Sergeant-at-Arms, escort the witnesses in.

Mr. Miltenberger, for the record, could you introduce your witnesses.

Thank you, Mr. Chairman. I have with me Sandy Kalgutkar, acting deputy minister of Finance, Kelly Bluck from Finance, and Ian Rennie from Justice.

Thank you, Mr. Miltenberger. Welcome, witnesses. Just to get clarification on general comments, do you want to do it all at once or do you want a response from the Minister after every general comment? Let’s agree to the rules up front.

Okay. Okey-dokey. General comments. Mr. Abernethy.

Thank you, Mr. Chairman. I’d like to thank the Minister for bringing forward the Heritage Act. There certainly has been a lot of talk about the Heritage Act over the last four years and I think it’s good that it finally came through. For me, as the purpose indicates, the Heritage Fund is to ensure that the future generations of people in the Northwest Territories benefit from ongoing economic development, including the development of non-renewable resources. Ultimately what this comes down to is this is for the people. This is for the people of the Northwest Territories both today, but more importantly in the future.

As we develop resources in the Northwest Territories and pull diamonds out of the ground, we need to ensure a legacy for the individuals who are going to come after us: our children, our children’s children, and their grandchildren. I think an act like the Heritage Act will put some money in place so that when renewable resources are gone, there will be something for future generations.

Just for the record, I just have to go on the record and basically say to my colleague Mr. Ramsay that I do disagree with him on the concept of dividends. Dividends, in my mind, would only be a reasonable utilization of the Heritage Fund should the Heritage Fund grow to significant proportions. Otherwise, I think we should ensure that it’s there to protect programs and services that are available to the people.

I did have an opportunity recently of talking to a number of state legislators of Alaska and we did have a conversation about their Heritage Fund, and the ones I was talking to encouraged extreme caution with respect to dividends. There have been some benefits but it has also caused significant numbers of problems. So future generations of this Legislature, future Legislatures should be very cautious about dividends and if they are going to explore them, they should be something that’s only used should the Heritage Fund grow to mega proportions.

In the meantime we’ve got this thing in front of us and it’s something that we do need to start thinking about, putting some money in, and there are some areas where there might be money available. There might be revenues generated out of the Opportunities Fund. That might be a reasonable allocation for this as a starting point. With devolution, should it be finalized, should we get to a final agreement and move forward, there may be money available to put into this thing in the future.

It is important. It is timely. No point waiting. I think the time is now and I’m happy to see this thing before us. There are lots of questions. There are lots of things that need to be done and decided with this thing, and hopefully, when the future government, the 17th Assembly starts developing

some regulations, they will share the regulations

with the Regular Members, because this is a big picture item. This is about the future of the Northwest Territories and I think all Members should be involved in its design and future.

That’s about it. Basically, I support the piece of legislation. I’m looking forward to its passage and I will look forward to the future of this fund. Thank you, Mr. Chair.

I’ll allow the Minister to respond to the comments. Mr. Minister.

Thank you, Mr. Chairman. I appreciate the Member’s comments of support. Clearly, it is a starting point. The fund is structured to remain untouched for the first 20 years so it can build some critical mass, and then there will be ongoing debates, I’m sure, among citizens of the Northwest Territories and future legislators as to the best way to touch this money. You just have to look around the world at some of the other funds besides Alaska. You could look at Norway. You can look at other funds, as well, to see what may be in the best interests of the residents of the Northwest Territories, but clearly, we’re contemplating a 20-year growth and building period. Thank you.

Thank you. Next, I have Mr. Beaulieu.

Thank you, Mr. Chairman. I think that the government should have this Heritage Act, as I see it, like a savings account but only use this fund or put money into this fund when all of the communities have what is required for them to function as a community.

Right now I have mixed feelings about a fund such as the Heritage Fund, a fund such as this, when we know that there are still communities in the Northwest Territories that don’t have basic essentials. The basic essentials that are afforded to larger communities in the Northwest Territories, that’s not a problem. They can save, put money aside and put it away for the future. However, for us MLAs that represent small communities, we don’t have the basic essentials needed in small communities. We don’t have youth centres for all of the communities for the youth. I have many youth in Lutselk'e and there is no youth centre there. They’re looking at using old buildings here and there that would be handed them by the government. We don’t have youth workers. We need people, youth officers and so on in these communities. We don’t have environment officers in the communities that could go there and work in the communities to protect the land. We don’t have our land cleaned up from past explorations and so on.

It’s a very tough act for me to support. I think it’s a good idea if the government is not running a deficit, if the government is not approaching the debt wall, and if the government doesn’t have to borrow

money to increase the debt wall in order to provide infrastructure. Those are good ideas. This I see as kind of like saving money on one hand while you have people that are hungry on the other hand, and that’s the reality here. Instead of putting $10 million into a Heritage Fund, why not put $10 million into creating employment in small communities so that people don’t have to go back to the government and ask the government for support to fix a doorknob or change their window or have to always rely on the government to provide income? They should be able to take the same money and put it into those programs or put it into something, because we need help now, not 20 years from now.

Small communities are finally getting an opportunity to turn around and get some of the things that are needed like having highways into our communities that are chipsealed, good highways into the community that lower the costs and a highway, not when you’re leaving your community because you have to go to the neighbouring larger community to buy groceries to keep your grocery bill down, but you beat your car up. Communities that have no access. Communities that have only barge access. Communities that have winter road access only and the only opportunity to lower costs is driving out on winter roads and so on. Then, when all of those things are dealt with, then we should think about saving money.

But right now this is a hard bill for me as I represent the people of Tu Nedhe. It’s a difficult bill for me to go to even the youth of Lutselk'e, the youth in Fort Resolution and say this government doesn’t have any money to be able to provide a good, qualified youth worker that could help you in your future and so on, but at the same time we’re going to save and put some money away, like, millions of dollars away that could be used immediately in small communities. Thank you, Mr. Chairman.

General comments, Bill 10. Mr. Ramsay.

Thanks, Mr. Chairman. Just to reiterate some of my earlier comments on Bill 10, and I appreciate my colleague Mr. Abernethy’s take on the dividend and what it means to people, but from the way I look at it, I was looking for an opportunity for the government to set aside money that would eventually end up in the pockets of our residents so that they could help offset the high cost of living, it would help attract potential employees, and it would give the residents across the territory a sense of us all being in this together. Instead of the government hiving off 5 percent as it sees fit after the initial 20-year period to do with what they want with the 5 percent share to go to programs and services, but it just evaporates into government largess and it doesn’t end up, like I said, in the pockets of our residents where I think

we should have been going with this bill. But, again, it’s a step in the right direction.

The regulations and everything that is associated with that will be worked out. There might come a day where that actually does happen. It’s a ways off, but again, it’s like we’re opening a savings account but we don’t have any money. It’s a weird situation for us to be looking at this legislation, although I think the vehicle is right, it’s just the fact of the matter is right now we have no money to put aside into this savings account, and Mr. Beaulieu has some very good observations on the needs that are out there in the small communities and the fact that it would be kind of strange for the government to take $10 million, if we had it, and put it into this fund when we all know there are pressing social needs out there in almost all of the communities across the Northwest Territories. So, again, this is going to be good when we’re flushed with cash, but right now we’re not.

Again, I’m going to have to support it because I think it has to be the vehicle that is there that gets us started on saving some money for the future, which I think is a prudent thing to do and the right thing to do. With that, thank you, Mr. Chairman.

At this time I’ll allow the Minister to respond to the comments and also at the same time you can respond to the comments by Mr. Beaulieu.

In regard to Mr. Beaulieu’s comments and some of the MLA for Kam Lake, Mr. Ramsay, I think, yes, we have far more needs than we have resources from now as far into the future as we could plan we will need every cent we have. If we just want to keep spending everything we have, our capital demands everybody knows are far in excess of the capital budget for next year. Something like half a billion a year versus $75 million, not to mention our program needs. So I would suggest that we have to do both; that we plan for our employees, we plan for pension funds, superannuation, we plan for the future and we encourage people to put money aside to be as self-sufficient as possible.

As a government we have to take something of a similar view, I would suggest, in planning for the future; that the resources that are here today may not be here tomorrow, that if we don’t take the time to consciously put money aside, it will never be the right time. When it’s too late and we look back on what we could have done, all we’ll be able to do is look back with regret.

So I would suggest that as difficult as it may be, we’re starting the process to set up the instruments and make those types of necessary decisions as we try to do both things.

The next Legislature will decide if they want to contribute anything to this fund, but I know that all

of us, for example, in our pensions and pensions of all our constituents that work are very important for them because it allows them to plan for the time in the future when they will have some needs they have to put aside today during their earning years.

So, Mr. Chairman, I appreciate the concerns. I think this is a good first step, as Mr. Ramsay indicated, and will be challenged moving forward on how do we make this work, along with meeting the day-to-day program needs. Thank you.

Thank you. Next I have Mr. Jacobson.

Thank you, Mr. Chair. I’m in favour of it, but the same lines as Mr. Beaulieu. Some of our communities there’s so much that has to be done before some money is put aside. There’s schools, there’s roads, there’s just basic youth facilities that are needed in the smaller communities and stuff that I’ll probably never see in my lifetime, but at the end of the day we’ve got to try to keep providing services to our youth and giving them what’s needed.

If the devolution deal goes through, within three years we’ll have some money to do some good for all of the Northwest Territories, but the money that we’re planning to set aside if we were in the upcoming 17th Legislative Assembly, I mean, we

have people on income support that can’t even provide for their children and that has to be looked at. We either look at almost increasing on income support per household and per client.

We have to create jobs in the communities, not just quick fixes, but long-term employment such as roads. If we’re able to get the Tuk-Inuvik highway done, that opens up the North. In the Western Arctic, if we become a deep sea port, there’s so much potential there. An LNG plant possibly going in to Tuk, a lot of jobs. The cost of living is going to go down regarding fuel oil for your private homeowners for your home and gasoline for your vehicle or your boat to go hunting. I’m in favour, but we’re not in a position to do this and if we were to do this, it’s going to be really minimal monies that are set aside until devolution is signed.

When the 17th Legislative Assembly comes in they

really have to look at this on a go-forward basis, but the priority one is we’ve got to take care of the people we represent and make sure they’ve got a roof over their heads, they’ve got jobs and can provide for their families. I will be supporting it and we’ll leave it to the 17th Assembly. Thank you, Mr.

Chair.

General comments in regard to Bill 10. Mr. Bromley.

Thank you, Mr. Chair. I’m in favour of this bill in general. I don’t think it’s the best thing we could have done, but I think it’s a very good start.

Really the issue at hand is our non-renewable resources in particular are being shipped out of the Northwest Territories typically with very little value added despite our best efforts, and at really an incredible rate, and these are some of our most finite resources. We’ve learned from others that if we’re going to ensure intergenerational benefits, it must be done explicitly and with much forethought, and a Heritage Fund seems like a really appropriate way to make this happen.

Essentially what we are doing here is as we transform these assets, which are in the ground or on the land, into a financial form or some value that gets shipped immediately out we take some proportion of that value and nail it down, put it into this account and let it build in value for future residents who will not have the benefits that we do earlier in the process of extracting our renewable resources.

I think obviously filling the fund, getting some dollars in there is a key consideration, and I have not heard much clear thinking on that or consideration of how we’re going to do that. I and others have made suggestions of such things as resource tax or a proportion of our corporate tax and so on. Wherever non-renewable revenues exist and flow, we should be somehow tapping into those to start putting dollars into these funds. Now we certainly will always need every cent, as the Minister says, and hard decisions do need to be made. So, really, my first question for the Minister is: how does this bill provide guidance for the development of regulations concerning the management of the fund and all of the decisions that must go into that?

Mr. Minister, do you want to respond to the comments?

Thank you, Mr. Chairman. We lay out some of the basic principles and approaches that we’re going to take in terms of how the money is to be invested. There’s no decision made in here or direction in terms of limiting future Assemblies as to how much money and where they want to take the money from to put into this fund. We’ll be running it through the processes and policies that currently exist. Under clause 11 on regulations we lay out some of the basic points and processes to be followed. Thank you.

Mr. Bromley.

Thank you, Mr. Chair. Thanks to the Minister for that response. I believe the Minister’s response reflects my general observation as we reviewed the bill, that it’s a fairly unformed bill. It provides the basics but only the basics. A lot will need to be developed beyond, obviously, basic principles and running it through processes and policies. Many of these policies and processes don’t exist at this time for a bill of this nature. I

suppose the implication of the Minister was that this would be done through regulations, and certainly highlights the thinking of committee as to why those regulations would need to come to committee and possibly through them to the public for some input and guidance in that development.

Committee has certainly spoken clearly on policy mechanisms for encouraging participation of the public in management of the fund. I’m wondering if the Minister could tell me what provisions are actually provided in the act to ensure public input on the management and use of these public funds which are being preserved, or proposed to be preserved, for future generations.

Mr. Miltenberger.