Debates of February 9, 2005 (day 32)

Thank you, Mr. Speaker. I would like to pick up where I left off with my statement. That is to talk about the secondary diamond industry here in the Northwest Territories and the fact that, to date, on the Sirius deal, this government has lost $3 million. That is all I can talk about today with the government, is the fact that we have lost $3 million, but I just want to say that it is going to end up costing the government substantially more than that, Mr. Speaker.

As a preamble, what I understand is that we have a socioeconomic agreement with BHP. Whether the 10 percent allotment of rough diamonds is contained in that socioeconomic agreement, I don’t think it is. What we do have, Mr. Speaker, is a written agreement from BHP to supply 10 percent of rough to northern manufacturers. We also have an understanding from Rio to supply rough to northern manufacturers. What I would like to ask, Mr. Speaker, if the Leviev Group, who went through the receiver, submitted a proposal to purchase the Sirius plant as a going concern and met all of the GNWT’s due diligence work on whether or not they could be deemed a northern manufacturer and, as such, were deemed a northern manufacturer by the Government of the Northwest Territories, why did they subsequently fail in the negotiations with both producers to get a supply of rough diamonds, Mr. Speaker? The concern I have is whether these agreements we have with our producers actually hold any water, and what involvement did the government have in trying to see these negotiations through to completion. Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. The honourable Minister of Finance, Mr. Roland.

Return To Question 349-15(3): Agreements For Supply Of Rough Diamonds

Thank you, Mr. Speaker. Mr. Speaker, the Member is correct that at this point we have booked a loss for the Sirius operations of $3 million, and we entered into a process and had a court-appointed receiver put in place and followed through a process of trying to have the Sirius operation go as what we would call a going concern, meaning that it is a fully operational business, feeling that would be the best value we receive for that. We did enter in that process. The "receiver" entered into the process. It went out for bids to receive those. We looked at those proposals. We, as a government, made a decision to go with what we felt at the time was the best package that we received. We went about doing our work and felt that we were satisfied with our work. We are prepared to offer the Leviev Group a northern manufacturer status, conditional on them getting a supply of rough agreement with the mining operation. The reason that we are not pursuing this avenue any more is that they were not able to come to an agreement. I don’t have any details of how far it went. Just knowing that our concern as a government was to make sure we tried to get a sale in as timely a manner as possible, it is unfortunate that we are not able to do that and had to go to the next option in working with our receiver once again on what options are available to us. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Ramsay.

Supplementary To Question 349-15(3): Agreements For Supply Of Rough Diamonds

Thank you, Mr. Speaker. Mr. Speaker, I thank the Minister for his response, but I would just like to know, when the negotiations for a sales agreement between the Leviev Group and the producers goes sideways, for a government that has sank millions and millions of dollars, time and effort into a secondary industry here in the Northwest Territories, cannot stand up and do something about it, I don’t understand why we didn’t step in five months ago, six months ago and demand of the producers that they come to an agreement with Leviev. We have lost millions of dollars. I would like to know what the Minister plans to do to mitigate those losses. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 349-15(3): Agreements For Supply Of Rough Diamonds

Thank you, Mr. Speaker. Mr. Speaker, the first thing is for us is to see if there is a possibility of getting another deal through our receiver to take care of the Sirius operation, that facility, and see if we can keep it as a going concern. Secondly, as I stated publicly, as a government, we are going to have to review what options we have to try to strengthen our position with the dealings we have with the mining companies. In some cases, we may have better agreements in place. But for this specific one, unfortunately, from the FMBS side, our involvement through the receiver trying to encourage a deal and trying to find out where things are was very limited, as we entered into a very formal process through the courts. So that limits what we can do. I am aware that the Minister of RWED, through his shop, was also monitoring what was going on. It is something that we, as a government, are going to have to look at if we are going to truly encourage the secondary industry from not only a mining operation, but any development of non-renewable resources in the Northwest Territories.

Thank you, Mr. Roland. Supplementary, Mr. Ramsay.

Supplementary To Question 349-15(3): Agreements For Supply Of Rough Diamonds

Thank you, Mr. Speaker. Mr. Speaker, I would like to again thank the Minister for his response. I would like to know if it’s in the government’s future to support this industry and if it is, why are they saying today maybe we will bring in some stronger measures to deal with the producers after we’ve lost millions of dollars? I would like to know why today it’s a concern, when unfortunately in the ‘90s I know there was a former Finance Minister who stood up in the House in 1997 and said they would bring in a tax to choke a mule before BHP went into production. Maybe the government in the 1990s didn’t go far enough, Mr. Speaker. We’ve already lost millions and millions of dollars and I would like to suggest that the Finance Minister and this government take a firm stance, so that we don’t lose any more money and that we can support the secondary industry that we have spent a tremendous amount of money on in the Northwest Territories, Mr. Speaker.

I would like to ask the Minister of RWED a question, Mr. Speaker. What is currently stopping this government from going back to the producers and saying we have this agreement with BHP for 10 percent and we have an understanding with Rio for 10 percent? I don’t know if it’s quite 10 percent, but to supply rough. We set up a diamond agency, secretariat, or whatever, and we get the 10 percent. Then we set up an exchange here in the Northwest Territories. What’s stopping the government from doing something like that, from going back to the producers and supporting the secondary industry? Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 349-15(3): Agreements For Supply Of Rough Diamonds

Thank you, Mr. Speaker. Mr. Speaker, I don’t believe there is anything stopping us from doing that. We can begin the discussions in that area. My understanding in looking at the matter is there were some initial discussions in that area for the Government of the Northwest Territories to receive 10 percent and then look at some sort of operation to go out from there. That wasn’t acceptable at the time to the parties involved. For us now, we have to go back to the drawing board to look at what options are viable to us here in the Northwest Territories and what it would mean for us to support that. It is a difficult thing.

When we look at the situations of having to come forward already for a $3 million loss for that operation and the Member is correct, at some point when we close the deal we will have to look at the numbers at that point and come forward to this House with potential further losses. The important thing now is to sit down and evaluate where we are, where we intend to go and look at the implications of that direction and the avenues we choose. The operation has been going. We have had the agreements. We’ve heard concerns from both sides. It is now time to sit down and re-evaluate where the weaknesses and strengths are and decide from there where we are going to go. Thank you.

Thank you, Mr. Roland. Short supplementary, Mr. Ramsay.

Supplementary To Question 349-15(3): Agreements For Supply Of Rough Diamonds

Thank you, Mr. Speaker. Mr. Speaker, as I see it, this is our territory, it’s our future and it’s our economy. There are many good reasons why we should revisit this, Mr. Speaker. I would like to ask the Finance Minister, does he believe the secondary diamond industry here in the Northwest Territories is indeed our industry or is it the producers’ industry and we are going to continue to let them call the shots? Let’s take the industry back, Mr. Speaker, and let’s revisit that, as the Finance Minister had stated. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 349-15(3): Agreements For Supply Of Rough Diamonds

Thank you, Mr. Speaker. It is what we are going to do now, go back and review our situation, how things have unfolded to this date and look at what we need to do to strengthen our position. It is timely that we do a review of these agreements, but we have to do this in a comprehensive way to make sure the avenue we choose, the road we go down is something that will be supported by this Assembly. We do have to look at what’s left for the future. We know the non-renewable resource industry, at some time an operation will close down because it has used all the material there. So as a government, we are going to have to look to not only this government, but our future generations, our children in the Northwest Territories and see what’s going to be left for them. So we are going to have to take all of that and look at if what was entered into was a success or a failure. We do have three operations continuing in the Northwest Territories, but, yes, it has been an expensive way to go to try to encourage secondary industry in the North and we’ve had a lot of doubters out there. Let’s just say it’s not over yet and we have to re-evaluate where we are going to go with this. Thank you.

Thank you, Mr. Speaker. Mr. Speaker, my questions today are for the Minister responsible for the NWT Housing Corporation. Mr. Speaker, as a government, we concern ourselves with the issue of affordable housing in our communities and this is particularly relevant when it comes to affordable housing for seniors. Mr. Speaker, over the course of the past several years, there has been affordable social housing units built in communities for seniors. Hay River had about a $1.8 million budget on the books for awhile and the government very kindly accommodated the Seniors’ Society in allowing them to explore various options for how best to deliver seniors housing in Hay River. So this money did stay on the books. Finally it was decided that the government would let a contract and would proceed to construct units of appropriate size and model for seniors in Hay River. The construction began on a number of units. Suddenly, they were boarded up and they have been left in that way for some time now. For the benefit of people in Hay River who may be wondering what is happening there, I was wondering if the Minister, Mr. Krutko, could share with the House and with the public the status of those housing units under construction in Hay River. Thank you, Mr. Speaker.

Thank you, Mrs. Groenewegen. The honourable Minister responsible for the Housing Corporation, Mr. Krutko.

Return To Question 350-15(3): Status Of Housing For Hay River Seniors

Thank you, Mr. Speaker. Mr. Speaker, at this time, I don’t have an update on that matter, but I will sit down with the Member and give her a briefing on it, at the time I receive it. I do not have an update on the question that has been asked, so I will take that as notice.

Thank you, Mr. Speaker. In my Member’s statement I spoke about the reinstatement of the rent scale increases and who it affects, Mr. Speaker. It affects the non-government workers in my riding who work hard and pay their bills on time and who are comfortable with the current rent scale because it hasn’t been changed since 1995, Mr. Speaker. Now this 30 percent increase from the 60 percent level to the 90 percent level means at least a $300 increase to their current expenditures, Mr. Speaker. I would like to know from the Minister responsible for the Housing Corporation, Mr. Speaker, what is the implementation plan for these affected tenants of the Housing Corporation?

Thank you, Mr. Menicoche. The honourable Minister responsible for the Housing Corporation, Mr. Krutko.

Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. Mr. Speaker, the question with regard to rent increases, this is a project that has been implemented for a number of years that was a phase-in approach. They were looking at implementing it in 1995. They were supposed to phase it in over a four-year period, so it doesn’t have a big impact on the tenants who are in social housing. It was a system that was supposed to make it fairer and easier for those tenants to realize this is what the increase was. What happened was in 1997 the phase-in was put on hold and now we are bringing it back to conclude the last two years of the phase-in. We have phase one, phase two, and in two years we are looking at completing that. The idea was instead of giving a total 100 percent increase in year one was to spread that out over four years, so you will see a 30 percent increase in the first year, another 30 percent increase in the second year, then a 30 percent increase in the third year and a 10 percent increase for the last phase-in in the fourth year.

The whole idea was to have a system in place to allow tenants to be aware that social housing is there to assist social clients and also to make people aware that we do have other objectives out there. The Member states that people are going to be impacted. A large number of these tenants will not see any increase. Sixty-four percent of the tenants will not see an increase. The other 15 percent, which takes it up to 75 percent, will see a $100 increase. The idea is to have a fair system. This is social housing for social clients. We need to ensure those other people who will be in the higher brackets get into homeownership programs to ensure that they are able to maintain their units for programs to help people get into homeownership. If you are paying that high a rent, it’s important that we look at that.

This is just the conclusion of a program, which stopped two years ago and we are now trying to implement the conclusion of the four-year phase-in. It’s not 30 percent in one shot, it has been phased in over four years. We are only implementing the third year of a four-year phase. Thank you.

Thank you, Mr. Krutko. Supplementary, Mr. Menicoche.

Supplementary To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. I don’t think I am against the implementation plan, Mr. Speaker. I am in favour that we will have to charge our tenants at the 100 percent mark, but I believe that we can graduate this plan because it’s been so long and going immediately to the 90 percent mark is far beyond what even four or five tenants can handle in Fort Simpson, Mr. Speaker.

Even so, we are forcing our tenants' hands. I don’t think they have a choice where they can go, Mr. Speaker. They don’t have anyplace else to go as an alternative. I would like the Minister to recognize that and at least commit to minimizing the increase, Mr. Speaker. Will the Minister look at minimizing this increase and eventually get to the 100 percent by next year, Mr. Speaker?

Thank you, Mr. Menicoche. Mr. Krutko.

Further Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. Mr. Speaker, like I mentioned earlier, the whole idea of the phase-in over four years is so it would not burden the tenant with seeing a major increase in one year. They’ve phased in the rent increase over the first two years and now we are trying to conclude that. To be fair to everyone out there, we are trying to ensure that those tenants, some 34 tenants, who will be seeing a major increase at the high end, but we also have to realize we have one of the lowest tenant rates in the country. In most jurisdictions, it’s 25 to 30 percent of your income. In the North, we are going to be increasing it from 11 percent to 14 percent. If you start looking at other jurisdictions across the country, we do have a fair rate system for social housing, not like other jurisdictions across the country. They look at 30 percent of your gross income.

So this system is to ensure that we phase it in over the next two years, but also ensure that you don’t get the whole 30 percent or 40 percent increase in one shot. We are trying to spread it out over two years.

Thank you, Mr. Krutko. Supplementary, Mr. Menicoche.

Supplementary To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. I am in agreement with the Minister, but it’s in terms of percentages. I am proposing to the Minister today let’s phase it up from 60 percent to 75 percent of the rent scale and then we both agree at the same time, as well, Mr. Speaker, that it’s 100 percent for the second year. It’s just the first year of how we are getting there. I am proposing it to be at 75 percent because what we are having here is we are going to create a sector of people who aren’t in arrears and getting them into arrears and further complicating their opportunity to get a house when it’s their turn, or to apply for other housing programs. I would like to know how the Minister will be addressing this concern of our current tenants getting into further arrears. Thank you.

Thank you, Mr. Menicoche. Mr. Krutko.

Further Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. Mr. Speaker, as all Members know, notices have been given with regard to the increases. Under the Landlord and Tenants Act, we do have to give three months' notice. The notice period has gone out and we are looking at implementing it April 1st. So it is based on the phase-in program. We are trying to conclude a four-year phase-in. We have two years left to go and we are in year three. So notices have been given, based on the rent scale implementation that has been put in place since 1995. So we are trying to conclude something that’s been there for 10 years. It’s something that I can look at, but in order to change it now we would have to put out notices to change the whole increase all over again. Because of that complication, I don’t think we can pull it back at this time, but we can look at it with regard to how we deal with it.

Thank you, Mr. Krutko. Your final supplementary, Mr. Menicoche.

Supplementary To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. It seems ludicrous that the government won’t be flexible on this at all. There will be a surprise if the client were to say you aren’t going to increase it to 90 percent on the scale, but reduce it to 75 because a notice did go out. I think the government can be flexible and they can say yes, you got the notice but, on second thought, we are just going to do the 75 percent for this year because we are still doing 100 percent for 2006-07, Mr. Speaker. I think this is short notice and expecting people to pay higher rents, purchase their homes and/or pay off all their arrears within a few months will have a serious impact on them. I would still like to know what the Minister’s plan is for implementing this and taking care of our clients and try to get them to be homeowners, Mr. Speaker. I don’t think this is the way to do it, by impacting their household budgets with a 30 percent increase to rent charges. Thank you, Mr. Speaker.

Thank you, Mr. Menicoche. Mr. Krutko.

Further Return To Question 351-15(3): Proposed Social Housing Rent Scale Increase

Thank you, Mr. Speaker. We are working with those clients. Like I mentioned, there are roughly 34 clients we are dealing with who are going to be seeing the bulk of this increase which will have an affect on them. We are working with them through our local housing authorities and also through our program officers and counselling these clients to make them aware how the increase will affect them and how they deal with their arrears. There is a way that you can pay off your arrears over a period of time or do a biweekly pay down of your arrears. We are working with clients to try to ensure the impact is as easy as possible. We have gone forward with the implementation of the rent scale rates at this time and notices have been given and we are continuing on that process.

Thank you, Mr. Speaker. Mr. Speaker, I notice with interest an advertisement in the paper. I will direct my question to the Minister of Education, Culture and Employment. There is a course offering at Aurora College for people to learn how to read palms. It’s called Palmistry. Mr. Speaker, we have a lot of demands on our education dollars and the needs of northerners in terms of education. I am not sure exactly what is involved in this course. It outlines the course in the paper. It talked about reading the lines on your hands to figure out how long you are going to live and what your future holds. Mr. Speaker, I would like to know if Mr. Dent’s department, as overseen by the boards and Aurora College, if there is any territorial government money…I think taxpayers should know if our taxpayers’ dollars, our budget dollars, are going into supporting a course for people to learn how to read palms. Thank you.

Thank you, Mrs. Groenewegen. The honourable Minister of Education, Culture and Employment, Mr. Dent.

Return To Question 352-15(3): Arctic College Palmistry Course

Thank you, Mr. Speaker. No, there would not be any government money into the provision of that course. The majority of courses that are offered by the college are third-party funded and that’s paid for by application fees or by the students signing up for them. In other cases it’s provided for by funds that are provided by First Nations or by employers. So a good portion of the programming that is offered through the colleges is third-party funded. This one, I suspect, is entirely funded by the fees that would be paid by the students who signed up for the course.

Thank you, Mr. Dent. Supplementary, Mrs. Groenewegen.

Supplementary To 352-15(3): Arctic College Palmistry Course

Thank you, Mr. Speaker. Mr. Speaker, I did notice that there was a fee attached to taking this course. I would just like the Minister’s assurance that if there are not enough participants who sign up and this is not a break even, that this government or the budget of Aurora College is not administratively or financially subsidizing this program in any way. Thank you, Mr. Speaker.

Thank you, Mrs. Groenewegen. Mr. Dent.

Further Return To Question 352-15(3): Arctic College Palmistry Course

Thank you, Mr. Speaker. Mr. Speaker, no, there would not be government resources that would go into this. This sort of programming is available across the Northwest Territories. Any person who has an idea for a course can come and pitch the campus director and request use of space when it’s not otherwise being used for college purposes. Then they have to pay for the course and the space themselves. The cost would have to be recovered from fees. The college would not be putting any money into courses like this that are offered outside of the regular programming.

Thank you, Mr. Dent. Supplementary, Mrs. Groenewegen.

Supplementary To Question 352-15(3): Arctic College Palmistry Course

Thank you, Mr. Speaker. So this is the utilization then of these resources in terms of our infrastructure. Is there any criteria applied to people applying in terms of what the course material contains? Is there any criteria an applicant has to meet in order to offer these courses through the Aurora College? Thank you, Mr. Speaker.

Thank you, Mrs. Groenewegen. Mr. Dent.

Further Return To Question 352-15(3): Arctic College Palmistry Course

Thank you, Mr. Speaker. I am not sure of the exact criteria. I would expect that the college would require people to be conducting courses that are within the law, that would not be personally offensive to others and the standard sort of requirements that you would expect for use of public space. Anybody is entitled to go to the campus director and propose a course and say here is what I propose to offer, here is how I propose to do it and if the space would otherwise not be used for something else, it can be made available if there is enough public interest to see such a course proceed.

Thank you, Mr. Dent. Final supplementary, Mrs. Groenewegen.

Supplementary To Question 352-15(3): Arctic College Palmistry Course

Thank you, Mr. Speaker. I remember some time ago getting into quite a debate in this House with Mr. Dent with respect to religious education in schools in Hay River. I would just like to confirm with the Minister then that this is a public institution and so if a faith-based organization or a religious organization, a church, for example, wanted to offer a course through Aurora College, I trust that that would not contravene the policy as he’s laid it out here. Thank you.