Agreed, thank you. Could we please go back to page 8-3? Department summary, infrastructure investment summary, total net book value and work in progress, $582.467 million.

Agreed, thank you. Does the committee agree that that concludes consideration of the Department of Transportation main estimates for 2005-06?

Agreed, thank you. Thank you, Mr. McLeod. Thank you, Mr. Neufeld and Ms. Cook. At this time what is the wish of the committee? Mr. Menicoche.

Opening comments for MACA.

Is the committee agreed?

Thank you. I will ask Mr. McLeod if he would please proceed with his opening comments on the Department of Municipal and Community Affairs. Mr. McLeod.

Thank you, Mr. Chairman. Thank you. I am pleased to present the Department of Municipal and Community Affairs' main estimates for the fiscal year 2005-06.

The department is requesting $82.5 million in operating expenses, and approximately $26.2 million for capital acquisitions for the 2005-06 fiscal year. The O and M budget for 2005-06 represents an increase of six percent from the 2004-2005 Main Estimates and the capital budget reflects an increase of 87 percent from 2004-05. Sixty-two million five-hundred thousand dollars, or almost 76 percent, of the operating budget is in the form of grants and contributions, the bulk of which go to key stakeholders: community governments in the Northwest Territories. This includes formula funding for community government operations and additional funding for sport and recreation programs, water and sewer services, municipal insurance, grants-in-lieu of property taxes, infrastructure projects and community development.

MACA's budget supports the critically important role community governments play in serving the needs and interests of the people of the Northwest Territories. Virtually all of the proposed forced growth and new initiative funding is in direct support of community governments. Specifically, additional funding has been requested to increase community government formula funding; to provide property tax revenues to communities in the general taxation area; to address water and sewer training and funding pressures; to assist in dealing with resource development; to build community capacity for managing infrastructure; and to support communities in leveraging additional resources for infrastructure and other priorities. By working in partnership with community governments, the department supports good governance to enhance the quality of life for all residents in the Northwest Territories.

As Members of this Assembly are aware from the budget address, the Municipal and Community Affairs' budget contains some exciting developments around the new deal for Northwest Territories community governments that will result in direct additional support for communities. First of all, effective April 1st, we are introducing the Property Taxation Revenue Grant Program where a total of $350,000 will be transferred to non-tax-based community governments. This amount represents the taxes collected last year within community boundaries in the general taxation area. This is an interim step towards our work with hamlets and charter communities to become municipal taxation authorities. The taxation revenues flowed to the community governments will be on an unconditional basis; however, communities will be encouraged to use the funding for infrastructure development or related operating costs.

In addition, the department's budget includes $1 million for planning and design work that is required in 2005-06 to prepare for the establishment of a separate community public infrastructure allocation. Beginning in 2006-07, MACA will allocate a total of $22.5 million for infrastructure in non-tax-based communities, an increase of $13 million from 2004-05, as well as an additional $3 million for tax-based communities, through a formula allocation to be

developed in consultation with communities. This will result in a stable, predictable funding base of $25.5 million per year for infrastructure development in our communities. This is in addition to our ongoing program of $2.5 million each year to support water and sewer infrastructure in tax-based communities. It is a significant change to the current manner in which we do business and one that has been a long time coming.

Complementing this are some recent federal announcements regarding support for community infrastructure. In mid-January, I signed the Municipal Rural Infrastructure Fund Agreement with Infrastructure Canada, on behalf of the territorial government, which will result in $16 million over the next four years for community infrastructure. Subsequently, the federal government has confirmed plans to share a portion of the gas tax with community governments. Northwest Territories community governments will receive revenues of $37.5 million over the next five years, with the total amount stabilizing at $15 million annually after that. I am pleased to be able to bring forward these significant proposals, which will help all Northwest Territories communities deal with their infrastructure shortfalls.

While the new deal is MACA's flagship initiative for 2005-06, there are a number of other priorities that may result in changes to the department's funding allocation in the upcoming fiscal year. As a government, we will need to consider our support for the 2008 Arctic Winter Games, which are being hosted by the Northwest Territories. Once a host community is selected by the Arctic Winter Games International Committee, the government will need to allocate funds to provide support to the community that is selected to host the games. In addition, the concept of the Northwest Territories Games will require further consideration by this Assembly to see if this should be continued after the inaugural event takes place March 18th to 21st in Fort Smith.

Overall, I am very pleased to confirm that MACA's 2005-2006 Main Estimates allocates the department's resources in support of the priorities outlined in the 2005-2008 Business Plan. To touch upon a few highlights:

• • As I mentioned, development and implementation of the new deal continues to be a top priority in order to provide community governments with greater autonomy and decision-making on the issues that directly impact their operations. A key component will be to ensure community governments are adequately supported and resourced in order to be able to manage new responsibilities.
• • MACA continues to support the evolution of community governments, especially with the implementation of various self-government arrangements on the horizon. To support the Tlicho implementation, the department has set up a dedicated task team to lead the department's work with the leadership and community governments in the region. MACA recognizes the importance of ensuring full engagement and support during the critically important pre-implementation and implementation phases.
• • The impact of resource development on communities is another area where MACA is working to provide support to community governments. The Preparing for the Pipeline Conference, which was held in December 2004 in Inuvik, provided a great opportunity to identify issues and opportunities for communities related to the Mackenzie Valley pipeline, and the department continues to work on supporting community governments throughout the environmental assessment and regulatory review process. In this budget, we are seeking approval for funds to establish a community resource development planning position in our Sahtu regional office. This will complement positions in the Inuvik and Deh Cho regions, which are directly working with communities to provide advice and support.
• • The importance of healthy choices is a key priority that is reflected in our work with the social envelope departments in support of sport and recreation, youth, active living and volunteerism.
• • The department will work with the proposed Department of Environment and Natural Resources to address issues related to the environmental remediation of abandoned mine sites. Because many of these mines are on Commissioner's land, MACA has a role to play in assisting the regulators on matters related to the surface lands associated with the mines.
• • MACA continues to see the value in brokering partnerships with community governments, the Northwest Territories Association of Communities, other governments and the private sector. The municipal rural infrastructure fund and the federal new deal are two examples where partnership has resulted in leveraging opportunities and increased revenues that support key priorities. The Building Healthy Communities document, released in partnership with the Northwest Territories Association of Communities, which outlines the current community infrastructure deficit, is one of the tools we are using to raise the profile of this issue and the benefits of collaborating to resolve it.

In conclusion, I want to confirm that MACA's 2005-2006 Main Estimates reflect the allocation of resources to the key priorities of the department and aim to build on momentum to date so we can advance priorities in partnership with our key stakeholders, the community governments. Community leaders and administrators have made it clear they want to work with the government to address challenges and opportunities facing the Northwest Territories. Initiatives such as the new deal for community governments are building momentum and garnering widespread interest and support. The investments government makes in communities will result in a payback of stable, good governance through the Northwest Territories and quality of life for all residents. I look forward to your comments on the department's main estimates and any questions or comments you may have. Thank you, Mr. Chairman.

Thank you, Minister McLeod. I'll now go to Mrs. Groenewegen for the committee's comments. Mrs. Groenewegen.

Thank you, Mr. Chairman. Mr. Chairman, the Standing Committee on Governance and Economic Development met with the Minister of Municipal and Community Affairs and his staff on January 14, 2005, to review the department's Draft Main Estimates for 2005-2006.

The mandate of MACA 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.

Arctic Winter Games

The Arctic Winter Games will be hosted by the NWT in 2008 and will provide an excellent opportunity for northern athletes to compete. The international committee will make an announcement late this spring as to whether Yellowknife or the South Slave will host the Arctic Winter Games. In 2005-06, MACA will be allocating funds to support the NWT's role as host for three fiscal years. The committee noted that funding for the Arctic Winter Games was missing from the MACA's draft main estimates and that the announcement with regards to funding will be made after the host community is chosen.

In the interest of transparency and accountability, the committee suggests the department announce funding for this initiative before the international committee makes their decision.

The New Deal

The new deal is a proposal from MACA to the communities which is to provide communities with greater control and decision-making over community infrastructure, including planning and decision-making for capital projects.

Capital projects can run into difficulty and require all kinds of expensive advice in the form of legal, engineering and contracts expertise, to name only a few. The committee is pleased to see that MACA is committed to working with the NWT Association of Communities, NWTAC, to make the new deal a graduated process for communities. The committee feels there needs to be a central pool of professionals for communities to access. Most importantly, communities also require guaranteed funding to help them budget for long-term capital projects.

Currently, although community government funding is based on a three-year projection, it is only guaranteed year-to-year because of the Financial Administration Act requirements.

The committee recommends that the Department of Municipal and Community Affairs continue to press the Financial Management Board Secretariat to find a means to guarantee multi-year funding for community infrastructure.

Municipal And Rural Infrastructure Funding

The Northwest Territories will receive $16 million towards green municipal infrastructure over four years, starting in 2005-06. After receiving this news, MACA has been working in partnership with the NWT Association of Communities to seek the association's input on priorities for application of the fund, as well as the application formula.

The funding will be devoted mainly to water and sewer repair. Fifty-five percent of the funding will go to non-tax-based communities and forty-five percent will go to the tax based communities, who MACA and the NWTAC feel are better able to fund their own projects.

Before any additional federal funding is announced, in the interests of transparency and accountability, the committee urges MACA to decide on and communicate in advance a fair and equitable approach to distributing funding. The approach should be based on criteria such as remoteness of a community, the cost of doing business in the community, the age of existing infrastructure, impact of population demand and the impact of resource development.

Granular Materials

There are many departments working in the various communities that have gravel requirements. Each department has to look after its own gravel requirements. There are roughly eight communities that require gravel for projects such as lot, airport and road development. In light of these requirements, the committee expressed concerns regarding MACA's proposed $250,000 budget cut to granular materials.

The committee is pleased to hear that rather than simply making this budget reduction, MACA will take the lead in determining all the departments that require the use of gravel in the different communities, their future requirements and how those will be met. The department advised it would have a plan for review within the next month.

That concludes our report. Thank you, Mr. Chairman.

Thank you, Mrs. Groenewegen. What is the wish of the committee? Mrs. Groenewegen. Sorry; Mr. Menicoche.

Thank you, Mr. Chairman. I move that we report progress.

Thank you, Mr. Menicoche. There is a motion to report progress. The motion is in order. It is not debatable. All those in favour? Those opposed? The motion is carried.

---Carried

I will rise and report progress. Thank you.

Could I have the report of Committee of the Whole? Mr. Ramsay.

Thank you, Mr. Speaker. Your committee has been considering Bill 19, Appropriation Act, 2005-2006, and Committee Report 10-15(3), and would like to report progress with two motions being adopted. Mr. Speaker, I move that the report of Committee of the Whole be concurred with.

Thank you, Mr. Ramsay. There is a motion on the floor. Do we have a seconder? The honourable Minister of Finance, Mr. Roland. The motion is in order. It is non-debatable. All those in favour? All those opposed? The motion is carried.

---Carried

Item 21, third reading of bills. The honourable Premier, Mr. Handley.

Mr. Speaker, I move, seconded by the honourable Member for North Slave, that Bill 15, Tlicho Community Services Agency Act, be read for the third time. Thank you, Mr. Speaker.

Thank you, Mr. Handley. The motion is on the floor. The motion is in order. To the motion.

Question is being called. All those in favour? All those opposed? The motion is carried.

---Carried

---Applause

Bill 15 has had third reading. Item 21, third reading of bills. Mr. Clerk, orders of the day.