Debates of February 10, 2005 (day 33)

Thank you, Mr. Speaker. Mr. Speaker, as a corporation, we are considering that in the mandate of the corporation. We realize we have people in the territory who depend on seasonal economies. They don’t have full-time jobs. We have to be open minded to find ways of working with these people who may have problems getting a mortgage through the bank. The key to anything is affordability. You have to be able to afford to not only manage your house but also be able to pay down your mortgage and also know that you can afford the mortgage and make those payments. I think what we are seeing now is that we have to be open minded to look at the projects such as working with the private sector but also through our market strategy with regard to market housing and also to design and develop houses in the North that not only meet our standards but also are affordable for our clients to be able to purchase them at the end of the day.

I am open to working with the Members, but, more importantly, working with our clients to try to find ways of getting these houses into communities and making sure that people can afford them at the end of the day and that they are able to live in them. I think you touched on a good word. How do you do a transitional process from going from social housing into private housing? We are working with that. I think the opportunity is there now for us to look at it. We are looking at the mandate of the corporation. That is a perfect place for us to do that.

Thank you, Mr. Krutko. A short supplementary, Mr. Yakeleya.

Supplementary To Question 356-15(3): Proposed Rent Scale Increases

Thank you, Mr. Speaker. Mr. Speaker, I am really encouraged by the Minister’s response. I am hoping I am hearing some flexibility in terms of the transition phase of phasing in the rent scales. Again, Mr. Speaker, I am going to ask the Minister, would he consider seriously and strongly the success of this program? Would he give it some thought in terms of after maybe six months do we need to scale back the rent increase to meet his target? He might have to do it an extra year or an extra couple of years. I would ask for that consideration. Thank you.

Thank you, Mr. Yakeleya. A short answer, Mr. Krutko.

Further Return To Question 356-15(3): Proposed Rent Scale Increases

Thank you, Mr. Speaker. Mr. Speaker, if we can make adjustments on how we phase in this program or how we look at what percentages are there, if that is going to make it easier for our clients and also for those people who are trying to make that transition, I am open to looking at those ideas. I think that, as a government, we don’t put any hardship on anyone, but I think more importantly we want to work with our tenants and the people who are there to assist them through this process but also assist them to the transition of becoming homeowners. Thank you.

Thank you, Mr. Speaker. My questions are for the Minister of Finance, Mr. Roland, and they continue from the information we heard this afternoon on our budget. Mr. Speaker, the area that I would like to explore a little bit relates to our formula financing arrangement with the federal government. We are a billion dollar government. According to the document released this afternoon, almost three-quarters of that, or about $725 million, will come from Ottawa through the formula financing deal, Mr. Speaker.

Now, this has caused us problems in the past and, through the Department of Finance in Ottawa, there is an agreement now to renegotiate this whole arrangement. The Minister told us, in the budget address, of a panel that has been struck, Mr. Speaker, to set new terms and renegotiate this. I think that is what I would like to frame up a question on here, Mr. Speaker. Could the Minister offer us some explanation of how this new panel is going to affect the future financing in the Northwest Territories? If I could put it down to a relatively straightforward question, are we going to come out ahead with this new approach to our financing deal? Thank you, Mr. Speaker.

Thank you, Mr. Braden. Minister responsible for the Financial Management Board, the Honourable Floyd Roland.

Return To Question 357-15(3): Federal Equalization Program Review Panel

Thank you, Mr. Speaker. Mr. Speaker, the Member is correct on formula financing. We are, at this time in our life as a government, heavily dependent on transfers from Ottawa, and receive up to 75 percent in any given year of our revenues from the federal government through transfers. We are hoping to turn that around, by the way, but it has been a slow process. The work that has been done recently has been driven by the federal government. Provinces and territories have raised the issue about formula financing and how it wasn’t working and meeting the needs that the initial program was set up for.

With that, the Prime Minister and Premiers agreed to have an equalization panel established to review the equalization program and include territorial formula financing in that. We worked from the territories’ end to ensure that formula financing was dealt with somewhat separately. A couple of the members from the federal panel will be part of the subcommittee that looks at territorial formula financing. There is another member being appointed from that committee to look at the territorial side of financing.

But it is really up in the air as to what recommendations they may come back with. Their task is to review the existing equalization formula financing program and then come back with some recommendations. We expect them to come back in about 10 months’ time. How will it affect own-source revenues? How will it affect taxation or taxation efforts? We are unclear of it, but we will definitely be plugging in to ensure that our points of view are registered. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Braden.

Supplementary To Question 357-15(3): Federal Equalization Program Review Panel

Mr. Speaker, when the Minister says that we will definitely be plugging in, does that mean that we have a direct voice on this panel? Some other aspect of this was, are we sharing this with our sister territories, Yukon and Nunavut? Is everybody into the same hopper here, and experiencing the same procedure here? That is where I am going, Mr. Speaker. I am not quite certain just how involved and how close we are going to be to the process and the outcome. Thank you.

Thank you, Mr. Braden. Mr. Roland.

Further Return To Question 357-15(3): Federal Equalization Program Review Panel

Thank you, Mr. Speaker. Mr. Speaker, when the decision to go ahead on the panel was moved by the federal government, we were asked to supply names to the federal government. We put forward names, along with the Yukon and Nunavut, on the formula financing side. We haven’t had confirmation as to the names on that side, that would be plugged in. But from the other side of it, as a government, we will continue to make sure whether it is going to be to the panel as a government or sending our staff to make sure that they are very aware of how we think the formula should work and the impacts that it has had on us as a territory. As well, with the terms of reference, as they formulate it, when they get together we will be able to try to plug in there. But we continue to work with federal Finance as well as avenues of our own and how we can either make presentations or provide the necessary information to them. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Braden.

Supplementary To Question 357-15(3): Federal Equalization Program Review Panel

Mr. Speaker, we have had troubles over the last four or five years here anticipating that we were going to have revenue shortfalls given the growth in our economy and the needs of our social side, we continue to have some pretty aggressive budgets. Every year we were facing a debt wall and doom and gloom. Every year along came some kind of last-minute rescue package for us; thank goodness. But it is not a very good way to govern a place. It is not a great way to run a railroad. What I would like to know is, given the continued uncertainty, we really don’t know where our formula financing is going to go after this coming year, 2005-06. What kind of planning measures can we undertake to put together future budgets? We really seem to be in limbo here. I am wondering if the Minister can help us through our next planning stage, Mr. Speaker. Thank you.

Thank you, Mr. Braden. Mr. Roland.

Further Return To Question 357-15(3): Federal Equalization Program Review Panel

Thank you, Mr. Speaker. Mr. Speaker, part of the transition we went from our formula financing arrangements which we initially looked at extension of a year and then, as a result of the First Ministers’ meeting, got into a full-blown process that we are now entering into. That is the equalization panel and territorial formula financing. Part of that process was setting a base or a floor for transfers to the three territorial governments. That is what we have been able to build this budget on. We know, for example, that is what benefited us this year, 2004-05, where we got a little bit more cash. In 2005-06 we have based it on that amount, and we know it will be escalated by 3.5 percent. As well, if this takes longer, then we will have to work with the federal government to continue the existing process and just have the base floor continue to be escalated. We know that in the short term or the long term that is not acceptable. We have to get something permanent in place. Thank you.

Thank you, Mr. Roland. Final, short supplementary, Mr. Braden.

Supplementary To Question 357-15(3): Federal Equalization Program Review Panel

A short supplementary, Mr. Speaker. Would the Minister be able to release any of the information about the mandate, criteria or baselines that we believe are important to the outcome of this? Thank you, Mr. Speaker.

Thank you, Mr. Braden. Mr. Roland.

Further Return To Question 357-15(3): Federal Equalization Program Review Panel

Thank you, Mr. Speaker. I am aware that the federal government has formulated a draft terms of reference. They haven’t been finalized as I am aware, at least I don’t have a copy of those. We are plugged in, in a sense, through federal Finance. Once we have that and we are able, from federal Finance, to share those, I would gladly share with Members of this House. Thank you.

Thank you, Mr. Speaker. I will be looking for a short answer from the Minister of MACA.

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The song I sang in my Member’s statement from Sesame Street, Mr. Speaker, is very old, and it is as old as the issue of hamlet versus village in Fort Simpson. I would just like to ask the Minister of MACA, what is his position on where Fort Simpson belongs in terms of its municipal status with regard to hamlets, or does he see it belonging with the tax-based communities? Thank you, Mr. Speaker.

Thank you, Mr. Menicoche. The honourable Minister of Municipal and Community Affairs, Mr. McLeod.

Return To Question 358-15(3): Municipal Status Of Fort Simpson

Thank you, Mr. Speaker. Mr. Speaker, I don’t think it is my position to side or give my opinion as to where I personally think the Village of Fort Simpson should belong, whether a tax-based or a hamlet. My job as Minister of MACA is to ensure that we have healthy and prosperous communities. If Fort Simpson has a problem with financing in the capacity of village status, I would certainly want to talk to them about it. Thank you, Mr. Speaker.

Thank you, Mr. McLeod. Supplementary, Mr. Menicoche.

Supplementary To Question 358-15(3): Municipal Status Of Fort Simpson

Thank you, Mr. Speaker. What is happening is that the honourable Member for Great Slave was talking about formula financing, and that is some of the similar arrangements that our government has with the communities. What has been happening is that it has been reduced quite drastically from $1.4 million in 2002 to where it is today. I think we are running at $800,000, and the village cannot run with those drastic cuts in a skeleton budget. I am just wondering how the Minister sees the village capitalizing on the new one-third/one-third/one-third financing deal that is so good for the communities. Thank you very much, Mr. Speaker.

Thank you, Mr. Menicoche. Mr. McLeod.

Further Return To Question 358-15(3): Municipal Status Of Fort Simpson

Thank you, Mr. Speaker. Mr. Speaker, in the last little while, we have had very good success in negotiating new pools of money for the communities to deal with some of the infrastructure deficit that we are facing. We have had an agreement or we received assurance that the money for the gas taxes is going to be rolled out in a certain way. That formula has been shared with us. We know we are going to get $37.5 million over the next five years under that program. We also heard today the Finance Minister announce that we will be looking at a base funding for capital for communities of $25 million. That is going to be starting to roll out the year after. We also have some money being allocated to us through the municipal rural infrastructure funding. This is the only program that requires matching funding at this point. We are looking at ways that we can accommodate some of the need to match the funding through our capital programs. We are trying to make our programs flexible enough so that we can accommodate the requests from the tax-based as well as the non-tax-based. Thank you, Mr. Speaker.

Thank you, Mr. McLeod. Supplementary, Mr. Menicoche.

Supplementary To Question 358-15(3): Municipal Status Of Fort Simpson

Thank you, Mr. Speaker. Once again, I would like to go back to see where the department stands on reverting the Village of Fort Simpson back to a hamlet. Recently I was made aware that Fort Simpson will not have the financial capabilities in 10 years to at least increase their tax assessment roll. This growth won’t be a factor. I would like to ask the Minister is it his department resisting changing the Village of Fort Simpson to a hamlet? Thank you very much.

Thank you, Mr. Menicoche. Mr. McLeod.

Further Return To Question 358-15(3): Municipal Status Of Fort Simpson

Thank you, Mr. Speaker. No, Mr. Speaker, we are not resisting. We have entered into discussions. We have initiated a study to look at the pros and cons of hamlet versus village. We want to be able to assure the community that the funding formula is calculated fairly and also that the money is factored in. All of the components that have to be factored in are also fair. This year, 2005-06, we are reviewing our community government funding policy, and we will be looking at all of the different communities to see how this rolls out and see which communities are being affected negatively. We also have committed to the Village of Fort Simpson, and I have had this discussion with the mayor, that we will take the time it requires to look at the formula. We will have a discussion. We will bring in resources to see where there may be a shortfall. If the formula is actually indeed flawed, then we should have a discussion about it and look at rectifying that. I have made that commitment to the community. Thank you, Mr. Speaker.

Thank you, Mr. McLeod. Final supplementary, Mr. Menicoche.

Supplementary To Question 358-15(3): Municipal Status Of Fort Simpson

Thank you, Mr. Speaker. I believe I know where the flaw in the formula is. It is the line that says village or hamlet, Mr. Speaker. I understand that current legislation does not include a process for cities, towns and villages to change their status to hamlet. Would the Minister be prepared to introduce a bill in this sitting that would amend the legislation to allow Fort Simpson to become a hamlet? Mahsi cho.

Thank you, Mr. Menicoche. Mr. McLeod.

Further Return To Question 358-15(3): Municipal Status Of Fort Simpson

Thank you, Mr. Speaker. I don’t think we would have all our review completed before the end of this session. I would point out, however, to the honourable Member, that the village was operating in the capacity of a village for some time. It has only been in the last while that they have been experiencing some problems. There have been programs to provide subsidy to a number of communities. This community has been one of them. We want to take a good look at it. Let’s find out where the problem is. If there is a problem, is it how the village spends its money? Is it the formula? What is causing the shortfall? Then we can move on to the next step from there. I can’t say with any certainty right now what that next step is going to be until we take a good look at it. We have a study that has been underway. We have been working at it. We have looked at it. We have seen the first draft. We have provided our input and our comments on it. It has gone back. We are expecting to have the final draft come forward by probably the end of February. I would appreciate if we could just take the time to look at it fairly and make our judgment call from there. Thank you, Mr. Speaker.

Mahsi, Mr. Speaker. My question is directed to the Minister of Municipal and Community Affairs, since he is on a roll here.

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I guess it says here in the budget address that the interim measure beginning April 1, 2005, the new deal is going to be rolled out with Municipal and Community Affairs with regard to property tax, revenues collected within the general taxation area of the NWT, which includes 27 communities, Mr. Speaker. I just want to ask the Minister how the new deal that the Minister is going to be bringing out April 1st is going to address the issues that we have in numerous communities of the NWT with regard to outstanding property taxes among a lot of the community members and any accuracy of a lot of the GTA's current assessment rolls. Thank you.

Thank you, Mr. Villeneuve. The Minister of Municipal and Community Affairs, the Honourable Michael McLeod.

Return To Question 359-15(3): Taxation Problems In NWT Communities

Mr. Speaker, I said the new initiative was a good idea, I didn’t say it was going to solve all our problems.

Mr. Speaker, we do have a number of communities like Fort Resolution, Fort Liard and Fort Providence where we have concerns raised by the community regarding property taxes and aboriginal rights. A number of things are factored in there. We have offered to these communities to go in, do an assessment; have a team of people go in and do the assessment. Up to now we’ve been told by the community of Fort Providence not to bother doing that. They don’t want our property tax assessment team in that community. We’ve also been informed by the community of Fort Resolution not to come in and do an assessment there, either. They’re not ready to talk about that. They would like to talk about some of the other issues around property tax assessments that MACA is not in a position to discuss. Thank you.

Thank you, Mr. McLeod. Supplementary, Mr. Villeneuve.

Supplementary To Question 359-15(3): Taxation Problems In NWT Communities

Thank you, Mr. Speaker. I guess just like what the Minister has stated that a lot of the communities are not all in tune with this new deal and I’m not sure if they know whether it’s a good deal or a bad deal yet. I guess with the inaccuracy of the assessment rolls to date, because there is a nine-year gap between the new roll and the old roll, and the resources to manage these assessment rolls are tasks that the communities are going to require, like the assessors, the administrative staff, the tax collectors, the equipment to print the assessment rolls, the tax notices, the property notices, the appeal processes. All these things are going to be rolled out to the community governments which they say they have to take on themselves. With this additional $350,000 in operating revenues that they’re expecting with these 27 communities -- which equates to about $13,000 extra per community, Mr. Speaker -- if this government could tell me how these communities are going to manage all of these tasks with the extra $13,000 that they’re supposedly going to be collecting, then I think maybe it’s a plan that we should implement in this government as opposed to pouring it on with the community governments and making them figure it out.

I just want to ask the Minister how the Municipal and Community Affairs department plans on assisting and providing resources to the communities so that they will be able to take on this new deal initiative. Thank you.

Thank you, Mr. Villeneuve. Mr. McLeod.

Further Return To Question 359-15(3): Taxation Problems In NWT Communities

Thank you, Mr. Speaker. The Member is quite right; there are a number of different components to this whole initiative that we have to work out over the next while. The issue of property taxes being transferred or reverted to the communities in terms of a grant is something that we plan to do in this next fiscal year. We are not planning to change how we collect those fees at this point. The Department of Finance will continue to collect them and we will provide those monies to the communities that they’re collected in, in the form of a grant. So we’re planning to use our own forces, our own resources that we currently use today. Thank you, Mr. Speaker.

Thank you, Mr. McLeod. Supplementary, Mr. Villeneuve.

Supplementary To Question 359-15(3): Taxation Problems In NWT Communities

Thank you, Mr. Speaker. That satisfies my question on the resources required for this gigantic task for each community. I just want to ask the Minister what plans the government has for the communities that do not want to take this new deal that has been offered to them. Thank you.

Thank you, Mr. Villeneuve. Mr. McLeod.

Further Return To Question 359-15(3): Taxation Problems In NWT Communities

Mr. Speaker, I’m trying to figure out which community would turn down money. If the community does not want to take the grant that we provide, that we collected in terms of property taxes, they don’t have to. We’re not forcing it on anybody. Thank you.

Thank you, Mr. McLeod. Final supplementary, Mr. Villeneuve.

Supplementary To Question 359-15(3): Taxation Problems In NWT Communities