MS. EILEEN O'CONNELL: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas this government's Speech from the Throne promised to bolster educational services; and

Whereas the bolstering contained in the budget consists of a $5 million increase in grants to school boards and a $5 million reduction in grants to universities; and

Whereas this bolstering will only lead to the further deterioration of our education system, caused by tens of millions of dollars in cuts imposed by this Liberal Government;

Therefore be it resolved that this House condemn the Liberal budget for its failure to halt the destruction of our education system and the deterioration of learning opportunities for Nova Scotians.

MR. SPEAKER: The notice is tabled.

The honourable member for Cape Breton West.

MR. ALFRED MACLEOD: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas the announcement, or lack thereof, of the private interest takeover of the Donkin mine leaves many serious questions unanswered; and

Whereas the timing, like the government's new-found budget money, made on Budget Day without any proper notification to the group which has been so supportive of the mine's development - Steve Drake and the United Mine Workers members - is mysterious to say the least; and

[Page 573]

Whereas there are questions as to what the loss of one mine with a real growth potential will mean to the future of Devco;

Therefore be it resolved that the Liberal Government discuss with their Liberal counterpart Dave Dingwall, who is in Sydney today, the details of what the sale/transfer will mean to the workers of Devco, where the expected markets are for Donkin coal, what the development plans include, and who is providing the financial backing to develop what the United Mine Workers was unable to convince the government would provide a future for Devco.

Mr. Speaker, I would ask for waiver of notice and passage without debate.

MR. SPEAKER: I hear several Noes.

The notice is tabled.

The honourable member for Queens.

MR. JOHN LEEFE: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas in a March 27th news release the Nova Scotia Department of Finance predicted that consumers would save 11 cents on a Tim Horton's coffee and two donuts under the BST; and

Whereas when contacted today, a Tim Horton's outlet in the Metro area said that the price of a coffee and two donuts has increased by 33 cents under the BST; and

Whereas Nova Scotians are once again paying for this government's BST miscalculation;

Therefore be it resolved that the Minister of Finance accept responsibility for his department's misleading advertisements and news releases by solving the mystery of the lost BST savings.

MR. SPEAKER: The notice is tabled.

The honourable member for Kings North.

MR. GEORGE ARCHIBALD: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas the Kings Volunteer Network has started a process to match people who want to assist with organizations seeking assistance or in need of help; and

Whereas within one week of informing the public about the new service, approximately 50 individuals notified the Kings County Volunteer Network that their assistance was needed; and

Whereas the program is as a result of a survey by the Kentville Development Corporation which indicated residents of Kentville and surrounding area were indeed looking for a centrally located volunteer resource centre;

Therefore be it resolved that all members of this Legislature acknowledge the efforts being put forth by the Kings Volunteer Network and wish program Director Graeme Dyck every success in their drive to recruit additional volunteers.

Mr. Speaker, I would like to ask for waiver of notice.

MR. SPEAKER: Is it agreed that the notice be waived?

It is agreed.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

The honourable member for Hants West.

MR. RONALD RUSSELL: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas tonight at 10:00 p.m. lives are being placed at risk in Hants County because of the reckless approach to health care reform undertaken by this Liberal Government; and

Whereas effective at 10:00 p.m. this evening, 24 hour emergency health care service at the Hants Community Hospital is being terminated and will now only exist between the hours of 8:00 a.m. and 10:00 p.m.; and

[Page 575]

Whereas the Minister of Health has been fully aware of the situation facing the people of West Hants which has now reached crisis proportions and the minister's response has been totally inadequate;

Therefore be it resolved that the Minister of Health show some compassion and take immediate steps to ensure that lives are not endangered by his stubborn refusal to secure 24 hour emergency health care coverage for those Nova Scotians serviced by the Hants Community Hospital.

MR. SPEAKER: The notice is tabled.

TABLING REPORTS, REGULATIONS AND OTHER PAPERS

MR. SPEAKER: The honourable Minister of Education and Culture.

HON. ROBERT HARRISON: Mr. Speaker, in response to a commitment made yesterday in Question Period with regard to school capital construction I would like to table a letter which is a copy of a letter sent to all school board chairs and superintendents indicating the process by which we will establish school capital construction project priorities this year.

MR. SPEAKER: The letter is tabled.

ORDERS OF THE DAY

GOVERNMENT BUSINESS

MR. SPEAKER: The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call the order of business, Public Bills for Second Reading.

PUBLIC BILLS FOR SECOND READING

MR. SPEAKER: The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, will you please call Bill No. 6.

Bill No. 6 - Gas Distribution Act.

MR. SPEAKER: The honourable member for Kings West on the hoist amendment.

[Page 576]

MR. GEORGE MOODY: Mr. Speaker, as I indicated as we were closing last night I rise to speak on the hoist to Bill No. 6. I understand that the Party that moved the hoist wants to know what the hurry is to move on with making a decision on the gas distribution. I hope they are not totally against the project which I think could be good for Nova Scotia.

Mr. Speaker, for a long time, we have talked about natural gas and oil offshore. There has been a lot of hype over the years. There have been a lot of ups and downs. I happen to believe, and always did believe, that there was a future in the offshore for Nova Scotia. The unfortunate part of this whole process, as I try to understand it and understand what went on in the offshore, and it is hard to yet assess for sure but I have difficulty in what I understand of it, knowing that this government got the best deal possible for the province. I think that is the key. We know the reserves are there. We know that the gas is going to come ashore, but what kind of a deal did this government give Mobil and what kind of revenues are we going to get as a province? I think that is the key.

To date, Mr. Speaker, there has been nothing, the government has indicated that that will all come later. It is like not to worry, but I do worry about that, because here is an opportunity for Nova Scotia. I happen to believe that natural gas, for this province, will be good. The question that I worry about, it is our gas, why isnt Nova Scotia getting a preferred price compared to New Brunswick or Maine? It is our gas and yet we are going to be selling it as cheap in New Brunswick and maybe even cheaper, we do not know, in Maine. So, what is the benefit to Nova Scotia? Obviously, it is a shorter distance to run the gas to the pipeline in this province and, if it is a shorter distance, does it not make sense that we should get it cheaper than somebody further away?

We talked about the postage stamp process where the price in a certain area, right now in New Brunswick and Nova Scotia it is the same, we know that New Brunswick is playing hardball. We know that New Brunswick has said, we want the gas to go to Saint John, we want the gas to go to Fredericton, we want the gas to go to Moncton because they know, as I think all members know, there is a great economic spin-off if we get this gas ashore and we get this gas distribution to the main centres of our province. There will be a benefit. Industry will come here because of that. We will have a cheaper source of energy. We will have all kinds of things that will attract, I believe, business to this end of the country.

For so long, across this nation, all the provinces except in the eastern part have had natural gas. We, unfortunately, have not. Here is an opportunity for us, and our Liberal Government here in this province has not played hardball. There is no guarantee that laterals will be in any part of Nova Scotia. I wonder whether we will get the laterals in the Valley. Will we get the laterals (Interruption) Now they are wondering whether it will even go to Cape Breton.

[Page 577]

You know this gas, as I said before, is crucial to economic development. I was hoping that when this government made a decision to sign Mobil and give up the rights, the 25 per cent that they had to the gas pipeline, that they would have ensured that we in Nova Scotia would have a direct benefit, not only from what royalties we might get or what profits might occur, that we get the direct benefit of gas being run through this provinces main centres so that no matter where you live in this province, even Yarmouth, you could get some benefit from natural gas. To me, there has been no assurance by this government that we will get any laterals. We have New Brunswick saying they are going to get it or the gas is not going through New Brunswick. Well, why cant we say that nothing will happen here unless gas goes to the important centres of this province so that we can reap the economic benefits that will occur by having natural gas?

I am really not sure whether the NDP is for this project or not. They have not made it clear. (Interruption) Oh, I have made it clear. I am for the project. (Interruptions) What did I say yesterday? Read my clippings. What did I say yesterday? (Interruption) Right. See, I have one member who at least listens. I have never said that I am not in favour of this project. I did not say that yesterday and I am not saying it today. All I said yesterday was, I got up to speak on the motion. That is all I said.

[8:30 a.m.]

AN HON. MEMBER: Read Hansard.

MR. MOODY: Well, you can read Hansard and I ask any member that if they are accusing me of something, they put it on the floor of the House and prove me wrong. But unless you can prove me wrong, don't accuse me.

I think that we have to get on with this project. I know there are a lot of decisions that have to be made. What the government is doing is setting up a mechanism, a framework so that gas distribution will happen in this province and, if we do this legislation, it is my understanding, if we do it early enough, hopefully it gives enough planning time that we will have more than one company come forward for gas distribution in this province. I think the key is competition. If we don't have competition, then the gas isn't going to be distributed around this province.

It will probably end up being something like cable TV. We don't have cable TV across this province because it never was set up as a competition. It was set up as a monopoly and any time you set anything up as a monopoly, you are not going to get a benefit for everybody in the province.

AN HON. MEMBER: Not in the country.

[Page 578]

MR. MOODY: Not in the country and that is unfair. I represent a rural area and I think that if it is set up as a monopoly, we may not have natural gas in the Valley and I will tell you, I believe that we, in the Valley, deserve natural gas every bit as much as anybody in metro deserves it. So I believe that competition is the way to go and so I am hoping, by this legislation being passed, it will give, as I say, more than one company an opportunity. Maybe we will end up with more than one company distributing natural gas in this province, although I have more difficulty with that because again I see something happening. If one company distributes it, then you are probably going to get it, and say to them, because they are going to benefit from the high density areas, the highly populated areas, you can force them to go into less densely populated areas. If you start giving it to somebody to just distribute in metro, it is going to be a much greater benefit than somebody who has to distribute it in Kentville.

I am hoping this government has said that they are going to allow the URB to make those kinds of decisions. I hope that when this government follows through on this legislation, allows the process to go on, that there aren't the kind of monopolies that we have seen in the past because governments did that with cable TV, that they make sure that there isn't a direct benefit by a few, that all Nova Scotians will have a benefit from this natural gas.

I am not going to support the motion to hoist this. I don't believe because we pass this legislation, now or in six months time, yes, somebody might say, well, what is the hurry? We haven't had the hearings. We don't know who is going to build the pipeline. In actual fact, that is true but there is no problem with having this kind of legislation on the books so when it does happen, and people know and follow that it can happen, they aren't waiting for government to catch up. So often we have been waiting for government to catch up and government is sometimes, maybe not wanting to, but it sort of impedes economic growth. Here is an opportunity where we can plan for the future, if it is done right and I have said there are some areas where we have to watch very carefully as we go on and watch natural gas come ashore. But if those kinds of areas that I talked about are addressed, then I believe we should get on with legislation. We will allow it to go to the Law Amendments Committee and then this will be in place when the hearings are finished and we actually know who is going to build the pipeline and when it is going to be started. Then those people who are interested in distribution can make their pitch to those companies.

So I will not be supporting the amendment but I will be supporting this legislation. I will have more to say on the main legislation when we get back to the main motion, Mr. Speaker.

MR. SPEAKER: The honourable member for Hants East.

MR. ROBERT CARRUTHERS: Mr. Speaker, I just want to say that I am very pleased to hear the member for Kings West when he speaks in this regard because I think he has identified the real crux of the matter but today we are speaking on the hoist.

[Page 579]

I just want to give notice to others in this House that at one point I thought I would rise on a point of order. I do not. But I wish to say that it is not the time to speak on the merits of the matter. It seems clear that what is happening here is there is a motion to hoist this bill. This bill is a very important bill. I must tell you, we in the government had looked at the matter and studied it closely as to whether this bill could be delayed. It could not. I must suggest to all those who may speak on the matter of the hoist, to hoist this bill will be to kill this project. I must say, I agree with the member for Kings West, is the New Democratic Party in favour of this project, or is it not? You cannot stand in your place, continually, and say, we are with it except for this. Either you are with this project or you are not with this project.

I wish to state clearly that any hoist of this matter, considering the political realities that we have today, would kill this project in its place. I would ask the New Democratic Party and those who might entertain a hoist to think clearly on what this will do to Nova Scotians and those who look to be employed in this year, in 1997, who wish to gain access to an income to feed their families, to consider when you make a frivolous motion to hoist this bill into next year, consider what you are doing to the public and the people of Nova Scotia. I would ask you to consider it. I stand by the comments from the member for Kings West. He is doing, clearly, the best thing for the Opposition Party. (Applause)

MR. GEORGE ARCHIBALD: On a point of order, Mr. Speaker. The honourable member has forgotten one of the first rules of the Legislature. You speak only to the Speaker, not directly across and point your fingers at members opposite. He should be pointing his finger towards you.

MR. ROBERT CARRUTHERS: On the point of order, Mr. Speaker. I have a piece of paper in my hand. I realize the member should recognize his compatriot from the other side of Kings County. At no point did I point my finger. I have a piece of paper in my hand. I know it is a dangerous weapon to this member, because paper and things that are written on it have always been a dangerous weapon to this man.

I would suggest to you, Mr. Speaker, this is not a point of order and it is needlessly a delay in this bill again.

MR. SPEAKER: The honourable member for Sackville-Cobequid.

MR. JOHN HOLM: Mr. Speaker, I welcome the opportunity to rise to speak this morning on the motion that was put forward by my colleague, the member for Halifax Fairview. I want to congratulate the member for Halifax Fairview for bringing forward the motion to hoist the bill. I listened to the tirade from the member who just spoke. The member said a number of important things in his comments. He told a couple of very revealing things. First of all, the member talked about politics and the political realities. That is one of the principal reasons why this bill is here. It has to do with political realities. It has to do with the

[Page 580]

pretense by this government that all kinds of stories that they are telling Nova Scotians, all of these pipe dreams, all of these sugarplum fairies that they want to have dancing in our heads, that is what the government is trying to pretend are there, without providing any of the facts or any of the information to back it up.

The member said that the government has looked at this project. We know what the benefits are. Well, Mr. Speaker, I say to that member and I say to all members of the government, it is not a matter of whether you support or don't support the project, it is a matter of what that information is. Let's see it. What is the project? If that member, and I am not sure if he was able to be in the House yesterday or not, that member, during Question Period, would have heard his Premier say that he will take it under advisement about whether or not the government will insist or will try to get the joint panel to look at the social, the economic and the employment costs of this project for Nova Scotians. Under advisement.

Here we have the member standing in his place a moment ago saying that we have looked at this project, we have the information. Well, I say to that member, put it on the table. I say to all members of the Liberal benches, put it on the table. Let's have a look at it. If we see that information, Mr. Speaker, if it is anywhere nearly as good as what you are telling us, we will be supporting this project without any questions. Put it on the table, let's have a look at it, because we haven't seen anything so far.

Mr. Speaker, I came to the tint of the hair that is on top of the noggin there by longevity; I can remember hearing about the promises that were made, the wonderful things that were going to be happening as a result of the offshore oil development. I heard about all of the jobs that were going to be created. I remember hearing about how when that offshore oil was going to be developed there were going to be all these jobs created here in Nova Scotia. I remember hearing and I remember seeing a former Liberal Premier standing up and showing off a little vial of oil. I remember hearing about the petrochemical industries that were supposed to be developing in Nova Scotia as a consequence of that oil development.

AN HON. MEMBER: You can take that to the bank, I think they said.

MR. HOLM: And you can take that to the bank, they said. I remember hearing and I even remember seeing the ships that were tied up not too far from here to export that very oil for processing elsewhere. I also remember how well this government stood up for workers in the petrochemical industry when the plant across the harbour shut down. Those Ultramar employees who are still unemployed or underemployed because this government did not or could not and their federal counterparts would not force that company to honour the commitment that it made to keep that plant open. I remember that.

I also remember hearing, Mr. Speaker, the reports and listening to what was said by another former government on a totally different mega-project, Churchill Falls power, which was supposedly going to save . . .

[Page 581]

MR. ROBERT CARRUTHERS: Mr. Speaker, on a point of order. We are debating a hoist, that is the motion before us. If he wishes to speak about the Churchill project, I would ask the speaker to consider whether that is relevant to the question of a hoist.

MR. HOLM: Mr. Speaker, on the point of order, it is a very valid question, is it valid to the arguments that I am making on the hoist? I am attempting and with a slight bit of patience, and I know that the gentleman can be very patient and maybe he wants to get out of here very quickly, I will try to weave them together to show some relevance.

There were commitments, there were promises made about how that was going to be the salvation for the Province of Newfoundland and Labrador, how there was all this revenue that was going to be coming into the coffers of that province and that that was going to be solving their economic difficulties. The same kinds of promises that are being made here. Mr. Speaker, they hadn't done their homework, obviously, because we see that, in fact, as the time is going on instead of those profits increasing that project even to continue to operate is going to be costing that province money.

Mr. Speaker, we are talking here about time. There is an awful lot of information that has to be made available. Now, the government is pretending over here that if this doesn't proceed immediately this whole project can be lost. Well, I point out that a six month period of time is not crucial one way or the other to the viability or the lack thereof of this project.

[8:45 a.m.]

What six months has to do with it is this government's election timetable. Quite honestly, whether any one of us - with the greatest respect, I say to yourself, Mr. Speaker, I say to members who have spoken before me or myself - whether we are here or not after the next election, pales in importance to the Province of Nova Scotia. When you compare that to needing to know that what we are doing is in the best interests of Nova Scotians, it pales in comparison.

This should not be about politics; this should not be about being able to have a piece of paper to pretend that you have accomplished something for the next election within the next few months. We are talking about our natural resources; we are talking about our gas; we are talking about Nova Scotians' jobs; we are talking about revenues, income, to come into the Province of Nova Scotia to maintain and enhance those programs that are desperately underfunded, that are desperately in need of expansion; and we are talking about the future, therefore, of this province. The gas is not even expected to be ready to be delivered, under the most optimistic timetables, until 1999.

We have down the street a joint panel that is meeting. That joint panel has not even yet decided whether they will approve or not approve this project, yet the Government of Nova Scotia is now setting up the legislation to jump in, to preclude the approvals that have already

[Page 582]

been given to set up how that can be distributed in the Province of Nova Scotia. We don't even know what will be distributed.

Mr. Speaker, it is in the interests of the government to be racing forward with that timetable to make sure that we have to have a decision made by September. I suggest that that is probably a little bit of hogwash, because the federal energy regulatory commission in the United States is backed up and they have not yet had in the U.S., where almost all of that gas is designated to go, been able to have their hearings and they do not expect that the U.S. environmental hearings will be able to be held until at least the summer of 1998. (Interruptions)

I hear that the member across who used to have another oil refinery in his riding - Mr. Ultramar - disagrees with part of what I have to say, and I welcome the opportunity for him to stand in his place a little later on in this debate, and maybe he will even have the power and the influence to persuade his federal colleagues not to provide the financial loans to ship that plant out of Canada. Maybe he will be able to persuade them to keep that plant here, where it belongs, and put those workers back to work. (Interruptions) Gee whiz, I am being asked, Mr. Speaker, by the member who used to have an Ultramar plant, who is going to run it, the federal government or the NDP? (Interruption) Oh, now the former Speaker who has a Tim Hortons now located in his riding says, maybe the former executive director of the Ecology Action Committee.

MR. SPEAKER: Maybe the honourable member could return to the debate, please.

AN HON. MEMBER: The Deputy Minister of Economic Development and Tourism proved himself. He brought a Tim Hortons to Whitney Pier, and as soon as he brought the Tim Hortons to Whitney Pier the prices went up. Now, that's success. (Laughter)

MR. HOLM: Mr. Speaker, I am sure that we have many capable people in the province, certainly we have a very skilled workforce in this province who would be only too anxious and willing to go back to having good paying, secure jobs working in that plant. You have the product there. I am sure it will be done.

Mr. Speaker, I want to go back, briefly, to talk again here about a couple of the items, now that I have got over the rabbit tracks that were thrown by members opposite. I want to take a look at a few of the items that need to be considered before this is passed and I want to argue, and I would argue, that in a period of six months, those kinds of things can be considered. (Interruption) I think that the member opposite must have some business he wants to attend to elsewhere, or we got him up too early this morning, because he is very cantankerous over there. However, let's take a look at certain realities. (Interruptions)

[Page 583]

MR. SPEAKER: Order, please. The honourable member has the floor.

MR. HOLM: Mr. Speaker, you know, it is very interesting how certain members on the government benches can sit in their places and squawk. But you know, they cannot get on their feet and they cannot provide the facts, the information that justifies or shows why they are supporting this project, other than the political motivation behind it.

Mr. Speaker, I want to talk about a couple of things here. Let's face a reality. In six months from now, within a period of six months, there will probably have been a provincial election in the Province of Nova Scotia. The bunch who are around us on the government benches are very concerned that after that period of time has elapsed, that they may not be occupying the comfortable seats that they have at the present time. They are very much concerned that the people of this province are not going to re-elect them. The proponents, those who are pushing for the September date approval down at the joint panel, they also know that if all of the approvals have not been put in place, i's dotted and t's crossed, then they know that they would be required to renegotiate the agreement with whichever political Party happens to be in power at that time.

Of course, the government knows that they are doing so poorly in opinion polls and that they have been doing so dismally in terms of job creation, that they are trying to pretend or they have to try to pretend that they have something out there that they can run to the people with that is going to be trying to show or tell the people that we are on the road again and that all prosperity and good times are returning to Nova Scotia. So it is political.

Mr. Speaker, let's take a look at the royalty scheme. Nova Scotia, under the scenario that is being pushed and supported by the government will, in the next century, start to receive some royalties, after the companies who are extracting our gas, Nova Scotians' gas, start to make the profits.

If you were to go to other jurisdictions, for example, Alberta, when that gas comes out of the ground a royalty is paid to the people of the Province of Alberta. It is paid at the well head, it is measured there. They get their cut up front. It is our gas. It belongs to the people who live within the Province of Nova Scotia. It isn't Liberal gas, it isn't Tory gas and it is not New Democrat gas. It belongs to the people of Nova Scotia whether they live in Sydney or whether they live in Yarmouth or any other community in between and it belongs to the future residents of this province, those who are going to come here, or to our children or our children's children; it belongs to them.

What this government is doing is that they are giving away a royalty scheme and not even providing all the details on that. We are being told about jobs and we are being told about all of these thousands of jobs that are being created. The companies that are building and planning to build have not said how many jobs. They are not prepared to guarantee these

[Page 584]

jobs to Nova Scotians. Also, the majority of the jobs are going to be of a very short-term duration.

In this province we have suffered from politics for years. We have seen our logs in ever increasing numbers being exported out of the province. We have seen our resources, our fish being shipped out round, unprocessed. We have been a major exporter of raw materials and therefore a major exporter of jobs. The most valuable jobs and the greatest number of jobs are created in the value-added sector.

Why is it that the government when it negotiated the deal did not require that the petrochemical industry be expanded and established here in the Province of Nova Scotia? That would have ensured jobs and other jurisdictions do that. Other jurisdictions do that, they put the interests of their people first, not their own political agenda.

This deal is not going to fall apart. The Sable gas field development is not going to not happen if this bill doesn't receive approval within six months. It is not going to in any way at all mean that project will not be viable, it will not mean that project cannot go ahead. It has nothing to do with that. What it has to do with is very simply the political agenda of this government.

There are in this bill as well many other important issues that need a period of time to have a look at. The way this legislation is drafted in many ways is very suspect. We have all been in this Chamber long enough to know the reality that once a bill passes through second reading and goes on to the committee stages the chances are 99 out of 100 that this government will not because of their vast numbers and the feeling that they don't have to listen to Nova Scotians, the vast majority of times there is virtually no chance to have any amendments or improvements made to that legislation.

The bill that is before us has the very real potential to give almost a monopoly situation to a certain public utility because this government when they were in Opposition, when the former government privatized Nova Scotia Power, they said that they were going to be re-regulating it and they did not.

[9:00 a.m.]

As well, the way that this is set up, the Utility and Review Board, which many people question this impartially, there are still many members on that board who were not appointed by this government. I would like to think that those who are - regardless of how they got there - on the board, I would like to believe and I want to believe, as many who got to the benches of the courts in another partisan system, I would like to believe that when they adopt that new position that former politics are set aside and that they will look at things fairly. I am not going to just say that certain people on that board, because of their past political

[Page 585]

connections, that they are going to be just simply Liberal hacks who will do whatever they want; I am not making that accusation.

That having been said, the power still, unfortunately, does not even rest with an independent body, the Utility and Review Board. It does not rest with them because the way that this is set up, they can recommend what they want, but the reality is that the approval is not from the Utility and Review Board, where there can be public hearings held, the approval has to be made by that political body, by Cabinet. If you are going to have an independent body - a semi-judicial body like the Utility and Review Board - who make that decision, if they make the recommendation, I suggest that they should be the ones who make the decision and any appeal to that decision should have to be to the courts, not to the political masters. That is an insult to the integrity and the independence of that body. It is an attempt, I would suggest, to make it less of an independent regulatory body. It is turning it into a slightly removed arm of the political people who occupy the government benches, Cabinet.

There are many other issues that have to be looked at before these kinds of projects can proceed. The joint panel that a lot of people were pinning a lot of hope on, that through this joint panel process that is taking place we would be able to get to the heart of a number of matters; that much of the information that Nova Scotians so desperately need in order to make a fair and a reasoned decision would come out through that process.

There is no question at all, none whatsoever, that when the gas is developed - and eventually that gas is certainly going to be developed - and my guesstimate, based on talking to some people who are directly involved in it and also on some anecdotal information from talking to others who have worked in the offshore, my belief is that the amount of gas that is there is substantially greater than the amount that has been proven; it is quite possibly two to three times more than what has been proven. So, eventually, that certainly will be developed. It is going to happen.

There are pluses; there is no question about that at all. There are advantages to developing it as quickly as possible, but there is also another side to it. There are costs associated with that. There are jobs that could be placed at jeopardy. We know that. We know that Nova Scotia Power will be - and this part is good - switching, for example, their oil-fired power plants to gas-fired power plants. That is good because that will replace expensive, imported oil. That's good.

We also know that when that is done, those plants will be switching over to become the prime load-bearing plants. That means that our current coal-fired power plants will become more peak demand varied plants and that means that there will be less demand for coal, whether that be coal from Cape Breton or coal from Pictou. That, Mr. Speaker, can cost jobs.

[Page 586]

We also know that the proposed gas pipeline which would be shipping it out of Nova Scotia will be travelling very close to the Trenton plants. It would be a very simple matter to switch those plants to gas instead of coal. Mr. Speaker, that means jobs as well.

Now, let's not delude ourselves to think that the monies that the oil companies, Shell or Mobil, or the company that is involved in the transport - let's not delude ourselves into thinking that the profits that they are making are staying in Nova Scotia, because they are not. Let's not delude ourselves into thinking that there are all kinds of jobs once that pipe has been put in the ground, which is a relatively short process. It is a relatively short-term project. Once that has been put in the pipelines and is being shipped along, there are very few jobs left, actually, in that gas industry, particularly since the government is not prepared to require that there be a petrochemical industry here. The profits that they are making are leaving the province.

The monies that are made from the coal industry are spent in our province. The workers who spend their money in this province, their wages, that money then circulates. It has a spin-off effect in creating other employment within the province, taxes. It is very important. We all know about that. We all hear about that every time the government goes out to cut a ribbon. They don't just talk about the number of jobs that are being created at this particular plant or that particular plant; they talk about all the spin-off effects, all the other jobs that are being created.

Mr. Speaker, is it unreasonable? I would suggest it is not. Is it unreasonable to say that somebody should look at the scales? We are hearing what the pluses are; we are hearing what the bonuses are going to be. Well, let's look at the other side too. We have to know which way that scale is tipping. If that scale is not tipping to the net economic benefit in terms of the economy and in terms of jobs for the Province of Nova Scotia, if it is not tipping to our advantage, then it is not a good project as it is designed for the people of Nova Scotia and we have to go back to the drawing board and push for a harder deal.

It is not unreasonable, I would suggest. That is not saying kill the project. Anybody who dares to ask questions, we are accused of being opposed to the project, we are being accused of being opposed to jobs in Nova Scotia. That, Mr. Speaker, is total hogwash. It is a complete fallacy; it is absolutely untrue.

I cannot stand here and say that I am going to give carte blanche approval to a project because the Liberal Government says it is a good deal for us. The joint panel has said that they are not looking at and will not look at the costs to Nova Scotia associated with this project.

Mr. Speaker, they say it is not within their mandate. I wish it was. Maybe, and I certainly would have a lot more confidence than just saying that I will approve something, if it was in their mandate and if they would and did agree to look at that other side. But what

[Page 587]

we are being, not asked, but told to do here is to support something and just assume that that balance swings in Nova Scotia's advantage, without looking at the other side. Nobody has a clear crystal ball. Nobody has that 20/20 vision, unless it is in hindsight. We don't have that. However, when you are advancing, when you are moving forward with a project that is so crucially important, one would expect, and I believe that most reasonable people would expect, that the government would have ensured that all sides were looked at.

When I asked the question yesterday of the Premier, after the joint panel had said that they would not take a look at the costs associated, when I asked the Premier who will look at it? His immediate answer was, well, the joint panel is going to look at this. So I went back to him again and they have already said that they will not do that. Mr. Speaker, I also said to him, will you ensure that your government lawyers will challenge that and push for them to do that cost-benefit analysis? The Premier said, I will take that under advisement.

The final question I put to the Premier was, well, if they are not going to do it, will you at least guarantee that that cost-benefit analysis is done? Check that scale. Will you guarantee that if they don't do it that somebody will do it before final approvals are given? I got no answer to that. (Interruption)

AN HON. MEMBER: The watchdog.

MR. HOLM: The watchdog over here for the government, Mr. Speaker, is trying to keep me honest. The truth squad said that what I just said wasn't true. That the Premier did give me an answer. I guess where we are having our disagreement is over if what the Premier said was an answer or not an answer. It was kind of an answer because the Premier did say, in fairness, as I had said a moment before, that he would take it under advisement. Taking something under advisement is a far cry from committing the government to ensure that there has been a full cost-benefit analysis for the project, as it relates to Nova Scotians, being done. I guess the member is correct. The Premier did give me an answer. What I am saying, I guess, is that the answer was woefully inadequate, in my estimation, for what kind of commitment was necessary. I think that it is inadequate for what Nova Scotians believe.

We have heard an awful lot about, and we have seen and I have attended even some of the press conferences, some very elaborate public relations exercises sponsored by Mobil and Shell and the proponents of the project. They bring out their glossy pictures. One of the ones down here even brought in a few models of offshore rigs; wonderful models, beautiful models. I am sure that most junior high school teachers would be just totally impressed if one of their students brought them into school as their classroom project in Social Studies. They were great to look at, but they don't answer the questions. We have all seen pictures and actual oil rigs. I have even stood on them. I stood on them out on the offshore in the oil fields that were supposed to be our salvation where, in fact, Nova Scotian taxpayers ended up losing money because the former government jumped in on a project that, as it turns out, was

[Page 588]

not good for Nova Scotia. That was not the fault of the workers, the people who were involved in the exploration, that was the fault of the planning.

[9:15 a.m.]

There is far more that is needed to be known. We don't even know how much gas is going to be available for transshipment throughout Nova Scotia. The primary reason - and the company has even stated it - for wanting to develop it is to ship it on across this province down to the United States to the Boston markets; to export it. We have not even managed to get any commitments, any requirements written into any agreement with those companies who want to use our gas. It belongs to the people of Nova Scotia, it doesn't belong to Mobil Oil, it doesn't belong to Shell. It belongs to us.

Do you know, Mr. Speaker, as part of a six month period of time, we can be looking at these kinds of important elements. If, for example, that scale that I talked about, if we see that there are to be jobs lost or placed in jeopardy as a consequence of this proposal, then we can see on the other side what has to be done, what has to be renegotiated, what has to be required in order for the project to go ahead. If we are just going to export jobs, along with our resources, our economy isn't going to benefit. In reality we also know that the way that the deal is structured, since it is only going to be based, in terms of the royalties that are coming to Nova Scotia, on the companies making a profit, there is no incentive for them to make sure that their operation is as efficient as it can be because any costs are paid for by the taxpayers of Nova Scotia, because of the structure and the way it is set up.

Plus, Mr. Speaker, the way that it is set up, they can attribute all kinds of costs to this project. Whether they are fairly proportioned to it or not, or to some other operation somewhere else in the world, they can attribute the cost to it and, in so doing, rob Nova Scotians of royalties that they deserve.

That, Mr. Speaker, doesn't make sense. It is Nova Scotians' resources. I know that the member who used to have the Ultramar refinery in his riding doesn't like to hear that. I am sure that the people who live in his constituency would like to know that when our resource is coming out of the ground that we get our royalties up front as they do in Alberta and many other places, not just after the profits are being made.

Obviously, this project needs to be reviewed. Six months is not in any way, shape or form despite the rhetoric, despite the scare-mongering - to use a word that the Premier likes to use, of the members of the government bench and I accuse them of the scare-mongering - a six month delay in approving legislation for the distribution of gas within the Province of Nova Scotia is not going to kill it at all. The only thing that it puts a little bit of a crimp in, the only thing that it would put a damper on at all is the political games that the Government of Nova Scotia is currently trying to play. That is the only thing that would have a wrinkle being placed in it, nothing else.

[Page 589]

In the fall of 1997 this bill or another piece of legislation, after the joint panel has concluded their presentations and assessment, can be on the floor of the Legislature. Those who want to distribute the gas to the United States, they won't even have approvals from the commission in the United States until next summer. They can build that pipeline that distance by 1999; during that limited time-frame there is absolutely no reason at all the pipelines for the short little spur lines in Nova Scotia cannot be built in the time-frame between this fall and whenever the gas is needed. There is absolutely nothing that would stop that, there is plenty of time.

Those companies who would want to bid for these franchises, these monopolies, nothing in delaying this project is going to stop them from doing their planning, their design work in anticipation of legislation coming forward because that work is going to have to be done. You can also be darn sure that those companies that want to establish the spur lines throughout this province, if they are capable or competent enough to have those franchises, they also aren't stupid. They aren't going to be going out and spending huge megabucks in designing and planning for the building of the system until that joint panel review process has been completed and filed their report. That is scheduled for September.

Mr. Speaker, holding up this bill for a period of six months is in no way, shape or form going to kill this project. As I said before, all it puts a crimp in is the Liberals pre-election and election propaganda strategy. Thank you.

MR. SPEAKER: The honourable Leader of the New Democratic Party.

MR. ROBERT CHISHOLM: Mr. Speaker, I am pleased to rise and speak for a few moments on the amendment to this bill in second reading by my colleague, the member for Halifax Fairview. I do so because I have been increasingly concerned and alarmed at the tenor of debate on the matter of the development of offshore natural gas in this province over the past six months or so. I see us here dealing with a bill, Bill No. 6, which allows the Utility and Review Board and actually the Cabinet of this province to hand out franchises, who is going to distribute the gas, before the panel that is reviewing the merits of the proposals in terms of the transmission of natural gas and the offshore development itself even had the chance to finish their review of the project, and it is probably two years at least before that gas will even be coming on shore.

I just am concerned about the idea that has been raised that this bill that deals with franchising the transmission of natural gas throughout this province is necessary now basically for the survival of this project. It doesn't make sense to me, Mr. Speaker, and therefore I am thankful to the member for introducing this amendment because it gives me time and hopefully it gives other members sufficient time to be able to seek the kind of answers that I think are necessary before we move forward on these kinds of matters.

[Page 590]

The member for Hants East stood up earlier, Mr. Speaker, and he said in full flight that this amendment or any attempt to delay this bill would kill the project. He actually said that. I believe he added that the government has reviewed this and we believe that to be so. He may have even said that we have sought legal advice. I don't know, we will check Hansard and see. I am just flabbergasted that a member of this government would go so far to try to intimidate and limit debate on this issue to say that any attempt to delay this bill will mean the end of a very significant, major energy project that is being considered by a joint federal and provincial panel. If he has any evidence of that, then I would appreciate him bringing it to the floor but I cannot imagine, in the absence of that, that it is anything other than political rhetoric and that, in effect, is the basis for a lot of the points that I want to make here today.

The fact that the whole question of the development of offshore natural gas is so caught up, once again, in politics that anybody who raises any concerns or any questions about the claims made by the proponents or about the role of the government is automatically labelled as being against jobs or against Nova Scotia, against economic development or somehow ideologically predisposed to be opposed, Mr. Speaker, is wrong. That is unfair and that is merely an attempt, I believe, to squash any democratic debate and discussion about the merits to try to dig through the political rhetoric and the boosterism that is associated with this project. Also to try to get at the main issues which are very simply, I think, a question of whether or not this project, the Sable Offshore Energy Project, is in fact the best project to deal with the development of offshore natural gas, whether in fact the project, the way it has been established in terms of how development is going to take place offshore, in terms of how development is going to take place onshore, where the gas is going to go, who is going to be in control of it, what is going to happen with any by-products. All of those questions, in terms of the impact on Nova Scotians and Nova Scotia, are the kinds of questions that we need to ask and we need answers to those questions.

[9:30 a.m.]

I know that some members of this House and certainly of this government and the members of the Official Opposition have indicated that this project is good for Nova Scotia and that we have to go ahead with it, we cannot do anything that would delay it. I am not convinced and I am sure there are a lot of other Nova Scotians who are still unconvinced that this in fact is the best project, that this is the best way to do it. It is really important that we determine the answer to that because when the gas is pumped out of the ground and travels along whatever pipeline to go wherever it goes, it ain't coming back. It is gone. It is a non-renewable resource. We are not going to get another chance. When that gas goes away or when that development starts, as it has with the Panuke-Cohasset project, and all of the sudden we find out that, oops, we negotiated a bad deal, there is nothing we can do about it. There is absolutely nothing we can do about it. All of the money that has been expended in that project and the lack of royalties that are coming to Nova Scotia - there is nothing we can do about that now. The deal has been done. The deal has been signed. That is it. That is why I think it is so important that we ask these questions.

[Page 591]

I think it is important to say that I am sure the intentions of this government are to get the best deal for Nova Scotia, as I am sure the intentions of the former administration were to get the best deal for Nova Scotia. You know that old saying, the road to hell is paved with good intentions. That is why it is important for us and it is important for anyone else that has any knowledge of this project, of the energy business, to raise questions, to push the government, to push the Sable Offshore Energy Project proponents and others for answers to important questions.

What has been really disconcerting is that as we have raised questions, as intervenors have raised questions in the hearings, this government and other boosters of the project are trying to suggest that again for other reasons people are just trying to deep six this project because maybe the government is responsible and they think we want to do it because we want to make the government look bad.

We have to step back and look at this through eyes that are not coloured by politics. That is what I ask all members of this House to do, to look at this project, including Bill No. 6. This is the first foray into this project by the government, the first official foray through this Legislature into the project. It is the first opportunity for us to actually debate the merits here in this House. What would be most damaging to the Province of Nova Scotia would be if we end up with another energy deal - they are talking about 18 trillion cubic feet of natural gas out there. That could be a huge bonanza for this province not only if that is true, but if we can come up with the kind of plan, the kind of project, that will make sure that we get the maximum benefit from that, taking into consideration all of the factors in terms of where the offshore rigs are built, where the pipeline materials are built, who works on those different facets of the project, all of those questions. Who supplies the different parts of all of that? Those are things that we need to make sure that we maximize the benefits for Nova Scotia and that we ensure, because this is Nova Scotia's gas, that Nova Scotians get a reasonable rate of return.

Mr. Speaker, there is a prerequisite under the transmission deal that the company responsible is guaranteed a minimum of, I think it is, 13 per cent or 14 per cent return on their investment.

AN HON. MEMBER: It is more like 12 per cent, 13 per cent.

MR. CHISHOLM: It is 12 per cent, 13 per cent return on their investment. There has been some suggestion that is not high enough, that is not good enough. Well, what are we getting? What kind of return are we getting in Nova Scotia? There have been suggestions that, for example, just simply the royalty agreement itself is not the best deal that we could get. I don't know. There have been some supposed experts in the energy field who have suggested that, in fact, Nova Scotia could do much better. That is all well and good, but the point is that it merits examination.

[Page 592]

What about the whole tolling question? If we go with the postage stamp deal, what impact will that have on Nova Scotia? What will that mean for us? It will have some positives and it will have some negatives, as will the other side of that coin. You see we haven't heard, we haven't seen any evidence of the fact that the government has examined it.

One thing that I think needs to be said is that when people oppose this project and what the proponents are saying, it doesn't surprise us when the proponents come back and attack. It somewhat shows a lack of class or a lack of professionalism, that there are some challenges before the panel and the intervenors' integrity is questioned and their whole predisposition toward the particular project is questioned and so on. Mr. Speaker, we expect the proponents to come back and challenge people that are raising questions, to try to defend their positions and so on, but we don't expect that same strategy from the Government of Nova Scotia.

The Government of Nova Scotia should be leading the charge to find out whether or not this is the best deal. We have the chairman of that panel who is concerned now about the fact that he is getting it both ways from the proponents. This was reported in the Halifax-Chronicle Herald two days ago, Mr. Speaker. This was Mr. Fournier. He said, ". . . the evidence presented by the facilities, drilling and operations witnesses for the Sable project was contradictory during the past two days of testimony and cross-examination.".

He said, "'On the one hand, I felt I was being assured everything was under control. We know how to do this; we've done this for many years,' said Mr. Fournier. '(On) the other side, I'm hearing comments that we're not there yet. We haven't really gotten that far, we don't know, we have some reservations. It sounded to me like a contradiction.'". In other words, he is not getting the full goods from the proponents, from the witnesses.

Mr. Speaker, I say to you and I say to all members of this House, why is the government not raising those kinds of concerns? Why is the government so readily accepting of the position of the proponents? This is a business deal for Mobil and Shell and Maritimes and Northeast. This is a business deal for them. I don't criticize them and their position in this at all. We met with the president of Mobil, he seemed like a fine gentleman. We had continued communication and representations from the Sable Offshore Energy Project folks and they have been extremely and extraordinarily upfront and candid about what is going on here; this is a business deal for them.

There is gas out there, a product that they feel they can make money off and that is fine, that is great. They are pushing at the panel so that they can maximize their benefits. What the chairman and other witnesses are saying is hold it now, some of the things that you are saying maybe don't seem to jibe or there doesn't seem to be the evidence to support them, or that is all well and good but give us some evidence, give us some supporting documentation. There have been others who have suggested that not only is some of the information contradictory, but it is inaccurate. Now that is what is being hammered out there at the panel.

[Page 593]

What I have said to the Premier on many occasions is, why isn't the province asking those same kinds of questions? Why isnt the province, the ministers and the MLAs on the government side, challenging me and the members of the NDP caucus when we raise those same concerns? We say to them, excuse me, you tell us that Nova Scotia is going to get all these benefits and this is the best deal in the world and yet, every day, new information comes out which suggests that there are real problems and a desperate need for answers to many of these very questions.

HON. JOHN SAVAGE (The Premier): Go to the inquiry.

MR. CHISHOLM: The Premier says to me, go to the inquiry.

We have been through 20 years in this province of governments who have wrapped themselves in the flag and stuck themselves in the pockets of major offshore oil developers like Mobil, and have basically tried to give away the farm. They have told Nova Scotians about the riches that are going to flow, about what a wonderful thing we are doing, not only for you but for generations, by supporting this deal.

Other members have talked about former Liberal Premier Gerald Regan standing up and holding a vial of oil and telling us all about what a wonderful thing this was going to be. Everybody in this province still remembers that. Then we get the Tories, under former Premier John Buchanan, and I didn't think there could be a bigger booster, a bigger cheerleader for things that didn't necessarily have any merit than John Buchanan, yet this government has taken on that mantel. My point being, that through Nova Scotia Resources Limited, a company that ran up liabilities and debts of almost $500 million and got the Government of Nova Scotia into a deal that is not, in fact, in the best interests of Nova Scotia, that is not returning the kind of benefits to Nova Scotia in terms of jobs or in terms of royalties; that is what has happened in the past.

I say to the member for Hants East and all other members of the government benches, don't tell me that I am somehow misguided because I am skeptical about a government that stands up and says listen, follow us and we will lead you to the promised land and the promised land will be fuelled by natural gas. We have heard it before and we know just how hollow and empty that promise can really be.

[9:45 a.m.]

All I am asking and all my colleagues are doing is saying to members of this House, on all sides, let's put away this politics, this partisan nonsense with respect to the offshore natural gas project. I know that members of government want to be able to put on their leaflets, on their pamphlets in the next election, it even got in the Budget Book, for Heavens sakes, Mr. Speaker, about the benefits that were going to flow from Sable. But I say, please, put that

[Page 594]

aside and start asking the hard questions and demanding answers before you commit us any farther than you already have. That is what we need to do.

We have just heard this morning, for Heaven's sakes, from the Mayor of the Cape Breton Regional Municipality. He acknowledged, at least on the report that I heard, that maybe they were asleep at the switch, and maybe they were, on the whole question of whether Cape Breton was going to benefit from the distribution of natural gas. They now want to be an intervenor in order to be able to consider that. But there are a whole lot of other questions with respect to Cape Breton that have not been discussed in this House and we haven't been able to get answers from this government, dating back to the fall of 1995, about things like what kind of impact is the development of offshore natural gas going to have on the Cape Breton coal industry? Because we have evidence from a report that had been commissioned for the Council of Maritime Premiers in 1992 that for this to be a viable project, they would need to have the buy-in of Nova Scotia Power, for one, and New Brunswick Power for another. If, in fact, they bought in buying huge volumes of gas, that would then displace Cape Breton coal. It is fairly simply. That was a question that we asked of the government back in the fall of 1995. I don't think that is an unrealistic question.

If we know, for example, what the impact is going to be, then we can prepare for it. If, for example, we know that the impact is going to be such and such, then maybe we can prepare and plan for that.

THE PREMIER: On a point of order, Mr. Speaker. This has absolutely nothing to do with the hoist. This has to do with the subject matter and I suggest you make a ruling that we stick to the hoist.

MR. SPEAKER: Do you wish to speak to the point of order?

MR. CHISHOLM: I don't agree, Mr. Speaker. The six months' hoist is an opportunity to review the merits of the need for this particular piece of legislation as it fits in, and the government had said that when they introduced the bill, that is a part of the total package. So that is, in fact, what I am trying to argue.

MR. SPEAKER: I am not certain if the point raised by the Premier is, in fact, a point of order. But I would draw to the honourable member's attention that the debate on the amendment has gone far from the point of the amendment, and that is to hoist the bill for a period of six months. I would call your attention to the fact that you should be addressing your comments to that specific issue, and not to the general principles of the bill. So I would ask you to bear that in mind in your future comments.

MR. CHISHOLM: Mr. Speaker, I certainly will and I think I am, because what I object to, very strongly, is the fact that the member for Hants East, for example, got up and criticized and castigated the member for Halifax Fairview who introduced this amendment by

[Page 595]

saying that it was frivolous and a waste of time and what I am trying to argue is very much to the contrary, that it is very important that we have the time provided by this amendment in order to examine some very pertinent questions that relate to this bill in its entirety.

I am somewhat nonplussed by the reaction when I begin to look at some of the questions that we need to ask and some of the answers we need over the next six months and I look at this bill, I wonder why it is here at all. Why is it even in the Legislature at this particular point in time? It is so far ahead of itself. It was bad enough in the Budget Address that the government announced that 50 per cent of the Sable royalties are going to go directly to the debt. What Sable royalties? Are we allowing the NEB to discuss this and debate this and decide whether or not this project is going ahead? Well, then let's let that happen and let's participate in that debate and make sure that the decisions are in the best interest of Nova Scotia. Some would get the sense that this government has already decided that this is, in fact, in the best of interest of Nova Scotia, Mr. Speaker. They put it in their budget, they put it in their Budget Address and now they brought a piece of legislation in that provides for the distribution through franchises of that very natural gas.

Mr. Speaker, there have even been questions raised as to whether or not there is going to be enough gas to be distributed in Nova Scotia and New Brunswick. There is significant debate at the hearings about whether or not some of the proponents have already oversold the volume of gas that is going to be developed. So if that is the case, if we don't know the answer to that question, why are we into this whole issue of the distribution? I think it is premature and I think it further fuels the sense that this matter is a boulder rolling down the hill and it is almost unstoppable and that the people who are propelling this rock, this stone, this boulder, are the proponents.

They have come in, they have invested some money . . .

MR. KEITH COLWELL: A question, Mr. Speaker. The honourable member has been saying repeatedly that the Sable gas project is oversold. I ran a business for a long time, and I understand he never has, and if you are in a situation where you have more demand for your product than you have product, the first thing that happens is that your price goes up and your profit margin goes up and if that were to transpire the Province of Nova Scotia would gain dramatically. I would just like to know if he could tell me what negative impact an improved economic opportunity for Nova Scotia is?

MR. CHISHOLM: Well, there you go. The member for the Eastern Shore introduces a question by questioning my ability to answer the question because supposedly I haven't been involved in business and, therefore, I don't have the merits. Why did he ask me the question in the first place if he thinks that I don't have enough knowledge to be able to answer the question? If the member for the Eastern Shore was such a successful businessman, why is he sitting in here in the backbenches of the Liberal Government with very little to say? I mean, come on. You can't have it both ways. (Interruptions)

[Page 596]

What he is saying is that the only people that can deal with these issues are business people.

MR. KEITH COLWELL: On a point of order, Mr. Speaker. I realize that the member has totally demonstrated he has the inability to answer the question and has a total misunderstanding of what is going on here. I would ask him, if he can, to really look at what is best for Nova Scotia and see that there might be a possibility here for some job creation and some economic gain, rather than involving himself in some useless political rhetoric. (Interruption)

MR. SPEAKER: On the point of order, I would rule that the point is, perhaps, a good point, but not necessarily a point of order. With that, I will ask the honourable Leader of the New Democratic Party to address his comments to the amendment. The amendment is that of hoisting the bill for six months and all other comments on the bill will be conducted during the debate on the bill. Now we are going to deal with the amendment. I already drew your attention to that once and I would ask you to keep your comments in that order.

MR. CHISHOLM: Mr. Speaker, I believe the member for the Eastern Shore asked me a question about an issue relative to the questions that have been raised at the panel hearings about whether in fact the Sable gas project has been oversold.

MR. SPEAKER: I have asked you to address your comments to the amendment and you will take the direction from the Chair. I would ask you to keep that in mind.

MR. CHISHOLM: Mr. Speaker, you did allow that question to be asked and I would be happy to answer it. If the question is legitimate, then surely I can answer. (Interruption) If that is your ruling. That was not a question asked and I won't answer it. That is fine.

MR. SPEAKER: I think the ruling was fairly clear and I am sure you understood exactly what I said.

MR. CHISHOLM: I did. I understood that you allowed the question to be asked, but you will not allow me to answer it. I will now continue on with my debate, Mr. Speaker.

Mr. Speaker, the questions that have been raised about this bill, I think are legitimate and require answers. That is why we require some time here to discuss this whole issue. Why are we considering to set up a framework for distribution if, in fact, there isn't going to be any gas sold in Nova Scotia or if, in fact, we are going to just sell gas here in the metro area, or are we going to go to Cape Breton? These are all questions that I think should be examined before we put forward a piece of legislation which supposedly sets up the framework.

[Page 597]

I know that members of Cabinet have the final decision and that they are all wise and will probably, regardless of what the bill says, be able to make the appropriate decision. It is not me that said that there are questions about the gas that is going to be developed has been oversold. That may have been raised by experts in this field at the hearings.

[10:00 a.m.]

MR. ROBERT CARRUTHERS: What is wrong with that?

MR. CHISHOLM: Well if it is oversold then we are not going to have anything to distribute in Nova Scotia, that is the point. That is the point that has been raised and that is the concern. Is that enough to deep six the project? That is not the issue. Surely to Heaven it isn't one way or the other way you know it is either all of nothing. Surely members of this House and even the members of government are reasonable enough to be able to accept that there can be questioning, there can be examination, there can be skepticism without meaning that you are 100 per cent opposed.

Let me propose this, what if, in fact, we find out down the road after we have signed the deal that the proponents bring in workers from everywhere outside of Nova Scotia? I say that because the government is saying that it is going to all go to Nova Scotians and it is going to be the best deal. Let's say that it happens the other way, is the government going to be happy? Even if they are not government anymore, even if they are not in this House, even if they are back working in business, law, education or whatever but regardless they are still Nova Scotians, we are all Nova Scotians and we all want what is best. Isn't it reasonable that we try to find the answers to these questions before we sign on the dotted line?

Don't you think that we should have obtained a bit more commitment from the developers on this Cohasset-Panuke deal? That is the point here that I am raising concerns about the process here of dealing with this bill at this particular time and members of government and of the Official Opposition suggest that I don't support the project.

AN HON. MEMBER: Do you?

MR. CHISHOLM: I am asking questions about this project and I have every right to ask questions about this project. I want to make sure that we get the best deal for Nova Scotia and we don't find out after the gas is gone that it was a stupid deal like we have done in the past. The government has wrapped this is so much political crap that you can't even ask questions. You can't even say maybe this isn't the best deal or (Interruption) If that was an inappropriate word and it probably is . . .

MR. SPEAKER: Yes.

[Page 598]

MR. CHISHOLM: I regret having uttered it and I withdraw it, absolutely. I just get so frustrated with this idea that by asking a question, by being somewhat skeptical, by asking for answers and urging the government to get clear commitments from the proponents before they sign anything, I or anybody else is portrayed as against the project, against Nova Scotia, against jobs. It is just a lot of baloney. (Interruption) The member for Hants East has lost it as far as I am concerned in being another one of these kinds of boosters, these cheerleaders who don't want to hear. I don't want to hear anything. Don't tell me anything that might dissuade me from jumping in holus-bolus on this one because I don't want to accept it. Nova Scotians are not like that. Nova Scotians do not believe that is the way you go about life. Why do the government members expect that we have to do that in this place? I do not accept it. I do not agree and I will continue, as my colleagues will, to raise serious questions about this whole deal.

That does not mean that I am against developing natural gas on the offshore of Nova Scotia, but I want to know certain things. I want to know that the deal we commit to is the best deal for Nova Scotia. I am not convinced because all I hear from the government is rhetoric. All I hear when I ask about commitments that they have gotten about the royalties and about jobs and about that - they do not have any commitments. It is just like the BST. They are saying if you are against the BST, you are against 3,000 jobs. At the same time economists say that those 3,000 jobs may never come. That is the whole point.

I wanted the opportunity to stand for a little while and to try to raise some of my concerns about the fact we are dealing with this particular piece of legislation at this time. The fact that we are, I think, jumping the gun here. In the haste of members opposite and members of the Opposition to once again accept holus-bolus that Mobil Oil is interested in Nova Scotia's interests. Mobil Oil is interested in Mobil Oil's interests. They are interested in their shareholders. They are interested in their profits. There is nothing wrong with that. All power to them.

Our responsibility and this government's responsibility is to make sure that it is more than Mobil's interests that are looked out for here in this deal. There is Nova Scotia's interest, because once the gas goes by, once the gas comes out of the ground, you cannot put it back. That is the issue here. That is why I believe the government is getting way ahead of itself with this piece of legislation.

I think there are a number of additional questions that have to be asked before we can go any further in terms of committing ourselves with legislation such as this and I think the opportunity over a period of six months provided for by this amendment is extremely reasonable. Do not forget, the panel will be finished in early fall, perhaps. Then if the decision is to go ahead, it is not going to be until probably the fall of 1999, at the earliest before anything is going to be on the go. There is no rush here. What we should be feeling some urgency about is getting the answers to those many questions that still remain. I would urge

[Page 599]

all members to consider the reasonableness of this motion and to vote in favour of the amendment.

MR. SPEAKER: Are there any further speakers to the amendment?

I have a request and I will recognize the honourable member for Kings North in a moment. I do have a request from the Deputy House Leader to revert to the order of business, Introduction of Bills. I believe that requires unanimous consent and if I have that, I will do so.

Is it agreed?

It is agreed.

The motion is carried.

INTRODUCTION OF BILLS

Bill No. 7 - Entitled an Act Respecting Certain Financial Measures. (Hon. William Gillis)

MR. SPEAKER: Ordered that this bill be read a second time on a future day.

The honourable Deputy Government House Leader.

MR. RAYMOND WHITE: Mr. Speaker, will you please call the order of business, Public Bills for Second Reading.

PUBLIC BILLS FOR SECOND READING

MR. SPEAKER: The honourable Deputy Government House Leader.

MR. RAYMOND WHITE: Mr. Speaker, will you please call Bill No. 6.

Bill No. 6 - Gas Distribution Act.

MR. SPEAKER: The honourable member for Kings North.

MR. GEORGE ARCHIBALD: Mr. Speaker, I will be very brief in my discussion of the amendment that was introduced by the people on my far left.

[Page 600]

I was interested, though, in the discussion of the amendment so far that has come on. I think there was a bit of a slight by the honourable Leader of the New Democratic Party made toward backbenchers - those of us who are not sitting in that front row. Truly, it was just a year or so ago that my honourable colleague was sitting in the back row. So has improved his stature greatly.

Mr. Speaker, this amendment that has been introduced to hoist the bill for six months and send it on for further looking and reading and studying and so on, I am not exactly sure whether I could support it in principle or in fact. Actually, I cannot vote in favour of it and I will tell you why. I think the Government of Nova Scotia, under the leadership of the Minister of Natural Resources and the former Minister of Natural Resources, have not shown any great interest or understanding of the Nova Scotia population and not a great deal of understanding of the oil and gas industry. None of us living here in Nova Scotia have ever had any experience in oil and gas, but we depend on others who have for advice and counsel.

I do not think that the deal that the Government of Nova Scotia negotiated with Mobil and Westcoast Energy and all the partners of those main companies was to the advantage of Nova Scotians in any way, shape or form. I think they have given away the birthright of Nova Scotians, both present and future generations, with very little consideration from the companies involved. However, by the same token, Mr. Speaker, they are the duly elected Government of Nova Scotia and they are in the driver's seat. In effect, they are making the decisions. This bill is small potatoes compared to what they have done without the benefit of legislation in this Chamber and without any discussion, because even during Question Period, we are unable to get satisfactory answers from anybody.

There are so many ifs and that if is such a large word that I don't think sending this bill for further study for six months will alter the course this government is taking one iota. I don't think the government is interested, particularly, in listening to the Opposition or other Nova Scotians regarding the natural gas industry. Most people in Nova Scotia have the opinion, I think, that the natural gas is really not going to make the difference that we hoped it would. Most Nova Scotians are of the opinion that the gas and oil industry in Nova Scotia will not make the difference to Nova Scotia's economy that it has in Alberta. I don't think putting this bill away for six months is going to change that.

I see the Minister of Natural Resources giggling and laughing and saying, ho ho. Really and truly, I don't think that Nova Scotians do feel that we have the same benefits, in the long run, that they have had in Alberta from the petrochemical industries and the petroleum industry. Six months study is not going to change the rules that this government has been operating under.

AN HON. MEMBER: They might not be the government, George.

[Page 601]

MR. ARCHIBALD: No, I am sure they will not be the government in six months, if people have the same attitude in six months time as they have today and there is an election in the intervening time.

So this bill, I think, is a bill we can live with. It is very peculiar and it is very hard to understand exactly the position of the government when it comes to the distribution of natural gas. I do not understand from the bill whether there is any universality in it. Perhaps we could study it for six months and come to a conclusion, but if there is any highlight of this government, if there is any lightning rod, it is the fact that they don't listen anyway. So studying for six months and six months of committee work, would that really change their mind? We have seen the attitude of the government in the Law Amendments Committee. As soon as the people are out the door, the chairman says, we will vote now and all the people that worked so hard to make presentations, many should have saved their breath because the government isn't listening. I am not sure that sending this bill away for six months would do one single thing. Hoisting this bill would not do one single thing to change the attitude of the government.

[10:15 a.m.]

Mr. Speaker, with those few thoughts I regret that I am not going to support this amendment but in fact, will send it off to the Law Amendments Committee and we will have another go. Perhaps some people will come before the Law Amendments Committee that the government will listen to. I am not sure who those people are, I haven't seen any evidence as yet that they listen to anybody in particular but perhaps some of the notable people that have benefited from the decisions of the government will come forward and make some suggested amendments that we could discuss when the bill comes back for further reading. I will not be voting in favour of the amendment simply because I don't think that it is in the best interest of Nova Scotia nor do I think it is in the best interest of this bill to have it studied any further.

MR. SPEAKER: Is the House ready for the question on the amendment?

The question is being called. I will read the amendment so that we are all clear. The amendment as introduced by the honourable member for Halifax Fairview reads, thus: "That the words after 'that' be deleted and the following be substituted: 'Bill No. 6 be not now read for a second time, but that it is to be read a second time six months hence.'".

Would all those in favour of the amendment please say Aye. Contrary minded, Nay.

I declare the motion carried in the negative.

We will now return to the main motion of Bill No. 6.

[Page 602]

The honourable member for Pictou West.

MR. DONALD MCINNES: Mr. Speaker, I am pleased to have the opportunity this morning to make a few comments with regard to Bill No. 6. When I first looked at the bill I thought that any person with franchises would apply to the Utility and Review Board and I thought first, is that the right group to hear the applicants or whether it should be a group of independents. Then I thought about it again and I guess the appointments to that board are people who are knowledgable in making reviews for the power corporation and for the telephone people so perhaps that part of it is not all bad.

I really don't like the fact that the Cabinet has to have final say but that is the wish of the government that they will again second guess the board or whether they will just rubber stamp the approval of the board after they make their review.

I didn't feel like supporting the amendment of my colleague to my left on the six months' hoist. I don't know what good that would do. Hopefully, this bill will pass second reading and it will go to the Law Amendments Committee and any groups or people that are interested should come. I hope that the government will listen to those people and hear their concerns. I am sure there will be a number of interveners.

I guess my other main concern is what kind of a deal did the government make with Mobil? Did we give the gas away? From what little I understand about it, it depends on the profit of the company as to how much money we get. I think we should have gotten so much at the well-head for that gas. I think we should have a percentage there whether the company makes any money or Mobil makes any money or not, that . . .

AN HON. MEMBER: That is their problem.

MR. MCINNES: That is their problem. We all know accountants . . .

AN HON. MEMBER: . . . at the well-head.

MR. MCINNES: We are getting a percentage at the well-head?

AN HON. MEMBER: No, you are not.

MR. MCINNES: Would the minister like to answer that? I would be very happy to let her. Eventually, she says.

What I was trying to say is that you can make up a set of financial statements and it is not hard to get some extra costs in there, so your bottom line doesn't necessarily show a profit. I think we all understand that, that there can be expenses made up, one way or the other. I just am very concerned, it is Nova Scotia's gas and I have always said that gas and

[Page 603]

oil out there is money in the bank to the Province of Nova Scotia. It is our heritage, but is our money.

We are going to put it out and I hope this deal is good. I think that gas should go to Amherst and we would have a special rate and then, as it goes to New Brunswick, they would have a rate and, when it goes to Maine, they can have another rate, but I think Nova Scotia should have the best rate for the price on that gas. (Applause)

I also think it is very important that we get some laterals put on this line. For example, we have the Nova Scotia Power Inc. generating plant in Pictou County; we have the Tufts Cove plant; and the Trenton plant, my colleague for Pictou East says. I understand from the NSP officials that the Tufts Cove plant could be changed over - it uses oil - very quickly and at very little expense, to use Sable gas. Would that not be good for Nova Scotians, that we could generate electricity cheaper? Would that not be important to Nova Scotians? I think it is. I think if we had a pipeline and we had a spur off, or lateral or whatever you want to call it, from New Glasgow to go through Pictou County to the Trenton generating plant - it is a coal plant now, and I am not against coal, don't misunderstand me - if we can use some of this gas and we still use the coal in the Cape Breton generating plant, that is fine, but is it our gas and all I am saying is let's use that gas to our advantage.

New Brunswick is saying that if you are going to let the pipeline go through here, you are going to put a lateral through into Saint John or they will not take the gas. Well, I don't blame them. That is playing hard ball, but that is good stuff. I don't blame them a bit, but why can't we have that gas distributed to Nova Scotians at a better price than to the other areas? I am not against the other areas, again I say, but I think that it is important this gas goes through. Hopefully, it will bring in a lot of money to Nova Scotia. We would love Nova Scotia to be a have province. I don't think there is much wrong with the bill really, as I see it. I have read it very carefully. I say I don't particularly like the idea that the Cabinet has the final say, but the fact is, that is what is in the bill.

I do want to make a point, and I make it because my constituents asked me. We have a number of people in the West Branch area of Pictou County who are against the pipeline. I went to a couple of meetings with them. They are scared it is going to blow up; they are scared it is going to hurt their property. I could honestly say, if it was going 1,000 feet behind my house where I live now, I would not be upset. Personally, I would not be upset. I just raise it. I have mentioned it. I said that I would and I did raise it, that they have concerns. I don't know if they are justified or not. There are all kinds of pipelines in the West. I don't have to tell you people that, but there are thousands of miles of pipeline. I am sure they blow up. Sometimes the Nova Scotia Power Inc. lines will have a back-up and kick back into a house and have a fire. Anything is possible, but I think the pipeline will be quite safe with the modern technology they have today, and it is interesting reading to see how it will be laid.

[Page 604]

If that pipeline could have spurs to Truro and to Halifax, that would be a very important asset to Nova Scotians.

I just hope the government in its wisdom will make sure that that happens. I just wanted to take a few minutes to express my concerns about Nova Scotians' ability to get the full utilization of this gas. As I say, it is money in the bank for us and I think it is important that this bill go forward to the Law Amendments Committee and see who comes in and makes presentations. I hope that the government in their wisdom will listen to those presentations and make any changes that might be necessary.

MR. SPEAKER: The honourable Leader of the Opposition.

DR. JOHN HAMM: It is my pleasure to make a few remarks at this point on Bill No. 6, An Act Respecting the Delivery and Sale of Natural Gas in the Province.

One of the exciting prospects for Nova Scotians is energy self-sufficiency. We have not been self-sufficient. We have been dependent on imported energy sources from around the world. Now we have a supply of energy which will supply not only our needs but the needs of others.

If we are to maximize the advantage and the prospects and opportunity before us, we have to be extremely careful that the groundwork by way of legislation, the groundwork by way of agreements, is such that we will be able to take full advantage of what is our stepping stone into the next century.

Cheap energy available around Nova Scotia will pay dividends far beyond the 4,000 jobs that we talked about in construction, the 250 to 300 jobs that will be available in the production phase. It will be a bigger advantage than the royalty structure that is in place. Cheap energy is a tremendous advantage and it will advantage the economy of this province, if the proper steps are being taken now.

Many speakers before me on this subject have mentioned what can happen when governments make a poor decision over the long term in making energy agreements with the private sector. You only have to look at Churchill Falls to realize what a horrendous mistake that was in the long term, even though at the time of that agreement it seemed the sensible thing to do. It is extremely important that our government extract from this arrangement every single advantage that it can from the Sable Offshore Energy Project.

I do not think that is being unreasonable. We do need a little bit of time and I think that it is our responsibility as Opposition to examine what the government is doing in this regard. Good examination, a plan that can stand up to public criticism and public examination obviously will be the kind of plan that will be in the long-term benefit of this province.

[Page 605]

This bill deals specifically with the distribution and the sale locally. The question, however, that it begs to ask is will there be anything to sell? Will there be anything to distribute around the province? Will this province merely be pass-through for gas passing from the offshore through our province into the industries of New Brunswick and the northeastern United States? That would be a tragedy. That would be a tragedy even if the royalties are coming in, even if the 250 to 300 jobs are out there. It would mean that we have lost, perhaps, the major benefit to this province and that is cheap energy. Cheap energy will help the jobs that we have here to grow and it will bring new jobs to the province.

[10:30 a.m.]

I was present on February 5th when Mr. Michael Phelps, the Chairman and Chief Executive Officer of Westcoast Energy Limited addressed the Halifax Chamber of Commerce. He spoke about an opportunity for the Maritimes to build a natural gas industry for the 21st Century. If you look at what Mr. Phelps had to say on that day, I think you get some idea as to whether or not there is a guaranteed supply of gas to Nova Scotia and, from that, we will be able to deduce whether or not we will be extracting the major benefit from this project. We must remember that the background to this speech, leading up to February 5th, the Government of Nova Scotia had been engaged in a dialogue with all of the participants in the offshore and in the transportation of the gas.

Mr. Speaker, it is our gas, it is our advantage, it is our call. This gas cannot be produced without the concurrence of the Government of Nova Scotia. We are in the driver's seat. Have we allowed ourselves to be pushed out of the driver's seat into the passengers seat? There is strong evidence, from what Mr. Phelps said on that day, that that is, in fact, the case. I would like to just briefly remind the members of what was said on that day.

Mr. Phelps said, "Let me assure you that the U.S. transportation toll we are seeking to charge is very helpful in enabling us to price our service to Canadian customers as low as we are.". Now, it would seem very strange to me that when Mr. Phelps is discussing Nova Scotia gas, that he would be talking about Canadian customers. You would think, at some point, he would have made reference to Nova Scotia customers. He made no reference to them in this regard at all, because he didn't say enabling us to price our service to Nova Scotia customers as low as we are, that didn't seem to enter into his particular appreciation of what this project was all about.

Mr. Phelps goes on, immediately, to say, "In Canada, we have applied to charge a common tariff to everyone," - Westcoast Energy, who have just been negotiating the transportation of gas, a partner in that is Mobil. We have given the rights to Mobil to develop this offshore. Our government has been involved since 1993 in this endeavour. - "so that each customer who buys gas . . . is charged the same fare regardless of where on the line they are.". So that means customers in Sherbrooke will pay the same fee as a customer in Moncton, as a customer in Saint John, New Brunswick.

[Page 606]

I would ask you, is that the kind of arrangement that we should have been party to in the distribution and the sale of our gas? Mr. Speaker, absolutely not. This impacts on this bill because this impacts on the sale of this gas. It means that the distributor here will not be able to sell this gas at a lower price than it will be sold in New Brunswick.

AN HON. MEMBER: Unfair.

DR. HAMM: We sit at the edge of this country and the major markets in this country are in the central part of the continent and our country. Every time a truckload comes Nova Scotia from central Canada, we pay more than New Brunswick and if it is coming from Ontario, we pay more than Quebec. When we send back a truckload of whatever it is, we pay more to send that to the market than they do in New Brunswick or if it is in Quebec, to send it to Ontario. Now I don't see those provinces saying to us, look, let's make an arrangement and we will all pay the same; we will average it out. That means we will pay the same to have it shipped from Toronto to Moncton as we will Toronto to Halifax or Toronto to Sydney or the reverse. That simply does not happen. The other provinces would not agree to that.

Now the shoe is on the other foot. We have the gas. It is close to us. It is our gas. Why should we be subsidizing the transportation costs of gas to New Brunswick or to any other province in Canada? This is our gas. It was given to us by a specific arrangement back in the 1980's. It is our advantage and we are frittering it away.

Mr. Speaker, isn't it interesting? This gas play would not be in place today if in the 1970's governments did not start to look at offshore development. Successive governments in this province invested in an offshore industry and it is now starting to pay dividends. It is only there because of the foresight and the advanced investment. This did not just happen accidentally. Now is payback time. That is the point; now is payback time.

Mr. Phelps goes on. It is obvious that Mr. Phelps was not influenced by what he heard from our Nova Scotia representatives. "We chose that tariff structure because we believed it to be fair and equitable to all concerned . . .". Well, it is not fair and equitable to Nova Scotians. It is interesting. Through this whole thing the government has been publicly very silent in terms of what it feels Nova Scotians should have as a specific advantage in the oil and gas play.

I look at the very strong stance that was taken by the Province of New Brunswick. They said that there will be no pipe cross New Brunswick unless there is a preferential tariff to the businesses and the residents of New Brunswick. Very clearly they established their position and they did that so effectively and so well that the pipeline company said, well, we will deliver the gas to you at the same price we are going to deliver it to Nova Scotians. Where were the people who negotiated the position of Nova Scotians to guarantee that what we are talking about here today, the sale of gas to Nova Scotians, would be at the best price? We have been out-negotiated and out-snookered in this deal.

[Page 607]

Mr. Phelps went on. He is talking about laterals. I made the point earlier that without lateral distribution of the gas, simply with pass-through of the gas through our province, we are missing what easily could be the major benefit, and that is, for the next century very low energy prices. What is the guarantee that there has to be an aggressive sale? The bill that we are talking about is fine; it sets up - and I will have something to say about the detail of the bill - but on the other hand, if there are no laterals, there won't be any gas distribution. If there is no motivation, no requirement to provide the gas to Nova Scotians, then why would they sell any gas to Nova Scotia?

Here is the reason. The pipeline will have a tariff from Country Harbour or Goldboro to the New Brunswick border. Now that is what they have applied for. Then there will be an additional rate to carry the gas through New England. So they will make the most money in putting the gas in at Country Harbour from the offshore pipe and delivering it in New England. That is where they will make the maximum profit from every cubic foot of gas. What in that arrangement would motivate them, if they are not required to do so, to let the gas be capped off here before they get the rate all the way to New England? It doesn't make any sense. They will make it pay and we will pay.

You know it is interesting that there is so much misinformation around about this project. This project releases or makes available a tremendous amount of natural energy. We always take this cap in hand approach but we have a real card to play. Did we play it properly or did we allow ourselves to be bluffed? That is the question and I would suggest very strongly that we were stared down and we allowed a bluff to override our trump card.

Here is what Mr. Phelps says about laterals, this is the commitment of Mr. Phelps to the distribution of gas in Nova Scotia. "There has also been a lot of discussion about access to this new form of energy for customers in Nova Scotia and New Brunswick. Can we build a lateral to Halifax, northeastern New Brunswick, to northwestern New Brunswick? The answer to all these can you do it questions is 'sure, if there is enough demand for natural gas to pay for the expense of building the infrastructure.". Why would they build the infrastructure when they can deliver the gas all the way to New England and get the full fare? There must be a demand. If they are going to make this pipe then they are going to provide laterals to Nova Scotians.

It was interesting because the Premier of New Brunswick was not afraid to stand up and say part of our agreement is you have got to guarantee a lateral to the City of Saint John, New Brunswick. I didn't hear our Premier saying that he was demanding a lateral anywhere. I didn't hear our Minister of Natural Resources saying we are demanding a lateral, didn't think of it.

This is February 5th, the groundwork has been laid. On the same day that Mr. Phelps is telling us how he is going to sell our gas and he has also told us, if you read between the lines, that he is going to sell it the way he sees fit because he doesn't seem to be under any

[Page 608]

constraints, the province tries to nail down specifics on local gas jobs. I would have to ask you if here we are with public announcements by the senior officials of the participants on the business side of the gas delivery who are going public and saying what they are going to do, that the arrangements are in place and this gas is going to be delivered and we are going to run it across your province and then the province is trying to nail down the specifics. I would have thought the time to nail down the specifics is before you signed any agreement, before you said okay go ahead you have our blessing, you have our commitment to support your development of the field.

[10:45 a.m.]

On February 5th, the same day that Mr. Phelps is telling us what the company is going to do, the Savage Government has asked American-owned Mobil Oil - and Mobil is a partner, by the way, as well, in the pipe - how it defines a resident of Nova Scotia. Well, that is very interesting. The advantage to Nova Scotians is one that will accrue if, in fact, when they are building the project that the jobs in putting the pipe across the province and putting the platforms out in the field, if Nova Scotians are involved in the construction. We talk about those 4,000 jobs, but unless those 4,000 jobs are filled by Nova Scotians who spend that weekly paycheque here in the province, then we have missed a major benefit.

It is interesting, I can't understand why, on February 5th, the province is now saying, what is a Nova Scotian? Well, I know what a Nova Scotian is. It is somebody who lives here and spends their paycheque here. It is not somebody who works offshore and, on their two weeks off, they fly to Quebec or they fly to New Brunswick or they fly to England or Ireland to spend that paycheque. It is somebody who spends their paycheque here. We all know where the Devco workers, who are involved in digging energy out of the ground, spend their paycheques, in Cape Breton. I want the people who work on this project to spend their paycheques in Nova Scotia.

On the same day, the government wants Mobil to explain how Nova Scotians will qualify for preferential access to training and employment opportunities. Well, that would seem to be a detail that should have been worked out by contractual arrangement. I am not embarrassed to stand up and suggest that because this is our advantage, this is our gas, that we, by contract, would have the privilege of participating fully as Nova Scotians in every aspect of this project, that we would be guaranteed participation. The current minister knows and I acknowledge the fact that there are certain activities that will go on that require out-of-province expertise, and that is a given, but I don't want the government asking, on February 5th, how you would qualify as a Nova Scotian for preferential access. I would have thought that government would have arranged this well before February 5th.

On the same day - it was February 5th - it goes on to state that during that news conference, Mrs. Norrie was asked if the province would set strict guidelines to ensure that Nova Scotians get first crack at jobs. That is a key question. It is a question that should have

[Page 609]

been asked, on a daily basis, the minute negotiations started with Mobil and others in the development of the project. It goes on to say that she, being Mrs. Norrie, refused to answer, saying, "We are demanding every Nova Scotian that is qualified gets an opportunity to work in the offshore.". Then she goes on to say, "I would prefer now to stick with the royalties, but we are demanding.".

My question is simply, and I acknowledge that the minister was not involved in the early part of these negotiations, but it does distress me that she now has to say "we are demanding". What the minister should be able to report that by contractual arrangements, Nova Scotians are guaranteed preferential access to the opportunities that are coming forward in the development of our gas project.

It is interesting. I do not know if members of the House have had an opportunity to review some of the requests for proposals and the contracts that the Newfoundland Government signed in the development of its offshore oil industry. Those contracts are full of clauses that guarantee Newfoundlanders preferential treatment in the access to jobs and opportunities connected with the development of their resource. We should have done the same. If we have not done the same, then the questions that are being asked on February 5th by our government indicates that we did not provide the same kind of comfort and protection for the people of Nova Scotia that has been provided, for example, to the citizens of Alberta who always benefit in a very real way the development of the Albertan resource.

Now, the bill talks about the distribution. How much gas are we going to have to distribute? We talked about 400 million cubic feet a day. We talk about 540,000 BTUs a day. It never talks about how much of this is guaranteed to Nova Scotia. Sometimes you hear the figure 20 per cent of production will go to Atlantic Canada. If that is the case, it is my understanding that already the Province of New Brunswick has indicated and has signed agreements with the industry that they will take 15 per cent of the supply. Does that mean there is 5 per cent left for Nova Scotia?

What is the requirement? Do we have or do we not have unlimited access to this gas at a preferential price? Do we not or do we not have an agreement that industries in this province will have a guaranteed access to this low-cost energy source? If there are agreements in place, then no one makes reference to them.

Is there an agreement to guarantee that gas will come to Halifax? Will gas go to industrial Cape Breton? Will even gas go across to Port Hawkesbury?

AN HON. MEMBER: No.

DR. HAMM: I hear the answer and the answer is no.

AN HON. MEMBER: Check your sources.

[Page 610]

MR. GEORGE ARCHIBALD: Maybe they know something that nobody else knows.

DR. HAMM: Well, yes, perhaps there is information circulating around the House that indicates that suddenly now there is an agreement to put a gas line across the Strait of Canso into Port Hawkesbury. (Interruptions) Well, right now the only pipeline that I have seen a plan for is take the wet products across. There is no plan to take the gas across.

Let's talk about the distribution. Is it the plan of government to make the gas available to all major industries who wish to utilize the cheap energy source? Is it the intention of government to provide communities with natural gas for heating homes? We are now starting to talk about using the gas for home heating, but I remember early on having some briefings in which it was clearly indicated that the suppliers of the resource were not interested in getting into the heating market because they did not want really a customer that wanted gas in high demand or in high amounts for six months and then in the summer months not require any gas because that would mean there would be, during the summer months, unutilized capacity in the system. In other words, they wanted only to sell the gas here in Nova Scotia to customers that would guarantee a year-round purchase of gas. (Interruption) I think we should get that clarified.

Will this company provide the gas to customers that will require the gas primarily during the winter months and will it supply gas to those customers at a fair and preferential price? Or is it going to neglect those customers because it won't be able to sell them their product during the summer months? Does government have an agreement that this will be actively marketed for home heating use?

The other interesting thing, too, if it is marketed for home heating use, will it, like other sources of home heating, now be subject to the blended sales tax? Will it be subject to the 15 per cent tax as is electricity, as is propane, as is home furnace oil? Or will it have escaped this oppressive tax, the tax on keeping warm.

In terms of who will decide the distributorship of this resource in our province, if it can be determined there is resource to distribute, I cannot help but think back to the situation that developed I guess more years ago than one would think when the cable television industry was in its infancy and we developed, across this province, a number of small companies delivering at the local level, cable television services. The provision of services in highly populated areas was extremely popular and, of course, highly sought after. Many of these small companies developed very quickly an interest in providing that service, less of an interest in providing it to the less populated areas. As a matter of fact, many areas in the province, even today, do not have direct cable TV service.

What is the government's intention in terms of providing this source of energy? Will it be simply to the highly populated areas or will it be available in the rural parts of the province? Now it is no problem to market it in the urban areas. It is highly profitable and it

[Page 611]

is highly profitable across this country to distribute locally natural gas. Will we have the same kind of situation in which a number of small, local suppliers will spring up all across the province, later to be bought out by a major supplier, analogous to what is happening in the cable TV industry, making all of the local suppliers instant millionaires? Or will there be a plan in place that is clearly in the public interest to get off on the right foot, to get the maximum amount of distribution available first off so that as many Nova Scotians as possible can benefit from this resource?

If there is a single flaw, if one had to say what is the single worst thing about this bill, well, that is very easy to discern, to determine, to identify. This bill allows the licensing of local distributors be made at the Cabinet level. Now this is analogous to the situation where, for example, let's go back and have the Cabinet decide who is going to get all the big contracts. Let's get rid of the tendering. Let's have Cabinet decide when we are going to award a big road contract or a big purchase contract for government. Let's go back to that because that is what this bill does. It decides that Cabinet will decide, ultimately, who will receive the contract for local distributorship, or even province-wide distributorship. Thats not right.

[11:00 a.m.]

That leads quickly to the question, who should be? An independent body, a non-political body should make that decision, the same way that a non-political body makes the decision on who gets the highway contract or who gets the big procurement contract or who gets the big consulting contract. Why should Cabinet have the pressure put upon it to make a decision as to who will get the contract? We have a small province and, needless to say, many people, their political persuasion is well known. To put the onus on Cabinet to make a decision as to who will get a contract and to suggest that the public perception of that would be apolitical is absolutely ludicrous. These will be perceived to be, and ultimately will be, political decisions and they should not be. They should be business decisions and made by an arm's length body.

I don't have a better suggestion than to allow the process to stop at a fairly appointed public Utility and Review Board. It may well be that a separate body could be set up for the adjudication or the awarding of these contract rights, but it definitely should not be at the Cabinet Table. This will lead to the kind of political pork-barrelling that has been a criticism of governments in this province for decades. Let's get a piece of legislation before us that takes the politics out of the selection of the distributorships of gas in our province. Let justice be done and let justice appear to be done. Thank you.

[Page 612]

MADAM SPEAKER: The honourable member for Hants West.

MR. RONALD RUSSELL: Madam Speaker, I got to my feet a little before I had thought I would be getting to my feet. I don't think there is a Nova Scotian who is not aware of the importance of natural gas to this province. There is no doubt that, in the long term, there are going to be a lot of benefits that are going to accrue to Nova Scotians individually and to Nova Scotians collectively through improvements in business opportunities in the province. But there are a lot of questions that remain to be answered, I think, before Nova Scotians can be assured that the benefits that will accrue from the pipeline will come to benefit this province and the citizens of this province.

My colleague and my Leader, a few moments ago, Madam Speaker, was talking, first of all, about the amount of gas that will be available to those users within this province. It is our understanding that of the total capacity of the line, only 20 per cent is allocated for use within the Maritime Provinces. We have been told that, however, additional gas may be available beyond that 20 per cent to the Maritime Provinces. When we examine the contracts that have been promised which would allocate 15 per cent of the Maritime supply to Irving Oil in the Province of New Brunswick and we compare that to the 5 per cent which is remaining for the Province of Nova Scotia, it appears that if that contract goes ahead in that fashion that we are going to receive the short end of the stick.

However, we have been told not to worry; that additional gas will be made available beyond the 20 per cent. My fear and I am sure it is the fear of many Nova Scotians is that additional gas that will be made available to the Province of Nova Scotia will not be at the price that the gas is retailed for in the Maritime Provinces but at the price that the gas is retailed and contracted for at the end of the pipeline in New England. There is a considerable difference in that price, so we are told.

The second thing is New Brunswick has very strongly indicated that unless there are certain benefits accruing to that province, then the gas is not going to be wheeled through the Province of New Brunswick to the New England markets. In fact, New Brunswick it appears has got a clamp on - and I mean that figuratively - the pipeline. In other words, if the distributor of the gasoline - the pipleline company - to the New England market does not agree to the terms and conditions of the New Brunswick Government, then the gas simply doesn't flow. It seems to me that this is wrong.

We, in Nova Scotia, should be the ones who are doing the dictating to the pipeline. We, in Nova Scotia, should be the ones who accrue the greatest benefits from this gas when it comes ashore and if we are not then we should be the ones who are applying the clamp on the pipeline and saying if there is no agreement that has a significant benefit for industry and consumers in the Province of Nova Scotia then the gas doesn't flow, we will just leave it sitting out there until such time as we can have some kind of deal that does accrue the primary benefits of that gas to this province.

[Page 613]

There is a very great advantage to having a supply of cheap energy, we know that for instance from the experience in the Western Provinces, the Province of Alberta primarily but to a lesser extent in the Province of Saskatchewan and the Province of British Columbia. Having a source of clean, cheap energy such as gas can accrue great advantages to manufacturers and to the normal user, the consumer in heating their homes and providing a source of energy for cooking and what have you. I would be very disappointed if indeed this government has not made some kind of an arrangement within the agreement with the pipeline company for those particular advantages to be accorded to the people of Nova Scotia.

That is about the pipeline. This bill really isn't talking about the pipeline it is talking about the laterals from that pipeline which will service areas within the Province of Nova Scotia. In other words, the pipeline agreement simply takes the gas, puts it into a trunk line and takes it out of the province and that is the end of it. I am told that if we wish to have the distribution of gas, for instance, in the metro Halifax area or in Truro or in Kentville or Bridgetown or in New Brunswick that this bill lays the groundwork for the allotment of a franchise for a company to provide those services.

The difficulty that I see is that, again getting back to New Brunswick, New Brunswick has said that as part of the base agreement for the pipeline to travel across New Brunswick there must be a spur down to Saint John. I say bully for New Brunswick. I think that is fine. I think that we in Nova Scotia, again, because it is our gas should be saying to the pipeline companies that there are certain spurs, certain laterals, that we will demand that you put in, in reaping the reward for taking our gas and taking it down to the New England states. One of those certainly should be a spur, I would suggest, into Halifax and up through Truro to the Strait area and on into the New Brunswick market.

The use of gas in Nova Scotia no doubt is going to displace some of the traditional energy that we presently use. That traditional energy, of course, is electricity and oil and coal. Electricity, oil and coal are all linked together in that a portion at the present time of our electricity that we receive from Nova Scotia Power is generated by oil, but the vast amount of it, the major amount is from coal. Although today we are supposed to view coal as being a rather dirty kind of an energy producer, there are ways that have been found and we have found them in the Province of Nova Scotia. Point Aconi, I would suggest, is a pretty good example of where we are actually producing electricity from coal without any of the environmental difficulties that are caused quite often by the use of burning coal.

I would suggest that if Nova Scotia Power becomes involved along, I believe, with Consumers Gas in Ontario as a distributor of natural gas, then I think there is going to be a very strong incentive for Nova Scotia Power to turn over more and more of their electricity production to generation from natural gas. We have met with Nova Scotia Power in recent days and they have told us that at the present time their intention is to generate electricity across the harbour where they are presently using imported oil to generate power, that that would be one of the first plants that they would probably convert to gas and that a second one

[Page 614]

would possibly be at Trenton. They do not go any further than that. They say that that is as far as they would go with converting plants to generate electricity from natural gas.

I would suggest that that would probably be the thin edge of the wedge. I would think that, as I say again, if Nova Scotia Power had that franchise for the distribution of gas, there would be a strong incentive for them to expand further and perhaps to move into other areas within Nova Scotia where they are presently generating electricity by coal and to convert those generators to natural gas. I would think that the Province of Nova Scotia would have to look very seriously before they would permit that kind of a changeover to take place because I think we do have to remember that we have a very large indigenous coal industry in this province and that the loss of that industry would be catastrophic, particularly in Cape Breton although there are other areas that produce coal as well within the province that would be affected.

[11:15 a.m.]

Madam Speaker, as I say, I am an enthusiastic supporter of the development of the offshore gas resources that we have. We shouldn't kid ourselves that these are limitless resources; however, they are substantial resources. There may be upwards of 15 trillion cubic feet of gas that is recoverable from our offshore and that is a considerable size gas field. In fact, the amount of gas that is necessary to make the offshore field viable, I am told, is only 3 trillion cubic feet. In other words, 3 trillion cubic feet of recoverable gas offshore is sufficient to warrant the putting in place of a pipeline and all the attendant costs of bringing that gas ashore and still make a profit. So in point of fact, if there is, as Mobil and Shell and PetroCanada and on and on seem to believe, about 15 trillion cubic feet of gas out there, it could indeed be a very profitable, a very long-term and viable project that we have getting under way in our offshore.

When we are talking about this particular project, Madam Speaker, we are talking about something long term, we are talking about something that is profitable and something that can indeed have a very positive impact upon the economy of Nova Scotia and also something, incidentally, that can have a very positive impact, I would suggest, on the general outlook of this province. If there is anything that could revise our self-confidence, I would suggest it is the offshore.

Madam Speaker, there is also a downside to it. It depends how you look at the downside, I suppose, because quite frankly I think most Nova Scotians would look at the downside and say, well, that is a good thing. The downside is simply this: under the offshore agreement that we have with the federal government, for every dollar that we earn in profits from the offshore - in other words, for every dollar that we get in a royalty payment on the offshore - we lose 50 cents in equalization from the federal government. In point of fact, of the offshore revenues that we get, that we accrue in Nova Scotia on the debit side, we are going to have the federal government chop off 50 cents from our equalization payments.

[Page 615]

AN HON. MEMBER: Some have suggested it is as much as 70 cents.

MR. RUSSELL: Well, it could be 70 cents. Madam Speaker, I am chatting on the side here, which I should not be doing. However, as I understand it, right now it is 50 per cent of the revenue - I beg your pardon; the profits. We have to be very careful that we're saying that; the profits, 50 per cent of that will be debited by the federal government.

The Leader of the New Democratic Party just pointed out to me that that figure could be 70 per cent and it could be 70 per cent because the original, going way back to about 1973-74 when Mr. Regan was in the House and held up the bottle of oil, at that time it was indeed 70 per cent loss on equalization. We have that out there, Madam Speaker. When we speak about the profits from the offshore, we have to remember that those profits are going to be possibly not as great as we anticipate.

The Minister of Finance this morning was talking about using 50 per cent of the profits to pay down the debt of the province. In fact, he intends to entrench in legislation that requirement. I have no difficulty with that and I don't think anybody has any difficulty with that, but we must remember that this is not going to have a tremendous effect on the debt of the province, even if the profits from the offshore are $1 billion. We are going to lose $500 million of that in equalization, so there is only $500 million left as net and you put 50 per cent of that against the debt and it is $250 million over the life of the project. So it isn't very much.

The major gain that we are getting from the offshore is what we can do with the gas when it gets onshore. That is why, Madam Speaker, we have to be so hard-nosed when it comes to bargaining with, first of all, the pipeline company and, secondly, with whomever the franchisers of the gas distribution are, because that is where we actually get the oomph. That is where we get the kick insofar as the economic development of this province is concerned. It is not from the royalties and we shouldn't kid ourselves. In fact, I don't know what kind of a deal we have, and I presume that Cabinet knows, but I don't think anybody else in Nova Scotia knows exactly what kind of a deal we have with the pipeline company and with the developer of the gas offshore. We don't know what that it is.

There are all kinds of agreements that could be there. For instance, are our profits based on the amount of gas that comes ashore? In other words, do we get so much for every thousand cubic feet of gas that comes ashore, or is it a percentage of the going price for the gas in the New England market, or is it a percentage of the profits made by the oil company developing the field? We don't know that yet, although we suspect that, unfortunately, we are locked into an agreement and maybe the minister, when she wraps up on the second reading of this bill, will let us know. Are we stuck with an agreement that says that we will get a percentage of the profits that the field generates, after accounting for all expenses on the sale of gas, both in this province and in the United States?

[Page 616]

In other words, Madam Speaker, in that arrangement, the developer and the pipeline company can put all their expenses into a pot and say, this is what we sold the gas for. This is what our expenses were. This is our profit. That might sound okay at first blush, but, however, we have no way of knowing whether those expenses are inflated or whether they are real, because they are incurring the expenses themselves. So if that is the kind of deal that we have, I would suggest that it is not indicative of big profits for Nova Scotia, it is far better that we have a regime that says, okay, 1,000 cubic feet of gas comes ashore, that 1,000 cubic feet we get one-fifth of a penny or whatever the case may be or if that isn't the case we say then the selling price of the gas, the actual revenue without expenditures that we get a share of those revenues. That is probably the best deal of the lot but I have a worry that we have been sucked into something that isn't that good. I don't think that long term we should be looking at any great bonanza of profits from the actual exploitation of the field itself offshore or through the transportation network.

I think that what the Minister of Finance was so proudly coming forward with this morning in this bill that he is going to introduce in this House, that 50 per cent of the profits are going to go toward the debt, is a PR exercise and that is all it is. As a philosophy it is fine but you don't have to put it in legislation to do it and secondly, whether it is philosophy or in legislation, it doesn't really amount to very much as he himself admitted down there, that the maximum it would accrue and benefit to the province would be $5 million to $6 million per year, so it is not very much and in fact it could be far less than that.

The last item that I would like to touch on during my remarks deals with what the industry calls the postage rate for the delivery of gas. As I understand it, the agreement that we have signed with the pipeline company says that whether you pick up the gas at Country Harbour and you buy 1,000 cubic feet, or whether you pick up 1,000 cubic feet of gas at Amherst at the border, or whether you pick up 1,000 cubic feet in Moncton, or whether you pick up 1,000 cubic feet at the United States border, the price is going to be the same over that whole length of pipeline. Once you cross the border into the United States then another rate applies.

The term postage rate refers to the fact that when you mail a letter for instance and you want to send it across to the other side of the City of Halifax and you mail it in the City of Halifax it costs you 45 cents. If you want to send it out to Vancouver then the price of the stamp is the same, it is 45 cents. In other words, the same thing applies in their terminology with regard to the transport of gas through pipelines. It you take it at the beginning of the pipeline, fine; if you take it at the end of the pipeline, fine; but the cost is the same all the way along.

That may work well in some jurisdictions but what I am going to suggest to you is if we had agreed to that kind of pricing arrangement, then we have absolutely sold the farm because we know that the Province of New Brunswick is going to take the largest percentage of the gas available for the Atlantic Provinces. Having gas available at a lower rate has an

[Page 617]

advantage that accrues to that particular place, no matter where it is, for the development of industry that uses a great deal of energy.

I would suggest to you that if gas is available in the Province of New Brunswick at the same price as it is in the Province of Nova Scotia, then industry is going to accrue to New Brunswick rather than accruing to Nova Scotia and that is not good, that is bad. We should have a preferential price for Nova Scotian gas in Nova Scotia and it makes sense from the point of view that the gas only requires a certain amount of pipeline to come to users within Nova Scotia. So, therefore, the price of the gas should be cheaper. If we haven't got that kind of arrangement, Madam Speaker, I would suggest that we put the project in abeyance and just leave it there until we do get that kind of arrangement.

[11:30 a.m.]

If New Brunswick can stand there and dictate to the oil companies and to the pipelines and we can't. I say, it is our gas and it is our gas. Sable Island is a part of Nova Scotia. In fact, Sable Island is a part of the constituency of Halifax Citadel. This is gas that belongs to Nova Scotians, it is Nova Scotian gas and it is on Nova Scotian territory. Don't let anybody tell you different simply because it is out in the Atlantic. If it is our gas, then surely to goodness we should have preferential treatment. We should have preferential treatment insofar as quantity is concerned and as far as price is concerned.

Madam Speaker, I will be a lot happier if the minister can get up and assure me that those two particular requirements have been met. Thank you.

MADAM SPEAKER: The honourable member for Halifax Citadel.

MR. TERENCE DONAHOE: Madam Speaker, I propose to be brief in my remarks in relation to this bill, Bill No. 6, but I do want to make some observations which I trust you and others will find reasonably worthwhile. I want to begin by saying I am unequivocally in favour of the natural gas industry, the development of the natural gas resources off Sable Island because I believe fervently that, properly done, the development of that resource can and will bring new wealth and prosperity and employment to the Province of Nova Scotia and that for many years to come. But, as I said, if done properly.

I am really very concerned, as I know many members of this House are and many thousands of Nova Scotians are, as to whether or not the way in which this government has conducted itself in connection with the development of the offshore gas resource is what they, the Nova Scotia taxpayers and potential gas consumers, would consider to be in a proper fashion. It must, and I think it is a self-evident truth, be a given that the Nova Scotia gas resource, and underline the words Nova Scotia, Nova Scotia owns this gas. The Nova Scotian taxpayers own this gas. The Government of Nova Scotia, having a position of trust for and

[Page 618]

on behalf of the taxpayers of Nova Scotia, must do everything it possibly can to maximize the financial and economic return for the Nova Scotia taxpayers.

The resource, in the course of its development, and in the course of the gas being brought onshore, and the course of the construction and development of a pipeline, and the course of the transmission of the gas through that pipeline to Nova Scotians, and to persons in New Brunswick and elsewhere, must be done with one, and only one, fundamental, underlying principle in mind and operating. As far as the Government of Nova Scotia, what is in it for Nova Scotians? How do we maximize the return to Nova Scotians?

You will recall, Madam Speaker, that back in 1987 when some of us here on the Opposition benches had the opportunity and the privilege of being on the government benches, there was legislation passed and it was entitled, An Act to Implement an Agreement Between the Government of Nova Scotia and the Government of Canada on Offshore Petroleum Resource Management and Revenue. I just want to make the point, and make it briefly, that this piece of legislation talks about gas, obviously, and it defines gas as Section 2(m), "'gas means natural gas and it includes all substances, other than oil, that are produced in association with natural gas;". Then it has a definition of Nova Scotia lands. Section 2(p), "'Nova Scotia lands means (i) Sable Island and (ii) those submarine areas that belong to Her Majesty in right of the Province or in respect of which Her Majesty in right of the Province has the right to dispose of or exploit the natural resources, and that are within the offshore area;".

There is a schedule attached to this particular piece of legislation, passed by the previous - by some of the members opposite in the current government, the previous and sometimes - much-vilified Conservative Government, passed this legislation and in the schedule attached to this legislation it clearly defines the geographic area in which the gas reserves which we now are talking about developing and bringing ashore belong to Nova Scotia.

I guess I wonder how there can be any other mentality at play in the minds of anybody on the government benches as we deal with this issue. How can there be any other mentality at play other than that this is Nova Scotia's chance. We have heard of the Alberta Heritage Fund. Well, I am not going to suggest, necessarily, that the long-term resources of this particular Nova Scotia offshore gas find is of a quantity and a magnitude which makes it realistic for us to talk about Alberta-like Nova Scotia heritage funds. It is clear that this is, more than any other element that is now before us and upon us here in Nova Scotia, the opportunity to realistically and in an environmentally sensitive and economically sustainable fashion exploit a resource which has the potential to provide very real and long-term prosperity to the Province of Nova Scotia.

[Page 619]

In order to do that, Madam Speaker, I say to you and through you to the government members that that must be done on the basis that it is done under rules and regulations that are designed specifically for the Nova Scotian taxpayers and they are not designed or should not be designed at all by or for the shareholders of any multinational company, indeed any company at all of whatever size or magnitude. This gas belongs to every Nova Scotian taxpayer. It is, therefore, the right of every Nova Scotian taxpayer to receive and realize for him and her and their families the maximum benefit possible from the exploitation and the rational use of that resource.

Nova Scotia now, I say, has a chance through this natural gas play to move to an age of relative prosperity, certainly as compared to where we have been for a number of decades. All Nova Scotians must have an opportunity to benefit.

So we, Nova Scotia, have to call the shots. The reason that some of us are rather concerned and unsettled about what has been going on is we are not at all satisfied because we have not heard anything straight from the minister responsible for this legislation or from the Premier or anybody else on the government benches. We have not heard anything straight at all that leaves any of us, certainly myself included, but thousands of Nova Scotians across this province, we have not heard anything straight to give us comfort that in the course of the negotiations by and on behalf of the taxpayers of Nova Scotia undertaken by this government that they have pounded the table and pointed their finger across the table at anybody and everybody with whom they have dealt and said, excuse me, ladies and gentlemen, boys and girls, we are dealing here on the basis that we, the taxpayers of Nova Scotia, own the resource. You, all of you, are going to play by our rules. I do not have any confidence that that kind of an attitude has been taken by this minister, by the Premier and by this government.

The first step, I think, is that clearly, fundamentally, this government has to establish and insist that there is a royalty paid for every speck of the oil that comes ashore, and that the royalty is applied at the well-head. Well, the honourable minister, when another colleague made a comment along those lines earlier, she said that is in place. I would like to ask the honourable minister, for the sake of rational discussion and debate and understanding here in this Legislature, I would like the honourable minister to stand up and tell us, what is the royalty regime that applies at the well-head?

The difficulty and frustration is that the minister says, well, all you Opposition members, you talk and say what you want to say and then I will get up and make my speech and I will tell you all about royalties at the well-head and so on. Well, that is her prerogative and she can do that if she wants, but it hardly leads to the kind of debate and discussion which I believe all Nova Scotians would want to have. The reason that is an unfortunate approach, an attitude to be expressed and taken by the minister, is that, of course, she well knows that when she next has the opportunity to rise and speak to this piece of legislation, the time has

[Page 620]

passed for members of the Opposition, at this stage of the proceedings at least, to engage in further debate, and the bill moves on to another phase. I just find it unfortunate.

I am going to make the suggestion that I just simply do not believe that this minister or this government has, in fact, established a reasonable royalty regime, which applies at the well-head which is in the best interests of the taxpayers of Nova Scotia; there is no evidence of it. We have seen no statement from this minister or from the Premier or from anybody else in this government that that, in fact, is the case, and I just simply do not believe that such a royalty regime at the well-head has been put in place in any royalty arrangements that have been made.

I think the next precondition that has to apply here, and other members have made reference to it, Madam Speaker, I defy the minister responsible for this legislation or any member of the Treasury Benches of the Province of Nova Scotia to explain to any Nova Scotian taxpayer why the cost of Nova Scotia offshore gas to the taxpayers and consumers of Nova Scotia should not be less than the cost of that same gas to consumers in any other place, New Brunswick, Quebec, New England, or I could not care less where. I defy any member of the government to explain why Nova Scotians should pay more for Nova Scotia's gas - their own gas - or even as much as will be paid for that gas by consumers elsewhere. I have not yet heard any member of this government make a statement that that, in fact, will be the case.

Some might say, why would this member become exercised or even have any concern on that score? Well, we have heard reference to a speech made by Mr. Phelps - I don't have a copy of the text here, but sufficient references are found all over Hansard to the Phelps speech, Madam Speaker. Oh, yes I do - The speech to which I refer, and it is Remarks of Michael E. J. Phelps, Chairman and Chief Executive Officer, Westcoast Energy Inc. He made this speech to the Metropolitan Halifax Chamber of Commerce, February 5, 1997 - not so very long ago - and he very generously titled his speech, An Opportunity For The Maritimes - note, for the Maritimes - To Build A Natural Gas Industry For The 21st Century.

He made some very interesting remarks in that speech on February 5th to the Chamber of Commerce and I am going to reference remarks made by my colleague, the member for Kings North, when he spoke the other day. I think it is worth repeating because I think it is a fundamental concern. My colleague pointed out that our Premier was asked after Mr. Phelps' speech whether there was going to be a postage stamp pricing system, whether there would be a pricing system that would be lower for those closest to the beginning of the pipeline and can you believe it? The Premier of the Province of Nova Scotia, ultimately responsible for the government which has to make this deal, which has the potential to bring to Nova Scotians and Nova Scotia taxpayers more prosperity perhaps than any other deal we have seen in certainly 50-plus years, said that he did not know the details involved in pricing at that time.

[Page 621]

[11:45 a.m.]

This was February 5, 1997, and the Premier acknowledged publicly that he did not know the details of the pricing regime. I am not sure whether the Premier really knew whether he was being asked, Mr. Premier, do you know what postage stamps cost or do you know what natural gas is going to cost? The fact is he probably did not know the answer to either. It is absolutely scandalous and without justification, Madam Speaker, that our Premier would say weeks ago that he did not know whether the pricing system would be lower for those closest to the source, namely the people whose interests he is supposed to represent, the Nova Scotia taxpayers, than would be the price for people further distant from the source of the natural gas.

My colleague from Kings North astutely pointed out, Madam Speaker, that these remarks from our Premier were made after the deals were signed, after the royalty agreement apparently was signed with Mobil and Mobil's very skilled negotiators. Can you imagine? The Cabinet Ministers of Nova Scotia were not aware of the details and, more astounding, the Premier of Nova Scotia was not aware of the details, after the deals were signed; after the royalty agreements are in place. Premier John Savage says publicly that he does not have any idea whether the cost of our Nova Scotia natural gas is going to be cheaper for Nova Scotia taxpayers and consumers than it might be for taxpayers and consumers in other places.

Doesn't that, Madam Speaker, make you wonder whether or not the fundamental issue which I referred to earlier in my remarks was driving the discussions and the dealings and the negotiations undertaken by this government? Surely it must make you wonder, as it makes me wonder, because if the fundamental driving element of the Nova Scotia Government in this deal was under no circumstances will the Nova Scotia taxpayer or consumer be charged more for this Nova Scotia gas than consumers in New Brunswick or Quebec or New England, or God knows where, if that was the fundamental and underlying principle, then clearly the Premier's answer would have been, Mr. Reporter, I don't care what Mr. Phelps says in his speech; Nova Scotia taxpayers and consumers are going to pay less for their own resource than any other consumers of that resource. Of course, he didn't say that at all.

It really does make you wonder, Madam Speaker, what is the attitude, what is the motivation, what is the underlying principle, what is the driving force of the negotiation being undertaken by and on behalf of the Nova Scotia taxpayers by this government in this regard. I suggest that the question that I ask and the question that others have asked is a pretty valid one. Why, how is it possible, what justification can there possibly be that Nova Scotia taxpayers and Nova Scotia offshore gas consumers in Nova Scotia should pay more, indeed, should pay even the same for that resource as is paid for it by consumers of that Nova Scotia natural gas in other provinces?

[Page 622]

If, Madam Speaker, the net result, when this is all said and done, is that Nova Scotia taxpayers are paying the same or more for this Nova Scotia gas, for their own asset, then I suggest that that will be perhaps the most monumental betrayal of the Nova Scotia taxpayers perpetrated by any government in the history of this province.

Madam Speaker, why is there all this confusion, and there is, about an equally fundamental concern and issue? We have heard all kinds of talk, some of it spouted by ministers and spokespersons for government, that the deal is that of all the totality of the gas, 20 per cent of it will be allocated to Atlantic Canada. Note with interest that it is Atlantic Canada. There is no particular reference to guaranteeing an allocation to the Province of Nova Scotia. It is Atlantic Canada. Eighty per cent of it is to be allocated, apparently, to New England.

Well, the reason there is considerable confusion now is that you are aware and increasing numbers of Nova Scotians are coming to be aware, that there appear to have been commitments made that may well result in Nova Scotians one day being told, sorry, Nova Scotia consumers, but the gas in that pipeline is going right by your door and you cannot have access to it because it is committed to New Brunswick or to New England or to someone else.

If the allocation of this gas is 20 per cent Atlantic Canada - all four Atlantic Provinces - this gas, remember, is Nova Scotia's gas, I think it is a fairly legitimate question to ask, how and why is it that this government would allow a commitment of 15 per cent of the gas, 75 per cent of the gas committed to the Atlantic Provinces, to be sucked up by the Irving Corporation? How did that happen? Why would that happen? What is the rationale? (Interruption)

I am being asked across the way, am I against Irving Oil? I am not against anybody. I am for the Nova Scotia taxpayer. I am trying to suggest, Madam Speaker, that a commitment of that portion of the allocation for us here to a New Brunswick-based corporation runs us the risk, as I just said a moment ago, of having us being told one day, I am sorry, Nova Scotia consumer, the gas in that pipeline is not coming your way, because, in order to meet the commitment to Mr. Irving, it is going elsewhere and it is going to his empire. I just think that the chance of that happening is now very great.

The chance of that happening and the ordinary, everyday, hard-working, God-fearing, taxpaying Nova Scotian having a chance to heat his or her home or cook his or her meals or run his or her small commercial or corporation operation using his or her natural gas, because he owns it, Nova Scotians own it, is further minimized by this fact. It is questionable that that Nova Scotian will have that opportunity when one realizes that if you look at what the big guys say, if you look at what the Mobils and what the big multinationals say, they couldn't care less is my analysis of this issue. Whether there are laterals off the main trunk lines that serve the Nova Scotian taxpayers, that serve the people who own the resource at all, they

[Page 623]

couldn't care less. The name of the game for them and what I am frankly fearful of, it appears increasingly by the day, the name of the game for the Nova Scotia Government is get it ashore, get it in the pipeline, shoot it through Nova Scotia as fast as you can through the main trunk and get it down to New England. That is what this government's attitude is all about.

If that is not the case why is it that we have not heard an awful lot more than we have heard by way of commitment? We sure don't see the commitments in the legislation. We see things about what the Utility and Review Board can do about granting franchises and so on. I note with great interest that the availability of adequate gas supplies is one of the considerations to be made by the URB. With that immense resource, our Nova Scotian resource off our shore, that it is there, it is going to be brought ashore, it is one of the largest offshore gas finds in the world and how is it possible that when one applies for a franchise there could be a real question about the availability of adequate gas supplies? That starts to make me wonder a little bit about whether Mr. Irving and other commitments are going to consume, before the Nova Scotia taxpayer has an opportunity to have access, the portion allocated to Nova Scotia.

I would like to see the Nova Scotia Government produce a piece of paper which says that relative to Nova Scotia offshore gas, nobody but nobody gets a sniff until all of the needs of the Province of Nova Scotia, by use of that natural gas are attended to. That is the basic premise upon which this whole play should be operating but that is not the attitude that is being displayed here by this government. So I have very serious concerns and reservations about the approach that is being taken here.

There was an offshore accord signed pursuant to legislation in which a government of which I was a part in had a hand. One of the reasons and this government knows it and Nova Scotians who have paid attention to what has happened here in the last little while know it, they don't like to acknowledge it but they know that many of the efforts of the previous government were a fundamental and necessary prelude to us getting to where we are today, the legislation and the offshore accord and so on.

The Canada Offshore Petroleum Resources Accord which was signed on August 26, 1986 has among its objectives the following, "to recognize the right of Nova Scotia to be the principal beneficiary of the Petroleum Resources in the Offshore Area, consistent with the requirement for a strong and united Canada;", Nova Scotia to be the principal beneficiary. I don't see anything in this bill even by way of an objects clause or a statement of intent that recognizes or alludes at all or underscores or supports the position that in regard to Nova Scotia offshore gas, Nova Scotia is to be the principal beneficiary of this resource.

The pipeline will come ashore at Country Harbour and the main trunk line will run as quickly as it can up to New Brunswick. What about Halifax metro? What about Yarmouth? What about Cape Breton? What about laterals that will make it possible, as I have said before, for every Nova Scotian private personal consumer and every Nova Scotian business which

[Page 624]

wants to have access to this resource, its resource, their resource, what about that? How unseemly and how frustrating and I can't tell you how annoying it was for me and for hundreds of Nova Scotians.

[12:00 p.m.]

I am engaged in some other political activity to which reference has been made in this place in recent days, Mr. Speaker. What it is that I have knocked on about 5,000 doors in the City of Halifax in the last eight weeks. In the course of conversation on those 5,000 doorsteps, whether the members opposite want to acknowledge it or believe it or not, that is for them, their treatment, more to the point their mistreatment and mishandling of what is going on with the offshore gas is the subject of discussion with me on many of those doorsteps virtually every day.

AN HON. MEMBER: The next one is the question, how is Alexa?

ANOTHER HON. MEMBER: Preparing for retirement.

MR. DONAHOE: We will have to ask David MacDonald how Alexa is, I am not sure. (Laughter)

The question is frequently asked, Mr. Speaker, as to what really is going on as far as this government is concerned with the offshore gas. You know what really has stuck in the craw of so many of those to whom I have spoken over those last weeks, and I know that other colleagues in all Parties have spoken to on doorsteps or elsewhere, on the street corner or wherever, is the absolute (Interruption) Yes, I am trying to think of the right word because it is so extreme. (Interruptions)

Well, I will just simply say it this way; Nova Scotians were ticked-off in the extreme to watch these wimps on the government benches sit by . . .

AN HON. MEMBER: Are you calling me a wimp?

MR. DONAHOE: You are not on the government benches, you are just one of those backbenchers. Remember? You heard about that - the Treasury benches, to listen and watch those on the Treasury benches opposite, Mr. Speaker, sit idly by and twiddle their thumbs as Premier Frank McKenna stuck it, or tried to stick it to every Nova Scotian.

Well, Premier Frank McKenna can do and say what he wants to do about the interests of the taxpayers of the Province of Nova Scotia. The sadness is that we don't have a government that is standing up and speaking and acting for the interests of the taxpayers of the Province of Nova Scotia. If they had any gumption and if they had the fundamental, basic premise and no other at play here, they would look Frank McKenna straight in the eye and

[Page 625]

say, get stuffed. You, Premier McKenna, you deal with us after we have assured that the best interests of the Nova Scotia taxpayers are looked after, and you, Premier McKenna, don't dictate to us about what is going to happen with Nova Scotia's offshore gas. It isn't New Brunswick's offshore gas.

Now I am not naive enough to fail to realize that this pipeline is going to move at some point through the Province of New Brunswick. Well, let Mr. McKenna deal with Mobil and make his deal with Mobil and make his deal with Mobil once it hits the New Brunswick border and it goes through New Brunswick, if that is what he wants to do. But don't have Premier Frank McKenna try and stuff it to the Nova Scotia Government, more to the point, try to stuff it to the taxpayers of the Province of Nova Scotia. That is exactly what he has been doing. Meanwhile, the stuffees, the Treasury bench members of the Nova Scotia Government don't stand up to Premier McKenna and it is sickening. It is disgusting and it is an abdication by this government of their responsibility to the taxpayers of Nova Scotia. It is time that on this issue this government took, exercised and articulated some strong leadership on behalf of the taxpayers of the Province of Nova Scotia.

Frankly, with respect, Mr. Speaker, I don't believe that in the last many months, relative to this particular piece of legislation, relative to the discussions and negotiations, perhaps better said the way it seems to be coming down during the get-togethers where the internationals dictate to the Nova Scotia Government, I haven't seen any evidence that the Nova Scotia Government has played anything close to hardball. It occurs to me that is, perhaps, not an inappropriate reference to playing hardball, because the fact of the matter is that in this instance, relative to offshore gas, Nova Scotian taxpayers not only own the hardball, they own the bat as well. This government has not, at any point, on the basis of anything that we have seen, looked McKenna or Chretien or anybody else in the face and said, boys and girls, ladies and gentlemen, we are playing on Nova Scotia's baseball diamond. We are playing with Nova Scotia's asset. We are going to play on the basis that we maximize the return to the Nova Scotia taxpayer. There has been, in my opinion, with the greatest respect, absolutely no evidence whatsoever that that has been the attitude at all.

The legislation before us, Mr. Speaker, requires that franchisees will pay for establishing laterals and that, frankly, makes one wonder whether that means that those on the laterals are going to pay more than those who secure their gas direct through the trunk. Is that going to happen? Does that mean that as it comes out the other end, somebody, probably another major multinational corporation, when it consumes the gas coming through the main trunk somewhere in New England, is going to be buying that gas through the end of the trunk in New England at a rate cheaper than somebody at the end of a lateral here in the Province of Nova Scotia? Is that what that means? Well, if it does, this minister and this government should just simply walk away and resign and hide their heads. (Interruption) If that means that, then this government should be turfed out on its ear at the earliest possible opportunity. (Interruption)

[Page 626]

The honourable member for Hants East asks, if it doesn't mean that, should the people of the province re-elect this government, Mr. Speaker? This piece of business is one of the most important, but one of only a litany so long, and I don't have time enough left in the time available to me here this afternoon, the litany of reasons why this government should be turfed out on its backside, but one of the principal ones is the mash that they have made of this natural gas arrangement.

Mr. Speaker, there are so many other things which I might say about this legislation and about this whole issue. I am very much saddened by the way in which the government appears to have handled the matter. I don't believe that this government is handling the Nova Scotia offshore gas issue in a way that they can honestly and legitimately say that the interest of the Nova Scotia . . .

THE PREMIER: Find out about it.

MR. DONAHOE: The soon to depart Premier, Mr. Speaker, is saying to me, find out about it.

THE PREMIER: Go federally.

MR. DONAHOE: And go federally, he says. Well, we will see where we both end up. That is for another day. But the Premier from across the way, Mr. Speaker, says find out about it. Well, with the greatest respect, if the Premier had been here just a few moments ago, he would have heard me say that we probably would have a real good debate and Nova Scotians would really understand what is ahead for them if this government was anything close to being as open and accessible and as transparent and as honest with the Nova Scotia taxpayers as they, at the time they formed government, said they would be. They are so open and honest and ethical that they haven't even managed to get around to producing the document that says what their code of ethics is.

So I say to the Premier, with greatest respect, that he might as well just stay out of the issue unless he wants to stand up and make a speech or if he will direct his Minister of Natural Resources to stand up and make a speech here, Mr. Speaker, which will do exactly as he suggests, find out about it.

THE PREMIER: She will do that when you shut up.

MR. DONAHOE: Well, he says shut up. He hollers over to me, Mr. Speaker, the Premier says to me, shut up. Well, momentarily I will take my place.

THE PREMIER: No, I didn't say that.

AN HON. MEMBER: You did so. I heard it.

[Page 627]

MR. DONAHOE: I heard the Premier tell me to shut up. (Interruption)

THE PREMIER: Mr. Speaker, on a point of order. Indeed what I said was, if you would shut up, the minister would speak. (Interruptions)

MR. DONAHOE: If I would shut up, the minister would speak. That, as far as I am concerned, is a very kind offer on the part of the Premier for me to shut up and I say again to the Premier, through you with respect, Mr. Speaker, that if he had been here earlier, he would have heard me say that if the minister had done what she should have done particularly in relation to such a fundamentally important issue to the taxpayers of Nova Scotia, namely stood up and told the members of the Legislature so there was an opportunity for legitimate dialogue and debate about these crucially important issues, if she had stood up and told us and through this medium told the taxpayers of Nova Scotia what the answer to some of these questions are about the royalty issues and about whether or not they are insisting and have insisted and have, either - well, certainly not in this legislation because it is not there - but have another piece of legislation coming which insists, which makes law, which makes it clear and incontrovertible that the best interests of the taxpayers of Nova Scotia are what is going to guide and what will guide the bringing ashore their own, the Nova Scotian taxpayers' own, natural gas.

I suppose that when I take my seat, or as the Premier might suggest, when I shut up, others will want to engage in this debate and others who are not in this place, whom the Premier might also like to have shut up, will continue to talk about this issue because the truth is what has really happened is that the government has shut up. The government has failed and neglected to come anywhere close to its responsibility to outline to the people of Nova Scotia in an open and a full and a fair and an honest and an understandable way what is ahead for them and for their families relative to the offshore gas play. That is the problem with which we deal and that is the disadvantage under which all Nova Scotian taxpayers are labouring in relation to this issue.

So with those remarks, Mr. Speaker, I simply say that this government has clearly, until we hear otherwise, blown one of the most significant opportunities for the taxpayers of the Province of Nova Scotia. The absolute potential, the overwhelming potential and benefit to the taxpayers of Nova Scotia as a result of Nova Scotia offshore oil and gas has, I believe, been seriously impaired by the absolute incompetence of the government opposite. I will be voting through the various stages of debate of this bill for amendments which I believe will have the effect of injecting back into it some of the protections which are so absolutely and fundamentally necessary for the taxpayers of Nova Scotia. I trust that all members of this House, government members included, will realize the deficiency and the mess that we now face and the improvements which are necessary. Thank you, Mr. Speaker.

[Page 628]

[12:15 p.m.]

MR. SPEAKER: The honourable member for Sackville-Cobequid.

MR. JOHN HOLM: Mr. Speaker, I welcome the opportunity to say a few words on the bill that is before us. I note that there were no interjections when the previous speaker made a compliment to this government. He called them wimps and that is a compliment to this government when you compare it to what they really are with regard to this. (Interruption) The member for Hants East indicates that in fact he thought that it was a compliment as well and that he expressed his appreciation, so I apologize. I hadn't caught that.

Mr. Speaker, the bill that we have before us and the whole issue that we are talking about is one that is crucially important to this province.

MR. ROBERT CARRUTHERS: Mr. Speaker, on a point of order. I cannot allow the member to stand in his place and say something which was absolutely and totally untrue. What the member for Hants East said was that he did interject when the term wimp was used. The member for Halifax Citadel was speaking and I am sure he will back me up on this. The member for Hants East said not even anything close to what the speaker is saying now. I think really in the interest of honesty he should retract that statement when he knows personally it was untrue.

MR. SPEAKER: The point is noted.

MR. HOLM: Mr. Speaker, I will accept the member's clarification on what he said. What I heard him saying over here when I made the comments about being a wimp, and I made the point that I was surprised that no government members congratulated him for the compliment and interjected with the compliment (Interruptions)

MR. SPEAKER: Maybe we could ask the honourable member to return to the main motion.

MR. HOLM: That is one of the risks when people, of course, are interjecting their side comments. They aren't as clear from their side comments as they are when they stand in their place. Of course, when they stand in their place, it is in the public record and it is not misconstrued. I am glad that the member did in fact clarify what he was trying to say. (Interruptions) Yes, you get in trouble when you do, of course, interject the side comments.

I want to get back to the bill. Mr. Speaker, as I said earlier, what we have before us is a bill which has very complex ramifications for the people of the Province of Nova Scotia. I consider that just simply calling the government wimps is a compliment because it certainly appears that they are far more than wimps. They are incompetent. They are selling out.

[Page 629]

Certainly this is a government that said that it believes in openness. This is a government that said that they want to share and consult with the people of the Province of Nova Scotia. That promise has been completely ignored. Instead they are going behind closed doors, down behind the red curtains in their bunkers and elsewhere to come up with their agreements that are selling out Nova Scotian interests.

Mr. Speaker, I want to deal specifically with a number of points. Let's get something straight first. It is something that I believe - or at least I hope - that every single member of this Chamber agrees on. Maybe we can get some unanimity on this point first. That is, it is a Nova Scotian resource. It is a resource that belongs to the people of this great province. That gas belongs to us. I think the members, certainly on the basis of the comments from the Official Opposition, I believe they agree that this is a Nova Scotian resource. It is something that we in the New Democratic Party caucus certainly believe in very strongly. I would hope that members on the government benches, members of the Red Team also believe and if you don't, please stand in your place, get on your feet, interject, tell me. Do you believe that this is a Nova Scotian resource? As I see nobody getting up I assume the people on the government benches agree with us that this is a Nova Scotian resource. If we believe that it is a Nova Scotian resource, if it is ours, it belongs to the people of this province, then surely to Heavens the people on the government benches would agree that Nova Scotians should, and I will go a step further, and I will say must receive the maximum benefits from our resource.

The companies, Shell, Mobil and those two gas companies who are vying for permission to use our resource, to extract our resource from the ground and to ship it to their markets, their primary concern and I don't fault them for this, is not the people of Nova Scotia. That is not their number one priority. Their number one priority is to their stockholders, to the people who own shares in Mobil, in Shell, to the partners who are involved and their objective is to get the resource for as little as possible, as cheaply as possible, to get as maximum a control over that resource as they possibly can so that they can maximize the profits for themselves. That is business and I am not faulting them for that. I am not being critical of them for that, that is reality, that is the real world, that is who they represent.

The Government of Nova Scotia does not represent the companies or it shouldn't. Their primary concern is not the best interests of the shareholders of these oil companies. Their concerns should not be to ensure that the profits of those who are trading the shares and the stocks down in New York and elsewhere are going to maximize their profits. The Government of Nova Scotia's responsibility, that for which you were elected, was to ensure the people of this great province, the residents of Nova Scotia, that we, those who are here, our children, our children's children, that they are the ones who are going to be benefiting from this resource to the greatest extent possible. That is government's responsibility and they appear to have been failing on that sadly.

[Page 630]

Let's take a look at a number of aspects. First of all there is no doubt that there is a lot of gas in our offshore. By conservative figures we have enough gas to last at the projected pumping rate for 25 years, that is within the proven area. But you know that amount in the proven area, the 3 trillion cubic feet, is but one-sixth of the potential. We know that there are the proven 3 trillion but there are at least that amount that they are pretty confident is there plus there is a very real potential shown that there would be at least another equal amount or another 6 trillion cubic feet as well.

[12:30 p.m.]

Mr. Speaker, this huge reserve has the potential to create tremendous wealth for the Province of Nova Scotia. It has the potential to create massive employment for the people of the Province of Nova Scotia. It also has the potential to make billions of dollars in profits for those who are the companies that are going to be developing our resource. I can't underscore that, I can't emphasize that point enough. It is ours.

Although there is the potential to have that, there is also a potential that if it is not developed, if it is not managed appropriately and carefully in the early planning stages, that what could be the benefits to us, as the people in the Province of Nova Scotia, can be compromised, can be lost and our costs in social, economic and employment terms will be greater than the benefits that we receive. Where have all these deals been made? Behind closed doors. Much like the Jim Campbells Barren decision to remove that from the protected wilderness spaces, behind closed doors.

AN HON. MEMBER: Had to do it behind closed doors. We didn't want any leaks.

MR. HOLM: I am told it had to be behind closed doors, so that there would not be any leaks, Mr. Speaker. I will leave that one. I am not going to tread into that water right now, because I may say some things that I might think and that might cause me to have a little bit of a problem. So I will button my lip on that point at this particular time.

I think the people in this province are fairly reasonable people. They recognize that when you do something, there are pluses and there are negatives, that you take a risk. We know that if you want to advance, if we want to encourage things to happen, you have to sometimes take risks. We do that in our private lives. Every time a Nova Scotian tries to build or establish a business, or to expand their business, they take risks, but you take calculated risks if you want to be successful. You don't just go out there on a hope and a prayer. You don't just automatically buy what the seller of a product, who is trying to get you to buy, you don't just take their word on face value as to what the benefits are going to be. Somebody who is running a successful business, if somebody comes along and offers to sell them something, a new machine or a new piece of equipment or new software, they check it out first. They don't just look at it. They don't just take the fast sales pitch. They examine it; they look at the plus side and they look at the costs.

[Page 631]

Here we, of course, are being told that there are thousands of jobs that are going to be created, about 4,000 jobs created in the initial phase in the construction. But where are those 4,000 jobs? How many of them are in Nova Scotia? How many of those jobs are elsewhere in producing the product that is going to be placed in the ground, the pipes, et cetera, to transport our gas through our province to the New England States. We know that the rigs involved in the exploration and the drilling are going to be rented. I attended a press conference where they talked about the millions of dollars that are being invested and how much you are going to spend every day, but how much of that money is being spent to rent those rigs? Do not let us suggest for one minute that all of that money is being pumped into the economy of Nova Scotia by any stretch of the imagination. A huge chunk of that change is being spent to pay the rent on the rigs that are being rented to come up here to drill and to install.

That is not money staying in our economy. Yes, there are going to be some important jobs for people who are providing products to those rigs. The food and the other items are important products, but let's not, in our wildest fantasy, believe that every dollar that is being spent on this project is going to be spent here in Nova Scotia because that is not true.

Once the gas has been brought ashore and once that gas is to be distributed, there are very few jobs that are going to be involved in the actual ongoing production and transport of that gas. We can look at the short term, at least the promise of this huge potential of jobs, even in the short term and those jobs are important. Mark my word, for everybody who is out of work, a one-year job is extremely important - so those jobs that will be created, I do not underestimate the importance to those people who are unemployed, the 58,000 in this province.

Important, too, are the jobs that could be displaced as a result of this being brought on-shore. Now the government, earlier in a Question Period exchange, took a shot at the Official Opposition because the Liberal Party were in strong support of the position that the New Democrats took in the last session of the Legislature when the former government privatized Nova Scotia Power. Together, we put up a very valiant fight against the Conservative plan. We lost. We did not have the numbers. That is true; we could not stop it, but both the Liberals and the New Democrats fought against it.

Of course, the government then throws the blame at the Tories for the fact that Nova Scotia Power is privatized. What this government has not done is they have not restored authority to the Utility and Review Board to more closely regulate Nova Scotia Power, to ensure that it operates, even as a private company, in the best interests of Nova Scotians. They have not given the Utility and Review Board the power when they are looking at the price structure that Nova Scotia Power is trying to charge. They have not given them the authority to look at the social and the employment and economic impacts, of the power corporation's decisions, on the Province of Nova Scotia as a whole. Government can do that. They once promised that they were going to do that, but they did not.

[Page 632]

If there was an independent body that was going to look out for the interests of Nova Scotians and for those who may be displaced because of the gas and which as a result of their displacement in terms of employment, the economy as the whole of Nova Scotia suffers, then there might be a little less concern.

We do know that not only do New Brunswick Power and the Irvings in New Brunswick want gas, but Nova Scotia Power does as well. We know that when they convert the expensive oil-powered plants to natural gas that those plants will turn into load-bearing plants. That means that they will be running at their optimum, at their maximum capacity all the time to produce the regular, steady, ongoing electric demands for the Province of Nova Scotia and that the coal-fired plants will be cranked down a notch because they will become peak-period plants, providing more power in the times when more increased electricity is needed, for example, during the winter months.

We also know, Mr. Speaker, if you take a look at the pipeline route, as it has been produced and distributed, the pipeline is going very close to the Trenton power mills and whether they be coal miners from Cape Breton, in the Pictou area, when that plant is converted, yet again more jobs are lost. Now you can say, well, good, in the sense that we may be having a Nova Scotia resource still being used, you can make that argument. You might make the argument that it might result in slightly cheaper costs. It might but then again it might not, because coal, certainly for producing load-bearing electricity, is cheaper than gas, in most place, overall.

But you know that when we talk about job losses, we are not only talking about that person who goes into the mine or gets on the equipment, if it is a strip mine, we are not only talking about the loss of an income for that individual, we are talking about the loss of the main income for a family and we are talking about the removal of that amount of money from the economy of that community which means that all of the businesses in that sector suffer and jobs can be lost. The multiplier effect and, Mr. Speaker, if we create even more unemployment through this process, that then increases the government costs, the social costs and the government hasn't looked at it. They haven't studied it.

You know again today the Premier, when somebody was speaking in this House - I believe it was my Leader, the Leader of the New Democratic Party - provided his helpful comment across the way, go down and listen to the joint panel. Go down the road and see what they are saying down there. Well, Mr. Speaker, the joint panel is not looking at, it is not within their mandate - and they have said that they will not exceed their mandate - to look at the social, the economic or the employment costs to Nova Scotia. I say somebody has to. You have to know, you have to be able to look at that balance. We all know what a balance is. We have all seen those. You put weights on one side or the other.

HON. ELEANOR NORRIE: Balanced budget.

[Page 633]

MR. HOLM: It is a far cry from what the government calls a balanced budget. The Minister of Natural Resources throws across balanced budget but we will get into that another day and we will measure the weight of the shells on one side and fiscal management on the other.

Anyway, you have to take a look and try to come up, what are the economic, what are the employment, what are the social benefits to the Province of Nova Scotia of going ahead as it presently sits and what are the costs on the other side? We have to have an understanding. That means that somebody other than the proponent, other than the person who is going to be coming along and trying to sell you the product to get you to buy their option, of course, they hire their public relations experts to put forward their side of the story, to paint the best picture they possibly can. That is business, that is right, that is proper, that is how it should be.

[12:45 p.m.]

The other side, the ones who represent us, that is the government, you who were elected to serve the people of this province, you should be ensuring that the other side is also examined. When you buy a car you do more than kick the tires or look at how glossy the brochure is on the outside - some of us do, anyway. You look, or at least most people do, a little deeper than that. Some people say you can't even afford the tires any more. What a lot of us are starting to wonder is, can we afford this government's bill and the proposals before us, Mr. Speaker? What they seem to be far more interested in is their pre-election sales pitch rather than the long-term benefits to Nova Scotia.

Mr. Speaker, none of us in here are indispensable. None of us in this Chamber will be missed for very long once we no longer sit in this House. The decisions being made with respect to our future resources are going to be with us and our children and our grandchildren and will have a much longer effect.

Earlier in the debate today I raised the issue of Churchill Falls. At the time I am sure they thought it was a good deal. I have no reason to think that the Government of Newfoundland at the time just simply entered that agreement for political reasons but certainly in the long term, and we have to step back and look at the longer term, not just what is going to be good for two months or six months or a year down the road, we have to look at the longer term, in terms of what is good for Nova Scotia.

What do we have with our agreements? We have a royalty agreement that would be laughed out of Alberta. We have a royalty agreement where the royalties that are going to be paid to the Province of Nova Scotia are simply being based on profits. It is after they become profitable that they start. Mr. Speaker, in places like Alberta, as it comes out of the ground, the royalty is charged immediately, as it should be in Nova Scotia. We should start to get our money now.

[Page 634]

Of course, this the government that gave away its back-in provision for the pipeline to deliver the gas, supposedly on the basis that we can't afford to borrow the money. The way that governments have operated in the past, there is very good reason to think that that may not have been a good idea but, of course, pipelines are a regulated industry, like Nova Scotia Power, they are guaranteed a rate of return. In the pipeline industry I believe that figure is somewhere in the range of 12 per cent. So if you had an investment of $500 million and it is being guaranteed at a 12 per cent rate of return, that would have meant $60 million profit a year for the Province of Nova Scotia, $60 million to put into health, into education and to put into maintaining programs and services in this province. The province just gave it away.

What do we get for it? Zip. By giving that away we gave up profits. We didn't sell it, we gave it away. What are we getting for the pipelines and distribution lines here in the Province of Nova Scotia?

If I can make a comparison. Compared to the cable industry, when cable companies started in Nova Scotia and across Canada, they were giving franchises to particular areas so that if somebody won a contract, they were given the franchise so that they could deliver the cable services to the people who live in a particular area. What the government is proposing is to give those franchises, give those monopolies away. What do we Nova Scotians get for them? If you want a Tim Hortons franchise, you pay for it. That is the ability to make a lot of money. If you want to open a McDonald's, you want to open something up, you pay for it. That is our gas out there and we are talking about giving it away. Not only giving it away, there are no public consultations on that and the decision, ultimately, as to who gets that franchise, that license to distribute the gas and to make millions of dollars, is going to be a political one to be made, finally, by the red team, by the Cabinet, in private, in their bunker, out of public view. That is where the decision is going to be made.

The Utility and Review Board will hear applications. They will make recommendations, but the decision is not theirs. The decision is Cabinet's and that, Mr. Speaker, leaves it open to the real and certainly the perceived impression that it is open to political abuse. (Interruption) We hear the Minister of Education saying that is why we have elections. Maybe Nova Scotians can't wait to have their opportunity to cast their version when the election rolls around. However, in that period of time between elections, when the Cabinet is making those political decisions, the decisions that they make cannot necessarily be overturned when the government is kicked out of office by the people in an election. Because if they give a franchise, if they give a contract away, that contract does not expire when the next election is held. They have it. It is worth millions, and as in the cable company industry, when many of these companies started a cable business, they got the franchise. They started a service and they flipped that service and they sold it and they made a fortune.

[Page 635]

I would suggest that a better way would be for an independent body to make the recommendations and that those recommendations become binding unless they are overturned by the courts, the independent judicial system, not by the political body, which has been seen to be open to abuse in the past.

Mr. Speaker, I have major reservations about allowing Nova Scotia Power Inc. to have a franchise to distribute that gas through one of its subsidiary companies that it can set up and I will tell you why. First of all, for the power company, the primary concern is to produce electricity and to make a profit for their private shareholders, the majority of whom don't even live in Nova Scotia, as the greatest percentage of the shares are owned elsewhere. Their primary concern since the Conservatives privatized it, has been their shareholders.

Secondly, another primary concern is to produce electricity. If they are to be distributing that gas to private homes for home heat and other purposes, that gas can come in direct competition with the electrical power that they generate.

Even though electricity is important, gas can often be shown to be less expensive as a heating fuel and other things than electricity. Certainly the electric company is not going to want to have that gas displace customers they have with the electricity.

Finally, still with that, under this legislation, the way it is set up, there is no control over the price. There are talks about controls on the amount that can be charged for the tolling of the gas to go through, but not what you or your constituents, should it make it to your part of the province in terms of being distributed down there, or not to what the residents of my area or any other parts of the province will be paying for that gas. That is not going to be regulated. That is not going to be controlled.

Let one company get that franchise, that monopoly, given to them, they have control. They have control.

All of this behind closed doors. All of this without any guarantees of jobs for Nova Scotians. Jobs. There are 58,000 unemployed in the Province of Nova Scotia. That is what was there when this government took power. That is what is there now and that is what they are predicting into the immediate future.

Where are the jobs in the petrochemical industry? Where are the jobs producing the gas and the concentrates into secondary products? Where are they? Why is there not a requirement in the legislation? The Premier said he distributed all through Dartmouth South last fall his brochure. He was quoted in the press and on the electronic media saying, if the primary benefits are not here for Nova Scotia, you might as well leave it in the ground.

[Page 636]

All members on the government benches agree. I just heard the member for Sackville-Beaverbank saying, right. I say right, too. (Interruptions) There is nothing in this legislation, however, that says that that is right. There is nothing in the legislation. There is nothing that this government has done or is prepared to do to insist that Nova Scotians get the maximum benefit.There is nothing in here that requires that Nova Scotians' needs be met first. (Interruptions) There is nothing in this legislation or in anything that this government has said that says that not only must our gas needs be met here first, but that a proportion, a significant amount of that product must be used in the industries here in this province in the petrochemical industries to create more jobs for Nova Scotians. There is nothing that requires those companies that are going to be doing business with our gas to have to give preferential treatment to Nova Scotians for employment or to Nova Scotian companies to provide them with goods and services.

Nothing, and it is our gas. It is our gas that we are holding in trust. It is our resource that we are holding in trust for our children and our grandchildren. This government says, and they walk around and they talk about, oh, we are such wonderful fiscal managers and we are getting control over our expenditures because we are not selling or spending our children's money. Yet, they are prepared to give away our children's resource without being willing to stand up and demand that our children and our children's children and their children after them receive the maximum benefits from this resource.

If you have the information that you are doing that or that you have done that, put it on the table.

Now the member for Bedford-Fall River says she cannot hear me and maybe I should speak up for her but I will just ask her to please listen a little bit more intently because I don't want to raise my voice any more.

What we are dealing with I feel very passionate about. I feel very strongly about the fact that we have to ensure that Nova Scotians get the maximum amount out of this. Nova Scotian people, the population in this province, are hard-working individuals. We have a beautiful area, a beautiful part of the world. It is a wonderful place to live not only because of our geographical position and our natural scenery but because of the kind of people who are here. They have struggled, they have suffered higher unemployment than most parts of the country persistently; we have had our resources and therefore our economic opportunities for advancements compromised by the export in the unprocessed state of our resources to the benefit of others away.

I say as we are looking at the development we must ensure that is not going to happen with our natural gas and the concentrates. We were promised, we were told, we got this bill of goods about how much benefit we were going to get from the Cohasset-Panuke oilfields. We heard that. We saw the ship docked in the harbour that had been loaded up on the offshore with our oil as it was being shipped out of the country for processing elsewhere and

[Page 637]

even very few Canadian seamen got jobs as our oil was being exported. This was supposed to be such a job generator and a wealth generator for the province and I can't remember the exact figure, I think it was around $250 million, something in that range that we lost. I desperately don't want that to happen again. No political timetable can justify ensuring that we don't get the best deal that is needed possible for Nova Scotians.

It is an affront to us to think that Nova Scotian's resource could cost us more than other customers on down the road. The postage stamp rate that is being suggested by one of the major proponents is an affront. It certainly will provide no incentive for those jobs that we are going to develop from it to develop here in Nova Scotia. In fact, the same company that is promoting and pushing for the postage stamp rate here vigorously opposed it when they were building pipelines in Western Canada. It is no good for out there but down here they want it.

Our job is not to look out for New Brunswick. I don't think the New Brunswick Premier is looking out for other Canadians, Nova Scotians or others when he is travelling around the province trying to persuade companies to move from another province to New Brunswick. He is looking out for the interests of New Brunswick. When the New Brunswick Government is standing up and demanding to have a postage stamp rate so that those who are in New Brunswick pay the same price for gas as they do in Nova Scotia, he is standing up for New Brunswick. It costs more to transport that gas to New Brunswick than it does to Nova Scotia. On the share of fairness of the economies of the cost, the cheaper rates should be here in Nova Scotia.

[1:00 p.m.]

If we are not going to get those benefits, the Premier was absolutely right, we might as well leave it in the ground until we can negotiate a better deal for Nova Scotia. I don't think there is anybody who will doubt for one minute that eventually that gas, if not this year or next year, whether it comes onshore, it will because it is in hot demand. The companies that are dealing with government know that this government is under a very strict electoral timetable. Let's not fool ourselves, they understand the process, they play hardball, they are looking out for their stockholders. They know this government wants this deal inked and signed for the election. So they can stand up and wave a piece of paper; you don't know what the costs are, you don't know what the ramifications are but they can spin whatever story they want. They want that before the election.

Of course, the oil companies want that deal inked and signed because if this government, as many people project, will not be re-elected, they don't want to have to renegotiate because after an election they may find a government that is more willing to fight for and stand up for the interests of Nova Scotians and demand renegotiations, demand better terms, demand better royalties and that guarantee about employment for Nova Scotians.

[Page 638]

Mr. Speaker, the timing for this September is very suspect. We are told by the government that we can't do anything, that this bill needs to be passed in order for there to be planning. We are told by the companies that desperately want this inked so that it won't have to be renegotiated and by the government that wants it for their election timetable, it has to be approved by September because there is a very short window of opportunity to get into the markets in the United States.

Well, let's face it, the contracts to sell your gas are generally very short-term contracts; by the month, sometimes by the week, by the year. A very long one is a two year contract. So that window of opportunity is not as narrow as some might suggest. Of course in order to get this gas to where they want to put it, and that is not Nova Scotia, the companies are not developing this gas for our good, they are not developing it with a plan that they will be able to distribute it here in Nova Scotia. Oh no, we are an afterthought. Their primary concern was to get that gas to the New England markets where they know they can sell it very easily. If there is a market for some of that in Nova Scotia, well and good but the New England market is what they were aiming at all along.

In order to do that, there still have to be some pipelines built in the United States; whichever route is taken there are some pipelines that have to be built. In the United States they also have to go through an approval process. In terms of that approval process, the regulatory commission that looks at it is very backed-up and, not only are they backed-up, but it means that they will not be able to look at it and review it until the summer of 1998. Yet we are pushing for a September 1997 approval here when it is going to be close to a year later before the approvals will be given, if they are, in the States. Why? Would elections have anything to do with that timetable? Surely not. That wouldn't be considered. No.

Madam Speaker, if everything sails along at the joint panel tickety-boo, exactly as the government wants, and their favoured project gets approved, gas for export still won't be landed here until 1999. The route from where the gas is being brought onshore down to the New England market is much longer and the kinds of pipe and the sizes and dimensions, et cetera, are much greater than those that would be used in laterals. To suggest for one minute that if this bill doesn't pass in the Legislature in April 1997, six months before the earliest the approval will be given by the joint panel, and over a year before the approvals are likely to be received in the States, all of which depends upon whether or not the offshore develops the gas project now, to suggest that not passing this bill now will mean that somehow or other laterals would never be able to be built in Nova Scotia is ridiculous in the extreme. It is absurd, but it is political.

No company, whether it is Nova Scotia Power, that would want to expand their monopoly to maximize even greater the potential profits that they will make from Nova Scotians to ship to their foreign shareholders, not even they will start to spend the money to put anything in the ground before the project has been approved.

[Page 639]

Madam Speaker, the way one looks at this, we see how the franchises are to be given out. We see how the political process would be involved there. We look at the royalties. We know that there has been no cost-benefit analysis done on the social, the economic or the employment aspects. We see that the government has no requirements, no provisions to ensure that Nova Scotia persons or businesses have first opportunity and first call on either the gas or the employment or the supply contracts.

We don't even know what this government is planning to do with its 6 per cent ownership. The Government of Nova Scotia still owns 6 per cent of the offshore. Of course, they are trying to sell Nova Scotia Resources, which is in debt by about $250 million or more . . .

AN HON. MEMBER: Its $450 million.

MR. HOLM: It is $450 million? So it is even higher than what I was saying off the top of my head, almost double. Much of that debt was incurred because of the last oil not producing what was promised and what was predicted in the way of profits, by the former government.

Madam Speaker, I would very much love to be able to stand here and say that I totally and wholeheartedly support the project. I cannot. I can't say that I am totally opposed to the project either because in reality we have not been given the information. Maybe it is floating around there somewhere, maybe the member for Timberlea-Prospect has had this information shared with him or maybe . . .

AN HON. MEMBER: He is going to announce it when he announces his leadership campaign.

MR. HOLM: Well, that is possible. Some people are speculating that he will be number three in the race next week and that when he does it . . .

MADAM SPEAKER: That is irrelevant to this debate.

MR. HOLM: It is irrelevant but I am hopeful . . .

AN HON. MEMBER: It might be an opportunity to get information.

MR. HOLM: . . . that it might be an opportunity for all this data, all this information to be made available. (Interruptions)

MADAM SPEAKER: You have one minute.

[Page 640]

MR. HOLM: My time is almost up? I am sorry, Madam Speaker, I didn't even get a chance to get into things like even the fact that the chairman of the joint panel has major concerns about what is being proposed and being brought forward because we are being told by government that everything is copacetic, everything is there, all of the plans, everything is known but then when you get to the panel and questions start to be asked, well we haven't looked at that yet, well we are sure we can do it, we have confidence. I hope that this government will make sure, as I close, absolutely certain that Nova Scotians best interests for the long term are protected and that we will benefit and that they will not just be driven by the short term, political agenda. Thank you.

MADAM SPEAKER: The honourable member for Queens.

MR. JOHN LEEFE: Madam Speaker, it gives me pleasure to have the opportunity to join in debate this afternoon on Bill No. 6, an Act Respecting the Delivery and Sale of Natural Gas in the Province. This legislation, in a sense, is successor legislation to bills which were passed in 1980, then in anticipation of the production of natural gas on the Scotian Shelf as well as oil and additionally of the transmission of those commodities from the Scotian Shelf to the market place. So conceptually the bill is not significantly different from those that will be repealed as a consequence of its passage.

There is an improvement in this bill and the improvement lies in this, that the Utility and Review Board at least does have a role to play with respect to the determination of what companies will be given the opportunity to distribute natural gas in Nova Scotia in advance of recommendations going from the Utility and Review Board to Cabinet for final decision. I say that that is an improvement because in 1980, 17 years ago, the Public Utilities Board which has been replaced by the Utility and Review Board, did not have a role to play. So there is a step in the right direction.

I think it is indeed unfortunate that the government did not take the two steps in the right direction which would have caused us to come to the end of a journey and the successful conclusion which would be in the best interests of the people of Nova Scotia and that is for the Utility and Review Board not to be an interim step towards the final decision as to which distributors will be given the nod to distribute gas throughout Nova Scotia but rather the Utility and Review Board would in fact make that final determination thereby removing and any possibility, if not probability, of political favouritism with respect to determining what companies will have that very significant opportunity.

Time and time again, members in the Opposition have alluded to the process in the 1970's whereby the Liberal Party in Canada distributed its largesse to friends of the Liberal Party with respect to the licensing of cable television right across this country.

[Page 641]

[1:15 p.m.]

In fact, I think if we take a look at those in Nova Scotia who benefited from the granting of those licenses by that federal Liberal Government, you would find what amounts to who's who of the Liberal Party in this province. There may be exceptions. If there are, I am not aware of them. I think of names like John Bragg and Charlie Keating and others. Certainly, one would not be likely to find them at a Tory meeting or a NDP meeting. In any event, I think that is a great shortcoming in this bill and it is, indeed, a shame that the government was only prepared to go half measure and not full measure.

There are those who, on the government side, may chide me and say, yes, you were a backbencher in the government in 1980 that passed this legislation. I say to them, yes, indeed I was. But we now are 17 years down the road. What was right or acceptable in 1980 is not necessarily what is right or acceptable in 1997. Just to put it into an interesting context, think of the 17 year period between 1933 and 1950 and ask ourselves if what was acceptable in 1933 would have been deemed acceptable in 1950. One might particularly allude to Europe in those years and ask that question, this of course being on a much smaller scale. But, nonetheless, good public policy would seem to dictate that we should have, by this time, put behind us that discretionary power which this bill continues, in the hands of the Cabinet, and that is for the provision of deciding what companies will benefit economically as a consequence of being given distributor rights for Nova Scotia's natural gas. It moves us further down the line, but it doesn't take us to the end of the line and that is an opportunity lost, for now, at least.

I think the most unfortunate aspect of this bill lies in this - that the horse has already bolted from the barn. What we have available to us as a consequence of this legislation is a far slimmer and far less shiny and far less valuable package than otherwise should have been available to Nova Scotians had this government provided the leadership which was required to hammer down and hammer out the best deal for Nova Scotians. Just think of the opportunities that this government has lost with respect to our offshore as a consequence of either taking bad decisions or vacillating and taking no decisions and thereby allowing others to advantage as a consequence of that vacillation.

One example, the failure of this government to take advantage of the back-in provision which was negotiated by the government of which I was part and the then Liberal Government of Canada. Interestingly, the Minister of Energy who signed on behalf of the Government of Canada is now the Prime Minister of Canada. He gave his undertaking, as I recall, and the instrument which he and, I think, Joel Matheson signed, Joel Matheson then being the Minister of Energy in Nova Scotia, that he would undertake to ensure that Nova Scotians gained full benefit from that offshore accord. One of the benefits was a back-in provision which would allow the Province of Nova Scotia to back into ownership of the gas pipeline in Nova Scotia, on land, from the point where the gas comes ashore to the point of departure from the province at the Tantramar Marshes.

[Page 642]

This government had an opportunity to sell its back-in right provision to the industry and instead of going out and aggressively using that back-in provision, either to generate cash for Nova Scotia or to generate a combination of cash and other benefits to accrue to Nova Scotians, it stepped back and said, we are not interested, thereby losing for Nova Scotia and for Nova Scotians an asset that perhaps had a value of $25 million or $30 million or $35 million. We will never know for sure but it certainly is in the tens of millions of dollars, and an asset that could have been used to ensure greater opportunity to the men and women of Nova Scotia who had hoped to see some long-term, stable employment, both directly and indirectly generated for them and for their children.

Then we have had this government again drop the ball when LASMO offered to this province, gratis, its interests on the Scotian Shelf. When this government could not make up its mind as to whether or not it was going to accept that offer, LASMO, in the absence of government decision-making, in the absence of any vision by this government, in the absence of any overt expression of interest by this government, sold that interest to PanCanadian for, I think, $50 million. Another opportunity lost.

Then there is the question, of course, of the tax pools. Again, the failure of this government to exercise appropriate business management on the interests that Nova Scotians have in the offshore, the tax pools being worth $40 million, $50 million, $60 million (Interruption) Credit, exactly. In other words, before this legislation ever even saw the light of day, let alone was brought into this place, this government, through mismanagement of that offshore resource, through the failure to take timely decisions, through lack of vision, had cost Nova Scotians something in the order of $75 million to perhaps $100 million. Yet this is the government which brings this legislation into this House and says to this House, to the men and the women and the young people of Nova Scotia, trust me, trust us, we are well equipped to manage your affairs. To date, this government's record with respect to the way in which it has husbanded this resource suggests everything other than that it should be trusted in that husbandry.

Where does the control of this offshore resource reside? Does it reside with the people of Nova Scotia? Does it reside with the Government of Nova Scotia? Not total ownership but control, influence with respect to what happens to this project. It does not reside on those government benches, nor in the departments which support those governments up and down Hollis Street. No, it resides with the major multinational oil companies, which is a consequence of the failure of this government to stake out Nova Scotia's claim, now absolutely control our natural resource which is yet to be extracted from the Scotian Shelf. I suggest to you, Madam Speaker, that that is not in the interests of Nova Scotians.

If it were not bad enough that we had not exercised that significant degree of control available to us with respect to the offshore, we have the spectre of another Liberal Government and indeed no less a person than the Prime Minister of Canada, intruding himself and his government into the debate on the routing of the gas pipeline which will carry Scotian

[Page 643]

Gulf natural gas to the market place. A very unwelcome intrusion indeed. It would seem that not only do Nova Scotians not have friends in government in Halifax, neither do they have friends in government in Ottawa.

What about the royalty agreement that is referenced in here? The royalty agreement, as I understand it, is essentially based on a percentage of profits. There is not a Nova Scotian who does not understand that companies have legitimate ways of ensuring that profits can be demonstrated to be diminished as a consequence of costs. So that instead of our royalties being based on a gross figure they are based on whatever net is left after the accountants are finished their job. The whole method of determining the royalties works to the advantage of these multinational corporations not to the advantage to Nova Scotians and that is wrong.

With respect to access to this natural gas every Nova Scotian asks themselves will we benefit directly as a consequence of the coming onshore of natural gas. They know that the government will benefit to some extent as a consequence of the payment of royalties but the taxpayer will only benefit if the government in some way funnels that money through to them in their homes and in their workplaces.

Is there any guarantee that the men and women in the workplaces of Nova Scotia and in their own homes will have access to their natural resource? Will they have access to it in their workplaces such that it will provide less expensive energy to Nova Scotia businesses which will make them more competitive, which will increase their profitability which then can be translated into more jobs for Nova Scotians?

Can they be guaranteed and are they guaranteed that they will not have to pay for the very expensive electrically-generated power that we have today but may be able to rely on natural gas to heat their homes, to fuel their hot water and to cook their meals? No, neither of those guarantees is there. Neither of those promises is there. This legislation does absolutely nothing to give any kind of assurance or guarantee, anything other than the most modest of vague promises that Nova Scotians will have direct access to that resource.

There is nothing in this legislation which says to those companies which having passed through the narrow window of Cabinet approval for distributorship licences, that they must distribute that to all homes within their distribution area.

[1:30 p.m.]

How can I go home to my constituents on the South Shore and say that this legislation is good for you, that what the government is doing is good for you because you will be able to have the option to have natural gas in your home? I cannot go and say that to them because they do not have that option here nor has the government spoken to guarantee that option. The great likelihood, the great probability is this, that the people of Nova Scotia are less likely

[Page 644]

to have that option available to them than more likely to have that option available to them. and that is wrong.

We ask ourselves as Nova Scotians where does proprietary right lie with respect to this natural gas? Everything we have heard to date tells me, tells us, tells the people of this province that although we are the first to have the gas landed onshore, we may well be the last to have access to that gas.

The New England market place has a proprietary right over Nova Scotia for access to that gas and that the Province of New Brunswick may well be able to exercise such a right as well. What a vicious and cruel joke for this government to play off on the people of Nova Scotia. To watch here in Halifax the hearings being held by the Sable gas panel and to witness not the representatives of the Government of Nova Scotia standing up and vigorously questioning the proponents of this project and demanding what is right for Nova Scotians but to have to sit back and suffer the embarrassment of the Province of New Brunswick's representative standing up and asking those hard questions and placing those hard demands on the proponents.

It was not the Province of Nova Scotia's representatives who dug into the facts and discovered that the gas resource is already probably over-subscribed. Nobody from Nova Scotia asked that question. Perhaps because the government would have been too embarrassed with the answer it already knew was there.

All parliamentarians have heard that dictum. Do not ask a question unless you already know the answer and if you do not like the answer you are going to get, make sure you do not ask it. I wonder if that is the direction that was given to the lawyers and the representatives of the Nova Scotia Government that went to the Sable gas hearings.

How can we in Nova Scotia be guaranteed access to that gas when it is already oversold? We cannot be and that is a tragedy for Nova Scotia. The subscription is now at something like 532 million BTUs a day. Even the officials representing the proponents have admitted that it is highly unlikely that they will be able to sustain anything other than 480 million BTUs a day.

Much has been said about the jobs that will be created as a consequence of the tapping of our natural resource on the Scotian Shelf. One figure I looked at in the newspaper just a few moments ago, 3,900 jobs associated with the work offshore and the building of the pipeline. Now, 3,900 jobs, all of them well-paying, sounds like a great benefit accruing to Nova Scotia until we begin to ask the hard questions. How many of those jobs will actually be created in Nova Scotia? Ask ourselves this: is it reasonable to assume that the Nova Scotians who work on constructing the gas pipeline here are probably going to be the people who work in constructing the gas pipeline in New Brunswick and in Maine and in

[Page 645]

Massachusetts and in New Hampshire? Only a fool would think that would be the case. Not even this government is that foolish.

How many of those jobs will be filled by people from outside Nova Scotia who come in here because they have very specific kinds of expertise which is required to construct this pipeline and to construct the platforms on the offshore? The answer we do not yet know, but in probability a very significant proportion of that workforce will come from outside with its specialized equipment and its specialized skills.

Sure, there will be some jobs for Nova Scotians. We can sell them sandwiches and coffee. We can clean their offices for them. We can do that kind of menial work. When they have gone and when those good jobs have gone and when the spending spin-off that they provide into our community while they are here is gone, so too will be the opportunities to sell the sandwiches and the coffee and to clean the offices. At the end of the day, what are we guaranteed with respect to employment opportunity? Thirty-five full-time jobs which will ensure that the gas goes as quickly as it can from Nova Scotia's Scotian Shelf through New Brunswick and down the pipe to New England. Thirty-five jobs.

Meanwhile this government sits there and rubs its hands, smiling with false confidence, nodding knowingly to each other and saying never mind, we will still have those revenues available to us. Oh, yes. If anybody wants to apply for distribution rights, they will have to see us before that happens. The benefits from Scotian Shelf gas are not going to accrue to Nova Scotians in the substance which they should accrue to Nova Scotians. The benefits of Scotian Shelf gas are going to accrue to people along and at the other end of the pipe.

Mobil will benefit from this, Shell will benefit from this, other oil companies will benefit from this, the pipeline owner will benefit from this, New England will benefit, New Brunswick will benefit and then Nova Scotia will benefit. The people at the very bottom of the heap are the people of Nova Scotia who have no guarantee that they will domestically or industrially gain directly as a consequence of the coming onstream of our own natural gas resource. What a dismal prospect this government has created for Nova Scotians with respect to the husbandry of our offshore resource. We have become, as a consequence of their failure to provide leadership, minions of the oil companies and whatever pipeline company wins the great raffle. We are assured that we will be the hewers of wood and the drawers of water with respect to our natural resource. They have learned nothing from history. What a dismal prospect for Nova Scotians.

This is a government that talks about Government By Design. This is a government which will speak of this project as being part of that great master plan, Government By Design. Let me remind them and let me remind all of us who have a stake in this that the best of designs unless properly executed and managed, do not guarantee success and can result in disaster.

[Page 646]

Saint John Cemetery in Fairview is full of people who trusted in the excellence of design and who died as a consequence of poor management and that is in the excellence of the design that went into the building of the Titanic. This in a weird and warped kind of way is our Titanic with respect to Nova Scotia's offshore. This project, this bill is prone to being holed and sinking with our hopes and our aspirations and control over our own resource as was our MS Titanic.

This government's sworn responsibility was to put the interests of Nova Scotians first and this government has demonstrated certainly with respect to the Scotian Shelf gas that it, in the mad rush for a short-term gain, has guaranteed that Nova Scotians rather than coming first will come last. They are fully prepared on the eve of a provincial election to sell long-term gain for short-term gain and to ensure that Nova Scotians, instead of experiencing long-term gain will be experiencing long-term pain.

There are so many things that should have been done differently before this bill came into this place. The abject failure of the government to husband this resource is a failure for which it will be cursed by generations yet to come.

We will look forward to seeing how this project unfolds and each and every one of us must hope, as we criticize the path chosen by this government, that we are wrong. But I greatly fear that we, in fact, are right.

Madam Speaker, I thank you for your forbearance and for giving me the opportunity to respond to this piece of legislation this afternoon which is an admission of failure respecting Scotian Shelf gas, an admission of failure by this government and its ministers who have so terribly let Nova Scotians down, who have ensured that Nova Scotians will be the minions of outsiders and will be the last to benefit and who will continue to be hewers of wood and drawers of water until 20 or 25 years hence when that natural resource is gone and the best we can hope is that we can import gas from somewhere else in North America.

The die is cast, and future generations will measure them for their failure. Thank you, Madam Speaker.

[1:45 p.m.]

MADAM SPEAKER: The honourable Leader of the New Democratic Party.

MR. ROBERT CHISHOLM: Madam Speaker, I am please to have the opportunity to stand and speak this afternoon on Bill No. 6, An Act Respecting the Delivery and Sale of Natural Gas in the Province.

[Page 647]

I listened with interest to the intervention by the member for Queens earlier and took note of some of the issues that he raised. What I particularly noted from his intervention is part of the theme that has been discussed quite extensively by some who are raising concerns with the way this government is handling the whole question of the development of offshore natural gas. That is, are the best interests of Nova Scotians in fact being pushed, being protected, being guaranteed? I think some of the points need to be restated because they shed some light into why it is that we need to review the whole question of this legislation and the whole strategy that this government has relative to the development of natural gas.

As I was listening to the member for Queens - he was talking about local distribution - he was saying that in Bill 6 there is no provision to ensure that if a distributor gets, let's say the metro area, that that distributor will ensure that gas is available to everyone within that district. I think that is an important point.

I want to go back a bit further. I want to go back and respond to some information that we were able to collect from some consultations we had from the Sable Offshore Energy Project people; that is with respect to the whole question of local distribution. You may recall that there has already been some discussion here today about whether or not there is even going to be any gas available for distribution in Nova Scotia, because of the idea that it has all been sold or, as fast as it can be pumped out of the ground, it is going to have to go to markets in the United States or outside of Nova Scotia. That issue is still being wrestled with at the National Energy Board hearings.

What we have been told by the developers is that, with respect to local distribution, it has been suggested to us that it will not even happen. If it is going to happen, okay, let's say that the question of whether it has been oversold has been resolved and there is going to be distribution of natural gas in Nova Scotia, it is not likely to take place within the first few years of operation. That is coming from the proponents themselves; that has been raised by those people themselves.

In other words, let's say that the project is up and running by the fall of 1999 at the earliest. The suggestion is it will be another couple of years, in other words, they will have to operate to meet demands to sell and probably pay off that initial outlay for the development costs, and only then until they have done that, and been able to pay down some of the debt, will they be able then to look at the whole question of local distribution.

The other question relative to that is that if it does take place, we have been told that it will likely be limited to new neighbourhoods due to the cost of installation and then only if a major industrial user nearby is buying.

Madam Speaker, there is a significant question being raised about whether firstly there is going to be gas available for distribution and the second part of that is when it will be available? It has been suggested that it will at least be a few years after the production starts

[Page 648]

in the fall of 1999. The second part of that is if it is going to be available for local distribution, that it will be to major cities where there is a high concentration of people and it will only be delivered to new neighbourhoods because of the cost of trying to deliver that gas to older, established neighbourhoods, you know, tearing up roads and reinstalling in local homes and so on. In other words, it will only go to new neighbourhoods because they will be able to lay down the infrastructure before the development begins.

Then we are told, by people in the industry, that it will only go into an area if there is a major industrial user, like maybe a Michelin or one of the pulp plants or Trenton Car Works or something like that. So, in other words, there has to be a reason. There has to be a major consumer in one of those areas for that community to get a lateral is, in fact, the point.

Just to build on what the member for Queens said, not only is there anything in the bill that ensures that if a distributor gets a franchise that ensures that they make it available to everyone, but there are serious questions, Madam Speaker, which limit that further. That has to do with the basic economics of the whole distribution question and it appears that it is subject to some significant question as to whether it is viable. So on that merit and just to pick up again, as I wanted to do, to pick up from what the member for Queens had to say, I just wanted to expand for a moment on that point.

I want now to talk a little bit more about the Government of Nova Scotia's role in all of this and what they have done or not done to guarantee the interests of Nova Scotians with respect to the benefits of natural gas in the Province of Nova Scotia. It has been mentioned before about what is known as a back-in provision with respect to the transmission of natural gas through Nova Scotia, a provision, I believe, that was negotiated in the federal-provincial offshore oil and gas agreement between the federal and provincial government back in the mid-1980's. What that provides is that the Province of Nova Scotia has an opportunity to participate to the tune of 50 per cent in the development of the transmission line, the pipeline, in other words. We have heard that that would cost, I believe, estimates of upwards of $500 million for the Province of Nova Scotia to take advantage of that back-in provision, it is called, that opportunity.

The other part of that is that this back-in provision is worth money. It has been estimated by some to be in the area of $20 million, but we would suggest, perhaps, that it would be worth a lot more if somebody took advantage of it. But, anyway, even $20 million is significant. What the government has been accused of is not taking advantage of that back-in provision and not selling it to somebody but in fact giving it away to Mobil Oil.

The interesting point here is that in discussions with Mobil, with senior officials, in fact, the president of Mobil Oil, we were talking about the transmission line and the fact that the tolls, the cost of transmitting gas through that line will be regulated by the National Energy Board and that while it is not guaranteed it has been suggested that the allowable rate of return by the NEB will be in the 12 per cent to 14 per cent range. They will regulate the rate

[Page 649]

of return like the Utility and Review Board with Maritime Tel & Tel and the same thing with Nova Scotia Power. We know the rate of return for those two has been in the area of 12 per cent.

I said to Mr. Anderson, why wouldn't Mobil want a piece of that action if you are guaranteed a return of 12 per cent? His response to me was, we don't do that, that is not the part of the business that we are in. He said we can make more money in other parts of the business, we can make a greater return than 12 per cent on our investment in other parts. What I thought about afterwards was how much risk is there for the Province of Nova Scotia to invest $500 million if they are pretty much guaranteed a 12 per cent return? A 12 per cent return would represent $60 million annually in revenue simply from the transmission of natural gas through this pipeline. That is a benefit to Nova Scotia and to Nova Scotian taxpayers.

The Minister of Finance, with some considerable fanfare, talked today about how if the Sable gas project goes ahead and if we realize the kind of revenues predicted under the royalty agreement, we may - notice the ifs and the may, we may - realize somewhere in the area of $600 million over the life of the project, $300 million of that, according to this new bill which we will be talking about later on in the weeks ahead, we will take that money and return it to the debt. It is not a whole lot when you are looking at an $8 billion or $9 billion debt. Mind you, if you add $60 million a year to that now you are starting to get it up a little bit.

I said to somebody earlier today we might be able to use that $60 million to replace the $100 million we are losing from the BST in order to keep our hospitals open, in order to keep health care workers in the field, in order to keep our schools and keep teachers in the classroom. We may need that money but there you go right there, there is a possibility of $60 million a year for the life of this project that it kind of seems to me that the government has given up the opportunity on. I know there has been an explanation by the minister that we are not in the oil and gas business but that looks to me like a pretty sound investment, a pretty sound deal.

I would like to know what happened there? What did the government do with that back-in provision? Did they, as some have suggested, give it away to Mobil and, if so, why did they do that when it is apparent that there was some considerable value there?

[2:00 p.m.]

When you talk about whether or not the Province of Nova Scotia, as they say, is not in the gas and oil business and just because mistakes have been made in the past, what prevents this government from doing it right, from doing it better? What prevents this government from, in fact, taking advantage of that opportunity to bring some revenues into Nova Scotia through this particular deal?

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Madam Speaker, this government are not the kind of people that built this country, that laid down the tracks, that built the infrastructure, that ensured that wealth was distributed from one end of this country to the other. That took risk. That took people standing forward in the face of significant challenges and being prepared to make an investment in the future. This government has not shown themselves capable of that. In fact, one would suggest that this governments friend, perhaps, and a mentor, C.D. Howe, would be spinning in his grave when he witnesses the temerity of this particular government in their failure to consider the future and the need for the government to participate, on behalf of taxpayers, in developing the future infrastructure of this country.

Mr. Speaker, I understand that someone would like to make an introduction. I would be happy to yield the floor.

MR. SPEAKER: The honourable member for Inverness.

MR. CHARLES MACARTHUR: Mr. Speaker, it is indeed a great pleasure for me and I must thank the member for allowing me to introduce to you and through you to all members of the House of Assembly, a class from my constituency, the Grade 5 class from Whycocomagh Consolidated School. A number of weeks ago, they had the pleasure of the Minister of Education visiting them himself in the constituency and in their school. I want to, on behalf of each and every one of us here, welcome them to the House of Assembly. I would ask them to stand and receive a good warm welcome from the House of Assembly. (Applause) They are accompanied by Mr. Burton MacIntyre, Betsy Jardine and Linda MacKenzie, teachers in the school, as well as a number of the parents.

MR. CHISHOLM: Mr. Speaker, I, too, welcome our guests to the House of Assembly. So I am going to move on now. I talked a bit about the back-in provision as perhaps an example of where this government has missed an opportunity on behalf of Nova Scotians to participate in this project in a way that would ensure, again, that additional benefits accrue to Nova Scotians.

The second point that I wanted to raise with respect to this issue, is the whole question of Nova Scotia Resources Limited's 6 per cent share of the project. Back on June 30, 1996, when Minister Norrie unveiled the royalty agreement, it would, according to her figures, appear that the project will generate between $15 billion and $17 billion in profit over the next 25 years, Mr. Speaker. On that basis, Nova Scotia Resources Limited's 6 per cent share would be worth in the area of $1 billion over that period. That is a fairly significant piece of the action. My question to the minister is that she and the government have made it clear that they want to get out of this, no matter how good it is, no matter how much benefit we might have by participating on behalf of Nova Scotians, this government is going to wash their hands of it, they are going to walk away from it. She is going to get rid of the 6 per cent from Nova Scotia Resources Limited.

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The question is, what are they willing to take in order to get rid of Nova Scotia Resources Limited? Not less, surely, than $100 million or more, given the fact that that 6 per cent could be worth as much as $1 billion over the life of this project.

We get concerned, though, when we see the lengths to which the government has been prepared to go to unload other assets, like Sysco, for example. They jumped in, they made it known to the world back in 1993 that they were prepared to unload Sysco and at that point they indicated a purchase price between $200 million and $400 million. My understanding was they had upwards of 50 prospective bids and some interest shown by approximately 50 companies on that basis. Then there was silence and the next thing we knew they had unloaded half of it to Minmetals in that notoriously bad deal that the former minister, now the Minister of Health, was responsible for, for the princely sum of $30 million.

Given that history we have to ask this question. To what lengths is this government prepared to go to give up a possible $1 billion from that 6 per cent of Nova Scotia Resources Limited's piece of the action on that basis? We saw what they did with the tax credits, which some estimated to be worth in the area of, I believe, $4 million to $5 million. One has to ask then the question, what they are prepared to do to get out of it? So there are a couple of issues relative to the willingness of this government to participate in this project in a way that will be in the best interests of Nova Scotia and Nova Scotians.

There is another area, the whole question of planning. We have known since at least the early 1980's that we had some potential offshore. We understood the need to prepare. I believe, if I recall correctly, this government made that kind of pronouncement that we needed to prepare and plan and train our workforce in order to be ready to take advantage of the opportunities that present themselves with the development of offshore natural gas.

Have we done that? Have we done that in this province? Have we got our workforce, those thousands of unemployed welders out there, those people who could be employed to put together the rigs, those people who could be put to work on the transmission lines? Are they ready? Has this government put in place sufficient programs to ensure that Nova Scotia's workforce is ready and able to participate in this project? My understanding is that there has not been that kind of activity.

Have we given local companies in Nova Scotia the opportunity to get themselves ready for this particular project? Have we done the work necessary to put together the consortia or the companies that have the scale in order to take advantage of this project? Or are we going to sit back and allow companies to come in from offshore, allow companies to come from other jurisdictions and as somebody indicated earlier, just basically end up with a few short-term jobs? Or are we taking the opportunity with this project to build our skill and our capacity here in Nova Scotia to be able to participate in this kind of work not only now but in the future, elsewhere? Are we preparing ourselves, in other words, and are we working

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with our labour force and with the business community to prepare ourselves to make maximum use of this potential?

If we are not, then we should be. If we are, we should also then be prepared, as a government, to ensure that the developers, the proponents in this case, guarantee in return for the right to participate in the development of this project, guarantee that a certain percentage of jobs, the maximum level we can possibly get, are given to Nova Scotians; guarantee that as large a proportion as possible of the content that goes into those rigs, that goes into the transmission lines, that goes into these projects is Nova Scotian, made by Nova Scotians, supplied by Nova Scotians and serviced by Nova Scotians. Those are the kinds of guarantees that we need to be able to extract from these proponents if they want to develop our offshore natural gas. They are not doing it out of the goodness of their hearts; they are not here to try to do favours for us. They are here because it is a good business decision for them.

Our job, on behalf of Nova Scotians, is to ensure that we maximize the benefits to ourselves, to our province and, if we don't, then maybe we should think twice about whether this is the right project to develop the offshore natural gas, Mr. Speaker. As I have said before and as I will say again, once the gas is pumped out of the ground, once it is in the line, it is not going to be long before it hits its destination. Once it is gone, it is gone and that is it. It is non-renewable. Therefore, it is incumbent on all of us to ensure that we maximize the absolute, ultimate benefit that we can possibly get. If we have not done it yet - and there have been some major questions raised about whether we have - if we haven't raised it yet, if we haven't been able to achieve those kinds of guarantees, then maybe we should put everything on hold for now. Maybe we should wait until we have been able to assure ourselves that we are, in fact, getting the best we can possibly get out of this particular deal.

When we talk about planning and training and getting ready for this project, this development, I think, of course, how it relates directly to the whole question of the development of a petrochemical industry. From our discussions with the proponents, we know that what has been put in place is the infrastructure to separate the heavy gases, to contain the liquefied gas and to get it ready to transport from the Strait area and possibly refine it in Dartmouth. Even that is a question.

What happens to it then? The discussions we have had is that it would then be available to be transported by barge or by other mode of transportation out of this province. Our understanding is that, in Alberta, the government there encouraged, forced the gas developers there to build up a petrochemical industry to deal with the by-products. In other words, it is not going to just happen naturally. It is not going to just happen because they decide, well, we will do it here. If they can do it cheaper somewhere else, if they can do it cheaper closer to market somewhere, if it is cheaper for them to just get rid of it and sell it the way it is, then that is what will happen.

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[2:15 p.m.]

The only way, I think, that this government can ensure that, in fact, we will have a petrochemical industry or that we could have a petrochemical industry develop in this province - and that is certainly one of the boasts - the only way we can do that is by this government giving very firm direction, I would suggest, in the form of legislation and/or regulation to ensure that those by-products, in fact, remain here in this province, are refined here and an additional value-added production happens in Nova Scotia.

We should understand by now after centuries of seeing our natural products, our natural resources shipped out of this province whole, without value-added, for heavens sake, that only through government intervention can we ensure on behalf of taxpayers, on behalf of residents, in fact, that we add the sufficient value to this production to maximize jobs and spin-offs for the province as a whole. So there is some work that has to be done, Mr. Speaker, to ensure, in fact, that we do maximize the benefit.

The concern that I and a number of people have indicated here is that this deal, Sable Offshore Energy Project, a review is being conducted and we are just not getting the kind of information that we require to make a decision on whether or not this is a project that we should, in fact, support.

It was extremely disconcerting to hear that the National Energy Board joint panel has decided that it is not within their mandate to consider the socio-economic impacts, to consider, in fact, that by bringing gas onshore, we may displace upwards of 3,000 jobs in the coal industry, that we may, in fact, impact on that industry, an industry that contributes upwards of $200-plus million to the economy of Cape Breton every year.

Knowing that after the construction jobs, after the initial outlay of jobs in the first year or so have gone by, once gas starts pumping through those lines, we have somewhere between 30 and 40 full-time permanent jobs as a result of this resource, Mr. Speaker. If we continue this way, we are going to be pumping natural gas from under the sea, from under the Scotian Shelf to the U.S., Quebec or wherever it is going to go and we will put 35 people to work, in contrast to the 2,500 people that are now employed in the coal industry.

Now, there may be some question about the cleaner fuel or whether or not at some point in the future there will be a need to replace coal as an energy source. I think, Mr. Speaker, that figures have shown, in fact, across the world that the production and consumption of coal as a fuel has been increasing. Only in this country have we reduced the production of coal, whereas the demand has increased, the use has increased and the production in other countries has increased.

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I would suggest to you that we could have many years of a very viable and productive and valuable coal industry in the Province of Nova Scotia if we don't cut our nose off to spite our face and jump in on this offshore natural gas deal without understanding what the impacts are going to be in the long term. So those are very basic questions that have not been answered about the impact of bringing natural gas onshore. What concerns me when I and other people ask these questions it is suggested to us that we don't support the project, we want to kill the project.

What we want to do, you see, is we want to understand in the final analysis that the economy of Nova Scotia is going to be better off. We have not seen any evidence that is going to be the case. We also want to talk about that if the government is going to go ahead with the project and it is going to kill the coal industry, what is it going to do with those miners, those people that are dependent on the coal industry? If the panel is not going to discuss those socio-economic impacts, if it is not going to hear any representation about the effect this industry might have on other jobs, businesses and other parts of the economy in this province, then how are we going to be able to prepare ourselves for those impacts? The clear answer is that we won't and my concern is that this government is more concerned with its immediate political future than it is with answering those questions, not unlike what we saw prior to 1993 with the Cohasset-Panuke deal.

The fact that the government of the day wanted to nail that down and saw it as a real boon, real boost for their election chances, something they could talk about in the campaign and so on but I think what we have seen so far is that the particular deal that was negotiated at the time was not the best deal, was not a good deal for Nova Scotia, it was not something that we can be proud of. Again, it is a natural resource being depleted and Nova Scotians are not gaining sufficient benefit of it.

As I wind down my intervention on this bill I want to say, as I did earlier today, that my great concern about the tenor of debate on this issue is that we are not looking at the merits of it, at the potential impacts. We are not getting answers to questions about jobs, about job displacement, about royalty agreement, about tolls, about environmental impacts, about how much gas is going to be produced and how much gas is going to be sold, where it is going to go. There are a lot of unanswered questions here.

What we have is a giant in the energy field, a giant in the business field around the world, a multinational company, Mobil, whose assets make Nova Scotia look like a very small player indeed. This project is being pushed by Mobil and their partners because they see it as a real opportunity, it is a real investment. It is something they want to do because it is a small project for them and they want to participate. It is their first foray into natural gas and they want to do it here off Nova Scotia because they think they can make some money off it and that is fine, but that does not have to be our agenda. It is not to say that it cannot be good for Mobil and good for us, too.

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The concern is that what we have here is an agenda where Mobil and its partners are the ones who are going to truly benefit. Yet, when the 20 years or the 25 years are up, Mobil is going to go somewhere else. They are going to go. They say that there are not very many more places in this world where gas and oil is going to be found but Mobil is going to go somewhere else. They are a big company. They have operations around the world and they do very well. When gas runs out here, they are going to pick up stakes and move on somewhere else.

What about Nova Scotia? If we in fact dont maximize the benefits out of this natural resource, what is going to happen to us? Are we going to be in the same situation as we are right now with the fishing industry, where we have not managed the resource very well? We are seeing now coastal communities that are suffering very desperately from the lack of that resource because of mismanagement.

What is going to happen down the road when that gas is pulled out of the ground and it is gone? We do not have it any more; no longer can we build any economic activity around that natural resource. Once it is expended, it is gone. I think it is incumbent upon us, all members of this Legislature, from all sides, to ensure that before we engage in a deal, before we jump into bed with the proponents, before we get our pompoms, and stand behind or lead the parade or whatever you want to call it, to boost this project, that we ensure it is the best project, that we answer all those questions that have been raised in order that Nova Scotians will get the maximum benefit.

I understand a member wants to make an introduction; I will yield the floor.

MR. SPEAKER: The honourable member for Cape Breton West on an introduction, please.

MR. ALFRED MACLEOD: Mr. Speaker, I would like to thank the member for Halifax Atlantic for giving me the opportunity to make an introduction.

Mr. Speaker, through you and to you, I would like to introduce two gentlemen in the gallery who are well known on the Island of Cape Breton. They both serve that area. They are both councillors in the Cape Breton Regional Municipality. We have the Deputy Mayor, Mr. Clarence Prince and a county councillor, Wes Stubbert, beside him. I would ask for a warm welcome.

MR. CHISHOLM: I, too, welcome the guests in the gallery.

Let me say as I begin to wind up, that I reiterate that there are some serious concerns that I have with this proposal. With respect to this particular piece of legislation itself, let me say that I am concerned that the decision of who will get the franchises will be made - as has

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been mentioned by my colleague from Sackville Cobequid - behind closed doors, will be made by Cabinet.

Why run this all through Utility and Review Board and waste their time and then have Cabinet make a political decision behind closed doors? It does not make sense. We have seen too many examples of how things go wrong behind closed doors. Let's not forget the back-in provision appears to have been given away . . .

AN HON. MEMBER: It was.

MR. CHISHOLM: . . . without any money. The lack of information that we have received about the proposed sale of Nova Scotia Resources Limited. What is the government going to do with that 6 per cent ownership in Sable gas? The whole issue, in terms of behind-closed-doors decisions, the whole question of Jim Campbells Barren, what happened there, there are some very significant questions and some concerns about what kind of information was or was not released relative to that particular decision. In fact, let me go on.

[2:30 p.m.]

The question about why we are dealing with this bill now, when I started off I said that we had been told by the proponents that if, in fact, there is going to be a local transmission, that it is going to be a few years after the project begins. Where the project starts maybe, at the earliest, late in 1999, you go two years from that and you are in the year 2001 before there is even any possibility. That is what the proponents tell us, that is what the operators tell us. Then there are all the questions about who is going to have access to it, who is going to have responsibility for it and so on.

In other words, why the rush? We are not going to know until next fall whether or not this project even has the go-ahead, so why the rush? Why are we having this proposal come before us here today in the form of Bill No. 6? Why is it that it is being done?

It is interesting, speaking of Jim Campbells Barren, I talked about it earlier. It is interesting that this government can drop a bill of this significance when there is no apparent rush, a bill like this on the table here in this Legislature, yet it doesn't have time to deal with protected spaces legislation. That is an indication of the kind of priorities we have because this government has decided that it can make more political mileage giving out franchises as political plums than it can, in fact, by doing the right thing, that is by protecting, in legislation, those protected spaces, Mr. Speaker.

The other thing is the fact that we have not had an opportunity to adequately deal with this whole question, the merits of whether the bill is appropriate or inappropriate are being dealt with down the road, the government is silent, they don't have any answers. Yet here we

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are, we are supposed to let a piece of legislation that sets up the initial processes go through, Mr. Speaker. I tell you that I have significant concerns about that.

One other thing about the bill is the whole question about the fact that it is not going to regulate the price of gas, only the distribution system and leaving the price of gas up to the market, Mr. Speaker, again is something that is extremely interesting and somewhat questionable and something we need to consider.

In conclusion, Mr. Speaker, let me say this, we have been accused, as we have raised questions about this project, about this bill and about where the government is going, as being against the development of offshore natural gas, which is not true and is certainly not fair, that we are against jobs. It is the same kind of argument as when we argued against casinos, along with hundreds of thousands of other Nova Scotians, we were accused of being against jobs. When we argued against the BST it was suggested that we were against jobs. When we stand up and rail away about tax breaks for corporations, we are told that we are against jobs. When we raise questions about the efficacy of 30-60-90 project, it is suggested that we are against jobs. When we raised concerns about this government handing out $10 million to help Terry Matthews become Wales' first billionaire, it is suggested that we are against jobs.

I think the bottom line here is that what we are against are the priorities that this government has shown itself to have, relative to the interests of ordinary, hard-working Nova Scotians. What we have seen them do is be prepared to sell those people, to sell the majority of Nova Scotians, whether it be in terms of taxes, whether it be in terms of labour legislation, whether it be in terms of wage freezes, we have seen this government be prepared to sell ordinary Nova Scotians, like they are in this gas deal, down the river and their heritage down the river in the interest of a favoured few in the Province of Nova Scotia. That is what we are concerned about, Mr. Speaker. We are also concerned about the fact that there continues, will in the next few years, continue to be 58,000 unemployed Nova Scotians in the Province of Nova Scotia and this government does not appear to have the will, let alone the solutions, for how to solve that problem.

We think that it is time that a government came on-side, this side of the House, that, in fact, was committed to creating jobs in this province and standing up for ordinary Nova Scotians and ensuring that any decision, whether it be with gas, whether it be with taxes, whether it be with health or education, that every decision is made, considering not only the short-term interest of Nova Scotians, but also the fact that we have to create jobs and we have to generate economic activity in this province, not only for now, but also for the future because it is like participating in this gas deal.

We have a responsibility, not only to this generation, but also to future generations. In order to provide the infrastructure and the wealth in this province that those people will be able to enjoy to pay for services, we need to make investments now right across the board. That is something this government has lost sight of and something we are going to continue

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to push them on, whether it has to do with offshore natural gas, whether it has to do with their priorities in public services, or whether it has to do with their decisions on the matter of taxes.

Mr. Speaker, I will be interested in listening to presentations at the Law Amendments Committee as people come forward in order to, hopefully, provide us with some answers to the many questions we have relative to this bill and to the whole question of offshore natural gas.

MR. SPEAKER: The honourable member for Cape Breton West.

MR. ALFRED MACLEOD: Mr. Speaker, it gives me a great deal of privilege to rise today to speak and say a few words on Bill No. 6, An Act Respecting the Delivery and Sale of Natural Gas in the Province.

I think the first thing that I would like to point out to all my colleagues in the House is that I am very concerned about jobs in Nova Scotia. I am not going to spend a whole lot of time standing up here and talking, because I think it is important that we get this bill to the Law Amendments Committee so that people can come in and give their view of what is good and bad about this bill. I think what is also important is that members of the Law Amendments Committee listen to what the people have to say, actually listen and hear and react to what the people of the Province of Nova Scotia want.

I think when you go back to the beginning, there are some basic questions that have to be asked. What are those questions? Well, whose resource is it? It is Nova Scotia's resource. When you answer that question, the next question would be, who should benefit? Nova Scotians should benefit, that is who should benefit from this project, not big companies, not millionaires somewhere else; Nova Scotians should benefit. Another question that has to be asked, Mr. Speaker, is, who should get the work for this project? The answer to that, is very obvious. It is Nova Scotians, that is who should get the work. So the questions are fairly simple in my mind and I think they are pretty simple when you look at the whole project. It is our resource. It is us, in the Province of Nova Scotia, who should benefit and it is Nova Scotians that should work. If we can answer those questions and answer them right, make it possible for Nova Scotians to benefit, then we will be doing our job.

The problem is, Mr. Speaker, a lot of people feel that this whole deal is a bad deal to begin with. People are going to say, well, you know, that is just politics, the Opposition is up ranting and raving and saying the Sable Island gas deal is a bad deal. Well, they can say that. But, you know, I would like to bring to the attention of the members of this House something that was said by an MP for this province. He said that the Sable Island gas deal has to be looked at because maybe we are not getting all the benefits. Maybe we are not getting all the benefits for Nova Scotia that we should.

[Page 659]

This same individual who said that he would like to be the Leader of the Liberal Party in Nova Scotia and the Premier of this province. Mr. Speaker, it is not only the Opposition that are saying the deal has to be looked at, it is people like MP, Russell MacLellan, those are the types of people that are saying that this deal has to be looked at.

Now, Mr. Speaker, a while ago this project was put together and the Canada-Nova Scotia Offshore Petroleum Resources Accord was signed on August 26, 1986. One of the objectives that was there when that agreement was signed was to recognize the right of Nova Scotia to be the principal beneficiary of the petroleum resources in the offshore area, consistent with the requirements for a strong, united Canada.

Madam Speaker, that is what we are requesting. We want to be sure that Nova Scotia benefits from this project. It is an important project, there is no question about that.

Then, if we move on, after we have determined what the project is all about and who should benefit, one of the questions that has to be asked is, where is the pipeline going? Right now the pipeline starts at Country Harbour, goes straight across, into New Brunswick and down into New England somewhere.

Question two, where isn't it going? Well, it is not going to Halifax, it is not going to the South Shore, it is not going to Yarmouth and it certainly is not going to industrial Cape Breton.

Now, if, again, this government has some vision, if this government is concerned about making sure that Nova Scotians benefit from this project, then they should be looking at where these laterals are going. They should be determining that it is important that all parts of Nova Scotia can benefit from this project. We should be there now.

When these companies are coming in to build this pipeline, that is the time to build the laterals. The equipment will be here so it will be easier and most likely cheaper to build them now than do them as add-ons down the road.

You know, the government has talked about the jobs that it will create. They are saying that there are 4,000 jobs to be created and that is a good thing. The bad thing is, nobody has told us what the guarantees are for Nova Scotians to get those jobs.

At the end of the day, if we allow just the pipeline to go from Country Harbour to the New Brunswick border, well, then, Madam Speaker, that means that there will only be 35 jobs, not 4,000, 35 permanent jobs; 35 permanent jobs is unacceptable in a province that has a high unemployment rate and it is unacceptable when you think of the 27.4 per cent unemployment that faces people on the Island of Cape Breton. As you have heard many times, Madam Speaker, but it cannot be said too often, it is not only the highest

[Page 660]

unemployment rate in the province, it is the highest unemployment rate in Canada. Those are the type of deals and things that we have to deal with.

This whole issue is a double-edged sword for Cape Breton Island. On the one hand, we are being told that we have a natural resource that is good for the people of the Province of Nova Scotia, will help drive the economy and will give manufacturers a hand. Then we are told, we are not getting a lateral into Cape Breton Island because our economy does not deserve it.

The other problem, the other edge of this sword is that natural gas has a very strong potential of displacing coal. So what is going to happen Madam Speaker? On one hand, we are not allowed to reap the benefits of natural gas and on the other hand, our natural resource, coal, is probably going to be put down the tubes. Now, I know it has always been said that the deal with the natural gas and Nova Scotia Power is that Nova Scotia Power will only use natural gas to replace expensive offshore oil but that is just the beginning. That is just the crack to open it up. Eventually they will probably look at doing all the power generation by displacing coal. So then what happens? You put 1,800 Cape Breton coal miners and their families out of work and at the same time you haven't given them the benefit of a lateral in there to supply natural gas if that is what they want. So let's be honest and upfront about it, this project should benefit and treat all Nova Scotians the same.

[2:45 p.m.]

I think it is absolutely important that we believe and make sure through bills like this that everybody gets a fair and even shake. That seems like it is just too easy and demonstrates the fact that this government has no vision. It demonstrates that all this government is concerned about is the short term because we don't know what is going to happen in the long term but there are opportunities now and they have been pointed out by many experts from many areas of this country of things we can do to make sure the long-term goals and benefits for Nova Scotians are put in place now and that is what we have to be doing. We have to be sure that all Nova Scotians benefit from this resource.

We can see that governments both federally and provincially lack vision. The classic example for me was the announcement yesterday that they may sell off the Donkin Mine for $1.00 to a private interest. Now I am not against jobs, never will be, especially jobs that are coming to Cape Breton West but I will say this, everybody in the coal industry has always felt that Donkin was their insurance policy. If we had a problem in Prince Mine, which was an older mine, Donkin would be there for a back-up. If we had a problem in Phalen Mine, which has had a lot of geological problems, that Donkin Mine would be there for a back-up. That seems to have gone out the window with this letter of intent. The vision has to be questioned. The commitment to the Cape Breton Development Corporation has to be questioned. The commitment to the Cape Breton workers has to be questioned.

[Page 661]

This province has a great deal to play in this part. It is the province that owns the resource that will be mined there. It is the province that will regulate how the mining is done because it will be a private interest and won't be under the guidelines of the federal Crown Corporation of Devco and therefore won't be under the guidelines of the federal mining regulations. So the province has a big role to play here and it is one they have to keep their mind to.

We are also very aware that Nova Scotia Power has no allegiance to the Cape Breton Development Corporation. They are going after a licence to be a distributor of natural gas. When there was a little bit of rough ground, the Nova Scotia Power Corporation went offshore to bring in coal, so they are not committed to the Cape Breton coal industry.

It is our opportunity by putting together the right package to make sure that Nova Scotians in all parts of Nova Scotia benefit from what we are doing. It is important that the benefits that can be realized, if there are any from natural gas, that everybody shares in them equally. But we never hear from this government.

They talked in New Brunswick and said they wanted certain things and if it didn't happen it wasn't going through their province. Not once did we ever hear this government stand up and say, if these jobs don't go to Nova Scotians then that pipeline doesn't come ashore. We have never heard that and we have to wonder why they are not standing up for Nova Scotians and their jobs. Why is it that this bill is so important to get through before we even hear from the Utility and Review Board? Why is it that we have all the smoke and mirrors going on on the eve of a leadership and provincial and federal campaigns. Are there real jobs here? Is there a real benefit here for the people of the Province of Nova Scotia or is the only benefit here for the politicking of forming the next federal government? Those are the types of things we have to be aware of.

Madam Speaker, I think that we have to look at what we are doing here very closely. I believe that everything is not as it seems. I don't think that people should be fooled because somebody said this is the way it is going to be. I think we have to look very closely at what happens. So I would invite Nova Scotians to come to the Law Amendments Committee, those who know a lot more about natural gas, those who know a lot more about distribution of gas and those who care about the future of the Province of Nova Scotia.

I think, Madam Speaker, that we deserve the very best deal that we can get and I am not sure that this bill will offer us that. Thank you.

MADAM SPEAKER: If I recognize the honourable minister it will be to close the debate. (Applause)

[Page 662]

HON. ELEANOR NORRIE: Madam Speaker, I want to take, first of all, the opportunity to thank all of the members for speaking to Bill No. 6. Actually, I not only want to thank them, I want to say how pleased I am to learn, as a matter of fact, a great deal from what they have said the last two days. Maybe pleased is the wrong word. I think more what I am is concerned, and maybe appalled is the word as well, to learn from the members opposite how little the members opposite know about the Sable gas project that is going on offshore and onshore Nova Scotia. Anybody listening to the members opposite when they were speaking would think that this project is probably the worst thing that is going to happen to Nova Scotia when, indeed, this is the best thing that has happened to Nova Scotia in its history. (Applause)

Madam Speaker, I am also troubled that the members opposite have not taken the time - and it is very obvious in their speaking - to learn nor have they taken the time to understand any of the issues attached to this project. I realize there are a large number of issues. It is very complicated and it takes a lot of work and a lot of time to learn and to understand all of those issues. I want to advise the members opposite not to be afraid of a little work, not to be afraid to spend some time to work, to learn about the project and about all of the legislation that governs this project.

As I have said, this is the best thing that has happened to Nova Scotia in its history. It is the largest capital project ever undertaken in this province. Sable gas will provide a tremendous opportunity for Nova Scotia. I want to assure the members opposite, everybody in this House, and all Nova Scotians that this government is watching, we are overseeing and we are ensuring that Nova Scotia will come first throughout this whole project. (Applause)

This project is governed, and maybe the members opposite don't know this, by seven pieces of legislation, some of them brought in by the members opposite in the Official Opposition. This will be the eighth piece, the new piece to govern the distribution of gas here in Nova Scotia. The bill gives Nova Scotia the authority over gas distribution within Nova Scotia. A lot of the discussion that took place talked about where the gas is going when it leaves here, where the ultimate end of the gas is. It talked about the main transmission pipeline and the companies involved in that. In case they are not aware of it and in case Nova Scotians are not aware of it, the National Energy Board has authority over and it regulates interprovincial pipelines, not any individual province.

When the members opposite talked about New Brunswick and what they are doing to protect New Brunswickers, I want to note here that New Brunswick has said, at the panel hearings and in the media, that it is willing to give the National Energy Board authority over the laterals in New Brunswick, off the main transmission line. Nova Scotia is not doing that.

With this bill we want the authority over laterals here in Nova Scotia. We are not giving it up to the National Energy Board; we are going to control the laterals within the Province of Nova Scotia and that is what this bill is all about, Madam Speaker.

[Page 663]

We are working within the authority of all those pieces of legislation that I have mentioned. The number one piece of legislation is the accord that was signed by some of the members opposite, in the late 1980's. We are very serious about this project, we are very serious about our Nova Scotia First policy. That comment was made by members opposite, that is a direct quote from the Minister of Natural Resources of Nova Scotia.

For the member from Kings North to stand up here and say, I don't care where the gas goes when it leaves the New Brunswick border, he only cares about Nova Scotia. He is going to put it in a brown paper bag and take it from the border of New Brunswick somewhere else. Is that serious? Does this man have any idea of the seriousness of that statement? Look it up in Hansard.

SOME HON. MEMBERS: Oh, oh.

MRS. NORRIE: It reminds me of the little boy in the schoolyard who took the brown paper bag and blew hot air, gas, into it and then burst it to make a noise. That is about the size of that comment. (Applause)

Just for the record again, in case anybody has not looked at Hansard, from April 17th, the quote from the member for Kings North, "from a very personal point of view, it makes no difference to me how the gas is transported once it hits the New Brunswick border. If they want to take it to Boston in a paper bag, that is fine with me." That is for the record, an appalling statement.

You will note Madam Speaker, that we have here a government that is paying very close attention to what is happening. We are following the approval process that is set in the accord legislation and we are making sure that this is dealt with in a manner that is fair and open, through a quasi-judicial panel that has been set up to hear all the evidence, to hear all the interventions that are being put forward by 124 interveners.

In order to expedite this process, we have created a review panel that is streamlined to assess the economic benefits, the social benefits and all the benefits that this project will bring. We are following the legislative process, and in that we are looking after Nova Scotia. We know where we stand; we know exactly where we stand on this whole issue. We want the project to happen and I think every member in this Legislature would like to have this project happen. We will have no delay.

The member for Kings West stood up here yesterday and said - and I will quote from Hansard again - "I want to rise and support the motion to hoist . . .". A quote from Hansard. Okay, now what does that mean? He does not want the project to go forward.

[Page 664]

[3:00 p.m.]

Apparently overnight the member for Kings West slept on this and thought, gee, maybe it should not be delayed. He had a vision, so he got up this morning in the House of Assembly and said that he is convinced now that there should not be a delay, that he would not support the hoist of the bill. So what we are saying here is, Where's George? That is a quote from another person from another country, Madam Speaker.

We are very serious about this project. As I have said, we have done a number of things to make this happen in the best interests of Nova Scotians. We have set up an arms-length review panel where there are over 124 interveners that are stepping in. Individuals, other governments, other companies, environmentalists, everybody who feels they would like to have an opportunity to speak to this are attending the review panel that is going on as the Premier has said, and a lot of light has been made of it, down the street. Down the street there is a very serious hearing taking place.

I would urge all Nova Scotians to pay close attention because Nova Scotia's position is loud, it is clear. For us as politicians in this House to make any comment would taint that process. We must be very careful that we do not do that. This is arms length and this will be assessed on its value. The review panel is arm's length. (Interruptions) We have also set up an offshore energy office, in case the members opposite have not been paying attention. That offshore energy office has been put in place to identify opportunities for Nova Scotians. (Interruptions) It was set up by this government to promote those opportunities and to work with the companies of Nova Scotia to identify opportunities so they would know where they could fit into the project, where they could make a benefit of the project and to create jobs for Nova Scotians.

SOME HON. MEMBERS: Hear, hear. Jobs. More jobs. More benefits. More opportunities. We have turned a corner. Nova Scotia is open for business and growing.

MRS. NORRIE: As a matter of fact, Madam Speaker, there are a number of jobs and companies that have taken advantage of this even before the review process is finished, even before the companies have made a decision to go forward.

On the offshore portion of this, Nova Scotian companies have benefited from contracts already awarded by the Sable Offshore Energy Project group. In March and April 1997, alone, Nova Scotian companies have already received nearly $3 million worth of contracts from the companies.

Last fall, 1996, there were two contracts for which Nova Scotians received $5.6 million worth of work. In total in 1996, it was $6.5 million for the year. So you put 1997 and 1996 together and you end up with close to $10 million worth of contracts let to Nova Scotian companies. I remind you here, Madam Speaker, that this is before the project has even had

[Page 665]

the approvals and even before the companies have made a final decision to go forward. We are already benefiting here in Nova Scotia from this project, proposed project, if you will.

Further to that I want to remind everybody or to inform the members of this House and Nova Scotians that from the pipeline, the onshore portion of the project, already dozens of Nova Scotia companies are benefiting from the Sable gas and the pipeline project. For example, the pipeline proponents, the one pipeline proponent that has been filed with the panel, there is only one proposal, remember. That is the Maritimes and Northeast proposal. They have engaged 50 contractors and consultants in a variety of fields ranging from environmental consulting to public relations work. Of the 50, 38 per cent of those engaged are Nova Scotia companies. 76 per cent of the contracts let were to Nova Scotian companies. (Interruptions)

From the environmental point of view, all six environmental consultants and subcontractors used by Maritime and Northeast are local. They are supported by 16 suppliers of goods and services. All 16 are local. (Applause) On other contracts that would be land related and had to do with appraisals, legal assessments, four of the appraisers, law firms and other firms involved in land work associated with the pipeline are Nova Scotians, out of ten in total.

As a matter of fact, as a bit of an aside, Madam Speaker, I had a call in my constituency office about two months ago from a local Truro individual born in Truro, Nova Scotia. He has got a two year contract with the pipeline company to do right-of-way appraisals and approvals from the New Brunswick border through to the end of the project, a Truro born Nova Scotian, already doing work and benefiting from this project.

Engineering and related activities. Twelve Nova Scotia companies are providing engineering and related activities. There are 20 in total; 8 are from New Brunswick and 12 are from Nova Scotia. For anyone to say that Nova Scotians are not going to benefit from this, for anyone to say that we are not looking after the store, wrong again. We are looking after the province. (Interruptions)

MADAM SPEAKER: Could we have order, please. We have had almost six hours of debate on this bill and I know all the Opposition members are anxious to hear the minister's reply to the questions they raised.

MRS. NORRIE: Now we can speak a little bit about the benefits that we can look forward to. What I have just said are the benefits that have already happened. Nova Scotia will benefit from natural gas in many ways and the gas distribution bill that we are debating here is just one of them. If you want a review of the benefits, Madam Speaker, investment in the development of the industry here in Nova Scotia is a $3 billion project and not one cent of Nova Scotia taxpayers' dollars are invested in this. This is invested by private companies. (Applause)

[Page 666]

We will be developing with this project a whole new industry, gas distribution within the province. This means that the development of laterals, conversions of homes and businesses and retrofits will be weaned off expensive, imported oil. Local gas distribution will make Nova Scotia more attractive to new businesses and to industries. Gas distribution within the province will bring us up to date with North America, which has had access to natural gas for decades. We are the last region in North America to get natural gas. It is coming and it is coming before the end of this century. That, Madam Speaker, will make Nova Scotia's industries more competitive.

Also, Madam Speaker, the local distribution system will provide infrastructure that will encourage further gas development. In other words, the six fields that are being explored in this project will provide an infrastructure that will allow us to develop further fields that are known to be offshore. Also, this gas distribution bill is there so that we can properly distribute other forms of natural gas - coal bed methane that is found in Cumberland County, Colchester County and in Pictou County, not just the offshore natural gas. (Interruptions)

MADAM SPEAKER: Order, please. If the honourable member wants to carry on a shouted conversation across the floor, I suggest you take it outside.

MRS. NORRIE: Over the long haul, the benefits from the gas sources within our own jurisdiction will create competition. It will be good for customers, good for business and good for industry.

Madam Speaker, how can Nova Scotians and this government be assured and how can we guarantee that Nova Scotia workers and companies will benefit from the Sable gas project other than what has already happened here? There is a legislative requirement under the Canada-Nova Scotia Petroleum Resources Accord Implementation Act, that guarantees that. The developers must have specified already in their development plan jobs and training for Nova Scotians. Our government insists that if Nova Scotians are qualified, if they are competitive, Nova Scotian companies and workers will get work on the project.

As I have said, the key role of the offshore energy office is to identify opportunities for Nova Scotian workers and firms. That is happening.

I would urge any member opposite who has not visited the Offshore Energy Office on the sixth floor of Founders Square to do so and to get the information that they may be able to take back to their areas of Nova Scotia, back to their ridings, back to their companies, back to individuals who may be interested, find out the opportunities that are there and get the word out and urge those companies to become ready, to become competitive so that they can take part in this project.

[Page 667]

Now, Madam Speaker, how can Nova Scotian content be policed to ensure that companies are complying? This government and the governments are the regulators. That is our job. We are not the investor. As I have stated, the private consortiums are the investors in this project. We have not risked one cent of taxpayers' dollars. When you speak of investing in the back-in option that we had, that would have meant borrowing money to invest in a project that has a high risk, when we have companies that are prepared to come to Nova Scotia and take on that risk. We are not going to build another $450 million debt that the Nova Scotia taxpayers will have to pay for for this project. Somebody else is taking that risk and we are looking forward to them making a decision in the fall that they will go forward.

We can regulate this project through government agencies and departments, such as the Canada-Nova Scotia Offshore Petroleum Board, the petroleum development agency of the Department of Natural Resources. The Department of Labour is involved in this well, the Department of the Environment all have regulatory authorities over this whole project.

There are a lot of other benefits, and welcome to the Chair, Mr. Speaker. I am glad to have you here so that you can know this as well because I know that this will benefit your area of the province eventually as well.

Other benefits that will flow to the project besides the jobs that we have talked about, are opportunities for contractors and expertise, new tax revenues from the goods and services that will flow as a result of this project. The royalties; there was a lot of discussion here about royalties in the last two days. We have determined with our arrangement, our framework, that we will have royalties of between $2.5 billion and $3.5 billion over the life of the project. Comments were made that we would not get a cent until profits were realized. Under this framework, royalties will flow on the day that the gas starts flowing, we will get royalties here in Nova Scotia. (Applause) And new business opportunities, all the spinoff jobs. As we speak, I would challenge any member in this House to try to find a legal firm here in the City of Halifax that does not have somebody working on a file attached to this project. That is happening as we speak and that will continue.

Infrastructure projects for the future offshore and also at the Strait of Canso and creation of a whole new domestic gas industry, local distribution. That is what this bill is all about.

Mr. Speaker, there are a number of benefits, there are a number of areas where this government is paying close attention to make sure that this gas is out of the ground, brought onshore in an environmentally safe and secure manner, benefits flowing to the province, gas that will be transported across Nova Scotia, to the New Brunswick border and beyond - not in a brown paper bag, as I will repeat again, as the member for Kings North has said, he is quite willing to let somebody come along with a brown paper bag at the New Brunswick border and carry the gas, he doesn't care where or how much they get for it. He is like the little boy, as I have said, in the schoolyard with a brown paper bag, fill it up with gas, make

[Page 668]

a big bang and hope he has some effect on the rest of the world. Sorry, this is a much more serious project than that. I would hope others would prepare themselves for this project, be much more prepared than the member for Kings North.

Bill No. 6, the Gas Distribution Act, has to do with gas distribution here in the Province of Nova Scotia. The National Energy Board has control and authority over any interprovincial line, the main pipeline. Let me tell you, within Nova Scotia we are getting ready and I challenge every member in this House and all Nova Scotians to get ready, individuals and companies, get ready for a whole new industry in Nova Scotia, get ready for the future of this great province. What this bill is doing is getting Nova Scotia ready.

With that, Mr. Speaker, I would move second reading of Bill No. 6. (Applause)

MR. SPEAKER: Is the House ready for the question? The motion is for second reading of Bill No. 6.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Ordered that this bill be referred to the Committee on Law Amendments.

The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please revert to Tabling Reports, Regulations and Other Papers.

TABLING REPORTS, REGULATIONS AND OTHER PAPERS

MR. SPEAKER: The honourable Minister of Finance.

HON. WILLIAM GILLIS: Mr. Speaker, I wish to table the Supplementary Expenditure Detail for the 1997-98 Estimates.

MR. SPEAKER: The report is tabled.

The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, on Monday we will have the response by the Opposition Finance Critics to the budget resolution. Following that we will do Public Bills for Second Reading, beginning with the bill introduced by the Minister of Finance, the Financial Measures Act.

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I move that we do now rise to sit again on Monday from 2:00 p.m. to 10:00 p.m.

MR. SPEAKER: The motion for adjournment has been made.

The House will now rise to sit again on Monday at 2:00 p.m.

[The House rose at 3:25 p.m.]