The third priority of the 14th Assembly is "A northern-controlled economy that is balanced, diversified, stable and vibrant." We are fortunate that our economic future holds such great promise.
The prospects for mineral and petroleum development in our Territory are bright. Diamond mining has become an established industry in the North, with one mine in production and planning to expand, a second in the final planning and approval stages, and a third expected to soon make application for environmental licensing. We have weathered a severe downturn in the international gold market and are hopeful that the worst is over.
The recent increase in the North American market for natural gas has led to a renewed interest in Northwest Territories oil and gas reserves. For the first time in 25 years, the possibility of a Mackenzie Valley natural gas pipeline is a hot topic in boardrooms across the nation. In addition, Northwest Territories aboriginal leaders have formed the Aboriginal Pipeline Group to promote aboriginal ownership and participation in pipeline development.
Our renewable resources also hold great potential. We have made great strides in our tourism industry, but there is room for considerable growth. Northwest Territories fashion designers are making the national scene with products that combine traditional materials and methods with a more contemporary look. Our forestry and agricultural potential has not been realized.
The renewable resource sector is especially important to the smaller communities and to those who prefer seasonal employment or employment related to traditional skills. Tourism now generates in excess of $30 million a year in income in the Northwest Territories. The recent display of northern fur garments at the Montreal fur exposition confirms the world demand for our high quality northern wild fur. With healthy fish and wildlife populations, outfitting continues to provide seasonal employment for over 300 Northerners. Proven agricultural ventures include two egg production facilities and successful market gardens located in Hay River and Fort Smith. The egg quota alone exceeds $3.8 million in value. Opportunities exist in such areas as secondary processing of timber, the harvest of wild plants and agriculture. Examples of recent success stories in these new areas include the test harvest of morel mushrooms in the Yellowknife area last summer and the Inuvik Community Garden Project. Development of the renewable resource sector is critical to developing a diverse and stable economy.
Finally, the development of our resources needs to be balanced against the impact on our environment. The Government of the Northwest Territories is coordinating the development of a northern strategy to control greenhouse gases. This process involves over 40 federal and territorial agencies, aboriginal organizations, industry and environmental groups. The general public will be part of the consultation process as well. The draft strategy to control greenhouse gas emissions will be presented to Cabinet in the fall of 2000.
Mr. Speaker, we are working to maximize the opportunities for Northerners from development of our resources. To do this, we have to address a number of challenges, such as the need to provide training, to build the necessary infrastructure and to ensure that we as Northerners benefit from development. The Government of the Northwest Territories has made a substantial investment in promoting a secondary diamond industry, and has supported aboriginal organizations in becoming partners. In addition to the direct funding of $5 million to support and promote value-added diamond initiatives, the GNWT has also approved $20 million in loan guarantees to three companies establishing operations in the Northwest Territories. Within our means, we are committed to continuing to provide similar support to northern companies working in the oil and gas sectors.
In January of last year, the previous Minister of Resources, Wildlife and Economic Development, the Honourable Stephen Kakfwi, initiated the Economic Strategy Panel, representing a cross-section of Northwest Territories interests, to examine the opportunities and challenges we face. The diverse interests represented on the panel have ensured a broad and informed view of what needs to be done to stimulate development and improve the circumstances of Northwest Territories residents.
Under the leadership of Mr. Richard Nerysoo and Mr. Daryl Beaulieu, the panel has completed its work and has provided the comprehensive recommendations we need to focus our economic development efforts.
I am pleased to announce that the report of the Economic Strategy Panel, entitled "Common Ground", will be tabled during this Session, and I look forward to the debate of the report's discussion and recommendations. The document will also be made available to interest groups and the general public to ensure we are on common ground and can proceed confidently with a clear and definitive economic development strategy for the Northwest Territories.
Development of our non-renewable resources has the potential to generate $35 billion in resource royalties and over $55 billion in taxes to both levels of government over the life of known and potential reserves. An agreement on devolution of authority for resource management with Canada would allow a significant portion of those revenues to flow to northern governments --both public and aboriginal.
However, in order to realize those revenues, major investments must be made today. The Northwest Territories lacks the basic infrastructure to support economic development, including a system of all-weather roads, communications systems on par with the rest of Canada, and municipal services that can support rapid community expansion. Many northern residents lack the educational levels that would allow them to take advantage of jobs created by development. Northern businesses, including aboriginal development corporations, may not have access to the necessary venture capital or expertise. Industry has told us time and time again that the regulatory regime in the North needs to be streamlined and the rules have to be clearer before they are willing to make major investments in the development of our resources.
In order to address these challenges, I have proposed a Non-Renewable Resource Development Strategy. The strategy outlines the investments that are required to create the right environment for resource development in the North, to manage development effectively, and to ensure that northern residents reap maximum benefits.
But this is not just a plan for the Government of the Northwest Territories. We cannot do it alone. We want to see all the parties with an interest in northern resource development work together to make the needed investments, including the federal government, the territorial government, aboriginal groups and industry. For this reason, we have presented our proposal to the federal Ministers of Indian and Northern Affairs and Finance, to our aboriginal partners through the Intergovernmental Forum, and also to members of industry.
The strategy proposes an investment level of $340 million over the next four years. Mr. Speaker, the GNWT is prepared to do our part. We propose to maintain current levels of investment totaling more than $100 million over four years. We are hopeful that the federal government will make the required level of commitment and invest in a bright future for the Northwest Territories.
Part of the strategy is the vision of a Mackenzie Valley gas pipeline, which would bring natural gas from the Beaufort Sea and Mackenzie Delta to markets in southern Canada and the United States. This pipeline would also be the cheapest way to bring gas from northern Alaska to markets, and would allow for the development of other reserves along the route of the pipeline.
A Mackenzie Valley pipeline would also provide significant benefits to the rest of Canada. Much of the equipment and materials used to build the pipeline will come from southern Canada. We estimate that a Mackenzie Valley pipeline, with a link to Alaska's Prudhoe Bay reserves, would result in about 80,000 person-years of direct, indirect and induced employment during construction.
Eighty per cent of these jobs will be in southern Canada. The construction would increase Canadian Gross Domestic Product by $5.5 billion. More secure supplies of natural gas would replace other kinds of fuel and help Canada meet its commitments to reduce greenhouse gases under the Kyoto Accord.
To respond to ongoing and future development of the Northwest Territories' resources, a number of initiatives will be undertaken by this government this year. The Department of Resources, Wildlife and Economic Development will commit over $700,000 this fiscal year to help communities prepare for this development. These initiatives include:
- • The creation of four regional petroleum advisor positions, one in each of the three regions that have the greatest levels of activity and one position in headquarters, so that northern communities can maximize economic and employment opportunities through planning and preparation for the expected increase in industrial activity;
- • Allocating funding to provide legal and business development advice to aboriginal organizations to work together to obtain significant ownership in the construction and operation of Northwest Territories pipelines. Equity participation in oil and gas infrastructure is considered to be one of the primary ways to ensure long-term wealth creation for northern residents;
- • Providing resources to the Aboriginal Pipeline Group to assist with acquiring legal, financing and business development advice to support the initial establishment of this consortium;
- • Gathering information on the ecosystem and baseline health data for the Deh Cho, Sahtu and Inuvik regions. This information will be used to support environmental and socio-economic monitoring of the impacts of development in co-operation with communities, industry and the federal government; and
- • Investigating options for adding value to the gas industry through the manufacture of products and developing access to northern produced natural gas as an alternative source of energy for communities and industry.
We will also make investments to ensure Northerners have the education they need to take advantage of job opportunities. The Department of Education, Culture and Employment will spend $1.3 million in 2000-2001 to promote employment in the oil and gas and diamond industries. The department will also invest an additional $1 million to target youth employment.
The recent expansion in the Northwest Territories resource industries has increased the demands on the territorial highway system. To keep pace with this heavier, industrial traffic, the Department of Transportation has planned capital improvements for Highways 3,4,7 and 8 where the impacts of the increased traffic have been greatest.
The reconstruction of Highway 3 between Rae and Yellowknife should progress by another eight kilometres this year at a cost of $6 million. The department is involved in federal-territorial discussions to apportion the $600 million in National Highway Program funds announced by the federal government earlier this year and it is hoped that a significant amount will be allocated to the Northwest Territories for work on the Rae-Yellowknife portion of Highway 3.
In anticipation of continuing oil and gas industry development in the Liard Valley, approximately $500,000 is scheduled for grade stabilization and surface improvements on the first 50 kilometres of Highway 7 from the British Columbia border north to Fort Liard.
On Highway 8, the Dempster Highway from the Yukon border to Inuvik, the $2 million reconstruction program for 2000-2001 includes the installation of a new bridge at Campbell Creek south of Inuvik. The bridge replaces two large diameter culvert pipes and should prove more habitat friendly for fish stocks in the stream.
This year, the Department of Transportation intends to continue its bridge program on the Mackenzie Valley winter road into the Sahtu. The completion of the Ochre River Bridge, at a cost of $960,000, will allow the winter road to open earlier and should extend the winter road season by as much as a week.
I would now like to turn to the issue of taxation. Today I am announcing a tax initiative which I believe will help make our economy more diversified. Mr. Speaker, the tourism potential in the Northwest Territories has barely been tapped. This industry can be an important component of the Northwest Territories economy and can play a key role in diversifying the economic base of our communities. First, we need to let potential tourists know where the Northwest Territories is and what we have to offer. We need to project a strong Northwest Territories image and promote the Northwest Territories as a destination throughout the world. Second, to better serve our customers we need to strengthen the base of tourism services in every region. We must develop quality attractions, products and services in every region and we must advertise these attractions.
However, to effectively achieve these two objectives, investments are necessary. The GNWT cannot afford the required investment on its own. One of the sources for such investment is a tax on hotel occupancy. Today, I am proposing that the Government of the Northwest Territories, effective April 1, 2001, adopt a five percent tax on occupancy charges in commercial accommodation facilities with four or more rooms. We propose that the estimated $1 million in annual revenue raised from this tax would be reinvested in tourism with the goal of developing our tourism potential. If this tax is approved, the Department of Resources, Wildlife and Economic Development will be coming forward with a plan for tourism promotion for inclusion in the 2001-2002 budget.
It is my intention to introduce legislation respecting this measure later during this Session. I will also be seeking input from MLAs, individuals, and business groups, in particular the tourism industry, and other organizations prior to the passage of this legislation.