Thank you, Mr. Chairman. The Member is right; as we initially met, I referenced the fact that we were waiting on waivers to be signed. As has it, with lawyers involved from a number of different parties, that hasn't gone as smoothly as we would have liked it to. But they will be executed today. Once those are executed, then the receiver can once again go out there and seek other interested parties or return contacts that other interested parties have made. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.

Thank you, Mr. Chairman. I'm just wondering, in terms of other losses that continue to pile up, how might the Minister suggest we find the money to account for these losses that are piling up on an ongoing basis. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, the first thing we need to do is to calculate the total losses of the situation we're in right now. Again, a fair bit depends on what the receiver can come together with in the sense of another deal. Once we have those numbers and things proceed, we will be able to calculate the total amount that we will have to come forward to this House and seek approval for. That would come through a supplementary appropriation, as we have not booked that within our budget at this time. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.

Thank you, Mr. Chairman. A little bit of the concern that I had with the first recommendation that appears in our committee's report was the date of April 1, 2005. It was a date that was put out there I guess to try to put the brakes on the losses that were happening at the Sirius plant, to give some assurance to the Regular Members here that this issue would be dealt with once and for all by April 1st. But I want to try and get a comment from the Minister on what's going to unfold here. I know there were numerous proponents lining up when the initial call for proposals went out for the Sirius plant and I'm just wondering what his optimism is like for finding a new purchaser for the Sirius plant. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, I guess it's one thing we can say in the North and the rest of Canada is that the diamond industry is small in our jurisdiction and the word and rumours spread fast about what's happening. We're aware there's significant interest with the operations. As well, the way it's been working through a court appointed receiver, the receiver will have to make those contacts, look at what the results of those contacts can bring and then advise us of what the potentials are. If there's a deal to be had, they would recommend a movement on that and whatever deal is worked on would have to be sanctioned by the courts. Again, because we have a court appointed receiver, that process is quite formal. I'm quite confident that we will have a final decision as to if, in fact, we are moving and entered into a serious set of negotiations once again by April. I think we should have some information before then, but again, because this is a court appointed receiver and the process is quite formal, we know that we could, for example if things moved along front end quite quickly, decide if, in fact, one of the proponents coming forward was satisfactory. We would once again go through the process of doing our due diligence and deciding if the company is satisfactory, would meet our criteria for a northern manufacturer, then that process would again kick up to the mines to have them set up their agreement for a supply of rough. If that can come together, then it would go back to the courts and through the court process. There's a 30-day appeal period. Once that period ends then the deal can be officially signed off.

I'm fairly confident that before April 1st we will have direction that we will go in, whether it's a proposal that's good enough to move forward on or, as a government, we re-evaluate where we're standing with the ongoing concern of the facility. Thank you.

Thank you, Mr. Roland. Last time up, Mr. Ramsay.

Thank you, Mr. Chairman. This is a real burning question that I have with regard to this whole Sirius plant arrangement. The inability to get a deal done between the producers and the Leviev Group. The real burning thing that I have, Mr. Chairman, is why the government wouldn't find somebody much like a middle man or somebody to bridge the gap between the producers and the potential purchaser to get a deal done when the government, I believe, Mr. Chairman -- and I mentioned this in the House the other day -- knew full well that the producers weren't negotiating with the Leviev Group. Why couldn't we find somebody to step in to speak to the producers, to speak to the Leviev Group, to make sure that a group could get done, Mr. Chairman? That didn't happen and I would like to know why. Hopefully I will get to the bottom of it during the life of this session, but why doesn't that happen? I know you can throw around the receiver and two businesses not wanting to get together and the mumbo jumbo but, at the end of the day, Mr. Chairman, this is our industry. It's our future and if we didn't have somebody trying to do that, I think we would drop the ball completely and miss a huge boat that was sailing in here. I would like to hear what the Minister has to say. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. The Member has raised this issue on a number of occasions now and probably won't be satisfied with the responses he gets today that I have tried to supply information about where we are and the process used. There are a few key things that have impacted where we can go as a Financial Management Board and our involvement. One is the original agreements that were put in place and who would be parties to those discussions. The process, as laid out, is the government was involved on the front end to see if a

producer or a company could be looked at satisfactorily and grant them a northern manufacturer status. Once that's done the process then allows for that company to then begin negotiations with the diamond mining companies. There were no provisions for us to become involved with that; number one, on the original side of the agreements that were put in place; two, and further complicating where things were is because we ended up moving to a court for a court appointed receiver, that process has to be respected, as well, and the involvement of the government and the departments. We are aware, as the Minister of Resources, Wildlife and Economic Development stated, through his shop and keeping track of where things were flowing, from our shop of FMB working with the receiver, trying to see where things were going and trying to encourage a speedy resolution to things that were happening. But ultimately it comes down to the fact that we did not have the ability to enter the room to say let's sit down and make this happen.

Of course, since this has happened, there have been suggestions made about sitting down with the mining companies initially and discussing who would be satisfactory to them. There are things that have come out after the fact. But as I had committed to from a government perspective, we are going to have to review where we are with the processes and see where we can strengthen our positions, so that we don't end up in this situation in the future. Thank you.

Thank you, Mr. Roland. Ms. Lee.

Thank you, Mr. Chairman. I had comments I would like to make about the consolidation of the human resources section. Before I do that, I would like to make some comments and observations about this debate going on about the loan guarantees and the receivership for the secondary diamond industry.

First of all, I do believe that this is an important industry. I do believe that the diamond industry in general is one that we have to appreciate for all that it has done for our economy. I do support the previous government and the current government for having worked hard to encourage and foster the secondary diamond industry.

Having said that though, I don't believe the government has the power to, as Minister Bell said earlier, force two businesses to marry. We can't force individuals to marry. From what I understand, this potential buyer that did not turn out to be the buyer is a big player in the diamond industry. I think from my understanding, there are many more issues here than just whether or not the northern diamond producer was willing to give enough rough cuts. There are lots of issues involved that they had to work out on their own. I agree that the government has a role to play and goodness knows that the government has expended a lot of investments in terms of loan guarantees and socioeconomic benefit agreements, and lots of influence and pressure was put upon the diamond industry by all successive governments since the beginning of the diamond industry to get as good a deal for the North as possible.

I think we come to a point where we really have to look at where we are and how much we are willing to do for this industry and how many millions we are going to pour into this. Keep in mind there are secondary diamond cutting and polishing plants that are doing okay. Tiffany is doing well. They are getting their rough cuts. I guess they have a closer relationship with Diavik and that's working to their benefit. Arslanian and all of them have had some downturns, but I just don't know if we can get to the bottom of what exactly happened in this room.

What I am more interested in is I would like the government to come to us and have a heart-to-heart talk about where we are going with this secondary diamond industry in terms of this company. As the Minister already indicated, this has already gone into receivership. The diamond industry worldwide is small. There might be huge companies looking for bargains out there, so we might not even get a deal that will benefit us. I don't want to be pessimistic, but that's how the free market works. We live in a capital society and the market has to dictate at some point and the government has limits as to what it can do.

I am just wondering if the government did not go about it backwards. Why was it that the government announced publicly that the Sirius diamond plant would be sold to this one player, however big or reputable he was, without having gotten the deal written down, and was the producer not consulted in advance to say we have this buyer, are you able to do business with them? Was it not possible for the government to entertain all four proposals at once? I understand there was more than this player who were interested in buying this plant. So why was it that the government came to the gate and said we found a buyer and we will all be happy?

I would think diamond producers in the North are rooted here, they have made investments here and they should have some say on who they do business with and whether or not they can have a business relationship that will work for them, work for the new buyer and work for the government in terms of what the government is interested. If that wasn't done and you have no plan of doing it, how can you have success in upcoming negotiations? Thank you, Mr. Chairman.

Thank you, Ms. Lee. Mr. Roland.

Thank you, Mr. Chairman. First off, coming from the side that I do on the financial side, if there wasn't support for the secondary industry from this government, the first and quickest way of cutting our losses would have been to liquidate the operations when this first came up. But as the government has chosen to continue to support the secondary industry, we've entered this and requested the courts to step in and have the receiver begin doing their work. The receiver entered into a process of basically going out to tender, putting out a package and having those that were interested submit their proposals. Based on the proposals that came forward, there was a review done of all of the parties, and it was recommended in discussions with the receiver that the best deal that was there was the one we went forward with.

As for discussions with the mines and going to them and asking if, in fact, they would be supportive of who we brought forward, there's nothing right now stopping the mines from developing the secondary industry in the Northwest Territories, or proceeding. We've seen somewhat of a partnership already with a couple of the organizations that are in business.

So we, as the GNWT, began this process in allowing guarantees to be put in place to help establish the industry, and there has been much discussion back and forth about support or non-support from the suppliers, being the mining companies.

Again, I go back to the fact that right now there is nothing to stop the mining operations from establishing their own cutting and polishing arms of their operations here in the Northwest Territories. In fact, if they wanted to do that, we would invite them to get directly involved. As this first came out, we were told that, in fact, there was no interest in that. So that's why we proceeded with, from a GNWT perspective, trying to develop the secondary industry.

Things obviously have changed from the first mining operation that came into reality here in the Northwest Territories, from not wanting to be involved in a secondary industry in the North to now companies becoming involved, to a certain degree, with arrangements with cutting and polishing plants here in the Northwest Territories. But again, is there a better way to do it? Well, maybe there was. As the first socioeconomic agreement was put in place, I think we've learned from that exercise and worked at strengthening the position we have as a government, and we'll continue to do that. Thank you.

Thank you, Mr. Roland. Ms. Lee.

Thank you. I don't think I was saying that in terms of getting the producers to take a more active role in this whole state of affairs. I didn't include in that the option of the producers setting up their own cutting and polishing facility. What I'm saying is given where we are, we have a company that we have poured millions into in receivership. The buyer we thought was the one, has backed out. We know that the secondary diamond industry around the world is not that big. The ministry even admitted that the news had spread. So I don't know if the world diamond industry sees this is as a good bargain for them to pick up at a low price, or if they look at it as damaged goods that they don't want to touch with a 10-foot pole; I don't know.

I'm not saying that the diamond producer here should be asked to step in. What I'm saying is, from what I can tell, the first approach of finding a buyer did not work out. If there was supposed to be a marriage between the new buyer and the producer, somebody forgot to tell the producer that they're getting married to somebody. We can't force them to marry. I'm just saying if you're going to have better success a second time, they should be told. Is there any plan on the part of the government to bring this producer in?

A socioeconomic agreement is what we have. I understand the BHP one being the first one, and we've had many after that, and probably the first one was not as tight as we would have liked to have had. We have learned from that, and the second and third socioeconomic agreements are much tighter.

My understanding is, I haven't read the fine words, but there's a lot of room for interpretation. So what I'm saying is this government is not going to get a deal unless you get everybody working together on this. You have to get the producer and whoever the new buyer is, whoever is a bargain hunter or whoever really wants to get into the industry. So I would like to get assurance from the Minister about what we're going to do differently so we can have some comfort that we're not just going to be asked to keep going down the same path that's given us nothing but grief. Thank you, Mr. Chairman.

Thank you, Ms. Lee. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, I agree with the Member that, as she laid it out, the first socioeconomic agreement can be interpreted a number of ways. It's not very tight. We've learned from that. From a GNWT perspective, we have tightened it up to better reflect where we want to go and see things as the secondary industry develops. But at the same time, we, as a government, have to look at the big picture. The resources that are coming out of the ground are resources that belong to the people of the Northwest Territories, if we're going to believe in land rights and that position. It goes back to a much broader picture about devolution and who makes decisions to pass on things and make a project develop in the Northwest Territories and who benefits from those.

With the tools we had available as a government when diamond mines were being discussed and what potential benefits could accrue to the Northwest Territories and the people of the Northwest Territories, this was one of the ways that was seen as being a more cooperative approach. If the cooperative approach isn't working, then we, as a government, have a duty to see what, in fact, we can do to ensure some benefits stay in the North, and that may be re-looking at the whole side of it and saying maybe we need to look at a different method and go down that road.

Initially I think we're trying to take the cooperative approach. At the end of the day, what we saw was a deal that we thought would be very positive for the Northwest Territories and solidify the opportunities in the North in the sense of the secondary industry. We're aware that it won't be bargain hunters coming out. Interested parties have already started making contact to see what can be done. We have been waiting and the receiver has been waiting for the execution of the waiver, and that, again, as I said earlier, is going to happen today. So the process will once again kick into full gear as we begin looking for a potential buyer for the plant.

A couple of other things will come into play. One, is there are some people out there with history in the Northwest Territories and history with the mining operations. Ultimately, yes, it will go back. With the agreement the way it is set up, it will go back to the mining operations signing an agreement with a potential new buyer on the supply of rough. We're hopeful that this will go through, but again we have to look at what's going to come forward from the receiver, and maybe we will get to the point where we say this is not a benefit to the Northwest Territories to continue with this process, and work with the receiver and look at the other side of the scale and liquidate all the assets out there.

But as the GNWT, we have been supportive of the secondary industry; we continue to be and are hopeful that a deal will come through. It is unfortunate that we find ourselves back in this position. Believe me, as Finance Minister working to ensure that our money is spent wisely, it has been a difficult process, but it's one that at times is necessary to try to see the long-term benefit for the

Northwest Territories and its people. Hopefully we will be able to see some of that as we go forward. Thank you.

Thank you, Mr. Roland. General comments. Ms. Lee.

Thank you. I'll leave that topic of diamond guarantees and the secondary diamond industry. I just want to offer some comments about the consolidation of the human resources function of the government. I want to put on record, Mr. Chairman, that I do support this initiative that the government is engaged in, largely due to the desire that I have for better and more effective functioning of management of human resources and not in any way as a cost-cutting measure. I think it's important for the people out there to know that really this was never engaged as a cost-cutting measure.

I hear this on the street and because of other developments that we have been hearing around the North, that they're having some parties whose interest it was to actually interpret it this way. I'm hoping that with the consolidation and regionalization -- because it's not a consolidation of all the services at headquarters -- there will be some rationalization making the services more centralized to a few locations so that there could be some expertise built in an area that is quite complex and difficult.

I'm hoping that this would reduce the instances of all these phone calls that I've been receiving for the last couple of years from people who are not able to get their pension file sorted out, or their records of employment provided to them in a timely manner. These are rules about pension and insurance and employee benefits; all that stuff. It's very complicated, and people need to do enough of it to get that kind of training and concentration of work to build up that expertise. You don't want to see your pension files screwed up. Sorry for that language.

I believe in decentralization and creating job opportunities in communities, but we do that in areas that make sense and there are things that make better sense. For example, the business services section of the government should be in communities. But this is about managing human resources for the government. I'm hoping that this will really serve the public service well. Also, once this gets centralized, I look for things like a better hiring policy that looks at the government-wide approach; that there's a better management program and management training program for the civil servants so that there's upward mobility and there are training opportunities for the employees of the government, and that there's better succession planning.

We know that the demographics show that a large part of baby boomers are going to retire in the next five or 10 years. We also know that the government is not the most coveted employer of the North anymore. We have to fight with other industries to get the best people possible, and I don't see that there is as good a human resource management plan as we could have. I would like to see better implementation and action on affirmative action. I would like to see more women in senior management, and all those questions you have about human resource management of the government right now are spread out everywhere and no one person or no one Minister is accountable for who is hired to do the work that we do.

As MLAs, we get lots of questions from people who didn't get the job that they thought they should get. There are affirmative action candidates who didn't get an interview and such. So this is part of larger work that I think needed to be done, to make sure that we have a concentrated effort to manage our human resources better.

Having said that though, I think we have to always remember that we are talking about people's jobs. People don't like changes and there is always a better way to do these things. One of the most important things about this is communication. I understand, from what I know so far, that this is at a very initial stage. But I'm already hearing rumblings out there, there are people who are hearing that they're going to lose their job or that they're not being told enough about what is happening. In going through the main estimates, we have witnessed and we have seen that each department is at a different stage in terms of how this is going to get done. There are some departments that have been told that there are five or six positions under human resources in their department that are going to move. Some people think it will move this April, some people think they're going to move six months from now, some people think that they're all going to move with this transfer, and some people think they're going to lose their jobs. Some people have already been given lay-off notices. When you're talking about people's jobs, it's really important, because we cannot do this work without the support and understanding and input and the buy-in from the people who are affected.

So that's just a short statement on my support for what's going on in principle, but just to assert, once again, that there's a right way to do it, a wrong way to do it, there's a wrong way to do it, there's a better way to do it, and there's a poor way to do it. Could I ask the Minister, for the record -- I don't know if he's had a chance to say what's going on -- just to state what's going on with this transfer and what the employees should be expected to understand about it? Thank you, Mr. Chairman.

Thank you, Ms. Lee. Mr. Roland.