HALIFAX, THURSDAY, MAY 5, 2016

 

SUBCOMMITTEE OF THE WHOLE ON SUPPLY

 

2:50 P.M.

 

CHAIRMAN

Mr. Gordon Wilson

 

            MR. CHAIRMAN: Order, I call the Subcommittee of the Whole on Supply to order. We will begin with the Estimates of the Department of Energy.

 

            Resolution E6 - Resolved that a sum not exceeding $29,597,000 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. MICHEL SAMSON: Merci beaucoup, M. Président. It's a pleasure to be here today as the Minister of Energy, Acadian Affairs, Trade, as well as Minister responsible for Part 1 of the Gaming Control Act.

 

            J'ai l'énorme privilège d'être le ministre de ces quatre ministères. Nous avons travaillé fort au cour de la dernière année pour atteindre les objectifs et servir la province de la Nouvelle-Écosse.

 

            It is also my pleasure to introduce the staff members from each of these organizations joining me today. He will be arriving a little bit later but Murray Coolican, Deputy Minister of Energy: also from the Department of Energy, Chris Spencer, Executive Director of Business Development and Corporate Services; Keith Collins, Executive Director of Sustainable and Renewable Energy. Over here to my right is Kim Himmelman, Director of Regulatory and Strategic Policy, and over here to my left is M. Remi MacDonell, Manager, Financial Services, with the Department of Finance.

 

            Also with me here today is Mr. Bob MacKinnon, President and CEO of the Nova Scotia Provincial Lotteries and Casino Corporation and Paul Gillis, the Executive Director of Intergovernmental Affairs.

 

            I would like to take a moment, Mr. Chairman, to thank these individuals and the dedicated and professional staff in all the departments for which I am responsible for their ongoing work. Today, I'll outline some of the work and investments in our future being made by each of the organizations for which I am responsible.

 

            I'll begin by focusing first on the Department of Energy. Our estimated budget for 2016-17 is $29,579,000 with the following expenses for the department: administration, $1.6 million; sustainable and renewable energy, $2.3 million; business development and corporate services, $2.9 million; petroleum resources, $4.9 million; office of the deputy minister, $400,000; Canada-Nova Scotia Offshore Petroleum Board, $4.5 million; non-electricity energy efficiency, sustainable transportation and conservation grants, $13 million.

 

            C'est ainsi le secteur croissant de l'énergie en Nouvelle-Écosse est passionnât. Le personnel du ministère et moi-même prévoient connaître une autre année occupée et productive.

 

            At the department, we are focused on managing and promoting Nova Scotia's energy resources. Our goal is to achieve optimum economic, social, and environmental value from the energy sector. We do so by tapping into the potential of our energy resources in as efficient and sustainable a manner as possible. Nova Scotia is a beautiful place to live. Those who live here highly value our home and recognize that the quality of our lives and the beauty of our province is dependent on deep respect for our environment. It is also dependent on a thriving and growing economy that can meaningfully support Nova Scotia families and allow the province to deliver important services like health care and education. Both of these interests must be deliberately and carefully balanced.

 

            Our government places a premium on the needs of Nova Scotia families in all corners of our province. We want to celebrate an electricity system that works better for Nova Scotians. That's the premise on which we built the province's first electricity plan. To ensure Nova Scotians receive the more predictable and stable power rates they are looking for, we are opening the door to competition, innovation, and greater accountability. Our electricity plan focuses on four main themes Nova Scotians and experts raised during the electricity system review. They are accountability, the predictable and stable rates I just mentioned, and introducing more innovation and competition into our electricity system.

 

            This past Fall we introduced the Electricity Plan Implementation (2015) Act. It authorizes the Nova Scotia Utility and Review Board to set performance and reliability standards for Nova Scotia Power. It also requires regular reporting and provides the board with the authority to order penalties of up to $1 million each year if the utility fails to achieve the standards. Penalties will be paid by shareholders and used to reduce fuel costs for Nova Scotia ratepayers.

 

            Nova Scotia Power is now also required to submit a three-year fuel stability plan. This will reduce volatility and set the amount customers pay to cover fuel costs each year. Over the next three years, the electricity rates Nova Scotia Power has filed are far lower than what Nova Scotians have experienced in many, many years. There's probably few of us who can forget huge increases of 7 per cent, 8 per cent, and 9 per cent in some years. That just wasn't doable for too many Nova Scotia families. Rates over the next three years will be less than the expected rate of inflation.

 

            We're also opening our energy market to competition from renewable energy producers for the first time ever. Consumer advocate John Merrick recently applauded our efforts to set this bold new direction and create the opportunity for Nova Scotians to choose their energy provider. He has said Nova Scotians are seeing the dawn of a new energy marketplace in our province. He believes as we do that stable low rates are going to depend on Nova Scotians having access to energy not from just one source but from a variety of sources.

 

            Last month, we also ended the legal requirement to operate the Nova Scotia biomass plant in Port Hawkesbury as a must-run facility. These regulations, brought in by the former government, place unnecessary constraints on optimum electricity system planning and management.

 

            Nous avons fait de progrès important pour ajouter plus de sources renouvelables à notre panier d'énergie. Aujourd'hui il est non seulement possible mais nécessaire d'être flexible pour produire de l'électricité le plus économiquement possible.

 

            In addition to regulation change, it also allows Nova Scotia Power to include renewable electricity generated from approved community feed-in tariff, or COMFIT, projects in its system planning. This will enable Nova Scotia Power to increase the accuracy of projected energy costs and ensure the diversity of our renewable energy mix is properly recognized.

 

            In 2016-17 we will continue to implement the electricity plan, dedicating funding for innovative solar, storage and electricity use management projects. The Community Buildings Solar PV Pilot Program will promote installation of solar panels on community buildings like town halls, fire halls and community centres. The Electricity Innovation Pilot Program will award funding on a competitive basis, to research projects focused on energy storage and new ways of managing electricity use. It will also provide sector support for tidal energy development.

 

The net metering program will offer more certainty on modest investments by homeowners, businesses and institutions that wish to supply their own needs and sell surplus power from the renewable sources.

 

            Nova Scotians told us that stable, predictable power rates are of utmost concern for them. We listened, we are delivering and we will continue to make this a high priority. Not only is our electricity plan making stable rates possible, it is also moving us closer to a lower carbon future, something I know many Nova Scotians highly value.

           

As part of this budget, government is again investing in sustainable transportation. We are dedicating another $600,000 to Connect2, matching our 2015-16 contribution. The Connect2 program helps communities create and promote active transportation options for trips of two kilometres or less between community hubs and rural and urban parts of the province.

 

During the first year of the program 26 projects across the province were completed. Communities were able to build multi-use paths and bike lanes that connect residents with each other and local gathering points like neighbourhood schools, medical centres, and business districts. It's great to see more Nova Scotians able to get where they need to go through active transportation. The 2016-17 budget also includes $225,000 for community transportation improvements, supporting marketing efforts and data collection and analysis and other sustainable transportation initiatives.

 

            Une autre façon de faire réduire notre empreint de carbone est pour les Néo-Écossais de garder un peu plus d'argent dans leur poche et d'améliorer l'efficacité énergique de nos maisons et de mettre sous pieds d'autres programmes de conservation d'énergie.

 

            Back in early 2015 we removed the efficiency fee from power bills and introduced EfficiencyOne. In 2016-2017 my department will continue to implement our long-term electricity, efficiency and conservation plan, using less energy released in 2014. To assist homeowners who most need help in making needed energy efficiency improvements to their homes, we are continuing funding for low-income efficiency programs, such as the HomeWarming program. Up to 45 per cent of the heat lost in a home can be prevented through better insulation and draft-proofing. This can make a big difference in heating and cooling bills, as well as personal comfort.

 

            The department provided EfficiencyOne with $600,000 in funding for nine pilot projects in 2015-16. Implementation continues and will be completed in 2016-17. The programs will help us identify how efficiency programming can be delivered without providing participants with significant financial incentives. What we learn will inform future decision-making.

 

            Total investment in efficiency programming for low-income Nova Scotians is $12.17 million in the 2016-17 energy budget. Our work to reduce our reliance on non-renewable energy sources is also making a difference. Already Nova Scotia's renewable energy accomplishments are impressive. Today we are punching above our weight. Nova Scotia is at the forefront of our country when it comes to reducing greenhouse gases.

 

            Our work to reduce our reliance on non-renewables and increase our use of sources like wind, hydropower, solar and geothermal is paying off. We reached and then exceeded our goal of 25 per cent of our energy from renewable sources by 2015. We are well on our way to exceeding our 2020 goal of 40 per cent energy from renewables. As a result, we are also becoming less vulnerable to global price pressures.

 

            I am excited about the potential of marine renewable energy sources to generate clean, renewable energy for consumers in Nova Scotia, Canada and far beyond. I know that you, Mr. Chairman, have a particular interest in this file as well and have been very active in it.

 

            I'm also excited about the potential as an economic and export driver, and as a way for Nova Scotians to build world calibre expertise by playing to our strengths. Nova Scotia's proximity to the Atlantic Ocean is a significant and natural strategic advantage. From fisheries to trade, shipbuilding to the military, over the course of our history the sea has played a major role in our economy and our ability to thrive.

 

            L'innovation dans les technologies océanologiques est essentielle pour accroître notre avantage concurrentiel sur le marché mondial.

 

            We are making a concerted effort to develop a world class marine renewable energy sector that is built on science and deserving of the public's trust.

 

            It has been estimated that there are over 2,500 megawatts of commercial potential in the tides of the Bay of Fundy. As expected, a tidal energy industry in Nova Scotia could generate as much as $1.7 billion in GDP over the next 25 years. Already it has launched and attracted companies such as Black Rock Tidal Power, Cape Sharp Tidal, DP Energy, Atlantis Operations (Canada) Ltd. and Minas Energy with Marine Current Turbines and Bluewater.

 

            It has also created new opportunities for existing local companies in areas like marine operations, fibre optic cable, engineering and acoustics. FORCE, or the Fundy Ocean Research Centre for Energy in Parrsboro, has approval to demonstrate small arrays of tidal devices up to five megawatts of power at each berth site. There are now five berth sites and four power cables with a capacity of 16 megawatts at each berth. The cables come to shore in Parrsboro where they connect to the North American grid.

 

            Cape Sharp Tidal is, as we speak, working with local fabricator Aecon in Pictou County to build tidal turbines for testing in the Bay of Fundy. The company is determined to become one of the world's first multi-megawatt arrays of interconnected tidal turbines, and they are doing it right here in Nova Scotia. To get there, Cape Sharp has already spent almost $33 million with local companies in Chester, Pictou, and Halifax and created jobs for about 200 people in the process and this is but one company.

 

            Our government has provided funding to FORCE to ensure it has the onshore infrastructure necessary to support the activities of the developers who want to test technologies in the bay.

 

            Through continued support to the Offshore Energy Research Association, the Fundy Ocean Research Centre for Energy, and other entities the province is ensuring that developments and regulatory activities are fully informed by quality, peer-reviewed research and data collection.

 

            In this budget we have included $150,000 for tidal innovation funding to support projects designed to reduce project costs and increase the ability of these companies to compete in the global marketplace. This funding will be available to companies over the next three years and will total $450,000 over this period.

 

            When you're leading the world it is important to get things right. As with all our endeavours, we are balancing our interest in economic growth with clear and rigorous expectations for developers. Last year we passed the Marine Renewable-energy Act, the key legislation governing the development of tidal energy in Nova Scotia. The Act governs the development of marine renewable energy resources, waves, tidal range, in-stream tidal, ocean currents and offshore wind in designated areas of our offshore. It is the culmination of consultations with communities, environmental groups, fisheries, academia, industry and government.

 

            Later this year we plan to introduce the Marine Renewable Energy Regulations to clearly lay out what we expect in terms of sustainable and responsible development. They will strengthen the requirement to collect environmental information and outline how this information must be shared with the public. We are proceeding carefully, ensuring the health of the Bay of Fundy and all the sea life in it is at the forefront of our work.

 

            Our ocean is a large part of our energy sector. The offshore oil and gas industry has played and continues to play an important role in our economy. Nova Scotia's fishing industry and other sectors have safely co-existed with responsible offshore developments for 25 years. In fact, Canada has one of the strongest offshore safety environmental protection regimes in the world. When companies come here they do so under stringent rules that are strictly enforced by an independent regulator.

 

            Earlier this month I and my federal counterpart signed a statutory moratorium, taking effect April 15^th, on any oil and gas activities on Georges Bank. The moratorium will remain in place until at least 2022. This is an ecologically rich and sensitive area that supports many Nova Scotian communities and families who make their livelihood from it. It is important that we continue to protect it.

 

            Offshore exploration and development creates significant economic activity for communities across the province in rural and urban areas and also for the ocean sector service and supply chain and all the Nova Scotians who work in it. It contributes to our province's ability to provide the essential services that Nova Scotians want for their families, like health care and education.

 

            The Play Fairway Analysis, a body of geoscience research completed in 2011 that evaluated Nova Scotia's offshore oil and gas potential, suggests that an untapped eight billion barrels of oil and 120 TCF of natural gas lie off our coast. There is more gas to be discovered and developed and through additional investment in geoscience research and analysis, we have been working to better inform ourselves about the potential of our offshore resources, as well as promote new investments in this area.

 

            Par conséquence, nous continuons d'investir dans la recherche géo scientifique parce qu'elle est nécessaire pour prouver à l'industrie la valeur stratégique de la Nouvelle-Écosse.

 

            The more we know and can share about our offshore resources, the greater our chance of realizing one of the most significant economic opportunities for our province, so we are continuing to invest in the research needed to demonstrate Nova Scotia's strategic value to the industry. In this budget $3.2 million is included for ongoing petroleum geoscience research as part of our offshore growth strategy. Companies such as Shell, and partners ConocoPhillips, Suncor, and BP, with partners Hess and Woodside, have made billion dollar work commitments here and our geoscience work has contributed to those decisions.

 

            In 2011 Shell Canada was awarded four deep water parcels in southwest Nova Scotia for a continued work expenditure bid of $970 million. Subsequently, Shell Canada was awarded two additional deep water and two shelf parcels for $32 million, resulting in a combined work commitment of more than $1 billion.

 

            In 2012 BP was also awarded four deep water parcels southwest of Sable Island, for a total work commitment of $1.05 billion. BP made a $630 million work expenditure bid on one of its parcels. This represents the largest work expenditure bid on a single parcel in Atlantic Canada. The company just issued an expression of interest for engineering and consulting services in support of drilling one or more offshore wells in 2018. Last year we also attracted Statoil and another $82 million in new exploration commitments.

 

            Investments in geoscience research, like the one we are making this year, play an important role in bringing super-major companies here. Today we are midway through our four-year, $12 million investment in geoscience and marketing efforts. Our current area of geoscience study is in the deep water area southeast of Sable Island. We are updating our original Play Fairway Analysis covering this area. Last summer our staff, along with researchers from Natural Resources Canada, collected deep water piston core samples from the ocean floor. We are collaborating again with the geological survey of Canada on a three-week sampling program. The results will again be made available free of charge to the industry.

 

            By 2017 our efforts to better understand our offshore potential will represent a provincial investment in offshore geoscience and marketing of $33 million. In addition to geoscience efforts, the offshore growth strategy includes initiatives to optimize economic benefit opportunities from offshore development. This includes undertaking supply chain capacity development work, positioning local companies and workers for offshore opportunity and leveraging opportunities and joint venture partnerships.

 

            Our capacity assessment work involves generating new understanding about the potential opportunities that may result from deep water exploration in the areas of engineering, manufacturing, fabrication, and supply and service. As I said, any developments must first be responsible and sustainable. Earlier this year legislation and new regulations that strengthen accountability for companies operating in offshore Nova Scotia came into effect.

 

While we already have one of the strongest offshore safety and environmental protection regimes in the world, these changes represent a significant update to environmental liability protections, transparency, and clarity for offshore operators. In essence, they provide clear rules, particularly around cost recovery regulations, administrative monetary penalty regulations and financial requirements. This is important in terms of protecting our environment but also in terms of laying out for the industry a predictable regime. When businesses know what to expect, they can effectively plan.

 

            The Offshore Petroleum Board will also be adding more resources to focus on environmental protection and safety, as well as Aboriginal consultation. The industry will increase its contributions to the board to recover these costs so they are not passed on to Nova Scotians. This week, as much as it pained me to be away from the Legislature, I was in Houston at the Offshore Technology Conference where I was pleased to share that a new call for offshore bids has just been issued by the Canada-Nova Scotia Offshore Petroleum Board. The call includes six blocks totalling 1.2 million hectares. Three parcels are in shallow water in the Sable Island area and three parcels are in the deep water area southeast of Sable Island, immediately adjacent to previously awarded blocks now being explored by BP. These deep water parcels have been a focus of our 2015-16 geoscience work. We are excited about our new analysis and believe there will be industry interest in this call which is open until October 27, 2016.

 

            Very recently I was in Toronto as part of a panel discussion on our progress and liquefied natural gas, also known as LNG. I was able to tell the audience, which included potential investors, that we have three proposed LNG export projects in Nova Scotia and that those proponents - Bear Head, Pieridae, and H-Energy, all believe our province has the advantages they need to compete on the global stage. Foremost is our proximity to the largest reserve of natural gas in North America, the Marcellus shale.

 

We also have advantageous proximity to markets in northwest Europe, eastern South America and Asia. All three of these projects are making progress and achieving the necessary regulatory approvals. The Bear Head and Pieridae projects recently achieved a major milestone when they sought and gained approval from the U.S. Department of Energy to export natural gas sourced in the U.S. to free trade and non-free trade nations.

 

            Natural gas is also something Nova Scotians use as part of our fuel mix and to heat our homes and institutions, so a secure supply of natural gas is also a good thing for us. Work to expand the capacity of the Maritimes and Northeast Pipeline, which connects the northeastern U.S. with New Brunswick and Nova Scotia, and to capitalize on existing rights-of-way is under way.

 

            Moving forward, my department will continue to support emerging opportunities related to LNG import and export and investment in Nova Scotia. In our efforts to balance our environment and our economy, two years ago we put a prohibition on high-volume hydraulic fracturing in shales. The majority of Nova Scotians expressed strong concerns about whether this activity, essentially unproven in Nova Scotia, could take place in an environmentally and socially responsible manner. The prohibition will hold until we are satisfied that the economic benefits to Nova Scotians do not compromise our environment. We are now taking the time needed to develop regulations that appropriately address the economic, environmental and social challenges associated with hydraulic fracturing. That work is complex, multi-faceted, and ongoing.

 

            Next I would like to move on to my capacity as Minister responsible for Part 1 of the Gaming Control Act. My job is to ensure the regulated gaming industry is as socially responsible as possible while also generating reasonable profits for the provincial government to help fund important programs and services for Nova Scotians. The Nova Scotia Provincial Lotteries and Casino Corporation, or NSPLCC, the Crown Corporation that oversees the industry, sets out a balanced and measured approach to ensure that programs and services valued by Nova Scotians continue to benefit from gaming revenues.

 

            Video lottery terminal, or VLT, revenue has increased this year, and I would like to take a moment to address why. First, some players are returning to video lottery as a result of the removal of the My-Play System. While well intentioned, that system did not achieve its objective of helping players make more informed decisions about their play. The My-Play System cards were not being used as intended. Harmful myths were being perpetuated, and some players were using their data to chase losses. That is the exact opposite of responsible gambling. The system was also a barrier to participation for those at low or no risk. Many players had privacy concerns and did not see the value in the information and features.

 

Second, as approved in 2011, the replacement of obsolete terminals was completed in Fall 2014. That purchase included 1,000 Techlink terminals. Those terminals did not catch on with players in Nova Scotia. The Nova Scotia Provincial Lotteries and Casino Corporation had to start replacing them in December 2014. The replacement of the obsolete terminals with the subsequent start of the removal of the Techlink terminals, resulted in increased player interest and participation.

 

Our commitment is to lead a socially responsible industry for the benefit of Nova Scotians and their communities. We deliver effective, responsible gambling programs, assess products and promotions, make information available to Nova Scotians so they can make informed decisions about their play, and support efforts to reduce the harmful impacts of problem gambling.

 

            One area of focus this year is strengthening performance metrics and targets for our responsible gambling programs. This was a recommendation made to the NSPLCC by the Auditor General. We are also working to reduce reliance on VLT revenue. Government has continued to reduce the number of VLTs through attrition. To date, 126 VLTs have been removed. Government's revenue from VLTs is expected to be less than 1 per cent of government revenue, compared to just under 2 per cent in 2005.

 

            Another area that is top of mind is Internet gambling participation. A survey was done by the NSPLCC in conjunction with the Department of Health and Wellness to understand the extent to which Nova Scotians are currently playing online in unregulated, illegal environments. This research goal was set out in the 2011 Responsible Gaming Strategy and conducted last year.

 

            Our government strives to have the right mix of responsible gambling programs in place to help players make informed decisions. The NSPLCC is open to continuous quality improvement.

 

            For generations, Nova Scotians have supported worthy causes through charitable gaming activities. Many times, they have been recognized as being the most generous people anywhere.

 

            The Support4Sport program, a designated ticket lottery program, is making meaningful impacts to sport in the province. Since its inception, the program has contributed over $31 million to support amateur athletes, coaches, officials and community sport organizations. The program has far-reaching impacts with over 125,000 Nova Scotians benefiting each year from Support4Sport in one way or another.

 

            Another designated lottery program is Support4Culture, which supports arts, culture and heritage in communities across Nova Scotia. Introduced in 2013, this program provides approximately $2 million annually and has provided more than $6 million to date for aspiring established artists and community organizations. The Support4Culture program is having a meaningful impact in communities throughout the province. In its first two years, there have been more than 360 allocations to support arts, culture, and heritage programs. We look forward to supporting more as the program grows.

 

            The gaming industry also provides support and learning opportunities for charitable and non-profit organizations through the Support4Communities program. Each year, NSPLCC supports approximately 10 licensed Monte Carlo nights for a variety of important community causes, including for example, the Mulgrave Volunteer Fire Department, the Pictou County Special Olympics, and the Sydney YMCA. In addition, seminars are offered at no charge to organizations to help them improve their bingos, raffles, Monte Carlos, and other fundraising efforts.

 

            I would now like to make a few remarks in my capacity as Minister of Trade. Under my direction, the Trade Policy Division is responsible for articulating and furthering Nova Scotia's interest in domestic and international trade negotiations and disputes. The division also acts as a resource to the Government of Nova Scotia by providing trade policy advice to all departments. Mr. Chairman, 2015 was a busy year for the division, and this will continue into 2016-17 with a number of active trade negotiations, disputes and litigation files being led by Intergovernmental Affairs.

 

Domestically, negotiations toward a comprehensive renewal of the Agreement on Internal Trade, or AIT, have been ongoing since 2014 at the direction of Canadian Premiers. The AIT is the agreement that governs trade within Canada. Its objective is to reduce and eliminate, to the extent possible, non-tariff barriers to the free movement of persons, goods, services, and investments within Canada. It also aims to establish an open, efficient, and stable domestic market. The rules governing internal trade are important to this province. The Canadian market represents 52 per cent of Nova Scotia's trade in goods and services.

 

            All federal, provincial and territorial jurisdictions are committed to working towards an ambitious, balanced, and equitable renewed agreement that further liberalizes trade within Canada. Negotiations began in December 2014, and 18 negotiating rounds have been held to date. Negotiators continue to work toward an agreement in time for the meeting of Canada's Premiers this coming July in Whitehorse.

 

            The negotiation toward a renewed AIT is an extension of the progress Nova Scotia is making towards a progressive regulatory environment for business. An example of this is the work we're doing with New Brunswick and P.E.I. through the new Office of Regulatory Affairs and Service Effectiveness to harmonize regulations and reduce trade barriers.

 

            As part of the national-level work, Nova Scotia led the way in securing a nation-wide apprentice mobility protocol that makes it easier to train apprentices and allows them to move between provinces and territories.

 

            Nova Scotia was also one of the first jurisdictions to pass regulations that allow Nova Scotia consumers to import wine, giving Nova Scotia consumers access to the great wine being produced here and across Canada.

 

            In addition to finalizing the text of the agreement over the coming months, we will also be encouraging other provinces to reduce importation restrictions. This will make it easier for consumers to access Canadian wine for personal use.

 

            Internationally, the Trade Policy division works closely with our federal partners on matters related to the negotiation, ratification, and implementation of, and compliance with, international trade agreements. This, for example, includes the North American Free Trade Agreement, the Canada-EU Comprehensive Economic and Trade Agreement, and the Trans-Pacific Partnership. The Comprehensive Economic and Trade Agreement is better known as CETA. The Trans-Pacific Partnership is better known as the TPP.

 

            Several other international trade agreement negotiations are on the horizon for Canada, including with China, Japan, and India. Nova Scotia's involvement in these talks ensures the interests of Nova Scotia companies and consumers are well represented at the table.

 

            In addition to negotiations, the Trade Policy division is also responsible for administering trade conflicts in the form of disputes and litigation. The division is actively involved in matters related to the imposition of countervailing duties on Canadian supercalendered paper in late 2015.

 

            In early 2015, the Coalition for Fair Paper Imports, a group of U.S. paper companies, petitioned the U.S. Department of Commerce and the U.S. International Trade Commission to impose countervailing duties on imports of supercalendered paper from across Canada. Companies involved in this process are Port Hawkesbury Paper, JD Irving in New Brunswick, Catalyst Paper in B.C., and Resolute in Ontario and Quebec City.

 

            For Port Hawkesbury Paper, the Department of Commerce concluded that a number of actions of the Government of Nova Scotia in 2012 constituted countervailable subsidies and levied an overall tariff of 20.18 per cent. We are disappointed and frustrated with the result of the U.S. process. Nova Scotia, Port Hawkesbury Paper, and Canada have all jointly filed two separate appeals against the U.S. decision under NAFTA and the WTO. These appeal processes will be active over the coming year.

 

            The trade policy division is also involved in a number of active files linked to the supercalendered paper case, including an expedited review of the Irving group of companies in arbitration under Chapter 11 of the North American Free Trade Agreement, initiated by Resolute of Delaware in late 2015. While the Government of Canada leads the defence on these matters, we are involved throughout the discovery process and beyond.

 

            Another active file is softwood lumber. The softwood lumber trade has been a contentious issue between the U.S. and Canada for years. The U.S. claims Canadian lumber is subsidized. It contends that governments set the fees for Crown timber below market value, thereby making Canadian exports of softwood lumber cheaper than lumber produced in the United States. The U.S. has initiated dispute mechanisms through a succession of agreements with Canada dating back to 1982.

 

            On October 12, 2015, the most recent Softwood Lumber Agreement expired. There is now a one-year standstill in effect until October 2016 prohibiting any trade actions or litigation. Once that year is over, the U.S. industry can initiate proceedings against Canadian softwood lumber exports either via a countervailing duties investigation or an anti-dumping investigation.

 

            Canada is actively engaged in negotiations with the Office of the United States Trade Representative on a new agreement to replace the SLA. The Trade Policy division works closely with industry, the Government of Canada, and the Atlantic Provinces throughout this process.

 

            The situation for Atlantic Canada is unique. The region has historically earned an exclusion from export measures under the agreement. Stumpage rates in the region are set at a fair market value, and the majority of our lumber comes from private wood lots versus Crown lands. The exclusion has saved the Maritime industry over $1 billion since 1996.

 

            The Trade Policy division operates within the Department of Intergovernmental Affairs and currently has a staff complement of five full-time equivalents. In addition to salaries, the division's operational budget for 2016-17 is approximately $100,000.

 

            Finally, I would like to conclude with an area of government's work that is very close to my heart, Acadian Affairs.

 

            Les Acadiens ont une longue histoire en Nouvelle-Écosse. Ils font partie intégrale de la province et de qui nous sommes en tant que peuple. Aujourd'hui en Nouvelle-Écosse compte une communauté acadienne et francophone dynamique qui est fière de son patrimoine, de sa culture, et de sa langue. Plus de 34 000 personnes en Nouvelle-Écosse aujourd'hui ont le français comme langue maternelle. Près de 100 000 Nouvelle-Écossais connaissent à la fois le français et l'anglais.

 

            The Acadian and francophone community makes invaluable contributions to our province. Acadian communities, with their rich history, are an essential part of our cultural landscape. They can be found from the southwestern tip of the province to the far reaches of Cape Breton Island. In some communities, like Clare, Argyle, Isle Madame, and Cheticamp, we make up the majority of the population.

 

            French language services are a priority for me personally and for my government.

 

            Nous sommes fiers d'offrir des services en français et d'appuyer le développement de la communauté acadienne and francophone de nombreuses façons.

 

            Acadian Affairs, a division of the Department of Communities, Culture and Heritage, works to support a thriving and growing Acadian and francophone community. It offers advice and support to government and its departments and entities so they can develop and adapt policies, programs, and services that reflect the needs of Acadians and francophones.

 

            Acadian Affairs ensures government is aware of the needs of these communities. It offers advice and support to departments, offices, and agencies of government and to Crown Corporations. This enables them to develop, adopt, and provide programs, policies, and services that reflect the needs of the Acadian and francophone community. It provides support for other departments for French-language services within government. It develops partnerships with Acadian and francophone agencies at provincial, national, and international levels; ensures that Acadian and francophone needs are addressed in the development of programs, policies, and services; and recognizes the contribution of the Acadian and francophone community.

 

            Les Affaires acadiennes gèrent la mise-en-ouvre le la Loi sur les services en français et aussi du plan stratégique de la Nouvelle-Écosse pour les services en français, qui sert de guide pour l'élaboration, la prestation, et l'expansion des services gouvernementaux en français. Le personnel des Affaires acadiennes offre des services et des programmes au ministères et institutions du gouvernement provinciaux afin de leurs aider à offrir des services en français, y compris des cours de français, de financement pour les services de traduction et des projets, des conseils stratégiques, et les utiles comme tel que le programme d'identification visuelle Bonjour.

 

            The French-language Services regulations specify the government institutions to which the French-language Services Act applies and from which the Acadian and francophone community can expect to receive services in French. These designated public institutions include all departments, most offices, and many agencies. French-language service coordinators oversee a range of activities relating to French-language services such as the preparation of the annual French-language services plan and the development of policies and programs, as well as investments relating to French-language services.

 

            We work collaboratively with our partners to identify and prioritize work that best serves the needs of this important community. Their input and advice has contributed greatly to the development of French-language services, and it guides the work of our office. The Vive l'Acadie Community Fund provides funding in support of cultural projects.

 

            Le gouvernement continue à travailler en étroite collaboration avec la communauté acadienne et francophone pour élaborer et améliorer des services offerts en français aux Néo-Écossais. L'année dernière, les faits soulignant le travail du gouvernement sur les services en français incluait de nouveaux services à l'intention des aînés, y compris la ligne d'information à l'intention des aînés et la ligne d'information et de renvoi en matière de violence envers les aînés par les services 211. Nous voulons faire en sorte que les Affaires acadiennes soit bien placée pour aider la communauté acadienne et francophone à poursuivre son essor et son rayonnement, à la fois dans les régions rurales et urbaines. Plutôt cette année, nous avons formé un comité ministériel chargé d'examiner le rôle des Affaires acadiennes au sein du gouvernement en ce qui trait à la mise-en-ouvre de la Loi sur les services en français. Nous avons demandé au comité de nous dire comment le gouvernement peut mieux servir les citoyens francophones de la province en mettant l'accent sur les services à la clientèle et la développement communautaire.

 

            An eight-member committee was made up of people from across the province to examine the position of Acadian Affairs within government with respect to the structure of the office. We felt it was important to ask the people who use these services and the office because they are the experts in knowing their needs and the needs of the community.

 

            Government has received a report and recommendations and is currently reviewing them to see how we can better serve the citizens of Nova Scotia. It is our intention to raise it publicly in the near future.

 

            Acadian Affairs is also working with the Acadian Federation of Nova Scotia to update the French-language Services Act, which I mentioned earlier.

 

            Je reconnais l'excellent travail de l'équipe des Affaires acadiennes ainsi que des coordinateurs des services en français qui se trouvent dans le ministère à l'échelle du gouvernement et qui continuent à renforcer les services gouvernementaux en français pour les Néo-Écossais. Je reconnais également le travail de la Fédération acadienne de la Nouvelle-Écosse qui nous avons rencontrée récemment afin de discuter des changements possible à la façon que le gouvernement travail avec la communauté acadienne et francophone. Comme toujours, j'ai bien hâte de collaborer avec tous nos partenaires au cours de la prochaine année.

 

            In conclusion, I would like to thank you for this opportunity to outline the important work of the Department of Energy, Acadian Affairs, and the significant role that Trade Policy and Part 1 of the Gaming Control Act play. It has been my pleasure to also outline some of our government's investments in 2016-17. The Department of Energy's mandate is to manage and promote energy resources to achieve optimum economic, social, and environmental value from the energy sector.

 

            En 2016-17, nous continuerons d'accomplir notre mandat tout en servant les intérêts sociaux, environnementaux, et économiques des Néo-Écossais.

 

            We will maintain the careful balance between the development of energy resources in an efficient and sustainable manner and the tremendous opportunities this sector provides for all Nova Scotians.

 

            The Nova Scotia Provincial Lotteries and Casino Corporation's commitment will remain the same in the 2016-17 budget year to ensure a responsible, accountable and sustainable approach to gaming that benefits Nova Scotians.

 

            Trade Policy will work diligently to represent the interests of Nova Scotians and ensure they benefit from improved trade.

 

            Acadian Affairs will continue its important mission providing tools and resources for delivery of services in French by public institutions, overseeing the implementation of the French-language Services Act and ensuring Acadian and francophone communities' needs are met.

 

            Je serais très intéressé d'entendre vos questions.

 

            I'm very interested in hearing your questions and providing as much information as we can. Thank you.

 

            MR. CHAIRMAN: Merci beaucoup, ministre Samson. We will begin the questioning. The Progressive Conservative Party has waived and we will begin with the New Democratic Party.

 

The honourable member for Queens-Shelburne.

 

            HON. STERLING BELLIVEAU: Before I ask the minister questions, just for clarity's sake, I know the minister has several portfolios - would it be appropriate to ask questions from either portfolio or do we do the Department of Energy first and move in that sequence - just for some guidance here?

 

            MR. CHAIRMAN: I believe the minister has indicated that he is open to questions for any of his portfolios.

 

            MR. BELLIVEAU: I had my notes prepared for the Department of Energy so I'll start there. I do appreciate the minister's longevity in the House and I want to recognize his experience here. Also I want to thank the staff. I have a number of questions. The minister alluded to some of his personal favorites - Acadian Affairs. I do have some favorites, but I do have some prepared notes and I may get in trouble if I don't stick to my briefing notes here. I'll endure to address some of the questions for the minister.

 

            On March 23^rd the URB ruled on Nova Scotia Power's proposal regarding the creation of renewable to retail market and I'd just like to know the department's reaction to that particular decision.

 

            MR. SAMSON: If I could just ask the honourable member, are you referring to the decision which - there have been a few decisions so we just want to make sure we get the right one that you are referring to - if it's the one I'm thinking of it's the one where the board globally indicated what type of rates could be charged by Nova Scotia Power for renewable energy producers but indicated there would be a final ruling with the specific numbers. Is that the one you are referring to?

 

            MR. BELLIVEAU: Yes.

 

            MR. SAMSON: We are pleased with that ruling, I think, as I mentioned in my comments, you heard John Merrick, the consumer advocate, say that it was the dawn of a new day of opportunity for diversity in our energy production in Nova Scotia. I think you heard from a representative from the renewable energy industry saying that this was an important step. Obviously they are still waiting to see what the final figures are going to be as far as the tariffs and other charges that Nova Scotia Power can charge for the use of their infrastructure for the transmission of new forms of renewable electricity.

 

            To answer your question, I would say we felt very positive about that decision. Looking back and without being too long, our goal was to create the regulatory environment to allow competition to take place. It is the Utility and Review Board that will decide what the final numbers will be and, more importantly, it is private industry that will make the final decision as to whether they believe they are able to put forward a product on a competitive basis that they can compete with Nova Scotia Power and compete for customers by providing them with renewable forms of electricity. So it was an important decision and we await to see what the final decision of the board will be, where it will set exactly what sort of tariffs can be charged by Nova Scotia Power.

 

            MR. BELLIVEAU: Through you, Mr. Chairman, to the minister, who does the department see as potential purchasers of this renewable energy under this new structure?

 

            MR. SAMSON: Again, that is going to be up to private industry to be able to go out and market their product. Renewable energy producers will have to make a decision once the final tariffs have been set, whether they are able to provide renewable energy to Nova Scotians, either at a competitive rate or establish a niche market.

 

            There have been some suggestions that there are consumers in Nova Scotia who would be prepared to pay slightly more than what they are currently paying to Nova Scotia Power, on the basis that it is renewable electricity that they are receiving.

 

            Again, as government, our goal was to establish the framework, create the environment, but it will be up to private industry and independent power producers to be able to make the business case and it will be up to them to go out and convince consumers that they should be switching to them rather than staying with Nova Scotia Power, which as of now, prior to these changes being made, there was no choice.

 

            MR. BELLIVEAU: I anticipate some discussion on this point. I know, Mr. Chairman, I heard the minister address this several times in the House but I'll ask the question here for the record, for my record; at what point do you feel that the Department of Energy has considered Nova Scotia Power's monopoly broken? I'll ask for the minister's comments.

 

            MR. SAMSON: I think clearly the minute we introduced that legislation we started the process to allow for competition. I don't think anyone was mistaken in believing this was going to happen overnight, because of the fact that our electricity system in Nova Scotia is highly regulated, as it should be, to ensure the protection of consumers and to be able to at least start the process of putting in place the regulatory regime to allow for competition was an important step. So bringing in the legislation, which was one of the first pieces of legislation we introduced as a government, was the first step.

 

We've continued along that way with the Utility and Review Board, as per the decision which you referred to in your first question. Again, the whole idea here is that it's private industry and independent power producers who will be responsible to go out and make the business case as to why Nova Scotians should be buying power from them rather than Nova Scotia Power. I think that's the way the system should work and again, it is Nova Scotians who will have the choice to make as to who they wish to purchase their power from.

 

            MR. BELLIVEAU: Well I'm no electrician but I think I have a good understanding of what a monopoly is and my observation is that Nova Scotia Power has total dominance over the grid system across Nova Scotia. My question is, if there is only one person that owns that infrastructure, to me that is a monopoly so maybe the minister could explain the difference there.

 

            MR. SAMSON: I guess the difference would be that as we sit here today we have no choice but to buy power from Nova Scotia Power - nobody else. No one has come to you to say we can give you cheaper power or you can pay a bit more but it will be a different source. It's not even a conversation that's taking place.

 

            We've changed that. With the final decision to come from the Utility and Review Board, it will allow for independent power producers to be able to go directly to consumers and offer up their product for sale.

 

            Now you are correct, Nova Scotia Power owns the infrastructure, but it's no different than our telephone companies where you see, whether it be in the cellphone business or others, where different companies have to use the existing equipment of other companies.

 

            Secondly, we realize and independent power producers realize that with renewable forms of energy, they are not consistently producing 24 hours a day, so they will have no choice but to enter into agreements with Nova Scotia Power to ensure that when their renewable source of energy is not producing, that they do have a backup supply guaranteed by Nova Scotia Power.

 

That certainly is going to continue, that is a reality but the fact that you now have an opportunity for independent power producers to be able to offer to Nova Scotians a choice as to who they get their power from, a choice in what the rates will be, which will remain to be seen, we think that is exactly what Nova Scotians told us. When we did our electricity review and even prior to the election Nova Scotians told us they wanted to have choice, they wanted to have more than one supplier of electricity in our province, they wanted greener forms of electricity but they made the message loud and clear, they didn't want to pay more.

 

            The challenge has been to be able to strike that balance. On the side of breaking the monopoly, I think we're well on our way to providing the regulatory framework to allow that to happen but more importantly, again, it is private industry that will make the business case for this and Nova Scotians will be the ones to decide as to which option they want to pursue.

           

MR. BELLIVEAU: That's certainly an interesting topic because I believe we are in an evolution of developing some of these energy sources.

 

            Mr. Minister, in your opening comments you suggested also one other energy source was solar storage. To me I understand the concept of solar panels but there has to be some mechanism for storage. Are our grid systems up to date? Do we have the capacity to create that capacity to have stored energy from the solar energy?

 

            MR. SAMSON: That's a good question that you ask there because the reality is that our grid system is such that it has limitations in certain areas. We've seen examples of where individuals have come forward, whether it be with wind turbines, whether it be even on the tidal side, that they've asked to locate in areas where the grids just can't handle that extra capacity so there has to be a well-thought-out plan when you're looking at capacity issues and where the grid would have to be upgraded. There are certain parts of the province where that clearly would be an issue.

 

            On the solar piece, we've been watching this very closely. The price of solar is starting to come down. It's more affordable than it was in the past, which is why - and you've probably heard this from your time in government - there was always that frustration of why COMFIT did not include solar. People were puzzled by that and I'm sure you probably received as much correspondence as what I've received during my time because people really felt that it should have been part of that. It wasn't and we understand the reasons why it wasn't which is why in this budget we've decided, as part of the electricity plan, to invest in some more research on solar.

 

            It's interesting that you ask about the whole storage of solar power because there's quite an interesting pilot project taking place, in your riding in fact, at the old Bowater facility. There's a young lady, Danielle Fong, with LightSail Energy - I'm not sure if you're familiar with Danielle but she's a very impressive entrepreneur from here in Nova Scotia who is working down in Silicon Valley in California. The whole goal she has been working towards has been on energy storage, whether it be with wind, whether it be with solar, again the concern being that they don't produce 24 hours a day, therefore, there needs to be an ability to store, to be able to draw down that energy at a non-producing time.

 

            We have made some investments in that area, as I alluded to in my opening statement, to better understand solar. I will also encourage you and encourage all members, as part of the pilot project we've decided to focus on community gathering places, whether they be community halls, whether they be fire halls or other institutions, we thought we would approach it by looking at the non-profit sector to see what types of savings might be incurred.

 

            I would encourage you, in speaking in your communities, that if they are talking about their electricity costs and alternatives, that they may want to look at this program. It's going to be a competitive process as to who gets approved so there is some work to be done. I know I have a local company in Cape Breton, Appleseed Energy, which has been a leader in the solar industry that is quite excited about this pilot and looking forward to working with different community groups and individuals to advance this industry.

 

            MR. BELLIVEAU: Again, to me, just moving in a little different direction here, in the evolution of our automobile industry, and minister, I know you probably have actually driven in electric cars, they are amongst us as we speak. My observation again is that they are limited to a certain range. My understanding is that if you or I were driving home to our constituency this weekend, we would want to know where we could recharge them because my understanding is that it is limited to go a long distance.

 

            To me the capacity is not there for this particular technology. Would you agree with that comment or is there something new out there that I have missed?

 

            MR. SAMSON: Thank you for the question. You are right, we probably have equal distances to travel from this place to your home and to my home in opposite ends of the province. It is a challenge right now that there isn't the infrastructure available in as many parts of the province as we would hope. What I'm advised is that this is something the federal government is looking at very closely and encouraging more green uses of transportation so we're working closely with the federal government on the issue of charging stations or other means of encouraging this industry.

 

            I would suspect as well that being in an area of private entrepreneurs that they will see opportunities as well, once you see more electric type vehicles on the roadway, opportunities to provide charging stations and other services for them.

 

            I can advise that there isn't anything specifically in this budget dealing with that issue, but we certainly will continue to work closely with the federal government on that question.

 

            MR. BELLIVEAU: I'm going to ask one more question about our electrical system. I was trying to make the case that we're actually moving towards green energy, new technology. Solar power is a good example. Electric cars is another one. The point I'm trying to make here is that our grid system needs to be upgraded. There needs to be a smart grid system. My final point before I move on to another area is that there seems to be a lack of infrastructure to do all the things that we just talked about here in the last five minutes. Do you agree with that statement? Or is the development of this infrastructure on the horizon?

 

            MR. SAMSON: I think the grid that we have as such can be upgraded where necessary. For example, when you've seen turbines being built in specific areas, upgrades have taken place to the grid. There are opportunities to do that based on demand. But there needs to be a strategic approach to that and the fact that there are areas of the province, in the more remote areas, where to suddenly put a significant increase of demand on the grid would require some upgrades. Look, for example, at the Maritime Link. That's new infrastructure that's being put in place due to the excess demand that's coming from the hydroelectricity of Muskrat Falls. The grid is being adapted to address any increase in capacity that's required, but I think it's safe to say that our grid can be adjusted to handle more as required.

 

            MR. BELLIVEAU: I'm going to move on. I'm going to try to address as many different sectors as I can within energy here in the time allotted.

 

            I know this issue has been raised in previous sessions by myself, and the minister has reflected on this. I want to point out that there certainly have been a lot of concerns raised last Fall and last year about Shell's proposed timelines for capping in the event of a blow-out. I know that there were a lot of discussions about the 21 days, and that has been reduced. I appreciate the involvement of the minister and the Chair on that particular topic. The point I'm trying to raise here is that the fisheries are deeply concerned about the potential for a blow-out. I know I raised the point that there's no capping mechanism on North American soil to address that. I raised questions about tidal flow, and I'm talking about the Shelburne Basin now.

 

            I want to be crystal clear that myself and our Party support the development of offshore, but these are serious questions when it comes to making sure you have the right infrastructure in place to prevent an accident. I know the minister and I discussed this last year. The minister has had an opportunity to reflect. Some time has gone by. Through you, Mr. Chairman, are the minister's views the same today as they were a year ago on this topic?

 

            MR. SAMSON: They most definitely are, and I'll explain to you why. Obviously, as the member would remember from his days in government, staff do a wonderful job of providing you with briefings and information that the industry has provided that they've researched, or that the offshore petroleum board has provided. They provide all that information for you to make a decision. But at the end of the day, and possibly the member is the same, I'm a very visual person. You can give me stuff to read all day, and I'll read it, and I'll absorb as much as possible. But show me what you're talking about, and I'll certainly have much better appreciation.

 

            I took the concerns raised by the member and others of the fishing industry and other organizations regarding the capping stack and regarding the blowout preventer. I had the opportunity in February to fly out and see the Stena IceMAX myself. I went to the vessel, used the same helicopter that the men and women who work on our offshore use on a daily basis, having taken the safety training last year.

 

For those of you who are not familiar with this, you are required to be strapped into a helicopter and dunked on four occasions. Two of those times, you are upright and, until the water is above your head, you can't unbuckle yourself. Then you have to knock the window out and get yourself back to the surface twice - upright. The last two times, the simulator is turned upside down, which is what would usually happen with a helicopter because of the weight of the blades, and all the engine parts are on the top. So being upside down, submerged in water, having to unbuckle yourself and get out of a window is daunting, to say the least, and even more daunting when, like myself, you don't know how to swim.

 

            I was determined to be able to get out there to see for myself and better understand what is going on. I can say this to the member, which I said to my staff when I came back from the ship, that had they put a piece of paper in front of me and said now draw us what you think a blowout preventer looks like, prior to going on the ship, it would not have looked anything like what I did get to see. It was interesting because when I first arrived on the ship, the captain asked, is there something specific you want to see? It's a 700-foot vessel, 11 stories high. I said, it's absolutely imperative that I get to see the blowout preventer. He said, well which one do you want to see because we have two. I said, what do you mean? He said, well we have one right now that's at the wellhead - I'm trying to remember what the depth is, around 2,000 metres. There's one which is right on the ocean floor at 2,000 metres. And there's one onboard the ship, the spare one. Needless to say, I was more interested in seeing the spare one than going down to see where the other one was located, 2,000 metres beneath the surface.

 

            The blowout preventer is approximately four stories high. On it are various stages where they can cap a well. They can completely slice off the well and seal it. Then there are two other backup systems on the blowout preventer in case all of those have gone wrong. It is all operated by the crew on the ship who are actually sitting in a remote centre where they have the underwater remote operated vehicle. If for any reason the electric system between the blowout preventer and the ship were to fail, the underwater remote vehicle has the ability to go down to the blowout preventer and actually press the manual buttons required to seal off the well if there happens to be any issues with it.

 

            This is all equipment that didn't exist prior to the Macondo incident. This is how the industry has responded. Not only do they have one on the wellhead, but they also have one on the ship. If you look at the situation with the Stena IceMAX right now, the challenges they have had, while the riser broke off, the blowout preventer is still sitting on the wellhead. So when they get back out to the site and reconnect, that blowout preventer has stayed there the entire time.

 

            One thing I would say to the member, and I'm not sure how fussy he would be on taking the training because it's mandatory, but I would love for the member himself to be able to see this with his own eyes, to have that appreciation. I almost wish we could take that blowout preventer and bring it around the province for people to see it because it's an impressive piece of equipment. It's the industry responding to a disaster that took place, to ensure that this doesn't happen again.

 

            In the problems with the Stena IceMAX, there was talk that it may have even been coming into the harbour. I can assure you, if that was the case, I would have done my best to arrange for the member and other colleagues to tour the ship and see exactly what the blowout preventer looks like and how it operates. We're certainly happy to get more information for the member about the blowout preventer and how it works. I know there's some videos out there that would be helpful as well.

 

But to answer your question, when you asked the question back then, I felt it was important to see it in action, see it in operation, 250 miles off the coast of Shelburne. I thought that was essential to give me the understanding necessary so that when you and others ask me if I'm confident, I can say yes, I am, because I've seen it in action. I've done my research, and I can say I've been on scene watching it carry out its purpose.

 

            MR. BELLIVEAU: In fact, I was following your exercise offshore very carefully. I was aware of your safety training, and I can assure you that I'm not really too enthused about doing that at this time in my life. I can tell you I took similar training. I jumped off our community wharf, two stories high, with a survival suit on. I've had a Navy SEAL adjust my regulator in the bottom of an Olympic swimming pool. I don't want to do that today. So I do recognize the minister's acknowledgement of taking that training and going off, and I really appreciate that.

 

            It's a coincidence - I think you were there - but also in March of this year, there was an incident Shell had where unfortunately some of the equipment was lost. This is the North Atlantic, and when you're travelling in a helicopter, I think you appreciate that. There was loss of equipment. The public is interested in learning when the report is going to be done to talk about that incident, and the public will have access to it.

 

            MR. SAMSON: That's certainly a great question to ask at this point. I know that the Canada-Nova Scotia Offshore Petroleum Board has met with Shell and is in ongoing discussions as to what is the best option with the riser that has fallen to the ocean floor. Already, they have received some different opinions. I believe the Fisheries Advisory Committee with the Offshore Petroleum Board met with Shell as well.

 

            Where they're doing the drilling is an area that's extremely deep, to say the least. While we were watching the underwater remote vehicle, the surface of the water was quite choppy. The supply vessel that was next to us was going up and down, so it was quite choppy. Down at the wellhead was dead calm. It was almost unbelievable that you could have that much sea movement up above, yet down at the bottom, there was none at all. It was as calm as could be, and in fact, there was even a fish that came by. We weren't sure what the species was. It had catfish characteristics, but it had some funny elements to it that none of us recognized, and we couldn't be too sure. There's little activity taking place there. As the member probably knows, there's no commercial fishing activity that takes place in that area.

 

            It is a muddy bottom that is there. My understanding is that when the riser fell down, because of the way it came off, it basically started twisting and that. It didn't fall down straight. It is twisted up. It's turned. Almost like a coil effect is what happened. Some of it has now started to settle on the bottom. That raises the question that if you try to raise it, you're disturbing the bottom, which some would argue is not a good idea.

 

            My understanding is that because of the way that it's gone in a coil type effect, to raise it, you would have to cut it in pieces. There's the cost of bringing in that equipment and having a remote underwater vehicle that could actually go and cut off sections of it. The other concern is that because the bottom has very little movement, any sort of disruption of the mud would mean it would take a day or two for it to settle so that you could even see what you were doing. All of those questions are being asked.

 

            One of the interesting comments that the fisheries committee apparently raised was that when a vessel goes down, there's no requirement to raise it. What we do know is that there was no oil in this riser. It had been drained. I think we both know that when a vessel goes down, it's got oil, it's got fuel, and Lord knows what else is aboard that vessel. We don't ask anyone to raise those vessels once they go down.

 

            That is all being looked at. I don't think anyone has raised any final decision as to what should be done, but my understanding is that with everything the Offshore Petroleum Board does, they will make a decision. I fully suspect that their report will be public. They have assured me that their Fisheries Advisory Committee is working closely with them on that very question of what to do with the riser.

 

            MR. BELLIVEAU: It asks an interesting question because my other critic area is fisheries. For the Minister of Fisheries and Aquaculture, this particular budget identified money for a remote vehicle that can go down underwater. I raised the question, and I know we're talking offshore here, so this is my question, is that machine capable of going to those great depths?

 

            The industries are interested in some of these questions that we're trying to get the answers to. I would ask the minister if he could give me some updated information on that particular vehicle, the capability of the distance and the depth of the ocean that it can observe.

 

            MR. SAMSON: I have to admit that I am not familiar with that. Are you referring to the one that Shell has on their vessel? Is this a new one you're referring to?

 

            MR. BELLIVEAU: This is a new vehicle that's in the budget for Fisheries and Aquaculture. I can withdraw the question and have the minister respond in my further questions.

 

            The Minister of Fisheries and Aquaculture, in this year's budget, has money allotted for a remote vehicle - a manned vehicle, that's my understanding - that can go down and look at aquaculture sites, different sites around the inshore fisheries. Lobsters were mentioned. You are talking of some depths up to 30 or 40 fathoms.

 

            I know we're talking about the offshore. I just wanted the Minister of Energy to comment on the potential of that particular vehicle.

 

            MR. SAMSON: I would feel fairly confident saying no. This is 2,000 metres deep that we're talking about, where Shell is drilling right now. My understanding is that the vehicle you are referring to would be mostly based for aquaculture operations, which would be in much shallower depths than what is being proposed here.

 

            One of the points raised to me as well is that because it's 2,000 metres, there's even the question, if you even tried to lift that pipe, whether it would even remain in a solid state. Because of the amount of pressure that it's under, there are concerns that it will twist. It could do anything because of the immense pressure it's under.

 

            There's a lot of consideration going in. My understanding is there is no local equipment that would be available to lift these pieces or any underwater vehicle, as you referred to, that would be able to go down and cut the sections off and then have them lifted to the surface.

 

            MR. BELLIVEAU: I'll try to get through some of these questions. I don't follow my own notes prepared for me. I just go off in certain directions. I enjoy the questioning.

 

            Minister, BP has also successfully bid on the proposed $1 billion drilling venture in offshore Nova Scotia. My question is, how much has already been received by the province, this government, as a result of that particular bid?

 

            MR. SAMSON: What happens in a case like this is that the company will put in a bid which is an amount of money that is considered to be a work commitment. With the bids, they have a certain period of time in which they are able to do the work regarding that specific parcel. While BP has successfully put in a bid for up to $1 billion in work, at this point in time, I don't believe that any of that money has been spent.

 

            MR. BELLIVEAU: Last session, I raised a question regarding dispersants in the offshore. This is a very sensitive issue with fisheries. In the minister's opening remarks, he talks about extending the moratorium on Georges Bank. The parcels of development, 3 and 4 are in close proximity to Browns Bank. I raised questions before regarding dispersants. The fishing industry has concerns about the use of them as a tool to manage possible spills. The minister's view was that this is a safe tool in the toolbox of managing oil spills, as of last year. I want to ask the minister, are his views the same regarding this particular use of dispersants?

 

            MR. SAMSON: I want to correct the last answer I gave you. I said that BP hadn't expended money yet. They did undertake part of their seismic program last year. We can get the numbers of what those expenditures were. I don't have those offhand, but I'll ask staff to make a note to send you the exact figures of what was spent last year.

 

            With the dispersants, the way dispersants have been explained to me is that if you look at the Macondo disaster, for example, you had a case where you had a well that was spewing out oil and had to be capped. My understanding is that around the rig site itself, naturally all the oil was rising. When the service ships came in to try to help control the situation, they could not get to the rig because of the oil. That is when dispersants were used. It was to try to clear a path from the rig to these supply ships and clear the oil out of the way so that the ships could get safely to the rig. Other than that, it was not safe to be sending ships into a sea of oil. That is where dispersants were used. My understanding is that it would only be in very limited circumstances.

 

            I'm also told that prior to them being authorized, they would have to show there is a net environmental benefit to their use. It would appear that there has been some misconception that if there is a situation where oil were to flow out, dispersants would be used to try to control that situation of oil with no other outstanding reasons. My understanding is that that's not the case at all. As you know, oil will eventually break down. The dispersants themselves, when you look at the Macondo situation, they were specifically to clear a path to allow the ships to get to the rig, not as a means of trying to control the amount of oil that had already spilled because of that well.

 

            I know the member has other questions. I'm wondering if we could just take a two-minute break, Mr. Chairman, and resume.

 

            MR. CHAIRMAN: Not a problem. We'll recess for two minutes.

 

            [4:28 p.m. The committee recessed.]

 

            [4:33 p.m. The committee reconvened.]

 

            MR. CHAIRMAN: Order. The honourable member for Queens-Shelburne.

 

            MR. BELLIVEAU: I know that last year there was some difference of opinion regarding the use of dispersants. The point I was trying to make in the last session was that the fishing industry was very concerned about the tidal flow in the area of the Shelburne Basin. I've seen maps about the influence of the Labrador current - the fishermen have that local knowledge - and the influence of the Bay of Fundy.

 

            The minister made reference to the protection of Georges Bank. In close proximity to Georges Bank and Sites 3 and 4 is Browns Bank, which has a protected box for haddock spawning and lobster spawning. It is literally next door to the Shelburne Basin.

 

            Now, the fishing industry is concerned about the use of dispersants. Again I want to repeat that there is agreement in the fishing industry that these industries can coexist, but on this particular issue there is a difference of opinion. The view of the fishing industry hasn't changed - the influence of the Bay of Fundy and the Labrador current. The point here is that many of the shellfish larvae spend the first two or three weeks of their life in the top of the water column. This is where the dispersant does its magic. This is the concern of the industry.

 

            I can tell you that the majority - over 60 per cent - of Canada's fish landings are landed west of Halifax. That area is very important to not only Nova Scotia but Canada. Again, there is a controversy on this one issue, this one tool that is being used. The fishing industry would love to sit down and have further consultation on this topic. I know that there has been some progress, Mr. Chairman. Actually through the help of the chairman, there have been two new seats filled on the Canada-Nova Scotia Offshore Petroleum Board.

 

            Given that, I want to ask before I move on, is there any room for more consultation on this topic to relieve the fears of the fishing industry?

 

            MR. SAMSON: I don't think anyone has closed the door to further discussions. I think the Canada-Nova Scotia Offshore Petroleum Board would be more than happy to continue discussions and continue to hear any concerns raised.

 

            When you live in a fishing community, there's always the fear that there's going to be a disaster. When I look out from my front yard, I watch the tankers going in and out of the Strait of Canso, knowing that in the 1970s we had the Arrow disaster, and then we had the Kurdistan disaster as well. They had devastating impacts on the Strait area at a time when there was little knowledge on how to deal with oil spills. The member probably remembers some of the different technologies that were tried, the slickers that were used, the army called in to dig up the beaches - then finding sites to dump the oil in. That then became an issue, who's watching those sites to ensure that there's no contamination from them?

 

            It's a fear that always exists, which is why you have to look to the industry and look to experts in the field to see if all reasonable precautions are taking place. What took place in the Gulf of Mexico was - no question - one of the most significant disasters we've seen in the offshore. It certainly sent not only a chill, but it also sent an alarm throughout the industry that they had to do everything possible to ensure that this was not going to happen again. Having seen the blowout preventer, having seen how it works, knowing that everything would have to go wrong in order to have something such as what happened in Macondo happen off our coast, and knowing the safety protocols that are in place and that - at the end of the day, we've seen the offshore exist in so many jurisdictions.

 

            Look at Newfoundland and Labrador, for example, knowing the importance of fisheries for that province and that region and knowing the amount of activity that is taking place in a safe way with the same protocols that we have here; knowing for example, back home the importance of the snow crab fishery, which is just off of Sable Island, where we have our Sable and Deep Panuke projects taking place. There has been a history of co-existence between our fisheries and offshore exploration and offshore development. I think that's a testament to the legislation that has been passed by governments of all stripes in this Legislature that have continued to strengthen the safety and environmental protocols for our offshore.

 

            But if the member is interested in arranging for more discussions on the safety protocols being used, by all means, we're happy to convey that to our colleagues at the Canada-Nova Scotia Offshore Petroleum Board. They are the ones responsible, not our department, when it comes to the issue of environmental safety and security for our offshore. My sense is that they would be more than happy to share information and more importantly, not only share but also listen to any concerns that still exist from the fishing industry or from anyone else.

 

            MR. BELLIVEAU: Mr. Chairman, can you give me an update on how much time I have left? We did have an interruption.

 

            MR. CHAIRMAN: You have 29 minutes. You'll be through at - 4:54 p.m. is the finish time. You have 14 minutes.

 

            MR. BELLIVEAU: Minister, recently there has been discussion about the Muskrat Falls project. You actually made reference to it, I believe, in your opening comments. My observation of watching the media is that there is at least a year delay in the construction of this particular project. Will that delay have any effect on the cost of electricity in Nova Scotia?

 

            MR. SAMSON: That's certainly a valid question to ask. As you've indicated, there are some cost overruns and some deadlines which are not being met on the project.

 

            As I indicated, I had the opportunity to speak to Minister Coady prior to the decision by Mr. Martin to step down as the president of Nalcor. During the conversation, we certainly reaffirmed the commitment to seeing this project being completed. They had asked for an independent report regarding the project, and it identified some cost overruns and some delays. She made it clear that they would be providing us with the update that they were waiting for as to when the project would be completed and when we could expect to see that hydroelectricity flowing to Nova Scotia.

 

            My understanding is that if there are any delays, Nova Scotia Power will continue to provide the electricity needs in Nova Scotia. That those costs, as has always been the case, will have to go before the Utility and Review Board for examination and for review as to what charges Nova Scotia Power can put forward for the cost of that electricity.

 

            MR. BELLIVEAU: So help me understand, minister. Right now, it appears there is going to be at least a year's delay, and my understanding is that Nova Scotia Power has projected that this power source will come online at a certain time.

 

            My point is, if this project is not completed on time, there is a vacuum that is left. If it's a year or 18 months, that energy has to be directed from some other source. My question is, if that energy has to come from some other means, is it going to be an additional cost to Nova Scotia taxpayers?

 

            MR. SAMSON: I guess what needs to be made clear, and it's naturally confusing the way it is sometimes put out, is that Nova Scotia Power is currently meeting our electricity needs. When the hydroelectricity starts flowing from the Muskrat Falls project, that's a reduction in the amount of electricity Nova Scotia Power will have to provide. It's expected to be 20 per cent. That generation is taking place now, so if Muskrat Falls is delayed, Nova Scotia Power still has the generating capacity to continue providing Nova Scotians with their needs.

 

            If, for some reason, they would be required to purchase additional capacity, then in that case, as I mentioned earlier, they would have to go before the Utility and Review Board and present that for their consideration. It would be premature and, I would say imprudent, to suggest that, even with that delay, it would necessarily equate to an increase in rates to Nova Scotia consumers.

 

            MR. BELLIVEAU: Again, minister, you talked in your opening remarks about Efficiency Nova Scotia and the loss of energy in homes. I believe you said there's possibly up to 45 per cent loss of heat. Efficiency Nova Scotia does a lot of work, but it seems like Efficiency Nova Scotia doesn't cover every potential scenario. I'll give you this one scenario. If people are renting a home, and the person who owns that property does not want to do the upgrades, but the individual is basically pouring money literally out the window, do you recognize that as an issue? Is there anything there for the consumer to improve that scenario?

 

            MR. SAMSON: It's a great question, and it's one that I know many governments have struggled with. If there was an easy solution, somebody would have done it by now. It is a challenge when the person is renting, and it's ensuring that the savings are passed on to the consumer.

 

            You have different situations where, in some rental units, you are paying directly for your energy costs. Again if it's a place that is drafty or has no insulation, your energy costs are going to be very high. In other units, the energy costs are fixed by the landlord at a certain amount.

 

            Too often, we look at things too much from the negative side. The question always is, if you make those investments in properties that are owned by landlords, what assurances are there that those savings are going to be passed on to the tenants? That's where I think everyone struggles, how you guarantee that. The last thing we would want to do is see that public funds are being used by EfficiencyOne or any other agency to help upgrade buildings owned by landlords when the benefit is not being passed on to the tenant. The whole idea is to reduce consumption and to create savings for Nova Scotians, but that seems to be the gap.

 

            Rather than not doing anything, I'm happy to report, as I mentioned in my opening comments, that $600,000 was invested in EfficiencyOne last year. One of the pilot projects they were running was to try to find a solution to the exact point you are raising. How can we make these programs available to landlords and have this be a benefit to the tenants?

 

            Work is being done on that. If you have a solution, we're more than happy to hear it. As I said, many governments have struggled with this, not only with this program but other types of programs, so work is being done. We're certainly waiting to see what EfficiencyOne comes back with. If there is an option that makes sense, absolutely we're going to look at it. We want to ensure that low-income Nova Scotians, whether they own or they rent, can take advantage of energy savings. It's just that, on this one, there is no simple answer.

 

            MR. BELLIVEAU: I'm trying to cover as many of the minister's portfolios as possible. Again, in your opening remarks you talked about Acadian Affairs, something that's dear to the minister's heart, and I understand that. My understanding is that in Acadian Affairs there is a boundary review that needs to be participated in every 10 years. I went through that, and I think the minister is very aware of the challenges around that.

 

            I understand your understanding of this issue. There were a number of controversial opportunities in discussions out in the general public when the last review happened. My question to the minister is, will you be considering possibly revisiting that boundaries issue?

 

            MR. SAMSON: It's a great question for myself from the member for Queens-Shelburne. Now I see the member for Argyle-Barrington and the chairman, from Clare-Digby. All we're missing is our colleague from Preston-Dartmouth, and we would all be here as some of those most affected by that decision.

 

            One of the things that we made clear when we came into government is that the whole question - as you know, the Acadian Federation has started legal action on this. One of the things they had asked for is to be able to submit the question directly to the court. The previous Minister of Justice, Mr. Landry, had rejected this request, which would have taken that much longer. We accepted that request. I had a number of people say, well, now that you guys are in power, just change it. Just fix it and change it.

 

            The question being put forward by the Acadian Federation is a question of linguistic and minority rights. That's a question for the courts. It's not for elected officials. If we were to say we're putting back the Acadian ridings the way they were, it wouldn't be because of the courts. It would be because the Liberal Government made that change. That's the last thing we want to see. The community itself, even though sometimes they just wish it could be fixed, deep down I think they realize that we really need the courts to make a final decision on the status of the Acadian ridings and the African Nova Scotian riding as well and what legal rights come with that.

 

            What I can advise the member is that it's my understanding that this is going to court in September of this year. We'll wait to see the arguments and see exactly what the court decides at that point. But it will be courts that govern this. There's no intention by our government to be doing anything on the question of electoral boundaries prior to the decision of the court.

 

            MR. BELLIVEAU: I publicly confess that I'm a political junkie, and I watch anything from local council to CPAC. I actually watched the British Parliament a couple of days ago.

 

            I'm deeply interested in what's happening with our neighbour to the south. You talked about the softwood, our issues regarding the United States, our partner there. You also talked a bit in your opening comments about supercalendered paper, dealing with Port Hawkesbury. I know that there's going to be an election this Fall in the United States. There was an observation by one of the candidates talking about NAFTA and basically tearing that up. Does that statement concern you? I'm just looking for your comments on that particular deal that's so important to Nova Scotians and Canadians.

 

            MR. SAMSON: I think the fact Prime Minister Trudeau, on his agenda in meeting with President Obama, had the softwood lumber agreement as one of the areas of discussion certainly speaks volumes that our federal colleagues see the importance of this.

 

            The important thing for us is to keep our Maritime exclusion. The fact is that British Columbia and other provinces provide a significant discount on stumpage rates, and they have a lot of Crown land that's being used for their lumber industry. As I'm sure the member knows well, we have very limited Crown land, and a lot of our harvesting takes place on private woodlots. Our stumpage fees are competitive. They're some of the highest stumpage fees that exist. Because of that, we feel that we have a solid argument in suggesting that Nova Scotia, New Brunswick, P.E.I., and Newfoundland should not be treated the same way as the rest of the country when it comes to the softwood lumber agreement. So I can assure you that our trade officials are working diligently on this.

 

            The other important thing as well, which I'm proud to say, is that we have sent correspondence on two occasions now to our federal counterpart. It has been sent jointly by all four Mministers of Trade in the Atlantic Provinces. Having that type of regional co-operation I think bodes well for the Atlantic Provinces. It sends a clear message to the federal government that we are united and that we have a case to make.

 

            As you've indicated, any candidates in the U.S. suggesting they're going to start tearing apart agreements is of great concern to me as it should be to all of us. But again, this is not even a full election campaign yet. They're still in the nomination process. What is said in the nomination process, what will be said during the campaign, and what will become reality will have to wait.

 

            But I can assure you that this is very much on the federal agenda. Any time we speak to any of our ambassadors or our consuls general in the United States, they are very familiar with the file and continue to lobby their colleagues in the United States as well for a new agreement. There's a lot of effort being put into this, and we'll continue to lobby to protect Nova Scotia's interests.

 

            MR. CHAIRMAN: The time has expired for the New Democratic Party. We will now rotate to the Progressive Conservative Party.

 

The honourable member for Pictou East.

 

            MR. TIM HOUSTON: I thank the minister and his staff. I'm just wondering what the minister's thoughts are on what the most significant file is that's on his desk at the moment?

 

            MR. SAMSON: I would say they all are. Look at energy. I was just down in Houston, and I said it's an interesting department because on one extreme, it's renewable energy, and on the other extreme, it's oil and gas development. So it's an interesting mix of the two of them.

 

            Look at the trade front. As was mentioned, you have Port Hawkesbury Paper, and you have the Softwood Lumber Agreement. You have the agreement on internal trade which has seen me travel to Ottawa and Toronto on two or three occasions to date already to meet with colleagues in order to try to get a deal. We're scheduled to meet again this month to try to get a final deal on that.

 

            It's essential that we be able to modernize our agreement on internal trade in Canada, especially when you have the European trade agreement, CETA, and you have the Trans-Pacific Partnership. If we don't change our agreement in Canada, it will be easier for Nova Scotia to do business with European countries than it will be with New Brunswick, and that's ridiculous. We can't have that kind of situation. We've been able to negotiate these agreements with foreign jurisdictions, yet we haven't been able to get our act together.

 

            Look at the decision that came out of the New Brunswick court just recently regarding the fact that they tried to charge someone for bringing too much beer from Quebec. It's 2016. How are we possibly looking at what people are bringing, as far as alcohol, from other provinces? It's one thing to be crossing the border from the U.S. but from other provinces. Fortunately, the courts there threw that out, and the federal minister indicated how pleased he was with that because we need to break down those barriers. That's on the trade front.

 

            There are other matters with trade. The member may be aware that Resolute has started an action against the Province of Nova Scotia via the federal government for the funding that was provided to Port Hawkesbury Paper. That's another file we're following. There's also the Bilcon file from the proposed quarry in Digby Neck, which we're following as well. On the trade file there's quite a bit.

 

            On Acadian Affairs, as has been indicated, there's the boundaries, and there's ensuring proper French language services via the federal government. I appointed an eight-member panel to review the Office of Acadian Affairs to make sure that the office is meeting the needs of the community, that the mandate is what it should be, that the structure is what it should be, and that the programming is reflective of what the community wants. We've received that report. We had meetings with the Acadian Federation where they presented their wish lists to us as well, along with the Premier. We've had two meetings with the Premier to date. I think that's double the amount of meetings they would have had with the previous Premier, so they're quite pleased at the level of attention our Premier has given to the organization and to the requests they have made.

 

            Every file - in Energy, I could go on about all the files that are in front of us there. They are all pressing files, and that's why it certainly keeps me busy. They are all files that I think are of great importance to Nova Scotians.

 

            MR. HOUSTON: I thank the minister. It does seem like there's a lot happening in that department. I'm just thankful you were able to get out of that contraption when you were upside down in the water.

 

            I want to start with electricity. We know the expression about breaking the monopoly, and you've talked a little bit tonight about getting people a choice. It just wasn't clear to me if that choice is there today or if the framework to ultimately allow for that choice is. Where are we at?

 

            MR. SAMSON: I guess first, just to give a bit of history, the first step that had to be taken was to bring in the legislative framework to allow for competition to take place. We all know that Nova Scotia Power has had a monopoly in our province for some time. They are a regulated utility, which allowed them to maintain that monopoly.

 

            We made a campaign commitment to break the monopoly. In order to do so, it had to first go with legislation to allow it to take place. Next came the Utility and Review Board hearing where we had independent power producers make submissions as to what they thought the tariff should be for being able to use Nova Scotia Power infrastructure to get their renewable power to customers. We had Nova Scotia Power, naturally, setting what they thought should be the rates charged. We had the recent decision of the Utility and Review Board which basically set a global picture of where they thought the rates were going to be. Clearly, it was not what Nova Scotia Power had asked for. We had independent power producers indicate that they felt good about this initial decision, but there's a final decision to come which will actually give the exact tariffs that can be charged by Nova Scotia Power. When we get to that final tariff, it's at that point where independent power producers will be in a position to decide if they can make the business case to go forward and convince Nova Scotia customers to buy their power rather than being with Nova Scotia Power.

 

            Over the years, I have certainly disagreed with some of the comments made by John Merrick. I point that out because I'm sure if you go through Hansard, you'll find instances of that. But in this case, I thought it was interesting that Mr. Merrick, who has always been quite challenging - which is part of his role - said this was the dawn of a new day. If all this falls into place, if everything goes the way it appears to be heading, it really is going to give Nova Scotians an option as to who they buy their power from to have new sources of electricity in our province being made available to consumers. He was very positive about it.

 

            But again, the role of government is to establish the framework to allow competition to take place. The decision on being able to move forward to convince Nova Scotians to sign up to get power from independent power producers will come from private industry. They will be the ones to make that decision.

 

            The message they gave us loud and clear was, allow us to at least go and compete. Prior to the legislation being brought in, prior to our government being elected, you couldn't legally even have that as an option. Today you can. With the final decision of the URB, that's where we'll see where the independent power producers will be able to say, I can make a go of this; I can make this work. Know as well - and I mentioned this earlier in my comments, and I don't know if this is a shock to anyone - that independent power producers will sign some form of agreement with Nova Scotia Power to back up their source of electricity when these independent power producers may not be producing or not producing sufficient amounts.

 

            There is work to be done here, but again, the framework has been set. The Utility and Review Board will provide the final rates. At that point, it will be up to private entrepreneurs to make the case of being able to convince Nova Scotians to buy their power from them.

 

            MR. HOUSTON: Do you have a date of when you expect the decision from the URB on when those exact tariffs may be known?

 

            MR. SAMSON: I don't believe they've set a date, but we'll check into that. It might even be posted on their website. I'm not aware of - they haven't told us about a specific date yet. We're anxious, needless to say, and I'm sure many others are anxious to see that final decision. If we have any more information, we'll certainly let you know.

 

            MR. HOUSTON: It certainly is a key piece of information. I guess the way this would unfold is, that decision would come down, then the private companies could determine how much they might need to charge, and then they would need to go through the steps to make their projects real. So there's a few more steps to be made for sure.

 

            Does the department have any kind of best guess - in a perfect world, what's the department's expectations of when Nova Scotians would be able to purchase electricity from a company other than Nova Scotia Power?

 

            MR. SAMSON: I don't think we have a specific time frame, but I would venture to say, I feel fairly confident in saying, that the independent power producers are waiting for the final number from the URB. They know what their costs are, they know what their overhead is, and they know what they can possibly provide us. I would suggest to you that they have a magic number already in mind. They are waiting for the final number from the URB to see if that works within the costs that they have as to what they would need to charge. So until they see that final number, that's what they're waiting for.

 

            I would dare say that they have that number already at hand. They're waiting to see what the tariffs are going to be, and at that point, we'll be in a position to make a final decision.

 

            MR. HOUSTON: Would it be fair to say there was a lot more involved in breaking the monopoly than people realized three years ago? Would that be a fair assessment?

 

            MR. SAMSON: I don't think anyone at any point thought this would happen overnight. It's a highly regulated industry. Anyone who has been to the URB or has followed along - I served as Energy Critic for a number of years and just the amount of emails, because I was copied on every submission that was sent. I'm not sure if the member gets those same emails, but they will fill up your inbox pretty quickly. It's a complicated process. Anyone who has followed a rate hearing knows. It's incredible, the amount of documentation that goes through, the amount of evidence that is provided.

 

            Again, if there was an impression that we somehow indicated that breaking the monopoly was going to happen overnight, it just wasn't possible. I believe our government has done everything to make this happen as quickly as possible, but when you're dealing with a regulated market, you are dealing with certain time frames.

 

            Again, there's a process to be followed. We can't control how quickly the Utility and Review Board makes its decisions. As I indicated, at this point in time, we have a preliminary decision from them, and we're waiting for the final decision, which hopefully is something that won't be too far away.

 

            MR. HOUSTON: Does the department have any projections, if it looks out maybe five years or three years or whatever the case may be, as to how many Nova Scotians who today purchase their electricity from Nova Scotia Power would be purchasing from an alternative source?

 

            MR. SAMSON: There's no means of knowing that number, and I'll give you an example. Let's say that an independent power producer decides they are going to build a turbine on Isle Madame, and they're going to try to pick up customers on Isle Madame. Clearly, they're not going to get customers from Yarmouth if they've built their turbine in a certain geographic area. It's next to impossible to be able to say at this point in time because it's going to depend on where the independent power producers are going to put their infrastructure and where they're going to be able to service a certain geographic area.

 

            Again, as part of our electricity review, Nova Scotians made it very clear. We had over 1,000 comments on it. They said they want more sources, more options. They want competition. They want greener energy. And they don't want to pay more.

 

            We believe that setting the framework that we have is breaking the monopoly. You see the work that is being done by EfficiencyOne now as well, which is competing with Nova Scotia Power. Now the next step is having these independent power producers being able to approach Nova Scotians directly to get their business. We believe that's exactly what Nova Scotians have asked for, and that is what we committed to doing.

 

            MR. HOUSTON: Can you give us a sense of how many independent power producers the department has been working with or talking to? Is it one or two, a couple of dozen, or much more than that? Can you just give a sense as to what you're feeling might come out of the market?

 

            MR. SAMSON: I guess one place to start would be the list of interveners who were involved in the URB process. That would list some of the independent power producers that were there. There's no question that we've had discussions with some of the Nova Scotia homegrown companies, especially those that were involved with COMFIT and others that have been around Nova Scotia for a while.

 

            But it needs to be understood that once URB makes its final decision, if it's decided that the tariffs being charged are going to allow for competition, I think you're going to see companies from all over the world look at Nova Scotia because this is something that they've been waiting for, to be able to compete with these utilities and go directly after customers. We're one of the few jurisdictions that's actually allowing that to happen. I wouldn't suggest that the companies we've talked to as a department over the years is a proper reflection of the opportunities there could be once the decision comes down if it's decided they can provide a competitive rate to convince Nova Scotians to sign on with them.

 

            MR. HOUSTON: Is the department aware of any renewable energy projects that have already passed the environmental assessment stage but haven't yet secured a power purchase agreement with Nova Scotia Power?

 

            MR. SAMSON: Are you referring to COMFIT projects?

 

            MR. HOUSTON: No, just any renewable. I don't know if it might be a new producer. I'm just trying to get a sense.

 

            MR. SAMSON: There are a number of projects that were approved under COMFIT prior to us shutting the program down that are going into the future. They would not have a power purchase agreement with Nova Scotia Power yet, but we're going to check just to make sure. My understanding is that if you go on our website, there's a list there of all the independent power producers that have power purchase agreements with Nova Scotia Power. For example, we've heard talk about the offshore wind project that's being proposed for Yarmouth. At this point in time, that would be a direct relationship between those proponents and Nova Scotia Power. It would have nothing to with our department because of the fact that the COMFIT program has been closed, and they probably wouldn't have qualified for that program. We'll check to make sure that there's not any outstanding ones that we're not thinking of today.

 

            MR. HOUSTON: I appreciate that. I guess what I'm trying to get my head around is if there's anyone ready to sell power. If there's not, which I assume there's not, how long it would take them to get a point where they would be ready? They would have to go through environmental assessment, and there would be a number of other steps they would have to do. They would have to do some construction, and they would have to hook on and stuff. I'm just trying to get a sense as to, if somebody decided they were going to enter this market, how long it would be from that decision until people actually had the choice to purchase from them. That's all. I'm just trying to get an understanding of that.

 

            MR. SAMSON: It certainly depends on what technology is going to be approached. One thing I should point out is that a number of the proponents under COMFIT, as they started to do more and more projects, they got more and more efficient. They were able to turn things around much faster, get the site preparation faster, get the application process faster, get the regulatory process faster. These are all efficiencies that they have been able to build in with their experience to date, which they would bring to the table as potential competition to Nova Scotia Power. Depending on the type of power production they would go with and depending on the amount of experience they have, it's almost impossible to suggest exactly when they would be able to turn this around.

 

            MR. HOUSTON: Do you have a sense of how long an average COMFIT program was, from approval to production, just as kind of a benchmark, I guess? It seems to me that we're talking about something that would be years away, but I have no basis for that, it's just my gut feeling.

 

            MR. SAMSON: Again, there's so many factors at play that it's almost impossible to suggest how long it would take. As I mentioned earlier, especially under COMFIT, some of these producers had a number of projects in place, and with each one they were able to get them going faster. There are elements such as community buy-in for the projects as well, which for some has been a relatively fast process. For others, it has been less efficient.

 

            Again, if it's a solar type project, for example, that's much easier to set up than if it was wind. It's next to impossible, at this point in time, to say how long it would take to turn that around.

 

            MR. HOUSTON: Fair enough, thank you for that. I heard from people who said that because of the way the draft regulations are structured so that the independent power producer couldn't lock in customers, there was some question. First off, I guess I would ask if that's your understanding of the regulations. If we get to the point to where an independent power producer does sign up customers, those customers are free to come and go as they want, right?

 

            MR. SAMSON: We'll check to make sure, but we're not aware of anything that would prevent any independent power producer from being able to enter into either a long-term agreement or a short-term agreement. We see those taking place now with natural gas customers and some of the customers on propane where they're agreeing to longer-term agreements for better prices and that. We'll check to make sure, but we're not aware offhand that the regulations would prevent that from being able to happen.

 

            MR. HOUSTON: Would Emera be able to set up another independent power producer? Could they actually come into the market through another brand name as well?

 

            MR. SAMSON: I don't believe there's anything that would prevent them from doing so.

 

            MR. HOUSTON: Do you expect them to do that? Do we have any expectation of whether they might do that?

 

            MR. SAMSON: Not that I'm aware of.

 

            MR. HOUSTON: I want to switch gears a little bit and talk about the biomass plants and the change from must-run. What percentage of the energy for the province does the biomass plant produce as it is now, even a month ago, before the change in classification?

 

            MR. SAMSON: We will get that exact figure for you - not to tie it up and delay this. We'll get that for you right away.

 

            MR. HOUSTON: I'm just wondering if you can also figure out how much that biomass plant contributes towards the renewable energy targets. I don't know if that's a number that somebody has to hand - just in scope. It doesn't have to be exact. I'm just wondering. It's pretty significant to our renewable energy, I think.

 

            MR. SAMSON: Again, we'll get you that exact figure. Our understanding is that Nova Scotia Power has indicated it will not impact the renewable energy targets at all. I guess the other thing I should add, and the member might be aware, is that while it was on a must-run basis, the biomass really was never running at 100 per cent. It was running at a lower capacity. There were certain practical reasons for that. The overall impact on our renewable targets was not significant.

 

            MR. HOUSTON: So with that said, I wonder, is there any expectation that that will run any different amounts of time now? If it wasn't at 100 per cent before, will it run roughly the same going forward as it has over the past year?

 

            MR. SAMSON: No, it will be substantially less now. I'm trying to remember the terminology. Basically, it was a must-run. Now it's as-needed. I believe that's what the new term is. There are expectations that, for example, on very cold days in the winter months, because of generation issues, there may be a need to use the biomass.

 

            My understanding is that there's an agreement that's been put in place between Port Hawkesbury Paper and Nova Scotia Power because the biomass was also providing steam to the supercalendered paper mills. That was a whole different issue, that they need to ensure that their steam production is still there for their mill.

 

            But Nova Scotia Power will now have the ability to decide when to use the biomass based on a competitive cost analysis - in other words, use it when it makes financial sense to do so. With the must-run, they had no choice. They had to continue running it even though the cost of running it exceeded other means of generation within their system.

 

            MR. HOUSTON: I might not have these numbers just right, which the minister probably knows, that maybe my numbers aren't always just right. I have in my mind that the biomass plant was using about 600,000 tons of feedstock, and about 300,000 of that was waste from the mill. Do you have any sense as to (a) whether those numbers are in the right range and (b) with the change in classification, what the 600,000 tons it uses would drop to? This is obviously a concern to people in forestry.

 

            MR. SAMSON: We rely heavily on DNR, Department of Natural Resources, to get us those figures. They are the ones who keep track of the amount of biomass that's being used in that. We'll try to get you those specific numbers, post the decision of removing the must-run and what the case was prior to that. It's DNR that we would rely upon rather than having those numbers internally ourselves, but we'll try to get those for you.

 

            MR. HOUSTON: I appreciate that from the department. In terms of Muskrat Falls, you did touch on that a little bit with my colleague. Do you have any expectation of what is the latest status? When would energy start to flow through there? Is it 2019? What's your most recent belief on that from what you know?

 

            MR. SAMSON: Again, as I indicated earlier, the new government of Newfoundland and Labrador had asked for a review of the project. It was clearly indicated that there were some delays, and there were some cost overruns. I don't think, when you look at the size of that infrastructure, that anyone was really surprised by that. There have been some changes to Nalcor with its president and its board.

 

            As I indicated, I had the chance to speak to Minister Coady, who's responsible for this file. Our Premier had a chance to speak with Premier Ball regarding this file as well. They've indicated to us that they're anticipating receiving a new schedule shortly that will show construction timelines and new cost analyses and have made it clear that they will share that with us as soon as they receive it. It's impossible for me, sitting here in Nova Scotia, to suggest when that energy will be flowing. Emera has contracts with Nalcor to have that flowing by January 1, 2018. If that is not the case, that's obviously a contractual issue between those two parties.

 

            The other issue I want to touch on as well is, there seems to be a belief that this 20 per cent that's coming is something that Nova Scotia Power is not producing now. They are. The 20 per cent will allow them to reduce their generating capacity because of the 20 per cent that will be coming from Muskrat Falls. There seems to be an impression left out there that we weren't going to have enough electricity without Muskrat Falls. That is not the case. It's a misconception that without this we're in trouble. We have that generating capacity now.

 

            If, for any reason, additional generating capacity is required, Nova Scotia Power will go out, find those sources, and will have to go before the Utility and Review Board and explain what those costs are and what the cost should be to consumers.

 

            MR. HOUSTON: But is it the case that ratepayers would pay for that electricity twice? We would have to pay for the electricity that's not coming on schedule on January 1, 2018. We're still paying for that, but we're also paying for the additional generation that we have now. Is there any possibility that ratepayers are paying twice for the same block of energy?

 

            MR. SAMSON: No. Nova Scotia ratepayers will not be paying twice. That has been confirmed. The other thing to keep in mind is that it's a 35-year agreement with Nalcor. Whenever the energy starts flowing, the 35 years will kick in at that point in time, but the suggestion that we will be paying as of January 1, 2018, for power we're not receiving from Muskrat Falls is false.

 

            MR. HOUSTON: In the URB decision, did they not allude to the fact that the delay will ultimately cost ratepayers? It's just whether it's now or then, but it will have a cost. That's not your feeling, I guess, as we sit here today?

 

            MR. SAMSON: Based on the information that we have, we don't see a delay resulting in an increased cost to ratepayers.

 

            MR. HOUSTON: I may come back to that, but I don't want to miss the opportunity to talk about high-volume hydraulic fracturing. When does the department expect it may be able to release a definition of high-volume hydraulic fracturing?

 

            MR. SAMSON: There continues to be a significant amount of work on this file. As I've indicated before in the House, staff have had the opportunity to visit some U.S. jurisdictions where this practice is in place to see what type of legislation, regulations, and definitions are being used. We've also had the opportunity with staff to look at British Columbia, Alberta, and I believe even possibly Saskatchewan or Manitoba, regarding this - yes, British Columbia, Alberta, North Dakota, West Virginia, Pennsylvania, Ohio, New York, and New Brunswick. Needless to say, each one has slightly different rules and regulations that are in place and different definitions being used as well.

 

            There's no question right now that the majority of Nova Scotians have told us they're not comfortable with this type of industry. It is not an industry that has a long history in Nova Scotia. It was interesting last Fall when we had the Energy and Mines Ministers' meeting in Halifax, Minister Bill Bennett, from British Columbia, was there talking about how they've been doing fracking in B.C. for 50 years.

 

            I said to him, I have to say, when I think of B.C., I usually think of you guys as a green province. It's where Elizabeth May is elected, and you've always kind of been branded as that. I asked, how have you been able to do fracking for 50 years? He said, it's a couple of factors, one being that most of the area where they're doing their fracking is up north. I said okay, now would you be able to do fracking on Vancouver Island or in Victoria? He just laughed and said, absolutely not, they would never get away with that.

 

            He said that what he found interesting was, while naturally there have been reservations expressed in Nova Scotia about onshore oil and gas activity, we're very comfortable with offshore. He pointed out that in B.C. any mention of offshore exploration in B.C. is a non-starter. They can't get it even close to having a discussion on it. The population shuts it down.

 

            It's almost the exact opposites that are taking place, but obviously it's an area that we, as a department, want to continue to explore. One of the issues is that, unlike British Columbia, we don't have up north in Nova Scotia. Our province is populated pretty much from one end to the other, with communities all over the place. It's not as if we have a remote area in this province where we could undertake fracking, where there wouldn't be a concern for well water or a concern for nearby communities or anything else.

 

            I know your Leader has raised this a few times, and I've asked whether he had an opportunity to speak to municipal leaders, for example, and identify if there are communities that would embrace this type of industry and would be ready to move forward on that. With these types of initiatives you really need a social licence, and the local population has to see the benefits of it and has to support it. I haven't heard back yet as to whether he has identified any of those communities.

 

            If you look at the map, some of the counties where it is believed there's potential for onshore gas exploration are Cumberland, Colchester, and Pictou County. The last time I checked there seems to be more of your colleagues in those areas than there are of my colleagues. I think if we're going to have a discussion about creating the type of industry, it's not just a matter of asking when you are going to have a definition of hydraulic fracturing. I think there needs to be a discussion of the communities that you represent and that your colleagues represent. Are they prepared to have this industry in their areas? It's not Richmond County. We don't have the hydrocarbons there that have been identified. It's Colchester, Cumberland, and Pictou County. At this point in time, I certainly haven't been given a sense, either from the municipalities or elected colleagues provincially, that there has been any work or discussions that have taken place in those areas seeing if those communities were interested in moving forward with this industry.

 

            MR. HOUSTON: There's a lot of different moving parts there for sure. But I guess the thing that's of interest to me is that there's a bill that was passed, and nobody understands what it is because it's hinging on a definition that nobody has. There's a couple of ways that can proceed, I guess. It can be defined, and people can understand what the legislation does, or maybe the legislation can be repealed. Maybe it just came to the floor of the House too quickly without the understanding. But that doesn't change the fact that the legislation is there, so I guess at some point, it's going to have to be defined. Is that the expectation, that the department will define what that means at some point? If so, when might that be?

 

            MR. SAMSON: As I indicated, it's a work in progress. There has been a lot of work done to compare what's being done in other jurisdictions. There has been work done to meet with regulators in other jurisdictions as well. There's a lot of misinformation that exists regarding the industry.

 

            Having had the opportunity myself to go to the U.S. and a couple of jurisdictions, there's a lot of confusion even within those jurisdictions, especially between gas production and oil production. In many instances, it would appear that gas production gets blamed for issues which are really being caused by oil production onshore.

 

            Even in those jurisdictions, there are difficulties and challenges that exist. If you look at the United States as an example, one state allows it, and the state next door has banned it. Even in those cases, there's not a cohesive approach. You have the Marcellus shale gas, which is producing gas to a number of states that have banned the very activity that produces their gas, especially the north New England states, which have all banned the practice yet are drawing on that gas to produce heat and electricity for their state. As I mentioned, it is a challenging issue.

 

            Again, I think if we had the sense that communities were prepared to see this activity move forward, that would possibly help move the debate on this. But at this point in time, I have not been given the sense that there are communities that have clearly expressed their desire to pursue this type of industry.

 

            I know that a number of people have indicated that it's all about the definition. There's only so many definitions out there. At the end of the day, there's enough jurisdictions doing this. Those definitions are there. The idea that it's the definition that's going to make the difference, I would suggest to you, is a false assumption. Either the communities are going to buy into this type of land-based extraction of gas, or they're not. But to be of the belief that the department will issue a definition that's either going to allow this industry to move forward or not move forward, and it's the definition that's going to make the difference, I would suggest to you, based on the information I've seen and the experiences that I've presented, that that's not the case.

 

            MR. HOUSTON: So you don't subscribe to the theory that there's uncertainty in the development community and in the business community about where this is going, so that's kind of caused them to have a hands-off approach? You think that that's a falsehood?

 

            MR. SAMSON: To your point, I think it's important to recognize as well that there have been 130 wells drilled in Nova Scotia over the years. None have shown any commercial quantity of gas that would lead to production. We've already had that activity take place.

 

            I would say as well that there would be a limited amount of companies that have even expressed any interest in Nova Scotia. At this point in time, we're still an unknown territory when it comes to commercial production compared to other jurisdictions. We're going to continue to work on putting a definition on this forward, but I wouldn't suggest that the definition itself is what's going to make the difference.

 

            What I can say is that we have lots of companies interested in our offshore. That's where we've certainly had focus. You have $2 billion between Shell and BP, and now you have Statoil coming in for over $80 million. I can you tell you, when I was in Houston earlier this week, there aren't many jurisdictions out there that can say that they've got those types of work commitments still on the books. We're the envy of many jurisdictions. The fact is that Shell is drilling now, and everyone is waiting patiently to see what the discovery is going to be. You have BP lined up, and now you have Statoil coming in as well. There are very few jurisdictions that can say that. In fact, those three companies have cancelled exploration projects all over the world, yet they're still interested in Nova Scotia. I think that bodes well for the experience we've had in our offshore.

 

            We have the Canada-Nova Scotia Offshore Petroleum Board, which has such a strong safety and environmental record going forward. That is an area where Nova Scotians have supported the industry. As our colleague from Queens-Shelburne has indicated, there are always ongoing concerns, which is healthy in a democracy. That's something we should encourage when you have these types of developments take place.

 

            Naturally, we have a tremendous opportunity with our offshore. The commitments are there. It's not a matter of saying, will a company come, or will it not come? They're here, and they are coming. They've made significant commitments, and they've put their money down on investing in our offshore.

 

            Our onshore remains an unknown. We haven't yet seen any communities come forward to say that they embrace the technology or that they embrace the concept of onshore gas exploration in our province. We will continue to work on that. As I've told the media, the minute that we've finalized that, we'll let them know, and I can assure the honourable member, we will let him know as well.

 

            MR. HOUSTON: I do think the offshore stuff is great. Do I take from your comments that, in the face of the offshore activity, the onshore is just kind of not worth the risk to the department?

 

            MR. SAMSON: It's not the risk to the department. It's a question of whether Nova Scotians want this.

 

            Onshore activity is not going to take place at the Joe Howe building, so we're not concerned about drilling at Joe Howe. That's not going to happen. It's going to happen in your community and your surrounding communities. The question I would put is, have you talked to your communities and your municipal leaders? Have they said, yes, we think this industry is one we wish to pursue, and we're prepared to work closely with government and with industry to make it happen?

 

            This is not something that affects the Department of Energy. We have worked closely with other jurisdictions to see what they are doing. As part of our electricity plan and previous other efforts, Nova Scotians clearly expressed their reservation.

 

            If you look at New Brunswick, our neighbouring province, they as well have put in a moratorium and are continuing to review. The difference with New Brunswick is they had producing wells. They're much more advanced than our province ever was. I would say, based on geology that I've seen, that their potential for that industry is much stronger in New Brunswick than it is in Nova Scotia just because of the geological formations that exist there as compared to our province.

 

            Again, it's an area where we are not hearing from communities that are saying, we want this, so make it happen. We're prepared for this industry to move forward. It's clear that Nova Scotians want more information about the industry. They want a better level of comfort. I don't believe we're at that stage yet.

 

            We've been doing work on developing the appropriate regulations, the appropriate definitions. That work does remain under way.

 

            There's no question that the offshore has certainly drawn more attention. I should point out as well that, as part of our budget, we are investing $150,000 in developing an onshore atlas. I think you're familiar with the Play Fairway Analysis where we've kind of mapped out our offshore. We've now invested money in this budget to try to get a better sense of what's on our onshore to be able to know what is there and what the potential is. A bit of work has been done over the years on that, but we felt it was time to have a more specific sense of what exactly is there.

 

            The other thing that should be pointed out is, as one of my staff often says, there's onshore drilling taking place every day in Nova Scotia. It's mostly for wells, but for the extraction of natural gas, that is a different subject. We do onshore drilling already. We're just not at the stage of onshore drilling for gas in our province.

 

            MR. HOUSTON: I'm glad to hear about that $150,000. I was going to get around to asking about that, so that money has been budgeted. What's next? Is that done in-house or sent out to tender?

 

            MR. SAMSON: Kim here is providing me useful information. It was $150,000 in last year's budget and another $150,000 in this year's budget. If you look at the offshore for example, when we've been able to do our Play Fairway Analysis, the work that's done there is shared with the industry. The whole goal is that we are using public funds to go out and do some core samples and surveys to find out exactly what we have with the idea of sharing it with the industry to hopefully draw it to their attention. The expectation with the onshore atlas is that that information will be shared as well with Nova Scotians and with industry. As I mentioned before, we've had over 130 wells that have been drilled in our province over the years, and no commercial quantity has been identified to date.

 

            There still is the unknown. I won't name a specific municipality, but we had one of our municipalities on the far western side of the province ban fracking on a municipal level. With the geological formation there, there will never be gas exploration in that area. But that was unknown. At the time, being caught up in the debate, it was felt, let's take this action. So I think the onshore atlas will certainly give us a better sense of exactly where this is and focus more on whether those areas of the province are comfortable and prepared to see this type of industry move forward.

 

            Secondly, industry itself has to make a decision. Is there enough within our geological formation to justify developing that industry here in Nova Scotia?

 

            MR. HOUSTON: I just want to confirm, of the 130 onshore wells that have been drilled, there's no commercial wells?

 

            MR. SAMSON: No.

 

            MR. HOUSTON: Do we have an expectation of when the atlas may be ready? It's a multi-year project, presumably, the onshore atlas.

 

            MR. SAMSON: It's always great to have staff here when you might have missed stuff. There is some potential for coal-bed methane. In fact, you're probably familiar with the company there. They're not at the point of commercial production, but I believe they believe strongly that they can. So I want to correct myself. There is at least one there that has been drilled and that has potential. But that would be coal-bed gas methane.

 

            As far as the onshore atlas, it is a multi-year project, but my understanding is that we do hope that before too long we'll have something that can be shared. The whole goal here is to share the data with academia so that it can be reviewed by them as well, which is the same as what we do with our offshore. We have a peer review of the evidence that's provided. As soon as that information is available, we certainly share.

 

            But I wanted to correct that, of those 130 wells, there's one that could potentially come to commercial production.

 

            MR. HOUSTON: Thank you for that correction. There was $150,000 last year for the onshore atlas. Is that consultants doing some analysis? What's the process to get to an atlas?

 

            MR. SAMSON: My understanding is, it's a combination of consultants and staff time, but we'll see if we can get you the specific breakdown.

 

            MR. HOUSTON: I only have a couple of minutes this round. Maybe we'll just use it to talk about sustainable transportation. The budget has $13 million for non-electricity energy efficiency, sustainable transportation, and conservation grants. I wonder if you can just tell me how much of that $13 million is for sustainable transportation.

 

            MR. SAMSON: I think some of the monies you mentioned have gone to EfficiencyOne. Those are for the low-income electric programs. As far as sustainable transportation, we have the $600,000 for Connect2, which is a continuation of funds from last year. I believe 26 projects were funded under that. We also have a $225,000 envelope that's been set aside for sustainable transportation initiatives.

 

            MR. HOUSTON: Have any of these sustainable transportation initiatives been identified? Or is it that you get proposals?

 

            MR. SAMSON: We can get you the exact breakdown of those, but what I have here is 26 completed projects - 14 projects aimed at sustainable transportation infrastructure and design, and 12 projects enabling awareness or information for sustainable transportation. All of these were announced last year, so it's all public information. We can certainly get you the breakdown.

 

            To your earlier question, what does happen is that organizations make application. I know a number of municipalities and a number of different organizations have made applications. They apply to the program. I just sent out a press release earlier this week or last week encouraging people to get their applications in. I think the information is all on our website. We try to encourage as many as possible to announce. In fact, I'm pretty sure there was at least one or two in Pictou County as well that were funded under this program last year.

 

            MR. CHAIRMAN: The time has expired for the Progressive Conservative Party. I believe we have a request for a five-minute recess. We'll recess for five minutes.

 

            [5:55 p.m. The committee recessed.]

 

            [6:02 p.m. The committee reconvened.]

 

            MR. CHAIRMAN: I call the meeting back to order. The time has expired for the Progressive Conservative Party. We'll now rotate to the New Democratic Party.

 

The honourable member for Queens-Shelburne.

 

            HON. STERLING BELLIVEAU: I understand I have an hour. If I get through my questions, I may be friendly here and move some of that time over to my PC colleague.

 

            I want to pick up where we left off. I know the minister has several portfolios, and one of them is Minister of Trade, which is something I find very interesting, the technology and the world that we live in. We live in a very small global world where we can travel to major markets. In particular the one I'm looking at is China, Asia, and Europe.

 

            I guess my first question is, are there any trade missions on the horizon? Can the minister give us a brief update of what particular resources may be in some of these trade missions? I'm deeply interested in how that unfolds.

 

            MR. SAMSON: When it comes to international trade, that's certainly something that our federal colleagues tend to lead for us. NSBI has been very active on the trade front on behalf of the Province of Nova Scotia. I can tell you I don't have any specific trade missions that have been scheduled for me.

 

            You're probably aware that our Premier has been to Asia and has led delegations from Nova Scotia. We recently announced our China-Nova Scotia strategy as well. We had the opportunity to meet with a number of representatives from that country who are very interested in continuing the growing trade relations with Nova Scotia.

 

            As always, as minister, if I'm asked to attend and help promote our province, that's certainly part of my mandate. As I mentioned, being in Houston for the last number of days was for the purpose of promoting Nova Scotia, promoting our offshore, promoting our tidal industry, and promoting our renewable industry and everything that we're doing here in our province, which is part of my responsibility as minister. Any chance that I get to share the message of Nova Scotia and share the great potential that we have here and the fact that we are open for business is something that I'm always happy to undertake.

 

            MR. BELLIVEAU: I want to try to go through some of these questions. I don't want to repeat myself, but I think I'll go through another sector.

 

            There was a Newfoundland company that made an announcement I believe back in December of the previous year regarding energy and proposed a $4-billion wind farm off of Yarmouth. I kind of smiled when I heard that announcement because the closest point is literally off my home town. It's in the heart of the fishing industry, and I believe the minister may know where I'm going with this. It's an interesting concept, establishing 120 wind turbines just 20 kilometres off of our coast near Seal Island and I know the minister is very familiar with that area. What I found interesting in the media announcement was - I forget the terminology, but basically they suggested that there was no fishing activity that would be disrupted. My initial concern to the minister is that this is literally in the heart of the fishing industry. Has the minister met with a representative from Newfoundland on this particular energy project? Can he give us a quick update if so?

 

            MR. SAMSON: What I can advise is that the proponents of the project did have a meeting with a few of my staff. I did have the opportunity at a social event to speak to one of the proponents as well. It was very general conversation. If you were to ask me what this wind farm would look like or what base they're using or anything else, I don't have any of that information. It's very preliminary information that I have been given. In fact, I don't believe our department has been given much more specifics on the matters that you are raising concerns about.

 

            MR. BELLIVEAU: This is kind of the troubling issue around this. If you read the media press releases, there seems to have been discussions with the local chamber of commerce. I can tell you that our Party has tried to get in contact with this company, and we have failed to this point. I find that interesting. Whether there's something with the technology - I'll leave it at that.

 

            There are some concerns about how those are going to be developed. There's a number of questions. Is there any potential of loss of fishing grounds? I know that they can co-exist with traditional fisheries. I know that. But there's many answers to how those structures are going to be basically developed in the heart of the fishing industry. To me, there is a lack of consultations with the fishing industry, and there are some questions out there.

 

            Again, I'll ask the minister, can there be some improvement on that consultation? It would probably get some of these questions addressed in the initial stages of this proposed development.

 

            MR. SAMSON: I'm just curious - in your attempts to contact them, when you were dialing, were you pressing 1 before the area code? I'm just kidding. (Laughter)

 

            It's very early stages. Obviously what you're asking there is absolutely the type of question that they will have to answer. What has been suggested to our staff is that it would be gravity-based structures that they would put in place that would be anchored to the bottom. But obviously, how that would work and how they intend to be able to adjust that in a marine-type area, in a fishing-type area, those are all questions that will have to be asked first. I would certainly say that at this point in time, it's at a very early stage. I think there's a lot of work that has to be done on it.

 

            On the flipside, we're certainly looking at some of the success Norway has had with offshore wind, which I know many jurisdictions are now looking at to see how that can be done in their jurisdiction as well. I do suspect you're going to see a renewed interest in offshore wind around the cost of Nova Scotia considering the amount of wind that we have.

            I know as well, I believe in Norway, that offshore wind has also attracted a lot of interest from aquaculture developers as well. My understanding is that the bases that hold these turbines are wonderful anchors for cages and for aquaculture sites. The fact that they're offshore as well addresses some of the concerns around the aquaculture industry and its closeness to the shoreline and that.

 

            Not to repeat myself, but I would say this is a very early-stage concept. There is a lot of work to be done, and obviously all the questions that are being asked would have to be answered before you would see this project move forward.

 

            MR. BELLIVEAU: It certainly raises a number of questions for me, even having the layout site for the construction of these 120 turbines. There's an interesting concept in that the proposal is to build that 120-turbine field of windmills in our ocean 20 miles off of southwest Nova Scotia and for that energy to go directly to the U.S. My question is, why can't they have a cable that comes ashore in Nova Scotia and have some of that energy for Nova Scotia's use? That's the concept that I'm trying to ask the minister about. I'll put a second part there - is our grid system capable of handling this potential for renewable energy?

 

            MR. SAMSON: You raise an interesting point. That ties back to a decision to terminate the COMFIT program.

 

            We don't need any new generation in Nova Scotia. We have the generation that we require. The question it comes down to, as I mentioned before during our electricity review, is that Nova Scotians told us, we want choice, we want competition, we want new forms of energy, we want renewable energy, and we don't want to pay more. That's the balance that we're having to find in Nova Scotia. It's the balance that we sought to get in our electricity plan. That's the balance in having a three-year rate period. It was to address those concerns.

 

            The question for that offshore wind - as you know, with the COMFIT program, in order to attract wind developers to the province, the URB set a guaranteed rate for a 20-year period that would be paid. We all know now that that rate is much higher than what it costs Nova Scotia Power to produce electricity in its traditional forms. If we had continued the COMFIT program, for example, putting more of that type of energy into the system, the payout that Nova Scotia Power was having to provide under these guaranteed contracts was getting more and more expensive, and it was starting to become a pressure on rates that Nova Scotians would have to pay.

 

            I've had many people ask me the same question. Why would we have an offshore wind project to send it to the United States? Why wouldn't we bring it in for ourselves? Unless those producers can bring that electricity to our shores at a price competitive with what Nova Scotia Power is currently able to offer, then it's not something that's going to make sense for our province because we already have the generation we need, and to get ourselves off of that generation - for example, the 20 per cent from Muskrat Falls - allows us to reduce our use of coal in our generating stations, but there's a fixed price that's attached to that. Our electricity plan shows that that can be done without having a shock effect to rates in our province.

 

            Unless those developers are able to get the costs to a point where it would be attractive to Nova Scotia Power, that is why. It's not a question of our grid being able to handle it. It's a question of not needing it from a generation capacity, and it's a question of how expensive it would be, which is why we terminated the COMFIT program. Putting more of that type of energy into our grid system was going to have a negative impact on ratepayers, which Nova Scotians clearly said they did not want to see happen.

 

            I believe part of their business proposal is that, as you may be aware, a number of New England states have been passing legislation calling upon renewable energy to be used in their states. My understanding is that there have been a few proponents that have suggested offshore wind off of Massachusetts. The locals weren't so big on that. As crazy as it sounds, there's strong potential that that type of offshore wind will come from Nova Scotia rather than coming off the coast of the United States due to local opposition to it. I believe their belief is that those U.S. states will be prepared to pay a premium for electricity in order to meet some of the legislative goals that they've put in place.

 

            But again, we're very much in the preliminary stages. This is private sector led. It is not something that our government is in any way investing in. Who they sell their power to and at what price will be determined by them.

 

            MR. BELLIVEAU: Just before we leave this topic, I found an interesting article last week regarding the Minas Basin. I know you made reference to it again in your opening remarks. You talked about the company there, FORCE, which has the turbines there. I know that there was initially consultation with the local industry there, but I did see some press comments that the fishermen felt that there was no consultation or a lack of discussion. I believe it was weir fishermen who, as we speak, are trying to catch a gaspereau or herring or whatever they're catching in their weir. There were legitimate concerns coming from the industry, but there seemed to be nobody home to answer their questions about noise and some of the activity that was going on with the installation of some of these turbines in the Minas Basin. Can the minister give us some input? Has he had any discussions with companies that are using the Minas Basin for collecting energy?

 

            MR. SAMSON: To suggest that there hasn't been any consultation take place here, for anyone to say that is completely false. There's no question that we see the tremendous opportunity that the tidal industry brings, but at the same time, there needs to be respect for the area in question, for the fish habitat, and for any fishing activities that take place.

 

            As minister, I've seen numerous funding requests that have come across my desk for various projects for the Minas Basin. I can tell you that the companies involved are companies from all over the world - Ireland, France, Germany. These companies are not interested in negative publicity. These companies want to ensure that the technology they are using is environmentally friendly and that it respects the marine habitat it's located in, because these are long-term projects. So the employees over at FORCE and the direction there have been working closely doing ongoing environmental monitoring to ensure that the turbines, the technology used, can be put in place and will not have a negative impact on that marine environment.

 

            There's a tremendous opportunity here for that industry to grow, which will require more turbines, which means more construction. OpenHydro right now, have two turbines that are under construction in Pictou County. It's an investment of over $30 million. That's two, and that's one company. There are four other berth holders out there that are looking at technologies. I know, Mr. Chairman, of your interest in Digby County being a supply hub for this industry and the potential it brings.

 

            We've been very careful. You saw that when we brought our legislation in, the Marine Renewable-energy Act. We tabled it, left it for the summer, to see if there are any concerns before bringing it back for discussion in the Fall. There has been tremendous consultation that has taken place.

 

            I read the same article you read. I read the article that that individual was in previously. At some points, I'm not sure if any consultation will address 100 per cent of the concerns that some individuals have.

 

            This is an industry that I think we've been careful in the approach to. I believe it's one that has been supported by previous administrations as well. We want to ensure that we get it right. We've worked closely with our federal colleagues as well. They've made significant investments in this industry and see the potential. There will be ongoing monitoring even when these turbines are deployed. There are technologies that are being used where they want to be able to assure themselves that it's not having a negative impact and that they're able to watch for that as well.

 

            Work is being done today, and I assure you, work will continue to happen. Monitoring and consultation of this industry and in the Minas Basin is going to be an ongoing thing. I'm not sure if there ever will be a day when it's not taking place.

 

            MR. BELLIVEAU: Now I'm going to take the minister in a different direction. You have a number of hats. I'm going to ask you to put on your Gaming Control Act hat.

 

            I find it fascinating, actually. I've got to be amazed. I was taught as a very young child not to participate in gambling, but I know that people use it as a recreational tool, and I respect that. I'm amazed at the revenue and the interest in Chase the Ace. But all I want to say is that we do have a somewhat similar version of that in our area, but it's nowhere near the public involvement as there in the Cape Breton region. Anyway, I just wanted to make that comment.

 

            In the only update provided by this government on the Mental Health and Addictions Strategy, there were several checkmarks not checked. One of these areas that is still not completed in year 4 or 5 of the strategy is to collect and monitor alcohol, drug, and gaming data. My question to the minister is, can the minister outline specifically what is happening around collecting gambling data? Why has this work not been taking place?

 

            MR. SAMSON: Obviously, there were different ideas when raising children between Shelburne and Cape Breton because I can tell you, the minute we could count at cards, we were sitting around the table as a family gambling. Whether it was for 10 cents a hand or 25 cents a hand, it was some fond family memories. After a big meal, you'd have 10 or 12 people around the table playing Pass the Ace or playing Scat. That was a normal activity for us. I guess we had different approaches there.

 

            It's important to understand that there are three different departments involved when you talk about gaming. You mentioned Chase the Ace, and there were questions asked about that. Under Part 1 of the Gaming Control Act and under the Provincial Lotteries and Casino Corporation, we don't get involved in that. The permitting for that all comes through Service Nova Scotia, and my colleague Minister Furey, who is responsible for Part 2. The inspectors, the gaming inspectors and that, all fall under his jurisdiction, and he would be responsible for it.

 

            As far as some of the data that you're referring to on alcohol consumption, that data is collected by the Department of Health and Wellness. They are the ones responsible for collecting that data, and they would be the ones who would be better able to answer the question that you have put regarding the mental health strategy.

 

            MR. BELLIVEAU: I appreciate your response, but in fairness to my mother - you never met my mother. She taught me some values that I think really hold true today. I respect the other side of it.

 

            It draws me to a question. I would like to understand the difference - I'm sure the minister knows where I'm going here - between a problem gambler and a recreational gambler. Like I say, I know you can play the odd slot machine, but there is my mother literally standing over my shoulder. To me, that's a recreational level. I guess my question is, how does the minister's department distinguish between a problem gambler and a recreational gambler with this current level of monitoring?

 

            MR. SAMSON: We can probably get some more information to the member regarding some of the national standards that are used to determine the recreational gambler versus the problem gambler. The corporation's whole goal is to promote responsible gaming, people taking advantage of gaming for fun, setting a limit as to how much money they're going to spend and the frequency of when they're going to be gaming, and not causing a stress or having adverse effect on their lives. On the problem gaming side, oftentimes we are seeing that it does cause stress in the family, that funds that may have been set aside for rent or for other purposes are instead being used for gaming and in an irresponsible way. But as I mentioned, there are some national standards that we would be more than happy to share with you as to what is used to determine problem gaming versus recreational gaming.

 

            MR. BELLIVEAU: How often does Nova Scotia Provincial Lotteries and Casino Corporation meet with the Department of Health and Wellness or send this information related to gambling?

 

            MR. SAMSON: There's a very collaborative relationship that takes place between the Department of Health and Wellness and the Provincial Lotteries and Casino Corporation. They meet on a monthly basis in order to go over some of the data that has been collected and to discuss any issues. I can also advise that the Deputy Minister of Health and Wellness sits on the board of the Nova Scotia Provincial Lotteries and Casino Corporation.

 

            MR. BELLIVEAU: Minister, when you look at the Nova Scotia Provincial Lotteries and Casino Corporation's budget context pages, you'll see that the video lottery terminal, or VLT, revenue estimates have increased by $27.1 million, a total of 23 per cent. This compares with ticket lottery revenues estimated to increase by $7.9 million, less than 1 per cent. I wanted to ask the minister, can he explain why the VLT revenue estimates are placed at 23 per cent higher in the 2016-17 budget? Also, what are the contributing factors to this significant increase?

 

            MR. SAMSON: There are a couple of factors that have been at play. The member might recall from his time in Cabinet that the decision had been made in 2011 to purchase 1,000 Techlink terminals from a company that once existed in Cape Breton. It was clear that those terminals were not very popular with the individuals who use VLTs. Those terminals have started to be retired, with new terminals being brought in which have been more attractive to individuals who play VLTs.

 

            The member would also recall the My-Play System, which was brought in during his time in government. While it had great intentions, unfortunately, it was clear that it was a system that was being abused. There was a count at one point of how many cards were actually used. There were over 2 million cards that had been issued under the My-Play System, which was nowhere near the amount of individuals who were actually gaming. Therefore, it was clear that people were using multiple cards, which was not the intention. It was not helping to prevent problem gaming. People were able to access these cards easily without ever giving their real information. It was clear at that point that the costs of the My-Play System, the cost to upgrade it and to maintain it - the results were certainly not showing any decrease in problem gaming or that it was having this desired effect.

 

            The decision to remove that system has brought back a number of casual gamers and recreational gamers. I think I've used the example in the past of some of the veterans at my local Legion. They would complain that at Legion events in the past, they used to enjoy putting $20 in a VLT. Once the card system was in, they completely refused to get those cards. There were concerns about privacy information, how that information was being used, so they completely stepped away. Once that system was removed, it made a difference, and they started to come back as well.

 

            The other thing that I should point out is that even with the increases today, it is still less than the amount of revenue we were getting from VLTs going back, I believe, to 2008-09. Even with the increases you're seeing, we haven't reached the levels we were at back in those years.

 

            MR. BELLIVEAU: Not only has the VLT revenue estimate increased by 23 per cent in the budget, but the 2015-16 forecast is $15.8 million higher than the 2015-16 estimate. My question to the minister is, why is there such a massive gap between the estimates of VLT revenues and the actual total?

 

            MR. SAMSON: Last year would have been our first year without the My-Play System, so staff at the Provincial Lotteries and Casino Corporation gave their best guess as to how many individuals would come back to using VLTs. They put a number forward which they thought was a reasonable number to put forward, but because it was the first year, there wasn't hard data to use to rely on that number. Add in the fact that the Techlink terminals were being refreshed with new terminals that were providing more popular games. Put those together, and that's why you're seeing such a difference between the forecast and what the actual budget number was.

 

            MR. BELLIVEAU: I guess I'll move in a somewhat different direction. I had the pleasure of being Minister of Environment. There was a lot of discussions about greenhouse gases. That particular topic affected a lot of departments, including Energy. There is a recognition of the delay for the Muskrat Falls project of at least a year. My question for the minister is, knowing that there are targets to meet for greenhouse gas emissions, are we still on target, knowing that there's a possibility of Muskrat Falls being delayed for at least a year?

 

            MR. SAMSON: Again, any suggestion of delays at Muskrat Falls is speculation at this point. We don't know exactly if there will be a delay or what it will be. I can tell you that it's still the intention, and we believe we're still on track, to meet our 2020 goals of having 40 per cent renewable electricity in Nova Scotia.

 

            MR. BELLIVEAU: I was deeply interested in some of the comments that you made with my colleague earlier when it was his opportunity to talk. Minister, you made reference to several offshore companies being deeply interested in Nova Scotia, the offshore. You mentioned Statoil, BP, and Shell. Those are the ones that are familiar to me. From your comments, it sounded as if there is more interest out there. Could you go into some details and bring me up to date on other possible new companies that may be interested in developing our offshore oil and gas?

 

            MR. SAMSON: Obviously, I think it's safe to say that many companies are watching to see how Shell is going to do with their exploration. We announced on Monday - the Offshore Petroleum Board announced, I should say - six new parcels that are being put up for bids which will close in October of this year. We focus a lot on some of the big players that are in our offshore. But if you look at Shell, for example, they also have a partnership with Suncor and ConocoPhillips, which are two other major oil and gas players. British Petroleum as well has a partnership with Woodside and Hess considering the parcels which they have bid on as well. To answer my colleague's question, there are four new companies that many Nova Scotians may not be aware have interest in our offshore as well.

 

            MR. BELLIVEAU: I'm going to show my age on this because I actually know some of these dates here. I'm interested in the decommissioning of the Sable project. I know, Mr. Chairman, that many Nova Scotians were shocked when they learned last year that taxpayers would be on the hook for roughly an extra $100 million for the Sable decommissioning cost. I know that the minister did not sign that agreement because that was in 1997, if memory serves me correctly. But the minister was elected in 1998, so I think he's very familiar with this. I would just like for the minister to take me inside the mindset of the government at that time when they negotiated that. To me, that's a lot of money to ask the taxpayers to contribute when it should be a commitment from the oil company to decommission that project.

 

            MR. SAMSON: My understanding is that these types of arrangements are the same as are being used in Newfoundland and Labrador right now with their offshore exploration, and it's the same type of arrangement that Alberta has with oil sands development as well. The idea here is that there is a profit-sharing royalty that we have in Nova Scotia, and there's a risk that's being incurred by all parties involved. When negotiating the deal, it was decided that, as part of the profits, a certain amount of that money would be set aside for the eventuality or possibility that there would be abandonment costs involved with this project.

 

            The member may not have been aware, but during the four years he served in government, his government as well was putting money aside into this fund under this agreement. I'm not sure how it came as a sense of surprise because that has been the case since 1997, when the agreement was signed. Again, it is a common clause that is included in most if not all of the agreements in Newfoundland and Labrador and in Alberta as well. I think any suggestion that this was a bad decision made by the Liberal Government of the day is disingenuous, considering the fact that this is a standard agreement being used in at least two other Canadian jurisdictions, one of them being right next door to us.

 

            MR. BELLIVEAU: Again I'm trying to understand the book work on this project, a project roughly 20 years or more ago, and trying to understand how the government decided last year to book the entire extra $100 million as a negative prior to that year's adjustment.

 

            I guess my question is, is this required by law, or is this a choice of the accounting practices?

 

            MR. SAMSON: Finance and Treasury Board would probably be in a better position to explain this, but my understanding is that it is standard accounting practice. The proponents of the Sable project were able to provide us with updated figures of abandonments. As a result of those updated figures, it was a requirement under standard accounting practice that that money be accounted for when that information was made available to us, which I believe our Minister of Finance and Treasury Board has done.

 

            What I can advise the member as well is that we continue to talk with the Sable partners. It is our hope that this project does continue, but they have a private sector decision to make. We would like to see this continued. There are tremendous opportunities with some of our LNG proponents going forward to have some of our offshore gas brought ashore for these projects. Discussions do continue, but as far as your specific question, and again Finance and Treasury Board might be in a better position to explain, my understanding is there was no choice once the proponents gave us the updated figures. Bills had to be accounted for immediately.

 

            MR. BELLIVEAU: We have our Finance Critic coming up here shortly, so he may be taking some notes.

 

            How much money had the governments set aside for decommissioning? I know you alluded to the fact that the previous government had done this prior to this extra $100 million.

 

            MR. SAMSON: For commercially sensitive reasons, we don't share that number. That number is known by our finance people. They are the ones who have been administering this on behalf of the province since 1997, but there has been a policy, based on the agreements we have in place with the proponents of the project, not to share what this amount of money is.

 

            I'm sure that the amount of monies required, based on the information that we have been provided over the years, has been set aside and accounted for by the Department of Finance and Treasury Board over various administrations.

 

            MR. BELLIVEAU: One last question, and then I'll turn my time over to the PC member. How much money has the province made off the Sable project up to this point?

 

            MR. SAMSON: You often learn through this process that what sounds like a simple question doesn't come with a simple answer. I'm sure the member has had experience in that.

 

            Direct royalties, as I think your question was on direct royalties for Sable, have been $2 billion. But there has also been a Crown share in that. There's also offshore taxation. There's the benefit from the whole supply sector and everything else. Overall, it's $2 billion in direct royalty, but you would have to add in hundreds of millions of dollars more of benefits that have come in from the project as well.

 

            MR. CHAIRMAN: That concludes the questioning of the Minister of Energy for the NDP. We'll now rotate to the Progressive Conservative Party.

 

The honourable member for Pictou East.

 

            MR. TIM HOUSTON: I think there's two potential LNG plants in the province, two contemplated. Can you give us a little update on what's happening with those possible LNG plants?

 

            MR. SAMSON: I'm happy to do so. If there's one file that I don't need staff to assist me on, although they're great, it's the LNG file because it's certainly one that's near and dear to my heart.

 

            There's actually four projects that have been proposed. I would put two as very serious, one serious, and the fourth one, we don't have too much updated information on. I can go through them for you.

 

            The Bear Head LNG project - I think the name might have changed a bit now, but we always refer to it as Bear Head - is the one that's in Point Tupper, which is in the Point Tupper industrial park. That site was initially set up by Access Northeast Energy. It was two individuals who had set that up over 10 years ago. They were bought out by Anadarko, and Anadarko bought the site in Point Tupper.

 

It's ironic that, at the time, they signed a tax agreement with the Municipality of Richmond so that they would not have to pay taxes until they start to produce. They never produced, so that property sat there for 10 years when the municipality didn't collect any revenue at all, and I think the tax bill should have been over $200,000 a year.

 

            Almost $10 million was spent on getting that site ready. In fact, if you ever have the opportunity, you can just contact the representative. Paul MacLean is the Nova Scotia representative for the company, and they can take you in to see the site. It's all gated, with a nice road going into it. The layout is there, and two cement pads were prepared for the tanks to be constructed, so the site is well under way for it to move forward.

 

            There was community buy-in 10 years ago. So when I talk about LNG, people ask, how familiar are you with it? We were ready for this 10 years ago. The community was ready. Look at the Strait of Canso, the NuStar facility, which used to be a Gulf Oil refinery. When they closed the Gulf Oil refinery, the refinery portion was removed, but all of the tanks were left, and that became a trans-shipment facility.

 

Since the late 1970s-1980s, it has been under various ownership, but basically what has happened is that large tankers coming in from either South America or Europe come into the Strait of Canso and come to that facility. They unload, it is stored in these tanks, and then smaller tankers come in, pick up the product, and take it down to the eastern United States. They've been doing that for 20, 30 years now.

 

            For the community, seeing another big ship coming in is not something new, although I don't know if you've ever seen a picture of an LNG ship, but they are funny looking ships. Think of an oil tanker with these great big spheres on the deck. They're different-looking ships, to say the least, but our community certainly was prepared for it.

 

            They picked up the site, Bear Head LNG. They are a company out of Australia primarily. They had some of the individuals who were initially with Anadarko on the site, so they were very familiar with it. They have a project in Australia. They also have an LNG project that's getting the final investment decision down in the United States. It's called the Magnolia project, which will be an LNG facility as well.

 

            Here's where they are at. They have signed an agreement with the local chiefs. They have an agreement with First Nations, which is very important, and we're really pleased to see that they were able to get that.

 

            For all of our LNG proponents, the question is source. Where are they going to get their supply? There are different options there. Is it to come from our offshore, with more activity and more drilling on our offshore to get the gas from there? Is there a means of being able to get the gas from the Marcellus Shale in the United States and bring it up through the existing pipeline infrastructure - reverse flow, possibly?

 

            There's even talk of having some gas from B.C. and Alberta coming through Nova Scotia. I know that sounds crazy considering the size of our country, but I can tell you, high officials in Alberta have shared with me that they feel there's a stronger chance of seeing Alberta gas flowing off the shores of Nova Scotia than ever flowing off the shores of B.C. As crazy as that sounds, there is existing pipeline infrastructure. Some of it goes into the U.S. and that, but there might be opportunities to get that infrastructure upgraded to be able to come in.

 

            I can tell the member that we did ask TransCanada, with their Energy East Pipeline, if there was a way to put an adjacent pipeline for gas. Naturally, they want to build one for oil, but is there a way to build one for gas? The way they explained it to us is that you don't run gas and oil pipelines next to each other, so to run a gas line would be a whole project in itself.

 

            We're exploring all avenues, I guess is the way I would explain that. They're trying to find that source so that they can get that to their project.

 

            For both Bear Head and I'll get into Pieridae in a second, to get the Marcellus Shale gas, you need two permits. The first one from the Department of Commerce in the U.S. is to be able to take U.S. gas and ship it from Canada. The restriction was that it could only be to free trade countries, countries that the U.S. had trade agreements with.

 

            One of the proponents - not Bear Head but Pieridae, which is the one in Goldboro, Guysborough County - one of their main partners that were interested in buying their gas was E.ON, which is a big energy company in Germany. Germany doesn't have a free trade agreement with the U.S. Both projects went back and asked, can we get approval to use U.S.-based gas and ship it out of Canada to non-U.S.-free trade countries? You're probably aware that Germany right now is highly dependent on Russian gas. With the instability in Russia with their current administration - one never really knows where they're going one minute to the next - they're looking to get off their over-dependence on Russian gas. Getting LNG from Canada is very attractive to them.

 

            To your question of where they're at, both projects have received that approval, which is certainly a major accomplishment on their parts. I know there was a lot of lobbying by both the current and previous federal governments on this file with our U.S. counterparts to get this done.

 

            From a construction viewpoint, the Bear Head facility would probably be the one that's most advanced in construction and would be ready to roll quickly.

 

            If you look at Goldboro, the site where Pieridae wants to put their LNG plant is where the current gas line from Sable comes ashore. It's not the fractionation plant, but where the gas plant is onshore. Basically, the gas is coming directly from offshore. It gets to this plant, and not to get too into the science, the good gas is immediately sent in through the Maritimes and Northeast Pipeline. All of the liquids are then sent through another pipeline which actually comes into Richmond County and Point Tupper as well, which is where the fractionation plant is. It is at that plant where they break down the butane, propane, and some of the different by-products of the gas.

 

            So the Pieridae option would be to build the LNG site right next to where the gas plant is now. If you want to compare the stages, the proposed Goldboro plant is the big one. It's a massive undertaking.

 

            The Bear Head approach has been start smaller but be prepared to go bigger. You may have noticed that Bear Head recently purchased 75 acres or so from NSBI, an adjacent piece to their current lot, which they will now have if they choose to expand. So their approach is start smaller and then expand.

 

            The other big difference there is that the Bear Head model would not have fixed customers. Instead, it would be supply and demand. I think they refer to it as a tolling system, if I'm not mistaken. Whereas Pieridae already has an agreement with E.ON as a base, which is certainly easier for finding investors, knowing you've got a base client, which is certainly a reputable client as well for your gas. So that's where they want to build it in Goldboro.

 

            It's ironic that you ask that because while I was in Houston, on Tuesday, we went with Warden Vernon Pitts, CAO Barry Carroll, and Gordon MacDonald, from their Energy Office. We went down to visit an LNG facility which is under construction in Freeport, Texas. As I'm sure you're probably aware, that whole coast of Louisiana and Texas is swampland. Where they're building this facility, which is about three-quarters the size of what's proposed for Goldboro, they had to go there and dig down eight feet, pour cement to try and reinforce the base, and cover that over again. On the site itself, they are going to drive in 16,000 100-foot-long pylons to reinforce the site.

 

            It was funny because one of the individuals with the engineering company - ironically CBI, which is the engineering company doing the project, has partnered with Pieridae, so they would be doing the Goldboro project. So it was great for us to see that kind of construction. Where they were at right now on that site, which when you look at it is still very preliminary, they had 1,000 construction workers already. One of the lead engineers asked Gordon MacDonald how much reinforcement he thought they would have to make to the base for the site in Goldboro. He laughed and said, well, when they built the gas plant, they tried to drive one pylon in, and after two days of not being able to get one in, they gave up on it. He said, we're on solid rock. So all of those costs will not be incurred in Goldboro, and I feel fairly confident in saying we have just as much rock in Point Tupper for the Bear Head one.

 

            They are building two tanks there. They are cement tanks, and they are all built right from the ground up. There's no forms or anything. It's just rebar. You go up so high, and then you go up so high. The tanks take three years to construct, and they are just massive things. There were two on this site. I believe Goldboro will have three.

 

It's expected that the construction would take four years. Goldboro, the municipality is figuring they will need anywhere from 2,500 to 3,500 workers for that project, which is just incredible when you think of a project of that size. We talk about the shipyard and the amount of workers there. This would be for a four-year period, not including the ongoing employees.

 

            The big question at this point is that both of these projects need to get to a final investment decision. That number has been moving. But what I can tell the member is that both projects have told us they do expect that a final investment decision will be made in 2017. So once that is made, as far as approvals, regulatory, they are very well advanced.

 

            I just want to indicate to you as well, Pieridae would be built onsite where the gas comes ashore. For the Bear Head project, they are now proposing a pipeline that would go from Goldboro, where the gas is coming ashore. That would run straight across over to Point Tupper. That is called Bear Paw. That's how they refer to it, and they are going through the environmental process right now for approvals of building that site.

 

            The third site is H-Energy. They're looking at a floating platform that they would have. I can tell you, the municipality is not overly fond of that because you can't really tax a floating platform. They're much more interested in the Pieridae option. That one would be less advanced. But Goldboro Bear Head is well advanced.

 

            I'll share this with the member. We had a press conference at the OTC in Houston, and I was able to give a summary of where we were at, especially with LNG. One of the reporters afterwards came up to me and asked, how does it feel that Nova Scotia is now ahead of B.C. in developing an LNG industry? I looked at him with a straight face and said, look, we're not in competition with B.C. We wish them well. It's different markets. We work collaboratively in trade shows and everything else.

 

            It was a bit of an eye-opener because a year ago, if you had asked anyone in Europe or Asia or even in Canada or the U.S. where the potential for LNG was in Canada, it was B.C. We weren't even on the map. I think we've made great strides there, and we'll continue to work with it.

 

            The important thing for us is managing expectations. I'm sure you have an appreciation for this - you're not far from the Strait area. If every project that was promised in the Strait area had come through, it would be one booming area. There have been so many disappointments over the years. We've been careful not to get people overly excited but to do what we can at trade shows, at conferences, and in every speech we give to support these companies and try to support the industry.

 

            Hopefully that gives you a good sense, but both companies are very open to sharing where they're at. If at any time you would like a briefing, I'm sure they would be more than happy, and we would be happy to arrange that for you.

 

            MR. HOUSTON: That was actually very helpful. I appreciate that. So it's kind of in the hands of the companies at this stage to get their financing, which is in the hundreds of millions or billions?

 

            MR. SAMSON: The Freeport project that we went to see was $7 billion U.S. It's three quarters of the size of what's expected for Goldboro. Keep in mind it's U.S. funds. On that project itself, I can't imagine what the foundation costs were up front that we wouldn't have for our project. It's hard to say. Both companies would be able to give you a better sense of it, but for both projects, you're talking billions, not millions.

 

            MR. HOUSTON: I guess to kind of finish up, I'll stay on natural gas and ask if the department has any plans on how they may expand the use of natural gas throughout the province. Is that something?

 

            MR. SAMSON: Again, it's going to come down to a question of supply, where the supply is coming from.

 

            It's ironic that the member for Queens-Shelburne was talking about my longevity. But when I first started and when the Sable project first started, it was initially anticipated - in fact, it was legislated - that the gas had to be made available to all 18 counties in Nova Scotia. That was the goal at the time, that from Yarmouth down to Sydney and all points in between would have access to gas. I'm not sure if either of you remember, but in one of the debates that came up - and I remember Ron Russell was the Minister of Transportation at the time - the company in Nova Scotia wanted to be able to lay the pipes along the highway. It became a whole debate of whether you could have natural gas lines running along our highway. The decision was made at the time not to allow it. The company that was in at the time - I'm trying to remember (Interruption) Sempra - they basically at that point said we can't do it. There's no way. If we can't go within the rights-of-way of the highways, we cannot connect the 18 counties. So it is a challenge, to your point.

 

            One of the things that has been happening, and you may have noticed, is that there has also been an effort to connect places like Antigonish. What they've been doing is, they've been trucking in the gas. They have a large storage unit available there, and we've been working trying to connect hospitals and universities.

 

            Running the pipeline all the way from Truro down to Antigonish or even any parts further would be a challenge. But if there's more gas coming in from these LNG facilities, it may build a case of being able to run a line down to Sydney or run a line elsewhere. The member may not be aware, but with the Sable project and that, there was a Gas Market Development Fund where certain monies were set aside by the companies that were used to help encourage home owners and businesses to convert to natural gas. That's still ongoing.

 

            You may have noticed we made some changes. Heritage was bringing forward an application to URB. They're going through a difficult time right now because the price of natural gas is quite high. Propane is much lower. Even oil is lower than gas, so they were losing a lot of customers. So we had to make a regulatory change to allow the URB to consider a proposal that they are putting forward to offer flexible rates.

 

            There is still opportunity there. If I'm not mistaken, and the member for Queens-Shelburne may remember this from his Department of Environment days, I think we're still the province that uses more oil per capita for home heating than anywhere else in the country. There is still the need to try to find alternative ways of heating our homes throughout the province. So whether these projects open up some new opportunities, we'll have to wait and see.

 

            MR. HOUSTON: I thank the minister and his staff. That concludes my questions.

 

            MR. CHAIRMAN: Minister, we have three minutes and 33 seconds left.

 

            MR. SAMSON: First, I want to thank my colleagues. I have to say, both in Opposition and in government, this has probably been my most pleasant day of doing estimates. I want to thank my colleagues for that. They've asked very honest questions, very reasonable questions. I would hope they feel the answers were the same. As always, any information that we weren't able to provide, we're happy to provide.

 

            We are very open about all of my responsibilities from Acadian Affairs to gaming to Trade to Energy and share information. We try to promote the programs we have, and we want you to promote them as much. Your communities are just as important as any other communities. Getting the message out, letting people know what's available and encouraging them - sustainable transportation and everything else - we all win when we're able to do that. So I thank my two colleagues for their questions today, and we'll certainly provide any follow-up information.

 

            I want to thank my staff. Obviously when we get here, there is a tremendous amount of work that goes into this binder. I mentioned to Remi and the rest of the staff that when I had the opportunity to look through it, everything I could have possibly wanted at my fingertips was here. That took hours of work and a lot of dedication.

 

            While we're the face of the departments, it is these individuals and so many others who make our departments work, who we trust to make decisions for us and to administer our budgets. We get them passed. They are the ones who deal with this on a daily basis and make it work. I'm very proud to be able to work with them. They certainly don't get the credit that they deserve. Nova Scotians can be proud of the men and women who work in all of government, but I have a bias for those who I work with on a regular basis under my responsibility.

 

            What we've brought here - especially in the Department of Energy - has been some slight reductions in spending, but we certainly have not seen any increases. We've been very prudent. One of the first things I learned from my deputy minister, Murray Coolican, is that Energy is the department that makes money for the Province of Nova Scotia rather than simply spending money. Our goal is to increase those revenues, to continue to promote Nova Scotia and promote our resources and do so in a socially responsible way and an environmentally prudent way.

 

            Again, it has been a pleasure to be able to have this discussion today and to be able to go through our budgets.

 

            MR. CHAIRMAN: Shall Resolution E6 stand?

 

            Resolution E6 stands.

 

            Resolution E47 - Resolved, that the business plan of the Nova Scotia Provincial Lotteries and Casino Corporation be approved.

 

            MR. CHAIRMAN: Shall Resolution E47 carry?

 

            Resolution E47 is carried.

 

            The time has elapsed for consideration of Committee of the Whole on Supply.

 

            The committee is adjourned.

 

            [The committee adjourned at 7:09 p.m.]