This is page numbers 241 - 272 of the Hansard for the 13th 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 chairman.

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Further Return To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

Michael Miltenberger Thebacha

Thank you, Mr. Speaker. That is an interesting suggestion and yes, I will take it into consideration. Thank you.

Further Return To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

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The Speaker Samuel Gargan

Oral questions. Supplementary. Mrs. Groenewegen.

Supplementary To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

Jane Groenewegen Hay River

With respect also to these programs that were proposed, I am wondering what is the vehicle or method by which the funds for these programs or made available are known in the communities? That is the communication strategy because again, if these programs were in existence before, I was not aware. Their achievements have not been touted in this House because I have not been aware of what they have accomplished in the past. What is in place in terms of a plan for making them known in the communities?

Supplementary To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

The Speaker Samuel Gargan

Mr. Miltenberger.

Further Return To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

Michael Miltenberger Thebacha

Thank you, Mr. Speaker. Mr. Speaker, the plan is to use, as I have indicated in the statement, the existing infrastructure. With Working Together, it will be delivered through the regional offices of advanced education. There are offices in, in the Member's case, in Hay River through her department with a wage supplement. The other ones will also be delivered through the regional offices and area offices and community offices. As well, there are already adult basic education programs being offered through different non-government organizations and they will just continue to be funded, as far as I am aware. Thank you.

Further Return To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

The Speaker Samuel Gargan

Oral questions. Question period is over. Your final supplementary, Mrs. Groenewegen.

Supplementary To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

Jane Groenewegen Hay River

Thank you, Mr. Speaker. Mr. Speaker, the Minister has agreed that he will look into the suggestion that I have made here today. Would he do this expeditiously? Would it be hopeful that we could have something like this in place for this year or is the timing too short? I notice in here it says that this program will be available to employers by the end of this month. If there is going to be any kind of shift in how this program is delivered, could we be hopeful of it being done quickly and any chance of it happening for this summer coming up? Thank you.

Supplementary To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

The Speaker Samuel Gargan

Mr. Miltenberger.

Further Return To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

Michael Miltenberger Thebacha

Thank you, Mr. Speaker. Mr. Speaker, if I understood the Member's suggestion, it was for basically a summer high school where students could pick up courses over the course of the summer prior to being able to get into university or other institutions. It is an issue that has been raised before. I will talk about it with the department. Whether we are able to, in fact, have something in place in such a short period of time, I do not know but we will give it our best shot and serious consideration. Thank you.

Further Return To Question 98-13(7): Employing Special Needs Assistants
Question 98-13(7): Employing Special Needs Assistants
Item 6: Oral Questions

Page 254

The Speaker Samuel Gargan

Question period is over. Item 7, written questions. Item 8, returns to written questions. Item 9,replies to opening address. Item 10, replies to Budget Address. Mr. Morin.

Budge Reply 2-13(7)
Item 10: Replies To Budget Address

Page 254

Don Morin Tu Nedhe

Thank you, Mr. Speaker. Mr. Speaker, it was very interesting to hear the Budget Address of the Minister, Mr. Dent. I would like to congratulate him on presenting his first budget. I would like to congratulate the Premier for appointing such a competent person to that position. You do have good support around the north, Mr. Dent, and I wish you the best of luck with getting your first budget through this House. That does not necessarily mean what you bring in will come out at the other end either, but we will try to work with this government to accomplish that.

The community of Fort Resolution has a long history of forestry industry, harvesting the white spruce timber along the Slave River since the early 1800's. Until the early 1960's there were sawmills and logging camps barged up and down the Slave River. Since the completion of the road from Pine Point in the late 1960's, there has been a permanent sawmill facility in Fort Resolution under various owners and management organizations until the Northwest Territories Development Corporation took over the business in 1994. In the past 30 years, two to three generations of residents in the settlement of Fort Resolution have either worked in the sawmill or logging operations at one time or another. Logging and sawmilling have been in this community for over 150 years. One hundred and fifty years, Mr. Speaker, and as part of the fabric of this community providing good, meaningful, longer-term employment for several generations.

Since the construction of the present sawmill, the financial performance of this sawmill has never achieved its potential for a small-scale forestry operation. There are a multitude of reasons for this, but they come down to four major factors. No comprehensive long-term business plan based on the available wood supply, lack of on-site competent management, over a 40 percent drop in lumber prices over the past few years, not unfamiliar to what we have been hearing of Yellowknife with the drop in gold prices. The lumber prices have dropped approximately 42 percent, and this government has chosen, at this time, to increase the stumpage fees at least a hundredfold, I believe it is, for this government's revenue from our sawmill in Fort Resolution reaches close to a quarter of a million dollars that we have to pay to harvest our own loss in Fort Resolution.

These four deficiencies have resulted in losses of hundreds of thousands of dollars over the past, and the trend will continue unless there is a major change in the direction and operation of this company. With this trend, the Northwest Territories Development Corporation has only two appropriate financial options. The Northwest Territories Development Corporation has only two options available to them, Mr. Speaker. Support the following, the achievable business plan which I will table later today in this House, or wind down this operation for closure for good, putting the community of Fort Resolution residents completely out of any viable income.

Close or wind down the operation, those are the two options they have, Mr. Speaker, and I already have commitments from the Premier. We already have commitments from the Finance Minister, through his Budget Address, from the Premier earlier today in this House that the second option is not really an option of winding it down and closing it. They are committed to working with the people of Fort Resolution. They are committed to working with the people in the smaller communities to make their businesses viable, especially when it is the only economic activity that we have in the community. The socio-economic implications of closing this facility would be significant on the community of Fort Resolution.

In the past three years, Great Slave Lake Forest Products Limited injected over $450,000 in payroll for local residents during the milling season. As well, logging and construction contracts and the forestry operations exceeded $600,000, most of which are awarded to local contractors. The loss of these dollars would have a devastating effect on their economy, of not only Fort Resolution, but also much of this money is being spent directly and indirectly in our neighbouring community, Hay River. As well, over $500,000 annually has been spent directly on supplies and services, most of this coming from our neighbouring community of Hay River. A total of over $1.5 million has been injected into the Fort Resolution and Hay River economies annually. Over the past three years, the continuance of this sawmill has been important to both Fort Resolution and Hay River, Mr. Speaker, and the South Slave region. I may add it is important, in general, to the whole Northwest Territories, the new Northwest Territories.

In recognition of the economic importance of Great Slave Lake Forest Products Limited, the Northwest Territories Development Corporation recruited a general manager with expertise, background and knowledge to develop the existing asset base of Great Slave Lake Forest Products Limited and to a profitable, sustainable company that would be a flagship community of forest operation in the new Northwest Territories. The role of this general manager was not only to run the day-to-day operations but to develop a viable business plan to ensure a long-term sustainable business. This business plan is a result of eight months of research into the internal operations of this company, as well as consultation with other individuals with the industry. To ensure that the investment in capital, operational cost, and marketing is appropriate for the economies of scale and geographic challenges this operation has, the result of this plan is a realization of this sawmill in Fort Resolution. This sawmill in Fort Resolution can be profitable, viable, and a long-term business that will be self-supporting within three years.

That, Mr. Speaker, is when I go back to the vision of this government. This government has a vision to ensure that we have the tools, to ensure that we have the things necessary as part of their vision to think longer term. That is what this plan does. It does not have a quick fix for tomorrow. It is not going to turn the sawmill around overnight, but they do have a vision, that is good to hear, that this sawmill can be turned around within three years and it could be a profitable, viable and long-term business that will be self-supporting within three years.

Great Slave Lake Forest Products Limited and the community of Fort Resolution presently have the following elements to become a modest manufacturer of lumber and timbers and other forest products in the Northwest Territories: existing accessible long-term viable timber supply, sawmill plant and infrastructure. We have excellent road and transportation infrastructure, an experienced work force, as I mentioned earlier, experienced for generations, existent competent management. The limiting factors of this operation is the forest land base, the sustainable allowable cut available, over the long term, has not been determined. Great Slave Lake Forest Products Limited presently has access to harvest or purchase 50,000 cubic metres of white spruce timber to April of the year 2000. With this licence, as well as future allocations, Great Slave Lake Forest Products Limited plans to log and manufacture from 20,000 thousand cubic metres to 25,000 cubic metres annually, in between 3.7 million to 5 million board feet of lumber. Processing this volume with the existing sawmill equipment would see a large loss.

In order to improve the financial performance of Great Slave Lake Forest Products Limited, the following objectives must be achieved: the sawmill must improve to ensure maximum labour efficiency, lumber recovery must be improved by at least 20 percent, smaller diameter logs down to six-inch stump must be utilized efficiently, the wood waste for the disposal must be reduced and managed properly, high product value must be obtained for the lumber and timbers.

Those are the tools we need, but that is also part of the vision of this government, the vision of the future. When we have a vision, we have to have that vision from one community to one community to one community. We just cannot think wide and high at this level. We have got to think of our communities out there that are striving to make a living and striving to make to make their economy work so we do not all end up back on welfare. People are willing to work, and it should be the government's job to make sure that they have the tools to work with.

Production levels will average 40,000 board feet of rough dimensional lumber per day from the sawmill and 50,000 board feet per day from the planer. Eighty per cent of this volume will be finished construction lumber sold into the northern market at a price above $390,000 board feet, FOB Fort Resolution. Sales projected in the first year will exceed $1.2 million, $1.8 million in the second year, $1.7 million in the third. Net income over that period is projected as follows: for the 1999-2000 cutting season, $325,960 in the hole; 2000-2001, $92,110 to the good; 2001-2002, $6,490 to the good.

Once you reinvest in other equipment in the mill to make it produce right, that will be the sales and that will be the profit this sawmill will make. This does not include the lumber and log inventory we have on hand and the Premier will have an opportunity to see that when he visits Fort Resolution in a very short period of time, but you can barely see the lake from the stack of logs in that yard. They have approximately 50,000 logs laying on the ground and the yard in Fort Resolution harvested by Fort Resolution people this winter.

The results of the financial performance will be the development and maintenance of 20 to 25 permanent seasonal positions in the sawmilling and planing operations and another 20 positions in the logging operations through contractors. As well, Great Slave Lake Forestry Products Limited will continually generate $1.5 million of direct economic activity from a local sustainable resource, from a local renewable resource. More importantly, the people in the community of Fort Resolution will have the opportunity to develop the skill base to operate and maintain a value-added forestry operation and continue the local sawmilling tradition.

Great Slave Lake Forestry Products Limited will also be manufacturing and selling a quality lumber product throughout the north, as well as going south. When we sell lumber to the south, we bring in new money to the Northwest Territories, Mr. Speaker. Also, by speaking to some of the residents and leaders in Fort Resolution, Mr. Speaker, the long-term plan has never changed. When we asked the Development Corporation to come into our community according to the legislation that set it up through this House, we asked them to come in and help us to get our sawmill up and running so that one day we can have it owned and operated 100 per cent by Fort Resolution residents, That plan is a part of the vision of our community in Fort Resolution. We are hoping to achieve that.

The forestry resources, one of the most critical elements in the success of the Great Slave Lake Forest Products Limited, is availability of a timber supply within the forest land base. Traditionally, the land base for this operation is in large diameter stands within Slave River lowlands. There has been discussion regarding the annual allowable cut available for this area and how sustainable the present cut levels are. However, there has been a comprehensive inventory to determine the true annual allowable cut at sustainable levels. Renewable Resources, forestry management division, and the Deninu Ku'e First Nation are scheduled to complete a forestry inventory by the year 2001. Although there will always be a large portion of the annual harvest taken from this area, this company must look for other potential sources of timber from other stands west of the Slave River and Fort Resolution, timber stands previously considered unmerchantable must be included in the land base in order to continually maintain a viable annual allowable cut. As a result the average log size will reduce over time.

This limited wood supply makes it imperative that Fort Resolution sawmill must effectively recover all available lumber from logs down to a six-inch stump and four-inch top. When we are talking about west of Fort Resolution, we are not talking Nahendeh, we are not talking Deh Cho, we are talking in our own area east of Big Buffalo River and west of Taltson River. That is where the Slave River lowlands lie and that is where our timber stands lie as well. We do consider them ours, Mr. Speaker. They are ours. That is our traditional lands and we will continually harvest from those lands.

At present, Great Slave Lake Forest Products Limited retains a two year licence of 40,000 cubic metres. A total of 18,000 cubic metres will be harvested in 1999 and 20,000 cubic metres to be harvested in the year 2000. In addition to its own licence, Long Island Logging Limited is a holder of a licence for 10,000 cubic metres over two years, which are both aboriginal people from Fort Resolution. As well, the Fort Resolution sawmill is the only customer for logs within economic hauling distance, all logs from Long Island Logging Limited are purchased by Great Slave Lake Forest Product Limited. This guarantees 50,000 cubic metres of timber are available for the sawmill over the next two years.

Mr. Speaker, the overall harvest for the next three years is projected to be: 1998-1999, 23,000 cubic metres; 1999-2000, 25,000 cubic metres; 2000-2001, 20,000 cubic metres; 2001-2002, 20,000 cubic metres. Mr. Speaker, when we harvest this amount of wood, this government expects from our people in Fort Resolution, a cheque close to $250,000 to $350,000. Why is this government still requesting that type of cheque from the community of Fort Resolution through the Great Slave Lake Forest Products to harvest our own wood? There is no reforestation program in our area. That was a program implemented by the federal government that this government adopted. When you go to the office downtown here to get a service from the government, not too many people are expected to pay that type of money for a service. Those cheques alone that we have to produce for our stumpage, harvest our own wood, is killing our sawmill, Mr. Speaker. That dollar is there to be reinvested into our sawmill and it can make it go a lot farther and make it more economically viable. Even the British Columbia government, how big it is and how distant it is from the people, knew that. Even they reduced the stumpage fees in order to make their forest industry more viable and I believe they did it in other places in southern Canada. I have asked that question before, Mr. Speaker, and I have never received an answer yet, except from the deputy minister of Renewable Resources, I will get back to you. I have never heard back yet, so that is one way we can make this thing more viable is by reducing those stumpage fees and reducing what you expect as a government to get from the people of Fort Resolution through the Development Corporation.

We have to do the logging different in our area, Mr. Speaker. With an annual harvest of between 20-25,000 cubic metres, the only economic, viable and environmentally acceptable harvest technique is hand falling with line skidders. The volume is not large enough to warrant economies of scale of purchasing faller bunchers or big machinery like that. All logging will be done where possible with the use of local contractors and local employees. Contractors in the Fort Resolution area only require the purchase of good used line skidders with an approximate value of $30,000, which can earn potential revenues of $53,000 in approximately three months. The objective is to encourage the development of skill of contractors and individuals in the safe and proper logging techniques. However, there is a limit of skilled loggers in the community of Fort Resolution. Mr. Speaker, the reason for that is the majority of our older loggers are now at retirement age and a new group are coming up and some of those young fellows have to be trained properly because the sawmill was down for some time and there was no continuation of that operation. Mr. Speaker, I seek unanimous consent to continue on my reply to the Budget Address. Thank you.

Budge Reply 2-13(7)
Item 10: Replies To Budget Address

Page 257

The Speaker Samuel Gargan

Yes, under Rule 35(4) Members are allowed 20 minutes to reply to the Budget Address. The Member for Tu Nedhe is seeking unanimous consent to waive this Rule 35(4). Do we have any nays? We do not have any nays. Mr. Morin, you have unanimous consent, but to remind the Members again that while we are in formal sitting to address the Members or the Ministers in their proper title and that means the honourable Member, not Charles. Just to remind the Members, okay. Please, Mr. Morin.

Budge Reply 2-13(7)
Item 10: Replies To Budget Address

Page 257

Don Morin Tu Nedhe

Thank you, Mr. Speaker. I will try not to do that any more, honourable Member, Minister of Finance, Mr. Dent. I thank the Members for the unanimous consent. Like I was saying, Mr. Speaker, we do have a gap in the logging end and in the falling and skidding for the simple reason the mill was down and we missed out in training some of our young people. The majority of the best skidder operators and the best fallers are at retirement age now and those are the people who worked many years in the bush. This part of the harvesting operation will retain, but it will still create 20 to 25 jobs for two and one-half months for local residents in the winter months. Great Slave Lake Forest Products Limited is, and will continue to utilize, soft log picker trucks to load, transport and unload logs for the licence area of the Fort Resolution sawmill. Mr. Speaker, these are soft logging trucks that have huge pickers on them that are a very high investment for people and logging companies out of Fort Resolution. They made that investment this year in December. The logging sawmill requested the companies in Fort Resolution to invest in these pickers, so people went out and did that. People actually went out and invested their own money in these pickers to bring these logs into the yard and they got paid. This was the first year of that operation, so hopefully it will continue so those people can recoup their investment as well.

You must understand that logging in the Northwest Territories is very difficult, very short period of time, and you have to make large investments to get any return on that money. The people of Fort Resolution are committed to this as well and they have proven that by investing dollars in equipment to actually go out and log. As well, as individuals I know that are long-term trappers have switched occupation and went and invested in skidders as well. We have also had, for the first time this year, a local contractor who went out and invested in equipment to build a winter road, and the Minister of Transportation can appreciate how much that costs, in order to put in winter roads and ice crossings and everything else and the investment of those people in that community. Once again, Mr. Speaker, the logging costs are projected at $41 a cubic metre and taking $10.30 per cubic metre for reforestation fees, that is what they are called, into consideration, the operational costs for logging is projected to be $30.70. Once we added $10.30 to it, that is one of the highest costs for logging in North America. The reason that is, is because of the stumpage fees. That is one of the main reasons and that is that reforestation, but they do not do that any more anyhow. But that is what we are paying this government for every metre, $10.30.

For those Members that know my area also can understand that the first 20 miles of getting in to any of the logging areas is just a floating bog and that has got to be some tough winter road building too, Mr. Speaker. It is one of the toughest areas to build winter roads in. Previously through this government, previous governments, we used to get roads to resources type funding and that was $25,000 a year outright grant to any company that had to put in winter roads to renewable resources and we managed to do that in the past.

Mr. Speaker, I could go on with this report for hours and hours. I think it would take me about two more hours to finish it. I am about one-tenth of the way through, but I did ask for unanimous consent and I asked for the Members goodwill to carry on and finish my statement. I do understand the rules of this House and I will not put the Members through two hours more of me reading this report. I will table it later in this House, but one thing I want is for it to be made very clear to the Members of this Legislative Assembly, especially to the Members of this government, is the sawmill in Fort Resolution is more than nuts, bolts and machinery. It is people, it is people's lives that this government has to make a decision on. There are not many choices. There is a clear path on how to recover. There is a clear path on how to make it work. It is up to you to take the right road. With that, Mr. Speaker, I thank you and I thank the Members in the House for allowing me to speak more than my allotted time. Mahsi.

Budge Reply 2-13(7)
Item 10: Replies To Budget Address

Page 257

The Speaker Samuel Gargan

Thank you, Mr. Morin. Yes, Members do have opportunities to address their concerns in this forum and

different committee of the whole past the Opening Address. Item 10, replies to the Budget Address. Item 11, petitions. Item 12, reports of standing and special committees. Item 13, reports of committees on the review of bills. Item 14, tabling of documents. Mr. Morin.

Tabled Document 30-13(7): Great Slave Lake Forestry Report And Business Plan, March 1999
Item 14: Tabling Of Documents

April 21st, 1999

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Don Morin Tu Nedhe

Thank you, Mr. Speaker. Mr. Speaker, I would like to table a document, Great Slave Lake Forest Report and Business Plan from March, 1999. This was given to me by the people of Fort Resolution. Thank you.