Mr. Chairman, I am pleased to present the 2010-2011 Main Estimates for the Department of Industry, Tourism and Investment.
ITI’s mandate is to promote economic self-sufficiency through responsible development of the NWT’s natural resources and the promotion of tourism, trade, investment, business and manufacturing to create a prosperous, diverse and sustainable economy for the benefit of all residents.
This mandate supports the commitment of our government that all residents of the NWT must have the opportunity to build a stronger future for themselves, their families and their communities. In total, the department’s main estimates proposes total operational expenses of approximately $51.8 million for the coming fiscal year, which is an increase of 1.7 percent from last year’s main estimates.
This includes sunsets of $5.5 million, strategic initiatives of $4.5 million and forced growth of $2 million.
Mr. Chairman, at this time last year we were in the middle of a worldwide recession, unlike any we have seen since the Great Depression, which has serious impacts on the NWT economy. NWT economy is expected to rebound and while we are not out of the doldrums just yet, the department is looking at investments in 2010-2011 to help our economy continue on the road to recovery.
These proposed investments will come in areas such as small business development, arts and fine crafts, sport hunting, agriculture, NWT fish and meat harvesting and processing, renewable energy planning and parks.
Mr. Chairman, I will now provide some detail on the department’s proposed spending plans for the upcoming fiscal year.
Mr. Chairman, in keeping with the goal of assisting in our economy’s recovery, the department is addressing some areas of forced growth funding this fiscal year. That funding would include $140,000 in support of the Northwest Territories Community Futures funding program, a very successful government program where community-based corporations assist small businesses and entrepreneurs through services that range from providing lines of credit to business planning.
We are also proposing to invest $120,000 in funding for a full-time regional land and resource analyst is the Deh Cho region. This position will help deal with the demands for increased land development initiatives in the Deh Cho region.
The department is also proposing $100,000 in funding for marine safety training. These training courses are provided to licensed tourism operators and guides who use motorized boats as part of their business. The training provides certification that allows these operators to meet new federal standards required to run their businesses.
Mr. Chairman, before I get into our department’s proposed strategic initiatives, I want to take a few moments to talk about some major ongoing projects and programs ITI is involved with and the funding we are proposing to spend on them.
The Mackenzie Gas Project is one of great importance to this government. As a result, the department will continue to allocate $2 million in existing funding to go towards its work on this proposed project and to support the work of the Mackenzie Valley Pipeline office in coordinating the government’s planning and response to the MGP. This funding will also allow us to continue our support for the Aboriginal Pipeline Group, while fulfilling our government obligations and ensuring communities benefit from the MGP if it proceeds.
Reducing our reliance on diesel fuel for power generation, cutting back on greenhouse gas emissions and developing more renewable energy sources are all priorities of this government. That is why the department continues to support the NWT Energy Corporation in its efforts to expand the Taltson Hydro system. This proposed project is currently in the environmental review process.
ITI also proposes spending $1.3 million on the Tourism Product Diversification and Marketing Fund, which assists tourism businesses to develop new tourism products and diversify their product base. Since the fund was started in 2007-2008, ITI has distributed $3.42 million in assistance to tourism businesses.
Perhaps no one area of the department addresses as much in the NWT economy for individuals as our traditional economy programs. From the Genuine Mackenzie Valley Fur Program to the Take-a-Kid Trapping Program and the Community Harvesters Assistance Program, the department’s continued focus on the traditional economy assists in diversifying our economy and providing all regions and communities with choice. The department proposes continued investment of $1.97 million in our traditional economy programs in 2010-2011.
Mr. Chairman, the government will achieve its vision of the 16th Legislative Assembly through five strategic actions. These actions are:
Building our Future
Reducing the Cost of Living
Maximizing Opportunities
Managing the Land
Refocusing Government.
In our efforts to achieve those strategic actions, our department has focused on renewable energy projects like the Sahtu Hydro Assessment and Lutselk’e Mini-Hydro Facility, to wean our Territory off of diesel power generation and reduce the cost of living in our smaller communities.
We have invested in our entrepreneurs and our small businesses through continued support to the Support for Entrepreneurs and Economic Development Policy, SEED. We have worked on maximizing opportunities through investments in promoting our talented NWT artists and the arts and fine crafts they produce. And we have worked to assist our communities in being healthier and more self-sufficient through our investments in agricultural infrastructure development and promotion of the commercial processing and marketing of NWT fish and meat.
Mr. Chairman, all of these efforts are directed at achieving the 16th Legislative Assembly’s vision of strong individuals, families and communities sharing the benefits of a unified, environmentally sustainable and prosperous Northwest Territories. I will now go over some of the key strategic initiatives this department proposes for the coming fiscal year to help the government achieve its vision.
Perhaps nothing is as important to NWT residents as managing and protecting our land. With that in mind, the department is proposing investments in a number of areas to help the government meet this strategic initiative.
The department proposes investing $800,000 in 2010-2011 into the Expansion of Residual Heat Initiative. This initiative is looking into using waste heat from electricity generators for space heating in our communities. A residual heating system will be completed in Fort Liard in 2010 and another system is scheduled to be completed in Inuvik in 2010-2011.
The department also proposes $500,000 in funding for the Sahtu Hydro Assessment. This regional hydroelectric assessment will examine all viable energy options for Sahtu communities and potential industrial customers.
Getting Sahtu communities off diesel power generation would not only decrease the cost of living in the region but also lower our greenhouse gas emissions.
Another strategic initiative ITI is focused upon is maximizing opportunities. In 2010-2011 the department plans to support this initiative by proposing investments in a number of programs and projects.
Continuing on our success at Northern House and the 2010 Olympics, ITI proposes a $560,000 investment to promote the NWT as a place to live and work through the National Marketing Campaign. This campaign will target specific regions in Canada and it is designed to address the leakage of employees moving from the NWT to other jurisdictions and its associated fiscal benefits.
The department proposes an increase of $30,000 for a total of $600,000 towards the Sport Hunt Outfitter Marketing Program. This program will assist sport hunting outfitters in targeting new markets for polar bear hunts, such as Mexico and Europe, and refocusing markets to non-consumptive tourism products. This is an important proposed initiative and would help maintain the viability of a business investment operating in this sector.
The SEED Policy has become a very important and popular ITI initiative. This policy promotes business and community economic development in the NWT. The department is proposing investing an additional $300,000 into the policy for the 2010-2011 fiscal year. This will increase its budget to $3.5 million.
ITI is proposing investing $250,000 in the Mining Workforce Initiative MOU. In partnership with mines, this funding is designed to increase the benefits from mining activity in the NWT by reducing leakage of employment out of the Territory.
The department is also proposing an increase of $125,000 for a total investment of $225,000 to promote NWT artists and arts and fine crafts production. This funding will increase the economic impact and production of arts and fine crafts products in the NWT and will maximize the delivery of programs and services to NWT artists.
This funding is intended to promote our arts and fine crafts sector and open up new markets for our artists and the products they create.
The final strategic initiative I will highlight is ITI’s proposed $150,000 investment to continue to improve infrastructure and upgrade facilities at its territorial parks. The reason the department proposes this investment is to attract park visitors to stay longer and see more of the NWT while they are here.
As this government looks for ways to reduce the cost of living in the Northwest Territories, ITI has identified some key areas to invest in. One of the most critical is in the area of energy planning. The department is reviewing electricity rates and regulations, and the NWT Electricity Review continues. The goal is to implement a GNWT response to the recommendations of the 2009-2010 review process. The objective is to develop a long-term vision and plan for the management of generation, transmission and distribution of electricity in the NWT.
But it’s not just in the realm of energy where ITI is concentrating its efforts to reduce the cost of living in our Territory. It is also focusing on areas such as the traditional economy, agriculture and fisheries. Over the past several years our department has invested in increasing food production across the NWT through initiatives like the Small Scale Foods Program.
In 2010-2011, ITI proposes to invest $450,000 in promoting and supporting commercial harvest processing and marketing of fish and meat in the NWT. This funding would support the packaging, distribution and promotion of our fish and meat products to consumers in the NWT, providing a stable support of food for local needs and for sale at local markets. The funding would also help provide training to spur continued growth in the NWT fish and meat production sector.
The department is also proposing funding of $250,000 for agriculture development infrastructure. This investment is designed to lengthen growing seasons, increase yields in NWT communities and help lower the cost of living.
Mr. Chairman, the mission of the Department of Industry, Tourism and Investment is to provide quality programs and services to promote and support economic prosperity and community self-reliance in the NWT.
The initiatives I’ve touched on in these remarks are examples of how ITI is working on behalf of this Assembly and this government to fulfill its mission and have a diversified economy that provides all regions and communities with choices and opportunities as envisioned by the 16th Legislative Assembly.
Let me conclude my remarks by thanking the Members of the House and the members of the Standing Committee on Economic Development and Infrastructure for your guidance and input in 2010-2011 Main Estimates process. Thank you, Mr. Chairman.
Thank you, Mr. McLeod. Would you like to bring witnesses into the House?
Yes, Mr. Chairman, I would.
Thank you, Mr. McLeod. Sergeant-at-Arms, please escort the witnesses into the House, if committee agrees.
Agreed.
Committee does agree, Mr. Sergeant-at-Arms.
If I could ask the Minister to please introduce the witnesses.
Thank you, Mr. Chair. To my left, Mr. Peter Vician, deputy minister of ITI, and to my right, Ms. Nancy Magrum, director of shared services with ITI and ENR.
Thank you, Minister McLeod. I believe we’ll start with general comments.
Detail.
Calling for general comments, hearing none, thank you, committee. We’ll start with detail and we will defer until after consideration of detail the operations expenditure summary on page 12-7 for ITI and turn to page 12-8. Department summary, information item, Industry, Tourism and Investment, infrastructure investment summary. Questions?
Agreed.
Thank you. Page 12-9, department summary, information item, Industry, Tourism and Investment, revenue summary. Questions?
Agreed.
Page 12-10, department summary, information item, Industry, Tourism and Investment, active position summary. Questions?
Agreed.
Page 12-11, Industry, Tourism and Investment, department summary, information item, active positions, Business Development Investment Corporation. Questions?
Agreed.
Page 12-13, Industry, Tourism and Investment activity summary, corporate management, operations expenditure summary, $7.52 million.
Agreed.
Committee agrees. Page 12-14, information time, Industry, Tourism and Investment, corporate management, active positions.
Agreed.
Page 12-17, activity summary, Industry, Tourism and Investment, minerals and petroleum resources, operations expenditure summary, $6.558 million. Agreed?
Agreed.
Page 12-19, activity summary, Industry, Tourism and Investment, minerals and petroleum resources, grants and contributions, contributions, $995,000.
Agreed.
Committee agree?
Agreed.
Page 12-19, Industry, Tourism and Investment, information item, minerals and petroleum resources, active positions. Questions? Mr. Krutko.
With regard to energy, I noted in the Minister’s opening comments he talked about residual heat in Inuvik and also for Fort Liard. I would like to ask the Minister what about those communities that have already looked at that business venture. There already is a business in the Inuvik region that specializes in residual heat. It’s Aadrii Energy which is a joint venture between the Gwich’in Development Corporation and Northwest Territories Power Corporation. I’m just wondering, have you spoken to that organization. I noted that you have Inuvik mentioned, but believe we have had discussions with the people in the Gwich’in Tribal Council, because it is one of their business arms.
Thank you, Mr. Krutko. Just to be clear, I believe you’re on the next activity. We’re on page 12-19, minerals and petroleum resources. Is that right, Mr. Krutko?
Yes, I’m on the next page; energy.
Thank you, Mr. Krutko. So just to be clear once again, committee, page 12-19, activity summary, Industry, Tourism and Investment, information item, minerals and petroleum resources, active positions. Questions? Mr. Yakeleya.
Thank you, Mr. Chairman. Just for clarification on this one here, I take it these positions are in the South Slave and are to do with our office in Hay River that people are responsible for the potential Mackenzie Gas Project. These are the positions.
Thank you, Mr. Yakeleya. Mr. McLeod.
Thank you, Mr. Chairman. That’s correct. These are six positions for the Mackenzie Valley Pipeline office that are located in Hay River.
The work that they are doing to support the initiatives of the proponents to build the pipeline, these are positions that people here do go into the various other regions that the pipeline will be impacting, the communities that will be impacted by the potential pipeline.
This office helps coordinate the activities throughout the government and is also responsible for coordinating with community governments and aboriginal governments. So they have been travelling to the different communities to update them on what’s been happening with the Mackenzie Valley Pipeline.
Thank you, Mr. McLeod. Is that it? Page 12-19, activity summary, Industry, Tourism and Investment, information item, minerals and petroleum resources, active positions. Questions?
Agreed.
Page 12-21, Industry, Tourism and Investment, activity summary. Mr. Krutko.
Thank you, Mr. Chairman. Just following up on what I was saying earlier that there are already people in the business of providing residual heat in the communities, there is a company that’s established with the Gwich’in Development Corporation called Aadrii Energy, which is a joint venture between the Gwich’in Development Corporation and the Northwest Territories Power Corporation, who provides residual heat in Fort McPherson. They’ve put some $3 million or $4 million into this company and I’d just like to ask the Minister, I note that you have Inuvik listed in the suggested projects for residual heat and I’d like to know if we’re going to be working with this company to offer them the opportunity to expand their business or are we going to be competing against them by getting into a business that we already are a partner in for residual heat and specializing in that area. I’d like to ask the Minister if he has spoken to the Gwich’in Development Corporation or the Power Corporation and offered them the opportunity to expand their business opportunities in the Inuvik region. Inuvik is in the Gwich’in Settlement Region and this is a Gwich’in company.
Thank you, Mr. Krutko. Mr. McLeod.
. Thank you, Mr. Chairman. Residual heat projects are a very important component of our alternative energy framework. I’d just like to point out that in 2009 we allocated $1.3 million for the Fort Liard Residual Heat Project and in 2010-2011 $800,000 will be used to complete the Fort Liard project and $1 million is allocated for the Inuvik project. The Fort McPherson Residual Heat Project is a success story today. As the Member indicated, the system is a 50-50 joint venture. Right now investigations on upgrading the school service and moving to 100 percent is in the works. We’re also looking at a $40,000 retrofit for heat exchangers at the school. I understand there are also options for supplementing the system with a wood pellet boiler. My understanding is that we’re working with the company that the Member mentioned.
There have been discussions between the Minister and the president of the Gwich’in Development Corporation on the opportunity of the Inuvik project to provide residual heat to the new government office located adjacent to the power plant. I think that also the band office is just down the street from the power plant and they are looking at the possibility of joining those facilities around the power plant in Inuvik through a proposal similar to what they did in Fort McPherson. Have you approached Deze or Aadrii Energy to look at that as a possible business opportunity as they are already involved in it? Have those discussions taken place?
My understanding is there have been discussions to connect the new Public Works and Services office building. The total cost is $1.5 million. Certainly, we’re interested in all of these kinds of residual heat projects. My understanding is that NTPC has been in discussions with the project managers and I would certainly be interested in these types of projects.
I noted that these projects seem to be one-offs, where we’re starting one here and one there. Do we have a long-term projected plan of how we’re going to look at expanding these systems in other communities? I know that the community of Tsiigehtchic has raised this at the Beaufort leaders’ meeting, because they have a fire hall right next to the power plant. It came up at the Beaufort leaders’ meeting why they can’t get residual heat from the power plant to heat the fire hall, which is the next building over. Right now it’s costing them a lot of money to heat the facility. The power plant’s right next door. Are there plans to offer this residual heat technology to other communities so they can take advantage of the location of their power plants to public facilities around them so we can tie in to those facilities to provide that residual heat?
The energy priorities framework that we had established was expressly for that purpose. The alternative energy framework and the $60 million that was identified over three years was to enable us to undertake pilot projects to show or prove that alternative energy worked here in the Northwest Territories. Residual heat has been proven. As we got further into this we would move into establishing ongoing programs so that we could begin to implement it across the Territories because of the fact that there are short payback periods and it would save government money.
That’s it, thanks.
Next I have on my list, Mr. Yakeleya.
Thank you, Mr. Chairman. Just a follow up to Mr. Krutko’s questions. I want to talk about the energy policy. I understand that there is a hydro symposium planned in Deline to look at the different possibilities of the hydro. Hydro has a lot of potential in the Northwest Territories. Actually, in the GNWT’s website it says that the promise of hydro power in the Northwest Territories is estimated to be over 12,000 megawatts. That’s a lot of power that the Northwest Territories could tap into. So I want to ask the Minister here in terms of hydro potential in the North here. I’ll talk a little bit more of the one we’re looking at in the Sahtu, more specifically the Deline mini-hydro project. They’ve been working on this project for the last 16 years and they still wanted to see if it’s a possibility. Of course, there are various opinions as to the technology that wants to be used. There are different arguments on both sides as to which technology should be used. I want to ask the Minister in terms of after 16 years is it safe to say that Deline is very close to constructing a mini-hydro plant? In previous comments made, energy is used elsewhere in the region and it seems like some plants are going to be constructed in terms of reducing the cost of living, but also to help out with the issue of greenhouse gas.
