I have another concern that I wanted to express on behalf of the Hay River Reserve. For many years now, as far back as 1986, two young girls drowned in Sandy Creek. I have expressed a need for the community to have an above-ground swimming pool, so they have a swimming program in the community. I just wanted to express that concern to the Minister. Thank you.

Thank you. Total capital expenditures, $35.254 million. Agreed?

Agreed.

---Agreed

Thank you. Does this committee agree that this department is concluded?

Agreed.

---Agreed

Thank you. What does the committee wish to do next? Mr. Antoine.

We agreed earlier on that, once we had completed MACA, we would get into Economic Development and Tourism.

Agreed.

---Agreed

I would like to thank the Minister and his witnesses at this time.

Department Of Economic Development And Tourism

We will go on to Economic Development, on page 13-7. I wonder if the Minister would like to make any opening remarks? Mr. Todd.

Introductory Remarks

Thank you, Mr. Chairman. Yes, I do have a few opening remarks. The departmental capital estimates, for the fiscal year 1994-95, total $10 million, $6 million for the NWT Development Corporation and $4 million for parks and visitor facilities.

NWT Development Corporation

The Northwest Territories Development Corporation receives capital funding through the department but operates at arm's-length. It is mandated to invest primarily in lesser developed communities, where jobs are needed the most. The corporation has invested in 24 enterprises, most of which utilize traditional skills.

The board of the corporation has approved $24.8 million for investment to date. Investments have generated some 300 full and part-time jobs. About 200 of these jobs are occupied by aboriginal northerners and 40 by non-aboriginal northerners. In addition, corporation activity generates work for over 300 cottage workers, hunters and fishermen. The NWT Development Corporation is contributing to the well-being of approximately 650 northerners, of whom, about 560 work in level II and III communities.

Parks And Visitor Facilities

With respect to parks and visitor services, to meet the needs of communities and tourists, the department undertakes five types of projects. Destination parks, such as Katannilik in the Baffin, serve as the focus of tourist visits. People come specifically to experience the physical beauty of an area. Surveys showed that Auyuittuq National Park was too rugged for many visitors. Katannilik Park serves this niche in the market place, as well as other adventure travellers and eco-tourists.

Tourism supports parks, like Blackstone in the Deh Cho region, complements existing attractions and provides tourists with basic campground services needed to make it easier to experience remote wilderness attractions like the Nahanni National Park. Community parks, like Hay River's territorial park, have strong local recreational use and provide basic facilities to accommodate tourists who are then able to take advantage of what communities have to offer.

Visitor centres are intended to provide information and perhaps generate interest in other areas of the north. The visitor centre in Dawson City, for example, was developed to divert Alaska Highway travellers to the Dempster Highway. Informational signs and displays and roadside pull-offs welcome and inform the traveller.

Facility development, to date, has been largely determined by tourism plans, community aspirations and visitor surveys. The government has no formal policy to determine which facilities should be developed or where they should be built. We will be developing a clear policy on park establishment in the next eight to ten months. Included in the policy development process will be the development of a means to analyze the costs and benefits of development. Staff in the department are presently working with the Bureau of Statistics to develop a model to measure direct and indirect benefits generated by parks and tourism facilities.

One measurable direct benefit of the park system is local employment. Last year, approximately 44 direct construction jobs were generated by the capital expenditures. The direct benefit of the park system is significant, when the 50 small park operations and maintenance contracts, totalling $500,000, are added to these construction jobs.

Statistics collected at 14 parks and campgrounds indicate that last year, parks utilization increased 17 per cent from 1992, from 9,608 to 11,280. Increases in traffic resulted in a 35 per cent increase in revenue, from $103,000 to $139,000. This is revenue from fees only, and does not include revenue to businesses from tourist expenditures.

We have been able to measure some of the direct benefits resulting from the establishment of Katannilik Park. This past summer, four tour operators made 11 trips into Katannalik, with 115 package tour clients. These visitors brought an estimated $88,000 in direct benefits into Lake Harbour and Iqaluit. Of this amount, $32,000 was spent on air transportation and $10,000 on services and purchases in Iqaluit. Guide training for Lake Harbour residents resulted in direct employment for a number of local guides and outfitters who earned $15,000 in fees. A total of $26,000 was spent on carvings and souvenirs. The Lake Harbour hotel earned $5,000 for accommodating tourists, and programs involving local homestay and home meals were also developed and met with resounding success.

Lake Harbour has never attracted many tourists. With very little development in this park, there was tremendous growth in tourist activity and business in the community this past summer. Investments in parks and visitor facilities are much like investments in transportation infrastructure. They will continue to generate dividends, long after the initial investments are made. The indications from operators travelling to Katannalik this summer are that growth in demand, in 1994, will be as much as 40 per cent.

It is a difficult job to attract tourists into remote areas and small communities. Attractions are needed, as are facilities to handle visitors when they come. Through the parks, program attractions and facilities have been developed. Our parks are drawing people to the north. The essential services provided make for a better stay. Recreational needs of local residents are being met and employment and business opportunities generated. Thank you, Mr. Chairman.

Thank you. The Standing Committee on Finance would like to make opening remarks. Mr. Antoine.

Standing Committee On Finance Comments

Thank you, Mr. Chairman. Two major issues were raised during the committee's review of the Department of Economic Development and Tourism capital forecasts. These issues are outlined below:

-The relative economic benefits associated with tourism projects; and,

-The absence of policy to guide capital expenditures for parks development.

The committee also expressed concern regarding the department's response to the previous year's recommendation on the fisheries industry.

Economic Benefits

The committee is very concerned about the absence of a strong rationale for the overall allocation of capital funding to tourism projects. It is imperative that a comprehensive economic assessment, which clearly identifies the real and potential benefits to communities, be conducted. The results of such an assessment are necessary to determine the appropriate allocation of overall capital funding to parks development and other tourism projects. In light of the $4.5 million the government plans to commit next year, this type of information will prove invaluable.

A specific example of the need for further information is provided by the Katannalik Park, near Lake Harbour on Baffin Island. The planned investment in this park, between 1992 and 1998, is $1.4 million. Katannalik is a destination park where visitors come specifically to experience its remote location and Arctic environment. The park undoubtedly contributes directly to the community's economy, in terms of employment generation and local purchasing, but adequate measures of indirect benefit to the community and region have not been quantified.

The committee would like to see the department use Katannalik Park, specifically, for a detailed forecast of economic costs and benefits associated with the parks program. As well, detailed economic benefit forecasts should also be carried out for other types of parks facilities such as Blackstone, a tourism support park; the Fort Smith Mission Historic Park, a community park; and, the Western Arctic Regional Visitors' Centre in Inuvik, a visitors' centre.

The committee recommends that the Department of Economic Development and Tourism complete a detailed forecast for direct and indirect net economic benefit expected:

-from its tourism and parks program, in general; and,

-from specific projects, in the context of the communities where the benefits are expected.

The committee further recommends that this detailed forecast be completed in sufficient time to guide the allocation of overall capital spending for the fiscal year 1995-96.

Parks Development Policy

The committee noted, and the Minister confirmed, that the Department of Economic Development and Tourism is operating without the benefit of a policy to guide its parks development program. The Minister committed, during the review, to develop a comprehensive policy. The department indicated that it would take about eight or nine months to develop and implement this policy.

Fisheries Industry

In its review of the 1993-94 capital forecasts, the committee recommended that the Department of Economic Development and Tourism develop a long-term plan for the fisheries industry in the Northwest Territories, including examining the feasibility of increasing the processing capacity of existing fish plants. The departmental response has been to initiate a comprehensive study of the industry, prior to developing a long-range plan. The committee is not satisfied with this response. Members would like to impress upon the department that a long-range plan is urgently required.

Mr. Chairman, I have one motion.

Proceed, Mr. Antoine.

Thank you. Your motion is in order. To the motion.

Question.

Are you ready for the question? I need a quorum to take a vote.

Question.

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Mr. Chairman, that concludes the Standing Committee on Finance report on the Department of Economic Development and Tourism. Thank you.

Thank you. Before I call for general comments and questions, I wonder if the Minister would like to bring in his witnesses, at this time?

I would at this time, Mr. Chairman, if I may?

Does this committee agree?

Proceed Mr. Minister. Mr. Minister, for the record, would you introduce your witnesses at this time?

Thank you, Mr. Chairman. On my immediate right, is Mr. Bailey, who is the Deputy Minister of Economic Development. On my immediate left, is Alan Vaughan, who is the President of the NWT Development Corporation.