Thank you, Mr. Chairman. Mr. Chairman, the committee met with the Minister and his officials on September 26, 2006, to review the draft business plan of the Department of Industry, Tourism and Investment.
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 $38.9 million in operations expense and $1.8 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:
Tourism
The committee commends the Department of Industry, Tourism and Investment for their work on the Tourism 2010 Plan. The committee further commends them for acknowledging tourism requires a greater investment from this government. The 2010 plan endeavours to increase investment in tourism from $104 million to $140 million by the year 2010.
This goal is very admirable but it does not go far enough when compared to the millions of dollars the government has invested in resource development.
For example, including last year's increase of $400,000, $2.7 million is available for tourism marketing. By comparison, the Yukon spends upwards of $7 million, and Las Vegas alone spends $150 million. The Canadian Tourism Commission only spends $100 million for all of Canada. A recent article in the Globe and Mail stated that more people visit Banff in a summer week than visit all three territories in a year.
Further, there is only $300,000 budgeted for tourism infrastructure. With fierce competition for infrastructure dollars, this number is unlikely to change any time soon. There has also been insufficient funding for transportation projects, such as chipsealing the highway to Fort Smith and the extension of the runway at the Yellowknife Airport, which are also keys to tourism growth.
The tourism industry is under duress. Aurora Tourism is struggling because of increased competition from Alaska and the Yukon, and limits on non-residential hunting of caribou will have a detrimental effect on outfitters. The tourism industry as a whole is affected by the new requirement for American tourists to have passports, the federal government's cancellation of the GST rebate, increasing insurance premiums and labour shortages.
Since the beginning of this Assembly, the Governance and Economic Development committee has been a strong advocate for a diversified and sustainable economy. The committee supports hunting and trapping not only because they are hallmarks of aboriginal culture, but also because they are activities that identify this territory as unique and distinct from other places. Renewable resources such as agriculture and commercial fishing can take place outside the larger centres in the Territories and, therefore, contribute to smaller local economies. Tourism is also a key element in a diversified economy that supports local economies and can be environmentally friendly.
Product Development
During their pre-budget consultations, the committee heard from members of the public who suggested the GNWT should provide more resources for product and infrastructure development and marketing. The Minister of ITI has echoed these sentiments.
The committee discussed the possibility of creating an interpretive bison centre with the Minister. This project would not only be a great tourist attraction, but also a practical solution to some of the issues on a problematic section of Highway No. 3. For instance, the highway between Fort Providence and Yellowknife has some long stretches without any services.
The Standing Committee on Governance and Economic Development would like to thank the Department of Industry, Tourism and Investment for their commitment to performing a feasibility study on this project.
Socio-Economic Agreements
The committee was concerned about the lack of support for northern businesses. For instance, over $240 million leaves this territory annually with migrant workers who live in the South and work in the North. The NWT loses revenue in real estate, in municipal and territorial taxes, in goods and services and transfer payments. This hurts northern residents and businesses.
The committee met with the representatives of BHP Billiton, Diavik Diamond Mines and De Beers to discuss these concerns and was impressed by the lengths to which these companies go to meet the requirements of their socio-economic agreements and to attract workers to the Northwest Territories to work and to raise their families. The mines say they are working very hard to meet the targets of their socio-economic agreements because of growing competition for the limited NWT labour force.
Components of their northern hire policies include retention bonuses, priority training opportunities with northern preferences, scholarship programs and housing assistance for senior employees.
The mines also say they offer assistance to aboriginal suppliers to attain joint venture partnerships and break down large contracts in order to allow smaller northern businesses to compete. They even encourage suppliers to move to the North.
The socio-economic agreements are required of the mines by the GNWT. They stipulate conditions such as targets for training, employment and business opportunities.
That concludes the committee's overview of the Department of ITI. Thank you, Mr. Chairman.