This is page numbers 753 - 787 of the Hansard for the 12th Assembly, 5th Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was development.

Topics

Clerk Of The House Mr. David Hamilton

Return to Written Question 18-12(5) asked by Mr. Lewis to the Minister of Economic Development and Tourism and the NWT Development Corporation concerning businesses taken over by the NWT Development Corporation.

The following majority owned Development Corporation companies acquired the assets and/or assumed operating responsibilities of existing operations:

1. Northern Forest Projects Ltd. (Hay River) was established by the Development Corporation. It is a forest products management company contracting for the supply of logs, milling of logs and sale of lumber. However, some of the rolling stock assets of that company were transferred to it from #933261, and more than half of its revenues originate from logs milled by #933261. #933261 Ltd, is a contract milling company located in Hay River and owns all of the milling assets of the former Patterson Enterprises Ltd.

Northern Forest Products is responsible for arranging for the sales of lumber produced by $933261 (the Hay River mill).

It is expected that $933261 in 1994 will produce about four to five million board feet of lumber, and it is expected that this company and Northern Forest Products will both enjoy small profits.

In 1994, these two companies will fund 25 full and part-time positions, and will likely expend some $1.590 million on the payment of wages to NWT residents and the purchase of goods and services from NWT businesses.

2. Great Slave Lake Forest Products Ltd is based in Fort Resolution and is a contract lumber milling company. The Development Corporation entered into an agreement with Nuni Ye Forest Products that resulted in the transfer of the assets of Nuni Ye to Great Slave Lake Forest Products Ltd. Nuni Ye had been dormant for approximately eight years at the time.

Northern Forest Products will sell all of the lumber milled by this company.

It is expected that Great Slave Lake Forest Products in 1994 will produce 2.5 to 3.5 million board feet of lumber, and it is expected that this company will likely break even.

Fifteen to 20 full and part-time positions will be funded directly by the company in 1994, and the company will likely expend some $821,000 on the payment of wages to NWT residents and the purchase of goods and services from NWT businesses.

3. #913044 (Fort McPherson Tent and Canvas Shop Ltd) was an Economic Development and Tourism (ED&T) managed enterprise prior to its transfer to the Development Corporation.

The company operates a small craft outlet and produced a variety of manufactured fabric products. It is forecasting production of 500 tents, 4,600 bags, 250 miscellaneous fabric products and some custom work (example, boat covers) in 1994. Arctic Canada Arts and Crafts Wholesale is the majority wholesale customer of this business.

This company is not forecasted to generate a profit in 1994.

In 1994, it is expected that this company will fund 22 full and part-time positions and will likely expend some $560,000 on the payment of wages to NWT residents and the purchase of goods and services from NWT businesses.

4. Cumberland Sound Fisheries transferred its fish plant processing facilities to Pangnirtung Fisheries Ltd. at the time of the incorporation of Pangnirtung Fisheries.

Pangnirtung fisheries buy char from a variety of Baffin Island communities and turbot caught through the ice near Pangnirtung. It is expected that the plant will produce 300,000 to 400,000 pounds of finished turbot products and 25,000 to 40,000 pounds of Arctic char products in 1994. In addition, Pangnirtung Fisheries is involved in discussions that may result in the processing of summer caught turbot on a pilot project basis this year. It is not likely that more than 55,000 pounds of finished product would result from such a test project. This company is not forecasted to generate a profit in 1994.

Arctic Canada Foods arranges for the sale of virtually all of Pangnirtung Fisheries products.

In 1994, it is expected that this company will fund 37 full and part-time positions, and will likely expend some $1.630 million on the payment of wages to the NWT residents and the purchase of goods and services from NWT businesses. This includes payments to some 100 fishermen.

5. Nahanni Butte General Store Ltd was an ED&T managed enterprise prior to its transfer to the Development Corporation. It is the only store in the community and sells a range of fresh products and dry goods to community residents. In addition, it provides a taxi service for community residents to other nearby communities and also operates a small water taxi service. This company is not forecasted to generate a profit in 1994.

In 1994, it is expected that this company will fund five full and part-time positions, and will likely expend some $230,000 on the payment of wages to NWT residents and the purchase of goods and services from NWT businesses.

6. Acho Dene Native Crafts Ltd was an ED&T managed enterprise prior to its transfer to the Development Corporation. It generates a retail arts and crafts outlet and will purchase about 1,280 birch bark products and 830 moose hide products in 1994. This company is not forecasted to generate a profit this year.

The major wholesale buyer of its products is Arctic Canada Arts and Crafts Wholesale.

In 1994, it is expected that this company will fund three full and part-time positions and will likely expend some $210,000 on the payments of wages to NWT residents and the purchase of goods and services from NWT businesses. This includes payments to approximately 42 cottage workers.

7. Rae Lakes General Store Ltd was an ED&T managed enterprise prior to its transfer to the Development Corporation. It is the only store in the community and sells a range of fresh products and dry goods to community residents. This company will likely break even or generate a small profit in 1994.

In 1994, it is expected that this company will fund six full and part-time positions and will likely expend some $377,000 on the payment of wages to NWT residents and the purchase of goods and services from NWT businesses.

8. The Cambridge Bay HTA transferred its meat processing operation to Kitikmeot Foods Ltd. It is expected that in 1994, Kitikmeot Foods will produce 55,000 pounds of caribou and muskox products and 14,000 pounds of fish products. This company is not forecasted to generate a profit in 1994.

Arctic Canada Foods arranges for the majority of the sales of Kitikmeot Foods products.

In 1994, it is expected that this company will fund 12 full and part-time positions and will likely expend some $258,000 on the payment of wages to NWT residents and the purchase of goods and services from NWT businesses. This includes payments to some 4 fishermen and hunters. The volume of production and the benefits generated by this company will rise somewhat if the current negotiations for the purchase of 200 to 300 muskox carcasses from Holman are successfully concluded.

It should also be noted that the Cambridge Co-op has agreed in principle to transfer its fish processing operations to Kitikmeot Foods. If this transaction is completed, then in 1994 it is expected that there will be an additional $530,000 of payments of wages to NWT residents and the purchases of goods and services from NWT businesses. These additional payments would include payments to some 20 additional fishermen.

9. Keewatin Meat and Fish Ltd acquired the fish processing operations in Rankin Inlet that were managed by ED&T as an enterprise. On takeover of the fish operations, steps were taken to broaden the product lines to include meat and fish from all Keewatin communities. The majority product of Keewatin Meat and Fish since its takeover is processed caribou.

It is expected that in 1994, Keewatin Meat and Fish will produce 69,600 pounds of caribou and 42,000 pounds of fish products. This company is not forecasted to generate a profit in 1994.

Arctic Canada Foods arranges for the majority of the sales of Keewatin Meat and Fish products.

In 1994, it is expected that this company will fund 25 full and part-time positions and will likely expend some $280,000 on the payment of wages to NWT residents and the purchase of goods and services from NWT businesses. This includes payments to some 66 fishermen and hunters.

10. Uqqurmiut Arts and Crafts (1993) Ltd recently began operating the Uqqurmiut Centre. The major products of the centre are tapestries, prints, signage and woolen products. In addition, the operation runs a small arts and crafts retail outlet.

Arctic Canada Arts and Crafts Wholesale will arrange for the sale of some of the Uqqurmiut products in 1994, and the balance will be sold by Uqqurmiut Arts and Crafts Ltd.

In 1994, it is expected that this company will fund 25 full and part-time positions and will likely expend some $580,000 on the payments of wages to NWT residents and the purchase of goods and services from NWT businesses. This includes payments to some 35 cottage workers.

Clerk Of The House Mr. David Hamilton

Return to Written Question 19-12(5) asked by Mr. Patterson to the Minister of Economic Development and Tourism and the NWT Development Corporation concerning the operating guidelines for the NWT Development Corporation concerning the operating guidelines for the NWT Development Corporation.

The objectives, mandate, terms of reference and policy guidelines for the NWT Development Corporation are contained in the Northwest Territories Development Corporation Act, by-law No. 1, the existing corporate plan, the investment guidelines and a public hand-out describing the operations and objectives of the NWT Development Corporation. These documents have been provided under separate cover to the honourable Member.

The Speaker Jeannie Marie-Jewell

Thank you. Item 8, replies to opening address. Item 9, petitions. Mr. Clerk. Item 10, reports of standing and special committees. Item 11, reports of committees on the review of bills. Item 12, tabling of documents. The honourable Member for Baffin Central, Ms. Mike.

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Rebecca Mike Baffin Central

Thank you, Madam Speaker. I wish to table the following document. Tabled Document 47-12(5), guidelines for allocating staff accommodation.

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The Speaker Jeannie Marie-Jewell

Item 12, tabling of documents. Mr. Clerk.

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Clerk Of The House Mr. David Hamilton

Madam Speaker, pursuant to rule 57(10), I wish to table Tabled Document 48-12(5), a response to Petition 5-12(5), presented by Mr. Dent and responded to by the Premier, concerning summary of specific recommendations, Special Committee on Health and Social Services.

Item 12: Tabling Of Documents
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The Speaker Jeannie Marie-Jewell

Thank you. Item 12, tabling of documents. Item 13, notices of motion. Item 14, notices of motions for first reading of bills. The honourable Member for Hay River, Mr. Pollard.

Item 14: Notices Of Motions
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The Speaker Jeannie Marie-Jewell

FOR FIRST READING OF BILLS

Bill 18: Write-off Of Debts Act, 1993-94
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John Pollard Hay River

Thank you, Madam Speaker. Good afternoon. Madam Speaker, I give notice that on Thursday, March 24, 1994, I shall move that Bill 18, Write-Off Of Debts Act, 1993-94, be read for the first time. Thank you, Madam Speaker.

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The Speaker Jeannie Marie-Jewell

Thank you. Item 14, notices of motions for first reading of bills. The honourable Member for Hay River, Mr. Pollard.

Bill 19: An Act To Amend The Tobacco Tax Act
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John Pollard Hay River

Thank you, Madam Speaker. Madam Speaker, I give notice that on Thursday, March 24, 1994, I shall move that Bill 19, An Act To Amend The Tobacco Tax Act, be read for the first time. Thank you, Madam Speaker.

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The Speaker Jeannie Marie-Jewell

Thank you. Item 14, notices of motions for first reading of bills. Item 15, motions. Recognizing that the honourable Member for Deh Cho, Mr. Gargan, is not in the House, Motion 23-12(5) will drop from the order paper. Item 15, motions. Item 16, first reading of bills. Item 17, second reading of bills. Item 18, consideration in committee of the whole of bills and other matters: Bill 1, Appropriation Act, No. 2, 1994-95; Committee Report 2-12(5), Report of the Review of the 1994-95 Main Estimates; Tabled Document 1-12(5), Towards an NWT Mineral Strategy; Tabled Document 2-12(5), Building and Learning Strategy; Tabled Document 34-12(5), Tradition and Change, A Strategy for Renewable Resource Development in the NWT, February 1994, with Mr. Lewis in the chair.

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The Chair Brian Lewis

I would like to call the committee to order. What is the wish of the committee? Mr. Ningark.

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John Ningark Natilikmiot

Thank you. I would like to suggest, Mr. Chairman, that we do the Department of Economic Development and Tourism and, if we're able to conclude that, Energy, Mines and Petroleum Resources. Following that, we would like to deal with the Workers' Compensation Board, in that order. Thank you.

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The Chair Brian Lewis

Thank you, very much, Mr. Ningark. Are we agreed?

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Some Hon. Members

Agreed.

---Agreed

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The Chair Brian Lewis

The Minister for Economic Development and Tourism, do you have any opening remarks

for the committee?

Department Of Economic Development And Tourism

Introductory Remarks

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John Todd Keewatin Central

Thank you, Mr. Chairman. To carry out with the department's mandate in the 1994-95 fiscal year, the government has budgeted just over $34 million, that's an eight per cent increase over last year's budget as a result of forced growth. Of this amount, 86 per cent is targeted directly to programs and program delivery, and 14 per cent is allocated to general management and program support.

As I've indicated on other occasions, in order to effectively meet the needs of the residents of the Northwest Territories and to get more for each dollar spent, the department has reorganized and streamlined. New management techniques have been introduced, funding application procedures have been simplified, divisions performing similar functions have been consolidated, and program implementation and decision-making responsibilities have been decentralized to the regions.

Departmental activities must be linked to the best economic opportunities at the local and regional levels. To this end, the Standing Committee on Finance has recommended that the department provide economic planning leadership and support to communities and regions, as required. We are responding to this recommendation. Staff are meeting with local councils, regional organizations and business groups to review the current initiatives and to seek advice and recommendations on future activities. Formal planning exercises will be undertaken in all regions during the coming fiscal year. In addition, more emphasis is being placed on cost-benefit analyses to help identify the best opportunities and to ensure we are getting the most for our money.

The department is continuing on the course established in the 1990 economic strategy. Emphasis on the development of small business as a means of job creation will continue. Every community has highly-skilled individuals in traditional pursuits: hunting, fishing and the production of arts and crafts. People with these skills tend to live in communities where opportunities for employment are few. The department, as well as the Northwest Territories Development Corporation will continue to focus on these sectors of the economy, in order to generate employment and create income opportunities where they are most needed.

Efforts to increase the level of self-sufficiency of NWT residents will continue for the development of food production capacity and by encouraging the development of the service businesses to meet the needs of residents and to cater to tourists. By using northern firms and products, we will be keeping our money circulating in the northern economy. We will continue to encourage the sustainable commercial harvest of muskox, caribou and fish and to undertake marketing initiatives for Arctic foods.

To support these initiatives, and on the advice of Members of this House, work has been initiated towards a policy on the use of northern foods in government institutions. Food represents a significant portion of the NWT's imports. In addition to developing the Arctic foods sector, agricultural growth will also be encouraged. To guide the development of the industry, an agricultural development policy will be developed.

Tourists are another renewable resource that must be nurtured. Generally speaking, tourists are an ideal resource. They leave behind their money and they take home only memories, pictures and souvenirs. Tourists do little to damage the environment or the cultures. They come to see. We must have attractions and potential visitors must know about them. A new tourist marketing strategy has been finalized and will be implemented in the coming fiscal year.

Marketing activities will be fine tuned to help us compete in this highly competitive market and also recognize the differences between tourist products in Nunavut and in the west. We have different products to sell in each area and to better promote these products, we will develop distinct marketing activities for each part of the Northwest Territories.

With respect to parks, at the request of the Standing Committee on Finance, work on a parks policy has been undertaken to provide direction for future park development. In addition, in response to the committee, the department has started to look at the cost-benefits of parks development. As work on the parks policy is proceeding, maintenance and renovation work on already existing parks will be carried out. A management plan has been developed for facilities already approved and some long-range planning will be undertaken, but no new parks will be approved.

The market for NWT-produced art is soft because of the recession. International marketing efforts are needed to offset this lack of growth in the domestic economy. To promote NWT arts and crafts, the department will publish new promotional booklets and will work closely with the NWT Development Corporation to develop projects to encourage the production of quality craft products, the development of markets, and the establishment of effective distribution networks. Marketing plans for Europe and the United States have been developed. The department has established the wholesalers support program to assist with exporting initiatives and will organize wholesaler meetings to better coordinate plans.

The business development fund was designed to meet the needs of more sophisticated small businesses in the Northwest Territories. To meet the needs of very small businesses, the department has designed a new program to assist the little guy who wishes to start up or expand a micro-business. The new grants to small business policy recognizes the significant contributions that micro-businesses make to community economies. The program is specifically designed for artists, crafts people and commercial renewable resource harvesters.

Business opportunities have to be taken up when they arise or they will be lost. In order to speed up the funding process, applications are now being considered in regional offices as opposed to being sent to Yellowknife for review. Regional superintendents have authority to approve business development fund contributions up to $250,000.

---Applause

Thank you, thank you, thank you. Changes have also been made by the Business Credit Corporation to improve services to clients requesting loans. Loans up to $200,000 can now be approved at the regional level.

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An Hon. Member

Hear, hear.

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John Todd Keewatin Central

This means that most applications for funding assistance can be approved and processed in the regions. Regional staff are more knowledgeable of the local economic environment and have a better understanding of local aspirations and needs. With these changes, clients can expect a much quicker response to their applications for financial assistance.

The Standing Committee on Finance has expressed some reservations with the decentralization of authority to the regional level. I can assure this House that measures are being taken to give regional staff the tools required to meet the new responsibilities. Person years and associated funding is being transferred to regional offices from headquarters. In addition, training will be provided to the staff to ensure that clients are served in a professional and expert manner.

As the department's new senior management committee includes all regional superintendents, I am confident that the programs and policies will be administered with more consistency across the territories and with greater accountability than has been the case in the past.

In conclusion, Mr. Chairman, we are responding to the directions of this House and to the concerns raised by the business community, and we expect to see further improvements in the coming year. Thank you.

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The Chair Brian Lewis

Thank you very much, Mr. Todd. I was asked by a Member to recognize two members who were in the gallery, but who have now left and did not want to interrupt Mr. Todd in the middle of his presentation. They were John Amagoalik, chief commissioner of the Nunavut Implementation Commission, and Simon Awa, executive director of the Nunavut Implementation Commission. I am sure we would all like to welcome them and appreciate their visit to our Assembly building.

---Applause

Mr. Antoine from the Standing Committee on Finance.

Standing Committee On Finance Comments

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Jim Antoine Nahendeh

Thank you, Mr. Chairman. On behalf of the Standing Committee on Finance, we have a statement here in response to Economic Development and Tourism. The Department of Economic Development and Tourism has long had a reputation of being overly bureaucratic and centralized. This has caused frustration in the northern business community. However, recent movements by the department have started to reverse that trend, which the committee sees as a positive sign. Recent changes to devolve authority should go a long way to making the department and its programs more accessible to northerners.

Devolution

However, with this devolution of authority comes risk. Now that the regional superintendents and regional planners have greater granting and lending authority, they will require training and support to wield that authority in the most effective manner. With devolved decision-making comes a greater need to ensure adequate training of the ED&T staff in the communities and to ensure more consistency and accountability in the application of the department's policies. Committee Members will be watching to see that the mechanisms required to ensure proper accountability are being implemented.

Further, the granting of more responsibility and authority to individual ED&T employees in the communities could create new stresses in their relationship with community members. With a significant change in the role that the employees play in the community, will come a shift in how that individual is perceived in the community. With fewer "levels of appeal", the role that the employee plays in making opportunities available to community members becomes even more critical. Increasing an employee's responsibility and authority could become a major problem in communities where the employee has not earned the respect and trust of community members.

While the department said that decision-making has been devolved, the committee did not see a corresponding shift of support resources to the regions. Regional employees will undoubtedly require supplementary resources in order to carry out additional responsibilities. Committee Members would like to see this issue addressed by the department.

Small Business Ventures

Committee Members feel strongly that the support of small business ventures is a key element in developing a strong economy in the Northwest Territories. Government support of and investment in small businesses or "cottage" industries will produce more jobs per dollar and will greatly enhance a more equitable distribution of economic opportunities throughout the territories.

The department should make every effort to demonstrate their appreciation for and understanding of the role of small business in our economy, especially in job creation. The development and support of small business ventures, particularly aboriginal businesses, should be encouraged everywhere in the territories, including the larger centres. Current policies tend to discriminate against aboriginal individuals who live in larger centres. This unintended discrimination is based on the assumption that larger centres provide more opportunities for business development. However, the department should recognize and address the fact that need and opportunity should be assessed on an individual basis and not on the size or classification of the community.

Members suggested that the department take an active role in assisting communities to develop specific capabilities - for example, various forms of arts and crafts - and to identify appropriate marketing opportunities. Small business ventures that require a consumer market larger than what currently exists in their home community should be provided assistance to identify and assess viable marketing opportunities in other communities or regions.

Tourism Zones

One of the committee's major concerns was about the effectiveness of tourism zone concepts. There is a perception that planning and decision-making in some of the zones is dominated by a few individuals from larger communities and by tourism operators, many of whom reside outside the territories. Smaller communities in a given zone are not heard or taken into account. The committee feels that it could be appropriate for the department to make funding to the various zones' associations contingent upon the guarantee of appropriate representation from all communities within each tourism zone.

Recommendation 7

The committee recommends that the Department of Economic Development and Tourism consider ways to encourage adequate representation of all communities within a tourism zone in its zone association.

Secondment

One specific issue which brought concern to the committee was that of a long-term secondment of a GNWT employee in Rankin Inlet to Piruqsaijit. This secondment was...

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An Hon. Member

(Microphone turned off)

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Jim Antoine Nahendeh

Yes, that's exactly what I said.

---Laughter

This secondment was continued over a number of years at the government's expense. However, the current policy regarding secondment clearly states that the receiving organization usually pays the full costs associated with the secondment. This is from the Human Resource Manual, section 1407, page two.

Recommendation 8

With reference to Piruqsaijit, the committee recommends that the Department of Economic Development and Tourism provide a complete justification for the continuation of this secondment and an assessment of compliance with government policy. This report should be provided to the Standing Committee on Finance prior to the review of the Department of Economic Development and Tourism's budget in committee of the whole.

Committee Members believe that the idea of seconding a trained government employee to a new business for a short period of time has merit. If the government wishes to continue this practice of promoting secondment, then policies and guidelines should be in place to ensure that equal opportunities exist across the territories.

Recommendation 9

The committee recommends that the Department of Economic Development and Tourism consider and develop a policy for secondment of government employees in new business ventures and provide the Standing Committee on Finance with a draft policy by May 31, 1994.

NWT Development Corporation

The Minister responsible for the Development Corporation made it very clear that the top priority for the corporation is job creation. The committee fully supports this position and encourages the Development Corporation to continue to create as many jobs as possible for northerners.

Committee Members feel that the Development Corporation can enhance its performance in job creation by focusing on identifying and supporting small business opportunities. To date, the Development Corporation has supported the development of a few large initiatives in a few regions and communities. While the Development Corporation has $6 million in capital in place for the fiscal year 1994-95, only about $600,000 of this amount has not been committed to ongoing projects. Most of the large projects are concentrated in one region. There is concern about this approach creating economic disparity among regions and communities.

In addition, the committee feels that by adopting a strategy to focus on small business opportunities, the Development Corporation can be more cost-effective. The cost per job created will be reduced and the opportunities for individuals increased.

Recommendation 10

That concludes the Standing Committee on Finance report, Mr. Chairman. Shall I get right into the motions?

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The Chair Brian Lewis

Mr. Antoine, that concludes your report. Is the committee ready to go into motions?