Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue 20 - Evidence - Afternoon


HALIFAX, Wednesday, December 5, 2001

The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 1:12 p.m. to examine such issues as may arise from time to time relating to energy, the environment and natural resources.

Senator Nicholas W. Taylor (Chairman) in the Chair.

[English]

The Chairman: Our first witness this afternoon is Mr. Rankin, who is with Maritimes & Northeast Pipeline. Are you an old-time Maritimer?

Mr. Stephen Rankin, Communications Manager, Maritimes & Northeast Pipeline: Yes.

The Chairman: Please proceed.

Mr. Rankin: It is a pleasure to be here today. I thank you for the invitation to speak to you today about the Maritimes & Northeast Pipeline project. I am proud to have been involved with the organization since 1998.

The Maritimes & Northeast Pipeline was built in a region where no transmission pipeline existed prior to us constructing it, and also in an area where new sources of gas supply were being developed, which is truly a green field market.

Today I hope to describe the system as it now exists, summarize some of the challenges and opportunities before us as we expand the system and show you the key role Maritimes & Northeast Pipeline, M&NP, plays as a cost-effective, competitive delivery system in an evolving market.

Could I ask you to refer to the loose map that is in your package? It is a system map of our pipeline. Maritimes & Northeast Pipeline begins at Goldboro, Nova Scotia and picks up the gas from the Sable Offshore Energy Project gas plant. It is a 30-inch pipeline, runs 1,051 kilometres to Boston to the mainline compressor units in the U.S. It currently has plans to add compression in Canada as the market develops.

The pipeline also has laterals to Halifax to the Tufts Cove power generating station owned by Nova Scotia Power, to Cape Breton Island and to the Point Tupper area. Stora Enso, Compañia Generale de Combustibles, CGC, and the Sable Offshore Energy Inc., SOEI, fractionation plant are also customers there. We have a small lateral to Moncton, New Brunswick that serves a local distribution company called Enbridge Gas New Brunswick. We have also have a lateral to Saint John, New Brunswick that serves the Irving Group of companies, including the Irving Oil refinery, the J. D. Irving, Limited pulp and paper plants in the area and also one power generation unit named Bayside Power L.P., which is a joint venture of New Brunswick Power and Westcoast Energy.

We are under contract to move approximately 530 million cubic feet per day on our system. I am happy to be able to report that we have been successful at moving significantly higher volumes than that. We are shipping over 600 million cubic feet per day.

The Chairman: Normally, I do not break in, but are you the pipeline company that is talking about going to Montreal, or is that your competitor?

Mr. Rankin: That would partly involve our company, yes.

The Chairman: One of those yellow lines on the map should be a heavy line then, if you are going to Montreal.

Mr. Rankin: The yellow line represents potential pipelines. The ones that appear in purple are currently built.

The Chairman: Are you building later on to Montreal? That would be represented by an orange line on the map.

Mr. Rankin: Hopefully, we will.

The Chairman: All right.

Mr. Rankin: I will speak about that.

The Chairman: It is quite a puzzle to many of us when we hear about two or three groups of pipelines leading one from the other.

Thank you.

Mr. Rankin: There is potential for us to build a lateral up through the Northwest New Brunswick area to interconnect with a particular pipeline named Cartier Pipeline. The proponents for that pipeline are Gaz Métropolitan and Enbridge Incorporated. We are in discussions regarding that.

The Chairman: Will the Cartier Pipeline come down to the north end of your yellow marking?

Mr. Rankin: It would come up to the New Brunswick-Quebec border.

The Chairman: Okay, thank you.

Mr. Rankin: It would involve an extension from the Trans Quebec and Maritimes Pipeline Inc., TQM, system near Quebec City along the south shore of the St. Lawrence River and cutting towards the New Brunswick border.

The Chairman: I just want to get the alternatives clear in our minds.

Mr. Rankin: I will talk a little more about that later.

As I was saying, we are moving in excess of 600 million cubic feet per day, which is more than people predicted, and we are proud of that. We are prouder of the fact that over 25 per cent of that gas is being delivered in Canada, which is also more than most people thought would happen with our system.

Just to give you some background on the company, the joint venture of Maritimes & Northeast Pipeline, we are owned by a partnership of four very prominent players in the energy business: Westcoast Energy, 37.5 per cent interest; Duke Energy, 37.5 per cent interest; - those two companies are, respectively, the Canadian managing partner and the U.S. managing partner of the system - Emera, which is the parent company of Nova Scotia Power, and Exxon-Mobil, which is the lead SOEI partner, hold a 12.5 per cent interest in our pipeline.

To date we spent $2 billion to build the entire system, $1 billion of which has been in Canada. Approximately 60 to 70 per cent of our investment in Canada was spent in the Maritimes. We are proud of that as well.

We consider our role as key to the future resource development of offshore Nova Scotia and Newfoundland, as well as onshore Nova Scotia, New Brunswick, and Prince Edward Island. That role is to provide the most effective, competitive transportation system for the East Coast.

To hopefully place that into context for you, I will show you a slide of where we fit within North America and what other basins we compete with. Several natural gas basins in North America have the ability to deliver to particular markets to which we deliver, for example, the U.S. Northeast. As demand grows in North America for natural gas and electricity fired by natural gas, the supply response from those basins will occur in various stages over the next few years.

From the Scotian Shelf we were currently serving about a half a billion cubic feet per day. That will grow over the next few years as we bring on new production. We compete, in the New England and U.S. Northeast markets, with gas from Western Canada and also gas from the Gulf of Mexico. In the future, as particular areas of the U.S. grow according to forecasts, particularly, the Southeast Florida area of North America, Gulf of Mexico gas will largely feed that growing market and will be able, hopefully, to capture more of the U.S market.

It is important to note that Scotian Shelf supply response presents a true opportunity as it currently is connected to expanding markets.

This map is important to us because it is this map that drives our need to be competitive and cost-effective in our delivery system.

The evidence we refer to as an indicator for growth of the East Coast Basin is the commitment made by companies to explore in the offshore areas of Nova Scotia and Newfoundland. In Nova Scotia alone, the commitments over the next five years are $1.5 billion to be spent on seismic and drilling. In offshore Newfoundland the number is also growing. It is nearing the $1 billion mark as well.

We have put in place the necessary infrastructure required to date, and we intend to expand our pipeline system as new supply becomes new production.

What is exciting and extremely evident about this map is the shear proximity the region has to large and growing markets in the U.S. Northeast and Eastern Canada. The ability to deliver to these markets in a cost-effective and competitive manner offers a significant advantage for continued development within the region.

The Chairman: Before we finish with this map, there is a loop coming from the east to Newfoundland up through St. John's and then back down through. Is that a proposed pipeline?

Mr. Rankin: I would not called it a proposed pipeline, senator. I would call it a potential routing for pipelines, and that is what several companies have examined. The misdirection of it to the north of St. John's is as a result of the iceberg scour in the area on the Grand Banks, and it is a solution that is being considered by a few companies as a possible routing. It is not placed on the map to indicate that our company would build a pipeline - though our owners certainly would be interested in infrastructure like that - but simply to put forth that there are people considering the potential for bringing that gas to market. That is a potential route. The same would apply for the yellow line.

In terms of expanding our system, we have plans underway to expand the capacity of our main line, which I will describe later in more detail. In addition to those main line projects, we are working toward accessing new markets through system extensions. The potential exists for laterals to the New Glasgow-Pictou area, to Prince Edward Island and for facilities through Northwest New Brunswick to interconnect with proposed facilities in Quebec.

Beyond the Maritime Provinces, as is evident in the slide, we are proposing access to markets through the U.S. Northeast and Eastern Canada via interconnects with the Tennessee Gas Pipeline transmission system, the Portland Natural Gas Transmission System, PNGTS, and, in the not too distant future, the Hubline project - a Duke Energy project that is being developed.

Because I do not want to go over my time limit, this is a brief update on other evidence for expanding supply in offshore Nova Scotia.

We have done an open season in September, which involves us approaching the market - potential users and potential suppliers - and saying, "We are expanding our pipeline and are interested in knowing your timelines for potential development." Basically, the requests for services were very positive. The results from the supply side for natural gas - that would be producers and explorers of natural gas - were roughly double the current production from the Sable project, and in terms of end-use demand, were roughly equal to the Sable production. There is truly a great opportunity for the East Coast to continue to develop. The bottom line for us is that we will be able to respond to that need and serve growing supply demands and growing markets.

Concerning expansion, I mentioned our main line. The first round of expansion for Maritimes & Northeast Pipeline is supported by a contract to transport natural gas from the PanCanadian Petroleum-owned Deep Panuke project in offshore Nova Scotia. The 10-year project with PanCanadian will drive a 400 million cubic feet per day expansion, roughly a little under double our current capacity, at a cost of about $0.50 billion, of which $200 million will be invested in Canada. That would involve adding compressor units in four locations on the Canadian side of our pipeline.

This is a proposal. We are filing in January with the National Energy Board to construct these facilities. It is secured by contract, as I mentioned, and the in-service projected date for that would be late 2004 or early 2005.

This is a picture of what might come next over the next few years up to 2010. The future expansion of our system will be supported by additional natural gas supply and market growth, as evidenced by the open season and by exploration and production company commitments to drill and explore.

An advantage of the existing system and of having it in place is the ability to stage expansions of various capacities, incrementally. Possibly the first section of loop on the map would go in without the second, third or fourth, as the production levels from offshore or onshore would merit. That is a significant advantage.

To put it into perspective, consider that for an initial $2 billion investment in the pipeline, we built the existing system to transport 0.50 billion cubic feet per day. With a repeat of the same $2 billion investment, M&NP can increase its capacity from the current system by four times. That provides an idea of the potential for the improved economics for netbacks for producers, for encouraging other exploration to take place and, hopefully, for production offshore in Nova Scotia and Newfoundland and onshore as well.

Just to give you an idea of what that perspective means in terms of tolls, as you project through, you can see in the graph that expansion economics improve as you expand the system, bringing the toll from the current level about $1.20 per million British thermal units, MMBtu, energy units from Goldboro to Boston to approximately $.85 at a capacity of 2 billion cubic feet, Bcf. In fact, once we have done the expansion by adding compression from our current $1.20 toll, it will be approximately $1. You can determine that from the graph as well.

With all these opportunities before us, there could not be a lack of challenges. Just to summarize the challenges we have before us, we must maintain robust prices to encourage offshore exploration and onshore exploration. We need successful drilling programs. Without finding new supplies of gas, the production will not come on and this growth will not occur.

We need clarity and certainty going forward. We are working toward that with local government and also with our regulator, the National Energy Board, NEB, to encourage regulatory streamlining and also to encourage a competitive fiscal regime in which to do business.

We have to attract and train the right resources to locate here on the East Coast to participate in the industry, which is growing. Overall, we must do everything we can to sustain the basin competitiveness across North America.

Senator, you mentioned the opportunity before us in Northwest New Brunswick. I will provide an update on that and try to tell you where our company is with that. The NEB review is ongoing for those facilities. We had a Phase 1 of a Phase 2 process completed in October. Our position during that procedure was fairly clear, and if I could boil it down to one thing, it is that we have to maintain the competitive toll. It is no coincidence that I have been talking about that throughout the presentation, about our competitiveness in markets that we serve.

There is a supply requirement to support that project. That has to be put in place to provide the economics of how the facility is treated in terms of tolling, whether it is a postage stamp toll off of our system or, potentially, will be incrementally tolled. Once those issues are resolved, the gas supply still has yet to be secured to support the project.

Beyond that, we stand ready and willing to build the project. We are concerned about the competitiveness and the economics of how the cost of the facilities will be treated in relation to the revenues. We believe it will be built and that it is a matter of timing.

We take note that, given that Ontario and Quebec are already fully served, there seems to be time to consider this and treat it properly. We offer that in the interim. There is a connection to the markets that is proposed by the potential of Northwest facilities and Cartier Pipeline off of our pipeline. From our U.S. main line there is an existing pipeline, Portland Natural Gas Transmission System, which does have the capability to flow gas in that direction - and has on some occasions in the past.

To wrap things up, let me simply say that we feel that our company is doing a good job at serving the Canadian interest. We have shown a proven interest in connecting new markets and we are providing meaningful benefits to the Canadian market. We have a cost-effective transportation system, which promotes development of the local basin.

We have also market development tools known as the lateral policy that balance existing energy to shippers. Again, we are mindful always of competition.

There has been mention of potential offshore pipelines dealing with the offshore resources in Nova Scotia and Newfoundland. We maintain the position that access to those resources is essential to Maritime market growth and eastern Canadian supply diversity.

Basically, the offshore pipelines do not present the benefits we provide. If landfall is not secured for onshore production in a significant way, other spin-off industries in the value chain for natural gas will not take place, such as petrochemicals. The ability to connect to other markets in Canada will not exist.

With that, I am at your disposal for questions. I hope I have been concise but brief.

Senator Buchanan: I just want to make sure that Steve gives my regards to his father and his mother. I have known them both for a long time - since Steve was a little boy. Steve's father, you might be interested in knowing, was a very active executive at Devco for many years. He is still very active as an executive, but not in the coal industry. You never know, Steve - the coal industry is coming back.

Mr. Rankin: That is quite right. That will be in the private sector.

Senator Buchanan: You mentioned the benefits to Nova Scotia from Maritimes & Northeast Pipelines. Did you mention the gas plant in Goldboro and the fractionation plant in Point Tupper?

Mr. Rankin: I did not, simply because they are owned by the Sable Offshore Energy Project.

Senator Buchanan: Yes, but they are serviced by your pipeline.

Mr. Rankin: Yes, they are.

Senator Buchanan: Could you mention, for the committee's information, the number of jobs that would be involved in the spin-off from the pipeline onshore versus a spin-off from the one that may go offshore, as was discussed at the conference in Boston just last month? The discussion was about the line that may come from the Sable Island to Newfoundland and right down into the States, maybe with a landfall in the Shelburne area. Maybe you would mention the spin-off for Nova Scotia and the jobs at the two plants that are in existence now.

Mr. Rankin: Yes, senator. I will speak from memory here. This is not my area, but it was a $2 billion investment in Canada in the Sable Offshore Energy project. Two benefits in terms of opportunities for people to work in construction are: there were thousands of people involved in construction of the onshore gas plant and there were several people employed, not only in the Guysborough area but also the Point Tupper area, to operate the facility. There is employment at the head office, here in Halifax, as well.

I think it is a little more significant to mention the jobs in the Guysborough and the Point Tupper area because these are new jobs. They are being created. They are not replacements of others. This is new employment and it is significant employment in that people in the oil and gas sector are traditionally well benefited for working in the industry.

Senator Buchanan: Could I just make a comment, Mr. Chairman? You would certainly like to go there and have a look. I have toured both the Goldboro gas plant and the one in the Point Tupper, the fractionation plant. When you drive by, you believe you are in Alberta because the plants are brand new. On the horizon of little old Goldboro and Point Tupper, it is incredible to see the fractionation plant and gas plant, which are creating a lot of new employment, as Steve said, with really good paying jobs.

Mr. Rankin: Precisely. The infrastructure is world class and will be there for quite a long time. It is adding significant tax revenue to the region as well.

Senator Buchanan: I have one other question. The only place in Nova Scotia that is serviced at the present time is in the Dartmouth area. I guess the only customer there - it is its own customer since it has 12.50 per cent interest ownership of your line - is Emera. I understand from David Mann that, from time to time, all of that gas is not being burned. Emera can sell its share of the gas to the pipeline into the States whenever it wants, of course. Do you know what proportion is being used now and what is being sold?

Mr. Rankin: I could not quote a proportion, but I can offer some anecdotal evidence in that this has been a little more visible when gas was being burned. The ability to switch to Bunker C oil exists in that facility in all the units, as well as to burn natural gas in all the units.

During the summer months, when I think the staff was becoming accustomed to it, this was used a little less. Also, there was the opportunity, on a best efforts basis, for us to offer an alternative delivery to other markets on our system, specifically, to the U.S., where gas prices were some of the highest we have ever had. Our shippers are able to benefit from that as well. They can turn some revenue from that arbitrage, if you will, if they are into that side of the business. That was selected in the case of all of our shippers on some days. There are significant volumes being burned - meeting the full contract - on many days now that we are in the winter season.

Senator Buchanan: I have another comment, Mr. Chairman, if you do not mind. The people of Dartmouth would much prefer that Emera Power Corporation burn natural gas than oil because, over the years, they have suffered from soot being on their windshields all the time and with natural gas there is none. That was a big benefit for Dartmouth.

There is another issue that maybe you could comment on that members of the Committee would appreciate. In New Brunswick there is a local distributor that is distributing to many households or businesses. At the beginning there were only two consumers, but I think that is up now to about 100 or so. Is that correct?

Mr. Rankin: In fact, it is doing better. That number is now in the 300-range.

Senator Buchanan: Is the number of consumers in the 300-range?

Mr. Rankin: Yes. Of course, consumption is dominated by commercial customers right now because the financial ability exists in reserves for improving businesses. Also it is a good investment for them to make because they are projecting savings. For example, the Saint John Hospital is planning on a conversion very soon, if it has not done so this month, taking service from the Enbridge Gas New Brunswick system. I am told that the savings could be $100,000 on an annual basis.

The Chairman: Thank you.

Senator Buchanan: Maybe you should mention also that in Nova Scotia there is no distributor at the present time because Sempra is leaving. Perhaps you could mention that situation.

Mr. Rankin: That is correct. Sempra Atlantic Gas has elected to surrender its franchise. It just completed that process this week. There are other parties that are interested in distributing. We will know more about the requirements for doing so over the next few months as we hear about the revised energy strategy for Nova Scotia. I am told that applications are expected from a few companies to distribute gas in Nova Scotia in early 2002.

The Chairman: Before I ask Senator Adams to ask the next question, I will exercise a privilege of the chair, if there is one, to try to build onto Senator Buchanan's questioning. He was leading to the numbers of jobs and you were answering concerning all the jobs created in Nova Scotia. You have a proposal that indicated the next pipeline will be built directly under the ocean, all the way to Boston. Naturally, looping up and going down to Boston costs more money than crossing directly. You have a government that sort of said, "It will be the most economical route." The most economic route is to go nowhere near New Brunswick or Nova Scotia. It is to stay under the water. How do you respond to that? In order to serve Boston, do you have to serve Canada, at a certain cost?

Mr. Rankin: I do not know if I could answer the policy side of the question, but I can say that there does exist an economical advantage in capturing the next few stages of gas production, and that resides with us. There is an economic advantage to shippers to use our system, which is the fact that we have the footprint in place. We have done the stream crossings. We have done the initial work on doing the route. We have established relationships with landowners, communities and governments. We can do it more cost-effectively by adding compression to our system and then adding additional pipeline within the corridor.

We have been pretty public with the fact that we do not have a problem with two pipelines. We just want them both to be in our corridor.

The Chairman: Yes. When you sell to a consumer in New Brunswick, is that more a political issue than an economic one in comparison to selling to the consumer in Boston? In other words, it is a political issue. It is not an economic issue. Although we hope to make money from New Brunswick sales, that would not be as much as you would make in Boston. Am I correct in saying it is more of a political thing than economical in order to create jobs, on the surface, up here?

Mr. Rankin: There are definitely political impacts that start with the benefits of onshore construction and extend to the operating life of the pipeline.

In terms of contributions to the local economy in Nova Scotia and New Brunswick, we contribute approximately $50 million, annually, to the economy. If we expand the compressor units, as I described, that will grow to $60 million. Part of that is through property tax of our assets that are in Nova Scotia and New Brunswick. As far as I know, there is no way to tax an offshore pipeline. The benefits, even though influenced by politics, are also economic for the onshore.

Senator Buchanan: May I just add to that? The idea of a pipeline offshore all the way to the United States, to Massachusetts, is not new. That was discussed through the 1980s.

The Chairman: Are you for a new pipeline to Boston under the water?

Senator Buchanan: No.

The Chairman: That is all I wanted to know. Okay, you are not.

Senator Buchanan: We want it to come onshore.

The Chairman: I know all the reasons why.

Senator Buchanan: At the present time the one that goes underwater all the way is piped through.

The Chairman: Okay, that is all I wanted because there was quite a square dance going on here and I was trying to figure out what to do with it.

Senator Adams: Thanks, Mr. Rankin. I come from Rankin Inlet, so I like your name.

Mr. Rankin: That is right, Rankin.

Senator Adams: I am especially interested in the arrangements concerning the United States border. Is the cost of gas per cubic meter fixed before anything is started? Is there some kind of agreement for gas that is supplied to Boston? There are two American pipelines that are built there in addition to your pipeline. How are arrangements worked out, especially in the beginning for the labourers and stuff? People are commuting from the Maritimes. Is that resolved before anything in the pipeline starts? You had quite extensive negotiations. How does that work out?

In my area, between Yukon and Northwest Territories and Alaska, we are talking about another pipeline. How are things worked out, beginning from the time you built the pipeline down to Boston?

Mr. Rankin: I can speak, senator, to the Canadian side, though it would be very similar in the area in the State of Maine where it also was green field territory for pipelines. We committed our company to attempting to maximize local benefits and local employment, through the labour halls as it turned out, as we do all the contracts for construction.

The need for training was determined early because that type of construction - in particular, welding - was not available in the maritime provinces. From a business perspective, it made sense for our company to do that because if we spent the up-front money on training with the community colleges and with the welding institutes et cetera, our costs later, during construction, would be less than if we had to bring people from Alberta or from parts of the U.S. to weld the pipeline or to construct it. We also made great efforts to identify within the community transferable skills in terms of heavy machinery equipment and to use such skilled individuals on the job.

Those were some of the approaches we used. We are committed to continuing this approach.

For the compression expansion I mentioned, which we called the Phase 4 expansion that will take place in 2004, we are doing the design work with a joint venture. It has been awarded to a company called Atlantic Gas Engineers. It is a joint venture of two companies, CBCL, an engineering consulting firm based here in Halifax and Saint John, New Brunswick and a company based in Calgary, Cimarron Engineering.

In the same way that we recognized that the welding technology, called "downhand welding" did not exist in the Maritimes, we determined that the ability to design compressor stations, which are an evolving technology - the technology changes from within two years of the new technology coming on - requires allowing for the technology transfer to occur. We encouraged companies to do joint venturing and we awarded the contract to a joint venture.

The initial design for the first compressor station of the four to be built in Canada will be done in the Calgary office of Cimarron involving the local engineers. Compressor stations 2, 3 and 4 will be designed out of the Halifax and Saint John offices. We are very happy with this result of awarding our first contract related to that expansion product. That type of approach has worked well in the Maritimes for maximizing the local involvement of the workforce.

Those are a couple of suggestions I can offer, but I am also available to your staff to discuss it at greater length.

Senator Adams: The yellow lines on the map represent future pipelines. You do not yet have a pipeline to Montreal from your the line in the Maritimes for transmission of gas.

The blue line on the map represents your pipeline and continues from the border to Boston as a joint pipeline. On the American side, do you still make decisions concerning gas prices because your pipeline is connected? Do the Americans establish their own price for gas?

Mr. Rankin: There is a separate toll on that system off of our system. The red line on the map represents the component that we have within the pipeline industry as common carriers. We are essentially trucking companies. We form the delivery toll from source to market. That is how we influence price.

There is another commodity cost, which is a larger portion of the delivered cost of the energy, but, yes, there is a separate delivery toll on the PNGTS System.

Senator Adams: Concerning the future, there is exploration being carried out around the American border. What would happen if more gas were found around the Boston area?

Mr. Rankin: That is an interesting question. There is currently a moratorium off the Eastern seaboard on exploration, as there is offshore in Florida and California in the U.S. In Nova Scotia we have the Georges Bank moratorium because of traditional involvement in the fishery, which is a very strong economic driver for the region. For this reason the fishing moratorium has been put in place there. Potentially, with energy policy changes in the U.S., there could be exploration offshore on that part of the shelf as well.

Senator Adams: Even if new resources were found on the American side, would that still be part of the partnership with the pipeline and the gas et cetera?

Mr. Rankin: Would that fall under our partnership?

Senator Adams: Yes.

Mr. Rankin: We would likely compete for the business.

Senator Adams: Yes.

Mr. Rankin: Our business is to build pipelines and to offer a good service.

Senator Buchanan: Concerning the Georges Bank situation, by the way, the federal government passed, in the mid- to late 80s, legislation to prevent drilling, which is reviewable every five years.

Mr. Rankin: Yes.

Senator Cochrane: I wish to address demand in Canada. You were saying 25 per cent of this production is moving in Canada. Is this largely to satisfy residential demand or commercial sector demand? From what part of the market is this demand coming?

Mr. Rankin: That is an excellent question. It is industrial demand and it is from large industry. Part of the process of developing our system and laterals involved direct purchases from our pipeline by large industrial customers, or, for that matter, any customers who were interested, simply because at that time there were no distribution franchises awarded. We have had success in hooking up some local large industrial customers.

The companies I mentioned earlier are all large industrial companies and are involved in either generation of power or manufacturing, with the exception of the distributor that has come on board in the last two years in New Brunswick.

Senator Cochrane: There was a press release in June from your company in which you stated that the Maritimes continues to be the preferred route for moving offshore Eastern Canadian gas to market. The press release was announcing the expansion of the Maritimes pipeline system to accommodate gas from PanCanadian - the Panuke deal. What about the regulatory system that is in place? Are you having problems? Is it a big setback in regard to the construction of the pipeline?

Mr. Rankin: I would not say that it is a burden. Regulatory process, in general, in Canada is more intensive than in the U.S., which is a market we compete with. The regulator is put in place to protect public concerns with regard to our project. In that way it is an effective way to develop projects.

One thing we ask regulators to do is to keep an eye on the regulatory streamlining that is happening in other jurisdictions, in particular, the U.S., because energy companies in Canada compete with energy companies in the U.S. and Canadian pipelines compete with U.S. pipelines. If there is a timing advantage to developing or accessing a new market in the U.S. versus a Canadian market, then that surely cannot be the intent.

In the pipeline industry there will be a lot of scrutiny given, of course, to pipelines from the Northwest Territories or Alaska, but in terms of that potential project's link to U.S. markets, regulatory streamlining would be a very important one, as it is to our developments.

Senator Cochrane: What are some of the citizen's concerns that you have encountered so far?

Mr. Rankin: Common concerns start with our landowners. When you are constructing projects, they are unaware of what is involved in a linear infrastructure, like a pipeline, being constructed where it involves a trench and different machinery and an intense amount of people on the corridor for a very short period of time. That has been an education process that we have worked through and we have developed good relationships with landowners.

Beyond construction, there is always a high level of public expectation for this particular industry on the East Coast, which is evident within all of the Atlantic provinces, to deliver immediate benefits because that is what people recognize most strongly. This is a long-term business and pipelines are built for a minimum of 25 years, as are offshore platforms. The benefits can be significant, but they come over a long period of time.

Other concerns would relate to operating facilities, oil and gas, natural gas pipelines in the region involving routing decisions and involving public safety and environmental concerns.

Senator Cochrane: I have a question on your chart entitled "East Coast Gas Potential." Of course, being from Newfoundland, I am interested in this.

Mr. Rankin: Yes.

Senator Cochrane: When do you expect this to begin?

Mr. Rankin: Our experts are forecasting a 2010 time frame.

Senator Cochrane: Thank you.

The Chairman: May I ask a supplemental on that question? You put the pipeline in New Brunswick and Nova Scotia. Although 50 per cent of that area is probably sedimentary basin and there will be shallow, low reserves, they will be viable because of proximity to the pipeline. The pipeline goes in to serve the big reserve and then all the little ones tap in. Have you put a pencil to what kind of reserves, what kind of drilling would happen onshore? This is to supplement what Senator Cochrane is talking about.

Mr. Rankin: In terms of the existing corridor, yes, we have. That takes place the same way that other markets hooking up comes along. There are several companies involved in onshore exploration. There are a few of them that say having pipeline infrastructure is a benefit in that it will allow them to scratch that off their list of items required for an economic project.

If companies like Corridor Resources, which is based in Halifax, were not able to explore and exploit the natural gas that they might find, either associated with oil or occurring on its own, they would not be able to commercialize that product without having a delivery system in place. There are companies like Corridor Resources that have leased onshore and have potential to bring on gas reserves within that time frame, between now and 2010.

There is also exploration taking place on Prince Edward Island. A company named Meteor Creek Resources, I have been told, has found some gas. The company is not sure if the discovery is commercial. Feasibility work is being done on it now.

There is exploration happening in the corridor and that is encouraging. It is a benefit that happened because the infrastructure was in place.

Senator Cochrane: One more, what type of infrastructure would you have to put in here before you begin this project of 2010?

Mr. Rankin: As with most things in the pipeline business, it starts beyond pipeline. It starts with the producers. Offshore in Newfoundland, there are projects that have associated natural gas and some non-associated gas with the White Rose Project that has been proposed.

Currently, companies there are no longer flaring, which is good. They are injecting gas back into the reservoir to increase oil production. What that does is leaves the gas for future development as well.

To justify the large investment to build offshore pipelines that would connect to the pipeline grid, there has to be a very large amount of gas that people call the "critical mass." There has to be that critical mass of resource that can be brought in to justify the huge spending you have to do for the pipeline, once the critical mass is determined. You would involve the regulatory process in the estimation of the economics for putting such a pipeline in place. That is the most significant thing that has to happen for that reason. For new resources to come on would be to develop a larger cache of reserves that could justify investing that large sum of money.

Senator Cochrane: Do you have a time frame for that?

Mr. Rankin: As I mentioned, there are known reserves in the area. The Canada-Newfoundland Offshore Petroleum Board recently revised its estimate for natural gas and increased it by 1 TCF, trillium cubic feet, or 2 TCF, to about 9 TCF. That is not necessarily all within the same region of the Grand Banks, which seems to be a cluster of developments. Those developments seem to have 2 TCF to 3 TCF of natural gas. More of that must come on. As I mentioned, I have heard producers talking of the 2007 to 2010 time frame for planning for that natural gas, knowing they will have more detail on the reserves they have and, hopefully, will gain new reserves.

The Chairman: Before I go on, what bothers me a bit is I notice that 37.50 per cent is owned by Duke and Westcoast owns 37.50 per cent. Westcoast is in the process of being bought out by Duke. That gives you a pipeline with 75 per cent ownership by Duke, which has little or no interest, really, in New Brunswick or Nova Scotia, but it owns a good chunk of the distribution system of gas in Boston.

Would I just be a curmudgeon and a suspicious Canadian to say that if an oil field that has a market in the States is dominated by Americans, I am just not going to get the same break as I should, that it will be doing some real "spinmeistering" and even hiring local employees to try to convince people that it should get the pipeline? Am I being exceedingly suspicious?

Westerners try to separate the ownership of the pipeline from the ownership of the gas and oil. We figure that is an incestuous relationship that does nobody any good. This thing seems to be getting worse rather than better. Have you any comments on that?

Mr. Rankin: That is a fair question. It is a trend we observe in the industry, which has happened over the last few years, on ownership. I do not work for Duke Energy currently. There is an offer to purchase the Westcoast Energy shares. I work for Westcoast Energy. I can comment on what I have been told and that is Duke Energy was extremely interested in the opportunities that were before Westcoast Energy as a reason for making the offer to purchase the shares.

One of those opportunities at the top of the list is the Maritimes & Northeast Pipeline Project, in which Duke Energy currently has a share. Duke Energy is committed to maintaining a significant presence here on the East Coast and capturing some of the opportunities that will come along in the value chain.

The Chairman: Seventy-five per cent is certainly significant. Even Senator Eyton would argue 75 per cent is pretty close to absolute control.

Senator Eyton: If that happens in Toronto, it is okay.

The Chairman: I notice you show Exxon-Mobil holding 12.5 per cent. Exxon and Mobil, of course, are producers too. Maritimes & Northeast Pipeline has a huge producer-ownership - a huge American ownership and a huge market in Boston. What you are telling us of Canadian presence there? You are not telling us to sit back and trust that everything is going to be all right in the end.

Mr. Rankin: I would say, "Judge us on our history," which has been brief. As I said, 25 per cent of the gas is being delivered in the Maritime provinces. It is a business decision between end-user and supplier as to where that gets purchased. We are invested here. We are present. We are providing significant benefits to the local community and the local basin.

The Chairman: Am I reading into this - or my mind is gone - that you have a pipeline coming out of Montreal to the north boundary of New Brunswick called Cartier. My understanding is that Cartier is asking you to continue to deliver 25 per cent or50 per cent of the gas you find offshore up there, but you people want to deliver the new gas almost 100 per cent to Boston? Am I wrong? There is more money for Duke Energy, but is there more money for the taxpayers of Canada?

Mr. Rankin: Let me qualify that in a couple of ways. Cartier is proposed. Cartier pipeline is proposed, as are the Northwest facilities off of our system that would interconnect with them. We take that project very seriously. We are an infrastructure company and the way we make money is by building pipeline that is economic. We very much want to build that section of pipe and add that to our system. We are doing whatever we can to develop that project and to have it come to fruition.

When I say "Judge us on our history," it is simply that we are committed to developing the Canadian market, particularly in the Maritimes.

In terms of deciding where the actual commodity goes, we have very little involvement with that, as a pipeline company, because that has more to do with the negotiation between the supplier of the commodity and the end-user of the commodity. The end-users who are discussing that would be the proponents for the Cartier projects.

We are, as I mentioned, a common carrier. We are like a trucking company for the resource. If the facilities required, for instance, that we should go through Northwest New Brunswick to connect to a Cartier pipeline, we will do that, provided it is economic.

The Chairman: That is your problem. You say you are a trucking company, which is fine, you are. You say "provided it is economical." That is fine if you say that, but when we realize that your ownership is gas producer and big buyer in the Northeast Pacific, to trust completely that you are just going to be a trucker, running a trucking company in the Maritimes and up to Quebec, is a little hard. If the CPR told me that it was running a railroad for my benefit, I would be very suspicious.

Should not Canadians be thinking of divorcing ownership of the pipeline and the transportation feature entirely from marketing and production? We had to do that in trucking and in railroads and so on and so forth.

Mr. Rankin: In fact, that is very distinct. We have managing partners of our pipeline who take care of the day-to-day operation of the pipeline and the developing of it. Our other two partners are Emera, which, as you mentioned, is the owner of Nova Scotia Power, and an end-user and a company that has very much invested in the province of Nova Scotia, and Exxon-Mobil, which has very much invested in the province of Nova Scotia as well.

All I can offer in this respect is that we are managed by pipeline companies. The commitment is there. We have done significant work in developing that particular project since 1999 and we are continuing to do the work. We are ready and willing to build that project if the conditions are proper.

The Chairman: Thank you very much for dropping around. I do not take it personally at all when we have to look into the mouths of dragons occasionally. When the dragon says he is not interested in eating us and is only interested in helping us, sometimes we get kind of jumpy. So we just want to say that.

We will now hear from the Ecology Action Centre.

Mr. Rankin, you certainly are welcome to stay behind to listen to this group.

Please proceed, Mr. Butler.

Mr. Mark Butler, Marine Coordinator and Internal Director, Ecology Action Centre: I will introduce the centre and then Tony will give a short presentation on his work, followed by Stephanie and Susanna and myself. We work in different areas. Probably you might want to follow Tony's presentation with a few questions and then Stephanie's and Susanna's with a few questions and then mine with a few questions.

The Chairman: Are you all with Ecology Action Centre?

Mr. Butler: Yes.

The Chairman: Have you different responsibilities?

Mr. Butler: Yes. There is a lot to do.

We do not have a clear idea of what a Senate Committee does and whether you will produce a report from this meeting, or if there are any particular areas that you would like us to focus on.

The Chairman: We are almost as broad as is possible to be and still be in the energy environment field. We have had meetings in Vancouver, Edmonton, Calgary, Toronto, and Montreal. Our meetings are built around: What are our present sources of energy? Which are dirty ones? Which are clean ones? What do you foresee in the future in the energy field? Does enough clean energy exist to replace dirty energy or dirty energy that can be made clean? Which areas is the energy coming from? This concerns geographic areas as well as geological areas. We are interested, ultimately, in the environment and how it is affected by all these other things and what your feeling is on what you think is happening, what you think might happen if we do not change and what you would like changed that we are not addressing. That gives you a broad range.

Mr. Butler: Will you be producing a report from your cross-country examination?

The Chairman: We will be producing a report, but I have a hunch it will not be until next summer because we are getting so much diverse advice on which direction to go. Did you put something on my desk about protected areas underwater and at home?

Mr. Butler: Actually, our protected areas wilderness person elected in the end not to come because he examined your mandate and felt that because he was dealing with terrestrial wilderness in Nova Scotia, that is more of a provincial responsibility. Tony's focus is actually on coastal areas and protection of sensitive habitat in coastal areas. He will talk a little about that. I hope that he will not feel that he is out of place because he does not mention energy.

The Chairman: Our committee gets referred to, for instance, on rules for marine parks, so they end up under our jurisdiction. It is not our jurisdiction to run them but to consider them and comment on them.

Ms Susanna Fuller, Co-Chair, Board of Directors, Ecology Action Centre: I am on the Ecology Action Centre's Board of Directors and a Ph.D. student of biology at Dalhousie University. Although I am not currently an employee, I have worked on various issues at the centre including marine and transportation.

Ms Stephanie Sodero, TRAX Coordinator and Active and Safe Routes to School Coordinator, Ecology Action Centre: I have recently graduated from the faculty of environmental studies at Dalhousie University, and I am an employee at the Ecology Action Centre. I work on the TRAX project, which stands for Transportation Halifax. The project looks at sustainable transportation.

Mr. Tony Bowron, Salt Marsh Restoration Coordinator and Chair, Coastal Issues Committee, Ecology Action Centre: I am a graduate student at Dalhousie University in the school for resource and environmental studies. I have three roles at the Ecology Action Centre. I am the project coordinator for the Salt Marsh Restoration Project, which the Ecology Action Centre has been working on for the last two years, I am the Chair for the newly formed Coastal Issues Committee, and I am a member of the Board of Directors.

Mr. Butler: I am the Marine Coordinator of the centre and I have been there for five years. I work on a range of issues from fisheries to offshore oil and gas to invasive species. My background includes a graduate degree in environmental studies from Dalhousie University. I have some professional background in fisheries as I have worked as a fisheries consultant and as a deckhand on commercial fishing vessels.

The EAC has been around for 30 years. We have approximately 650 members. We have 120 active volunteers. Volunteers do much of the work. For example, Susanna is a volunteer.

The goal of the EAC encompasses making a better society, both in ecology and in economic terms. We are interested in the economic side of the equation, about how people make a sustainable living, and we look for win-win situations. Too often environmental issues are portrayed as, "save the environment - lose economic prosperity." It does not have to be that way.

We do research in the areas of natural science and social science. Susanna started at the Ecology Action Centre doing research on the impact of scallop dragging on the ocean floor in the Bay of Fundy. That was a DFO-funded internship. We are also involved in education. We go into the schools and we do community demonstration projects. Tony is involved in a hands-on restoration project in the Bay of Fundy. Another part of our role is advocacy.

The way we operate is that we have a number of committees that are peopled largely by volunteers, sometimes with a paid staff member, sometimes not. We have a wilderness committee, which is not represented here today. We have a marine committee, which I am the paid coordinator of, and we have a transportation committee, which Susanna is the coordinator of. The TRAX project is part of this committee. We also have an urban issues committee.

Energy was a big issue for the centre in the 70s and 80s. That focus diminished during the 90s, but it is now coming back with a vengeance. We think we have some answers around those issues.

Mr. Bowron: The Salt Marsh Restoration Project is focussed in the Bay of Fundy, which is part of the Gulf of Maine. I receive funding from the North America Fund for Environmental Cooperation, which has come through the Ecology Action Centre's involvement with the Global Program of Action Coalition, GPAC, and their program for the Gulf of Maine. This project has attracted provincial, regional and international interest and support through NAFEC and GPAC. The Gulf of Maine Council, with their recent five-year strategic plan for the Bay of Fundy, has identified that one of the top two priorities is the loss of coastal habitats in the Bay of Fundy and the Gulf of Maine region. The salt marshes, the need for the conservation of existing habitats and the restoration of previously altered and degraded habitats are at the top of this list.

Salt marshes are my main focus, but there is overlap between the work that I do on the salt marsh restoration project and the activities of the coastal issues committee of which I am the Chair. The salt marshes are just one of a number of habitats in a coastal zone area. When I am speak of a coastal zone area, I am referring to not only to the Bay of Fundy, where my project is focussed, but also the entire coastal zone area. This includes all three coasts of Nova Scotia, New Brunswick and the coastal area of Prince Edward Island.

Over the last 300-350 years, starting with the arrival of European settlers in Atlantic Canada, there has been the conversion of salt marshes in coastal areas into agricultural land. This history of conversion, degradation and loss, which at its time certainly had significant social and economic purposes, is representative of what has been happening to all our coastal habitats, be it a beach or a rocky shore. Our entire coastal zone is at risk and is being threatened both from historical activities, current activities, and future activities. I am including future activities because that ties in with the mining and energy.

Earlier today I was looking over some news articles that have come out recently about the proposed titanium mining in the Shubenacadie River. The Shubenacadie River is one of Nova Scotia's largest and last relatively pristine or unimpaired river system in the Bay of Fundy and there is a multi-million dollar mining operation proposed at this site. There is the connection between salt marshes and coastal habitats, and mining and energy.

Kermit, our wilderness coordinator, did not come today because he did not see the relevance. I was also having difficulty seeing why should I come today and speak. I wondered where the connection is. I was going through my notes that I have collected in the last few years, and looking at some issues that have been coming up around Nova Scotia with respect to coastal habitats and parks and marine protected areas where it was mentioned already.

I found some information that the Department of Fisheries and Oceans, within the last several years, identified an area in New Brunswick, the Musquash area, as an area of interest under the marine protected areas program. I mention this to illustrate the recognition on provincial, regional and federal or national level. There is recognition of the importance of these habitats and activities are beginning to be taken to protect these areas. We need to go farther.

There is a federal wetlands conservation policy in place and it identifies a number of priorities around coastal habitats and it calls for a "no net loss." We are nowhere near that. At the federal, provincial and municipal levels, there needs to be more integration of policies in the legislature and activities by these various levels for the conservation and restoration of these coastal habitats.

There is a proposal for a project that the coastal issues committee has recently submitted in partnership with Environment Canada through the voluntary sector initiative for a coastal land conservation project. There is a need for greater integration of policies, activities, and resources at all levels for coastal zone management and coastal zone planning. This is a proposal that has been submitted and is at the federal level for the final decision. This project is to coordinate a coastal land conservation project for the Maritime regions including all three provinces.

It draws upon a number of rationale and reasons. There are threats to the coastal zone areas. Approximately 90 per cent of the species at risk in the Maritimes are in fresh water and marine coastal zone areas. In other words, the link between Federal Conservation Policy and local planning is weak. There are also jurisdictional issues as the coastal area falls within three levels of government jurisdiction. You have local communities that are working at their level to conserve and restore coastal areas, but they are running into jurisdictional issues with the provincial and federal levels. This project is proposing to integrate and to partnership with groups at municipal, provincial and federal levels in Nova Scotia, Prince Edward Island and New Brunswick. This is to work towards integrating the activities, resources and efforts of all three levels to protect and work to restore these coastal habitats and to improve the management and planning in the coastal zone areas.

Mr. Butler: In Atlantic Canada we have some incredibly beautiful coastline, but it is not an endless commodity. There is only a limited supply of coastline and we are now starting to lose it. We are seeing how valuable it is because Americans for a long time have been buying coastal properties in Atlantic Canada but now we see Europeans, in particular Germans, coming over because it is not far from Europe. It is a four-hour flight and they get in a rented car and two hours later they are at their coastal summer home, so it is only a six-hour drive, which is probably closer than the Mediterranean is to Germany. What we are seeing is the rapid increase in the price of coastal lands but also much more coastal development. We are starting to lose the overall environmental integrity of coastlines. It is death by a thousand cuts through filling in small parts of salt marsh.

Tony has recently been involved in a case where a piece of salt marsh near Pictou was filled in. There was legislation protecting that piece of salt marsh, yet it was filled in and the government agencies responsible for protecting it were not active in stopping that from happening. That is happening all over the province and we are losing this valuable coastland. It is going to be death by a thousand cuts and what we want to do is to draw attention to the fact that the coastline and the coastal zone needs more protection.

Mr. Bowron: Are there any questions before we move to Stephanie?

The Chairman: What do you mean by the coastline being done away with? You mentioned salt marshes and I can see that they are drained and converted to wharfs and residences. What other things can happen to the coastline?

Mr. Bowron: I use salt marshes as an example of a coastal habitat because that is what I am working on. A relatively unique situation has occurred in Atlantic Canada with upwards of 85 per cent of salt marsh habitat has been converted into agricultural land. Dikes, dams, and causeways have been built across the outer edges of salt marshes and across tidal rivers to restrict the passage of water or the flooding of these areas for agricultural purposes.

Other coastal habitats include beaches and shoreline. With coastal areas you have a nice gorgeous little beach and someone says, "Hey, this is a nice place to build a cottage." They build their cottage there, but shorelines are not stable. They fluctuate, erode, and expand through deposition. They say, "Oh, my property is starting to erode," and you see people dumping large boulders, putting concrete walls across the edges of their property and converting what was maybe a nice little beach into a stone wall. That is one of the other threats to the coastal area and coastal zone.

It depends what you want to use for a definition. The entire watershed could be included in the definition of coastal zone. I am looking at the coastal zone in terms of the area where the land meets the sea and activities that are happening immediately on either side of that line and the impact of one on the other. If someone builds their house on the terrestrial side, it has an impact on the local marine side and activities that are happening on the salt marsh, on the beach or on the coastal island. In turn, it can have an impact on the land.

To this point in land planning and activities there has been little consideration of the impact that one will have on the other. Municipal planners, when they are producing their land strategies or their land planning strategies for their local community, plan up to the water's edge and where the map that they have sitting on their desk shows the water line is where they stop. There is no consideration of what is going on below that blue line.

In the reverse, when DFO or DNR is allowing for a mining company to mine in the Shubenacadie River, there is very little consideration of the impact that potentially is going to have on the land and on the adjacent or the shoreline habitats.

Senator Sibbeston: What are the other problems? I am not knowledgeable about what the adverse effect of the salt marshes being converted into agricultural land.

Mr. Bowron: The conversion of coastal habitats, salt marshes, and tidal rivers into agricultural land is not, in and of itself, a bad practice. When the Acadians came over 350 years ago, it was much easier and more economical for them to dike the coastal land because it is nice and flat for agricultural purposes rather than go inland and have to clear forested land. In its historical context, there was absolutely nothing wrong with that activity. However, when you look at it on a province-wide scale and see that activity combined with urban and industrial development on coastal salt marshes and the building of roadways and power lines across these coastal habitats, it has resulted in the loss of over 85 per cent of this habitat. Salt marshes are a very important habitat. As the accumulative and large-scale impacts become apparent, we realize that what we have been doing might not have been in the best interests and that we need to look at the opportunities.

Senator Sibbeston: Is there a loss of habitat for wildlife?

Mr. Bowron: All of the commercial fish species that are sought in the Bay of Fundy rely on the salt marsh habitats for either their food or their life cycle. The salt marshes are a major source of food production for marine organisms and habitat.

Senator Adams: Are you familiar with Bill C-5?

Mr. Bowron: No, I am not aware of C-5 coming in. If we are talking about endangered species with respect to Atlantic salmon, I think there is a potential there.

Senator Adams: I do not see anything there about any fish. They are mostly talking about caribou, whales, polar bears and stuff like that. Bill C-15 has to do with animals as well. It has not passed yet. I am somewhat familiar with it.

We have been through this before with a different chairman. Senator Buchanan was with us at that time and we were mostly concerned with parks and forests. We found out in Nova Scotia, the government owns 30 per cent of the forest and parkland. Are you concerned with the animals? With corporation-owned forests and mining areas, how does your organization work with that? Do you deal primarily with the government or do you also deal with the private sector?

Mr. Bowron: The land ownership in Nova Scotia makes things more complicated when trying to protect and restore habitats. On the other hand, it can also make it easier because historically owned properties are large properties and in many cases you are dealing with a single landowner. If you can get the buy-in of that landowner, then you are going ahead.

There is an act in the Nova Scotia Legislature right now that will make it easier for private landowners to engage in conservation on their property. Making it easier for conservation easements to be established. I do not know if that directly answers your question, but the issue of private versus provincial owned land does make conservation work interesting in Nova Scotia.

Senator Adams: We passed a bill addressing the environmental concern of the Inuit across Canada. Any future mining and oil exploration will require an environmental assessment before construction starts. I have a small construction company up in the Nunavut Territory and they were cleaning up the DEW Line to the community. We wanted to build a couple of kilometres of new road and clean out the side, but we cannot even build the road because a couple of creeks cross through there and you have to have an environmental assessment before you can put the road in. Are you concerned about the government restricting anything in the area that might be developed across Canada?

Mr. Butler: Are you asking us if we are concerned that the government is being too restrictive?

Senator Adams: Yes.

Mr. Butler: Coastal line salt marshes are extremely important for fisheries, for scallops, lobsters, shad and sturgeon. They are nurseries or feeding grounds for these species. If you had a construction company here in Nova Scotia, you could probably fill in a couple of hectares of salt marsh, and if there were not a citizen around who cared, then there would be little to stop you. We are saying that we need better protection of coastal habitat. It is a real concern when it comes to the Endangered Species Act. People need habitat and so do animals. If we take away their habitat, then there will be no animals.

In the magazine, there is an article about some of the protected area work we are doing and a proposal for a large protected area to the east of Halifax, which has a lot of support. I do not know if that was an answer that you were looking for.

Senator Adams: Are you concerned that right now, anywhere between B.C, and the Atlantic, there is a lot of farming going on? Is the fish farming situation going to get worse than it is now? I am on a fishery committee and that is why I am asking. We have a lot of people more concerned about doing the farming. There is some concern that it might be a too soon.

We do not know that aquaculture is going to work, especially in the fisheries. You start to get into environmental damage. That is why we are concerned and we do not have all the answers. I do not know if this is the type of work you do. Are you only concerned with swamp loss and related issues, or do you have something to do with the ocean?

Mr. Butler: Are you asking if we have concerns with the ocean?

Ms Fuller: Aquaculture here has been mostly in the Bay of Fundy. There has been some local resistance, not far from Halifax, in terms of putting new aquaculture in. There is public awareness of the problems with aquaculture. They are twofold. One problem is that pollution and changing of bent that occur to the bottom of the sea habitat underneath the fins. That depends on whether it is shellfish or finned fish.

The second problem, which we have experienced here, and which I think is one of the big objections to aquaculture in B.C., is the introduction of new species that would not be in those habitats naturally; therefore there is a lot of escapement. This is very hard to control. We found in Cape Breton in some of the rivers that 100,000 rainbow trout escaped. In the initial environmental assessment, they determined that the rainbow trout could not breed in those waters, so it was not viable. Those rainbow trout are now breeding in salmon rivers and preying on small salmon. Aquaculture, like anything that we do, should be done with moderation and with good environmental assessments, and really take into account a holistic view of the environment, what the effect is and how much we can control those species.

I believe that the Royal Society of Canada had a report last year on invasive species and on genetically modified organisms, GMO. In that report there was a big section on the dangers of fish. The recommendation was to have as little escapement as possible. I do not know if that answers your question.

In anything we do, we have to ask the right questions and take a holistic view of what is going on. Much of this is pushed forward for economic reasons, but if we take a long-term view of the economic reasons, we might not go so fast.

Senator Adams: Yes, I understand. In the meantime, we will deal with DFO, Coast Guard and the environment department.

Senator Buchanan: Ms Fuller, has the Ecology Action Centre taken any interest in, taken any assessment or done any study in the Northwest Cove problem? The Northwest Cove association and people like Patricia MacCulloch are opposing the aquaculture project in Northwest Cove. Is the Ecology Action Centre involved?

Ms Fuller: We are not involved at this point. We know about it and have had discussions with people involved. Our Marine Issues Committee is focussed right now on the effects on fishing. Most of the people working on this are volunteers. Mark is the only paid staff on our Marine Issues Committee, he works about 20 hours a day. This is the problem with volunteer environmental related work.

We have not actually worked with them. We have not addressed the aquaculture issue to a great extent in Nova Scotia. That does not mean we will not, but at this point our projects that have been funded have not been aquaculture based.

Senator Buchanan: At this point, you are not involved in the Northwest Cove; is that correct?

Ms Fuller: No, not in terms of getting active about it.

Mr. Butler: The Conservation Council in New Brunswick has done a lot of work around aquaculture and has put out some good reports. We tend to rely on them for our analysis, but we are concerned about it. Finned fish aquaculture growing of salmon and finned fish brings with it the most environmental problems, so we have a lot of concern around it. We are supportive of the stand taken by citizens in that area.

I would like to get at some of the issues about transportation, and oil and gas.

Senator Cochrane: Mr. Bowron, you referred to the salt marsh in Pictou being filled in and the government departments did nothing about it. Are the departments accountable to anyone? If so, who would it be?

Mr. Bowron: I have a newspaper article from October that was done on this issue. It is just less than 2 hectares. This means that the proposed activity is not applicable for a full environmental impact assessment, but it should have gone through a less rigorous process under the Environment Assessment Act, which is the wetlands directive under the Department of Environment. Department of Natural Resources has become involved with this case with respect to the adjacent protected beach and they have requested the landowner to do a bit of work on the area, but DFO and Department of Environment have both said that the area is not significant and washed their hands of it. I have viewed the area and am familiar with their legislation, and I think they should have been more forceful in this case.

The departments should be accountable to the public. There are a number of local community members that are outraged over this and the lack of action taken by the various government departments. The government departments, other than the Department of Natural Resources, have almost refused to comment or to respond beyond saying, "We are not doing anything." That was their response to the community to whom they should be accountable.

Senator Cochrane: Should there be more consultation?

Mr. Bowron: On the small scale there is very little consultation. There has been public consultation and public information meetings taking place and PR stuff regarding the proposed mining in the Shubenacadie River. If it is not multimillion dollar, large-scale project, it happens behind closed doors. In the case of this marsh in Pictou County, a local resident went out for a walk with her dog one morning and came around the corner to discover that the marsh was being filled in. The dump trucks were there. That was the first that she knew that anything was taking place. A series of phone calls, meetings and letters resulted.

That is representative of what happens pretty much around the province. This is the second instance of this type where local community members went out for a walk one morning to discover that the local marsh was being filled in. There were no advanced warnings or consultations.

Senator Eyton: It is hard to deny that the work that you are doing is a good thing. At the same time, you try to take a whole view of what you are doing and you would support responsible and intelligent development. You have given examples of people who are going ahead on their own and perhaps doing the wrong thing. How would you be part of the process that established limits to ensure that it was responsible development? Do you have examples of that? Are there people who come to you as a matter of course, or must you assert yourself? How does that process of establishing limits and defining responsibility happen where you are involved?

Mr. Bowron: I have been working with the Department of Transportation for the past year developing a dialogue. At the provincial meeting of their area managers, I presented on the issue of the impact of highway construction in the coastal zone, and the impact this has had on coastal habitats and tidal rivers. That is an example where I, along with the people that I am working with, have identified an issue and we are taking it the next step.

I am consulting with the Department of Transportation to make them aware of the impact and the opportunity for them to take action to mitigate the damages that their historical road construction have done. I also encourage them to be proactive, so that in future activities in the coastal zone and province wide, that they can do to make sure that the work that they do does not damage habitat. I have placed myself at their call that if they are in a situation, for example, where they are replacing a culvert and want to know what they can do to improve tidal flow and to improve the habitat upstream and downstream? I will go with them to review the site and make recommendations. That is an example that I personally am involved with trying to make changes and seeing that the past mistakes are corrected and future ones are not made.

This is a relatively young project. The Ecology Action Centre has only been working on this for two years, and the overall issue of salt marsh habitat conservation and restoration in Atlantic Canada is not much older than that. The groups that are involved in this kind of work are still getting established and we are still trying to integrate ourselves into the larger picture.

Senator Eyton: Does that include working with the private sector in some of the developments they are involved in?

Mr. Bowron: Long term I would like to see that take place, but at the moment it has not. I should back up a step. I am involved with the GPAC, the Global Program of Action Coalition, project for the Gulf of Maine and that is a bi-national Canada-U.S. multi-stakeholder group that has municipalities and the private sector at the table. One of the major working groups and success stories of that group is coastal habitat conservation and restoration. In that instance, the private sector is at the table listening to us talk about the need for conservation and restoration of coastal habitats.

Ms Sodero: My co-worker Alex and I work on a project for sustainable transportation in Halifax. By sustainable transportation I mean taking the bus, biking, carpooling and anything that avoids people driving in their car by themselves, which we refer to as a single-occupancy vehicle.

I am sure you are all familiar with the Kyoto Protocol to reduce greenhouse gas emissions by 6 per cent below 1990 levels by 2008-2012. Each day, Alex and I try to enact this on the ground. We try to change people's habits and reduce greenhouse gas emissions. We do this mainly for the environmental component. In Nova Scotia, greenhouse gas emissions from transportation accounts for 27 per cent of the greenhouse gas emissions. That figure is similar for the rest of Canada. This is the largest single sector contribution to greenhouse gases.

Only 33 per cent of Nova Scotian youth qualify as physically fit. If you assume that they are learning their physical fitness habits from their parents, those numbers are probably very similar for adults in Nova Scotia.

Two hundred million is spent annually in Nova Scotia on health care costs related to excessive car use. Sixty to 70 per cent of all car trips made are less than three kilometres. This is a distance that can be walked, biked, or bused very easily.

The TRAX project has two components. They are the trip reduction project, and public education and outreach. In the trip reduction project we go into workplaces such as Health Canada. We survey the employees about their current commuting habits; what time they leave their home, what time they want to be home in the evening and what incentives would it take to encourage them to try the bus. Then we work with the management at that workplace and we try to put these incentives in place. This could mean free car pool parking space, selling public transit passes at the worksite or providing bicycle parking. We will also do a follow-up survey to see if we have done anything.

We started off with a very ambitious target of reaching five places during the duration of our project. Despite our energy, we are not doing that. We have reached three so far. There is a project in Toronto that is doing similar work. They have four staff members working with two work places full time. It takes a lot of prodding, reminders, and a warm body in the workplace to remind them to do this.

Part of our education and outreach is being on committees. I will briefly summarize our work on three different committees. We are on the Bikeways Task Force, which is a Halifax group trying to increase cycling. They have two subcommittees, policy and network, and their latest work is an online survey asking residents of Halifax questions such as where they would like to see bike paths.

We are on the Sharing-the-Roads Committee with Service Nova Scotia. We have three main goals in this committee to change the driver's education handbook. Currently there are only 90 words dedicated to cycling in the handbook. We would like to make that much more comprehensive. We are going to publish two pamphlets with them, one for cyclists and one for car drivers on how to share the road. We are also going to distribute a package to teachers on how to encourage cycling safety among elementary students.

We are also on the UPASS Committee, which stands for University or Universal Bus Pass. Students pay a fee of $80 to $100 for the academic year and they can then use their student card as a bus pass. Currently, a monthly bus pass in Halifax for students costs $51 for a term, so there are great savings to be had as well as increases the ridership for the public transit service authority.

Currently our staff includes; myself, I am part-time; Alex, my co-worker is full-time; and two days ago we hired somebody to do a month of work for us. In addition, we are interviewing a jointly funded position, between the TRAX Project and the City, for a transportation demand management coordinator, which is fancy language for somebody who encourages cycling in Halifax. There is a lot of momentum and there is so much for us to do. The 20-hour day was already mentioned. We are trying to encourage sustainable transportation and this gets us half way there, but you also have to discourage car use. I would like to see a national cycling strategy. Peggy Cameron, who works at Clean Nova Scotia, has created a postcard to Prime Minister Chretien asking for a national cycling strategy, which would put money towards cycling in Canada.

I would also like to see a percentage of the national transportation budget allocated to sustainable transportation. Those measures would encourage sustainable transportation.

In order to discourage driving, I would like to see a tax on car advertising. Does anyone know how much is spent worldwide on advertising for cars? Forty billion is spent worldwide annually on car advertising and, according to my calculations, about three dollars is spent on cycling advertising. I would like to see the revenue from that tax put into promoting sustainable transportation.

I would also like to see a tax on larger vehicles. When I walk downtown in Halifax and I see somebody in an SUV, it gets me going. I caught myself yelling at one yesterday. Some people need a car, but do you need a car that large? There have been suggestions for a tax on the registration of vehicles that are that large.

Ms Fuller: I am the Chair on the Transportation Issues Committee. Can we convert dirty energy to clean energy? How does this effect the environment? We need to look at how to reduce our energy consumption. In the oil crisis in the 70s there was a lot of federal encouragement to reduce our energy use at home. We have R2000 houses and we can get halogen light bulbs. Nova Scotia Power often has in their newsletter how to reduce your consumption and how to reduce your electricity bill. People have taken this challenge up, especially with higher heating costs. People are much more aware of their houses because the government did advertise solutions, and there was also direct economic benefit.

This is not happening now, especially for transportation, and we are going to keep moving further and further away. We need to look at how to reduce our energy consumption in the transportation sector.

Through the Kyoto Protocol, as Stephanie was saying, we have commitments. Some of those can be met by emissions training, but one of the things that you have ask is how the environment is affected by energy use in Canada and what will happen if we do not change. We know what will happen. It is getting warmer. That is generally accepted. That climate change is happening and as one of the industrial countries that are using the most energy per capita, it is our responsibility globally to reduce our energy consumption. We need to put some emphasis on it through advertisements, funding, or by putting part of the transportation budget into sustainable transportation. Otherwise, there is no incentive for people. The only incentive was when gas prices went up and then there were huge protests. In the 70s people said, "Oh, gas prices are going up, there is an energy crisis. We will use less." We do not see that now.

I am not sure where this mentality comes from; it is very different from the 70s. We are in a worse situation, and I do not see the governments encouraging people not to use so much energy, especially when it comes to transportation. There could be more emphasis on public transit. That is happening in Ottawa. Ottawa is a great city for getting around without a car.

I was just recently in Miami, which is the worse city I have visited for getting around without a car, and the change is coming there. It has to come from bottom up and top down. People will respond if they see a direct economic benefit to themselves.

Mr. Butler: I understand that you have heard from the Canada-Nova Scotia Petroleum Board and Maritimes & Northeast Pipeline. This ties into what Stephanie and Susanne have said. It seems that we are not worried about security of energy, and the answer seems to be to secure access to supplies or secure new reserves of fossil fuels. Another way to assure security is to use less or to switch to sources of energy that we do not rely on the Middle East or Venezuela to provide. We have to start moving to solar, wind, et cetera. Fossil fuels in the mid- to long-term is a dying industry. It is the coal industry of tomorrow. We know we cannot rely on fossil fuels to meet our energy needs over the long term. We should think very carefully here in Atlantic Canada before we become too dependent on the fossil fuel expansion that is happening now.

The technologies associated with those industries are not going to be technologies that we are going to be able to sell anywhere else. The technologies that we will be buying in 20 to 30 years will have been developed in Europe or in the U.S. I understand you heard from Ballard Power Systems about fuel cells. That is the kind of direction we should be moving in over the long term and those are the kinds of industries that are the industries of tomorrow. It is not making pipelines for fossil fuels.

I am the coordinator of our Marine Issues Committee. We look at fishing, oil offshore, gas and invasive species. We have gone forward with a court case around the destruction of fish habitat, which is explained in our magazine. We are not anti-fishing. I have fished and I like to eat fish. We only want to see fishing done right. If it was done right, then the ocean would produce a lot of fish and perhaps we would not have to turn to aquaculture so much. The ocean is the best fish farm there is, if we look after it in the proper way.

When we talk about our work with invasive species, we are talking about the zebra mussels of the ocean. We have not had a scourge like the zebra mussel, but there have been other species that have come from Japan and from Europe that are changing the ecology of our coastal zone. One is a type of seaweed and another one is a tunicate. There is a real risk to coastal ecosystems. I believe the Union of Concerned Scientists identified invasive species as one of the top environmental concerns. It is something that does not get enough attention.

Our Marine Issues Committee got involved in oil and gas when the Exxon-Shell project off Sable Island, the Tier I phase, was approved as a result of the hearings were released in 1997. This was a big green light to that project and to the industry. We were also involved in the review of the Georges Bank Moratorium. It was a good decision. There was a moratorium placed on oil and gas in one of the most productive fishing grounds in the world.

The Chairman: Senator Buchanan does not get many accolades. Can you repeat what kind of a decision that was?

Mr. Butler: A good one. And the process for evaluating that decision was a good process because it was re-evaluated beginning in 1997 as the moratorium was destined to lift in the year 2000. There was a panel set up to review that decision and the panel produced a very good report. If you would like to read a good report on the impacts of oil and gas on the ocean, then turn to this report that was put out by the panel that was set up to review the Georges Bank Moratorium. I neglected to bring it with me, but their conclusion was that the risks from oil and gas development outweighed the benefits. Part of the reason was the importance of the fishery on Georges Bank. That area of the bank is now closed to oil and gas until 2012.

The Chairman: Who put out that report?

Mr. Butler: There was a Georges Bank Review Panel.

The Chairman: Norse, from Norway?

Mr. Butler: No, it was Georges Bank.

The Chairman: I have seen that one. I thought we had something new.

Mr. Butler: Georges Bank is down here. It is shared with the Canadian/U.S. border here. The U.S. extended their moratorium in 1999 until, I believe, 2012. Maine to Florida is under moratorium from the U.S., and also up the west coast of the U.S. We literally opened all of our land to oil and gas. This moratorium was put in place in 1990 and in 2000, and it was extended again to 2012. The moratorium area covers this area of the map. It is one of the most productive fishing grounds in the world.

Senator Buchanan: Mr. Chairman, I have a copy of that and I will get it for you.

Mr. Butler: The offshore licensing process is deeply flawed. At one point we were on an advisory committee for Canada-Nova Scotia Offshore Petroleum Board, but we resigned from that committee. I provided you with our letter of resignation. It was not an easy decision, but we resigned because we were upset over the licensing process. We thought it was so deeply flawed that by remaining on that committee, we were sanctioning a process that must be changed and reformed. We have concerns about our growing reliance on fossil fuels and combustion of fossil fuels. We have those concerns, but we resigned over the licensing process. People in the oil and gas industry and the fishing industry also share these concerns. I believe there is something called the Atlantic Canada Petroleum Institute, which is set up at Dalhousie University and is funded by ACOA and the industry. They are looking at the licensing process because they realize it does need reform. It is a similar process in Newfoundland, in terms of how licenses are issued.

Our biggest concern about the licensing process is the way it works. Areas are nominated by the oil and gas industry to the Petroleum Board in confidence. The first that the public, the fishing industry, the whale watching industry or the coastal residents hear about it is when the area is put up for bid. It is conceivable that the geology is not right. For example, the first that the tourism or the fishermen in Peggy's Cove would hear about that area going up for license for bid for oil and gas would be when it came out in the newspaper. People living in that area would not be very happy with that process.

Those licenses can extend right up to the high tide mark. When we hear the word "offshore" and when we think of the word "offshore" in the fishing industry, we usually think of 50 or a 100 miles, but offshore means below the high tide mark. There is no public consultation and no real environmental screening prior to those licenses being put up. Is it a sensitive area ecologically? Should it be excluded from oil and gas? Is this just the position of a flaky, radical environmental group?

We took a look at licensing systems elsewhere. In Norway, all of their coastal or offshore areas are closed until they are opened by Parliament. Before they open them to bidding, they have a process involving scientists, conservationists and the fishing industry to identify if there are any sensitive areas that should be excluded from the licensing process.

In the UK there was a court case, under the EU Habitats Directive, where the court ordered the government to identify sensitive areas before they put up any new areas for bid. I do not fully understand the process in the U.S., but I know they do environmental assessment before areas are put up for bid. They have a five-year planning process.

Another feature of the Norwegian system is that they stagger the opening of their areas. For instance, they would open the Eastern Scotian Shelf, that area would be open for development for five years, and then they would open the Mid-Scotian Shelf and then the Western Scotian Shelf, so that it is staggered. They did this not only for conservation reasons, but also for economic reasons. It is to avoid a boom-bust cycle and to stretch out their development to it more long-term. In addition, the bids on all of these offshore licenses is not money that is going to the government, it is money that companies say they will spend. The company that spends the most gets the bid. There are no royalties that are going to governments for exploratory drilling. Those bids would be higher if we had not opened up all of Atlantic Canada to bidding at the same time.

You may have heard of this already when licenses were being handed out for the offshore, by that I mean the real offshore, along the edge of the Scotian Shelf. Most of the licenses now are concentrated just outside the moratorium area up to the Laurentian Channel, which is under dispute between Newfoundland and Nova Scotia. If the bids that are presently before the provincial and the federal government are accepted, there will be almost eight million hectares under exploration license. We have asked them not to be accepted because of our concerns about the licensing process. The onshore land mass of Nova Scotia is 5.3 million hectares. In the last three years, we have put out for exploration license an incredible area.

While most of the licenses are offshore, there are two close-to-shore licenses. These are in the Sydney Bight area and in the Gulf of St. Lawrence. These licenses are issued just like the other licenses have been issued and that is where things got nasty. Where people began to realize that this process is really unfair both to traditional industries and also to the environment.

There is a coalition called the Save Our Seas and Shores Coalition and it includes all the fishing interests in that area, particularly that area in the St. Lawrence, between P.E.I. and Cape Breton that is particularly productive. We have some concerns with fishing. There has been a public review announced for January that will review those licenses. The House of Commons committee that I referred to earlier heard the same concerns and they have suggested in their preamble that a moratorium be put in place for those areas, and we would encourage this Senate Committee to consider that not all areas should be opened up for oil and gas development. There are areas, like Georges Bank or in coastal areas around Cape Breton, where oil and gas development should be excluded. The amount of area that has been opened up for oil and gas already is stupendous.

We have concerns about how all of this activity, even though most of it will be for export, is going to affect Nova Scotia and Canada's commitment to reduce its greenhouse gas emissions. There is a lot of industrial activity associated with this development, plus there are leakages and flaring from this activity. At the same time that we are making an international commitments to reduce our emissions, we are in a headlong rush into offshore and onshore oil and gas development. How do the two interact?

We have concerns that the Petroleum Board is like one-stop shopping for the oil and gas industry, and they are responsible for regulating environmental issues related to offshore oil and gas. DFO and Environment Canada have been relegated to the sidelines. The Petroleum Board is responsible for health and safety, worker safety, and the Province has realized that they cannot leave it to the Petroleum Board alone and have actually introduced legislation to recover some of the jurisdiction over that area. We question the Petroleum Board's responsibility for environmental issues, given that they have one staff member out of 35, who has an environmental background. The agency is set up and then is to proceed with the orderly development offshore oil and gas. We are nervous when they are also responsible for environmental issues.

The Chairman: The tidal power might flood the salt marshes twice a day, but ecologically, as far as emissions are concerned, it seems to be all right. How do you feel about that? Would you like to see a tidal power set up along one of your pristine beaches?

Mr. Bowron: It is an issue that I have been watching, in particular the Bay of Fundy, because its high tides is from an engineering standpoint and a production standpoint are highly attractive to tidal power. In the Bay of Fundy it is an issue that has been looked at. You can trace it back 150 years. The most recent investigation of tidal power in the Bay of Fundy was in the late 60s and 70s.

In particular a project that looked at in the Minas Basin, in this area here on the map, the idea was to put a dam across the mouth of the basin and put the tidal power plant in the middle. It was found that building that structure at that time would cause an increase of the tidal range of 10 per cent, which throughout the Bay of Fundy and the Gulf of Maine would have meant that Boston Harbour would have been flooded. For that reason and others, it was decided to step back. There have been rumblings in the last year or so that this issue is being looked at again in the Bay of Fundy.

It is not a good idea to use traditional technologies. The traditional idea is that you build a stop structure, be it a dam or a causeway barrier, and then put the tidal power plant at some point along it. That has huge environmental impacts. We are seeing that in the Petitcodiac River in New Brunswick. We are seeing the impacts of causeways in Annapolis Royal, and in Windsor, Nova Scotia. There are new technologies coming out to harness the power of the tides that have not been looked at in much detail for use in the Bay of Fundy. There is potential there for a low impact in comparison to the traditional hydro-power type of free-standing structures to be used.

Senator Adams: I am on the Fisheries Committee, and I am also on the Transport Committee. We heard a lot about kayaks and alternative transportation. I have lived in Ottawa for 24 years and I have seen many cyclists on the roads. We have many bike couriers making deliveries and it is very difficult. Sometimes you are driving in rush hour and a bike comes right alongside you and he figures that he owns the road. He takes half the road away and I cannot pass him.

I buy my licence every year and I pay road taxes, insurance and fees like that. If more cyclists are going to be on the road, you have to have an extra line on the road. A few places have started to do that in Ottawa, but I do not know about in Halifax. I get a bit angry when the cyclist will not let me pass him and he does not have a license plate on the bicycle. That is my concern. What do we do about it?

You say we should pour money into promoting bicycle use, but it is car drivers like me that are paying the road taxes and everything. I bought a car at one time and I had to pay $500 for tires. If I buy a brand new car, I would have to pay $500 tax for the tires. What can we do about the people who use a bike?

Ms Sodero: There are a lot of issues in there. For example, the road tax, as I understand it, does not actually cover all the costs related to driving. You point out that there was a conflict between the cyclist and the driver sharing the same road space. There is a certain mentality right now that the cyclists are on the side of the road and the drivers are in the centre of the road and that the cyclists are there by the permission of the driver. I see that both have equal rights to be there. Cyclists are often car drivers as well. They are homeowners and property owners. They pay taxes as well, so they have a right to use the road. What do you want me to particularly address?

Senator Adams: You say that Prime Minister Chretien should put money into promoting bicycle use. How is the public going to afford that? The highways and roads are built by provincial government, not federal government.

Ms Sodero: That is correct. The road taxes, as I understand it, do not cover all the costs related to roads. There are several external costs. One I mentioned was the health care cost in Nova Scotia of $200 million related to car use. In terms of an environmental impact and where the money should be going, cars are not sustainable whereas bicycles are. The government should be supporting bicycles as sustainable transportation. Money currently is going from the provincial government, as you say, to roads. There should be encouragements from the federal level to promote cycling.

Ms Fuller: When you drive along highways in any province, you often see a partnership between the province and the federal government. However, I have never seen that on buses or on multi-use pathways. As Stephanie was saying, we have to start looking at things holistically, how transportation relates to health, especially with our health care system in Canada.

There have been several reports that have come out about how inactive we are and how that trickles down to a massive health care cost. They talk about how many more children are having asthma and how much obesity we have. There is a report that in rural areas of Nova Scotia 12 per cent of people have what is called an active lifestyle. If you have travelled in Europe, Holland or Denmark, you will see that people are bicycling. There is not a lot of obesity. People are taking public transit. That is very important.

I am not saying that government needs to put a lot of money into it, but put a percentage back into what is sustainable because car use is not sustainable. We are advertising cars at $40 billion a year. People think of them as a good thing to have in their lives. However, in terms of the public good and with our public health-care system, and the money that is caused by car accidents, enforcement, and speeding, there are so many additional costs that are not covered simply by paying road taxes.

Senator Adams: How far in kilometres are you talking about?

Ms Fuller: How far what?

Senator Adams: How far should you bicycle? Are you talking about going to work? I would like to bike part way to work sometimes. It usually takes me forty-five minutes to get to Queen Street and then I get stuck for about an hour and a half before I can get to my office. It would be nice to have a bike in the back of my truck to use from Queen Street to work.

Ms Fuller: That is something, because in downtown areas, especially in Halifax, parking is a big issue. If you come downtown on a bike, it is easy to get around. You never have parking issues. It is faster and you get your exercise for the day. There are definitely good benefits to it.

Senator Buchanan: I hope that we can do everything possible to look after your wish list. It is a very good list, but it is because your bubbling enthusiasm has overwhelmed us.

Ms Sodero: I prefer "sophistication."

Senator Buchanan: Her father and mother are dear friends of mine from Cape Breton. Her grandfather, Dr. Watson Sodero, was our family doctor for years. Look what he did for me; he kept me alive all this time.

Senator Buchanan: Did you see just this week the new motor scooter that was unveiled this week?

Ms Sodero: Yes, I saw it.

Senator Buchanan: What did you think of it?

Ms Sodero: I did not get a chance to actually read the article; I just saw the pictures. It seems redundant.

Senator Buchanan: You are right. I cannot see anybody really holding on to that thing.

Ms Sodero: The bicycle has been around for quite a while and it does the same job. It is good old technology and we should keep with it. If that technology would get somebody out of their SUV, then more power to it, but I am dubious.

Senator Buchanan: We incorporated the Tidal Power Corporation of Nova Scotia back in the early eighties. We opened the only tidal power plant in North America. It is in Annapolis Royal and it produced approximately 20 megawatts of power. I have been there. It works very well. What do you think of the tidal power plant in Annapolis Royal?

Mr. Bowron: There is an issue with massive fish kills with respect to that power plant. The main problem, as with any sort of older technology, is more the causeway that the power plant is built in. The causeway has had a much larger impact on the ecosystem of that river than the hydro plant itself. The causeway was there first. The power plant was just built in the causeway.

Senator Buchanan: That is right.

Mr. Bowron: The major impact is from the causeway.

Senator Buchanan: That causeway was not built during my time. It was built in the seventies, but we did built the tidal power plant, and it is working. I have a big plaque on it and it works well.

Senator Cochrane: How is your centre funded? Are you affiliated with any other organizations?

Mr. Butler: We are funded by a variety of means. Our core funding comes from our membership. In the magazine that I handed out to you there is a membership form. If you are looking for an environmental organization to join, there is no better one than the Ecology Action Centre.

Ms Fuller: We are one of the top ten charities in Canada, as listed in The Globe and Mail last year.

Mr. Butler: We also engage in fund raising events like an annual garden party. We are selling organic, chemical-free Christmas trees. We get funding through government programs and through private foundations. It depends on the program. We also take advantage of internships. A lot of it we do without money, through volunteer contributions.

Ms Fuller: We are not advocating that everybody should immediately get on a bicycle and give up their car, but I think pedestrian issues are also involved in this. It is looking at other alternatives and we do not say that cars are bad, but there is a time and place for everything. There has to be a more balanced look at transportation, especially in urban areas.

Senator Cochrane: Mr. Butler, you mentioned that a common argument people make is that it is the environment at the expense of development. You made that argument. However, you say you support a win-win situation in this regard. How does your work support this attitude?

Mr. Butler: In the last five years the employment at the Ecology Action Centre has increased. As the world gets sicker, there are more jobs for environmentalists. On a more serious note, our policy around fishing is focussed on fixing fishing. There are some real problems with the technology used in fishing, for example, the impact of draggers on the ocean. It is an issue that has never really been addressed. If it had been addressed twelve or fifteen years ago along with maybe one other big issue, we would not have seen the collapses we saw. The cost of the fisheries collapse to Atlantic Canada is devastating and enormous. If we promoted less destructive gears like bottom hook and line, which kill fish too with much less damage to the bottom, we would get the fish out of the ocean. We would have a method per pound of fish caught that creates more jobs, both in just catching the fish and also in providing the bait for that fishery. That is a clear example.

We can look at want happened in Cape Breton with the issue of energy. The closure of the coal industry and the steel industry has wrought anguish and devastation. We should be looking at technologies like wind and solar that we can count on for the next 500 years, not the next 20 years.

Senator Eyton: Would I be welcome at your fund raising event if I was driving an SUV? You have to make some hard choices too.

Ms Sodero: Yes, I know that. We are very much supported by our membership, and some of our members and some of our board members have very big cars. The point is that they know and they understand that and they are doing other things. It is not that what you are doing is bad, and we do not want to see you here. It is, "let us think about what we are doing."

Let us walk the talk. As long as you buy several things that will fit in your SUV from the garden party, then you can come.

Senator Eyton: I should confess to you that I am associated with one of the car manufacturers. People love their cars and the reason they make SUVs and other big cars is people want them. There have been all sorts of initiatives where they have produced electric or battery-powered cars and hybrid cars. They are now working dramatically on new technologies including fuel cells. The car industry is spending billions every year on that development. It seems to be a sure thing now.

Ten years from now that could be how many cars are going to be powered. It is a very positive development from your point of view and really the point of view of all of us. The fuel cell technology is slow now, but it is developing very rapidly. The car industry itself is convinced that the fuel cell technology will power cars effectively with enough power, enough acceleration and enough endurance that it is going to be practical.

In your efforts to change people's attitudes, you must see a company or a building that tries to persuade people to leave their cars at home and take a bicycle. Does that really work? If someone said to me to take a bicycle to work, I would look at them and say that I am 67 years old. Are there dramatic results that are measurable that you can tell me about?

Ms Sodero: Our trip reduction projects have gone much more slowly than we would have liked. They take more time to get through, so we actually do not yet know the results from our trip reduction projects. We have to do a follow-up survey.

My father, who is 67 years old, just got back on his bicycle after teaching me when I was five years old. It is never too late.

It is difficult to get people out of their cars. Doing a pep rally for bicycles is not going to switch people. I need help to make it more difficult, more expensive and more inconvenient to drive a car.

Senator Eyton: The only way a program like that can work is to show success in one place, then in three places, then in six places and then in ten places. The only way you will develop the momentum is to be able to demonstrate success.

Ms Fuller: Another issue that we do work on is urban sprawl. That is a big issue now in Halifax. It is a big development issue in the United States. People are really looking at smart city growth. That is all related to how we get around. I do not know if any of you are familiar with the Bayers Lake Industrial Park, but the only way to get there is to drive. It is the only place you can get a lot of things in Halifax. Urban sprawl is a big issue, whether it is about ecological footprint or how many more roads we have to build, it is all related to how we get around.

Mr. Butler: People want cigarettes too, but we made some public policy choices about that.

You mentioned your association with the car industry. One thing that really upsets me is whenever I see a car ad, is that the car is often driving over a stream or through sensitive habitat. It seems ironic that the best way to advertise a car is to put it in a pristine wilderness, when cars, through acid rain, road building, et cetera, do a lot of damage to that very same wilderness. Perhaps there could be more sensitivity and not have cars and trucks, big GM trucks, driving through trout streams.

The Chairman: Thank you for your presentations.

The committee adjourned.