So if I can get this correctly, we are going to be working with the stakeholders to create the premium brand or at least promote the premium brand. Do we have any framework, foundation, guidelines, that the government is using currently for once the money starts flowing in, or is this something that we might see in the latter part of this fiscal year? Thank you.
Thank you, Mr. Dolynny. Minister Ramsay.
Thank you, Madam Chair. Any of those marketing efforts and dollars spent would have to be done in close conjunction with the manufacturer to ensure we are maximizing the exposure, the brand and getting that brand the premium it deserves as mined, cut and polished Northwest Territories diamonds. This also includes the Polar Bear, as well, Madam Chair.
Do we have any preliminary numbers, given what we know thus far when production will commence, as to what type of money we would be looking potentially for the fiscal year? Thank you.
Historically we’ve seen a range anywhere between $100,000 and $300,000. Once the factories are up and running, we could anticipate a number somewhere in that range, Madam Chair. Thank you.
I’m going to change gears here under grants and contributions. Under grants and contributions, I know there is a mining tax credit that is administered. Who administers that tax credit? Thank you.
We do not administer a mining tax credit in the department. Thank you.
I would assume that would be under the Department of Finance. Could I get clarity?
I would have to defer that question to the Department of Finance.
Thank you, Minister Ramsay. Minister Miltenberger.
Madam Chair, I was working on my BlackBerry. Could you repeat the question?
Thank you, Minister Miltenberger. Mr. Dolynny.
Thank you, Madam Chair. The question was who administers the mining tax credit? Thank you.
Without my officials here, I assume if it’s not ITI, it would be us.
Okay, so I’ll ask that question on another day then. What role does the geoscience office contribute within the grants and contributions? Do they perform any type of role in any type of incentive programs? Thank you.
Thank you, Mr. Dolynny. Mr. Vician.
Thank you, Madam Chair. The Northwest Territories geoscience office is our centre of excellence for science in geoscience activity in the Northwest Territories. They also provide outreach services. They have a specific role in terms of the ongoing budget that we see before us with regard to supporting prospecting. Through the geoscience office and through our regional office, they provide incentives to our Prospector Grubstake Program, which provides grubstake support for initial prospecting activity. That would be the ongoing program even post-devolution. Thank you, Madam Chair.
So I can assume that under grants and contributions, there is a Mining Incentive Program. It states in this area, $400,000. I would assume, from what we are hearing today, that the NWT geoscience office controls this grant money. Is that correct?
As part of the Mineral Development Strategy, the Northwest Territories has proposed a Mining Incentive Program which is before this House in this budget in the amount of $400,000 reflected on page 12-18. The Mining Incentive Program has not started. It is subject to appropriation by this House, but the intent is to provide contributions to prospectors, junior explorers in the Northwest Territories, to incent active exploration of our Northwest Territories mineral resources. This would be administered by the Northwest Territories geoscience office. Thank you, Madam Chair.
So this money is given to the NWT geoscience office for redistribution. Does the department have any performance measures, evaluation or audit tools in connection with this money?
As per the Mineral Development Strategy proposal, we are planning to incorporate a process similar to what’s used in the Yukon Territory. It’s been a very successful program over the last three years, particularly incenting exploration in many of their areas. The intent is that that incentive program would be measured by actual activity seeking new prospecting activity in the field. Through the Minister, the department has indicated we would be bringing forward the actual policy and program criteria in the coming months. Thank you, Madam Chair.
I will just conclude here. Maybe if the Minister or deputy minister can help this Member find out that question – who administers that mining tax – at some point in time, that would be appreciated. Thank you.
Thank you, Mr. Dolynny. Minister Ramsay.
We will get that question answered for the Member. Thank you.
Thank you, Minister Ramsay. Activity summary, minerals and petroleum resources, operations expenditure summary, $19.349 million. Mr. Bouchard.
Thank you, Madam Chair. I have a question about the Mackenzie Valley petroleum planning office. My questions are about the expansion into the Beaufort-Delta area and the positions that are expanded there. Why are we expanding in the Beaufort-Delta and not expanding the office in the Hay River area?
Thank you, Mr. Bouchard. Minister Ramsay.
Thank you, Madam Chair. We wanted to put the petroleum division in Inuvik. There are nine positions associated with that office being put into the community of Inuvik. We had to also look at the petroleum planning office, Mackenzie Valley petroleum planning office in Hay River and ensure that those six positions stayed in Hay River. The main thing was ensuring those positions stayed in Hay River. It also gave us an opportunity to put nine positions into Inuvik. Of course, we’re very optimistic about the future of the offshore and the development in the Beaufort-Delta. Thank you.
Yes, I guess the question that I have is why we put nine positions into there when we actually see more of the activity in the Sahtu and why the division wasn’t some into the Sahtu, some to expand the South Slave and only a few into the Beaufort-Delta where the potentials may be there but we actually haven’t seen very much activity. I think some of the decentralization and devolution concepts have been synergies in keeping groups of people together. It doesn’t make sense to create an office in the Beaufort-Delta.
Thank you. Again, it was important to keep the six positions in Hay River. There’s a lot of activity happening in the Sahtu and our anticipation is there will be a tremendous amount more activity happening in the Sahtu this coming summer and again next winter and into the foreseeable future. We’ve put positions into the Sahtu. As a government, as we move forward, we’ve made a commitment to look at decentralization and putting the nine positions for our petroleum office in Inuvik made sense to the government and what our objectives are. Thank you.
Thank you. My question is about the evaluation making sense where you have an office that already has six people in it, and I appreciate the Minister keeping those positions in the Hay River area, but like I said, the government has indicated that they’re trying to keep synergies together and they’re basically creating a bigger office, even bigger than they currently have into a new area where we currently don’t have a lot of activity, and we have a lot of activity in the Sahtu and we have an office in the Hay River area. So I guess my concept is that the thing would have been to expand the Hay River office and expand into the Sahtu where the activity is currently.
Thank you. As a government and as we move forward with decisions regarding where the positions would be, there’s a tremendous amount of pressure on the government, on the department on where those positions would end up being. Again, it’s important that we protect what we have. These are new positions that we’ve taken on in the transfer of responsibilities from the federal government. It was a chance for us to put nine new positions into a community like Inuvik and at the same time protect the six positions that we had in Hay River. We are very much watching the activity level in the Sahtu, we have put positions in the Sahtu and we will continue to gauge the activity level in the Sahtu and adjust things accordingly. Thank you.
I guess I’m having difficulty with the Minister’s answers to these questions. It makes sense to expand offices that you currently have, it makes sense to be in the areas where the offices are and I know, from the rest of the departments and the other expenses to devolution, that the Beaufort-Delta experienced a lot of positions. So I guess I’m having a tough time swallowing what the Minister is giving us for an answer and what the government’s given us for an answer on the decentralization and equalization, it’s in a different region. So I’m wondering if the department has done an evaluation of what the costs are to have people in the Beaufort-Delta as opposed to other regions, and I’m assuming some of these nine people are going to have to travel down to the Sahtu versus coming up from the South Slave.
Thank you. If we did that type of evaluation, we wouldn’t have any government positions outside of a few centres in the southern part of the territory. So we can’t just go off of this straight-up cost. I mean, it’s a cost to government, it’s a cost to accomplish what we need to accomplish.
Again, this was a transfer of responsibilities. We believe wholeheartedly that the activity in the Beaufort-Delta is going to be there. That’s the location of the three anchor fields for the Mackenzie Gas Project, it’s a home base for the offshore and the potential in the offshore. There’s $2 billion in work commitments in the offshore. We’re not responsible for the offshore yet, but hopefully, at some point in time, this government will be responsible for the offshore, and it’s important that we have a presence in the Beaufort-Delta and by putting that office in the Beaufort-Delta we certainly have a presence in the Beaufort-Delta. Thank you.
Thank you. I appreciate the Minister’s comments and I appreciate the Beaufort-Delta, I have lots of friends in the area, it will probably make it less now that I’m bringing this up. But the potential of the Beaufort-Delta, and the Minister said it himself, we don’t have the responsibility for offshore right now. So I don’t even know how we justify putting those nine positions into the Beaufort-Delta when we know that the activity currently, right now, is in the Norman Wells and in the Sahtu area. We have specialists in the Hay River office that are working on some of that as well. So those are the two offices where I think those nine positions should have been put into. I don’t understand the justification.
I appreciate the Member’s concern and I understand where he’s coming from. But again, from an operational perspective, it was important for our government to have a presence in the Mackenzie Delta, in the Beaufort-Delta, and putting these nine positions in the community of Inuvik made sense for us for the future.
Again, we are going to be negotiating a deal on the offshore. We have $2 billion in work commitments out there. We have a tremendous amount of potential, a resource that could rival the Gulf of Mexico in terms of oil and gas opportunities. Also, as I mentioned earlier, it’s home to the three anchor fields for the Mackenzie Gas Project, as well, and there’s tremendous opportunity in the Mackenzie Delta for further gas and oil exploration. Thank you.
I guess my difficulty with the whole process is that we could move some of those positions once we have that potential, not a potential anymore, but actual activity in the area. There is actual activity happening in the Sahtu right now and the Minister and the department decided that there are no positions going into the Sahtu currently, which I think is a grave mistake and I don’t understand how, operationally, it says it makes sense to be there as opposed to having positions in the Sahtu and expand your current operations in Hay River.
Thank you. I suppose it could have been somewhat worse for the Member. This is a headquarters function; the office could have been located in Yellowknife. We decided to move it outside of Yellowknife and Inuvik was the location that we decided to put the office. So it is outside of Yellowknife, it is in Inuvik, and again, it’s a transfer of responsibilities. This office will be responsible for the new statutory authorities that this government has under devolution and we’re looking forward to that office being successful, and again, in its backyard, in the Beaufort-Delta, there are tremendous opportunities. Thank you.
Thank you. I don’t really appreciate the tone in the fact that I should be appreciative of the positions that I have. The remark is that, well, if I don’t like it, well, the positions could be somewhere else and in Yellowknife. I think there’s a bit of an undertone there and I don’t appreciate that context. The concept is where the activity is happening is where the positions should be. I don’t think the department has justified why those positions are happening in the Beaufort-Delta, especially nine positions. We’re over doubling the amount of positions we currently have. I guess population doesn’t make much sense to me. So, thank you.
Thank you. I meant nothing by my comments. I was just trying to make a point that these are headquarters positions that we have decided to move outside of the capital to Inuvik. That’s a decision the department made and the government has made and one that we stand by. Thank you.
Thank you, Minister Ramsay. Next I have Mr. Bromley.
Thank you, Madam Chair. I’m not quite sure where to start here. Just on the petroleum resources office, I’m perplexed why we have two divisions here. You end up having a lot more costs because you’ve got to have directors and all this sort of stuff. These are obviously petroleum offices and I don’t have a problem with them being in two locations, but I just think there are some efficiencies that could be had there.
Maybe while I’m at it, I see petroleum resources also oversees the management of the Environmental Studies Research Fund. This is the fox in the henhouse, obviously. ENR should clearly be in charge of those. Maybe I could get the reasoning for that.
Thank you, Mr. Bromley. Mr. Vician.
Thank you, Madam Chair. The Environmental Studies Research Fund is established pursuant to legislation that is part of the devolution transition as part of our integrated management approach. What will happen in the administration of this portion of the fund, it will come under the Minister’s authority; however, in our relationship with the Department of Environment and Natural Resources, ENR will continue to administer the actual fund process overall, but it’s within the statute of the Minister, so it will continue essentially the way it is today in our relationship with the federal government but ENR will take the lead in terms of that administration.
Thanks for that clarification. I understand that the Minister of ITI is the new regulator for oil and gas in the NWT, and I understand now that we are contracting out to NEB and the industry-led regulator from Alberta, which has the atrocious environmental record that we all hear about every day on the radio, and the coal dam breach and slurry going down the Athabasca River heading for the NWT, and what did we hear the other day, six million litres a day coming out of one reservoir perched on the edge of the Athabasca River, and all this, you know, people with cancer. This is the regulator that were contracting with, all of which has been done without one iota of input from committee.
I have a lot of questions. Who will have what authority? What responsibility? What will the role of the Members be in decision-making? How will you be reassuring the public that they will have input and how will you be providing them the opportunity for input and a transparent process? Basically this unit is not even in here, but we find out that the dollars are. We’re buying a pig in a poke. This should not be in this budget. Talk about seamless and prepared. I don’t think so. How can you have half of it in here and half of it not with no input from Members? I’ll start with that.
The proposed budget reflects a $2 million cost to the regulator of oil and gas in the Northwest Territories. As the Member correctly points out, the responsibility for that regulator will be assigned to the Minister of Industry, Tourism and Investment, and that regulator then will oversee oil and gas operations pursuant to the proposed statute that is part of the transfer effective April 1st, the Oil and Gas Operations Act in the Northwest Territories. The Minister will have the ability then to draw from resources accordingly, and the primary objective is to have a seamless transition effective April 1st, and in doing so, we are in the final stage of an agreement with the National Energy Board to ensure that seamless transition with an ongoing contract with the National Energy Board to conduct this work. That was as proposed in the devolution discussions.
Now we are also in the process of negotiating with the Alberta Energy Regulator, a regulator that’s been in existence for decades, that is overseeing oil and gas regulation in Alberta through a number of incarnations and different structures, but essentially overseeing oil and gas development in Alberta and has a great deal of expertise that is drawn on by many organizations, including the National Energy Board, if I may say, to provide oversight for safety and environmental security of oil and gas operations. Those discussions and negotiations are going very well. We feel very confident that we’ll have all of the expertise and the resources necessary for a seamless and very safe and environmentally sustainable operation of oil and gas in the Territories.
That’s essentially baloney. We know, we read the papers, we listen to the radio, we watch the news on television, we watch the oil bubbling up because of this regulator’s failures in northern Alberta more and more and more daily without a resolution. We are not talking about a responsible… Around for years? This agency has undergone three name changes, I think, in the last three years. It’s an industry-led regulator. That is not what the people of the Northwest Territories are looking for, thank you very much. Let’s go on record here. Let’s use evidence-based decision-making for a change.
I had a number of questions. What will be the responsibility of each of these contractors’ contractees? How will the public input in our decision-making, which we know is finally behind closed doors? How is the public’s input going to be included and assured? How are Members going to be participating in decision-making?
Thank you, Mr. Bromley. Mr. Bromley, I know you feel strongly and passionately about this. I think that you could tell the deputy minister that you don’t agree with him or you don’t have confidence in what he is stating, but I don’t think it’s appropriate to say that what he is saying is baloney, because that is tantamount, in my mind, to being somehow not true. It just seems a little unparliamentary, so I’ll just caution the Member on that and go to Mr. Ramsay, please.
Thank you, Madam Chair. I’ll go to Deputy Minister Vician for some detail on Mr. Bromley’s questions, but I just wanted to assure Mr. Bromley and Members that at the soonest opportunity we’ll get to committee. We’ll have that discussion at committee so committee can ask the questions that they want to ask once this rolls out. It’s not our objective to be hiding anything. We want to get in front of committee as soon as possible.
Thank you, Mr. Ramsay. Mr. Vician.
