By Pav Jordan
HALIFAX, Canada (Reuters) - Tropical storm Earl, a mere shadow of the massive hurricane that frightened the U.S. East Coast this week, lashed Atlantic Canada on Saturday with high winds, waves and driving rain.
The core of the storm was expected to hit the Nova Scotia coast by mid morning, Canadian authorities said, warning that winds could still build to hurricane levels in parts of the province.
"It has been picking up speed," said Bill Appleby, regional director for Environment Canada's Hurricane Center.
"Pretty much we'll have a hurricane watch out for the south western coast of Nova Scotia."
The Miami-based U.S. National Hurricane Center (NHC) reported at 8 a.m. EDT (1200 GMT) that the tropical storm was packing maximum sustained winds of 70 miles per hour, slightly below hurricane intensity, with higher gusts.
"These strong wind gusts could cause tree branches and limbs to break and some trees to come down," the Canadian Hurricane Center said. "That could result in downed utility lines and related power failures."
Power outages were reported along much of the south shore of Nova Scotia.
Earl delivered heavy rain and gusty winds to parts of New England en route to Canada, but caused far less damage than feared on its path up the U.S. coast from North Carolina.
Officials warned that Earl -- though no longer packing anywhere near the power of its peak ranking as a fearsome Category 4 storm on the five-step Saffir-Simpson scale -- was still a large storm and could cause sea surges and localized flooding.
At 8 a.m. EDT (1200 GMT), Earl's center was located about 40 miles south of Cape Sable, Nova Scotia.
The fading storm raised hopes that the U.S. Northeast will suffer only limited losses during the three-day Labor Day holiday weekend, which airlines and other businesses bank on for a final surge of summer tourist dollars.
Many residents and business owners on Massachusetts' Cape Cod and the islands of Martha's Vineyard and Nantucket had boarded up windows on Thursday preparing for the worst.
The Coast Guard closed ports in southeastern Massachusetts and Rhode Island. Dozens of flights were canceled to the area, National Guard troops were standing by, and extra utility crews were in place to respond to any power outages.
High surf pounded Nantucket and Martha's Vineyard, with waves as high as 10 to 12 feet, local media reported. Some streets in downtown Nantucket were flooded as the island was pounded by heavy rain.
'DODGED A BULLET'
Storm-related outages from North Carolina to Connecticut knocked out power to about 3,300 customers, the U.S. Energy Department said -- a small number that showed the mild impact of what had once shaped up to be a monster storm.
No storm has threatened such a broad swath of the U.S. shoreline since Hurricane Bob in 1991. But as Earl moved to Canada, U.S. East Coast residents breathed a sigh of relief.
"We dodged a bullet here, since the storm was downgraded from a hurricane by the time it arrived," said Scott MacLeod, a spokesman for the Massachusetts Emergency Management Agency. "Other than some minor road closures due to localized flooding, we're not getting a lot of reports of major damage."
During the peak of the storm some 1,800 state residents lost power, but utility crews had already restored electricity to all but 700 of them by 6 a.m. EDT (1000 GMT), MacLeod said.
(Additional reporting by Scott Malone in Hyannis, Massachusetts, Gene Cherry in North Carolina, Jeffrey Jones in Calgary; writing by Matt Spetalnick and Ros Krasny; editing by Will Dunham)
