I will call Committee of the Whole to order. We are on the main estimates Department of Municipal and Community Affairs. I would like to ask the Minister responsible, the Honourable Michael McLeod, to provide committee with his opening comments. Minister McLeod.

Thank you, Mr. Chairman. Mr. Chairman, I am pleased to present the Department of Municipal and Community Affairs' main estimates for the fiscal year 2006-2007.

The department is requesting $110 million in operating expenses and $2.6 million for capital acquisitions for the 2006-2007 fiscal year. This represents an increase of 14 percent. Beginning in 2006-2007, the department's budget includes a stable ongoing funding commitment of $28 million for community public infrastructure. This enhanced capital funding, which was first announced in the 2005-2006 budget address sets the stage for the move to capital formula funding on April 1, 2007, as part of the implementation of the New Deal for NWT community governments.

Eight percent of MACA's operating budget is in the form of grants and contributions, the bulk of which flows directly to our key stakeholders: community governments. 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.

Communities continue to face increasing pressures including compliance with regulatory requirements, demand for services from residents, pipeline development, changes in governance arrangements, demand for land development and rising energy costs. Community governments are finding it difficult to recruit and retain capable staff in a competitive employment environment.

The new initiatives included in MACA's 2006-2007 main estimates are designed to help address these pressures.

Funding is requested to extend four term staff positions to assist community governments in undertaking preparations for the proposed Mackenzie gas project. MACA staff have been actively assisting community governments as they prepare for the upcoming panel hearings. In addition, significant effort is being undertaken to ensure that communities have up-to-date and relevant bylaws and user-fee agreements, affording them the opportunity to maximize the benefits of resource

development activities associated with the Mackenzie gas project.

Additional resources are also included in the 2006-2007 main estimates for term positions to address the increasing demand for land administrative services. These resources will assist community governments to address urgent pressures that are being experienced in all regions. Additional resources will result in improved land administrative service levels to the public across the Northwest Territories, and enhance the capacity of community governments to take on land administration activities.

A multi-departmental drinking water quality framework has been put in place to ensure all communities are provided with drinking water that meets federal guidelines. Recent developments in northern Ontario remind us of the importance of this issue. In addition to activities already underway, the department will use additional funding in 2006-2007 to assist communities with water licence applications and assist with training and certification of water treatment plant operators.

Communities need assistance to address rising energy costs. In 2006-2007, the department will continue to work with the Arctic Energy Alliance on its Community Energy Planning Program. In partnership with the NWT Association of Communities, the department will help communities to develop community energy plans as part of the broader requirements of the gas tax funding agreement.

The department continues to play an active role in delivering on the GNWT's strategic priority of healthy living.

Funding for the 2007 Canada Winter Games will enable NWT youth to become involved and will support the showcasing of traditional sports at the games. One-time funding for the Healthy Living Strategy will support the rollout of the second year of the Get Active physical activity challenge. Last year, more than 15 percent of territorial residents got involved in this challenge designed to promote physical activity.

Youth initiatives remain a priority for the department. One-time Northern Strategy funding will be used to build on existing programming and pilot some new approaches to support Northwest Territories youth to develop the skills they need to succeed and contribute to their communities.

During the 2005-2006 fiscal year, the government made $35 million available through the community capacity building fund to support communities in addressing local priorities. Any funds that are not expended by the end of this fiscal year will be carried over to 2006-2007, so that the communities still have the opportunity to make an application.

The New Deal for the Northwest Territories community governments remains a strategic priority of the department and the Government of the Northwest Territories. An initial round of community consultations was conducted over the spring and summer and the response from communities was positive. The department is committed to continue to work with the communities to ensure that their concerns, needs and unique pressures and challenges are addressed during and after implementation of the New Deal. I am pleased to report that good progress has been made on this initiative.

One highlight is that 2005-2006 was the first year in which the department distributed the property tax revenues collected within community boundaries in the general taxation area directly to community governments. This resulted in $250,000 in incremental funds going directly to the 18 non-tax-based communities.

Another highlight is that as a result of increased capital funding announced in last year's budget address, the department has been able to add several new community projects to our capital plan. I am particularly pleased to note the inclusion of several recreation infrastructure projects, including a gym for Nahanni Butte and an above-ground swimming pool for Tulita.

---Applause

One of the driving forces behind the government's New Deal was recognition of infrastructure pressures facing communities and the need to provide communities with the tools and the resources to deal with those pressures.

The 2006-2007 fiscal year is the last year where MACA will play the leading role in capital planning and development for most of the non-tax-based communities. Beginning April 1, 2007, MACA will provide capital funding to community governments through a formula. This new approach will not only give communities the authority to make decisions about community infrastructure, but the flexibility to lever funding from other sources, enter into partnerships and get more value for money.

In preparation for the transfer of full capital authority, the department is working with all 33 communities to undertake a baseline assessment of existing community infrastructure. The intent of the assessment is to tell us where immediate repairs or replacements are required. The results of the baseline assessment will also provide communities with a starting point for developing their own capital investment plans.

Over the next year, the department will consult with communities on a proposed formula funding approach and work with the small communities to develop transition plans so that all communities are positioned to assume new authorities for capital planning and development.

While the department is pleased to be able to provide enhanced funding, we recognize that government resources alone will never be sufficient to address all the infrastructure needs in communities. An exciting development over the past year has been the injection of $37.5 million in gas tax funding over five years beginning in 2005-2006, which will provide additional assistance to community governments. Community governments can use this funding for a variety of environmentally sustainable municipal infrastructure projects. Communities will be able to use this funding for dust control, among other things. Continued funding under the federal Municipal Rural Infrastructure Program has also supported the fast-tracking of infrastructure projects.

Over the past year, many of our achievements have been due to the support of our key partners. The Northwest Territories Association of Communities has provided excellent support during the negotiation of the gas tax

funding agreement and continues to work closely with the department on the implementation of the New Deal.

The local government administrators of the Northwest Territories have provided the expertise of community staff to support the department on several policy initiatives. The newly formed Sport and Recreation Partners Council is already bringing forward exciting ideas for collaboration with government departments. Sport North was fundamental to the success of the inaugural NWT Games over the past year, and the NWT Parks and Recreation Association has shown leadership in bringing together several funding sources to provide communities with access to recreation infrastructure funding. It is the department's intent to continue to work in partnership with these and other stakeholders in order to reach our common goals over the next year.

In closing, the department's draft budget provides additional funding for community governments, provides new resources to encourage healthy living, and responds to the needs of our communities. Thank you, Mr. Chairman. Mahsi.

Thank you, Minister McLeod. I now turn to Madam Groenewegen for the Governance and Economic Development committee's report that has the responsibility for overlooking MACA. Mrs. Groenewegen.

Municipal And Community Affairs

General Comments

Thank you, Mr. Chairman. The committee met with the Minister and his officials on Monday, September 26, 2005, to review the draft business plan of the Department of Municipal and Community Affairs.

Members also received a briefing from the Minister of Finance on January 17, 2006, outlining the changes to the budget of the Department of Municipal and Community Affairs since the committee reviewed the business plan in September.

Committee members made note that the department is proposing to spend $110 million in operations expenses and $31 million on capital projects in fiscal year 2006-2007.

Committee members offer the following comment on issues arising out of the review of the 2006-2007 Draft Main Estimates and budget-planning cycle.

MACA - Land Access And Squatters On Commissioner's Land

Building affordable and adequate housing for their residents is a serious challenge for our communities. The inability to expand our communities is jeopardizing our families and our businesses. For instance, the location of the proposed Kam Lake access road is on disputed land. This is one of the reasons the access road could not be included in the Department of Transportation's Corridors for Canada II proposal to the federal government. The difficulties of obtaining funding for this road may delay construction.

There are several issues complicating land administration. These are: the limited availability of land due to ongoing land claim issues; the lengthy 60-day consultation periods required by interim measures agreements, and finally, small communities simply face too many complicated land administration issues.

People without land tenure are building on Commissioner's land because of the lack of land and affordable housing available to them. With the impact of resource development upon us, the housing situation will become even more dire.

The committee recognizes the efforts of the Department of Municipal and Community Affairs to address the issues of land access and squatters by increasing land administration positions in the regions. We believe, however, that the department could go even further by taking over all land administration related issues for the government.

Recommendation

In order to allow territorial businesses to grow and to give residents access to affordable housing, the Governance and Economic Development committee recommends Municipal and Community Affairs expedite resolution of the access to land issues and also encourage the federal government to fulfill their obligations with regards to land administration in the Northwest Territories.

The Governance and Economic Development committee also recommends that the Department of Municipal and Community Affairs broaden their mandate with regard to land administration and become the department responsible for all GNWT matters pertaining to land administration.

Thank you, Mr. Chairman.

Thank you, Mrs. Groenewegen. I would now like to ask the Minister if he would like to bring in witnesses. Does committee agree?

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

I would now like to ask the Minister, the Honourable Michael McLeod, to please introduce your witnesses. Mr. Minister.

Thank you, Mr. Chairman. I apologize. On my left, I have Ms. Debbie DeLancey, deputy minister of Municipal and Community Affairs; on my right is Ms. Sheila Bassi-Kellett, the assistant deputy minister of Municipal and Community Affairs.

Thank you, Mr. Minister. Welcome to our proceeding this afternoon, ladies. We will now open the floor to general comments on the Department of Municipal and Community Affairs. Mr. Menicoche.

Thank you, Mr. Chairman. With respect to Municipal and Community Affairs, once again, I would like to commend the department for listening to the needs of Nahanni Butte.

---Applause

You made mention in the opening remarks of the gymnasium for Nahanni Butte. I look forward to progressing further with that.

Throughout the year, the inquiries I get within Municipal and Community Affairs would be technical in nature. A lot of the smaller settlements and band governments are getting increasingly frustrated, Mr. Chairman, on their ability to purchase heavy equipment, and the limitations that are placed on the specs that are there and the funding available for it. I just thought I would mention that.

I don't know how MACA can best address this, but in the larger communities the band governments are finding it difficult to address the pipeline development and they see that the responsible agency is...Like Fort Simpson is getting pipeline funding, but the band governments cannot access that same funding. There must be a way in order to massage the money that's available to prepare our communities for the potential impacts of a pipeline. So that's what is happening. It's not only the band, but the Metis governments in the larger communities are having trouble accessing these funds, too. It would go a long way. I don't know how the department would care to administer that.

Just on those two points, if the Minister cares to comment on the structure or the guidelines used for purchasing equipment, Mr. Chairman, as well as the guidelines and structures used to access community pipeline preparedness funding.

Mahsi, Mr. Menicoche. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, right now the specs that are used to set the standards for which the communities can purchase equipment are set by our department and our technical people. The specs are set in relation to what the equipment will be used for. We have a lot of communities that would like to use the equipment for other things and, in a lot of cases, would like to go to a bigger piece of equipment or a piece of equipment with more attachments. That's always caused some concern.

If, in the case of a community where there is a need or desire to go beyond the standards we set, if they are willing to pay for the difference, of course we will accommodate that and we have done that on a number of occasions.

Following the introduction of the New Deal in 2007, the communities will have the ability to set the specs that they desire. We will not be in the picture anymore in terms of setting what they can have and what they can't have. That will be up to them.

In terms of funding for the pipeline preparation, we, as a department, are funding the municipal governments, the governments we do business with, the ones that carry out and deliver our services or the services for the municipalities. The Member is right; we do not provide funding for band councils or the M‚tis councils. We have provided funding to all the municipalities in the North. They have all drawn down the initial base funding, and all of the impacted communities, or at least three-quarters of them have drawn down on the second drawdown for additional dollars. The funding for band councils would have to come from another source. That doesn't come from us. Our requirements are to fund the municipalities that deal with us.

Having said that, we have people in the regions that will be providing advice. They are not restricted to only deal with the municipalities. They can, and have, worked with the band councils and M‚tis councils. We don't anticipate that they will have any new monies into the communities. So this is what our funding restrictions are. That is what they are going to.

Mahsi, Minister. Mr. Menicoche.

Thank you, Mr. Chair. I would like to thank the Minister for that response. Just getting back to the type and availability of quick mentor infrastructure for communities. What are the guidelines based on? Is it per capita, accessibility, or remoteness, or non-remoteness? Just specifically, how is that guideline laid out, Mr. Chair?

Mahsi, Mr. Menicoche. Mr. Minister.

Mr. Chair, as I stated earlier, the guidelines are set through the requirements of the community. In the case of a loader or grader, it is evaluated as to what this piece of equipment is going to be doing. Is it snow removal? Is it gravel hauling? That is something that we take into consideration. There are standards and criteria developed for the size of the community, the population and what the equipment is going to be used for. A lot of communities, as I have stated, want to do more with some of this equipment. There is a desire to have sometimes bigger equipment with more attachments, but our evaluation is based on what it is actually needed to be used for.

Mahsi, Mr. Minister. Mr. Menicoche.

Okay. I know that, in your guidelines, you try to apply them equally to all the communities, but I think some of the feedback I have been getting is that it is quite often that the people, as they travel around, they will see a different side of the equipment in another community and say why didn't they get that? So it just comes up to the question. Is it being equally applied to all communities?

Just recently, I toured one of my smaller communities. They are saying that it appears, when it comes to infrastructure or equipment, our community gets left out or we get a smaller piece of equipment. It seems that they are not applying the guidelines equitably and fairly. I was just wondering if there is a way to ensure the communities, by the department, that programs and guidelines are being applied equitably to all the communities, just so that they see that one community is not being taken care of above another community, especially the remote ones. They tend to feel that, Mr. Chair. Just with respect to that, as an example, perhaps the Minister can explain how a capital need is addressed in a community from the ground up, just the various stages from identifying need up until it makes the capital plan -- cradle to grave -- and then what they do with the equipment once it is no good to the community.

Mahsi, Mr. Menicoche. Mr. Minister.

Thank you, Mr. Chair. Mr. Chair, I want to, first of all, assure the Member that our standards are consistent across the board. There are, of course, some communities that are of equal size and have a larger piece of equipment or a more costly piece of equipment, but that would have resulted as maybe -- we are talking hypothetical here -- being a lot of communities have invested their own resources or dollars into some of this equipment and resulted in having a larger piece of equipment, or equipment with a capacity to do more things.

The capital planning process starts, first of all, with the community identifying a need. Either it will be something that is required in the community, or it will be something that needs to be replaced, or something that is coming to the end of its lifecycle. That will be brought forward to our regional staff. Our regional staff compiles it, does an evaluation on it also, and then brings it to the attention of the headquarters staff and we put it on our needs assessment based on where we think it would be required in the community, or depending on the urgency of it. That would go through a process where it would also be filtered down to a five-year capital plan. The capital plan is approved on an annual basis in this House for the year that we are going to be expending the money in.

Mahsi, Mr. Minister. Mr. Menicoche.

Thank you, Mr. Chair. I have no further questions on this particular topic right now. Thanks.

Thank you, Mr. Menicoche. General comments, I have Ms. Lee on the list next. Ms. Lee.

Thank you, Mr. Chair. Mr. Chair, I, too, would like to begin by congratulating the Minister for having women deputy minister and assistant deputy minister on his side. Now I know why he is doing such a great job, Mr. Chair, not only because he is getting good advice from the women, but also because he is wise enough to know to take those.

Mr. Chair, let me just make some comments on two things. One is the land issue around the city of Yellowknife, and the second thing I want to address a little bit is about the department's plan on land administration issue. I would like to just, first of all, comment that I think that all observers on that issue on Yellowknife land selection and what the city has been requesting, as well as the requirements and demands by Akaitcho, has not been an easy issue. I do appreciate that the announcement that the Minister has made might not be one that is satisfying to everybody, but it does meet the requirements of...It goes in some lengths to address this issue for the time being. I do want to congratulate the Minister for really concentrating on the issue. I know that he has really been working to see what is the best way that he could handle this, and the government could handle this, at this time. I do believe that this is the project in progress. We are making a baby step progress. I think that everyone recognizes a need for more land for the city to grow into. It is a very economically vibrant community. There is no question that we need to be able to find more land in order to meet the growth and housing needs. One of the biggest cost drivers for the city right now are the housing prices that are mostly driven because of lack of land and the high cost of land that follows from it.

I also do understand and I think a lot of us in this House have had meetings with Akaitcho leaders and the elders. I can appreciate how this might look like sitting in Ndilo and Detah and many of the elders watch the city grow for 50 or 60 years where there were traditional homelands and doing their traditional things, and then all of a sudden these gold prospectors fly in and start a gold mine. Next thing they know, the city becomes a capital. Now it has grown into a 20,000 people metropolitan with Tim Horton's and McDonald's. We have laws in Canada and policies that compensate and address those. I think that all of the parties involved understand that the original inhabitants of this land have to be compensated, and we do that by way of going through land claims negotiations and sometimes combined with self-government agreements and such. I think the interest and the impetus right now is to get the process moving and to make sure that the city does have room to grow in the interim. I think, if anything, this is a way to get the process focussed and moving along. I want to tell the Minister that I do appreciate his effort thus far. I do know that we collectively all have a lot more room to go.

On that issue, where does the Minister see this issue going? He has given some parts of land to the city, but differently. It is only a part of what the city needs not only in the long term, but in the short and medium term, as well; probably for a medium term. The land freeze for two years will expire in two years from now when we will have a different Minister. I don't know if we are going to have the same Minister. This is a new process that the Minister...I give credit to the Minister and this government for really focussing on it. Obviously, it is part of his plan. The good plan should be such that, as a player leaves, the plan still survives. If he could just add more to where does he see this going and what is the outcome he is looking at. Thank you.