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April 8, 2002
Supply Subcommittee
House Committees
Meeting topics: 

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HALIFAX, MONDAY, APRIL 8, 2002

SUBCOMMITTEE OF THE WHOLE HOUSE ON SUPPLY

4:58 P.M.

CHAIRMAN

Mr. David Hendsbee

MR. CHAIRMAN: We will continue debate on the estimates. We have the Nova Scotia budget for the fiscal year 2002-03. (Interruptions) This meeting is called to order. It is Monday, April 8, 2002. Before us is the Department of Agriculture and Fisheries. I will ask the minister to make some introductions, some opening remarks, and then we will open the floor to questions from members of the government and the Opposition. The floor is now yours, Mr. Minister.

The honourable Minister of Agriculture and Fisheries.

HON. ERNEST FAGE: Mr. Chairman, would you please call Resolution E1.

Resolution E1 - Resolved, that a sum not exceeding $39,273,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Agriculture and Fisheries, pursuant to the Estimate and the business plans of the Nova Scotia Crop and Livestock Insurance Commission, the Nova Scotia Farm Loan Board and the Nova Scotia Fisheries and Aquaculture Loan Board be approved.

MR. CHAIRMAN: The honourable Minister of Agriculture and Fisheries.

HON. ERNEST FAGE: Mr. Chairman, it is my pleasure to be here today to present the 2002-03 Budget for the Department of Agriculture and Fisheries. Before I begin I would like to introduce some of my staff who are here today. First of all, to my right is Deputy Minister Peter Underwood; Acting Director of Finance for the CSU, Chuck Allen; Manager of Finance, Bob Mosher, to my left; Director of Policy, Planning and Communication Coordination, Diane Kenny; and Vice-Principal of Administration for the Nova Scotia Agricultural College, Bernie MacDonald.

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The Department of Agriculture and Fisheries has come a long way since its amalgamation in the year 2000. The amalgamation fulfilled our government's commitment to minimize duplication and concentrate on delivering better services. Since that time the department has been successful in bringing together its similarities and also with embracing its uniqueness. The outcome has been a department that is moving forward and making opportunities within the agriculture and fisheries sectors. This government has a high regard for these resource-based industries. Agriculture, fisheries and aquaculture are fundamental to the economy of many of our communities in rural Nova Scotia.

[5:00 p.m.]

While the resource industry is traditional in nature, it has established itself as a solid economic base and there are still many new opportunities ahead of the industries. We are committed to managing our resources responsibly and making our resource-based industries sustainable. Continued growth opportunities are expected for agriculture, traditional fisheries, as well as our aquaculture sectors.

As with every sector, agriculture and fisheries also face new challenges. The Department of Agriculture and Fisheries consists of four service areas: a policy branch, planning, and communications-coordination section, and the Nova Scotia Agricultural College. I will talk more about the department structure in a minute. Agriculture and fisheries have been identified as vital economic sectors in the province's economic growth strategy, Opportunities for Prosperity. Despite challenges, these foundation industries remain crucial to the future of the Nova Scotia economy primarily because of the efforts targeting growth and innovation. Agriculture, commercial and recreational fishing, aquaculture and related businesses are the economic base of many of our rural and coastal communities across Nova Scotia employing over 28,000 Nova Scotians and contributing more than $1.5 billion to the provincial economy.

Close to 4,500 farms produced $420 million in farm cash receipts in the year 2001. Seafood continues to dominate Nova Scotia's exports, posting a new record of over $1.1 billion in the year 2001. As well, Stats Canada has reported capital expenditure intentions in the fishing and agriculture industries for this coming year at $97 million of new investment.

Agriculture and fisheries are progressive, innovative industries, and their potential continues to grow. This potential will be realized by building on a solid foundation that encourages new technologies and product development, good stewardship and environmental responsibility, food safety, a supportive and effective regulatory climate, and a meaningful education and training climate. Despite the fourth-quarter slowdown related to September 11th, the combined foreign exports of the food manufacturing industry in the primary fishing and agriculture sectors advanced by 5 per cent in 2001, to a total record for the province of $1.33 billion.

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Since 1997 the exports from these industries have increased by an impressive 36 per cent. Over the prior three years, 1997-2000, exports had been increasing at 9 per cent per year, and this buoyant pace of expansion into international markets is expected to resume in the year 2002. Processed or value-added products accounted for an increased share of these industries foreign sales in 2001. Our Nova Scotia food manufacturers made shipments to 82 countries last year.

Now I would like to take some time to talk about the agriculture industry in Nova Scotia. Over the past month I have had an opportunity to speak on behalf of the agriculture industry in Nova Scotia to various groups. First of all, the Senate Committee on Agriculture held hearings in Truro, and I presented on behalf of the industry and the province. The Canadian Federation of Agriculture meeting was here in Halifax recently and provided an opportunity to not only have several meetings with federal Minister Lyle Vanclief but an opportunity to showcase the province to our agriculture peers from across Canada. As well, the House of Commons Standing Committee on Agriculture and Agri-Food held hearings at the Nova Scotia Agricultural College several weeks ago. It was also my pleasure to present an overview of the challenges and the strengths of the agricultural industry here in Nova Scotia, to that group.

I am also looking forward to the Agriculture Ministers Conference to be held here this June. As co-chair with the federal Minister Lyle Vanclief, we anticipate a full agenda as we discuss the future role of government and agriculture in Canada. A central focus of the ministers conference will be the work to date on the national action plan or the Agricultural Policy Framework, APF, by federal, provincial and territorial governments. With that in mind I believe the national action plan provides an example of what the role of government is and will be in the future of agriculture. Simply, government will be a leader, manager and collaborator with the agriculture industry and other stakeholders.

As I have said, agriculture is a key element in the provincial economic growth strategy and is considered one of Nova Scotia's foundation industries. The agri-food sector contributes $1 billion to the Nova Scotia economy, annually. Agriculture employs more than 14,000 people each year in rural communities - directly and indirectly. Another 56,000 people are employed in the food wholesale, retail and service sector. There is $420 million in farm cash receipts at the production level, a record number for the Province of Nova Scotia, and it continues to grow.

Inside that envelope, top farm cash receipt performers are the dairy industry, the poultry industry, horticulture, and livestock, as well as the fur industry. Forty-five per cent of the output of the province comes from these supply-managed commodities of the feather and dairy industry. Forty-one million dollars in new capital investment in agriculture is expected this year alone. Nova Scotia has the highest per capita of farmers with an undergraduate degree in agricultural science in the country. A ratio of 3-1 career opportunities for graduating students from our own Nova Scotia Agricultural College

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provides very real jobs and professional opportunities for our young people. There has been $750,000 investment in research which has resulted in the awarding of 128 projects, with a total value of $1.8 million for that centre.

More than $175 million in agri-food products were exported from Nova Scotia, and this sector continues its growth rate, achieving a 12 per cent growth rate since 1994. Top export products are blueberries, fur, frozen carrots and Christmas trees. Oxford Frozen Foods carried out a $70 million expansion to the facilities in Oxford, Cumberland County, this year, and will provide for the first time in that industry the opportunity not only to process Nova Scotia-grown blueberries, but blueberries grown around the Atlantic Region and New England. There is a new investment as well in Kentville, where Apple Valley Foods built a new plant for their fruit pie production. As well, Scotsburn Dairy Limited has built a new plant to double their ice cream production.

But there are some challenges, and I want to highlight some of the challenges we face in our industry, what we have done and where the APF fits. Keeping up with technology is one area that is one of those challenges. Profit margins between production and market price are decreasing for the primary producer. Many agricultural technologists are location-specific. As well, Nova Scotia's relatively small agriculture industry is highly diversified. The economies of size tend to equal productivity.

There are also some other areas that I would like to comment on. One of these is the labour market reforms that are needed to reduce disincentives to work and to provide better rewards for those willing to put in a hard day's work at the harvest. Nova Scotia agriculture-commodity composition makes it long on workers for intensive horticulture and livestock production in this province. As an example, Nova Scotia accounts for 1.5 per cent of the Canadian agriculture production but we employ 2 per cent of the agricultural workforce. Current EI premiums are set well above rates required to fund the program with surpluses going into general revenue for the federal government. The burden of excessive EI premiums falls more heavily upon low wage earners, for example, seasonal harvesters in this province.

Apart from improving the attractiveness of farm employment, there are positive social aspects of correcting the inequities of such payroll taxes. We need to identify how policy can be modified for seasonal harvest workers, which span on average in this province two to 10 weeks. The unavailability of seasonal labour results in economic hardship to producers from crop loss, as well workers because of less disposable income and, as well, community spending.

Another challenge is that farm debt is increasing. Much of the borrowing has been used to enhance, improve or expand operations. That expansion does lead to confidence. Sizeable proportions of loans, however, are concentrating in the dairy and poultry section, which are experiencing great success over past history under supply management. It's cheaper now to borrow, this is positive, interest rates are lower than they have been in many years.

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Changing demographics, urbanization of rural areas, environmental and increased nuisance complaints are also a challenge for Nova Scotia's agriculture industry. In Nova Scotia where agriculture is an integral and intermixed component of rural society, we are working on reducing the environmental risks and social impact of farming. We, as a government, have passed the Farm Practices Act, and the Agricultural Marshland Conservation Act to lessen that burden. We are working with industry to implement the Nova Scotia Federation of Agriculture's Environmental Farm Plan. It is our obligation to treat the environment, certainly, with respect. There is a gap in public awareness, however, and understanding of agriculture.

Some of the steps we've taken to address these challenges: we have gone to alternative service delivery. The Agriculture Development Institute, created in the year 2000, is an arm's-length service provider and provides timely expertise for situations targeted to specific operations. It works similar to a triage model in health care. Secondly, the Internal Water Task Force, this department group will look at water quality, access and quantity issues across the agriculture, fishing and aquaculture sectors.

There are also challenges. During the last four or five years we have seen drier conditions than normal. Balancing industry development that does not compromise our environment under these conditions will certainly be a challenge in the coming years. Food safety, starting at the farm, has been a topical issue and an issue that provides a real challenge to our producers not only on the cost side, but that absolute guarantee to our consumers that food produced in Nova Scotia or Canada is best or has no comparison around the globe.

As well, renewal of the industry in attracting new entrants to an aging industry population is going to be one of the hardest challenges to overcome in the coming years. Performance of the safety nets, developing consistent, fair, yet flexible safety nets for Nova Scotia's unique situation in co-operation with Agriculture and Agri-Food Canada is also on the agenda.

Drawing from our past, agriculture has always focused on the priorities in the national action plan. Farmers have always been stewards of the land, have been entrepreneurial, innovative, conscious as to food safety and managed risk. These have always been vital to the success of agriculture as we see it today, Mr. Chairman. I believe the difference in the convergence is an integrated action plan, and that is government and industry recognize how these areas are interrelated and are now being brought together to form a new focus and direction for agriculture, moving into the 21st Century.

Some of the pillars of this APF are as follows: Number one, the environment. The department has been involved in a number of initiatives and partnerships when it comes to our environment. Some of these include, as examples, the federation's Environmental Farm Plan Program, where the Federation of Agriculture has over 100 farms now completed or enrolled in this environmental planning program for their operations. Second, is the Nutrient Management Planning Program. Thirdly, program funding to address environmental

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improvements on farms. Fourth, developing best management guidelines, such as manure management. Fifth, applied research to find environmental solutions on farms such as artificial wetlands to treat waste, would be an example.

Yet, at the same time, in spite of attempts that land-use planning for agricultural protection, more and more urban people are moving into the country. This trend puts more public scrutiny on farming activities from new rural neighbours and increases the risk that these farming practices may impact these new entrants to rural Nova Scotia's lifestyles. The inevitable conflicts are occurring as these new rural residents object to some farming activities and demand the government do something.

The recent development of new or revised right-to-farm legislation, the Farm Practices Act, is one example of government attempting to protect good farming practices. But is it enough? Is modern farming compatible with higher environmental standards or society's expectation of agriculture? I believe the answer is yes; an aging farm population with issues involving intergenerational transfer of farms and attracting new people to the industry is a challenge of its own.

[5:15 p.m.]

The second pillar of this program is renewal. Our farming population here in the province is highly educated. Like many resource-based industries, this population is aging though, and we will not focus on exiting the industry for these individuals, but on the opportunities for the future. Renewal priorities will focus on the skills, access to capital and financing required for 21st Century farming. Key discussions will include access to learning opportunities, information and expert advice, succession planning, financial planning.

Nova Scotia farmers produce safe quality food for our tables. They are leaders in progressive farming and are continually working to make food production environmentally friendly. On the farm, in your grocery store and wherever in between, the agriculture and agri-food industry in Nova Scotia is continually taking advantage of the latest developments in research, Mr. Chairman.

Pillar three of the program, on farm-food safety. We recognize that a comprehensive approach to food safety, starting at the farm, is needed to compete nationally and internationally. These high demands are consumer and retail driven. This demand creates added costs for our producers and there is also a human resource challenge to develop programs and enforcement. Science and innovation are not new to agriculture. Agriculture is a science- and technology-based industry. Agriculture services has delivered a major component of the gains in living standards and in the quality of life we all enjoy today. Scientific investigation, accompanied by new technologies, is a cornerstone of economic development and human progress in this province and around the world. The Nova Scotia Agricultural College offers a curriculum in the emerging life sciences, environmental

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engineering and biology, agricultural business, new and value-added product development, as well as organic farming and aquaculture.

Pillar four, science and research. This particular area is in early discussions and current emphasis on life science and biotechnology are needed to ensure primary agriculture production and marketing areas are discussed. There is an opportunity for this process to fit into the Canadian Agriculture Research Council, which is currently developing a five-year national agricultural research strategy. On another perspective, agriculture faces many challenges, risk management against weather and markets, new environmental changes such as climate change and demands on soil, water and air quality, the whole question of urban-rural interaction and the right to farm issue, food safety issues, competitive issues, new market opportunities such as the organic trend and value-adding our production, new technologies such as GMOs, public awareness and appreciation, as well as technology and research and its extension as well as its application.

The fifth pillar is safety nets. A national review of safety nets has recently been completed and will contribute to this process. Nova Scotia has been meeting with industry to ensure we represent their issues and their views at the national level. At issue: cost of offering safety net programs is high and growing demand for ad hoc payments continue; responsiveness of the programs, the challenge of developing a national program is to ensure flexibility to meet the needs of farmers in each region of the country and for Nova Scotia, this particular issue is paramount because of our relative smaller size of farms and mixed approach; coordination between programs, overlapping and gaps also occur that have to be corrected and amended; federal funding allocation to regions also may be under review, but Nova Scotia will continue to strongly support the current formula based on farm cash receipts.

Nova Scotia strongly supports the integrated approach to developing the national policy framework for agriculture in its action plan. It is crucial that this process recognize the diversity of the industry across Canada, and it is from such diversity we draw our strength as an industry. What is new and what is most exciting is that we have national consensus from government and industry on these issues, and together we can accelerate activities to brand Canada as a premium supplier of safe, innovative, environmentally friendly agri-food products that are produced in an efficient and proper manner. The future role of government in agriculture will see a movement away from intense involvement to more partnered leadership and collaboration, focus on issues national, regional, convergence of government in industry on issues collectively working toward addressing and capturing opportunities. Government using its capacity to provide information for good business decisions, as well as government has the capacity to gather numerical information, analyze and disseminate this information. Government has economies of scale to help bear risk sharing, particularly as it relates to research and innovation. Also, there is a role in protection of public safety, new regulations and legislation to benefit not only the consumers but as well the primary producers.

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This is a transition piece and, as you can appreciate, there are many exciting activities in the year and years ahead for the agriculture industry, and the Department of Agriculture and Fisheries is very active and very supportive, Mr. Chairman.

Now I would like to speak about the fisheries sector. Nova Scotia continues to lead in export of fish and seafood products, exceeding $1.1 billion for the first time in 2001. Export figures are expected to grow. As well, in 2000, we had $1.1 billion in exports, compared to 2001 where we did $1.15 billion in exports. Nova Scotia is the largest exporter of any province in Canada. In the year 2000 our landed value was $647 million, while preliminary stats for the year 2001 indicate $744 million, up almost $100 million over the previous year. A viable, well-managed fishery is key to ensuring strong, self-reliant coastal communities in Nova Scotia. The U.S. market remains the primary destination for our fish and seafood products; this is followed by Japan, Denmark and the United Kingdom.

The fishery is the economic backbone of many of our coastal communities here in Nova Scotia. About 4,000 people are employed in the seafood processing sector in the Province of Nova Scotia. As well, the aquaculture industry alone employs 1,100 people. Our inland recreational fishery generates approximately $85 million to a growing tourism industry. In 2001, the provincial crab fishery had a landed value of $60 million. The exports were valued at over $90 million. The offshore scallop industry is the largest scallop fishery in Canada. In recent years, annual landings ranged from 5,000 metric tons to 7,000 metric tons, with an estimated value of approximately $100 million. Aquaculture products will be worth approximately $35 million for the year ending 2001. The export value of lobster is approximately $338 million for the year 2001 and, of course, our hard-shell lobster is known worldwide for its high quality and great taste.

We also see strong markets in our boat building industry. The value of our boat building industry has doubled in recent years. It returned an estimated $60 million to the Nova Scotia economy in the year 2001 and continues to prosper and grow.

New issues concern the future of government in fisheries, inland and aquaculture. First of all, one is new fishermen getting into the industry is a large concern for an aging population in our fishery here in Nova Scotia; the industry does expect significant retirement over the next decade; increasing prices of license for new entrants based on the DFO buyback for Native communities, the high cycle on the lobster and snow crab landings contribute to increased license pricing. As well, new fishermen really cannot get financing from lending agencies to purchase these licenses at these new price levels. The department is investigating options for these individuals and there could be some type of loan program; and we are currently looking at a licensed pilot program involved in the lobster fishery. As well, another area is capital gains taxes to retiring fishermen, we continue to lobby the federal government for that avenue, but it may have its drawbacks contributing to the increase of those license values. As well, the department will continue to lobby the federal government to introduce the capital gains exemption for the intergenerational transfer of licenses. I have raised this point with federal Minister Robert Thibault at a recent ministers' meeting in P.E.I. and

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received an encouraging response. The department will continue to work with the federal minister and follow up on these issues.

The second issue is the Native file. The department has been consistent, certainly, in its message to DFO since the Marshall decision; one set of rules for all commercial fishermen; the food fishery must be a true food fishery; consistent and effective enforcement for all fishers; the Native licenses should replace existing effort, not taken from traditional users; commercial fishermen should have meaningful input into the implications of the Marshall decision.

The department has worked with DFO for the past two and a half years and believes that given the possibilities that existed in September 1999, the implementation of Marshall has gone on with relatively few disruptions here in Nova Scotia. There is still a lot of work left to be done however, and the department will continue to raise the issues and deal with them with our federal counterparts. Some of those issues include the ongoing cost of licenses; the utilization of licenses that were already required; royalty charters and training for the Native community; displacement of crew members and others dependent on the transferred license and; some big issues like the final negotiation solutions involved in the tripartite negotiations; as well we will continue to ensure that the input from the commercial fishermen are heard.

The third issue is professionalization. The department supports professionalization that can address safety issues; can address training; can address succession planning; and can address Department of Transportation issues such as navigational requirements. The department will work with industry to pursue professionalization that will see to it that an industry is innovative and not government driven. It needs wide-spread consultation and support from the grassroots and there are issues at different stages in Scotia Fundy and the Gulf region to address this.

There are many challenges to be overcome, really, before a number of these sensitive issues move forward. We encourage industry representatives to work together to find solutions, as well. The department has not entered into any formal arrangement on professionalism and will not until the industry is ready to proceed itself.

On the oil and gas issue - point number four - the department's main focus is to ensure that the interest of the fishing industry is heard and factored into any decisions that are made pertaining to oil and gas development. A report recently released by Dr. MacNeil stresses the need to have broader consultation and full input from the fishing sector. Our department recognizes the value of the commercial fishery to our coastal communities and we must strive to communicate that message as new user groups, such as the oil and gas industry, apply for access. The concept of special areas that are extremely important to the fishing industry should be fully explored. Based on sound science, if areas are too sensitive then they should be excluded from oil and gas activities. We believe that even the oil and gas

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industry would welcome such a development so that they will know the ground rules and they can plan their future activities by them.

Other industry sectors beyond gas and oil, cables, ecotourism, aquaculture are also demanding access and use of coastal waters. The fishing industry is changing and new younger participants must be encouraged into the industry. Even though the disastrous turndown of the groundfish sector, our industry continues to be the economic backbone of our coastal communities in Nova Scotia. We must build on the strengths of our industry, recognize the changes that are taking place and work to ensure that future fishers maintain a role as a major industry in our province. Water issues around access and quality are an issue, particularly as it relates to our aquaculture projects and the inland fisheries sector. As well, we will continue to provide leadership, develop partnerships and provide representation for our fishermen on their issues with Ottawa.

[5:30 p.m.]

I want to take a minute and talk about some structure of the Department of Agriculture and Fisheries. The department staff is located in areas throughout the province where agriculture and fishery services are needed, with the primary centres in Halifax, Truro, Kentville and Pictou. The Agricultural Services Branch looks after the integration of regional agriculture services, dykeland maintenance, resource stewardship activities and a 4-H program for our rural young people. It also provides development and risk management programs for the agriculture industry and oversees legislated organizational responsibilities for the orderly marketing of supply-managed commodities. Within Agriculture Services you will find the Resource Stewardship Section is the environmental management and land protection section of our department, as well as 4-H and rural organizations and field services.

The Program and Risk Management Section looks after farm industry development, the aspects of agricultural research funding, and serves as the federal liaison for the department. The Fisheries and Aquaculture Services Branch provides services to the commercial fishery through advisory services, field and coastal zone management and new-fish technology. It also oversees aquaculture development, including leasing and licensing of aquaculture sites and manages the inland fisheries resource. The aquaculture division is the lead agency for aquaculture development in Nova Scotia. It administers 378 licenses for approved aquaculture sites. As well, this division also provides fish health services, research and project development.

The Inland Fisheries Division manages our inland fisheries resources, and supports the many angling and community groups who participate. It operates two hatcheries and stocks hundreds of lakes and streams and rivers throughout the province each year. This division helps to conserve wild fish stocks through the field and extension services and it supports ecotourism. The Marine Fisheries section is responsible for policy development and represents provincial interest. Our Field Services staff provide community-based assistance

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to commercial harvesters, processors, aquaculturists and sport fishing groups. Finally, the Technology section assists harvesters, processors and aquaculturists with developing new technology and provides assistance in harbour infrastructure such as hollows, slips and wharves.

The Industry Development and Business Services Branch is responsible for marketing, product quality development, business management and economic development services and two business development agencies - the Farm Loan Board and the Fisheries and Aquaculture Loan Board. The Fisheries and Farm Loan Boards oversee lending operations to the fishing and aquaculture industries, as well as the agriculture producers of our province. It also operates the New Entrants Program and the Weather-Related Loss Programs of the last several years. The Marketing section provides essential market and product research for our clients, and the goal is to work with industry to identify, develop and promote market opportunities to provincial, national and international clients. The Business Management and Economic Section provides economic analysis and information to industry and entrepreneurial initiatives.

The Legislation and Compliance Branch has the overall responsibility for food safety. It also provides consultation, education, leadership and excellence in licensing, legislation and investigation, as well as laboratory services within a timely and responsive regulatory framework. They also administer and issue licenses for fish processing and buying activities throughout the province. Another huge component is the inspection of processing plants, fish buying licenses, aquaculture operations and marine plant harvesting activities. In this section there is also a coordinated effort for legislation and regulation, Freedom of Information and Protection of Privacy Act responsibilities. The responsibility of our licensing enforcement

section is to manage licensing of seafood buyers, fish plants, enforcement of buying and fish processing activities. The Quality Evaluation is of course of utmost importance, this section carries out many services in the area of consumer health such as meat, food inspection, veterinarian and laboratory services.

The Policy, Planning and Communications section coordinates policy and communication activities as they relate to the department's mission and broad government priorities. Occupational Health and Safety is also in this section and requirements under the Occupational Health and Safety Act and regulations are being implemented throughout the department and include the promotion, coordination, administration and enforcement of health and safety for everyone. In May 2001, we appointed a manager of Occupational Health and Safety, and this person is working closely with staff to help them improve health and safety in all work areas.

The Nova Scotia Agricultural College continues to take a lead role in providing quality education, training and public service to its students. Traditionally, students have chosen NSAC for sound technical and academic training in agriculture science and technology. Increasingly, students understand that agriculture is a science of life and that NSAC educators provide a solid foundation for higher education and career opportunities.

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NSAC offers academic programs that qualify students for technical and technological diplomas, undergraduate and graduate degrees related to agriculture, aquaculture, business, and the environment. It also has programs to prepare students for veterinary Medicine and Engineering. Some of NSAC's research institutes and centres are, Atlantic Poultry Research Institute, the Nova Scotia Wild Blueberry Institute, the Nova Scotia Fur Institute, the Nova Scotia Soils Institute and the Organic Agriculture Centre of Canada.

Climate change is a global issue, and the NSAC is doing its part in Atlantic Canada. NSAC is researching methods to reduce greenhouse gas emission, as well as adapt currently accepted agricultural practices to changing climatic conditions. Working in co-operation with the industry and government, the NSAC Research Department is a centre of agriculture expertise throughout Atlantic Canada. The college carries out a lot of important research. The purposes of research are to contribute to the knowledge base of the agri-food industry, to enrich the quality of life, to develop agricultural technologies and to educate highly-qualified personnel regionally, nationally and internationally. The CSU Division - of course, the department is supported in its efforts by the Corporate Services Unit through the Finance, Human Resources and IT sections.

Challenges and opportunities for the department. As I noted earlier, during 2000-01, the two Departments of Agriculture and Marketing and Fisheries and Aquaculture amalgamated. As the department heads into 2002-03, it is facing some specific external challenges. First of all, the management of our water resource. The need to address environmental issues, particularly as they apply to management of the water resource and the sustainable development of the agriculture, aquaculture and fishing industries. Persistent drought conditions in the agricultural sector, competing rural interests in water use, access to suitable coastal waters for aquaculture development, concerns from the commercial fishery regarding oil and gas development in offshore and near-shore waters and concerns from sport fishing groups have elevated the focus on issues of quality and quantity and access to water in this province.

Number two, food safety and the need to address demands from consumers for high-quality safe food, and from industry for less red tape and fairer treatment. To meet these demands, the department will need to improve the regulatory regime governing food production and evaluation, including product standards, food labelling and traceability, education and research and analytical testing. Industry growth is also a major challenge. Industry growth and development, and the need to pursue strategic priorities as indicated in Nova Scotia's Economic Development strategy, opportunities for prosperity, particularly those related to growing exports, attracting new investment, expanding production and encouraging innovation through new technologies, research and value-added. Our goal is to create a climate that will help sustain and grow wealth and jobs in our rural and coastal communities in the province.

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Education and training is also a major challenge - education, training and the need to promote the role of NSAC in providing quality education and training for a global labour market. In addition, existing and future agri-food industry members require access to quality, lifelong learning and professional development opportunities and upgrades. There is also a challenge and opportunity to build on the NSAC's current involvement in research, particularly climate change, organic farming, bioengineering, and expand this activity and expertise.

Number four, fiscal responsibility - the need to comply with our government's fiscal agenda to balance the budget and meet the priority expectations of our direct client groups in Agriculture and Fisheries. Our department's strategic goal at the Department of Agriculture and Fisheries is the commitment to support the Government of Nova Scotia's corporate goals and priorities, more particularly fiscal stability, sustainable health care management, growing the economy, education and skill training, and good management and a professional public service.

The department's mission is to foster prosperous and sustainable agriculture and fisheries industries through the delivery of quality public services for the betterment of rural and coastal communities and of all Nova Scotians. In accordance with our mission, the department will strive to achieve sustainable and environmentally responsible development of Nova Scotia's agriculture and fishing industries. Sustainable resource management balances industry development with environmental and social responsibility through applied research, technology transfer, generally accepted management practices, and industry and public input and awareness.

Departmental activities in this area are designed to move our agriculture and fishing industries closer to a state where the three principles of sustainability - economic viability, environmentally sound and socially acceptable - are in balance. In order to get there, the department will work hard with the industry to promote standards of environmental stewardship among all business operations. The department will also work to ensure that freshwater fish stocks and habitat are well managed and sufficiently protected so that anglers and nature lovers can continue to enjoy Nova Scotia's natural beauty.

Education will be key in raising industry's awareness of environmental issues and the public's appreciation of the resource industries. Together these efforts will help sustain prosperity in agriculture, aquaculture, the fishery and secure the future of the communities that rely on these industries. Some of the department's programs to promote these activities are the resource stewardship, including our youth programs through 4-H, aquaculture extension services, in-land fisheries resource management groups, marine plant license and management, and marine advisory and field services.

A competitive business climate that encourages economic growth and increases jobs in Nova Scotia in rural communities is also a major goal. Industry growth and development focuses on Nova Scotia's rural and coastal communities by investing in industry stability,

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new economic opportunity and strategic development of partnerships and priorities. Programs and services in these areas are designed to assist Nova Scotia's agriculture and fishing industries compete effectively in a highly-competitive global marketplace.

The department will work with stakeholders to grow these industries and to ensure that they continue to drive the economy of our rural and coastal regions. In order to achieve these long-term goals, the industries need to develop in a stable business climate so that they can implement long-range planning and make the changes necessary.

[5:45 p.m.]

The department wants to support and enhance the ability of our industry to become more efficient and seize opportunities to be innovative, expand and value-add their products. Tourism is important to all Nova Scotians, and the department wants a sport fishing sector and new opportunity areas such as agri-tourism to be drawing cards for attracting more tourists to this province. Some of the department programs in this regard would include the integrated risk management program; farm investment and industry development program; marine advisory and field services; marketing, trade, business development; product and quality development; credit and financing services; aquaculture licensing, leasing and development services; and freshwater fish stocking.

An orderly development of agriculture and aquaculture and fisheries through a regulatory regime, which supports business and sector growth and development, and which ensures consumer confidence in food safety is also a goal. Responsible governance focuses on the orderly development of the industries through supportive legislative and regulatory frameworks. Departmental efforts in this core business area are directed toward developing a legislative and regulatory environment that supports business, protects consumers and minimizes the impact to the environment from resource-development activities.

To achieve this long-range goal, the department wants to ensure that legislation and regulations enable business development, that they are consistent and treat business equitably, and that they are not unnecessarily burdensome for business operators. An effective regulatory climate must protect consumers and the department wants to promote better product labelling, traceability and adoption of recognized standards of food quality. Promoting proper food handling will minimize the risk of food-borne illnesses and increase consumer confidence in commercial food establishments and among the general public.

Illegal fishing activities undermine the livelihood of legitimate commercial fish harvesters and the department will work with our federal partners to continue to address this pressing issue. Major department programs and activities in this area include the enforcement of regulations, governing the licensed operators and mandated activities; licensing of fish plants and buyers, retail food outlets and restaurants; as well as issuance of agricultural permits and licenses and farm registration; and the coordination of regulated marketing boards.

[Page 15]

A globally competitive Nova Scotia workforce through education, training, research and community services is the fourth goal. Education, training, skill development and lifelong learning focuses on sustaining expertise and excellence in Nova Scotia's agriculture, agri-food and aquaculture industries, and preparing Nova Scotians for a global labour market through teaching and community services.

The department offers a broad range of post-secondary education programs, training and research, and promotes environmentally responsible resource development. These efforts are aimed at stimulating industry growth, raising public awareness and promoting a greater appreciation of the value of agriculture and aquaculture to the economy of Nova Scotia. Major focus areas for academic and applied research include climate change, organic farming, product quality enhancement, soil and waste management initiatives.

As well, as you have heard, the Agriculture and Fisheries Department has an extremely varied mandate and there are many significant things I could mention; however I would like, at this time, to concentrate on a few of the department's initiatives, programs and services supported in this year's budget.

Number one is the water and environment. An internal group made up of staff, dealing with water quality and quantity concerns and issues. We are looking at better ways to assist our agriculture, aquaculture, sport fishing clients with issues of water, as it relates to the department and this is a priority for us. There is a concern in rural areas about the impact of farming activities on water quality and the department is committed to working with producer, residents and the environmental community to address these issues. The department has pulled together an internal water task force to look at water management issues facing our clients and the general public, as well as issues related to quantity and quality.

Farmers continue to modernize farm practice; many have adopted environmental audits. Also the Nova Scotia Federation of Agriculture in co-operation with the department is developing a nutrient management plan, planning programs that would help farmers to manage nutrients in an environmentally sustainable and economically viable way. We plan to accelerate the program in this year of 2002-03. We continue to research new and better ways to farm to ensure that water resources are protected while providing opportunities for agriculture to thrive. As well, we continue to conduct research on the link between water quality and farming activities to ensure that agriculture continues to be environmentally sustainable.

The department recently co-hosted the Scotia Water Management Conference, which brought together 125 people involved in the agriculture industry to discuss water strategies for farmer-operators here in Nova Scotia. This conference was organized with the co-operation of Agri-Food Canada, PFRA Division, as well as the Agriculture Development Institute and the Nova Scotia Federation of Agriculture. Participants viewed sessions on

[Page 16]

climate change, water and produce quality, water in the cropping system, and environmental issues in the general farm system.

This event was highly successful and had a very good turnout. The Prairie Farm Rehabilitation Administration, or PFRA as it's commonly known, brought a number of staff east for the conference, and their contribution was very helpful. As you are aware, PFRA staff were in the province for the month of March, working with the farm community on four initiatives to expand the knowledge of the water supply available to the farming community.

As you can see, everyone is working to find new and better ways to manage our water resource. Producers are also looking at ways to manage agricultural by-products, such as manure, to better protect water quality while continuing to provide benefits to the agricultural industry. The department supports the efforts being made by producers, fishers and aquaculturists to adopt environmentally responsible practice and is committed to fostering sustainable agriculture and fisheries industries.

Two, the national agricultural framework. Working on a national agreement with provincial interests at the forefront is a key. Agreement in principle was signed last June in Whitehorse and we continue to discuss with our producers and work with federal officials to bring this agreement forward. Certainly we would hope that the agreement will be signed at the Federal-Provincial Agriculture Ministers Conference this June here in Halifax for the next five-year plan.

Three, enhancing our food safety program. The department is proposing changes to the existing meat and food inspection program that has gone to a full public stakeholder consultation, which is currently happening across the province. The objective is to provide the best food safety program for Nova Scotia, and to build on economic growth opportunities for the food processing and distribution sector. There are many food safety concerns out there today, and our department continues to work diligently to provide information and assistance.

The laboratory services continue to provide testing services in the area of food safety. Initiatives to provide testing for our food safety inspectors continue to grow as we identify areas that require government support in matters of public health. More than 170,000 samples relating to food safety are analyzed each year. Bacterial analyses are conducted for food safety and include multiple testing on such products as dairy, water, juice, dairy by-products and export powder. The department has three dairy inspectors, six meat inspectors and 13 food inspectors, for a total of 22 inspectors in that particular division.

The department recently took on the responsibility of child care inspections for summer camps and campground inspections from the Department of Environment and Labour. In 2001, there were 5,324 food facilities in this province. Our inspectors carried out 11,615 inspections at these food facilities, and investigated 432 consumer complaints. There were 333 dairy inspections carried out and 17 plant inspections. The dairy products included milk, cheese, goat milk cheese, yogurt and ice cream.

[Page 17]

At the provincial meat plants, our inspectors carried out 33,000 livestock inspections, 58,000 poultry inspections and the province has 19 licensed meat plants and 22 meat processing plants. The department has also provided food handlers training to professional and volunteer food handlers. In 2001, staff offered the training to 2,829 professionals and 761 volunteer food handlers. Volunteer training is offered without charge and most of the people are from church and non-profit organizations.

Number four, attacking the illegal trade of fish and fish products. This certainly has a priority and a blue book commitment from our government and we have increased resources in the department to combat illegal activities. We will be introducing new regulation initiatives as well, looking at new fish processor and buyer license policy and this will be approved this Spring. Enhanced relationships between the DFO, CFIA and the Canada Customs and Revenue Agency have also resulted in a more comprehensive and cohesive approach to illegal activities.

Number five, safety net package. The proposed safety net package for Nova Scotia recognizes the role of safety nets within a broader risk management strategy and provides for a full cost-sharing between producers, the federal government and provincial government. Nova Scotia's safety net package has been developed in consultation with the agri-food industry. Core safety net programs are consistent with national framework principles in order to maximize federal participation in cost-sharing. Companion programs are designed to address income stabilization issues that are unique to Nova Scotia and maximize federal participation in cost-sharing. Companion programs are applied fairly and equitably across the industry.

MR. CHAIRMAN: Mr. Minister, I wish to advise you that you're approaching your one hour.

MR. FAGE: Thank you. The New Entrants Program, the Nova Scotia rural community and the Nova Scotia Federation of Agriculture work with government to develop a program to assist new entrants to the agriculture industry. Attracting and supporting new entrants into agriculture is vital to the continued and future success of the Nova Scotia agricultural industry and is one avenue for government to invest in Nova Scotia. I'm proud to say as of February 28, 2002, 45 new entrants, initial applications under the 2001-02 program, for an estimated $717,884 to be paid out over the next two years under that program, a real success program for the province and this government.

The Livestock Health Services Program provides the industry with a high level of veterinary services for large animals. Nova Scotia herds and flocks are relatively disease free and the department continues to recognize the importance of livestock health and is committed to the testing and monitoring through our health services and has contributed more funds in the past year to meet those needs of the industry.

[Page 18]

I would like to thank the members of the committee for allowing me to make a number of introductory remarks. I would now be pleased to present to you the 2002 estimates for the Nova Scotia Department of Agriculture and Fisheries.

MR. CHAIRMAN: Mr. Minister, I just wish to read for the record, are you also the minister responsible for the Harness Racing Commission? I was just wondering because actually if you're not the minister responsible for the Harness Racing Commission, I just want to read into the record the resolution we're dealing with for debate. We are dealing with Resolution E1.

[6:00 p.m.]

MR. FAGE: Yes, I didn't understand your previous question about the Harness Racing Commission. Do we fund it or do we administer it was your question?

MR. CHAIRMAN: Who is the minister responsible for the Harness Racing Commission?

MR. FAGE: That one is under, I believe, the Maritime Premiers Council.

MR. CHAIRMAN: We will start with the questions from the Opposition.

The honourable member for Hants East. You have the floor. The time is now 5:58 p.m.

MR. JOHN MACDONELL: Mr. Chairman, quite often I think when people say, you know, I want to thank you for your time or thank you for listening, I think most of us say no problem but, Mr. Minister, in your case when you say I want to thank you for listening, I'm going to accept that for sure on its face value. You certainly provide a lot of information. I do have some questions around the fact that the estimate for 2002-03 is certainly different than it was for the previous year. Can you tell me what the term, you know, Forecast, for 2001-02 we have Estimate and we have Forecast. I'm looking on Page 3.4 of the estimates, Supplementary Detail, for Agriculture and Fisheries. So for 2001-02, what does the term Forecast mean because there's not a line there that says Actual.

MR. FAGE: The estimate would be what the budget had estimated the previous year. Forecast would be the updated actual amounts that would have been spent in that particular year.

MR. MACDONELL: So the forecast is also the actual then of what was spent?

MR. FAGE: What it is is actually an estimate of the actual.

[Page 19]

MR. MACDONELL: So you have the estimate, then you have an estimate of the actual down over at some time as you're getting through your department, like through the year I'm assuming. It's kind of a re-evaluation of your spending then and then at some point there would be an actual spending?

MR. FAGE: Yes.

MR. MACDONELL: A couple of questions, I want to know, Mr. Minister, I think you've signed on with the federal government and the other provinces for the agricultural policy framework and this was to develop a comprehensive agricultural policy based on five elements: food safety and food quality; environment; science and innovation; renewal; and business risk management. So I'm just wondering if you've committed funding for this and will it be used to lever federal dollars and, if so, where would I find it in the estimate?

MR. FAGE: The framework agreement was signed last June in Whitehorse and what has taken place over the last year is the evaluation of the current risk management programs and now the discussion is centred between ourselves, on behalf of the industry, and certainly here in Nova Scotia in consultation with the industry, to be able to come to a comprehensible agreement that would be signed this June. There is no actual agreement until it would be signed this year, but the various elements are under discussion. Those five pillars you listed are the areas of discussion where agreement is being sought between the provincial governments and the federal government and we would be working very closely with our industry here on those particular points to put forward their view and the provincial view, how they could better improve those programs to serve them for the long haul and it would be my expectation that an agreement, when it would be signed, would be the same formula, 60/40 cost-sharing, 60 per cent being the federal component of that program and the 40 per cent being the provincial component.

MR. MACDONELL: Mr. Minister, in June when you come up with an amount, a provincial amount, will that be under Industry Development and Business Services? What line item would I find that under at some point in time?

MR. FAGE: Which line?

MR. MACDONELL: Yes, after June when you come up with an agreement and you determine what funding you may want to put into this, I'm just curious as to what line item it would be under at some point in the future?

MR. FAGE: It would be the line involving the Programs and Risk Management. There are currently funds set aside in the budget in anticipation of that signing and when it was concluded, it would end up primarily in that Programs and Risk Management involvement.

[Page 20]

MR. MACDONELL: So it wouldn't come under Industry Development and Business Services because it's an agricultural policy framework . . .

MR. FAGE: It would actually show up on the line, Agriculture Services.

MR. MACDONELL: On Page 3.5, looking at 2001-02, the Estimate and the Forecast, the Estimate, if I have that right, is $8,770,000? For Programs and Risk Management?

MR. FAGE: Which book are you looking at?

MR. MACDONELL: I'm on the Supplementary Detail. It goes in the Forecast to $10,274,000 and so I'm wondering what was the change in . . .

MR. FAGE: You're referring to the line under Programs and Risk Management?

MR. MACDONELL: Right.

MR. FAGE: And you're looking at the Estimate and the Forecast?

MR. MACDONELL: Right and I'm wondering why the difference.

MR. FAGE: The difference there is that funds were committed for the payment of programs to be disbursed under risk management to our producers. Those funds, the normal is to pay them into an account with the federal government - they actually issue the cheques on application out of Winnipeg. Those are additional funds in those risk management payments.

MR. MACDONELL: I guess I'm trying to get a handle on what happened that caused the difference of $1.6 million from your estimate to your forecast? Was there something unexpected or was it the drought or what?

MR. FAGE: The actual difference is $1.7 million and we, as a province, can make our commitment at any time and they will hold the funds. That was a commitment of $1.7 million that will go out to CFIA or NISA payments in the coming year.

MR. MACDONELL: So in the estimate, you really hadn't a dollar figure as a commitment in the $8,770,000; when you made up that number you didn't really recognize a commitment at that time of any amount or a certain amount?

MR. FAGE: The other number is a reflection on the far side, a reflection of how much we feel in addition to that it will cost to administer those programs this year.

MR. MACDONELL: Those programs - would that be for the most part safety net or would it be any other?

[Page 21]

MR. FAGE: Those programs involved, they're all risk management programs, they're safety net programs so there will be CFIA and NISA and crop insurance type commitments.

MR. MACDONELL: Okay. Because I'm looking in the Supplement to the Public Accounts, on Page 10, the Safety Net Programs, and it looks to me like $1,661,000. So, is that the actual figure that we're talking about here? You said $1.7 million. It's Page 10 on Public Accounts.

MR. FAGE: Who is it paid to?

MR. MACDONELL: It just says Safety Net Programs, that's the line item.

MR. FAGE: That particular amount would have been payments under last year's program in the Safety Net Programs, would have been matched by the 60-cent dollars by the federal government and the cheques would have been, or the funds distributed to farming operations here in Nova Scotia.

MR. MACDONELL: Okay, so that was paid out in 2001 in other words?

MR. FAGE: Yes.

MR. MACDONELL: Okay. So when we look at the Forecast, that means that you updated your estimate, really . . .

MR. FAGE: If I can maybe try and make it clearer, the estimate is what was in last year's budget, what we would spend. The forecast is the current closest figure we have. June is about the time you would end up with the exact actual figure, but the forecast may vary by small sums, but it's the best knowledge of what the actual amount is at this point in time. The books will close about June and then you would have an absolute figure then.

MR. MACDONELL: Absolute, okay. That's helpful. I guess my thought on this is that there's roughly a difference between the estimate and the forecast of about that amount. It tends to make me wonder what you had in the estimate if you increased it by almost the exact amount that you paid out. It almost looks as though in your estimate you didn't estimate anything near to what you spent. Does that make any sense?

MR. FAGE: Yes. Again, the province, at any time, can pay dollars into that fund and it doesn't mean that they are expended, the federal government - there's quite a lag time between when you would put money in and it may be six months before you get your numbers back. So that lag can push it over two years.

[Page 22]

MR. MACDONELL: I can accept that. I guess what I'm curious now about is if you can put those dollars in at any time, then they have to be represented somewhere. If you're going to put them in there, if they're not in there and you can put them in there, they have to be somewhere to put them there. So I guess my thought is, where are they before you . . .

MR. FAGE: They're right there in your Forecast at $10,274,000.

MR. MACDONELL: Okay.

MR. FAGE: That's included in that number.

MR. MACDONELL: Okay. That's when you actually start to spend them? That's when you realize them.

MR. FAGE: Yes. We've expended it because we've sent the cheque to our partner - they're the ones that actually send a cheque to the producers. Once it's come out of our budget, then it's an expenditure and that's why it's showing that. When the farmer applies for that - and that's why we would send a block of money - individual farmers, depending on their year ends or their situation will apply when they want to and then they will draw those funds down.

MR. MACDONELL: Okay, maybe I'm not really understanding this. It would seem to me that when you apply the expenditure, that before you apply the expenditure, you should either estimate it somewhere in a line item or in this line item or have it in another line item.

[6:15 p.m.]

MR. FAGE: But, it is in a line item there. If you look at the estimate, if you look at the forecast, the year 2001-02, then you go over to the estimate for this year 2002-03, any funds that are going to be expended are in one of those three lines. The instant we would send the cheque so to speak to that account for NISA - and it's a three-year agreement so the producer can draw their money out at any time - for our purposes the instant the cheque is sent, then it's an expenditure in our book. When the farmer accesses it from that combined account would be that individual's choice, but for us if it's in the system it's on that line, it's in those two lines there.

MR. MACDONELL: Okay, I think that's not clear. It would seem to me if it's in the system and if we're looking at 2002-03 and we don't know what that time frame is going to hold for farmers in Nova Scotia, so you're making a line item there in Programs and Risk Management of $6,825,000, right?

MR. FAGE: Yes, for this coming year.

MR. MACDONELL: For this coming year.

[Page 23]

MR. FAGE: This is what we're estimating. Besides what's residual in the account, we're estimating we will have to put this much more in that joint account to cover the programs that we know, as in NISA, those type of programs, that's our best estimate of how much we will require to meet our commitment this year and there can be a surplus in that account from the previous year because we've already expended, the cheque is gone, right? It travels over three years.

MR. MACDONELL: Okay, so does this represent extra funding that you may put into that account or what you actually expect to spend out of the account?

MR. FAGE: Again, I think it's important not to mix the two together. These are actual numbers that we would send to the account, that's the expense for us.

MR. MACDONELL: Yes.

MR. FAGE: The accounting of when and how it comes out of the account, and what amounts, is the function of the NISA group. These figures represent how large a cheque we will have to send to NISA or the risk management programs and then they will allocate it to the farm community. So all you're concerned about in the estimate, or should be, on these lines is this is how much money the province is putting in.

MR. MACDONELL: All right, that's what I thought. So I guess my thought is that in 2001-02 the province was thinking they would put in $8,770,000, right?

MR. FAGE: Yes.

MR. MACDONELL: In 2002-03 the province is thinking they will put in $6,825,000, right?

MR. FAGE: Yes.

MR. MACDONELL: It would seem to me that you're dropping that by somewhere close to $2 million, so I guess I'm asking what are you basing that on? What are your thoughts about what will be extracted out of that account or necessarily needed to be extracted out of that account, what are you basing on the reduction?

MR. FAGE: What you have there is with what was sent in 2000-01, you have our estimate, right? That's what we estimated the first year, and what has been sent is the $10 million. What is required to finish it is the $6,825,000 we're forecasting in the coming year. There's obviously a balance in the NISA account. There may be $1.7 million, $1.8 million, already sitting there to go on this year's requirement, and that's why we would have a lower number there because the requirement should be roughly consistent between the two years. So we've said there's this much already in the account, right? This is the required amount

[Page 24]

to make it roughly the same as the previous year and those are dollars required in the 2002-03 year to achieve that. That's why it's less.

MR. MACDONELL: Okay. Well I think I will move on. I have to say I don't think this is really clear to me, but anyway . . .

MR. FAGE: Maybe the easiest way, I can't give you the exact amount, but there are dollars already in that NISA account to be sent out, and likely close to that number, $1.7 million, $1.8 million, that we quoted there.

MR. MACDONELL: Yes.

MR. FAGE: Add that to the $6,800,000 and it gives you roughly the estimate.

MR. MACDONELL: About $8,700,00.

MR. FAGE: For the previous year.

MR. MACDONELL: Right.

MR. FAGE: That's how that accounting is done. You send it in any time and since there was more that went in last year than was needed at the very end of the year to cover everything, we're estimating we don't have to send as much this year.

MR. MACDONELL: That's good estimating I think, depending on we don't know what the year will bring.

MR. FAGE: Yes, I mean you have to establish a number and roughly last year's number on the average is what we're working off of there.

MR. MACDONELL: I think if I ask this question I'm going to be going down that road again, but I will ask it anyway. Under that same budget line, back to my same page, the funding really from the $10,274,000 has fallen - when we look at the $6,825,000 - by over $3.4 million. So can you advise whether or not this is really a decrease for safety net funding?

MR. FAGE: No, it's not. What it means is there are dollars in that safety net envelope that are administered by Ottawa that would bring you close to last year's estimates. I can't give you the exact number of what would be in the account today, but when this budget was drawn up, obviously it would be $1.7 million, $1.8 million balance, provincial balance of dollars there. Add the $6 million to it and it brings you up over $8 million. You wouldn't allocate more dollars to build a positive fund in somebody else's account, so to be consistent you would put an estimated value in there that would cover programs, roughly the $8.5

[Page 25]

million or $8,700,000. So the sum total of what was remaining in the account from the previous year, plus the new estimate, would cover the program requirement.

MR. MACDONELL: Well, I would assume that if the money is put into the account, that would be based on applications by farmers to access the account?

MR. FAGE: We do not administer the account, we provide the funds. The federal government out of their Winnipeg NISA office administer those accounts. We would supply blocks of funding into that account and as those individual farmers, because they have varying year ends, they can apply any time in the three years. You have to have a reserve there so they can process claims. They don't have that regularity to know when somebody is going to ask for the cheque, so we would at various times send a sum of money to cover our commitment. They would work away at depleting that.

MR. MACDONELL: Okay, so they're contributing on a 60/40 basis, I mean they contribute 60 per cent?

MR. FAGE: Yes.

MR. MACDONELL: So what you're saying is that they don't contact the province and say that we've had these requests so your 40 per cent share is X, would you please send that, that's not how it goes because there could be extra sitting there that doesn't get taken out?

MR. FAGE: If you were depleted, I'm sure they would send that request, but there would be a lot of duplication, cumbersome, if they approved an application form for NISA. I mean, when they apply that farmer is usually under some financial duress, and if that had to come back to the province for approval and as well be approved by the federal government, monies allocated, the farming community claims it takes two months to get it now, I would speculate it would take two years to get it.

MR. MACDONELL: Well, how do you or the department determine how much they want to send?

MR. FAGE: You would base it on previous years' claims. Obviously, the NISA you can calculate fairly close, the one that's difficult is the CEPA, or disaster relief fund, because you have to have a disaster before you can apply for it and so you obviously will set aside certain sums of money to cover that instance, but it's a bit like a forest fire season - before the season starts, you're only making an estimate and you may use the whole amount four times over or you only may use half of it.

[Page 26]

MR. MACDONELL: So, when you come up with your 2002-03 estimates, then you're already aware of what dollars you've sent to the fund that have not been taken out? The federal government tells you that - here's how much you have in the fund and you use that in making your estimate?

MR. FAGE: Yes.

MR. MACDONELL: Okay. That's a little clearer. Now, the Agricultural Development Institute - is the province still funding that?

MR. FAGE: Yes.

MR. MACDONELL: ADI? They are? To the $2.2 million?

MR. FAGE: Yes.

MR. MACDONELL: Where would I find that?

MR. FAGE: You would locate that on the top line under Administration.

MR. MACDONELL: Okay, on Page 3.5?

MR. FAGE: Yes. Same category we were in.

MR. MACDONELL: So under Administration for the department, that's where the funding would be for ADI? I have to say that . . .

MR. FAGE: There's certainly a much more detailed accounting under that Administration heading, that's where the $2.2 million is allocated out of funding.

MR. MACDONELL: You could have kept some of those staff and paid them under Administration anyway. I do have a concern, and you can take this to ADI in whatever mechanism you communicate with them, but we certainly have tried to get information about their budgeting process and how they spend taxpayers' dollars. I think actually I've raised this on the floor of the House and since you consider it an arm's-length body from government, it's very difficult to get information on their spending. Yet, you regard it as an industry-run body, but if it's an industry-run body, even the Federation of Agriculture can't get information about their spending, so that's an industry-run body as well and so I'm wondering if there's a mechanism whereby taxpayers can actually find out how ADI spends the $2.2 million that it gets of their money?

[Page 27]

MR. FAGE: You're absolutely right. It is an arm's-length industry controlled board. The majority of the board members come from industry and, as you're aware, those members are appointed by nomination from the federation. The only situation I could offer to you would be to contact them and ask them for details on their financial operating agenda.

[6:30 p.m.]

MR. MACDONELL: Been there, done that. I think I've pretty well whipped the programs on risk management to death.

I want to go back to some of the comments that you made in your opening remarks. I guess one of the things - I know that in your speech you talk about opportunities within agriculture and fisheries and I'm actually pleased to hear you talk that way, but I'm curious as to whether or not you can tell me how many - you mentioned how many farms and I think that number of farms you're talking about, somewhere around 4,400 is the number by Stats Canada and it's not the number of registered farmers with the federation - I wonder if you can tell me has that number gone up in the last year since we've done this or even for what information you might have had in 2001, you probably wouldn't have anything to this point for 2002, so I just want to know, is the number of farming operations going up in the province or is it going down? Can you tell me that?

MR. FAGE: We can certainly get you the exact numbers, but the last census over the last 10 years, which just recently came out, there's no question that over time the farming community or the number of participants is on a decline basis.

MR. MACDONELL: I know the most recent national information indicated that there's an exodus from rural communities for sure. I also notice that in your estimate for 2002-03, the budget for the department is down, so I'm just wondering what you would see as your role as Minister of Agriculture and Fisheries to try to stem this exodus and where you see the department can be proactive to try to keep people in rural Nova Scotia?

MR. FAGE: I think that's a great question. When you look at general trends over time and if you go back to the teens, First World War, just 75 or 80 years ago, over 40 per cent of people lived in rural Nova Scotia. The farm community in this province or any jurisdiction in this country, I believe, is slightly under 1 per cent now and that has been a very rapid decline over time through a number of those years and has slowed in recent years. There could be any number of factors because you're dealing with a much smaller base.

As far as the role of this government, when you look at export opportunities, growth in gross farm output, those are encouraging statistics. It means the sector is growing and offers stability that the agriculture sector will continue to have growth and growth potential.

[Page 28]

As far as the participants inside of agriculture, I, as minister for the province, am extremely pleased that since coming into power we have doubled the amount of program dollars in agricultural development and in income stabilization to the agriculture industry. Many stats put us second highest in the country, and when I speak to producers and organizations across this country, producers are envious and the president of the Canadian Federation of Agriculture, at their annual meeting here, made very strong note of the support of this government for agriculture as being one of the best in Canada. I think those words were encouragement for people in this province who deal with that constantly. Many people cite the programs under agriculture development, the new ones that we've instituted in the last two and a half years, as being very progressive and those do help stabilize numbers.

We receive a lot of accolades from across the country on our new entrants program and, as I noted, we've allocated and spent $770,000 alone on that program in this year and next year. Those are extremely important programs and initiatives by this government that demonstrate very strongly support for the agriculture community and very strongly our philosophy that those dollars need to go to the farmers directly. Even with budgetary restraints and the other priorities, we've been able to ensure that happens in Nova Scotia and certainly we're proud of it.

MR. MACDONELL: And you were saying the dollars that double under programs and in looking at Programs and Risk Management, and if we separate them, and we had quite a discussion around risk management in that line item, if some part of that is programs, then certainly I would have to ask how is it that the number has decreased for 2002-03 unless it's all accounted for in risk management, but the line says Programs and Risk Management, so if you've doubled the money in programs, is that doubling entirely contained in the $6,825,000?

MR. FAGE: Again that is a portion of what will be used this year. There is a surplus in the national account, so obviously no decrease, but as you will recall we negotiated a new arrangement two years ago, or 18 months ago approximately in pure time, that doubled the amount of money going into safety nets because we were able to convince our colleagues to support our efforts, that we went to farm cash receipts when we signed that agreement in July 2000 and that is reflective of those numbers there. That would be on the income support side. As well, you're aware of the funds going into agricultural development and, as I've mentioned, a new entrance program. All those funds contribute to direct support to the agricultural community and those direct supports to the agricultural communities are where funding has increased dramatically in this province.

MR. MACDONELL: So the new entrants program, you said you spent $700,000 or over $700,000 on the new entrants program?

MR. FAGE: Yes, the new entrants program, $717,840-odd has been allocated or been approved.

[Page 29]

MR. MACDONELL: And that's over what time frame?

MR. FAGE: That is over this current year we've just finished and those are the applications in this current year we finished and the payments that will go in the coming year. The program is structured that each applicant can receive up to $20,000 and they would receive it over two years, $10,000 in the initial year and $10,000 the second year, and that's why I would include the two years there to make it accurate.

MR. MACDONELL: And will that program be funded out of the Farm Loan Board account or where would I find that on a line item?

MR. FAGE: Yes, the Farm Loan Board administers that and it would be funded out of their account.

MR. MACDONELL: So that would now be Agriculture and Fisheries Loan Board?

MR. FAGE: Yes.

MR. MACDONELL: So I'm seeing a decrease in that account for the estimates for 2002-03 compared to 2001-02?

MR. FAGE: What you're seeing reflected there is we have decreased that particular program or line item by $1.3 million. As you will recall, the loan loss provision program that was a good program announced by the previous government, we decided as a government that the hurt was much more intense out there and that the farming community needed those dollars quicker in their hands. Originally it was announced as a five-year program. We accelerated it to a three-year program. Last year . . .

MR. MACDONELL: You exhausted it?

MR. FAGE: No. Well, the program's three years were up, so that particular line item of over $5 million . . .

MR. MACDONELL: Wouldn't show up for your estimate for . . .

MR. FAGE: Well, it was there, but there was no program to administer because the program's life was over with. So we decreased that particular program by $1.3 million, but it leaves $4 million there for new program initiatives and continuation for this year.

MR. MACDONELL: So the Loss Provision Program doesn't exist any more?

MR. FAGE: No, it has run its term.

[Page 30]

MR. MACDONELL: But you're not reinstating it or replacing it or adding dollars in the budget that would be new dollars to continue it then, I guess that is what you're saying?

MR. FAGE: I think it's important to look at the program that was there because of a particular drought and need . . .

MR. MACDONELL: Sure, sure.

MR. FAGE: So it satisfied the terms of why it was created. It was a single stand-alone program, so the program is over with, the dollars that were allocated to that program. Then you have to decide how you're going to reallocate it, or do you return it all to Finance? What we were able to do here was that because the program was terminated and there was no need to make a similar program, we returned $1.3 million of those dollars to Finance, thus the 4 per cent reduction in our budget year over year approximately, but there's $4 million there that will meet new program obligations this year dealing with a number of those pillars that we talked about earlier. That allows that funding to be set in place to address the new initiatives under the APF and, as well, lever the 60 cent federal dollars.

MR. MACDONELL: So the funding for the Loss Provision Program is going back to Finance. So we have $4 million for new initiatives you say, and if we take $4 million in new initiatives away from the estimate that we had for 2001 we come up with about $2,900,000 that would actually be left in the 2001 estimate. So my thought is what happened to all the programs, the $4 million worth of programs that were estimated in the 2001 budget if we have $4 million for new programs in the 2002 budget and we have a reduced budget?

MR. FAGE: I'm not understanding or following your math or your reasoning there, but if I can attempt to explain again.

MR. MACDONELL: Go ahead.

MR. FAGE: The Loss Provision Program, I believe $5.3 million, $1.3 million of that went back to central - okay? - leaving $4 million of a program that is not operating any more. That $4 million will be reallocated to support and develop new program agreements when we will sign it later this year and lever 60 cent federal dollars on top of that.

MR. MACDONELL: But what I'm looking at then is $4 million left from the Loss Provision Program because $1.3 million went back to central, so that means that $4 million or $5,650,000 in that line item, right?

MR. FAGE: That's right.

[Page 31]

MR. MACDONELL: Which is to be used for new programs, $4 million which you're going to use for new programs. So my question really is when that $4 million, I'm assuming was part of your estimate for 2001-02, the $6,935,000, because you had your loan loss provision program in there, right?

MR. FAGE: Yes.

MR. MACDONELL: So I guess what I'm saying is I'm assuming that the $4 million that would be part of the funding in the 2001-02 estimate must have been for programs as well, but now we're saying that $4 million is for new programs. So I'm wondering what happened to all the other programs in the 2001-02 estimate? They either must have ceased . . .

MR. FAGE: Remember it was $5.3 million that was allocated in 2001 under the loan loss provision program. The program was enforced and the money was expended, right? This year the money is there, that same $5.3 million, $1.3 million is going back to central, $4 million is going to be redeployed to new program funding.

[6:45 p.m.]

MR. MACDONELL: So what we're really saying is that in that estimate of 2001 that $6.935 million - actually there was $1.635 million that was not part of the Loss Provision Program?

MR. FAGE: The other dollars there, the main amount that's there, is another one-time provision for the potato processing industry which was allocated under the Loss Provision Program and those dollars in your forecast for 2001-02, that's where the accounting shows up for the administration of approximately $1.7 million under the Loss Provision Program to support the potato processing industry because the entire crop was rejected.

MR. MACDONELL: So I can say that really that $6.935 million became a loan loss provision as a result of the potato loss?

MR. FAGE: Yes.

MR. MACDONELL: Right, so what accounted for the difference in the forecast, the amount of money that I see, the $8.623 million?

MR. FAGE: Let me go through it one more time.

MR. MACDONELL: Okay, I'm here.

[Page 32]

MR. FAGE: There is the Loss Provision Program. The farm loan, we talked about the new entrants program that would be involved in that, the $700,000 that would be administered out of that.

MR. MACDONELL: Right, okay.

MR. FAGE: There would be the actual administration of the Nova Scotia Farm Loan Board in that and Fisheries Loan Board would be all in that figure. So in your forecast it would actually include that $1.7 million for the processing industry. Those would be the functions and programs of the Nova Scotia Farm Loan Board that would be covered under that.

MR. MACDONELL: Just bear with me here, okay, fine. So once we take out $700,000 for new entrants, then we've got about $1 million left to go into the administration of the Farm Loan Board, et cetera, or whatever else. So I guess my thought is was there anybody borrowing money in the agricultural sector from the Farm Loan Board? That wouldn't leave very much money.

MR. FAGE: Again, it's a little confusing, but this is the administration, not the capital loan portfolio of the Farm Loan Board. Their loan portfolio would be covered under a completely different regime. It would be part of capital borrowing that would be allocated by the Province of Nova Scotia, but this wouldn't involve anybody's loan. This is their administration of the Fisheries Loan Board, the Farm Loan Board and programs that they run. The loan function is a completely different accounting function.

MR. MACDONELL: Okay, a separate item.

MR. FAGE: Yes.

MR. CHAIRMAN: I wish to advise the member you have 10 minutes left in your hour allotment.

MR. MACDONELL: Okay. And the programs that they would run, one of them would be the Loss Provision Program?

MR. FAGE: Exactly.

MR. MACDONELL: Thank you, Mr. Minister, I appreciate that. I'm looking at Fisheries and Aquaculture Services on the same page and just wondering if you can tell me, every line item there, Administration, Marine Fisheries and Field Service, Aquaculture, Inland Fisheries, all of them are up and it's one of the few places that they are.

[Page 33]

MR. FAGE: The only explanation I can offer, and we can get you the exact detail, but most of them, or all of them are up just slightly, but you have to remember there was a salary adjustment between the estimate and the forecast, and that would probably account for that slight variation in those numbers.

MR. MACDONELL: So that wouldn't just be accounted for under Administration then. That would be accounted for through every . . .

MR. FAGE: Well, each one of those lines would have a whole number of functions associated with them. I mean they're large group headings and there would be quite a number of functions associated with them.

MR. MACDONELL: Sure, yes, that's fine. I'm curious about the funding for the organic institute. Well, I guess one question would be where would I find it here and what is the amount?

MR. FAGE: The organic institute, the allocation is $150,000, broken down at $50,000 a year for three years. Which exact heading it's under, well, you would find it under Administration on Page 3.5 under the heading Net Program Expenses. It would be under the administration of Agriculture Services. It would be involved in that, that top line number there. In all three of those numbers there would be a $50,000 appropriation there.

MR. MACDONELL: So on Page 3.5 under Agriculture Services, it would be program expenses under Administration?

MR. FAGE: Yes.

MR. MACDONELL: It would be $50,000 a year for three years?

MR. FAGE: Yes.

MR. MACDONELL: Okay, so that wouldn't be included in your forecast for 2001-02, or would it? Would it be included in your forecast for 2001-02?

MR. FAGE: Yes, I believe it is.

MR. MACDONELL: So you went from $4.126 million to $4.230 million in your forecast and then your estimate this year is reduced by almost $50,000?

MR. FAGE: It's down $50,000, obviously not that program, but it is making sure you have budgets in a line and it's a very small number versus the whole number and that's our estimate for the year, how we can control it.

MR. MACDONELL: Sure.

[Page 34]

MR. FAGE: I guess one of the significant items that didn't have to be budgeted this year in Administration is the grain elevator subsidy. That agreement ended last year. That was $70,000 a year under that agreement. So the requirement under that budget is $70,000 less than 2001-02. The agreement expired. Last year was the last payment in that agreement. So that would be $70,000 that would be freed up.

MR. CHAIRMAN: You have five minutes left in your allotment.

MR. MACDONELL: So that's $70,000 over a number of years or $70,000 in one year?

MR. FAGE: It would have been $70,000 over a number of years, that grain elevator subsidy. I believe, if memory serves me correctly, that goes back to part of the feed freight assistance when it was terminated a number of years ago and the upgrades on the grain elevators were taking place, that that was part of that commitment.

MR. MACDONELL: Can you give me the locations of those grain elevators? It wouldn't just be the ones here . . .

MR. FAGE: My understanding is the arrangement was the Port Authority's here with the grain storage here in Halifax. That's where the major upgrade occurred - if memory serves me correctly; the upgrade was at that time about $1.5 or $1.6 million. There was commitment made around the termination of that agreement from various governments and agencies, and those commitments were payments over time of $70,000 per year. Last year was the last payment or the termination. The requirement there is $70,000 less.

MR. MACDONELL: Was that done as a loan or a grant or a . . .

MR. FAGE: That would have been an outright grant.

MR. MACDONELL: Overall, it was $1.7 million?

MR. FAGE: I would have to look back to the exact details of which year it was signed.

MR. MACDONELL: Could you do that for me at some point and get that information to me?

MR. FAGE: Sure. No problem.

MR. MACDONELL: Actually, I will ask a question if you can squeak the answer out before my time is up. I don't want to impose on my colleague for Lunenburg West, but I'm curious. I had a constituent ask me about grants from the Department of Agriculture and I think he was referring to grants for infrastructure - building a building, building a barn - he

[Page 35]

said they had seen a program or something on the department's Web site and I told him I wasn't aware of it, so do you offer grants for infrastructure?

MR. FAGE: It would depend on - the technology development grant is probably what it would be associated with and it would depend upon what components he's putting in the structure. He would have to meet the guidelines. The best thing I would recommend is to have the constituent contact the department with his intentions and then we could advise him whether it falls within the program or not.

MR. MACDONELL: Would that be the only heading that people can apply for grants under technology development? I know that repairing fencing and so on, is that a loan with the Department of Natural Resources and Department of Agriculture for fencing of streams and wells, to keep livestock out of streams?

MR. FAGE: I think those are ones that are under consideration rather than active at this point. That's some of the discussion that is happening associated with stream banks and water protection.

MR. MACDONELL: Well, they're sending out applications, you should know that, because I asked for one.

MR. FAGE: Okay. I'm not aware that it's at that total development stage, there certainly are discussions. It could be under an award program or one of those ones, but it wouldn't be one of the ones, I don't believe, that we're administering, it could be one of the sub ones with awards or one of those that they might have some dollars available there. That's why it's important to have your constituent contact staff and they can advise him.

MR. MACDONELL: On that one, I would be the constituent.

Mr. Chairman, how much time?

MR. CHAIRMAN: You have 45 seconds.

MR. MACDONELL: With that, I will thank the minister and staff, and in an hour or so, or whenever, I will be back.

MR. FAGE: Thank you very much.

MR. CHAIRMAN: Now I will turn to questions from the Liberal caucus.

The honourable member for Lunenburg West.

[Page 36]

MR. DONALD DOWNE: Thank you very much, Mr. Chairman, and thank you, Mr. Minister and staff, for your informative opening presentation. It covered a lot of areas, in fact it was so intriguing it made me hungry listening to all those good agricultural things, so I had to go grab a bite to eat.

As I understand it, in the differential in the 10.9 per cent reduction in the budget - and this might have been covered, I couldn't quite follow the conversation here earlier, but the Loss Provision Program as I understand was down approximately $5.4 million and the risk management program was also down $1.7 million. That's basically the differential in the budget numbers. Am I accurate on that? Is that accurate?

MR. FAGE: Yes.

MR. DOWNE: That's the 10.9 per cent differential?

MR. FAGE: Yes. I think, just so we have it in the right context, that one-time program for the potato processing industry, the proper estimate numbers, the budget is down 4 per cent, to get to a 10 per cent, you have to add in the actual which was the allowance for those two new programs this year, which were one-time payments.

[7:00 p.m.]

MR. DOWNE: They were additional appropriations by the department through Finance?

MR. FAGE: That's correct.

MR. DOWNE: That's what I understood. The question then I want to ask about is safety nets. Was all the money spent for safety nets the last fiscal year? That's the provincial portion I'm referring to, the safety nets.

MR. FAGE: It's my understanding that they're still in the process of paying down those commitments. We will not know until June what the final commitment is on this year's safety net programs - those cheques are still going out from the federal government's administration of NISA, primarily in Winnipeg. What we have there is the actual amount of money that we allocated in 2001-02 and that would be under the forecast.

MR. DOWNE: So I take it that the minister is saying that they haven't spent all the money in the fiscal year we completed, not the current fiscal year that we're in, but 2001-02, all the provincial government's safety net money was not allocated?

[Page 37]

MR. FAGE: No. What I'm saying is, for our purposes the number you see there is the amount of money that's been allocated, committed, and left the provincial coffers. The actual redistribution of it is what we can't give you at this point because they're currently still paying out cheques there.

MR. DOWNE: So the answer is . . .

MR. FAGE: Our financier says yes, we spent that much money.

MR. DOWNE: And the answer is yes, it's been allocated or committed, but it hasn't been distributed. (Interruption) The Chairman just answered the question. (Laughter)

MR. FAGE: I guess I will answer it myself. It's a little more complex than yes or no. For the province's purpose, again, we contribute the money to the NISA agency and that's the number there that we've committed in the book under the Forecast. Whether that agency has reallocated that to individual producers applying for it, I can't answer that question other than that they're in the process of sending out those cheques.

MR. DOWNE: So under GAAP, if you can legitimately spend the money in a past current year, even though the expenditure doesn't get triggered until next year without - because you obviously don't have the bill for that, otherwise you would know exactly what it is - how does that work from an accounting point of view? Technically under GAAP you can prepay without having an actual knowledge of what the bill is that you're trying to prepay.

MR. FAGE: This particular one has, my understanding, the provision that provinces can pay in at any time because they're allocating it. As far as GAAP and finances, the Finance Minister is the gentleman you probably should question on that particular one.

MR. DOWNE: No, no. Maybe your financial person here can explain to you.

MR. FAGE: Those funds are commitments called to us by the NISA administration for the year 2001-02. That's what they've requested, that's what we've allocated. So those funds have been expended.

MR. DOWNE: So they would have known at that time, when they committed for that kind of money, the allocation of those dollars, where those dollars are going to go? They would have requested of you to give them X number of dollars for that program specifically, because they have to have an idea, if they give you a number, they must know where it's going to go. So I guess the question is (Interruption) There's nothing else? Okay. As a smart deputy, I would have passed that on. I'm sure he would have said something.

[Page 38]

The Industry Development program, $5.3 million Loss Provision last year - $5.3 million, $5.4 million, somewhere in that vicinity - the money that you're allocating this year is $4 million for that program, and last year you spent somewhere in the vicinity of $5.1 million on the safety net. Are you allocating $5.1 million this year? Is that accurate?

MR. FAGE: That's on Page 3.6? Is that where your question is coming from, that particular number?

MR. DOWNE: Yes, the safety net dollars. Your budget last year on your safety net, you spent that money, that was around $5.1 million? Under NISA.

MR. FAGE: Are you picking out a line item?

MR. DOWNE: No, I'm just asking a question in regard to under the NISA Program for safety nets, and $5.1 million, I think, is the number.

MR. FAGE: We can get that detailed breakdown for you, but we don't have it available, how much the exact NISA portion is out of that.

MR. DOWNE: What was the exact number last year for NISA?

MR. FAGE: We would have to supply that for you. We don't have that detail here, but we can get that for you.

MR. DOWNE: I think it was somewhere around $5 million. I could be wrong on that, but I think it was around $5 million last year for NISA. I'm assuming you're going to spend the same amount of money for NISA this year?

MR. FAGE: The projection is to be roughly the same as last year.

MR. DOWNE: So if it was $5 million for safety nets under NISA, $4 million for the industrial development initiative, which is what you're talking about in the budget this year, that's about $9 million. Both of them are on a 60/40 split. So that means for the whole program, if $9.1 million is 40 per cent, has Ottawa committed the other $13 million or $14 million? I forget, I don't have my calculator here. If $9 million represented 40 per cent, what would 60 per cent represent, $12 or $13 million?

MR. FAGE: Yes, approximately. There are two things to qualify that though. The $4 million is there for the new program and reinforced program. We have to sign the agreement first. So there's a fair amount of assumption there until we get the exact terms of the agreement. I obviously think that your percentage is right. I don't see the federal government wanting to give us 70/30 or 80/20, and 60/40 is probably the right split. We will have to check the exact number on what NISA was last year, whether it was $5.1 million or $4.3, million to do your math for you.

[Page 39]

MR. DOWNE: I guess my question to you, Mr. Minister, is not meant to be anything other than just a straightforward question. I'm happy to hear that you must be looking at Ottawa, assuming a 60/40 split would be a probable number. If they go 80/20, it would be great, and more power to you, but from what I gather out of Ottawa with my contacts in the department is, if anything, it's a 60/40 split and be happy to get that. It's not a 50/50, but I'm assuming 60/40.

MR. FAGE: The House of Commons Standing Committee on Agriculture, all Parties were 100 per cent in support of 80/20.

MR. DOWNE: I would be too. I'm in favour of 80/20 too. I tried it before.

MR. FAGE: When I speak to the minister, he's a little more of a 60/40-type guy.

MR. DOWNE: Yes, that's the sense I get. That aside, I guess my question really is if it goes 60/40, we're talking about a $22 million overall funding program for agriculture, part of which will be in the industrial development initiative, which would be about $10 million - $4 million you have there now, top-loaded by $6 million by Ottawa and the NISA, we're talking $22 million, so there's going to be a fair amount of new dollars in fact in the agricultural side, which is exciting. Am I missing something here in looking through these numbers in what's going on?

MR. FAGE: I agree with you completely. It is good news and exciting. I can't comment on the exact number of the dollars that you're estimating there, but there's a significant opportunity and we have our resources in place to move forward with the federal government in providing more in increased funding to the agricultural community, it's just until the agreements are signed and the exact details of the makeup of them. I agree with you, there is no question that it will probably be the 60/40, but until we have a total federal agreement, a signed deal, obviously we're pushing the federal government very aggressively because we see this as a great opportunity for the agricultural community. Your philosophy is right there.

MR. DOWNE: Well I would appreciate if you would, number one, commit to providing me the exact numbers as we talked about, and secondly, if and when Ottawa agreed to some formula in the split, the development of the programs that will be coming forward from that, would the minister be in a position to commit that the farm organizations will be a part of that decision-making process, or has the department already got their wish list put together and, if so, would he present that?

MR. FAGE: We're in very close consultation with the Nova Scotia Federation of Agriculture on those designs and new programs. They're going to be players through the entire negotiation process and will continue to be. Once we have negotiated commitments, firm commitments to be signed, it would certainly be my pleasure to supply them to you.

[Page 40]

MR. DOWNE: Would the minister be willing to share with me the wish list that he has on the table with Ottawa now?

MR. FAGE: What we're dealing with with Ottawa right now obviously involves those programs in my introductory statements, the five pillars.

MR. DOWNE: Yes, I realize the four basic principles or foundations or pillars or whatever.

MR. FAGE: They're related around those areas and, certainly, as we move forward with that, I don't think, in general, everybody would know from them what we're discussing, but I guess on the finite details, certainly it would be dependent on the other half of the funding - or more than half - the 60 per cent partner wanting to move forward in that manner before I could make those types of commitments.

MR. DOWNE: So the answer is no. That's fair enough; I appreciate that.

I want to move on to an issue that was brought up by the Minister of Finance in his comments about license plates and that we can now buy license plates that a percentage of the funding will be designated for the purposes of conservation, or I assume it was conservation, and this might be under your DNR hat, but it could very well be under your fishery hat and/or sustainability of agriculture hat, I'm not sure, but can you inform me if there are any license plates that are going to be provided to be acquired that would be for conservation environmental sustainability, whatever, for either agriculture and fisheries? If so, what programs would it be under and how much are they?

[7:15 p.m.]

MR. FAGE: If all goes well with the new initiative, they would be under the Natural Resources portfolio, and the anticipation with that design would be that conservation and habitat would be the two main areas of selection for those funds, and it would be administered out of a conservation fund established with the Department of Natural Resources.

MR. DOWNE: So it would not be a revenue generator, the monies would be separate from general revenue? Is it a separate designated and a separate board administering it, or is it going to be put under the department revenue stream and the department administer it? I guess I'm really out of order here because we're at Fisheries and Agriculture.

MR. FAGE: But I guess, honourable member, we can go into much more detail in Natural Resources.

MR. DOWNE: That's fine, we'll deal with it.

[Page 41]

Mr. Minister, I was attending the annual meeting of the pork producers the other day and they made a commitment to fund an R & D program. They brought in a doctor from Prince Edward Island at the AVC, the Atlantic Veterinary College, and they are doing research for the pork industry specifically, and now they've actually gone out and had support from New Brunswick producers and the New Brunswick Government to go into a bilateral arrangement for research and development. Recently at the pork producers meeting in Nova Scotia, the pork producers agreed to a check-off specifically for research and development. My question to you is, will the provincial government contribute its relative portion to that equal to P.E.I.'s and New Brunswick's commitment to doing so?

MR. FAGE: Certainly any research and development is very important and I guess I'm not aware that we have been approached for any requests for funding, but obviously we would be very interested in having a look at the proposal.

MR. DOWNE: I understand, Mr. Minister, according to the presenter, that the department had been contacted and the department had said that they were willing to participate, but can you clarify that for me maybe tomorrow when we get back? Maybe they misunderstood or something, but from what I understand, P.E.I. and New Brunswick are definitely financially contributing or agreed to contribute, the producers have agreed to contribute, and there was some indication that the Province of Nova Scotia was going to contribute, but there was no set amount established, but in principle it was supportive and it's really a tri-provincial initiative whereby the provinces and the producers - and then P.E.I. has a special other fund, I don't know where they get that money from, that was actually top-loading that whole thing as well. So it's meant for research and development specifically for the industry to be more cost-effective and efficient.

So if you would let me know that, I know if the producers are in, you would be the only province not supporting it according to the doctor who made the presentation.

MR. FAGE: No, I'm certainly not aware of any representation that has come forward to myself, but we will have a look at what has come forward to staff there and bring that back to you, honourable member.

MR. DOWNE: I understand right now ACA Co-Operative, we're taking a fairly large number of turkeys in processing and recently they've cancelled a number of growers and are forcing them to go to Quebec. I know what it's like shipping to Quebec, it's not a lot of fun. You're not paid the same price and there's a built-in board offset, but you know the line paying price is different, it's not based on grades as such and so on and so forth. ACA recently just cancelled contracts or agreements to process a number of producers in the province. Is the minister aware of what's going to happen long term if we get more and more of a percentage of our product going to Quebec as processing? We're importing basically the grain, we're importing the poult, we're growing them and then we're shipping them off to Quebec, and it appears that even more producers are being forced to do that. It's going to

[Page 42]

cause huge problems at some point in time. Is the minister aware of what's happening at ACA with regard to that and, if so, what are we going to do about it?

MR. FAGE: The honourable member is certainly aware that any time you would transport turkeys or any feathered fowl that there is obviously the opportunity for damage and the effect of ending up with lower grade, and certainly the Turkey Marketing Board has from time to time when they've had a concern approach me or staff in regard to marketing conditions or price structure in Quebec. Currently I'm not aware, nor my deputy, that the Turkey Marketing Board or any individual producer had come forward with any representation on the issue, but certainly we would welcome it and sit down to see if we could find some resolution to the situation if there is one.

MR. DOWNE: Yes, I don't know what the long-term issue is going to be there, Mr. Minister, but from what I understand there are two or three producers who have been told they cannot take the turkeys any more simply because they cannot market them. Yet the product is coming in from Quebec and Ontario which we are shipping to and it is just becoming a mess. Would the minister undertake to find out so that tomorrow maybe he can inform us as to, you know is there any reason for the industry to be concerned about that and, is there anything the government can do with that?

MR. FAGE: There's no question, certainly we don't mind having the Turkey Marketing Board contacted and apprised of the situation but, as I said earlier, we're more than welcome to try to do our best to negotiate a mediator to do those type of things and we have done that and will continue, but to my knowledge there hasn't been any representation come forward from them yet.

MR. DOWNE: Yes, probably not, it is an issue that, you know from what I understand is just that ACA cannot sell the product and it's a business decision, but my concern is that at some point in time, depending on what percentage of our product is being grown here and exported to be processed in Quebec and Ontario, it is an issue, especially when we lend money to ACA and it's an important part of the rural community in the Valley, but at the same time we've also got a lot of money in ACA and producers are being forced to ship to Quebec and it's very difficult.

Mr. Minister, the salaries between minister and deputy is up $15,500. I'm sure your deputy is worth a lot more of a raise than $15,500 for the work that he does. Can you explain why the increase in your office costs of $15,500?

MR. FAGE: I checked with staff and the reason for the increase is the negotiated salary increases over two years, 2 per cent and 2 per cent, and that would be reflected in that number.

MR. DOWNE: Yes, it's not all coming in one year?

[Page 43]

MR. FAGE: That allocation is an indication of anticipating the settlement, but the honourable member I am sure is aware that, once the contract is signed, then the back pay has to be given at the same time. I believe the agreement with employees would take effect - almost 18 months to two years have elapsed without a contract, so that's why two years' allocation of two and two has been appropriated there, because, in anticipation of signing a contract, then we would be obligated at a minimum of 4 per cent . . .

MR. DOWNE: That would be for your secretary and the deputy's secretary, are they the two staff persons you're talking about?

MR. FAGE: You're absolutely right, that involves the two secretaries.

MR. DOWNE: So two secretaries, two years retro at two plus two. Okay, that seems probably very accurate. That seems reasonable. What does your secretary make in a year?

MR. FAGE: We would have to look that up. We can provide that.

MR. DOWNE: The Academic Support and Research Funding is actually down $14,500. Can you explain the academic support and research, these are the grants?

MR. FAGE: We will look up why the Forecast is a little higher than the Estimate, but the two estimates are exactly the same in 2001-02 and 2002-03, they're both at $206.5. We will find out why the Forecast was higher, but the two estimates were identical. Did you want the list of grants that were paid? I don't have the comparison for the year before.

MR. DOWNE: Sure, if you could provide it for me tomorrow, that's fine. The $515,000 that was spent in Policy and Planning, the estimate showed $491,000. There is a $24,000 difference. Is there any major issue there that you can explain?

MR. FAGE: The staff tell me that that basic variation between the two numbers, again, is the anticipated 4 per cent for salary, the largest component of that.

MR. DOWNE: What's included in the Resource Stewardship under Agricultural Services? It's going up $136,500. Is that just salaries as well, or is that additional program development?

MR. FAGE: Under that particular Resource Stewardship heading there's $208,300 associated with Administration, then there's Resource Land Protection Services that would involve $1,016,300, Environmental Management would involve $297,000.

MR. DOWNE: So the $136,000 increase, is that spread out through the three of them?

[Page 44]

MR. FAGE: It's spread out, actually, there's more; regional services in that category, and that's $683,900 as well.

MR. DOWNE: Mr. Minister, under that regional services, would that be local staff?

MR. FAGE: Yes, that would be local staff. There's also the 4-H program - excuse, it's not the 4-H Program, the other $1 million . . .

MR. DOWNE: I was going to say, I have a question down here, I didn't think it fit in there.

MR. FAGE: The $170,000 is the Integrated Pest Management, that's the other program involved there.

MR. DOWNE: Integrated Pest Management initiatives.

MR. FAGE: That particular one is a new program that's allocated under that.

[7:30 p.m.]

MR. DOWNE: How much, again, was the Integrated Pest Management?

MR. FAGE: That's $170,000.

MR. DOWNE: So that's $170,000?

MR. FAGE: Yes, and that's a new initiative.

MR. DOWNE: Some of the other ones were cut back a little bit. This one here is obviously a new one. There's $136,500 differential, it's up. So some of these others took a little bit of a cutback.

MR. FAGE: Yes, and you have your 4 per cent salary included in those figures too.

MR. DOWNE: The regional services, my colleague, the member for Cape Breton The Lakes, has brought it to my attention time and time again that there's no staff up there, and that the farmers are concerned and they can't access Agriculture as well as they should. Is there any provision in here for providing additional staff persons for Cape Breton?

MR. FAGE: Under this budget there is a staff person funded up there.

MR. DOWNE: Is there?

MR. FAGE: Yes.

[Page 45]

MR. DOWNE: Okay. Great. Where is that?

MR. FAGE: Under the regional service budget.

MR. DOWNE: So that's for that $36,900 that you're talking about.

MR. FAGE: Regional staff services was $683,900. That's a staff position and office in the Sydney area.

MR. DOWNE: He will be very happy to hear that. He's in Cape Breton tonight, so it's going to be good. The department addressed new ongoing challenges including the Risk Management. The budget for Risk Management is down $3.449 million. I think I've already asked you that question in a roundabout way, but can you explain that to me again?

MR. FAGE: The forecast is what has been contributed this year.

MR. DOWNE: That was to do with the funding with Ottawa on . . .

MR. FAGE: Yes, $10,274, for the remainder of the year, our estimate is to provide the same level of support as last year is $6,825,700.

MR. DOWNE: The Legislation and Compliance Services, when you add all the difference up, there's administration and legislative service, fishery licence and investigations, quality evaluation. Quality evaluation is up $358,000. The budget wasn't met last year. Can you explain to me why the difference?

MR. FAGE: I will start - the staff are just checking - in the Department of Agriculture and Fisheries we assume the duty for virtually all inspection of food services now. We've acquired additional staff from DOE who are now on our budget. We've taken over campgrounds, daycares and a number of other recreational facilities. It seemed a much more practical and sensible way to look after food inspections if it's embodied in one department. Over the last year . . .

MR. DOWNE: That's the $358,000, and it's simply that DOE gave you $358,000 and the persons who would go with that.

MR. FAGE: Yes. We took the employees. I can't tell you the exact amount of money that came . . .

MR. DOWNE: He can.

MR. FAGE: From DOE, it was $111,000.

MR. DOWNE: So the other $247,000 is additional staff?

[Page 46]

MR. FAGE: The finer breakdown on that is the $111,000 for the increased inspection services and the new employees to the department; there's also increased revenues in that particular budget for fish processing licensing fees of $30,000; as well, there was an additional $80,000 allocation for food safety; $48,000 for the Atlantic Dairy Livestock Improvement Corporation.

MR. DOWNE: These are new initiatives?

MR. FAGE: Yes, under that particular heading.

MR. DOWNE: Okay.

MR. FAGE: The other one is the fisheries enforcement increase there that was committed to by the government, an additional $36,000 to finish that increased enforcement position this year to finish that complement. That's roughly it.

MR. DOWNE: Mr. Minister, would you mind providing that breakdown, I would appreciate it. They're all needed, that's for sure, but it looked like extra jobs and I was trying to figure out where it is. You mentioned the $30,000 for different fees. Can you give me a breakdown of all the new or current fees that you're charging - your user fees in the Department of Agriculture and the Department of Fisheries? Could you provide what they were last year and what they are this year so that I know the difference and what's happening there?

MR. FAGE: Just to be clear, my understanding, in Agriculture and Fisheries, - and we will check - there has only been one fee increase and that was this fish processing licence, it went from $100 to $200. That's the inspection fee on cost recovery for inspecting fish plants.

MR. DOWNE: That's the only new user fee or increase in fees in both departments?

MR. FAGE: That's it that I'm aware of.

MR. DOWNE: Mr. Minister, while we're talking a little about fish for a second, the whole illegal purchasing of lobster, the cash for lobsters - I don't know what the term is that they use, everybody has a little different one - and it seems to be fairly pervasive and there's a fair amount of activity. I know your department has been working on it for years, actually. One of the options you were looking at was to size the storage pounds or the poundage so that you don't have these rent-a-truck buyers for two months of the year and then they're gone. Not everybody who rented a truck and became a pound was doing things illegally, I wouldn't want to leave that impression, but certainly the ones who are there in the business and doing a legitimate job are asking the question, why be honest when the other guys are getting away with it? It's almost like a joke. I've heard people laugh about it. It's an embarrassment for anybody in government, us and you, no matter who's in power.

[Page 47]

Can you explain to me, when you start to go down the road on the size of the pound, which, to some degree would have stopped the overnight persons, why you didn't follow through with that? The steps that you're taking now, can you be assured that there's no illegal or cash-for-lobster purchasing going on with maintaining the pounds, the size, that they currently are? It's a huge issue, I realize that.

MR. FAGE: There are two, though related, separate issues. I think I will address the illegal one first. This government has taken the issue that the industry has brought forward very seriously and have done a number of initiatives that are new. For the first time, I would remind everyone, we require anyone with over 25 kgs. of lobster to produce a bill of sale or a destination for that. That was an extremely important regulation to put in a year and a half ago because, for the first time, it gave our inspection people the right to be able to designate where they were going. If that couldn't be proven then you could confiscate lobsters for the first time in Nova Scotia, which was extremely important.

We work closely with our federal partners at DFO, as well as Revenue Canada. We've also, in this province, hired new employees in enforcement, and that complement continues to come up. So you will see much more concerted activity on illegal lobster fishing or illegal fishing in any form, and it's a very strong partnership between those government agencies, provincially and federally, that are spearheading that initiative.

The other issue is the lobster review of the lobster purchasing requirement. I think the issue you're referring to was a proposed set of guidelines that went to public review last summer, the report will come down in the very near future. There are a couple of things, as I'm sure you are aware, at the ministers' meetings and to the industry, the requirement for 25,000 pounds from the current 250-500 pounds was dropped from that study last fall. The report on lobster buying and fish processing licences will be made public shortly and it will deal with a number of very important and pertinent issues dealing with food safety and compliance. You will see that reasonably soon, it's about ready to be released to the public.

MR. DOWNE: The sooner the better, Mr. Minister. I mean it actually promoted illegal activity in the past. People were laughing so much at the fact that governments were doing nothing about this issue, it was forcing companies that had complied with the law, they were losing clientele and customers, they were losing their business share to these illegal people running around the industry. I have no sympathy for those people who are illegally going out and paying cash for lobsters. The lobster fishermen were saying that nobody's getting caught, nobody seems to be doing anything about it, nobody seems to be putting any teeth to this. I've heard of individuals even out bragging about what they're doing. It's a huge problem. I know there are investigations underway. You cannot comment on that. I know you're privileged to certain information.

I sure hope we straighten that up because lobstering is one of the few parts of the fishing industry that's around and, if we don't deal with this issue, we're going to have a problem with lobster catch and everything else; they're not being recorded. We don't know

[Page 48]

what's going on. We're bootlegging lobsters as if it was the prohibition era. It is a problem, and I support anything you do to straighten it up. I hope you don't become weak on this issue. I hope you become tenacious and strong on this issue.

[7:45 p.m.]

MR. FAGE: Again I would reiterate that this is the first government that has taken this issue seriously in this province. We have employed more staff. We've passed regulation that allows our inspectors to seize product if there is over 25 kgs. involved, and these are very large changes that the industry congratulates and supports this government strongly on. As well, all retail outlets, for the first time, have been required to be licensed to help address those illegal lobster sales that you would see at tanks anywhere around this province. This is the first government that has made sure that they are licensed, and we have put the dollars, the personnel and the commitment. The industry, in comments to myself, acknowledge strongly that we asked you to support us in curbing this and stopping it. They acknowledge and congratulate this government very strongly, that we're out there doing it.

We certainly appreciate the support of all members of the Legislature in this initiative because it's one, I agree with you, honourable member, that has to be dealt with. We are dealing with it and our commitment is serious and the industry has been supportive so far and has been very vocal in their acknowledgment that this government is leading the way in that effort. Certainly, not in any position to discuss any particular investigations, but there are a number of agencies, provincial and federal, that have a virtual task force dealing with this. It's moving forward I hope to a positive conclusion and certainly will not be from a lack of commitment, morally or financially, from this government.

MR. DOWNE: I had a chance to talk to a previous minister about it and I think you would agree that the department was doing a lot of work over the last four years trying to - and you've been there three years. I think there's been a lot of effort made to try to get a handle on this issue because of hearsay and you've got to be able to substantiate it. I do hope you don't weaken on this issue.

Nova Scotia Community College is up $634,000. Part of that is the manure storage facility, I understand. Is there anything else in AC I should be aware of?

MR. FAGE: Agricultural College or community college?

MR. DOWNE: Nova Scotia Agricultural College funding is up $634,000.

MR. FAGE: I thought you said community college.

MR. DOWNE: AC I said, Agricultural College. I used the old term, sorry.

MR. FAGE: Staff tell me that's primarily salary increases.

[Page 49]

MR. DOWNE: Salary increases. Salary increases?

MR. FAGE: The net budget for 2001-02 was $5,383,000 and the breakdown on it, janitorial and safety, is $150,000 - excuse me, the easiest way to quantify those changes, is janitorial and health and safety is an additional $150,000. That's an additional allocation. The next one is the shortfall in revenues - staffing, operational funding issues was an additional $200,000. Tuition revenue increase, that is $70,000, but that is bracketed, so that's increased revenue. As well, wage settlements accounted for $661,700; general budget reduction, which is a positive, was $130,000; HR efficiency gains was a positive of $156,000 and you get to a net budget for the year 2002-03 of $6,036,000.

MR. DOWNE: The administration is up $257,000.

MR. FAGE: You're talking about the administration of the college?

MR. DOWNE: Yes.

MR. FAGE: Yes, that is up approximately, over the forecast, of $250,000.

MR. DOWNE: Can you explain, at a time when I thought you were cutting administration why you would be increasing administration by $250,000?

MR. FAGE: The first thing I would like to note is the estimate, that's roughly only $100,000 difference, but I'm informed by staff there is the wage increase component in there. As well, efforts to bolster enrolment, there is $100,000 initiative in there attempting to have more young people enter the Nova Scotia Agricultural College.

MR. DOWNE: The academic programs are up $552,000. We're going to be doing some new programs at the AC, is that just new staffing?

MR. FAGE: Is that academic programs?

MR. DOWNE: Yes.

MR. FAGE: There's an actual increase, over estimate, of approximately $500,000?

MR. DOWNE: Yes, $552,000.

MR. FAGE: The numbers associated there, again, would have the increased salary component, as well with the National Research Council Canada there's been a couple of new chairs established there and that would be the funds associated with them as well, allocated in that line.

[Page 50]

MR. DOWNE: That's the new chairs, Mr. Minister, to do with environment, waste management, composting, manure composting issue?

MR. FAGE: Yes. As well as climate change, I believe.

MR. DOWNE: Climate change, correct. Those are very worthwhile.

MR. FAGE: Yes. I think it's very important to note that the Nova Scotia Agricultural College, the expertise of the staff . . .

MR. DOWNE: Leading the nation in those areas.

MR. FAGE: . . . they've done extremely well in being able to attract a number of Canada Council grants. As an institution in Atlantic Canada, their percentage, I believe, is higher than any other institution so I think it's certainly an important issue for the agricultural industry and aquaculture industry but also a tribute to the staff there for the quality research they do.

MR. DOWNE: I totally agree, and those particular areas of research are very specific to current initiatives and current issues and not just somebody's pet project for a lifetime, it's actually applied research that we can use every day. Am I correct on that?

MR. FAGE: Yes. That's exactly right.

MR. DOWNE: Who are the two professors, who are the people who are chairing those two . . .

MR. FAGE: For the climate change it would be Dr. David Burton, and for the waste management it would be Dr. Rob Gordon.

MR. DOWNE: Thank you, minister. We talked a little bit about 4-H. Was the 4-H funding increased this year, or decreased, or held its own?

MR. FAGE: We will get you the exact figure. It's very close to being stable.

MR. DOWNE: I hope it is.

MR. FAGE: It's in excess of $700,000, which we've maintained the level the last three years. We will get you the exact number. The estimate for 2001-02 was $798,100. The estimate for this current year or the upcoming year of 2002-03 is $812,700. Again, that's the amount allowance for salary.

MR. DOWNE: Basically staff salary adjustments?

[Page 51]

MR. FAGE: Yes.

MR. DOWNE: Well, thank you for holding that, Mr. Minister, it's an important program in rural Nova Scotia. I know that it was on the block for awhile. I'm glad you're able to hang onto it. It's a good program. Is the School Milk Program still in place?

MR. FAGE: Yes, it is.

MR. DOWNE: There's no conflict of interest there, but is that still going to go at the same level of funding there?

MR. FAGE: I believe there had been an adjustment last fall on the actual percentages. We could supply that material to you, but the estimate was $450,000 in 2001-02. The upcoming year, 2002-03, it's down $50,000. The estimate for the coming year is $400,000 and the subsidy is 8 cents per 250 millilitres.

MR. DOWNE: So the subsidy is reduced?

MR. FAGE: $50,000.

MR. DOWNE: Has the industry agreed to pick up the subsidy for differential for the School Milk Program?

MR. FAGE: Those discussions were held with the industry, and the reason for the decrease in the allocation was that the forecast or the actual was $406,000. So $400,000 really leaves the same program in place and covers the volume.

MR. DOWNE: So comparing Forecast to Estimate here, the differential is $6,000, and you felt it would be basically in line? Do you see a consumption decline in the School Milk Program? (Interruptions) Pardon me? I've got one minute left. Thanks for the warning.

MR. FAGE: There are two factors at play here. Consumption has been in a slow decline, there's no question. That's why there was less money involved, but one of the major factors is the dramatic decrease in the number of children who are dropping out. The forecast for this year, enrolment will decline by 2,000 students for Nova Scotia, and that decline of roughly 2,000, I believe, is a trend that has been there for about three years now.

MR. DOWNE: Do you find, Mr. Minister, that next year the School Milk Program could have consumed all that, or wanted more, or are you prepared to move that program back up - you're basically telling me that the reason it has dropped is that it's tailored to the actual usage?

MR. FAGE: That's right.

[Page 52]

MR. DOWNE: With the decline in the enrolment in the school, the enrolment program, that $400,000 should, in fact, be right on?

MR. FAGE: That's what we're forecasting at $400,000, that's probably the usage. Obviously, if there's a little variance, those things are accounted for and you would see it in the following year.

MR. DOWNE: Is chocolate milk covered under that?

MR. FAGE: No, chocolate milk is not covered.

MR. DOWNE: You drink more chocolate milk than white milk don't you?

MR. FAGE: I enjoy both chocolate and white.

MR. DOWNE: I will look forward to having a chance to - I have five or six more pages of questions so I will be back, Mr. Minister.

[8:00 p.m.]

MR. CHAIRMAN: Are there any questions from the government members before I go back to the Opposition.

The honourable member for Hants East, your time is now 7:58 p.m.

One moment please, we need another member in here for a quorum, please. Could you just ask someone to come in from outside the room, please.

MR. JOHN MACDONELL: You would prefer I wait?

MR. CHAIRMAN: Yes, please. A quorum has been achieved again. Thank you.

MR. MACDONELL: Thank you. Mr. Minister, I just want to go back a bit to programs in Risk Management, but could you tell me what again was spent I guess on the Loss Provision Program and NISA, and if NISA and Safety Net are the same thing or are they two different things?

MR. FAGE: The Loss Provision Program was approximately $5.3 million and that was a completely separate program from Risk Management. To confuse it a little more, remember that the potato processing industry is in that line too. So there's an additional $1.7 million to add on that, it would bring you up to $7 million.

MR. MACDONELL: Okay, yes.

[Page 53]

MR. FAGE: Risk Management contains a number of programs, NISA, CIFA would be in there, and some crop insurance implication would be in there. I do not have the actual NISA amounts spent last year but, if the honourable member will allow us, we will supply that to you tomorrow what we actually spent on NISA last year.

MR. MACDONELL: Sure. That just leads me to another curiosity, because in the Public Accounts booklet on Page 10, fourth line down from the top, it has Safety Net Programs and $1,666,000. On Page 9, 10 or 11 up from the bottom, it has NISA Program of $1 million. So I'm curious as to why there are two different line items if NISA is considered part of the Safety Net Program, or at least that's my understanding.

MR. FAGE: The one section, remember, is the last budgetary year, 2001-02 - excuse me, 2000-01, the year previous to that. The next one was NISA Program payment, and that payment was $1,080,443 and that one was paid again in 2000-01. We're getting two budgetary years mixed up when you pull those numbers in. Those were the year previous to the year we're looking at, okay? So those numbers . . .

MR. MACDONELL: Right, what we're looking at here for 2001-02 is a year beyond this booklet which is 2000-01?

MR. FAGE: Yes, that's right. So that's why if you pulled that booklet up you're putting two budgetary years together.

MR. MACDONELL: Yes. Not all that helpful but, yes, okay. So I have to keep in my mind when I ask questions out of this that I'm talking about a completely different budgetary year than what we're talking about here?

MR. FAGE: Yes.

MR. MACDONELL: Okay, good, thank you very much. The House of Commons committee that you made a presentation to, when the federation, I believe it was, presented, actually Fraser Hunter made a presentation there and he raised some very good issues. He made an excellent presentation and one of the things he did talk about was Scotsburn Dairy and that you had even mentioned about the new ice cream, I don't know if it was an extra facility?

MR. FAGE: Yes, there's a new facility that Scotsburn constructed in the last year for ice cream production here in Nova Scotia.

MR. MACDONELL: One of the concerns he raised - because he's really a shareholder in Scotsburn - he said a problem that he had was that the dairy which is going to be producing ice cream that they are going to try to compete with everybody else who is producing ice cream and yet they were going to use butter-oil blends in the production of ice cream, which he said was actually counter to his business, I mean using butter-oil blends.

[Page 54]

He's a dairy producer. So I just wonder if you have talks with the federal minister, if this is an issue that does come up and where we are in that. My understanding of this issue, and it has been a couple of years, I think, since I discussed this with anyone, but that there was a limit on the amount of butter-oil blends that come into the country and yet the Americans had surpassed that by some large amount, actually over double, from what I understand. There didn't seem to be any action from the federal government to get them to back up what their allowable level was. So I'm just wondering, in any discussion, does that come up and where are you with it?

MR. FAGE: Yes, those issues involving trade, in the general sense, obviously would be issues we would discuss at the ministerial level. Specific ones such as the butter-oil, depending on the size of the problem, certainly would be issues we would be discussing or corresponding and urging the federal government to honour their obligation at any time. That particular issue is one of those ones where the federal government hasn't appeared to have been very aggressive. Let's be kind. They at least appear to be awful soft in pushing forward the issue of butter-oils and some of the sugar products that would be associated with the dairy industry. It obviously is a national issue that deals with trade. The issue, though, if a company is importing it, is, I think, of extreme concern to the industry and should be a concern to Nova Scotians and Canadians. It gets much dicier if the product is being manufactured here in the country.

MR. MACDONELL: Right, okay. I can see that. Well maybe I will just leave that. I could see how that would throw another wrinkle into the process of trying to keep it out of the country. I guess I still would wonder if the federal government even could exercise some restraint on that area as well, but I can't ask you that. I will have to save that for the federal minister.

MR. FAGE: I'm absolutely certain, I mean, you and I, both of us, would be supporting the industry in their discussions with the federal government to try to hold their feet to the fire. These are the rules, now let's make sure they're followed.

MR. MACDONELL: Yes, and if there is a mechanism to circumvent the rules, then certainly we would hope that the federal people would be active in trying to see if they could . . .

MR. FAGE: Enforce the regulations.

MR. MACDONELL: . . . yes, enforce the regulations. I was interested in your numbers, actually, around when you talked about labour market reform and you said that 1.5 per cent of agricultural production is from, was it Nova Scotia?

MR. FAGE: Yes.

[Page 55]

MR. MACDONELL: We employ 2 per cent of the country's farm labour. So I'm curious as to what role your government sees for themselves in trying to somehow facilitate an easier labour package, I guess, that some of the obstacles that the agriculture sector has run into around labour and the use of labour and trying to get enough labour. It certainly shows that we employ a high percentage in relation to our production in the country.

MR. FAGE: For Nova Scotia, that percentage is significant when you look at the number of people that are actually employed, especially in the horticulture industries and seasonally. When you look at ways that Statutes could be addressed to help encourage employment here, obviously we would rightly point out that the EI situation is the one that probably could do the most dramatic help. If you look at the area of Nova Scotia you're from, if there was an easier way to employ more people in a situation, blueberry raking versus mechanization, those situations help tilt the balance to more mechanization. So we would lobby with the industry, again to the federal government, to have a look at changing those situations, specifically for that industry.

There is no question that they would put forward lots of arguments that there shouldn't be exemptions, but this is one industry where the rules work very hard against the seasonal opportunity. Many families could use a few weeks work and it certainly would help out the social service rolls in this province. What tends to happen at this point is there are actually a number of permits requested to allow offshore labour to come in for the summertime to work in those operations because those operators simply cannot find Nova Scotians or Atlantic Canadians, or enough of them, to fill that work requirement.

MR. MACDONELL: When you talk about social services, we're not really talking about EI in that case. I mean, we're talking about Nova Scotians who would come under the province's social service system. So there is something that the province can do to prevent clawbacks if they make extra money and things that would be incentives for people to work. I think that there are people there that certainly, like anybody who goes to work, you don't want it costing you more than you're getting. So I think for those who are able and willing and would like to try to get extra income, we certainly don't want to see them penalized for their initiative.

MR. FAGE: That comes back to the EI rules again, that every hour has to be accounted for.

MR. MACDONELL: Right, for sure. Okay. I'm interested in your water task force. I would like to know what it is actually and I'm also wondering, is that related at all - I might get this wrong - but the PFRA, am I right with that?

MR. FAGE: Yes.

[Page 56]

MR. MACDONELL: So tell me where you are with the water task force because people are talking as though this year is predicted to be another dry year and I'm wondering what you're thinking there?

MR. FAGE: I'm with the honourable member for Kings North. I'm hoping for a year where there's sufficient rainfall and we will deal with the outcomes from that perspective. What we have, basically, within the department, last Fall we formed an inter-divisional water task group to address the many challenges of ensuring reliable sources of good quality water for the industrial sector within the province, i.e. agriculture and aquaculture and fisheries. That's the main focus and the cross-department water task group will help our agriculture, aquaculture and inland fisheries industries with a more coordinated response to water management. Water is obviously a shared resource and other departments and other Nova Scotians have to be involved in that process.

[8:15 p.m.]

When we look at the PFRA's involvement, they are a division of the federal agriculture and agri-food group who for many years have dealt with water and water-related issues in Western Canada. We were very pleased last fall that the federal government consented, after industry and after provincial governments' discussions and requests, to allocate $300,000 in the budgetary year that just ended on March 31st, for staff, to move some of that resource and some of that expertise and those individuals here. So that was part of the water management group and the meetings that I discussed in my opening statements a little while ago. We have assigned one staff person to coordinate that effort and we will be working very closely and have been working very closely with industry and the PFRA and our federal component to establish and finish those inventories, look at opportunities, and once the inventory and the policy part of it is done, then I hope to be requesting our federal partners to get more directly involved again on this particular issue.

MR. MACDONELL: As far as the water task force, you indicated that there are a number of departments involved. I'm really wondering as to exactly, you know, when the rubber hits the road, where are we with that? If the PFRA is doing an inventory, then I'm just wondering two things, the two things I'm assuming are interrelated in some way, but I would like to know your timeline, like when you're hoping to have information enough that you actually can apply it on the ground situations and also the $300,000, if I remember correctly, at the federation's meeting in December, I think it was, when Geoff Regan announced that money. So you say that was for the budget year that ended on March 31st. So I'm assuming that $300,000 . . .

MR. FAGE: Is spent.

MR. MACDONELL: . . . is spent. So do you think that that was enough, you know, to get you where you were hoping and also is there any indication, if it wasn't, that the federal government is interested in putting some more dollars for this year?

[Page 57]

MR. FAGE: Two things, just to clarify, when I say inter-divisional water task group, it is not a task force. It's a task group and inter-divisional means within the department, all our different agencies within the department. There will be obviously more extensive work with other departments as this moves forward. We've already developed our terms of reference and have begun that process. The PFRA funding that was announced at the federation's annual meeting was to be expended and my understanding is it was expended in this budgetary year that just ended March 31st. From a province, and I know the industry feels the same way, we view that as the beginning with the federal government on the long-term commitment on financing and water strategy and expertise and nutrient management and water quality and quantity, all those issues.

MR. MACDONELL: Yes.

MR. FAGE: That will be the next phase, keeping those discussions going, and our goal and the industry's goal is a long-term commitment from PFRA or federal funding. So those discussions are being pursued right now.

MR. MACDONELL: How are they going?

MR. FAGE: I guess that's the hardest question in the world to answer on somebody else's behalf of the people you're talking to, but we're very hopeful.

MR. MACDONELL: I guess that makes me ask the question, the $300,000 that they announced last December, did that come as a surprise or had there been, you know, several months of negotiations to get that money which would maybe give you an indicator of what you might be up against?

MR. FAGE: I, myself, as minister, on this issue have been in discussions with the federal minister. That would have been one of the continuing issues that we've been pursuing since the fall of 1999 and I hasten to add also that the industry has been pursuing it very hard from that time frame or earlier.

MR. MACDONELL: Yes, well, that's not necessarily encouraging in the sense that it took two years, but it's encouraging in the sense that they did come through with it and . . .

MR. FAGE: Well, to never have been able to access the funding in 40 years and it is, you know, there's optimism out there that we've got the feds engaged in the industry and from a provincial perspective because that is the first time that funds from PFRA have ever been allocated in Eastern Canada. So, you know, there's some optimism.

MR. MACDONELL: Yes, it's a good thing.

MR. FAGE: Yes.

[Page 58]

MR. MACDONELL: It's a good thing. I applaud you for your effort, for your department's effort. I don't want to be seen as knocking you for a job well done and certainly I would encourage you to stay on them and I know you don't need me to say that. I know that your people are doing that. I think it's encouraging considering the way the safety nets were set up and the federal response to our growth situation and also in regard to how it doesn't apply to our more diverse agricultural community. The fact that they were willing to take a look at this and supply those dollars to help us with a strategy around the lack of water on occasion, certainly makes it appear that the federal government is thinking, well, you know, there are concerns that have to be addressed in Nova Scotia that are things that we've seen in Western Canada where the safety net program actually seems to be designed more appropriately for. So I would see that as a good thing. I think the fact that the federal government has done it once, that it has every bit of optimism. If they see it has been a positive thing as well, they will consider, you know, maybe this worked.

MR. FAGE: We've got our foot in the door.

MR. MACDONELL: Right, you've got your foot in the door. Now, Mr. Minister, you're the co-chair for the conference that will happen in June, I think?

MR. FAGE: Yes.

MR. MACDONELL: And that's for the national plan?

MR. FAGE: Once a year there is an annual federal-provincial ministers meeting and that always occurs in the month of June. So last year it was in Whitehorse and it would rotate between the provinces and the territorial governments. Nova Scotia's turn to host it is this year. By virtue of hosting, you become national co-chair. That would be the process.

MR. MACDONELL: I guess I would like you to spell out your understanding of what that process is around. I know it's referred to as a national action plan and agricultural policy framework and I wonder is this discussion mostly around safety nets in safety net programs?

MR. FAGE: The majority of the discussion, I think, would be more properly put using the term risk management and risk management, in my paraphrase of what we're discussing, would be an inclusive system. It would very much be a total system on the risk management side. We're looking at a system that would incorporate the elements of crop and livestock insurance, income support and stabilization of NISA, and disaster relief of CFIP. An all-inclusive discussion is what's occurring there.

As well, under that meeting or those discussions will be the headings of the pillars there, renewal, life sciences, and those types of issues, and other opportunities that can be attachments to those agreements and that could be very beneficial to our producers in our industry. It will be the discussion, since the risk management program review, is going to be much more widespread and encompassing for looking at, is there a way that we make the

[Page 59]

programs better, and remove elements from a number of programs and see if they will fit together to satisfy the needs of producers even better.

The one issue from Nova Scotia and most eastern provinces that we continue to set aside is, obviously, trade-distorting subsidies. It is very difficult, from our view, to encompass them in a normal risk management package that deals with weather, that deals with normal market conditions, and that's the one we are supportive of our western colleagues but we would want to see that dealt with as a separate issue.

MR. MACDONELL: Can you tell me what the acronym - is it CFIP or is it CFIA - is for the federal program? It used to be the AIDA Program, I think.

MR. FAGE: Yes. Disaster.

MR. MACDONELL: So is it Canadian Federal . . .

MR. FAGE: Canadian Farm Income Program. The basic rule in that program was 70 per cent. You had to be in a situation where you were down . . .

MR. MACDONELL: You had to make less than 70 per cent of the average.

MR. FAGE: Yes, your average eligible sales from other areas. If you were below that, then you would qualify.

MR. MACDONELL: You qualified to top up to 70 per cent.

MR. FAGE: Yes, and that's why it was a disaster program.

MR. MACDONELL: And disastrous.

MR. FAGE: Well, obviously if your income, in rough terms, had declined by more than 30 per cent, then you are in a disaster situation, and it would fill in that portion. In many cases, depending on what kind of balance you had in a NISA account or if you had that crop insured, they could keep you from getting there, but if you didn't insure yourself in any way against perils and risks, there was still a program to try to keep the bottom from falling out of the whole ship there, if you hadn't protected yourself. That's why it was 70 per cent, because you really had two lines of defence out there in front of you first, if you were willing to take advantage of them.

[8:30 p.m.]

MR. MACDONELL: I guess I'm always curious about - and I would like you to speak to it, although I know you can't be directly involved other than just to advise your federal counterparts - and I've had some questions around, WTO. I tried, just myself, to

[Page 60]

contact our lead negotiator in Ottawa, or that area. I did get hold of somebody, and they did send me Canada's negotiating position, I guess it's for 2005, they expect to ratify these present negotiations. I have to say I haven't had a chance to really sit down and review that. I always worry about what it is that people are negotiating away, and am concerned about what the proposed benefit is when you lose something.

I'm curious - it appears to me that Canadians have really tried to toe the line on their commitments to WTO, and their realization of the amount of subsidy in the industry. I think it's been pretty fairly cut to the bone in this country. That's not my impression. From what I hear about the American farm bill, and I'm not sure just what stage that's in in the U.S. right now. Also, it seems like the Europeans and the Americans still seem to subsidize a fair bit. I wonder, in any of your conversations with your federal counterparts, what their take on all of this is, in trying to develop a negotiating plan at that level?

MR. FAGE: The next round of the WTO is coming up in three years. Obviously, the preliminary discussions and the meeting in Doha and the Doha agreement are extremely important to agriculture producers in Nova Scotia and across Canada. The negotiation philosophy or principle now put forward by the Canadian industry through the federal government is one that the Federation of Agriculture and farmers across the country have helped develop and are supporting. The ministers from across the country, provincial Agriculture Ministers, endorse that negotiation position and policy, and that is the position that the federal minister is carrying with his colleagues from Trade forward to these initial rounds.

As that moves forward, if there are modifications or pressures, hopefully we will be advised if there are situations where decisions have to be made. Thank goodness we have a consensus in the country, between industry and government as a position, and we're moving forward with that consensus position of support from industry and government at this point. As you know, it's in the preliminary phases and as that moves through that process in the next three years, I'm sure there will be junctures when the industry will be very concerned, and all of us will have our concerns as well.

MR. MACDONELL: Thank you. I guess I'm more concerned about your voice than I realized, that any of these issues in particular would be in your particular jurisdiction if they come under the federal realm. I recall recently seeing, I think it was put on Country Canada, probably in the last month, an interview with the federal minister, and it was around GMOs. I think it was oil seed in the west. It was plants produced, genetically modified by Monsanto. The whole question, actually around the federal department funding some of the research and Monsanto funding some research.

To me, this is an area that I think the federal government, in the best interests of Canadians and certainly Canadian agriculture, shouldn't be involved with companies, because the information in the studies wasn't made available to the public because of the corporate funding that was involved. It would seem that if the Canadian Government is

[Page 61]

involved in any of these initiatives, it should be done purely on their own, so that information is available to Canadians. I just wonder what your view on that is.

MR. FAGE: I guess you asked me my personal view.

MR. MACDONELL: Yes.

MR. FAGE: The majority of research in this country has varying components of private enterprise, government research, foundations, and a whole variety. It's rare that you would see research initiatives that were funded only from one source. I mean when we go to the AC, we see a component from the federal government. We will see a component from the provincial government. We have probably eight or nine industry institutes that would contribute not only money from companies in research that would be in the production of chemicals or those types of things. I recently attended on behalf of the Minister of Health an announcement for $3 million worth of research conducted at Dalhousie which is important to our economy, our knowledge base, and may develop new drugs or techniques that help our citizens.

I guess my personal view is that the research dollars are needed, there's no question, and I think you would have a very tough time and you would stymie research if governments and private enterprises weren't allowed to collaborate or be co-funders of different types of research. It would be very challenging for our industry and our country to remain competitive and we as the recipients of the research and the jobs provided by it, especially in an area like Halifax here with the number of universities we have and in the province as a whole, it would be very difficult to not support research in that manner and I guess I think clear conflict rules have to be in place, but I certainly support the partnerships and the research. There need to be rules in place I think, honourable member.

MR. MACDONELL: I would have to say that as far as the rules in place, I would agree. I think one of the roles of government is to be a regulator and I think that when government tries to be a promoter and a regulator both, then it's in a conflict of interest and in the best interests of Canadians, I mean I certainly feel that governments, and certainly the ones with the deepest pockets and I will say that, you know, it's probably the federal government, I think should actively be involved in research.

You're right about the economic spinoffs from that. It's positive and all the more reason for the federal government I think to go it alone quite often and thereby having all the say into what those studies have shown and what they get out of it and to bring that information to Canadians and actually in doing that, in funding that research, then they do have that say and I would say as well that if they would maintain their role as a regulator, then they could put the standards in place for private industry that wants to do its own research and demand to see anything that's going to be turned over in the public realm from that research and the public has every right to know whether it's going to be advantageous or not to them.

[Page 62]

We can always buy the story that, you know, somebody doesn't have enough money on their own to do this and it has to be a collaborative effort and we're always told that government has no place in business or business has no place in government and yet all the time we see taxpayers' dollars in union with businesses and I don't think for the welfare of Canadians that that's always a good partnership.

MR. FAGE: I guess from my point of view there are a couple of things that are important to consider in that discussion. First of all, the division of regulatory and promotion within any government is an important function and I guess, you know, the Department of Environment, that's why they do environmental guidelines. The Department of Agriculture will do agricultural research and partner with companies and that's two separate divisions and the same occurs, the inspection agency federally is CFIA and they have the expertise to do the evaluation.

I guess, to me, it's quite simplistic to assume that another agency or wing of government or portfolio wouldn't be in partnership on research and then to ignore your research at universities and allow all the development in research to be concentrated in a wing of government research smacks of really strong socialism and how would you know the right thing to research and then if you have a product, then does government become all encompassing, develop the product and go into commercial production against private industry?

I guess that's why that balance in my mind is there and that's why there are specific agencies charged with the public good and certainly from my experience I have the highest regard for those researchers and people in those agencies like CFIA. They are truly scientists. They deal in pure science and I very much respect their decisions because they take their responsibility of public safety very, very strongly and that's why I would tend to disagree with not doing partnerships.

MR. MACDONELL: You answered your own question. I mean you talk about the quality of the scientists and then you say how would you know what to research. Well, there's your answer. I mean these are people who have spent a lifetime, professionals, you know, and they certainly are on the cutting edge of whatever is happening in their particular field. I think they would be the people who would be applying for grants to do research and so it would seem to me that whether it appears to be socialist or not, to do things in the best interest of your people, maybe that's socialist, but it would seem to me to be sensible. If private industry has ideas and they want to fund them, then certainly I say, you know, leave that up to them and then government has a role to monitor what the effect of that is going to be.

You may not remember a case about - I'm going to say three years ago, but I may be wrong. I forget the scientist's name, but he worked for the Canadian Department of Agriculture and he actually spoke out about research that was being done in conjunction with a corporation and that he and his colleagues had really deep concerns about the application

[Page 63]

and the fact that some of the information of this research was not allowed to come out to the public. I think if we consider the credentials and the quality of the researchers we have in this country, this is someone who came forward and under penalty, you know, told that he could not speak and deemed it important enough in the public's interest to make his comments known.

So on that basis, that's why I feel that the two should be separated and so I'm just wondering if you ever get into discussion and, obviously, I'm assuming from your comments that this is not an area that you see as a concern so you probably don't raise it with the federal government or the federal minister.

MR. FAGE: Again, the linkages, I have a hard job to conceptualize them. When you look at the researchers, first of all, the researchers are generally employed by universities, not the federal government, and when a person with research background is employed by the inspection agency, they bring that expertise to monitor other individuals and projects, not to do research and experimentation on itself. That would be the actual workings of the mechanism.

[8:45 p.m.]

The reality of commercially-applicable research is extremely important as part of the funding component and why you would do the research. If you have no obligation in any type of research other than your own personal interest and taxpayers' dollars are supposed to fund that, I would dare say the system would quickly fall apart. Seeing how many polka dots you can get on the lab animal may be intriguing to a government-funded system, but the taxpayer who is paying for that may get tired of the burden, and the commercial application of that, although it may be very popular at Easter time, may have a hard job of the test of longevity and an economic return. That's why I would have those types of views.

Certainly the inspection side is extremely important because the Canadian public has to have confidence in food safety and quality. The people who warrant that, we place a great deal of trust in them to do that. Those people are government-employed now. I guess I would be certainly even more concerned if the research was plugged only in the avenue of government and the inspectors in the avenue of government, so apparently with that theory we would have to go to private enterprise to monitor the government research and inspection, because they only work for government and we don't have anybody left to monitor them, if you follow that philosophy.

I think it's important, from my perspective, that we try to achieve that balance, that government through specific agencies has the trust and the obligation of the general public on a scientific basis to evaluate data coming in from private research or university research and verify it or discount it and the full authority of the law to get to the bottom and audit any situation. Many situations, it's not a function of doing those audits and ensuring that it's done right that it would be disclosed, that research, because a lot of it's proprietary information

[Page 64]

and huge implications that they should have to publish that, then the industry is not going to be involved.

You have to weigh those real concerns and the reality of the world out there that we live in that those are some of the restrictions that are going to be placed on researchers, but we have to be able to trust someone, and those people, CFIA or whatever agency is responsible, that we have to provide them with the knowledge and with the type of justice and regulatory support so they can do their job, but I don't think it's an absolute requirement that everything they would investigate would then have to be public disclosure, because at that point all research, commercial development would go to another country or jurisdiction because every bit of proprietary information that they had through the research would be disclosed.

Those types of things, in my view, honourable member, are a balance that is achieved through government, university, private enterprise. I would see it addressed in those types of equations. I agree with you, if it was the same agency doing the research as was doing the promotion and the evaluation, I would get really concerned. I still put my faith in those agencies, like the CFIA, that are independent and in charge, and whether it's another government agency or department that's in partnership on that research, it's their job to monitor the private and the government and the academic institutions, in my view.

MR. MACDONELL: I don't know if I've ever had anybody spell out the philosophical difference between you and I in more clearer terms than you just did.

MR. FAGE: Exactly. I respect your views, and I know you respect mine.

MR. MACDONELL: I will go there, yes, I do. I have to say that I probably knew enough of the politics, but I'm not so naive as to assume that because one government department is actually the regulator and another government department may be the promoter, that there may not be someone telling the regulator, back off, if a concern was to arise on a particular issue.

The issue of the number of polka dots on a rabbit might be fine around Easter, but if you're trying to ensure that the polka dots don't wind up on somebody's child as a result of some adverse effect to a product that's been created in a joint venture between government and industry, then I think one of the roles of government is to ensure that its people are safe, and that's why it would seem to me that to have a distance - Mr. Minister, I think you have to be aware, there is research that's done on the idea to prevent costs, not to make a profit but to keep people healthy, and this is all part of how we've been able to get to the stage where we're at.

We see more and more of it, I think if the bottom line is all that motivates it, because for Canadians I think their health and welfare is an issue for them and they would certainly like to see their governments spend dollars in their best interests for protection as well, they

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would be fine if anybody wants to make $1 million or $1 billion but don't make my children sick, I think is what they would say. I definitely think the research can be done, if industry wants to do it. I think government has a role to ensure that the people are taken care of, as a result.

MR. FAGE: I think you always have to keep in mind the vast majority of research that would be having government involved with, it's not the researchers out there doing it, it's an institution, a college, an academic situation or private research lab, and that fear you have that there are federal researchers working beside the company, there's not that research capacity and it's done in that manner. A fine example would be NSAC, an allocation of funding under innovation from the federal government, that would be achieved by NSAC; it's the academics there that would do the research, there are no federal government researchers. That's the reality.

MR. MACDONELL: And that makes perfect sense. I actually don't have a problem when it's federal money, then that's the peoples' money in conjunction with the province's money which is the peoples' money. Maybe we will agree to disagree. I think that the federal government does have an obligation to its people first, and I would just like to feel reassured. There used to be research paid for by the taxpayer that was for the benefit of the taxpayer. Now it seems that if it's not in conjunction for a commercial application, then nobody wants to do it.

I had a question about - and I'm going back to the Public Accounts 2000-01. You talked about the new entrants program. So, what's the difference between the new entrants program and the young farmers program?

MR. FAGE: The New Entrants to Agriculture Program, some people would term it as the young farmers program. It's a new initiative we began in the budget year of 2000-01. There was a previous program that was eliminated a few years ago, and that was commonly referred to as the Young Farmers Program. This one is sometimes referred to in the farming community, instead of the New Entrants to Agriculture Program, which is the proper name, the young farmers program. The young farmers program is an old program that they would refer to.

MR. MACDONELL: The reason I raise that is because in this book on Page 10 there is a Young Farmers Program and on Page 9 there's a New Entrants Program.

MR. FAGE: We will look it up here - I would assume that is probably an allocation - they have a Young Farmers Program, public speaking, and would have a conference once a year. We would contribute some support to that. That's probably the reference there to the Young Farmers Program, but we will just make sure.

MR. MACDONELL: I will say thank you, Mr. Minister, and I will relinquish the floor to the honourable member for Lunenburg West.

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MR. CHAIRMAN: Actually, the time for debate has expired. There are four minutes left, which the honourable member for Lunenburg West will take up tomorrow. The time for debate has expired for tonight.

[8:56 p.m. The subcommittee rose.]