In the Legislative Assembly on February 26th, 2002. See this topic in context.

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Roland

During the review of the Main Estimates the committee was informed that RWED once again has numerous vacancies -- 73 for this year. This committee has previously raised concern about the number of vacancies within RWED's department. While the committee recognizes that some of those vacancies are seasonal, others are not and require the hiring of casuals and contract workers to fulfil those necessary roles. The department informed the committee that it currently has 39 casual positions for this fiscal year. The committee would like to see these positions filled with permanent staff to ensure that necessary programs are being provided.

The committee also remains concerned about the department's admission that funds saved from vacancies are indeed being used for program funding. The department stated that there have been cases where some money does get transferred, but the funds pretty much stay in the same program area.

The committee is not reassured by the department's statement that the money is "pretty much" kept within the relevant division. The committee would prefer to see vacancies filled and program funding within divisions maintained at a planned and consistent level.

Committee members discussed the possibility of allowing the lapse of funding for vacant positions. The government could then reapply for funding for the next fiscal year when additional staff is hired to fill vacant positions. The committee will continue to monitor this situation and recommend changes to address this continuing problem.

Mr. Chairman, that concludes the Governance and Economic Development Committee's review report on the Department of Resources, Wildlife and Economic Development. Thank you.

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The Chair

The Chair David Krutko

Thank you, Mr. Roland. At this time, I would like to ask the Minister if he will be bringing in any witnesses. Mr. Minister.

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Jim Antoine Nahendeh

Yes, I have witnesses.

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The Chair

The Chair David Krutko

Does the committee agree that he brings in his witnesses?

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Some Hon. Members

Agreed.

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The Chair

The Chair David Krutko

Sergeant-at-Arms, can you escort the witnesses in. Mr. Minister, can you introduce your witnesses for the record?

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Jim Antoine Nahendeh

Thank you, Mr. Chairman. Mr. Chairman, to my left I have the deputy minister of Resources, Wildlife and Economic Development, Mr. Bob McLeod. To my immediate right is Mr. Jim Kennedy, the director of corporate services. To my far right is Mr. Fred Koe, the president of the Northwest Territories Development Corporation. Thank you.

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The Chair

The Chair David Krutko

We will now take a short break.

-- Break

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The Chair

The Chair David Krutko

I would like to call the committee back to order. Are there any general comments regarding the department's estimates? General comments? Mr. Roland.

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Roland

Thank you, Mr. Chairman. Mr. Chairman, just to go a little further, as we reported in the Standing Committee on Governance and Economic Development report on the review of the main estimates, I would like to acknowledge that the department has provided further follow up information as they committed to during the main estimate review. There may be a few further outstanding issues that Members may have questions on.

Just one area before we go into it. Again, as we reported with our committee report, the government did state to a higher view and profile for the environment issues that were being raised. One of the things that I would like to point out when you look at the expenditures by activity, the resource management and economic development portion far outweighs environmental protection when you look at expenditures by activity. As we go through this in detail later on, I have some questions about where they are planning to address the issue of environmental protection. Thank you, Mr. Chairman.

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The Chair

The Chair David Krutko

General comments? Mr. Dent.

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Charles Dent

Charles Dent Frame Lake

Thank you, Mr. Chairman. I would like to follow up on some of the comments that the Minister made in his opening remarks regarding the department's support for the value added diamond industry.

The issue I would like to follow up on is I understand that the department is working on a marketing strategy to help capitalize on the interest in so-called clean diamonds, or to take advantage of the fact that blood diamonds are not as easily marketed these days as those that come from places like Canada, which have much stricter labour laws and where the diamonds themselves are not being used to fund armed insurrections.

What I am concerned about is if we are focusing on this marketing, I think there is probably a market to go after but we are still going to face a problem with the long-term viability of the diamond manufacturing plants that we attract to the Northwest Territories. There is not enough of a premium that is now allotted to diamonds that come from places like Canada over the blood diamonds in order to justify the increased cost of doing business in the Northwest Territories. I have not seen a strategy to deal with the long-term viability of these companies and that is something that we need to start working on.

Probably one of the few areas that we could have some impact on these companies without direct subsidies, would be if we were to spend some effort getting the Canadian government to consider giving up on the 10 percent excise tax on goods manufactured. I think we should try for it in the Northwest Territories, using the argument that we need to have that kind of tax-free zone, if you will, in order to encourage the enterprises to grow in the Northwest Territories. If we cannot get that, we should be encouraging them to give up the excise tax across Canada.

I think that would do far more for these companies than anything we can do in terms of marketing. In the long run, I do not think marketing is going to have as much of an impact.

There is a 10 percent decrease in margin right now. If we give up the 10 percent tax, that would be something that would allow the diamond manufacturers to bring the cost of their goods down to compete in the world market.

I have heard that the diamonds that come out of Ekati Mine are of such quality that Ekati stones extract approximately a 10 percent premium in rough sales over what is obtained from other diamonds. If that is the case, that means that our diamond manufacturers are paying a 10 percent premium over what someone in Belgium would pay for South African diamonds or Russian diamonds. Our polishing is to the same standards, so you are winding up with a nice, fine, gem-quality stone, but you started off paying 10 percent more. You obviously do not have as much of a margin to work with, even if you can get ten percent more at retail.

That is where we are going to have a big problem with the sustainability of this business. So no matter what we do to market diamonds, I do not think we can maintain enough of a margin for these companies to make money. We would like to know if the department has examined the issue of the excise tax and if the Minister is prepared to put some time in Ottawa working at getting that excise tax taken off the products manufactured in the Northwest Territories.

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The Chair

The Chair David Krutko

Mr. Minister.

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Jim Antoine Nahendeh

Thank you, Mr. Chairman. Mr. Chairman, in the diamond sector in the value-added activity, we as the government over the last three years or so have been supporting and encouraging the manufacturing of diamonds in the Northwest Territories. We have helped out three different companies to begin the manufacturing. It is just the very beginning of an industry here and we are still in the growing pain area of this whole industry. There are a lot of different possibilities there that we should pursue.

Being new to this industry, the suggestions of trying to have the 10 percent excise tax not be applied to the diamonds coming out of the Northwest Territories is an excellent idea. We have heard this from the manufacturers themselves and they have identified that as a possible approach. We have not officially pursued that approach, since we have just recently been advised of it and certainly we will pursue that. I think it is an excellent idea.

We have been talking with the different politicians in Ottawa, namely our Member of Parliament, Ethel Blondin-Andrew, recently. There is a growing interest by the federal government to realizing that we do have very good quality diamonds coming out of the Northwest Territories and that we should pay more attention to it. There were suggestions of trying to look at ideas like a diamond sector council. This was advised by our Member of Parliament.

There are ideas out there, Mr. Chairman, on how to best move forward in trying to support our fledgling diamond manufacturing sector in the Northwest Territories. Thank you.

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The Chair

The Chair David Krutko

Mr. Dent.

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Charles Dent

Charles Dent Frame Lake

Thank you, Mr. Chairman. I would encourage the department and the Minister to work aggressively at trying to get Ottawa to do that. Whether we have a diamond sector council or we offer support for marketing, I suspect that given the economics right now, we have a couple of the manufacturers that are probably finding it very difficult to make a profit.

If the company does not make a profit, they have a difficult time staying in business. I think we are going to have to try and put some effort into more than the marketing. In fact, I would encourage the Minister to look at the excise tax issue as the priority. I think it is far more important than marketing assistance at this point, because we need to open up that window of profitability, I think, for these companies if we want to see them stick around in the Northwest Territories and if we want to have a chance of attracting even more of them to the Territories. Thank you, Mr. Chairman.

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The Chair

The Chair David Krutko

Mr. Minister.

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Jim Antoine Nahendeh

Thank you. I will take the honourable Member's advice and direction here. We need to pursue whatever options are out there. There are two manufacturing companies that are trying to make the best go of it and are finding it a little bit difficult to find their way through this new industry. As the government, we are very supportive of them. They are trying to find different approaches at this current time and we will support them whatever way we can.

We have also, as a government, approached BHP as well, to try to find an approach there as well. We are trying everything we can at this point in time.

The ideas of working with the federal government and trying to find different ways of alleviating some of the costs, we certainly will have to develop a good approach here and work with our Member of Parliament in this area as well. Thank you.

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Page 198

The Chair

The Chair David Krutko

Thank you, Mr. Minister. Mr. Dent.

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Charles Dent

Charles Dent Frame Lake

Thank you, Mr. Chairman. I just cannot help but make one comment, because I know I have talked to the Minister about the trademarks issue a fair bit. I find it quite interesting to notice the trademark by the name Canadian Arctic Diamonds. I am encouraged to see that the department is pursuing their own trademark and would think that is a good name and one that we should capitalize on as a northern territory. I am hoping that this is a sign of the approach we are going to take. Thank you, Mr. Chairman.

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The Chair

The Chair David Krutko

Mr. Minister.

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Jim Antoine Nahendeh

Yes, like I said, the diamond sector is a new sector for us in the North. We are finding our way through it. There is a difference of opinion in some areas and we are sorting ourselves through that. Our intention here is to support the manufacturing industry. We will resolve the difference of opinion that is out there and then try to create a good manufacturing sector of diamonds here in the North with Canadian Arctic Diamonds. Thank you.

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The Chair

The Chair David Krutko

Thank you, Mr. Minister. General comments? Mr. Lafferty.

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Leon Lafferty North Slave

Thank you, Mr. Chairman. On the comments of the Minister, under partnerships, we seem to see a lot of the tourism activities are all on the larger communities, the larger centres. In my riding there is no tourism at all, except for one in Wha Ti, which has been ongoing, I think, since even this government was in existence. I would just like to say I think we need to put more emphasis on working with the smaller communities in the Northwest Territories, not only in my riding but in other ridings as well, to ensure a balance where we get into the wildlife...there was no mention of the Wildlife Act that is being reviewed right now.

I sort of have a concern because in my community, they sometimes want to go out and harvest some bison. There is a bison management board out there somewhere making rules and laws and saying who can shoot what and when and how. I saw a proposal of a new Bison Management Act. I do not know how you manage bison. You lasso them or you corral them or whatever, how you manage them. But they want to put a bison management board in place and there is no equity in it. They have 20 tags for Fort Providence and they are down to one in the Dogrib region. We do not see any quotas put in any groups when it comes to caribou hunting, muskox or anything, but when it comes to bison, some groups get more than others, which I do not think is fair. I think that should be looked at.

They are more of a nuisance on the highway. There are more highway road kills than there are tags out there, I guess. So maybe there should not be tags or maybe equally shared.

Also in harvesting is how funds are allocated to the community for the harvesting funds. It has come to my attention in the last two years that there are no trappers and not very many hunters on those committees. It is run by the bands. There are a number of trappers out there who wish to have input in it but do not have input. I would like the Minister to make sure there are trappers on there, whether they are elected members or not, because right now there are only elected members sitting on it to decide on what happens. Some of these people have never trapped in their lives and they decide on what a trapper should do. I do not think that is fair.

Going on to environment, this government, by installing hydro and dams out there, they have affected fish stocks in some of the lakes in the Dogrib region. I would like to ask the Minister if they can look at restocking some of the lakes that have been affected by these hydro dams and power dams. The last dam did not affect them. They were all ready gone. Dogrib power put a dam and it did not affect them at all.

Then going to capacity building, you have over 200 people receiving training in the Maximizing Northern Employment Program. I would like to know which 10 communities have received funds for this. That is about all I have on Resources, Wildlife and Economic Development. Thank you.

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Page 198

The Chair

The Chair David Krutko

The Minister responsible for Resources, Wildlife and Economic Development, Mr. Antoine.

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Page 198

Jim Antoine Nahendeh

Thank you, Mr. Chairman. Mr. Chairman, the honourable Member for North Slave has asked a number of questions and I will try to respond according to his concerns.

He talks about partnerships mainly into the area of tourism. Tourism is always going to be there, whether you are diamond mining or looking for oil and gas. This is another sector of our economy that is there and will be there forever. And there are a number of companies, people who have developed a niche for themselves in the tourism industry. We would like to encourage that.

This current year we put close to $1 million into the Northwest Territories Association for Tourism. This year we are going to do that. They have levered that with the Canadian Tourism Association to get over $2 million worth of funding this current year and next year. So whoever wants to get involved in the tourism business, they are the group to go to. They are accepting proposals and inquiries in how to pursue it. We would recommend that whoever is interested in starting up tourism work with them.

We as a government will continue to provide the necessary funding and the loans and the grant funding available from the other parts of RWED to help out in this regard. There are opportunities there now this year and next year that were not there previously.

With regard to the Wildlife Act, it is on stream. We are pursuing it. There is consultation that just happened with the WAG group, and we are putting together preliminary documents towards a proposal for legislation.

With regard to a bison management board, there is currently consultation going on with the communities of Fort Providence and Rae-Edzo. The bison population is expanding. They are going out of the Fort Providence area and going into the Dogrib area. As a result, there is a request for more tags and looking at the regulations that are in place.

There are a number of legislative changes that have been proposed to the regulations regarding the hunting of the bison. There is consultation to seek support for the changes. These are underway in Fort Providence and Rae-Edzo. We hope that new regulations will be in place by the start of the next hunting season on July 1, 2002.

We are looking at some changes to increase the total annual allowable harvest of the bison and establishing a new bison management area in the Rae-Edzo area. There was no bison management area in the Rae-Edzo area before and bison are moving there. We have to establish a bison management area in that area with a quota for the Rae-Edzo general hunting licences. These changes will deal with a draw system and perhaps extending hunting seasons in the Fort Providence area -- changes to the draw system and hunting requirements for NWT residents.

We are hoping that these changes will provide Rae-Edzo GHL holders with several more tags. This is what the consultation is about. We are moving forward with this and trying to find a way to make some changes to bison hunting.

On the harvesting funds, you wanted trappers on there. We will look into it. We have to talk to the band in Rae-Edzo and forward your request to them and see if they will comply or agree with that.

On the environment, with regard to what happened with the hydro and dams, they asked about fish stocks. Again, whenever you talk about fish in the river system and in the lakes, we are dealing with the federal Department of Fisheries and Oceans. Your concern about restocking fish in the Snare River system we will pass on to them and try to work with them to see if there is a way of doing it.

On capacity building, you asked about which ten communities. I have a list here that perhaps I could share with you. It is pretty extensive. I can pass on that information to the Member. Thank you.

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The Chair

The Chair David Krutko

Thank you, Mr. Minister. Mr. Nitah.

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Steven Nitah Tu Nedhe

Thank you, Mr. Chairman. Mr. Chairman, I have several issues I would like to cover with the Minister while he is on the hot seat. I would like to first start with his opening remarks. He spoke about partnerships and how the department is going to work with the NWTAT on accessing more funds. I am all for tourism, Mr. Chairman, but when I see tourism only in Yellowknife, I get discouraged. What is the department doing in its relationship with the NWT Arctic Tourism to promote the Northwest Territories, not just Yellowknife? How can the department guarantee or encourage -- I will not go as far as guarantee, I do not think any department can do that -- how can they encourage tourism to be developed in communities?

Right now we have tourism in Yellowknife, a little bit in Inuvik and Hay River, it is elderly people only. Where is the diversification, Mr. Chairman? Thank you.

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Page 199

The Chair

The Chair David Krutko

The Minister of Resources, Wildlife and Economic Development, Mr. Antoine.

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Page 199

Jim Antoine Nahendeh

Thank you, Mr. Chairman. Mr. Chairman, as I indicated, the NWTAT has been funded by this government to match it with the Canadian Tourism Commission. They get close to $2 million a year now for product development and tourism. The department has worked with the NWTAT to promote tourism in the Northwest Territories. They are open to suggestions. There is an aboriginal component to the NWTAT, and they are taking on recommendations and proposals at this point in time for any ideas. They have some adequate funding now to do things that they were not able to do before. That is one good thing about it. We have to work with them.

As the Government of the Northwest Territories, in our own way, we do promote the Northwest Territories. We do not have any ads on TV or anything like that, but there is funding in the NWTAT to provide that. We need to work with them. As you say, we cannot guarantee them to provide the funding to promote the Northwest Territories but we certainly encourage and work with them to do that. Thank you.

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Page 199

The Chair

The Chair David Krutko

Mr. Nitah.

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Page 199

Steven Nitah Tu Nedhe

Thank you, Mr. Chairman. Mr. Chairman, when the Standing Committee on Governance and Economic Development was traveling in the Northwest Territories and conducting public hearings on the proposed hotel bill that did not pass in this House, we talked about tourism. The vast majority of hotel owners in the Northwest Territories said that they did not see any tourism. If we cannot get them to the communities, then we are not promoting them. If we do not have hotels or handcraft shops in our communities, tourism information facilities or EDOs, what is the point of promoting the Northwest Territories for tourism?

I would like to know of all tourists that the department is aware of that come to the Northwest Territories, where are they going? They are going to the lodges for sure, but they promote their own facilities and their own businesses. I do not have a decent hotel in Lutselk'e. There are no hotels in Fort Resolution. There are bed and breakfasts. Restaurants? None. How are we supposed to take advantage of the great tourism potential in the Northwest Territories, especially in the East Arm of Great Slave Lake? What is the department doing to encourage these facilities and these resources, human resources, so that we can take advantage of tourism in the Northwest Territories, amongst many other economic potential? Thank you, Mr. Chairman.

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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters

Page 200

The Chair

The Chair David Krutko

The Minister responsible for Resources, Wildlife and Economic Development, Mr. Antoine.

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Page 200

Jim Antoine Nahendeh

Thank you, Mr. Chairman. Mr. Chairman, this department here, RWED, they are there to assist potential clients in looking at all types of funding opportunities that are there through RWED. There are funding opportunities there that exist for tourism and to look at product development. We are there to help develop business through loans and grants. There is training involved. We help out in training and we are also involved in marketing. Again, like product development, we provide that. There is management training, different level guiding of training, and again promotional costs and production of tourism materials. So there is a lot of assistance that this department could provide.

Again, in terms of restaurants and hotels, through the Northwest Territories Development Corporation, they have worked with community corporations in some instances to build hotels, coffee shops and so forth. The funding and the mechanism is there. We just have to find a way to work with the people in the communities if that is what they want to do. There is opportunity there to do it.

There are initiatives that this department has funded to finance the construction of community facilities and to provide the training. It is ongoing. There are joint ventures that NWT Development Corporation has done with some of the community corporations to have these facilities.

It is a matter of trying to find out if the community is interested. We have the different programs to do it. Thank you.

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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair David Krutko

Mr. Nitah.

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Steven Nitah Tu Nedhe

Thank you, Mr. Chairman. Maybe the department should spend a percentage of the time they spend promoting the Northwest Territories and promoting the kinds of programs and services the department has available to communities. I am pretty sure most of these communities do not know anything about some of these programs.

Let's talk about Community Futures and the NWT business development centres. You have the Akaitcho Business Development Centre in which you have the city of Yellowknife, N'dilo and Detah. You have the Thebacha Business Development Centre, which has Fort Smith, Lutselk'e and Fort Resolution. I see Lutselk'e and Fort Resolution never had any money coming out of that development centre and that development centre is placed in Fort Smith I believe. They have not done anything to promote business development in the communities. Maybe they have done it in Fort Smith but certainly not in Fort Resolution or in Lutselk'e. If you do not have resources associated with these positions or these offices, or these offices are not known to the people they are supposed to serve, how are they supposed to do their jobs? Economic development officers in every community, paid sufficiently by the government as comparable to what they pay individuals working for the departments, would be excellent in these communities so that they can take advantage of business opportunities. There is a lot of potential out there but we are not utilizing it.

I think the Minister has the gist of my concern and my suggestions, so I would like to get into the area of environment, Mr. Chairman. The Mackenzie Valley Resource Management Act is a creation of the federal government through their negotiations with land claims. In the Northwest Territories, you have the Deh Cho, the Dogrib region and the Akaitcho, who do not have agreements, and this Mackenzie Valley Resource Management Act is enforced upon them. Specifically in the area of the Patterson sawmill application, the Mackenzie Valley Resource Management Board used a site in northern Alberta to do an assessment in the Pine Point area. They used the environmental assessment done by the proponent, Mr. Patterson, to do the environmental assessment. Is that the practice of the Mackenzie Valley? Is that acceptable to RWED, Mr. Chairman? And when is RWED going to complete its environmental base line studies in the Slave Geological Province? Thank you, Mr. Chairman.

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Page 200

The Chair

The Chair David Krutko

Thank you, Mr. Nitah. I would like the Minister to answer your questions, but time is up. We will rise and report progress as it is 7:30. I would like to thank the Minister and his witnesses and you can answer the question when we resume tomorrow. I will rise and report progress.

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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters

February 26th, 2002

Page 200

The Speaker

The Speaker Tony Whitford

The House will come back to order. Item 21, report of the committee of the whole. The honourable Member for Mackenzie Delta, Mr. Krutko.