This is page numbers 227 - 260 of the Hansard for the 12th Assembly, 7th 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 ---agreed.

Topics

The Speaker Samuel Gargan

Minister of Education, Culture and Employment, Mr. Nerysoo.

Return To Question 140-12(7): Funding Provided To Students At Lester B Pearson College
Question 140-12(7): Funding Provided To Students At Lester B Pearson College
Item 6: Oral Questions

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Richard Nerysoo Mackenzie Delta

Thank you, Mr. Speaker. In fact, the House has approved the reduction in that support in the 1994-95 budget year. We would maintain those students who were there, but we would have to re-evaluate our participation role in that particular institution. So we have not cut all of it, but we have the approval of the Legislature to reduce our participation in that particular funding arrangement.

Return To Question 140-12(7): Funding Provided To Students At Lester B Pearson College
Question 140-12(7): Funding Provided To Students At Lester B Pearson College
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The Speaker Samuel Gargan

Thank you. Supplementary, Mr. Antoine.

Supplementary To Question 140-12(7): Funding Provided To Students At Lester B Pearson College
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Jim Antoine Nahendeh

Thank you, Mr. Speaker. There are students down there from my constituency who have received letters from the Minister indicating that their funding will be totally cut off, and the Minister just indicated that there is still some support. I would like to ask the Minister, historically, what type of support has this government given to this program in the past? Thank you.

Supplementary To Question 140-12(7): Funding Provided To Students At Lester B Pearson College
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The Speaker Samuel Gargan

Mr. Nerysoo.

Supplementary To Question 140-12(7): Funding Provided To Students At Lester B Pearson College
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Richard Nerysoo Mackenzie Delta

Mr. Speaker, that's a detailed question and I couldn't answer it in specific terms, so I will take the question as notice.

Supplementary To Question 140-12(7): Funding Provided To Students At Lester B Pearson College
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The Speaker Samuel Gargan

Thank you. The question has been taken as notice. Item 6, oral questions. Mrs. Marie-Jewell.

Question 141-12(7): Acting Premier
Item 6: Oral Questions

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Jeannie Marie-Jewell Thebacha

Thank you, Mr. Speaker. I would like to ask the Government House Leader who is acting Premier today? Thank you.

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The Speaker Samuel Gargan

Mr. Pollard.

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John Pollard Hay River

Mr. Speaker, the Premier asked me to look after the shop while she was away for a short time. Thank you, Mr. Speaker.

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The Speaker Samuel Gargan

Thank you. Item 6, oral questions. Item 7, written questions. Item 8, returns to written questions. Item 9, replies to opening address. Item 10, replies to budget address. Item 11, petitions. The House will take a 15-minute recess.

---SHORT RECESS

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The Speaker Samuel Gargan

I would like to call the House back to order. Item 12, reports of standing and special committees.

Committee Report 4-12(7): Report On The Review Of The 1995-96 Main Estimates
Item 12: Reports Of Standing And Special Committees

February 21st, 1995

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Jim Antoine Nahendeh

Mahsi, Mr. Speaker. In accordance with its terms of reference, the Standing Committee on Finance is pleased to submit its Report on the Review of the 1995-96 Main Estimates of the Government of the Northwest Territories.

Introduction

The Standing Committee on Finance met in Yellowknife between January 9th and 31, 1995, to review the proposed operations and maintenance main estimates of the Government of the Northwest Territories for the 1995-96 fiscal year.

As the committee chair, I would like to offer thanks to the Members of the committee for their effort and their contributions to the review. The committee would also like to thank the Cabinet Ministers and their staff for their cooperation, for the information they provided to the committee, and for their participation in the committee's review. All government departments were reviewed, except for the Ministry of Intergovernmental and Aboriginal Affairs, as the Minister responsible could not meet his commitment to appear before the committee. This ministry will be reviewed during the current session of the Legislative Assembly. Finally, the chair thanks the committee staff for their assistance in the review and in the preparation of this report.

Setting The Stage For Next Year And Beyond

The 1995-96 main estimates are the last estimates that the 12th Legislative Assembly will consider. The 13th Assembly will face very difficult challenges; notably, the preparations for division of the Northwest Territories, and the "new fiscal reality," where funds from the federal government will no longer be abundant or even secure. The Standing Committee on Finance recognizes that these challenges add greater importance than usual to the Assembly's consideration of this budget.

The standing committee has undergone a number of changes over the life of the 12th Assembly. Yet there are two themes which have recurred since 1992, and which were uppermost in committee Members' deliberations this year:

- Fiscal uncertainty, with its implications for transition planning, division and constitutional development; and,

- Commitment to social issues, and the implied interdepartmental cooperation necessary to exercise that commitment.

Fiscal Uncertainty

The Northwest Territories is far from being financially independent. Over 80 per cent of GNWT revenues come from the federal government, with less than 20 per cent being generated internally. The NWT simply does not have the revenue base necessary to support all of the programs offered by the government.

While the government has announced the creation of a task force, which is to develop and report suggested taxation improvements, the fact remains that the possible revenue sources available to the government are limited compared to the revenue presently received from Canada.

Through the 20th century, the people of the north have been drawn into a state of dependence on government. The influence of non-native government has largely forced aboriginal people away from most aspects of the day-to-day life of their ancestors, towards a more "western" lifestyle, replacing nomadic camps and living off the land with wooden houses and store-bought food. Since the devolution of authority from Ottawa starting in 1967, northerners have come to rely specifically on the Government of the NWT for a whole range of services, including educational, health, and social services, as well as highways, municipal projects, and other services.

Meanwhile, Ottawa is finally coming to grips with the massive debt plaguing the federal government. They are looking everywhere for ways to cut spending, and grants to the NWT have not been and will not be exempt. There are tremendous economic and political pressures facing the federal government. The opportunity to increase revenues through higher taxes is sorely limited by economic conditions. So the federal government is forced to consider massive spending cuts as the primary way to balance the federal budget -- a budget where close to 30 per cent of expenditures go towards servicing the debt. As a result, the next Legislative Assembly and the government they choose will have to face the possibility of further cuts in federal grants to the NWT -- cuts that will force that government to make some very tough choices.

To date, the Government of the NWT has done well in managing their resources. Since the beginning of the 1981-82 fiscal year, the government has maintained a surplus financial position. In fact, the 1993-94 accumulated surplus of $19.833 million was the lowest figure since 1981. This accumulated surplus is now gone. The NWT has, unfortunately, joined the remainder of Canadian jurisdictions in indebtedness. Granted, the deficit now is quite small compared to that of other jurisdictions and the current deficit position can be blamed more on unforeseen circumstances -- such as the extreme forest fire season of 1994, or the additional funding assigned to compensate for the 1992 federal cuts in social housing funding -- than on the management skills of the government.

Balanced Budget Legislation

During the review of the 1995-96 capital estimates, the committee brought forward the idea of introducing legislation which would force the government to have balanced budgets. The committee recommended that the Financial Management Board "seriously consider...introducing...legislation that requires the government...to ensure that, on March 31, 1998, no deficit has accumulated." The intent of this legislation would be to ensure that the new territories to be created upon division would not be burdened by debt incurred by the outgoing territorial government.

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An Hon. Member

Hear, hear.

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Jim Antoine Nahendeh

Committee Members were surprised that the Minister of Finance did not discuss this recommendation in his budget address. The committee still strongly recommends that balanced budget legislation be introduced in this session. Such legislation must address the issue of the government's accumulated deficit as of March 31, 1998, and must also contain sanctions to encourage compliance.

Recommendation 1

The committee recommends that the Minister of Finance introduce legislation in the current session which would require that the government ensure that, on March 31, 1998, no deficit has accumulated; furthermore, that the legislation include sanctions which would encourage compliance with the legislation.

The Standing Committee on Finance feels very strongly that the passage of balanced budget legislation must be a priority in the current session of the Legislative Assembly, and that these important points must be included in the legislation. If such legislation is not introduced by Cabinet in a timely fashion, committee Members will introduce this proposed legislation into the House as a private Member's bill.

Mr. Speaker, since this document is quite lengthy, I would like to ask my colleague, Mr. Mike Ballantyne, to continue with this. Thank you.

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The Speaker Samuel Gargan

Mr. Ballantyne.

Transition Planning

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Michael Ballantyne Yellowknife North

Thank you, Mr. Speaker. A positive legacy of the previous government was the Strength at Two Levels report -- he blushed modestly.

---Laughter

This report was used by the current government as the basis for many of the organizational changes that have taken place over the four years.

Anticipated federal cuts to territorial funding will provide a very difficult set of challenges to the next government. When those cuts arrive, the new government will have to be ready to deal with them. That is why the standing committee felt that it is critical that the current government also prepare a transition plan that will allow the next government to be prepared for a difficult future. The committee pointed this out to the Minister of Finance in our January hearings, and we are pleased to see from his budget address that he is considering this proposal.

Recommendation 2

Mr. Speaker, the committee recommends that the Cabinet prepare a transition plan which would assist the Cabinet of the 13th Assembly in the management of the affairs of the government; and further, that this plan should be completed in time for the standing committee to review it and report its findings to the Cabinet before the dissolution of the 12th Legislative Assembly.

Much of the difficulty in dealing with federal funding has come from the numerous financial disputes that have gone on between the territorial and federal governments. Disagreements over health billings, social housing funding, official languages funding, RCMP costs during the Giant Mine strike and other issues have all had a significant impact on territorial finances.

Well over a year ago, the standing committee strongly recommended that the government consider a "package" approach to negotiating with the federal government. Rather than attacking each funding dispute individually, the government was advised to address all such issues, including negotiations for a new formula financing agreement, together.

After initial reluctance, the government accepted the proposal, and now the "package" approach seems to be paying off -- many of the disputes are close to being settled, and it seems Ottawa is taking our government, and our concerns, more seriously in financial discussions. Through the efforts of the Premier, the Minister of Finance, other Cabinet Members, and the Legislative Assembly, the federal government is more aware of the critical importance of this funding to the people of the north.

Mr. Speaker, if I could turn over the reading of this report to my colleague, Mr. Zoe.

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The Speaker Samuel Gargan

Mr. Zoe.

Division, Constitutional Development And Fiscal Reality

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Henry Zoe

Henry Zoe North Slave

Thank you, Mr. Speaker. The standing committee's review was interrupted from January 18th to 22nd by the Western Arctic Constitutional Conference in Yellowknife and the Nunavut Leaders' Summit in Gjoa Haven. Committee Members attended both meetings, and spent considerable time discussing issues related to division and constitutional development.

Committee Members are concerned that a conflict will arise between the constitutional and self-government expectations of the people of the Northwest Territories, and the resources available for them to meet those expectations. The aboriginal peoples of the Northwest Territories have expressed a desire for self-government for quite some time now, but only in the last few years has the federal government taken steps to make that desire a reality. Between the creation of the new territory, and the ratification of the Nunavut land claim agreement, most of the self-government expectations of the Inuit of the eastern Arctic will be fulfilled.

In the western Arctic, there is much more work to be done. The land claim agreements signed by the Inuvialuit, the Gwich'in, and the Sahtu people are one step towards greater self-government. Other aboriginal peoples in the western Arctic, however, have positions on self-government that differ from those reflected in the land claim agreements signed to date. The First Nations people of the Deh Cho and the Treaty 8 area are hesitant to even participate in the western Arctic constitutional process. They have expressed a desire to deal directly with the Crown as represented by the federal government. This complicates the concept many people have of a unified public government in the western Arctic. Therefore, it is important that the two processes -- western Arctic constitutional development, and direct self-government and land claims negotiations between the First Nations of the north and the federal government -- go forward together in an orderly way.

As has been discussed, the federal government is expected to cut expenditures across Canada, at a time when there will be additional funding required resulting from the federal government's commitment to division of the Northwest Territories in 1999. There is no doubt that two territories will need more federal funding than the Northwest Territories presently receives. The federal government has to live up to its commitment to provide sufficient funding for the two new territories.

The constitutional framework to be agreed upon by the people of the western Arctic, and the organizational model chosen for government in Nunavut, must take into account the fiscal realities of the 1990s. This will require that the services provided by government after 1999 be delivered more efficiently than ever before.

The standing committee recognizes that the decisions to be made about the future of the north must be made by all the people of the north. However, the Legislative Assembly has the responsibility to provide leadership in helping the people of the north make constitutional decisions which will allow the provision of necessary services to northerners in the most effective and efficient manner possible. Mr. Speaker, I would like to turn this over to my colleague, Mr. Dent, to continue.

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The Speaker Samuel Gargan

Mr. Dent.

Social Issues

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Charles Dent

Charles Dent Yellowknife Frame Lake

Thank you, Mr. Speaker. Mr. Speaker, in September 1994, the standing committee met to review the 1995-96 capital budget. At the time, however, committee Members acknowledged that many of the "big issues" normally dealt with in the O and M budget also had important implications in the capital budget. Therefore, our committee examined many of those issues in their report called Investing in our Future.

In that report, committee Members reiterated their desire to see education established as the government's most important long-term priority. Committee Members also noted that this government had to strike a better balance between economic development and social programs. The standing committee is concerned that the difficult social problems that northerners face must be addressed at the same time as the northern territories become more self-reliant and independent. Committee Members feel quite strongly that helping northerners solve their social problems -- inadequate housing, alcohol and drug abuse, family violence, high school dropout rates -- is the best investment the government can make.

In Investing in our Future, the committee identified three areas in which the government was recommended to place special emphasis:

- early intervention programs for children at risk, or with special needs;

- an interdepartmental model for providing school-based youth services (as recommended in the review of the 1994-95 main estimates); and,

- providing more resources to address the problem of family violence.

In the 1995-96 main estimates, committee Members noted the government's response to the committee's concern on social issues, and especially on the priorities outlined by the committee. As well, the Minister has informed the committee that additional funds will be identified for pressing social issues. The committee will wait for the details of that extra funding before we make our final comment on the overall government approach to social issues.

Of special note was the new emphasis on the concept of "envelopes," whereby government departments were grouped by their general function -- social programs, infrastructure, or resource management and development. This approach allows the government to examine its spending on a broader basis than merely "department-by-department." With a stronger emphasis on the envelope concept, it is much easier to examine, for example, social spending versus infrastructure or resource management spending.

The 1995-96 budget for the social programs envelope, including the departments of Health and Social Services, Education, Culture and Employment, Justice, and the NWT Housing Corporation, includes an increase of over $36.6 million in capital and O and M spending compared to 1994-95, reflecting the increased importance given these issues by the government and the standing committee. Committee Members feel that the most important place for our limited resources is in helping our people to be independent and strong.

Interdepartmental Cooperation

Mr. Speaker, the "envelope" concept also suggests a future where different government departments can work better together. Too often, government programs suffer because competing departments worry more about "turf battles" than about efficient cooperation. But formally linking similar departments and considering them together on the Cabinet level could lead to better cooperation and increased efficiency.

The committee does have one significant concern, however, about the concept of interdepartmental cooperation. This concern also extends to the task that lies ahead for the newly amalgamated Department of Health and Social Services; that is, of combining their programs and resources at the regional and community level.

In the past, regional operations were controlled in the regions. Often, regional staff would look to the regional director for guidance, rather than to their departmental supervisors in Yellowknife. This has changed, however, and now most control of regional operations resides in departments' headquarters offices. Regional superintendent in departmental offices now look to Yellowknife for assistance. While this has its advantages, it can be counterproductive when departments have to work together in the regions. The committee strongly encourages the government to promote and facilitate interdepartmental cooperation in the regions. Local coordination of interdepartmental initiatives should be far more effective and efficient than any long-range supervision from headquarters.

Mr. Speaker, I would now like to request that the committee chairman, Mr. Antoine, be allowed to conclude the report.

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The Speaker Samuel Gargan

Thank you, Mr. Dent. Mr. Antoine.

Restructuring Initiatives And Employee Morale

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Jim Antoine Nahendeh

Mahsi, Mr. Speaker. Over the term of this government, there have been a number of restructuring initiatives undertaken in the bureaucracy: Government Services and Public Works were amalgamated; the Executive, Finance, Personnel, and the Financial Management Board Secretariat were completely reorganized; corrections programs were transferred to Justice; Municipal and Community Affairs recently underwent a significant reorganization; and, most recently, the Departments of Health and Social Services were combined.

Many of these initiatives were taken in response to the Strength at Two Levels report, or to other recommendations such as those of the Special Committee on Health and Social Services. Others were intended to increase the effectiveness and efficiency of government bureaucracy. The committee notes with approval the government's efforts to streamline the operations of the government, and to improve the efficiency of the public service.

However, committee Members have some concerns about the implementation of these initiatives. The employees of the public service are one of the most important resources available to the government. Yet, many of these restructuring initiatives have been implemented with poor communications to employees affected, and often with little evidence of an organizational plan. Government employees understand that such initiatives may lead to lay-offs or job reclassification. Committee Members note with approval that the workforce adjustment program is quite a generous one, and has made the task of downsizing much less difficult for employees. But it is critical that all employees be kept informed throughout the process, to avoid uncertainty, and the subsequent loss of morale.

The committee urges the government to exercise all due consideration and concern for public service employees involved in restructuring or reorganization initiatives. The government is likely to downsize further in the future, and it is important that Cabinet approve improved policies and procedures in order to ensure that senior managers keep affected employees well informed throughout restructuring initiatives.

Mr. Speaker, that concludes my introductory comments on the Report of the Standing Committee on Finance.

Motion To Receive Committee Report 4-12(7) And Move Into Committee Of The Whole, Carried

Therefore, I move, seconded by the honourable Member for North Slave, that the report of the Standing Committee on Finance on the Review of the 1995-96 Main Estimates be received by the Assembly and moved into committee of the whole.

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The Speaker Samuel Gargan

Thank you, Mr. Antoine. The motion is in order. To the motion.

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An Hon. Member

Question.