Thank you. Employee benefits, total O and M of $17.797 million? Agreed?

Agreed.

Thank you. Detailed works performed on behalf of third parties, pages 6-16, 6-17, and 6-18. Agreed?

Agreed.

Total department, $80.839 million. Agreed?

Agreed.

Thank you. Page 6-19, revenues, recoveries and transfer payments. Agreed?

Agreed.

Distribution of budget. Agreed?

Agreed.

Thank you. Page 6-09, program summary, total O and M of $27.406 million. Agreed?

Agreed.

Is this committee agreed that the Department of Personnel is concluded?

Agreed.

Thank you. I would like to thank the Minister and his witnesses at this time. What does the committee wish to do next? Madam Premier.

Economic Development, Mr. Chairman.

Is this House agreed that we will deal with Economic Development?

Agreed.

Thank you. Proceed, Madam Premier, for opening remarks.

Introductory Remarks, Department Of Economic Development And Tourism

Mr. Chairman, I would like to apologize on behalf of the Minister responsible, for matters beyond his control, he is not able to deliver his budget address. So, I will be trying my best to carry out this function.

Mr. Chairman, the 1992-93 main estimates for the Department of Economic Development and Tourism total $45.738 million, which includes $34.228 million of operations and maintenance funding, $8 million for the Northwest Territories Development Corporation, and $3.5 million for Tourism and Parks capital projects. In addition, this budget provides funding for 147.5 person years.

Mr. Chairman, the government has heard from communities that priority must continue to be placed on supporting the creation of new jobs through the growth of the private sector, particularly in the smaller communities.

To this end, the Department of Economic Development and Tourism has re-allocated resources, and adjusted operations, in order to continue to stimulate growth in smaller communities.

The programs and services offered by the Department of Economic Development and Tourism are geared towards business development and increasing incomes. The variety of programs, issues and responsibilities, covers sectors such as fisheries, small business, arctic foods, agriculture, arts and crafts, tourism marketing, parks and visitor services, as well as interprovincial and international trade.

Mr. Chairman, there are different organizations within, or at arms length from the department, aimed at delivering programs to promote economic development in these areas. I will provide Members with some highlights of initiatives that the Department of Economic Development and Tourism, and related organizations, are undertaking to develop the economy of the Northwest Territories.

Mr. Chairman, I would like to stress that the success rate of initiatives undertaken by the department, and related agencies, is largely dependent on the level of community support. When local groups initiate, or help, to drive the course of a project, there is a sense of ownership and pride in the outcome. The Department of Economic Development and Tourism endeavours to involve local residents when initiatives are being considered, and we encourage communities to help identify potential economic opportunities.

The Business Credit Corporation is a product of the Northwest Territories' economic strategy, and is structured to make funding more accessible to level II and III communities.

The N.W.T. Business Credit Corporation Act was proclaimed in October, 1991, the effective date of start up being April 1, 1992. The purpose for establishing the corporation was to create an arms length lending agency capable of providing term loans, contract security, and loan guarantees, to new or established northern businesses. It replaces the department's business loan fund, which had provided similar services since 1977.

Although the corporation provides the same lending services as the previous business loan fund, there are a number of distinct differences in its method of operation.

While the current cap for the loan fund is $20 million, it has the ability to grow to a maximum of $50 million, at the discretion of the Financial Management Board.

The loan fund is intended to be self-sustaining. That is to say, that interest income, net of the cost of borrowing, must be greater than the fund allowance for write off. The corporation will continue to receive approximately $333,000 annually to cover operating costs.

The Board of Directors has been granted lending authority up to $500,000, and has been empowered to delegate its authority to officers of the corporation. The delegated authority is currently set at $200,000. Loans in excess of $500,000, up to a maximum of $1 million, can be approved by the Minister, on the recommendation of the board.

Mr. Chairman, the corporation is fully functional, but has a number of operational and administrative initiatives, which will be undertaken prior to year end to increase its effectiveness. This includes the delegation of lending authority up to $25,000 to regional staff. The delegation of authority will be implemented upon the completion of credit training courses, being sponsored by the department over the next two months. All departmental economic development officers, board members, and B.C.C. staff, will take the course currently scheduled for Inuvik, Iqaluit, Yellowknife, and Hay River.

Over the past 12 months, the board of directors of the corporation have approved 43 loans valued at $6.350 million. There is approximately $18.290 million in principal currently outstanding to 223 clients, and the total portfolio, including interest due, is approximately $19.200 million.

The Business Development Fund was established in 1991, in response to concerns raised in the Scone Report, and also in conjunction with, the direction established in the government's economic strategy.

The program was designed to achieve the following objectives: to consolidate a variety of business incentive policies into one comprehensive policy; to target funding to businesses in disadvantaged communities; to improve client access to funding programs; to reduce the time required to apply and receive funding; and to provide funding for the complete business cycle.

In all instances the guiding principles which dictate applicant eligibility are: One, projects must demonstrate a level of job creation. Funding is based on $25,000 per job created with a job being measured as $12,000 in wages, or 40 weeks of employment; Two, the applicant must demonstrate need. The program continues to be last resort funding. Therefore, all other sources of funding must be accessed before approaching the fund; Three, the project must demonstrate potential for viability within reasonable time frames, generally two to three years; Four, the applicant must share the risk. Although the minimum equity required for each program, ranging from 5 percent to 20 percent, in the policy is mandatory, it can be increased if the applicant has the resources.

A full report of the fund's performance over the past 12 months will be tabled in November. In it, you will note that there has been a significant shift in the distribution of funding to less advantaged communities, and that the programs are meeting our objectives.

For example, since the new policy was introduced in 1991, approvals in level III communities have increased 76 percent, those in level II have increased 13 percent, with an estimated 68 percent of the funding being provided to aboriginal-owned businesses.

In 1991-92 the department issued 229 contributions for a total of $3.35 million. This generated 172 new jobs, and levered an additional $9.85 million in project funding from other sources.

The proposed reduction of $607,000, in total, to the department's contribution programs should not affect this performance since it reflects historical lapses.

Mr. Chairman, we will continue to refine the policy, system and programs, to further enhance access to the fund, and to improve the level of service to the business community.

The usage of the fund crosses all sectors, and shows that contributions need not be large to make a difference.

Eight fishermen received contributions through the Business Development Fund, of about $1,500 each, to purchase automated haulers for the winter turbot fishery, to increase their efficiency and productivity.

Similarly, assistance totalling about $40,000 was provided to seven char fishermen in the Keewatin, to purchase boats, motors and fishing gear.

With a contribution of $8.277 million, the Toonoonik Sahoonik Co-op in Pond Inlet hosted three japanese tour wholesalers. As a result, two departures to the floe edge will be offered in May, 1993, and summer narwhal viewing tours are scheduled for August. Total income from these bookings is estimated to be $60,000.

The True North Trading Company received funds to develop a mail order catalogue for N.W.T. arts and crafts. Over 100,000 copies will be distributed throughout Canada by the end of October.

The department provided assistance of $31,000 to an Aklavik resident for a pilot project to produce fur parkas. Twelve parkas were produced prior to the Inuit Circumpolar Conference, and the initial response indicates that there may be a limited market for these parkas within the Northwest Territories.

For the third year, the small tools and Capital Equipment Assistance Program has provided funds to regions, to assist artists and crafts people to by tools and equipment. Better tools will allow for better quality arts and crafts production, and greater incomes for producers. A total of $200,000 has been provided to regions this year.

Each year, the freshwater fish marketing corporation administers a commercial fisheries assistance subsidy on behalf of the department. To date, $544,000 has been committed this fiscal year, to offset costs for the Great Slave Lake fishery.

The Department is the implementing party for the majority of funds under the D.I.A.N.D. Cooperation Agreement of the 1991-1996 Canada-G.N.W.T. Economic Development Agreement. This agreement totals over $10 million this fiscal year, with the Northwest Territories portion being 30 percent of that, or about $3 million.

Projects are under way in a number of sectors, including arts and crafts, fisheries, community sponsored development, agriculture and wildlife harvesting. These sectors account for 68 percent of the total program funding.

We also participate in the Industry Science and Technology Canada Cooperation Agreement, which includes funding this year for tourism and entrepreneurship. The total value of this agreement for 1991-92 is over a million dollars.

A third cooperation agreement, valued at $2.7 million over five years, has been signed by the Government of the Northwest Territories and Forestry Canada. Over half a million dollars has been allocated for the 1992-93 fiscal year, to undertake forest management and development initiatives. The Department of Economic Development and Tourism participates in the decision making under this agreement, although the Department of Renewable Resources is the lead G.N.W.T. department for this agreement.

Mr. Chairman, the regions have direct involvement in the design of the programs, and the criteria for E.D.A. applications. There is an extensive consultation process, leading up to the development of work plans. Regional sub-committees, with public representation, have the authority to review, and approve applications.

The Department is working to ensure that this E.D.A. will provide money in the sectors where it is need most, with direct involvement at the community level.

Mr. Chairman, some examples of projects undertaken through the E.D.A. Program are as follows:

1. In response to industry concerns about soapstone supply, quarry projects were funded in Pangnirtung, Lake Harbour and Broughton Island. An assessment of the Cape Dorset marble deposit was completed by Energy, Mines and Petroleum Resources officials and the local Economic Development Officer;

2. E.D.A. funds were invested in the Cape Dorset and Pangnirtung Graphics Program, both collections of which will be launched this fall. The Pangnirtung collection has been produced under the auspices of the Pangnirtung Print Shop, and is the first collection produced in five years.

3. Keewatin Region saw a commitment of $455,000 directed to exploration for fish stock, and enhancement of technologies for fishing activities in both Hudson's Bay and Inland Lakes.

4. The Baffin Region has undertaken an aggressive five year program involving the exploration for, and testing of, fish stock in areas in and around Baffin Island. Over half a million dollars has been committed to this program for this year alone.

5. The Kitikmeot Region saw a commitment of $90,000 towards enhancing fisheries production technologies, as well as seeking new stocks in communities outside of Cambridge Bay such as Gjoa Haven.

6. Community sponsored development funding was approved for the Baffin Regional Chamber of Commerce to promote small business week in October, and conduct the second annual Nunavut Trade Show next spring.

7. The eastern Arctic's second business service centre is under construction in Cape Dorset through funds provided by E.D.A. and the N.W.T. Development Corporation. Built in conjunction with a new retail store for the west Baffin Co-op, it has been a cooperative effort between the department as facilitator, and the Kingnait Development Corporation as proponents. The Business Service Centre will be occupied by the G.N.W.T. as a primary tenant which will help subsidize new business tenants. It will open in early 1993.

8. There are approximately 250 performing artists in the N.W.T. who will have the opportunity to benefit from E.D.A. funding directed towards professional development and enhancement opportunities.

9. In the tourism sector, the department negotiated $1.4 million over the life of the current E.D.A. specifically directed towards increasing the tourism skills of northerners. An excess of 200 northern students graduated from these programs last year.

10. A significant initiative within the commercial renewable resource sector in the west involved musk-ox harvesting for export markets. In the first year of the E.D.A., Umayot Corporation, an Inuvialuit controlled company, received $375,000 towards the purchase of capital equipment to facilitate the commercial harvesting of musk-ox on Banks Island. Approximately 2,000 animals were harvested under the direct supervision of Agriculture Canada.

The Commercial quota of 5,000 animals on Banks Island leaves considerable room for expansion. This year, and additional $300,000 has been approved for investment in upgrading technology, and a harvest is planned for this October.

11. An additional $250,000 has been allocated for this fiscal year to test the feasibility of conducting an export harvest of musk-ox near Holman. This will be the first harvest of this kind carried out in a location other than Banks Island. Again, Umayot Corporation will be working closely with the local Hunters' and Trappers' Committee, and the department. Meat harvested from Banks Island, and Holman, will hopefully find its way into markets throughout Canada, and the rest of the world.

12. The department has also facilitated the approval of funding for carrying out harvests for a projected 200 caribou in Coppermine, and 200 to 300 musk-ox in Cambridge Bay. These harvest are to be structured to allow for government inspection for the first time in N.W.T. All meat harvested from these two projects will be committed to commercial markets here in the N.W.T. The local hunters' and trappers' associations are the primary proponents, with the N.W.T. Development Corporation providing professional support and access to markets.

13. The North Slave Region will receive funding to consult with communities to determine their interest in pursuing commercial caribou harvesting.

The total commitment for this fiscal year for commercial wildlife harvesting is $735,000 with proponents, chiefly Umayot Corporation, providing an addition $500,000 in equity.

The N.W.T. Development Corporation was established in 1990. It is mandated to invest primarily in, or for, the benefit of lesser developed communities. This year, it will invest some $8 million towards development of business opportunities. These businesses are community based, with local boards playing a major role in their continued operation.

Mr. Chairman, all commercial enterprises currently operated by the department, will be transferred to the N.W.T. Development Corporation. This will allow these enterprises to operate in a more business-like setting, and remove the artificial limit to their growth that was imposed through their inclusion in the government's budgetary processes.

One project the corporation has undertaken is the airport kiosk in Toronto International Airport. "Arctic Canada" was opened in July of this year, and provides an opportunity to market northern products, and gain a better insight into product demand patterns. Suppliers benefit from direct market feedback on their products, and "Arctic Canada" provides a vehicle to promote the Northwest Territories to a national, and international clientele.

Sales are carefully monitored so that breakdowns by product line and by region are easily available. We also obtain information on where customers are from, and what they are buying. This information will assist any N.W.T. suppliers in targeting their products to specific markets.

On the production side, the corporation is involved in several projects. One of these is the Tuktoyaktuk carving project. In seven months, ending August 1992, the project purchased 1,095 carvings from 46 different artists in the community. These purchases amount to $84,700. for the period. The carvings are being marketed in the national market, as well as directly through Arctic Canada.

In Rankin Inlet, the Corporation is undertaking a pilot project for fabric arts and crafts products. This project has been operating since July, and is fostering some creative new product lines.

The Corporation is also involved with older and more established businesses, such as the Fort McPherson Tent and Canvas Shop. The product line there is being developed to bring new concepts to a well established product.

Mr. Chairman, some of these products are on display at the N.W.T. Development Corporation Offices. I invite Members to drop my to get a first hand view of the type of products that are being produced through development corporation projects. Their offices are located on the seventh floor of the NorthwesTel Tower.

Mr. Chairman, another development corporation project, or key interest, will be the provision of continued support to the expanding fishery in Pangnirtung, which includes a new plant and secondary facilities. This investment alone is approximately $3.3 million, not including the operational costs, bringing the total investment and support offered to this region in excess of $4.2 million for this fiscal year.

With a downturn in the Canadian economy, and slow arts and crafts sales, the department's arts and crafts marketing has been focusing on development of European and Asian markets. This involves raising awareness of the product, and N.W.T. generally, and an aggressive program to establish links with dealers.

The Government of the Northwest Territories has provided ongoing support to the Amway Environmental Foundations, "Masters of the Arctic Exhibition", currently on a world tour, including Japan, Mexico, Brazil, and the United States.

We have provided a wide range of technical and artistic assistance as well as funding. We will be taking advantage of this high profile exhibition by undertaking a number of commercial exhibitions in the United States portion of the tour. Concurrent with this, negotiations are under way to include N.W.T. arts and crafts as part of Amway's Corporate Awards Program, and inclusion of these products in Amway's consumer catalogue.

There are seven galleries in Europe currently carrying N.W.T. arts and crafts. Our objective is to triple this figure by direct contact, and taking advantage of our increased exposure through Expo in Seville, and 14 exhibitions through Spain this last year.

A new Spanish company which is wholesaling our products has purchased $120,000 worth of arts and crafts to date from wholesalers such as Arctic Co-operatives Limited.

Mr. Chairman, I would like to note that approximately 45 percent, $374,000, of purchases for the Expo retail outlet were Dene arts and crafts. Our exports to broad markets, as I have just described, include both Inuit and Dene arts and crafts.

To assist further with the development of Dene crafts, a new person year was allocated to Fort Rae. Furthermore, an E.D.A. contribution of $88,000 was provided for the development of promotional materials to enhance sales of N.W.T. arts and crafts which five of eight brochures dedicated to Dene crafts.

Our Asian marketing campaign has produced sales of over $900,000 with costs incurred by the department amounting to just over $340,000. Japan and Korea are the target markets. Major exhibitions in leading Japanese and Korean galleries were undertaken after the successful showing of the "Masters of the Arctic" exhibit in the newly opened Canadian Embassy in Japan.

The department is working with Arctic Co-ops Limited and a Japanese businessman to build on the excellent reception these products have had to date. A similar arrangement has been made in Korea.

An extensive survey of the United States market was conducted with the assistance of Canadian Consulate offices. It found that only 32 outlets now carry Northwest Territories products but an additional 50 expressed immediate interest in doing so. We do anticipate increased sales opportunities through follow up to this study.

The initiatives I have just outlined form part of a comprehensive arts and crafts marketing strategy developed pursuant to our overall economic strategy. Current retail sales in this sector are just over $28 million. This strategy is aiming at increasing sales by $10 million by 1995.

In addition to departmental promotion efforts, the Northwest Passage Trading Company of Gjoa Haven is an example of a community group taking the initiative to directly market its products. This company is the focus of a revitalization of the carving industry in Gjoa Haven, and we are pleased to be working cooperatively in furthering their initiative.

Mr. Chairman, the N.W.T. is rich in terms of a large land mass, highly marketable unique resource base, and a strong cultural identity. Renewable resources in the north are characterized by slow growing stocks, however, and development in this sector faces high cost of production, a limited pool of qualified managers and workers, inadequate infrastructure, and small markets. The department's resource strategy is targeted at assisting in overcoming these barriers and harnessing the wealth in this sector.

In this year alone the department, in conjunction with E.D.A. and the N.W.T. Development Corporation, committed over $9.5 million to assisting growth in the commercial renewable resource sector. The vast majority of that assistance and investment has gone towards expanding fisheries, which involve primarily level II and III communities.

The department combined its efforts with the Department of Renewable Resources to secure new offshore allocations involving three operators and 8,800 tonnes of fish and shrimp, in addition to the 1,000 tonne open quota for turbot in Cumberland Sound. Only two years ago, the offshore allocation to the N.W.T. was limited to one operator and approximately 2,000 tonnes.

The agriculture sector is somewhat limited by geography, but opportunities and developments in recent years have been exciting.

The department is focusing on development of market gardens and greenhouses in the North and South Slave areas.

Technical advice and infrastructure has been provided in a variety of communities such as Trout Lake and Kakisa.

Much of the work being done now is modeled on work completed several years ago by the department with a company called "Produce North" in Norman Wells. This company operates a very technically advanced greenhouse producing a full range of vegetables and fruits. The company's entire production this year was sold to the Northern Store in Norman Wells displacing significant amounts of produce normally supplied from the south.

Our focus in this sector is to replace imports, and develop value added processing of Arctic foods. Our successes in developing product lines for Expo will assist sales of northern food products, both locally and outside the Northwest Territories.

Mr. Chairman, a major function of the department is to support the development of the tourism industry. Areas of activity include, product development, marketing, licensing and regulations, research, intergovernmental coordination, and park establishment.

The travel industry has been one of the faster growing components of the service sector in the N.W.T. Since 1979, all purpose travel has almost doubled, and related expenditures have more than tripled. Visitor expenditures in 1989 were reported to be $89 million of which 456 million or 63 percent were pleasure-based, while 33 percent gross receipts was derived from business travellers. Statistics show that the number of non-resident motor vehicles, entering the Northwest Territories increased 10 percent in the five year period from 1986 to 1991.

Although the western part of the Northwest Territories still receives a major share of the visitors, largely as a result of the road network, there has been substantial activity in other regions, especially the Baffin.

A significant proportion of the new travel businesses are located in the smaller communities. Overall, the number of hotels/motels and bed and breakfast facilities in the Northwest Territories has increased from 23 in 1971, to 98 in 1992.

The most recent information shows that little to slight growth in visitor numbers has occurred between 1990 and 1992 for the Northwest Territories as a whole. Total business and pleasure person trips are expected to remain level this year at 89,000. Although 1992 visitor statistics are not yet available, we anticipate increased visitation in the Inuvik region, partially resulting from Alaska Highway celebrations, and the opening of the N.W.T. Visitor Centre near Dawson City. The Dawson Visitor Centre had 8,414 visitor registrants in 1991, the highest of all Northwest Territories operated facilities.

Estimates for the eastern Northwest Territories indicates a slight decline in numbers during the same period. For package tours operating in the 1992 season, bookings are said to be down. Although the short term outlook for the tourism industry presents a challenge, it should be remembered that the industry has performed equally or better than other provinces. Many provinces experienced a significant decline in tourism sector activity in 1992.

It is likely that any downturn in industry performance is due largely to the recession in the south curtailing the vacation plans of visitors to the north.

Mr. Chairman, the department's research indicates the need for a more focused marketing program, and the requirement for tourism products offered in the Northwest Territories to keep pace with consumer trends.

Improvements required to generate additional employment and economic benefits from tourism include, the immediate need to streamline and target market our existing and proven products. An immediate focus on more product specific marketing, the long term development of more non-consumptive specialty type products, and a gradual improvement in the quality of facilities in both the private and public sector.

The Department of Economic Development and Tourism has and will continue to monitor, evaluate and support the tourism industry.

Continuing department initiatives in the tourism sector include:

1. Support for community based tourism through the provision of financial assistance to tourism zone associations.

2. Assistance to community initiated tourism feasibility planning activities. For example, the Fort McPherson tourism business plan or the Ndilo tourism and cultural attraction feasibility study.

3. Support for public infrastructure and associated creation of marketable tourism destinations deemed valuable by the industry and Northwest Territories residents.

4. Assistance to operators for product development.

5. Monitoring and evaluation of tourism trends, and dissemination of appropriate information to business operators and decision makers.

6. Support for private sector tourism operators through the business development fund.

7. Liaison with other departments and governments, to ensure that the concerns of the Northwest Territories Tourism Industry are coordinated/represented.

One example of a potential growth area is the visit of the Russian Icebreaker to the Kitikmeot and Baffin regions with about 50 tourists, 32 of whom joined the vessel in Cambridge Bay, and six of who were tour operators looking to add to the destinations they market.

These people were impressed with the quality of the facilities available, and are booking a return trip with 112 tourists next season.

Mr. Chairman, a major new initiative of the department is the development a product oriented cooperative marketing program.

Over the past three years, the department has implemented a tourism advertising campaign

to position the N.W.T. as a desirable tourism destination, in a variety of target marketplaces. Although this general awareness campaign has generated a significant amount of interest within our target markets in Canada, the United States, Japan and Europe, N.W.T. tourism operators are telling us that sales have not reached expectations.

Therefore, the department is adopting a new approach to tourism marketing activities this year. In developing this new approach, we listened carefully to what N.W.T. tourism operators were telling us with respect to: types of marketing activities which provide the best linkages between specific N.W.T. tourism products and key marketplaces; tourism industry attitudes; the general health of the tourism industry in the Northwest Territories, within Canada, and worldwide; and the interests and capabilities of the Tourism Industry Association, and the tourism zone associations.

The basis of the new approach will be to develop product-oriented, cooperative marketing activities and promotional tools, which include a specific point of sale contact.

Our agency of record, Inkit Ltd., in association with Camp and Associates, is currently developing an advertising campaign which will focus on existing saleable N.W.T. tourism products, and will encourage private sector investment in marketing activities.

Economic Development and Tourism will provide the seed money to develop the creative advertising layouts, and anchor space in strategically targeted publications. N.W.T. tourism operators will be invited to participate by purchasing additional space in these publications, to include their company name, address, and telephone number in the advertisements.

The department has contracted a facilitator, the North Group of Yellowknife, to work with the operators to identify strategic linkages between products, and solicit and coordinate operator participation in the program.

By adopting this product-oriented, cooperative approach, and applying these key principles to the department's tourism marketing activities, the N.W.T. tourism industry will continue to provide a significant contribution to the Northwest Territories economy.

Mr. Chairman, I would like now to review the role of parks in the tourism industry, and the benefits provided to the people of the Northwest Territories.

Parks contribute significantly to the economy of the N.W.T. National parks, in particular, are specific brand name destinations that are the essential ingredients for tourism packages sold nationally and internationally. Nahanni National Park Reserve, for example, has an established reputation that draws wilderness enthusiasts from southern Canada, the U.S.A., and Europe.

National parks are important sources of employment in several towns and smaller communities in the N.W.T. For example, Auyuittuq National Park employs 20 people in Pangnirtung, three quarters of whom are Inuit. Three of the five management positions are held by Inuit, and most of the resource management and enforcement staff are Inuit. While any employment is welcome, such park jobs are specifically desirable, because they enable aboriginal residents of small communities, to take full advantage of their traditional skills and knowledge of the land. Total payroll for Auyuittuq for 1992/93 is $722,000.

Parks are also important because they protect wildlife populations and guarantee subsistence harvesting. They thus support the traditional ways of life, that are critical to the economic and social well-being of many small communities.

Mr. Chairman, the department recently joined representatives of the Inuvialuit and the federal government, to sign an agreement to establish Aulavik National Park on Banks Island. After more than ten years of negotiations, the people of Sachs Harbour concluded that this national park would bring important social and economic benefits to their community. The G.N.W.T. supported this negotiation process and worked to ensure that the agreement provided maximum benefits to the community and to the N.W.T.

In addition to national parks, which emphasize conservation, the G.N.W.T. has a system of territorial parks which promote local and tourism use of natural areas.

As a key development in this area, the G.N.W.T. is now seeking transfer of the necessary land to establish Katannilik territorial park in the Soper River valley near Lake Harbour. The community sees important benefits in guiding, outfitting, and accommodating visitors, as well as increased sales for its nationally and internationally known carvings.

Canadian Heritage River Status for the Soper River is an important attraction. Six tour operators now offer Soper River trips, and more operators are expressing interest. The owner of one firm, Bob Maynard of "Country Walkers" in Vermont, was so impressed with the quality of the experience, that he has booked two departures for 1993, and committed 10 percent of the tour profits for environmental education in Lake Harbour.

The emergence of Katannilik and the Soper River as a brand name destination results in benefits for Iqaluit as well. Visitors require stop-over accommodation and charter flights, amongst other services. With Katannilik joining Auyuittuq, two highly regarded territorial historic parks at Kekerten and Quammaarviit, how do you say that? I am almost finished!

---Applause

I wonder if John is really sick!

---Laughter

This is plus the planned new national park near Pond Inlet. The Baffin is acquiring the critical mass to become a world-class destination for the rapidly growing ecotourism market.

In the west, a series of parks in the south Mackenzie have been renovated to expand capacity, and encourage bus tour traffic. Blackstone, Saamba Deh, and Lady Evelyn Falls parks are now substantially improved in order to attract greater numbers of tourists.

Mr. Chairman, consistent with the economic development strategy, the Department is concentrating its tourism facility development initiatives into areas with high potential. There has also been development of facilities along the Dempster Highway, and into the Mackenzie Delta. This system consists of expanded and improved parks, community interpretive signs, roadside pull-offs, promotional facilities in Dawson City, at the beginning of the Dempster highway, and planning for new visitor centre for Inuvik.

These facilities and communities will gain from the national parks established in the northern Yukon, Banks Island, and at the Tuktoyaktuk pingos. Road improvements planned by the Department of Transportation will add considerably to the attractiveness of such a trip.

Mr. Chairman, each year tourism volumes along the Dempster Highway have increased, this year setting a record by surpassing last year's peak by 5,000 people. The opening of the centre in Dawson City, and the developments I have just described, will add to these numbers year after year. Communities along the highway, such as Fort McPherson, as well as Tuktoyaktuk and Inuvik, will benefit from this increasing level of travel.

The Canol Trail also has significant potential as a tourist destination. The Sahtu claim may include support for the establishment of this trail as a tourism destination.

In the interim, the department will be instrumental in assisting the people of the Sahtu, and particularly Fort Norman, in accessing "Arctic Environmental Strategy" funds to undertake the cleanup of discarded material, and stabilize some of the structures which could be considered historically significant.

To take advantage of road access, generally, we have also been working closely with the Department of Transportation to improve the quality of roadside pull-offs and highway signage. Most notable has been the large new sign promoting the Liard valley, which was erected at the Alaska Highway junction.

Attractions such as these provide a wide range of potential visitors with specific destinations and facilities that they can take advantage of. The benefits accrue as these destinations become better known, and more accessible in terms of transportation and locally available services. Parks and visitor services are a necessary and desirable element in our overall tourism promotion and development efforts.

Mr. Chairman, this budget includes ongoing funding for six new economic development officers which were established through supplementary funding in 1991-92.

Concurrent with this initiative, we have and will continue to be responsive to community requests to transfer funding to community councils in order for them to hire economic development officers who will work directly for the councils.

The department should be seen more as a partner than solely as the provider of capital. We must work cooperatively with community businesses to facilitate development and be a catalyst for development.

To this end, better use will be made of available federal program dollars as well as private sector equity in developing new businesses. The Development Corporation will play a larger role in the economy of many smaller communities across the north, and program delivery will be streamlined.

Initiatives we are undertaking such as decentralizing authority for the Business Credit Corporation, and the Business Development Fund will allow more timely action, responsive to community needs.

In terms of overall development of the economy, we are developing new markets for N.W.T. products, maximizing the impact of government expenditure of the northern economy through our "Buy North" program, and development of a northern manufacturing incentive to encourage this sector of the economy. Such an incentive is currently being developed to promote the purchase of northern manufactured goods by government, and those contracting with government, as called for in the recently updated business incentive policy.

Mr. Chairman, as example of the type of role we have outside of program delivery, is the department's role in the decommissioning of the DEW Line facilities.

The department is coordinating an interdepartmental response to this federal initiative, which has resulted in the purchase of surplus equipment for relocation to nearby communities where it will continue to be put to good use.

We will continue coordinating this effort with a view to maximizing the potential benefits from dismantling the remaining facilities. Our efforts will focus on having the contracts broker down sufficiently to make them accessible to as many northern businesses as possible.

The Government of Canada will negotiate a cost sharing arrangement with the government of the United States for dismantling. The final contracting approach will have to fit within the terms of the agreement.

Mr. Chairman, while our participation at Expo '92 did not produce the revenues hoped for, it has been a success in show casing the products and the people of the Northwest Territories to the world. There are risks involved in participation in an event of this magnitude. Those risks were clearly laid out before this House in documents tabled prior to debate on the bill, establishing the revolving fund for Expo '92, as well as in the debate itself.

This Legislature reviewed those risks, and decided that the potential benefits outweighed the risks involved. The international recession, high prices and strikes are all factors that contributed to lower than expected revenues for Expo.

As a result, our participation will cost almost $3.9 million, however, we should not overlook the fact that we have delivered a high quality product in terms of our facility, our service, and our northern products. Our staff have been excellent ambassadors for the north. They have been recognized in the Spanish press as being some of the friendliest on site. Unlike Expo '86 where the turnover of staff was significant, we have had only seven of our 51 staff come home, and three of them were for medical or family reasons. This is an excellent record, and I think that they deserve our thanks for their efforts.

The tourism training group, and other agencies, provided excellent training and orientation to the staff prior to their leaving for Seville, and this has undoubtedly contributed to the continuity, teamwork and excellent spirit that has been demonstrated these past months.

Members should know that the Canada Pavilion in Spain, without factoring in our investment, cost Canada and the provinces of British Columbia, Ontario and Quebec almost $50 million. We spend almost $6 million, and recovered more than $2 million for a net cost of $3.9 million. The provinces and the federal government went in without any opportunity to recover any of their investment. We sold a lot of product, we received excellent exposure for our products and much of what we spent, in fact $2.6 million, was paid to on behalf of northerners in purchasing or towards personnel.

We will be taking advantage of this increased exposure through tourism, arts and crafts, and northern foods marketing. We have made valuable contacts, and inroads, and I believe we can benefit from them over the long-term.

Mr. Chairman, much has been in the news concerning free trade, the Canada/U.S. free trade deal, the North American free trade agreement (N.A.F.T.A.), the G.A.T.T. talks, and initiatives related to reducing trade barriers within Canada have received widespread attention.

We have been monitoring developments and participating in working committees, on all these fronts, for the purpose of ensuring that Northwest Territories interests are maintained, in the form of our continued ability to stimulate the northern economy through government purchasing and contracting practices. The Business Incentive Policy stipulates the measures we will take when contracting for goods or services.

The recent international free trade deals run counter to our practice of providing an incentive to northern business, but does not directly apply to the Northwest Territories.

At the last First Ministers' Conference on the Economy, however, First Ministers directed the federal/provincial/territorial committee of Ministers, on internal trade, to eliminate trade barriers within Canada by 1995. This initiative could directly affect the Northwest Territories, and our ability to maintain the Business Incentive Policy. We will be formally requesting an exemption for the Business Incentive Policy from this initiative.

The recent Constitutional Consensus Report adopted at the Charlottetown meeting has produced a more pressing concern. The report includes a political accord on a Canadian "common market" that will accompany the constitutional amendments. The principles of the political accord could make it unconstitutional to restrict access based on a business location. Although these principles will have to be ratified by a future First Ministers' conference, and are subject to further negotiation, I feel I must notify this Assembly of this governments concern over these potential changes, and note our commitment to making every effort to state our case for maintenance of the principles of the Business Incentive Policy.

Mr. Chairman, the Northwest Territories economy is almost entirely import based. Every dollar we spend eventually ends up in southern Canada, with only a very small multiplier within the territories.

We are a developing economy. More industrialized areas of the country have developed over the past hundred years with the benefit of government protection. The Northwest Territories requires time to catch up with the rest of the country and help to develop a Northwest Territories business community which can be competitive. Thank you, Mr. Chairman.

Thank you, Premier. Do we have the comments from the Standing Committee on Finance? Mr. Todd.

Yes, if part of the departments strategy was to wear us down, I think they have succeeded. It is understandable why Mr. Pollard is sick today.

Mr. Chairman, that sounded so good, I wonder why so few people believe it? Part of the problem in my riding, is that I am not sure that they agree with the committee's effort, that it obviously took, to put this long, elaborate, and eloquent speech together.

I am not going to, at this late hour, because I am worn out after listening for 55 minutes to wonderful things that the Department of Economic Development has done. I am not going to sit here, and refute for another hour.

However, if I may, I will try to proceed with some of the motions in the areas of concern that we have. Can I proceed with the motions, Mr. Chairman?