Agreed.

---Agreed

Thank you, Mr. Chairman. I would like to thank Members for their advice in passing this budget and I would like to thank the staff for preparing the budget.

We wish to proceed with the budget and deal with Energy, Mines and Petroleum Resources.

Agreed.

---Agreed

Department Of Energy, Mines and Petroleum Resources

The one significant change in the 1993-94 budget proposal results from the transfer of energy awareness program responsibilities from the Department responsible for Government Services and Public Works. This amounts to an increase of $280,000 and two PYs.

The total proposed budget for the department for 1993-94 is $4.787 million and 24.9 PYs compared to $4.490 million and 22.9 PYs for 1992-93. This total includes funding for the mineral development agreement of $2.370 million, representing about one half of the total budget.

Energy Management

Responsibilities for energy awareness were transferred to the department effective August 4, 1992, as part of the government's consolidation exercise. A new director came on staff in December, and we are in the process of recruiting an energy management coordinator. The department has also re-allocated internal resources to this initiative.

The program will be administered from Yellowknife with the assistance of Government Services/Public Works technical staff in the regional centres.

Minerals

Major mining-related projects which the department will be working on in the coming year include coordinating the GNWT's involvement in the possible development of the Izok Lake base metals property. This would be a very large development which could be a catalyst for the development of additional mines, and transportation and energy infrastructure.

The department will be working with industry and the Inuit of the Kitikmeot region to facilitate the negotiation of a benefits agreement for this project, and is sponsoring work on upgrading employment data in the Coppermine area.

The NWT is the only jurisdiction in Canada which has experienced an increase in mineral exploration activity over the past year. The diamond staking rush is continuing, and is turning out to be one of the largest in Canadian history.

Industry is still at an early stage in the cycle for the exploration of diamonds, and it will take perhaps another five years and an expenditure of over $100 million, to know if a diamond mine or mines are viable.

In the 1992 field season, a total of 12 mapping projects were run under the minerals initiatives agreement. Four of these were managed directly by the department. The other eight were carried out by the geological survey of Canada.

Five of the 14 summer staff hired for the 1992 mapping projects were northerners. Any northern student taking training in geology can obtain summer employment with the minerals initiatives mapping projects.

Northern Accord

The northern accord still has not been finalized, even though most of the issues have been settled. Our concerns relate primarily to the financial elements of the federal government's current proposal.

This proposal would not provide the GNWT with the means to assist in the continued development of NWT oil and gas resources, the program transfer funding is not adequate and the fiscal arrangements would not provide the GNWT with an incentive to encourage development activity.

There is reason to believe that federal Ministers are taking a second look at their proposal, and discussions will be continuing between the two governments at a political level to see if we can resolve the few remaining issues.

Oil and gas activity in the NWT remains at depressed levels, due to low prices, and the lack of oil and gas exploration rights issuances in those areas of greatest interest to the industry.

The department has and will continue to work with the aboriginal organizations, with industry and the federal government, to find means by which these exploration rights might be issued under terms and conditions which would be acceptable to all parties. This work has included the identification and analysis of investment opportunities for local and native-owned companies in the oil and gas resources of their regions.

The department is facilitating a proposed project including the Inuvialuit Petroleum Corporation, a new company called Zhik'e Petroleum which is based on the Hay River Reserve, and Paramount Resources. This project could lead to the eventual development of a gas pipeline from Cameron Hills to Hay River and Yellowknife.

The department is facilitating engineering and economic investigation by the Deh Cho tribal council for a possible gas pipeline extension from Pointed Mountain to existing gas reserves in the area. The department is working with the Sahtu development impact zone society as a seismic program proposal.

It will also closely monitor the progress of the recent proposal by Hondo Oil & Gas to transport natural gas from the Delta to Alaska, and will coordinate the government's input into the project.

Utilities

The department will continue to represent the government in future public utilities board hearings. Of particular importance will be the "phase 2" hearings on the NWT Power Corporation's rate structure.

The department will be working closely with the Power Corporation and other NWT utilities in coordinating the development and implementation of energy conservation programs.

This concludes my opening remarks, Mr. Chairman, and I would be pleased to answer Members' questions.

Thank you, Madam Premier. Does the Standing Committee on Finance have any opening remarks? Mr. Patterson.

Comments By Standing Committee on Finance

Northwest Territories Power Corporation

Thank you, Mr. Chairman. Mr. Chairman, the Standing Committee on Finance had hoped to review the trends of power costs and outages by community. The NWT Power Corporation had over 120 days to respond to the committee's request for this information, but failed to do so until recently.

The committee believes that the Power Corporation has a responsibility to take the initiative to bring down electrical costs, particularly in view of the major impact that these costs have on the total cost of living in the north. The fact that the Power Corporation has a monopoly selling electrical energy outside of the major centres, should not prevent them from competitively pricing electricity.

Committee Members expressed concern that the corporation does not appear to be operating efficiently and effectively. The Assembly has approved a motion for a comprehensive audit which must be followed up by the Premier. We all agree it should be operated in a more business-like manner.

We asked the Power Corporation for some measure of customer satisfaction. A simple survey would provide the necessary initial feedback. The corporation's response that consumer satisfaction is linked to demand side management, and any major initiative has to receive public utilities board approval, seemed extraordinarily bureaucratic.

More work must be done to study the merits of privatization of the Power Corporation. Caution must be taken because of the public policy implications of this essential service.

Energy, Mines And Petroleum Resources

The Department of Energy, Mines and Petroleum Resources should also be probing ways and means to bring down electrical and fuel costs in the Northwest Territories.

Finally, the committee supports the Minister's efforts to expand the exploration and development of mines and promote the development of related infrastructures, particularly where northern benefits are maximized. However, we believe that these efforts should become an integral part of an overall publicly stated strategy.

Executive

In our introductory comments, we have talked extensively about leadership and vision. It is the Government Leader's job to provide the vision. It is the central agency's role to provide direction and support to program and service departments, as required. The evidence shows that departments and agencies are not getting the necessary direction and support from the Department of the Executive. In response to a 1992-93 -- I wonder, Mr. Chairman, if I should be stopping here. I think I will stop here, although I am getting on a role, because now we are getting into the Department of Executive.

Madam Premier, are you prepared to invite in your officials?

Mr. Chairman, I am a bit confused from the response by the representative of the Standing Committee on Finance. I read the opening remarks to Energy, Mines and Petroleum Resources. I did not provide the opening remarks to the Power Corporation's budget review. I think the honourable Member might be a bit ahead of himself.

Mr. Patterson.

As Mr. McCallum used to say, "Mea culpa." I should have confined my remarks to Energy, Mines and Petroleum Resources. My apologies.

Madam Premier, do you wish to invite your officials in at this time?

Yes.

Does this committee agree?

Agreed.

---Agreed

Proceed.

General Comments

I would like to make the comment and it would lead to a question, that the big initiative of this department in my experience has been pursuing the northern energy accord and I know an enormous amount of work has been done to develop a very detailed NWT position on the northern accord. I know, as well, recently the Yukon government has become very much involved and, I believe, supportive of the NWT position. It has been an initiative of the Government of Canada, we know the Prime Minister signed the enabling agreement to negotiate the northern energy accord, here in Yellowknife. We also know that a tremendous amount of effort has been put into this initiative by the Honourable Nellie Cournoyea.

Are we in danger of all this tremendous effort and work ending without a whimper as the term of Mr. Mulroney comes to a close, or is there a possibility that this work can be finished off, especially now that we have Mr. McKnight in the Energy, Mines portfolio, federally? I would like to get a feeling from the Minister. Do we still have a chance of finishing off this very important business before a federal election or, perhaps, before the leadership convention in June distracts everyone's attention? Is it still possible we can conclude this long-standing issue? Thank you.

Thank you. Madam Minister.

Mr. Chairman, I hope we can. We are trying to give it one last shot with the Prime Minister. There are only a few issues which have to be laid to rest. I think all the work which has gone into this northern accord has addressed and readdressed every avenue we could find to make a deal with the federal government that will be good in the long term. That is what we are looking for, but the three issues left to be resolved are the perversity factor which is a finance issue, the program dollars and the Norman Wells

development fund. Those are really the only issues, and we are going to try to push the Honourable Brian Mulroney to see if he can maybe give us one last handshake that is worth something. We are working very hard to get that meeting going.