Sorry, Madam Chair.

---Laughter

The mandate of the Department of Municipal and Community Affairs is to provide community governments with the support to deliver public programs and services essential to sound community life, to assist with the development and maintenance of community governments, and to provide the resources necessary to achieve community goals.

The Standing Committee on Governance and Economic Development met with the Minister of Municipal and Community Affairs and his staff on February 19, 2004, to review the department's draft main estimates for 2004-2005.

Property Assessment Positions

MACA is requesting forced growth funding of $495,000 for three new property assessment positions which it advises are needed in order to clear a backlog. The department estimated that additional property tax revenues resulting from completed assessments could amount to $3 to $4 million per year. The committee is concerned that this will be an ongoing expense for the department in future years and there does not appear to be a joint strategy between MACA and Finance, which is responsible for setting mill rates and collecting property taxes, to ensure additional revenues will be sufficient to make this investment worthwhile. In any case, it will be some time before the revenue is even sufficient to offset the assessment costs. Members noted the following specific concerns:

1. 1 There are no apparent plans to prioritize the assessment of high revenue potential properties, such as resource development properties over lower revenue potential properties, such as residences;
2. 2 There is a backlog of assessment appeals, the outcome of which could impact on assessment values and consequently property tax revenues;
3. 3 There are no apparent plans to collect tax arrears more aggressively;
4. 4 Other alternatives to assessments may be possible for some properties, for example, MACA could look at indexing older properties with established assessments instead of reassessing them.

The department also advised the committee that they have attempted to address some of the backlog by contracting the work to the private sector, but have had difficulty finding enough contractors for all the work. Considering that private contracts are often more lucrative than salary and benefits, Members are sceptical that the Department will be successful in recruiting three full-time assessors.

The standing committee recommends that funding for three new property assessors be taken out of the 2004-2005 main estimates.

The committee would be pleased to reconsider this proposal during the next business plan reviews if MACA and Finance are able to come forward jointly with a strong business case for investing in additional property assessment resources.

Community Financial Services

The standing committee noted the large increase in this division's other expenses. The department explained the increases were made in response to recommendations from the Auditor General that MACA improve its financial advice to community governments because so many communities were running deficits. The committee was advised that the funds have largely been spent hiring contractors to assist communities. For example, communities often have difficulty recruiting and retaining senior administrative officers and financial officers, and need temporary replacements for these positions.

The standing committee suggested that services could be provided more cost-effectively by using departmental staff rather than contractors.

The standing committee also suggested that the School of Community Government should increase its efforts to train people committed to staying in the communities so that there would be less of a turnover problem. The standing committee also warns it is important bad management practices not be seen to be rewarded and that additional resources are made available to communities in financial difficulty.

Transfer Of Commissioners' Land To Communities

The standing committee advised the Minister of their concerns about delays in transferring Commissioner's lands to municipal governments, particularly in the Inuvik and North Slave regions. These delays are placing limitations on development. The Minister acknowledged the need to rectify this problem, although it is not entirely within MACA's control to do so. The department indicated it has hired a consultant to review its lands policies, which may provide some assistance. The committee recommends that MACA take a leadership role in simplifying and expediting the transfer process within all existing policies.

The standing committee will continue to monitor this issue.

Arctic Winter Games

The committee is aware that the Arctic Winter Games International Committee has a policy in place until 2010 that it will not consider bids involving more than one host municipality. Members see this policy as unfair to smaller communities and requested that the department continue to work on this issue and do what it can to influence the International Committee.

Youth Programs

The standing committee is concerned that there is a Minister responsible for Youth but that the funding for youth programs is included within MACA's budget. This creates confusion about where funding applications should be directed and does not serve the public well.

The standing committee looks forward to seeing this situation resolved by the Premier as soon as possible.

Planning Act

The standing committee was pleased to learn that MACA is undertaking a review of the Planning Act in cooperation with the NWT Association of Communities in order to address many longstanding concerns with the outdated act.

Squatters

The standing committee was advised that the department is working with the Akaitcho Territory and Canada on a common approach to dealing with squatters in the Yellowknife area. As part of this effort, the department has developed a database to track who is living on the Ingraham Trail.

Members were pleased to hear of the progress on this issue and look forward to further updates.

Performance Measures For Grants And Contributions

The standing committee noted that the MACA budget includes significant grants and contributions. While the department monitors the financial management of community governments quite closely, the committee believes the department could do more to develop performance measures to ensure value and accountability.

Maintenance Of Community Infrastructure

Members have noted that while significant dollars are invested into community infrastructure, the resources are not always put into maintenance and upkeep. Members gave examples of community facilities being allowed to deteriorate resulting in a need for expensive repairs.

The Minister acknowledged this is a concern, and advised that the department is training the recreation facility managers to work with coordinators to work towards better maintenance programs. The committee looks forward to update the success of this initiative.

Land For Access Road From Highway No. 3 To Kam Lake

The committee was advised that discussions are taking place at the staff level between the City of Yellowknife and MACA to address the matter of land availability to develop an access road from Highway No. 3 to Kam Lake. Members look forward to hearing of further progress on this issue.

Duplication Of Functions

Committee Members noted several apparent duplications of functions and would encourage government to consider whether addressing these areas could save costs. The community governance division appears to overlap and duplicate some Aboriginal Affairs activities. The sport and recreation division needs to be streamlined and thought needs to be given on how it will work with the new NWT Council of Sport and Recreation partners and whether some resources should be transferred out of the department. In terms of community preparedness, there is also duplication with MACA and RWED on the pipeline development.

Members were pleased to hear that the department has given consideration to the Deloitte and Touche report which recommends dismantling MACA. The committee understands, however, that the NWTAC had opposition to the total dismantling. The committee would like to suggest that even if dismantling the department altogether is not an option, there is an opportunity to deal with some of the specific duplication issues mentioned in that report. Committee Members hope to see changes in the next business plan.

That concludes the report of the Standing Committee on Governance and Economic Development, Madam Chair.

---Applause

Thank you, Mr. Delorey. Just before we take a break, I would like to ask Mr. Zoe if he would like to bring his witnesses in, to give them an opportunity to get set up while we're having the break. Would you like to bring in witnesses?

Yes, thank you.

Thank you, Mr. Zoe. Does the committee agree?

Agreed. Thank you. Then I will ask the Sergeant-at-Arms to bring in the witnesses. Before Mr. Zoe begins the consideration of his department's main estimates, we will take a brief break. Thank you.

---SHORT RECESS

I call the Committee of the Whole back to order. We are considering the Department of Municipal and Community Affairs. Mr. Zoe, would you please introduce your witnesses for the record?

Thank you, Madam Chair. To my right, I have Deputy Minister Debbie DeLancey; and, to my left, I have Director of Corporate Services Sheila Bassi-Kellett.

Thank you, Mr. Zoe. General comments. Mr. Delorey.

Thank you, Madam Chair. The committee had a chance to review the draft main estimates for this department and there were some of the areas where the committee had some concerns. In property assessments, the committee did come forward making a case for $495,000 to put three new assessors' positions in place to get caught up on a backlog of assessments. The committee had a hard time to justify this extra money based on the case that MACA put forward. There were a lot of uncertainties from the committee's point of view where we get good value for our dollar, although MACA did make the case that we could possibly recognize $3 million to $4 million per year if we did catch up on the backlog on property assessments in cases from backlogs. There was a lot of concern from committee on this issue. Also, the fact that the committee had some doubt as to whether the department would even be successful in recruiting three new full-time assessors. There seems to be some concerns about how many property assessors are out there and whether we might

not be better off getting this work done by the private sector. I would put a question to the Minister on the availability of assessors. How does the department think they would be in recruiting three full-time assessors? Thank you, Madam Chair.

Thank you, Mr. Delorey. Mr. Zoe.

Thank you, Madam Chair. Maybe I will start by explaining the rationale and why we've decided to go in house and try to get those three staff positions that we are asking for. Years ago, the department had more assessors, in '96. They went from five assessors to only two. At that time, the committee of the day suggested that we move people to regional centres. They tried recruiting assessors to be moved to the regional centres. That was during the decentralization period when we had five assessors at headquarters, but once we moved those positions to the regional centres, none of those assessors moved with their positions to the regional centres. So we did have a problem there. After that, the department decided to recruit from the private sector. This is a skilled position. You have to have people who are very skilled to do this type of work. We are even having a difficult time recruiting them from the private sector. So we've decided now that we are going to try to recruit for headquarters. We are confident that we are going to be successful in adding these positions here in headquarters.

I know some members raised the concern about Yellowknife, but I can tell the committee in the earlier days it was decided to move them to the regional centres. If I had my way, I would move them, but because these are very skilled positions, we felt at this time that we would like to start off with headquarters first and maybe down the road, we could move them into the regional centres. If we are successful in getting these positions, we are going to hire a qualified senior property assessor and we are going to get a northern trainee who meets the entrance requirements for property assessment certification and assessment technicians. Those are the positions we are going to be looking at.

We are going to enter into long-term committed contract arrangements for northern firms for providing incentives for training and certification for northern residents as property assessors and we are also going to expand contracting activities, establish property assessment funding directly to tax-based communities, effectively decentralizing the function to those communities. We have similar arrangements with the City of Yellowknife. We are also going to ensure all industrial properties are assessed and paying tax revenues to our government. We are also going to ensure compliance with the legislative requirements of the Property Assessment Taxation Act.

So those are the three positions we are going to be looking at. We are quite confident we can attract these three positions, if they are situated in headquarters for the department. Thank you.

Thank you, Mr. Zoe. Mr. Delorey.

Thank you, Madam Chair. From what I am hearing now, there would be only one assessor position and then a trainee and technician. That seems like a lot of money for one assessor and one trainee and a technician that would basically be training. It seems that that is a considerable amount of money. Is that all this money is going to be used for, strictly for those three positions? Thank you, Madam Chair.

Thank you, Mr. Delorey. Mr. Zoe.

Madam Chair, the Member is right, it does look like a lot for those three positions, but you have to take into consideration, because of the three positions that I identified, it's not going to take up all the money that is allotted for the assessment section. We are going to continue using the private sector to help us catch up or to do the proper assessment, so that we are up to date. Thank you.

Thank you, Mr. Zoe. Mr. Delorey.

Thank you, Madam Chair. I would think that that would be a function that MACA was involved in doing before anyway, land assessment and dealing with the private sector. I guess another question I would have is what is the department's priority area as far as backlogs are concerned? Where are they going to prioritize doing the assessment? Is it on industrial, residential, tax-based municipalities? What kind of a priority list does the department have? Thank you, Madam Chair.

Thank you, Mr. Delorey. Mr. Zoe.

Thank you, Madam Chair. The Member is suggesting maybe we should take a look at assessing only certain properties, but the act doesn't allow for any such distinction. We are required to assess all properties equitably. Therefore, we need these positions to undertake that initiative. As I indicated during the review, we have to bring all these assessments up to date and we have to do it in all categories. We definitely require additional money to undertake these initiatives. Some of this will be used for our private sector and also these three new positions will try to bring us right up to date, so the assessments are current. Thank you.

Thank you, Mr. Zoe. Mr. Menicoche.

Thank you, Madam Chair. I just have a few comments with regard to my constituents, particularly to the Village of Fort Simpson. I know we have discussed this issue in the House as well and it's an issue because of the distinction of being taxed as non-tax-based communities. Therein lies our challenges. The Village of Fort Simpson is on the borderline. Yes, there is a tax base, but there are only 130 people and yet they are classified as a tax-based community. If they are to assess a tax of $100,000 per taxpayer, we would be okay, but the reality is that there isn't enough of a tax base there. I just wonder how the Cities, Towns and Villages Act compares with the Hamlets Act in terms of funding and taking care of these communities. Perhaps the Minister can answer that; the distinction between the Cities, Towns and Villages Act and the Hamlets Act. Thank you.

Thank you, Mr. Menicoche. What I hear you asking the Minister is you would like him to articulate the distinction from a tax point of view, how that would impact Fort Simpson to revert

from a village to a hamlet. You want to know the specific implications.

No, just the distinction between that act and the Hamlets Act and how communities are taken care of.