Thank you, Mr. Speaker. Really this is a global challenge and we believe that the Northwest Territories can be part of a continental energy solution for North America. The Mackenzie Valley gas project, the Mackenzie Valley pipeline use of natural gas as opposed to more carbon intense fuels I think is a step in the right direction. We need to supplant use in North America of oil and coal with natural gas wherever possible, with hydro. So if we can bring some natural gas on stream and bring that into the market in North America, we're certainly lowering, we believe, the emissions account, if you will, for North America. Thank you.

Thank you, Mr. Bell. Your final supplementary, Mr. Yakeleya.

Thank you, Mr. Speaker. Mr. Speaker, the communities will be very interested especially where the route where the Mackenzie Valley would be looked at by the proponents of the pipeline. Can the Minister tell me whether any GNWT funding is available to community governments, businesses or private citizens who want to look at reducing the gas emissions? Thank you.

Thank you, Mr. Yakeleya. Mr. Bell.

Thank you, Mr. Speaker. Our government has been involved, as I mentioned, through the Arctic Energy Alliance. We've been able to lever some federal money toward community energy plans. The one in Wha Ti comes to mind. I think there's a real potential for other communities in the valley on the pipeline route to take advantage of that location. I'm confident that we'll see through discussions that are being led now by the Power Corporation and their partnerships, some hydro initiatives come to fruition. I think that that will provide legacy infrastructure to those communities up and down the valley. We need to both from a pure economic perspective get communities off diesel, but also from an environmental perspective we can do a lot for our communities if we can give them long-lasting hydroelectric power. Thank you.

Thank you, Mr. Bell. Item 6, oral questions. The honourable Member for Yellowknife Centre, Mr. Hawkins.

Thank you, Mr. Speaker. Mr. Speaker, I rise today to bring up the subject of the Audit Bureau once again. Last week I spoke about the lack of staffing, but today, in recognition of our audience in the gallery and the recent comments in the news yesterday by the Auditor General of Canada, I'd like to ask a question to the Minister responsible for the FMBS. Would the Minister explain the reporting model of our Audit Bureau in the GNWT? Thank you, Mr. Speaker.

Thank you, Mr. Hawkins. The honourable Minister responsible for the Financial Management Board Secretariat, Mr. Roland.

Thank you, Mr. Speaker. Mr. Speaker, I don't have that information at hand and I'm not very familiar with the actual reporting process. So you'll get me on this one and I'll take it as notice.

---Applause

Thank you, Mr. Roland. The Minister has taken the question as notice. Item 6, oral questions. The honourable Member for Great Slave, Mr. Braden.

Thank you, Mr. Speaker. My questions this afternoon are for the Premier and this is in his capacity as the Minister responsible for the hydro initiatives in the Northwest Territories. Of course, following on Canada's taking on of the Kyoto commitments, our capacity for hydro development becomes much, much more relevant and, Mr. Speaker, in the past three or four years now our government has invested heavily in communication plans and surveys to get people more familiar with hydro development in the NWT. The projects in the Taltson, in the Taltson River system in the south, and in the Bear River system of Great Bear Lake are high on our list. I wanted to ask the Premier this afternoon, Mr. Speaker, about the negotiations and the arrangements with the First Nations, with the aboriginal people of those regions, of the Taltson and the Bear regions, which are going to be key to implementing any kind of hydro development. What is the status of our negotiations with those partners? Thank you.

Thank you, Mr. Braden. The honourable Premier, Mr. Handley.

Thank you, Mr. Speaker. Negotiations continue on both of the projects. Very briefly on the Bear hydro project, there have been recent meetings and a move to create the Sahdae Energy Corporation. There's also a meeting now to finalize an MOI, memorandum of intent, between the Tulita and Deline land corporations. The Tulita Land Corporation and the NWT Energy Corporation have recently held meetings, as well, with Imperial Oil to further the discussions there, and I think they've had two meetings since the beginning of this calendar year and plan to have another one soon. So that project is moving along well.

Mr. Speaker, I can also say that on the Bear River, the partners in the Bear project have also applied for and received intervener status and are working on that front, as well. Mr. Speaker, if you can bear with me because it is a fairly long answer, but on the Taltson River, that one has continued with some work, but it has slowed down, as I told Members last fall, because one of the partners whose traditional lands the transmission line would have to cross had a deal with Regional Power. The Lutselk'e Band recently had a meeting and decided that they would support the Taltson power project over the Regional Power one and I believe are in the process of severing their relationship with Regional, but I'm not party to all the details there.

Unfortunately, there's been a change in leadership in Lutselk'e and we are now waiting for the outcome of the new election, which I think is happening, in order to advance those discussions.

With the Taltson power, we are still looking at having power go to the diamond mines, but as days go on, that becomes less and less economical and could mean substantial backing from our government if it were to move ahead. So as an alternative we are looking at southern markets, which may be possible. We are also looking at other alternatives, including using more hydropower from the Taltson ourselves. For example, in Fort Smith we have a lot of government facilities. If we were to convert them over to electrical heat as compared to diesel fuel, it might be economical. Those are the kinds of issues we're looking at as alternatives on the Taltson project. Thank you, Mr. Speaker.

Thank you, Mr. Handley. Supplementary, Mr. Braden.

Thank you, Mr. Speaker. The Premier mentioned the most important other consideration in this

whole initiative; that is making sure that we have good and viable customers, the pipeline and the diamond mines being among them. On the pipeline, the principal problem we had was convincing those folks that taking on our hydro is going to be a lot more efficient than burning up their own product to move the gas to market. Just how are we doing on this one? If there is a time crunch ahead of us, Mr. Speaker, it is on getting a commitment to be a part of that part of the pipeline deal. Just how much time do we have left? What are the hurdles before we can sign a deal with the pipeline project? Thank you, Mr. Speaker.

Thank you, Mr. Braden. Mr. Premier, Mr. Handley.

Mr. Speaker, as I have mentioned, we've had two meetings. The partners have had two meetings with Imperial Oil on this matter. Imperial acknowledges that the use of hydro for compression is technically feasible. They have questions about the economics of it. They did give the northern partners some information. In our view, there were some flaws in it. Our people in the NWT Energy Corporation and Sahdae Energy are looking at those responding and noting where the flaws are. As soon as they have completed that work, they will hold another meeting with Imperial.

Mr. Speaker, we don't have a deal yet, but we are certainly negotiating toward that. Depending on how the federal government lays out its plan in response to Kyoto targets, this could change considerably and make this a very feasible project, both economically, technically and in terms of our emissions in the Northwest Territories and probably benefit the company. Thank you, Mr. Speaker.

Thank you, Mr. Handley. Third supplementary, Mr. Braden.

Mr. Speaker, I think, with the diamond mines, one of the things that many people in the NWT regret is that we did not make it a condition of the mines being able to get started in the NWT. We did not make it a condition that, at some point, they would take hydro energy from us. We may have missed that opportunity. Would the Premier consider, Mr. Speaker, making this a condition of a Mackenzie Valley pipeline, that it will take our power? Thank you.

Thank you, Mr. Braden. Mr. Handley.

Mr. Speaker, we have not, at this point, made it a condition. We are in the process of negotiating the socioeconomic agreements. We are talking with Imperial. We are not asking them to somehow subsidize our power development, but we do expect them to work with us as good business partners. We would like to deal with some of the issues first on the economics of it and the technical side and certainly encourage them at this point to look at this seriously, which they are. Up to now, I think it is a little bit early to be able to come to a final deal with them. Thank you, Mr. Speaker.

Thank you, Mr. Handley. Final supplementary, Mr. Braden.

Mr. Speaker, it has been 11 years since the last hydro development was started in the NWT. Energy markets and costs and the Kyoto deal itself really compel us to accelerate our work on this. Mr. Speaker, when does the Premier expect we will see the next hydro project started here in the Northwest Territories? Thank you.

Thank you, Mr. Braden. Mr. Handley.