Mr. Chairman, thank you. Yes, I would like to make some opening remarks. I would also like some time to ask some staff to come in with me for any detailed questions that may arise.

That's correct, Mr. Chairman. I have opening remarks I would like to make, but the officials who I'm expecting to come in are not here yet.

Thank you, Mr. Chairman. I would like to thank the Members of the House for this opportunity to appear before the committee of the whole, and to have a full discussion of the water and sewage service policy amendments and subsidy reductions that I announced in my statement to the House on March 30, 1994.

Historically, the water and sewage service subsidies provided by the government have not been consistent across all the communities. As a result, the changes to the subsidy provisions in the water and sewage services subsidy policy appear rather complex.

Mr. Chairman, I will not repeat the text of my previous statement to the House, however I would like to elaborate on some of the background and context surrounding the changes that were announced.

The water and sewage subsidy program is targeted at three groups of users; residential, non-profit and commercial users. There is no subsidy for government or industrial users.

The policy has been designed around four principles. Firstly, that NWT residents should be entitled to basic water and sewage services to safeguard their health. Secondly, that these services should be provided to residents on an equitable and affordable basis. Thirdly, that municipal governments should exercise authority and responsibility for delivery of water and sewage services. Lastly, that these services should be provided as efficiently as possible.

Mr. Chairman, I must stress, however, that the ability of the government to fulfil these principles is limited by the financial resources that are available.

The most difficult element of this policy to deal with is the determination of what is affordable to consumers and what is not. In the absence of a better standard to rely on, this policy refers to the rate charged to residential customers in the city of Yellowknife for piped water and sewage service to be the guide in the determination of what is an affordable rate to all NWT residential consumers. This approach is consistent with other similar utility subsidy programs of this government.

When the water and sewage services subsidy policy was first introduced in April of 1987, the base rate -- the rate based on cost of service in Yellowknife -- was approximately .20 of a cent per litre. This rate was subsequently revised upward to .22 of a cent per litre in April of 1990. Today, Mr. Chairman, the rate has reached approximately .33 of a cent per litre. Accordingly, the recent announcement of the adjustment in the subsidized rate was necessary to keep up with the increase in the rate.

In addition to the change in the base rate there has been a need to modify the policy to make it more consistent throughout all communities.

When the water and sewage services subsidy policy was first introduced, it only applied to the hamlets, charter communities and settlements. The remaining tax-based municipalities continue to receive only the benefit of a trucked water delivery subsidy.

Local circumstances in each of the tax-based municipalities were such that over time the trucked water delivery subsidy provisions had to be applied differently from one community to the next. Ad hoc arrangements prevailed. What was consistent was that trucked sewage pump out and piped water and sewage service received no subsidy at all in the tax-based municipalities.

In some instances, the lack of subsidy for these services meant that some residents were unable to have their sewage pump out tanks regularly emptied. This contributed to local sanitation problems. In other instances, high user rates were imposed upon government and industrial users in order for the municipality to indirectly subsidize the provision of services to local residents and businesses.

Over the period of 1989 to 1991, the water and sewage services subsidy policy was extended to include the towns of Norman Wells and Iqaluit as part of the turnover of the local water/sewer infrastructure to the municipalities. There was one exception in that only 50 per cent of the commercial consumption would be subsidized, whereas in hamlets, charter communities and settlements, commercial users were subsidized at a rate of .44 of a cent per litre for 100 per cent of consumption.

Mr. Chairman, the amendments to the policy which I announced on March 30, 1994, will now finally extend the subsidy provisions to those remaining municipalities with the exception of the city of Yellowknife which is funded through a separate block funding agreement.

As my colleague, the Honourable John Pollard, indicated in the House one year ago, the subsidized rate to commercial users in hamlets, charter communities and settlements was to be reduced to 50 per cent of consumption from the present level of 100 per cent. This would make the subsidy arrangements for commercial users in hamlets, charter communities and settlements consistent with the subsidy rules applied in the towns of Norman Wells and Iqaluit. It would also make a contribution to the government's effort to address the overall operating deficit that has been projected.

There has been recognition however, that the pursuit of consistency in the design of this subsidy policy may be at odds with the principle of affordability. As a result, the reduction of the commercial subsidy in hamlets, charter communities and settlements is being implemented very carefully. The subsidy is being reduced only to 90 per cent of consumption at this time, not to the 50 per cent level originally indicated.

Mr. Chairman, this will allow the government time to monitor and assess the impact of this 10 per cent subsidy reduction to commercial users before any further reduction is considered. The 10 per cent subsidy reduction also strengthens the local accountability of councils and their administrations for the efficient provision of water and sewage services.

Should the local economic rate for water and sewage service increase, it will now have a direct impact on the non-subsidized 10 per cent of service to commercial users. If commercial users believe that the service is not provided as efficiently as possible, they are likely to raise their concerns with the local municipal government.

Mr. Chairman, this kind of feedback is essential for local councils to be truly responsible and accountable to their residents for the efficient delivery of municipal services.

At this time, Mr. Chairman, I would like to thank Members for their patience in allowing me the time to elaborate more fully on this matter. I and my officials are prepared to respond to any detailed questions Members may have. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Before we get into the short break, can I ask that the Minister provide copies of his opening comments to us?

Yes, Mr. Chairman. I would like to bring in some departmental staff.

Agreed.

---Agreed

Thank you, Mr. Chairman. To my right is Mr. Al Menard, deputy minister of Municipal and Community Affairs and to my left is Mr. Vern Christensen, assistant deputy minister of the department.

Thank you, Mr. Chairman. First of all, I would like to apologize once again to the Members for the manner in which the Members found out about the amendments to this policy. However, I believe it is an amendment to a policy which was not equitable to the communities across the territories. The amendments that are being made to this policy make it equitable for all communities.

I think a decision like this, to pick the pockets of the residents of the Northwest Territories, is a very difficult decision that was made. Whenever a government such as ours has to make amendments of this type and decisions like this, it is very difficult. The timing of such an amendment is difficult in that there is really no right time. There was to be an announcement made by myself in the form of a Minister's statement. However, the statement didn't come through early enough to be made here in the House. I apologize for that. That statement was not made earlier in the House, but it still is an amendment that had to be made to make all communities equal in the subsidization for this program.

As for the consultation, it is something that has been mentioned in the annual general meetings of the Association of Municipalities. I think that the department is trying every way to make it smoother for communities to be able to accept this amendment to the policy. The departmental officials in the regions are working with each individual community to try to ease this policy. For the consultation part of it, with the policy having been introduced in 1987, it started out to be a policy which was using Yellowknife as a base rate. However, they didn't go far enough with the policy to make it equitable amongst all communities in the territories. I understand that communities are aware of this policy and the manner in which it is run.

I have also indicated that the water and sewage rates in the city of Yellowknife, which are used as a base, have increased since the policy was introduced in 1987. I also understand that the policy was amended in 1990, which affected some municipalities. So it has been four years, Mr. Chairman, since this policy has been amended. The amendments being made at this time are making it equal for all municipalities in the Northwest Territories. I think it is a roundabout way of saying there has been consultation, but for any more details on the consultation, I would have to ask Mr. Menard to elaborate. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. With regard to ongoing consultation, this is something that has been discussed well before my time, so I would have to refer that to Mr. Menard or Mr. Christensen. The policy, which has been in existence since 1987, gives a 90 day time period to inform municipalities, which I understand is sufficient time for municipalities to change their by-laws to come in line with any amendments that may be made to the policy.

With regard to the municipality of Inuvik, I understand that is an anomaly and it is being dealt with, I believe, in a manner in which the residents of Inuvik should be able to handle. Over the period of time that this policy has existed, the community has enjoyed the rates they have been paying for water and sewage services. To the suggestion the Member is making, I would have to bring that to Cabinet for their consideration.

I would like to ask Mr. Menard to respond to concerns about ongoing consultation.

Thank you, Mr. Chairman. Even though the executive of the Association of Municipalities indicated to the Member that there was no ongoing consultation, we have been dealing with some municipalities on a daily basis for two years now. We have been making them aware of the changes that are coming about. Some of them have been happy to receive the news and some of them have not been so happy. It depends who they are. I think I spent more time talking to the mayor and the administrator in Fort Simpson than I have ever talked to anyone in my life. I have talked to them every day, and they are anxious to get in line with the policy.

The only thing we could not consult with them about was the rate change, itself, because we didn't know what Cabinet was going to approve. So, that was not done. As far as the association, the executive director works right in our building and I talk to her on a daily basis. She has been well-aware, not officially in writing, but on a verbal basis, of exactly where we have been with the policy.

Regarding hamlets, I've personally dealt with the mayor of Rae-Edzo, the mayor in Rankin Inlet, a lot of mayors. They've been waiting for the policy changes and are aware of them. They just don't know what the rate is. We only got official approval towards the end of March. In fact, I broke protocol by advising some municipalities of it because they were anxious to hear about it, even before the Minister had a chance to announce it. That wasn't the right thing for me to do, of course, but I did it to try to help them out so we could review the impact of the policy amendments on their municipalities.

We know we need at least 90 days before we can implement the policy, to give the users a chance to adjust to the rates, to rationalize them and to ensure they watch any hardship cases that might arise. We don't know all the impacts this will have because every tax-based municipality is different. Some hamlets are different too. We are hoping during the next few months that we will be consulting with them on a detailed basis, knowing what the rates are.

We have been consulting on an ongoing basis for the last two years, not in writing or anything like that, but unofficially. As we see each other -- and we see each other often -- the superintendents have been preparing the communities for changes, the same way as they advise us when they have to change their rates. We consult, sometimes, a year in advance. Some of the reasons some of them are in deficit situations is because they have to change their rates. There have been ongoing discussions about that. It sometimes seems to be easier for them to change their rates when they have to increase them than when they have to decrease them because they are collecting too much revenue and they have too large a surplus.

As far as timing, we'll have to go back to Cabinet to get permission because we are running out of time for the 90 days, as required. We probably are going to have to ask permission to push the date back because we need the time for consultation about the effects in each community.

As far as the deficits in each community, we have dealt with some of the ten communities that are in a deficit position. They know what they have to do about it and the by-laws have already been changed. The consultation did take place. I might also add that we did consult with some MLAs as well. In fact, Mr. Antoine was in touch with us a few times and we kept him advised of how things were coming along, but, again, we didn't know about the exact rates. If we delayed it too much across the board, then it might cause some hardship for some municipalities like Fort Simpson, because they want to get on it as soon as possible, and the same thing with Hay River.

Mr. Chairman, I would ask Mr. Menard to respond to this.

In consultation, the Member is right. We have not yet advised the hamlets, other than the fact that they know something is coming. We are just getting the letters ready this week for the Minister to sign. We waited for discussions in the House before we did that. Out of protocol, I advised the tax-based municipalities. We have been dealing with the Association of Municipalities, at least at the bureaucratic level, on an ongoing basis. We have been dealing with Inuvik for two years with the joint committee on the turnover of the utilidor, which affected the rate and whether they should have metering or not. We know there will be different swings in Inuvik. We are anxious to sit down with them and look at these things to see if some of them are too onerous on people or not. It depends on use. The more they use, the more they will have to pay. We hope to encourage conservation and everyone will take the responsibility for paying for the services. I feel there was adequate consultation, from the department's point of view. At least as much as we could, without knowing

what the final decision would be on the rates. That is my feeling. Thank you.

Thank you, Mr. Chairman. Mr. Chairman, according to the information I have, there are about 13 municipalities that are experiencing accumulated deficit with water and sewage delivery. For the fiscal year ending March, 1999, if the initiative goes ahead, more burden will be placed on these communities. I understand Mr. Menard indicated just now that we have to conserve water. I think it is the understanding of each and every Member of the House, perhaps the population of the NWT, that we have more water in this land than anywhere else in the world. In fact, every year the snow falls and subsequently melts in the spring. Sometimes it is very hard not to get your feet wet when you are walking around your community or on the land that we so love, Mr. Chairman. Given what I have said, can the Minister identify communities in all parts of the NWT where the water supply is such an issue and concern that conservation is crucial? Thank you.

Thank you, Mr. Chairman. I think there has been much discussion in this Legislative Assembly about the transferring of various programs to communities. I think with the transfer of these programs comes accountability and responsibility, which I believe this government has been working with since its inception. The program being transferred to communities makes the municipalities more accountable for the way in which they are delivering the water and sewage program. They will begin to realize what the department has been indicating to them for a period of time, which is to say that they should be delivering a water and sewage program in an efficient manner. Part of the reason the program is considered a closed program is so that users of this program do not pay more to subsidize other programs that other municipalities may have.

With regard to the particular question the Member is asking, I would again have to defer to Mr. Menard because I don't know if there are any communities that have conservation difficulties.

Thank you, Mr. Chairman. I don't think the availability of water is the issue. There is no place in the Northwest Territories that doesn't have water available to it in any amount. It is the producing and delivering of it that is costly. That is where conservation comes in. If people conserve a bit, they pay less. Right now, it is the government that is taking the burden of the cost. Other than Nahanni Butte, I think every community in the north has an ample supply of water. It is just the varying cost of delivering it and making it available to home owners. That's the area we are looking at for conservation because there is quite a bit of wastage, particularly when people don't pay very much for it. We are trying to grapple with that issue as well. That's why I

mentioned conservation. It's the cost of delivering it that's the issue, not the availability of it.

Thank you, Mr. Chairman. Mr. Chairman, one of the problems we've often talked about in this particular jurisdiction is overcrowding in social housing. One of the reasons some tenants tend to consume more water than expected by the municipality is because of overcrowding. I wonder if the honourable Minister has considered the overcrowding problem when they introduced these changes to the water and sewage services subsidy policy? Thank you.

Mr. Chairman, I don't believe this policy will affect residents who are in social housing. It is only those who are in private residential houses that this policy would affect.

Thank you, Mr. Chairman. Mr. Chairman, on page five of the Minister's remarks today, he refers to the policy changes making a contribution to the government's effort to address the overall operating deficit. I would like to ask what is the projected net financial effect of this policy for the coming fiscal year? Thank you.

Thank you, Mr. Chairman. With the way the present policy is being amended, for June 1, 1994, I believe the impact to the government will be in the neighbourhood of about $201,000.

Thank you, Mr. Chairman. So, I take it that with 9 months at $201,000, with 12 months, it would be a little bit more. Does the Minister have a breakdown of the source of these additional revenues that would accrue to the Government of the Northwest Territories, by community? Thank you.

Thank you, Mr. Chairman. I believe the $201,000 was for a period of ten months. I will ask Mr. Christensen to respond to the detail Mr. Patterson is looking for.

Thank you, Mr. Chairman. We don't have a listing handy of the impacts of the policy on the

communities, but we do have a listing of all the various components that make up the policy.

So, I take it that information is not readily available to the committee?

The information could be prepared. It isn't readily available here, though.

Thank you, Mr. Chairman. In reviewing some of the documentation that has been provided by the Minister and his department, it seems the decrease of the commercial subsidy is obviously going to affect commercial enterprises. In one statement, they cite examples of commercial users and how they will be affected. They say that the Northern Store in Aklavik will go be going from $31 to $39 and there are a couple of other examples of Northern Stores in the communities. Although I recognize that the Northern Stores are commercial users, they are very minimal users, I would take it, of water consumption in the communities because they are retail operations.

I would like to ask if they've looked at some of the larger operations, such as hotel operators and restaurant operators, those which are higher consumers of water services in the communities, and what effect the decrease in the commercial subsidy will have on their businesses? Thank you.

Thank you, Mr. Chairman. Yes, there has been an analysis done, per community, of the impact this may have on commercial users in hamlets. Thank you, Mr. Chairman.

I would like to ask if that information would be available to committee Members? Thank you.

Mr. Chairman, that would not be a difficulty. We have copies here that could be distributed to Members.

Thank you, Mr. Chairman. When they implement this rate change, it will require some adjustment to the reporting requirements of the municipalities to the department. I was just

wondering if they could update the committee Members on what exactly this will mean for the reporting relationship of the municipalities? Thank you.

Thank you, Mr. Chairman. I don't know that. I would have to ask Mr. Christensen to respond.

Mr. Chairman, the reporting relationship would not change in the case of the hamlets and non-tax-based communities, but the relationship would change somewhat for the towns and villages. Part of the implementation of this policy would involve community service agreements, agreements set out between the department and the municipalities regarding rules on what are eligible costs to charge against the economic rate for the water and sewer service. It is against the economic rate that the subsidy is applied. The department would work with municipalities through that agreement so that both parties have a good and common understanding of what rules apply.

Thank you, Mr. Chairman. Just to clarify then, there won't be any changes required for non-tax-based municipalities software and the reporting of the municipal usage? It is something that is easy to do?

Mr. Chairman, our belief is that the software that is in place is readily usable to implement this change. However, if there are some modifications required to the local software that is used, the cost can be incorporated into the economic rate calculation for water/sewage services. This wouldn't be a cost directly bearable on the municipality.

Mahsi, Mr. Chairman. From the town of Inuvik's perspective, there was a brief analysis that was done about this new policy. The majority of the residents are going to be greatly impacted in Inuvik. I mentioned some numbers earlier in a Member's statement where the increase on residents would go up from $55 to $123.73 per month. In cases of commercial users, the rates will either double or maybe triple, if some of the assumptions which are used in calculating rates are correct.

Given that, and if those assumptions are correct, I have a lot of problems with this policy and so do the people I speak on behalf of. Any increases in the cost of doing business or the cost of living in these times of restraint and poor economic

situations is an impact on the pocket book of the user and is a cost that some people may not be able to afford.

The question that Dennis raises to the cost-benefit to the government is one that is quite a concern. If the number the Minister said, $200,000, is what the cost-savings to this government is to implement this thing, I can assure you that most of that is going to come from Inuvik users just based on the numbers that I have. Again, I haven't worked it out by resident or by business, but that can be done quite quickly.

The point I am making is there are going to be impacts on residents. There will be impacts on businesses and the large users such as the hotels and the restaurants. The Minister, in the documentation we received, said that the subsidy is to be based on fairness and equity. Fairness in terms of users, that all residents are entitled to basic water and sewage services. Basic water and sewage should be provided on an equitable and affordable basis. So this whole issue of equity and affordability has to be defined. Equitable has to be defined in terms of the delivery of services across the north. From what I am hearing, my understanding is because of situations in certain communities, we are now broad brushing everyone across the north.

There is another issue of usage versus conservation. The whole issue of conservation I think we all believe in and every individual should. The north has 20 per cent of the world's supply of fresh water. So I don't think the issue of availability of water is an issue in any of the communities that I am aware of.

In Inuvik there is the Inuvik Utilidor Planning Committee that has been ongoing for several years. The deputy minister has indicated that he has had correspondence and discussions with this committee. They are looking at the utilidor system that is in Inuvik. The utilidor system is based on the water running through the system for heat for buildings, to keep the sewage pipes from freezing and also supplying water to buildings. So the majority of the residents in Inuvik have some form of piped water. They didn't always, but they do now.

The calculation for economic rate is based on the total cost of delivering the water, plus the cost of trucked water which is very minimal in Inuvik. I assume there is some reserve there for capital growth. That is divided by the number of litres of water utilized. That gives you an economic rate per litre. In Inuvik, if no one used water, you are still going to have to maintain the system.

The other assumption being used for Inuvik is to try to get the residents of Inuvik on meters, with the assumption that once they are on meters, then there will be a higher tendency to conserve. The notes I have are they are looking at up to 50 per cent of reduction and consumption of water. If that is the case, you would be delivering 50 per cent less water, but you still have the full system to maintain. So the cost of maintaining the system is not going to change. If that is the case, your economic rate then doubles based on an assumption that there is 50 per cent less consumption. That extra 50 per cent is going to be passed onto the users. The calculation I have is that for some of the commercial users, hotels, for instance, their rates are going to increase by 118 per cent.

So the flaw in the concept is if there is decreased usage, that the costs are going to be the same. But the commercial users are going to pay considerably more then. Commercial users, to my understanding, are already on meters in Inuvik.

The other problem I mentioned is the cost of maintaining or running the utilidor system which is based on water. You need to keep the system moving, so there are some electricity costs and you have to bleed the pipes and machinery that is used to keep water running.

The area of conservation comes to the use of meters. It is an issue that has been discussed with the town and department. But if meters are installed, the assumption is that water will be conserved. The argument that has been used is the cost of installing meters, which may be $400,000 plus. I am not sure what the capital costs were before, but let's use a hypothetical number of $400,000. My understanding is the savings are about $13,000 to $30,000 per year. So it doesn't make economical sense to do this.

I just wanted to raise some of these concerns. I'm sure that the points that Mr. Zoe and other Members have brought up, that there has to be more consultation, that we have to be more certain, or should be more certain, as to what are the impacts on the residential users, especially on the business users, given the economic situations in the north. Those are some general comments, Mr. Chairman, that I wanted to raise. I'm not sure if the Minister wants to respond.

Thank you, Mr. Chairman. I know that Inuvik is a special situation. It is being dealt with in a different way from the way that this policy is being handled at this point. But for any details with regard to the way it effects Inuvik, I would, again, have to ask Mr. Christensen to respond.

Mr. Chairman, just a comment, initially, on the example that was used regarding the increase to residential charges in Inuvik. The rate would increase from .22 of a cent per litre to .33 of a cent per litre, or a 50 per cent increase in rates. The residential example that was calculated, my assumption is that it would have used the commercial rate as opposed to the residential rate because the residential rate should only go $82.50 per month as opposed to the $125 per month that had been indicated.

Mr. Koe indicated the concern over the impact on consumption that will occur if the rates go up. The consumption will come down substantially and that will have an impact because the utilidor system still needs to be operated for the same amount of money. We would anticipate that is what would happen, although the amount of the change is uncertain. What is interesting, though, in the case of Inuvik is to compare the economic rates for service in Inuvik which right now is at .52 cents of a litre compared to some of the other economic rates, for example in Iqaluit the rate presently is about .95 cents of a litre and Norman Wells is about 1.3 cents per litre. So, in relative terms, the economic rate in Inuvik, even if it was to increase as a result of the reduction in consumption that would come with these policy changes, should still rank somewhere within the range of some of the other similar municipalities.

What we have proposed with Inuvik is, because of the big change in the rates for commercial users in Inuvik, and the fact that, at present, high rates are charged to government and industry users in order to indirectly subsidize and keep rates low to commercial users, in addition to the implementation of these policy changes we've proposed a phasing out of the cross-subsidy. In the process, rather than a sudden increase of the 118 per cent that was indicated within two or three months, this rate would actually be phased in over three increments over the next two fiscal years. The actual sudden impact that commercial users would experience would be minimized as a result of that. The charges that these people would receive would in the end be similar to the charges to commercial consumers in the other tax-based municipalities.

(Translation) Thank you, Mr. Chairman. I'm understanding what is being said with the amendments to the policy concerning the current rates. I understand what is being done as amendments to the policy, but the information sheets that were provided indicated which changes would occur in relation to the commercial areas, such as the co-ops, particularly those co-ops that have hotels. They are combined as both a general store and as a place to stay away from home. More and more hotels are being implemented in the communities, as owned by the co-ops. For instance, we have a number of them in the Baffin region.

The commercial sector have their own houses as well. Many of these businesses are not making a profit. In many instances they are just barely breaking even. This doesn't apply to every business, but this will add further to the bills that they have to pay.

I have a question. You say there will be more uniformity in the payment of the rates in the territories. My question is, I'd like more information. How different are they right now as they stand, first of all? That would be my question to you. Thank you.

(Translation) Perhaps your question, if I may answer it, are that the hamlets and the municipalities differ with every municipality in the territories. Because of that we're trying to make them more uniform. People are paying different rates for the same or similar services for water and sewer delivery, pick-up services, et cetera. They are trying to make this more equal amongst the various communities. Do you understand what I'm saying?

(Translation) Just for clarification, will that apply to all home owners and people in public housing under social housing? Will this apply to home owners who have their own homes? Will this increase for water and sewage services

be applied to home owners and people in general social housing for the services that they will be receiving? Thank you, Mr. Chairman.

Thank you, Mr. Chairman. (Translation) This will be affecting home owners. Tenants under housing authorities for the water and sewer services are being provided and paid for by the Housing Association, but the rates that they pay will be slightly increased.

(Translation) Mr. Chairman, I am sure everyone can understand this issue. I was told that this idea has been in place for quite some time now. However, we, the MLAs, who have people to represent, should be involved when important policies such as this are being implemented. Until now, we have had very little involvement. You indicated that this idea has been around for a long time now and you said they would be in effect within 90 days. This is probably a new idea to some communities.

Once this water and sewer services policy is amended, it seems to me that many communities are in agreement, but as representatives of the people here in the House, we haven't really received any feedback from the people. We don't know if they agree or disagree. Because of that, when this is going to be implemented almost immediately, I would first want full consultation with the communities, especially from the regions that I represent, because it will be affecting them in a huge way.

How much time have you given as notice? Have you received quite a response from the communities that you have been in touch with? It is hard to tell, at this time, what they think of this policy amendment. I am aware that the majority of the hamlets will probably support the policy amendment concerning the community services and the slight increase for the villages and the towns. There should be more input and public information being made available before this becomes implemented as a policy. There are many different communities that will have different opinions, but we seem to have given too short a notice to our communities. In the end, it will be us who have to do the explaining.

If you want to amend this policy, it is important that we know about it well in advance so we can inform people in our ridings. They, in turn, will be looking at us for some answers. They will be keeping abreast of the developments on this amendment. Mr. Chairman, this is more of a comment. I would want this better publicized and more consultation with the communities because it is going to have a huge impact on those communities. I am not just trying to disagree with the policy amendments, but I think consultation with the public is very important. I am sure people will have an opinion if it involves any increasing of rates. This was more of a comment rather than a question. I will stop there. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. I wanted to add to what my colleagues had said regarding consultation. I had mentioned in my Member's statement as well that I don't believe that the department has consulted as thoroughly as they could have. I think they may have done it on a limited basis to some communities and to some Members and some organizations. Although, generally, I agree with the user-pay concept where some of these charges will have to be increased in the immediate future. It will be one of the things that the government will continue to have to take a look at, as long as it is fair and equitable and affordable in these rates being charged to the consumers and the residents in our communities.

I did have a chance to briefly review this policy regarding the impact on water and sewage charges on commercial users that the officials provided to us while I was speaking on it. I would like to thank them for that, but, with all due respect to the staff members who put it together, I believe there are some omissions and some pretty significant ones from this paper that has been provided in my initial review of it. When you look at a community like Rankin Inlet, there are only five or six businesses listed there, and I know there are three hotels, the Northern store and co-op store are not listed in Rankin Inlet. I noticed, in some of the other communities, the Northern stores are listed but their staff housing isn't listed, unless they are lumped together as one under Northern. In others, they are broken out, so there are some inconsistencies in some of the reporting on this rate change analysis that the department has provided. I would like to ask them if they are aware of this, or if there is any particular reason for it. Finally, I noticed, in speaking to my colleague, Mr. Pudluk from Resolute Bay, that their major hotel, Narwhal Arctic Services, isn't listed in this analysis as well. I would like to get some comments from the department on that. Thank you.

Mr. Chairman, when I look at this list as well, I think there are some areas which have not been listed. For the specific consumer commercial users that are listed in this particular listing, I am not aware of the details. Mr. Christensen has more information on it.

Mr. Chairman, the source of the document was drawn from all of the municipalities listed. This was the list of commercial consumers that were supplied to us from the municipalities. If there are errors, then we will make every effort to update the list as soon as we can. Thank you.

Thank you, Mr. Chairman. If the integrity of this list is in doubt, then aren't all the calculations that the department has put forward regarding the net effect on the government all based on the consumption levels of commercial users in the NWT as a result of this document?

Thank you, Mr. Chairman. I will ask Mr. Christensen to respond again.

Mr. Chairman, the financial analysis for the subsidy changes were drawn from the actual claims that we paid to municipalities and the detail that came from the claims themselves, in terms of aggregate consumptions. This list was drawn from a separate effort on request to the municipalities.

Thank you, Mr. Chairman. Mr. Chairman, I think we should know what we're dealing with here. I must also thank the Minister for making these samples of impacts in various communities available. I appreciate that. I think, as Mr. Ng said, that there could have perhaps been better examples given than the one cited in the Minister's statement of March 30 about the Northern Stores in three or four communities. The thing that leapt out at me in looking at this sample list is the impact on hotels.

The Sunshine Inn in Arctic Red River is facing a more than doubling of its water costs as is the Pingo Park Motel in Tuktoyaktuk, the Inns North operation in Whale Cove and the co-op hotel. The Clyde River Qamaq Hotel rates are projected from $3,006 to $6,532 per annum. I just have to ask myself what that is going to do for tourism in our communities, especially the small ones that are trying to develop tourism. I also wonder what it is going to do for the cost of doing business by this government and other people in the Northwest Territories.

There aren't very many examples of private homes in the sample list, but I see that the water rate for one home owner in Cape Dorset, if I understand it correctly, is going to double. I believe that's a private home. I find that curious because we have a government who on the one hand is promoting private home ownership and even, for heaven's sake, selling staff housing in places like Cape Dorset. Yet, on the other hand, signals are coming out to these people that they are going to have to pay substantially more for water.

I agree with Members that the impacts really need to be fully assessed before we embrace this policy. In the initial statement the Minister made, he talked about the call for further coverage of this policy by the village of Fort Simpson and the Member for Nahendeh. I certainly don't want to get mixed up in his riding. I know that over the years, Fort Simpson has had to have special attention from this government because of its small size and small tax base, and I suspect that's the same reason Iqaluit has the benefit of the subsidy extended to it

because of its small tax base and the expensive utility operation there which is a burden on the town.

If there was a problem in Fort Simpson, then why didn't the department look at fixing up the problem in Fort Simpson and doing what is necessary to meet their concerns, rather than -- and the Minister will correct me if I'm mistaken in this -- apply the solution for Fort Simpson to hamlets and communities from Sanikiluaq to Arctic Red River? Wouldn't it have been a simpler matter to fix the problem in Simpson? Thank you.

Thank you, Mr. Chairman. I would like to indicate that I am in support of home ownership and small businesses across the Northwest Territories. I think that has been stated clearly by Members of the Cabinet. However, I would like to say that part of the message we wanted to send with this increase is that there are costs to this government which could be shared by the residents of the Northwest Territories. This is not a very easy decision to make, but I hope it will make people realize how much of a subsidy is being received by the municipalities.

This is a small rate reduction for most residential users. The example the Member used with Cape Dorset appears to be the name of a person, but in the records of the department, it is one of the commercial users there. Therefore, it is listed with the commercial users of Cape Dorset. I believe that answers the question about Cape Dorset.

With regard to the other question, I will ask Mr. Menard to respond.

We did look at dealing with Fort Simpson without disrupting the other communities. We looked at dealing with Fort Simpson that way and we looked at dealing with Hay River and Inuvik the same way, but we only had so much money so we tried to rationalize a whole water and sewage subsidy program in one, and then had to do some changes. We had a hard time wrestling with fairness and equity because what was perhaps fair in Fort Smith to businesses was not fair maybe in Resolute Bay or other places.

There is only so much that we felt that this government could subsidize and we wanted to equalize the subsidy to allow businesses the opportunity to recover some of their costs through rates. I don't think the increases are that bad that they will deter tourism or anything like that. Again, we went with the wisdom of the Cabinet. Instead of going with 50 per cent right away, we will only go ten per cent at a time to see the impacts. We want to minimize the impacts and hope they will be minimal before we move to the next ten per cent cut. I think, eventually, we'll be able to equalize.

We'll also encourage conservation because one of the worst abusers of water are hotels. When I travelled to Cape Dorset back in the early years, every place I went in the bathrooms there were little signs. I was scared to turn the water on because of the signs that said don't waste water, conserve. As soon as we came in with the policy, the showerheads were changed, they had bigger taps and people used more water, to the point of just about wasting it. We know, as a government that supports it, that it might cost the government more money. But I think by rationalizing the policy, we're shifting some responsibility to users, to municipalities and try to live within our means.

Thank you, Mr. Chairman. Mr. Chairman, I understand now that the sample list we got was commercial users. I wonder if we could ask the department whether they have prepared a similar analysis for private home owners in various communities to project the typical impact of this proposed change? Thank you.

Mr. Chairman, we don't have one that would list the residents of every community. We do have a paper that did look at the impact on residential and non-profit users in a number of communities across the Northwest Territories, but not as extensive as the commercial users impact analysis that was handed out. We could make this available to Members as well.

Mr. Chairman, I don't know if I was fair to the Minister in my Member's statement today. I don't recall a whimper of notice about this when we discussed the main estimates of Municipal and Community Affairs. Was the new proposed water and sewer services subsidy policy built into the main estimates of the department or will the proposed revenues be in addition to the revenues forecast in the main estimates approved by this Assembly earlier this session? Thank you.

Thank you, Mr. Chairman. I don't know if it is so much revenue as it is savings. However, the impact of this particular amendment was not in Cabinet and had not been considered in this budget. Thank you.