Sorry, Mr. Chairman. I should have mentioned it. It is in program delivery details on page 11-27 in your mains. Thank you.

Thank you, Mr. Bell. Mr. Menicoche.

That is good, Mr. Chairman. I will end my comments on this topic for now and allow another Member to have their say.

Thank you, Mr. Menicoche. Mr. Hawkins.

Thank you, Mr. Chairman. At this time, I will be very brief. I wish to emphasize the Minister's statement, recognizing the area of tourism as a vital component of the economy, although I will not go into it at length and I'm sure he will appreciate that. He has already heard from me a couple times in regard to my concerns about investment in Aichi, Japan, with expo.

I do want to say my support for the leadership provided at this time with the division of RWED, and, therefore, it will help establish a clear mandate for the industry and tourism side. The only thing I would like to stress at this time beyond that, other than looking forward for the BDIC Act to come forward, into full implementation, I am looking forward to the opportunity where we can truly discuss about the Territories taking full control or becoming a full partner in the Mackenzie gas project.

What I would like to hear from the Minister is how he envisions from the legislative point of view, whereas the Territories people can help maximize those benefits. As I see it, legislation will be our key and if it's simply a legislation mechanism, such as legislation clearly draws out that gas coming down the pipeline has to be tied in by industry, things of that nature, that's the type of thing that would inspire me. I want to see us being able to maximize our benefits and I would kind of like to hear some of the Minister's thoughts in that regard about us maximizing these.

I would like to see what he has envisioned, taken those words a little further, so maybe we can help see some of this. Thank you very much, Mr. Chairman.

Thank you, Mr. Hawkins. Mr. Bell.

Thank you. Just to be clear; the Member is looking for our vision and how we expect the people of the Northwest Territories will be able to maximize benefits from the development of the Mackenzie gas project?

Thank you, Mr. Bell. Mr. Hawkins.

Yes, absolutely. If there is a legislative component that could be built into that, as I cited the example, does he envision legislation coming forward? Well, I will just say it; that helps tie hands of industry to help enable our people to get those types of benefits. Does he envision that type of thing? Thank you, Mr. Chairman.

Thank you, Mr. Hawkins. Mr. Bell.

Thank you, Mr. Chairman. It's a very good question and something that, upon our election and the start of this government, we had a lot of discussion around, about how we could best take advantage of the opportunity that is coming.

One of the first things that we did was to strike the joint committee of Cabinet and AOC members to advise our government on its role and its coordinated effort in terms of the Mackenzie gas project. We recognized that there were a number of departments who were all conducting individual activities. For instance, Municipal and Community Affairs working with communities to develop capacity, working with communities to better understand their infrastructure challenges and needs; RWED, of course, involved from both the environmental perspective, but also working with communities and would-be entrepreneurs to take advantage of opportunities coming their way; ECE involved from an employment and training perspective, and, of course, we know and we have had some discussion around the social envelope departments and their role in ensuring that where there are negative impacts that we do what we can to mitigate those.

This steering committee is advising our government on all issues related to the pipeline. We have created the Mackenzie Valley pipeline office, which we are in the process of staffing up to ensure a coordinated government effort. But I think the short answer to the question around legislative initiatives is no.

We see that the most effective approach we can take is to negotiate a socioeconomic agreement with the Producers' Group and make sure that all the various different line departments are plugged into our committee and ensure that we negotiate the best agreement that we can on behalf of the peoples of the Northwest Territories.

There are a number of other mechanisms available to us as well. We have registered and are in the process of sharing information with, proponents around the JRPEA, the Joint Review Panel Environmental Assessment, and the NEB process to come. Members can expect that we will advocate strongly for the interests of northerners in those processes. They are two separate processes. One is more of a technical nature, related to tolling and tariffs around the pipeline and how the pipeline will technically

be reviewed and should be best structured so that we cannot only develop the three anchor basins that we have all talked so much about, but we also want to ensure that we develop the entire basin going forward, because we think that a lot of the benefit to northerners will come from the exploration and activity that follows having the actual conduit in ground.

We have a number of different roles we are playing, and I would say that those are really the main tools that we have available to us in terms of ensuring that benefits stay in the North. Thank you, Mr. Chairman.

Thank you, Mr. Bell. Mr. Hawkins.

Thank you, Mr. Chairman. The Minister mentioned socioeconomic agreements and I'll first start off with, because he's also the Minister in charge of the BIP. Some constituents have been concerned about, for example, potential projects coming forward under this big, mega project and the example that they really cite is they can't compete with the mega projects just because of scales of economy. They're small contractors and I think even Mr. Menicoche had once mentioned an example, and it was a very good example, of a supplier in his community who could supply 50 trucks or 20 trucks, but they wanted three times as many by one supplier. What is our government doing to help ensure that when industry comes knocking, that industry examines that?

Let's break some of these contracts up into useable, feasible sizes that the small guy can jump on board and the small guy in the community, the same guy that supports the hockey team, the same guy that walks his daughter around selling Girl Guide cookies, the same guy that shovels snow at Granny's house down the street for no reason other than he cares about his community, has that chance. As it stands now, I haven't heard, and it's not that you haven't said those words, but I'm not hearing that we have that potential built in, that industry is going to be encouraged.

Now I'm going to tie it back into the socioeconomic agreement. Right now the Minister of Finance is meant to be the leg breaker on these things. When the RWED agreement moves forward in the future, ITI will create these socioeconomic agreements. Part of the problem is that they don't really have legs. As the Finance Minister had said, these are pretty tough to enforce. I can recall that Mr. Dent had words in the last Assembly when he was sitting on this side of the House saying that for this diamond company, you have to give away your next born. There's such a solid agreement and yet, at the end of the day, they're very difficult to enforce and we've had our second in command here say, look, they're just tough to enforce.

I don't need to go endlessly into examples. I don't think there's a need. I think the point is there. Before moving on, the issue is why would we consider socioeconomic agreements as the promised land to our future when we have a history that can be proven at a moment's notice, whereas we fall down on these things and we just can't use them to the effect that they're built with the intent and the honesty that people have come forward to build these items together with. Why wouldn't we create legislation that just broad brush deals with some of these issues? I think it would be very competent of us. It stabilizes the environment for industry. Industry knows exactly what they have to do. There are no hidden rules and there's no interpretation from legislation. It's pretty straightforward and without negotiation.

So I'm kind of concerned that I'm not hearing legislative initiatives to help deal with this. I hate to think that once a socioeconomic agreement is struck, which I can appreciate...They're an ongoing negotiation. I don't have to mention again the Minister responsible for the FMBS is taking the heat for the diamond problem, which is arguing over how much rough is coming across the table, whether it's 2.5 percent or 7.5 percent, who knows. We shouldn't be arguing this. It should just be simple here's the law, here's the land, this is it. How does the Minister feel that the socioeconomic agreement will truly take us to the promised land so that the little guy out there, wherever the little guy is, will take advantage of these things? I don't have to underscore it any further about how important the little guy is to the community long after these mega projects have come and gone and no longer continue to invest in our communities. Thank you, Mr. Chairman.

Thank you, Mr. Hawkins. Mr. Bell.

Thank you, Mr. Chairman. I appreciate the points the Member is making and, of course, we've grappled with how to best ensure benefits stay in the North. But maybe let me explain why we've arrived at this mechanism as potentially the most effective one, we believe. I think the Members know that through access and benefits negotiations that are happening in regions, there will be beneficiary companies that are so identified in order to be available for business opportunities and we aren't privy to the detail of these negotiations, but I think we can assume that companies will be identified that qualify and there will be efforts made by the proponent to use those companies much the same as we've seen with the diamond mines.

Now in terms of northern businesses and in terms of benefits for all northerners, we are negotiating a socioeconomic agreement. There are obviously details of this that have yet to be negotiated, but probably no surprise if I speak in generalities that there will be a chapter on northern business opportunities. Of course, we'll have to arrive at a definition the way we did with the diamond mines at what constitutes a northern business. We've got some work to do there. There are a number of things we could do. The Member indicated that sometimes you have northern businesses that don't have the capacity or the sheer size really to take on some of the bigger projects. I think our experience has been that oftentimes businesses can be encouraged to cooperate to put together joint bids so they can bring the resources to bear on a project. We can also encourage a proponent to scale contracts or, in fact, break them down into more manageable sized contracts so that some of our smaller businesses can take advantage of the opportunities.

We're going to work to ensure that there is a significant amount of involvement on behalf of northern businesses. What the Member is proposing in terms of legislation on the flip side or something with more teeth, I understand what he's proposing and what he's suggesting. I think though that we'd find very quickly that if we were to try to do something like that, we'd run afoul of trade agreements between provinces and potentially even international trade agreements. I think you'd end up creating a regime that was so inefficient and would, I think and believe, really

become a disincentive to future investments. You'd be hard pressed to find companies who are willing to come and invest in mega projects in the Northwest Territories if they knew that we were going to lay out legislative requirements that they use the companies that we wanted them to. I think it's just much too much protectionist. I think we have to operate with certain principles, the principles of free market.

Having said that, we can use a tool like the SEA to try to steer benefits toward northern companies. The SEA won't get into this or that company gets the business. The SEA will get into the types of business that we would like to see used and then, as we know with the diamond mines, there will be reporting mechanisms so that we can tell if commitments are being met and lived up to. I think that's what we have at our disposal and I think we can make very effective use of these SEAs, but it is important that we structure it appropriately and that we set as our priorities things that are easily measurable and things that make sense and are achievable. I think we've had a lot of discussion around employment targets. I think what we'll find in a project of this magnitude is that people with adequate training are not going to have a difficult time getting employment. So maybe we need to focus more on the actual training than indicating which jobs can go to northerners. These are just some of the things that we're considering.

Obviously it's early days in the negotiation of the socioeconomic agreement. Mr. Vician is heading up those negotiations with Imperial and is taking direction from the joint AOC and Cabinet steering committee. We'll be able to report back in future, but at this point it's early days. But we do feel it can be a very effective mechanism. Thank you.

Thank you, Mr. Bell. Now I have Mr. Ramsay.

Thank you, Mr. Chairman. I just wanted to start off with a few general comments on ITI. I guess I could have photocopied the transcript from last year's Hansard in terms of a couple things I'm going to talk about. The first one is tourism. I know some other Members have touched on this as well. Again this year, there's no increase to tourism. I know the department has gone through a process where they hired a consultant and are looking at the inner workings inside the department as well as Northwest Territories tourism to try to find some common ground perhaps, and make sure that what finite resources are there are utilized the best way possible. I'm really looking forward to seeing the completion of that, where the dollars are going and how better we can serve the tourism industry here in the Northwest Territories.

I don't believe we've seen an increase in tourism funding in a number of years. I think it's going on six or seven years, perhaps. I think it's time we had a look at tourism. I know it's easy for the government and this is the argument I'll make: It's so easy for the government to spend millions of dollars and lose millions of dollars on bad investments in other areas, but when it comes to tourism it always seems to be the poorer sister or brother, however you want to phrase it. We have to do more as a government to promote and market ourselves internationally and nationally. So that's one thing I wanted to touch on.

The other thing I wanted to mention is I'm very supportive of the move to split the Department of RWED into ITI and ENR. However, the one thing that causes me some concern, and caused our committee some concern as well, is the cost going forward in the area of $2.5 million, if you add up what it's going to cost for both departments. This causes me some concern. I know the Minister has mentioned this to us before about trying to get that number down. I'm looking forward to perhaps working with him through this process so we can try to maybe realize a smaller number. It is a big price to pay on an ongoing basis. I think what we're doing, Mr. Chairman, is duplicating positions in a lot of cases and I don't know if a service centre type model could be utilized for superintendents. New superintendents of both departments could perhaps look at working both sides of the fence. I don't know, but we're hiring a substantial number of new employees.

The other thing I wanted to mention is any of the ads that I've seen that have gone out for new positions with either one of the two departments have been open to indeterminate employees only. That causes me some concern, Mr. Chairman, because it doesn't allow for the department to bring in any new blood. It's just folks who are recycled through the system basically and that's what you're going to get. I don't know if there was any thought given to perhaps looking outside the current public service to try to bring in some new blood, especially when you're starting up two new departments. Those are my comments on that.

In terms of investment and economic analysis, I do believe that there is some overlap and duplication there, perhaps, in some of the functions and roles that IEA plays and the Development Corporation currently plays and BCC currently plays. There's some work there I think needs to be done. I'm looking forward to the committee working with the Minister to try to get us where we want to go with that.

Again, I could have gone back and got my script from the last budget session when dealing with the Mackenzie Valley pipeline office. I don't think we've been given the information that we need, Mr. Chairman. What we're looking for is a list government-wide of positions that dealt specifically with the pipeline and what we got was a list, but it wasn't a comprehensive list. It wasn't an accurate list. I think what we need is to really get a grip on the positions that we have government-wide, where they're located and what they do. As a member of GED today, I don't really know where all these positions are or what they do or anything. I think that's something that I'm looking forward to seeing.

Again, the pipeline office in Hay River, I can understand and appreciate the staffing difficulties in trying to get that office up, but here we are, it's been a year and the office still isn't open. That's a shame. I think it should be open. We should be getting the ball rolling here. We've been asleep basically for five years on this, meanwhile they're planning for an $8 billion pipeline down the Mackenzie Valley. Really, as a government, I don't know where our coordinated approach is. It just isn't evident. We have a long way to go in that. Again, I know the committee and myself were looking forward to working with the Minister to try to get that coordinated approach and it's going to take not just the Minister of ITI or ENR to work this through, it's going to take the commitment from the Premier and the rest of Cabinet to get these positions on the table and get some coordination. It's very convoluted, the reporting function amongst deputy ministers and committees and

where the information goes and how it's disseminated, it's very confusing to the lay Member of this House, that's for sure.

I just wanted to end on a positive note. I know the committee and myself have had a good relationship with the Minister and I know the Minister has shown evidence to want to work with the committee and he does actually take what we say and work with us on trying to implement some of the recommendations that we bring forward. It's been a good working relationship and I look forward to working with the Minister to accomplish a few more things here in the next year. Thank you.

Thank you, Mr. Ramsay. Mr. Bell.

Thank you, Mr. Chairman. A number of areas that the Member touched on, I first want to thank the Member and committee for their continued support and advocacy for tourism. I think that's something that I have especially noted, was the committee's focus and belief that tourism can really play an integral role in diversifying our economy. I want Members to know that despite the reduction exercise that we engaged in here, their support and advocacy was noted and we were able to ensure that there were no reductions to the tourism budget and NWTT's budget this year. We have and are proposing to create a new tourism position through the reorganization exercise. We do recognize that this is a priority and it is something that committee has pointed to as a priority and I'm looking forward to trying to support and work together with committee to further support and enhance tourism in the Northwest Territories. I think this review underway should point us in the right direction, which I am very optimistic about. But I look forward to sitting down with committee to go through that as we talk about moving the tourism agenda forward.

The Member also pointed to the reorganization expense and I know that we had a lot of discussion as a department and we came back and forth with committee a number of times and did settle on the least cost option that would allow us to still roll out an effective program and service delivery. I think Members would realize and understand that there were going to be some costs. In order to create the two departments out of one, there was an additional expense. We tried to keep that expense to the bare minimum by setting up things like the shared services structure so that much of the administrative work can be shared between the two departments and not, in fact, duplicated. But in some areas where we had thought that there might be more savings, we ended up realizing that in order to really deal with the issues that were driving us, we weren't able to do so. For instance, policy departments. You can imagine if you're trying to deal with a perceived conflict between the existing department, you really need the heart of the matter; the heart of the issue is the need for two separate policy shops. So we've done that. Superintendents have to be separated, we believe. There have to be two different superintendents in the regions. So it's an additional superintendent position in each region, but we think it's absolutely necessary. It did drive some additional office requirements in certain locations, but we felt that it was important. So when we looked at the options in terms of one-time costs and ongoing, we looked at a few and really came down to the option that we thought was going to be effective while still being the cheapest. Given our fiscal reality, that did drive some of our decision-making. So we tried to keep the cost to a minimum wherever possible.

The Member pointed out, and the committee makes note of it as well, and we had a number of discussions around this issue in committee, but the new BDIC and his suggestion that there were in fact still some duplication between our investment and economic analysis division in RWED and the new BDIC and talked about where these positions might best be located.

I do like the recommendation about the NWT service centre and that is certainly something that we want to look at. I appreciate the recommendation from committee. I think that's a very good one. But I would say to Members that we are dealing with these issues and, as I mentioned and committed to before, once the board is up and running, I will direct a program and service review for our business programming and we can have some discussion around these issues and where these positions would best be housed.

Pipeline employees; I will acknowledge that I fell down here in terms of responding to committee. I initially did not grasp that you were not only looking for RWED positions but government-wide positions. We've now moved on that and we're going to the various different departments and collecting and tabulating that information. We'll come back to committee with a discussion around those issues. It is a more extensive exercise, so it's going to take us some time, but I will commit to coming back with that information to committee and we can sit down and talk about it. You're right; it is important that we have this overall government coordination and it is important that we adequately understand what each and every department is doing in this regard to make sure that there is the best use of resources possible and that we're not duplicating efforts.

MVPO money, regarding the Member's disappointment that we haven't been able to move more quickly, in the June session we did get the supplementary approved and we have moved forward to an RFP process for office space. The office is currently being constructed and we think it will be ready by the end of March. We haven't waited for that. We do have one employee who's moving down, I believe, maybe at the end of this month. The communications person for the MVPO, one of their tasks will be exactly the recommendation committee makes, if I can go to Committee Report 10-15(3), and that was a recommendation that ITI develop a communication strategy to advise the public how the public is organized around this project. That will be one of the first tasks for the communications person at the MVPO and as further employees come on stream, they will move to Hay River and take those jobs. But we don't expect that is likely to happen until the end of March. April 1st was our time commitment; we think we're going to be ready to have people moving into that office as of April 1st.

I think that was the number of issues that Mr. Ramsay had asked me for some information on. He also mentioned indeterminate hiring around some of the positions. We would acknowledge that we are looking to GNWT employees first. We think this is a great opportunity and wanted to offer, specifically in regions, the opportunity for superintendents to come from the existing public service. Where we aren't able to staff those positions then we will go and have a broader look, but we were trying to move quickly and thought this was certainly a good opportunity

to grow and develop our public service. Thank you, Mr. Chairman.

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

Thank you, Mr. Chairman. I would like to take this opportunity to make some general comments on the Minister's opening statement, as well as on the department. This is my first chance to publicly respond to the unveiling of the division of the department. I have to say that I know that the Minister and his staff have been working diligently over at least a year in working this out and I'm sure it was difficult, but I was expecting something new and more innovative. I have to tell you that I am disappointed that we are going to be creating new positions. I'm not going to say that it was an easy thing to do, but I was expecting more. To see that last year, under RWED, we had five superintendents and about 10 directors, I think, and we're going to create virtually the exact replica with the exception of creating five more superintendents and two positions sharing administration. I guess we could always justify why we need to have new bodies or enough bodies to do our work, but in the big scope of things we're not being responsible in doing it this way, I believe.

I note that $1.7 million that's going to go into the carrying out of this mandate, $1.7 million of new dollars that needs to go in, that is $1.7 million every year. I wonder what the tourism industry could do with $1.7 million every year that was not able to be found when the tourism industry asked for more money in tourism and other investments. But it seems like it's available for every year forever, now that the government has decided to create this new department. I also note that $1.7 million could build an indoor facility in Nahanni Butte. That's about exactly the money that we're looking for and every year we could be creating a $1.7 million indoor gym to Kakisa, to Nahanni Butte, to a number of other communities. I know we're supposed to stay within the department's mandate, but for the people who are sitting outside in the communities, they have to look and wonder how the government sets out priorities. The government sets out priorities that this department's mandate was conflicting and we're going to do something about it. They send off a Minister and the deputy minister, they work hard for a whole year, and they come back and create a structure that is the twin of each other and that creates five new superintendent positions. People have to wonder how they get $1.7 million every year to do what they need to do in communities. It seems to me this is a result of nobody losing anything. It was like, if you needed to be convinced that there will be a new department created nobody has to be affected about anything because they're just going to...It's like osmosis. It's just going to be easy. Just create two of everything almost. I am really disappointed with that.

Another thing is this new outline of organizational structure, when you look at ITI and then you look at ENR, to me it really speaks to the philosophy of the government as well. Everything about ITI is staying intact and ENR is looking a lot like a very junior department. I really think it reflects the philosophy of government of being very pro-development, pro-pipeline, and I don't know if any of the latest broadcasts in the media and the attention that we're hearing from the communities, if that's any indication people out there are not ready. I don't think people are ready for the pipeline. I don't think they really care that we have really nicely designed, neat departments that we've created. I don't mean to be harsh, but I find it hard to sit here and look at RWED from last year and ITI is an exact replica, except that you took out two or three directors and created five new superintendents. I wonder why we don't have pipeline readiness under ENR and a director in charge of social development. If we had to create all those new senior positions I wonder -- I know there are persons attached to these positions, so when I'm saying this I hope nobody takes this personally -- why we need a director of minerals, oil and gas and then we have diamond projects, which is a mineral, and then we have a director of energy which is the same as oil and gas. The Mackenzie Valley planning office has to do with oil and gas development. It seems that everybody needs to have a hat and we had to keep the two ADMs and nobody had to lose anything.

So this is my first opportunity to say anything about this and I just think it would have been harder, but it should have been done in a way that would not have created $1.7 million a year every year going forward, because that money could not be found when the tourism industry asked for that sort of money or we're not able to...I don't know how we prioritize the government spending. That's one big objection that I wanted to bring to this. I'll just end it there because I think the Minister will probably out speak me on this thing. So I'll just see what he says. Thank you.

Thank you, Ms. Lee. Mr. Bell.

Thank you. I will try to keep the answers short. I appreciate the Members want to get a number of questions in. The total employees for the new departments, in ITI, it is going to be 189 employees and a budget of about $34.9 million. In ENR, we are talking about 276 employees, so almost 100 more employees and over $50 million in proposed budget. I would certainly disagree with the Member's suggestion that we are entirely focused on economic development. I think you can see from the numbers of employees and the bulk of the budget being in ENR that we take this very seriously and take the role of environmental stewards very seriously. I think this division of the departments will allow us to do that and continue to move that agenda forward without the perception that somehow it is better.

The creation of new positions out of whatever that is, 480 some employees; we are talking about 23 new positions created when we create the two new departments. So we aren't duplicating all of the positions. One of the things we needed to do was to build regional capacity. That is why we have additional superintendents in every region. We think it is very important. We don't think we can ask a superintendent to be a superintendent of two separate departments. We also have three positions to create an energy policy office. If you look now and take a good close look at our energy policy, I think there is really a void. I don't think we have a good handle on both demand side and supply side issues. As a government, I don't think we are doing an adequate job around energy policy. I think that is what this addition of these positions speaks to. This is about trying to build more capacity at the regional level. That requires new positions. Thank you, Madam Chair.

Thank you, Mr. Bell. In fact, you have a minute left on the clock. Ms. Lee.