This is page numbers 281 - 307 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 development.

Topics

Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

---Agreed

Bill 1: Appropriation Act, No. 2, 1995-96Committee Report 4-12(7): Report On The Review Of The 1995-96 Main Estimates
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters

February 23rd, 1995

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The Chair Brian Lewis

I will call a short break so the committee can have some breakfast.

---SHORT RECESS

Department Of Health And Social Services

Bill 1: Appropriation Act, No. 2, 1995-96Committee Report 4-12(7): Report On The Review Of The 1995-96 Main Estimates
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The Chair Brian Lewis

I would like to call the committee back to order. We were dealing with the Department of Health and Social Services and we were on general comments. Mr. Dent.

Committee Motion 29-12(7): To Defer Consideration Of Department Of Health And Social Services, Carried
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Charles Dent

Charles Dent Yellowknife Frame Lake

Mr. Chairman, in order to give the Minister of Finance a chance to come forward with some funding to handle the budget supplement that we were discussing when we were last talking about Health and Social Services yesterday, I move that we defer consideration of Health and Social Services at this time.

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The Chair Brian Lewis

The motion is in order and it is not debatable. To the motion.

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An Hon. Member

Question.

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The Chair Brian Lewis

All those in favour? All those opposed? Motion to defer this item is carried.

---Carried

Mr. Dent.

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Charles Dent

Charles Dent Yellowknife Frame Lake

Mr. Chairman, I would like to recommend that the committee move to consider the budget of Energy, Mines and Petroleum Resources.

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The Chair Brian Lewis

Thank you very much, Mr. Dent. Do Members agree that we go on to that department?

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Some Hon. Members

Agreed.

---Agreed

Department Of Energy, Mines And Petroleum Resources

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The Chair Brian Lewis

There being no objections, we will move on to that department. Mr. Todd is the Minister of Energy, Mines and Petroleum Resources. It is item 13 in your book. Do you have any opening comments, Mr. Todd?

Minister's Introductory Remarks

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John Todd Keewatin Central

Yes, I do, Mr. Chairman, if I may. For the 1995-96 year, the department's proposed budget is $910,000 higher than the current year. This proposed increase responds to the increased importance of mineral development to the GNWT. It will help ensure that this government and our communities are prepared to take advantage of the opportunities created by mineral activity.

Part of the proposed new funding will be used to support a small community geology program, under which information and expert advice will be provided to communities about mineral development activities and potential, to provide technical assistance for prospectors, and to advise local mineral development opportunities. Additional funds are also being allocated to devolution activities.

The department is actively pursuing the northern accord, and with the assistance of the Department of Economic Development and Tourism, it is working with aboriginal organizations to redraft our northern accord proposal to the federal government. We hope to begin formal negotiations with the federal government in June of this year.

Despite last summer's poor results from one of the underground bulk sampling projects for diamonds, investor confidence remains strong. Mineral exploration activity is expected to continue at high levels for the foreseeable future. It is anticipated that at least three companies will be bulk sampling for diamonds in 1995. One of these projects is under way and two are in the permitting stage. An exciting new diamond discovery in the Keewatin was recently announced. BHP is undergoing a full public review of its NWT diamonds project and is now proposing to mine five kimberlite pipes over a 25-year time period, starting as early as 1997.

The NWT is about to become a major producer of diamonds. This is a tremendous opportunity for our small jurisdiction and I am committed to ensuring that this government and the residents of the NWT obtain maximum long-term benefits from this new industry. Another new mine, Athabasca Resources' Nicholas Lake project, is scheduled to be brought into production this year.

San Andreas Resources Corporation is working on a feasibility study on the development of the Prairie Creek base metals project. If the study is positive, the company hopes to bring the property into production during the latter part of 1996. The minerals initiatives program represents a large portion of the department's budget. This is a five-year program which is funded under the Canada-NWT economic development agreement. A total of 70 per cent of the expenditures from the minerals initiative program are recovered from the federal government. So, 1995-96 is the last year of the current minerals agreement.

Oil and gas activity will resume in the NWT this year. In addition to the long-awaited approval of the Norman Wells expansion project, the federal government has initiated oil and gas exploration rights issuances in the Fort Liard area and in the Sahtu region. These rights issuances have been well received by the industry and will provide important economic benefits to the local communities. With devolution, the GNWT would be able to manage and promote environmentally responsible oil and gas activity. In the meantime, however, Mr. Chairman, these responsibilities will continue to be delivered by federal agencies.

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The Chair Brian Lewis

Thank you very much, Mr. Todd. The Standing Committee on Finance has reviewed this department. Mr. Dent.

Standing Committee On Finance Comments

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Charles Dent

Charles Dent Yellowknife Frame Lake

Thank you, Mr. Chairman. On behalf of the Standing Committee on Finance, I would like to present the remarks of the committee on the Energy, Mines and Petroleum Resources budget. The Department of Energy, Mines and Petroleum Resources is a small department with very important responsibilities, given the current mineral exploration and renewed interest in some oil and gas areas. We note the efforts of the department to work closely with other departments, especially Economic Development and Tourism, Transportation, and Renewable Resources, and encourage a continuation of this cooperative approach.

Minerals Accord/Northern Accord

The committee continues to strongly support the department's efforts in trying to finalize devolution of management of minerals and oil and gas from the federal government. Members agree with the Minister when he stated: "There is a sense of urgency to get the accord in place and put the responsibility where it belongs: in the hands of northerners."

To ensure all northerners have a clear understanding of what is being negotiated, there has been increased involvement of concerned aboriginal governments in the process, since aboriginal governments have benefits and revenues from and jurisdiction over these resources in parts of the Northwest Territories. At a territorial level, discussions now revolve around working together for control of oil, gas and minerals by the people in the north. Committee Members hope to see the Government of the Northwest Territories, aboriginal governments, and all northerners work together to ensure that development of these resources brings the maximum net benefit to the people of the north.

The committee hopes that this particular aspect of devolution will finally be completed as soon as possible after about eight years of negotiations. The completion of this process will mean that northerners will be able to control the development of the non-renewable resources of the north. There are numerous benefits to be realized: increased northern employment; more northern control over the environmental impact of mines and oil and gas projects; and, increased revenues to northerners which will reduce dependence on the federal government.

Committee Members agree with the Minister of Finance that there must be a balance between profits for shareholders in mining and oil and gas ventures, and net benefits for northerners. Members also agree that devolution of management of these resources to northerners is critical to achieving that balance. Last year, the committee recommended that this department: "involve concerned aboriginal groups and finalize the devolution of responsibility for minerals and oil and gas from the federal government." Only through devolution can northerners be assured of finding that balance.

Community Prospecting Program

During the past year, there have been some small efforts to fund a community prospecting program, through the minerals section of the economic development agreement. It is important to find ways for northerners to become involved in the mineral development happening on their land. As one Member noted, the community prospecting program, "is another small way of getting northern people involved in what is a very important spin-off of resource development." Committee Members welcome this initiative.

Presentation To The Environmental Assessment Review Panel

Mr. Chairman, in the past there were occasions where government departments made different and, at times, contradictory presentations before federal panels. The committee strongly recommends that a unified approach be taken for the government's presentation to the Environmental Assessment Review Panel considering BHP's application to develop a diamond mine. Having both the Department of Renewable Resources and the Department of Energy, Mines and Petroleum Resources work as partners on the presentation and, even more importantly, on answering the questions of the panel and intervenors should provide a strong territorial voice in the process. It also reflects the important balance which is key to the government's position; support for development which is consistent with the aspirations of northerners and is done in an environmentally and economically sound way.

Mr. Chairman, that concludes the opening remarks of the Standing Committee on Finance. Thank you.

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The Chair Brian Lewis

Thanks very much. Mr. Todd, since we're going to be dealing with your budget, do you need some help?

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John Todd Keewatin Central

Yes, Mr. Chairman.

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The Chair Brian Lewis

The Minister would like to have some strangers come into our Chamber. What does the committee feel? Agreed?

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Some Hon. Members

Agreed.

---Agreed

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The Chair Brian Lewis

Sergeant-at-Arms, bring the witnesses into our Chamber, please.

Thank you, Mr. Todd. Maybe you could introduce your witness for us.

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John Todd Keewatin Central

Thank you, Mr. Chairman. On my immediate right is Mr. Graham Nicholls, who is the deputy minister of Energy, Mines and Petroleum Resources.

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The Chair Brian Lewis

Thank you very much. Any general comments on this department? General comments? Mr. Ballantyne.

General Comments

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Michael Ballantyne Yellowknife North

I have a few comments I would like to make about this particular department. I'm generally quite supportive of the approach that the department is taking. I, probably ad nauseam, have made a number of observations from my own point of view in this House about what's happening in the country and how we really have to find new sources of revenue. I've talked about the Quebec situation. Whatever way it goes, whether Quebec stays in or goes out, there's going to be a new look at how the federation is put together and there's going to be a lessening of the federal government's power.

There's a lot of talk about the federal government turning over to the provinces block funding for health and social services and education, which again lessens the federal government's power.

My fear is that if we don't get as many powers and as many responsibilities and as much control over our resources as possible in the next very short period of time, I don't want to predict what the future is going to be like for the Northwest Territories. Because those in the territories who think it's going to stay the same as it is now are wrong, absolutely wrong. I want to be on the record now when history looks back at this time when we had an opportunity to do something, that I said very strongly we should do something, that we have to move ahead, we can't sit on our hands and we can't pretend that the world is staying the same.

I, for one, even though politicians are afraid to say it, support mining exploration, I support mining, I support utilizing our oil and gas reserves here in the Northwest Territories. I think it's critical that all of us have to look at utilizing these resources, because without them we have nothing; we're a welfare state; we're irrelevant.

I, for one, commend the Minister on the approach he's taking. What I would like to say is that the debate about mining is done at an absolutely ridiculous level. There is one group that says if you support mining you're against the environment; that's nonsense, it's absolute nonsense, this is the 1990s. We're not talking about developing mines the way we did in the 1950s or the 1960s. A modern mine with all the environmental technology can have a minimal impact on the environment of our land.

So this is not a matter of either you're for mining or you're against mining. I, for one, am for responsible mining. I think that distinction has to be made. It's like you're put in one camp or the other. You're either for it or you're against it. It's absolutely ridiculous. We have to have mining up here. We don't have other forms of revenue. Therefore, if you acknowledge that as the basic premise, the second premise is we will make the mining companies use the most modern environmental technology possible. It's a given.

So I hope that whenever we debate this in the House you can be both; you can be pro-mining and you can be pro-new environmental technology. You can do both, and I have no problem saying I'm supportive.

I was just at a conference in Vancouver and talked to a lot of the exploration people who work here in the Northwest Territories. The word I'm getting from most of them is they're really fed up and frustrated. There are so many different groups they have to deal with up here. The federal government...and who knows if they're for or against mining.

Our government has some responsibility in some areas, but it doesn't have responsibility in other areas. There are discussions on division, discussions on self-government. All these discussions, all these initiatives are important and they have to happen, but in the meantime the investment potential in the Northwest Territories is right now being looked at with somewhat of a jaundiced eye. So I think we should be very aware of that.

At the end of the day, I think that it's possible for all of us here in the Northwest Territories to pursue legitimate goals whether they're self-government goals, whether it's the goal of division, whether it's the goal of putting together a public government here in the west. But at the same time, we all have to agree that in order to finance all of these good ideas we need investment dollars and we're going to need mining. There's no doubt about it. So I think all of us should agree that we are going to work together to allow development to go ahead, development that takes note of the environment and uses the modern technology available now to mining. But we can't sit on our hands and say let's wait until we figure it all out up here, because it may be another decade. By that time, I tell you, there ain't going to be nobody coming up here. And once they're out of here, exploration money goes anywhere in the world. Once they're out of here, if people think they're going to come back...I think sometimes we live in a bit of a fool's paradise.

There's mining potential all over the world, all sorts of places where mining investment is moving right now. So I think that we have to be responsible, but I also think we have to be aggressive and pursue our opportunities. Because if we don't, other places in the world are going to think lucky for them that we're such fools.

I want to say again that I think the fact is that the Minister has done very good work bringing the aboriginal groups together. I think we're beginning to see some meeting of the minds. I think there are a lot of very clever leaders in the Northwest Territories; pragmatic, realistic leaders who also understand that in order to achieve your dreams you have to be able to pay for them. And I think the Minister has done a good job bringing those leaders together, so I for one support his efforts. I really urge the aboriginal leaders to have a look at this and let's find some mechanisms so everybody can protect their interest, but we can all move ahead and we all can slowly take off the yoke of the federal government. The stream of money we have from the federal government, inevitably, is going to be diminished in the years to come. I think we all have to recognize that.

So I really hope that a diamond mine is built here in the Northwest Territories. In our trip to Africa, we visited the most modern diamond mine in the world: Venetia in South Africa. I think all of us on the trip were quite impressed with the technology used in that mine, and the possibilities that are available to BHP or other producers here in the Northwest Territories. Putting in a diamond mine in the 1990s is very different from building a diamond mine 50 years ago.

Diamonds, of all the minerals that can be mined, are really the most environmentally benign. They don't use chemicals. Essentially, you have a hole in the ground; a pile of gravel. In Venetia they have new techniques so that as they are actually using the mine they are reclaiming it. So they are not waiting till the end of the mine in order to do that. They are actually reclaiming parts of the mine as the mine is producing. In Venetia they have created a game park many times the size of the actual mining area and they are reintroducing the elephant, lion and other animals that haven't been in the area for many years. It's interesting that in this one particular area of South Africa, this mine has actually added value to the environment as opposed to taking away. There is a hole in the ground for a few square kilometres but there is a much bigger area that has actually been repopulated with animals. So, with some imagination and some realistic approaches to the problem, there are all sorts of innovative ways that we can enhance the environment using the revenues generated from mining.

I would hope that the environmental groups don't spend all of their energy opposing mining. I hope that they can use some of their creative energy to come up with some examples and

ideas of how the revenues generated from mining can be put to good use to protect wildlife and to protect the environment.

Basically, Mr. Chairman, I just wanted to say a few words about my thoughts about mining, the mining industry and the departmental initiatives. I think there is tremendous potential in this area, and I guarantee that if we don't take advantage of that potential, 10, 15 or 20 years from now people are going to be asking, why not. Thank you, Mr. Chairman.

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The Chair Brian Lewis

Thank you, Mr. Ballantyne. Any other general comments? Mr. Koe.

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Fred Koe Inuvik

I just want to make a few comments on this particular department.

I guess we can't over emphasize the need here in the north, as most of my colleagues have already mentioned one way or another, to develop some kind of northern accord and have all the groups and everyone in the Northwest Territories support the particular accord.

I know that lately there has been a lot of emphasis on minerals, but we have another sector that I think we should pay some attention to and that is the oil and gas sector. In the 1970s and early in the 1980s, there was a lot of oil and gas activity up through the Mackenzie Valley. We got a pipeline out of the deal and a lot of exploration went on in the Beaufort-Mackenzie Delta area. The resources are still there. There are proven finds of oil and of huge gas resources that we have to consider when doing an economic plan for the Northwest Territories. We have to also consider ways and means of enticing and enhancing the development of those resources.

We also, as I mentioned, have to ensure that the peoples of the north are fully involved from the initial discussion levels in the development of these accords. I know the Minister has been active in ensuring that the aboriginal groups especially have opportunities to participate in the discussions, and for that, I thank the Minister and his departmental staff for those initiatives.

One other area the department is responsible for is the investigation and looking at of alternate uses of energy. One thing that we don't hear too much about these days is energy conservation or using different sources of energy. We know there have been a lot of studies and a lot of work done in those areas. I think we have to keep pursuing them. With taxes being raised every year for oil and gas and whatever else we use, we have to look at ways of conserving energy or using different sources. The initiatives in the Dogrib country using hydro is one that I think would benefit and should benefit all Northerners.

We have to ensure these activities through an accord or whatever mechanisms, are tools that not only this government but the federal government can use. We have to ensure that we get the maximum benefit that we can and have that provided to the north.

I just wanted to make those few comments, Mr. Chairman, on this department. Mahsi.

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The Chair Brian Lewis

Thank you very much, Mr. Koe. General comments on the Department of Energy, Mines and Petroleum Resources. Mr. Antoine.