Nova Scotia - A Leading Investment Location for the Chemical Sector

Nova Scotia has been in the gas production business since late 1999, which brings new opportunities to the Province. The Sable Island area offshore Nova Scotia is already the fourth largest natural gas producing basin in North America and, with export of most of this gas, Nova Scotia is a significant energy supplier in New England. These strong markets are driving plans for significant exploration work. Petrochemical producers are already looking at how they can take advantage of this new supply of natural gas liquid feedstock on Canada's east coast. And in 2002, KPMG ranked Nova Scotia locations as among the world’s most cost-competitive in which to do business.

Outstanding Industrial Growth

• Nova Scotia's natural gas supplies markets within the Province, in New Brunswick, and in New England through the Maritimes and Northeast Pipeline (M&NP)
• Recoverable Sable Offshore Energy Project (SOEI) reserves amount to 2.6 tcf in 6 fields, 3 of which are currently in production
• 9% of our high quality workforce is available to work, and at affordable rates
• Halifax, Nova Scotia offers the largest percentage (25%) of people with post secondary degrees of any major city in Canada

Opportunities for the Chemicals Sector

• Strong demand for natural gas in Nova Scotia is helping to drive major exploration efforts offshore Nova Scotia to discover new supplies
• Petro-chemical development projects in Nova Scotia are assured of having access to feedstock
• SOEI has awarded contracts for development of its 4th field, which is scheduled to come into production in late 2003
• The National Energy Board has conditionally approved M&NP’s application to expand their pipeline system to 1bcf/day

Major Companies Invest With Us

• EnCana has taken a time-out until Fall 2003 from the regulatory review process for its Deep Panuke gas project (capital of $1.1 billion; production of 400 million cu ft/day; reserves of 0.9 tcf), while it works to enhance the project’s economics
• Total offshore exploration commitments in Nova Scotia currently valued at over $1.5 billion
• Recent exploration focus is in the deep water, with its geological similarities to other international deep water playst
• Three blocks offshore Nova Scotia have exploration commitments in the $100 - 200 million range

A Skilled Labor Force

• Nova Scotia graduates more than 10 000 post-secondary students each year from 11 universities
• More than 45 000 available to join the workforce
• Nova Scotia has one of the lowest average rates of employee absenteeism (3.4%)

Market Access/Transportation

• Nova Scotia offers excellent road, rapid rail and direct container connections to key U.S. markets
• Nova Scotia's major international seaport in Halifax guarantees efficient sea links
• Canadian National Railway Inc. operates a full-service intermodal facility in Halifax

Business Climate

• Nova Scotia offers an investment tax credit of 15% of capital costs (less government assistance) for new manufacturing and processing plants and equipment
• Nova Scotia has eliminated the provincial corporate income tax for the first three taxation years on the first $200 000 of annual active business income
• Halifax, Nova Scotia is one of the most cost-competitive cities in the world, and has the lowest overall cost of doing business in the New England/Atlantic region (KPMG 2002)

Cost Advantages

• Halifax, Sydney, and Truro, Nova Scotia are amongst the most cost-competitive cities in the world for the production of Specialty Chemicals (KPMG 2002)
• The Capital Cost Allowance allows taxpayers to charge up to a 30% declining balance on manufacturing machinery and equipment
• Employer-paid payroll taxes in Nova Scotia are the lowest in Canada

Technology Infrastructure

• Nova Scotia is one of the few places in the world with a fully digital telecommunications network
• Nova Scotia has a thriving telecommunications industry, including more than 40 call centers
• Dalhousie University's Faculty of Computer Science is the fastest-growing in Canada

Research and Development

• Nova Scotia R&D incentives include the immediate and full write-off of eligible costs plus a 15% refund of eligible expenditures, and are considered to outperform almost all U.S. locations according to Ernst & Young and the Conference Board of Canada
• An additional federal investment tax credit of 20-30% is available to firms conducting scientific research
• R&D activities are further supported by the Nova Scotia Innovation Corporation (InNOVACorp)

Quality of Life

• Maclean's Magazine named Nova Scotia as one of the "last best places" to live in North America
• The Conference Board of Canada survey has rated Halifax as one of Canada’s top 3 cities in which to live
• There are 11 degree-granting institutions and 13 community college campuses in Nova Scotia

Contact

Allan Crandlemire, Manager Gas Marketing and Distribution
E-mail : crandlal@gov.ns.ca
Nova Scotia Department of Energy
Web site: www.gov.ns.ca/energy
Tel: (902) 424-6829
Fax: (902) 424-0528