Inform Members that inspectors use a risk management program to determine the frequency of inspections required each year on projects, so it's not as though this reduction was arrived at willy-nilly. As always, it was evidence-based. Perhaps Mr. Hagen would like to add something to that answer. Thank you, Mr. Chair.
Thank you, Minister. Mr. Hagen.
Thank you, Mr. Chair. Our inspection targets have been met each year since devolution. Based on the planned inspections for the remainder of this fiscal year, it's anticipated that we will also meet the target this year. We carried out 791 inspections in 2015-16; 678 inspections out of a target of 766 this fiscal year. So it went over the target. We have a very busy winter inspection ahead of us yet, and so we have absolutely no reason not to believe we wouldn't make our target for this year also.
The funding that we have with the reduction, we had one position that hadn't been filled for two years, which was a diamond inspector. One of the reasons it wasn't filled before Snap Lake went into care and maintenance was it was not required. It was a position that was never filled and when Snap Lake did go into care and maintenance; we gave up that position that was never filled as a reduction.
We looked hard at the operations over the past two years, plus years of operating history, and we made careful choices about where reductions could be reasonably made without impacting services of the inspections program and we feel -- I feel also -- strongly that the funding that we have in place is adequate to carry out any and all inspections. For example, we didn't budget for Enbridge shutting their pipeline down and having the problems, but yet we had enough resources to cover that incident that was a surprise to everybody. Thank you, Mr. Chair.
Thank you, Mr. Hagen. Mr. Testart.
Thank you, Mr. Chairman. So just to be clear, I appreciate the information. I do wonder if we still need to maintain a high level of awareness of what's happening at Snap Lake. Even though it's not in full operation, it still has a significant impact on our environment and represents a significant liability in ensuring that the company is maintaining its obligations throughout the care and maintenance period. Hopefully, we can get it back online but at this point I would hope that our current budget can accommodate that. I think I heard that from the deputy minister.
I want clarity on this. The Minister is telling us that this is an evidence-based decision to reduce this and that inspectors have a risk matrix and they've determined that there will be few requirements so this is a natural kind of progression. The deputy minister is saying they were asked to make cuts; they looked at their available programs, found the ones that would be least impacted where they could make those cuts. So which is it? Was this program cut -- was this funding cut because it will not impact services but they needed to make the cut anyway or was it cut because it would have been cut anyway due to the risk matrix. Is it evidence-based or is it reduction driven? Still unclear on that. Thank you.
Thank you, Mr. Testart. Minister.
The decision to make this reduction was, of course, evidence-based, as are all our decisions. Again, we look at the matrix to ensure that we will give the coverage that residents of the Northwest Territories expect and we simply felt that this was an area that could be reduced still meeting all of our obligations. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. Testart.
Thank you, Mr. Chair. So I'll just put it a bit more plainly. If there was no reduction exercise asked of the department, would this funding have been cut? Thank you.
Thank you, Mr. Testart. Minister Sebert.
Mr. Chair, some of this funding might have been lapsed had there been no reduction exercise, but again, the amount of money allocated for this very important function was based on a risk matrix and not based on concerns about the overall budget. So it's not as though we're not living up to the expectations of the people of the Northwest Territories; again, this is based on a risk matrix. There's less activity out there; therefore, less money was required for travel.
Could I add to that?
I wonder if Mr. Hagen could be allowed to expand on that. Thank you.
Thank you, Minister Sebert. Deputy Minister Hagen.
Thank you, Mr. Chair. I just want to clarify. In my remarks, I never suggested that we were told to make any cuts. I said that we looked at our operations over the past two years, operating history, and we made careful choices where reductions could be reasonably made.
For your question on Snap Lake, before the mine was flooded there was more activity because there was more work for them to do to keep the water levels up to where they should be, and so we had inspections every two weeks. Once the mine was flooded, we reduced the inspections to once a month because of the slowdown in activity. So, as we speak right now, we're going into the mine once a month. If there are any problems that the inspector might see in his monthly visit, we would probably go in again back to every two weeks. Thank you, Mr. Chair.
Thank you, Deputy Minister Hagen. Mr. Testart.
Thank you, Mr. Chair. If increased activity requires a greater inspection budget, how will the department meet that demand in the wake of this cut if it goes forward? Thank you.
Thank you, Mr. Testart. Minister Sebert.
Thank you, Mr. Chair. I believe we would have sufficient funds within. I suppose, if there was a very, very drastic increase of activity, we would have to seek supplementary funds. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. O'Reilly.
Thank you, Mr. Chair. So, I just want to get this straight. We had the Minister first say that these cuts were being made because there was reduced activity. Then it transitions now into explanation that they rejigged the risk matrix so that there is less work to do and that is why the cuts are being made. That does not really quite flow the way I had expected an evidencebased decision to come out of that.
Let's start with facts here. First, when we got devolution, we promised that we were going to do better than the federal government, and that is promise that was made to our residents. Now, the Minister says, at least initially, that part of the reason for doing this a reduced level of activity out there. I don't see any evidence of that. Where is the evidence that there is a reduced level of activity out there?
If you look at the business plan for the department, and the deputy minister talked a little bit about this, in 201415, 669 inspections were carried out; in 201516, 791 inspections were carried out. That is on leases, water licences, reservations' land use permits. This year their target is 768. That is a little bit of a dip. That is not a lot. Commissioner's land assessment activities, these are, looking at Commissioner's lands, usually close to builtup communities. In 201415, there were 1,650 inspections; 201516, 2,818.
So, really, where is the evidence that there is a reduced level of activity out there? Does the Minister actually have statistics on the number of active land use permits, active water licences, active leases that we are required to monitor and carry out inspections on that he can point to about a reduced level of activity? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
Well, Mr. Chair, we have not adjusted the risk framework to meet the reduction. The risk matrix still remains the same, so we based our decisions on that as to the number of inspections required. I don't have all of the numbers requested. I can look into that and get back to the Member, should he wish. Thank you.
Thank you, Minister Sebert. Mr. O'Reilly.
Thanks, Mr. Chair. Sure, if the Minister wants to supply that information to support what he said earlier about less activity out there, great. Otherwise, I have a little bit of difficulty. There is no evidence of that, what the Minister has presented.
In any event, let's move on. Let's talk a little bit about Snap Lake and diamond mines. I have been to Snap Lake once. This is a property that is quite highrisk from an environmental perspective and did exceed water licence limits in terms of its discharge into Snap Lake. They had to apply for a water licence amendment, I think maybe once, maybe twice. This is an operation that had promised to do paced backfill of its tailings. Those tailings never were put underground. They are sitting on the surface in a huge pile now, right next to a big lake.
This is a highrisk environmental site out there that, even if it is not operating as a mine, requires us to watch it very carefully. I am glad to hear that we had inspectors out there doing the work. So, we have got a highrisk property, in my opinion, Snap Lake, plus we have actually got another diamond mine that is up and going now, Gahcho Kue, plus Diavik, plus Ekati. So, even if Snap Lake is in closure, it is still highrisk and requires inspection, so we have got four diamond mines that we are actually watching now.
So I have not really heard any evidence of reduced level of activity, even in the diamond mining sector. In fact, we know that there is going to be an expansion to the Ekati project with Jay going ahead. The company said they were going to go ahead. It is been through an environmental assessment. They are going to get a water licence. So does the Minister actually have any evidence that there is reduced activity in the diamond mining sector that would require us to use less money for travel for inspectors? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
Mr. Chair, I do believe there is evidence that growth in the resource economy has slowed. I hope that is just not anecdotal evidence that I have heard. I do believe that there has been far less in the oil and gas industry, down the valley. As to the diamond industry referenced by the Member, there has been continuing robust, some robust activity in that. One mine has closed down, and another one has opened. With respect to Snap Lake specifically, I understand that inspections to this point have raised no concerns. Thank you.
Thank you, Minister Sebert. Mr. O'Reilly.
Thank you, Mr. Chair. So, I don't believe the Minister has been able to present any hard evidence, facts, figures to support the earlier statement around reduced level of activity. He is got anecdotal information about perhaps there is less spending on mineral exploration, but the facts are there are still lots of water licences, land use permits, leases out there that do require inspections. There is no evidence that that activity has diminished in any way.
Let's go on a little bit further now into this risk matrix that the Minister has spoken about. Can he just provide a little bit more detail about how that risk matrix was tweaked so that now we don't have to do as many inspections and will therefore spend less money? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
Thank you, Mr. Chair. I am going to ask Mr. Hagen to respond to that. Thank you.
Thank you, Minister Sebert. Deputy Minister Hagen.
Thank you, Mr. Chair. To go back to a question just before that, Mr. O'Reilly, when you mentioned devolution, the promise that we would be better at inspections than INAC, I was in the Land and Water Board system as chair for 15 years, and we worked with INAC all that time. Their inspections were quite adequate, so I don't know how much we would have to improve on them, although we have probably more frequency of inspections, even today.
The matrix has never been tweaked. It is the matrix that is used throughout Canada, basically the same system of risk management that you used and you based it on the operation, whether the history of the operator and whether they are more riskprone than, say, a diamond mine. Then you determine your frequency of visits, inspections, based on how their operation is going and also based on an inspection itself. If the inspection turns out that there are no deficiencies, then you may not go in there every two weeks. It is not necessary. You go in there monthly.
So, it is not tweaked to make reductions. We would have lapsed dollars if we had not done a reduction in travel because our budget is adequate for the time being. I mean, if you want examples, I can give them to you in writing, but all you have to do if you want to see a reduced economy is go into the Sahtu, go into the Beaufort Delta.
In the Sahtu, there is no Husky Oil, there is no ConocoPhillips, who were in that fracking dilemma that they had, and Imperial Oil is handled by the federal government, by INAC. The proven field, that is all federal field. In the Beaufort Delta, all we have there is the Inuvik to Tuktoyaktuk Highway where we are doing inspections. So there is a huge reduction in activity, but, you are right, there are water licences and permits out there, but a lot of them are not active. They are reporting, you know, on it but they are not active. So we are looking to target this year 766 inspections, and that is not all on operating facilities. Some of them are like highways; the ice road, for example. So there are a lot of other inspections that we do that are not related to an activity. Thank you, Mr. Chair.
Thank you, Deputy Minister Hagen. In the view of time, we will move on. Mr. Beaulieu.
Thank you, Mr. Chairman. My first question, Mr. Chairman, is for the environmental cleanups that are occurring in and around the area here, the mines, I think one is called Bullmoose, the former mines. There might be seven of them. Is this the responsibility of this department? Thank you.
Thank you, Mr. Beaulieu. Minister Sebert.
I understand this is the responsibility of ENR. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, I am going to speak about the lease costs here. Lease cost to the people in the communities. Currently the lease costs are very high. I indicated that in my questions to the Minister earlier about the cost of the lease being two to four months' salary for individuals and that. Of course as a committee, we are opposing the quick implementation of the increases to the land leases, land rent, land taxes, whatever, and what we are proposing is phased-in increases. I am totally against increases because they are too high as it is. I mean some are not that high and the Minister talked a little about the difference between, I think, Crown and Commissioner's land, or whatever status the land has, but one status for sure is 10 per cent of the value.
So I equated that to saying it is kind of like a 10 per cent mill rate. So I would like to ask the Minister if this department could look to re-examine their decision to increase the rates of leases, which is already reasonably high, in my opinion. Thank you, Mr. Chair.
Thank you, Mr. Beaulieu. Minister Sebert.
Thank you, Mr. Chair. In examining this issue, we attempted to rationalize the two systems of Commissioner's land and territorial land and they both had different current minimums, and our proposed minimums, as is known, is $840. Now, my understanding is that these rates had not been changed or altered in any way for 20 or 30 years perhaps, so to some degree we are just catching up with inflation and we feel that this was a rational compromise in many ways because, if you looked at it even from the point of view of inflation, the increase probably would have even been more.
There were some initial discussions that perhaps a larger amount would be more applicable, so after an evaluation, though, of the concerns that I have heard from the Members what we did was that we selected an amount that we felt was reasonable. I do not think the amounts proposed would amount to sticker shock, if I can put it that way. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, I think the Minister and I are talking about two different things. What I am talking about here is I am trying to get the Minister to see the unfairness in a situation where we have a community that has employment rates in the 40 per cent, most people over the age of 65 living on Old Age Security; very few, if any, people in the small communities I represent actually have a pension that is, for example, a superannuation pension, something that gives them fairly decent income.
We are talking about people who are living on Old Age Security. There has never been employment in these communities, so people have gone from one short-term job to another short-term job to another short-term job until they get to 65 years old and they start to draw Old Age Security. Old Age Security, as an estimate, is about $1,000. How would any department or any government see it being fair to already charge somebody four months' worth of salary? I will correct myself because of the relief, it turns out to be two months' worth of salary, and that is if the senior knew that they were supposed to go down and apply for the relief.
So how does somebody justify or see that as fair now and even further look at possibly increasing that fairly sharply? We are opposing this because we are saying at least phase in the increases, and I am not talking about the minimums. If the minimum is $800 for this type of thing, that is probably about what we should charge. I am talking about this unreasonable 10 per cent mill rate, is the only way I could really determine it, and if it is rent it would be like if we rented a house in Yellowknife under the same type of rule. Let us say a three-bedroom trailer for $400,000. This indicates that $40,000 would go to rent and that would be the land, that would be just renting the land.
I am asking the Minister take a look at that. I think anybody would agree that is inappropriate and it is not fair. Thank you.
Thank you, Mr. Beaulieu. Minister Sebert.
Thank you, Mr. Chair. Again, we feel that the overall rates suggested are appropriate tied as they are to the NWT Consumer Price Index. The Member has raised a broader issue as to how this might be difficult or perhaps unfair to certain individuals. I would like to remind Members that there is a 50 per cent discount for seniors.
Now, again, he has raised broader issues as to the affordability of housing of leases, but I think that could be dealt with in different ways. I do not think by lowering our minimums, lowering our rates, rather, which I suggest are reasonable, would be a reasoned response to this issue. I think perhaps what this Assembly might look at is providing more assistance in different ways to those need assistance so that they could afford these reasonable rent or lease payments.
The lease payments, again, are not just pulled out of the air. There is a minimum admittedly and there is 10 per cent of assessed value. For example, if a property was assessed at $40,000 the rent would be $4,000. If it was a senior it would be reduced further to $2,000, which would work out to $155 a month. Therefore, we do feel that this system overall is fair. We acknowledge that it could create difficulties for certain individuals, but we suggest that perhaps those individuals could look to other sources for income because we feel that the proposed minimums and the manner in which we determine the lease rent is reasonable. Thank you, Mr. Chair.
Thank you, Minister Sebert. Moving on. Mr. O'Reilly.
Thanks, Mr. Chair. I just want to return briefly to this issue of the reduced inspection budget. Why I am so passionate about this is because of a promise our government made about how we were going to do things better than the federal government. I think with reduced inspections, we are going to have increased risk of some of these sites becoming -- we are pretty good at generating abandoned, contaminated sites here in the Northwest Territories. We have a terrible track record of that under the federal government. We are now responsible for that. If we are carrying out inspections on these sites, we are responsible. We can't go back to the federal government on some of these sites. We don't have the purse that the federal government has in terms of trying to remediate contaminated sites. If we mess up now, it is going to cause us a lot of financial difficulty and prevent us from doing some of the good things we have all agreed to do in our mandate. I think cutting inspections is very short-sighted. Save some money now is going to lead to a greater risk of us inheriting sites and things that we really should be doing a much better job at preventing.
I want to transition from that, Mr. Speaker, into another topic, which is: how do we prevent and make sure that we don't inherit these sort of sites? Inspections are part of the picture. The other part of it is making sure that we have proper financial security in place. We have had at one time a unit; I can't even remember the name of whatever the entity was before. We have had some people working on this issue now. I know they are doing good work and hard work, but we have had this jurisdiction now for almost three years, and there is not one piece of policy, not one legislative change that has come about to make sure that we improve our financial securities and liabilities regime here in the Northwest Territories. When can we actually expect to see something emerge from this department in terms of it improving financial securities?
I am just going to give a couple of examples. Right now financial security is usually asked for, but it is not mandatory. It is discretionary. It is discretionary under the current legislation. Why can't we make it mandatory as it is now indeed under the Commissioners Lands Act? Because of changes that were made a few years ago because of the lessons learned from Giant Mine. We have had this jurisdiction for three years. When are we going to see some solid policy work, some solid legislative changes come out of this department to prevent us from inheriting more contaminated sites? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
Thank you, Mr. Chair. I think I certainly agree with the premise in the Member's question as to vigorous inspections. I don't want him to think that, because there has been a reduction in the travel budget, the inspections will be any less vigorous. I know that we have formed a securities project assessment division, which is 80 per cent staffed. They are building a securities tracking system. I am going to let Mr. Hagen perhaps expand on that. Thank you.
Thank you, Minister Sebert. Deputy Minister Hagen.
