in your opening statement it sounded much more grand than it really is because you're actually spending a million dollars more on staff this year than you did last year and you made it sound like you're going to spend less when you're not really. You're spending less than you budgeted but you obviously achieved spending $1.2 million less and the department seemed to work just fine.

 

MR. PARKER: Well, again, I think the number of FTEs was 48, almost 49 in total, and the year before the total amount was 62, the estimate, but in actual fact there are a number of vacancies in there . . .

 

MR. YOUNGER: I agree, I'm just wondering why do you need . . .

 

MR. CHAIRMAN: Mr. Parker have you finished your answer?

 

MR. PARKER: Yes.

 

MR. YOUNGER: I'm just wondering why need to fill them. I understand that they were empty but why do you need to fill them? Because what you're suggesting is actually increasing the number of FTEs over the number of FTEs that you actually had working in the department last year. I'm just wondering why there is a need to fill - I'm sure that some of them need to be filled but why do all of those positions need to be filled?

 

MR. PARKER: As I mentioned there were a number of vacancies last year and we're working to try to get up to full complement, I guess as extra responsibilities and duties are being assigned to the department. For example the COMFIT program is certainly in full mode right now and we're working hard to engage Nova Scotians in renewable electricity around the province. There is more interest in our offshore with the recent Shell bid. There are just extra responsibilities and we're working to get those vacancies filled and get it back up to complement.

 

MR. YOUNGER: So did your department run poorly last year having those spaces vacant?

 

MR. PARKER: Pardon.

 

MR. YOUNGER: Your department, did it run below standard or poorly by having those vacancies there?

 

MR. PARKER: Absolutely not, no. We are staffed, we're very dedicated, they work hard, they worked extra hours, extra time to get the work done that was required but as we move forward there is going to be even more work and responsibilities and that's why it's important that we have the full complement of staff. As I mentioned in my opening remarks I'm very proud of our staff and, as I said, they work hard and are committed to our goals and our mission in the department. They have contributed greatly to renewable energy and other forms in our province and I have every faith they'll continue to do that.

 

MR. YOUNGER: Mr. Minister, for what it's worth, I agree with you that your staff have worked very hard and are very intelligent and dedicated and I think they did a very good job which is exactly why I would suggest that maybe those vacant positions, I think your department maybe has proven in the past year that those vacant positions maybe don't need to be filled, or at least all of them, and I would hope you would consider that because from my perspective I look at it as a $1 million increase in your budget.

 

One of the things that you talked about in your opening statement, and just now you referred to it, the Shell bids, and I want to ask you about that. The Canada-Nova Scotia Offshore Petroleum Board nominated four parcels. Four parcels were nominated by industry. My understanding is the parcels which were nominated by government, by the board, were not bid on, received actually no bids and that the parcels which Shell bid on were actually nominated by Shell themselves - which is fine, they're obviously allowed to do that and they only received a single bid which was Shell.

 

That suggests that there is a problem in the way that offshore parcels are being nominated by at least the government agencies, the board for example, because nobody seems to be showing an interest in the parcels nominated by the board. Yet there's obviously an interest even if it is only one party in the parcels nominated by industry. Have you looked into that to find out why that might be the case?

 

MR. PARKER: Mr. Chairman, certainly we're excited with our offshore. There's a lot of interest in it, you know, we spent a lot of time and effort getting ready for it and then when the call for bids came through the Canada-Nova Scotia Offshore Petroleum Board there was a lot of dedicated work by our staff to go out really around the world and talk to super majors and other oil companies to engage them. The whole premise of their interest and excitement was the Play Fairway Analysis which was contracted through the Department of Energy and there's a lot of participation in that from very knowledgeable companies like Beicip-Franlab from Paris, a company from London and, of course, our own Saint Mary's University and Dalhousie, the Geological Survey of Canada, Maritime Energy Association, our own Department of Energy, and so on.

 

That work is seen as a real tool I guess now for our department and we're going to continue to roll that out but it's 350 pages of maps and diagnostic information. I don't know if you've seen it, honourable member, but it's a real piece of work. It's very valuable to industry. Normally when industry is interested in land around the world, they'll do the work themselves and then decide whether they keep it as proprietary information. In this case we, as a department, contracted to have it done and we showed it willingly to anybody and everyone who wanted to see it. The interest was very strong but because it is such a large document and a large piece of work, it takes time to go through it and time to analyze it, and really to know what's in it and be able to interpret it. The call for bids came last year. Certainly there were a lot of companies that were interested in it, including some, you know, that were self-nominated to the board.

 

Out of the parcels that were put up, four were successfully bid on and I do know that there's going to be a call for bids coming very shortly again this year and again next year and the year after. We're excited about the prospects. We've had a lot of interest in it again this year and, you know, we're expecting there will be more interest but not only because it's coming again but I think it's because they've had some time to look at it and interpret it and are realizing, wow, if Shell is willing to put up $970 million, there must be something there and what does Shell know that we don't.

 

So I think there are other companies now that have a very strong interest in our offshore and it's six years of exploration and a lot of that money will be returned in jobs and goods and services that will be purchased here in our province. Again, we're just pretty excited about the prospects of moving forward from other gas and oil companies that we expect will be participating.

 

MR. YOUNGER: Thank you, minister, it didn't really answer the question. I will start by saying I'm glad to hear you talk so highly of the Play Fairway Analysis since the NDP, while in Opposition, opposed the government spending money on it. The person who is now Premier actually opposed quite voraciously the government spending that money. It is a welcome change to have that opinion because I think you're absolutely correct - for what it's worth. It's important that's out there and available to anybody interested in the offshore.

 

The question really was, there were eight parcels nominated, four of them were nominated by industry and four of them were nominated by the board. The issue is that the board-nominated parcels received no bids. I'm wondering what is being done to ensure - you have a great Play Fairway Analysis, I agree with you - the question is, you need to make sure that the parcels that industry are actually interested in are the ones that get nominated so that you can generate more than one bid. If there had been three bids on the parcels that Shell got, we might have got more money.

The Shell deal's great, but if Shell, Exxon and BP - for the sake of argument - had all bid on those parcels you might have ended up with more than $500 million. What is your department doing either independently or in co-operation with the board to try and ensure that the parcels that are nominated are actually parcels that the industry is interested in bidding on?

 

MR. PARKER: Certainly if industry wants to nominate some land through the Canada-Nova Scotia Offshore Petroleum Board, the board is then obligated to put that up for bids but it remains proprietary information. The board doesn't release which lands were bid or nominated by the board and the number of bidders. None of that is released by the board and it certainly will not be by the Department of Energy.

 

MR. YOUNGER: Thank you. It's fairly widely known, it has been reported and confirmed by the board at this point and as well as by Shell and a number of the other players, they've pretty much admitted in a number of news media outlets over the past couple of months. Whether they should have or not is kind of beside the point because it's in the public domain now and it's extremely well known in the industry. It's actually an issue that's being discussed is how to address that issue.

 

I understand the industry can nominate bids and Shell's quite open that they put those industry parcels up for bid because they were interested in them, as we would expect them to do, incidentally. I don't criticize them for doing it, that's why that provision exists. I would just like to see if somebody's looking at - you indicated you have people going around the world either in person or by phone, I'm not sure, but talking to people and saying to companies, what are you interested in trying to find out?

 

What I want to know is, are you soliciting from them the parcels or areas that they might be interested in having put up for bid in the next round so that maybe we'll have more bids? I think that's the important discussion here, the fact that the bidding results have been released either on purpose or inadvertently or by mistake. I don't think that hurts anybody at this point because we know that Shell won the bid so it doesn't really matter.

 

I think a legitimate question to ask is, is there a way to address this in the future to solicit more bids? And, have bids on all the parcels, or most of them, not just the ones that an individual company would put up. So, if you don't want to talk about the fact there is nobody bidding on four of the parcels, that's fine. It doesn't change the fact that we could still talk about it hypothetically if that makes you more comfortable and say, hypothetically, if nobody had bid on the four parcels by the CNSOPB, do you have a plan to try and ensure that the parcels being nominated are ones that the industry people who you said you've spoken to would actually be interested in bidding on?

 

MR. PARKER: We work with industry, we work with the board, we have staff in our department that travel the world and talk to industry wherever they may be in North America or Europe or Asia or whatever. That one-on-one contact is very important.

 

The board also has a responsibility in the licensing of certain parcels and they certainly provide good information to industry as well on what they're aware of, but I guess it's all of our jobs in the department, in the Canada-Nova Scotia Offshore Petroleum Board, for us in the department here to promote the industry and provide the information they need to make informed decisions.

 

As I mentioned, the Play Fairway Analysis was a great piece of work. It provided a lot of good information. We shared it freely with industry that wanted to see it and we'll continue to do that. There's more information to be gained from the Play Fairway Analysis and our job is to dig out more valuable information that industry can then make informed decisions on and our goal is to make that an evergreen project and more and more activity in our offshore is good. It is good for Nova Scotia. It's good jobs and good royalties in time and a good spinoff into the economy. So we're promoting continuously.

 

The board has come out with a three-year plan on lands, areas they would like to put up for bids, but always industry has the option to nominate as well and so we'll continue to work to make sure that we do get as many bids as possible that will help Nova Scotia.

 

MR. YOUNGER: Thank you, minister, and I will move onto another subject. I'm just saying I hope you'll look into the issue to see if there's a way to solve it. It sounds like maybe you're willing to look at that.

 

I want to move on to the issue of fracking. In the document that I've already tabled with the House, you are quoted as saying this morning to members of the New Democratic Party, and this document has already been tabled, that the province needs to ensure that the appropriate rules are in place to govern this practice - referring to fracking - in order to protect the environment and our drinking water for today and future generations.

 

The wording of that paragraph and other paragraphs implies that the government will permit fracking in Nova Scotia and that was actually the same wording last year when the review was announced and it's really about just the regulations under which that will occur. Is it the government's intention to permit fracking in one way or another?

 

MR. PARKER: Mr. Chairman, we've been very clear on this, we know that Nova Scotians are concerned about their drinking water. They're concerned about the environment. They're concerned about their communities. We've listened carefully to what Nova Scotians have been saying to us. We've undertaken a review of environmental practices, looking at other jurisdictions, looking at best practices, and trying to decide whether or not this process should be allowed in Nova Scotia. We asked for input from a lot of Nova Scotians. I think we had close to 300 people who participated in the scope of the review on what it is that we should be looking at and because of that we added some things to the scope from what was suggested by various folks around the province.

 

Since that time we've undertaken a very thorough look at other jurisdictions in Canada and the United States. We have some qualified people certainly in the Department of Energy and the Department of Environment, you know, geologists and hydrogeologists, environmental engineers, policy analysts and others who have met regularly over the past number of months and continue to do that. Of course, everything that they have found out has been on our Web site and available for the public to review. We've had experts come in to testify and give us the benefit of their knowledge. I know, for example, I met with a gentleman, a regulator in the State of New York, who was here and met with our staff. So we're taking advantage of the expertise out there amongst other jurisdictions but at this point, you know, we've learned a lot but I guess we find out the more you learn, the more there is to learn. We realize that there's a number of jurisdictions that have important assessments or reviews of their own, including the Environmental Protection Association in the United States. They have two major studies underway at this time.

 

Environment Canada has a full review underway and, as I mentioned, the State of New York and the Province of Quebec, the Province of New Brunswick and so on. This is valuable and important information and what we're trying to do is make an informed decision that will best protect the environment, protect drinking water, protect ground water and try to find that balance between the environment and the economy. It's going to take some more time and we think it's the wise thing to do.

 

I think Nova Scotians expect us to get the best information possible, not to rush into this but to make, as I said, an informed decision on the best way to develop this industry or not. That decision has not been made yet and the review committee will gather the information from all these other studies that are out there and decide if or how we're going to move forward.

 

MR. YOUNGER: The NDP MP for Halifax, Megan Leslie, says fracking should be banned, do you agree with her?

 

MR. PARKER: There are lots of people with various opinions on this topic and I respect Ms. Leslie and her environmental interest but we need the best information out there to make an informed decision. Until those other studies are done, we can't make a decision in a hurry without knowing what they will find out, what they will recommend. Until we have that, we're not going to make a decision on this practice.

 

MR. YOUNGER: It's interesting that when the federal Minister of Natural Resources gave that answer to her, she wasn't very pleased by that answer. Can I assume that there's a difference between the position of the provincial NDP in Nova Scotia and the federal NDP on the issue of fracking?

 

MR. PARKER: No, I think we are on the same page, we want good economic development in our country and in our province but we also want to protect the environment and protect our drinking water. The last thing we would want to see is harm to our environment or our drinking water.

So what is the best way to get there? We feel the best way is making an informed decision, based on the science and the facts and whether we would allow this process or not. Until we have that information, we're not going to make a final decision.

 

MR. YOUNGER: Listen, I agree that it should be based on the science, and the best science available. Frankly, it's rather amusing to me to be here this week and have this discussion when much of what you announced yesterday was exactly what was in my bill last year that you stood in the House and spoke against. Obviously I'm happy because you did what I asked you to do last year that you said was wrong last year. I guess I'll just wait long enough and you'll come around to my position on some of these things, which I'm certainly pleased about.

 

However, it is amusing to read the NDP caucus' and your own statements about our bill last year in the House, when it was up for discussion. You certainly felt very differently about some of these issues - not all of them. Certainly some of what you are saying is the same but at the time you opposed having a moratorium on fracking during the period of the review. We brought to your attention the EPA studies, the studies in Quebec, which were announced actually around the same time as our bill. There was another study, which I don't have at hand and you didn't seem to think it was quite as important then, so I will say that I am glad you were willing to change your mind on that, I think that's important and that you're going to take the time to look at it.

 

You are probably aware that in the intervening time there have been developments in the technology of fracking and because of some issues particularly in Alberta and Oklahoma, they are moving away from the use of heavy amounts of water and instead, moving to a gel-propane style of fracking where they inject propane into the ground and use that for its explosive force instead. Will your review include that method of fracking as well?

 

MR. PARKER: Well, as I said, we're not going to approve any hydraulic fracturing in Nova Scotia until the review is complete. That may take until sometime in 2014. The review committee is monitoring everything that is happening out there and it will continue to post on the Web site any new information they find.

 

If there is new technology, I'm sure it will be looked at on an individual basis but we'd certainly have to be convinced that the environment would be protected. But if there is something new or less threatening to the environment, we're always interested in getting that information and I know our review committee, again made up of very strong professionals in our Department of Environment and Department of Energy, has been looking at every aspect to do with the technique across our continent and around the world actually. So if there's a new process or a new technique available that's less invasive, we would certainly be willing to look at it on a one-on-one basis and, again, protection of the environment is paramount but, again, we would not allow hydraulic fracturing until the decision is made.

 

MR. YOUNGER: Thank you, minister, and I want to just clarify something there. Hydraulic fracturing is done with water and the new technology - which I assume it's being used - but there are certainly a number of articles about it this month in some of the journals out of Alberta, uses propane which obviously would not be hydraulic fracturing because hydraulic by its own definition is water. So when you, I just want to clarify, when you say hydraulic fracturing, I assume you mean all sorts of fracturing? Am I correct in saying that?

 

MR. PARKER: Well, as you mentioned, hydraulic fracturing, the very root of the word is water and, you know, we have said clearly that the technique that uses sand and chemicals and high amounts of water certainly are not going to be allowed here in Nova Scotia until that review is done. If a new technology is out there, we're as interested as anyone in having a look at that but, again, you know, it would have to be looked at on an individual basis to see what the impacts of it may be to the environment, to our water or to our air. We would have to be convinced that it would be safe but, again, it would be considered individually and, again, certainly no hydraulic fracturing would be allowed.

 

MR. YOUNGER: If you're putting a ban only on hydraulic fracturing, what happens if somebody comes in with a permit application for an alternate type of fracturing? Would you not be obliged - you put a moratorium on hydraulic fracturing for natural gas - if somebody comes in seeking a permit to frack using an alternative technique, such as propane fracking, would you not be obliged to issue them a permit in the absence of a moratorium?

 

MR. PARKER: Mr. Chairman, well, again, we have our one-window process for applications and any activity has to be approved. We certainly would look at, you know, on an individual basis what the technology is or what type of new technique is available but it would have to be approved by the one-window committee before anything could move forward but, again, we have to be convinced that it's protecting the environment and if it does or if it doesn't, that's up to the staff within the departments to make that determination but certainly we're open to seeing what else is out there. Certainly the concern really has been around water, the high amounts of water and sand and chemicals that may be used in the process. Like I said, we're as interested as anyone in learning about what else might be a substitute for that.

 

MR. YOUNGER: Minister, I'm not convinced that the biggest or only concern out there with hydraulic fracturing is water. I think that's part of it but part of it isn't so much the water usage, and I understand that that is one major issue, it's the issue of the exploding of the shale formations has on wells but also, as I'm sure you've seen, the recent studies that have come out from the U.S. Government and the British Government indicating a likely link with microquakes, there are issues with the waste that's created. There are all kinds of issues. I don't think it's just water usage and, honestly, I am not trying to trip you up here, I'm trying to understand, is this a moratorium on fracking or is it just a moratorium on hydraulic fracking? I'm not trying to play semantics but they are two different things. If it's just on hydraulic fracking, that is an entirely different moratorium than if it is a moratorium on just fracking generally and, honestly, I'm not trying to trip you up, I'm just trying to understand what this moratorium is really about.

 

MR. PARKER: Mr. Chairman, as I indicated, if there's a new technology out there, we'll certainly be willing to look at it on its own merit. The biggest - coming back to hydraulic fracturing - the biggest concern has been around water, still, whether it's groundwater on the surface or aquifers, drinking water within the first couple of hundred metres of the surface.

 

Again, the review committee is looking at all aspects of the technique and any impacts, whether it is on water or air or what impacts deep underground, so it's the full gamut of study that is being done by the professionals in our two departments.

 

We've said clearly also that traditional oil and well activity would still be approved but no hydraulic fracturing, but if companies want to do other work that they normally have done outside the hydraulic fracturing, that certainly would be considered by the one-window committee on each activity that they do.

 

MR. YOUNGER: Okay, thank you. I'm actually a little bit surprised by that. I guess I probably should have read the release more carefully, to see that it was just hydraulic. I am a bit concerned about that because frankly - I'm sure your department does, too, and probably my Tory colleague might as well - I get an enormous volume of mail in the run of a week on this issue. I can assure you that water usage is not the only issue, it is not even close to being the only issue. So that's fine.

 

Last year in estimates - we were actually talking about fracking last year in estimates, we were in the other room, I think. The question I have about that is, last year you said that we had talked about fracking for coal-bed methane up in Pictou County and at that time you acknowledged, or one of your department officials - I don't want to credit something to you that maybe it was a department official who said - had acknowledged that yes, there had been some fracking done for coal-bed methane. I believe the phrase at the time was, that's a different type of fracking. Can you tell me whether fracking for coal-bed methane is still ongoing anywhere in the province?

 

MR. PARKER: Mr. Chairman, no, there's no coal-bed methane activity going on at this time. We have a couple of exploration licences out there but they haven't been - they have done a little bit of work but not significant. I think that was in the Springhill area and in the Pictou County area.

 

MR. YOUNGER: Does your ban or moratorium or hold or whatever, cover fracking? I don't know what word to use because I'm not really sure what the department is calling it and I don't want to misquote what you're saying. Does that extend to fracking for things like coal-bed methane or products other than natural gas - shale gas, I guess?

 

MR. PARKER: Mr. Chairman, we've said clearly that no hydraulic fracturing will be allowed in the province and that includes natural gas or oil or coal-bed methane. During the period of this review and until it is finished, there will be no hydraulic fracturing allowed in Nova Scotia.

 

MR. YOUNGER: Mr. Chairman, are you going to share with us all?

 

MR. CHAIRMAN: You didn't catch me, did you?

 

MR. YOUNGER: For people reading Hansard 30 years from now, he's got a chocolate bar.

 

MR. CHAIRMAN: It's hidden.

 

MR. YOUNGER: I want to move on to Lower Churchill, I don't have a whole lot of time left. What is the landed price for Lower Churchill going to be?

 

MR. PARKER: Thank you, Mr. Chairman. Lower Churchill is an exciting project, certainly for Nova Scotia. It has the potential to bring clean, green, renewable energy to our province, at a stable price for 35 years, plus the possibility of purchasing additional power at market price, whatever that might be at the time.

 

The URB will determine what the price will be and at this point that is not known to us but it's going to depend on the capital costs that are involved here in the project. So they will be thoroughly looking at the project, determining if it's in the best interests of Nova Scotians and what the final price should be, but that is yet to be determined.

 

MR. YOUNGER: I don't believe for a second - I know the final price would be set by the URB, obviously - I don't believe for a second that the department or the Premier or yourself would get involved in a project of this magnitude and hold a press conference and everything else without having somebody having sat down and figured out some rough estimate of what the pricing would be for Nova Scotians.

 

I can assure you that Emera has done that because - well, I think you were at the same speech I was, if I'm not mistaken, at the Marriott a little while ago, where he didn't give the price but he did talk about what price they determined would be unacceptable. He wouldn't tell exactly what they had worked out. Are you suggesting the department has never done some ballparking of what that price might be?

 

MR. PARKER: Certainly there are ongoing discussions here between Nalcor and Emera. They haven't yet come to a complete agreement on their own. Certainly they are well-known, Maritime, Atlantic Canadian businesses, they have smart people in their companies who have worked the numbers. We've had discussions also with them and we feel that this is our best bet moving forward, for long, stable prices, like for the 35-year period, as I mentioned.

Again, the URB will review exactly all the details of the project and make the determination whether it is the best deal for our province. I'm sure the accountants and number-crunchers in both departments have worked long and hard to make sure this is a viable project and they spent many years now bringing this forward. We've had discussions with them as well, so we feel confident that it is a good project and that it will provide 8 to 10 per cent of our renewable electricity by 2017.

 

We do know the price of oil and the price of coal is continuing to go up. There's no certainty there. We have no guarantee what prices we're going to be paying in the future for those products. We're pretty confident they will continue to rise in price.

 

The advantage of hydroelectricity, as with renewables of any type, is generally that it's a stable price, once the fuel so-called is generally free, once you get the capital infrastructure in place and that's true of hydroelectricity. So we have confidence in the companies that are involved here that they have looked at this long and carefully. We look forward to receiving that hydro-electricity at a competitive price in the future.

 

MR. YOUNGER: How do you know it's a good deal if you don't have an estimate of what the price is?

 

MR. PARKER: Your questions are short and to the point. Again, we have confidence in the companies and in our own departments here in Nova Scotia and in Newfoundland and Labrador. We feel it's our best bet for green, renewable energy as we move forward, along with our plan to use less electricity through Efficiency Nova Scotia programs and other sources of renewables. Until it's proven otherwise, we think it's our best bet in working with these companies or utilities, for the benefit of Nova Scotians.

 

MR. YOUNGER: I have to say I'm a little bit concerned that one of two things is happening here; either you don't want to tell me what the price is or the department hasn't done one. Either one concerns me because when I read and listen to the Premier speak at events and press conferences say it's a great deal but we don't even know that.

 

We've heard two prices floated around and they both could be out to lunch. Listen, I understand they both could be out to lunch but they are the only two the public has at the moment - one is 17.5 cents per kilowatt hour, at a landed price. Mr. Huskilson did not deny that, when asked by the media, that that's maybe one of the stumbling blocks in discussions with Nalcor at the moment. My understanding is that a price has come out of Newfoundland during their hearings recently, at 23.5 cents - that's on the Island of Newfoundland and it has to get through there before it gets to us, this is why it's a concern - I agree completely that the price of fossil fuels is increasing rapidly and we have to go in another direction, there's absolutely no question about that. I think there are very few people who, if they honestly looked at the data, would disagree that average renewables, over the long term, will be cheaper and more stable than almost all fossil fuel sources.

 

That doesn't mean that all renewables will be. The COMFIT, which you talked about and I recognize it's a small amount of production but set one of the small-scale tidal COMFIT rates - this is by memory so I might be out by a few cents but it's around 64 or 65 cents for small tidal. That probably isn't a huge impact on power rates for the tiny amount of COMFIT tidal that is likely to be approved. However, if you have 10 per cent of your electricity generated at a landed price of 17.5 cents a kilowatt hour or 23.5 cents - which are the only two prices that are out there at the moment - and then you add the distribution charge within Nova Scotia to that, and by your own admission a few minutes ago and the Premier's admission that we can then buy more energy at the market rate, that kind of volume at that kind of price will have a massive impact on power rates, to the point where all this talk about, we have to upgrade the interconnect between New Brunswick and Nova Scotia in order to take in more Hydro-Québec energy, for example - Vermont just signed a deal at 3 or 4 cents a kilowatt hour - and I agree - listen, you've said in Question Period but yes, that's an escalating price by CPI, you're absolutely right, it takes a long time to escalate from 3 or 4 cents to 23 cents, a long, long time. In fact, it would probably take many generations.

 

So if you've sat there and you've said to me that the department has done some analysis and feels that this is the best deal and it gets us to renewable energies and that's great, it does get us to renewable energies, you're absolutely right. The only way you can know if it's the best deal is if you've actually looked at the price and figured out what that price will be, even if it's - listen, we know the URB is going to set the final price but the URB actually isn't going to set the final price per kilowatt hour for Churchill Falls. What the URB is going to do is they will approve that project, as a whole, as a capital expenditure for Nova Scotia Power or some other independent company, and then what they are going to do is they are then going to have a rate hearing for Nova Scotia Power and factor that in at 8 or 10 per cent of the load. It will get averaged out and it will come to whatever it is and they will have their cars and their fleet and their finance department. They will never actually sit down and approve a per kilowatt hour price.

 

That's fine, that's what their role is, but it really comes down to the fact that we do want clean energy, we do want to move in a direction but we also want people to be able to afford to live in their houses. So if it turns out that it's cheaper, even building the interconnect and the upgrades in the transmission, to bring power in from Hydro-Québec, then obviously we should be looking at that. That's why I am concerned. That's why I'm trying to figure out why it is that there are two prices floating around - 17.5 and 23.5 - but the department doesn't seem to have even looked at what the price may be.

 

You might be wrong, I get that. It might turn out to be wrong but I'd at least like to know what you expect it to be.

 

MR. PARKER: Mr. Chairman, well certainly the cost of electricity is a concern to all of us, whether we're a homeowner or a small business or an industrial complex. We all want fair and reasonable rates in this province.

 

I believe the CEO of Emera, Mr. Huskilson, has said that the rate will be determined. He fully believes that it will be competitive with other renewables, whether it's biomass or tidal or wind or whatever, he has gone on record saying that he believes the price will be competitive for the hydroelectricity from Muskrat Falls, as compared to other renewables in the province.

 

Certainly as an example on wind power, we know that some of the early projects that were built back in the earlier part of the decade now are lower in price than fossil fuels like coal. For example, the Pubnico project, I think it was built in 2005 I believe it was, and it has now been surpassed in price by coal, I believe somewhere less than 7 cents per kilowatt hour was the cost of that project at the time. It seemed like a lot of money but lo and behold, just a very short few years later it is cheaper than coal.

 

It looks good that we're going to have a number of bids under the renewable electricity administrator program for some of the larger wind projects coming up and the call for bids comes this Spring that there should be some very competitive rates there that we think because of the competition amongst the companies, while it would be higher than the Pubnicos but it probably in very short order is going to again be cheaper than coal, as that continues to go up in price.

 

The price that will be paid for the Lower Churchill energy, again the URB will determine that, based on the best evidence available to them, calling the experts they require, looking at all the capital costs and they will make a determination on how that should move forward.

 

You mentioned the COMFIT program in your question and really that's an investment in clean, green, renewable energy in all our communities around the province and in small community projects, it's really building community economic development and almost changing a pattern of thinking for people who can invest in their own power source, in their own communities. It's in the distribution network, not in the transmission system. As I mentioned earlier, it really creates more interest in other types of green energy, like transportation, for example, or builds I guess a mentality in the community that they want to be engaged in local production of their energy and want to be green and how else can they do that in their daily lives in their families, in their homes, in their communities. So it builds that capacity, I guess, within the communities.

 

In time, while that energy might be up there now in an experimental basis, as we move forward and actually before this year is out we are going to have a review of our COMFIT program and look at how it's working and are there other sources of energy that maybe should be considered, are they within a reasonable level or is it possible to initiate something in geothermal or in solar? That's under review and will be later this year.

 

Those rates will come down over time, as more and more capacity is built, as more technology and experience is available, then we'll see a dropping of those rates over time and that's good, but it's helping build capacity in our communities in the meantime and on green initiatives overall.

 

You also mentioned Quebec power and, as you know, we do buy a little bit of electricity right now from that province but that's up to Nova Scotia Power, when they feel it's to their advantage to have some of that coming in at a competitive price but the problem there, of course, is again as you mentioned, we don't have the capacity. The transmission lines are not fully available for any large amount of power from the Province of Quebec.

 

When we build Lower Churchill with the transmission upgrade, that will give us an option to, you know, look at other sources of energy and what can we bring in on an upgraded transmission system. It may well be feasible that we could make some kind of an arrangement with the Province of Quebec but right now, you know, they haven't offered us anything in that regard. They've even, I know other jurisdictions where they have made transactions with them, for example the State of Vermont, it's at market prices and there's no guarantee that it won't go up and up and up over time. There's no guarantee if it will or won't, I guess, but there's no guarantee like we have at Lower Churchill that it will remain at a stable price once it's set for a 35-year period.

 

So there are a lot of variables here in the whole electricity initiatives in Nova Scotia. We're looking at a truly portfolio approach, whether it's hydroelectricity, or biomass, or wind, or tidal or other sources. We're not putting all our eggs in one basket as has happened in the past with coal. We just feel that we can diversify and really transform the energy industry in Nova Scotia and really build that community capacity as well at the same time. So we think overall that's a win-win.

 

MR. CHAIRMAN: Mr. Younger, I usually give about a 10-minute warning, you have about seven and a half minutes left.

 

MR. YOUNGER: Fine, thank you. All right, here's the problem though, you've signed a deal - or you haven't, Emera is entering into a deal that they're still trying to negotiate that was due back a few months ago anyway, I can't remember the deadline, I think it was January 31^st or something that they've missed. Whatever the deadline was, they've missed, but that deal would have stable prices for 35 years.

 

However, after that 35 years you still go to market price and the irony about this is, let's say it's 23.5, which is one of the two numbers being floated out there, well, that 23.5 could actually be higher even at the end of 35 years - because 35 years is not a long time - than options from other sources. So, for example, if you look at Hydro-Québec, and I've heard you say many times, well, they haven't given us a call, well, I've attended a number of meetings with some of the U.S. States and the U.S. States initiated the call. Hydro-Québec didn't initiate the call and, you're right, they're 3 cents, 4 cents, starting, and you're right, it goes up. It's generally triggered to CPI. Most of the deals are CPI. Like, we had CPI at zero last year but let's say we take the CPI, what is it, 2.3 per cent, or 2.7 per cent? Let's say it's 5 per cent and do the math on that, it still takes a long time to hit that 23.5 per cent, even with the compounding.

 

So it's not a matter of whether - and I agree with you, I completely agree with you that, I know Pubnico is generating now in wind at a cheaper price than what we're getting coal. I think most Nova Scotians understand that. What Mr. Huskilson said, and I was standing right next to him when he said it at the Marriott, was that it will be competitive with some types of renewables and there's a huge difference, and you know this from the prices that have been awarded to COMFIT, between biomass and tidal, well, if it's competitive with COMFIT tidal, that's 64 cents or 65 cents. If it's competitive with wind, maybe that's 12 cents or 14 cents. It's a big difference and so that's why this is critical.

 

He also said that if it comes in at 17.5 cents - and you can look this up on allNovaScotia.com because they reported this at the time - he said it would be a deal breaker and they wouldn't accept it at that price. Yet I haven't heard you say once that there is a price at which you think it's too expensive for Nova Scotians and that's what I want to know. What bothers me is that it isn't about whether this is a good project on certain merits because obviously it is, this is about whether it is economically feasible to do this and I understand that Emera and Nalcor are out there trying to negotiate this. But I also understand that the Premier had a press conference and tried to take credit for this and maybe he deserves some credit, I'm not sure, but if he going to take credit then the government also has to be willing to take the answers and not say well Emera and the URB and Nalcor will deal with this because you don't get it both ways. If you're going to have the press conference than you've got to take credit for it and you also have to answer for it.

 

That's why I want to know from you whether anybody in your department has sat down and said we think that for that 10 per cent of electricity, that the price is going to be within this range, whatever that range is because if you haven't can you imagine the Minister of Finance just walked in, can you imagine the Minister of Finance doing a budget without having estimates, or estimates of what a barrel of oil will be, of course that's how they base the budget is on estimates of a range in which things will fall.

 

That's how you do your own department, is you say listen, salaries are going to be within in this range and so forth so what I want to know is have you even, has your department sat down before holding a press conference and saying this will be a game changer and the greatest thing in the world. Has anybody ever sat down and said listen, we think the price is probably going to fall within this range?

 

MR. PARKER: I know we don't have a lot of time left here, probably, in this round so I'll try to be as brief as I can. Again, we do have confidence in our partners in this with Nalcor and Emera. We have regular contact with them and discuss these issues and more and we have confidence as Mr. Huskilson said it will be competitive with the renewables. We do have the option to buy additional power from the system at that time, whatever the market rate may be.

 

In addition, Nova Scotia Power will have the option to charge transmission fee, if power goes beyond Nova Scotians and into New Brunswick, towards New England or Prince Edward Island. So that will help offset the cost of the power coming through because they are making money through that transmission of additional power.

 

But in the end it's the URB that's going to determine here exactly and their role is to make sure that Nova Scotians pay the lowest possible price based on the capital cost of the Maritime link and we have faith in their judgment and ability to make that determination, call in all the experts that they require to make an informed decision.

 

Again, we believe it's our best bet for clean, green, renewable energy that we will be locked in for 35 years at a stable price and will have provide other benefits of employment and work on the construction and upgraded transmission system. That will allow us in time to look at other jurisdictions that maybe better buy can be, or give us the option to look at other opportunities as well. We feel firmly that it's our best option for Nova Scotians.

 

MR. CHAIRMAN: Mr. Younger there are only seconds left so in your second round I'll give you a few extra seconds.

 

MR. YOUNGER: That's fine.

 

MR. CHAIRMAN: We will now call on the Conservative caucus for an hour.

 

The honourable member for Hants West.

 

MR. CHUCK PORTER: Thank you Mr. Chairman. Glad to have the opportunity this afternoon to ask a few questions with regard to what I think are some pretty important topics not only to myself, but from the people I'm hearing from on a very regular basis, and I know Mr. Younger spoke about the amount of correspondence we get in our offices and I'm sure you do as well as the MLA for Pictou West. What the cost of energy, the cost of our power bills specifically and everybody gets it every second month. You know when they are coming out, that's how defined they are by way of when they are coming in, you can almost set the date and time when those e-mails are going to start coming in and it's a shock to them and they get upset and you can't blame them for that given the increases that we've seen in our rates across Nova Scotia.

 

There are a couple of things, we had an interesting meeting last Wednesday in Public Accounts Committee. We had before us Efficiency Nova Scotia, learned a couple of things there. We'll get into more questions about that specifically but one of the biggest focuses here - and I spoke to this as well in that meeting - is that we need to figure ways to become more efficient all around. Reducing our energy use in our homes and businesses however we can. You spoke already about a number of different businesses that have taken part and energy efficiency opportunities by way of how to invest in their business and how to decrease their costs. I know that individuals would like to take part, probably more than are right now and maybe as the program becomes more popular and more known and gets out there in the public eye and they see the true benefit of investing a little to save a lot over the course of a number of years, there will be more people that will take part in it.

 

They might look at that and go, okay, I need to invest $1,500 or $5,000 or what have you and they're probably right now given the last couple of years the way things have been, I know in my area we've had significant numbers of jobs lost, we've had people whose EI has run out. We have people that are increasingly falling onto social assistance unfortunately while we wait for things to turn around a bit globally.

 

I know, minister, that you can't control that all by your lonesome, nor can any of us, nor can this province. It will come around when it comes around and I think most people understand that and it will come around. We've been here before, we'll likely be here again unfortunately. There will be a time when people are not hanging on to their money I think so much as they are right now and those that have it are hanging on to it a bit and they're not buying that new car or they're not buying this or they're not buying that because they know the cost of things are going up and it's pretty desperate out there.

 

But reducing our energy usage I think is one of the greatest things we can teach anyone, including our kids. I spoke to this last week as well and my children, I teach them every day, turn off your light, I'll just have to point now, they know exactly what I mean. Go turn your light switch off, it's all it is now. Pretty soon I'm hoping I won't have to do that anymore, that it will just naturally happen. We know what repetition does, it does create that sometimes, quicker usually in those things that they're interested in by way of being children. I appreciate that but the reduction of energy usage has to be one of our most important focuses moving forward, especially with the cost going out of control.

 

Right now, minister, there are many, many people that would tell you the costs are already out of control. They've seen enormous jumps. I know in my office and I'm sure in many, there are people coming in trying to figure out - and they tend to wait, they'll get their cutoff notice and they'll go another month because they don't know what to do. They can't afford to pay it and they'll wait and then they'll come in with a final cutoff notice, disconnection and they'll wonder what to do next.

 

Fortunately over the last number of years we've had a pretty good working relationship with the folks at Nova Scotia Power. We've been able to pick up the phone and make some arrangements, in most cases, not all. There have been people who have been disconnected. These people are struggling but we have been able to make some arrangements. But at the same time when you make an arrangement to have your power bill paid but there's still a new one coming in. It's all just adding right on top of the stress they already have. These people are trying to make a decision, I know you've heard this many times before, this is real though. People are trying to make a decision - am I going to put gas in my car to go to work? Am I going to buy groceries? Am I going to cut back? Where am I going to cut back is what it comes down to and pay my power bill because I have to have heat, I have to have lights. You have to have the basic necessities.

In this day and age, most of us would consider power a basic necessity for all of our lives; maybe our fathers and our grandfathers, maybe not so much. We've not adapted to the ways of old days, we've adapted to the common world and that is we need power for everything and it shows in the usage.

 

I do understand the idea of renewable energy and I think we do need to be there, I think we need to be green and we need to be as clean as we can. I'm not sure the targets that have been set or changed - I know I can speak from previous years prior to your government coming into place in 2009 that there was an Act in place of sustainable prosperity which set some targets that were based on scientific fact and people did a lot of research and a lot of work and so on and determined that these targets were a correct method, a right direction. Also ability-wise you could afford them.

 

Right now people would say that those targets, having been increased, are not so affordable. There's nothing wrong with going green, most people that I've ever talked to would say, we think green is good, we think it's perfect, we should be. Everybody talks the talk, the problem is people cannot afford to walk the walk. That's what it comes down to. Now again, problems like Efficiency Nova Scotia, things are great, people can't afford to invest is the problem.

 

One of the questions I asked last week was about what is low income. Well I got one figure of $50,000 being a low-income family, that's hardly low income. But I did get from Hugh Fraser who did forward me three different figures of low income, middle income, high income and I wish I'd brought that today. I don't have it with me but I do recall it. Hugh did forward that to me and that was great.

 

One of the other problems is it depends on where you live, what low income really means, for all things, whether it's energy efficiency or whatever it might be. I'm not sure how we ever got to that because it shouldn't matter where you live, low income is low income is low income, but it does matter where you live in Nova Scotia, what you are classified as and what that figure means.

 

When you think about all of these things combined and the stress that we're putting on families today, most families, as they are able, are two people working, trying to survive and they are living paycheque to paycheque, not much more than that, especially in rural Nova Scotia, especially in the area that I come from, it's certainly more and more that way. I see these people every day, I see them on weekends when I'm out in the evenings and so on and I hear from them.

 

When we think about the cost of power, they all want to figure out how they're going to survive. When will it stop, is the question that I get - this is out of control, how can I afford to pay it, when and where will it stop?

 

I heard Mr. Younger ask a few questions and of course I'm going to go similarly, when you talk about the cost of the kilowatt hour and the price of doing these major projects, it's incredible to me, how you don't know or you can't or you won't give that cost of what - just as an example - the Newfoundland project is going to cost Nova Scotia ratepayers. At the end of the day, again I'll say this, they believe in buying green energy, everybody wants it. There's some misconception, however, that it's going to be cheaper to go green and nobody has really taken the time over the last few years that I've noticed, to say green energy is not necessarily cheaper energy. They seem to forget sometimes that there's a cost to creating, by way of technology or whatever the usage is, of creating this energy.

 

A lot of people also don't understand how the whole system works. They don't know that Nova Scotia Power is buying and selling and looking every 10 minutes, I'm told, by Nova Scotia Power folks, at the cost of power and trying to obviously procure the cheapest power that they can buy but because they are buying it at a different price, it doesn't really reflect in our power bills. Our power bill kilowatt hour rate is still the same.

 

I know I've gone on a bit, minister, in my opening here but I would ask you, how much does it cost Nova Scotia right now, and you talked a bit about the wind energy and we have a potential one, I'm sure you're aware of, out my way, right at the border of Lunenburg County and Hants West, there's just a small bit in Hants West but the bulk of that project that Minas Basin is involved in, and others, is on the Lunenburg County line, on that side of it. How much does it cost per kilowatt hour for wind right now in Nova Scotia? Do you have a figure?

 

MR. PARKER: Well thank you, Mr. Chairman, and welcome, member, to our estimates debate here this afternoon. Your question was long and rambling but you made some salient points in there. I certainly agree with you, there are concerns out there, especially for low-income Nova Scotians, on how they can pay their power bill.

 

As an MLA, you and I both know that we get people from time to time who are just not able to pay their bill, maybe because of other priorities or maybe there are legitimate reasons, they just don't have the income to cover all their expenses. It's a concern and we deal with those folks in each of our offices from time to time and work with Nova Scotia Power and their representatives, to try to find a solution or a payback method or some way to keep the lights on, more or less. Lots of times they've been co-operative in finding a way to phase it in over time.

 

Of course we work with Community Services as well and that's why we have that security net, to help people who are in a difficult position who don't have the income but have the expenses. They will often work with the client to find some workable solution.

 

The cost of electricity is certainly a concern, as time goes by with fossil fuels going up and up and for too long we depended on the price of coal, in particular, which was a driving force for Nova Scotia Power in their electrical generation. Of course that was fine when we had coal here in our own province, in Cape Breton or in northern Nova Scotia but as you know those days are pretty well gone except for surface mining so most of our coal now comes in offshore from Columbia, Venezuela or from the United States. It has continued to go up in price, I think it has gone up something like 75 per cent in the last seven years so there is every good reason to get away from coal and imported oil and to look at programs that will allow us to have more stability and more energy security and not be at the mercy of international markets or on fossil fuels.

 

As you mentioned we've gone towards many other sources of clean, green energy of renewables and the diversity of large projects that Nova Scotia Power has initiated themselves, other IPPs, the large wind projects that are under the authority of the renewable electricity administrator and those are competitive bids and we'll wait and see what the cost of those will be but with the competition and the technology that is out there we expect that those will be very competitive as compared to fossil fuels.

 

Also as you mentioned we have our COMFIT program that allows small scale green energy projects in our local communities, whether it's wind, tidal, biomass or Run of River projects. Also we've diversified with the low price now of natural gas that has helped Nova Scotia Power to bring down the cost of fuel so that's a competitive fuel source and a cleaner source than coal or oil. It's a combination of things in our portfolio approach, as we like to call it, that we're looking at. Of course, the best energy that we can use is the energy that we don't use at all and that's why we've put our strong emphasis on Efficiency Nova Scotia and programs that will help homeowners, businesses, industry and government to save money on their energy costs.

 

We've had more and more emphasis on low-income Nova Scotians because as you mentioned earlier these are the folks that are most impacted by the cost of electricity or other costs in their daily lives and there is stronger emphasis all the time on low-income Nova Scotians. There are a number of good programs that we've used to work with them and some of them have been free. We've gone in and replaced light bulbs with more energy-efficient ones, air sealing, weather stripping, insulation, increased ventilation if they qualify as low-income Nova Scotians no charge to the family.

 

Last year, for example, in 2011-12 we spent $4.22 million on low-income programs and helped out about 2,593 households in this province. This year coming we know the value of helping those in the greatest need and this year that budget will increase not quite double but almost, it's going to be $7.33 million. The number of households we anticipate reaching just under 8,000 - 7,675 households - will be included and then the following year that will increase again, higher budget, more households. The advantage of that is that once they have received the benefit of the insulation, air sealing, a blanket around their hot water tank or whatever those savings are year after year after year it's not just for that one year but their power bill will be - they'll receive those savings forever really once they've insulated or done the work. Again, low income is our emphasis in the Efficiency Nova Scotia Program.

 

We will be saving energy, and as I mentioned earlier, contractors and building supply dealers are going to benefit from that. It's a real win-win for everyone but especially the homeowner that really does not have the income to pay all their expenses but their power bill will be down because of energy savings and over time, because we're using less energy, there's going to be less need to build more generation facilities, we're not going to need the large generation capacity. It is predicted that by 2015, with these energy-efficient programs over the several years leading up to 2015, there will be enough energy savings that it would be a whole new coal-fired generation plant that would be not needed. That's significant.

 

It's just a combination of helping a lot of Nova Scotians but we're going to have less need for generation capacity and as I said, if this continues on the plan we have to 2015, there will be a whole new power generation plant that will not be needed. Of course there will be others that will be phased out or slowed down, already the Lingan facilities in Cape Breton are on a seasonal shutdown because there's less demand for energy and there's more renewables coming on line all the time. So we'll see more and more of the coal-fired generators either not needed or because of less usage overall or not needed because there's more renewables coming on-line or not needed because hydroelectricity will be available from Newfoundland and Labrador.

 

So I think you agree with me that we're on the right path. It's just that we want to help those who are in greatest need and there are a lot of good programs through Efficiency Nova Scotia to make sure that low-income Nova Scotians are protected and the cost of electricity is determined by the URB as you know, and Nova Scotia Power has an obligation to provide the lowest cost. They are a utility that has to provide the lowest cost energy, they are mandated to do that.

 

Yes, there's going to be some investment along the way in renewables but we've said all along the cost of renewables, between now and the next five years, will be somewhere in the average of 1 to 2 per cent a year. We think that's an investment in lower power rates over time and it's much better than relying on coal or other fossil fuels. We have a plan and we're going to work that and I think in the end we'll find that Nova Scotian homeowners and businesses and industry will benefit from that.

 

MR. PORTER: We would agree, minister, probably that we may be on the right path, i.e. a green path and a greener, more efficient path, yes. Would we agree on the time frame and the ability to pay for it? Probably not, given that we've not been able to get the answers to the question of what it is going to cost.

 

You talked at length there and you did everything except answer the question that I specifically asked you with regard to the cost of wind energy. You said that we would be very competitive - very competitive based on what? Where's the science?

 

MR. PARKER: Well again I said that our determination in the Department of Energy is that the cost of renewables over the next five years will be somewhere in the 1 to 2 per cent increase in the power rates. Again, we feel that's a good investment in the future of stability on power rates and it will allow for people to be assured that the rates are going to be reasonable over the future. One to 2 per cent, that's an investment, that's cheaper than the cost of coal. Over time, as those renewable projects come on-stream, they are a flat rate, whether it's wind power or whatever, we know for sure that they'll stay stable for 20 years or more and it's absolutely the best cost economy or best cost rates for Nova Scotians.

 

MR. PORTER: I want to stay on wind for just a minute, before I move on. It was interesting, I had a conversation the other day with a gentleman who was from Norway. He talked about how we're getting into the wind industry and Europe is getting out of it - Germany, Sweden, Europe and those guys are not seeing the value in it. What are your thoughts around that? Are your thoughts we're investing in all this wind right now, we'll see it through the time frame whereby the maintenance is good for a number of years and then we're going to let it fade away as well?

 

MR. PARKER: Wind power is one of the renewable sources that we are blessed with here in Nova Scotia. Wind mapping has been done that shows that there is a great potential here, I guess because we are on the Atlantic Seaboard we're open to a lot of wind and if you look at the mapping that has been done certainly the Yarmouth-Digby area, a bit along the Eastern Shore and a bit on the Northern Shore. Cape Breton Highlands, on the western coast, there is a huge amount of wind that is available there. Cape George, Antigonish County, again it stands out there into the Strait so we have tremendous wind potential here in Nova Scotia and the technology is available. We have wind manufacturers here in the province in DSTN and in Seaforth Energy and various sizes of machines.

 

Wind power is proven to be successful; it's a stable rate once the investment is made so we feel confident that it can be part of the portfolio in our electric mix, or energy mix. We don't want to put all our eggs in one basket like in the past for coal as we relied on so strongly. We're looking at diversifying our energy portfolio in tidal, hydroelectricity and natural gas, these are all sources that we have here in our own province that we're blessed with. We have some of the best wind regimes in the Eastern Seaboard, we have probably the strongest tidal potential anywhere in the world, they say on every tide there is more energy there than all the rivers in the world. We have our own homegrown natural gas and oil potential here onshore and offshore and if used responsibly we have potential for biomass from our forest. Again, we have a great variety of homegrown natural resources and wind is certainly one of them but it is not the only one.

MR. PORTER: Thank you, minister, for your answer on that and I guess it just depends on who you talk to in some cases. We see a number of these wind turbines now going up around the province and some people will say some of that's okay but pretty soon we're going to be flying over and all you're going to see is wind turbines all over the province and some people would say that is a deterrent for other things like tourism and the like. But one thing for sure is the wind blows regularly in this province and we do have the ability to generate a substantial amount of power through wind in certain areas and you've touched on some of those. I do agree that there is an opportunity there to harness some wind and I've been to a few of those places and it's a pretty unique operation, there is no question about that.

You talked about the tidal there just briefly you mentioned it. As I'm sure you're aware I have a huge, huge tidal opportunity in my backyard and Minas Basin has been involved for some years now in development but it has been very quiet. Here we are we're talking about the Newfoundland deal and what it's going to cost we don't know. There has been some money invested, obviously, in this project out in the Minas Basin and where are we with that, why aren't we hearing anything on it and why has there been no development, or at least it's not public if there is? What can you tell me about what's going on out there?

 

MR. PARKER: You're absolutely right we have a huge potential with our tidal power and as I mentioned earlier the potential is greater than all the rivers in the world so it's just a matter of finding the technology and the ability to harness that and to build the capacity of the power to come ashore and to build the capacity for the technology that we can sell around the world. That's maybe the largest benefit in time that if we build the expertise here they will come to learn from us and where there is other tidal potential in other parts of the world.

 

You mentioned the Minas Basin and certainly we have the FORCE project there off of Parrsboro not far from Hantsport which has the ability to service some of that industry as time goes by. Right up and down the Bay of Fundy there are number of ports there that have that capability, from Parrsboro, Hantsport, Digby and some of the smaller ports in Digby County. The FORCE project has been a collaborative effort. I don't know if you've had a chance to go on site and see it there but it's quite a project. I had the opportunity a few months ago to be up there and we had a tour of the facility. The cable is ready and it has been purchased, I guess the company that made it was from Italy but it's a specialized cable that was available through them.

 

As you know, Nova Scotia Power and their partner, OpenHydro put a project in the water in 2010, I believe it was, and they were disappointed that their machine had some malfunctions, but as a positive though, they realized that there is more power there than they thought there was. When they took it up all the blades were destroyed and it showed that they had more work to do but it showed that there is huge potential for energy there.

There are three other partners that are in various stages of development with different prototypes or different types of projects all of which is money that they are going to be investing in the project and use in local goods and services to get it into the water. I believe all three of them, it will be early next year most of them will be in the water and ready to be connected to the cable and provide power into our system. OpenHydro and Nova Scotia Power are looking for other alternatives on tidal power and have actually withdrawn from that particular FORCE project. That will give us another opportunity to look for another berth in that facility.

 

There is commitment, there are local companies involved here, I know Minas Basin Pulp and Power that you're quite familiar with is one of the partners here and have been a strong proponent of the FORCE project, they with their European partners and the other two groups as well. We think there is a lot of potential there and then under the COMFIT program we have a number of smaller projects Dana Morin is developing those in the Digby County area and now in Cape Breton in the Barra Strait in the Bras d'Or Lakes.

On a large scale and a small scale there are things happening and, again, the real potential, yes, is to bring power ashore and provide electricity to our homes and businesses in the area. But the bigger prize here, I believe, is the potential to develop the technology and the knowledge base and have the scientific community involved and that technology is what we can export around the world. I think there is potential here for thousands of megawatts over time but there is a huge potential in the technology that we export as well.

 

The other thing we're working on in the department is our marine strategy. Department staff have been consulting with many folks at the university and industry level and around the world to try to get this right because we know the potential is there in the Bay of Fundy for a huge amount of power and we'll soon be coming forward with that marine renewable strategy that will lay out exactly other plans on how we're going to develop this technology. We're excited about that, that should be coming forward later this Spring and it will give us a lot more good information so I'll leave it at that for the moment.

 

MR. PORTER: It's interesting, your words, you're excited about that, as am I, I think many people are. It has been an interesting development out there, there is no question that tides are extremely strong. We have seen some of the prototypes that have been destroyed however the one at Minas Basin they did put in the water is looking quite successful from what I understand. I have seen some slides of things that have been going on there, the development and the technology the type of technology that they are looking to move forward on but there is still some work to be done there.

 

Nothing new - we know that that water, as a lot of places, creates tidal water, creates great opportunities for energy and we've seen it. You look down in Annapolis, you look even through Panuke Lake down along St. Croix there, Jodrey put his own dam in there and it has been generating power since the 1930s - great foresight, he knew then that there was an opportunity to create energy and large amounts of energy from this mechanism. I keep thinking we're going to get tied into a long-term deal that's going to cost billions of dollars with Newfoundland and Labrador, we're going to have - well we don't know what we're going to have, we're going to have some kind of deal. We have some memorandum of understanding now, as I understand it, there is no actual deal signed but there will be, we're confident of that. What will this mean for the development of things like Minas Basin once we've invested so much money in a large-scale project like the Lower Churchill, what money will be left to invest in things like the Minas Basin project, as an example?

 

MR. PARKER: As you mentioned, I think we're all excited about the potential of the tidal power right here in our own home province, in the Bay of Fundy and the Minas Basin as being part of that. Again, we're not putting all our eggs in one basket, we have a portfolio approach and hydroelectricity as you mentioned is part of that with the option to buy more if it's competitive. Tidal power is part of that, biomass generation, wind power and natural gas and coal is still important, but less so as time goes by. We're still going to be heating our homes and driving our cars on fossil fuels for some time to come but we're gradually getting away from that and higher and higher amounts of renewable electricity.

 

Another thing to remember about tidal power and wind power, the wind doesn't always blow and the tide doesn't always come in so they're what is known as an intermittent source of power. It's important that we can balance that with some type of firm source of power and natural gas provides that, it's always available. Hydroelectricity is always available once it comes on stream. That's an advantage of the Lower Churchill project and it will give us that firm source of electricity at a guaranteed price for 35 years so it's very stable but it will back up wind and tidal and other intermittents. It helps provide that balance that's so vital.

 

I mentioned our marine renewable strategy and that will be coming out sometime this Spring. We predict that in 2020-30 period we certainly will be getting the tidal electricity. It will be coming on stream and both from large projects and small projects, especially the small projects that are under the COMFIT, they're already getting underway. That will be a significant source of our electricity during that decade.

 

It takes time to build the capacity, to get the technology right, to build the infrastructure, but we're well on that path, well on the way and during that decade after 2020, it will be an important source of our portfolio approach on electricity.

 

MR. PORTER: I recall a former Minister of Energy in the Chamber over there on the other side of this place stating about the wind not always blowing. I know that great fun was made of that at the time but that is in fact the case. The wind doesn't always blow and I guess we've figured that out over time. It was interesting you talked about the tides not always flowing, I'm certainly no scientist, I'm not an engineer, I don't work on the water, but I can tell you having lived on the Minas Basin all of my life, that the water is either moving one way or the other just about 24 hours a day with the exception of a very short period of changeover there which I think is an hour I was told. As far as I know, the water is always flowing one way or the other so I'd like to make that point very clear.

 

Your comments were interesting regarding the tidal. You're investing in a smaller type tidal now and COMFIT and so on. To me I would see that as being something more secure than the wind and I just want to get into that for a moment. It comes back to the question of why aren't we investing in more of that tidal, knowing there is work that needs to be done, especially in places like the Minas Basin that are very strong and those turbines are going to need to be something quite special out there to accommodate and withstand what's coming and going and flowing almost 24 hours a day one way or the other. You have ice out there and you have a number of things.

I realize there are issues with regard to fish protection and all of these things that go along with that. But there are numerous other opportunities, I would think, around the province to do tidal, or at least hydro-type of generation. I certainly would be encouraged to see more of that, maybe as opposed to more wind energy, not that I'm taking anything away from the wind side but I'm thinking about the long term, the guarantee of power being generated, and at a fairly static cost, I would think as well, given that once it's developed there wouldn't be a great deal of cost. I guess there would be some maintenance, there would be regardless of what you're doing.

 

Getting back to the tidal side of things, I really am looking forward to seeing more investment in that. I'm worried about where the money is going to come from over the years if we've got ourselves tied into a long-term deal with the Province of Newfoundland and Labrador. You know 35 years is a long time, it's also billions of dollars that we're planning to be on the hook for here potentially. There's only one place for that money left to come from, in all honesty, and that's got to be the ratepayer.

 

As we continually grow the idea of green, it continually becomes the ratepayer/taxpayer - to me they are the same person. Now Chris Huskilson will disagree with me on that and maybe others will too, but I can tell you I know a lot of ratepayers who are taxpayers, so they are one in the same when you really look at it, the dollar is still coming from the same place, generally speaking, and I'll give them that, generally speaking a lot of those people are the same people.

 

That money has got to come from somewhere. I can't image that the province is going to make a commitment whereby they're going to continually keep throwing billions of dollars at projects. When I think about projects, we can invest in Newfoundland and we can give all the money we want to Nova Scotia Power that will continually spend it and take it happily and invest it in other places around the world, which they have been doing and I'm sure will continue to do. They are a private company, they are in business to make money and I take nothing away from that, that's fine, and I'll come back to that. They are very clear on where the funds for the projects are coming from - capital expenditures, the cost of fuel, the cost of doing business.

 

I remember being in those meetings. I know at least one of the gentlemen sitting with you today sat around that table as well and there were great discussions, I'm glad that I went to those meetings. Although others didn't attend, I'm glad that I went to those meetings; there was a lot of to be learned, a lot of interesting information, but Nova Scotia Power is clear, as a monopoly, they are in the business of making money, like any private industry should be. I'm okay with companies making money, that's how they survive, they hire lots of people.

 

The problem is that here we have this little entity called the URB. Where else does a government body - you can call it arm's length if you want because that's the term that has been used for years and incorrectly, as far as I'm concerned, that's certainly not new, I've made that known in the past - setting the rate and telling Nova Scotians what they will profit, as a private company. There's something wrong with that whole scenario with the way that that works and people don't understand it.

 

What about competition? We haven't talked about, in any of this, competition. Everything that we've talked about by way of producing energy, whether it be green or otherwise, in this province has a tag line that says Nova Scotia Power. It doesn't matter if it's what we just referred to as the coming onshore over in Parrsboro project of tidal - still got Nova Scotia Power involved. It doesn't matter if it's bringing something from elsewhere, it's got Nova Scotia Power involved.

 

We have no competition in this province and I understand why and where we're at right now and how we got there but as a minister who is responsible to the people, who I'm sure does care about the price of energy in this province, does care about those people I referred to earlier who are struggling to pay their power bills, who I'm sure does see them, the same examples coming in the door at his office, has to have some idea about how you actually stabilize this.

 

You can buy all the energy you want but as long as you've got a company coming to the table every year, at least once, maybe twice, talking about the FAM, the fuel adjustment mechanism costs, talking about rate requirements for maintenance, talking about capital expenditures and all of these things, that money continually, and they make it very clear where that is coming from - it's coming out of the rate that's being set.

 

Where are we ever going to get away or how are we ever going to get away from this idea of a monopoly and create some kind of competition? Do you ever see that, minister, coming forward in this province? Or are you stuck on the fact that Nova Scotia Power will always be part of what we're doing?

 

MR. PARKER: You asked a lot of questions there, a lot of comments and I'll try to deal with some of them. We talked about firm electricity and intermittent sources of electricity. The tidal, maybe it's flowing one way or the other more often than the wind might be blowing so it may have more potential as far as being less intermittent but still it is intermittent at times so it's important to have the backup. We certainly know that hydroelectricity would be coming from Newfoundland and Labrador and would have that constant availability of power so it's a great source as a backup.

 

You talked about who is going to pay for the investment in the tidal power and there is a lot of interest by a lot of companies around the world in our tidal potential here, also local companies, you're quite familiar with Minas Basin Pulp and Power and I've had the opportunity to sit down with Scott Travers and John Woods and others at that company and they're excited about the potential here in renewable electricity, including tidal power. That's why they've been such strong promoters of the FORCE project and they're one of the proponents, one of the four that are there, to develop their technology with their partners. I've had that opportunity to meet their partners as well from Europe so there's real excitement there but I guess I believe in the ability of entrepreneurs to come forward and invest in projects they feel can be profitable for them. It's great to see Minas Basin Pulp and Power involved and a whole lot of other local companies as well as worldwide companies that are coming in to look at this.

The power of entrepreneurship is great so I feel the investment will be there, the capital will be available. If companies believe there's money to be made here, the money will come forward and it will be available, and as always, entrepreneurs who will lead the way. It's all about attracting capital and attracting that investment that will allow those companies to continue to move forward.

 

On the potential in the Bay of Fundy, we recognize in the Department of Energy and this government that it does have huge potential, not only to produce power but also, as I mentioned, to develop the technology that we can sell around the world. We've done a number of studies to bring us up to date, to learn as much as we can. As you know, we commissioned Dr. Fournier to do a report and he came back with 27 recommendations on how we should move forward and on a whole variety of issues.

 

We also did our separate infrastructure study on the port capability in the Bay of Fundy. As I mentioned, Hantsport and Parrsboro and Digby and Wedgeport and Tiverton and others have the potential to supply the industry as it develops but they also recommended not to get too far ahead of the industry, the industry will lead the way and natural infrastructure will develop over time. As I've mentioned, we've developed and have almost completed our marine renewable strategy and that will be coming forward this Spring and we will lead the way on we feel the best way to develop our potential on tidal energy. That's exciting and you'll soon see that.

 

I forget now what else you asked. The investment, I guess, in tidal needs to be balanced with the firm source of power as well and the investment Nova Scotia Power will be making in the Maritime link is an important part of that so that we have that firm source of electricity. As we know, tidal is expensive and, on the COMFIT rates, it's the highest of any of the renewables. Over time, as technology develops, that will come down but I think right now it's around 65.2 cents per kilowatt hour so that's the highest of any renewable source. Again, it's a small amount of electricity, but it's an investment in the technology and will allow the industry to develop and in time that will definitely come down to where it's competitive.

 

But we have to start somewhere, we have to invest in our communities and we have to invest in industry to allow this to happen. You'll see some of that in our marine renewable strategy as we move forward. I'll leave it at that for the moment.

 

MR. PORTER: Tidal is the most expensive, that's what you just said. Knowing that, that would tell me that we're going to be bringing power across from Newfoundland and Labrador and it's going to be expensive. Did I get that right?

 

MR. PARKER: I don't know - I'm not sure how you draw that correlation but tidal is expensive but hydroelectricity from water falls is a completely different source of energy and they're not related one to the other.

 

MR. PORTER: I just wanted clarity in what you were saying for sure. So, when we think about the investment in our tidal here in Nova Scotia and you talked about where's the money going to come from? I asked the question, you said we think we'll have companies from around the world perhaps coming forward looking to make investments in Nova Scotia knowing that there's probably money to be made in this industry and I would agree that it certainly appears there's money to be made and I can't believe we're in 2012 and we're not even there yet given all of the things we've learned over the course of how tidal works, many, many years.

 

It would have just seemed that we would have been there long ago but we're not but we're working that way, that's a good thing. Would there not be value right now and significant investment in this industry right now when you think about job creation for Nova Scotians building things like the turbines here, placing them, all of the jobs that come with the development of this kind of industry? Instead we're not totally focused, at least right now, you do say somewhere in the future that could happen, may happen, companies from here or there may come and invest. We're looking to create jobs in this province, we've had significant job losses across the Province of Nova Scotia. What an opportunity not only to create our own industry in tidal and invest further and seek out technologies, help support investment in research development, better technologies that will make this work, at the same time putting people to work building turbines at one level or another as we expand and get to know what will work out there and what won't work out there. We don't seem to be hearing anything about that opportunity from you as Minister of Energy.

 

The main focus has obviously been on the project with Newfoundland and Labrador and with not being able to answer the cost of that project, people get skeptical, as you well know. You've heard that and you've heard that from over there, you've heard that earlier in questioning - you can't tell us the cost or you won't tell us the cost, whichever it might be. If you say you don't know, I'm going to give you the benefit of the doubt and say, okay, you don't know what it is. All you'll say is it's competitive but at the same time we don't know what that means. Would we have a better opportunity to invest here in our own Province of Nova Scotia in the tidal industry where we could benefit greatly from what they can or will produce?

 

MR. PARKER: I think we are developing our industry, we are building the capacity to make it larger over time. It's new technology, there's very little tidal energy that's being produced in the world at this time but Nova Scotia is a leader in the field and we have the best marine capacity here of anywhere in the world. We're taking the time to do it right but we already have the FORCE project employed in the Minas Basin which has attracted several large international and local companies in partnership. That technology is developing and there will be power produced there next year.

 

We have our COMFIT projects with Fundy Tidal Inc. approved in the Digby County area and also in the Barra Strait in the Bras d'Or Lakes in Cape Breton. We done our report through Dr. Fournier, we've done the infrastructure study, we're going to be coming out with our marine renewable strategy here very shortly. There has been lots of interest from around the world, contact has come in to the Department of Energy that we continue to dialogue with companies from France, England, Korea and all over. There are jobs starting to develop. The FORCE project, there are people employed there, we've had a lot of interest from the Port of Digby and how they can develop their infrastructure there and they are already starting to do things there on their own.

 

We're very fortunate in Nova Scotia we have probably the largest collection of Ph.Ds in the marine sciences of anywhere in the world. I think it's estimated we have 450 PhDs here that have expertise in the marine field. We have a collection of expertise here already and a number of those are being called upon to provide advice to government. Innovacorp and our government is working on new technological knowledge and devices all the time.

 

I think it was just recently, sometime in 2011, the Halifax Marine Research Institute was established and are trying to develop new technologies in the field. I'm sure that some of those jobs that are now being created are filtering right down through the community to the local restaurant, service station, boat captains and crews and so on. It's a good mix of scientists, engineers, boat captains and right down to the waitress in the restaurant. There is a filtering out through the economy of good people already involved in the marine industry and it's only going to get better.

 

MR. PORTER: Minister, you made a comment that you're taking the time to do it right. It didn't take long for you once you became the Government of Nova Scotia to make changes in the targets with regard to renewable energy. Did the department do some socio-economic study, for example, on Nova Scotia families and businesses to see what renewable targets should be - that they weren't happy, were happy, where did the direction come from?

 

MR. PARKER: We're probably all familiar with the renewable electricity plan that our government came out with in 2010 and that was based on a lot of consultation with Nova Scotians. It was a culmination of the work that was done by Dr. Wheeler and there was extensive consultation with Nova Scotians and research that was done leading up to that. That's where the socio-economic work was done and again, we thought it was very important that we get that information from Nova Scotians to know what they wanted and the end result was our 2010 renewable electricity plan.

 

MR. PORTER: Interesting, okay. So you did some study, or consultative work, with Nova Scotians. What kind of proof did you gather in this study, or the consultation in the department or whoever did it for you, that Nova Scotians can afford to move as aggressively as your plan is to renewables? Again, I don't want to take anything away from renewables, I stressed earlier the importance of it, I just am curious about where the proof is that says we can afford what we're being tasked with here in the province.

 

MR. PARKER: We always feel it is important to consult with Nova Scotians. We're not moving forward without full consultation with the ratepayers, with the taxpayers, with all Nova Scotians. To mention the Wheeler report, that process was followed as well and we consulted widely with the residents of this province.

 

Nova Scotia Power also has done their own integrated resource management plan. What was being said was that they wanted diversity in our electricity plan and that's why the portfolio approach has come forward. They've gone through that in 2007 and again in 2009 and it's important that Nova Scotians be consulted and they hear from their government and through the proper process they know exactly the best way to move forward. It has been done on behalf of Nova Scotians, with Nova Scotians and it's our plan and it's getting away from coal, it's getting on to renewables of various sources, it's part of our portfolio approach. It's working with Efficiency Nova Scotia on reducing the demand that's out there and it's diversifying with hydroelectricity and natural gas, both renewables and cleaner burning fossil fuels. It's just part of the consultation process.

 

We've consulted widely to come up with our plan, the 2010 renewable electricity plan.

 

MR. PORTER: In closing, I know we only have a couple of minutes left, that it will be interesting to note how many Nova Scotians were consulted - small and large business - for input on what they think that plan should be, what it should look like.

 

I'm sure everyone that you ever asked, depending on how you posed the question, it's like any poll, you can always make it leading, if you will, who's not going to say that we value green energy? I think that anybody you ask would probably agree it's a good thing. How can you ask a question or consult on green energy costs when you don't know what the costs are? So far you haven't even been able to give us a real projected cost analysis on what it might be and you said over time it will level out, I heard the words it would be lower, it'll never be lower than where we are today, it will only grow, I'm pretty sure.

 

As far as consulting with Nova Scotia Power, I don't know where that input would be of any value given they're a private company that is in the business of making money. We know that and is also guaranteed they're going to make money by another body of government, which is absolutely ludicrous in my opinion, how this all works. I would say that there's much change needed in how this whole entity within the URB works, it just does not make sense that we would go back to them and keep saying it's got nothing to do with the minister, it has nothing to do with government, it's an arm's-length body.

 

Supported by whom? The government needs to at some point step in. Government steps in and takes the credit which is fine when they're making an announcement and it's great. That's all well and good if it's a good announcement and it makes sense and it can be afforded, Nova Scotians believe in that, that's one thing. It's another not to know what the costs are.

 

I do hope in the days, weeks, months ahead, whatever it might take before there is a final agreement in place that there will be lots of very detailed information, they will know what the costs are. I do hope government does plan and you as minister do plan before you ever sign any permanent agreement with anybody that has to do with NSPI or Nalcor, the Province of Newfoundland and Labrador that we know what those costs will be. Nova Scotians need to know what those costs will be before they're going to buy into the fact that this is the right deal for them. They will always say, yes, they believe in green energy, I do, we all do. There's nothing wrong with that but at the same time they need to be able to eat too and I think there's a pace . . .

 

MR. CHAIRMAN: Mr. Porter, you've already gotten an extra minute. Do you have a few more sentences?

 

MR. PORTER: Yes, I do. How much time do I have left?

 

MR. CHAIRMAN: You've gone a minute over.

 

MR. PORTER: Oh, well I'll save it for the next round, thank you.

 

MR. CHAIRMAN: Mr. Minister, we've been going for two hours and 44 minutes. Would you like to take a five minute break?

 

MR. PARKER: A five-minute break would be in order.

MR. CHAIRMAN: We will recess for a five-minute break which will probably run to seven or eight minutes but we'll call it five.

 

[4:50 p.m. The subcommittee recessed.]

 

[5:00 p.m. The subcommittee reconvened.]

 

MR. CHAIRMAN: Minister, members, we will resume the questioning in relation to the Department of Energy. The Liberal caucus will have one hour and I turn it over to Mr. Younger.

 

MR. ANDREW YOUNGER: Mr. Chairman, I will split this hour with the Tory caucus so that the minister has a few minutes at the end before the four hours are up and gets up to do his conclusion as we agreed with the Government House Leader. If I split that roughly in half, that should allow the minister about 15 minutes to do his closing statement and move his motion at that time.

 

There are a few things I want to cover. I just want to jump back to the fracking thing for a minute. Energy and Environment are obviously involved in this review in the governance and so forth of fracking. Are there any other departments involved? Like Natural Resources?

MR. PARKER: No, the review that's being undertaken is by the Department of Energy and the Department of Environment. There have been geologists and hydrogeologists, policy analysts, environmental engineers and so on but they're all from those two departments only. Of course they're calling on expertise around the world as they need to and talking to other jurisdictions but really the only two departments are Energy and Environment in our province.

 

MR. YOUNGER: I would expect them to draw on expertise from wherever they need it. I was thinking more just in terms of how it's budgeted for and the work on that. It would just be out of those two departments then.

 

MR. PARKER: Yes.

 

MR. YOUNGER: You'll recall that I asked you last year and mentioned it earlier today, this issue of disclosure of chemicals. A number of jurisdictions, New Brunswick - Quebec has put a ban on so I expect it's a bit of a moot point - but New Brunswick and a number of U.S. jurisdictions and so forth have indicated that regardless of the outcome of any review, there's an immediate requirement for the disclosure of all chemicals used in the fracking process.

 

I'm wondering whether you agree that in the event fracking, or some form of fracking, is permitted, that all chemicals used in that process should be disclosed to the public?

 

MR. PARKER: Certainly the issue of concern has been the amount of water that could be injected into the earth along with sand and various chemicals. That can vary from well to well. It could be a small amount, it could be quite a large number of different chemicals, biocides - there's just a whole variety of possibilities there and generally that has been proprietary information that the company has kept to themselves but shared with the regulators but not public information.

 

Certainly in the review process that their expertise in the Department of Environment and the Department of Energy have looked at across North America, that's one issue that has come up and the need to be open and more transparent on the chemicals that are used. We're looking at best practices in other jurisdictions and when the recommendations come forward after the review is done, that certainly may be a part of it. It wouldn't surprise me that it would be part of it and other jurisdictions have looked at that issue and are making some determination in that regard.

 

MR. YOUNGER: I asked you earlier today if your position aligned with the federal NDP. I'm wondering if you've signed the federal NDP's petition requesting, or demanding actually, government regulation that would require the public disclosure of all chemicals used in fracking?

 

MR. PARKER: I don't believe I've seen that petition or document, whatever it might be, so I haven't had a chance to review it.

 

MR. YOUNGER: Well, I would encourage you to do so. Earlier you said that you felt the policies aligned and Mr. Mulcair, the current leader, is on the record quite voraciously as saying that's the minimum that anything should have as fracking. Megan Leslie came out with a formal statement on the issue on January 15^th requesting all members of her Party to sign it. Again in Question Period and then actually on March 12^th, just a few days ago, the federal NDP launched a nation-wide petition calling on the federal government, and I understand provinces as well, to require that. So if indeed, as you said earlier, you feel that you are aligned, then I would encourage you to certainly look at that because that has obviously been a big issue for over a year. I tend to agree with her that if you want to pump chemicals into the ground, then you should let people know what it is because I think it's pretty hard to monitor for those chemicals if you don't know what you're monitoring.

 

I don't know if you're on well water, I'm not, I'm fortunate to be on city water. Some people would prefer to be on well water anyway but I don't if you're on well water but I'm sure if there was fracking nearby, you would want to know personally which chemicals to be looking for. It is my understanding, although I certainly stand to be corrected, that the Government of New Brunswick now requires the public disclosure of all chemicals used in fracking. So I would encourage you to consider resolving that issue for Nova Scotians once and for all. I don't think that's an issue that necessarily even needs to wait for the review. Any thoughts on that?

 

MR. PARKER: Mr. Chairman, you referenced Mr. Mulcair. Certainly the New Democrats across the country made their choice on who they thought would be the best leader and he was obviously the winner of the leadership race. I guess Canadians will have a choice down the road to make their choice in the next election as well but here in Nova Scotia, you know, no NDP Government has ever allowed hydraulic fracturing in the history of our province. The review will determine what regulations will be recommended, including around chemicals that are used in the process, but the bottom line is that we've said we're not going to allow hydraulic fracturing. There's not going to be any hydraulic fracturing in Nova Scotia during the period of this review and, therefore, there will be no chemicals injected into the ground during this period of time. So we'll wait and see what recommendations come forward in the review, but you can be sure there will be no chemicals going into the ground because there will be no hydraulic fracturing.

 

MR. YOUNGER: Mr. Minister, I'm sure you're aware that that's not entirely accurate because, first of all, you've said earlier that this only covered hydraulic fracturing and when I very specifically asked you about whether it concerned other types of fracking, you said they would be reviewed on a case by case basis. So there could be chemicals in the ground even resulting in fracking, that is not hydraulic fracking, and there are other drilling activities in this province where chemicals are put in the ground as part of the drilling process. It's just part of the onshore drilling process. I think we all fundamentally understand that and I think the disclosure of chemicals goes beyond just simply hydraulic fracking but it goes into all sorts of onshore drilling activities because they all require monitoring and they have different issues.

 

So, you know, I'm not trying to play semantics, I think it's a bigger issue and I know you're couching the words a little bit. I thought these two studies had already been released but apparently they're being released tomorrow and I'm wondering whether you're aware of the study being released tomorrow by the U.S. Geological Survey and also the Government of the United Kingdom, both of which have apparently, according to the media there, conclusively linked large numbers of microquakes to fracking activity, have you heard, I'm not suggesting you would have read the study or anything like that but have you heard of those studies?

 

MR. PARKER: Well, I said earlier that we're not going to allow hydraulic fracturing and that is absolutely the truth. We're not going to allow any other type of stimulants, or whatever you want to call them, whether its propane or whatever, to be used without a full review with the proponent of that type of activity and it would have to go through our regulatory process in the Department of Environment and the Department of Energy for it even to be considered but no hydraulic fracturing will be allowed.

 

Certainly the review process is looking at any alternative methods that are out there, any and all new information whether it's around new stimulation techniques or whether it's on any relationship between tremors in the ground and the hydraulic fracturing. All those studies and information are available to the review committee and I'm sure they've had the access to the latest reports that are out there.

 

I'm aware of the study that is coming out in the U.K. and again our review committee will be looking at that once it's available, and the U.S. Geological Survey as well. They are up to date, if new information becomes available, that's why we're holding off on making any decision until some of these reports are available or completed so that we can make an informed decision on what's the right way to move forward here in Nova Scotia.

 

MR. YOUNGER: I'm going to move on to a different subject. Back to offshore issues, last year I had asked whether you had a chance to read the report done on the helicopter crash in Newfoundland and Labrador, I'm just wondering if you've had a chance to review the recommendations from that report.

 

MR. PARKER: I and my staff have had some time to look at some of that, my staff in much more detail than I, of course. We place a strong emphasis on worker safety and protection of the environment. We work closely with Canada-Nova Scotia Offshore Petroleum Board and we have a strong regulatory system in place. Certainly the Wells report, as you referred to, has some recommendations for the Government of Newfoundland and Labrador, we've had a chance to review that as we look at any other activities or occurrences that have been in the offshore field in other jurisdictions around the world. We're constantly monitoring and looking for best practices from other jurisdictions, so we're on top of those and we absolutely want the best possible protection for our offshore workers in this province.

 

MR. YOUNGER: The report made what the author of the report actually called his single most important recommendation which was that there should be an independent offshore safety board that is independent of the, in that case obviously, the Canada-Newfoundland Offshore Petroleum Board. There was also some discussion about whether there should be a single national board, obviously in this case at this point there would only be a few players, Newfoundland and Labrador, Nova Scotia, maybe Prince Edward Island, Quebec - but Newfoundland and Nova Scotia would be the two biggest players, I would say, in terms of a safety board. Have you put any consideration to that recommendation or have you discussed that with your Newfoundland counterpart?

 

MR. PARKER: Again, as I mentioned we put a very strong priority on the health and safety protection for our offshore workers. We continue to have discussions with the Newfoundland and Labrador Government and also with the federal government in Ottawa, and there are partners here. The Wells Commission Report was a report to the Government of Newfoundland and Labrador and we certainly have studied it but the recommendations were made to that government.

 

We are working with our partners in the federal and provincial levels to, as always, have the best possible regulations in place and we're looking at Occupational Health and Safety Regulations, again, working with those partners that come forward with the mirror legislation that would, in all three jurisdictions, ensure the best practices for safety. We have a bit of a different model here in Nova Scotia than they do in Newfoundland and Labrador in that our Chief Safety Officer reports directly to the board, unlike Newfoundland and Labrador and that allows for some independence or better accountability.

 

I had the opportunity to meet our Chief Safety Officer, Dave Scratch is his name, and he is very thorough and very committed to the protection of our workers. They have a very strong regulatory system in place and the training that the workers have to go thorough is just top notch. You can't just decide you're going to go out to visit an oil rig, even as an MLA or an outside observer or media person, whatever, you have to go through the underwater helicopter training, I think it's a two-day course, even just to get out onto an oil rig off our shores.

 

For the workers there is WHMIS training and there are all kinds of safety and for each category of worker out there, of course, there is different training in addition to their standard safety training for all of them. I was certainly impressed with Mr. Scratch and his dedication to make sure that the workers are protected; if necessary he can put a stop work order in place regardless of the company, if the workers are at risk then he is not hesitant to do that. I think we have a very strong regulatory system, we have that protection that the Chief Safety Officer is reporting not to the CEO directly but to the whole board and that provides for more accountability and better protection for our workers. But, like I said, we're continuing to work with our partners in Newfoundland and Labrador and in Ottawa to make sure that we have the best possible regulatory system in place for the protection of our workers.

 

MR. YOUNGER: Minister, I have no doubt that that person is highly qualified and puts safety first, and all those things you just listed were also the rules in Newfoundland and Labrador and a helicopter still went down and people lost their lives which resulted in this, and I don't think anybody would have predicted the gearbox issue with the oil or anything like that. Your counterpart in Newfoundland and Labrador has expressed interest in going in this direction and I think it would be a shame if they ended up deciding they had to go it alone because Nova Scotia wasn't interested in participating.

 

I'm very familiar with offshore safety regulations, I've done quite a lot of work in the offshore. The fact of the matter is that many years ago the Ocean Ranger went down and things improved after the Ocean Ranger went down. We had the helicopter crash and I'm sure that things will improve from there. Ironically last year we had a supply boat, a lot of them are off of Newfoundland but they have more rigs off Newfoundland than we do. We had, it was either off Newfoundland or Nova Scotia last year we had a diving supply boat bump into one of the rigs. We had another rig damaged that was brought into Halifax last year to be repaired. These things happen, it's a dangerous environment.

 

It was Mr. Wells who made a point of indicating in his report that he felt this was the most important recommendation and I agree with you that it is a report to the Newfoundland and Labrador Government. You are right that we have had a reasonably good track record of safety in the offshore, I would just be concerned that we wouldn't decide that that makes it good enough, that there isn't an opportunity to do better and Mr. Wells has indicated an opportunity for Newfoundland and Nova Scotia to work together to make it better, and obviously as, maybe other partners come on - one day we'll have Arctic drilling, I'm sure, whether I want it or not. So I would just like to encourage you to at least be open to that possibility and I'm sure that you speak to your counterpart in Newfoundland periodically, either at ministers' meetings or otherwise and just to at least broach the subject and see where that opportunity lies. I don't necessarily need an answer because I think I already got the answer, unless you wanted to say something about it? No, okay.

 

I wanted to ask you about some expenditures from last year just so that I can understand them a little better if that's okay. Some of them, honestly, aren't very much, I just don't really understand what they are. For example, there is a $10,000 payment to the Manitoba Minister of Finance, last year out of your department and I just can't for the life - oh sorry that's Page 116 of the Supplementary Public Accounts. Obviously it's last year's detail because you haven't spent the money this year yet.

 

I'll give him a chance to find it. There was only actually three or four that I wanted to ask about, most of them are self-explanatory.

MR. PARKER: Thank you Mr. Chairman, I guess we have it here now. It was $10,000 that was paid to the Manitoba Minister of Finance and it's for Regulatory Performance Improvement Working Group, and that working group is one where our province and the others come together and just on general regulatory improvements in the energy industry. It's a co-operative approach between the provinces.

 

MR. YOUNGER: That makes sense. I just have a couple of others I wanted to ask, one is on the exact same page. There is $7.7 million in an Accounts Payable Adjustment which seems, compared to some of the other departments, to be an enormous adjustment. Do you know why the department ended up picking up such a large accounts payable adjustment?

 

MR. PARKER: Is that the accounts payable adjustment, the $7.7 million?

 

MR. YOUNGER: Yes sir. I'm just wondering compared to, it just seems like an enormous adjustment amount for the size of the department. If the answer isn't readily available you can always get back to me.

 

MR. PARKER: I think it might be best to get back to you on that because I don't have the answer right at the very moment.

 

MR. YOUNGER: That's fine thank you.

 

MR. PARKER: I think it's related to our oil and gas industry but we need to get more details for you.

 

MR. YOUNGER: I was just wondering because it just jumps out as being, compared to the size of your department, relatively large. It's almost $8 million of a $30 million total in grants and contributions.

 

As I say, the vast majority of them are self-explanatory. There was one on the next page, actually there are two on the next page that I just wanted to ask. One is the Qatar MICE Development Institute.

 

MR. PARKER: I think that's related to our trade mission, in December of last year we went to the World Petroleum Congress meeting and there was a cost to set up a booth and the company that was doing it had MICE in their name, I think.

 

MR. YOUNGER: They managed it.

 

MR. PARKER: So they managed the booth setup for that World Petroleum Congress.

 

MR. YOUNGER: That makes sense. As I said, the couple that I have are ones that - most of them in these are self-explanatory, like allNovaScotia and stuff like that. Although I'm convinced after reading the budget that the allNovaScotia survives solely on the basis of government contracts. It's like $5,000 and $10,000 per department in subscriptions. Good for them.

 

There is almost $31,000 to the Pembina Institute which I know is a research institute so I'm just wondering, did they do research for the department? I think they're a think tank.

 

MR. PARKER: Pembina is from Edmonton, Alberta and they were the successful bidder to put together our landowner guide to wind energy in Nova Scotia. That was the cost of that production.

 

MR. YOUNGER: I didn't realize they were the ones that put it together. The last two I wanted to ask about was, Canada-Nova Scotia Offshore Petroleum Board, on the previous page, $3.3 million. It's listed under Grants and Contributions but then it comes up as a separate line item. I assume that's just the annual payment or grant that you make to that organization for their operations? That's not for something other than that?

 

MR. PARKER: That's true, that's our annual budget for the Canada-Nova Scotia Offshore Petroleum Board. Is that the one you're referring to? The federal government also contributes an equal amount to that. In time we get half of our contribution back from industry. As the board collects it, then it comes back to the province and to the federal government.

 

MR. YOUNGER: The last one I wanted to ask that's on the list of Grants and Contributions, same page, I'm not even going to try to pronounce it, OEER Associates. It's for $580,000.

 

MR. PARKER: OEER stands for the Offshore Energy Environmental Research Association. They do various projects, as the name implies, it's a combination of universities primarily but they do research on contract for Department of Energy, for government. They might be looking at fish habitat with regard to drilling offshore or seismic work. They're a research arm of most of the universities here in the province and they provide valuable advice to government.

 

They've done the SEAs on tidal work as well. They do a variety of environmental research for government but it's valuable information that we can have.

 

MR. YOUNGER: I appreciate that. I think probably where the confusion was is the Department of Finance listed it as Oeer, which made it look like that was the name of a company as opposed to the organization. I appreciate that clarification.

 

The last thing I wanted to ask about is something you just brought up there - it's not on those pages - before I turn it over to my colleague from the Progressive Conservative caucus is, you did mention tidal a couple of times. Site selection for tidal test sites and permanent sites - I assume as more of these COMFITs, there will be some COMFITs in tidal come up at some point. We know that Nova Scotia Power, OpenHydro and a bunch of others are all looking at these things. Everybody's going to want the same spot, right, because obviously they want the best tidal regime for their unit. How are those, on a long- or medium-term basis, going to be selected and the decision made, sort of who's eligible to have which pieces of land on the bottom of the ocean?

 

MR. PARKER: You're correct, in that we have a lot of interest in our marine tidal potential and we're developing it through the FORCE complex in the Minas Basin up near Parrsboro. There are a lot of local and international companies that are involved there as partners in one form or another. As I mentioned to the previous questioner, the cable is there and it's ready to connect, most of those will be in the water by next year and be bringing power ashore and that, in some ways, is the tip of the iceberg because it's the start of power but it's also the start of technology that we can develop and can market around the world. That's the real prize here is the capability we have to do the research and to get the information and to sell that technology to other areas of our planet.

 

We also have the COMFIT projects through Fundy Tidal Inc. in the Digby and Tiverton and Wedgeport area in southwest Nova Scotia, and as well, there is a COMFIT approved yesterday in the Barra Strait in the Cape Breton area, in the Bras d'Or Lakes. Technology is developing on a large scale and on a small scale and we're coming together.

 

You ask about the ground, or the Crown land, I guess it all belongs to the Crown under the water. We're developing our marine renewable energy strategy right now and that's something that is being looked at but from Dr. Fournier's recommendation and other studies that we've done we're coming together with how to handle that type of thing. There are some areas that are better than others for tidal technology but we're going to address that in our marine renewable energy strategy, that will be released this Spring and you'll have some answers then on that issue and many others at that time.

 

MR. YOUNGER: I do have a lot of faith in Dr. Fournier, he was my oceanography professor at Dal. The last thing I want to ask and then I'll turn it over to my colleague here, is there an expectation that we would have a royalty from the land leases associated with those tidal installations?

 

MR. PARKER: I guess all options are under consideration and that's something that certainly has been discussed . . .

 

MR. YOUNGER: Or rental.

 

MR. PARKER: Or could the province take a direct investment in it or partnership. But it is Crown land, it does belong to the people of Nova Scotia and obviously, if companies are going to develop this technology, what's the best way to encourage that but also to get a fair share for Nova Scotians. We do get a royalty from our oil and gas that is produced offshore so there may be different options on how to look at that, or a power rate that's attractive to Nova Scotians - royalty, rental, I think all the options are being considered but, again, our strategy when it comes out this Spring will be more inclusive, so stayed tuned.

 

MR. YOUNGER: Okay, I will turn it over to the Tories.

 

MR. CHAIRMAN: Thank you very much, does that conclude the Liberal time, do you want the minister again in this life or in another life tomorrow?

 

MR. YOUNGER: I'm going to see him on Thursday in Natural Resources. So I think the Tories will take it, leaving about five minutes for the minister to wrap, well five minutes by the time you do the motion, you don't want to end up like the Minister of Education and find you did the motion after the time elapsed.

 

MR. CHAIRMAN: There are 40 minutes remaining, actually. No, I'm sorry there are only 25 minutes remaining. So the situation is that the minister wants how much time for conclusion? Just two minutes.

 

MR. PARKER: I won't be long.

 

MR. CHAIRMAN: Thank you. Mr. Orrell.

 

MR. EDDIE ORRELL: Thank you for allowing me to ask a few questions, Mr. Minister. Just a few simple questions, I hope, around the Muskrat Falls subsea cable coming aground in Cape Breton. I'm told that the cable is now going to come ashore in Point Aconi, I wonder if that can be verified and at what time frame.

 

MR. PARKER: I can't give you any confirmation on where's it's going to land, I know Point Aconi has been looked at, Lingan has been looked at, I've even mentioned up near Wreck Cove or somewhere on the shore there but that's to be determined by the proponents, by Emera. The Maritime Link is an exciting part of that project and they'll determine where the best spot will be but I'm sure they'll be doing proper research and determining what the best site will be.

 

It's a complex process, the environmental assessment, the Public Utility and Review Board, the MOU between the Nalcor and Emera, there is a number of balls in the air here at the same time but we still have confidence that this will move forward and Maritime Link will be coming ashore in Cape Breton, it's just yet to be determined the exact location.

 

MR. CHAIRMAN: Mr. Orrell before you go on I was right about the time frame. We started with an opening statement from the minister of 44 minutes. We had 60 and 60, we had two hours, and we will only have, at 6 o'clock - the 25 minutes that you have will leave still 16 minutes because the minister's opening statement was 44. So there are 16 minutes left over from there. We'll only have three hours and 44 minutes in so you do have extra time for questioning or if not the NDP caucus will pick up just a few minutes. But I don't think we need to do that, Mr. Younger is still in the room and he could come back if he wanted. We're very fair in this chair, so Mr. Orrell.

 

MR. ORRELL: You were saying there is going to be a number of different factors to be determining factors of where that cable may come ashore. Is there any indication of what the main determining factor would be there, would it be geography, would it be an aging facility, distance from the major markets, any indication that you might be able to provide there for that so that maybe the people in Cape Breton can get a little excited in certain areas.

 

MR. PARKER: Again Emera is building the Maritime Link and I'm sure they are using all the expertise and knowledge available to them. Certainly geography is an important factor and the availability of the transmission lines that are there or the easiest route to build. But again they are going to make that determination based on the best information that will be available to them.

 

MR. ORRELL: You say about the availability of transmission lines, are there enough transmission lines in the system now to allow that to come through and be transported through the rest of the province?

 

MR. PARKER: I understand the weakest link in the transmission system is at the Strait of Canso where it comes across the water there and there is no question that is going to have to be upgraded to handle the capacity. We've already seen this year where Nova Scotia Power is reducing their capacity from Lingan and as more renewables come on stream - in other words when some of that generation is taken off the system then we'll provide capacity for Muskrat Falls. I suspect there are going to have to be some transmission improvements but there will be some extra capacity from what's coming off the system as well.

 

MR. ORRELL: We're hearing different opinions about the actual cost to generate electricity through Muskrat Falls and deliver it to the system in Nova Scotia. Is there any indication that that is going to be cheaper than production with coal-fired generation, wind, or any other renewables that are on target?

 

MR. PARKER: Certainly the new federal guidelines around greenhouse gas emissions and our own provincial regulations, coal is going to have to be replaced and come off the system, coal generation.

 

We know the total cost of the project has been estimated at $6.2 billion and the URB will be looking at the whole project and making a determination on what's in the best interest of Nova Scotians and what is economically feasible. As I said to one of your colleagues earlier, Mr. Huskilson, the CEO of Emera, has said the price will be competitive with other renewables and I'm sure these large utilities and companies would not go into the exercise without believing it could be feasible and competitive with other sources of energy.

 

MR. ORRELL: Do we have a written guarantee from Mr. Huskilson that that's going to be competitive or is that just an assumption? We know that the price of coal-fired generation is giving us power at a certain rate and we know we're going to need coal-fired generation for 20 to 30 more years, we've said that already. We know the price of that unless the cost of coal goes up - we'll get into debating the Donkin mine later, that's another story.

 

We know the cost of coal-fired generation and if he's saying it will be competitive, are we going to be guaranteed of that or is that going to be something where we're overrun, we're going to have to charge consumers more?

 

MR. PARKER: There are no guarantees in life. We do know that fossil fuels are going to continue to rise, continue to go up and coal has gone up 75 per cent in the last seven years. We're importing that from the United States or from South America. Oil is over $100 a barrel now and it appears to be going upwards. So there are no guarantees on what fossil fuels are going to be, but we do know that renewables, once the infrastructure is in place, is a stable price.

 

We have a guarantee, I guess, that the Lower Churchill will provide 35 years of stable energy prices with the possibility of buying additional power at market rates. We have other renewables in the province - tidal as we talked about previously and biofuels and wind power and all of those are renewables that are, once again, the infrastructure is there, they stay at that rate. The fuel, basically, for most of those are free and the real cost is the infrastructure to get it there but once it's in place, it's established, you have a guaranteed price for decades to come.

 

I mentioned earlier the Pubnico wind farm is now cheaper than coal. At the time it was built in 2005 it seemed like an expensive source of energy but it has proven to be a really good investment and it's now less than 7 cents a kilowatt hour, locked in at that price for a long period of time. Coal has continued to go up over those seven years and I think the renewable electricity administrator will be putting out the call for bids here for more wind power shortly, more renewables and we expect those to be very competitive - if not cheaper than coal then within a very short period of time they should be the way the rates of fossil fuels have been going up.

 

MR. ORRELL: We're talking imported coal, correct? The cost of mining local coal should be a lot cheaper, especially if we get the market in Cape Breton or Nova Scotia. Anyway we'll get into that at another time.

 

We're talking about stable power but are we talking about affordable power? Have we done a cost-benefit analysis saying it is going to be affordable to consumers in Nova Scotia? We know it's going to be stable if they're providing it for 35 years but at what cost is the biggest question that's burning in my mind?

 

MR. PARKER: Again, the URB will determine if this is in the best interest of Nova Scotians. They will call in all the expertise they require, they'll look at any studies that have been done in Newfoundland and Labrador by Nalcor and I believe Navigant has done some research there and Manitoba Hydro. Any and all information that will be out there they will have to review and call in more expertise if necessary to make sure that it's a good deal for our province and is as reasonable a rate as possible.

 

That's their role, that's their job, they're the regulators and they'll determine what's fair and reasonable to all concerned.

 

MR. ORRELL: So we don't really know if it's going to be affordable, it's up to the URB. The power rates have been rising and the URB has been able to raise those rates because of increase in infrastructure costs that they've been passing on to the consumer through Nova Scotia Power. My concern is such an enormous cost to Emera and the province getting involved in this. Is it going to be stable? Yes, I understand that but we want to make sure that it's going to maintain and be affordable and stay affordable. There's no indication that won't rise either with rising costs of employment and so on and so forth in the other areas and we'd have no control of out-of-province what they'll charge us to produce it. My concern is affordability, not stability. Yes, we need stable power but affordability is my biggest problem.

 

The other question I have is how many jobs will this create in the Province of Nova Scotia? I know Newfoundland and Labrador will probably get the bulk of the construction costs and we will have some construction costs here, but how many jobs can we predict this may create in Nova Scotia and maintain?

 

MR. PARKER: I believe the estimate is around on the Maritime Link portion, through Newfoundland and across the water into Nova Scotia is about 6,800 person years of employment that will be created for Nova Scotians. We have a memorandum of understanding with the Province of Newfoundland and Labrador that we will be given equal access to those jobs whether it's on the island of Newfoundland or whether it's in Cape Breton or on mainland Nova Scotia, we have equal access for Nova Scotians to those jobs. In addition, the rest of the project, the generation plant in Muskrat Falls and then the line that comes from there across the Strait of Belle Isle and through to Holyrood, those are first and foremost in Newfoundland and Labrador. Naturally they'll have first access to it but Nova Scotians will have an opportunity after that also to be considered.

 

There's a lot of work here and coincidentally there's a lot of work elsewhere in the offshore in Newfoundland and Labrador and mining projects in Labrador as well. There will be a huge demand for labour and we feel confident there will be Nova Scotian companies and contractors and workers that will get employment in the other aspects of the multi-billion dollar projects. Partly because a lot of the skilled labour will be employed in their mines and their offshore so it will create opportunities on the Muskrat Falls project as well for Nova Scotians and Maritimers and even beyond into Central Canada. There's going to be a positive impact on employment and contractors in all of Eastern Canada and as our Premier said, it's a nation-builder here. It's not just Newfoundland but many of the provinces in Canada will benefit from this project.

 

MR. ORRELL: The bulk of that work will be done in Newfoundland though, correct?

 

MR. PARKER: Well, it's going to be done in Newfoundland because that's where it is. There will be first preference to Newfoundlanders and Labradorians on the generation station and the line coming into the mainland of Newfoundland.

 

The Maritime Link, which I think is maybe 100 kilometres approximately from where it enters the water, that's on the land from Stephenville or that area of the western part of Newfoundland and across the water, across the Cabot Strait and into Cape Breton. That's the preference, equal treatment will be given there to Nova Scotians.

 

MR. ORRELL: We're still going to be shipping people from Nova Scotia and Newfoundland to work, the same as you do to Edmonton and Alberta and those places now, whereas if we develop the mine in Donkin, we know we're going to employ Cape Bretoners in Cape Breton or Nova Scotians or Canadians, which will create jobs and still be able to use the coal to sell or export or use that we already know we're going to need.

 

We're going to need some backup to the wind energy for sure, if we're going to focus on renewables. How much are we actually going to need to back up the renewables that are going to be here, we'll say within the next - the target is what, five years?

 

MR. PARKER: I know we're going to be having the Natural Resources estimates probably on Thursday and I'm sure the Donkin coal mine is one that you or your colleagues or somebody is going to raise here with me. It is a very important economic driver in Cape Breton and has potential to create hundreds of good jobs and we're working hard there with the proponents to try to see that come to fruition.

 

You're right, we're still going to need coal in our system and most of it now is imported from offshore. There are a couple of surface mines where it also comes from but proportionally it's a much smaller amount.

 

As we move forward, by 2020 we'll have more of our electricity, the bulk of it from renewables, at least 40 per cent as we've set that goal. That means coal will continue to come down as a percentage of the total product, it will be around 35 per cent at that time, right now it's about 57 per cent of electricity and just a few short years ago it was well over 80 per cent. So we're making good progress in that regard and creating economic opportunities in the renewable fields.

 

The Lower Churchill project, as you mentioned, it's a firm source of power. Once it's there and the infrastructure is in place, barring any transmission difficulties, it should continue to provide a very firm source of electricity hour after hour, day after day, year after year. So that will help back up the tidal or the wind or any other renewables that perhaps are intermittent. It's really helping us get that balance and so we need that firm source. It can come from natural gas, it can come from coal but it can also come from clean, green, renewable hydroelectricity. It's all part of our portfolio approach in finding that balance between the intermittents and the firm sources.

 

MR. ORRELL: That's good, thank you very much.

 

MR. CHAIRMAN: We have five minutes remaining in the third hour of questioning and the minister's opening remarks combined with that, 44 minutes, so there are 16 plus five, we have 21 minutes remaining. The minister will need probably three minutes or so for his statement. So certainly we'll open the floor to Mr. Younger, if he wants to come back. That's how small "l" liberal we are.

 

We'll turn it over to the Liberal caucus for most of the remaining 20 minutes.

 

MR. ANDREW YOUNGER: Mr. Chairman, if you want to just let me know when there's five minutes left so I give enough time to the minister.

 

MR. CHAIRMAN: I will do that.

 

MR. YOUNGER: I appreciate that and can I nominate you for Government House Leader, you're just so congenial.

 

MR. CHAIRMAN: It's better than deputy.

 

MR. YOUNGER: The member for Hammonds Plains-Upper Sackville looked really nervous all of a sudden. I wanted to follow up on something my colleague was asking about which is coal usage in the province. Can you tell me, or do you know, what percentage is domestic coal, and by domestic I actually mean Nova Scotia coal, and what percentage is imported coal? Or alternatively can somebody get those numbers at some point?

 

MR. PARKER: I'm trying to ascertain the exact amount here. I know a very large bulk of our coal is coming from offshore and it's coming from Colombia or Venezuela or from southern U.S. I think there are only two operating surface mines, is there, at Point Aconi and Stellarton?

 

MR. YOUNGER: Yes.

 

MR. PARKER: It's somewhere, I believe I'm told, 300,000 to 500,000 tons per year. That information we can certainly get for you but I just don't have the percentage at the moment.

 

MR. YOUNGER: I would appreciate it, if somebody doesn't mind tracking down that and the reason I ask is because there is quite a lot of debate among people about what that breakdown is, and obviously I favour seeing the amount of imported coal reduced for a whole lot of reasons. In fact, my wife used to work in a coal mine in Colombia, of all places, as a teacher so I'm well familiar with the conditions in the mines there, especially the environmental practices.

 

When we look at the potential opening of Donkin has there been any thought to reducing the environmental restrictions placed on the coal that Nova Scotia Power can burn in order to allow them to burn coal from Donkin?

 

MR. PARKER: The Donkin project is a huge potential for economic development in Cape Breton. Good rural jobs and usually in the mining industry the average salary is well above what it is in other resource industries so it is encouraging. Xstrata and Erdene are working on that project, that environmental assessment is underway. I'm sure in Natural Resources estimates we're probably going to have a further discussion about this but there's huge potential there. We are restricted by environmental regulations, both federally and provincially. We're working towards our goals of greenhouse gas reductions and in time those are coming down, mercury amounts as well.

 

There are restrictions, I know there have been discussions between the proponents of the mine and Nova Scotia Power about whether there's other technology out there to clean the coal or make it more environmentally acceptable and those discussions are ongoing, as they are with the Department of Energy. There are possibilities but I know the proponents have looked at other sources, other markets for the coal but it's just hard to know at this point whether the companies can work out something that would satisfactory, not only to them, but to government, to standards.

 

MR. YOUNGER: The reason I ask is because I was concerned when the government chose to reduce mercury restrictions and I guess that's sort of an Environment Department/Energy Department, sort of a cross-department thing to some extent - a Cabinet decision anyway. I would personally much rather see them look at other options around, you know, if we're going to find a way to burn that coal in Nova Scotia, I know they are looking at offshore markets in a significant portion of their business plan but I would certainly much rather see the government explore some of the other options you've mentioned, like are there ways to bring the coal to a standard that would allow burning. What are the options, for example, at Point Aconi?

 

On the Point Aconi side, I've toured that plant a number of times and one of the things that Nova Scotia Power has raised to me is that that plant is unique in Nova Scotia both in terms of its ability to deal with emissions, but more importantly its ability to burn a lot of different fuel sources and not just coal. I'm wondering whether your department has engaged in any research either with Nova Scotia Power or independently to see what other fuel sources there might be that could be used at Point Aconi and in an environmentally responsible manner.

 

MR. PARKER: Co-generation is certainly something that has been looked at or considered. As the member would know, we did reduce our allowable total of dry tons of biomass from 500,000 to 350,000 last year. We're just trying to be ultra conservative in that regard as far as making sure we protect the sustainability of our forest and that's very important.

 

The Point Aconi generation station has been burning petroleum coke there in addition, so that's an additional fuel source that they have been using. We've had discussions with Nova Scotia Power on other sources of fuel but at this point that's as far as that has gone. But as time goes by we are always willing to consider what else might be possible.

 

MR. YOUNGER: Thank you, and minister I'm not only thinking of things such as coking coal and things like that but as well, or even forest biomass. They brought up a whole list of things, for example, some of the wood fibre products that come in as waste that are C & D sites, which they've expressed some interest.

 

There are a whole lot of things that - what I'm wondering about is obviously if we are taking, for example, wood from a demolition site to a dump, it's a C & D dump which is better than taking it to the old-style dump. But if there is an opportunity to chip those sorts of things and use those and generate enough electricity to make it worth it, I'm wondering whether that solves a number of issues for us, we're a relatively small land mass where locating new landfill sites is difficult.

 

Anybody that has been through one of those, it's never fun. But it also may be an opportunity to look at alternative sources to deal with two issues at once plus continue to reduce our reliance on coal and I would think it would have fairly low mercury content, fairly lower greenhouse gas emissions. You wouldn't have the nitrous oxide issues and some of the other ones. I'm wondering whether your department has been looking at those possibilities and whether there's any research that your department is participating in on that front.

 

MR. PARKER: Our department is always interested in new technology and new initiatives and new possibilities. There is potential out there or technology that can produce energy from garbage or C & D waste certainly would be relatively easy. We certainly have done some research and worked with some municipalities and private interests on hay grass, or grass pellets, I guess you'd call it. There is a developing industry there especially in the Annapolis Valley and in northern Nova Scotia. There is a lot of interest amongst farmers and the municipal units. I know LST Energy is building wood pellet furnaces and grass pellet furnaces and it has the potential and the synergy here to bring in the agricultural industry and the manufacturer, and maybe what's really missing is a pelletizer or some pellet mill to put it all together. That's something that our department has put quite a bit of time and effort in and worked with Nova Scotia Agricultural College on that. That is one technology that is out there that's feasible and certainly if others are coming on stream we're always interested in different ways of producing energy, especially if it helps build our rural economy.

 

MR. CHAIRMAN: Mr. Younger about 10 minutes left, seven for you and three for the minister.

 

MR. YOUNGER: Thanks. Two final questions I want to ask and I'm honestly not sure if these are Department of Energy or Department of Natural Resources. So if it's the Department of Natural Resources you can tell me and I'll ask you on Thursday; you'll still have to answer them, you'll just know the question in advance.

 

The first is related to the coal issue with the Stellarton strip mine and my understanding is that the mine has its environmental permits through the Department of Environment to continue operating but it does not have its extraction licence which there seems to be some confusion, at least in the public, whether that comes from Energy or Natural Resources. That has lapsed yet the mine is still operating and I'm just wondering if you can advise what the situation is there and how that's being resolved.

 

MR. PARKER: I'm certainly familiar with the Stellarton surface mine. It provides a good number of jobs in that local area; on the other hand there have certainly been some concerns about coal dust and environmental concerns. I think you're right, they have all their environmental permits in place but the extraction licence had lapsed. I know the Department of Natural Resources looked at it, and I think the Department of Environment, perhaps, is involved with this as well. I can't honestly give you an answer, maybe by Thursday if we're in Natural Resources estimates I'll be able to give you a detailed answer on that but I do know the issue was looked at and I assume it has been corrected but I can't say. Ask me again on Thursday and I'll try to give you a more informed answer.

 

MR. YOUNGER: If you don't mind talking to the Minister of Natural Resources about that I'd appreciate it. That was my attempt at a joke.

 

Have you looked at, with Churchill Falls coming ashore and some of the other renewables there will be units that will obviously be shut down on a permanent basis in Nova Scotia coal plants. At the moment they are being shut down really on the basis of where they can do maintenance, so last year Point Aconi shut down, they did maintenance for much of the summer and now they've got two units, I think, at Lingan shut down. Part of that will allow them to do some maintenance in those facilities, which is great, that's fine, and they've been doing that for years and they can just shut down two this year instead of one.

 

Have you started looking at which units would be the most likely ones to shut down? I know it's a Nova Scotia Power decision at the end of the day but the government would have some role in this I would think.

 

MR. PARKER: We are in constant communication with Nova Scotia Power but really it's there as a private entity, it's their decision what they want to keep open or not. You're right, they closed Lingan, two of the four units there, on a summertime basis or temporary basis this year. There is less demand for power in the summertime unlike some provinces, maybe southern Ontario, there might be more demand with air conditioning needs but our biggest demand is in the winter months, of course, here for We have an arrangement with the federal government and there's some flexibility on, I guess the greenhouse gas emissions, and so that will be a factor that the company might determine, you know, on where they need to close those but in the end it's Nova Scotia Power's determination what they keep open or not.

 

MR. CHAIRMAN: There's time for one more question and one answer.

 

MR. YOUNGER: So the last question I'll ask then is something you just raised which is on the solar side. I think you raised it in your opening remarks about the possibility that might get rolled into COMFIT or some of the restrictions. A lot of our subdivisions, especially in metro, are now being built with air conditioning and so forth which will start to increase in the summertime the electrical demand. As well, we have an extremely good solar regime in the winter which will still generate electricity. It might be cold but it's sunny and you can generate electricity. What is the likelihood of including solar in some of the programs that currently don't include it in the next revisions?

 

MR. PARKER: Mr. Chairman, certainly solar is a great source of energy and, you know, the technology is developing better all the time and even storage around that energy source for nightime or dull days, I guess, you know, to capture that source from the sun. We have a review that will be underway later this year on our renewable electricity plan, including COMFIT, so that we'll be looking at what might be feasible with solar, is it within the realm of possibility. It's certainly coming down in price so that's a good thing. You know, of course, there are some people who have already connected up some solar units to their home and, of course, they have the net metering option through Nova Scotia Power to buy back or sell into the grid at the same rate that they're buying it for.

 

Of course, we have the solar project, Solar City, with HRM and that has been popular and a big demand for that. We're going to roll that out hopefully to other municipalities in the province. So solar holds a lot of potential. There are a lot of components to it but the sun's energy is free. It's just a matter of harnessing that and using it to the best advantage for Nova Scotians. So we're certainly interested in that and just how to develop the policy around it that works.

 

MR. CHAIRMAN: That concludes the Liberal caucus time and gives the minister enough time to do his estimate.

MR. PARKER: Well, first of all, I want to thank the honourable members for their questioning. Certainly we've covered a whole wide variety of topics and there are some thoughtful and precise questions on all aspects of energy policy in this province. So I thank the honourable members for those.

 

Secondly, I want to thank my staff for the support they've provided to me here this afternoon and the backup, I guess, on the back benches but really we are a team, we are a unit together, and everybody is important in what they contribute.

 

We are going through an energy transformation in this province. We are looking at a portfolio approach and it's exciting in many of the respects of what we're offering to Nova Scotians. We're getting off coal. We're diversifying and moving forward with a variety of energy sources and we can be a world leader in what we're doing. So I'm very pleased with the initiatives that we have in the department.

 

MR. CHAIRMAN: Shall Resolution E6 stand?

 

The resolution stands.

 

Thank you, minister, thank you, members, and thank you to the minister's staff.

 

We stand adjourned.

 

[The subcommittee adjourned at 6:19 p.m.]