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.