Hurricane Bill brought rain and heavy winds to Nova Scotia in eastern Canada on Sunday, but the Category 1 storm caused little serious damage as it moved northeast toward the region's offshore oil and gas facilities.

The Canadian Hurricane Center said it expected Bill to weaken to a tropical storm as it moves over cooler water to Newfoundland later on Sunday. Heavy rain and waves of up to 10 meters (32 feet) could cause damage.

This is not a pussycat of a storm at all, Peter Bowyer, program supervisor at the Canadian Hurricane Center told CBC News.

Cape Breton, one of Nova Scotia's main tourist areas, was expected to be hardest hit by the storm. Forecasters expect the region to see winds of more than 85 mph. Flights were canceled there and ferry service was suspended.

The storm knocked out power to more than 23,000 homes and businesses in southern Nova Scotia and felled trees, but did little serious damage to the provincial capital of Halifax. No injuries have been reported.

We're not seeing any severe damage, said Michelle Perry, a spokeswoman for Nova Scotia's Emergency Management Office. We are seeing things like washed out roads and power outages ... but we haven't seen the worst yet and are watching it carefully as it makes its way up the province.

Bill, the first hurricane of the 2009 season, dumped rain on Bermuda and pushed powerful surf onto the shores of the 20-square-mile (52-sq-km) British territory, a center for the global insurance industry.

It also brought heavy surf, swells and rain to the U.S. Atlantic seaboard, including the island of Martha's Vineyard, where President Barack Obama and his family were to start a summer vacation. The Obamas' departure was delayed four hours by the hurricane.

Atlantic Canada, where the storm is heading, is an energy-producing region, exporting oil, natural gas and refined products to the U.S. Northeast and elsewhere.

The Sable Offshore Gas Project, off Nova Scotia, evacuated staff, but the operator of the massive 98,200 barrel per day Hibernia platform said it would continue to operate normally.

Both Sable and Hibernia, a platform that was built to withstand the icebergs that are common in the region is operated by Exxon Mobil Corp. An iceberg sank the Titanic off the coast of Nova Scotia and some 150 of the ship's victims are buried in Halifax.

Other oil projects in the Jeanne d'Arc basis about 185 miles southeast of St. John's, Newfoundland, plan to weather the storm and have not moved employees to land.

We're keeping an eye on the storm, but it's business as usual, said Brad Bellows, a spokesman for Suncor Energy Inc, which operates the Terra Nova oil project.

Bill is a Category 1 storm, the mildest on the five-step Saffir-Simpson scale, but it is still potentially threatening. Canadian officials said they were particularly worried about heavy rain and the fact that high tides would exacerbate the storm surges that hurricanes bring.