Thank you, Mr. Speaker. Mr. Speaker, I seek unanimous consent to deal with the motion I gave notice of earlier today. Thank you, Mr. Speaker.

The Member is seeking unanimous consent to deal with the motion she gave notice of earlier today. Are there any nays? There are no nays. You may proceed with your motion, Ms. Lee.

Thank you, Mr. Speaker.

WHEREAS the Standing Committee on Accountability and Oversight presented its Report on the Review of the Report of the Auditor General on the Workers' Compensation Board of the Northwest Territories and Nunavut on October 26, 2006;

AND WHEREAS the committee recommended that a comprehensive response to its report be provided within 120 days;

AND WHEREAS the Minister responsible for the Workers' Compensation Board has tabled the comprehensive response;

AND WHEREAS a public discussion on the response would provide important context for Members, stakeholders and the public prior to the consideration of proposed amendments to workers' compensation legislation;

NOW THEREFORE I MOVE, seconded by the honourable Member for Sahtu, that Tabled Document 104-15(5), Workers' Compensation Board Comprehensive Response to Committee Report 5-15(5), be moved into Committee of the Whole for discussion.

Thank you, Ms. Lee. The motion is on the floor. The motion is in order. All those in favour? All those opposed? The motion is carried.

---Carried

Motion 104-15(5) will be moved into Committee of the Whole.

---Applause

Motions. The honourable Member for Sahtu, Mr. Yakeleya.

Thank you, Mr. Speaker. Mr. Speaker, I seek unanimous consent to deal with the motion I gave notice of earlier today. Thank you, Mr. Speaker.

Thank you, Mr. Yakeleya. The Member is seeking unanimous consent to deal with the motion he gave notice of earlier today. Are there any nays? There are no nays. You may proceed with your motion, Mr. Yakeleya.

Thank you, Mr. Speaker.

I MOVE, seconded by the honourable Member for Frame Lake, that the Speaker be authorized to set such sitting days and hours as the Speaker, after consultation, deems fit to assist with the business before the House.

I would like to call Committee of the Whole to order and ask the committee, what is the wish of the committee? Mr. Lafferty.

Mahsi, Madam Chair. The wish of the committee is to review Bill 21, Appropriation Act, 2007-2008, dealing specifically with Industry, Tourism and Investment and the Justice department. Mahsi.

Thank you, Mr. Lafferty. Is committee agreed?

Okay, we will do that after a break.

---SHORT RECESS

Good afternoon. I'll call Committee of the Whole back to order. We are dealing with ITI this afternoon. I'd like to ask the Minister if he has any opening comments.

I do. Thank you, Mr. Chairman. Mr. Chairman, I am pleased to present the Department of Industry, Tourism and Investment proposed main estimates for the fiscal year 2007-2008.

The main estimates propose total operational expenses of approximately $39 million for the coming fiscal year; and overall net increase of less than $2 million, approximately 2.5 percent over last year's budget.

Economic Climate

To set the context for our deliberations today, let me first provide you with an overview of our economic climate.

As Members are aware, the rate of economic development in the Northwest Territories has outpaced the rest of Canada for a number of years. Overall employment and income have grown substantially since 1999 thanks largely to our territory's non-renewable resource sector.

However, in 2005 we experienced a slowdown in this growth, measured in GDP, resulting almost entirely from declining diamond sales totals. This slowdown was not unexpected and will likely reverse again with the commencement of production at De Beers' Snap Lake project this fall. While economic growth has been slowing, overall investment has remained at record levels. Investment has been increasing significantly over the past five years, and for 2006 is expected to exceed $1.7 billion.

Retail sales in the NWT are linked to population and incomes. Since creation of the NWT in 1999, retail sales have been increasing by over $250,000 per month, despite relatively slow population growth. In 2005, annual sales approximated $280 million.

Wholesale trade, with annual sales of $208 million, is an important part of the NWT economy.

With significant new mining investment, both retail and wholesale sales are expected to increase over 2007-08.

Department's Mandate

Since its creation two years ago, the mandate of the Department of Industry, Tourism and Investment has been to promote economic self-sufficiency: to create a prosperous, diverse and sustainable economy for the benefit of all NWT residents.

The NWT is a huge area where resources, potential and opportunities vary significantly between regions and communities. To realize our full potential, and to ensure equitable opportunities and benefits for all NWT residents, ITI's work is wide-ranging across many different sectors and all regions.

The department took steps this year to more closely define its role with the NWT's vibrant and wide-ranging economic environment, and to balance its work for energy, mines and petroleum resources with development of the traditional economy. At the same time, we have promoted increases in trade and services through socio-economic agreements and the department's support programs for businesses.

ITI is committed to building a diversified, sustainable economy in the Northwest Territories, beginning at the community level. Our regional delivery model reflects our objective to ensure support and assistance is available in every community in the Northwest Territories.

We are working with our many partners to improve the overall effectiveness of our plans and services: providing greater support to small businesses, traditional economies and industry; developing an energy mandate; and continuing our priority on tourism and resource development.

Staff are working in each region to strengthen relations and expand communication with communities, businesses, partner organizations and all regional stakeholders.

Regular community visits, together with enhanced communication initiatives, will ensure clients have access to reliable information, assistance and planning advice.

Key Initiatives

I would like to comment briefly on some key areas of investment that demonstrate our continued commitment to best serve the Northwest Territories on target, on time, and on budget, meeting our primary challenge: to foster a prosperous and diversified economy for the Northwest Territories.

There is no question that our economy is currently driven by the non-renewable resource sector. Over 80 percent of all NWT exports are dependent upon diamond production. Most mineral investment, and the vast bulk of mineral sales, is directly related to diamond mine production, although exploration efforts continue to find and develop other minerals. The remaining 20 percent of our exports is largely made up of oil and gas produced in Norman Wells and in Fort Liard.

We recognize the risks of being dependent to this degree on a single resource. Diversifying our economy is key to avoiding the boom/bust cycles associated with non-renewable resource development.

As I have stated on many occasions, tourism represents an opportunity to expand our economic base.

With the introduction of Tourism 2010 last year, we, as a government, made an unprecedented commitment to the development of tourism in the Northwest Territories; one designed to drive economic diversity and the development of viable and sustainable small business ventures in almost every NWT community.

To date, our $1 million investment in this strategy has leveraged an additional $1.2 million for this sector, increasing opportunities for tourism training and supporting new opportunities for tourism infrastructure and product development.

Our tourism industry is facing some challenges which will require our continued attention. We are working with the sport hunting industry in light of proposed changes to harvesting quotas. As well, we are looking at how we can maintain our important aurora viewing and sports fishing visitations in the face of aggressive competition.

We are renewing our ongoing commitment to the tourism sector and will continue to encourage the expansion and development of this important contributor to the NWT economy.

Traditional Economies

The significant expansion of tourism also offers a ready market for the production of arts and fine crafts that will generate some income opportunities particularly suited for smaller communities where other employment options are limited.

In the coming weeks, we will be introducing a new arts branding logo in support of the NWT's vibrant arts sector. This brand will be a key element in a national and international marketing campaign targeted to increasing global recognition and promoting NWT artists and their products.

We continue to support the NWT's traditional way of life. For participants in this sector, the traditional economy provides a secure, stable source of food, fuel, shelter and clothing, and also helps to reduce the economic gap between large and small communities in our territory.

As part of this budget, additional funds will be provided to the Community Harvesters Assistance Program and to expand the Genuine Mackenzie Valley Fur Price Program.

Mackenzie Gas Project

We continue to support the development of a sustainable oil and gas sector in the NWT, specifically through the proposed Mackenzie gas project. Beyond any other benefits that a pipeline project will bring to our territory, the certainty of its eventual construction will facilitate the discovery and the opening of new natural gas basins in the Canadian North.

The proposed natural gas pipeline associated with this project will open the Mackenzie Delta and valley to exploration and development of the NWT's natural gas resources. It is the next stage in the development of the NWT's economy and will open the door to a new era for our northern economy.

The advancement of this project will significantly benefit the Beaufort-Delta, Sahtu and Deh Cho regions and expand our mineral sector.

ITI will continue to deliver focused government-wide coordination, planning and strategy formulation to maximize the benefits, and to address the many challenges resulting from the Mackenzie gas project.

We will spend an estimated $1.7 million this year to support this planning and to ensure that our communities and businesses are adequately prepared to meet the demands and maximize the benefits that this project will bring to our territory.

JRP/NEB Hearings

We have also extended the funds and resources required for our department's full participation in both the NEB and JRP hearings. These regulatory processes are a primary focus in ensuring the MGP will be sustainable, responsible and beneficial as demanded by the people of the NWT.

To that end, Mr. Chairman, we have an important dual role: to better understand how the project will affect NWT residents and to advance the public interest of residents of the NWT, and to provide information and expertise to allow regulators to make the best decisions possible in the interest of our territory, our communities and our residents.

Energy

The Department of ITI will also continue its work to identify and steer a course towards developing our energy potential, and reducing our reliance on imported fossil fuels. The 2007 energy plan will be an important first step in our work to guide future government decisions with respect to energy development.

Mr. Chairman, I would like to thank Members of this Assembly for your ongoing guidance and insight in the development of this budget. I am confident that together we have established the foundation and investment necessary to seize the opportunities we have available to secure our future. Thank you, Mr. Chairman.

Thank you, Mr. Bell. At this time, I'd like to call upon the chairperson of the Standing Committee on GED for comments regarding the review of the Department of Industry, Tourism and Investment. Mrs. Groenewegen.

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.

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

I would. Thank you, Mr. Chairman.

Does committee agree?

At this time, I'd like to ask the Sergeant-at-Arms to bring in the witnesses, please.

Thank you. Mr. Bell, can you introduce your witnesses, please.

Mr. Chairman, thank you. With me today: Peter Vician, who is the deputy minister of the department; and Nancy Magrum, director of finance and administration for our shared services centre. Thank you.