Thank you, Mr. Chair. There is legislation coming in this 18th Assembly; we expect to have some rolled out here in 2017-18. We do have the office set up now. Actually, we are staffed up almost 90 per cent in securities. Like you know, the securities on a development is set, not by Lands, but by the land and water boards. It is collected and kept by the Minister of Lands and by the Minister of ENR for water. The land and water boards, I think, Mr. O'Reilly, you are well aware, they set the amounts of security. I haven't heard or seen of any operation or development out there that do not have security on it going forward or even going back. If, you know, go back far enough -- let's say back 20 years. Thank you, Mr. Chair.
Thank you, Deputy Minister Hagen. Mr. O'Reilly.
Thanks, Mr. Chair. We can compete about who has got a longer memory. Certainly with Giant there was $400,000. It is going to cost the taxpayers probably over a billion dollars, maybe even closer to two by the time it gets remediated. Even as recently as last year with Norman Wells, there is no financial security, or not enough set aside. Now it is $180 million. The Minister could accept a promissory note on the back of a napkin as financial security. That is just not good enough. There is certainly still room for improving and making greater accountability through our legislation. I know the Minister would never accept something on the back of a napkin, but I know that he will be happy to change that legislation to make sure that future Ministers can't do that either. I just want to get into a couple of specifics here. With the Cantung Mine, have we given back this surface lease to the federal government? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
I am told that we haven't yet. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. O'Reilly.
Thanks, Mr. Chair. Is that going to happen sometime soon, or how soon? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
I will let Mr. Hagen respond to that question.
Thank you, Minister Sebert. Deputy Minister Hagen.
Only on Cantung it is in care and maintenance under the federal government. Inspectors are federal inspectors. Now we are in discussions that have been moving along fairly well. INAC has said in correspondence they are going to take administrative control of the whole site back, which is right now in the process of happening. I would suspect within the next two months, the feds will be totally in control of Cantung.
Thank you, Deputy Minister Hagen. Mr. O'Reilly.
Thanks, Mr. Chair. Glad to hear that. I really look forward to getting that lease back to them and reducing our exposure. Let's talk a little bit about Prairie Creek now. This surface lease is in over-hold tenancy. When are we going to put in place full financial security for the assets that are on the ground right now? As any other operator has to have up-front financial security, when are we going to do that for Prairie Creek so that we are not exposed? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
Thank you, Mr. Chair. Prairie Creek. The government is protected from historic liability at Canadian Zinc Prairie Creek Mine through the terms of the devolution agreement. I understand that Canadian Zinc, the proponent, has met all security requirements under its permits, licence, and authorization. The Mackenzie Valley Land and Water Board has set a total security amount at $17,700,000, which the company will be required to post in stages as the project proceeds. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. O'Reilly.
Thanks, Mr. Chair. We could have a great debate here. My concern is the longer our fingerprints are on that through the surface lease the more difficult it is going to be for us to try to make a case to the federal government that they can and should take it back. So we've got the ability to increase the security to cover the existing assets that are on the ground, the existing liabilities; why can't we do something about it now? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Sebert.
Well, Mr. Chair, I understand that the Mackenzie Land and Water Board sets the security and they've determined that the amount should be $17,070,000.
Thank you, Minister Sebert. Time has expired. Mr. Thompson.
Thank you, Mr. Chair. I would like to go back to my colleague from Tu Nedhe-Wiilideh who was talking about the leases. I guess my first question is: how do they come up with these lease agreement calculations in the small designated authorities? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Yes, the properties are assessed by MACA and on that basis the evaluation of what the rent or lease amount should be, so it's evidence-based.
Thank you, Minister Sebert, Mr. Thompson.
I thank the Minister for his answer. Evidence-based? I guess we live in two different worlds but, I mean, I greatly appreciate that.
So I guess my concern is my colleague was sitting here talking about a $4,000 lease in the community of Fort Resolution. Now, what logical world and evidence-based world would they come up with this kind of a lease and how does the department use that and work with Housing to get people to pay for the leases? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Well, again, the amount of the lease is based on the appraised amount. So if the appraisal comes in at $40,000 the amount expected to be paid yearly would therefore, in a normal case, be $4,000, although as I mentioned earlier there could be exemptions for a senior citizen. So it is based on the appraised value, a percentage of the appraised or assessed value of the property. It's not so different than leases anywhere and it seems to me that a yearly lease or rental of 10 per cent of the appraised or assessed value is not an unusual or extraordinary amount. Thank you, Mr. Chair.
Thank you, Minister Sebert, Mr. Thompson.
Thank you, Mr. Chair, and I thank the Minister for his answer. I guess this lease is an everlasting gift to the Government of the Northwest Territories. It just keeps on giving and giving and giving. So people who have to pay $4,000 a year -- I know in my community as a tax-based person, I pay $1,400 for a home. So, man oh man, you need to work with the Department of Municipal and Community Affairs to come up with a more realistic approach to it. Or is this a new industry for this Government of the Northwest Territories? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Mr. Chair, this is not a new industry for the government. Under the prior system I don't think we were even meeting our costs. I don't think a yearly 10 per cent of the appraised value of a property is extraordinary or out of line with normal commercial practice. Perhaps Mr. Hagen would like to add something to this. Thank you, Mr. Chair.
Thank you, Minister Sebert, Mr. Thompson.
Thank you, Mr. Chair. I guess we should be encouraging the people who live in Fort Resolution and the smaller communities to actually move to Yellowknife because my colleague beside me here only pays $2,000 for rent. I don't know what Hay River is, but I know in Fort Simpson I should be encouraging them to come to Fort Simpson because they only have to pay $1,400.
So again, will the Minister work with the Minister of Municipal and Community Affairs to address this huge outrageous bill that these community get? You're talking, if it's 10 per cent, man, I would be paying $10,000 on my home or $20,000, depending on the appraisal. So will the Minister work with the Minister of Municipal and Community Affairs to come up with a better system that works for the residents of the Northwest Territories who have to deal with leases? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Mr. Chair, I'm pleased to hear that one of the Members from Yellowknife is only paying $2,000; however, I imagine during the term of his ownership of the property he also had to make mortgage payments and so on. One of the things with a lease is that you generally pay a certain amount based on market, if there is a market, or, as we've done, on appraisal, and I don't think that a yearly rental or lease of 10 per cent of the appraised value is out of line. I think that's roughly what I'm paying for the apartment I live in when I'm in Yellowknife. Thank you, Mr. Chair.
Thank you, Minister Sebert, Mr. Thompson.
Thank you, Mr. Chair. We haven't even talked about the issue that I want to talk about. I really would hope the Minister would actually look and understand what the real world is for these small communities, and this is a problem is that, yes, you say it's $40,000, but some of these people had to pay mortgages, so they continue to pay the mortgage and they do these things.
So will the Minister work with the Minister of Municipal and Community Affairs to come up with a system that works better for the residents of the Northwest Territories, in particular the smaller communities? We're not talking Fort Smith, Yellowknife, Hay River, Fort Simpson, Inuvik. I'm talking about the smaller communities. Will he work with the Minister on this to address this issue? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert, to the question.
Mr. Chair, the system proposed by the Member, I suggest, would be a nightmare. We'd have a checkerboard system. It is clear, and everybody understands, that incomes are lower in some of our small communities. That is definitely the case, but that's an issue that can be addressed in other manners. These numbers were arrived at after a good deal of consideration, looking at inflation rates and the need to cover our costs. Thank you, Mr. Chair.
Thank you, Minister Sebert, Mr. Thompson.
Thank you, Mr. Chair, and I thank the Minister for his non-answer again. I love that. I mean, I'm sorry to say we'll have to agree to disagree on this. So it kind of falls in to the next step, is the cuts to these jobs that are community-based. So will the Minister explain how these cuts were identified?
Thank you, Mr. Thompson. Minister Sebert.
As we've mentioned previously, the Lands department was only created a couple of years ago, and there was an amalgamation of employees who worked for the territorial government and those that formerly worked for the federal government, and naturally there were overlaps when the systems to incorporate cultures, if I can put it that way, were combined. So when we were looking at the situation, we looked at areas where we thought there could be rational evidence-based reductions, and for that reason we looked at the positions and determined that these positions were ones that could be reduced. Thank you, Mr. Chair.
Thank you, Minister Sebert, Mr. Thompson.
Thank you, Mr. Chair. So we're talking evidence-based, so there was an input and output, which means that if we're looking at if you remove this job out of the community and then put him on income support, that was part of this evidence-based process, I am assuming, so it was an input and output and we are looking to make decisions. That to me is evidence-based. The Minister talks about these redundancy positions. Well, we started out with eight the previous year, went to seven last year, now we are down to six. So are you saying that regional operations are redundant? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Twenty seconds; would the Minister like to respond?
Thank you, Mr. Chair. I mean, whenever there are positions that are affected often there is a process that the government goes through, and often these people find other positions in the government. That is often the case as we all know from the round of reductions that took place last year. Most people found other positions, some retired. Some who were affected unfortunately could not find other positions, that is true, but the government has to live within its means and therefore we have to look at a rationalization. We always hear that the government should be acting more efficiently. Well, unfortunately sometimes that does mean the reduction of positions. Thank you, Mr. Chair.
Thank you, Minister. Next I have Mr. Beaulieu, I believe.
Comments or questions? Seeing nothing further, I will call this activity. Lands, operations, operations expenditure summary, $9,995,000. Mr. Vanthuyne.
