Thank you, committee. There's nothing on planning coordination, so we will return to page 55 to consider the total. Lands, total capital estimates, $932,000. Does committee agree?

Thank you, committee. I want to thank the Minister and the witnesses. Sergeant-at-Arms, you may escort the witnesses from the Chamber.

Committee, we have next agreed to consider the Department of Municipal and Community Affairs, found on page 61. I will ask the Minister of Municipal and Community Affairs, Minister Moses, to take a seat at the witness table. Sergeant-at-Arms, please escort the witnesses into the Chamber.

Minister Moses, would you please introduce your witness to the House.

Thank you, Mr. Chair. It's Mr. Robert Tordiff, the assistant deputy minister for MACA. Thank you.

Thank you, Minister. Welcome to the witness. Committee, we will defer consideration of the departmental total until after consideration of the activity summaries, the first of which is on page 64, with an associated information item on page 65. Mr. Vanthuyne.

Thank you, Mr. Chair. Mr. Chair, as the Minister is well aware, the NWT Association of Communities and a number of its members have identified shortfalls year over year as it relates to an undertaking that we took back in 2014 to identify community needs. I think, at the time, it was about a $40-million-a-year shortfall. That was back in 2014. The City of Yellowknife claims to have received an annual shortfall of about $11 million. Of course, the City of Yellowknife is just weeks away from going into its budgetary process, and they're naturally going to raise this issue again, and they're going to point the finger to our government as it relates to not making the commitment to try to lessen this gap.

So, you know, on page 64 this is where we see the contribution. It's $29 million and it's to all of the communities. I just want to know from the department if they're doing some work as it relates to lessening the gap. If they are, what is that? If they're not, then what are some of the ways in which we can potentially strive towards overcoming this significant gap? Thank you, Mr. Chair.

Thank you. Minister Moses.

Thank you, Mr. Chair. I did hear the Members' comments, all of them that made general comments to the Minister of Finance's opening remarks. We do know this is a concern, and I did hear it when I did become Minister of Municipal and Community Affairs, when I did sit with the NWTAC's executive. This year, there is a small increase in the funding for O and M as well as, I believe, water and sewer services. Since, I think, 2014, there has been small incremental increases each year. This funding really is used for core needs of the community, and I know we need to find ways to address that. As you heard with the Minister of Finance, we try to allocate some of our dollars, and some of the communities actually use some of their CPF funding to try to leverage federal dollars, as well. Some of the agreements and federal funding that we are looking for and looking at is obviously the new Building Canada Plan, Phase 1 and Phase 2 of the Investing in Canada Infrastructure Plan as well. So we're looking at opportunities that we can look at closing some of the gaps through trying to leverage some of that federal funding.

As we all know, there's been new elections that just happened, and we are committed to sitting down with the new membership, looking at addressing this by developing a strategy. As Members know, during business planning session I did mention we have put that strategy on hold until the elections were done. Hopefully, we should have that strategy in place in the early new year. We will share it with the NWTAC as well as committee then.

Through you, Mr. Chair, maybe I can ask my assistant deputy minister if there's any other further information he'd like to share with the committee. Thank you.

Thank you, Minister. Mr. Tordiff.

Thank you. Mr. Vanthuyne.

Thank you, Mr. Chair. I want to be genuine in respecting and appreciating the department's efforts. I think they undertook some really good work, with the NWTAC and some community members and what-have-you, back in 2014 when we underwent the evaluation that ultimately identified this gap.

I am convinced, and this is going to be more of a comment, that the government, given the pressures that we have on our budget and the stretch dollars that we have, that we really, in fact, are never going to be able to overcome this, because the demands for capital projects within the communities is, as was mentioned, growing, but then, so is the rate of inflation on all of this stuff. Based on what allocations we have available and how all of us in this House realize how tight this budget is year-over-year, I just don't ever foresee how we are going to remove this infrastructure gap or this funding gap.

It is my belief that the only way we are going to be able to do that is if we -- and I will be raising this in a number of different ways over the next little while, but the Territorial Formula Financing agreement that we have with the federal government has to be renegotiated with, and it is with the purview of these kinds of shortfalls in mind that we have to renegotiate that. I don't think, on a per capita basis, that we need to request more money, but we certainly need to give consideration to, when we generate our own-source revenues, that it doesn't get clawed back by the federal government. They need to recognize that these are the kinds of gaps that we need to fill and that that is a process that we have to go through and have a heart-to-heart.

I recognize that TFF, I think, is up for review in 2019. Although the federal government has given early indicators that they are going to maintain status quo, I would argue that that is not satisfactory, and this is a primary example as to why we have to renegotiate that, or we will never fulfill this gap. Those are my comments. Thank you, Mr. Chair.

Thank you, Mr. Vanthuyne. There were comments. Would the Minister care to respond?

No, I appreciate the honesty and the comments made by the Member. As I mentioned, one fund that we are looking at is the Investing in Canada Infrastructure Program that would help address some of the water and possibility sewage needs some of our communities.

The little increase that we did get in this budget will look at priorities of which municipalities need their infrastructure upgraded. We are going to be looking at that when this budget passes, but I really appreciate the Member's comments. Thank you.

Thank you. Next, I have Mr. Beaulieu.

Thank you, Mr. Chair. Mr. Chair, along the same line of the previous Member, I am trying to sort out how the whole system works. Is there a situation where, when you are trying to fulfill the capital deficit in the municipalities that have capital deficits, you are removing money from other communities that are not considered to have a capital deficit? Thank you.

Thank you. Minister.

Thank you, Mr. Chair. The easiest answer is no.

Thank you. Mr. Beaulieu.

At least, I guess, in communities that are considered not to have accumulated deficit, the money stays the same? I am going to take the answer "no" as meaning that.

My question is: when you accumulate a capital deficit, it is based on depreciation, I am assuming. I am going to ask the question, though: is the capital deficit accumulation based on the depreciation of the assets you have? Thank you.

Thank you. Mr. Tordiff.

Thank you. I will just remind the witness to indicate when you are done talking with a "thank you," just so that the technical team knows to change the mics. Mr. Beaulieu.

[Microphone turned off]...turned capital, but I could also say infrastructure. Now, if there is a community, such as Yellowknife, which has lots of infrastructure, and there is a depreciation on that infrastructure, then, every year, when they replace water lines, I know that there is little depreciation the first year, but as soon as it goes into use after one year, there is a depreciation. That depreciation would be considered a deficit in the infrastructure. That is what I am trying to get at.

In the small communities, we have very little infrastructure, a few warehouses here; most of our roads are gravel; we have no running water. We have water trucks that haul things around and so on. They depreciate as well, but they are very minor items. If you write a water truck off over 10 years versus trying to write off a water system over 50 years, I mean, I realize that some of the systems in the city last longer, but, Mr. Chair, what I am trying to get at is that we, in some of the small communities, don't appear to have huge infrastructure deficits because we don't have the infrastructure that we need. Not all of our streets are chipsealed. We don't have piped water systems. We don't have the swimming pools, arenas. I mean, we do have some arenas, but not something, certainly, like what some of the larger centres have.

I have always been concerned about the way that infrastructure deficits are accumulated. It looks like the people that have the most have the greatest deficits. The greatest amount of money goes to the people that have the most infrastructure, and the communities that have very little infrastructure are having very little accumulation of appreciation, if I can use that term. It is kind of an oxymoron, but there is an accumulation of deficit to determine the infrastructure deficit.

I am wondering if the Minister has looked into that system that they have employed since 2014 to see if it really is a fair system in determining infrastructure deficits. Thank you, Mr. Chair.