Agreed.

---Agreed

--- SHORT RECESS

Agreed.

--- Agreed

Department Of Municipal And Community Affairs

Thank you, Mr. Chairman. I am pleased to present the 1996-97 main estimates of the Department of Municipal and Community Affairs. Mr. Chairman, the Department of Municipal and Community Affairs works in partnership with municipal governments and communities. MACA works with communities by providing training and technical advice and support on a wide range of municipal programs and services.

For the 1996-97 fiscal year, operations and maintenance and capital estimates of $106.153 million are proposed for the department. This amount is a decrease of 2.6 per cent over the combined 1995-96 main estimates.

The department has cut five person years, all at headquarters; from 141.8 to 136.8 person years.

Mr. Chairman, the department is proposing 1996-97 capital main estimates of $35.562 million; a reduction of 10.6 per cent over the 1995-96 main estimates. The department's 1996-97 capital estimates proposes 31 per cent, or $10.3 million, for constructing new water and sanitation facilities to maintain a safe water supply and good public and environmental health.

About 19 per cent, or $6.1 million, is planned to construct arenas, community halls and gymnasiums, which are important to the quality of life and the social and leisure time activities of community residents.

A further 16 per cent, or $5.4 million, is identified for land development. Another 12 per cent, or $4.1 million, of the proposed capital estimates is planned for the construction of new firehalls, community offices, municipal parking and maintenance garages and warehouses.

These estimates also include capital carryovers of $3.2 million for 18 capital projects which, owing to construction or other delays, could not be spent in the 1995-96 fiscal year.

Mr. Chairman, the department is proposing operations and maintenance main estimates of $70.591 million for 1996-97. It is important to note that over 80 per cent of the department's budget is transferred to community governments or other organizations, or is spent on community infrastructure.

As the lead department for community empowerment, MACA will build on its partnerships with communities and other departments to increase local authority and control over programs and services.

Over the next few months, MACA will be talking with community leaders about opportunities for community empowerment. We are already working with several communities that have indicated an interest in taking on increased responsibilities.

MACA is also currently leading an interdepartmental effort to identify and eliminate legal, legislative, administrative and other barriers that stand in the way of community empowerment.

Mr. Chairman, community empowerment is what many communities have been requesting for many years. My Cabinet colleagues and I are determined to see that communities have equal opportunities to make this a reality.

In many communities, more training and support will be required as communities assume greater responsibilities. MACA will work with communities to identify these training needs and to ensure that they are met. MACA has identified $1.6 million for community training, which represents 34 per cent of the department's other operations and maintenance estimates. This amount does not include training for departmental staff.

Community planning is another important part of community empowerment. We need to bring all the groups together to plan for the future. MACA is working with all the other departments to ensure that developmental support and the resources and tools to support community planning will be in place.

Mr. Chairman, that concludes my opening comments. I would be pleased to respond to any questions that the Members may have. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. It is my pleasure to present the comments of the Standing Committee on Infrastructure regarding this department.

The standing committee appreciates the efforts of the department in reducing the 1996-97 capital spending by deferring a number of capital projects. As well, over the course of the business plan review process, the department also introduced further O and M reductions, bringing their efforts in fine with those of other departments in the infrastructure envelope.

The standing committee felt that further capital cuts might be possible in this department. However, the Financial Management Board disagreed, saying that the department had already done its share. Committee Members appreciate that reducing capital programs in this department will have a noticeable impact on our communities. But committee Members would rather see arenas and new subdivisions cut before nursing stations or schools. Many of the programs offered by the department are of a lower priority than the social programs offered by the government, and reductions to the government's overall budget should reflect that.

The standing committee did appreciate the emphasis on community empowerment. Committee Members agree that greater responsibility and accountability should be transferred to municipalities. This can have significant advantages, both for providing services more efficiently to NWT residents at the community level, and for reducing the strain on the government's limited financial resources. However, the standing committee urges the government not to use community empowerment as a way of dumping programs on communities and then reducing contributions. Downloading programs at the community level should carry assurances of appropriate funding levels.

The standing committee noted a number of training initiatives being undertaken by the department. Committee Members agree that the effectiveness of community empowerment will be directly related to the quality of the training and education available to elected leaders and administrators in the communities. However, committee Members also want to see that training initiatives are efficient, cost-effective and appropriate for the needs of NWT communities, The standing committee recommends that the department provide details of all current training initiatives to the committee for review.

Committee Members noted the work done by the department last summer in helping communities build firebreaks to protect from forest fire damage. However, the committee was concerned that this effort seemed somewhat unplanned and ad hoc. The committee recommended that the department consult with the Department of Renewable Resources to develop a clear set of policies and procedures for building firebreaks around communities. Discussions are apparently under way between the departments, and the standing committee recommends that the final plans be presented to the standing committee before June 1, 1996.

The standing committee approved the elimination of the home owners' property tax rebate program. Committee Members do recognize that home owners generally contribute significantly to local economies. However, the original purpose of this program was to encourage home ownership. Committee members do not feel that a rebate of $300 or $75 is sufficient to potential home owners to justify the continuation of this program.

The water and sewer subsidy program has been a source of concern in the past. Not only has there been tremendous growth in the expenditures of this program over the last few years, but committee Members were concerned that the program was not encouraging efficient delivery of water and sewer services in municipalities. The standing committee agreed that growth in this program should be stopped, as proposed by the department, and also recommended that a further five per cent be taken out of the program. As well, the committee recommended that the department should identify the amount of subsidy by community and introduce further proposals towards a more user-pay system. The reductions in this program should be implemented in such a way as to encourage efficient delivery of water and sewage services and discourage inefficient delivery.

The department has now put forward a plan to introduce block funding for water and sewer services to communities and intends to implement that plan by June 1, 1996. The standing committee looks forward to seeing its effects on the efficiency of water and sewer service delivery. I think that should be the efficiency of water delivery and sewage pick-up.

Finally, committee Members recalled an item briefly discussed in the review of the first draft. Members had expressed some concerns regarding the fact that leases for Commissioner's land are $250 per year, no matter what size the lease is or its planned use. The department mentioned that they intend to develop a strategy for recovering the actual costs of leasing the land, especially administration costs. The department also discussed bringing in a user-pay policy for land developed by the department in non-tax-based municipalities. The standing committee agreed that fees paid for the lease and development of land should be paid for by the users of the land. The standing committee recommends that the department develop user-pay strategies for development and lease of land and provide those proposals to the standing committee by June 15, 1996. Mr. Chairman, that concludes the report.

Agreed.

--- Agreed

Thank you, Mr. Chairman. To my left is Penny Ballantyne, deputy minister; the ADM for MACA, Vern Christensen; and, Jim France, director of finance. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Mr. Chairman, Municipal and Community Affairs is one area that I'm very interested in, as it relates to three of my communities. One area that I would like to speak briefly on is community empowerment and block funding. I think the two go hand in hand.

Mr. Chairman, I have mixed feelings about this area, there are pros and cons. Mr. Chairman, ever since the day Pelly Bay became a settlement and then became an incorporated hamlet, we have had an elected membership in the community to deal with the community problems, look after municipal services, at cetera. People have begun to talk about the decisions that are made, are made from a distance. People talk about having decisions made at the regional office in Cambridge Bay. People talk about having decisions made in headquarters in Yellowknife. I think the community empowerment will allow the communities, such as Pelly Bay or any other community in the NWT, to decide for themselves what is right for the community and what infrastructure should be built. I think block funding will allow the community ... The community talks about a funding formula coming from this government, but there isn't enough input from the community. The decision about funding is made from the region or regions, or from headquarters. I think block funding will allow the communities to make their own priorities in the area of funding.

I'm not seeking an answer at this point in time, but my question is if, in fact, a community chose to go to block funding from the government, how would the funding be given to the community? Would it be monthly, quarterly or does the community have to produce a financial statement before that community is given block funding? Would it be a portion of block funding given to a community for a year? I don't know. Would the community be given the ability to get into term financing? By that, I mean, would the community be able to put money in the bank. If the community is in fact given quarterly financing, then the community would be able to put money in the bank and retain the money made from the interest. Will the community be able to priorize their own programs? I think this block funding would allow the community to priorize their own programs.

What happens at the end of the year, as has happened many times in the past, is communities in the Territories have gotten into a bad financial situation and have ended up with a deficit. In many cases, they have had to bring in a person from outside to do a recovery program. By that, I mean a manager from outside of the community has to go to the community and try and help the community out of the financial situation. In many cases it has been very successful, Mr. Chairman. In fact, if the community is in a bad financial situation, will the users of the municipal services -- water delivery, garbage, road clearing, at cetera - will the community suffer because perhaps the community has gotten into mismanagement?

Mr. Chairman, the hamlet of Pelly Bay is now getting into taking over the housing association. Before the hamlet council of Pelly Bay was able to take over the housing association, I was involved in the public meetings, I was involved in the council meetings and so on. The hamlet council of Pelly Bay has initiated, prior to taking over the operations of the housing association, a business plan and have gone over this many times in order to ensure that once the hamlet council takes over the operation and administration of the housing association, they wanted to be sure they would start on the right foot. I think that is one area we should look at.

A community has to be ready, a community has to be willing. If, in fact, a community chose to go into the empowerment block funding, will that community retain the services of the regional municipal administrator; a person who comes from the MACA regional office to a community to do a monitoring program among other things such as checking out the books and accounts, at cetera?

Mr. Chairman, during the life of the 12th Assembly when the government was talking about the community transfer, we were given the assurance of that government that the community will have to come out first in order to take over the programs and services and what have you. There has to be training in place before a community is able to take over many of the programs. I believe that community empowerment will do the same thing.

Mr. Chairman, we were given the assurance that the amount of money that was given to a community before the community transfer initiative takes place was not going to be less than what it was prior to that time. We were also given the assurance that a community taking over the program would be phased in. The community has to be ready.

Mr. Chairman, I am in favour of community empowerment to a degree, I am in favour of block funding to a degree, but many questions have to be answered; one of them being is the government downloading because we are in a very serious cashflow situation within the government. I believe that many of my communities, especially Pelly Bay, are very interested in taking over the programs and services -community empowerment and block funding -- but they are also concerned about the ability of that community to take over the financial management process.

We have to make sure that any community that wishes to go to block funding will have to have a very capable management staff. The community will have to have a very capable, very qualified, very understanding member of council. The community has to give the residents of that community the assurance that the community will not suffer from the lack of essential municipal services because the municipal council happens to be in a bad financial situation. Will the government monitor, very closely, the process that is taking place, even after the community has taken community empowerment, block funding, at cetera? Will the resources from MACA be at the regional office, even when the community is taking over all the programs that the system allows that community to take over. Will the resources from the regional office or headquarters be there to monitor what is going on in that community? Thank you, Mr. Chairman.

(Translation) Thank you, Mr. Chairman. I understand fully what the MLA has brought up. While we have been discussing these opportunities for community empowerment, the communities have been involved. I'm not sure if I remember all the questions he raised, but the Department of Municipal and Community Affairs will definitely have to monitor what is going on and there will be training that has to be provided. We are

working towards that. (Translation ends) ... Cabinet Committee for Social Programs and Community Empowerment. This committee has taken leadership on the community empowerment. We have been talking a lot about the concerns that the Member has raised. He has raised a lot of questions and has asked a lot from the communities that are wanting to take on more responsibilities, as well as take on transfers from programs in their communities.

There will be monitoring going on from the regional offices, so that this community empowerment and transfer goes as easy for the communities as possible. I strongly believe in training, so there will be some training going on at all levels and also to the staff at the community level. The communities are very worried about taking on the responsibility and failing into a deficit situation, but we are going to make sure we are committed as a department that this won't happen.

Are we offloading to the communities? The answer is no. Funding for any transfer will be based on what a community spends for the programs and services. Funding will be available for training, community development and implementation costs. Community empowerment should mean that things are done more effectively and efficiently in the future. This should help in the future to fight increasing costs. If the communities are worried that the transfers are going to be complicated, the aim of the review of community empowerment presently under way is to make it possible to transfer the greatest amount of authority along with the greatest amount of flexibility in the most efficient manner. Any unnecessary red tape will be cut.

I know a lot of the communities are ready to take on community transfers and also community empowerment, to take on more responsibility. I know they are worried and the department has done everything in their business plan to make sure that we can be there when they need us, so that we can help them whenever they need us and also monitor along the way.

In terms of funding these communities through block funding, we just did block funding with the town of Fort Smith. I just came from there this morning. We did a three-year block funding arrangement with them. The money would be coming to the community on a monthly basis. The community would have more flexibility and more to do with their programs.

I don't know if I answered all the questions, but there were quite a few. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Mr. Chairman, 1, as a politician, will not get in the way of one of my communities wishing to get into the programs. I will support the community. Mr. Chairman, I hear the honourable Minister indicating that, in the area of funding, the community will be given funding on a monthly basis. To me, that doesn't allow the community to get into financial management by putting that portion of money not being used into the bank and able to yield money to do other

programs. I would have thought that perhaps funding was going to be quarterly or even bi-yearly. Of course, it isn't up to me to determine how the funding is going to be released to the community. I don't have any more questions, Mr. Chairman. That concludes my general comments. Thank you.