Thank you. I would like to get a copy of that. I think that this is a very important area. I think that this kind of thing is long overdue and I am glad to see the department is taking this so seriously and putting some money and some time in to this. If our committee could get a copy of that material, it would be helpful for us to take a look at it. Thank you.

Thank you, Mr. Bell. Mr. Krutko.

Thank you, Mr. Chairman. I was going to ask about the different provisions of the Gwich'in Land Claim Agreement, but it is under the municipal lands area. I was just wondering if it was appropriate to bring it up at this time.

Any objections from the committee? Mr. Krutko.

Mr. Chairman, we have heard a lot of complaints, especially in the community of Aklavik, in the way taxes are being levied against the properties in the communities.

I know for a fact that there are certain provisions in the Gwich'in Agreement and the Sahtu Agreement regarding the municipal land provisions. Those lands are exempt from property taxes. It says developed Gwich'in municipal lands means the lands with improvements. Those lands are exempt from these taxes, which means that no services are being provided.

There is also a provision that talks about the federal government, where the federal government agrees to pay local governments any real property tax levied for 50 years from the date of settlement legislation.

I know for a fact that they are taxing the organizations, and many aboriginal people have houses on lands that were selected by the Gwich'in, yet under this, they are exempt from taxes. People are being taxed by your department. Why is that? Have you looked at these provisions?

One of the concerns I have is why has there been such a major increase in the value of the land taxes in a lot of our small communities, where before, you can go back ten years where the value of a lot of these properties was under $2,500, and now we are talking $15,000. I think many people are concerned.

How did you come up with such an exorbitant value on the property, especially property above the Arctic Circle, which is not the same value as southern parts of the Northwest Territories. That is where I here a lot of complaints from many people in Aklavik. Many people are not paying their taxes because they believe they have certain rights and they are not being adhered to by this government, especially treaty people who have land that was designated for bands under the Indian Act, which was called IAB, Indian Branch Lands. Many people are now being told they have to pay taxes because your house is sitting on it. This government does not own that property. Why are you dealing with that?

Thank you, Mr. Krutko. This might be better dealt with under page 4-25, land administration. We could wait until then to deal with this further. We are on page 4-13. We will wait until we get to page 4-25 to address that question. We are on page 4-13, community financial service, operation expense, total operation expense, $1,367,000. Mr. Krutko.

Thank you, Mr. Chairman. With community financial services, one of the problems we see in many municipalities is that the amount of responsibilities we are downloading to these municipalities, they do not have the financial resources. One of the big concerns many of them have relayed is that they do not have financial expertise, or people in place to deal with the financial management side of the accountability in our communities.

I see a number of communities who had to get extra funding to assist or offset their cost to the different communities for financial management services. In Fort McPherson in the last number of years, they have gone through three financial administrative officers, because you cannot attract people in these small communities. It is frustrating not only to the councillors, but also the community, because they do not have the expertise in house. The resources they get to compete against other organizations or corporations or what not, they are able to pay these extra dollars to retain these people, but to keep anybody in the small communities for an extended period of time...the government has to do more to enhance or assist them, to ensure they have the resource people in our communities to deal with the financial management of the municipalities and the dollars that are being spent in our communities.

I would like to ask the Minister what they are doing to improve that.

Thank you, Mr. Krutko. Mr. Antoine.

Thank you, Mr. Antoine. We will take a short break and come back in ten minutes.

-- Break

I will call the committee to order. We are on community financial services, operations expense, total operations expense $1,367,000. Mr. McLeod.

Thank you, Mr. Chairman. I want to pick up on a line of discussion that Mr. Krutko was talking about in funding to the communities and some of the problems that I have experienced as a former mayor. Over the years the funding to the communities has been an issue that was raised at the association of municipalities annually. The problem that we raised with the funding is that there is no incentive there for communities to operate efficiently.

Over the years we have seen non-tax-based communities...inaudible...through a budget; all increased drastically. A couple of years ago the department looked at ways to try and alleviate that problem and indicated to the communities that they would be looking at a type of block funding, and we all welcomed that. What it came out to was a cap on the dollars for services. In a way it has helped the department in terms of holding the increases down.

I see a different solution to the problem. The way the system is set up now it does not encourage efficiency. If one community operates very efficiently and it generates a surplus at the end of the year, they are not allowed to keep it. It goes back to the government. If another community operates and spends a lot of money and runs into a deficit situation, they are bailed out. When the cap was set, there was a rating, an analysis done by the department, on all the communities in the North on the water and sewer program. The community of Fort Providence was rated number one in terms of efficiency. It was capped at a level that they were spending for that year. Other communities of the same size, the same population, were capped at a much higher level and that is the money that they operate on to this day. In a way, the community of Fort Providence was penalized for running a tight ship, for operating efficiently.

I have never been able to understand why we cannot incorporate a method of encouraging people to try to run a surplus operation. I would like the department to look at that kind of a scenario. Maybe the community is allowed to keep a percentage of the money they save. I want to ask the Minister if they have considered incorporating an incentive to run a tight ship, or balance budgets.

Thank you, Mr. McLeod. Mr. Antoine.

Thank you, Mr. Antoine. Mr. Murray.

Thank you, Mr. Murray. Mr. McLeod.

Thank you, Mr. McLeod. Mr. Bob McLeod.

Thank you, Mr. McLeod. Mr. Antoine.

Thank you, Mr. Antoine. Detail. Community financial services. Mr. Krutko.

Under operations expenses, financial services, there is $550,000. Could the Minister elaborate on what that is for? Where is it being spent?