This is an issue that has been raised as one of concern as well. For example, the chiefs in the Tlicho region where we were visiting and having our regular meetings with the chiefs about the need to gather around the table and take a broader look, hunting is not the only issue. There are things that we have to better understand as a government, a territory and a Legislature. We’ve made significant investment to try to reduce our carbon footprint to switch off of fossil fuels, to get more involved in provision of renewable energies all in an attempt to mitigate what is now known to be a clear factor that is driving up the temperature. At the same time, we are struggling to adapt. There is work going on in many quarters on that particular issue and that is, indeed, one that is very complex. Thank you.

That issue came up during the Jay pipe hearings. The issue of cumulative impact was a directly contributable effect in terms of fatalities on a regular basis.

It’s

one that has not been clearly defined. There have been changes made as issues have been raised in

terms of the road access, how the road is used, how the traffic flows, the ability of the herd to cross the road. So, there is continuing work as we look at that particular issue. Thank you.

What we have learned as part of the decline in 1986, 460,000 animals, down to today about 15,000 for the Bathurst, during the prime hunting times a number of years ago, about 15,000 animals, mainly cows, were taken out of the herd. What we have learned since then

– as the Member has indicated, no

hunting for the last probably four or five years now – is that there are other contributing factors. They all combine together. There are access roads, cumulative impact, rising temperatures and things like in the last two years we’ve burnt four million hectares of forest.

With the pressures on the herd, the stressors, it takes a long time to turn around a decline that precipitous and we are still struggling with every herd in the Northwest Territories with probably the exception of the two to the east and the west, the Porcupine and the Beverly Ahiak. It is one of many factors. There are others like predation, climate change, as I indicated, and those other types of things, but there is still a need to control the harvest because, as the Member has indicated, the population drop has been precipitous. Thank you.

Forecasters are already looking at large-scale global weather models and into forecasts for next year. Forecasters are predicting an El Nino winter, warm with limited precipitation which, depending on the actual outcome, may affect our water levels for next season. It seems that the drought through the NWT will continue.

As such, the Department of Environment and Natural Resources, or ENR, will continue to be proactive and ready itself for the next fire season. A debrief of this year’s lesson learned will take place in the fall and public meetings will take place over the winter.

The rollout of the new Air Tractor 802 Fire Bosses continues. The first two planes have been built and are awaiting avionics and floats. The entire squadron of eight aircraft will be ready by May 2017 and will be integrated into the department fleet over the 2017-2018 fire season. New aviation and personnel contracts will be negotiated over the winter.

Mr. Speaker, I cannot stress enough the value of the

FireSmart

Program.

Everyone

has

a

responsibility to help prevent and protect their homes, cabins and communities from the risk of wildland fires. Property owners and communities should be using FireSmart tools to reduce their risk of loss from wildland fire. It was noted over the past month, Mr. Speaker, that some of the cottages and cabins on

the

Ingraham

Trail

were

FireSmarted. This made firefighters’ jobs of protecting these values that much easier.

FireSmarting homes, cabins and communities allow firefighters to concentrate on fighting fires and is in these difficult years a simple solution to a very complex problem. Information on FireSmart is available from local ENR offices and local community governments.

There is still much to do before the next fire season. ENR will clean up and put away the gear from this past summer and prepare for the next. Firefighting can be a dirty, laborious and under-appreciated job. Our hats are off, Mr. Speaker, to the firefighters who return every summer to protect our communities: young women and men from the North and across the country who should be applauded for their efforts. Thank you, Mr. Speaker.

Mr. Speaker, it isn’t very often we can say that weather forecasters were spot-on with their projections; however, this fire season it seems they got it right.

The fire season started very early. In fact, it may be one of the earliest on record. It seemed like the 2014 fire season just spilled over into 2015. There were several hold-over fires from the 2014 season, fires that burned deep over the winter. By early June the numbers and frequency of fire occurrences were record setting. The effect of extended drought was really evident through the South Slave, Deh Cho and North Slave regions. Fire behaviour on most of the fires was explosive. Fire crews reported having issues finding water sources to run their power pumps.

Large fires began to show up on the landscape in the Deh Cho and South Slave regions. Several communities were impacted, including Trout Lake, Jean Marie River, Fort Simpson, Hay River, Enterprise, Fort Providence and the Hay River corridor.

Large numbers of heavy equipment were hired to help deal with the fire situation. Finding additional wildland fire resources to help stem the tide of these fires became a serious challenge as western Canada and the United States, suffering under the same drought as the Northwest Territories, began to take up any available resources in the country. A National

Critical

Resource

Protocol

was

established to divide available resources according to need, the protection of human life being the

priority. As you are no doubt aware, Saskatchewan was indeed the most affected province in the country, requiring the most help with several communities evacuated. Despite conditions here, the NWT was still able to render some assistance, along with Ontario and the Maritimes.

Fortunately,

as

meteorologists

predicted,

conditions changed from mid- to late-July and we began to get some substantial rain. This, of course, helped firefighters get the upper hand and establish control. In early August the North Slave joined in the fray as a fire near Hearne Lake began to grow beyond the control lines of firefighters and into the Reid Lake area. Cottagers were evacuated and firefighters from other parts of the NWT and Alberta moved in to help the region deal with this fire. Again by mid-August, wetter conditions moved in and curtailed the fire. Priority areas of the fire were brought under control and extinguished.

For those statistical analysts, there were 241 fires in the NWT and 622,000 hectares of land consumed by fires, which is above average. However, things could have been a lot worse. Last year, as you recall, the NWT had 378 fires which consumed

3.4

million

hectares

and

the

Government of the Northwest Territories spent $55 million

on

wildfire

suppression.

To

date,

expenditures for 2015 are close to $32 million. However, we can say, with glad hearts, that no lives were lost and very few values-at-risk were affected, which is, of course, our ultimate goal.

Mr. Speaker, I seek unanimous consent to conclude my statement.

---Unanimous consent granted

Mr. Speaker, I want to take this opportunity to update Members on our fiscal situation and the challenges that Members of the next Assembly will be facing.

As the 2014-2015 interim Public Accounts that I will table later this session will show, we have achieved our fourth consecutive surplus last year, totalling $120 million. Our departments were diligent in keeping expenditures within budgeted levels. However, this is not enough. The public accounts will also show that our net debt has increased $37 million. This means we continue to rely on short- term debt to pay for our capital expenditures and we remain in a cash deficit position.

In June of this year we received the last of the 2014 resource revenues, and after adding in the estimate for the revenues we expect to receive for the first three months of 2015, we have recorded $63.7 million in resource revenues in the 2014-2015 Public Accounts. We have shared $6.3 million of the net fiscal benefit of the revenues already received with our Aboriginal partners under the Devolution Agreement. After sharing with the federal government and our Aboriginal partners, our remaining net fiscal benefit for 2014-2015 is $23.9 million. This allowed us to make our first contribution of resource revenues to the Heritage Fund. In August we transferred $4.7 million to ensure that future generations share in the resource

development

happening

now.

The

remaining resource revenue will be dedicated to investment in infrastructure and debt repayment, consistent with our previous commitment to the Assembly and public.

In 2015-2016 we will continue to meet our fiscal challenges in spite of extraordinary expenditure pressures resulting from fire suppression activity and low water levels at our Snare Hydro system. This year’s revenue forecast has not materially changed from the February budget. Due to extraordinary expenditures related to forest fires and low water, we are expecting a reduced operating surplus at $105 million, down from $147 million projected in the 2015-2016 budget.

We need these operating surpluses to fund at least half of our annual capital investments, and our dedication to managing our expenditure growth in line with revenue growth has kept us in a surplus position. Going forward, even more fiscal restraint will be necessary to maintain surpluses because our revenue growth is forecasted to be flat over the next five years.

The flat revenue outlook means less fiscal resources to sustain programs and services and capital investments at current levels. Under current fiscal planning assumptions, our operating surplus will continue to decline to what would barely be a balanced budget by 2019-2020. That year could see us with a small surplus of $10 million and still in a short-term cash deficit position, living beyond our means as we continue to borrow money to finance operations and capital investment throughout the life of the 18th Legislative Assembly, something we

said we must not do.

The key components of our revenue are beyond our control, so we cannot simply choose to grow them. The reality is that almost 70 percent of our revenues come from the Territorial Formula Financing Grant, which increases at the rate of provincial and local government expenditure growth adjusted by the NWT population growth. As provinces struggle to balance their budgets and manage their debt loads and we deal with flat population growth, our main source of revenue will also begin to decline.

While making up only 19 percent of total revenue, our own-source revenues are volatile and difficult to estimate and are linked to the NWT economy.

The NWT economy has experienced three years of growth, primarily because of activity related to the construction of the NWT’s fourth diamond mine.

However, this fact masks the reality that the economy is only 85 percent of what it was before the global recession in 2008. Furthermore, economic activity is uneven, with southern NWT, especially the North Slave region, benefitting from mineral exploration and diamond mine activity, but other regions, especially the Sahtu and Beaufort- Delta regions, experiencing serious declines in economic activity. This economic slowdown has caused business opportunities to dry up and the population to stagnate, as families leave to seek opportunities elsewhere.

Yesterday’s Statistics Canada release of the July 1, 2015, population estimates show 0.2 percent population growth in both 2014 and 2015, caused mainly by less people leaving the territory. While these new estimates suggest that the retention efforts in our Population Growth Strategy are working, other important initiatives of this strategy, including increasing immigration to the NWT through the Nominee and Express Entry programs, may also be bearing fruit. However, It does not change the Northwest Territories fiscal outlook and we cannot relax efforts to address our economic challenges.

What happens in the resource sector has a dramatic ripple effect on the rest of the economy in relatively short order and we are keenly aware that our resource sector is strongly linked to the global economy as the prices for NWT resources are set in the global market. Both workers and capital can easily leave the NWT when the economy slows down or another province experiences strong growth. Simply having the resources is not a guarantee that they can or will be developed.

The scope and timing of new resource projects are uncertain. Currently, potential new mines are having difficulty obtaining financing, and low prices have caused oil and gas activity in the territory to decline significantly. New drilling and exploration projects in the Beaufort Sea and Sahtu regions have been put on hold. At present there are no potential projects large enough to replace the existing diamond mines and the resource revenues they provide our government when they stop production. None of the existing diamond mines are projecting production past 2031. The first mine projected to close is Diavik by 2023, just eight years away.

Resource development depends on exploration investments made by private companies with plenty of worldwide options for future growth. A new mineral discovery may take more than a decade to become a productive mine and the rate of exploration investment has decelerated. Total mineral exploration is at levels similar to 2009, when the global economy was in recession, and very little oil and gas exploration has been undertaken over the past few years. Without

exploration, new resource development does not happen.

This is our dilemma. We need to make investments in our economic future now by ensuring our territory is attractive and welcoming to potential investors. Infrastructure investment can help encourage resource exploration and development and we need to position ourselves to capture the benefits of a global economic recovery. However, our projected revenues are flat and our existing expenditure pressures continue to intensify. Taxation and other measures to increase our revenues are not the answer; these would only raise the cost of living and doing business here and discourage the investment we need.

The solution is growing our economy and growing our population, which means investments in infrastructure are required to not only support resource development but to diversify our economy, lower our energy costs and, in turn, lower the cost of living and operating businesses in the NWT. In short, we need to spend money to create future prosperity, but that means managing current expenditures so that we have the fiscal resources to invest for the future.

As we look to our future post-devolution and the need to grow our economy, there are key things to be done. Specifically, we need to commit ourselves to settling outstanding land claims. This will bring political certainty to both the GNWT and Aboriginal governments. It will bring economic certainty and opportunity to industry, opening up 144,000 square kilometres of mineral rich land that has been under interim withdrawals for decades, allowing for potential development. Settled claims also mean no more tens of millions of dollars spent on protracted negotiations, saving three levels of government critical fiscal resources.

Going forward, the GNWT will need to do more to free up fiscal resources to continue to meet the difficult challenge of maintaining existing assets, improving housing stock and meeting legislative requirements. We have to create fiscal capacity by ensuring expenditure growth is still controlled, implementing reductions in areas where reasonable and looking at ways government could be structured more efficiently.

If current planning assumptions remain unchanged, our operating surplus will continue to decline over the life of the 18th Assembly to as low as $10 million

by 2019-2020. This will require us to lower our investment in our capital program after 2016-2017 to ensure we are able to manage debt and adhere to the Fiscal Responsibility Policy. This means our infrastructure deficit will continue to grow.

We cannot borrow our way out of this quandary despite the increase in the federally imposed borrowing limit to $1.3 billion. Increased debt today leads to higher future debt repayments. Using the

increased borrowing room entirely would add almost $30 million annually in expenses for interest and debt repayment. The operating budget would be required to cover these extra costs and we would be in deficit by 2019-2020.

We need to ensure we are living within our means, watching what we spend on operations so we can continue to invest in infrastructure to grow the economy. The current outlook projects both flat revenues and increasing expenditures. This leaves us with a narrowing surplus and a capital investment profile that is cut in half by 2019-2020. Economic growth and diversification will require capital investment so that mine closures in the medium term do not push the economic base past a tipping point. Make no mistake, I am confident that as we transition to the 18th Legislative

Assembly, the resilient people of our fine territory are up to the task. Aligning our expenditures to our flat revenue growth will be challenging but necessary as we continue on our path to creating a sustainable economic environment that will allow the future Legislative Assemblies to provide our residents with programs and services they require. Thank you, Mr. Speaker.

Thank you, Mr. Chairman. We fully agree with the Member about the need for the government, especially in the smaller

communities but across the economy as a whole, the territory as a whole, especially given the fact that we’re now into a second recession in the last eight years, to use our infrastructure dollars to help stimulate the economy. We did that in 2007. We borrowed to our limit to make sure that we had as much infrastructure go into the ground as possible, and I think we did over a million dollars in a few years. We still see that as a critical way forward, especially infrastructure that is going to help create the conditions for economic growth. We are very aware of the concern and appreciate the Member’s reminder about not just downloading if you are going to work with communities, but make sure that they have the resources to do the job. This whole Assembly has been built on the issue of trying to deal with the cost of living. We’ve been able to make some inroads, but there are still a lot of things to do, especially on the energy side.

Morel mushrooms, I agree; for a little piece of fungus, they are like gold. Changes to the Forest Management Act are coming up. ITI has done a very fine job on the promotion side and managing working with the communities and the folks who want to get into the business, so I think that’s been a very good success story.

The tourism promotion was raised, as well, in the House earlier by Mr. Moses. We’ve seen a growth in tourism and the need to pay close attention to that. On wood pellets, we’ve spent millions of dollars ourselves and the federal government working with Mr. Mapes and communities to get this to the point where it’s at. They now have the land sorted out and the actual mill should be starting construction before winter.

We fully intend, as a government, to continue with the Biomass S

trategy. It’s a long-term energy plan

that should have a long, long future. It’s a renewable energy source, so it should have a long future in the North.

With regard to the treatment centre, we don’t have a lot of notes on that one, but the Minister of Health will be able to have that discussion when he comes to the table here in the next few days. Thank you.

Thank you, Mr. Chairman. In regards to Stanton, the plan, as we will lay out tonight in detail, is going to be for a new hospital with the old hospital being designated for some other use in the coming years.

In regard to the $28 million for communities, what we have done is protected that money from any reductions, recognizing that it is a critical need and that as we manage our money and look at balancing our expenditures and revenues, that’s one area that was deemed to be in need of protection. I appreciate the Member’s comments both about the planning studies and the extended care facility planned for somewhere in Yellowknife.

In regards to the schools in the list, or the better job on schools, in my recollection, in my time there have been cycles where there have been years of schools being fixed and now we’re in a health centre renovation phase, plus trying to do housing, plus trying to do some schools, and we have, as I would remind Members, a $3 billion infrastructure deficit and the total budget this year, I think, with carry- overs and such was $300 million.

So, we’re all

challenged to try to meet the demand as best we can. The challenge for housing, of course, as Minister McLeod has pointed out numerous times, I think they’ve taken out over $6 million so far out of the CMHC funding and that number’s going to get bigger faster in the coming years.

With the issue of too much emphasis on roads, we pointed out, I think, when we’ve met previously, that there are options being looked at as a way to free up more cash in the capital plan through the Build Canada and deal with the roads differently where a lot of the work is basic ongoing maintenance and upgrades. So, we’ve touched on that with committee and will continue to have that discussion.

The cost of power is too high, we appreciate that. That was one of the big reasons we put the $29 million down, that we didn’t want to see an additional 20-something percent increase. We agree, as well, that we in Yellowknife need to pick up our distribution capacity, which is one of the reasons why we’re looking at an expression of interest for one

megawatt, five megawatts and 10 megawatts of wind and/or solar in Yellowknife in the Snare system. We’re also doing a resiliency study and we’re revisiting some of our transmission options just to see if there are any other opportunities and we’re going to continue to invest in the thermal communities, as well, to look at the price of power. Once again, that’s going to require strategic investments and the borrowing of money in a manageable, carefully thought out way to allow us to address some of those pressing issues.

The issue of the support for the Simpson Health Centre, I appreciate the Member’s comments as I am sure does the Member for Nahendeh. So, that would conclude my response. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. I just note and thank the Member for his comments and evidencing his pleasure and being pleased with Highway No. 7, Trout Lake chipsealing, Highway No. 1 north of Wrigley needing work but still thankful for the work on Highway No. 1 and Trout Lake and the fact that he likes the way that contracts can be used to stimulate the economy.

With regard to the community hall, that’s a possible gas tax project the community could look at where they have capital money.

The seniors home is a housing issue. I don’t have detail to speak to that, but I would assume the intent would be to get it done. If they started late, they want to finish strong next year.

With regard to the Fort Simpson Health Centre, there’s been a lot of work underway. There are studies that have been done and they have sorted out the land and making sure… I will maybe ask Mr. Guy to talk about the land issue. There were burial sites, but there’s been work that’s been agreed to. We are looking at the whole process being done by fall 2016, which would allow us to then determine specifically if it can be reasserted into the red flag process.

Mr. Chairman, if I could just ask the deputy to talk to the land issue. Thank you.