Debates of March 19, 2004 (day 4)

Thank you, Mr. Minister. Mr. Hawkins.

Thank you, Mr. Chair. What type of time frame or timelines can this government expect to see by the amalgamation of this information and possibly proceeding in that direction? Thank you.

Thank you, Mr. Hawkins. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, the exercise we are going through now, we are trying to meet the next business planning process. So we are hoping to have some initial numbers or information for June and then finalizing things in September as we begin the business plan process. Thank you.

Thank you, Mr. Minister. Mr. Hawkins.

Thank you, Mr. Chair, and thank you, Mr. Minister. Does your department recognize the report done by Grant Thornton, produced I believe in December of 2000? Thank you, Mr. Chairman.

Thank you, Mr. Hawkins. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, the Department of Executive and FMBS did commission that report, so that report was done for our benefit. Thank you.

Thank you, Mr. Minister. Mr. Hawkins.

Thank you, Mr. Chair, and thank you, Mr. Minister. Is your department looking at the recommendations and possibly implementing the recommendations by that and, if I may further, does your department recognize the previous motion made by Mr. Dent, seconded by Mr. Roland? Thank you.

Thank you, Mr. Hawkins. Apparently there was a previous decision by the Assembly. Mr. Minister, are you willing to respond to the Member’s comment?

Thank you, Mr. Chairman. I will respond to the question that in the report he has referred to that all of the recommendations in there would be part and parcel of our review and what areas we can go forward with. Thank you.

Thank you, Mr. Minister. Mr. Hawkins.

Thank you, Mr. Chairman, and again, thank you, Mr. Minister. Since I have come onboard four months ago, I have been a strong advocate for the GNWT to proceed in the public services model to open up the accountability process in a sense of non-partisan. Therefore, we can get true representation and a clear representation that we are implementing our public service policies in a fair manner. It has also been pointed out that maybe we are not digging deep into the recognition of the affirmative action policy and it not being represented or accurately being responded to as the desire, or I should say the true representation of the North. My next question is that noting that there have been some policy concerns and possibly some concerns raised, what type of consultation will the department be going into and what type of research will they be expanding into before they bring it to the business plans? Thank you.

Thank you, Mr. Hawkins. Mr. Minister.

Thank you, Mr. Chairman. I think most importantly that we should state that we are going to be using the work that has been done in the past as a starting point and moving forward with that. We don’t see a need to get into a lot more review in a sense of beginning something new and trying to get more information, we feel we have a lot of information. Then, of course, we would be working with the Members of this Assembly, with AOC, as we go through the steps moving forward to ensure that we are on the right track and working along with them to develop a program that would be beneficial for government and our staff. Thank you.

Thank you, Mr. Minister. Mr. Hawkins.

Thank you, Mr. Chairman. Just my last comment, maybe if I could get a response and I'll leave this dead horse alone and quit beating it. I'll just proceed with a question. Is it anticipated that the FMBS, as in the Minister, will be consulting the national public service for any guidance or overview on possible examples of how we can implement this process? I know I'm a big advocate of this Public Service Commission. I've seen many other Members of AOC seem very interested in this and I would like to see that we get a nice, strong model as it proceeds forward with a draft. Does the Minister anticipate any consultation with the federal public service at all? Thank you.

Thank you, Mr. Hawkins. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, one of our practices is to work with other jurisdictions and look at best practices that are out there. Again, if we can adopt something that is working well in other jurisdictions and make it fit better in the Northwest Territories, then we will work with those models that are out there. Our intention is to work with the Members of this Assembly, come up with a model that will be beneficial to our staff and to how we carry on the business of hiring and dealing with our staff. Thank you.

Thank you, Mr. Minister. General comments. Next in line is Mr. Roger Allen

Thank you, Mr. Chairman. My comments are specifically related to the $1.127 million increase to the power subsidy program. It concerns me greatly, Mr. Chairman, that the territorial power support program has a significant increase on an annual basis. It comes back to the very point I want to make, and unfortunately there's nowhere in the budget process that we can address this to the NWT Power Corporation. I think it requires us to revisit some of the many contributing factors as this power subsidy program increases at an alarming rate. One of the issues that was raised to me in the last several weeks was the fact that the low end of 700 kilowatt hours for residential use is not effective in the Northwest Territories during the cold winter months. This is proven in Inuvik where some of the power bills have increased over 100 percent to some of the consumers. I think one of the areas we want to highlight is not so much in the overall parts of the increase, but as a matter of principle of how we should look at more sustainable environmentally-friendly power sources. One of the questions raised to me by one of the local contract groups in Inuvik was if they had the ability to influence a policy change, where they would be able to sell back private power generation into the main grid to see if they could help alleviate some of those cost factors.

So I will conclude that statement by asking, through yourself, Mr. Chair, to the Minister, if there was further consideration given to the proposed initiative. Thank you.

Thank you, Mr. Allen. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, the power subsidy program has increased dramatically and, as we have highlighted, has grown over the years. A large part of that is the actual rates themselves have jumped significantly in a number of communities. For example, if you look at 1998-1999, the community of Lutselk'e used to pay 39.3995 cents per kilowatt hour. It is now at 73 cents per kilowatt hour. We have examples of that. The community of Rae Lakes in 1998-99 was 44 cents and is now up to over $1 a kilowatt hour. So a lot of the drive in that is the rate changes that have happened over the years.

The other area that the government is looking at -- as was evidenced in previous assemblies with reports coming forward on how we should look at delivering our power program -- is renewable energy through the hydro facilities that are being discussed now with a number of land claim groups in the territory. The other side of it is, as well, the specifics of looking at the initiatives under the Power Corporation. I can't give the response. The Minister responsible for the Power Corporation would have to do that in those particular areas.

I guess for the average consumption, there has been an exercise done over the last number of years to see what the average kilowatt hour use is. We have that breakdown by community. For the average, a large number of customers out there manage to, on a yearly basis, stay under that 700 kilowatt area. Of course, that's an average and we know that there are high cost units out there that impact the residents.

So on the Power Corporation side there has been work done through the Executive and there have been some reports done and we continue to have to look at that. As stated earlier, this continues to grow. We're adding just over $1 million to this area. Thank you.

Thank you, Mr. Minister. Mr. Allen.

Thank you, Mr. Chairman. With all due respect, I understand there are continual increases in costs to provide sustainable power. I guess the emphasis would be in terms of the fiscal strategy, in trying to meet some of the increased costs that are sometimes in the control of the environment. I would like to ask if the power support program would support alternative power sources such as voltaic or solar panelling, solar energy, as a way of mitigating some of the individual's costs, especially in the remote communities where there should be less demand on diesel generation, for instance. That would be my question to the Minister, through the Chair. Thank you.

Thank you, Mr. Allen. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, there have been exercises done by the government in the past, normally through Resources, Wildlife and Economic Development looking at other sources, whether it's wind energy or solar panels, as well as through the Power Corporation itself being that those are a number of other areas that deal outside of what we deal with just paying for the subsidy program. I will be taking those comments and delivering them to the other Ministers, and I'm looking forward to what we can come together with. Thank you.

Thank you, Mr. Minister. Mr. Allen.

Thank you, Mr. Chairman. I would like to ask a question to the Minister and his officials. Would someone who has self-generation be eligible for a subsidy out of this power subsidy program? That will be my final question to the Minister. Thank you, Mr. Chairman.

Thank you, Mr. Allen. Mr. Minister.

Thank you, Mr. Chairman. The way the power support program is structured today, I don't think that would be able to apply. But we would look at seeing how that could be incorporated into the power support program. Thank you.

Thank you, Mr. Minister. General comments. Next in line, I have Mr. Bill Braden.

Thank you, Mr. Chairman. I have a couple of areas of detailed enquiry, but I will save them until we get to the appropriate part in the budget, Mr. Chairman. I did want to ask though of a reference the Minister made in his opening comments to continuing to invest in some software upgrades to our existing financial information system to keep it functional while a decision regarding its replacement is pending. We're going to spend almost $200,000 on these interim software upgrades, Mr. Chairman.

It's something that I know came before committee, I think in at least the last two years of the previous Assembly, that our financial information system was, like all technology, seeing its days come to an end. We have a huge reliance on this, it's a big part of our infrastructure and a serious decision, also a very expensive one. My question, Mr. Chairman, is at least to my recollection because this issue has been out there for I recall about two years now, we're still looking at options or still looking at making a decision regarding the replacement. What is taking so long? When and how are we going to get around to looking after this? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, the Member is right; there has been ongoing work in this area. The business case review has been completed and we are looking in the area of up to $15 million to replace that system. The next phase would be to go out and start trying to find a system that can replace the existing system, but it comes back down to the question if we don't have the dollars to do it, then there's no use going to that next stage. That's why you see us right now trying to make due and carry it a little bit longer. That decision is going to have to be made at some point and then we're going to have to go forward, but figures go between $11 million and $15 million for replacing the system and that was as a result of the business case review.

Thank you, Mr. Minister. Mr. Braden.

Okay. So if we had the money, we would do it right away. Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. If we had the money, it would be on our capital acquisition plan for this year. Thank you.

Thank you, Mr. Minister. Mr. Braden.

Thank you. That helps answer a question there, that we have made at least a technical decision. Okay, everything is going up in cost. As we continue to delay or defer this, the sense that I have is that this is not really an option for us. We're going to have to bite the bullet on this. For every year that we put this off, Mr. Chairman, how much more is it costing us? What's the inflation rate on this stuff? Are we unnecessarily deferring or delaying this necessary decision? Thank you.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Trying to pinpoint what it would cost ongoing, besides the fact that we're putting more money into the existing system now, we know there's a direct cost there. Delaying the decision to replace the FIS system is difficult to nail down, because as technology changes, maybe we can come up with a better system that may be a little less or it could get more expensive. It's difficult to measure that portion. What we can measure are the direct costs that we keep adding in trying to prop up the system we have now.

Recognizing that, it is a critical situation and at some time we're going to have to bite that bullet or we're going to find ourselves in a whole lot of trouble in trying to track things by paper and pen again if the system were to ever crash. We're doing what we can and recognizing our capital acquisition plan and the dollars available that are very limited in trying to meet the critical core needs of residents out there. That's why this hasn't made the cut to date. As I stated, that review has just been completed and we're going to have to decide going forward how we can address that situation. Thank you.

Thank you, Mr. Minister. General comments. Mr. Delorey.

Thank you, Mr. Chairman. Just a few short comments. Some of these comments were brought up in our committee report, but I just wanted to ask a couple of questions anyway. I wanted to ask on the $120,000 increase in grant-in-kind equal to the value of interest of non-negotiated settlement and that is due to diamond manufacturing companies. This is an issue that has come up and there has been some concern raised about how a company could negotiate a settlement for this. I know from hearing about this that the government is probably caught between a rock and hard place, as far as getting some kind of settlement to at least get back the principal on some of these loans. I'm just wondering if the Minister could tell me how the government is doing in collecting on the principal since this negotiated settlement was arrived at to defer the interest on it. How are we doing at collecting the principal?

Thank you, Mr. Delorey. Mr. Minister.

Thank you, Mr. Chairman. Since the agreement has been signed, the principal payments have been made. We have not had any problems in that area. Thank you.

Thank you, Mr. Minister. Mr. Delorey.

Thank you, Mr. Chairman. I know that there are a number of other loan guarantees out there from the government with respect to the diamond manufacturing industry. Are any of the other loan guarantees secured better than what this one was, or could we be facing the same type of deal here where we have to negotiate a settlement and have to be writing off even more money in interest payments? Thank you, Mr. Chairman.