Thank you, Mr. Speaker. We are very proud of the fact that during these past Arctic Winter Games, 27 of the 33 communities across the Northwest Territories were represented, and it’s our goal to get the other five communities in so when we go to Whitehorse in 2012 that we will have all 33 communities represented.
We have started the After School Program to try and encourage kids to get into the sport. Some of the money was able to be used for purchasing of equipment. As well, there was the federal money that we had allocated to some of the communities, the recreation infrastructure funding that some of the communities had applied for. We’re continuing to search for alternative funding out there that we could pass on to the communities, because we would like to see the day come when we have more and more athletes from the NWT competing at a national level. Thank you, Mr. Speaker.
Mr. Speaker, I’d like to ask the Minister, I know there was a previous program called the Community Trails Program, and I think it was a joint program between the Government of the Northwest Territories and the federal government. So I’d like to ask the Minister, does that program exist and if it does, how much resources are in that program.
Mr. Speaker, I’d have to follow up on that. To my knowledge, I don’t know if the program exists anymore, but I will follow up and get that information and pass it on to the Member. Thank you.
Mr. Speaker, I believe that these types of programs do develop community capacity, but more importantly, it allows our athletes to be able to train similar to other athletes in the larger centres but train on facilities that are designed for their activity, regardless if it’s cross-country skiing or snowshoeing or even the ability to be able to use that facility for community usage. So I’d just like to ask the Minister, can his department consider looking at some sort of an initiative that allows communities to work on a program that develops Community Trails so that it can be used for recreational purposes.
Mr. Speaker, there is the money that we do pass on to the communities through the gas tax and the community infrastructure money that they’d be able to use for developing trails, if that was one of their priorities. I think we’re starting to see the results of a lot of the money that has been expended towards recreational facilities towards the development of our athletes, and I think the fact that we had 27 communities represented in the Arctic Winter Games goes a long way in showing that the money is being invested and is being used wisely by the communities. Thank you.
Thank you, Mr. McLeod. Your final supplementary, Mr. Krutko.
Mr. Speaker, I believe there’s a need in our communities also for firebreaks, and I think that’s probably a perfect opportunity for the Department of Municipal and Community Affairs, working with the Department of the Environment, to use those dollars that are going to be expended to develop firebreaks around communities as, basically, fire protection. So I’d like to ask the Minister, will he consider talking with his colleague from the Department of Environment if there’s such an opportunity for communities to use those dollars to not only develop firebreaks but also use them to develop multi-use trails which could be used as a firebreak and also that can be used for trails and used for ski trails or, basically, snowshoe trails around our communities. Thank you.
Mr. Speaker, there are also some communities that have some trail programs and there are a lot of ski trails from the old TEST Program that they’re starting to groom again. But for the communities that have put together trail programs, I’d commit to the Member that I’ll follow up on some of his requests and get some information as to how they went about doing it and pass that on to the Member. I’ll also have a discussion with any other departments. We look for any opportunity we can to improve the infrastructure in the communities. Thank you.
Thank you, Mr. McLeod. The honourable Member for Frame Lake, Ms. Bisaro.
Thank you, Mr. Speaker. Mr. Speaker, my questions are addressed to the Minister responsible for the Power Corp. I spoke in my Member’s statement about the fact that we continually hear that the Taltson Expansion Project, Deze Energy Corporation, is a business, and that the enterprise and the expansion is itself a business, but the GNWT, as I mentioned, has put quite a few millions into this particular project. I’d like to ask the Premier whether or not the GNWT will be paid back for the millions that we have invested in this project. Thank you.
Thank you, Ms. Bisaro. The honourable Minister responsible for the NWT Power Corporation, Mr. Roland.
Thank you, Mr. Speaker. Mr. Speaker, the project is indeed based on the business model of a partnership. The partnership of Deze Corporation is made up of our NWT Energy Corporation No. 3, the Akaitcho Energy Corporation and the Metis Energy Company that make up the one-third partners on this project. We have, as the GNWT, over a number of years invested, through the Power Corporation, in the neighbourhood of $13 million, I believe it is, up to this year in getting ready for the environmental phase that we’re in the closing of and that business modelling that was prepared and getting the expertise to help us with that business model.
If the project is to proceed, the dividends that would be received from that project after the initial investment was paid back, we would start to see that return to the Government of the Northwest Territories long term, yes.
Thanks to the Minister for that explanation. It doesn’t really help me much. It’s going to be an awfully long time before we get any money back, but I guess I have to assume that eventually we will get back our $13 million.
I mentioned in my statement that one of the bullets on a presentation that we received some time last year was that there needs to be the GNWT to backstop this project for construction. I’d like to ask the Minister to explain what that means. Are we providing a financial guarantee to the Taltson Expansion Project? Thank you.
Mr. Speaker, the business case that was put forward, the modelling, the request for support from federal funds, as well as this total project being based on the power purchase agreements that are to be signed with the mines. Without those power purchase agreements, there is no project. The issue of the construction phase is until the construction is done and the delivery of power happens, the revenue source isn’t there yet, so that’s the construction phase that they are seeking to have some commitment from the Government of the Northwest Territories or the federal government to deal with that construction piece.
As the GNWT, as the Minister of Finance has stated, we are unable to guarantee that level of debt to the Power Corporation. Hence the discussions of finding partners beyond ourselves to help carry this project through. Thank you.
Mr. Speaker, I guess if we are and we have already input some $13 million into this project, we are going to get paid back through dividends, if I understood the Minister correctly, but I would think that if we are one-third partners and there is a dividend of, say, $30, we are only going to get one-third of that $30 dividend. We are only going to get $10. My understanding is that the other partners in the Deze Corporation have put in minimal money compared to our $13 million. In getting paid back through dividends, are we going to get an equal share of any dividend or are we going to get a larger share because we will have put in far more money at the outset than any of the other two partners? Thank you.
Mr. Speaker, the partnership agreement that is to be signed will spell out all of that detail. We are in the final… There are a couple of months that the Cabinet has requested to review that initial document that has been put together by the partners. We have yet to sign an agreement that would see this go forward, but we have supported the groups coming onside. We fully realize that the investment we have to make up front is from the Government of the Northwest Territories or the Power Corporation to help move it along, because the partners themselves at this present time without a power purchase agreement are unable to find those resources.
As earlier, a number of Members were speaking in Members’ statements about capacity in the North and seeing a broader partnership and a revenues build coming to the aboriginal governments and organizations, this is a way of doing that, is to provide them the support up front and have them build on a capacity as this project is built. Thank you.
Mr. Speaker, thanks to the Minister. I understand that things are being negotiated and so on, but I guess I am concerned, as I mentioned in my statement, that we are entering into this project. We are, at this point, backstopping the project without any sort of financial safeguards. I think the Premier mentioned yesterday, in response to a question from Mr. Abernethy, that some part of this project is coming up to this government for approval in the near future. Could I get an explanation of what he meant by that? Thank you.
Mr. Speaker, as this project is moving along, the work on the partnership agreement as well as the power purchase agreements have been going parallel with the environmental review process. We are, as a Cabinet, having to look at that partnership agreement and decide if we can sign that or not or if we would tell the remaining partnership that they would have to go seek outside partners to help bring this project along. Thank you.
Thank you, Mr. Roland. The honourable Member for Great Slave, Mr. Abernethy.
Thank you, Mr. Speaker. My questions are in follow-up to my Member’s statement. On March 3rd, in responding to questions from my colleague Mr. Bromley, the Premier said, according to the unedited Hansard, “We have looked at this project and this project has been built on a clear case of a business model. If we want to establish more to it, then we can do that.” Later, in response to another question, he indicated, according to unedited Hansard once again, “So if this project goes, and it will go only by the fact that it’s a business case model, if we add more to it, then we lose the business case and there is no project.” I was wondering if the Premier can help me understand the contradiction in those two statements and help me understand whether or not there is an opportunity for us to actually change this project and go with alternate routes that actually have greater benefits to the people of the Northwest Territories over the long term. Are we stuck to this eastern route or nothing? Thank you, Mr. Speaker.
Thank you, Mr. Abernethy. The honourable Premier, Mr. Roland.
Thank you, Mr. Speaker. There is no contradiction. There is, in fact, if the Government of the Northwest Territories wants or this Assembly wants to see alternate routes, this Assembly would have to come up with money to afford that, because, as I had stated, this project has been built on the business case, not offsets from the Government of the Northwest Territories, no subsidies, purely on a business case of the ratepayer being, in this case, the diamond mines. If they don’t sign onto this and make it feasible, then there is no project.
The developer’s assessment report that’s been filed through the environmental review process has been moved forward. We’ve updated Members on that of that process and recently it’s gone through its final extension that was put in place for public input and we’ve heard some concerns in that area and are looking at adjusting. Deze is looking at adjusting the routing to deal with the issues raised by those around the original routing and Lutselk’e itself. We’ve done work based on that. The initial review that was done and the original information was requested along routing lines. That work was done and provided through the environmental review process. Thank you.
With respect to routing lines, there are several different options and there has been some costing suggested, but the costing was actually provided by Deze themselves and the NWT Hydro Corporation, both obviously proponents of a particular route. I was wondering if there was any opportunity or could the Premier facilitate the acquisition of costing that wasn’t done by the two organizations that want to go a particular direction. I think it would be interesting to get an independent assessment that would cross the islands, the island route or outside the sub-islands or even the western route would be from somebody who wasn’t 100 percent convinced that the only route doable was the East Arm route. Thank you.
The Power Corporation contracted out much of the expertise that’s required in doing some of these assessments and pulling some of the costs together. The Member has talked about a number of routes: submarine that would be under the lake or at the bottom of the lake; the trans-island route, as discussed; and the western route. We’re talking of the base case plus, for example, the submarine. The estimates were about $50 million more; trans-island was about $40 million more; the western route was looking at $200 million or more.
Again, the partnership has looked at this purely on the business case. We have to be able to say if we are going to make this work, be able to sell power to the industry, in this case the mines, for a lower cost than what they can produce right now and that is diesel generation and hauling the fuel up to their sites, otherwise they have no interest because they have already invested in the infrastructure.
The one case scenario is Gahcho Kue where they have yet to make a decision if they are going to go to a mine development. They are looking to see if we, as a government, are going to provide the hydro side or will they have to provide for their own power initially and that could affect their decision about go or no-go.
So we’ve had to fully base this on the ability to provide power at or better than they can develop right now and that’s been driving the business model we’re into.
Now, Members would like to see this additional information. I will see and provide again an update to Members on who put this information together for us and provide that to Members and see where that goes. Right now, the Member asked earlier, this business call, the developer’s assessment report that went on is based on the routing that was laid out, that has gone through the hearing and we’ve got some feedback there. Deze is looking at doing some rerouting to adjust for the concerns of the band and others in the area. Thank you.
I get a business case, I understand it. Quite frankly, it makes sense to me. If you want to make a lot of money, the eastern route is the best thing. If I was a businessman or a member of Deze, that’s what I would want as well. But I’m not. I’m a territorial politician and so is the Premier and what we need to be doing is we need to be working in the best interest of the people of the Northwest Territories.
I’m not convinced that is the best route. I am happy the Premier is willing to meet with us and give us some additional information, but what I want to ask the Premier is if it’s too late to change gears on this project and bring it back into the interest of the public.
The people are speaking. The people are telling us they want to see grids, they want to see opportunities going to other places, other routes considered. Is it too late to resist something that we could still do in the best interest of the people of the Northwest Territories, remembering that I’m not a businessperson with Deze, I’m a politician for the Northwest Territories and so are you.
The development assessment report that went in for environmental review is the business case to model we have used. They have asked for alternate routes. That information was provided. There has been an acceptance that that is the area that makes the best-case scenario for us. The adjustments that are being looked at are the result of the recent hearings that were held.
If Members want to see this change, then we would have to pull it back. There would be a full additional review done. That would delay anything there. That would run out of additional years of mine life. In some cases some of our older mines have limited life. That could potentially affect the go or no-go of a new mine.
Let’s talk about the best-case scenario for the people of the Northwest Territories. The diamond mines have brought to the Government of the Northwest Territories $1.1 billion in GDP. In a time when the economy was starting to severely wane because of the gold mines in shutdown mode and slowing down and the oil and gas was stagnant, it was purely on GNWT and transfers from Ottawa. Through the mining industry and the diamond mines in particular we have been able to shore that up and bring it up so that we’re one of the fastest growing jurisdictions in GDP across Canada.
With that in mind, our interest at this point, knowing that they are the game in town, in a sense, we need to ensure that we can supply them power, that they can extend their mine life so that GDP can continue to remain or grow instead of shrink.
Let’s talk about the power to the Slave Geological Province. We’re talking the potential to grow our northern economy in the area of 700 jobs. When you look at the construction of this facility, long-term revenues would accrue to the aboriginal governments and public sector shareholders, that being ourselves, in extending the mine life that grows our economy long term. Yes, we have to look at other areas. If we run the line around to the other sides and hook our communities up, then that falls into the PUB and the rate base. Those customers cannot afford that extension. It would have to be purely a government contribution outside of that PUB process. Then we’d be asking for the $100 million-plus if we go around the western side, for example.
Thank you, Mr. Roland. Final supplementary, Mr. Abernethy.
Thank you, Mr. Speaker. Thanks to the Premier once again for all that information. I couldn’t agree more. That’s all good information and that’s where the Taltson expansion could benefit us regardless of the route. If they go around the east, we get the same result as if we go across the islands. It’s a little bit more money. We hit the diamond mines, we hit Avalon, we open up the North Slave Geological Province; everything that he just said happens regardless of whether we take either one of those routes. The difference is with the across-the-islands route someday we’re going to be close enough to Yellowknife that we can grid in easily. There are social benefits to that route. If we grid in, then we can use that power from Snare. My question is, why are we so set on this East Arm route when the same advantages that the people of the Northwest Territories expect and want, plus many, many more, exist from an alternate route across the islands? It may be a bit more expensive, but the long-term benefits far outweigh the benefits of going around the East Arm route.
This is one of the difficulties we face, is when the government-of-the-day puts the business model and gets behind a project. The government-of-the-day, and even this government, realizes we have limited capacity in subsidizing any projects of this nature. So this has purely been on a business case. That is the kilowatt-hour sale that could make this project go that could then deliver revenues to the partnership, that could then grow capacity, that could fuel further development potentials in the area. So we have looked at those options, as I stated earlier, through the environmental review process. The additional cost deemed it unaffordable based on the business model.
Yes, we see the long-term objective as a government of connecting a grid in the Northwest Territories through all our hydro and up the valley when you look at our 11,000 megawatt potential that we have and the sale to southern Canada through that potential. Those are long-term goals and projects beyond our capacity. We’d have to find partners for that. The partnership would have to be sure that they could sell this at a profit and not require subsidy from governments.
Thank you, Mr. Roland. The honourable Member for Yellowknife Centre, Mr. Hawkins.
Thank you, Mr. Speaker. Like my colleagues, through Members’ statements and questions, I will continue the issue of the Taltson expansion and the Deze partnership.
We have to be very clear, the GNWT represents the social interests of all residents of the Territories. To be crystal clear, the Deze interest is a group of partners that are represented strictly on economic interests, not public and social interests.
The challenge I see here is who represents the public interest in this partnership. That’s the question to the Premier right now, is how will the public be plugged into this partnership through accountability and in the context of public interest in this deal.
Thank you, Mr. Hawkins. The honourable Premier, Mr. Roland.
Thank you, Mr. Speaker. The public interest is represented by the Government of the Northwest Territories as a shareholder through the Power Corporation or through the Hydro Corporation itself. The public interest being served by the fact that there would be revenues accrued from that. The public interest would be in supporting aboriginal governments and building capacity and having long-term revenue sources going into them so that they can build on their capacity. The public interest would be reducing 100 million litres of fuel. The public interest would be 280 kilo-tonnes of CO2 reduced annually. That’s where our public interest is. That’s where the big picture is.
The Premier did not talk about how the public interest has a position in this. The public interest was not discussed in his answer about how the public interest gets represented. If we represent a one-third interest in a corporation outside of the territorial government, that’s way beyond arm’s length, then the public interest is lacking. What is stopping the Premier from evaluating fairly and strategically with all the proper information about the route that we’ve discussed in this House, which is either over the Simpson Islands or under the water? What is stopping this department of NWT power from evaluating that fairly and weighing and balancing the social interest and social benefits of this opportunity?
The interests are being represented, one, to help growth of the Northwest Territories through an economically viable project. Members have already said on a number of occasions that we do not want a repeat of where we are guaranteeing or backstopping and having to put additional dollars at risk. This model is based purely on the business-case scenario.
What I think I’m starting to hear is that, well, as a government maybe we should step in and put more involvement from the government side. That is a different scenario altogether. It’s been based on a business case. It’s been built on building capacity with our aboriginal partnership in the Northwest Territories. It’s built on a business case of extending mine life which would keep growth and revenue coming overall to people working, companies keeping their jobs and the Government of the Northwest Territories keeping its corporate taxes going.
The additional routing through the environmental phase has been done. That information has been provided. Again, if it’s the government’s will that we do this, then we have to accept that we’re going to stop the process where it’s at. We’re going to potentially add to the uncertainty of our economic climate at a time when that’s not the best solution.
Earlier in a response to Mr. Abernethy the Premier was touting the GDP growth because of this opportunity. To be honest, GDP growth in the Northwest Territories is all either theoretical or useless, because the piper being paid is Ottawa over the Northwest Territories. Yes, people are working, but those who are getting the money from the resources and those revenues go straight to Ottawa.
The Premier says this is all based on a business case. I’d like to hear the Premier explain to this House where the money will be coming from for this potential project as we all well know this is worth way more than any money that this territorial government could ever raise even at a one-third partnership. Where is the money?
The partnership that has been put together that has built this business case, this model is based on the fact that the power purchase agreements make this project viable. That is why the most economical routing has been put forward. If we decide as a government to socially engineer this, as some of the wording that has been used, then the Government of the Northwest Territories needs to find some of its own-source revenues to offset that cost, otherwise it gets passed on to the rate base. Who in the communities along that side can stand an increase in power generation and the cost of power generation from their existing areas of power generation?
The other part of the Member’s question leading up to that is, yes, the federal government gets the royalties from those mines. But let’s not forget that we just passed a budget that had over $800 million of transfer back to this government from the federal government.
The Premier raised the issue of power purchase agreements. Those are all well and good. But to date I have yet to see these power purchase agreements. As I said in my Member’s statement, if they are such a great deal for the diamond mines company, they would drag us to the table kicking and screaming and make us sign them with them. The point being, Avalon wants to sign a deal, Fortune mines is interested, the City of Yellowknife has a life of in perpetuity that we could be hooking up. Don’t forget about Dettah, Ndilo, Behchoko, Whati, and many other customers that we could create a grid with. The point being, the power purchase agreements are here today in living proof, not short-term mine life. Where are the power purchase agreements that they keep waving that are the key to this deal?
The city of Yellowknife and the surrounding area served by it, hydro facilities up to the city of Yellowknife over 70 percent is served by hydro. We have to run the diesels from time to time to offset some of the outages and the high demand times. The fact is if we were to build this project purely on the existing rate base, it is unaffordable. We could not pass that extra cost on to the individuals.
The Member spoke about Avalon. We would like to see that development occur. The issue is, at six cents per kilowatt hour we’re unable to develop any new extension of our facilities at that cost. We don’t have the customer base for that. Those are some of the areas that we’re looking at new customers to pay for this. That right now would be the mines.
Thank you, Mr. Roland. Final supplementary, Mr. Hawkins.
Thank you, Mr. Speaker. Where are the power purchase agreements? That really is the question. Where are the diamond mines who are willing to sign on the dotted line and say they are willing to buy power at ‘X’ rate? Where is the proof that they are behind this project? That could settle a lot of uncertainty today.
There have been ongoing negotiations for quite some time with the mines. In fact, there will be a meeting held in the very next...probably within the next week with the key folks from the mines. That will tell us if in fact we’re going to put any more effort into this. It is based on power purchase agreements that have to be signed off. But before we can get there, much like the Mackenzie Gas Pipeline, much work needs to be done to build the business model to go through the environmental phase, then a final decision on should the project go or not. We’re faced with the same scenario in the Taltson system.
Thank you, Mr. Roland. The honourable Member for Weledeh, Mr. Beaulieu.
Mahsi cho, Mr. Speaker. Mr. Speaker, I, too, will talk about the Taltson expansion. I’ll try to ask some questions that are different than the questions that the Minister responsible for the Power Corp has already answered. My first question is: what is the GNWT’s overall management role in the Taltson Hydro expansion? Who has the lead management role in this expansion? Thank you.
Thank you, Mr. Beaulieu. The honourable Premier, Mr. Roland.
Thank you, Mr. Speaker. Mr. Speaker, the GNWT, through the Hydro Corporation and more specifically the NWT Energy Corporation No. 3, that is a partner at the discussions and the Deze partnership. It is through that involvement that we’re involved and, again, our relationship through the Minister responsible to the Hydro Corp exists through that avenue. Thank you.
