This is page numbers 309 - 336 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.

Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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An Hon. Member

Agreed.

---Agreed

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The Speaker Samuel Gargan

Thank you. Minister of Economic Development and Tourism, Mr. Todd, do you have opening remarks for the committee?

Department Of Economic Development And Tourism

Minister's Introductory Remarks

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John Todd Keewatin Central

I do, Mr. Chairman. The opening remarks are somewhat lengthy as I thought that it was important to try to spell out as clearly as possible some of the important initiatives that this department has moved forward on in the last two years. Thank you, Mr. Chairman. Accustomed as I am to being brief, this is somewhat unusual.

Introduction

The details of the proposed budget for the Department of Economic Development and Tourism are in the documents before this Assembly. As I said, Mr. Chairman, I would like to take this opportunity to review highlights of the past year and address some of the major thrusts that we intend to take in 1995-96.

1994-95 In Review

There has been little fundamental change in the department's programs during the last year. The focus in the department has been on delivering existing programs more efficiently and more effectively.

Structural Changes

Over time, the Department of Economic Development and Tourism became a highly centralized arm of the government. Decisions were made in headquarters far from the client base in the communities.

To better meet client needs, the department was reorganized and structured to more clearly define roles and to facilitate decision-making by the regional staff who are closest to the clients. During the last year, organizational changes and new administrative procedures have been put into practice and solidified.

The roles of headquarters and field staff have been clearly defined. Regional staff deliver programs, headquarters evaluates, coordinates, analyses and assists. The two roles are quite different, but are not and cannot be exclusive. To ensure that the department works efficiently and decisions are formulated on the best knowledge base available, a senior management committee has been established. Regional superintendents, the deputy minister, assistant deputy minister and three headquarters directors sit on the committee.

Through the senior management committee, the needs in the communities drive annual plans, policy development and, more importantly, budget decisions. This management structure ensures that decisions made and actions taken are based on detailed knowledge of conditions in the communities.

Program decision and expenditure authority have been delegated to regional superintendents. Most expenditure decisions are now made at the regional level.

The structural changes are working. There has been a noticeable change in client satisfaction with the department. The most dramatic visible change to date can be seen in the delivery of the business development fund. With delegation of authority to the regional level, more contributions are being processed at the regional level: 97 per cent to date this year, compared to 54 per cent in 1992-93. The average number of days required to make an approval has fallen from 58 days to 28 days during the same period.

We are looking forward to continuing improvement in client services in this particular field.

Information And Communications

A delivery mechanism and people to deliver programs are in place. To ensure that residents of the Northwest Territories know about our programs, two staff members in the department, one in Nunavut and one in the west -- have been dedicated to community relations. They will be visiting communities to meet with the department's client base: community groups, aboriginal groups, business organizations, business people and would-be entrepreneurs. The department has long recognized the need to reach out to the aboriginal community.

Not only will the community relations staff make sure people are aware of the department's programs and services, they will also provide feedback so programming can be improved.

Programs

Although the department's programs are fundamentally unchanged, that side of the department has certainly not been ignored: -Extensive work is being done to determine if the programs are doing what they are supposed to do, if we are getting good value for money, and if they are appropriately targeted.

-We have looked at the fishery and the fish freight subsidy and have done extensive work towards developing a fisheries strategy. The Parliamentary Committee on Fisheries and Oceans has recommended that the federal government wind down the Freshwater Fish Marketing Corporation and make marketing of freshwater fish from the NWT a territorial government responsibility. The federal Minister of Fisheries and Oceans has until July to respond. Until it is clear what direction the federal government is going to take, it would be premature, at this time, to conclude a comprehensive fisheries strategy. For the present, existing policies and programs will be maintained. When the federal government responds to the recommendations, we will consult with the fishermen to determine what has to be done next.

-The business development fund is being evaluated. We have to determine if it is doing what it is supposed to do and how to improve our investments in the Northwest Territories business community.

-Cost-benefit analysis is being done to determine if we are getting the best value for money. Members have already seen the initial results of this when the parks and visitors' services capital budget was reviewed last fall.

-The tourism sector is viewed to be one where there is good potential for growth and the creation of jobs. Analysis is being carried out to determine where funding can best be placed to get the best return. What do tourists want? Where do we advertise to get the best return on investment?

Regional Planning

In 1995-96, the department will start to facilitate the development of opportunities I have already identified in the plans that are complete.

1995-96

Structural Changes

During the next fiscal year, additional structural changes will be made in the department to improve program delivery.

There are two assistant deputy minister positions in the department. At present, only one position is filled. As I indicated to the Standing Committee on Finance, the vacant position will be filled this coming fiscal year. One assistant deputy minister will operate in the east, the other in the west. The incumbents will focus on respective area issues as well as the orderly division of the department in 1999.

Residents in the east and the west are faced with different opportunities and constraints with respect to developing their economy. To make better use of skills and experience, superintendents in the east meet as a group, as do those in the west, in order to share ideas on responding to economic opportunities and circumstances. These exchanges are expected to continue into the future.

We are going to try to better utilize staff in the coming year. Last year, seven person years were transferred from headquarters to regional offices to aid in the better delivery of programs. This change has made a difference but additional staff redeployment is required.

The department has economic development officers in some communities that are not large enough or busy enough to warrant a full-time person. We often find ourselves in a situation where staff are not available in other areas to provide departmental services or assist communities in taking advantage of opportunities that arise. To make more efficient use of staff, the department will establish an itinerant EDO service. These staff members will provide services to communities that are too small to warrant full-time staff and will also respond to special needs. They will be able to assist with the development business plan, as well as assisting clients during start up. There is a need for aftercare. The itinerant EDOs will be able to respond.

Programs

During the coming year, the department will continue to apply cost-benefit analysis to programs to ensure we are getting the most for our money. Programs will be evaluated and adjusted, if necessary, based on the findings that take place.

1995-96 Program Highlights

Business Development

In order to develop the northern business community, particularly in the smaller centres, there is a need for funding, a need for business infrastructure and a need for business management skill development. It is our intention to enhance all three during the next fiscal year.

-Business Development Fund. Services and programming for business will be improved with the proposed expansion of the business development fund. The fund is consistently oversubscribed. This program is a primary tool for job creation. We are proposing to increase the fund by $550,000.

-Mortgage Investment Corporation. Progress is being made toward the establishment of a Mortgage Investment Corporation which will put badly-needed capital into the economy. I had hoped progress would be faster but it is a complex undertaking. Cabinet has approved the development of a legislative framework, including a legislative proposal for Cabinet approval for inclusion on the legislative agenda.

-Business Service Centres. In smaller communities, there tends to be a shortage of commercial space. In order to alleviate some of the pressure, business service centres are being developed at Pond Inlet, Coppermine and Cambridge Bay using EDA funding. These facilities will provide desperately-needed commercial space for new entrepreneurs at subsidized rents and include provisions for services such as bookkeeping, secretarial and reception services.

-Small Business Management Training. In order to improve the skills of the northern business community, the three Nunavut regions jointly allocated EDA funds to Kakivak Association of Iqaluit to develop and test deliver in Nunavut communities six business management training modules. These were developed by Nunavut experienced trainers and address specific needs of Nunavut's future business managers. Development of all modules is now complete and some test delivery is planned to proceed in the next few months and continue in future years. Following test delivery and refinements in the coming year, it is hoped these modules will be adopted as standard courses in business management training in Nunavut.

Arts And Crafts

The arts and crafts sector, like hunting and trapping, is the only source of income for many of our residents in the small communities. In order to improve producer incomes, staff in the department, working with producers, wholesalers and retailers, will place renewed emphasis on market development.

Producers usually sell their products through Northern stores or the co-op. The department is supportive of these traditional purchasers of arts and crafts but there are independent producers who would like to try selling their products themselves. To give these producers a better chance to get into and succeed in the marketplace, the department will provide market information.

For a number of years, efforts to expand the marketplace concentrated off-shore, in Europe and Japan. Market information indicates that the largest potential market is in North America. In order to expand sales of arts and crafts, a coordinated effort to market products in the United States will be made by the Northwest Company, some co-ops, Cape Dorset Fine Arts and the Dene Cultural Institute. EDA funding will be utilized by the proponents.

Parks And Visitor Services

Parks are a significant capital item for the department. A new parks policy will be finalized and a parks system plan developed. The plan will be developed on the basis of the policy and extensive consultation and will guide park development for the next 20 years.

Parks attract tourists, provide a place for them to stay, and provide recreational opportunities for residents of the Northwest Territories. They are needed but have to help pay their own way. The department will develop a revenue-generation strategy involving fees, permits, royalties, donations and merchandise related to parks.

Capital projects approved during the last session will be carried out this year.

- Construction of the Inuvik Visitors' Centre will be completed and the facility opened later this year.

- A start will be made on construction of tourism information facilities in Pond Inlet and Lake Harbour.

- Major renovations will be done at a number of parks including the Gwich'in park in the Inuvik region; Hidden Lake Park, east of Yellowknife; and, Meliadine River Park in the Keewatin. South of Great Slave Lake, work will be done on the Hay River Park.

Planning related to park activities in the Sahtu and development along the Wrigley highway extension will also be undertaken.

Tourism Development And Marketing

The department is conducting a review of tourism organizations in the Northwest Territories with the objective of establishing two tourism authorities -- one in the east and one in the west. Products are different in each area and with two authorities the needs of operators and tourists can be better met with increased industry participation in decision-making.

Natural Resources

Fur

The development of the renewable resource sector in a sustainable manner has always been a priority of this government. In the smaller communities, the harvest of renewable resources is often the only economic option for residents. We are still committed to this policy.

With the crash of the market for seal skins, and depressed prices for other furs, hunters and trappers have been under financial pressure for a number of years. The demand for fur products is making a slow come back. In order to capitalize on this, the department is proposing to give the Northwest Territories Development Corporation a one-time contribution of $450,000 towards offsetting the cost of developing high-end fur coats and the establishment of manufacturing facilities in the Kitikmeot and Inuvik regions. Subject to the commercial success of these new products, one further production centre would be established in the Baffin region and another in the Deh Cho in subsequent years. An estimated 30 manufacturing jobs will be created with this initiative.

This initiative dovetails well with the renewable resource development strategy done under the auspices of the Minister of Renewable Resources and will support efforts being made by his department to revive the fur industry.

Commercial Game Harvests

The Department of Economic Development and Tourism and the Department of Renewable Resources have been collaborating -- how unusual -- to assist the Aiviit Hunters' and Trappers' Association of Coral Harbour to plan and execute a spring caribou harvest of approximately 2,000 animals. The harvest is to be undertaken to federal inspection standards with the NWT Development Corporation providing marketing services on a contractual basis. Firm offers to purchase have been provided by the NWT Development Corporation.

It is expected that the hunt will be completed by the end of April. If successful, the Southampton herd is sufficiently large enough to support continued large scale harvests in future years.

Conclusion

In conclusion, we are taking the advice of this House. We are undertaking initiatives Members have asked for. I think most of you will agree that progress has been made during this past year which has been beneficial to us all. Thank you.

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The Chair John Ningark

Thank you. On behalf of the Standing Committee on Finance, Mr. Dent.

Standing Committee On Finance Comments

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Charles Dent

Charles Dent Yellowknife Frame Lake

Thank you, Mr. Chairman. The standing committee is generally pleased with the work of the department. As the Minister noted in his opening statement, the changes made in the last year to devolve authority seem to be making progress towards making the department and its programs more accessible to northerners. In the report on the 1994-95 main estimates, one of the committee's major concerns was about the effectiveness of the tourism zones concept. The committee said there is a perception that planning and decision-making in some of the zones is dominated by a few individuals from larger communities and by tourism operators, many of whom reside outside of the territories. Smaller communities in a given zone are not heard or taken into account. The committee feels that it would be appropriate for the department to make funding to the various zone associations contingent upon the guarantee of appropriate representation from all communities within each tourism zone.

Committee Members feel many of the concerns they raised last year remain. To add to those concerns, there has been a cut in the funding this year to tourism zone associations. The developing tourism industry supports the efforts of the department to increase economic activity. The tourism association's primary focus is to increase tourism. Before cuts are made, there should have been an evaluation of the effectiveness of those dollars and of possible alternative uses for the funds which would then be more effective. The committee has received a commitment from the Minister to complete an evaluation before the end of the fiscal year. Before any decision to cut funding to tourism associations, the evaluation should be considered in the House.

Recommendation 7

This leads to recommendation 7 of the committee, Mr. Chairman, which I will make as a formal motion at the end of our comments. The committee recommends that the tourism development and marketing activity in the estimates of the Department of Economic Development and Tourism not be considered until the Minister has tabled an evaluation of the

effectiveness of grants to tourism zone associations, and until this evaluation has been debated in the House.

Evaluation

The Minister described for the committee a number of changes in the areas of tourism, marketing and support to the industry association. Before changes are made, there should be an evaluation of the current activities and value for dollars spent. The committee urges the department to prepare objective evaluations prior to proposing program changes.

Assistance To Small Businesses

Committee Members noted that many northerners are finding success by establishing very small businesses. Often, these business ventures can be started with as little as $5,000 to $10,000. The committee encourages the department to encourage continued development of these small businesses.

Now, Mr. Chairman, I would like to make a formal motion of recommendation 7.

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Charles Dent

Charles Dent Yellowknife Frame Lake

Mr. Chairman, I move that this committee recommends that the tourism development and marketing activity in the estimates of the Department of Economic Development and Tourism not be considered until the Minister has tabled an evaluation of the effectiveness of grants to tourism zone associations, and until this evaluation has been debated in the House.

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The Chair John Ningark

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

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An Hon. Member

There isn't a quorum.

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The Chair John Ningark

Thank you, I've been advised that there isn't a quorum in the House. I will ring the bells.

Thank you. We need order. Order, please. There's a motion on the floor. To the motion.

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An Hon. Member

Question.

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The Chair John Ningark

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

---Carried

Mr. Dent.

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Charles Dent

Charles Dent Yellowknife Frame Lake

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

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The Chair John Ningark

Thank you, Mr. Dent. Before I open the floor for general comments, I would like to ask the honourable Minister if he wishes to bring in a witness or witnesses.

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John Todd Keewatin Central

If I may, Mr. Chairman, that would be appreciated.

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The Chair John Ningark

Thank you. Do we have the concurrence of the committee that the honourable Minister bring in the witnesses?

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Some Hon. Members

Agreed.

---Agreed

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The Chair John Ningark

Thank you. Proceed, Mr. Minister. Thank you. For the record, Mr. Minister, would you kindly introduce the witness to the committee?

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John Todd Keewatin Central

Thank you, Mr. Chairman. On my immediate right is the deputy minister of Economic Development, Mr. Roland Bailey.

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The Chair John Ningark

Thank you. The floor is now open for general comments. Do we have general comments from the committee? Member for Thebacha.

General Comments

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Jeannie Marie-Jewell Thebacha

Thank you, Mr. Chairman. Mr. Chairman, I don't have much to say on Economic Development. Basically, I just have to commend the Minister for turning the department around, and for addressing some of the issues that have needed to be addressed with regard to streamlining and cutting down the time frames for funding to be evaluated. I certainly have recognized that it is a quicker time frame.

However, I did want to ask a couple of questions about a comment he has made. First of all, I would like to ask about pages 6 to 8 regarding visitors' centres. Recognizing that there are visitors' centres in the eastern Arctic and in some parts of the western Arctic and Inuvik's visitor's centre has been completed, I would like to ask about whether consideration is being made for visitors' centres in the Fort Smith area.

In addition to that, Mr. Chairman, I wanted to get clarification about our natural resources; in particular, fur. It states: "The demand for fur products is making a slow come back," and he is proposing to: "...give the NWT Development Corporation a one-time contribution of $450,000 towards offsetting the cost of developing high-end fur coats and the establishment of manufacturing facilities in the Kitikmeot and Inuvik regions. Subject to the commercial success of these new products, one further product centre would be established in the Baffin region and another in the Deh Cho in subsequent years. An estimated 30 manufacturing jobs will be created with this initiative." Does this basic initiative, which includes high-end fur coats, also include anything with respect to tanneries? I would like an update on that area. Thank you.

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The Chair John Ningark

Thank you, kindly, honourable Member for Thebacha. The honourable Minister.

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John Todd Keewatin Central

Thank you, Mr. Chairman. On the issue of visitors' centres, I have felt -- if I can be candid, which I like to be -- that perhaps the return on the investment of those buildings wasn't as great as it should be. I gave some direction to the department that, clearly, before we invest in large visitors' centres which cost this government significant dollars -- these are not cheap buildings, if that's the right term -- we need to evaluate the traffic flows of tourists, et cetera. Of course, the Inuvik one is easily defendable, certainly since I became the Minister, because of the enormous flow of traffic in there.

There are no plans under way right now to build visitors' centres in Fort Smith. I think we do provide some support to some of the visitors' centres that are there; some fiscal support. But, there are no plans in the department's budget to build a visitors' centre in Fort Smith.

The other issue of fur; it has been indicated to us that there is a very slow increase in the fur sales. There certainly is a keen interest in Arctic fur in comparison with farm fur. We are trying to assist the NWT Development Corporation to get some manufacturing jobs done in some of the areas of the territories. We're looking right now at development of small tanneries. I believe that was the question. When you get into the larger-scale type of operation, we come under a great deal more environmental consideration and a whole set of policies that are different than if we do small, compact tanneries. We have an experimental one going on in Whale Cove, I believe, also one in Broughton Island. It certainly would be our intent and our long-term plan to tie in the development of the fur, the development of client products; it would be our intent to tie in the tannery as well so that it's all-encompassing. Thank you.

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The Chair John Ningark

Thank you. General comments. The honourable Member for Thebacha.

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Jeannie Marie-Jewell Thebacha

Thank you. Mr. Chairman, just looking through some of the pages of the budget, if the Minister could obtain for me the amount of funding that is given to a visitors' centre. I guess the point I want to make is that the visitors' centre in my community of Fort Smith was built totally by the community with no government funding. The amount of funding they get now is very minimal. I think it's something to the tune of $16,000 a year.

The concern I have is being in a community south of the lake where we have our season of tourists starting very early compared to normal spring season; I think that amount is inadequate. When you look at the amount of this budget with $7.3 million in this particular activity, $16,000 is very little. I think the community should be commended for that. At the same time, I also believe that if you're going to start looking at these lucrative visitors' centres and they're going to be underutilized, then maybe the government should be looking to spend their dollars in a more economical sense and repriorizing their funding accordingly.

Mr. Chairman, I also want to ask with respect to...I recognize that the Business Credit Corporation is at arm's length, it's a Crown agency. I would like to ask if there are any policies -- and I recognize that the Business Credit Corporation just came up a few years ago -- or procedures in place to ensure once you get your loan agreements or any type of credit contribution, that they're repaid accordingly? The problem that I have noticed is the continual monitoring is not on a consistent basis, where many of your loans may fall back, then maybe a year later there is all of a sudden a lot of pressure placed on these different businesses to repay these particular loans.

I get some criticism because of it being government loans, of many people not paying back. As a result, community members feel they will be forgotten about. Then later on, the department comes in with an extreme amount of pressure trying to collect these loans. Like any other bank, if you don't pay your loans, they take their measures and address them. But it seems like the measures taken by the department at times are inconsistent and cause concern in the communities. Thank you, Mr. Chairman.

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The Chair John Ningark

Thank you. The honourable Minister.