HANSARD
NOVA SCOTIA HOUSE OF ASSEMBLY
COMMITTEE
ON
PUBLIC ACCOUNTS
Wednesday, December 1, 2021
LEGISLATIVE CHAMBER
2021 Report of the Auditor General: Performance Report - Value for Money of Early COVID-19 Relief Programs for Individuals and Small Businesses
2021 Report of the Auditor General: Performance Report - Internet for Nova Scotia
Printed and Published by Nova Scotia Hansard Reporting Services
Public Accounts Committee
Hon. Kelly Regan (Chair)
Nolan Young (Vice-Chair)
Dave Ritcey
John A. MacDonald
Melissa Sheehy-Richard
Trevor Boudreau
Hon. Brendan Maguire
Claudia Chender
Susan Leblanc
[Hon. Brendan Maguire was replaced by Hon. Patricia Arab.]
In Attendance:
Kim Langille
Legislative Committee Clerk
Gordon Hebb
Chief Legislative Counsel
Kim Adair,
Auditor General
Andrew Atherton,
Assistant Auditor General
Michelle Edmonds,
Audit Principal
Emily Dickey,
Audit Principal
WITNESSES
Department of Finance and Treasury Board
Geoff Gatien - Associate Deputy Minister/Controller
Robert Bourgeois - Executive Director, Government Accounting
Department of Education and Early Childhood Development
Sara Halliday - Acting Associate Deputy Minister
Denise Stone - Executive Director, Early Learning and Child Care
David Potter - Executive Director, Financial Services
Department of Economic Development
Scott Farmer - Deputy Minister
Mike Queripel - Executive Director
Develop Nova Scotia
Jennifer Angel - President & CEO
Nova Scotia Internet Funding Trust
Margaret MacDonald - Chair of Trustees
Dalhousie University
Matt Hebb - VP, Government & Global Relations
i-Valley
Terry Dalton - President
Barry Gander - Co-Founder
HALIFAX, WEDNESDAY, DECEMBER 1, 2021
STANDING COMMITTEE ON PUBLIC ACCOUNTS
9:00 A.M.
CHAIR
Hon. Kelly Regan
VICE-CHAIR
Nolan Young
THE CHAIR: Good morning. I’d like to call the meeting of the Standing Committee on Public Accounts to order. My name is Kelly Regan. I am the Chair of this committee. Just a few reminders before we start. I would ask folks to keep their masks on during the meeting, unless you’re speaking. Please put your phones on silent or vibrate and please wait for me to recognize you before you speak. I’m going to start off with introductions to my left. The member for Dartmouth South, we’ll start with you.
[The committee members introduced themselves.]
THE CHAIR: On today’s agenda, we have officials with us from the Department of Finance and Treasury Board, Department of Education and Early Childhood Development, and the Department of Economic Development, as well as Develop Nova Scotia, the Nova Scotia Internet Funding Trust, Dalhousie University, and i-Valley to discuss two Auditor General Reports. One is with respect to internet for Nova Scotia and the other is regarding value for money of early COVID-19 relief programs for individuals and small businesses.
Now I will ask our witnesses - and we have a cast of thousands this morning - to introduce themselves, beginning with Geoff Gatien.
[The witnesses introduced themselves.]
THE CHAIR: We will first start off with Mr. Gatien who will make opening remarks, speaking on behalf of the Department of Finance and Treasury Board and the Department of Economic Development, and then we’ll move down the room.
GEOFF GATIEN: Good morning, Madam Chair and committee members. Thank you for the opportunity to be here today to answer questions about the Auditor General’s most recent report that looked at early COVID-19 support programs and the internet trust. I’ll deliver opening remarks on behalf of the Department of Finance and Treasury Board and the Department of Economic Development.
I’d like to start by providing a bit of background on the Internet for Nova Scotia Initiative. In 2018, the province received significant one-time funding from offshore royalties totalling $232 million. The government of the day allocated $193 million to expand and improve high-speed internet service across the province, particularly in rural communities.
A trust was chosen as the best structure to signal significant provincial support for the roll-out of this initiative. The trust agreement outlines the intent of the funding. The independent and accountable trustees oversee the trust. Develop Nova Scotia has taken on a helpful role in support of the Internet for Nova Scotia Initiative. My colleague, Jennifer Angel, will speak to the progress being made.
I’ll now briefly touch on early COVID-19 support programs. This pandemic required governments to respond in a way that protected the health and safety of people while also protecting the economy and livelihoods. For the Public Health restrictions to work, we needed businesses and workplaces to close and people to stay home, and for that to happen they needed confidence that support would be readily available.
Late in the 2020 fiscal year, Nova Scotia reached an agreement with Dalhousie University where certain relief programs would be administered by Dalhousie through what would become a $100 million fund. In terms of oversight and pursuant to the agreement, the university created the COVID-19 Response Council to oversee the use of these funds and the Province struck a Deputy Minister Advisory Secretariat to provide policy support and advice.
We were pleased to see the Auditor General found that government responded quickly and that Dalhousie University has done a good job delivering these programs. As of today, there is approximately $10 million not yet allocated. Another $34.7 million serves as a loan guarantee through the Tourism Sector Financing Assistance Program. It’s important to note that the pandemic is not yet over. Nova Scotians can be assured that remaining funds are available for COVID response if needed. As it stands, when the funding agreement wraps up in 2027, any remaining funds will be directed to Research Nova Scotia for public health research.
In closing, the pandemic required an unprecedented mobilization of provincial government resources and the response continues. We respect the work of the Auditor General and will look at all the lessons learned through this response and implement the Auditor General’s recommendations so that we can improve how government responds to future emergencies. Thank you and we look forward to your questions.
THE CHAIR: Ms. Halliday.
SARA HALLIDAY: Good morning and thank you for the invitation to speak. With me today - just before I begin, I would like to introduce Denise Stone, who’s sitting behind me, the executive director of Early Learning and Child Care; and David Potter, the executive director of finance for the department.
We know how critical access to child care is for families, communities, and our overall economy. This reality was highlighted when we saw the mandated closure of all licensed child care providers. In March 2020, we saw the beginning of a once-in-a-generation pandemic emerging on a worldwide scale. At the beginning, the novel coronavirus was unfamiliar, with little known about its spread and the degree to which it would cause illness. Governments and chief medical officers of health reacted quickly and took unprecedented emergency actions to try to keep us all safe.
As part of these actions, child care operators were required to close. Because these closures were universal and it was unknown how long they would last, child care operators were also directed not to charge fees to families during the mandated closure. Child care centre employees were left without work and subsequently without income. The risk to the closure of the sector was clear. Unless measures were taken to protect these small businesses, there was a serious risk that when it was safe to begin to open the workforce, the child care necessary to ensure that people could return to work may not be available.
We were pleased to respond quickly with $30 million in emergency grants to child care providers in addition to regular annual sector funding of $70 million. This emergency funding offset fees that would have been paid by families. It covered continued wages for staff and fixed operational costs for things such as insurance payments. The grant supported the child care sector through a complete three-month shutdown and a gradual re-opening throughout the Summer.
The emergency child care grants were a lifeline to operators, early childhood educators, and staff working in the licensed child care sector. The goal of this significant investment, as announced at the time, was to ensure child care centres could reopen and families could continue to access care once mandated closures were lifted. We were pleased to see that nearly 100 per cent of regulated child care centres reopened and families continued to have access to child care spaces. This funding helped over 300 child care centres across Nova Scotia and approximately 15,000 families who rely on them.
To say we responded quickly is an understatement. This was extremely important work that was undertaken by staff who themselves were transitioning to work from home and at short notice. We take very seriously the role we have in monitoring our grant programs and maintaining fiscal accountability. We value the work of the AG and accept the recommendation for the department. Our goal from the beginning has been to conduct financial audits once the pandemic stabilized, and this work is already under way. Thank you and I’d be happy to take any questions you may have.
THE CHAIR: Thank you, Ms. Halliday. Now Ms. Angel.
JENNIFER ANGEL: Good morning, and thank you for the opportunity to address the committee regarding the Internet for Nova Scotia Initiative, which Develop Nova Scotia is leading on behalf of the Nova Scotia Internet Funding Trust. It is a responsibility that we take very seriously.
The way we think about this work is through the lens of the impact it has on every Nova Scotian. We carry the weight of those who don’t have a good internet connection, as well as everyone else, given the large investment of public funds involved. We work with urgency to troubleshoot timeline pressures and accelerate the project wherever possible. We have been rigorous in our project management.
We’re pleased that the Office of the Auditor General has concluded that the project has indeed been managed appropriately and we have addressed their recommendations for improvement.
Through the project, we have focused on outcomes, not specific technologies or delivery models, and we have invited the best solutions - solutions that met our service requirements and exceeded speed targets set out by the CRTC, which represented the best value for Nova Scotians.
We now have projects under way to reach more than 97 per cent of Nova Scotia homes and businesses by 2023 and connections are happening every day. To date, 49,000 homes and businesses across the province have access to connections since the project began through partnerships with five different ISPs to date and two First Nations communities. It’s mostly fibre, which, while time-intensive, is extremely robust technology and it will enable expansion of cellular and 5G services as well.
The project is challenging. More than 12,000 kilometres of fibre is being run and the timeline is at risk every day. To say communications have been a challenge is an understatement, but every day, our partners are solving problems to protect the timeline. Our project remains on time and budget, and we are confident Nova Scotians can expect to receive what we have committed to deliver. We know it can’t come soon enough.
THE CHAIR: Ms. MacDonald.
MARGARET MACDONALD: As I said earlier, I’m Margaret MacDonald. I’m Chair of the Trustees of the Nova Scotia Internet Funding Trust. For your information, I’m currently a lawyer. I retired as a deputy minister in the provincial government. Once I was Chair, I was requested to add to the Board of Trustees for the trust. I appointed Greg Keefe, a retired professional accountant and a person who also retired from the provincial government, as well as Mark Thorburn, a retired professional engineer with experience in the telecommunications industry. I feel that we have a solid group of trustees.
Our appointments as trustees were made pursuant to the trust document. This document provides our authority to act in this capacity and imposes a fiduciary responsibility on the trustees to ensure the funds in the trust are spent only on those matters specifically set out in that document.
We have worked in partnership with Develop Nova Scotia throughout the whole process. We audit our financial statements each year. In accordance with the trust document, we have spent or committed $164 million out of the $193 million to date on internet projects.
As the Auditor General’s Report states, we have approximately $29 million of uncommitted funds at this time. Our expectation is that these funds will be required for successful completion of the project. I would be pleased to respond to any questions you have.
THE CHAIR: Mr. Hebb.
MATT HEBB: I won’t say too much - I know there are a lot of folks here - but maybe just a couple of thoughts from me to open up with. Dalhousie was asked to provide unprecedented and significant support to the province at the outset of this pandemic. We agreed to answer that call. We did so without seeking or receiving any kind of fees or remuneration for that. In fact, we were very rigorous about keeping even our expense recovery incredibly modest, just to cover things like the efforts of students and faculty.
I would like the committee to know, that not withstanding, I’m so delighted to have dozens of colleagues in my institution - including the leadership of the institution - who were very committed to diligently and enthusiastically supporting these programs, appreciating as they did the dire need that we faced in the province. They did this above and beyond all of the regular things that we would all normally be expected to do in our roles in the university.
I guess I would just close by saying that the reason we did that is because Dalhousie recognizes that our role as an institution in this province is to play an impactful and leading one in the economic and social well-being and we take that seriously, to the point where it’s embedded in our current university strategy where we acknowledge our role as a civic university whose own fate is directly intertwined with the fate and well-being of the province. We only understand our success as a university as success for the province as a whole, and it’s coming from that ethos that we agreed to enter into this challenge at the call of the Province, and this morning I’d certainly be very happy to answer questions about that.
We’re pleased that the Auditor General on looking at this found that we did a good job with it, as it’s not our usual work, and I’d like to - as I said to the Auditor General earlier this morning - commend her team for the work that they did. We appreciated it and found that to be a constructive process, and look forward to any further questions that you may have this morning.
[9:15 a.m.]
THE CHAIR: Thank you, Mr. Hebb. And now on behalf of i-Valley, Mr. Gander.
BARRY GANDER: Thank you very much. I’ve been honoured to do the opening part of our presentation. Terry will do the rest. I-Valley is a not-for-profit organization. It started here in Nova Scotia about five years ago. It’s growing very fast. We’ve been very successful. We now have offices in British Columbia and Alberta working with Indigenous communities and others.
We are also working on Nova Scotia’s largest project in Pictou County, a $70 million project that the municipality is funding itself, although we have received federal funding because we won some of the competitions for federal funding. In fact, we’ve won more federal funding competitions than any other organizations in Nova Scotia put together. We’re very, very lucky at that and the approach, therefore, that we have has been validated by the federal government.
We strive in all of this - and you’ll see this in a chart on the page you’ve got in front of you - to make it a world-best effort, because, face it, we come from behind. The purpose of the chart you’re looking at right there is to say that Canada has one of the highest internet costs in the world, and that’s caused by the high market concentration of Bell, Rogers and Telus. Canada, in fact, has the second most expensive internet service in the G7. So we can’t compete by, obviously, trying to compete against that concentration. That’s not our role.
What we can do is go into a different kind of role. We can compete on a smart community role, which is very different, and it illustrates the fact that what we’re trying to do is compete on a global level, not a national level. We don’t want to be best in Canada. We want to be the best in the world at some things, and we’ve been successful in doing that. The Annapolis Valley, under our tutelage, has obtained a certification for being the world’s first smart rural region. That’s an ISO standard. So we can do global things, and we can do them successfully here in Nova Scotia. Now I’ll turn it over to Terry. Terry, if you would, take it from there.
THE CHAIR: Mr. Dalton.
TERRY DALTON: Thank you, Barry and good morning everyone. As Barry alluded to, we started this out with smart community development in mind but as we progressed through smart community development, we found that most communities themselves do not have an appropriate level of broadband to express the smartness of a community.
We went down the road with many different players. I met with most municipalities throughout Nova Scotia, and right across the country actually, and one of the things that we have come across is benchmarking - where do you start to realize where you need to develop and for what reasons? It is an outcome focus that we are challenged with.
There are many, many articles that have been produced about broadband and the reasons for it but so much of it is lack of accountability. I love a paper that was just produced last month, and it says that you can’t spell “broadband” without accountability. So one of the things that i-Valley has done is partner with the Canadian Internet Registration Authority and helped them develop the Internet Performance Test, which is a consumer-based test to understand the performance - the experience that a consumer realizes, and not what a consumer is being told is available to them.
It is a real-world measure. It is an international research project. It is not something that Canada does on its own. Many countries use this. As a former co-chair of the National Research and Education Network for Canada, I was part of that early development about 18 years ago with Internet2 in the U.S. and other global research and education networks as well.
One of the things that we have done is mapped every community in Nova Scotia against the Internet Performance Test. The results are in the report there shown. Red is typically zero to five meg. When you get into blue, that’s when you’re up into the 50-plus, as was reported earlier.
Some of the things that we are doing, in particular with the Municipality of Pictou County - we’ve invoked what’s known as a digital twin to understand exactly where things reside and to inform citizens, because the council has decided that it wants to provide 100 per cent equitable availability to its citizens. We took it upon ourselves to help them understand that through digital twin efforts, we can tell them exactly whether they’re going to have fibre, whether they’re going to have wireless, when they are going to have it, and what expectation they can expect from that level of service that the municipality is providing.
We believe in open access networks - networks that are run by municipalities so they can determine and govern their future, and not owned by a private company.
That’s where we stand on that level of capability. We have large capital backers that work with us across the country and in the U.S. such as Digital Ubiquity Capital, and we work with great organizations such as SimplyCast, who have partnered with us to ensure that we have real-time measure and real-time information going to every person who needs access to broadband throughout the Municipality of Pictou County.
One of the things with regard to affordability - and I noted in the report, for example - is that only about 25 per cent of available connections have actually been done. In the Municipality of Pictou County, one of the things that we face is the poverty situation - impoverished families - and what is required to have them connect to the internet as well.
There are many facets. The elderly as well, for example, are another demographic - 25 per cent of the population that finds it difficult, so literacy becomes an issue as well - so all kinds of factors.
Availability, affordability, and using are completely different things. We as people in the know, and all levels of government, really need to come together and close that particular divide through education and affordable efforts, so that everyone can participate. More and more, we’re finding that all levels of government, commerce, socioeconomic opportunities and the like are fully dependent on the availability of the internet to everyone. When you have a huge population that can’t afford it or doesn’t know how to use it, they’re being left behind.
That’s where we need to fill the gap. I’ll leave it at that.
THE CHAIR: We’ll now open the floor for questions. Just a reminder of how this works and for anyone who hasn’t appeared before the committee before, the first round of questions - each Party will receive 20 minutes to ask questions. Even if someone is in the middle of an answer or a question at the 20-minute mark, I’m sorry but I have to cut you off. Then we’ll start a second round of questioning. Just depending on how much time is left over, we will end questioning at 10:35 a.m., which will give an opportunity for any of our presenters to make very brief remarks. Then we do have some committee business after that.
With that, we’ll begin with the Liberal Party, then the NDP, and the PC Party. Making her first appearance here at the Public Accounts Committee is my colleague, the Honourable Patricia Arab.
HON. PATRICIA ARAB: This is fun - 20 minutes to talk all to myself. This is the first time in a committee that I’ve had that much time.
I’d like to take the first part of my questioning to focus on the COVID-19 relief. I think that Mr. Gatien said something very important in his opening remarks, which is that the pandemic is not over. We have - maybe not all now, with new variants - but we’ve been 20 months in this COVID-19 world and it’s easy to become commonplace. It’s easy to be anxious to start living with the virus, which makes it easy to forget what it was like in March of 2020, when we had never experienced anything like this before. Everybody was doing the best that they could, whether it was in government or it was frontline health care workers or our child care centres or parents and families.
I remember feeling extremely overwhelmed and worried and never really believed that we’d get to a point where we could feel commonplace about COVID-19, where we could be - even though now we’re used to wearing masks, we’re used to sanitizing, we’re used to all of the protocols. But back in March of 2020 that wasn’t the case and so it’s important for us to get there, because the decisions that were made at that time were made without any experience - without any precedents, I should say. We were trying to do what was in the best interests of Nova Scotians and making sure that we could navigate this very stressful and tumultuous situation that we found ourselves in.
Considering that unprecedented nature of the crisis that we were in at the time - and I’ll ask my first question to Mr. Gatien - what would you say would have been the social and economic consequences if we hadn’t acted immediately?
GEOFF GATIEN: That’s a very challenging question to start off with, but yet a good one. I’ll try not to go too long. My honest answer is, I don’t know. But you’re absolutely correct on how quickly this developed, what the circumstances of the time were and I think even as that was moving along, probably not quite knowing how unprecedented it was.
We went from February where we had heard of COVID-19 in North America but we had a budget without any provisions for it - and then March came along. March break came and a lot of travel plans changed and things certainly much worse than travel plans changing as we started to recognize the gravity of likely border closures, social distancing and the like.
What would have happened had action not been taken? I don’t know. The decision-makers of the day were certainly mobilized and engaged, talking with senior leaders in the bureaucracy about how to have people start working from home and where the effects would be most crucial, through community services, health care, education, child care - a lot of those things that really needed to be focused on, and making sure that citizens and businesses had the confidence that we’re all in it together and we’re all focused on it. Had the response been different, I don’t know what the outcome would have been, but it was certainly all part of the context of the decisions of the day.
PATRICIA ARAB: Thank you. We exist in a bureaucracy that we all have a role in taking our time and making decisions and looking at all of the unintended consequences of a situation. Some people will criticize that we’re slow in the civil service or in government or whichever portion of it you want to point a finger at, but when you have a situation like what you were facing in February of 2020 and then the change in that in March, can you give me some insight into what those conversations were like? Because for all intents and purposes, it was the opposite of what the usual approach to policy-making or decision-making would be in government.
GEOFF GATIEN: Sure. It became very fluid. There were a lot of group conversations. There were a lot of conference calls set up, because we did start working from home. I forget the exact date, but my guess would be the early twenties or late teens of March. As issues were coming up, it’s the benefit of elected officials with constituents - there’s questions coming in from all areas. Ministries were getting questions from concerned stakeholders.
[9:30 a.m.]
It was very responsive. I’m not going to say there was a lot of access to any more time than people had, but you’re correct - it had to be responsive. The benefit of a professional Public Service, I think, is you have seasoned people who certainly hadn’t seen anything like the onset of COVID-19, but had to draw on professional experience, professional advice, and give the best advice we had in the context - had to fully articulate some of the uncertainty. When I say some of the uncertainty - the significant uncertainty that we’re all facing.
There certainly were risks that had to be articulated, had to be digested by our decision-makers. Then they had to use their judgment to make the final decisions on what the actual response would be.
PATRICIA ARAB: Definitely a professional Public Service - I was with Service Nova Scotia and Internal Services at the time. I’ll shout them out any chance I get on the record because I feel they were the unsung heroes of the COVID-19 response. All of our departments had roles to play, but I feel that at Service Nova Scotia, they were really working on their feet and trying to figure out the best way to approach and the best way to support Nova Scotians.
I appreciate Mr. Hebb pointing to Dalhousie’s sense of civic responsibility - or the institution is based on civic responsibility. I’m a Dalhousie graduate, yet I wouldn’t know that particular mandate. I’m assuming that maybe it wasn’t the purpose for Dalhousie being chosen to be the ones to administer this fund. I’m wondering if somebody could give some insight into why Dal was the chosen body to administer the fund.
GEOFF GATIEN: Again, in the moment, looking at what might be necessary. There were discussions about how we mobilize and how we ensure resources are used as responsively as possible - management capacity reach within the province.
There are, I would suggest, probably a few large organizations in the province, but Dalhousie does have a good relationship with the province. They had management infrastructure and a management team that people felt would be able to help with a contribution agreement to help roll out and administer programs. Also, their presence in Nova Scotia for a long period of time.
Why exactly Dalhousie? I don’t know the answer why Dalhousie was the first phone call, but I believe they were probably the first phone call made. I believe people were pleased that their response was positive. Then there is a trust with the organization and a knowing responsibility and ability to work with.
PATRICIA ARAB: I’m going to actually move to Mr. Hebb for a second. The resources that were allocated to Dalhousie were used to support individuals and small businesses. I’m curious what you saw the overall economic and social objectives of this fund were.
MATT HEBB: As we understood, the purpose of the funds was to provide immediate support to those most impacted by not only the COVID-19 pandemic, but in particular those who were impacted by the Public Health orders that needed to be put in place for us to manage the pandemic.
Casting my mind back, there were certain sectors that were immediately affected by the Public Health orders that included restaurants, bars, salons, gyms and things like that. There was a need to get some programming out to those small businesses, in the first instance - particularly before some of the federal programming got up and running. There was also a concern in those early moments about individuals who would fall through the cracks of what was coming to be developed as CERB, and so a need to get a program out that would immediately start to get support to highly vulnerable individuals impacted by the COVID crisis.
That’s what we understood as the initial purpose and then as the pandemic went along and our understanding of the impacts of it, some of the programming evolved with that and so our understanding of the purpose of the funds remains to support the Province in providing programs or services or supports that address those public needs arising from either the pandemic or our response to it.
PATRICIA ARAB: Keeping along those lines of social and economic benefits, I want to move to the Department of Education and Early Childhood Development and Ms. Halliday. We have the Family Home Day Care Operating Grant, the Supported Child Care Grant, and the Child Care Operating Grant to our child care centres. Can you give us some insight as to what economic and social benefits came from these programs when we put them so early on in the first wave? Does that make sense?
SARA HALLIDAY: Thank you for the question. I think we’ve already spoken this morning about the immediacy of the response that was made. When there was an announcement about closure of licensed child care, there was a need to respond quickly, because these child care centres are businesses that pay staff and have fixed fees.
The funds provided to them allowed them to continue to pay their staff while the centres were part of the mandatory closure that was for all of the good reasons related to safety that were discussed at the time. It allowed them to pay staff. It allowed them to keep their facilities’ lights on and ready and viable for when the closure was lifted, which frankly we didn’t know when that would be.
I think the initial announcement was for two weeks, which was optimistic now when we look back on that. We’re happy to say that as we reopened the province and reopened child care centres, 96 per cent of those child care operators reopened their doors with the staff and were able to welcome families back into those centres.
PATRICIA ARAB: Let’s talk a little about that, and the ability to keep everything afloat so that you could reopen quickly. I know that all of us who have been mired in this take for granted what is common sense and what is not, but without child care providers, without child care centres being open, that meant our frontline health care workers who have kids having issues, our workers in grocery stores.
We all sat at home - or the majority of us sat at home and it was stressful working from home and it meant for 16-hour days for a lot of us. But there were people who physically could not do their job from their homes and had to leave, so when schools were closed, when they couldn’t rely on family members or grandparents to look after their kids, the need for these child care centres to be able to stay agile and to be able to open as soon as they were allowed to be open was paramount. Can you talk to us a little bit about that?
SARA HALLIDAY: When the child care centres were part of the mandatory closure in March, there was a complete closure for three months, I think, and then a gradual reopening as the province started to reopen around mid-June. It was imperative that those centres were ready and prepared and able to reopen during that time so that as people were returning to their jobs that they had the child care that was so necessary.
Through the mandatory closure, we did definitely see the value of the child care sector to the province and to the province’s economy. This is something that families rely on. It’s part of our day-to-day lives if you have young children. It was key that they were able to reopen, even from a gradual standpoint until the full reopening later in the year.
PATRICIA ARAB: Let’s do comparisons. Mr. Gatien, how did our relief programs compare to others across the country?
GEOFF GATIEN: I don’t have an answer to that question. A lot of different circumstances in different jurisdictions. I certainly haven’t had time to request people to dive too deep on that. I’m not sure if there’s anything on the economic development front. I don’t know if Scott might be aware of some other supports. I’m not trying to throw you in front of a bus. (Laughter)
THE CHAIR: Mr. Farmer - without bus.
SCOTT FARMER: As we proceeded through with the development of the various programs, of course we had regard to what kinds of programs were in place in other provinces. At a point, the CFIB did a chart focused on small business in terms of the types of supports that were available. I would say Nova Scotia was pretty much in line with what other provinces were doing - more aggressive in some areas and less aggressive in others.
Our overarching strategy was that good public health is good economic policy. That bore out. The 2020 GDP numbers across the provinces show that Nova Scotia had the smallest - next to P.E.I. - decline in GDP. There were certainly sectors that were hit hard and that continue to feel the impacts, but from an overall economy perspective, the wholesome effort that was put in place between Public Health measures, between supports that Ms. Halliday has described, and interventions to support small business - importantly, federal interventions of course, but the provincial supplements as well - all helped put Nova Scotia in a better position than it might otherwise have been.
THE CHAIR: Ms. Halliday.
SARA HALLIDAY: Again, we haven’t delved deeply into comparing. We know that Nova Scotia was one of the leaders in how they supported the child care sector during the mandatory shutdown. I think that the success of that bore out in the number of centres that reopened at the end of the mandatory shutdown.
PATRICIA ARAB: Can we talk a little bit more about the federal programs that were being rolled out around the same time and what consideration was made to dovetail, if any - so that we could cover anything that was being missed.
SCOTT FARMER: The primary response, Canada-wide, was the federal program. When we look at the scale of the programs in Nova Scotia, they’re massive. CERB is measured in the billions of dollars. The Canada Emergency Wage Subsidy - $1.5 billion was the last number that I saw on that, which I think was current to August.
The provincial role was really to try to fill gaps where gaps existed. An example - and it’s noted in the Auditor General’s Report - is the initial Worker Emergency Bridge Fund, which was intended to be support for those who wouldn’t qualify for EI at the time. We tried to work with business to understand where the gaps were and then fill them through various programming - whether it’s through the Dalhousie program and the COVID-19 Response Council or directly through government action. As the Auditor General’s report notes, there was nearly $700 million in COVID-19 spending in the province as well, so over and above what was in Dalhousie.
[9:45 a.m.]
THE CHAIR: Thank you, Mr. Farmer. We now move on to the NDP and your time will end at 10:05. Ms. Leblanc.
SUSAN LEBLANC: Thank you, Madam Chair, and thank you very much for everyone being here. I just wanted to echo my gratitude to the Public Service and your leadership at Finance and Treasury Board, and Economic Development or whatever it was called then, in the quick response, and Dalhousie’s quick response to those days.
It is kind of an interesting feeling to be reflecting back on those days, but one of the things that, Mr. Farmer, you just reminded me of is that bridge fund - that $1,000 Worker Emergency Bridge Fund. I come from an arts background and most of my friends don’t qualify for EI ever because they are gigging workers, and that was a real saving grace to many of them. Before the federal government realized that there was a whole whack of people who weren’t going to qualify for the CERB, that was a really important fund for those folks and for many, many artists in Nova Scotia - and not just artists. Anyway, you reminded me of that and how important that was.
I wanted to say that the Auditor General has pointed out that the response was very quick, and that was really good, and that the programs were run really well, so congratulations and thank you for all of that work. But I wouldn’t be doing my job if I didn’t pick at some of the things that the Auditor General said maybe were of concern that we want to talk about. I’m going to focus some of my questions on that right now.
First of all, I wanted to ask a question about a discrepancy that I heard. In the report, the Auditor General said that there is $24 million currently unspent in the contributions to Dalhousie and the fund, but Mr. Gatien just said $10 million. I was wondering if you could explain that discrepancy.
GEOFF GATIEN: If there’s more detail, I’ll refer to Deputy Farmer. It’s simply a timing issue. The Auditor General’s Report was up to a certain date and in the subsequent months that have gone on, it has continued to be fluid. More commitments have been made. Dalhousie continues to be actively engaged. That’s where the number - the reconciliation.
SUSAN LEBLANC: One of the concerns that the Auditor General pointed out was that in the agreement between the Province and Dalhousie, Dalhousie “may” consult with the government on the use of COVID-19 recovery funds. Mr. Gatien has talked about how there’s a deputy minister advisory panel and that kind of thing, but in terms of that there is no duty to consult with the government on how funding is spent or how the programs roll out - and I can ask both of you - what is your response to that criticism or that worry on behalf of the Auditor General?
GEOFF GATIEN: The agreement was, I think, reasonably prescriptive on what the purpose and what the program’s focus would be initially. The purpose, I believe, of the deputy ministers secretariat policy support was for if the programs that were included in the agreement - if there were funds that were available or not fully subscribed.
We were working with estimates at that point where we wouldn’t necessarily know if something would be a $20 million need, a $15 million need or a $10 million need. As we learn more and the numbers go down, then suddenly there would be come capacity with funds with Dalhousie that may be able to be used for something else. That, I believe, was the purpose of the deputy ministers’ support.
As far as the programs were - if they were moving along at the initial estimates of the expected $20 million - it was going to be $20 million - there really would be no need for Dalhousie to engage or seek direction or collaborate with the deputy ministers. So it’s really just as the events unfolded and the actual was different from the estimate, Dalhousie could consult. But the terms of the agreement were still quite clear on what the overarching purpose was: COVID-19 support for those who were not covered with other programs.
SUSAN LEBLANC: It’s okay, I don’t need to hear from Mr. Hebb about this, but I’m going to ask a follow-up question to Mr. Gatien, if that’s okay. I’m going to ask you a question, so don’t worry about it. (Laughter)
In the event of a disagreement about the use of funds, what would the government do? Dalhousie is on this track and wants to do this, but all of a sudden the government realizes that something is coming down the road. What would happen? Who has the last word on where the funding is spent?
GEOFF GATIEN: In the contribution agreement, Dalhousie had the final say. As we did see in the Public Accounts that were released towards the end of September, there was still $700 million of activity that the Province was working through the fiscal year as well. The contribution agreement was not expected to be a sole source or key ongoing source of government decision-making. It was a tool that represented capacity and management resource to really help navigate uncertain circumstances and to work collaboratively.
Had there been a significant disagreement, I think that would have been a first point of surprise - but Dalhousie would have had the final say, without a mutual agreement with the Province.
SUSAN LEBLANC: That just underlines the concern that that’s public funding that another organization is in charge of, as opposed to the publicly-elected, paid-for civil servants making those final decisions. I’m just pointing that out.
According to the AG Report, there is currently - well now, as Mr. Gatien said, there is $10 million in unspent contributions. As you mentioned, it’s a fluid fund. I’m wondering if there is any kind of current priorities being considered for the use of this money. How are the priorities being determined? At this point where we’re not out of the pandemic but we’re sort of in a place where things are shifting a little bit, how are the priorities determined? Is there any widespread consultation about economic recovery taking place that can be applied to the conversation?
THE CHAIR: Ms. Leblanc, just to clarify, your question is for Mr. Hebb?
SUSAN LEBLANC: Sure, Mr. Hebb, please.
MATT HEBB: I appreciate the question, I appreciate the observation and I appreciate the way that the Auditor General made the observation in this space. I would make one general comment, and then I’ll also answer the question specifically.
I think that one of the reasons why this arrangement was possible in the moment was because of the fact that there was a relationship of trust between the Province and Dalhousie. Even though it’s possible to ask a question - and proper to ask the question, what if Dal had decided to do something and there was a disagreement - I think the reality is that the institution is a trusted partner and wouldn’t want to be in a position where we’re doing something that’s contrary to what the government would want to see.
That goes to my specific answer, which is that we would not try to establish priorities for unspent funds in the absence of advice directly from the government. Dalhousie has no interest in inserting ourselves into the role of determining what’s in the public good. We believe that is a responsibility of the government and the members of this Chamber. We’re happy to play our part in trying to implement on that, but we do not see a role for ourselves in establishing what those public good priorities ought to be.
We’re happy to be thought partners. We’re happy to think through our own experiences and offer, “This might work better than that,” or “Have you thought about this or the other thing?” We would have no interest in trying to unilaterally assert something in the absence of advice coming from the government.
I think that the government’s ability to count on that reality is part of how we ended up into the agreement. In the moment at the time, the agreement in retrospect, probably could have found other ways to articulate that kind of thing more strongly, but I think in the moment we didn’t really fully know what was going to happen and how it needed to work. What mattered most was actually having trusted partners who you knew were not going to run sideways with this thing - we were going to do the right thing, we were going to work through things and learn and focus on what we thought was in the best interests of the response.
We’ve always wanted to adhere to that approach and would continue to do so up until the last dime is allocated or spent.
THE CHAIR: Ms. Leblanc, you have 10 minutes left.
SUSAN LEBLANC: Given what you’ve just said - and again acknowledging the quickness of how everything just came about back in the day back in 2020 - the Auditor General has also noted that there are a number of clauses missing in the agreement. For instance, an example would be to terminate the agreement earlier. Given what you’ve just said, that Dalhousie wants to be a partner with the Province, is there any appetite to making changes to the agreement now that there may be a little breathing room? Are you looking into that, as a response to the concern from the Auditor General?
MATT HEBB: We’re not actively looking into it, but I can tell you 100 per cent if the government approached this and said, we’d like to re-think this agreement in some way, no problem.
SUSAN LEBLANC: That’s great to know. Thank you. I guess I’ll turn that to Mr. Gatien, then: Is there an appetite to revisit the agreement with Dalhousie?
GEOFF GATIEN: Not something with regard to Dalhousie that I’ve been asked to explore or discuss. Certainly, from our response to the Auditor General, that’s among the items that I expect that however we document a lessons-learned and some sort of approach with agreements, they’re all valid points. We’ll take them into consideration, certainly, for future agreements and if we’re asked by anyone to revisit, we’ll certainly entertain conversations.
SUSAN LEBLANC: I’m just going to ask one more question in this sort of line and then I’m going to hand it over to my colleague.
The other interesting part of this is the unused portion of these funds. I know that some of them are sitting in an account as a loan guarantee until 2027. That’s a long time from now. Obviously, the funds need to be there, but as they’re there, I’m assuming they’re gathering interest.
Has there been any discussion of (a) taking that interest and actually transferring it back to the Province so that we can use it in the regular Public Accounts, the public spending; and (b) in terms of any leftover money - again, we know that the plan is to take it to Research Nova Scotia to use for public health research, but there may be things that need to have money spent on them before that. Is there any discussion - has Mr. Gatien - have you been directed by the minister to have these conversations about those potentials of returning the money back to the Province?
GEOFF GATIEN: No, I’ve not been asked to entertain the conversations at this point.
THE CHAIR: Mr. Hebb.
MATT HEBB: Just to maybe answer one specific part of the question directly, there’s no mechanism that we’ve currently got that would allow us to return interest to the Province. However, I want to be clear and I think the Report of the Auditor General is clear, we are tracking all of the interest.
What is happening right now is all of the interest is just going into the pot. If the pot continues to be used for COVID purposes, whatever those might be, the interest will go into that capacity. It’s not going anywhere else; it’s going to stay in this pot. It will go either back towards these programs or whatever that future use of those funds would be.
THE CHAIR: Ms. Chender - and you have six minutes.
CLAUDIA CHENDER: You are a lot of people and expertise in a very short period of time. I’m sure we have more questions, but I’m going to ask a couple of questions on some of the other topics that were here today.
I just have one question on child care and early learning. I think one of the findings from the Auditor General was that things were maybe not documented or organized as well as they ought to be. One of the big things that we heard throughout the pandemic - everyone will remember “Stay the blazes home” as the famous phrase, but the other famous phrase less appreciated was “organic child care.” That was one that really, really rankled.
One of the questions we got consistently was about child care for essential workers, which I know is not within the scope, but I think it is because it goes to that decision-making and documentation piece. I’m wondering, were there conversations about giving essential workers more than organic child care during the pandemic?
SARA HALLIDAY: As we mentioned early in March or mid-March, the decision was made to close licensed child care centres. We have unlicensed child care available in our province. Many of you would know that as a grandparent, a neighbour, an aunt, uncle - someone in the community who delivers child care out of their home. That’s an acceptable form of child care in our province, as long as certain numbers are maintained.
The unlicensed child care did remain to be available and an option for individuals who were seeking child care options during that time, but regulated child care was part of the mandatory closure.
[10:00 a.m.]
CLAUDIA CHENDER: I could talk about this all day, but I’m going to switch to some internet questions. I will just momentarily editorialize and say that I don’t think that answered my question, about what discussions were had. In the spirit of learning forward, I would say that was a huge mistake and we’ve seen the stress on our frontline workers. We’ve seen the shortages of essential workers and I think that was a huge miss on the part of the Province - no personal aspersion intended.
Turning to the internet. I want to ask a bunch of questions, but I’m going to start with the AG’s observation that the trust indenture notes that the unspent funds in the internet trust will be distributed to underserved municipalities, and after that, successful proponents from the RFP processes to maintain the investment internet infrastructure.
This is going to be to either Mr. Farmer or Ms. MacDonald or both of you, if you’d like to answer it. We heard a little bit from i-Valley about the kind of chokehold that ISPs have on internet not just in Nova Scotia but in Canada, and the ways in which that leads to incredibly inflated costs for internet, which I’m hoping I’ll have a chance to get to.
Given the concerns we’ve heard, does the option of divvying up the remaining funds to those ISPs - does that sit well with you? It doesn’t sit great with me. I’m just curious if you have any comment on that.
SCOTT FARMER: I’ll invite Ms. MacDonald to comment as well. There is all but $29 million committed at this point, and the way that it’s structured is that it goes to underserved municipalities and then to ISPs for long-term capital improvements. However, we still have work to do in terms of the full rollout and getting as close to 100 per cent of internet coverage as is possible. We anticipate that the vast majority of the $29 million remaining will be consumed for that purpose. Perhaps Ms. MacDonald can add to that.
MARGARET MACDONALD: I was not involved in developing the contents of the trust document, but having been involved in the project over the last three years now, I think it makes sense. There is a finite amount of dollars and there’s a finite amount of time, and so I think the observation was that it’s probably useful to allow that money to continue to make sure that anybody who is left underserved, if that happens, would have access to some additional money in order to try to complete that. I don’t know the thinking that went into some of those terms, but that would be my understanding.
I would also like to say, and I confirm what Deputy Farmer has said - our expectation is that we will spend almost all the money, if not all of it. Develop Nova Scotia has done an incredible job of identifying all of the areas and all of the underserved and difficult-to-serve household units in the province. We go over that number bi-weekly, see how it’s being addressed, see what it’s going to cost us - because those will be some of the most expensive places to get to in terms of trying to serve those folks. That’s what we’re working on.
While there may be some dollars left over, it’s really unlikely that there is going to be anything significant left over after the project is done.
THE CHAIR: We will move on to the PC caucus. Mr. Young, are you up first?
NOLAN YOUNG: I’d just like to thank everybody for coming out today and making themselves available. My first question is to the Department of Finance and Treasury Board, and it’s around the transparency of the selection process. Regarding the selection at Dalhousie to disburse the COVID relief funds, can you just walk me through what the tendering process was, and what other institutions were examined to give out the COVID relief funds.
GEOFF GATIEN: I wasn’t part of all discussions that transpired in this space so I’m not aware of other entities in particular that were considered. I would expect other post-secondary institutions would have had some level of consideration. Also, this would have been without tender, so there wouldn’t be a tender process. There is no administration fee, so again Dalhousie isn’t earning profit or bottom line as a result of this. All of the programming dollars are to go to the programs agreed to deliver. I think that’s the best I can do on that question.
THE CHAIR: Mr. Young - and I’d just like to note that you have until 10:25 for your caucus questions.
NOLAN YOUNG: Just for clarity again, Mr. Gatien, Dalhousie indicated that the government reached out to Dalhousie. You’re not aware of any other institutions that may have been brought up or may have been contacted?
GEOFF GATIEN: No, that there are other discussions going on. I think people were happy that Dalhousie was on the list and were happy to make the phone call.
NOLAN YOUNG: Why Dalhousie? Why was it Dalhousie that was chosen?
GEOFF GATIEN: The ultimate decision wasn’t mine. It wasn’t necessarily Finance and Treasury Board’s. I believe for reasons that Mr. Hebb, I think, articulated - I think I might have a little bit as well - I think it was a management capacity of numerous faculties that they’d be able to draw on in uncertain times.
We look at a business school, we look at a legal faculty, we look at a medical faculty - there’s a lot of capacity that they had, not knowing what gaps might need to be filled. Also, some of the programming where you might want to reach out for public administration
I believe they were reviewed to be an institution with a long-standing relationship with the province, with the depth and capacity to help in a moment of unprecedented uncertainty.
NOLAN YOUNG: Thank you.
THE CHAIR: Mr. MacDonald.
JOHN A. MACDONALD: What you guys delivered was great - this is just a review of some learning going forward. This would be to Mr. Gatien: How was the number of $100 million actually given? Because from what I’ve read, it was $50 million, then somehow it became $100 million. I don’t know if somebody flipped a coin or what, but where did it come to $100 million exactly?
GEOFF GATIEN: Again, how that figure was reached, I don’t know precisely how. As we approach year-end, and as any year unfolds, we’re monitoring the financial position of the Province as best we can. There’s a lot of uncertainty even in ordinary times. What we felt was likely transpiring - the pandemic was late in the 2020 fiscal year. The onset was the last half of the last month, so I believe that the Province was expecting that we were certainly going to be at whatever the level of surplus that had been forecast, that there was going to be additional capacity.
I believe the decision of the day was that in these unprecedented times, we wanted to demonstrate to those people that we’re asking to close their businesses, to stay home and not go to work, and trust the government will be here to support them. I believe part of it was they wanted to show a substantial support going out that was going to be there in times of need.
JOHN A. MACDONALD: So, Mr. Gatien, your department wasn’t asked if it should be $50 million or $100 million - you were kind of told that this is what the number will be. I see on September 24, 2020, it was amended to get to $100 million from $50 million. Would that be a correct assumption?
GEOFF GATIEN: It wasn’t amended to get to $100 million. The contribution agreement had an initial contribution of $50 million and then, depending on how the financials of the Province looked for the year, it was potential to go up to another $50 million.
JOHN A. MACDONALD: So in the agreement, it was based on if the Province was in a surplus, to get the money back there to help on the front lines? I can read all the agreement. I got through most of it. I must have missed that - sorry.
GEOFF GATIEN: Yes, there would have been a phrase in there - probably in the contribution section that would talk about the potential for a contingent contribution.
JOHN A. MACDONALD: I’m done. Thank you.
THE CHAIR: Ms. Sheehy-Richard.
MELISSA SHEEHY-RICHARD: I just have another question on that, too. Why was a decision made to not allow any of the money to come back into general revenue to the Province of Nova Scotia? How was that decision made?
GEOFF GATIEN: With the agreements, and there is some accounting nuance to that - in order for the Province to demonstrate that level of support and put the money out to Dalhousie, it was felt that all of the money should be spent in accordance with the agreement, on purposes consistent with the agreement. If not directly for pandemic response, if there was a surplus left at the end, public health research would be a consistent purpose that would still have a long-standing public benefit.
MELISSA SHEEHY-RICHARD: Again, the research may or may not have been directly related to COVID-19. There’s no real determination how long that would be. Fighting it right now, that money could be better used, would you say?
GEOFF GATIEN: I don’t think that’s a question for a finance official to answer, whether it would be better spent one way or another right now. The contribution agreement is reflective of the direction of our decision-makers of the day, our political leaders.
It was unprecedented. There has been a lot of flexibility through the agreement. It was a decision made by our decision-makers that public health research, while maybe not COVID-19 - they were hoping it would be post-pandemic by the end of the agreement. Then what would we benefit from that? Research and public health were considered to be an appropriate utilization of surplus funds, if there are any.
THE CHAIR: Mr. Ritcey.
DAVE RITCEY: Again, welcome to the committee, to be able to answer some questions. Just to go back to the funds that are held at Dal - the Auditor General Report was completed on July 31st. Correct, Mr. Gatien?
GEOFF GATIEN: I can’t confirm. If it’s in the report - I believe it was July. Yes, I’ll confirm.
DAVE RITCEY: That would be my next question. You said that given time, there was $24 million at that time, but over the last five months we’re down to $10 million. My question is: Where did that $14 million go?
THE CHAIR: Before we go to Mr. Farmer, I would just say that the Progressive Conservative caucus has 10 minutes left in questions. Mr. Farmer.
[10:15 a.m.]
SCOTT FARMER: At that snapshot point in time, there would have been some applicants who were still paid under those various programs. So there’s a little bit of a trueing up on some of them. For example, the Small Business Real Property Tax Rebate had just recently closed. We continued to process applications and follow up on incomplete applications after the fact. Some of the numbers as reflected on July 31st will have increased since then just based on additional grants and funding that’s gone out the door.
Over and above that, not captured are some other programs there. There’s the Nova Scotia Small Business Rental Deferral Guarantee Program, which had a later closing date, about $3.5 million. There’s a Digital Assistance Program that was introduced in two blocks; that was about $3 million. There was a program around outdoor events and attractions intended to kick-start some of the main street activity. Together with the true-ups, that accounts for the difference in the $23 million in the current amount available.
DAVE RITCEY: I guess it goes back to why - and this could go to Mr. Hebb. Why so long is that money sitting until 2027? I may have missed it in an earlier question but just some clarification perspective: Why so long?
MATT HEBB: The funds that sit until 2027 are related to the Tourism Sector Financing Assistance Program, and that is because the terms of that program were for us to provide, essentially. I probably won’t get the technical finance terms here right but a five-year security term to support those anchor institutions in getting better financing rates that would then allow them to manage operations through the challenging COVID times better.
That program was set up as a five-year security term and so we simply have to hold those funds either for five years until the term ends, or, in the event that there’s a call on the security before-hand because one of the businesses fail or one of the businesses pays out the indebtedness that the security’s attached to prior to that time. The five years is the longest amount that it can be held for because that’s the term of the security.
The funds that are not associated with that particular program are not necessarily being held for five years. They’re available to be used immediately and as has been said, we estimate that that’s somewhere around $10 million to $13 million, something like that.
DAVE RITCEY: Thank you.
THE CHAIR: M. Boudreau, did you have any questions that you wanted to ask?
TREVOR BOUDREAU: Thank you, Madam Chair. I’m going to turn my attention to the internet part of the program. I’m from a rural riding, Richmond, and we were very pleased to see internet as a priority, but that was a significant amount of money - $193 million - and given that it was a significant investment, I just would like Mr. Gatien and Mr. Farmer to elaborate on the other options outside of the trust.
A trust was used in this case to use those funds. Were there other options, and what made the trust the best option rather than those other options that you would have looked at?
GEOFF GATIEN: I’ll start and then see if Deputy Farmer has anything to add. I’ll talk more about why a trust was selected, I think. As Ms. MacDonald mentioned in her opening remarks, a trust brings with it fiduciary obligation on the trustees. We start with an enhanced responsibility of the group who take charge of the trust fund. Trusts certainly don’t work in all circumstances, but when there are clear terms, a clear purpose and understanding of beneficiaries and trustees who are willing and able to take on the responsibility, it works quite well.
With this initiative, it was one that was viewed as a priority. There was a report that had been produced, the Brightstar report, that had laid a little bit of a paper - more than a little bit - on what it would take to bring national standard internet to most areas of the province. With that, our Department of Public Works isn’t involved with building internet towers.
The challenge of establishing the middle mile to help make it economical for households and businesses to get connected in underserved areas was one that I believe was at the core of the decision that it was in better hands with private sector and communities to collaborate and come up with a plan, rather than for government to proceed on its own. I shouldn’t say on its own - there would always be the ability for partners - but to take ownership of the middle mile or take responsibility for construction.
This was viewed as an option to have others step into a place where it’s probably better suited in the hands of those other parties. I believe that was the main reason and why I think in this circumstance that a trust was a good, appropriate vehicle to use. Do you have anything to add, Scott?
SCOTT FARMER: I have very little to add. That was quite a comprehensive answer. What I will observe is that in its execution, since it was established, the report is generally favourable in terms of the effectiveness in identifying some things that need to be cleaned up a little bit in terms of contract signatures and progress monitoring, which have since been addressed.
In terms of the vehicle, it’s proved to be an effective vehicle. As Ms. MacDonald identified, the trustees that have been brought to bear to oversee this have brought really strong credentials and background to help this be a success.
TREVOR BOUDREAU: Thank you, and I think you answered part of my questions - I guess maybe there weren’t other options looked at or whatever. I can appreciate the reasons for a trust but certainly with a magnitude of this, you expect to see that there were other options looked at as well. Thank you for your answer.
In terms of the $193 million, you talked a bit about the studies from 2016 to 2018 that mentioned $300 million would probably be required for the strategy. Then the department, I think at one point in 2018, had suggested they be putting $120 million into the trust. It ended up being $193 million. Can you explain why $193 million? What was the reasoning that $193 million was invested?
GEOFF GATIEN: Again, the rationale on the final number rested with others and our decision-makers, but on the back of the Brightstar report, I believe there was reference in the report that the middle mile was approximately $150 million to complete. That was a number that was sort of a number to shoot for.
As more clarity came with the offshore resolution and the magnitude of dollars that came up, I believe government was prepared to invest more in it because - as you pointed out - there were some ranges in there about full connection to national standard could have been in excess of $300 million. In the moment, government was, I believe, viewing this as a vehicle to make a substantial contribution to increase the economics to connect households and businesses - so the $150 million middle mile. Then depending on how much came in from the offshore settlement, they were willing to invest more.
It was intended to be a substantial contribution, but not the sole contribution. They did expect communities and private sector internet service providers or others to contribute to it as well.
THE CHAIR: We’re now moving into our lightning round of questioning, where the caucuses have a total of 10 minutes between them to ask questions. We’ll each get three minutes. Ms. Arab, you’re up first.
PATRICIA ARAB: It’s one question that can be answered by whomever, given the time. What is the main positive that has come from this experience? We’re not done with the pandemic, but I’m sure that we’re taking time to debrief and to look at best practices and look at where we’ve grown and where we haven’t. In terms of how this program was laid out and is continuing to be laid out, what are some of the positive take-aways from it?
SCOTT FARMER: Is that in respect to the COVID-19 program?
PATRICIA ARAB: Yes.
SCOTT FARMER: I think there has been reference made in going back to the situation we were in in March 2020 and remembering what that was like. It was pretty foggy for everybody - what was happening and what was about to happen. What we saw was really an unprecedented all-hands-on-deck kind of an effort. We talked about contacting Dalhousie. They’re not in the business of administering relief programs, but didn’t hesitate.
We had people working in the Public Service who had one job and were asked to do something completely different because it was needed and they jumped in, and they did it. You mentioned being the Minister of Service Nova Scotia. I was at Service Nova Scotia at the time, and I recall a Saturday morning phone call where we moved something from idea to being ready for Cabinet review in the course of three or four hours because it was a regulatory change that was necessary. There was a lot of unprecedented activity that took place.
I think a take-away from all of this is really what’s achievable through a collective effort. We think about that in terms of response to a pandemic, but I think that can be applied in response to any number of challenging problems that we face in the Public Service and in our province.
PATRICIA ARAB: Thanks for that. I guess what would be the opposite of that is: What is a lesson that we shouldn’t repeat moving forward - or something that we can clean up, if we ever face a situation like this or something similar?
SCOTT FARMER: I would say a lesson that we learned - the business continuity plans that we had in place didn’t foresee a pandemic. They were really about natural disasters and short-term interruptions. I think that something that we’ve learned is that you need to think about business continuity.
THE CHAIR: Thank you. Ms. Chender.
CLAUDIA CHENDER: I want to quickly go back to the tourism loan guarantee. My understanding of that is that the guarantee is from Dal. Those funds are incurring interest. They’re going back into the pot. The reality is that if none of those large anchors default, then that money just sits there, unavailable for government revenue, and then goes directly to Research Nova Scotia. There won’t be an opportunity to reuse it because if nobody defaults, at the end of the term of the trust, that money is still there. I think the AG specifically said that seems like not a good arrangement particularly.
I guess I want to go back again. I don’t know if Mr. Farmer or Mr. Gatien - probably Mr. Gatien. Will the government reconsider this arrangement, given the criticism of the AG, and given that essentially it’s likely to be a $30 million bequest to Research Nova Scotia that didn’t happen under any normal kind of government auspices or channels when we are in a deficit position and we could use those funds if that guarantee sat with the province, rather than with Dalhousie?
GEOFF GATIEN: I have to think through some of the implication if it did sit with us. It’s not my decision what government considers going forward or not with those funds. The letters of credit do exist. I’ll simply note, Research Nova Scotia has received significant sums of money because the research has been valued as well.
[10:30 a.m.]
I don’t know if there would be interest in government revisiting that or doing a different approach. The source of authority to provide guarantees - the Nova Scotia Jobs Fund was closed - the flexibility that this fund with Dalhousie provided, did provide the flexibility to respond quickly to these anchor tenants.
I don’t want to be too presumptuous that it’s going to be easy times for them to honour obligations, because I expect that their businesses have been quite substantially impacted even as people start to travel a bit more now.
CLAUDIA CHENDER: Thank you, but can I just confirm that if that was the appetite, are you saying that would not be possible, given the closure of the Jobs Fund or would it be possible if there was an appetite in the Executive Council or whoever would determine that to change those agreements?
GEOFF GATIEN: It would be something that we would explore. There may be other options available.
CLAUDIA CHENDER: I guess just a follow-up . . .
THE CHAIR: I’m sorry. We’ll move on to the PC caucus. Mr. Young.
NOLAN YOUNG: My question is to Ms. MacDonald. Similar to the Dalhousie and the Province open to amending the contract or the agreement, would Develop Nova Scotia be open to amending the agreement as well?
MARGARET MACDONALD: Yes, I think we would be. We would certainly be open to the discussions. In fact, we did amend the trust agreement twice through the lifetime of the agreement. One was to ensure that Aboriginal band councils in Nova Scotia were named as potential beneficiaries. We do have some successes in that regard.
The other amendment was to allow the trustees to take a somewhat more liberal approach to some of the funding requirements because of the pandemic. We’re not looking for an amendment, but we’d certainly be open to discussions if we were approached by government in that regard.
THE CHAIR: Mr. MacDonald.
JOHN A. MACDONALD: I think this is going to go to Mr. Gatien. The accounting report that Dal is going to do: Are those reports public, meaning they will be given to the public, or are they just private?
GEOFF GATIEN: I’d actually defer that to Deputy Farmer or Mr. Hebb. That level of detail, I don’t have.
SCOTT FARMER: With respect to transparency around the Dalhousie agreement, I would say that there are various levels of reporting. There is very regular operational reporting that takes place between our department and Dalhousie and the administration of the agreement. There is a requirement to publish the outcomes and summaries of the various programs and those have been published on open data. Then the contribution agreement requires that at the end of the term, there be a full accounting.
I can tell you that Dalhousie has been very responsive every time that we’ve asked for an update. At times, there has been daily interaction around that.
THE CHAIR: Mr. Boudreau.
TREVOR BOUDREAU: Back to some of the internet questions and maybe just for Develop Nova Scotia or the Chair. There are 49,000, I guess, businesses and homes that are connected - we were told in the audit it was 42,000, but 49,000. Basically, at that point in the audit, there were only 10,825 homes and businesses that have signed up.
Is there any concern about only 25 per cent of actual potential users? Is it a communications issue? Is it an affordability issue? What is stopping people? This is very important to rural Nova Scotia to make sure . . .
THE CHAIR: I’m sorry, Mr. Boudreau. We’re actually out of time now. We do have an opportunity for our presenters here today to deliver brief remarks, if they so choose. It’s not required. I’ll start here to my right with Mr. Gatien. Is there anything that you would like to say in summary?
GEOFF GATIEN: I’d just like to say thank you for the questions. Thank you for the work of the Office of the Auditor General and everyone who supports us - but I think productive questions and I hope it was helpful.
THE CHAIR: Is there anyone else who would like to speak in conclusion? Mr. Gander.
BARRY GANDER: It has been an educational session, thank you. I’ll just make the point that from what we see about how the counting is done for demand for the internet, there’s a tremendous undercounting being done through the Telco method of counting. It’s out by at least 15 per cent in our estimation. I would like to point out that the FCC has moved away from that kind of accounting in the last few days and has moved to a direct consumer kind of accounting that CIRA’s independent performance test would allow us to do.
We advised the Province to do that before there was a Develop Nova Scotia and it has been repeatedly ignored. I would say that the Brightstar report is not true. It’s at fault. It tremendously underestimates the demand in this province.
THE CHAIR: With that, thank you very much for coming to the committee. It’s nice meeting some of you for the first time and seeing some familiar faces here as well. The committee will now move on to our next part of our meeting, which is in fact dealing with the record of decision that has occurred in camera at our last meeting. Thank you very much. I don’t want to say you’re dismissed but you are dismissed. (Laughter) You’re free to go. Thank you so much.
I will just direct the committee members’ attention to our previous record of decision. We were unable to finish this at our last meeting and I will remind you that we are not in camera. This is public right now. So we will continue on with the record of decision. We met on November 17th and the record of this decision from this meeting has been provided to members. Is there any discussion on the record of decision? Ms. Leblanc.
SUSAN LEBLANC: I would like to clarify the discussion around this. I would like to make a motion to add a witness, so I’m wondering at what point in the meeting I’d do that. I don’t have any quarrel with the record of decision as it exists, but I want to suggest adding a witness.
THE CHAIR: If you would like to make a motion, you can put a motion forward to make a change to any item or members can make a motion to move the record of decision.
SUSAN LEBLANC. Thank you. Therefore, I would like to make a motion that for the first topic, which is child protection service caseloads, I would like to add a witness to the list of witnesses and that witness would be Alec Stratford, the Executive Director of the Nova Scotia College of Social Workers.
THE CHAIR: Is there any further discussion on this motion? Ms. Leblanc.
SUSAN LEBLANC: I would just like to remind members that some correspondence from Mr. Stratford and a report from the organization was circulated to members so folks would know who I’m talking about and about how important their voice is on this subject of child protection.
THE CHAIR: Ms. Leblanc has moved a motion that Alec Stratford of the College of Nova Scotia Social Workers be added to the topic of child protection service caseloads for Nova Scotia.
All those in favour? Contrary minded? Thank you.
The motion is defeated.
With that in mind, would someone wish to move adoption of the record of decision as distributed? Mr. Ritcey.
DAVE RITCEY: I move the record of decision on November 17th as distributed.
THE CHAIR: Is there any further discussion about this motion? All those in favour? Contrary minded? Thank you.
The motion is carried.
Ms. Leblanc.
SUSAN LEBLANC: I just wanted to propose another motion. The reason we don’t have it in advance is because it has come directly from the meeting that we’ve just heard. I know that my colleague - and other, perhaps, colleagues in the room - felt that there were a lot of witnesses and a lot of information to discuss in a very short meeting. We would love to recall the folks who were here to talk about the internet project. That would be Jennifer Angel, Margaret MacDonald, Terry Dalton, and Barry Gander.
We’d love to see if there is another time that we could reinvite them to come before the Public Accounts Committee to ask some more questions and get some more detailed information, as we felt we didn’t have enough time to really dig down into that project.
THE CHAIR: I just want to consult with the clerk because I’m not sure if adding it directly here is okay - I think it is - or whether that goes through the subcommittee process. I will just take a quick moment here. Mr. Young.
NOLAN YOUNG: I’d like to call a short recess, please.
THE CHAIR: Certainly. We’ll do a three-minute recess to 10:45 a.m.
[10:42 a.m. The committee recessed.]
[10:44 a.m. The committee reconvened.]
THE CHAIR: I’ll now call the meeting back to order. Mr. Young, I think you’d like to speak.
NOLAN YOUNG: I would just like to say that’s something that we would be fine with - pending maybe to amend the motion that we add them to the next round after the current list.
THE CHAIR: All right. I do think we have to vote on this and I’m trying to remember if you put it in the form of a motion.
SUSAN LEBLANC: I did.
THE CHAIR: Okay. Mr. Young.
NOLAN YOUNG: I’m asking if the previous motion could be amended on the next round, please.
THE CHAIR: Sorry, I didn’t catch that. Ms. Leblanc?
SUSAN LEBLANC: My understanding is that because we’ve already voted on the record of decisions, that’s the first round as it were. So the next time we’re making an agenda, we would be happy to make sure that those folks are invited to be on the next round of agenda-setting.
THE CHAIR: Okay, so I just want to make sure that I’m not doing anything out of order. We just need unanimous approval to amend Ms. Leblanc’s motion.
All those in favour? Contrary minded? Thank you.
The motion is amended and carried. It will be added to our next agenda-setting.
Our next meeting is December 8th, which will be in camera, and the witness will be the Office of the Auditor General and the Financial Report of the Auditor General for 2021 will be the topic. The meeting will be held in the committee room at One Government Place.
If there is no further business, I now adjourn the meeting.
[The committee adjourned at 10:47 a.m.]