Thank you, Mr. Chairman. I wanted to raise some general comments on a couple of issues. The first one being the new lease rates in the communities. It has been brought to my attention by the community of Enterprise, and more so from the community of Fort Providence. The new rates do not seem to reflect fairness and probably are going to be unaffordable to a lot of people.

The properties in Fort Providence, for example, were rated at $1,700 about four or five years ago. To date, because of the lease only policy, in order to lease these properties now, we are probably looking at 14 times more to lease it than if you were to buy it.

The old rate was $350 a year. Over a 20-year period, that would have come out to approximately $7,000. With the new rate of roughly $2,300 a year from the letters I received from Fort Providence, you are looking at the same property being $46,000. There is a huge increase in the rates. I think it should be taken into consideration that the assessment, which my understanding is supposed to involve physical visits and consultation with the property owners, has not happened. I am not satisfied that the whole process was done fairly.

Also for consideration, we should be looking at the smaller communities that do not have the services the larger centres have and should not be rolled under the same factors. There is a very great concern that a lot of people may have to move. We do not have high wage earners in the community, for the most part. We do not have the double-income families that most of the communities like Fort Smith and Yellowknife have.

It is becoming increasingly costly to live in the communities. There is a real migration trend to the larger centres as it is, and this is even making it escalate. That is one concern.

My second concern is the new formula financing that has been presented to the communities. From the outset, it looks like it is very good. We are providing funds to the community. Block funding is something the communities have been asking for for many years. However, when you start to look at it very closely and you start looking at the numbers, you see what is not included as part of the block funding. It does not look as pretty as it was initially presented.

For example, in Enterprise, we are looking at a number of things that were not calculated into the formula. Some funding that they used to get under community development, under minor capital, some recreation dollars, and land development planning, those numbers total to roughly $60,000 a year. You start adding that on a three-year basis over the next three years, that is $180,000 cut out of the budget automatically.

In the case of Enterprise, and because of the factors that are used to determine the dollars that are allocated to the community, infrastructure is one of the three factors. In the community of Enterprise, they have a weigh scale. A weigh scale that was put in the community without really acknowledging any discussion from the mayor or council. Nobody from the community works at the weigh scale. It really has no connection to the community.

It is the same thing with the highways setup that is located in Enterprise. All of the employees are from Hay River. However, these buildings and this infrastructure were calculated into the formula. It has caused the dollars that are presently allocated, which is about $250,000, to be reduced annually to roughly $220,000 over the next three years.

If you add all of the small program dollars that we are getting that we will no longer get, we are looking in the hundreds of thousands of dollars that we are losing. It is a real concern. They no longer can plan for anything constructive over the next while. They will just be trying to hang on to what they have, if they can do that. The services are probably going to diminish. They are already having problems, even with simple things such as snow removal. We start taking away that kind of dollars, we are really going to be seeing them in trouble.

Those things I wanted to raise with the Minister. I am hoping he will respond to those two issues. Thank you.

Thank you, Mr. McLeod. Mr. Krutko.

Thank you, Mr. Chairman. I too have similar concerns as Mr. McLeod, especially in the small communities where people have seen a major increase in regard to their property tax assessments. Also, the overall cost of living has skyrocketed, especially with people with private homes with the high fuel costs. In Aklavik, the cost of fuel is 74 cents per litre.

I think that as a government, we have to relook at how we are allocating funds to a lot of these communities. A lot of these communities do not even have the basic infrastructure or the resources in their communities to upgrade the facilities, the roads and what not that they have in their communities.

For the amount of money we have seen in the budget, it does not really keep up with the cost of inflation or the cost of operating in a lot of these communities. For myself, what I have seen within the communities I represent, they do have a real problem with the new provision for the way the formula is going to be funded. We as a government have to realize the effects on the communities, or a lot of the unforeseen costs associated with running a municipality have to be taken into account. There has to be a mechanism where those situations will be allowed for.

In a lot of communities, we do not have the infrastructure of recreation opportunities. I will use Aklavik, for instance. They have been hounding me for some time to ensure that they get a curling club. They have a curling rink which is old. It has been condemned and it has been shut down. Yet we talk about community wellness and empowering communities and giving communities the abilities to make decisions. It seems like for them to look at capital allocation, it is still being dictated by headquarters to the Inuvik office where they are limited on what capital they can really allocate in the communities. When it comes to prioritizing those capital items, they have to wait for these items to be constructed or built, because over the last four years, a lot of capital items have been cut out. It has been moved out into the budget. For many of these communities, the little things we take for granted like recreation facilities, we have to try to put more emphasis on that. I feel the government has to do more in that area.

Also with regard to the government's responsibility with the whole water quality argument and issue, this government has to find a means to ensure the health and well-being of the communities are taken into account. We have to have a better system in place of monitoring and ensuring we are meeting standards, but also have the accounting system in place so we can see what the tests are showing. Are we above or below the Canadian national standards? How much are we over? How long has it been? Has it fluctuated?

In the case of Fort McPherson, the THM levels are still 100 percent over the Canadian standard, yet the response I receive from the Minister clearly states that we are within Canadian standards. Without the data and information to back that up, it is really hard to track.

The whole question has come up about the liability of municipalities. I think a lot of communities and municipalities will have second thoughts, realizing that if any major incidents happen where you see major lawsuits being filed, I think a lot of people who run for council or even run the municipalities will really want to know, at the end of it all, am I liable for something that may have happened to a previous councillor, a previous government initiative?

I think that has to be clearly looked at, realizing that the liability of a lot of our infrastructure and water treatment facilities or even our sewage lagoons in our communities, will be the responsibility of the municipalities if they take these over. If they do take it over, do they have a long-term assurance from the government that it will be an asset on the government's books? That the government will be responsible to take on that liability in the long term? I feel that is a question now being asked by many municipalities regarding how they are going to handle the overall infrastructure in their communities. Do they even want to take them over? That has to be looked at.

The other area is the overall seniors' disability property tax relief program. I mentioned in the House this morning that I got a call from an 80-year-old lady who has her own home. She has been living in that home for quite some time and yet today she is still paying her property taxes. We have a program that is there to assist people. We should do everything in our power to reach out to those people and have somebody go from the hamlet office to that elder's home to explain to her the rebate is there and offer assistance to fill it out. There is no need for that.

The concern I have is how long has she been paying and what is her chance of getting back the fund that she has paid over the years, which will add up to quite a few dollars, especially if you are a pensioner and a widow. You need those resources to get you through for the next number of years. This government has to do more to ensure there is coordination between the departments who deliver programs for residents. I do not feel comfortable when a Minister says that is not my responsibility, this is my responsibility and anything outside of that responsibility, I do not have a say or I am not involved in that.

We as a government are involved in the day-to-day lives of the residents of the Northwest Territories. We should not take that view that just because that is my mandate, I am not going to work in conjunction with my other colleagues to formulate a system so that we can streamline these programs and services so it is more cost-effective. We have a fuel subsidy. We have a property tax subsidy. We have income support programs. We have all these different programs out there, but there is no real means of formulating it because the administration costs of running each of these programs separately is pretty high. Is there some way of streamlining or some kind of application process where if you get the fuel subsidy, automatically you are guaranteed the property assessment relief fund? It's automatic. It just kicks in. As soon as you apply on one of the two programs, it will automatically kick in to some sort of computer system and give you that rebate. You do not have to run over here and get an application and run over there to get another application. There would be an application that you fill out through the rebate form and submit it with your application. Elders do not like to be put in debt. They do not like to have a bill that is outstanding. I would like to get some answers on my questions from the Minister. Thank you.

Thank you, Mr. Krutko. Mr. Minister, would you like to respond to the last two general comments? Mr. Minister.

Thank you, Mr. Chairman. I will go in reverse order because what Mr. Krutko is speaking of is freshest in my memory and I do agree.

We are not trying to evade our responsibility to the seniors, but I think the principle of harmonization, and speaking to the point the Members raised, we do have a combined responsibility to address all the key issues. It is just a matter of developing a greater coordination role between the respective Ministers and also of government. Certainly we are working towards that happy medium.

Just to point out the fact that in respect of the 80-year-old resident of Fort McPherson, she should not have had to pay any taxes. We will correct that rather quickly here. Also, there are a number of points that were raised by the two Members.

With respect to formula financing, we alluded to the fact that there was a presentation made by the NWTAM on the business and economic prospectus for the Northwest Territories by this Assembly, which we are all part of. I think what we are trying to develop with the communities is we will suffer through what I feel will be a recessional period. If we do get more resources, then we can perhaps get more money into the communities. Until then, our presentation here today will really exemplify the limited amount of money we do have to work with.

The formula financing proposal is entrenched and the dollar value will remain the same for this year. It will allow us another full year to find other alternatives. It is going to be a difficult task. We know that it is one task that we will be working with all the communities in trying to find a more equitable way of dealing with it. Again, the principles that guided us to this were that communities wanted to be more flexible and have more independence on how they make those decisions. The department has, in the past, said there were 56 different factors. Now that is reduced to three based on population, community infrastructure indicators and the northern cost index. So it simplified that, although we know several communities are not happy. Also, we heard from the NWTAM that they wanted to have input into further discussions, which we had said that we would.

I am going to continue on, Mr. Speaker, to speak to the general comments and allow Mr. Murray to speak to specific technical detail as it was raised. Again, I just want to assure the Members that we have and we will continue to work. As I expressed in my opening comments, we will take the necessary steps to ensure that the community governments will have all the tools they need to manage themselves effectively. We have proven this. In Fort Simpson, we have gone in to help them work out details of how they could do municipal planning, talk about some of their deficit problems and how we can help them out in understanding and reaching a better financial position. Likewise, we have done that for Fort Rae.

We deal with every community on an individual basis. We have directed the staff to work very, very closely with the municipalities who are experiencing deficit problems. Some of them may have planning problems. Others who may have engineering problems. Every community has a different philosophy and a different psychology and it's our intention to make sure each one has the ability to come away from those problems with some surety the department has been involved in helping them out. It further goes to say we have done the same with water problems in Fort McPherson.

I think that pretty well sums up what I am hearing from the Members, other than perhaps certification of water treatment operators. That is a joint effort between Public Works and Services and ourselves, including Health and Social Services, who guides us through the national profile. I will ask my colleagues to speak more to the technical details and also on the legislation that drives us. I think I pretty well captured it all, except in terms of Mr. McLeod's question on lease rates and his opinions. I will ask Mr. Murray to respond to that particular part of the question.

The deputy minister, Mr. Murray.

General comments? Mr. Delorey.

Thank you, Mr. Chairman. Just a couple of points I would like to touch on in general comments. One of them is regarding the changes the department is making to block funding. I would like to commend the department for finally looking at this and making some changes. As you know, Hay River has been talking about the fact that they were underfunded in the block funding formula for a long time. Finally, the department has looked at that and recognized the fact that they have been underfunded.

The only problem I have, to some extent, is the fact that they will not be brought up to speed as what they now see as the fair formula amount. Hay River will still have to wait some three years before they get brought up to that full amount. Hay River is in a situation where they have limited funding in some cases, because of the block funding, to have extra money to put into their sporting facilities or any capital projects that the town wants to put money into. I am sure they are happy to see these increases in the block funding come into effect fairly quickly.

With this latest announcement that Mr. Miltenberger has touched on, and it has been on the radio, with the increasing insurance premiums. Just when something looks favourable, they get hit. I think Hay River is estimating that it is going to be something like a 74 percent increase in their insurance premium to the municipality. Why is this happening now?

One of the things that was pointed out is that the insurance premiums on their vehicles is going up at the same rate as anything to do with water and sewer. The insurance companies are riding on the issues that are coming out of the water deal in saying this is why they want to put the insurance premiums up, but why is it hitting every different spectrum if it has to do with water? Those are some questions they had that they would want to look at. I am hoping the department will be working with the municipalities. Hay River brought up the same point that Mr. Miltenberger brought up as far as what happens if the insurance premiums are going up so high that the municipalities are going to be looking elsewhere? They are just being priced out of the market. That should be a major concern to the department as well. I am hoping they will look into those areas.

There is still an ongoing concern with the town of Hay River as far as lands and taxes and leased lands within the municipality and how that is all being worked out with the Department of MACA and different land claim groups. That is an area they are very willing to work on, but departments have to come together and different land claim groups have to come together and put some closure on this and get some definite answers, so the town administration has more capable ways of going ahead and developing a municipality.

Those are some of the areas I wanted to touch on in general comments. I probably will have more questions coming into detail, but I will just stop at that and maybe get some comments back from the Minister. Thank you, Mr. Chairman.

Thank you, Mr. Delorey. Mr. Minister.

Thank you, Mr. Chairman. I would like to touch on the insurance issue at the moment. The government has acknowledged that there is certainly an increase in insurance costs. We will be dealing with that rather quickly. I stated that earlier this morning. We understand there is a wide range of problems with that. This is the first that I heard it involves vehicles as well. Again, both our department and the NWTAM will be exploring options in the very near future to try to determine longer solutions. We certainly do not want this to occur every so often and catch us off guard.

The questions with respect to Hay River, working alongside the Member, I have been in consultation with the farmers' association trying to see if we can secure more lands for them. I think that was one of the key issues raised at their annual general meeting in the fall. We are still working with the stakeholders, including this government, trying to find a quick solution. I believe that will take more time as we work with the land claim groups.

The question of block funding, I raised the point earlier that we are trying to work within our fiscal means. It is going to be a tough road to hoe for a while, but I think there are other options, as I said in my opening remarks, where we could lend assistance to the communities where there may be shortfalls in terms of engineering advice or financial advice. In terms of sports and recreation, we will probably talk about it in more detail, perhaps about the funding part of it.

I think, Mr. Chairman, that I have captured all of the essence of the concerns of the Members, unless I may ask Mr. Murray or Ms. Kennedy if they want to add more to the summary. Thank you.

The deputy minister, Mr. Murray.

Thank you, Mr. Murray. At this time I would like to recognize Ron Graf who works for renewable resources. He is also the husband of Laurell Graf, who works here at the Legislative Assembly. Also with them is Kevin O'Keefe, who is a teacher from Aklavik. , who is a teacher from Aklavik, and he is here participating in the Northwest Territories badminton championshipsHe is here participating in the Northwest Territories badminton championships. Welcome.

-- Applause

General comments.

We are on page 4-9, directorate, budget summary, operations expense, total operations expense, $3,925,000. Agreed?

Directorate, grants and contributions, grants, total grants, $469,000. Mr. Roland.

Thank you, Mr. Chairman. I wonder if the Minister or his staff could inform me as to the work that is going on to ensure that communities can meet their financial targets with the changes that are going on with the formula they are adapting, and addressing shortfalls. What work is actually going on at this time? Thank you.

The deputy minister, Mr. Murray.

Directorate, grants and contributions, grants, total grants, $469,000. Agreed?

Total grants and contributions, $469,000. Agreed?