Thank you, Mr. McLeod. Mr. Krutko.

Thank you, Mr. Chairman. Mr. Chairman, I too have some concerns with regard to the resources that are presently within the department, especially for people who want to get involved in the oil and gas sector. In the Delta, I have been working along with the tribal council and other companies within the Delta trying to excise dollars out of the department. Yet they are strapped for cash. They do not have any money to do a simple feasibility study.

You have to wait until the new fiscal year. If that is how we are going to get our people involved in business, I think it is the wrong way to go. We spend a lot of money within the diamond sector. We have done a lot of studies. We have done a lot of strategies and we have spent a lot of money developing nice, fancy reports, but at the end of it all, we do not have money to put proposals together to access dollars from other agencies, the federal government and what not.

We have to put more emphasis on providing the people within the private sector with the resources so they can get started in the industry by partnering with different people and getting proposals to access federal dollars or even seed money to get a business started. We have to do more there.

Yes, it will be great if we have an economic development agreement, but at the present time, we do not. I feel the federal government is taking a lot of resources and revenue out of the North yet we, who call those resources our resources, are not getting any resources back to call our own. We have to do more to promote the private sector, communities, regional organizations so they are able to access dollars and take advantage of those opportunities, especially in the oil and gas industry.

We have to start looking at developing strategies and start seeing how we can take advantage of the economic situation. A lot of people are putting a lot of eggs in the pipeline basket. My view is if you can come up with $5 billion to build a pipeline, the more power to you. A lot of aboriginal groups do not have that type of funding. I think they are better off concentrating on the service sector of business and that industry so you have these long-term jobs, not strictly by owning a piece of infrastructure or a utility system.

We have to find ways to look at the long-term job that is going to come with this development, so that we have people there who are going to be able to benefit in the long term and not just go for short-term gain where we have the boom/bust scenario. Once it is gone, the non-renewable resources have been taken out, they are not going to be able to be put back into the ground.

I think it is important that we also do a lot more to protect our environment. One of the things I have a lot of concern about, and I have not heard much of in the news, is we hear a lot about oil and gas development. However, one of the most sensitive spawning areas for fish that come from the Beaufort Sea into the Mackenzie River system comes from a lot of the creeks and rivers and lakes that run into the Beaufort Sea and the Mackenzie Delta.

I for one feel that with all of the seismic activity and what not, we could see a very major decline in that fish population. The same thing applies to the marine environment in the Beaufort Sea.

The other area that everyone knows I have a concern with is the whole aspect of the Porcupine Caribou, the calving grounds and what we see happening in Alaska. It is a renewable resource that will sustain people's lives long after a pipeline is built and long after the oil and gas is gone. If we do not do anything to protect that renewable resource and we have major impacts on those species, then we, as a people who depend on and live off of the land, depending on that food source, will be like any other country in the world where you see people have decimated their renewable resources for the sake of development.

I think there has to be a balance between the renewable resource sector and the non-renewable resource sector. As a government, I think we have to do more to look at improving our legislative processes and also finding ways to find a balance between them.

The other area that I feel we have to do more in is looking at our responsibilities on enforcement. We are cutting back, especially with our renewable resource officers. We have cut back in regard to people within our organization because of the cuts that have happened within the last five years. We have lost a lot of good people.

In order to keep people within government and keep people interested in the different sectors in regard to the renewable resource officers or people like our economic development officers, we do have to ensure that we continue the same strong human resource requirement in the North and making sure that we have people there.

One thing I feel that we do not really seem to hear much of, especially from this government, is the overall social and economic impacts of these developments on these small communities. Growing up in the Mackenzie Delta and being involved in the oil and gas industry for almost eight years, I have seen the impacts that come from oil and gas development where we say, the motto was, "two weeks to make her, and two weeks to spend her". That is practically what it was.

There was a lot of money wasted because of not having an inhibition that this industry was going to be around...it was there forever. You had a job for 20 or 30 years. When it crashed, it crashed big time. I think for us as a government, realizing that some of the problems we see now with FAE/FAS, social problems we see in our communities in regard to alcohol abuse, suicides, and what not, you can directly associate all of that to development back in the 60's and 70's.

I think as a government, we sort of lose track of the social side of our government or ourselves as people. The mighty dollar drives everything nowadays, especially in this country. As a government, we seem to be focusing too much energy in that area. A lot of that energy that we are using up, at the end of it all, we are not getting anything back. The federal government is the benefactor to all of these initiatives that we are taking on.

I think we as a government have to start looking at how we can improve not only the economics, but the social conditions and the systems that we have in place. Look at the statistics, look at the social statistics. Look at the money we spend on health, education, other areas and we are not seeing results. We continue to put more and more money into it, but at the end of it all, we as a government are continuing to try to find ways of nickel and diming and balancing that budget, but not realizing that we have to do better planning. We have to realize that we have to find a balance, a way to generate revenues, but also improve the lives of the people in the North who are going to be here, who were born and raised here and will eventually die here.

The development comes and goes. When you put too much emphasis in that arena, I think you have to realize, like anything else, look at the east coast fisheries. We are no different than the fishing industry. They are like the harvesters in the North. We are seeing it on the west coast. When you become too dependant on a particular sector of our economy, when it crashes, it affects everything. We have to balance out the opportunities and the resources we have. We have to have a diverse economic community from tourism to oil and gas to forestry and take advantage of all of the resources we have out there.

That is the short of it. I will ask if the Minister might be able to respond to a couple of those. Have at her.

Thank you, Mr. Krutko. Mr. Dent.

Thank you, Mr. Chairman. Most of my comments will come during the detailed consideration, but I do have a couple of comments that I would like to make about the Minister's opening comments and a question to ask about one section in the opening comments.

One thing that I would like to note that I am quite happy to see is the importance that is placed in the Minister's opening comments on the natural environment. I must say that I have had constituents mention to me that they were somewhat concerned that in our vision statement, Towards a Better Tomorrow, they did not see very much of an emphasis on environmental issues. I listened to the Premier's speech on January 17th and I listened to the Minister's budget speech on February 15th. In neither of those two documents did I hear much reflection of the importance of the natural environment, so I am pleased to see that the Minister has, in his opening comments this evening, put the natural environment high on the list of areas of importance.

As I said, I will have a number of questions for the Minister as we go through the detail of the budget, so I will save the rest of my comments for that. I do have one question from his opening comments and that is on page 5, the bottom paragraph, the final sentence:

"In addition to providing support to the traditional economy, the Northwest Territories Development Corporation has set goals to establish a new subsidiary and invest $1 million in northern ventures."

I was wondering if I could get some detail about what exactly that means. Have they already decided what this one new subsidiary will be and it is going to take $1 million in investment, or is this that they will have a number of different investments and they will total $1 million? Because it is in the opening comments and I did not understand what it meant, Mr. Chairman. I thought I should ask for that comment now. Thank you.

Thank you, Mr. Dent. Did you have more after this question, Mr. Dent, or was that the end of your general comments?

That was it for my comments before I got to my question, so that is it after the question. Hopefully it will be answered.

Okay, I am sure the Minister has that down. We will go to Mr. Braden.

Thank you, Mr. Chairman. I too will have some more specific questions as we get into the detail. One broad area that I wanted to bring some highlight to and perhaps leave a question with Mr. Handley when he answers us in a omnibus answer, and it relates to the Non-Renewable Resource Strategy. The package is valued at about $230 million, a package of potentials and strategies and ideas that was done largely to satisfy -- I believe there was a request from our friends in Ottawa to say, "Okay, what is it that your new government needs and sees as priorities? Where do you need the assistance?"

That document has just recently been finalized, but it has been in circulation with us and with Ottawa for some months. I would stand to be corrected, Mr. Chairman, but so far in terms of real cash and real investment from Ottawa, the only thing I am aware of that may have resulted is the $3.7 million that Ottawa has invested as a partner in the winter road projects in the Sahtu region. Those are excellent investments, but they pale in comparison to what we felt was a good plan.

About the most I have heard in terms of follow-through with that is that if there is going to be a further response from Ottawa on that proposal, it is not going to be in the fashion of a basket of EDA projects as the North has known EDA projects over the last couple of decades. My understanding is that it is going to be more individual sector-specific agreements, which I am led to believe will also require the negotiation and involvement with a number of other sister departments in Ottawa. It seems that there will be greater separation between things, they will be more independent.

I wonder, Mr. Chair, just how much more diverse and difficult is it going to be to manage these things as we get involved in different layers of accountability, have to train, if you will, new Ottawa or federal people about how things work up here, get them on side. It just sounds like it is going to be a much more cumbersome process. I will look forward to some explanation from the Minister of just where we are going in terms of that larger, longer-term investment strategy that we hope Ottawa is going to come onside with.

That is basically the opening comment and larger big-brush issue that I would like to explore, Mr. Chairman.

Thank you, Mr. Braden. With that, it looks like you are up to bat, Mr. Minister.

Thank you, Mr. Chairman. I will try to be brief, but hopefully not miss too many main ones, and hope that anything I miss we can pick up as we go through detail. I will try to go through them as the Members raised the issues, and I realize there is some duplication because people spoke to the same thing. I appreciate the words of support that I have heard from a number of people.

With regard to Mr. Miltenberger's comments on the energy strategy, yes, we have a lot of initiatives underway. It is at your recommendation, your cajoling, your urging, that we were undertaking to get one comprehensive strategy to integrate all of these pieces.

On the diamond industry, we leave it largely to the companies to decide where they will locate, but with new mines opening, hopefully there are new opportunities there.

We are doing a review of business programs as we go along now, and the results of that study, of BCC,BDF, Community Futures and some of our own programs, will be hopefully completed by the end of March. The BIP is out for review. I think we have received a lot of interest from the industry, particularly the transportation and construction industries, on this one. I think from the retail side as well. People are working on giving us a joint response or joint recommendation to our discussion paper that has gone out. The regional transfer paper -- we put it together, I do not think we carefully crafted it, as you worded -- we want to be accurate on that one.

On tourism, again I appreciate all the support. We have to find a way of putting more investment into the tourism industry. It is too important.

-- Applause

Mr. Bell talked about the BIP as well. I really do look forward to the results. I do not know that BIP can do all the things that Mr. Bell hopes it does. It is certainly a piece of it, but it will not be the answer to all our employment problems and so on, but I think it is an important piece. It is a task that other people did not want to take on in past governments. I chose to take it on. We will probably take some flack before it is finished, and I am sure we will never get everybody agreeing on an end result, but if we can make headway on it, then I am willing to do that.

Tax rates are part of the proposal in the BIP to lower small business corporate taxes. I would like to do that. I agree that we have to stay competitive. Having a manufacturing directive as part of it -- maybe not as an addendum to it as it is now, but as an integrated piece of the BIP policy -- I agree is important, because our manufacturing sector is one way of diversifying our economy.

With Mr. Delorey, while tourism is the first one, those are basically our five priorities. I do not want to say that this is first, second and third. These are five priority areas for the department. I do not want to say that tourism is more important than environment or oil and gas, and so on.

Federal dollars are always a problem for us. We just do not get the federal support that we need. I have already mentioned the energy strategy and why we are doing it. We are working with Arctic Energy Alliance. I do not know about the buildings in Fort Smith being converted to heating oil from propane. I will find out about that, but I do not believe that has anything to do with the Arctic Energy Alliance at all. We will check into that one.

The oil and gas sector is important. The position for the Deh Cho area is currently located in Hay River. We are waiting for the Deh Cho to tell us how they want to do this with us. It is temporarily being held by Mike Mageean in Hay River.

The forest inventory -- it is true that forestry is at almost a standstill right now because of the Deh Cho process. We will continue to do inventory and silviculture to a limited extent. A lot of that will be done through private companies, not through the department itself. We want to encourage that happening that way.

The company that you referred to that was helped with money and then was shut down, we did not really shut it down. It was through the Mackenzie Valley environmental regulatory process that the company ran into a lot of frustration. I understand what happened there and do not like it any more than do you or others.

The Development Corporation is planning on investing some money back into a number of ventures. Basically, the Development Corporation is looking at spending a million dollars; $200,000 goes into the arts and crafts industry to get a strategy going, and they are working with Education and other departments on that; $100,000 to start the Aklavik and Tuktoyaktuk fur shops; $105,000 goes to Acho Dene subsidiary, there is some basket making, birch bark basket project that has been going on for a number of years now; $200,000 to restart the Dene Fur Clouds in Fort Providence, which is a fur knitting project that has a lot of hope; and there is $350,000 that goes toward the purchasing of arts and crafts products. That makes up roughly the million dollars that they refer to.

Mr. McLeod talked about the emphasis of moving away from community to industry. I hope that is not a big trend, but we have to pay attention to the big industry. However, we do have to realize that the communities are important. We are putting $2.4 million into basically the traditional economy and I continue to view that as important. I think that tourism can also be an important piece.

The BDF funds are down, that is correct. They are down by something like $800,000. That is because we are limiting BDF contributions to $25,000. We are proposing to do that, rather than these big BDF contributions. I think this is a more business-like approach to working with communities, with corporations and so on.

With the IRMA funding, that is a federal program. The federal government has not indicated that they want to continue it. If they do want to continue it, then we are ready to cost-share it. However, until they indicate that they are going to have another IRMA at the end of March, then we really cannot do much.

The Kakisa fishery, there is a study being done. That is the Department of Fisheries and Oceans. We are participating, but we are not the lead on it. It is not our responsibility.

In terms of the Wildlife Advisory Group and the lack of Deh Cho representation, that is the Deh Cho's decision. We have a space for them. They are welcome to be there. They have chosen not to. They are busy with their Deh Cho process, but any time the Deh Cho want to have a representative there, then we are more than happy to include them. There is a place for them.

Mr. Krutko talked about the oil and gas sector, the importance of it. I agree. We have to work with the private sector, with regional organizations and so on . We do have money, not necessarily in Resources, Wildlife and Economic Development, but in the Government of the Northwest Territories to deal with this. There is $5 million and maximizing employment is one example, and we have been working hard to lever money from the federal government and from aboriginal organizations, to do things jointly. I think we have had some success in the last year.

Whether the aboriginal groups put their dollars into the pipeline or into the service sector, it is up to them. We will support the direction they take, but we will not tell them which way to spend their money.

Environmental protection is important, whether it is the rivers or the land, the marine or the ANWR. We take a position against development on ANWR which supports the federal government's position. I know the Premier has raised it with the Prime Minister.

I agree enforcement is important. Socio-economic impacts are probably the most important thing. If we do not get the benefits out of it, then why are we doing it? If it is just going to cost us money and it is going to disrupt a bunch of people's lives, make families dysfunctional and so on, then let us not do it. We have to have that support there too. I hope, as we look at the whole budget for the government, we can deal with a lot of that. We cannot have it, as you say, they become the main benefactors.

I appreciate Mr. Dent's comments on a natural environment. That is important. I personally view it as important and our government views it as important. It does not get the attention as often as it should because it does not mean big dollars that we need to run our other programs.

In terms of the subsidiary, I think I already mentioned that one. That is basically the Dene Fur Cloud project in Fort Providence.

Mr. Braden has made reference to the Non-Renewable Resource Strategy. That is a $330 million strategy; $100 million from us, $230 million from the federal government. We intend to keep working on it. I am meeting with, as I mentioned before in the House, Minister Martin on Sunday. It is still on the agenda. The federal government continues to quote it and use pieces out of it. Aboriginal groups are supporting it and I think it is a good strategy. As far as I am concerned, it is still the core strategy for a lot of our non-renewable resources development.

You are right, we have only received $3.7 million for the bridges. That is the only real cash that we have seen. We do not have an EDA or a northern economic development agreement. We have not given up on that one either. We need one. We have not had one since 1996, and it is certainly crippling our department because we just do not have the money in Resources, Wildlife and Economic Development to do the job we have to do, given the wide mandate we have.

With the federal money, the frustration to us is if the money comes to us in bits and pieces and there is no strategy to it and we never know when, we are almost beggars getting a few pieces of loose change every now and again. That is not useful to us in terms of our overall direction because we cannot plan anything. I really hope we are able to gain some success out of the Non-Renewable Resource Strategy. A lot is banking on that strategy being successful.

With that, Mr. Chairman, I think that is a quick summary of the questions and comments I heard.

Thank you, Mr. Minister. Mr. Krutko.

Mr. Chairman, I move we report progress.

We have a motion on the floor. The motion is not debatable. All those in favour? All those opposed? The motion is defeated. What is the wish of the committee? Is the committee prepared to go on to detail? What is the wish of the committee? Mr. Krutko, I will give you one shot at general comments.

Thank you, Mr. Chairman. We are saying the federal government has a lot of responsibilities and jurisdiction. We hear the federal government is basically stocking up their shelves with people. They are moving people into the oil and gas sector, yet as this government, we are talking about devolution eventually trying to take things over. The federal government is expanding in that area. I think that as a government, we have an obligation to ensure that any of those jobs that the federal government are developing or putting in place, we should work out an agreement with the federal government that those positions they are putting into the oil and gas sector will eventually either transfer to ourselves as a government, knowing we have heard out loud from Minister Nault that devolution is his priority and he wants us to move on it.

As a government, we are not really moving as fast as I would like to see on that envelope with regard to the Northern Accord. I feel that if we do not do anything within the next six months, we are going to miss the window of opportunity to get it through in the 14th Assembly. It has to pass through federal legislation. We have to develop our own regulations with regard to the Northwest Territories oil and gas act or whatever act we are going to put in place. It is going to take a while to develop. For the federal Parliament to pass it through, from our experience of land claims being implemented through the federal system, you are talking a long, long process, especially having groups such as the Reform Party and other opposition groups there, which could drag this out for some years.

I feel as a government we have to eventually call the Northern Accord process and put time lines or establish a negotiating table so we will negotiate a Northern Accord made in the North by Northerners. We cannot continue to fund organizations or agencies to have meetings to talk about it. We have been talking about a Northern Accord since 1988. That is when the Prime Minister of Canada, Mr. Mulroney, signed it over when the Dene/Metis claim was signed, which was part and parcel of the Dene/Metis claim process. A lot of our land claim groups in the North are waiting reluctantly to get that in place. The Gwich'in claim is a good example.

We have oil and gas companies on our doorstep, but under our subsurface resources section of our land claim agreement, it is pretty vague. That is where we are supposed to negotiate benefit agreements, access agreements, participation agreements on all aspects from training to environmental protection to alcohol policies, whatever you want to call them. However, we are not moving anywhere on it.

It is causing a grave problem with the Gwich'in, especially the benefit agreement they have with the company working there now. They are getting hijacked because there is nothing in regulations or policies where the Minister of Indian Affairs signs off an oil and gas lease, basically with no agreements attached to it. This government has an obligation where we are signatories to that Northern Accord agreement and those land claim agreements.

As a government, we do have an obligation to the residents of the Northwest Territories to move on this. I think we do have to start developing the different regulations and acts that are going to be needed to take over the oil and gas and mineral responsibilities in the North. We should be doing it now so we can show the federal government that we are serious, we are moving on it, we are going to have our own legislation.

We can start looking at what is happening in the east coast with regard to Nova Scotia or Newfoundland, but the perfect scenario would be the Alberta Natural Resources Agreement, which was signed because it is one of the best agreements in Canada. If push comes to shove, maybe we should give the Alberta government the authority to move their jurisdiction all the way to the Beaufort Sea. Then we will just enact the Alberta Oil and Gas Act, so we will get a larger portion of the revenues instead of having it all flow to Ottawa.

We as a government have to move on this. I still have four minutes. That is it.

Thank you, Mr. Krutko. Mr. Minister, did you want to respond to any of those comments?

Mr. Chairman, I will respond very quickly. I did not really hear a question there. I think it was a statement, several statements. With regard to the positions, we are still holding firmly in our argument that those should be in the North.

With devolution, yes, we want to move. I think the issue of how does this government move forward on the broad issue of devolution is one that is certainly bigger than RWED. I think it is something that we all have to take a look at. I agree that if we do not make some progress in the short term, in the next six months as Mr. Krutko says, then we are probably going to have a pretty steep hill to climb from here on in this Assembly.

Yes, we are a signatory on the land claims agreements, but there is not really a lot that we can do unless the federal government comes onside. We are just one party that has signed along only really on the areas we have responsibility. The overall agreement is more between the aboriginal beneficiaries and the federal government.

In terms of doing regulations now, I think our plan has been to wait until we have a signal, some basic principals in place, some time frame and then get on with regulations on oil and gas to show that we are serious. I really hope we can get an Alberta-type agreement, but every signal I am getting from Ottawa is that there will never be another Alberta agreement. Whatever it is, it is going to be much less than what Alberta has received.

The advice of moving the Alberta boundary north, that could be ground for a lot of debate. Thank you.

Thank you, Mr. Minister. Detail?

On page 11-9, Resources, Wildlife and Economic Development, corporate management, operations expense, total operations expense, $12,543,000.

Mr. Dent.

Thank you, Mr. Chairman. Mr. Chairman, I move we report progress.