Page 5-10, infrastructure acquisition plan, community health programs, total activity, $167,000, total department, $6.875 million.

Thank you. We'll go back to page 5-3 for department summary, infrastructure and investment summary, total net book value and work in progress, $129.430 million.

Does committee agree that the departmental review of Health and Social Services is concluded?

Thank you, committee. I'd like to thank you, Mr. Miltenberger, Mr. St. Germaine and Mr. Murray, for joining us this afternoon. We'll take a short 15-minute recess. Thank you.

---SHORT RECESS

Good evening. I will call the meeting back to order. We are now on the Department of Industry, Tourism and Investment's main estimates. Can I ask the Minister to make his opening remarks, please?

I am pleased to present the proposed 2005-2006 Main Estimates for the Department of Industry, Tourism and Investment. These estimates propose total operational expenses of $34.9 million. This represents a net increase of $1.7 million, or a five percent increase over last year's budget of $33.2 million. This increase is a net effect of sunset and expenditure reductions of $2 million and offset by an increase in new initiatives of $3.7 million.

These main estimates reflect the commitment of this government to the implementation of our strategic plan. These estimates relate to our collective vision of creating a territory that has self-reliant individuals, sharing in the rewards and responsibility of healthy communities and a prosperous and unified territory.

The mandate of this proposed new department links directly to the strategic plan developed by Members of the 15th Legislative Assembly. The priority of this government's commitment to diversify our economy, enhance access to markets and maximize benefits from resource development, including the proposed Mackenzie gas project, aligns with the mandate of the new Department of Industry, Tourism and Investment.

The Northwest Territories has experienced an unprecedented level of economic growth over the past several years and, with that, increased demands on our resources. Not only has there been a perception of conflicting mandates within RWED, but we must continue to strive to develop optimal organizational structures to effectively serve our clients. The creation of this new department will assist in addressing these important issues.

Today, Mr. Chairman, I bring forward these main estimates in order to ensure that we have the capacity to meet our targeted April 1, 2005, implementation date. I would like to take a few moments to highlight some initiatives in the main estimates for the Department of Industry, Tourism and Investment, which link to the strategic goal of diversifying our economy.

The tourism industry is critical to the NWT economy. It is a sector that can be an important wealth generator for every region of our territory, for communities both large and small. We are pleased to see that our tourism numbers are rebounding from geopolitical events over the past several years. The department will continue to work closely with the Standing Committee on Governance and Economic Development through the chair to see how best to plan for an NWT theme week at Expo 2005 in Aichi, Japan. We have developed a planning process that fully engages private sector stakeholders with an interest in Japanese and Far East markets. The private sector is showing a keen interest in participating with us in Expo 2005.

The government's strategic plan also identifies several key priorities related to the development of the Mackenzie gas project, such as maximizing northern benefits. To accomplish this, the Government of the Northwest Territories announced the creation of the Mackenzie Valley pipeline office. The additional proposed investment of $1.988 million will significantly increase our ability to support regions, communities and businesses to realize economic benefits from natural gas development. Staffing is currently in progress and we expect the office to be operational by the beginning of the new fiscal year.

I would like to thank the members of the Joint Cabinet/ AOC committee for their work and guidance on the Mackenzie gas project. Having members from the Standing Committee on Accountability and Oversight has provided important insight and direction in assisting us in moving forward with planning. We recently held a committee meeting in Norman Wells and it was a success by all accounts, Mr. Chairman. I look forward to our next committee meeting scheduled for April in Fort Simpson. I believe we have made much progress since this committee was created. We have much more work to do to plan for the Mackenzie gas project, which will ensure that all northerners benefit from this development.

Mr. Chairman, legislation has been introduced to create a new Northwest Territories Business Development and Investment Corporation. The new corporation will combine the operations of the Northwest Territories Development Corporation, the Business Credit Corporation and the department's business programs under a single board and administration. This one-window approach will substantially improve business support services to clients in all regions of the NWT.

In conclusion, Mr. Chairman, I would like to thank you for the opportunity to provide these remarks on the main estimates for the Department of Industry, Tourism and Investment. I want to assure the committee that your input and suggestions are reflected in these main estimates. This feedback is important to the business planning process. I look forward to the committee's comments

today and I am prepared to answer any questions you may have. Thank you.

Thank you, Mr. Bell. Now I would like to call Mrs. Groenewegen to make her remarks.

Thank you, Mr. Chairman. The Standing Committee on Governance and Economic Development met with the Department of Resources, Wildlife and Economic Development, RWED, on January 13, 2005, to review the 2005-2006 Draft Main Estimates. The restructuring of RWED into two new departments will occur in the new fiscal year but had yet to divide as of this report. In this unique year, the main estimates of the Departments of Industry, Tourism and Investment, ITI, and Environment and Natural Resources, ENR, were reviewed simultaneously by the committee and defended by the Minister of RWED.

The mandate of the Minister and the Department of ITI is to promote economic self-sufficiency through the responsible development of the Northwest Territories natural resource industries and the promotion and support of tourism, trade and investment, business and manufacturing to create a prosperous, diverse and sustainable economy for the benefit of all NWT residents.

Cost Of Restructuring

The committee appreciates that the government restructured RWED into the two new departments to improve program delivery. The committee also appreciates the difficulty in trying to quantify the cost of restructuring versus the cost of lost opportunity. However, the fact remains that the creation of Industry, Tourism and Investment alone will cost the government $1.765 million in ongoing costs. The committee is concerned about this expenditure.

Investment And Economic Analysis, IEA, And The Business Development Investment Corporation, BDIC, Amalgamation

The committee understands the focus of the IEA and the BDIC are different. The BDIC's main mandate is to help clients access programming in order to start businesses while the IEA provides economic strategic and policy advice to the government.

However, the committee believes there is still opportunity to amalgamate portions of these two programs. There are several positions within IEA that either duplicate positions in the proposed BDIC or may be more effective there. The NWT/Canada Business Centre would be one of several examples.

Amalgamating portions of the two programs would not only conserve resources but would streamline services to the public. The committee was pleased to hear that once both the BDIC and the Department of Investment, Tourism and Industry are operational, the Minister is prepared to further discuss this issue with the committee.

Expo 2005 Japan

As the committee observed in their review of the 2005-2008 Business Plans, the government plans to devote to the 2005 Expo only a fraction of the millions spent on past expos in Spain and Vancouver. The Japanese tourists spent an estimated $16 million last year in the Northwest Territories.

The committee argued this Expo requires a larger expenditure than $500,000 because there is competition from other places in the world for aurora viewing.

However, after hearing more information about the plans for the proposed funds, the committee is more confident of ITI's ability to increase the NWT tourism industry's exposure to the Japanese and international tourists at Expo 2005.

For instance, ITI will be maximizing private sector involvement by developing a sponsorship program to ensure that the private sector is involved. Furthermore, ITI has consulted with the NWT Tourism Association on the best dates for the NWT to exhibit at the Canadian Pavilion where one of three themes will be the aurora borealis.

Mackenzie Valley Pipeline

The committee is concerned about the government's human resources for the Mackenzie Valley gas project. The committee wrote to the Government House Leader on October 6, 2004, asking for a list of all the government positions devoted to the Mackenzie Valley pipeline project. The list was to include all positions both existing and proposed, including those in the regions and in all of the departments that are on the task team.

Further, the committee asked to see a justification for each position and explanation of what their role contributes to the planning and monitoring of the Mackenzie Valley pipeline. Finally, the committee asked how all of the information is collected, coordinated and communicated to the lead department.

The committee has received some of the information but believes it to be incomplete because the response only shows positions for two departments and fails to identify those housed elsewhere in the government.

The committee is also concerned about the complicated committee structure. There are five interdepartmental committees that report to the Deputy Ministers' Pipeline Steering Committee. The Governance and Economic Development committee is unsure of these committees' responsibilities and their membership.

Finally, although not all of the staff has been hired for this initiative and the office will not be operational until April 2005, all of the money for compensation, benefits, operations and maintenance has been expended for 2004-2005. ITI is still operating the MVPO on a transitional approach between Yellowknife and Hay River until the Hay River office can open.

The committee has expressed all these concerns during their review of the 2005-2008 Business Plans and is disappointed to see that no positive changes have been made, in order to safeguard their interest and to answer any questions the public might have.

Recommendation

The committee recommends that the Department of Industry, Tourism and Investment develop a communication strategy to advise the public how the government is organized;

And further, that a senior MVPO position be placed in the Deh Cho to better enhance communications in that region.

Thank you, Mr. Chairman.

Thank you, Mrs. Groenewegen. At this time, I would like to ask the Minister if he would like to call in witnesses.

Yes, I would. Thank you, Mr. Chairman.

Sergeant-at-Arms, please escort the witnesses in.

Mr. Minister, for the record, please introduce your witnesses.

Thank you, Mr. Chairman. Mr. Chairman, with me today is Peter Vician, deputy minister of ITI; I also have Jim Kennedy, director of corporate services. Thank you.

Thank you, Mr. Bell. General comments. Mr. Menicoche.

Thank you, Mr. Chairman. I certainly spoke in favour of the splitting of the departments in order to better serve the people of the NWT. As it's laid out before me, another initiative that I did speak for was that tourism has to be brought to the forefront of our government as it is a growing industry, particularly in my riding. It's something you want to capture as much as the tourism dollars are passing through right now aren't being captured enough as it is. Some of the things that are important are we do have the Acho Dene Craft Store that wishes to capture more tourists. A lot of tourists end up in Fort Simpson; go over to the Nahanni Mountains down the South Nahanni River to Nahanni Butte. There is a bit of a craft shop there that takes advantage of them. They come out to Blackstone and they drive back to Fort Simpson, completely missing Fort Liard altogether. It would be a huge boon to that economy if we could somehow capture that piece of the market.

Another thing that happens is that every year starting sooner, a lot of people drive the Alaska Highway. When they are passing Fort Nelson, there is a nice paved road that goes up to the border, but that's for another department. They pass our road and there is no significant signage that says here is the path to the NWT, come and see Fort Liard. That's another way we could capture more tourism. I think there is a small sign that says up to the Northwest Territories, but we need a nice big sign. I don't know if studies have been done to see if increasing signage will increase tourism for people who want to come North. In fact, I don't know how much advertising there is in B.C. about using our Deh Cho connection. There is a big loop there that we could use to capture more tourists during the summer months. In fact, it can act like a gateway into the parks and to see our natural resources, Mr. Chairman. That's something I spoke in favour of and that's something we are going to have to develop and capture those natural resources and take advantage of them.

It's not clear how much our tourism budget has increased over last year. Perhaps the Minister can speak to that, Mr. Chairman.

Thank you, Mr. Menicoche. Mr. Bell.

Thank you, Mr. Chairman. I want to thank the Member for those points and for the question. I would agree that tourism is a vital component of a diversified economy and we think has a lot of potential in the Northwest Territories. We just recently completed a sectoral analysis and I know that committee has seen that document. There are a number of action items in that document and we look forward to working with all Members and with committee to see if we can't realize our full potential in tourism. As the opening comments mention here today, one of the important things that we recognize is there truly is the ability for all communities, small and large, to develop some product around tourism. We can certainly play a supporting role as government in helping to develop that product. Every community, I would say, in the Northwest Territories has immense potential to improve and increase the tourism revenues to their economy.

When we toured Liard some months back with the Member, I heard a number of the points that he had been continually raising with me at some community and public meetings and that was certainly a good opportunity for me to get the sense that these were issues that were shared by the community and, in fact, he was responding to community needs in our discussions.

I would agree Liard is certainly a very beautiful community that has a lot of potential, but issues such as tourism signage came up. I want to assure the Member that after those meetings I spoke with our deputy minister who approached the Department of Transportation and they sat down and agreed to put a project in place -- and there is a project underway now -- and I understand that there will be a new border sign on the Liard Highway ready, prior to road season. I think the money probably flows through DOT, but we have been involved in advocating that that needed to happen.

I think the Member makes a very good point. It is difficult to expect that we are going to generate tourism traffic, if we don't have adequate signage. We heard the Member and the community on that issue and are moving forward.

Also, I would like to say that we continue to support and work with and on the Deh Cho connection initiative. We think that that is something very important for that region and we look forward in future to advocating regional approaches to tourism and working with communities, to better understand the kinds of things that they have to offer and how we can help people take advantage of their potential.

In terms of main estimates, this year to last year, if I look at the 2005-2006 mains there are about $5.7 million; 2004-2005 Main Estimates were about $5.578 million. Admittedly, we haven't increased tourism spending as much as we would like to, but we have undertaken a joint study with the NWT Association of Tourism, who has a new name -- the new name escapes me at this point -- to look at how we spend our tourism dollars to better understand the roles and department, vis-...-vis the industry organization in terms of research, product

development, destination marketing. I expect that we will have the conclusions of that study in a month or so.

It has taken a little longer than we thought. I think it's because we had two organizations involved jointly driving this project, so we had to do a lot of collaborative work. I think what we will see in the end is a much better product because we did collaborate quite closely with the industry association. Thank you, Mr. Chairman. If I've missed anything, the Member can draw my attention to it.

Thank you, Mr. Bell. Mr. Menicoche.

Thank you, Mr. Chairman. While we are on this specific topic, perhaps the Minister can reference the page number that had the line item of $5.5 million for me.