Thank you, Mr. Chairman. Mr. Chairman, one of the reasons we enter into block funding agreements with taxed-based municipalities is really recognizing they are at a stage of development where they are really able to manage a large capital budget and to plan and get economies of scale, et cetera, on their own. It is in recognition of their capacity to manage their own capital budget and to make those decisions that block funding agreements offer them flexibility once they are funded, to respond to changes in community priorities. Now if they were not being block funded, the department would be bringing those changes in community priorities from year to year forward to the House, through our capital planning process. The difference is that block funded communities do not need to go to those extra steps. They can make those changes year to year, as they see fit. Their capital budgets are still approved through the local municipal budget development process and through a voting process there. It is not that they are off on their own, doing something in secret. They have to come back and have their budgets voted and approved, through their councils. What we typically see is some changes as they get into the future years of the block funding agreement from what we thought they would do, when we are in negotiations. That is what happens in the normal capital planning process as well. What we think nontax-based communities funding are going to be doing in year three of the plan changes, as we get towards that year. That is why we see that flexibility, creating some changes in the plan as originally negotiated. That is the whole purpose behind block funding, to give them that flexibility. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Mr. Chairman, perhaps I can provide clarification that might satisfy the Members on this point. In terms of Fort Simpson, I am advised in this year's capital plan, the following items are included: a sewage treatment plant upgrade, which is a requirement of the water board, this is not something that is discretionary by the community. It is something they have to do. There is work to be done on the arena and the community centre. Main street improvements, district heating, which should result in some energy savings to the community. Some ambulance equipment and some computer equipment for the hamlet office. Mr. Chairman, the emergency road that was referenced earlier is not in their current plan. It is not something they have identified as something they will do. It is something that used to be in the capital plans. There is an example of something where the community has shifted its priority to things like the sewage treatment plan upgrade, which they really have no choice but to proceed with this year. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. I believe this is the procedure that was laid out for setting up the main estimates. Annual contributions are showing up as one year amounts, as opposed to multi-year projects. It is the convention that has been adopted for preparation of the main estimates. In the forecasting plan document, it would show the amounts annually for the period of the block funding agreements. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Generally our operations and maintenance support for taxed-based municipalities has been consistent on a population basis, except there is one major component of the funding has been our equalization contribution that we provide to communities. That is part of the operations and maintenance block funding. The feature of equalization contributions is that as the assessable tax-base increases and as the population increases, there is a tendency for that contribution to decrease. In the pot of money the department used to allocate to major municipalities, it tended to be smaller municipalities like Fort Simpson that got much more of that share, of what was called equalization contributions. The larger communities like Yellowknife got a very small portion of it because it was meant to be a kind of equalization funding so that in spite of the fact they are all taxed-based municipalities, there was some contribution there to recognize that some communities had a greater or lesser ability to raise their own revenue. That would be what would be influencing the difference in the operations and maintenance contributions that are showing up here under the block funding amounts. Thank you, Mr. Chairman.

I believe it is the main factor, Mr. Chairman.

Thank you, Mr. Chairman. We believe, in the discussions we have had with municipalities on negotiating block funding agreements, that we have been open and candid on how we have approached them in these discussions. We have been consistent on how we have approached each of the communities in negotiating these amounts and we do not anticipate, necessarily, that the amount of the current block funding agreement will be the same as the amount of a renewed agreement. The trail of information to work within those discussions with communities are well documented. There will be an understanding with communities when we begin the negotiation of renewed agreements in which they can see the logic, rationale and consistency that we have been dealing with communities on this. Thank you, Mr. Chairman.