Thank you, Mr. Speaker, Mr. Speaker, I would like to table a letter from the regional superintendent of MACA to Mayor John Pollard saying sign the agreement or we are going to cut off your funding. Thank you.

Thank you, Mrs. Groenewegen. Tabling of documents. In accordance with section 21(1) of the Retiring Allowances Act and section 11.1 of the Supplementary Retiring Allowance Act, I hereby table the Pension Administration Report - Legislative Assembly Retiring Allowances Act and Supplementary Retiring Allowances Act at March 31, 2006.

Tabling of documents. Notices of motion. Notices of motion for first reading of bills. Motions. First reading of bills. Second reading of bills. The honourable Minister responsible for the NWT Liquor Commission, Mr. Roland.

Thank you, Mr. Roland. The motion is on the floor. The motion is in order. To the principle of the bill.

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

---Carried

Bill 15 has had second reading and stands referred to a committee. Second reading of bills. Consideration in Committee of the Whole of bills and other matters: Bill 4, Bill 5 and Bill 16, with Mrs. Groenewegen in the chair.

I will call Committee of the Whole to order this afternoon. What is the wish of the committee? Mr. Lafferty.

Mahsi, Madam Chair. Madam Chair, the committee wishes to consider Bill 4, Northwest Territories Hydro Corporation Act; Bill 5, An Act to Amend the Child and Family Services Act; and Bill 16, An Act to Amend the Legislative Assembly and Executive Council Act. Mahsi, Madam Chair.

Thank you, Mr. Lafferty. Is committee agreed?

Agreed. Thank you. We will do that after a short break.

---SHORT RECESS

Good afternoon, Members. Welcome back to Committee of the Whole. We are now dealing with Bill 4, Northwest Territories Hydro Corporation Act. At this time, I would like to ask the Minister responsible to introduce the bill. Mr. Krutko.

I am pleased to introduce Bill 4, Northwest Territories Hydro Corporation Act. This bill is necessary to facilitate the participation of the Northwest Territories Power Corporation in a joint venture with the

Akaitcho Energy Corporation and the Metis Energy Company to expand the Taltson Twin Gorges hydro facility to provide power to the diamond mines.

The passage of this act will not in any way commit the Government of the Northwest Territories or the NTPC to proceed with the Taltson hydro expansion project. The act only makes participation in the project possible. Many steps are still required before a final decision to proceed with the project can be made.

NWT Hydro Corporation is being created as a Crown corporation under NWT legislation. It will be a public agency subject to the Financial Administration Act and direction from the Executive Council. The Northwest Territories Power Corporation will remain a public agency.

The legislation would create an NWT Hydro Corporation that would be able to participate in the joint venture for the Taltson project. A separate Crown corporation is being used to protect the assets and regulated operations of NTPC from any risks that may be associated with the Taltson project.

The legislation to create NT Hydro has been kept as close to the Northwest Territories Power Corporation Act provisions as possible. Some highlights of the bill are:

• • NT Hydro is an NWT Crown corporation accountable to a Minister and to the Legislative Assembly;
• • Cabinet and the Legislative Assembly have the same control over NT Hydro activities as they do those of NTPC;
• • NT Hydro is clearly authorized to enter into joint ventures and partnerships;
• • NT Hydro will hold the common shares of NTPC while the GNWT will hold preferred shares. Cabinet can still demand dividends from both companies and NTPC's dividend will continue to be available for the Territorial Power Support Program;
• • NT Hydro cannot pledge NTPC assets nor incur any debt that may put NTPC at risk;
• • Any significant NT Hydro borrowing requires FMB approval; and
• • The sale of power from the Taltson project to the diamond mines is exempted from Public Utilities Board regulation.

I feel that this legislation proposes the minimum changes necessary to enable the Taltson hydro expansion project to proceed.

I would be pleased to answer any questions that Members may have.

Thank you, Mr. Krutko. At this time, I would like to ask Mrs. Groenewegen for her opening comments regarding Bill 4.

Thank you, Mr. Chairman. Mr. Chairman, the Standing Committee on Governance and Economic Development conducted public hearings on Bill 5, Northwest Territories Hydro Corporation Act, in Yellowknife on April 18 and 19, 2007; in Fort Smith on April 23, 2007; in Fort Resolution on April 24, 2007; in Hay River on Wednesday, April 25, 2007; and in Inuvik on April 26, 2007. The clause-by-clause review was conducted on May 10, 2007, in Yellowknife.

The committee would like to thank all the witnesses for their comments and the Minister and his staff for presenting the bill. The main purpose of the bill is to create a new Crown corporation, NWT Hydro, that has a clear mandate to continue the work and discussions the NWT Power Corporation has started with other partners towards the potential expansion of the Taltson hydro facility.

NWT Hydro will become the owner of NWT Energy Corporation (03) which will, in turn, own one-third of the shares of the Deze Energy Corporation, a joint venture between the NWT Energy Corporation, the Akaitcho Territory Government and the NWT Metis Nation. Deze Energy Corporation will be the proponent of the Taltson expansion project.

Many of the concerns the committee heard were related to the project itself rather than to the bill and appeared to stem from insufficient communications between Deze Energy Corporation and affected communities.

The committee was, therefore, pleased to hear from the Minister and his officials that Deze Energy Corporation will be stepping up its consultation and communication efforts. Committee also looks forward to regular briefings from the Minister on the status of the project.

Committee heard from a number of individuals with outstanding compensation issues dating back to the existing Taltson dam, in particular trappers who, as a group, have suffered financial hardship, property losses and, in some cases, loss of life due to the flooding.

Some trappers also expressed concern that despite water licence requirements, the NWT Power Corporation does not notify affected communities when changes in water levels will occur. These unexpected changes in water levels affect ice conditions and create unsafe conditions for people out on the land. Some presenters raised concerns about the potential environmental impacts of the project. Others pointed out that the project, if it proceeds, will significantly lower greenhouse gas emissions by reducing the amount of diesel fuel for electricity generation. It would also reduce environmental risks associated with hauling diesel fuel over long distances to the mine site.

The committee heard from representatives of the Yellowknives Tsastontine Society, Deninu Kue First Nation, the Salt River First Nation and North Slave Metis Alliance, who stated that they had yet to be consulted on the project. Many of the individuals who spoke at our hearings questioned how the project would benefit their communities.

The Minister indicated the advantages to the project include increased infrastructure, impact benefit agreements, employment and training opportunities, the potential for a low-cost energy grid and for the sale of surplus power. The project may also encourage more mining development and extended life for existing mines because of the access to reliable, clean hydro power.

In light of the concerns raised by community members, it should be made clear this bill is a first step only and in one

way approves the Taltson expansion project. There are many conditions that need to be met before this project can proceed. Most importantly, it needs to have the buy-in of affected communities and aboriginal organizations and it needs to pass the environmental review process. The proponent needs to be able to demonstrate a strong business case, negotiate long-term purchase agreements with customers and secure project financing. We encourage Deze Energy Corporation to increase its efforts at consultation and open up dialogue with communities to assure affected people are informed and have opportunities to ask questions and raise concerns about the project should it proceed.

The committee raised a number of questions on the specific wording of the bill. Members requested clarification of whether the objectives of the bill would allow for the possibility of other hydro projects. The Minister and his officials confirmed that amendments would not be necessary for NWT Hydro or its subsidiaries to become involved in smaller, local community-based mini hydro projects, however, larger scale hydro projects would like to require amendments to add to the objects.

Members questioned what, if any, impact the new structure would have on the GNWT's revenue from the NWT Power Corporation, which is used to finance, in part, the Territorial Power Support Program. The Minister stated the NWT Power Corporation must stay under its current legislation, but will become a subsidiary of the NWT Hydro Corporation. Legislation allows the GNWT the same dividend declaration powers on the preferred shares that it currently has with the common shares. This maintains the ability of the GNWT to demand dividends from NTPC to finance the Territorial Power Support Program, while recognizing the need for the parent company, NWT Hydro, to own the common shares of the subsidiary.

Members also asked the Minister why projects north of Taltson hydro expansion are exempted from the Public Utilities Act. The Minister replied the Taltson expansion is unique. For the foreseeable future, the expansion will only supply power to the diamond mines. The Public Utilities Board, PUB, process requires disclosure of business information, which would adversely affect the proponents' bargaining power with the mines. The clause refers only to projects north of the facility, because the intent is that the PUB process should continue to apply to other customers.

Mayor Pollard of Hay River raised the concern that the wording "north of the facility" could leave out industrial developments in other directions that should be on an equal footing with the diamond mines. During the clause-by-clause review of the bill, committee members supported a motion which amended Bill 4 to remove the words "north of the facility." The Minister did not concur with the amendment.

This concludes the committee's opening comments on Bill 4. Individual Members may have questions and comments as we proceed.

Following the clause-by-clause review, a motion was carried to report Bill 4, Northwest Territories Hydro Corporation Act, as ready for consideration by Committee of the Whole. Thank you, Mr. Chairman.

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

Yes, Mr. Chair.

Does committee agree?

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

Thank you. Mr. Minister, can you introduce your witnesses, please?

Thank you, Mr. Chair. Mr. Chair, to my right I have Lew Voytilla, chairman of the Northwest Territories Power Corporation; to my left I have Mark Aitken, director of legislation, Department of Justice.

Thank you. Mr. Minister, at this time, I would like to ask Members if they have any comments. Mr. Ramsay.

Thank you, Mr. Chairman. I would like to welcome the Minister and his staff that are with us this afternoon to discuss Bill 4. I want to provide a few opening comments if I could.

First of all, I wanted to publicly thank those individuals in the communities we visited for coming out and providing us the input that they did on Bill 4. It was much welcomed. A couple of other things Madam Chair alluded to in committee's remarks was an issue over compensation from the initial Taltson development still weighs heavy on the minds of many in that region. I think it's something that needs to be taken care of by working with the federal government and those folks that are involved in that.

I do want to say that I will be supporting the bill. I feel it is necessary to move forward and get on with things and this is the enabling legislation to allow the expansion at Taltson. Mr. Chairman, I wanted to add a couple of things here. They are important for me. We look at the expansion at Taltson and the Minister has said it himself and others have said it, it's strictly designed to supply power to industry. That's the mining companies north of Yellowknife. There is something about that that doesn't sit right with me. The Northwest Territories Power Corporation needs to have more of a social conscience, if you will, and needs to learn at getting the best power rates into our communities as we possibly can. By looking at an expansion at Taltson and not looking at providing lower cost power to communities in the South Slave, I think we are missing a key aspect of this.

I am happy to see the aboriginal component included in this, but from what we heard out on the road, Mr. Chairman, the consultation has just been somewhat abysmal really. I don't know if we talked to anybody who had actually been to a consultation meeting or a briefing. Some people didn't even know it was happening. It was news to them. In a small community like the Northwest Territories, specifically in the South Slave area, you would think people would know what was happening. So I am not sure if the Power Corporation has responsibility. I think they do have a responsibility in that area because they are a partner in that project at the end of the day, but they have to communicate with their partners that in order for

this project to go anywhere, that consultation and the community involvement, the community buy-in, again if you can roll in a social component to this, I think that would be beneficial to be sure.

Again, it just pointed to the fact, again, Mr. Chairman, the Northwest Territories needs a comprehensive overall long-term vision on hydro development in the Northwest Territories. I know we are working towards one, but the sooner we can work out what we can do and how we are going to get it done, the better off we'll be, Mr. Chairman. So with that, I would like to thank the Minister and his staff for being here. Mahsi

Thank you, Mr. Ramsay. Mr. Krutko.