HALIFAX, TUESDAY, OCTOBER 3, 2017

SUBCOMMITTEE OF THE WHOLE ON SUPPLY

2:55 P.M.

CHAIRMAN

Ms. Suzanne Lohnes-Croft

            MADAM CHAIRMAN: I call this meeting of the Subcommittee of the Whole on Supply to order. We will be dealing with the Estimates of the Department of Energy.

            Resolution E6 - Resolved, that a sum not exceeding $29,004,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Energy, pursuant to the Estimate.

MADAM CHAIRMAN: I invite the minister to do opening remarks.

            HON. GEOFF MACLELLAN: Thank you, Madam Chairman, and committee members. I am certainly excited and pleased to be here to discuss all things energy in the Province of Nova Scotia. Quite frankly, it’s an exciting time for the Energy file with respect to the future moving forward. Obviously it impacts Nova Scotians and how they heat their homes and their relationship with Nova Scotia Power but of course on the renewable side, how we generate electricity, how we generate power and the tremendous future we have on many fronts moving forward, so I am happy to be here today.

            I do have some department staff with me who are going to help out. As many of you know, I have Deputy Murray Coolican here with us, we have Kim Himmelman, Director of Regulatory and Strategic Policy, we have Remi MacDonell, Manager of Financial Services and I think Chris Spencer, Executive Director of Business Development and Keith Collins, ED for Sustainable and Renewable Energy will be joining us shortly as well. We’ll just get into the opening comments and we’ll wait for them.

            I do welcome the staff here, and again, with a pretty short runway being the Minister of Energy, I rely on the great men and women who make up the Department of Energy. The senior staff are extremely experienced and they’re experts in their field. We’re happy to have them, and they can help bridge the gap with some information, anything that the members will ask about if I don’t have that info. I would like to thank them for all the work that they do. The work they are responsible for represents a significant contribution to the province’s finances and creating more opportunities for all Nova Scotians.

I’m going to begin by focusing on the details of our Department of Energy’s fiscal budget. Our estimated budget for 2017-18 is $29 million with the following expenses for the department: Administration $1.3 million; Sustainable and Renewable Energy, $2.3 million; Business Development and Corporate Services, $3.1 million; Petroleum Resources, $3.7 million; Office of the Deputy Minister, $400,000; the Canada-Nova Scotia Offshore Petroleum Board, $4.4 million; Non-electricity Energy Efficiency, Sustainable Transportation, and Conservation Grants, $13.6 million.

            The Department of Energy is focused on strategically managing and promoting our province’s energy resources on behalf of Nova Scotians. We’re delivering on that commitment in a way that strengthens our economy by creating opportunities for the middle class, creates jobs for young Nova Scotians, and protects the environment. It’s what Nova Scotians expect from their government, and they deserve nothing less.

            Our 25-year electricity plan is one of the main ways we are meeting those expectations. Nova Scotians were clear; they said they wanted predictable power rates and great accountability. It’s certainly greater accountability than it was a few years back. The electricity plan is certainly delivering.

            Nova Scotians are in the middle of an unprecedented three-year period of rate stability. Ratepayers know what electricity will cost them from now until 2020. Today, Nova Scotia Power is more accountable than ever before. Performance standards are in place for customer service, reliability, and storm response. Plus, the new fuel adjustment mechanism ensures ratepayers are only charged for the actual cost of fuel. This past Spring, they received a rebate for the first time.

            Through the electricity plan, government is opening the door to competition and fostering innovation. We launched a new solar program to help Mi’kmaq First Nations, non-profits, municipalities, and post-secondary schools be part of our cleaner energy future.

            Our work to implement the electricity plan continues with other innovative projects including electricity storage, management, and net metering. The result is cleaner, affordable electricity for Nova Scotia families and Nova Scotia businesses.

            We are leaders in renewable energy development and our accomplishments are quite impressive. Nova Scotia has already met its legislated target of generating 25 per cent of our electricity from renewable sources by 2015. We’re on track to exceed our target of having 40 per cent renewable electricity by 2020. No one in the Atlantic Region has installed more wind energy capacity than Nova Scotia. Only P.E.I. generates a greater percentage of electricity from wind.

            Our efforts have been focused on reducing emissions from the electricity sector because that’s our largest source of greenhouse gas emissions. Nova Scotians have made a significant investment in renewable energy, and they should be proud of the results we have achieved.

            Our leadership in clean energy extends to marine renewable sources. Tidal energy has the potential to be a game-changer for Nova Scotia, for Canada, and far beyond. Last year we reached a major milestone with the first grid-connected in-stream turbine in Canada. Tidal is a huge opportunity for Nova Scotia as an economic driver, especially in rural areas, an expertise-builder, and as a clean energy source. Companies such as Black Rock Tidal Power, Cape Sharp Tidal, Big Moon Power, DP Energy, Atlantis Operations (Canada) Ltd., and Minas Energy are all doing business right here. Dozens more local businesses are involved in opportunities like marine operations, engineering, and acoustics.

            We continue to support the important work of the Fundy Ocean Research Centre for Energy, also known as FORCE. FORCE ensures developers have the onshore infrastructure necessary to test technologies in the Bay of Fundy. Along with the Offshore Energy Research Association, FORCE is also helping the province collect data and making decisions based on sound scientific evidence.

            Our work with tidal and other forms of renewable energy has positioned Nova Scotia as a climate change leader. We are a national leader in reducing greenhouse gas emissions. We have already met the national target of reducing emissions by 30 per cent below 2005 levels. We are on track to achieve a reduction of more than 40 per cent by 2030.

            We will continue to lead the fight against climate change while protecting the pocketbooks of Nova Scotians. Again, Nova Scotians should be proud of these results.

            The credit for this achievement rests with all of us. We have made a significant investment as a province. We also reduced our electricity use faster than any other Canadian province, a full 1.2 per cent every single year. More than 100,000 Nova Scotians have reduced their reliance on oil by becoming more energy efficient through the use of heat pumps, extra insulation and other upgrades. We are the first province or state in North America to make LED streetlights the law. As a result, we’ve saved up to $18 million and 30,000 tons of emissions.

            To help homeowners continue to be more efficient, government has increased funding for the HomeWarming program. This investment is paying off for Nova Scotians who need it the most. Since April we’ve helped another 500 low-income homeowners save nearly $1,000 per year on their energy bills. This is help that has direct and immediate benefits for our most vulnerable citizens. This Fall we’re expanding this program to First Nations communities, affordable housing units, and non-profit homes.

            Over the life of the HomeWarming program we’ve helped thousands of low-income households lower their energy bills. As part of this budget, government continues to invest in sustainable transportation. Sustainable transportation is about creating options to get from place to place with minimal emissions impact. Encouraging active living is important for so many reasons but in many communities encouragement is only half the battle. The reality is that people are more likely to tie up their sneakers and get on the move when there are easily accessible and safe walking and bicycle-friendly options available to them. We want to make it just as easy to walk, run or cycle from place to place as it is to drive, or even easier.

            Connect2 aims to create and promote active transportation options for trips of two kilometres or less between community hubs in rural and urban parts of the province. These kinds of projects improve our neighbourhoods and help us build on achievements as a climate change leader by continuing to reduce emissions. We are providing another $600,000 to Connect2 this year, matching our 2016-17 contribution.

            Since 2015 we’ve invested $1.8 million, which has helped community groups leverage around $8.6 million for these projects. This investment has supported 78 total projects and 61 kilometres of connectors between community hubs.

            One of our best opportunities for success continues to be our offshore. Looking back over more than a generation of exploration and development, our offshore has delivered for Nova Scotians. Our province has received in total $3.7 billion in revenue from the offshore. That money goes directly towards paying for hospitals, schools, roads, law enforcement and all services that Nova Scotians use every single day. On top of that, oil and gas companies have spent more than $3 billion on goods and services within our province. We’ve accomplished this with a workplace safety and environmental record that is second to none.

            Oil and gas developments have safely co-existed with the fishing industry and other sectors for 25 years. We have one of the strongest offshore safety and environmental protection regimes in the world. We are a model for other jurisdictions. When companies come here they do so under stringent rules that are strictly enforced by an independent regulator.

As impressive as our list of successes is, our future is even brighter. Since 2011, major international firms have committed to spend more than $2.1 billion exploring off our coast. BP is getting ready to drill in 2018 and Statoil is preparing for its seismic program not long after that. I certainly wish both companies the best of success.

            Our offshore research is clear, we know there’s more oil and gas out there. The Play Fairway Analysis told us that more than 120 trillion cubic feet of gas and 8 billion barrels of untapped hydrocarbon potential lie off our coasts. We remain committed to working with industry to help find it. So far we’ve invested roughly $33 million to better understand our offshore potential and we’re providing that information to companies and the private sector.

            Nova Scotia will continue to invest in leading edge geoscience. We’ll continue to share the results openly with industry. With a little luck and a lot of hard work and investment, we hope to continue to attract significant work commitments from major international players.

            LNG and natural gas are another reason to be optimistic about Nova Scotia’s energy future. East Coast Energy, Bear Head, Goldboro and Alton all have projects underway that are in the best interests of Nova Scotians. These are projects that will create jobs in rural areas, plus having the capacity to store natural gas could save customers millions every year by smoothing out price spikes, particularly during the winter months when demand is at its highest.

            North America has an abundance of natural gas and the potential to help meet global demand. Our opportunity lies in finding a way to transfer gas from the supply basins in North America to markets around the world. We recognize that natural gas is a valuable resource and it will continue to be an important part of our overall energy strategy.

            There is plenty of good news in Nova Scotia for our energy sector and plenty of reason to be optimistic about the future. Perhaps the best part of all this is the opportunity it presents for young people. Our oil and gas industry has created more than 1,100 co-op work terms for students and invested more than $50 million in training and education. That leads to more graduates choosing to start and grow their careers here. There are jobs in manufacturing, research and development, engineering, project management and tech start-ups. Blue collar or white collar - opportunity is all around us.

            Through the energy training program and Pengrowth Energy scholarship, government is doing its part to support industry’s efforts to hire more young people. Our young people and our energy sector share one big fact in common - they are both filled with potential. If government and industry can work together - and we will continue to work together - I know we can and will create a better future for our young people and all Nova Scotians.

            I would like to thank you for this opportunity to outline the important work of the Department of Energy. The staff at the Department of Energy are focused on working towards a more prosperous Nova Scotia. They’re creating jobs for young people so they can start and grow their careers here. They’re ensuring that there are fair opportunities for the middle class and they’re giving us all reason to be optimistic about the province’s energy future. Now I would be happy to take questions from the committee.

            MADAM CHAIRMAN: Minister, would you like to introduce your staff first?

            MR. MACLELLAN: We have - adding to the list of staff we’ve got Murray, Kim, and Remi already. We’ve got Chris Spencer, Executive Director of Business Development. We’re just waiting on Keith Collins, Executive Director of Sustainable and Renewable Energy. That is everybody.

            MADAM CHAIRMAN: The honourable member for Inverness.

            MR. ALLAN MACMASTER: Thank you for the introduction. The Department of Energy is certainly important for our province. Many years of planning resulted in some very nice revenues for the province that helped to pay for a lot of social programs over the years.

            When looking at the numbers in the budget, I noticed what appears to be the largest change in terms of numbers was the budget for EfficiencyOne. I expect this is an increased grant program. I think specifically you look on Page 8.2 of the Estimates and Supplementary Detail, the actual figure for 2016-17 over and above the estimate, the actual was for Grants and Contributions under Departmental Expenses by Object was $28,743,000 - an increase from the previous year of $19,710,000. I’m presuming that is just more money that has been put into grants for people to make their homes more energy efficient, to switch to heat pumps, change their lightbulbs, that kind of thing. Just asking for a confirmation or clarification.

            MR. MACLELLAN: Thank you for that question - a very good one, for sure. You are correct - the department had the opportunity to go back to government and look at ways we can increase funding for that program in particular areas. They were with respect to the additional $7.5 million to low-income programs and efficiency programs for First Nations communities, as well as a program for non-profits to access efficiency funding. That made up for the difference in the year over year.

[3:15 p.m.]

            MR. MACMASTER: I know that EfficiencyOne was only offering incentives to customers of Nova Scotia Power who had electric-based heat, as one example, for quite some time. I know the government removed the efficiency fee, the funding for Efficiency Nova Scotia and I know now that people who have oil-based heat can take advantage of these incentives.

            Why was there a delay in the period between the fee being eliminated and the program being offered beyond just electric-based energy customers to oil-based energy customers?

            MR. MACLELLAN: Basically on the advice of my department, what happened was Nova Scotia Power had the plan with respect to efficiency for the electric so it was a government decision to focus on low-income that was non-electric based. What that program entailed was that it wasn’t a rebate per se, we would come in and actually do the work so the program that we established - I think the number was in the $1,000 range for low-income Nova Scotians. So if you think of someone who is in that low-income range, anything that they could access that would be a program up to $1,000 would have a significant impact. Again that’s not electric, so for oil-based and other sources of energy, this would come in as an important investment.

            As far as the delay, member, can you elaborate a little bit? I’m not sure about the timeline on the delay.

            MR. MACMASTER: Sure. I guess we heard that the government was going to get rid of the efficiency fee off people’s power bills. That fee was removed but now I think it is within the rate structure of Nova Scotia Power. So Nova Scotia Power is charging their customers in that rate structure the same old efficiency fee, as I understand. That fee is being used by those customers to take advantage of incentives or rebates but now it is also being used by customers of oil-based heat to gain an incentive or a rebate to convert to electric-based heat - perhaps purchasing a heat pump is one example.

            Now what we see are people who are purchasing oil-based heat who are taking advantage of incentives that are funded by customers from Nova Scotia Power who are paying for electric-based heat. I see the deputy shaking his head so I’m happy to hear the explanation if this is not the case but this has been reported in All Nova Scotia because we heard that the fee was going to be removed but at the end of the day the fee is now within the rate structure.

            MR. MACLELLAN: Thank you for your patience, honourable member. With the efficiency impact and how that is applied, Efficiency has to go the URB to justify that the savings are greater than what would be spent producing that electricity by way of coal. That’s the efficiency fee. That’s part of that.

            Secondly, and this is something for clarification, honourable member, we don’t have any information that that program can be used to buy heat pumps. In the efficiency program, they will go into a home and do a significant amount of retrofit with respect to heating efficiency, but we don’t have any information that the efficiency program actually provides heat pumps. Maybe you have information otherwise, but just talking to the staff, we don’t have that.

            MR. MACMASTER: I know that the name of the organization has changed a few times in the last few years. I know that you can get rebates for heat pumps, and I think it’s EfficiencyOne that it’s now called. It’s too bad I don’t have them here. I could table it if I had it here with me.

            I guess I’ll just back up a bit. Perhaps I have asked enough questions on this, but it was a political issue to get the efficiency fee off people’s power bills. It disappeared off the bill, but as we know, as you just indicated, EfficiencyOne has to go to the URB to get approval to add a fee within the rate structure to help pay for their programs, which is what the original fee was all about. In all actual fact, the fee is really still there. Is it better for the province? As you say, they have to get proof from the URB or blessing from the URB that their actions are reducing the cost of power. So that is a good thing, but the fee is still there.

            Then I was always aware that - because we would get calls at the constituency office, “I’d like to get a heat pump.” We would ask, do you have oil-based heat? If they say yes, well, we would tell them unfortunately you’re not eligible. I always thought the reason they weren’t eligible was because they’re not a customer of Nova Scotia Power for heat, and as such they’re not paying their share of that fee to get access to those rebates. Then I saw the program change so that now people who have oil-based heat are eligible to apply for it. I’m thinking, okay, well they’re paying for their oil delivery, they’re not paying into the fund by way of that part of the rate structure, which they would if they were buying heat from Nova Scotia Power – electric-based heat.

            So that’s what was precipitating all these questions. As I understand, I guess the delay doesn’t really matter at this point, but the fee is now - it’s no longer a fee, but there is an amount that Nova Scotians are paying for those programs within the rate structure. I’ve confirmed that.

            I guess the only other question I would ask is, is it fair for people who are buying their heat by way of electricity through Nova Scotia Power to be funding a program, which is then used to rebate people who are buying their heat by way of an oil delivery for an oil-fired furnace to get a rebate on a heat pump - as one example?

            MR. MACLELLAN: Just consulting with staff here - we don’t seem to have that information. This could be a rebate program through Nova Scotia Power, but to your point about someone who doesn’t pay for heat specifically through Nova Scotia Power having access to that rebate, non-electrical source of heat, that they would get access to that - do you have any information to confirm that? We just want to check with staff and make sure that we’re on the same page here, because we don’t know if that’s the case.

            MR. MACMASTER: I think perhaps maybe sometime outside of Estimates, I’ll provide the information, but EfficiencyOne has a number of programs and some are to help people with low income to insulate their homes - some are to encourage people to use heat pumps because they’re much cheaper than perhaps the heat source they have now. I think that’s probably something that’s best done outside of Estimates and I’ll move on from those questions.

            I would like to talk about the cap-and-trade program. I know it is something that was introduced by the Minister of Environment, but it certainly has impact on energy in the province and the consumption of energy in the province. How will caps affect the energy producers in our province?

[3:30 p.m.]

            MR. MACLELLAN: The member is certainly aware that this is a Department of Environment lead. Having said that, it has a clear implication for the Department of Energy in how we manage energy production and when the legislation is introduced. We haven’t had any final determination on exactly what the cost is going to be. We have made allowances for the GHG emissions, so there will be no cost for that aspect of the program. It certainly will be out of the gate much cheaper than what the application of the cap could be. But having said that, there is certainly a lot of work to be done at this point. As the Premier has said many times this week, we don’t have direct verification and specific numbers on what the cost structure may be at this point.

            MR. MACMASTER: It’s certainly very important legislation, and I respect if that is the response. I would ask this question, and perhaps the response will be the same. I’m thinking of Nova Scotia Power procuring and selling energy. I’m thinking of people who may not be procuring energy but who are selling it, like companies that are delivering heating oil for people. I’m thinking about gasoline retailers. What will the impact of the cap be on those organizations?

            MR. MACLELLAN: Again, we don’t have that specific detail at this point, but the one thing I guess, and the critical piece of this legislation with respect to the province is that the cap-and-trade model will certainly have less of an impact than what we would have had should we have had the carbon tax introduced. There is a far less impact on the businesses, the oil companies, and the gasoline retailers should there have been an overall carbon tax and carbon price applied in Nova Scotia. We don’t know those details on cap-and-trade yet, but one of the key pieces for us in the Department of Energy is that we have really mitigated that impact by way of cap-and-trade model as opposed to a carbon pricing model.

            MR. MACMASTER: If it’s unknown what the impact will be under the cap and trade, how can you compare to the carbon tax model? Was there some kind of economic analysis done? If you don’t know one number, but you know the other, presumably, how could you compare? You need both numbers. Could the minister comment?

            MR. MACLELLAN: It’s the fundamental difference, and it’s the overarching reality of the difference between the carbon pricing and the cap and trade. Under cap and trade, we will set allowances, obviously, for GHG emissions under those caps, so they’re free of charge until those caps are reached versus the carbon pricing model. Every emission that you would have under carbon pricing will be taxed. So fundamentally it will be less of an impact when you look at cap and trade and when those caps are reached, as opposed to just across the board carbon pricing.

            MR. MACMASTER: I’m not satisfied with the response. (Laughter) But I respect your response. There is going to be an impact. The reason any - whether it’s a carbon tax or cap and trade - I mean, the whole purpose of this is to get people to stop using as much as they are, whether it’s energy, whether it’s consuming goods. To do that, what do you do? You raise the price on it. I think that at the end of the day, if you can’t distill something down into something really simple, everything starts to go all over the place.

            I don’t mind that logic, if that’s what the logic is. I do think that people should know what it is and understand it, because if we can’t understand it in this room, how can we expect Nova Scotians to understand it?

            Where this affects people ultimately - if it’s actually going to work to reduce the impact on the environment - is people are going to want to consume less. I’m presuming that for the producers of energy or the people who are selling energy, that the cost of their goods is going to go up. If that is the case, I would presume that it’s going to go up for their consumers. So my question would be, under this cap-and-trade program that’s being introduced, how is it going to affect consumers? Are they going to be paying more for things like home heating oil, gasoline, their power bills? Or is there going to be no impact on consumers?

            MR. MACLELLAN: I do appreciate where the member is on this and I want to consult with staff, however, this is one where I’m quite comfortable with the position of Nova Scotia. I know that my seven years here in the Legislature have been filled with conversations about power rates and about the impact on power rates that major investments have had on the level of power rates over the last almost decade now.

            The reality is that Nova Scotia is a leader. We’re a leader on the continent. We’ve taken great strides with the Maritime Link and the impact that’s going to have on our renewable energy grid, and the fact that when you look at the idea of cap and trade, carbon pricing and the move to reduce greenhouse gas emissions, we’re at the top of the pack.

            With respect to the price we’ve paid in the past, I think it’s fair to say that Nova Scotians have certainly done their share. That has been something that has been echoed by many stakeholders in the province. The whole idea now as we consult with the federal government about carbon pricing, cap and trade, and the plan moving forward, we’ve done a lot.

            The cap-and-trade model gives us the ability to mitigate that impact for Nova Scotian homeowners, businesses and residents alike. It certainly is impossible at this point to predict exactly what impact cap and trade will have on pricing structures and costs for Nova Scotians, but certainly I could say that because of the work that the people of Nova Scotia, quite frankly, the rate base have done to this point we’re in a better position than I think many of our sister provinces.

            At this point, I really can’t speculate on what the impact will be, but certainly I think that as a province we’re in a pretty decent place in terms of having a system move in place for carbon that will have a lower impact on us, relative to other provinces.

            MR. MACMASTER: I find it shocking that we don’t know. As you’ve indicated, Nova Scotia has been a leader in introducing renewable energy and it’s making a difference for the environment. It is costing more.

            I remember I asked the Minister of Energy a few years ago, I asked the previous government, how many windmills would it take to power the paper mill in Point Tupper. He kind of laughed, as I suppose anybody would, they thought that was kind of a crazy question but my point was that I think it would take almost 300 windmills to power it and that’s only if the wind was blowing. If you put up that many windmills it would be three per kilometre between here and the Canso Causeway, which is not very practical. I was just trying to highlight the point that renewable energy can be good but we still have to make these decisions to make sure the energy is affordable and it’s actually good for the environment.

            As the minister knows, a lot of people have talked about windmills going up in Inverness County in the last couple of years. Some of them are actually environmentalists, some of the people who have come to me about that.

            I guess I’m surprised that we’re introducing something so major and we don’t know what the impact will be on consumers, knowing that our consumers have probably already been paying more than other jurisdictions which haven’t been as aggressive in moving towards renewable energy so there’s not really any point in me asking more on that here because I’ve received the answer. I know this is a major change for the province and we don’t know exactly what is going to happen but I would have hoped that we would have some more idea. Maybe that will come as time goes on.

            One of the features of this cap-and-trade program is, of course, the trading of emission allowances. We know that it is going to be internal trading only, I believe at this point. Who will benefit from the trading of the emissions allowances?

            MR. MACLELLAN: The companies that will benefit the most from a system of this nature quite frankly are the ones that perform the best. So obviously there’s a group, we think at this point probably roughly 20 companies. Those who maintain efficiencies and perform under their cap will be provided credits which they can trade in the open market so that’s the idea. In a short answer, it’s the companies that perform best that will have the ability not to use those excess credits and apply them to the market.

            MR. MACMASTER: As an example - and I think of a company that would affect just about everybody in the province - Nova Scotia Power, would they be assured of staying under their cap or is there a risk that they would go over their cap? If so, would they lose, in terms of these trading emission allowances? If so, would that have an impact on their customers?

[3:45 p.m.]

MR. MACLELLAN: We don’t have the ability to predict with absolute certainty what’s going to happen with Nova Scotia Power, however, because of some of the measures they had taken - and obviously because of our policies - we anticipate that they should have the ability to remain under those caps. Obviously we don’t have any of that set in place, but with the current situation and the current environment for Nova Scotia Power, we would anticipate that they can operate under the caps that will be in place and, again, with the policies that the province has, and with some of their own decisions and some of their own actions, they’ve put themselves on a good course.

I do want to assure the member and all members of the House and Nova Scotians that any of the benefits, any of the work that Nova Scotia Power would do that would provide their emissions under those caps would be passed on directly to the rate base. Obviously there is a vested interest for Nova Scotia Power to perform well, and again, any of the benefits that would be derived would be passed directly on to Nova Scotians.

MR. MACMASTER: Is it possible that no one will lose in terms of trading these? I guess there wouldn’t be any motivation to do any trading. Is it possible that everything is fine here - no Nova Scotian companies and, really more importantly by extension, Nova Scotian consumers will be impacted by the cap and trade?

MR. MACLELLAN: We certainly anticipate, expect, that the impact will be minimal. Again, we’re so far ahead in terms of the work we’ve done leading up to these discussions with the national government that we anticipate that our companies - those that will participate in this program - will have a minimal impact by way of the system, and therefore Nova Scotia will fare a lot better than other provinces.

MR. MACMASTER: If the impact will be minimal, does that mean the impact on the environment will also be minimal?

MR. MACLELLAN: Again, with the work that has been done - the groundwork by Nova Scotians - we’re the leaders and what we’ve done by way of reductions and greenhouse gas emissions, we’re way ahead of the target. We’re way ahead of what our sister provinces have accomplished by way of greenhouse gas emissions. What we’re on pace to reach by 2030 in terms of GHG reductions is a leader in the nation at this point.

We certainly anticipate that - and by way of the policy that we have moving forward and the plan to add the renewable sources to our grid and the number of opportunities we have in coordination with the other Atlantic Provinces on hydro, on the potential of offshore wind, of course with tidal through FORCE in the Bay of Fundy, we’re on track to do even better and to continue to reduce GHG emissions and be leaders in environmental protection by way of energy production. So as a province and certainly as a department, we’re on a good track so we certainly don’t anticipate that the cap-and-trade system, on the way it will impact the participating companies, will alter or change course with respect to our environmental stewardship that we’ve seen as a province.

            MR. MACMASTER: Will the information that companies are required to collect and report be provided to the public in an open and transparent manner? I’m thinking that companies are going to have to report to government about what their emissions are, what will that look like? Will the public get to see that? Is it going to be done in an open and transparent manner?

            MR. MACLELLAN: To the member, from a technical perspective the details of that question would be probably better suited for the Minister of Environment, because the cap-and-trade legislation is directly under the Department of Environment.

            Having said that, from our perspective with the magnitude of cap and trade, GHG emission reduction and the importance of protecting the environment first and foremost, you would expect that outside of any competitive or business-sensitive confidential information, again just speaking frankly, I can’t imagine that we wouldn’t have access as the public to that information. This is going to be a very open, public process. The players, the parameters, everything involved in cap and trade will be very much public.

            Again, from my own perspective, just based on common sense, anything that’s able to be made public and publicly available there would be no reason why anyone from a government department to a private sector operator to the national government, there would be no reason to keep that from the public.

            This is an important conversation that really impacts all of us and making that information available really is paramount.

            MR. MACMASTER: I’m almost willing to move off this topic, noting the time. I may just move off it and to something for a little bit here, just to see what kind of time we have.

            Muskrat Falls is another big topic and it’s certainly relevant to the Department of Energy and it’s going to impact Nova Scotians because Nova Scotia Power will be using some of that power. I can think of something very recent in this past year, there are towers being constructed to go across the Strait of Canso right now, somewhere very close to where I live.

            I was trying to get them to bury those lines, for the beauty of our Island, as I’m sure the minister will agree, provided that it wasn’t going to cost more. I found out some information on that. I won’t get into it here but I was kind of surprised.

            Nova Scotia Power had a consultant’s report they used. This is really the URB’s responsibility. What I found interesting was that first, they were saying they were constructing these towers to create a redundant line, so that if something ever happened to one of the sets of towers, they could immediately switch power over to the other set because there’s quite a bit of power being generated on Cape Breton Island that needs to go through to the rest of the province.

            Then I started to hear that the real reason they are constructing this extra set of towers is they need more capacity. Now Nova Scotia Power may be building capacity because it’s planning to try to export some of the energy - maybe sometime down the road, who knows? My thought was gee, if they’re putting up an extra set of towers and if it’s for the purpose of sending more power through the lines through the province, which we know we don’t need because our demand is decreasing as time goes on, I was thinking to myself why are they doing that? To me it’s almost like they were saying two different things.

            The concern for me and I think for Nova Scotians and this is a question, of course, to the URB, they are there to protect our interests. They reviewed a consultant’s report on this project that was purchased by Nova Scotia Power, so I would hope the URB would do their due diligence and make sure the consultant’s report was valid. I did find some information that would suggest it wasn’t, but I did not make it public because some of the people involved decided not to pursue it, and I respected that.

            I guess my question is, what is the department’s position on Muskrat Falls? Are Nova Scotians going to be paying fairly for this energy? I don’t want to ask you too many questions in one, but I think about fairness. Are we getting it for the rate that we were told we would get it for? I understood that was 7.9 cents per kilowatt hour. That came out of the mouth of the head of Nova Scotia Power at one time. I was in the room when he said it. Are we paying within our rate structure for infrastructure we don’t need, like perhaps an extra set of towers crossing the Strait? The energy that’s supposed to come is going to be delayed. Are we paying for things like the infrastructure to carry it before we even get the energy? Is it fair? I’ll let the minister answer those questions.

            MR. MACLELLAN: I thank the member for the question. First and foremost, the Maritime Link project is something I hear about quite a bit. The impact locally for us in industrial Cape Breton has been immense. The Woodbine location where the link touches ground is actually in his colleague, the member for Sydney River-Mira-Louisbourg’s riding. The capital project entailed there is immense. It has had a direct impact on the local economy. It’s a magnificent site. That obviously is part of that overall game-changing project for us.

            The good news is that our interest in this, the Maritime Link, is on time and on budget. What’s happening with Muskrat Falls doesn’t affect our price rate whatsoever, what the agreed-upon price per kilowatt hour does hold for Nova Scotia. That’s a good thing.

            With respect to the infrastructure, Nova Scotia Power, any of these lines that have been approved through the URB would have been approved both for the necessity for capacity and to have as redundancy, as the member said, so for the security of the lines. Reliability is obviously important. The capacity as we move away from coal-generated power into this renewable source from Muskrat Falls is something that would travel through that regulatory process through the Utility and Review Board, so they would not have been approved without full information and being deemed completely necessary by the URB.

            MR. MACMASTER: Minister, you’re making me feel like I’m a conspiracy theorist here. (Laughter)

[4:00 p.m.]

            It kind of opened by eyes because I was looking at the towers from the perspective of wanting to get rid of the flashing strobe lights at night, which have been an annoyance for years. Being a resident of the area, and recently - in the last four years or so - it became an issue for me. I thought, yeah, why don’t they just get rid of those lights? Somebody said, why don’t they bury them? So I approached them and they thumbed their nose at me and said, go talk to the feds, we’re just putting up what we’re required to put up. Then when I started opening my mouth about - why don’t we bury it? Then all of a sudden the lights came off and now they’re soft red lights that flash at night, which are much more tolerable. So that’s good, and maybe the two issues are completely unrelated. (Laughter)

            I uncovered some more information and it came to me because sometimes when you speak publicly people start coming to you and saying, I saw you spoke out about this, did you know this? Anyway, nothing was pursued because I respected their ask that it not be, but it kind of opened my eyes. Then I asked the URB about it - is this really for redundant lines or are they building extra capacity, and I guess we could see if there is extra capacity being built elsewhere through the province to determine if it really is.

            It’s probably something best pursued through the URB or the minister responsible, so maybe we’ll give you a break on that. I do hope what you’re saying is true though about the price that was agreed upon is what Nova Scotia Power customers will pay for that power. I know there are people in the energy industry that refute that. I spoke to somebody this week about that and I said, what are a couple of issues that you think I should bring up - and this was one of them.

            I know questions are being asked out there and there is a feeling that there is extra infrastructure being bolstered for other purposes, and we’re paying for it - and we’re not benefiting from it because we don’t need it.

            Natural gas has become a very political issue. In fact, I think about a few months ago it was raised during the election campaign at home near the end of the election. I believe it was raised on purpose by one of my opponents. It wasn’t by the opponent directly, but it was raising statements that were made by the Leader of the PC Party about fracking from a couple of years ago, but when people tweet those things or put them up on Facebook, people think that they were speaking about it last night on the news. Some people call that fake news.

            Suffice it to say, it’s just another example of how natural gas becomes politicized. Of course I had to put out there because natural gas - and specifically fracking - was a huge issue in Inverness a few years back. A company that wasn’t even planning to frack, but they were planning to do some experimental drilling, and the province recognized that the environment was too hostile for them to do it. In fact, they gave them their deposits back because they were receiving death threats, and they just couldn’t do business. They weren’t even going to do fracking, but that’s what it became about and people were very upset.

            As representative for the area, I wouldn’t feel comfortable supporting something that people are very upset about, especially when it comes down to people making death threats and whatnot. We often hear from the government - we need to have a social licence for this. I know things happen during election campaigns, but to me, that wasn’t helping the cause - to raise it during the campaign and to make it look like perhaps I, by extension, was suggesting we should have fracking in Inverness County.

            So we recognize that there is not a social licence for really any kind of natural gas exploration in the province, and we’ve heard members of the government say that. At the same time, if we look on the other side of the debate - like I thought Inverness County, if anywhere in the province people might be open to energy development it would be Inverness County because a significant percentage of the people who live there are travelling back and forth out West, and they’re working in this industry, and maybe they would like to come home and work in it here if it was safe and wasn’t going to impact the environment the way we’re hearing about.

            Does the government have any plans for addressing that issue, because right now there is nobody really going to speak for the other side because there are very few jobs here in natural gas, and very few interests to say, to balance the other side of the debate.

            MR. MACLELLAN: Thank you to the member for this question. This is certainly one that I’ve been very interested in, predating my time at the Department of Energy, because it is a very hot topic and I do remember in particular - I think it was the Lake Ainslie area - where the oil drilling was taking place and there was a protest about no fracking in Lake Ainslie at one point that I saw some placards and such and it wasn’t even that.

            I also remember the heated back and forths, the previous mandate about definition of high pressure hydraulic fracking and what that all means, et cetera. So it really is a topic of significant interest of course for our department, that always on all subjects of oil and gas energy production have to consider the impact for Nova Scotians on both sides of the argument, as you say.

            The reality is that the fracking moratorium is in place, it will remain in place. I do think that from the perspective of fracking, Nova Scotia isn’t open to that conversation at this point. Again, that’s my own personal feeling on it. However, I do think that what was lost in the conversation from our perspective and we were criticized for bringing in the moratorium early on in our previous mandate, was the fact that I think it’s incumbent on us, as a government, to acquire all the accurate information that we have and the options, such as different models for fracking, different approaches, different methods of using that particular instrument and process to access natural gas.

            I’m not intentionally going sideways on a conversation here but I liken it to what we went through in the previous term in my time as the Minister of Transportation and Infrastructure Renewal, on toll highways. It was a conversation I had to convince my colleagues that in this day and age you can talk to your citizenry, talk to Nova Scotians about anything, as long as you are open and fair and accurate in the information and you give them the full picture. We embarked on a very detailed consultation, all parts of the province, and we had true facts reflective of a lot of work that we did by way of third party consultants that gave us the information that we could present to Nova Scotians in a fair and balanced way and let them ultimately decide which direction we should go.

            I do think that the conversation of natural gas and the topic of fracking should follow a similar path if we’re ever to look at changing from the current path, which is the moratorium. We’re undergoing an onshore atlas at this point which will tell us where the deposits are, where the potential is across our entire province, to understand where that potential is. Then I think that when you have that process complete that’s still under way and ongoing, but when that’s complete I think you do have to look at the technology, the different options.

            I think the member would agree that even in the years since we’ve had that discussion and the moratorium has been in place, technology has changed, methods have changed, there are new ways developing quite frequently on how different jurisdictions conduct fracking.

            There are a number of consultations that would have to take place. There’s a lot of information when it arises to put it out there to Nova Scotians. I don’t think, certainly myself, the department staff who have had this discussion on several occasions, would ever be opposed, once we have that information completed, to put it out there for public consumption, to have these discussions take place in our community halls in a very open format so that people can understand the discussion, the decisions ahead of them and the decisions for government to make. Ultimately take their feedback, their opinions on something as controversial as fracking and take it to the people and allow people to give us some direction on which way we would go.

            I think to close the chapter, again, comparing it to the tolling conversation, for me in the Department of Transportation and Infrastructure Renewal, it became about answering this question once and for all and then stop talking about it. Every time there’s a deficiency on some portion of the highway from now until the end of time, we can say we have consulted Nova Scotians. They’re not interested in tolls. The one toll area that we have don’t want their tolls anymore. So I think that’s all fair, and we have landed on that from a Department of Transportation and Infrastructure Renewal perspective.

            I see it no differently than fracking. Quite frankly, speaking honestly, when we came in full stop with the moratorium, many of the critics of that moratorium held the position that we didn’t fully consider the Wheeler report and that there were things in there that could have maybe opened the door, kept the conversation going, and breathed a little bit of oxygen into the future. If fracking becomes safer, so to speak, if there’s a sustainable way to do it, if there’s a different method and approach, we would go from there. I think that conducting an onshore atlas, figuring out where it is, and looking at what methods we could use to potentially get at that gas would be the start.

            I think it would really break down to a regional perspective, again, not dissimilar to the highway conversation. In Cumberland County, would they feel different than in Cape Breton West versus the western side of the Island, Inverness County versus Yarmouth versus industrial Cape Breton. Those conversations will be had. It’s one of those ones that, quite frankly, from a public policy perspective, our best approach is to give everybody the information so this isn’t something that’s held . . .

            MADAM CHAIRMAN: Order. Time has elapsed for the Progressive Conservatives.

            The honourable member for Halifax Needham.

            MS. LISA ROBERTS: When your Party was running for office in 2013, breaking Nova Scotia Power’s monopoly was a key plank in your platform. We’re here four years later, past another election. Can you talk about that? Is that a broken promise?

            MR. MACLELLAN: Obviously that was an important conversation. Again, I reference back to my initial entrance into the Nova Scotia Legislature when power rates were extremely high, and increases had taken place which really crept up there in a hurry. At that point, it was the number one call that I received in my constituency office from 2010 to 2013.

            The renewable to retail legislation that we tabled early in our first mandate, 2013, was exactly designed to have Nova Scotia Power compete against other entrants. Obviously, that would be on the renewable energy side.

[4:15 p.m.]

            As I’m sure the member knows, the way the structure is, the URB structure, and the way that energy is produced and the way that projects operate and exist and feed into the Nova Scotia grid, the reality is that renewables were extremely expensive, going back a couple of years. Fortunately for us we’re seeing the cost decrease now with options like wind, with the potential for solar, again tidal which has tremendous potential for the province and to really change the conversation across the globe, there are opportunities. From a technical perspective renewable retail allowed entrance in against Nova Scotia Power. I can foresee some of the criticisms that may come with respect to Nova Scotia Power still being the dominant player in the market, there is no doubt about that.

            I think that quite honestly what people were looking for was the ability to rein in some of those costs and have Nova Scotia Power much more accountable to the rate base and have renewable entrants and renewable energy sources as a larger part of the conversation. I certainly think that has taken place with respect to the rate stability, the efficiency programs and again the conversations around renewable entrants and the impact they’ll have on the grid. I think Nova Scotians feel a lot better about the power rates and the fact that Nova Scotia Power is accountable.

            Again, I think to the member for Inverness’ point about the energy future with cap and trade, with the reduction in GHGs and carbon pricing and all those aspects in the mix, the conversation about energy production is going to get a lot different over the next 10 years.

I guess the answer to the member’s question, now we did take policy and legislative measures to add competition to Nova Scotia Power and we’re fortunate to have that predictability in the rates and we’ll continue to hold them accountable, work with Nova Scotia Power on shared interests and at the end of the day this is about protecting the environment - I know that’s quite important to the member - and continue to create energy cheaply for Nova Scotians, as cheaply as we possibly can and of course continue that transition away from carbon fuels and the fossil fuels that have been such a large part of our energy past.

            MS. ROBERTS: Back to the renewable to retail system, what is the timeline in terms of consumers having that as an option in front of them in a really concrete way?

            MR. MACLELLAN: It is in place now obviously, renewable retail is in effect and the reality is that in a large part it’s subject to market conditions and it becomes about a renewable energy producer that can compete with Nova Scotia Power on price. Again, we’ve seen a significant decrease in the cost to produce this energy. Clearly there’s a controlled mechanism by way of the URB for power rates and utility rates.

            In theory and technically speaking, that option is available. We haven’t seen any large-scale producers clearly come on the grid that would compete directly with Nova Scotia Power at this point but again, with the potential of the renewables that we have as part of our mix moving forward, we certainly encourage and hope that renewable retail adds those competitors. Again, we’ll continue to do what we can inside the mechanism to keep Nova Scotia Power rates as low as possible and protect the pocketbooks of Nova Scotians as best we can.

            MS. ROBERTS: I’d like to ask you about COMFIT, which your government cancelled in 2015 and other than a pilot project for solar panels on community buildings, we haven’t heard a lot from the department about a replacement for COMFIT.

            You’ve said that the province doesn’t have a lot of capacity for more wind energy so what is the vision for renewable energy beyond the target set for 2020?

            MR. MACLELLAN: Obviously our critical piece at this point - something that was supported by her Party when they were in government back between 2009 and 2013 - and that of course it the Maritime Link, something that was a solid decision, something that has really impacted the future of energy here in Nova Scotia. I remember when Premier Dexter made that announcement - it was moving in that direction.

While it obviously had an impact for the rate base and there were a number of complications with it, and obviously like everything else explaining the politics of it could be tricky, but the Maritime Link has really set us in a very good place moving forward. With the ability to add hydro to our grid, not only will we have a steady access to a power source and an energy source at a defined rate, but it will also allow us to access other markets by way of that relationship.

As we upgrade our links with the Atlantic Provinces and joint partnerships on the Atlantic link, we’ll have opportunities to move hydro. Wind is another aspect of that and when Maritime Link comes on line, we’ll be able to add wind to our complement as well - additional wind - and reduce our reliance on the coal-fired power energy production.

Again, the intermittent nature of wind is the challenge. When that interview was done with respect to wind, I kind of - you take a grasp when you’re suggesting that we’re not going to access it and we’re not going to rely on more wind. That’s certainly not the case. It’s just that at this point because of the intermittent nature, we need a more stable backup. Once the Maritime Link is online we’ll have that stability, we’ll continue to be a player in wind transmission and wind production, and that will be a big part of it.

As well, there is an incredible body of technology and research taking place with respect to energy storage, and I think that is the future. I know the member is well versed in that. That’s really where we’re going and when we have the ability to capture this energy and store it for future use, that’s really going to change the elements in the equation, and obviously wind is part of that. With respect to wind and hydro, we will continue to develop the technologies and the capabilities and continue to rely on those renewable sources for energy.

            The one without question that I’m the most excited about, one that I understood in bits and pieces from the member for Clare-Digby in conversations and that is about the Bay of Fundy and FORCE. What’s happening there really is a seismic shift in energy production. Some of the players who have the berths now in FORCE are doing incredible research. The FORCE organization, our people themselves, are compiling data, evidence, information that’s going to really change the scope of how we develop and rely on tidal energy.

            With the emergence of a company called Big Moon Power, we’re expecting a real interrupter in how we collect energy by way of tidal forces. That’s a huge opportunity for Nova Scotia. Again, having that access to stable renewable energy of that nature is huge. But the fact that would happen right here in Nova Scotia and employ a lot of people not only in the production and capturing of that energy itself but also in the indirect services that would be required to service this infrastructure that would take place down there, the potential at this point really is untapped and unlimited, and we’re excited about the prospects of what could happen there.

            Finally, with the idea of co-operation between the Atlantic Provinces and Quebec with their tremendous hydro capability and capacity, the Atlantic link and what we would establish in a regional grid will provide tremendous opportunity. This is one of those areas with respect to the Maritime Link and regional co-operation on energy production in energy sharing and feeding into the same grid that would be used for consumption and for sale - the Trade file really overlaps with the Energy file in many instances, and this is probably the best example where that’s the case.

            Speaking with many of the northeastern U.S. governors, they are extremely interested in Muskrat Falls and Churchill Falls in the future. That is potentially there. Again as I mentioned at the top of the Estimates with my comments, we’re going to be a significant player. In partnering with our fellow Atlantic Provinces, the potential is there to sell energy, to have a relationship with the northeastern United States, which is a massive market for us. We go from a relatively small consumer and a sort of self-enclosed producer of energy by way of Nova Scotia Power to really opening up a regional network of energy flow, energy supply, and energy sales.

            With respect to the question about the future, renewables, for us, I think that is largely unlimited. It’s going to take a lot of co-operation, a lot of private sector investment and a lot of private sector risk and some good government policy over the next decade and government investment in critical infrastructure. It’s a long way, and there’s a lot of work to be done and a lot of investment and research and commitment to be made, but Nova Scotia’s contribution to regional energy and continental energy is going to change wholesale over the next five or 10 years.

            MS. ROBERTS: You referenced renewable energy driving electricity rates during your time as an MLA. Can you clarify, what portion of the change in rates that we have seen is actually a result of coal price changes?

            MR. MACLELLAN: You know, I have had that conversation on many occasions with the staff. I don’t think they can break it down to the combination of the coal prices at that time and the investment in infrastructure. It was a combination of both. To the honourable member, I don’t know how it would break down specifically to what percentage was based on coal prices at that that time and what was based on the investments that were committed to by Nova Scotia Power. But there’s no question about it, to your point, that the fluctuation in coal prices during that period certainly was a significant contributor, no doubt about it.

[4:30 p.m.]

            MS. ROBERTS: I’ve also heard about Big Moon tidal. A lot of people seem really excited about that. I’m struck that a lot of the innovation, and certainly with that innovation great jobs that many younger people in Nova Scotia have across the province, but particularly quite a few individuals who I know in my district, a lot of that was really driven by the hard caps, by the targets we set, starting with the Environmental Goals and Sustainable Prosperity Act and then continuing with the Green Economy Act. Now we’re in this situation where we have a cap-and-trade bill that is going to be coming before this House and I felt like reassuring the member for Inverness - don’t worry, it’s not going to do anything - because that is what all observers of this legislation and this system say, don’t worry, it’s actually not incenting anyone to do anything. It’s not costing anyone, nobody is going to have anything to sell, we’ve already done everything we’ve done.

            That also means that the drivers for innovation are now six years, seven years old and meanwhile, everybody else is going to be incented to innovate, and innovation comes with employment. Are you worried that as a province, we’re sort of stepping onto the sidelines at the time that we should be really stepping up into the middle of the field with everybody else around the world who is trying to grapple with climate change?

            MR. MACLELLAN: Honourable member, I’m not worried at all. I become increasingly reassured every day.

            With respect again to where we are in terms of our provincial policy that has taken place over a number of years, quite frankly that had led us to this point. Again, I’m not looking to reiterate the same points but we are a leader at this point and I think we’ve done a great deal. I think we’ve done a tremendous - we are the benchmark in a lot of ways for the provinces and territories in this nation.

            Again, when I look at spending some time at the Core Energy Conference this morning, what we see in the Bay at Fundy at FORCE, the potential for increased wind, offshore wind, there’s companies looking all across this province on all coastlines, looking at the potential to tie in. One company is looking at tying into the Maritime Link off the coast of Cape Breton with offshore wind. There’s another looking to do something on the southern coast, off Yarmouth, to feed Massachusetts and the New England States so I think there’s tremendous work and potential. I don’t think we’re even close to being done.

            For us, and when I say us I mean the province, there comes a point that one of the things that I’ve always agreed on with the Premier and it was something that certainly Darrell Dexter believed, too, as well as the honourable Opposition Leader today for the Progressive Conservatives, there’s a point where we have to set the tone for business for the private sector and then get out of the way. That’s something I’ve always believed in, I’ve always carried that as part of the policies that I’m connected to in business, in trade and energy and in Service Nova Scotia with respect to red tape.

            I think the renewable energy companies, the players that we have here in the province, the players that we have here in the region, they’re not being slowed down or hindered in any by government policy, they’re doing it. Quite frankly, is the key to that shifting to renewables for the sake of our environment? Yes, absolutely, it certainly is but it’s the new economic reality as well. So 10, 15 years from now - I come from a place where coal was our lifeblood for 100 years. Coal is going to continue to decrease in terms of its importance and its contribution to energy production for heat for energy, for steel making, what is necessary and required for now.

            I don’t think that in any way, shape or form we’re slowing down. I think we’re still far ahead of the grid with respect to renewable energy, renewable production, renewable research and development. Again, while we have a number of different components of that taking place, anyone who hasn’t been to the FORCE site should get there to hear what they’re doing, to understand what’s happening with the private sector investors that are there, with the government body and the policy that’s taking place there. We’re on the cutting edge.

            I truly appreciate your concern, and I share the concern that we don’t want to fall behind. I can tell you that looking at what’s happening in the Bay of Fundy, the other places that are trying to develop tidal energy and working on the tidal energy file, they’re worried about losing more ground to us. I think that’s a good thing and I think that’s a place to look at from high, but having said that, we can’t stop.

Again, for me in my capacity as the Minister of Energy here in the province, I don’t want to do a single thing to ever slow down or inhibit that growth, that potential. If there are ways that we can invest by way of looking at things like the Play Fairway analysis program. We can do things of that nature, but at the end of the day this is going to come down to private sector research.

There is money to be made. There is investment that will contribute to profit for companies and that’s what we want. Along that path they’re going to hire eight Nova Scotians who are going to research, who are going to do development, who are going to study all things that we have. The potential overall with our oceans is staggering, and the energy that comes along with that - and I just think we’re at the beginning. I think the key, to your point, that I’ve taken away is that we have to stay ahead of that curve and we’re certainly committed to that at this point.

MS. ROBERTS: I’m looking at the budget for 2016 and 2017-18, and the budget for sustainable and renewable energy is going down slightly versus the actuals - it’s actually going up versus the estimate for 2016-17, but it’s going down slightly from the actuals from 2016-17. It is still considerably smaller by almost $1,500,000 than the petroleum resources budget line.

I’m wondering if you can speak to me about how as a province you anticipate recouping the investment in petroleum resources. Are there royalty projections going beyond 2020-21 that justify that investment in petroleum resources versus in renewable energy?

            MR. MACLELLAN: To the member’s point, the offshore petroleum strategy number, we’re in the final year of that particular program, so that number will diminish somewhat, probably by $1 million or so give or take once the strategy is finished. Basically in a nutshell, obviously that is used to stimulate and try to drum up activity offshore to the point where now, as I read in my opening remarks, $2.1 billion in investment over the next number of years with Statoil and BP will be taking place in the offshore. However, that number that the member indicated in the budget will sort of reduce and stay in that area. On the other side, with the clean energy and renewable pockets of money, the number is quite significant. We’re more in the range, with all things being told for that budget, closer to $20 million.

            Obviously, when you look at the holistic budget numbers and put together all that’s included in that portion of the budget our investment in clean energy and the significance of our commitment to that is much broader than the one number that was identified in the sustainable and renewable energy line. That’s a small piece of the overall investment in renewable energy.

            On the point about royalties, certainly in the line item Investment, there is no indication or no forecast whatsoever on royalties. Quite frankly, they are a number of years away or possibly a decade away. We know from the last round that it takes that long to identify what potential royalties are out there.

            We haven’t pegged any of that to royalty numbers or royalty projections. We’re just continuing that work on the offshore petroleum side. Again, through the Play Fairway analysis and some of the work we’re doing on geoscience, we’re trying to set the tone with respect to offshore oil and gas. That’s something that we haven’t given up on obviously. But we’re certainly committed to the focal points of renewable energy and what we can do on the clean energy side.

[4:45 p.m.]

            MS. ROBERTS: In your conversation earlier around wind energy, you talked about the need to have the steady source to balance out the intermittent source, which is wind. I’m wondering what work is being done on two different fronts to address that challenge, one being energy storage here in Nova Scotia. Are we working on that?

            Also, some people make the argument that we need stronger transmission links with Quebec and New Brunswick in order to be able to balance that by sharing across the grid. What would you say about the capacity in our grid to do that? What work is being done in that direction?

            MR. MACLELLAN: Thank you, Madam Chairman, and thanks to the member for the question. For the first part, energy storage, again we’ve alluded to this a few times in the discussion and this is of critical importance, and research and study and development are taking place across the globe. Quite frankly, Nova Scotia is at the forefront of that as well. Through the Department of Energy, through Innovacorp, there’s a number of different competitions and innovation grants we have specific to energy storage and coupled with that, we have a world-renowned and leading professor scientist at Dalhousie University named Jeffrey Dahn, who is really at the forefront, the cutting edge of this research. In fact the work he is doing is connected to Tesla. As we know, Tesla is a company that has revolutionized many aspects of society and what they’ve accomplished in their respective industries so far is ground breaking and they are here with a direct relationship to our Dalhousie University.

            The idea of energy storage and battery storage is critical and Nova Scotia is playing its part, to say the least. Again, when you tie in the efforts being made right here in the province with tidal, with wind and connected to energy storage where it puts us in a really good place. In regard to transmission links, this is one that the Atlantic Premiers discussed at great length and have for the last number of years. As we speak today, the Atlantic Provinces have teamed up with the federal government to do a study on the transmission lines, the links, exactly what would be required to bolster our transmission capacity, our shared transmission capacity. Our understanding, which is critical for us, is that the first priority that’s going to come out of that study and that review is upgrading the links between Nova Scotia and New Brunswick specifically. That would unlock a lot of potential and provide strength to any regional grid that we would have.

            Certainly progress on both fronts, with respect to the member’s questions, lots more work and investment to go but they are absolutely on the radar and they are two particular areas that we are advancing as quickly as possible.

            MS. ROBERTS: Coal wouldn’t fit under sustainable and renewable energy, nor would it necessarily fit under petroleum resources. I’m wondering if you can let us know if there is support for the reopening of the Donkin Mine somewhere in this budget.

            MR. MACLELLAN: I’m going to go off script a little bit here, guys. I truly appreciate the question. This is certainly something that for myself I have no issue with being on the record. While technically this is a function, coal production, the operation of coal mines falls under DNR. I can honestly say that I have been the lead minister on this one because of the Donkin coal mine and because of the regional proximity for me, the relationship and the fact that I’ve got a sense of the impact in Cape Breton.

            There is absolutely no doubt that we’re moving away from fossil fuels, and I can tell the member and the members of the committee, Kameron Collieries that operate the mine certainly know that. They know that there is a closing window and that a number of years from now - not in the far too distant future - as a society we’ll probably be completely away from the reliance on coal. It seems like it’s going to take some time, but eventually society will get there.

            For now, the world does need coal. Nova Scotia is a leader - again, I’m not going to reiterate the statistics and the points, but we’re certainly doing our share within the federation of GHG reductions. At this point we don’t have a large complement of the Donkin mine coal that’s being used vis-à-vis Nova Scotia Power. I believe there is a small amount at this point, but for the most part Donkin mine’s coal commodity supply is going to be brought to the international markets. That’s what is happening currently, and as they expand production that will continue to take place.

            The world still has a market for coal with respect to energy production for heating, for the production of steel, and there is a marketplace there. The licences, the ability to extract and produce and sell that coal was given a number of years back by the federal government and the provincial government. Donkin mine, Kameron Collieries is up and running and it’s going to be for quite some time.

            Obviously again, fossil fuels are something that we’re moving away from - that’s no secret. Having grown up as a product of the Cape Breton coal fields, for me I understand a couple of things. Coal is important for families. There are a couple of hundred people who are directly impacted and another probably triple or quadruple that are indirectly impacted by the Donkin mine operation.

            It’s a challenging job. It’s a challenging operation at the best of times. Quite frankly, I’m concerned every day that the Donkin mine folks, Kameron Collieries, adhere to each and every safety standard. Every report that I have is that they are doing that. It’s kilometres under the ocean. Extracting coal can be a scary place and we’ve got to make sure that we follow each and every safety procedure to the letter. Again, my understanding is that is happening both from officials here at DNR, from the mine officials and of course from the workforce. I know many of them very well.

            We want safe production. We want efficient production, but again, there is a limited window for coal production in Nova Scotia, and quite frankly, in the world, so it will be extracted while we can and then we’ll continue to move on and focus on those renewable energy sources for heat, for energy production and steelmaking and for all aspects of our energy needs in the globe.

            MS. ROBERTS: To return to my specific question, is there any support from the Department of Energy for the Donkin operation at all?

            MR. MACLELLAN: No, there isn’t. Obviously there is no financial support whatsoever. The only role is from obviously the safety and regulatory, and that’s all through the Department of Natural Resources.

            MS. ROBERTS: Does the department have a goal in terms of when we as Nova Scotians can actually stop burning coal for electricity generation? I know that with the government’s agreement with Ottawa we have an exemption, I believe, that allows us to contemplate doing that beyond 2030, but certainly world climate science would suggest that we might not want to do that.

            MR. MACLELLAN: We don’t have any specific timelines at this point. The member had stated that technically with the relationship with our national government, we could be beyond that point. We haven’t set any timeline, any sort of hard dates on when that would happen. We obviously want flexibility with respect to the environmental targets that have been put before us, which we are reaching already at this point, with many years to go and continued GHG reductions inline. We will be well below any levels that have been set for us.

            But again, at the end of the day, we need the flexibility to make sure that we can protect ratepayers and make sure that we keep power rates as low as possible and, having said that, continue that track of reducing our reliance on fossil fuels. The next five or 10 years are going to be significant with respect to the advancement of our renewable energies grid.

            Again, it’s not lost on anyone that we want to move away from fossil fuel energy production as soon as we possibly can. While we can’t box in Nova Scotia Power and the utility specific to coal, it’s in everyone’s best interest to continue on that renewable path as quickly as we possibly can.

            MS. ROBERTS: I received a letter from you today related to the Frontier and Offshore Regulatory Renewal Initiative, so I’m not going to ask some of the questions that I had prepared. But just one question related to chemical dispersants in the event of a blowout - are you confident that these dispersants will achieve a net environmental benefit as required by regulation or legislation?

            MR. MACLELLAN: I’ll give the general answer first, and then if there’s anything I can follow up and be specific on, I certainly will. I know the member is well-versed in this particular topic.

            Our regulator, the CNSOPB, has a clearly defined policy and has a relationship with Environment Canada where, should any incident occur, there would be a determination whether or not a dispersant would be used. I can certainly say that if that was the case and it was recommended that the dispersant be applied, we would be confident in the decision, the application of the process. That is well-established. For us, this regulatory process, the whole nature of how we monitor, regulate, and have oversight on the offshore activity, we are confident in it. I can say that through that process, we would be confident that in the very worst case scenario where we have an incident of that nature, that the policies that are set and the plan, the regulations that are in place, would be adequate and do the work quickly so that we would mitigate any negative impact.

[5:00 p.m.]

            MS. ROBERTS: Thank you for your answer. I know that your predecessor was the designated lead on marine protected areas. I’m wondering if you still are and if you can speak to why the Energy Minister would be the designated lead on that file.

            MR. MACLELLAN: Yes, it is still the Department of Energy and my role as minister is to have that main oversight, the reason being is that, by way of legislation, there is a joint management group, the body that would make the rulings and have the ultimate authority over issues related to the offshore. The relationship exists between the province and the federal government through NRCan and with the provincial Department of Energy. We would have that jurisdiction that any of the other associated departments for Nova Scotia’s offshore wouldn’t technically have from the legislative sense.

            MS. ROBERTS: You have stated publicly that you think marine protected areas are important but you are concerned about fairness and equity. Obviously Nova Scotia is Canada’s Ocean Playground so it sounds like you are less concerned on preserving the areas of high ecological importance and more concerned about an equal split amongst provinces, and Saskatchewan is not going to take its share, obviously. Is that a fair assessment of your position?

            MR. MACLELLAN: The reason for our position on this is that there is certainly an element of equity. The numbers have altered a little bit, but as of Spring 2017, Nova Scotia had double the protected areas of all other provinces connected to ocean coastline. There is a question of equity for us. Obviously, that doesn’t mean we’re opposed to protecting marine areas, not by any stretch. Again, we have co-operated with the federal government, and we have worked with them to identify those areas key for marine protection.

            Having said that, the regulations in each province are a little bit different. One that hits home for us, we’ll take B.C. as an example, their marine protected areas allow for fishing, our marine protected areas don’t allow for fishing. When we protect marine locations - a marine grid, these areas - there’s no oil and gas, and there’s also no fisheries permitted. That’s a bit of a shift. If the policies were apples and apples, it may create a bit of a different environment. When you look B.C. versus New Brunswick versus Newfoundland and Labrador versus P.E.I. versus Nova Scotia, the parameters are a little bit different. We’re fully committed to marine protection. A lot of it makes perfect sense. But when you look at the impact - oil and gas is one, and I know that that’s an easy one to subject to criticism.

            We also want to make sure that we protect the ability of our fishers to get on the water, to access the seafood, the product, that is our number one export. It’s our number one job creator in many rural communities in the province. It’s going to continue to be the leader with respect to our economic development. The ocean opportunities we have are immense, on research, the development of diverse species, different products that we could produce from the ocean unrelated to seafood, with respect to understanding the climate, with respect to energy. We have so much potential that’s inherent in our oceans.

            With the stringent regulatory regime that we have vis-à-vis marine protected areas, we just want to make sure that we are doing our share as opposed to doing the lion’s share for the nation which is really where we’re at now. We haven’t pushed back on the federal government. We’re not opposed to the DFO idea of protecting marine areas, but having said that, we just want to make sure that they’re applying as much equity as possible.

            MS. ROBERTS: I’ll follow up around the fishing. I am jumping around a little bit as I try to figure out which of the last questions to ask.

            Natural gas has been viewed as a stepping stone towards transition. In 2014, the government announced that seven more hospitals were converting to natural gas. Can you confirm or tell me if converting government-owned buildings to natural gas is still a priority?

            MR. MACLELLAN: Yes, that is the case. It certainly still is a priority. There’s a cost reality for having access to natural gas for our government-owned facilities. Any time we can access that supply and quite frankly operate government buildings more cheaply, we’re certainly going to do so. That is the program at this point. We’ll look to do that at every opportunity.

            MS. ROBERTS: Earlier in the conversation with the member for Inverness you talked about the lack of social licence for fracking activity in Nova Scotia. Can you confirm whether natural gas used in government-owned buildings has been sourced from jurisdictions where that natural gas is produced by fracking?

            MR. MACLELLAN: At this point the majority of our natural gas consumption is coming from our own offshore with the modest balance coming from the North American natural gas grid. So there is a lot of it that’s coming from our offshore operations at this point.

            MS. ROBERTS: Just remind me how many more years of that offshore resource for Nova Scotia do we have?

            MR. MACLELLAN: Probably in the range of two years.

            MS. ROBERTS: Is there any concern or has the government analyzed all the various factors to ensure that we’re not ending up investing in assets or infrastructure that will be stranded in another period of time?

            MR. MACLELLAN: Yes, that’s absolutely part of the discussion. We’re working on a number of ways in which we can ensure that we continue to access natural gas sources.

            MADAM CHAIRMAN: Order, time has elapsed for the NDP caucus. We’ll return to the PC caucus.

            The honourable member for Inverness.

            MR. ALLAN MACMASTER: Thank you, Madam Chairman, and thank you, minister, for providing the answers today. I appreciate that you’ve been quite quick in providing answers and that’s helpful so I appreciate that.

            I have just one question, I have a couple of colleagues who have a couple of questions and then I think we’re ready to move on to Business.

            The last question I have is on this new Solar for Community Buildings Program. When I read this I’m reminded of the COMFIT program. I was not a big fan of the COMFIT program because at the end of the day, if you want to buy renewable energy, why not make it as affordable as possible?

            When I see this program I start thinking okay, are we now going to be buying solar energy from community groups and paying them a premium over and above what we need to pay for the energy? I’m thinking that this sounds like COMFIT all over again. I’m thinking if the goal is to help the environment, we could be buying more renewable energy for the same price.

            You can’t blame the community groups, I have them at home. I have a group involved in the project. It’s a great source of revenue for them for 20 years but it’s not really serving the purpose of helping the environment. It’s not really serving the purpose of keeping rates affordable, so why is the government looking to go down this road again?

            In fairness, we don’t know what the rates are and part of this exercise is to find out what they are but I’m fearful that they’re going to be well above the market rates for renewable energy so I’ll let you comment. That is my last question.

            MR. MACLELLAN: Thank you, member for that question. Valid points. I think that we had a discussion about COMFIT here at various levels and the reality is that the COMFIT program was a success to the point where it was oversubscribed. It was initially planned for 100 megawatts and turned into 150 megawatts in a hurry. I know that it was almost a race for people to get applications in to meet a deadline, and there were all kinds of parameters around that.

[5:15 p.m.]

            I think it’s fair to say that the solar program is much different. It’s going to be a three-year program that will be capped each year so the investment will have a capped amount. Most importantly, for the interest of the market, it’s going to be a competitive procurement which I think changes the nature by which companies bid, and what comes forward. Obviously the importance of procurement and the procurement processes in government and anywhere is that it fundamentally, by way of natural market principles, drives the price down. I think that’s the idea. We’re certainly feeling confident that the parameters around this program are a little different than COMFIT, and I think that we will see a level of success based on some of the changes we made to the solar program.

            MADAM CHAIRMAN: The honourable member for Sydney River-Mira- Louisbourg.

            HON. ALFIE MACLEOD: Mr. Minister, first let me congratulate you on your new role. I haven’t had a chance to publicly talk to you back and forth on your new challenges. I congratulate you on that, and I want to thank your staff for the work that they do over the years.

            It has been my custom the last number of years when Energy has come up to always ask a question about the Donkin mine. Today would be no different, but I’m sure the answers are going to be much different than they have been in the past.

            As you and I both know, Donkin is now into the production stages. Life is moving on there, and I want to compliment the provincial government on the support they’ve shown that project because I think it’s a valuable project, and it’s very important to our economy.

            I am concerned and would like to get your opinion on what cap-and-trade legislation may do to the outcome of a coal mine where we are and with the challenges we face as a province. Do you have any comments on that?

            MR. MACLELLAN: I know that in our region and certainly his constituency, the residents understand the importance of reducing our reliance on fossil fuels and the fact that coal won’t be around forever. Having said that, as I mentioned to the member for Halifax Needham, there is a market for coal, and obviously the folks at Kameron Collieries and the Cape Bretoners who are associated with the Donkin mine appreciate that that’s the fact. They want to produce and extract coal efficiently, with safety being the priority, for as long as they possibly can. 

We know that as a society, we’re moving away from production and usage of fossil fuels for energy. This is an important time, and we want to take advantage of our opportunities. They have been blown away by both the quality and the quantity of what they’re finding in Donkin, which is part of the old Lingan Glace Bay coal seam. There’s still a staggering amount of commodity there, and it will be there for as long as the market needs it.

            With respect to the cap-and-trade conversation, those details are subject to the Department of Environment. We don’t know how exactly the cap-and-trade rules will be applied specifically. Any large-scale industry that’s using energy to produce their particular goods, commodity, or service will be subject to this legislation, these rules. We don’t have any specifics on it at this point. Like Nova Scotia Power and some of the other big entities and operations in the province, they will get the details on the cap-and-trade program. There will be opportunities for them to understand within their own operations how they can reduce their emissions and get under that cap, and if not, roll through the system as it’s going to be set up. We don’t have any specific details at this point, but I know that as details and the legislation unfold from the Department of Environment, we will be in contact with the officials at Kameron Collieries to ensure they’re in the know. They will figure out their plan from there.

            MR. MACLEOD: I guess the concern that I would express to you is that we have heard from Nova Scotia Power and indeed from your own department that there will be reliance on coal-fired energy production in our province for another number of years. As the cap and trade is moving forward, I would hope that the Department of Energy would keep an eye on what’s taking place to make sure that we can get as much advantage out of what we have as a natural resource in our own province rather than relying on somebody else.

            Part of that of course is the benefit it does have to our economy. I know that in your former role as Minister of Transportation and Infrastructure Renewal you have been very supportive of this project. I would ask that you maintain that support and encourage the new Minister of Transportation and Infrastructure Renewal to maintain that as well.

            What is going on with the Donkin Colliery, I don’t know how many people understand the significant impact it has had with very, very little investment by the government itself but indeed by private industry. We have people now who are actually moving home from out West to go to work in the local entities. Anything that the Department of Energy can keep its eye on to make sure that this project remains on the right track. Safety, as you had indicated first, is the most important thing that we can all deal with, but also having investment made in our own community and using our own resources and using our own people to develop those resources is a big improvement for your community and mine, and that’s part of why we’re here.

            I would hope that you as Minister of Energy and a representative of our island at the Cabinet Table will keep an eye on this file and try to make sure that it moves forward safely and efficiently and to the benefit of Cape Breton and certainly to all Nova Scotians. With the use of our own coal, we can help stabilize electricity rates for all the Province of Nova Scotia, not just for our part.

            I’m kind of missing your deputy minister there, because I have given him a hard time in the past on this file, but I certainly do want to be on record as saying that I am very appreciative of what has happened over the course of the last number of months and years to bring this online. I still think there’s a significant role for you and your deputy to play to make sure that this file is kept under scrutiny and at the same time represented in a way that will have a positive impact on our production and meeting the cap-and-trade legislation that has been brought forward.

            With that, I’m going to pass it on to my colleague, but I would appreciate any comments you have. I really believe that this is probably one of the most significant things that has happened to us as far as private investment in a long, long time in our neck of the woods, so to speak.

            MR. MACLELLAN: I thank the member for those comments. In an earlier reply to the member for Halifax Needham, I did discuss at great length my position on Kameron Collieries and Donkin mine. I will say that I can let the Deputy Minister of Energy off the look a little bit here because there isn’t a whole lot of interaction and overlap vis-à-vis the Donkin mine.

            As the honourable member knows, quite frankly my involvement was never at a technical level vis-à-vis Donkin mine. The significant amount of oversight as it relates to the provincial government is Natural Resources, so obviously, there was some relationship with respect to the Department of Transportation and Infrastructure Renewal. There’s some relationship with respect to Energy. I think the member had identified the cap-and-trade legislation as part of that, which really is being led by Environment, but there is clearly a tie-in with Energy.

            For me, this is a local issue, one that I’m proud to be a part of and support with respect to the fact that from an economic development perspective, it’s the best thing to come along in a very long time. For us in Cape Breton to have an entity come in and make an investment well north of $100 million with no ask and no expectations from government other than to apply the rules and regulations, safety being the first one, that’s a good thing.

            Again, having said that, everybody, including those leaders at Kameron Collieries, have their eyes very much wide open about our closing window on fossil fuels and the fact that this can’t go on forever, but they will find a marketplace while there still is one. They want to be the safest and most efficient mine in the world, possibly the last coal mine left a few years from now. Obviously, no one can determine how long that’s going to be.

            With respect to the idea of the Department of Energy and cap and trade and how we’re impacted, when the system comes into effect, we will have close relationships and discussion, communication, and interaction with those companies that are subject to this particular legislation. The reality is we have, again reiterating some of my comments to the member for Halifax Needham, done so much in this province, Nova Scotians have, to be so well positioned and far ahead of the curve in terms of our GHG reductions. We’re the leaders. 

It’s ironic - because the member, as a former coal miner, understands the importance of coal and the way it has impacted all of us in Cape Breton - the fact now that we are leading in renewables. We’re leading in GHG reductions. That gives us the ability, as opposed to setting a carbon price, and having that imposed on Nova Scotia, to pivot to that cap-and-trade system whereby there would be a free, so to speak, amount of credits given to emitters that under that cap, they would be permitted to do for free before the cap-and-trade system is applied.

            Everything that happens in Cape Breton, the sensitivities around job creation and job sustainability, is important for us. The member knows full well our collective involvement and co-operation on that particular file. Again, from the Department of Energy, there is a limited amount of interaction that we would have specific to Donkin mine.

            But as a minister from the area and the MLA for Glace Bay, I will always keep a close eye on the proceedings there, safety being the number one concern for me, as I said earlier. The member would know as well as anyone in the room, at the best of times, coal mining is a dangerous business, so we have to make sure that, when you’re so many kilometres under the ocean and you’re doing this to put food on the table and provide income for the family, that we do it safely.

I can tell you from the mine operators to the employees who are there, that is paramount for them every time they put their boots on and head down to the deeps, and I know that will continue to be the case. We will keep a close eye on that. I’m sure we will have further discussion as the details of the cap and trade are released in the coming months.

[5:30 p.m.]

            MR. MACLEOD: Thank you for your comments, minister. Indeed, we will be keeping an eye on you.

            In all seriousness, it is an important issue, and Nova Scotians have done their share when it comes to carbon emissions. They have worked very hard at getting to the point where we are now, and we are leaders in the country, and we have to keep that in mind as cap and trade moves forward.

            I just have one more quick question for you. We have heard lots of concerns about utility crossing fees and whatnot going on on the rail line on Cape Breton Island. I’m just wondering if anybody in the Department of Energy has had any conversations with Nova Scotia Power, which seems to be the lead on causing the frustrations for the individuals and the crossing fees that we hear of. I know it’s not completely within your bailiwick, but at the same time, because of where you’re from and because of the entity that’s creating the problems, I’m just wondering if you have any thoughts on that that you can share.

            MR. MACLELLAN: Certainly from the department’s perspective, there really wouldn’t have been much by way of engagement on that specific issue.

            I can say in my capacity as the Minister of Energy that in the first meeting I had with Nova Scotia Power officials I did bring this topic up. It’s a source of much frustration for people who have properties that cross over the Sydney subdivision of the CBNS rail line. I know it’s like nails on a chalkboard when we talk about the complexities for some of these residents who want to build property on the Bras d’Or Lakes side, which would require crossing over that rail line.

            Genesee Wyoming, the operator, has a utility fee of $4,000 per utility, and usually there are four associated with a development of this nature. It’s $16,000 just to get started. Then there are the obvious costs associated with power lines, poles, and the installation of the electrical system into the home. In some of the examples, we have seen that the potential bills would be in the $24,000 to $25,000 range, which is astronomical to me. I know that there are requirements for engineering reports and safety, and all those things are critical.

            I could never understand why the cost was so very high. We were back and forth with the rail operator, Genesee Wyoming, which had said, we don’t even apply these fees, it’s Nova Scotia Power really that carries the bulk of the fees. We talked to Nova Scotia Power, and they would say, no, we’re just collecting these on behalf of the rail operator. Really, it was a frustrating back-and-forth for a very long time.

            Recently, as the member would know, we commissioned an independent study by Neil MacNeil. One of the tasks was to figure out once and for all who was trying to apply these fees and how they could possibly be justified. In conversation since that point, since Mr. MacNeil’s report was done, I had discussions with Louis Gravel, the president of Genesee Wyoming. He had talked about working individually with these landowners to figure out how they could at least bundle some of these utility crossings so the $4,000 times four should be a lot less than that. They made that commitment to work individually with the landowners to try to reduce that. Again, there were conversations with Sasha Irving and others at Nova Scotia Power. They would look at the specifics of each individual file and take it from there.

            I’m not shying away from this responsibility because many of the landowners have put this on me because I was part of the discussions for a number of years. But now the details of that relationship with Genesee Wyoming, Nova Scotia Power, and the landowners is subject to the Minister of Transportation and Infrastructure Renewal himself and his staff. They’re working through some of those details.

            I haven’t seen the final report from Mr. MacNeil. I’m not sure if it has been released to the public or not, but if it hasn’t, it should be in short order. I’ll certainly follow up with Minister Hines at TIR to figure out where that is. I know it is something that has been subject to long, frustrating conversations, and the landowners want an answer one way or the other. I really hope that we’ll get them some kind of closure with this report.

            MR. MACLEOD: I would encourage you to indeed follow up as much as you can with your colleagues at the Cabinet Table. With that, I’m going to pass on my time now to the member for Cumberland North.

            MADAM CHAIRMAN: The honourable member for Cumberland North.

            MS. ELIZABETH SMITH-MCCROSSIN: Thank you, minister and your staff. I wanted to ask three specific questions that are in relation to Cumberland County and all of Nova Scotia.

            As you know, Cumberland County is leading the province in green energy, and we would love to set a goal to be leading in the country. We have of course tidal, wind, geothermal, solar, and our natural resource of wood in abundance.

            One of my questions is around the development of geothermal. The Cumberland Energy Authority has been working closely with the province to develop a green industrial park. Our geothermal is a much higher temperature because of our coal mines. I’m wondering if you can give me an update or let me know if this is a priority for your government.

            MR. MACLELLAN: There’s a lot of affinity with the communities that you represent that we have back in industrial Cape Breton. There was a heavy movement with respect to geothermal development. The critical area that we focused on individually back in Cape Breton was that of supplying energy for the community rinks. The rink which your colleague in the PC caucus for Northside-Westmount - he has the Northside Emera Centre, and Glace Bay has the Bayplex, and the Membertou Community Centre is represented by the member for Sydney-Whitney Pier. They have had, I would say, varying levels of success with the geothermal system. I’m not sure if it was a technology issue or the installation. We thought it would be a sort of game-changing technology that we could use as a renewable source of energy for us at home. It didn’t materialize that way.

            I’m not sure, with respect to your particular project, if that was the same thing or not. In a nutshell, we don’t have a whole lot of information specific to your project, but we would be happy to follow up. If you can get me some additional detail, I would be more than happy to check into it. Maybe you can give us a bit of explanation on what exactly it is and where you’re at in the process.

            MS. SMITH-MCCROSSIN: I will certainly get you that information.

            My second question is regarding a line item in the Estimates referring to your petroleum resources. It says you’re expanding on both offshore and onshore oil and natural gas exploration development and production and have over $3 million budgeted for this. I know in Cumberland, we have a huge resource of natural gas. It is being safely extracted in some of parts of the world, and we are importing it and using it. I’m just wondering if, in your budget, you have any plans for researching safe extraction that may be used for onshore development.

            MR. MACLELLAN: We had a discussion at length about the idea of fracking and where we have been and a bit of the history around the moratorium that we brought in during our first mandate. Again, I think the discussion at the time, based on the Wheeler report, identified different approaches and different ways in which we could address the issue of fracking and where we would be as a province.

            Obviously, based on a number of the opinions of those who were making the decision at the time, the stakeholders and the various departments, the moratorium was the optimal decision for Nova Scotians at that point. I still believe the social licence wasn’t there at that point, and I still don’t think it is. But, again, this is sort of my personal perspective.

            Having said that, I think the member was in her seat when I used the example and the comparison of the toll highway conversation and the fact that the consultation really opened up the discussion once and for all so that we would have it with Nova Scotians. I do believe that we didn’t do a great job collectively telling the story of the full picture of what the potential is for natural gas. I think that what we’re doing now with the onshore atlas, identifying where the potential for natural gas is, is important. I think that when we get that information once and for all, and we can have a fulsome discussion about fracking, we still may not have a social licence for it.

            Although the moratorium is technically in place, I still think we left a lot of questions unanswered. For the sake of industry, for the sake of stakeholders who understand the importance of potential natural gas moving forward and that we could use it as a viable energy source here in the province, we have to get that information. I think the onshore atlas, finding where it is - Cumberland seems to be one of the particular spots - but not only that, to your question and to your point, the methods and the technology since we brought in the moratorium four years ago have changed.

            Getting that information and in an all-encompassing document and getting it out there to Nova Scotians, if it requires that full-stop public consultation, that’s what we should do. I think that we owe it to each and every citizen to explain what the dangers are, what the safety regime would look like, and what the potential for economic development would be. Job creation is important everywhere in this province. I think that we have to put all the information on the table.

            We’re certainly not moving away from the fracking moratorium at this point, but when we have that atlas completed, not only will we have a better sense as to where the natural gas could potentially exist in the province, but also the ways in which the process for hydraulic fracturing - how we would do it, the type of components that would be in the water, and the different processes that now exist that probably didn’t exist a couple of years back. That’s going to be the key information. Our department would like to do that full analysis and have that information, present it to the public, have it out there for public consumption, and find out where Nova Scotians are. It may not lead to any different conclusion, or it may lead to a refreshed conversation about where we go with respect to fracking in Nova Scotia.

            MS. SMITH-MCCROSSIN: Thank you for that response. I agree that public consultation is the first step and very important. But I would like to share that if the people of Cumberland were supportive, we would love to see that development and use the resources that we have in our area.

            My third question - I believe the NDP had a question around the government’s priority for using natural gas to heat government buildings. If we’re going to continue to import natural gas and not use our own resource, would the government be willing to consider using our own wood resource, biomass heat, for heating our government buildings?

The reason I’m asking this question is because we have a huge forestry resource in our province. In Cumberland North and northern Nova Scotia, we have 14 private woodlot owners who are currently putting together a business plan. I have already met with DNR. They would like to follow the lead of what’s happening in Prince Edward Island, where they’re using biomass and their local wood resource to heat government buildings - is this something your government would consider?

[5:45 p.m.]

MR. MACLELLAN: Certainly, it’s a discussion that we’d have to have in concert with two other departments - TIR as the facilities operator for provincial buildings, for government buildings, and, secondly, Natural Resources. I don’t have a wealth of information around the process and the requirements for biomass and how we would do that, the efficiencies around those things, so quite honestly I don’t have enough depth on that particular topic, but again it’s one that we’d be happy to discuss with my colleagues at DNR and TIR.

            MS. SMITH-MCCROSSIN: Thank you for that response. The reason I asked the question is when we’re looking at our own economy, if we could be using our own resources rather than importing and having our monies leave the province. It makes good business sense.

That ends my questions. Thank you very much.

            MADAM CHAIRMAN: We’ll switch over to the NDP caucus.

            The honourable member for Halifax Needham.

            MS. LISA ROBERTS: I have just a last few questions. I recognize that some of your colleagues are here waiting for their round.

            As part of its Low Carbon Economy Fund, the federal government has promised Nova Scotia $56 million over the next five years to support projects aimed at reducing greenhouse gas emissions, including enhancing existing Efficiency Nova Scotia programs.

            Could you please tell me when that money will flow and what is the department’s plan for spending those funds?

            MR. MACLELLAN: We’re looking at, in discussions with the federal government, the flow looks to be late this fiscal, best case; early next fiscal, worst case. So, it’s coming, in government terms, certainly in the near future. At this point, really the member is probably aware that this particular fund requires matching dollars from the provincial government so clearly with that being the case there’ll be an element of negotiation, an element of prioritization, vis-à-vis these projects so we’re working with the federal government. Obviously, the efficiency programs will be a large part of that discussion, so how exactly we invest and leverage those dollars is a critical part of the discussion now. Again, we’re going to roll that out in consultation with the feds in very short order.

            MS. ROBERTS: Finally, can you identify what items in your budget that we see in the Estimates are funded by the federal government, if any - are there federal dollars here?

MR. MACLELLAN: No, everything allocated and indicated in our budget is all provincial dollars.

            MS. ROBERTS: Thank you very much.

            MR. CHAIRMAN: The honourable member for Clare-Digby.

            MR. GORDON WILSON: Thank you, Mr. Chairman - it’s good to see a new chairman here.

It’s always an opportunity for me, as your department staff would know, any time there is talk about energy, renewable energy - tidal especially - if I miss a chance to state not only the good work, but I’m really pleased with your department. I notice Sandra Farwell is not here, I should mention her name - and everybody else, and the support that they’ve given us to this tremendous opportunity.

            I’m not going to belabour a lot right now with comments, but I would suggest maybe in fairness to the minister that we recess just for five minutes, for you to have an opportunity to have a break.

            MR. CHAIRMAN: Let it be so.

            [5:51 p.m. The committee recessed.]

[5:58 p.m. The committee reconvened.]

            MR. CHAIRMAN: The honourable member for Clare-Digby.

            MR. GORDON WILSON: Thank you again, Mr. Chairman. Again, it was interesting to sit and listen to the questions from the Opposition. It’s also similar to yesterday - I sat and listened intently, and there were a lot of questions asked of the Minister of Fisheries and Aquaculture - another area that I have a lot of interest in.

What was interesting, it being a Treaty Day celebration, was that I never heard any questions around the Mi’kmaq and any initiatives in the fishing industry. We heard some excellent responses from the Minister of Fisheries and Aquaculture in regard to that.

I noticed that in your opening remarks you did talk briefly about some initiatives with First Nations here in the Province of Nova Scotia that the Department of Energy is participating in. I have a very good feeling that probably not a lot of people are aware of that. Again, seeing that this was Treat Day week this week, I’d really like to have some idea of what the Department of Energy is doing in that world.

[6:00 p.m.]

MR. MACLELLAN: Thanks to the member for that question. Obviously, in discussions with the KMK organization, the First Nations chiefs who represent our strong and proud First Nations communities, the Mi'kmaq communities across the province, we recognized the need for home efficiency investment and with respect to their community development many of the great things that are happening across our First Nations communities here in Nova Scotia required a specific investment for home efficiency.

So, part of our budget, as was alluded to in the opening, was $1.5 million for the Home Efficiency Program so we can apply that directly to the First Nations communities, the Mi'kmaq communities here, so they can access funding and continue to build on the strength of their community.

            Again, across many departments and jurisdictions in dealing with the KMK organization, they are true leaders in this province, and we’re fortunate to have a great relationship and the respect and, as you mentioned honourable member, the importance of Treaty Day, what that represents for all of us. The Premier always remarks that we’re all Treaty people and I know we all in this room, of all political stripes, believe that to be the case.

            The fact that we can make that investment and partner with the First Nations communities is significant to us and we’re happy to do that.

            MR. GORDON WILSON: Again, back to your opening statement, I listened intently at the very start and there were a lot of conversations around Nova Scotia Power and electricity rates. Certainly, I think all of us could attest to the fact that we’ve come a long way.

            I listened to all the concerns that the Opposition Party had. You made one statement and I think it was around accountability, that we have a greater amount of accountability than we had in the past. I know that’s a broad statement in a lot of ways, but I think it’s also an important statement for Nova Scotians.

            Can you elaborate on that a bit, on what that means to Nova Scotians as far as accountability goes?

            MR. MACLELLAN: Sure. Thanks to the member for that question. Again, with the renewable to retail and having the opportunity as we move into the renewable sectors and renewable energy, which have been prominent over the last number of years but are going to be more so the case over the next decade, I think that the whole notion and the effort toward adding competition to Nova Scotia Power was critical for us.

            Again, part of the conversation earlier was with some of the questions from the NDP caucus, we saw a tremendous rise in power rates during my first three years in the Legislature. Now the lion’s share of that, that was certainly connected to the fluctuating international commodity price for coal, so that was a reality, coupled with the fact that Nova Scotia Power had made significant investments in the Maritime Link that were costed at that point.

            Again, we know there are a number of issues that would be identified as critical and the daily conversations at the MLA offices vary over time. In my first three years here it was all about power rates. Again, we’re not going to rewind the clock and start pointing fingers at why we were there, but the reality is that now I think people have appreciated some level of stability.

There are a number of factors that contribute to that. I’m not here to take credit as a government or a department for that in its entirety, there are a significant amount of reasons why. Quite frankly, some of those investments that were decided upon with the Darrell Dexter Government are partly the reason why we’re so far ahead with respect to GHG reductions.

            On a personal note, we had the conversation at that time, and I thought they were certainly ahead of the curve and ahead of their time in terms of making that decision and supporting Nova Scotia Power and Emera in the efforts to bring the Maritime Link project to fruition. So that is part of it.

            As we look at 2017, the next three years, the fact that we have rate stability that people can watch and ensure that we don’t have a jump in power rates is important. Again, as we get into renewables, the reality is that, with the renewable to retail program, the cost of adding renewables to the grid was so extremely high over the last few years. But we’re seeing prices in these critical areas and the cost to add renewable energies to the grid decrease, which is a good thing. I think that when you look at wind and how it has come down with respect to the cost of generation, the tremendous opportunities we have in solar - and we’re doing a similar program to the COMFIT program in the solar area.

Of course, the member knows all too well we have staggering potential in the Bay of Fundy with the FORCE facility and what could happen there on tidal energy and power derived from our extreme changes in the tides.

We’re on the cutting edge of this renewable energy conversation with the potential of the Atlantic grid and having an Atlantic partnership where we’re all interconnected in not only the consumption but the sale and distribution of energy moving forward. We’re at the ground level of something pretty spectacular as it relates to energy supply not only for Canadians, but in the northeastern United States there is an extremely lucrative market.

Quite frankly, in my discussions in the trade portfolio, spending time in Washington and at a number of conferences with U.S. governors, particularly those in the New England states, we’re in a great position to be a seller. I think that’s important. Quite frankly, decisions that the Province of Nova Scotia and our Atlantic partners have made to get us ahead of that renewable energy curve are going to come in critical because states, like Massachusetts, that have massive energy demands are far behind. They’re looking at rushing into action on some things like offshore wind and trying to figure out a way to access our hydro power that’s going to come on line in short order vis-à-vis the Maritime Link.

With all those things being said, rate stability and having that steady supply are important. As we look at maximizing where we’re at now with respect to the wind power we have on our grid, because of its intermittent nature, when we add a steady supply like the Maritime Link and have that hydroelectric power feeding our grid, then we can reduce our reliance on some of the fossil fuel generation. Of course, again, when we have our capacity satisfied we can move it into markets that certainly are buyers at this point.

All things being told, there is some good news on that front, and we’ll continue to work on that.

MR. GORDON WILSON: At the very end of the questioning from the Opposition Party, I was intrigued to hear the member for Cumberland North ask a question around biomass as an opportunity. A lot of people probably aren’t aware of the fact, but the Université Sainte-Anne is actually leading the country in its energy savings and its innovation. They tout themselves as the greenest university in Canada. They converted from oil to biomass about four, maybe five, years ago, I believe. The savings for them was approximately $200,000 a year in heating bills for oil. They have wind generators. They have solar. They’re a leading example of what our institutions can do in that world with biomass.

Not only that, they’ve created a tremendous opportunity in our area for local companies to produce those chips for them, which also supports the forest industry because markets in that area are difficult in southwest Nova Scotia. I do commend them. It was very encouraging to hear the comments from the member for Cumberland North around biomass.

I did listen to your answer. It wasn’t directly related to biomass, but I would be interested in knowing if you had any further things that you’d like to add in that world as far as opportunities within the Department of Energy and biomass development as an opportunity and institutions in Nova Scotia.

            MR. MACLELLAN: Again, looking specifically at biomass and the opportunities for energy production, those are questions more suited for DNR, the issue and those questions around supply. Of course, the other partner in some instances - not particularly for universities, obviously, but for provincial and government buildings - would be the Department of Transportation and Infrastructure Renewal. They would be the lead on those two particular topics.

            However, one of the really valuable discussions and questions we had related to Estimates today around this topic of how government sets the table for these programs was during the back-and-forth with the member for Inverness. He talked about COMFIT. I think many are familiar with the COMFIT wind program and the fact that it was largely oversubscribed. We were thinking 100 megawatts, and it turned into 150 megawatts before it was halted. That was a program that was really very successful. Again, the subscriptions to that were more than we thought. Some of the COMFIT was with respect to wind and, for the honourable member, there were some elements of biomass in that as well.

            In fairness, I think there was a bit of a learning process in terms of how we would release these things for the public. Again, the member for Inverness brought home this point about the new solar program we have under the Department of Energy. In the old COMFIT, you had wind and biomass. In the new solar program, we’re going to put caps on the annual cost of the investment that we make over a three-year period.

            I think more importantly, and a little differently from the way the COMFIT program was run and the mechanism by which it operated, there was no open procurement. The idea for COMFIT initially was that it would be a competition, add renewable energy to the grid, and hopefully bring down the cost. I think that by way of open procurement, again based on the discussion with the member for Inverness, that’s your best way. Having the free market decide these things and bid on these particular projects and access to this potential in solar is the best way to add cost-effective renewable options into the grid. That’s one of the ways of moving forward.

            You mentioned Université Sainte-Anne. Our home university of Cape Breton University applied and then was successful through the COMFIT program and has a wind turbine that has made a tremendous difference in their energy efficiency and, of course, in their energy costs. All of those programs are good community programs. I think that the learning experience as we get into renewable energies, whether or not you’re a private sector operator, an investor, or in government crafting policy, there’s lots to be learned. I think that we have learned a lot over the last five years, and we will learn more over the next five.

            MR. GORDON WILSON: This is the last question I have for now, and I’ll turn it over to my colleague to my right here.

            You had talked about energy storage. I feel I have probably one of the most knowledgeable communities in renewable energy in the province, a very engaged community. They have hired a renewable energy position within the municipality of Digby. They have certainly done their homework as far as positioning themselves with tidal opportunities. We recognize that in the harbour in Digby we have the closest open deep-water port to access the servicing of the tidal industry in Nova Scotia. We also see probably one of the best wind regimes there is in the province. The farm that Nova Scotia Power/Emera has down in Digby Neck is one of the most productive that we have. I can go on and on. The mink industry has harnessed anaerobic digesters, and we have hydro power coming out of there.

[6:15 p.m.]

            Interestingly enough, one thing we don’t tout enough, and it’s a good thing and a bad thing, is we have a bit of a pinch point, which you’re probably aware of with the transmission lines coming down our ways. We just have no more ability to put out any more power. That’s kind of interesting in a way, when you think of it. What it means is that the communities we have down in that area are powered by hydro, wind, and other various renewable sources. It’s probably the only place in the Province of Nova Scotia that actually can say that 100 per cent of its energy generation, and that would include tidal at Annapolis Royal, is generated green. We’re quite proud of that.

            In saying that, it also creates again some challenges. We wish we could see another wind farm built - great economic drivers in our communities, provide great resources for our municipal government. I believe the one in Digby Neck provides approximately $180,000 a year in revenue for the Municipality of Digby, which they again agreed to reinvest in the green energy opportunities.

            We know we have tremendous tidal opportunities in Grand Passage, Petit Passage and the Digby Gut - huge opportunities. Fundy Tidal Inc. are going through their challenges right now, but they’ve shown that small tidal generation opportunities are another emerging opportunity in the world that needs to be looked at, as far as R and D goes.

            Between that and all the conversations I have with my colleagues, trying to look at a path forward is something we really have worked hard on. I want to thank the department. They’ve done a great job in pulling together at the request - through the last Minister of Energy - we had a working group that brought together all the government entities that had interest in tidal. I thank the ministers and deputy ministers and the support staff and Sandra Farwell will help with that, so that we could all try and keep one step ahead of the industry as it emerges.

            Stating all that, the real opportunities we see now are in energy storage, as I mentioned at the start. So without bragging about my community any more and what we see as opportunities, energy storages may be our future down our way. Can you fill me in on where we’re at with energy storage?

            MR. MACLELLAN: Thank you, member, for that. You said a number of things in that question and the most accurate of all the things you said is your ability to go on and on. (Interruption) You’re welcome, Opposition.

            Member, you know what? In all seriousness, your region down Digby County way, the amount of activity there really is impressive and it’s part and parcel of the natural environment that is there but it’s also the investment of the early pioneers who saw those opportunities and took the risk. This is what it’s all about and I will quickly address the specifics of your question.

            We have taken a number of steps and made investments with the innovation grants through our Department of Energy through Innovacorp on this whole notion of energy storage and battery storage. It really is the way of the future. Anything we do on the innovative side and anything we do to reshape renewable energies for the world, which we have the potential to do on many fronts - tidal and energy storage being two - it’s quite frankly not going to be done by government. It doesn’t matter who is in the Department of Energy, from a political perspective, and it doesn’t matter the government of the day, we don’t have the resources and, quite frankly, government can’t have the focus to reshape the specifics of things like energy storage.

            In saying that, it’s incredible, as the Minister of Energy, learning what I have over the last number of months, it’s incredible to understand the amount of private sector activity here. We are at the very leading edge of battery and energy storage at Dalhousie University. A professor by the name of Dr. Jeff Dahn is one of the foremost leading PhDs in this exact conversation. He’s working for none other than Tesla. So Tesla, that has shaped many conversations around technology advancement and the future, has a stake and a very vested interest right here at Dalhousie University in Halifax. That’s significant. They’re the things that government policy can help to a certain extent. Innovation grants are all part of the mix, for sure, and you need them, but at the end of the day, we’ve got private sector monsters looking at Nova Scotia as the breeding ground for a new age of energy storage.

            Again, with what Big Moon’s discussing as it relates to tidal energy in the Bay of Fundy - I know we often use this expression when it comes to energy, but these things are interrupters. They’ll change the landscape for decades to come. With respect to Big Moon, getting that technology right and having it operate in the Bay of Fundy - the direct impact is mind-blowing, but the indirect requirements that they would have in terms of workforce and supplies and the private sector operators that they would need to have in place just to support what they would be doing down at the FORCE site in the Bay of Fundy - it’s unlimited.

            Again, for us - I’m learning, and I’m at the bottom of the learning curve here, but I feel privileged just to see the potential that we have with the Energy file in Nova Scotia. We’re a modest province of fewer than 1 million people - growing by the day, but still fewer than 1 million - and we’re at the forefront of the new world of energy. It’s an incredible thing to be part of. We’ve got to make sure that we do the diligence. I’m surrounded by tremendously competent people in the Department of Energy who understand what policy we need to get us there, and we’ll continue to work to that end.

            Energy storage is just one of the many fascinating developments we have in the Department of Energy over the next couple of years, in the energy discussion. Ten years from now, the Province of Nova Scotia will be synonymous with game-changing renewable energies for the globe.

            MR. CHAIRMAN: The honourable member for Halifax Citadel-Sable Island.

            HON. LABI KOUSOULIS: Minister, earlier you were discussing the merits of Muskrat Falls, and I just wanted to explore, for better understanding, certain areas of that contract between our province and Newfoundland and Labrador. In the news we have seen that Muskrat Falls is approximately $5 billion in cost overruns, which is about 65 per cent of the project. Perhaps you could elaborate on any changes that those cost overruns might have to affect us, or are we and the ratepayers of this province protected from those changes, and how that came about?

            MR. MACLELLAN: We are protected by way of the agreements that were signed back when the project began. Aspects of the Maritime Link for us are completely separate and distinct from Muskrat Falls. Those cost overruns don’t impact the agreement we have and won’t impact the cost per kilowatt hour on our rate base.

At the end of the day, we made those agreements in earnest. Our portion, the aspects that financially impact Nova Scotia, are both on time and on budget.

MR. KOUSOULIS: Excellent. Thank you for that. That’s reassuring for all Nova Scotians.

I understand that in 2013, when that contract was renegotiated and the ratepayers were protected, there was also an agreement to buy excess power. Under buying the excess power, maybe you could talk about how much of that power is available to us. I think that, being green power, it’s great that it is available to the province. At what cost is it available to us? Is it cost effective for us to be purchasing it? Perhaps - it might not be today, but with inflation, we all know that power rates historically do go up every year.

            MR. MACLELLAN: The agreement certainly is one that looks to be fruitful for the Province of Nova Scotia. We have access, we’re entitled to a guaranteed 20 per cent block of energy for 20 per cent of the cost, that’s the initial agreement. On top of that, though, we’re entitled to an additional 20 per cent at the market rate at that time, so the New England spot rate at that time, which I just wanted to clarify with Kim, but we predict that would be lower than where we’re at now. Obviously that would be a significant block of energy that we would have the ability to trade. Then that’s again talking about being exporters and playing in that trade world, we’re going to have a coveted amount of energy supply. That’s where it will gain that economic benefit for Nova Scotia.

            MR. KOUSOULIS: Excellent, that’s good to hear. Just to recap, I’m very pleased to hear that the ratepayers are not going to be impacted by the cost over-runs and that was a good amendment that you put into the agreement in 2013 and I’m glad to hear that we can buy more power as well.

            My understanding, and this will be just a quick question, my understanding is that we are an energy island here in Nova Scotia and everything we use, in terms of energy, we have to produce ourselves and I know historically this has caused us to be one of the highest power rate provinces in the country.          I have noticed that in the last four years we haven’t had power rate increases, which has brought us more to the national average.

            One thing I heard - an engineer explained it to me but it was tough to fathom and I’m not sure if you or your department can explain this at this point but perhaps we could just get more information on it at a later date - when we connect Muskrat Falls to the province we’ll have a pipeline of energy coming from Newfoundland. Because of that pipeline of energy it’s almost like a ying and yang with the province where we can now import more power from, let’s say Quebec, from Churchill Falls, which is not only green power but quite inexpensive power, and we can do it without significant upgrades to the power transmission lines.

            From what I understood, one of the reasons that the previous government pursued Muskrat Falls was upgrading those transmission lines would have been a great expense but one of the - I’d say by having Muskrat Falls connect to the province, one of the benefits we’re going to get at very little cost is we can import, I believe it’s almost the same amount of energy through New Brunswick from Quebec. Is that partially accurate, in terms of how energy distribution works in the province and how we could tap into more green energy, which would be at a much lower cost than how we’re producing energy at this point?

[6:30 p.m.]

            MR. MACLELLAN: To the member, your assumption is correct. This effectively establishes an energy loop, so we’ll have access to Hydro-Québec through Québec and New Brunswick and of course coming the other way vis-à-vis the Maritime Link.

            One of the issues though, as we talk about the Atlantic co-operation on energy sharing and how we’re going to venture into that idea of energy export in the years ahead - the Atlantic Provinces have worked on a plan and a study with the federal government. Our national partners are at the table because they see the importance of this and our ability to get our energy to the northeastern United States. They talk about what we need by way of the regional transmission lines and what the priorities would be.

            When you look at that energy loop, how we’re all going to be interlinked and where the strengths are and the investments are required - one of the things that we have pretty much confirmed at this point is that when that study is completed, the first phase, the critical piece, is upgrading the transmission link between Nova Scotia and New Brunswick. That will obviously have a direct impact on us.

            Strengthening those lines and bolstering the ability and the capacity is really going to be a critical investment, but that energy loop is key, and that’s where we’ll be in very short order.

            MR. KOUSOULIS: I’m going to pass questioning on to my colleague for Chester-St. Margaret’s.

            In closing I would like to thank the department for stopping the must-run on the Port Hawkesbury mill, where we were actually burning 24/7 hardwood to generate energy. I do understand that this is not an efficient way to generate energy, and it’s burning wood. It’s a great practice that you stopped that because that’s harmful to the environment. The previous regulation that was passed by the NDP saying that burning wood is renewable energy - just because wood grows doesn’t mean we should be burning it and putting the carbon into the atmosphere. I would like you to pass that on to all of staff at the department to thank them for looking after the environment.

            MR. CHAIRMAN: The honourable member for Chester-St. Margaret’s.

            MR. HUGH MACKAY: Minister, like my colleague from Clare-Digby, I come from a rural constituency, and I’m pleased to represent that segment of the Nova Scotia population. I think on the South Shore in Chester-St. Margaret’s we’re also doing some unique things with biomass as well. We have Sustane Technologies down in Chester, which is actually taking 90 per cent of the black bag trash from the Chester municipality and turning it into biomass pellets. I think that’s an admirable thing, that we can see growing that company into an export market both domestically and internationally. But my question actually isn’t in regard to biomass. It’s about sustainable transportation.

            I recently had the opportunity to attend the opening of the Rum Runners trail, which extends now unimpeded from Halifax all the way to Lunenburg. This past weekend, I was glad to celebrate the Cycle for the Cure from Mahone Bay to Halifax. I think that that was only achieved through the contributions or the participation of the department through the Connect2 program. I’m just wondering if you can tell me, does the department consider if the Connect2 program has been successful, and if so, how you can continue on that success?

            MR. MACLELLAN: Member, thank you for the question, it’s a good one to finish off with towards the end of the discussion on energy. This is one that the Connect2 program has had a tremendous impact. The focus of it is bang on, having connecting points that are two kilometres in distance or less is a good way to do it. Obviously we’ve got a number of options through the Blue Route, through the Department of Transportation and Infrastructure Renewal that sort of is your large scale connection.

            With respect to Connect2, it’s short distances but it’s a significant amount of infrastructure. When you look at distances of that nature and $600,000 per year, those projects that get the green light have a significant effect on active transportation and through the department some of the initial research understanding after these investments are made how they really impact the community, they make a real difference.

            I know there’s a significant investment under the Connect2 program that runs along the Sydney-Glace Bay highway in my neck of the woods. Based on my previous mandate in Transportation and Infrastructure Renewal, I can tell you that a four-foot wide flat, paved surface is not a cheap endeavour, especially when you are doing it along the highway, the amount of operational costs and the procurement cost to put that together is significant. But when it’s done, it’s worth it.

This one, in particular, was done over a number of phases. I know the one down in your region, the others that we’ve done in recent times, the announcements that were made, they only impact specific areas but it adds up over time. I think when you have the results and the data that suggests that the activity increases - walking, cycling, getting out there and getting out of the vehicle - I think that’s a tremendous thing.

            These are certainly line items on a budget that don’t seem like much but when you see them at play in communities, and it’s not specific to rural communities when they happen in HRM, you see the amount of active living and active transportation that’s utilized here in the city and in the municipality, it matters.

            I think that for us you’ve got your monster items in the budget and then you’ve got the smaller, line items. Sometimes those small items are worth bolstering and fighting for as well. So the Connect2 is a good program and again, I think it’s one of those legacy pieces for successive governments that regardless, when you come in I think that these things are in place and they make sense so you continue to build and make the community stronger. It’s a good program and I do appreciate you asking that question, just to get it on the record.

            MR. MACKAY: Thank you, minister.

            MADAM CHAIRMAN: Any more questions from the Liberals? Ms. Diab.

            HON. LENA DIAB: Madam Chairman, I wasn’t going to ask but it’s in regard to the Connect2 Program. I just want to say I sat here all evening and I hadn’t heard that question. It was the one item that probably impacts the area that I represent in Halifax Armdale. On behalf of those constituents, I really want to thank the department and whoever thought this out because what you said is very true - a little bit of money has made a great difference in the constituency I represent, in particular to the Chain of Lakes Trail that starts off from Joseph Howe and it now goes around my neck of the woods that I represent and Fairmount. It goes all the way to Bayers Lake and now it’s connecting to Timberlea and so on. The people who are using it to bike, to walk, to do things they never thought they could possibly do, it’s marvellous, so keep that up.

            I don’t know if this is something that’s going to be ongoing. I certainly hope so because there’s a lot of trails. I also represent an area of Northwest Arm Drive, the Long Lake Park Trail and that certainly has benefited as well from sustainable transportation activities and funds.

            It is not a lot of money when you look at other items and budget items, but it certainly has affected people in a very positive way, so thanks for that. I guess the only question is, is that something that’s continuing? That would be my only comment. Thanks, on behalf of my residents and constituents.

            MR. MACLELLAN: Certainly there is no question about the fact that the program will be continued and we’ll look to the same sort of budget parameters in terms of the overall investment. Obviously, this is done by way of committee and the fact that you weren’t specifically aware that this was happening until it happened is a good sign that there is no politics - we’re not picking the communities. This is done by way of a neutral, objective arm’s-length committee that decides it based on priority.

            We’ll continue to do that each and every year and some regions will get some investment next year that didn’t have it before, so it’s all good and we share it around as best we can.

            MR. CHAIRMAN: Would you like to give closing remarks?

            MR. MACLELLAN: I just want to thank everyone - the Opposition, the government caucus for the questions. It’s a great discussion and I would say this is my fourth Estimates now and you actually learn a lot - not only about the communities that are represented by the MLAs who are here asking questions and the priorities, but sometimes you open your eyes to things when members make comments, and especially when there are opposing views, that’s helpful moving forward. So it’s good to get different perspectives on things sometimes and you’re not sort of singing from the same song sheet, because it can really bring awareness to things that you possibly overlooked, so I do appreciate the opportunity for government members and the Opposition members to ask questions and bring things to our attention.

            I want to close with - I’m very fortunate with the Department of Energy and with the Department of Business who are here patiently waiting. We’ve got great staff who are committed to doing good things on behalf of Nova Scotians in a very objective way. I’m appreciative of the Department of Energy’s time, and I know the gang from the Department of Business are ready to go. With that, again, I appreciate the opportunity to close.

            MADAM CHAIRMAN: Shall Resolution E6 stand?

            The resolution stands.

            Thank you. We’ll take a short recess while you roll over.

            [6:43 p.m. The subcommittee recessed.]

            [6:44 p.m. The subcommittee reconvened.]

            MADAM CHAIRMAN: Order, please. We will now begin the Estimates of the Department of Business.

            Resolution E2 – Resolved, that a sum not exceeding $196,137,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Business, pursuant to the Estimate.

            MADAM CHAIRMAN: I will now invite the Minister of Business to make some opening remarks and introduce any staff.

            HON. GEOFF MACLELLAN: Thank you, Madam Chairman. I am pleased to be here in my capacity as the Minister of Business and talk about the 2017-18 budget for our Department of Business, and of course answer the many questions that I am sure you all will have.

            Before I begin, I would like to acknowledge the great staff that we have at the DOB and the five Crown Corporations. I discussed in the Department of Energy Estimates the learning experience. I’m truly impressed by the tremendous amount of work that is conducted by the five Crown Corporations that we have under our department. Each of them serve a specific function that really support business development, growth and sustainability in the province, so I’m proud to have a relationship with many of the Crown Corporations.

            We have some of the senior leadership here today, should we get specific questions related to their respective Crown Corporations.

[6:45 p.m.]

            Of course, we have Una Hassenstein sitting beside me. Una is the executive director of the Department of Business, and she is happy to be here today. Thanks for being here, Una.

            We are joined up front by Louise Comeau. Louise is the manager of financial services at the Department of Finance and Treasury Board serving the Department of Business.

            Many of the CEOs of our five Crown Corporations are also sitting behind me, a talented and competent group, to say the least, and we thank them for being here as well.

            I would like to thank Mr. Stephen Duff, the outgoing president and CEO of Innovacorp, for his extraordinary service to our province. Friday was his last day at Innovacorp. He left a tremendous legacy, and he has done some great work there developing and creating innovation and collaboration among many entrepreneurs here in the province. We’ll miss Steve, and we know he will do great as he conquers his new challenges.

            I want to wish Malcolm Fraser, the new president and CEO of Innovacorp, a very warm welcome. I got the opportunity to meet Malcolm. He’s going to do a great job and align with the momentum that Stephen Duff had built. We know he’s going to be great.

            Madam Chairman, I request permission to substitute staff if needed. I’m sure the Opposition is okay with that should there be questions specific to Crown Corporations or something else.

            I say this very seriously. This government really is committed to doing business differently, and that certainly is the motto at the Department of Business. We’re creating an environment where business can thrive, and we’re advancing strategic goals like growing exports and tourism, supporting innovation in start-ups, increasing immigration, and boosting youth retention and employment.

            Government’s role, led by the Department of Business, is to create the conditions for private sector growth. That was the principal task given to us when the Department of Business was created in 2015. It was also one of the chief recommendations of the One Nova Scotia Commission. Of course, we take that role very seriously. It informs our thinking and guides us in our decision-making. Government, our five Crown entities, and Invest Nova Scotia are better aligned than we were three years ago. We’re advancing a common economic agenda, and so far, it’s working.

            One only needs to look at our record-breaking tourism numbers, our soaring seafood exports, our growing ocean sector, and our thriving start-up community to know that this is the case. We rely on our five Crown Corporations to advance government’s priorities. They also go above and beyond to serve businesses, citizens, and visitors every single day. I would like to use this opportunity to briefly introduce each Crown Corporation and highlight some of their achievements.

            I’ll start with Innovacorp. Innovacorp is Nova Scotia’s early stage venture capital organization. They support entrepreneurs and start-up companies at their early stage of development. Innovacorp finds, funds, and fosters innovative Nova Scotia start-ups that strive to change the world. The young, knowledge-based companies Innovacorp invests in and assists are innovative, globally competitive, and great job creators, particularly in rural areas.

            Take venture capital investment, for example. Last year Innovacorp invested $5.6 million in Nova Scotia start-ups, providing the capital technology companies need to launch, grow, and succeed. Innovacorp’s $5.6 million investment leveraged an additional $18.3 million in venture capital and private equity. The majority of those sources were from outside Nova Scotia.

            Innovacorp also provides hands-on business guidance to the companies it invests in. In 2016, 29 promising companies employing a total of 350 people worked out of Innovacorp’s world-class incubation facilities. Those companies are developing cutting-edge products like drugs that treat superbugs and solutions for detecting carbon dioxide seeping from soil.

            Innovacorp also delivers excellent programming that helps start-ups launch and grow. In August, Innovacorp announced the expansion of the popular Spark competitions across the province. The winners of this year’s Spark competitions will gain financial support as well as mentorship from seasoned business professionals. Innovacorp is also running three business acceleration programs for ocean technology start-ups, two programs for clean technology ventures, and one for med-tech companies.

            Innovacorp is also leading Momentum Cape Breton, the new technology hub in Sydney, located at New Dawn.

            Next we move on to Nova Scotia Business Inc. NSBI is the province’s business development agency, as we all know. Government has mandated NSBI to work with Nova Scotia businesses to grow exports. To do this, NSBI works with businesses to explore new markets, help sell goods and services abroad, identify business partnerships and opportunities, and provide business advice, solutions, and financing.

That strategy is working. Twenty-six NSBI companies became new exporters in 2016-17, with client-reported sales also increasing by 31 per cent. Already this year, NSBI has met with 535 clients throughout Nova Scotia in over 670 meetings. Two-thirds of those are companies in regions outside the HRM.

In addition to boosting exports, NSBI is responsible for attracting companies to our province, with a special focus on growing key sectors like oceans, ICT, seafood, and agri-food in co-operation with other government departments like Fisheries and Aquaculture, and Agriculture. NSBI also administers the Film and Television Production Incentive Fund. I’ll speak specifically about our screen industry a bit later in my remarks.

Next we move on to Tourism Nova Scotia. Tourism Nova Scotia is a Crown Corporation responsible for growing Nova Scotia’s tourism industry and maximizing the value of tourism to Nova Scotia’s economy. In 2014 the One Nova Scotia commission identified a significant goal for Nova Scotia’s tourism industry: to increase tourism revenues to $4 billion by 2024 - a 10-year span. To that end, Tourism Nova Scotia has developed a new export strategy that focuses on attracting more first-time visitors to the province, investing in markets of the highest return, developing and promoting world-class experiences, and building tourism confidence.

Tourism’s new approach is working. More people are visiting the province, and businesses and communities across the province are benefiting. Through Tourism Nova Scotia’s EXCELLerator program, tourism operators are developing compelling experiences that are building on our cachet as a vacation destination and motivating travel to the province - experiences like Dining on the Ocean Floor, which has received extensive international press coverage.

We expect 2017 to be another record-breaking year. Canada 150 events like the Rendez-vous 2017 Tall Ships Regatta and free access to Parks Canada sites have been great for Nova Scotia so far. As of the end of August, visitation to the province was up by 9 per cent over 2016. Compared to the same period in 2015, we have seen growth of 18 per cent in non-resident overnight visitation. Tourism revenues are also increasing, and we expect revenues to surpass $2.7 billion for 2017.

Heading into 2018, the province, Tourism Nova Scotia, and industry stakeholders will continue to work together to address areas related to capacity, quality, and competitiveness.

Our next Crown Corporation is Waterfront Development. Waterfront Development redevelops and revitalizes our waterfronts. Thoughtful planning, development, and management of our waterfront stimulate our economy and serve the public interest. Waterfront Development is helping to build the province’s vibrant oceans sector through exciting projects like the new Centre for Ocean Ventures & Entrepreneurship, known as COVE. COVE, located on the Dartmouth waterfront, will house ocean technology start-ups and small and medium enterprises, and will be a catalyst for innovation in commercialization. It’s on schedule to open in Spring 2018.

The Halifax waterfront is another strategic property and our most-visited tourism destination, with strong growth year over year. The backbone of the waterfront is the Halifax Harbourwalk. It provides public access to the water’s edge and links our heritage with our future in very dynamic ways. It also enables large and small businesses to showcase their products and services to the world.

The Queen’s Marque project, representing a $200 million investment from private sector on Halifax’s waterfront, will also bring new residents, visitors, businesses, and opportunities to the waterfront and throughout our entire downtown core. Central to this project are more than 75,000 square feet of new public space and three new wharves owned and managed by Waterfront Development - in, of course, the public’s best interest.

Lunenburg’s working waterfront, part of the UNESCO World Heritage Site, is another popular tourism destination. Waterfront Development is working with the local community to advance projects and enhance services to build on the waterfront experience by land and by sea. If you’ve been to the Halifax or Lunenburg waterfronts lately, you’ve also noticed more visitation by sea.

This summer we hosted the Rendez-vous 2017 Tall Ships Regatta in 11 ports across Nova Scotia, including Halifax and Lunenburg, bringing vessels and crews from around the world to our great province. We are also seeing increased visitation by super-yachts as part of the marine marketing initiative led by Waterfront Development. In the year ahead Waterfront Development will stay focused on seizing opportunities that build our ocean advantage.

Last, but not least, is the Halifax Convention Centre Corporation, which adopted the name Events East Group in April 2017. Events East Group connects the world to Nova Scotia by creating memorable event experiences throughout the Scotiabank Centre, Ticket Atlantic, and the new Halifax Convention Centre.

            Events East hosted over 650 events and 450,000 guests across the facilities they managed in 2016, generating $71 million in revenue for the province. In the weeks and months ahead, Events East will stay focused on opening Halifax’s new state-of-the-art convention centre and attracting top national and international conventions that will help to drive economic prosperity and bring new business opportunities to Nova Scotia. From attracting large conferences to hosting international sports competitions, Events East serves as a catalyst for new opportunities and connections between Nova Scotia and the world.

            The Department of Business and our Crown Corporations are also collaborating on some key initiatives to leverage each other’s strengths. The best example of that collaboration is our work on COVE. COVE will create a hub for our ocean research and entrepreneurship, making our oceans sector even more competitive. When COVE opens in the Spring of 2018, Waterfront Development will own and operate the property. The Institute for Ocean Research and Enterprise will manage day-to-day programming, plus marketing and attraction, and Innovacorp will run the start-up yard. We get more done when we work together, Madam Chairman.

            I’d also like to provide a very quick update on Invest Nova Scotia. Invest Nova Scotia was established in 2014 as an independent, decision-making board for granting economic incentives. Projects funded by Invest Nova Scotia must spark innovation, be measurable and attainable, and advance the strategic goals of One Nova Scotia. The independent Invest Nova Scotia board has funded three projects to date. Those projects are supporting entrepreneurs and helping our social enterprise sector grow.

            Invest Nova Scotia also recently added Tareq Hadhad, a young entrepreneur and Nova Scotian from Syria, to the board. Tareq’s entrepreneurial journey and experience building Peace by Chocolate, the Peace by Chocolate brand will be invaluable as Invest Nova Scotia continues to fund projects that build a stronger economy and create more jobs for young Nova Scotians.

            Now back to our financials. We expect our Crown Corporations to spend approximately $115 million this year. That figure represents 60 per cent of the Department of Business’ total forecast for 2017-18.We are allocating more than half our budget to our Crowns so they can keep advancing key priorities like growing our economy, increasing tourism, boosting exports, and sparking innovation – and, of course, to build on all of our recent success.

            Madam Chairman, I’d now like to spend the rest of my time talking tourism, exports, and innovation. They are our key opportunities for growth and they are key areas for us to invest in this year. Tourism is one of our top service exports and more people are visiting our province each and every year, but we need to keep building on that success. That’s why this year’s budget includes $2.6 million to revitalize the province’s iconic tourism sites, advance marketing in China, and undertake work to enable more direct air routes for passengers and cargo, which leads to exports.

            Our economic future also depends on exports, more exports, Madam Chairman. We led the country in seafood exports in 2016, but we need to win in more categories to grow our economy. This year’s budget includes $3.5 million to advance exports and trade, including the creation of a new export acceleration program for small and medium enterprises, the creation of a new Scale-Up Lab in Boston to help Nova Scotia companies break into U.S. markets, and to further our other trade work through the Atlantic Growth Strategy.

[7:00 p.m.]     

To continue to support our screen industry, we are also increasing the budget of the Film and Television Production Incentive Fund, $22.8 million. That estimate is based on forecasted productions as well as the demand. We value our screen industry and the people who work in it. Our screen industry is achieving success under the new film fund and we look forward to another great year.

            As of September 14^th, 61 productions have been approved under the film fund. This represents over $32 million in approvals under the fund and a Nova Scotia spend of over $112 million.

We will also continue to invest in innovation here in Nova Scotia. Innovation is one of the keys to our future. Entrepreneurs with new ideas and a determination to succeed are changing our economy. Innovative companies like Spring Loaded Technology, Kinduct, TruLeaf, Acadian Seaplants, Manifold, Marcato, LeeWay Marine, and Click to Order are selling products and services to the world; they’re also creating opportunities for other Nova Scotians - particularly young Nova Scotians.

Did you know that Halifax is Canada’s fifth largest technology hub - did you know that, Madam Chairman? (Laughter)

MADAM CHAIRMAN: No, I did not. I do now.

MR. MACLELLAN: That will wake everybody up. Making the top five is great - fantastic for a city the size of Halifax. But Jesse Rodgers, the CEO of Volta Labs thinks we can be number one - and so do I.

We’re working with our post-secondary institutions, the business community, other levels of government and entrepreneurs to build an innovation-driven entrepreneurial ecosystem. This year’s budget contains a number of investments that will advance that work. They include $10.7 million for the new Centre for Ocean Ventures and Entrepreneurship, and $2.5 million for a new innovation rebate program that will help companies in Nova Scotia develop more innovative approaches and products. Those investments are smart investments; they will go a long way to helping us build a better economy.

The Productivity and Innovation Voucher Program, now managed by NSBI, will continue to build linkages between small and medium-sized businesses and our post-secondary institutions.

We also expect to spend $14.5 million on high-speed Internet. Improving rural Internet service is a priority for this government and we’re making progress. We’re partnering with municipalities, the private sector, our community groups, and all stakeholders to improve this service. In the Spring, we launched our Municipal Community Grants Program which will improve service for up to 22 communities, 5,000 homes, and 400 businesses.

We are also developing a long-term plan for improving a service that will use fibre-op cable to build a backbone and be supplemented by satellite technology. We’re leveraging provincial investments against federal funding to improve the service for more households and for businesses.

Our ledger also includes some legacy spending - by that I mean financial commitments that pre-date the Department of Business that include many of the aspects in the Nova Scotia Jobs Fund.

As many in this House will recall, the Jobs Fund granted economic initiatives to provide private sector companies from 2011 to 2014 with these economic initiatives. It replaced the Industrial Expansion Fund. While the Jobs Fund closed in 2014, the province is still obligated to manage the fund and fulfill its commitments. We expect Jobs Fund spending to be $36 million for 2017-18. That figure represents about 20 per cent of the Department of Business’s budget for this year - down 20 per cent from our budget last year.

As was the case in previous years, I can talk about our Jobs Fund in general terms, but not about the individual transactions, as disclosing private company information would violate our confidentiality agreements. Again, we’ll share any information that we’re permitted to disclose. We’ll do our very best to be transparent and be accountable to taxpayers and to the members of this committee, and we will obviously do our best to strike that balance.

Madam Chairman, thank you again for the opportunity to update you on our work at the Department of Business and our five Crown Corporations, and explain in some detail the financial choices we are making. As I’ve tried to demonstrate today, our focus on private sector growth is working. The challenge before us is now to keep going and build on our recent success.

MADAM CHAIRMAN: We will turn it over to the PC caucus for just over a minute.

The honourable member for Cape Breton-Richmond.

MS. ALANA PAON: Thank you, Madam Chairman, and good evening everyone. Good evening, Mr. MacLellan. Since I only have about a minute left, perhaps I’ll just have a very short statement in saying that as I understand the Department of Business, it’s estimated to see an increase just shy of about $60 million this year, which is great to see.

            Most of the increase falls under Grants and Contributions, as far as I understand. I have some questions about that, but I don’t think I’m going to be able to have some time here to ask too many questions.

            My first question - and I’ll probably have to say it again the next time around - is going to be on operating costs. They are set to increase by about 60 per cent over last year’s estimates and nearly triple last year’s actuals - can the minister offer some details on what administrative costs will see an increase of this magnitude?

            MADAM CHAIRMAN: Order. The time has elapsed for today.

We will resume on Thursday. (Interruption) Yes, we did, and I think you did a record switch for departments; you did a one-minute quick switch. Thank you minister, and members.

            [The subcommittee adjourned at 7:06 p.m.]