Thank you.

-- Break

I would like some direction on how the Committee wishes to proceed from this point. Mr. Ootes.

Mr. Chairman, I would recommend that we consider the Department of Resources, Wildlife and Economic Development next.

Thank you, Mr. Ootes. The Committee agrees? Thank you. We will then proceed with the Department of Resources, Wildlife and Economic Development. I will invite the Minister, the Honourable Mr. Kakfwi for opening comments on the departmental estimates.

Thank you, Mr. Chairman. You have before you the very first budget of the Department of Resources, Wildlife and Economic Development. The total budget of $92.7 million represents a real reduction of 11 percent from the total combined budgets of the three former departments. In the amalgamation of Renewable Resources, Economic Development and Tourism, and Energy Mines and Petroleum Resources, we have done our best to reduce in areas of administration rather than programs and to reduce in headquarters rather than regions and communities.

For example, you will note we have reduced corporate services by 21 percent while the budget for environmental protection has actually increased by 31 percent. The overall reduction of 20 percent in active positions has been accomplished by a 26 percent reduction in Yellowknife headquarters. A 16 percent reduction in the 10 largest centres and only a 6 percent reduction in smaller communities. We have also made significant moves to decentralizing budgets and decision-making authorities.

Prior to amalgamation, less than 30 percent of the budget was under regional control. In 97/98 more than 50 percent will be under regional control. Most of the residual headquarters budget is in the "Forced Management Activity" which is headquartered in Fort Smith. During the amalgamation I have sought the advice of many groups, including Members of this Legislature. Some were concerned our attention to protecting the land and wildlife would distract us from our immediate needs to increase economic opportunity in jobs.

Others were concerned that we may compromise the environment for short term economic gain. Skeptics have said that it is impossible to be responsible for an environmental mandate and promote economic development at the same time. Mr. Chairman, I say we can do both. We must do both and we will do both. Our land and resources must continue to be our source of our wealth. We must use these resources today but we must use them wisely so they will be there for our children in future generations far into the future.

and establishes a higher level of commitment to northern employment and business involvement than has ever been made before. Mr. Chairman, we have faced a challenging year, managing the consolidation and absorbing a significant budget reduction at the same time. However, I am confident that with this behind us, the Department of Resources, Wildlife and Economic Development is well-positioned to move forward with its mandate. I am optimistic about the direction we are proposing to take. I am encouraged by the commitment of the staff of this new department to the new direction.

So where do we go from here? Mr. Chairman, our first priority must be to make sure the land and resources of the Northwest Territories are managed in such a way they will be available to use for generations to come. The department will continue to work closely with co-management boards in the study of management and conservation of wildlife and its habitat. Together we continue to provide models to the world for management of those resources.

We will also continue to work closely with our counterparts in other jurisdictions. For example, we have supported the development of a national accord for the protection of species at risk, in co-operation with other Canadian jurisdictions. This is to ensure that everything possible is done to prevent these species from becoming extinct as a consequence of human activity. The Government of the Northwest Territories has been and will continue to be committed to sound management of our wildlife resources.

As I have already noted, we have increased the budget of the Environmental Protection Service. A key priority of this activity will be to pursue partnerships with other government agencies, the association of municipalities and other private sector and energy management. The opportunities in energy conservation and energy alternatives will benefit the environment and reduce costs at the same time.

In March we will launch the development of the "Protected Area Strategy". The development of this strategy will involve staff from all divisions in the department, in partnership with federal departments, aboriginal organizations, industry and environmental groups. All areas of the north are special and all receive protection under laws of general application. However, there are areas of critical habitat, of special cultural, archaeological, scientific, historical, ecological or educational value.

There are areas of particular recreational or aesthetic interest. These areas must be identified and we need to look to establish measures to provide these areas with additional protection. The Protected Area Strategy, developed in a co-operative spirit, will give us a vehicle to do this. It is a commitment made under the Whitehorse Mining Initiative in 1994, and reconfirmed by the Minister of Indian and Northern Affairs and the Premier and myself in 1996. This task, Mr. Chairman, will require the support and commitment of a diverse group of interests. The result will be our legacy to future generations.

Mr. Chairman, by ensuring that we properly manage and protect our land and resources, we can proceed with greater confidence to meet our economic challenges and pursue our economic opportunities. As we all know the challenges are great. Our population is growing faster than our economy. People want jobs and opportunities so they can become more productive and self reliant. The need is greatest in our smaller level two and level three communities. This problem is compounded by our current fiscal crunch. Government finances cannot sustain economic growth. However Mr. Chairman, the opportunities are also great. Whether it is mining, renewable resources, tourism, arts and crafts, manufacturing, construction services or small business, every sector of our economy has the potential for growth and we must find better ways to harness this potential.

Government must use the resources we have in the most efficient way possible by reducing administration and overhead costs. We must target our efforts to those sectors that have the best potential and those opportunities that have the greatest need. We must find private sector partnerships which can compliment our efforts in bringing new investment dollars to the north. We must empower communities and individuals who can make better decisions about their own futures. Government must shift away from trying to design and manage our economy from the centre. We must move forward to a roll of providing a positive environment and the necessary support to communities, to the private sector and to individuals.

In the next few months, this department will be releasing a draft economic framework for discussion. This framework will provide information about the opportunities, strengths and challenges of every economic sector of the economy from a territorial, regional and community point of view. It will provide a basis for government, aboriginal organizations, communities, business and individuals to identify their opportunities and priorities and to identify the resources and programs they will need in order to succeed. The economic framework will provide a foundation for partnerships in improving the effectiveness of our economic policies and programs, from identifying and managing resources to improving access to business financing, to market development.

The framework will also help strengthen the links between our economic potential and workforce development. The provision of infrastructure and our regulatory and tax regimes. The economic framework will assist government, communities, business and individuals to make better economic decisions. Mr. Chairman, in the context of the framework, the department will also be pursuing several key economic initiatives. I would like to highlight a few of these.

An additional $500,000 has been budgeted to expand the community futures program to all regions. Community Future Societies in the Baffin, Keewatin, South Slave and Inuvik region provide funding and decision-making authority to community-based boards. These community future organizations are able to combine their resources, in partnership with other agencies, to work more effectively and efficiently in addressing local and regional priorities.

The Keevalik Partners in Development is a model of partnership. This organization brings together the department, Sakku, NTI and the federal government to provide a single window for business in lending contribution, training, marketing, research and infrastructure programs of the partners. As a logical extension of Community Futures, promoting and supporting community economic development will be a departmental priority.

Community economic development is a model where communities take responsibility for their own economic planning and decision-making. The role of government is to provide resources, information and support. Mr. Chairman, the Northwest Territories Development Corporation was established to create jobs in communities where the need is greatest and where private sector opportunities are limited. It has done so by establishing subsidiary companies and subsidizing start-up and operations costs. The Dev Corp. now has 21 wholly owned subsidiaries, creating jobs in manufacturing, arts and crafts, food processing, forestry and retailing. In this budget, an additional $500,000 will be allocated to the Development Corporation. The corporation's priority is to move existing subsidiaries towards greater self-sufficiency by increasing their efficiency and by aggressive marketing to enhance sales. Ideally these businesses will eventually achieve profitability and will be turned over to the private sector. This will in turn maintain existing jobs and free up money for new investments. In keeping with our goal of empowerment, the Development Corporation will also be increasing local authority and accountability for decisions about existing funds, in future subsidiaries. Mr. Chairman, the Minister of Finance provided information to Members on the Aurora fund and other initiatives to foster trade and investment in the Northwest Territories. The department will be complimenting his work by pursuing actions to improve access to investment capital. This will include a review of the roles of commercial lenders, the Business Credit Corporation, the NWT Development Corporation, community futures, the Aurora fund and others. To investment capital supports all economic opportunities.

In order to improve the investment climate, it is a priority of the Government of the Northwest Territories to reduce regulations and policies that create an unnecessary burden on the private sector. I will begin work with the Minister of Finance on the government-wide review of regulation. This does not mean that we will lower our standards or compromise protection of public safety, the environment, or consumers. Our aim is to clarify the rules and reduce unnecessary cost of red tape, for the business, the government, and individuals. The department is co-ordinating a broad range of government initiatives to commercialize, privatize, or devolve government functions which provide services the private sector can deliver with greater efficiency. Mr. Chairman, Cabinet has directed, I collaborate with the Minister of Education, Culture and Employment and the Minister of Finance, on fast-tracking the development of northern employment strategy.

This will build on the labour force development plan aimed at preparing our work force for emerging employment opportunities and on the economic framework aimed at enhancing these opportunities. Mr. Chairman, at the end of the day our success will be measured by the creation of new jobs and other productive opportunities which allow people to become more self-reliant, looking at business opportunities, jobs, the wage economy, opportunities to pursue traditional activities such as trapping, sealing, hunting, fishing, and cottage industries. Mr. Chairman, the Department of Resources, Wildlife and Economic Development has an ambitious agenda. The Protected Area Strategy, the economic framework, the northern employment strategy stand out as three of our most significant initiatives. We must continue to do well, those things that each of the former three departments did well.

In conclusion, Mr. Chairman, there have been significant changes as a result of the creation of the Department of Resources, Wildlife and Economic Development. However, I believe with these changes we are in a better position to meet the challenges before us. The support of all Members for our budget and the work ahead will ensure our success. Thank you.

Thank you, Mr. Kakfwi. I will now ask for comments on the committee's re-evaluated departmental estimates. Mr. Ootes.

Thank you, Mr. Chairman. The proposed budget for this newly consolidated Department of Resources, Wildlife and Economic Development has been identified at $92.669 million. When compared to the revised forecast for 1996/97, this equals an overall reduction of $16.427 million. As a result of the amalgamation exercise, more than 93 positions have been eliminated and regional spending authority has increased to over $47 million.

Forest Fire Centre - Fort Smith:

While reviewing the 1997/98 business plans, the committee questioned the Minister regarding the Forest Fire Centre in Fort Smith. Members identified that although forest fire operations are seasonal, this centre remains open on a year-round basis. After discussing this issue at length with the Minister, it was agreed the department would review the situation and develop options for potential cost savings. Members look forward to receiving this review as well as any recommendations that may come out of the evaluation.

Federal Bill C-65:

Members noted that the federal bill "The Endangered Species Protection Bill" would legislate the management of endangered species back to the federal government. Members agreed that this was not only an intrusion into territorial jurisdiction, but that it could also contradict current and/or future land claim settlements. Given that, Members recommended the following:

The standing committee recommends that departmental staff work with their federal counterparts to ensure that the proposed Federal Bill C-65 receives the required amendments. The committee further recommends that the GNWT ensure the involvement of its aboriginal partners throughout this process.

NWT Development Corporation Funding:

In reviewing both the 97/98 business plans and the 97/98 main estimates, Members noticed a proposed increase to the overall budget of the NWT Development Corporation of some $500,000. Members were concerned with this proposed increase as it was only last year that the standing committee recommended the Development Corporation's budget be reduced by $100,000.

Mr. Chairman, I would now like to pass the further reading of the report to Mr. Kevin O'Brien, the deputy chair of our committee.

Thank you, Mr. Ootes. Member for Kivallivik, Mr. O'Brien.

Thank you, Mr. O'Brien. Member for North Slave, Mr. Rebesca.

Thank you, Mr. Rabesca. I will now ask the Minister if he wishes to bring in witnesses? Thank you, Mr. Kakfwi. Does the committee agree? You may bring in the witnesses.

I would like to ask the Minister, Mr. Kakfwi, if he would like to introduce his witness?

Thank you, Mr. Chairman. I have with me on my left, the deputy minister for Resources, Wildlife and Economic Development, Mr. Andrew Gamble.

Thank you, Mr. Kakfwi. Welcome to the committee, Mr. Gamble. I now open the floor to general comments from the Members. Are there any general comments? Mr. Ootes.

Thank you, Mr. Chairman. I would like to first of all make reference to the committee's report regarding Bill C-65. There have been some recent developments that make our recommendation somewhat moot and I would like to provide an update on these recent events. I believe the Minister has already spoken in the House on this.

Regarding Bill C-65, a number of parties made representations regarding this bill to the Federal Standing Committee on Sustainable Development. Most of these parties echoed the territorial government's concern that the proposed bill would legislate the management of endangered species from the NWT back to the federal government. The standing committee has now completed its work on the bill and the bill has been revised, so that authority for managing endangered species remains at the territorial government level, at the GNWT level. I thought I would provide that to start with, Mr. Chairman, as clarification for everyone.

Regarding the Minister's statements, I would like to make reference to a number of areas and one was the area of consolidation of the department. It did require a great deal of work on the department of many officials, and including our Committee, who had to deal with looking at the pros and cons with consolidation. I think there are still some rough edges within the department that the officials do need to work on. I understand one area is the vacancy rate, at the moment within the department is a critical area.

The agreement with BHP, we were certainly all very pleased that this was achieved but it did demonstrate that we need, here in the territories, a more stream-lined process for large corporations like BHP to do business in the north. We need refinement and a clearer way for them to start operating in the territories. This was a particularly challenging and onerous two years that the company was put through and had it not been for the fact that diamond mining is very lucrative, it is my belief the company would not have stayed to conclude its business in the territories. It was very, very challenging for them. As I say, I think it was in their interest because of the value of diamond mining and the profitability of it, that they were able to do so. But had it been a marginal operation, a small gold mining operation that was put through these types of hoops, then I am not sure that particular company would proceed. Anyway, my point is we need to pay attention to the regulations and the streamlining of the process for companies, hence the need for us to address the northern accord which I would like to know where we are going with that. What is happening, because I have not heard a thing about it in the recent months. So, perhaps when we get into detail on the consideration of budget, we could have the Minister address that particular area.

The Protected Areas Strategy, again, I was very pleased with the Minister's statement yesterday regarding the effort to draw together in Inuvik all parties that may have a concern in this area. It is of concern to the mining industry and exploration companies because they want to know what lands are available and what lands are not available. It is therefore important for all parties to settle this. Also, there is, of course, an urgency to have the land claims settled fairly and quickly, so that companies know who they can deal with in respect to accessing land.

Regarding the economic side of the department which is responsible for tourism, arts and crafts, manufacturing, small businesses, I would like to have the department put forward a strategy to better encourage this whole sector, we are not putting in this budget. We have a budget of $1.2 billion. Sixty-two percent is being devoted to the social envelope area. This particular budget of this department is smaller than certain sectors of the major departments of Social Services and Health and Education, Culture and Employment. Yet this department is the only department that is working on job creation from the perspective of outside government job creation. I am glad to hear the Minister is working closely with the Minister of Education to tackle the problems of a job strategy and job education, because we have a need for identifying where the jobs will be in the future, so our education department can concentrate its efforts on where to provide training and education. I am very pleased to hear the Minister is working closely with the Minister of Education on that.

Regarding the NWT Development Corporation, there are now 21 wholly-owned subsidiaries which create jobs in manufacturing, arts and crafts, et cetera, food processing and forestry. However, while these corporations were established and there is a desire certainly and an important area for the corporation to play a part in job creation, that should not be the sole reason for its existence. We must have this Development Corporation create companies that become profitable. Profitable companies will continue to exist in the future. If we cannot continue to support these companies financially through the Development Corporation, then they will fail in the long run. It is imperative that we give attention to this, to ensure companies take the approach that their first priority should be to create a profit. If we create good employment and sustainable employment as a result, that is the purpose of it. I am pleased to see the Aurora fund again. We do have an area through the Business Credit Corporation, the NWT Development Corporation and Community Futures, as well as the Aurora fund, an opportunity for northern individuals and companies to access funding for the private sector.

Mr. Chairman, the reality for us in the territories is government will no longer will be a growth sector. It has to be private enterprise. This particular department is ultimately going to be extremely important to all northerners. It is my feeling that we have to look at providing more funding for this whole economic stimulation sector. Thank you, Mr. Chairman.

Thank you, Mr. Ootes. General comments from Members. Are there any further general comments? Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, my general comments will be based on the Minister's report. I am interested in the areas of particular recreation, aesthetic interest. We need to identify these and establish measures to provide them with additional protection. I am interested in that and how we would go about achieving some of these items and I guess establishing locations as well. I am interested to see if those are already named or if there is a way of doing that.

Also, I am concerned in the area on page five of his introductory statements, people want jobs and opportunities to become more productive and self-reliant. The need is greatest in smaller level two and three communities. I have a concern there. There has been an effort through the reduction to do most of the hits in the larger communities. I am using Inuvik as an example. Hopefully, there will be opportunities created through this department that would include the community of Inuvik which is considered a level one community. I hope there will be initiatives in that area as well or that we will be able to share in some of the programs that are available to level two and three communities. In the community of Inuvik, because it is classified as a regional centre, most of the hits have come through the regional centre itself.

My comments will be short, but in the area of privatization and initiatives to commercialize developed government functions, I am interested to see what initiatives are going to be undertaken and what areas and timelines are given to these. I believe it is good for both employees and the private sector to be aware of these, that if there is an opportunity to be taken full advantage of by the community people and even employees that it would be affected by these decisions. It would be good to see, as we go down the road, more activity in the area of good creation in all areas. As we have said before, we have heard it many times in this House, the government can no longer be the engine of the economy, but hopefully we can provide the gas for the vehicle to move down the road, so we can try to become the stimulator of it. Thank you, Mr. Chairman.

Thank you, Mr. Roland. General comments by Members. Are there any further general comments? Does the committee wish to proceed with the detail of the estimates?

Agreed. Thank you. We will still go over program summary. We will start on page 11-10. Corporate management, operations and maintenance, total operations and maintenance, $9,305,000. Mr. Ootes. I believe you had your hand up, Mr. Ootes.

Thank you, Mr. Chairman. I wonder if the Minister could tell us what the present staff level is of the department and how many staff were reduced in this particular department.

Thank you, Mr. Ootes. Minister Kakfwi.

Mr. Chairman, I answered that question during question period. I do not have the figures here with me. I think we said there is a total of about 73 vacancies in the department. It appears abnormally high. Normally the average would be somewhere around 20 to 30 vacancies. The reason it is so high is because we are holding these newly created jobs for over 50 effected employees within the department, who we wanted to give the first opportunity to fill these jobs. Over 52 employees, I believe, have chosen not to apply at this time and have chosen layoff, so we are now in a position to start advertising these jobs to give people in the public an opportunity to apply for these positions. That is the current situation with the vacancies. Thank you.

Thank you, Minister Kakfwi. Mr. Ootes.