Agreed.

---Agreed

Total activity, $23.236 million.

Agreed.

---Agreed

We'll go back to the summary on page 09-7. Capital expenditures, total capital expenditures, $36.304 million.

Agreed.

---Agreed

Are we agreed that this department is concluded?

Agreed.

---Agreed

Thank you very much, Members, for your questions, and thank you very much, Mr. Todd and your witness, for your answers. Would you like to take a five-minute break because a few people were nodding to do that, but I would be guided by what you want to do. Mr. Dent.

I would have to ask Mr. Todd if he's ready to handle that. Mr. Todd, it's the wish of the committee to deal with Economic Development and Tourism. Are you ready for that today?

Yes, Mr. Chairman, I'm ready.

Okay, then, proceed, Mr. Todd, with your opening comments.

Department Of Economic Development And Tourism

Minister's Introductory Remarks

Thank you, Mr. Chairman. As you can see from our budget estimates, we're proposing $8.4 million in new investments for 1995-96. These investments involve a number of projects either directly related to the development of small community economies, or to the development of our tourist infrastructure.

There is $4.9 million or close to 60 per cent earmarked for the community development of the NWT Development Corporation, while the remainder of $3.5 million is targeted for tourism and parks development.

NWT Development Corporation

Mr. Chairman, the role of the NWT Development Corporation is to create jobs and opportunities where few exist. In the NWT, this means investing in smaller, less developed communities. Although there is room for improvement, the evidence shows that the corporation has been very effective at job creation. This year alone, the corporation will spend over $12 million on NWT goods and services. It now has investments in 23 communities and makes regular purchases of meat, fish, crafts, artwork and other goods in another 10 communities. The benefits of these activities are significant. Based on the information collected this spring, every dollar the Development Corporation spends means $4.25 in other direct and indirect benefits. Just in terms of direct employment, businesses owned by the Development Corporation directly employ about 200 aboriginal people. In addition, another 400 hunters, trappers and fishermen received a cheque from the Development Corporation businesses.

I am also satisfied by our improvements in efficiency. Our capital target for this year is down by $1.1 million, or about 18 per cent. Subsidies have also been reduced by $100,000 to $2.2 million.

We are also moving to implement the committee's recommendation the corporation focus its efforts on smaller ventures and on a wider distribution of investments. Mr. Chairman, the investment plan of the Development Corporation reflects this direction. You will see that the six larger capital investments for 1995-96 are in the Deh Cho, Kitikmeot, North Slave, Baffin and Inuvik regions. The information we provided to the Standing Committee on Finance in October details the corporation's expenditure plans.

Some highlights of this investment plan include:

- $816,000 to upgrade the Kitikmeot fish and meat plant;

- $330,000 towards helping the people of Nahanni Butte build a new store, cafe and hotel; and,

- $250,000 to assist the people of Pangnirtung to rebuild the print shop.

Other major investments are slated for Taloyoak, Aklavik and Rae-Edzo. In conclusion, Mr. Chairman, I believe the Development Corporation's plan for 1995-96 addresses the concerns raised by the committee, and provides a sound basis for building opportunities and incomes within all communities.

Parks And Visitor Services

Mr. Chairman, the balance of the department's capital budget involves development of parks and visitor centres. Unlike the NWT Development Corporation which is directly involved with sales and employment, parks and visitors' centres represent a service to residence and the travelling public. They are designed to make it more comfortable and enjoyable to travel in the NWT. The objective is to encourage people, residents and non-residents, to travel more and to stay longer. The end result is more people spending more money in the NWT, creating new jobs and opportunities for local residents.

In the past, the department has been criticized for not measuring the impact of programs. I agree, and have made performance measurement one of the department's top priorities. In my opinion, what gets measured, gets done. While our last major review of the tourism industry was undertaken in 1989, this year we have initiated four reviews:

1. Working with the Bureau of Statistics we have completed a cost-benefit and economic impact analysis of parks expenditures in the western NWT.

2. We have implemented an exit survey to assess the total impact of tourism and resident travel expenditures in the NWT. Unlike the previous survey in 1989, which cost well in excess of $200,000 and was managed by a southern consultant, this survey was completed in-house using local community resources, for under $80,000.

3. This year we introduced the concept of a travel diary to the NWT. Although we had a late start, we managed to hand over 600 diaries to tourists entering the NWT. Each day the tourist is asked to complete a daily log of their

expenses and experiences, positive and negative. In this way we can identify the impacts of tourism on local economies. Although the final results are not in, our response rate has been very high, while the cost has been under $8,000.

4. Finally, we have developed a licensing database which maintains detail information on each tourism facility. This allows us to accurately track capacity and investment at the community and regional levels.

Mr. Chairman, without going into the detail of our cost-benefit analysis, I'd like to review some key findings. First, we found that close to 95 per cent of tourists reported that our parks met or exceeded their expectations. Overall consumer or client satisfaction, the first measure of success in any business venture, was very high.

Last year we charged $10 for staying one night in a campground and the total permit sales amounted to 175,000, an increase in attendance of 25 per cent since last year. Close to 90 per cent of the people surveyed felt the fees being charged were good value for money.

Or course, Mr. Chairman, these direct revenues are only a small portion of the total benefit. The overall objective is to have tourists spend more money in communities and on local goods and services. The Bureau of Statistics estimates that tourists using campgrounds between mid-June and early September contributed over $2.6 million to the territorial economy. This number does not represent the whole tourist season, nor does it include the impact of residential spending.

As Members of the Standing Committee on Finance are aware, we have developed a detailed cost-benefit model to assist in setting park development priorities. Staff are currently working on preparing a less technical version of the results -- which we all didn't understand -- which will be made available to Members of the standing committee.

Investment Priorities For 1995-96

Mr. Chairman, I would like to discuss the new parks and tourism investments planned for 1995-96. Over the past five years, our focus has been on modernizing and renovating older facilities. We will continue this work over the next few years, with the priority areas being in the Twin Falls and Hay

River parks, Happy Valley in Inuvik, Sylvia Grinnel Park in Baffin and the community campground in Fort Simpson.

We are also concerned about the eastern Arctic. Although our current year estimates are not final, there seems to be a decline in tourism activity over the past six years. We will be examining this development in greater detail over the current year, but in the interim we are developing plans for park development at Bloody Falls near Coppermine and Mallikjuaq Island near Cape Dorset.

New Parks Policy

We are also working on a new policy which will establish guidelines for parks development.

Conclusion

In conclusion, Mr. Chairman, this year's capital plan is strengthened by work on several fronts: visitor research; policy development; cost-benefit analysis; and, improved systems planning.

I believe the capital plan before you will ensure the continued growth of our tourism industry. Furthermore, it will provide opportunities and jobs in those communities and regions where few options exist. Thank you, Mr. Chairman.

Thank you very much, Mr. Todd, for your opening remarks. I would like to turn to the Standing Committee on Finance. Mr. Antoine.

Standing Committee On Finance Comments

Thank you, Mr. Chairman. The Standing Committee on Finance review of the 1995-96 capital estimates on the Department of Economic Development and Tourism start off with tourism and parks.

Tourism And Parks

The standing committee held its first week of hearings in Iqaluit. During that time, committee Members were able to see the NWT's newest territorial park, Katannilik Park, on southern Baffin Island. Not only did Members have a chance to see the park itself, and the facilities available to those using the park, they also met with the Lake Harbour hamlet council and tourism committee, and discussed the benefits expected by the community from the investment in the park.

This park is an example of how careful investment can result in greatly multiplied economic benefit to northerners. The tourist spending has greatly exceeded GNWT spending on the park, and the benefits in jobs and economic activity for the area are obvious. This objective was the basis of last year's recommendation to the department in the committee's review of the capital estimates.

Following last year's recommendation, the committee was pleased to see a comprehensive cost/benefit analysis of the department's tourism and parks program, and of specific projects. Not only that, but committee Members were especially impressed that conclusions from this initial analysis were indeed being used to guide the department's capital spending. Analysis of benefits from investment in Katannilik Park, in campgrounds in the western NWT, and in gateway visitor centres at the 60th parallel and in Dawson City, Yukon, have been used to guide and redirect departmental spending.

The sole complaint of the committee was that the analysis was very difficult to understand. While departmental officials may well find the analysis useful in its present form, committee Members and their staff found it hard to quickly digest and analyze the information as presented. Members look forward to seeing a more understandable version of the analysis, as promised by the Minister.

Country Foods

Committee Members raised earlier comments about the use of country foods by NWT institutions. Members recognize that, for institutions such as Stanton Yellowknife Hospital or the Yellowknife Correctional Centre, buying caribou or char would be more expensive than buying beef or tuna. However, the government has to consider not only the economic benefit to northerners of encouraging and supporting the development of a country food sector, but also the social well-being of those confined to such institutions who would likely prefer to have access to food with which they are familiar.

Recommendation 2

The Standing Committee on Finance recommends that the Department of Economic Development and Tourism take the lead in developing a policy that would encourage and enable government institutions such as hospitals and correctional centres to purchase and serve more northern foods.

NWT Development Corporation

The budget for the NWT Development Corporation was listed under this department. However, very little detail was provided. Committee Members would not only like to see details of planned investments and expenditures by the corporation, but also want to see the corporation's corporate plan. It is important that the committee have the opportunity to examine the corporation's activities and compare them to past results. The Minister promised to provide appropriate data as soon as it was available, and to table the corporate plan in the House. As such, Members will discuss issues related to the Development Corporation with the Minister in the House.

Mr. Chairman, I have a motion.

Okay, Mr. Antoine, proceed with your motion.

Thank you, Mr. Chairman. I move that the committee recommends that the Department of Economic Development and Tourism take the lead in developing a policy that would encourage and enable government institutions such as hospitals and correctional centres to purchase and serve more northern foods.

The motion is in order. To the motion.

Question.

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

---Carried

Mr. Antoine.

Mr. Chairman, that concludes the standing committee's report for the Department of Economic Development and Tourism. Thank you.

Thank you very much, Mr. Antoine. Mr. Todd, would you like to invite your witnesses in and take your place at the witness table?

Thank you. Yes.

Mr. Todd would like to have his witnesses join him. Is that all right with Members of the committee?