Mr. Speaker, I guess if we are and we have already input some $13 million into this project, we are going to get paid back through dividends, if I understood the Minister correctly, but I would think that if we are one-third partners and there is a dividend of, say, $30, we are only going to get one-third of that $30 dividend. We are only going to get $10. My understanding is that the other partners in the Deze Corporation have put in minimal money compared to our $13 million. In getting paid back through dividends, are we going to get an equal share of any dividend or are we going to get a larger share because we will have put in far more money at the outset than any of the other two partners? Thank you.

Mr. Speaker, the partnership agreement that is to be signed will spell out all of that detail. We are in the final… There are a couple of months that the Cabinet has requested to review that initial document that has been put together by the partners. We have yet to sign an agreement that would see this go forward, but we have supported the groups coming onside. We fully realize that the investment we have to make up front is from the Government of the Northwest Territories or the Power Corporation to help move it along, because the partners themselves at this present time without a power purchase agreement are unable to find those resources.

As earlier, a number of Members were speaking in Members’ statements about capacity in the North and seeing a broader partnership and a revenues build coming to the aboriginal governments and organizations, this is a way of doing that, is to provide them the support up front and have them build on a capacity as this project is built. Thank you.

Mr. Speaker, thanks to the Minister. I understand that things are being negotiated and so on, but I guess I am concerned, as I mentioned in my statement, that we are entering into this project. We are, at this point, backstopping the project without any sort of financial safeguards. I think the Premier mentioned yesterday, in response to a question from Mr. Abernethy, that some part of this project is coming up to this government for

approval in the near future. Could I get an explanation of what he meant by that? Thank you.

Mr. Speaker, as this project is moving along, the work on the partnership agreement as well as the power purchase agreements have been going parallel with the environmental review process. We are, as a Cabinet, having to look at that partnership agreement and decide if we can sign that or not or if we would tell the remaining partnership that they would have to go seek outside partners to help bring this project along. Thank you.

Thank you, Mr. Roland. The honourable Member for Great Slave, Mr. Abernethy.

Thank you, Mr. Speaker. My questions are in follow-up to my Member’s statement. On March 3rd , in responding to questions

from my colleague Mr. Bromley, the Premier said, according to the unedited Hansard, “We have looked at this project and this project has been built on a clear case of a business model. If we want to establish more to it, then we can do that.” Later, in response to another question, he indicated, according to unedited Hansard once again, “So if this project goes, and it will go only by the fact that it’s a business case model, if we add more to it, then we lose the business case and there is no project.” I was wondering if the Premier can help me understand the contradiction in those two statements and help me understand whether or not there is an opportunity for us to actually change this project and go with alternate routes that actually have greater benefits to the people of the Northwest Territories over the long term. Are we stuck to this eastern route or nothing? Thank you, Mr. Speaker.

Thank you, Mr. Abernethy. The honourable Premier, Mr. Roland.

Thank you, Mr. Speaker. There is no contradiction. There is, in fact, if the Government of the Northwest Territories wants or this Assembly wants to see alternate routes, this Assembly would have to come up with money to afford that, because, as I had stated, this project has been built on the business case, not offsets from the Government of the Northwest Territories, no subsidies, purely on a business case of the ratepayer being, in this case, the diamond mines. If they don’t sign onto this and make it feasible, then there is no project.

The developer’s assessment report that’s been filed through the environmental review process has been moved forward. We’ve updated Members on that of that process and recently it’s gone through its final

extension that was put in place for public input and we’ve heard some concerns in that area and are looking at adjusting. Deze is looking at adjusting the routing to deal with the issues raised by those around the original routing and Lutselk’e itself. We’ve done work based on that. The initial review that was done and the original information was requested along routing lines. That work was done and provided through the environmental review process. Thank you.

With respect to routing lines, there are several different options and there has been some costing suggested, but the costing was actually provided by Deze themselves and the NWT Hydro Corporation, both obviously proponents of a particular route. I was wondering if there was any opportunity or could the Premier facilitate the acquisition of costing that wasn’t done by the two organizations that want to go a particular direction. I think it would be interesting to get an independent assessment that would cross the islands, the island route or outside the sub-islands or even the western route would be from somebody who wasn’t 100 percent convinced that the only route doable was the East Arm route. Thank you.

The Power Corporation contracted out much of the expertise that’s required in doing some of these assessments and pulling some of the costs together. The Member has talked about a number of routes: submarine that would be under the lake or at the bottom of the lake; the trans-island route, as discussed; and the western route. We’re talking of the base case plus, for example, the submarine. The estimates were about $50 million more; trans-island was about $40 million more; the western route was looking at $200 million or more.

Again, the partnership has looked at this purely on the business case. We have to be able to say if we are going to make this work, be able to sell power to the industry, in this case the mines, for a lower cost than what they can produce right now and that is diesel generation and hauling the fuel up to their sites, otherwise they have no interest because they have already invested in the infrastructure.

The one case scenario is Gahcho Kue where they have yet to make a decision if they are going to go to a mine development. They are looking to see if we, as a government, are going to provide the hydro side or will they have to provide for their own power initially and that could affect their decision about go or no-go.

So we’ve had to fully base this on the ability to provide power at or better than they can develop right now and that’s been driving the business model we’re into.

Now, Members would like to see this additional information. I will see and provide again an update to Members on who put this information together for

us and provide that to Members and see where that goes. Right now, the Member asked earlier, this business call, the developer’s assessment report that went on is based on the routing that was laid out, that has gone through the hearing and we’ve got some feedback there. Deze is looking at doing some rerouting to adjust for the concerns of the band and others in the area. Thank you.

I get a business case, I understand it. Quite frankly, it makes sense to me. If you want to make a lot of money, the eastern route is the best thing. If I was a businessman or a member of Deze, that’s what I would want as well. But I’m not. I’m a territorial politician and so is the Premier and what we need to be doing is we need to be working in the best interest of the people of the Northwest Territories.

I’m not convinced that is the best route. I am happy the Premier is willing to meet with us and give us some additional information, but what I want to ask the Premier is if it’s too late to change gears on this project and bring it back into the interest of the public.

The people are speaking. The people are telling us they want to see grids, they want to see opportunities going to other places, other routes considered. Is it too late to resist something that we could still do in the best interest of the people of the Northwest Territories, remembering that I’m not a businessperson with Deze, I’m a politician for the Northwest Territories and so are you.

The development assessment report that went in for environmental review is the business case to model we have used. They have asked for alternate routes. That information was provided. There has been an acceptance that that is the area that makes the best-case scenario for us. The adjustments that are being looked at are the result of the recent hearings that were held.

If Members want to see this change, then we would have to pull it back. There would be a full additional review done. That would delay anything there. That would run out of additional years of mine life. In some cases some of our older mines have limited life. That could potentially affect the go or no-go of a new mine.

Let’s talk about the best-case scenario for the people of the Northwest Territories. The diamond mines have brought to the Government of the Northwest Territories $1.1 billion in GDP. In a time when the economy was starting to severely wane because of the gold mines in shutdown mode and slowing down and the oil and gas was stagnant, it was purely on GNWT and transfers from Ottawa. Through the mining industry and the diamond mines in particular we have been able to shore that up and bring it up so that we’re one of the fastest growing jurisdictions in GDP across Canada.

With that in mind, our interest at this point, knowing that they are the game in town, in a sense, we need to ensure that we can supply them power, that they can extend their mine life so that GDP can continue to remain or grow instead of shrink.

Let’s talk about the power to the Slave Geological Province. We’re talking the potential to grow our northern economy in the area of 700 jobs. When you look at the construction of this facility, long-term revenues would accrue to the aboriginal governments and public sector shareholders, that being ourselves, in extending the mine life that grows our economy long term. Yes, we have to look at other areas. If we run the line around to the other sides and hook our communities up, then that falls into the PUB and the rate base. Those customers cannot afford that extension. It would have to be purely a government contribution outside of that PUB process. Then we’d be asking for the $100 million-plus if we go around the western side, for example.

Thank you, Mr. Roland. Final supplementary, Mr. Abernethy.

Thank you, Mr. Speaker. Thanks to the Premier once again for all that information. I couldn’t agree more. That’s all good information and that’s where the Taltson expansion could benefit us regardless of the route. If they go around the east, we get the same result as if we go across the islands. It’s a little bit more money. We hit the diamond mines, we hit Avalon, we open up the North Slave Geological Province; everything that he just said happens regardless of whether we take either one of those routes. The difference is with the across-the-islands route someday we’re going to be close enough to Yellowknife that we can grid in easily. There are social benefits to that route. If we grid in, then we can use that power from Snare. My question is, why are we so set on this East Arm route when the same advantages that the people of the Northwest Territories expect and want, plus many, many more, exist from an alternate route across the islands? It may be a bit more expensive, but the long-term benefits far outweigh the benefits of going around the East Arm route.

This is one of the difficulties we face, is when the government-of-the-day puts the business model and gets behind a project. The government-of-the-day, and even this government, realizes we have limited capacity in subsidizing any projects of this nature. So this has purely been on a business case. That is the kilowatt-hour sale that could make this project go that could then deliver revenues to the partnership, that could then grow capacity, that could fuel further development potentials in the area. So we have looked at those options, as I stated earlier, through the environmental review process. The additional

cost deemed it unaffordable based on the business model.

Yes, we see the long-term objective as a government of connecting a grid in the Northwest Territories through all our hydro and up the valley when you look at our 11,000 megawatt potential that we have and the sale to southern Canada through that potential. Those are long-term goals and projects beyond our capacity. We’d have to find partners for that. The partnership would have to be sure that they could sell this at a profit and not require subsidy from governments.

Thank you, Mr. Roland. The honourable Member for Yellowknife Centre, Mr. Hawkins.

Thank you, Mr. Speaker. Like my colleagues, through Members’ statements and questions, I will continue the issue of the Taltson expansion and the Deze partnership.

We have to be very clear, the GNWT represents the social interests of all residents of the Territories. To be crystal clear, the Deze interest is a group of partners that are represented strictly on economic interests, not public and social interests.

The challenge I see here is who represents the public interest in this partnership. That’s the question to the Premier right now, is how will the public be plugged into this partnership through accountability and in the context of public interest in this deal.

Thank you, Mr. Hawkins. The honourable Premier, Mr. Roland.

Thank you, Mr. Speaker. The public interest is represented by the Government of the Northwest Territories as a shareholder through the Power Corporation or through the Hydro Corporation itself. The public interest being served by the fact that there would be revenues accrued from that. The public interest would be in supporting aboriginal governments and building capacity and having long-term revenue sources going into them so that they can build on their capacity. The public interest would be reducing 100 million litres of fuel. The public interest would be 280 kilo-tonnes of CO

2

reduced

annually. That’s where our public interest is. That’s where the big picture is.

The Premier did not talk about how the public interest has a position in this. The public interest was not discussed in his answer about how the public interest gets represented. If we represent a one-third interest in a corporation outside of the territorial government, that’s way beyond arm’s length, then the public interest is lacking. What is stopping the Premier from

evaluating fairly and strategically with all the proper information about the route that we’ve discussed in this House, which is either over the Simpson Islands or under the water? What is stopping this department of NWT power from evaluating that fairly and weighing and balancing the social interest and social benefits of this opportunity?

The interests are being represented, one, to help growth of the Northwest Territories through an economically viable project. Members have already said on a number of occasions that we do not want a repeat of where we are guaranteeing or backstopping and having to put additional dollars at risk. This model is based purely on the business-case scenario.

What I think I’m starting to hear is that, well, as a government maybe we should step in and put more involvement from the government side. That is a different scenario altogether. It’s been based on a business case. It’s been built on building capacity with our aboriginal partnership in the Northwest Territories. It’s built on a business case of extending mine life which would keep growth and revenue coming overall to people working, companies keeping their jobs and the Government of the Northwest Territories keeping its corporate taxes going.

The additional routing through the environmental phase has been done. That information has been provided. Again, if it’s the government’s will that we do this, then we have to accept that we’re going to stop the process where it’s at. We’re going to potentially add to the uncertainty of our economic climate at a time when that’s not the best solution.

Earlier in a response to Mr. Abernethy the Premier was touting the GDP growth because of this opportunity. To be honest, GDP growth in the Northwest Territories is all either theoretical or useless, because the piper being paid is Ottawa over the Northwest Territories. Yes, people are working, but those who are getting the money from the resources and those revenues go straight to Ottawa.

The Premier says this is all based on a business case. I’d like to hear the Premier explain to this House where the money will be coming from for this potential project as we all well know this is worth way more than any money that this territorial government could ever raise even at a one-third partnership. Where is the money?

The partnership that has been put together that has built this business case, this model is based on the fact that the power purchase agreements make this project viable. That is why the most economical routing has been put forward. If we decide as a government to socially engineer this, as some of the wording that has been used, then the Government of the Northwest Territories needs to find some of its own-source

revenues to offset that cost, otherwise it gets passed on to the rate base. Who in the communities along that side can stand an increase in power generation and the cost of power generation from their existing areas of power generation?

The other part of the Member’s question leading up to that is, yes, the federal government gets the royalties from those mines. But let’s not forget that we just passed a budget that had over $800 million of transfer back to this government from the federal government.

The Premier raised the issue of power purchase agreements. Those are all well and good. But to date I have yet to see these power purchase agreements. As I said in my Member’s statement, if they are such a great deal for the diamond mines company, they would drag us to the table kicking and screaming and make us sign them with them. The point being, Avalon wants to sign a deal, Fortune mines is interested, the City of Yellowknife has a life of in perpetuity that we could be hooking up. Don’t forget about Dettah, Ndilo, Behchoko, Whati, and many other customers that we could create a grid with. The point being, the power purchase agreements are here today in living proof, not short-term mine life. Where are the power purchase agreements that they keep waving that are the key to this deal?