Thank you. At this time, I would like to thank the Minister and also his witnesses today. Thank you. I would like to ask the Sergeant-at-Arms to escort the witnesses out, please. Thank you.

Thank you, committee. Next on the agenda we have MACA. What is the wish of the committee? Mr. Lafferty.

Mahsi, Mr. Chair. Mr. Chair, the committee wishes to consider Municipal and Community Affairs. Mahsi.

Does committee agree?

We will reconvene after a short break. Be back at 4:30.

---SHORT RECESS

Good afternoon, committee. We'll reconvene the Department of Municipal and Community Affairs. I'd like to ask the Minister of MACA if he would like to make opening comments.

Yes, thank you, Mr. Chair. I'd like to do the opening comments. Mr. Chairman, I am pleased to present the Department of Municipal and Community Affairs' main estimates for the fiscal year 2007-2008.

The department is requesting $114.6 million in operating expenses for the 2007-2008 fiscal year. This represents an increase of 8.7 percent from the department's 2006-2007 operating expenses budget. In 2007-2008, funding of $92.1 million, or 82 percent of the proposed operating budget, is in the form of grants and contributions, the bulk of which flows directly to our key stakeholders: community governments. This is an increase of $8.7 million, or 110 percent, from the 2006-2007 grants and contributions funding level. The department's grants and contributions include formula funding for community government operations, water and sewer services and capital, sport and recreation programs, municipal insurance, grants-in-lieu of property taxes, and community development.

The 2007-2008 budget reflects a stable ongoing funding commitment for community public infrastructure as part of the New Deal for NWT community governments, a key strategic priority of the Government of the Northwest Territories.

The proposed budget includes $32.1 million in capital funding, of which $22.6 million will be provided to community governments via a capital funding formula for communities to use to set their own infrastructure priorities. In addition, the budget includes an increase of $4 million for community government operations and an increase of $2.6 million for water and sewer services funding.

Although April 1, 2007, marks the date for the formal implementation of the New Deal, MACA and community governments have been working in partnership over the last two years on the development of the initiative. We have recently finalized changes to the New Deal policy framework that serves as the basis for allocating formula funding to communities for water and sewer, operations, and capital. The policy framework reflects the autonomy and authority of community governments and is consistent with recent legislative changes that put in place broad accountability and reporting requirements for community governments.

The 2006-2007 fiscal year is the last year that MACA will play a lead role in capital planning and development for most non-tax-based communities. The changed approach will provide communities with the authority to make decisions about community infrastructure, and the flexibility to lever funding from other sources, enter into partnerships and get more value for money.

To assist communities with the transition, the department has entered into agreements with five community governments to pilot the New Deal approach.

Under the pilots, communities have received funding from MACA to proceed with specific capital projects identified by their residents as a priority.

The purpose of these pilot projects is to identify best practices, gain insights into community project management needs, and determine areas where all community governments can benefit from additional support or resources during the implementation. In addition, the information gained from the pilot projects is helping MACA identify training needs and staff requirements to assist all communities in capital project implementation.

MACA has also put in place new training modules for community government staff through the School of Community Government, and is providing communities with access to resources, planning tools and other supports. The department recognizes that the implementation of the New Deal is a process that will evolve over time, and that communities require ongoing advice, support and assistance. To assist in this process, the department is working on individualized transition plans for all community governments that are taking on new authorities.

In addition to the New Deal, MACA has several other important initiatives that it will continue to advance over the 2007-2008 fiscal year.

In 2006-2007, a multi-departmental drinking water quality framework was put in place to ensure all communities are provided with drinking water that meets federal guidelines. The department's 2007-2008 budget includes resources to continue departmental work on this initiative, including assisting communities with water licence applications, and with training and certification of water treatment plant operators.

The proposed 2007-2008 budget also reflects the transfer of two positions from the water and sanitation unit of the Department of Public Works and Services. The transfer of this function to MACA will complement and strengthen the initiatives undertaken to date as part of the drinking water quality framework. The transfer will also assist in addressing the ongoing need to provide coordinated water and sanitation expertise to communities as they assume new responsibilities under the New Deal. It is critical that MACA work closely with communities to provide the necessary technical expertise that will ensure the integrity of community water and sewage treatment systems.

The department will continue to assist communities to implement the requirements of the Gas Tax Agreement. This agreement, signed in November 2005, results in $37.5 million in funding flowing to all communities in the Northwest Territories over a five-year period. As per the terms of the existing agreements, community governments will receive $6 million in funding in 2007-2008, an increase of $1.5 million from the funding provided in the current fiscal year.

The funding will be used by communities to address their infrastructure priorities related to water and wastewater treatment and distribution systems, active transportation infrastructure such as trails and sidewalks, and dust control. MACA is working with communities to determine how the gas tax funding can be combined with GNWT capital formula funding to provide for community public infrastructure. MACA also continues to work with other provinces and territories to encourage the federal government to make the gas tax funding a permanent program.

Communities continue to need assistance to address rising energy costs. The department is working with the Arctic Energy Alliance on its Community Energy Planning Program in the current fiscal year. The 2007-2008 budget includes funding for the department to continue this partnership, and to help communities develop integrated community sustainability plans, which include community energy plans. A planning conference to assist in this process was held in November 2006 and included representatives from 27 community governments.

Building on the momentum of the November conference, a second conference scheduled for April will provide a venue for the final discussion and approval of the NWT integrated community sustainability plan template. It will also assist communities to prepare for formal implementation of the New Deal through sessions on capital planning and project management, investment plans, land administration and capacity building.

The current fiscal year has seen the initiation and completion of several successful youth events, provided for on a one-time basis through funding made available under the Northern Strategy. This funding provided youth with the opportunity to participate in the Youth Trapper Training Program, the NWT Youth Leadership Program, a Youth Leaders Forum, and the National Aboriginal Achievement Awards. Funding was also used to establish a youth website to serve as a single window access point for youth on issues that may be of concern to them and to link all existing departmental youth related programs in one location. Since this funding was available in 2006-2007 only, it does not appear in the 2007-2008 budget. MACA will build on the success of these one-time initiatives and will continue to explore the potential for increased investment in youth programs through partnerships.

In the upcoming fiscal year, MACA will continue to advance GNWT priorities related to healthy living. The operational budget includes funding to continue the highly successful Get Active NWT initiative as well as funding to provide for continuation of a bilateral agreement with the federal government to support programming such as multi-sport youth camps and the NWT Games. These projects have been particularly effective in the more remote, primarily aboriginal communities, where the health and self-esteem benefits of sport are particularly critical.

Many of the initiatives we have implemented over the past year have been successful due to the support of our key partners.

The Northwest Territories Association of Communities and the Local Government Administrators of the Northwest Territories have provided invaluable insight and advice to the department throughout the New Deal initiative, and their recommendations were critical as we worked on developing options to flow capital formula funding to all communities. We look forward to their ongoing involvement as we begin the formal rollout of the New Deal in 2007-2008. The Sport and Recreation Partners Council has emerged as a significant source of input and advice as we continue our work on promoting the importance of active living, and Sport North was fundamental to the success of the NWT Games events over the past year.

It is the department's intent to continue to work in partnership with these and other stakeholders to reach our common goals over the next year. Thank you.

Thank you, Mr. McLeod. At this time, I'd like to recognize Mr. Bobby Villeneuve, chairperson of MACA.

Municipal And Community Affairs

General Comments

Mahsi, Mr. Chair. The committee met with the Minister and his officials on September 26, 2006, to review the draft business plan of the Department of Municipal and Community Affairs.

The committee considered the department's draft main estimates on January 16 and 17, 2007.

Committee members made note that the department is proposing to spend $114.7 million in operations expenses and $32.1 million on capital projects in fiscal year 2007-2008.

Committee members offer the following comments on issues arising out of the review of the 2007-2008 Draft Main Estimates and budget-planning cycle.

New Deal For Community Governments

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

The Governance and Economic Development committee has been cautiously supportive of this initiative. For example, we know that capital projects can run into difficulty and unexpectedly require expensive advice in the form of legal, engineering and contracts expertise which communities will need the capacity to manage. The committee is pleased that MACA committed to working with the NWT Association of Communities to make the New Deal a graduated process for communities. The committee is also pleased communities will receive increased funding to help them budget for long-term capital projects.

The committee appreciates MACA has several reports it uses to review the financial status of community governments. However, since we will no longer be reviewing the communities' capital appropriations, Members of the Legislative Assembly will need to have a level of comfort that public funds are being spent responsibly and the New Deal is providing communities with sufficient expertise and adequate funding for control over their infrastructure. For instance, Members are aware there are already problems arising with the revised water and sewer allocations. We have also been unable to review the baseline assessment study because it has been delayed. The baseline assessment study will look at every piece of community public infrastructure, including environmental liabilities, in every community, to evaluate the state it is in before MACA transfers those assets. These are the early days of the project and there is still outstanding information.

The committee is requesting ongoing and precise reporting on the progress and outcomes of the New Deal.

Recommendation

The Standing Committee on Governance and Economic Development recommends the Department of Municipal and Community Affairs keep the committee updated with details of capital spending, including a performance and evaluation mechanism to assure the Legislative Assembly that the New Deal is really working and improving community access to infrastructure.

Community Energy Planner

Municipal and Community Affairs is funding the Arctic Energy Alliance for one community energy planner position to support and assist communities in developing and implementing individual community energy plans. Through its obligations under the Canada-NWT Gas Tax Agreement, MACA has an interest in ensuring that there is technical support to communities to develop these plans.

The committee looks forward to reviewing the community energy plans. If well executed, they should be able to address the significant energy consumption and cost of living issues facing the communities.

These plans should become living documents with appropriate funding attached so they can be implemented and do not sit gathering dust on government shelves.

Recommendation

The Standing Committee on Governance and Economic Development recommends that community energy plans be included in the government's Energy Strategy and receive adequate funding for implementation.

That concludes the Governance and Economic Development committee's comments, Mr. Chair. Mahsi.

Thank you, Mr. Villeneuve. At this time, I'd like to ask the Minister if he'd like to bring in witnesses.

Yes, I would, Mr. Chairman.

Does the committee agree?

Thank you. I'll ask the Sergeant-at-Arms to bring in the witnesses. Thank you.

Thank you. Mr. Minister, at this time, I'd like to ask you to introduce your witnesses, please.

Thank you, Mr. Chairman. Mr. Chairman, with me I have Debbie DeLancey, the deputy minister for MACA, and also Laura Gareau. She's the director of corporate affairs with MACA.

Thank you. General comments on the department. Mr. Ramsay

Thank you, Mr. Chairman. I'd like to thank the Minister for his opening comments and welcome him and his staff to our proceedings this afternoon. I want to first start off by saying I really have been encouraged with what I've seen come out of MACA. I think the department in general is very responsive to community needs and does a good job at what it's there to do.

I do, however, have some concerns obviously on how the money is being spent and whether or not we have enough in terms of backup on the back end of it to ensure that the money that does flow through to communities does, in fact, get spent in an accountable fashion in the areas where it's supposed to be spent. I think it's important; these are public dollars. I've mentioned this in the past: not all communities are created equally, some need more help than others. It's important if we are looking at formulas that supply a base to all communities and then a percentage after that, obviously all communities are going to get money and some have a better capacity at the community level to ensure that projects are carried out and done accordingly, and others maybe not so much. So I wanted to mention that for the record.

The other thing I wanted to mention, too, and it isn't to pit the smaller communities against the larger communities, but when you look at funding and if you look at the gas tax, MRIF, and now this capital money, the base has been steadily increasing. It went from 1 percent to 1.5 percent and now it's at 2 percent. What that does, Mr. Chairman, is obviously it impacts the larger communities and takes away from dollars that are flowing through to the larger communities. Oftentimes, Mr. Chairman, the larger communities do have certainly the wherewithal to need the money, to use the money effectively and carry out the work. Not to say the smaller communities don't, but they might need some more help especially in the technical side of things. So I wanted to just mention that and I think that's one of the areas that has been a concern of mine.

But other than that, like I said, I think the ministry and the Minister and the deputy are doing an admirable job in looking after the interests of communities. I think we have come a long way even in the three and a half years I've been here, and I look forward to even more in the future. Mahsi.

Thank you, Mr. Ramsay. General comments. Mr. Lafferty.

Mahsi, Mr. Chair. (English not provided)

Mr. Chairman, as I indicated in my opening remarks in my language, I highlighted the capital funding. The capital funding formula that has been outlined by the Minister is a new initiative. We're setting their own infrastructure priorities. We talk about the New Deal that's coming on stream. It's great news for the communities of the Northwest Territories. I must say it is welcoming in my region as well. I think this has been a long time coming. My leadership certainly supports this initiative. We're putting the power back into the community. The communities will be making their own decisions, whether it be artificial ice, as I indicated just the other day. Those initiatives can be put aside and start planning on that. That's why I would just like to highlight this important initiative that's in front of us.

Also, Mr. Chairman, there's also new training modules that have been initiated by School of Community Government. School of Community Government has been training community administrators in the communities for some time now. Just within the last couple of weeks there was a joint force with the U of A

partnership, which is a big step. They're leaving a legacy behind where...This will be an accreditation program; it will be recognized throughout the North and throughout Canada. The certification program, whether it be a diploma or leading to a degree, that's what I'd to see as an individual Member sitting here. I think that's the goal of the U of A. The U of A is going to expand North here, which is great to see.

With this new initiative, the New Deal, there's also individualized translation plans for all community governments taking on these new authorities. You know, we're not just walking away from it. We are supporting the communities as well as the government, which is great to see that, as well. It's sort of like an aftercare program.

I would just like to highlight also another training initiative that's been highlighted in 2007-08 budget, on the training and certification of water treatment plant operators. You know, we living in small communities, we have people coming out at times as plant operators but slowly we're training our own people. At the same time, this also highlights that we need to have qualified personnel in the community. That's a liability issue on MACA, on government as a whole. I like seeing this report in there. This is a step in the right direction, as well, having qualified personnel within the system.

Mr. Chairman, I just wanted to highlight those two, three key areas because they caught my eye but there will certainly be more discussion to take place with the New Deal. At this point I would just like to leave it at that and I can have questions at a later point. Mahsi.

Thank you, Mr. Lafferty. General comments. Mr. Yakeleya.

Thank you, Mr. Chairman. Mr. Chairman, I want to make a few opening comments before we get into the detail of MACA's budget. I want to say that I like what the Minister has presented to us in terms of the deal, the New Deal, for the communities. In the small communities, the decisions and the authority will now be given to the local elected representatives of the community. Sometimes deal or no deal, just like that TV show.

---Laughter

The Minister has worked towards this. I'm not too sure how it's going to roll out in the future, but it seems like it's going to be a good thing for our people. We have to wait and see.

Some of the things I'm somewhat cautious about are some the infrastructure that's going to be left in our communities. My colleague alluded to that in his report on the baseline infrastructure study on what type of environmental liabilities that would be handed over to the communities. Later on it may be costing them more than it is and it may be using a lot of the money to fix up some of the infrastructure. I want to hear how that's going to be resolved or how it's going to be looked at and if the communities are prepared for it. If they're not, then we should have some alternate plans to look at situations like that.

Case in point, Mr. Chairman, the treatment facility plant in Tulita. The filters there are very expensive; the filters are ordered out of the United States. You have to change those filters every so often according to compliance and regulations. Because of the fast moving water of the mighty Great Bear River, the filters get clogged up right away. I'm not too sure if we have enough money. I think the Ministers and deputy ministers are aware of this issue that our hamlets or small communities may not have enough money or a huge portion of these funds may go just to ensure that we have clean water throughout the year. That's what I'm cautious about, that these types of situations are being looked at and considered when we take over these facilities. It's no fault of anyone, it's just the way things are rolling out in today's society.

Mr. Chairman, those are some of the things I want to be cautious of giving the green light to the Minister and say you've done a good job, a pat on the back, if there are still some things that need to be considered. You have to have the Minister continue to work hard for our people here so we don't...

Mr. Chairman, the other one I wanted to ask about is about the water quality. I think it's somewhere in the opening comments about the water framework. It's the drinking water quality framework. I know the elders in Good Hope have said this to me and I've talked to the Minister already about what they call dead water. There's dead water in our communities. They have the water, like in a glass, Mr. Chairman, and the water just sits in here without being moved around and it gets pumped out into the communities and it's dead. They call it dead water. They want to look at some issues there. I'm not too sure if that's part of the New Deal, that they take responsibility for this situation or it's being looked at. I want to ensure that we not only train our workers to be up to par with the compliance and regulations and test the water, but how do we get our water and how do we keep it healthy? That is number one. You can have the best water system but where you get the water, the water is alive, it keeps moving, otherwise we're just creating positions and jobs to take care of that water that's sort of like in a cup here. You've got water delivery, you've got water testing, and all this type of units that fit into the quality of our water that we deliver in our community.

Mr. Chairman, the elders talk about dead water, the water is not alive. You add chemicals to it, you add different type of chemicals and we drink a lot of chlorine with those chemicals. It kills the, in one sense, it kills the spirit of that water. I think that's what they mean by dead water. I wanted to bring that to the Minister, that it's still an issue in our region. He may know more than me in terms of how it's being resolved or being done; done in terms of how it's being discussed and taken care of.

The last thing I want to point out to the Minister is that in his opening statement I want to give him 110 percent on this one here, the youth trapping program that's in our communities and our region, that our way of life in this program is so dearly needed with our youth. I support him in terms of promoting it, encouraging it, and have the youth know that this type of life is why we're still, as community members, we're still sitting here.

This type of youth trapping program has a lot of lessons in there. I hope these lessons from the youth trapping program somehow could be used in our modern day education curriculum. For trapping you have to be smart. You have to be a smart person to trap. You have to be healthy. You have to be aware. You have to know how to count. You have to know a lot of things to be a trapper.

These youth, they'd love that. You have to be on the land there. I hope this youth trapping program somehow makes it into our, God willing, makes it into our curriculum somehow because it's a good program. That's how we support our people. It's about climate, land, environment. It's about reading a lot that you can't understand in the bush. We should really support that in terms of encouraging our children, both girls and boys, the importance of trapping and the way of life that is going to be here for us for a long, long time. After the oil and gas has been extracted from our land and the mining companies that have done the digging that they've done and taken out the resources, trapping is always going to be here. Hunting is going to be here. Fishing is going to be here. It's a very important program. We need good water. We need good air and a good environment to trap and live on the land. They know this. I think this program should be right up there with some of the core curriculum we have in our schools. I don't know if that's possible or just my wish right now.

Colville Lake is a fine example of all other small communities up in...(inaudible)...Paulatuk, Wekweeti, and other communities around the lake here. They know the importance of trapping. I think that's a good program. I support the Minister on that initiative. I don't think there's enough money in that program right now. We don't have the power to increase the budget, but that's just my comments to the Minister. That's all I wanted to say. I would like to get on with the business and get down to the detail here. Thank you.

Thank you, Mr. Yakeleya. Next, Mrs. Groenewegen.

Thank you, Mr. Chairman. I don't want to rain on the Minister's parade here today and all these accolades and well-wishing MLAs, Seriously, I do think that MACA, I have to chime in here, I do think that MACA is doing a great job. We work closely with them through our Governance and Economic Development committee. However, I have an unhappy community right now over the New Deal. I think the Minister is aware of that. I think there are some other communities as well that probably will have something to say about this over the next while. I guess it's just not enough to say, well, we're getting more money under the New Deal, so is everybody else. We think that it's not fair to expect the consumers of trucked water and services to pick up the difference. The ability to generate revenue through charging the customer is not a very palatable solution in Hay River. I think that the decision to cut the $200,000 out of that particular allocation under the formula happened too quickly. It's a lot of money and it's very difficult for a municipality to recover from that kind of an adjustment and come up with a plan to address that.

Most municipalities -- and I will speak about a tax-based municipality because that's what I represent -- most municipalities are struggling with aging infrastructure. A lot of communities in Canada are of an age where they have probably got some pretty major capital projects to undertake with regard to infrastructure, whether it's municipal buildings or piped water and sewer services, sidewalks, roads. A lot of communities are struggling with human resource issues, getting qualified staff operating it. It's a very competitive environment out there right now in terms of the labour market and communities are having to increase their compensation packages they're willing to offer to attract people to work for their communities, to get qualified people. There is a lot of pressure on communities right now. I think that to have a reduction of $200,000 in a certain category just overnight, no phase-in, no lead up to it, where there could have been some kind of a plan put in place to address it, I think it was just too harsh.

I know the Minister is already well aware of how Hay River feels about that, but I did want to speak to it under general comments. Of course, I had written questions in the House today and I'll continue to have more oral questions about that, but I would respectfully and earnestly urge the department to consider if there is anything that they could do to mitigate the impact of that particular reduction. The idea of community autonomy and the flexibility to move money around is, I suppose, one way of responding to it, but the formula was developed in such a way that, I think, the money was allocated under the various activities, or the various programs, I should say, were put there for a reason and that's because there is money needed in those areas as well. It would be very welcome news for us if there was anything that could be done to mitigate that. With that, Mr. Chairman, I'll just leave my general comments there. Thank you.

Thank you, Ms. Groenewegen. General comments. Ms. Lee.