Thank you very much, Madam Chair. The committee wishes to consider Tabled Document 9-17(4), NWT Main Estimates, 2013-2014, with the continuance of Industry, Tourism and Investment as well as NWT Housing Corporation. Thank you.
Thank you, Mr. Menicoche. Does the committee agree?
Agreed.
We will commence with that after a brief recess. Thank you.
I’d like to call Committee of the Whole back to order. We’re on the Department of Industry, Tourism and Investment. When we recessed yesterday we were on page 12-18 and before we continue on the detail, I’d like to ask Minister Ramsay if he’d like to bring witnesses into the chamber.
Yes please, Madam Chair.
Thank you, Mr. Ramsay. Is the committee agreed?
Agreed.
Thank you. I’ll ask the Sergeant-at-Arms to please escort the witnesses to the table.
Mr. Ramsay, for the record, could you please introduce your witnesses.
Thank you, Madam Chair. To my left I’ve got Mr. Peter Vician, deputy minister of Industry, Tourism and Investment, and to my right, Ms. Nancy Magrum, director of shared services, finance and administration, ITI and Environment and Natural Resources. Thank you.
Thank you, Minister Ramsay. Industry, Tourism and Investment, activity summary, minerals and petroleum resources, grants and contributions, contributions, $745,000.
Agreed.
Agreed. We are on page 12-18, Industry, Tourism and Investment. Agreed?
Agreed.
Thank you. Page 12-19, Industry, Tourism and Investment, information item, mineral and petroleum resources, active positions.
Agreed.
Agreed. Moving on to page 12-21, activity summary, energy, operations expenditure summary, $1.679 million. Mr. Bromley.
Thank you, Madam Chair. I’d say the energy planning role of this government is one of our most vital roles and, unfortunately, the challenges are so huge that we have made very little progress in this area. I’m very disappointed to see that our funding has continued to decline, I think, $4 million a couple years ago and a couple million last year, and for this current year it’s down another half a million or so.
I think there are some fundamental issues that we should have been able to address that we haven’t. An example, certainly, is that incredibly we are still spewing megawatts of electricity over the falls without it being used. We’re just letting it go into the environment. This, while our people are facing a high cost of living and so on. This is clean energy that’s being produced anyway. That’s really no additional cost. Rather than figuring out how to use these megawatts of power in the South Slave and figure out a way to reduce our costs, at least in that region where we have it, to me is untenable. We continue to spend millions of dollars as planners, and we have done this for years and years. The only thing we’ve done in terms of hydro where we spent this money, is replace a dam that we bought in a very dilapidated condition a few years before. So I’m very concerned about our investment in energy planning here.
I know there are plans to hook up the system and whatnot and I agree when we can, we need to connect our regions, but certainly to think that we can connect to the South and expect anything other than a commitment to buying coal-produced energy, with all that that means, and sending our money south instead of supporting local energy providers, it’s certainly nonsensical in terms of real, full economic sense. I know there’s an effort now to look at connecting our systems within the Northwest Territories. To me that sounds reasonable, but there is so much that could be done and within the existing, and we know that the South Slave has the demand and yet we continue to spill those megawatts of power. It’s just beyond comprehension.
So I want to express my disappointment in the performance so far. We’ve studied many dams, many projects and I suppose at some point maybe the data we produce will be useful there. But I really wish this government could focus on taking advantage of the stuff that’s before our very eyes instead of pursuing the elusive, so expensive and so megaproject sort of an approach that they’re generally not attainable. They’re not really economic. It’s well demonstrated the smaller the things are, the more economic they are when you bring in full cost accounting and so on. Certainly, the more achievable they are. There is so much we could be doing and I have to admit when it comes to actually doing things on the ground, there’s a lot that’s happening. I think ENR has a lot of good stuff going in biomass and now starting on solar and so on.
Let me start with that. Could I get the Minister’s take on what we can do to turn this around into where we’re planning in a way that actually we can see things implemented at an appropriate scale, living within our means, as the Minister of Finance says, and so on? Thank you.
Thank you, Mr. Bromley. Minister Ramsay.
Thank you, Madam Chair, and I thank the Member for his comments. I certainly appreciate his take on things, but we are making progress. I’m convinced we are making some progress here. We’re getting close to the end of negotiations on devolution.
We continue to talk to industry at every opportunity about power from Taltson. We need transmission, we need a very sizeable investment in the transmission lines. I know there’s been a lot of talk about the interconnect on the grid north and south, and I believe that can happen with that type of investment and it should happen. I think that’s something that we should certainly strive for. The government is working hard on trying to achieve that objective. We do need to plan. I mean, these things just don’t materialize. You don’t pull $700 million or $800 million out of thin air. We need to plan. We need to have a plan that we can target, we can get the money, get the funding and the customers. I mean, it’s all about having customers at the end of the day and a place to sell that power.
So we continue to work on that through MECC and the Premier’s leadership of MECC and Minister Miltenberger. We are making progress. It might seem to some that we’re not moving fast enough, we need more money, obviously, but our belief is we’re going to continue to move forward and make this work. After devolution there’s probably going to be a reorganization. As far as coordination goes, there might be different models that are looked at. So that remains to be seen, but from a coordination perspective, energy is still under MECC and the guidance of the MECC committee. So we continue to, again, ensure that this file is moving forward and my belief is that it is moving forward. Thank you.
I have to say I am disappointed in the Minister’s response. Transmission lines are at least $750,000 a kilometre, typically more, and in our environment probably more. That’s not what I’m talking about. We’ve been talking about that for decades. We can’t do that. We don’t have the money. The Minister said it himself. I agree with the Minister; we do not have the money. What we do have are customers. All of the South Slave.
Everybody uses energy. We heat our homes, we drive our vehicles, et cetera. Arctic Energy Alliance studies once again have demonstrated, for example, that the entire community of Fort Resolution could use a good amount of that power efficiently with ground source heat pumps, for example, to heat all their buildings, take one unit of electricity, produce four units of heat, and I would imagine the same is true for Fort Smith and Hay River where we have done a few sort of token projects, maybe a couple.
Clearly, the market is there, the energy is there. To think that, I keep saying we’re 43,000 people, 41,000, whatever. Let’s live within our means. Let’s adjust the scale of our thinking to where we actually benefit people where it’s possible, rather than pursuing these distant projects. We have $1.7 million, roughly, in energy planning. Will the Minister commit to looking at where it’s possible to get things on the ground soon in a scale that suits our communities and reflects the size of our communities and realizes the opportunities we have?
I appreciate the Member’s comments. Those are the type of comments that we’re looking for as we advance the discussion on energy through the Energy Plan.
We recently had the energy charrette. Those are the types of things and comments that we need to hear. We are going to have to present alternatives and options, new options, on how we get this done. I look forward to that discussion. We have to continue moving in the right direction and, again, through planning that’s how we’re going to arrive at the alternatives and make some decisions on where we go next. That has to happen. I thank the Member for his comments and I appreciate his comments on the matter.
Thank you, Mr. Ramsay. Mr. Dolynny.
Thank you, Madam Chair. Just to continue on the efforts from my colleague from Weledeh. I think we’re onto something here and I do realize that we have limited funds and there’s been a lot of austerity means to have a prudent budget before us. However, the concern I think many of us have, as you hear, is our energy costs and the costs associated with the cost of living. These are paramount questions that are asked time and time again, not only in the House but anywhere we go as Regular Members or as Members of the House.
The concern I have is that less than a year ago, in 2011-2012, we had $5.5 million of sunsets. A lot of the sunsets in this initiative were hydro initiatives. There was the Lutselk’e mini-hydro, there was an anti-Hydro Strategy, there was a Sahtu hydro assessment. These comprised a large part of that $5.5 million. Yet, as I said in one of my comments on the opening statement, our Hydro Strategy, in terms of our significant change that we need to do as a society to mitigate our use of fossil fuels, is very lax in this budget. In fact, we’ve been talking about hydro initiatives or strategies for the last two years. We don’t really see it again this year.
Can the Minister indicate when we will see the full investment in hydro and to coordinate that with, obviously, the transmission line strategy that we keep hearing about, especially since the charrette is now over?
Thank you, Mr. Dolynny. Mr. Ramsay.
Thank you, Madam Chair. I thank the Member for his comments. They’re spot on. That’s exactly what we’re trying to achieve here. We’ve got the Hydro Strategy rolled up with the Energy Plan. We have to get those alternatives. We have to get that investment back. It’s through the planning that we’re going to get there. Like Mr. Bromley, I thank Mr. Dolynny for bringing these issues up. We will get there. I know it might seem like a long way away, but we are working toward these solutions and we will continue to work toward the solutions through the planning.
I do appreciate the Minister earmarking the need. I guess the question is when. If he has the ability to ask that, it would be nice for the House to know what the master plan is behind it. More importantly, we found out yesterday through our deliberations that through the Opportunities Fund this government has roughly $7 million parked, for what I really don’t know. I would assume it’s for initiatives. If so, I would say that this is possibly a really good initiative to invest this money in. Maybe if we can get an answer as to if this is not a good initiative, what initiative is the money that $7 million or so in this Opportunities Fund doing and what is it earmarked for?
Thank you, Mr. Dolynny. It’s a bit of a change of topic from a budgetary point of view. Mr. Ramsay.
Thank you, Madam Chair. I thank the Member for the suggestion. Yesterday I mentioned that the remaining balance in the NWT Opportunities Fund is earmarked for economic pursuits in the territory. I haven’t seen a proposal. I know the department is working on a proposal on where and how that remaining balance should be spent and whether or not it’s on hydro, I would have to go to the deputy minister. We haven’t seen a plan come through FMB and that should be coming through FMB and hitting my desk, hopefully, sometime very soon. As I mentioned yesterday, when that happens our hope is to be able to share it with Members as soon as we get that plan. We’re still in the process of trying to find out the best way to proportion that $7 million.
By no means do I want to direct the spending of Cabinet. The suggestion is if we’re looking for new monies and new opportunities, that’s basically why I posed the question. Here’s an opportunity to put much needed funds to really have a true impact on the cost of living here for the Northwest Territories.
Just one other question with respect to this energy budget and everything. The NWT power system has been discussed a number of times here in the House, and the formulation of a plan, grid efficiencies or grid expansion. Can the Minister indicate, if this is entirely an important focus for government, is that reflected in this current budget, and if so, where is it in this budget?
It’s incorporated in the work that we’ve given to NTEC. That discussion on the power system here in the Northwest Territories, that dialogue continues through MECC. We’ve just recently met with officials from the Power Corporation. That discussion and dialogue continues. The planning continues and, yes, it is contained in the budget through NTEC.
Can the Minister be a bit more specific as to what percentage or dollar figure NTEC has in order to look at the power system plan?
Thank you, Mr. Dolynny. Mr. Vician.
Thank you, Madam Chair. Within the budget for the energy activity, which totals $1.679 million, there’s $1.1 million in grants and contributions. Of that $1.1 million, $700,000 is dedicated to contributions to the NWT Energy Corporation and the Energy Corporation is focused on solutions particularly in hydro development. That supports the costs of doing the work in that branch.
Could we get some clarification? Is this a one-time allotment to the NWT Energy Corporation or is this a multi-year program? I guess what I’m looking for is, what is the long-term strategy? Is this multi-year funding or one-time funding?
Through the Ministerial Energy Coordinating Committee the appropriation of funding for energy initiatives is approved on an annual basis. That information is shared with committee. There is no commitment to multi-year funding. The funding is considered on an annual basis and then brought to the Legislature through appropriation authority. At this point in time the focus is on hydro-development and the corporation focus is on working with us today, specifically completion of the Energy Plan with a large component focused on hydro solutions in addition, of course, to the other areas of energy solutions for the territory.
I guess the Minister leads me to my final question on the overall Energy Plan. As I mentioned in my opening comments, with all the different initiatives that we have on the go, there’s a myriad of multi-disciplinary, multi-functionality initiatives dealing with energy resources and cost of living. Everything boils down to this Energy Plan that we keep hearing about here in the House. Will we be expecting to see a finalized document, action plan for energy initiatives within this fiscal year?
Thank you, Mr. Dolynny. Mr. Ramsay.
Thank you, Madam Chair. I mentioned earlier, getting close to a deal on devolution, and certainly the Member hit a couple of high points here on the coordination. The proposal may be to look at a reorg and have a department like Energy Mines and Petroleum Resources set up where the coordination could take place inside one department. Those are decisions that are going to be made in the very near future, I would say. We have that to look forward to. I think that has been an issue for some time on the coordination side. This might be an opportunity to correct some of that coordination and put it inside one department.
Thank you, Mr. Ramsay. Ms. Bisaro.
Thank you, Madam Chair. I wanted to ask a few questions with regard to energy and the Energy Plan, and funding within the budget. Mr. Vician advised that we have $700,000 out of the $1.1 million in grants and contributions that’s going to NT Energy Corporation. I’d like to know, first off, what the other $400,000 is for, what initiatives or activities it’s funding.
Thank you, Ms. Bisaro. Mr. Ramsay.
Thank you, Madam Chair. The remaining $400,000 would be for medium- and long-term energy options for Inuvik at $100,000, a water monitoring program in Kakisa for $50,000, and the Whati T-line completion of regulatory application for $250,000.
With regard to the Energy Plan, I too have concerns. We have been putting money into NT Energy Corporation as a corporation. The government has been putting money into NT Energy Corporation for quite some time. I appreciate that the department wants to focus on hydro and hydro initiatives but I’m quite concerned that we’ve been giving up money, so to speak, and not seeing anything for it. We haven’t had any results since I don’t know when it was. How many years ago now? There was a plan to have a transmission line go from south of the lake up to the mines and that now has been put aside and we’re looking at other things. I don’t have a sense from the department or from NT Energy Corporation of what the plan is for hydro going forward. I imagine the Minister is going to tell me that’s what this Energy Plan is going to be for.
Madam Chair, on the Hydro Strategy and plan, it does fit in with the Energy Plan. We hope to have the work done on that hopefully by the end of this year – by this spring, Peter says – then we can start making some decisions. I think the planning has to go into this.
The Member talks about getting off of diesel and I think that is our primary objective here. We have to find a way to get communities off of diesel, whether it’s hydro or through natural gas development in the central Mackenzie or in the Mackenzie Delta. We have to look at getting communities off of diesel. That has to happen. It has to be coordinated. It is through the planning that we’re going to get this coordination.
I thank the Member for her comments. We’re working toward just what she’s talking about, it’s going to take us a little bit more time. Thank you.
Sorry, I’m laughing, Mr. Minister, because you say it’s going to take a little more time. Everything seems to take a little more time.
You said the end of this year and I hope you meant not calendar year but fiscal year, then I heard the word spring, so the Minister is nodding. That is the spring of 2013. Thanks for that confirmation.
I guess I’m a little frustrated with the fact that I don’t see, hear or get a sense that we have a long-term plan for our hydro. To get ourselves off of diesel, we’re going to have to get ourselves onto hydro. I’m talking about not just communities in and around Yellowknife and south of the Lake, but we need to be talking about hydro for the communities that are north of us here.
If we’re going to see that in the spring, if this Energy Plan and Hydro Plan are going to be presented to us in the spring, that’s great. I’d like to know from the Minister, what time frame is this plan going to cover. Are we talking one or two years? That is kind of what I’ve seen from my time here.
I feel that we need a plan that’s going to span not just a couple of years, but 10 or 20 years if it’s going to actually get us someplace. The reason why I say that is because there are huge costs associated with adding hydro initiatives, transmission line costs and generating hydro costs money as well. We need to plan for those huge expenses and we have a few other ones already on the books. What kind of time frame is it for the plan? That is about the basis of my question. Thanks.
Madam Chair, yes, and it’s this fiscal year, not next fiscal year. At the very earliest opportunity, I am sure, through MECC, we will bring the Energy Plan through committee, share it with committee sometime before the next session in May. We will get that there. We’ll have this discussion and I think it’s going to be a very good discussion. The plan is going to be multi-year. Obviously, some of the bigger projects would require large investments and be carried out over multiple years. There will obviously be some smaller things that could happen in the near term over one or two years.
This discussion has to happen. We will, like I said, at the earliest opportunity, through the chair of MECC and the MECC committee, bring the plan to committee at the earliest opportunity. That will probably be sometime before the session in May. Thank you.
Madam Chair, thanks to the Minister, I think, for that response. It’s kind of like, trust me, it’s going to be great, just wait, wait until you see it, it’s going to be really good. Pardon my cynicism, Mr. Minister. I believe there’s money in the budget for energy policy development, I think; I’m not exactly sure. I wonder if the Minister could explain to me if there is money in the budget for energy policy initiatives or development, and if so, what is the intent of the use of that money? Thank you.
Thank you, Ms. Bisaro. Mr. Vician.
Madam Chair, yes, the Member has indicated there is, within this budget, $100,000 allocated for energy policy. At this point in time, the MECC committee has asked that this funding not proceed for the 2013-14 year. It will be reconsidered as part of the Energy Plan. We intend to proceed, through committee’s advice, with an alternative investment of possibly in the alternate energy area. Thank you, Madam Chair.
