Thank you, Minister. I will now open the floor to general comments on Bill 7. We have general comments. Nothing from committee. Mr. Testart.
Thank you, Mr. Chair. This has been a long road coming to this place for Bill 7. Initially it came to committee and some details were omitted that didn't allow proper analysis. It went back for review for 120 days and committee has had time to consider it. Those public consultations, at least for me -- and I'll be clear, I am speaking for myself as an honourable Member of this House -- those public consultations were a real eye-opener for me. At first, the bill seemed an important step forward in delivering on crucial infrastructure improvements for the Yellowknife Airport and further economic opportunities, but the more we looked into it and the more we heard from important stakeholders, the more we realized that there was more in play here, and the proposed benefits and enhancements were less important than pulling an expensive piece of public infrastructure off the government's books and asking consumers to directly subsidize it through increased fees and taxes.
As we looked through other jurisdictions in Canada, and even through global rates of airline competitiveness, Canada ranks very poorly in affordable air travel, and largely because of increased fees and taxes that are imposed on tickets through airport authorities.
Even more recently, perhaps coincidentally in time for this debate, the CBC has launched a major investigative report into how airport improvement fees roll out across the country, and it was found that anywhere between 4 to 6 per cent of fees are kept by airlines, and this plan, this airport improvement plan, that this legislation enables didn't seem to be aware of that concern and it was not subject to committee's study, so there are a lot of unanswered questions.
It was originally called a governance reform for the Yellowknife Airport, and really it's more a governance structure for accounting, not really governance for the airport itself. There is an economic advisory committee that has been proposed, and this committee is not publicly accountable. It's not even accountable to the Minister; it's accountable to his Ministry. These are red flags in terms of creating a really robust entrepreneurial basis for funding increased economic and commercial activities at the Yellowknife Airport, and, ultimately, for a government that has pledged to keep the cost of living low, to tackle unnecessary increases to the cost of living, and that initially opposed a national carbon tax scheme out of concerns for increasing the cost of living. I find it somewhat galling that we are embarking wholeheartedly into increasing the cost of air travel in the Northwest Territories, and not just for Yellowknife but everyone who travels through that airport, which includes our world class tourism industry.
This is an industry worth subsidizing in my humble submission, Mr. Chair, and the price elasticity of airline rates has been noted in many of the submissions the committee received, and there is a direct correlation in decreased commercial activity as a result of increase in fees. People are very shrewd when they are purchasing air flights, and there are many resources out there to help make the most economical decision for them, so there will most likely be an impact; all the evidence that we were presented points to that.
Furthermore, what we heard is that people want a better airport. People want better infrastructure, better opportunities. This plan doesn't get us there any time soon. It's aspirational, and it was sold on aspirations. The immediate short and immediate term results of this plan is going to be fee increases and substantial fee increases across the board.
Nunavut and Yukon, our sister jurisdictions, are continuing to subsidize their airports. They have engaged in the federal government and in P3 projects to improve their local infrastructure and those are immediate projects that are under way today. We still don't have a plan to improve infrastructure. I would also argue that, if this is a political priority for government, then we will find the political will to put those improvements in, and if that's what the Assembly agrees to as a whole when we develop our mandate or develop those broad political priorities, then that's what takes precedent and perhaps bumps things up the capital planning list.
So I think that there's been a lot of work done on a sales pitch for this, and I appreciate that the department is trying to communicate its objectives here but I think they missed the mark. Ultimately, although this -- I can only call it a cash grab at this point has a direction that is towards airport improvement is far off, and at this time I can't support it. Perhaps under different economic conditions for our territory I could support it, but at a time when our economy is still sluggish and needs assistance from this government in the form of capital, in the form of opportunities, this is not an opportunity that is going to help our economy at this time.
This is an extra burden on the backs of Northerners who will be paying for this piece of infrastructure through fees and taxes, and those are my number one concerns: ensuring that our residents are not unduly burdened by any increases to the cost of living.
I have heard that line repeated by our Premier, by our Finance Minister, by numerous Members of Cabinet, so I can't understand why progressive things like carbon taxes can't be considered because of their undue cost yet an airport tax is completely reasonable and rational as a policy direction of this government.
So with that, Mr. Chair, I'll conclude my comments. This is not a quick decision that I have come to; this is something that has been with the committee that I serve on, Economic Development and Environment. I do want to thank my honourable friends on that committee and the work of our chair, the honourable Member from Yellowknife North, in moving this file along and ensuring that we were allowed to do our due diligence and had a thorough review of this proposal and well considered, including allowing the public to have their voices heard. Thank you.
Thank you, Mr. Testart. There's two minutes left of your time; would the Minister like to respond?
Thank you, Mr. Chair. I don't know how many people are going to have opening comments, so we may be repeating ourselves when I respond to each individual Member, but I've taken some quick notes on the Member's comments.
Right off the bat I want to comment on the ATAC fees. We have had a number of questions in the House surrounding that issue. This is something that is done through ATAC; it's a national thing. As I said in the House, we are paying close attention to them negotiating these fees going forward.
There has been a concern, I guess, in the paper or in the press about the amount of money collected by certain carriers. The one thing that I can tell Members is, if they were able to negotiate that price to a lower fee within the airport improvement fee, that will mean more money for capital for our airport, so that's actually a good thing. In a certain way, I think it's kind of timely that that report has come out and in the best case scenario they will end up having a lower fee on that and there will be more money for capital for our airport.
The Economic Advisory Committee, this is an advisory board. This is a first step on moving forward. I know our committee has supported more of an airport authority when they originally looked at this, and so have some other people who we have consulted with, but as I've said many times in the House, this is our first step in looking on how we wanted to roll this all out, and we feel that the Economic Advisory Committee is the proper way to do it. We believe we are going to get a wide range of participants, from Aboriginal governments to tourism businesses to business people in the surrounding area, that will help advise the government on what are the best practices and what our capital investments should be moving forward with the Yellowknife Airport.
The Member also said that we don't have a business plan moving forward. This has already been posted on what capital investments that we want to look at investing in the Yellowknife Airport, and that's already posted in our business plan on our website.
Cost of living. We've already put out that it's going to be .08 per cent cost of living to the Yellowknife residents in the Northwest Territories. The other thing that always sticks in my head is over half the people who are travelling through the Yellowknife Airport -- over half a million passengers -- over 50 per cent of them are non-residents of the Northwest Territories. These fees are going to be spread out over a wide variety of people, and we believe that this plan of Bill 7 moving forward is the best thing for the Yellowknife Airport. Thank you, Mr. Chair.
Thank you, Minister, right on time. You mentioned an acronym, ACAT or ATAC. For those not in government, could you please spell out what that stands for? Thank you.
Air Transportation Association of Canada. Thank you, Mr. Chair.
Thank you, Minister. Next on my list I have Mr. O'Reilly. If Mr. O'Reilly has any time left, then I will cede it to the Minister to respond. Mr. O'Reilly.
Thanks, Mr. Chair. Yes, I will try to leave some time at the end for the Minister to reply.
I don't want to repeat all of the arguments of my colleague from Kam Lake, but I do have some additional items, as well. I think it's fair to say that this proposal for Bill 7, it was not part of the mandate. This was not an initiative that I knew anything about. It was not part of the mandate, so what was really driving this? I think the motivation was the fiscal reduction targets set by Cabinet to try to get this $4 million contribution from our government off the books, quite frankly. That was the motivation, in my opinion, for this move. Because, if it had been such a great idea, this should have been done years ago, so I don't understand the timing of this. It's not just coincidence that it's being introduced at the same time Cabinet has their fiscal reduction strategy.
I think it's also fair to say that this proposal has been characterized by some rather poor communications. MLAs, we first heard about this because of media reports of staff from the department briefing Yellowknife City Council on this before we had received a technical briefing or even information about this. Also, when the legislative proposal was brought forward to committee in May, at that point, committee had asked for detailed information about how this was going to be rolled out in the form of a business plan. That business plan was not put together and provided to committee until September. It took months for the department to get this together. I know that there have been some remarks in the past about how committee is delaying this. That is completely untrue. It really goes back to, I think, the poor communications from the department in bringing this forward and providing the information to the standing committee.
Now, I want to go on to some other points here. Committee and members of the public, in fact, and committee members had asked the department to consider a phased-in approach to the fees. We felt that that was a more reasonable approach to take. The answer, though, from the department, from the Minister, was no, they were not prepared to consider a phased-in approach. I will have some questions for the Minister about that to see whether he might be willing to reconsider that. As my colleague, the honourable Member from Kam Lake said, I find it very inconsistent that on one hand this government has resisted a carbon tax with incredible fortitude in light of potential cost-of-living increases, but, on the other hand, cost-of-living increases related to increases in fees for users of the airport, that is fine because we can get that money off of our books. I just find that inconsistency a little bit too hard to swallow. I will be looking for a much stronger approach in terms of carbon pricing from our government when it comes to cost of living. They do not see that that is going to be a big issue, so I look forward to that from our Cabinet colleagues.
Like the previous speaker said, I think part of the issue here, too, is to try to get our federal government to invest in our gateway airport into the Northwest Territories, and I don't really see a sufficient effort on the part of our Cabinet to do that, and perhaps by previous governments, as well. We do have a federal engagement strategy, and investment in the Yellowknife Airport I don't think is even mentioned in the federal engagement strategy. I will have questions for the Minister in terms of what we are doing to try to tap federal funding programs for investment in the Yellowknife Airport and whether indeed we can or should be adjusting the federal engagement strategy and our requests under various funds that are provided to seek more investment into the Yellowknife Airport, perhaps even above and beyond roads to resources, one of the favourite investments from Cabinet.
Why investment in the Yellowknife Airport is important is because it can help promote tourism, and tourism is sustainable. That is why I think that we have to go back and look at how we are approaching the federal government to seek better investment in the Yellowknife Airport.
I want to move on to the Economic Advisory Committee. This is the thing that causes me the greatest amount of concern and my greatest issue with this proposal. There is nothing really changing with the governance of the airport. All that is happening is that the revenues from this are going to go into a revolving fund. It's still going to be a DOT operation. They just won't have to provide any money for that because it will be the users paying for it, but nothing else is really changing.
What I have heard from constituents and the community and the users is that they would like to have a more meaningful say in what happens at the airport. We pushed the Minister on this, and we asked about what this Economic Advisory Committee would be, and his response has continually been that we are looking for business leaders that already have an interest in the airport and that want to promote the airport, and that is what this Economic Advisory Committee is really all about.
Well, that does not meet the test of independence, representativeness, accountability. Having this committee appointed by a deputy minister rather than by the Minister, himself, I just do not understand how that creates confidence in what this committee can and should be. Pardon my terminology here, this is going to be essentially an "old boys' club" rather than a committee that is going to provide any kind of oversight.
I guess the example that I want to give, and we raised this with the Minister at the time, was that, under the Waste Reduction and Recovery Act, there is an Environment Fund established by Environment and Natural Resources. There is provision in that act in basically one clause of the act, section 2, that gives the Minister the authority to establish an advisory committee. Mr. Chair, I served as the chair of that committee for five or six years, and I served on it for five or six years even before that. That was a representative committee. It provided sound advice because there were people from the municipal order of government, people from the retail sector, from shippers. People from the electronics industry came on later, but it was representative. It had a terms of reference that were sound and where they had the ability to provide advice and some oversight on the Environment Fund, and it worked very successfully. That is not the model that is being proposed for the Yellowknife Airport. What we have is an advisory committee that is going to be an "old boys' club." I can't really see how they are going to provide any kind of meaningful oversight, and they're certainly not going to be representative.
I also would encourage the department to do some kind of metrics reporting as this proposal moves forward so that we can actually see that the funds invested are improving wait times and things like that as we go forward, as part of their public reporting. I have probably gone on enough, Mr. Chair, for now. Those are my opening comments, but I will have questions for the Minister as we move forward. Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister, the Member has left you a minute and twenty to respond to his statement. Minister.
Thank you, Mr. Chair. I won't get into the Economic Advisory Committee because we have already discussed that. I want to touch briefly on his comment on carbon tax and then around the government. This is a very complicated issue. He knows that. The government is having a very hard look at how we are going to implement that, or if we are going to implement it, or how we are going to implement it. There are a lot of discussions between us and Regular Members and the public on how that is moving forward, so I just want to get that out of the way because he threw it in there. It has nothing to do with Yellowknife Airport.
Business plans, we are going to put them online. They are going to be able to be scrutinized and have a look by the general public. Nothing is going to change there. He made the comment about us throwing a business plan, coming in late, to them. Last session, we agreed with committee to hold off until the next session. The reason for the lateness of the business plan, and we have already told committee before, was we were doing consultation. We met with 39 different stakeholders in consultation sessions on how the airport moves forward, engaging with the federal government. The territorial government is always engaging with federal government on how we're going to get federal funding for airports. It's always been a challenge on that. We continue to work on that.
Minister, your time is expired. Next on my list, I have Mr. McNeely.
Thank you, Mr. Chair. I agree with all the comments made. Looking back, and I also appreciate this was a very delicate subject with many involved and opinioned by other stakeholders and the public, but when I come back to my conclusion as an individual and the riding I represent -- who, by the way do not have a road and all-weather roads -- so it's either fly-in or drive-in for portions of the season, or take a long boat ride. We rely heavily on air travel.
I'm taking that into consideration as well as my colleagues on the high cost of living. I look at the discussions we had. I got to fly home, so I go through the building. I look at the building, talk to some of my associate previous-life work colleagues down South and talking with them, gathering their suggestions, their opinions, and relating that to the economics of the improvement fee. I see a lot of value going to this community, the workforce, the permanent workforce that is going to be created.
Looking at this government's budget, continuously it has always been the same neighbourhood amount that we've been operating on for the last 10 Assemblies. The fee itself, combined with the revenue it's going to generate, will go towards reducing a subsidized aspect of this government and improve services which are needed, expansion of the parking lot, and establish a showcase as a capital should to attract outside visitors.
The economic benefits also include improvement construction jobs. I look at the tourism potential of our remote pristine area in central Mackenzie, and I also take into account if the traffic could make their way to the destination out here. We've got destination Deline to attract those individuals to the next largest pristine lake in the Northwest Territories. Who's to say, we may even see 10 per cent of that traffic going to that neighbouring lake two Assemblies from now. So the vision of prosperity could be assumed in two-fold.
After analyzing the only reasonable carrier that we have in our area, the businesspeople, friends who I associate with down South who travel up here -- here in the committee, and some in my area -- I come to the conclusion on speculation that I think what we can only assume is going to be addressed in a pro forma business case. At the end of the day, my conclusion and I'll say it for the record -- and that's me only -- I'll be supporting Bill No. 7. Thank you, Mr. Chair. I'll leave half the time.
Thank you, Mr. McNeely. You gave five minutes to the Minister. I just want to remind the Minister, as a Member of this House, you do have your own 10 minutes if you ever wish to speak to it.
I apologize for the abruptness of cutting off last time, but rules are meant to be followed. I also appreciate that you don't have a clock up there. Next on my list, I have Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, I just wanted to touch on a couple of the issues, or concerns I'll call them, that I've heard as a Member of this House. I've heard that this was going to possibly have an effect on tour operators. It's not really affecting tour operators monetarily, but possibly affecting the numbers of tourists who would come. If it was at a higher cost, I'm pretty sure that the tour operators could essentially pass their costs on to the tourists themselves, but if it was too high, then you eliminate the percentage of the tourists. It could have some impact there, a possibility, so I certainly have a concern there about that particular item.
The other concern that I've heard frequently has been it would have an impact on the cost to air transportation companies. In that sense, it hits a little closer to home for me as a Member of Tu Nedhe-Wiilideh because one of my communities is affected with very, very high costs of living at this point, the fly-in community of Lutselk'e.
What happens there now is individuals in the community take full advantage of a trip to Yellowknife. If they have to pay for a ticket and then buy the groceries in Yellowknife and ship them in, the cost is significantly high enough that it just balances out if they can get a trip in for another reason. Many individuals take advantage of trips into the community, whether it be medical travel or travelling on other business that they have to do in Yellowknife or passing through here to do business elsewhere. They take advantage of the amount of weight that they're allowed to have and paid on their ticket. Anything above that, they pay a certain amount. If that company is hit with high fees, then they would pass that cost onto the customers that they serve and that would be many of the Tlicho communities and even the Nahendeh communities -- or one community, I'm not sure about that -- but definitely Lutselk'e.
When the people come, they look and they see. They take this opportunity to buy groceries here and save a lot of money on their groceries, and then the savings will go down when they have to put it on a plane at -- I think -- I don't know the amount, but it's over a dollar per pound. It's considerably over a dollar per pound. That will start to impact. This bill then -- if I look at this bill -- I would say yes, it would have. It may have an impact on people who are trying to lower their cost of living in the community at Lutselk'e because the Air Tindi is paying more than they are currently. They may have to pass that onto the customer.
I guess my question to the Minister -- I have three questions, actually. One is: has there been any discussion with the individual tour operators to see if there are ways where they could mitigate the impact on their operations? Number two: if there have been more discussions with the airline companies, especially the ones that serve communities where there is only fly-in, so especially when we have communities where they have to bring food in, just to keep the costs down. Food, of course, is an essential item, and that is one thing: even when the federal government taxes things, they don't tax food. We know that, because everything is done to try to keep the taxes on food as low as possible. In communities where there are high food costs and there is an opportunity to ship stuff in, by having a reasonable freight cost, if this was to turn this freight cost from a reasonable freight cost to a high freight cost, then it would be, essentially, like our government is going to now not charge taxes on food for those communities with the highest costs, but actually charge fees to individuals who are trying to feed their families.
I guess the third question, which I haven't even touched on here, would be: if there is capital, if this bill is approved and the money is there to do capital, one of the things that may eliminate a lot of those costs would be an extension of the airstrip. By extending the airstrip I don't know how many feet --- 15,000 feet, or whatever, it may give an opportunity for tour operators to fly people directly from their countries right into Yellowknife with bigger planes, bigger loads, and less distribution of costs amongst the individual tourists, thus continuing to make it a feasible, attractive place for tourists to come. Thank you, Mr. Chair.
Thank you, Mr. Beaulieu. Minister, there are three minutes. Keeping in mind you can always answer after the rest of committee has made their comments. Minister Schumann.
Thank you, Mr. Chair. I will answer him very quickly. First of all, we have met with NWT Tourism. We have actually met with them twice to discuss items that are issues around tourism. One of the things that we are working on with them is figuring out how we can attract direct flights from Vancouver to Yellowknife, which will allow for a lower cost for travellers from Asia, in particular, coming from Vancouver directly to Yellowknife. We believe that is going to help them out, because it is actually going to put more money in the tourists' pockets, and possibly even increase the numbers coming into Yellowknife.
As far as freight, our business plan says that the fees that are going to be implemented will only add one cent per pound to freight. That is a very minor increase. If the Member already said they are paying $1 per pound, now they are going to pay $1.01 per pound. I don't think that is a significant amount. Capital for expanding the length of the runway, that is something that is on the list, but I don't believe that is a priority right now, moving forward. It is something that we can consider in the future. I believe most planes are all coming in right now, and the runway is fine. Thank you, Mr. Chair.
Thank you, Minister. Next, I have Ms. Green.
Thank you, Mr. Chair. Mr. Chair, at this point, a number of issues have already been investigated, so I will try to focus on those which, I think, haven't had as much attention. I guess I want to start with the fact that use of the airport is non-optional for a big chunk of the Northwest Territories, because they have no other way to get to their communities on an everyday basis, or to get freight to their communities, or to have a medevac from their communities, or to go on medical travel from their communities. A question I will ask the Minister, at the appropriate time, is: how much of the money that is going to be paid out in the increased fees will actually be paid out by the government in all these different ways that they pay for airport use?
I will also be interested to hear some more detail on the Minister's figure of how much the increased fees are going to increase the cost of living in Yellowknife, and whether that is just in Yellowknife, or whether it is through the Northwest Territories as a whole. Mr. Chair, this is a very economically slow time, here in Yellowknife in particular. We have had job losses on many fronts to do with our key employers: both the mining industry and the civil service. The result of that, along with increased costs in different directions, is people are feeling very vulnerable about the costs of living here.
This is not going to allay their fears in any way that they are going to be subject to an additional fee to leave the territory. This is going to increase their costs, and while that may be negligible, I think the psychological effect is more significant. I know my colleague from Tu Nedhe-Wiilideh talked about tourism. My understanding is that tourism operators sell their products well in advance, and so they would not have had an opportunity to include this extra cost in prepaid tours, and the result could cost them literally hundreds of thousands of dollars of having to pay those airport fees out of their own pockets. This comes at a time where the committee heard compelling evidence that tourism thrives when flights are affordable, so making them more expensive doesn't seem to be the right direction to go, in this particular case.
Making them more affordable will help us to encourage the growth of this fledgling industry, one which we have all agreed we want to see grow, and we want to take up a bigger portion of our economy. Making things more difficult for that sector doesn't make a lot of sense. In the business community, we all know that the mining industry is a very influential player, and they have said, very clearly, that they are opposed to this fee, that it will cost them hundreds of thousands of dollars because of the flyover workforce that they have, and also for their general cost of business.
This is, again, hitting an industry that has already been very clear that it is feeling the pinch of lower-commodity prices, and so, as a result, lower profits. My bottom line here is that I can't support the bill the way it is now. I think there are some very significant outstanding questions about attracting federal investments, about strengthening the governments, about a more considerate approach to phasing in the additional costs, at a time when the economy is more able to bear it. With that, thank you, and those are my remarks.
Thank you, Ms. Green. Minister, would you like to now respond?
Thank you, Mr. Chair. We will wait.
Thank you, Minister. Do we have anyone further? Mr. Thompson.
Thank you, Mr. Chair. This should be brief. We have heard from our fellow colleagues, our honourable colleagues, as they addressed the issues. There are a number of questions that keep popping into my head. From my riding, it is a $39 increase. If we want to go to Edmonton, we have to switch from here onto another plane and then continue on. It is not a direct flight, like some of the other communities. It is a $39 increase. It doesn't sound like a lot, but when you are paying a large amount of money to get on a plane to get out just from Fort Simpson to Yellowknife, it is a factor.
Some of the other questions I do have, though, are: I asked the Minister regarding the costs of the GNWT. I understand we are saving $4 million, but how much of this is actually coming back? The departments have to pay, through medical travel and business travel. How much is being put back into the coffer? To me, if we knew the information, then that would help make a better decision for me, but right now, I don't know what that is. That is a cost that is out there, which seems to be saying, "We are saving $4 million, but if the government spends $1 million, really, we are only saving $3 million." That is an issue.
My other concern is in regard to O and M costs. If that is a $4 million subsidy, if we are taking that and we're putting it in the revolving fund, that means those costs are going to come out of that. Or is it? Is there another pot of funding that is being allocated? So I am trying to understand these things. I am trying to get a clearer picture of it. The other concern is in regards to the parking expansion enhancement. The plan, I am looking at the airport, and I am seeing the airport and trying to envision where this extension of the parking lot is going to be. Is it going to be a parking lot moved away? Is there going to be additional cost to it? Is it going to be a charter or a taxi, or is it a shuttle? I mean, these are costs that need to be reflected in the plan.
Finally, the cost, if it was actually implemented over a longer period of time, then it would be a better reflection of people to look at it and have a better appreciation of it. I understand the importance of doing business and that, but we are asking for a huge increase right now. Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister.
This one, I want to answer right away. Thank you, Mr. Chair. I don't know where the Member is coming from when he thinks there is going to be an extra fee on for his residents flying through from Fort Simpson south. Anyone who is flying from Fort Simpson directly through, if they have a stopover here and get on another carrier and continue south, there is not going to be a fee for that. The only way there would be is if they came here, spent a couple of days here, and had to rebook a ticket or something going south. Then there would be the $20 fee plus the additional aeronautical fees that would be added to that. That is how that is. There would be a $10 fee added to their ticket if they were flying north from here in that particular case, but, if it's flying through Yellowknife, if it's a stopover and a continuation of their ticket, there is no added cost to the passenger.
As for medical travel, I have stated in the House that it's a roughly $300,000 incremental cost that is added to the Government of the Northwest Territories. We have already provided committee with that information once.
As for capital improvements moving forward, as we have said, we are going to have our advisory committee along with the Government of the NWT and the airline industries in how we are going to move some of these things forward. That will be determined moving forward. The business plan that is drafted, that is already posted online, has laid out in it some of the changes that we have already decided to try to move forward as a draft plan. Thank you, Mr. Chair.
Thank you, Minister. Next, I have Mr. Nakimayak.
Thank you, Mr. Chair. I won't be very long. My colleagues stated a lot of the obvious and actually answered a lot of questions that I had.
With my colleague from the Sahtu, I agree that, if we are going to pay maybe $5 or $10 for a ticket, I don't think it would change anybody's mind to come to travel to the Northwest Territories. I think, when you look at the business model of it into the future, I think Yellowknife is probably the place that will benefit most out of this, and I think a lot of the surrounding communities will benefit, as well, from having tourists and clients. For myself, being in the outfitting business before, a lot of our clients were from Europe, and they had had to fly through other routes, sometimes it was impossible for them to reach my region and especially fly up to Paulatuk. In a sense, that cancelled some of their trips. From a business model, it affected our business, as well. I think this brings them a step closer to saying yes and drawing more tourists to the Northwest Territories.
Looking forward, earlier I had mentioned about how great our harvesting and our culture is, so we want to bring more people to see that, too. Yellowknife is the capital, and I see in Iqaluit, Nunavut, they are building an airport. Their population is less than half of what we have here, in Yellowknife, and their airport is by far a lot bigger. It shows that the territories are moving forward with plans to become more of an icon of the North. For me along with my colleague from the Sahtu, I support this, and I think it's a smart move in planning forward. I just wanted to say that I support the bill. Thank you, Mr. Chair.
Thank you, Mr. Nakimayak. Would the Minister care to respond? The Minister would not. Next on my list I have Mr. Vanthuyne.
Thank you, Mr. Chair. Mr. Chair, I am a Yellowknifer. I live here. I do business here, and I travel regularly through the Yellowknife Airport. The idea of running the airport as a self-sufficient business, charging user fees and landing fees, property leases and vendor rents designed to generate a profit like a business, in that context, it would appear to be a good concept, but the fact is that the Yellowknife Airport is not a business, it's not run by businesspeople, and it's not expected by residents to be a business. It's a government-owned and operated facility. It's almost certainly the NWT's most important piece of transportation infrastructure. It provides critical services to every individual, community, and business in the territory.
Mr. Chair, I agree that the experience for the traveller needs to be improved, the terminal needs some updating, we have to get people checked in more quickly, and we certainly need to break the bottleneck at the security area. Parking needs improvement, and, yes, safety for passengers going to and from the terminal to the planes needs to always remain a priority, but these things should be the focus of managing the airport every day, not just when it wants to seek $10 million a year in user fees.
The Yellowknife Airport should always have the travellers' best interests in mind and be continually improving the air travel experience, but the Yellowknife Airport is also more than just an airport passenger terminal. It includes exploration support companies, such as Matrix. It has a new diamond polishing plant in Almod Diamonds. The ever-famous Buffalo Airways is also located here in a big way. Aboriginal-owned transport and logistics companies such as Det'on Cho Logistics, and BBE are located at the airport. Of course, a number the North's homegrown airlines and helicopter companies are located here, as well. We even have an auto dealership and a few rental car businesses located here, as well.
Mr. Chair, these companies represent lifelines to the North. They bring cargo in and out, they support tourism, they support industry, but, most importantly, they support residents and the communities. Not one of these businesses is just a Yellowknife business. They are part of that critical infrastructure hub I spoke of that makes up the Yellowknife Airport. All of these northern businesses have one expectation of us as a government: to keep the cost of doing business down. In fact, I can't even begin to understand how we balance this idea of a user fee against many other demands we face as a government.
We have to fight tooth and nail for more money for education needs, for justice needs, and social needs to help overcome many challenges we face on those fronts, but here and now with the airport, there is just a simple list of nice-to-have projects and let's grab as much as $10 million a year in new money from residents to pay for it.
I don't need to shine a light on our economic realities anymore, Mr. Chair. Our residents are faced with those realities, and they are demanding every day that we keep the cost of living down. They told us clearly during the election campaign. That is why it's in our mandate. Yet, with this user fee proposal, we are going to be direct contributors to increasing the cost of living and the cost of doing business in the North. If we want to contribute to the economy, we need to keep overhead low. That will support established businesses and stimulate new ventures, and it will allow residents to keep their own money in their own pockets. Now is not the time to apply a new tax, a significant one at that.
Mr. Chair, the Northern Air Transportation Association, NATA, suggests the proposed user fee will work against the goals and priorities of this government. NATA points out that air travellers already pay significant taxes and fees. A recent ticket between Edmonton and Yellowknife with a base price of $112 actually cost the traveller $196. That is a 75 per cent tax. Now our proposed user fee would be on top of that. NATA also points out that it's the federal government, not a user-pay system, that is responsible for providing key airport infrastructure funding.
Northern air carriers are doing all they can to remain competitive. Numbers from the Yukon-based airline Air North show that lower air fares there helped increase the number of visitors, stimulate the economy, and support the business sector, but estimates indicate that a user fee in Yukon that would raise roughly $7 million for their airport would likely cost the economy $6 million in reduced tourism, lowered business travel, and a higher cost of living. The NWT-Nunavut Chamber of Mines, the North's voice on resource opportunities, recently put out a news release clearly stating that they are opposed to such a fee. They said it decentivize investment in the North, it goes against support for a healthy mineral industry and it will add to the cost of doing business. The president went so far as to say that it goes against the NWT Mineral Development Strategy which was created to rejuvenate investment, and he inferred that, if the government really wants to generate revenue instead of new taxes, it should support exploration in mining opportunities.
Both NATA and the NWT Chamber of Commerce have argued strongly that the department has not made a proper business case for this new fee. They further suggest that the airport should show it operates at a maximum efficiency and take advantage of all other revenue-generating opportunities before users are saddled with more fees. A user fee that can be perpetually increased will take away any incentive to improve efficiencies of existing operations.
NATA is sponsoring the Northern Aviation Business Conference here in Yellowknife in April. The conference will specifically address needed airport improvements. I suggest our government needs to be at that conference with open eyes and open ears.
NWT Tourism and their members said no to the fee proposal. Why? Because tour operators -- among the brightest sector in our economic outlook -- will be burdened with higher operating costs.
Mr. Chair, we heard from northern airlines, we've heard from the Chamber of Mines, we've heard from the NWT Chamber of Commerce and we've heard from NWT Tourism and we've heard from individuals. Higher costs do not support competitiveness, resource development, business growth or tourism, and certainly, of course, higher cost is a direct conflict with our mandate goal to lower the cost of living. New user fees at the Yellowknife Airport create an obstacle to achieving all these goals.
Mr. Chair, I like to use the triple-bottom-line approach to evaluate policy and program proposals; that means, to go forward, an idea has to succeed on three separate bottom line levels: fiscal, social, and environmental. This is clearly a lopsided initiative that has very limited benefit to attaining sustainability. If this user fee proposal were to be tested using a triple-bottom-line scorecard, it fails, Mr. Chair.
I agree that the Yellowknife Airport needs to grow and provide better service to travellers, but I submit that now is not the time to take money out of our economy this way. Instead, I speak today to say that now is the time to support the mandate and support northern businesses and families. Now is the time to protect individuals, families and small businesses by sticking to our government's ultimate business plan: the mandate, where it is clearly stated as our second priority on page 6 "the 18th Assembly will lower the cost of living."
For these many reasons, Mr. Chair, I will not be in support of Bill 7, An Act to Amend the Revolving Funds Act. Thank you, Mr. Chair.
Thank you, Mr. Vanthuyne. I have no one further on my list. Would the Minister like to respond to the opening comments?
Thank you, Mr. Chair. First of all, I want to make it quite clear, this is raising the cost of living by less than a tenth of 1 per cent, so it's very minimal. If I thought this was something that was going to raise the cost of living by 10 or 15 per cent in the Northwest Territories, this bill wouldn't be in front of the House.
Through the Member's comments that he just made around the Yellowknife Airport, the one thing I want to -- I agree with a number of things that he said in comments, some of them were very valid, but one of the things doing this revolving fund Bill 7 moving forward is it's going to free up $4 million that we're already spending, not including capital, and what that money alone is going to do just in the Yellowknife area for every million dollars that we bring forward is going to create three and a half jobs. So just out of that $4 million, not even counting capital, is going to create roughly 14 jobs in the City of Yellowknife at the airport. So that's going to be an economic driver alone. So I think that's very important.
Also, this money that we're freeing up is also going to be used for other priority areas in this government that every Member in the House has brought forward, especially in this city, around healthcare, education, housing. This is the stuff that these departments have to fight with with our department over this money, and by doing this user pay system moving forward, this is going to free up the money for other initiatives that are very important to every Member that is sitting around this Assembly. That's not peanuts; $4 million going on every year that we already spend there not counting the capital. I don't want to get into a he said or they said; a couple of Members have made the point that I make a sales pitch, but I believe this is the right initiative moving forward for the Government of the Northwest Territories.
This is going to free up the money to put into other initiatives within the Government of the Northwest Territories, but this is also going to be a huge economic driver for the City of Yellowknife and the territory as a whole. It has huge potential to bring more tourists to the Northwest Territories; bring more business potential to the Yellowknife Airport and it is going to change the way the Yellowknife Airport is going to be looking in the future moving forward. That's it for my opening comments. Thank you, Mr. Chair.
Thank you, Minister. Committee, we have concluded general comments. Does committee agree that we now continue to a clause-by-clause review of the bill?
Agreed.
Thank you, committee. Committee agrees. We'll defer the bill number and title until after consideration of the clauses.
Please turn to page 1 of the bill. As I call out the clauses, indicate if you wish to speak to or have questions about a certain clause, otherwise either agree or don't. Mr. O'Reilly, clause number 1.
Thanks, Mr. Chair. Presumably, this is the time where we can also ask questions of the Minister? Because I have a number of them. Thanks.
Mr. O'Reilly, you have 10 minutes to speak to clause 1 and you can ask questions of the Minister.
Thank you, Mr. Chair. I guess my first question is: I'd like to know from the Minister or staff what are the subsidy costs for other airports that we operate in the Northwest Territories? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister. Or, sorry, Mr. Neudorf.
Thank you, Mr. Chair. So we've just been through the main estimate process, and there would be a line item there that would provide the money that we need to run all 27 airports that we have in the NWT. I don't recall specifically what that item is, but we also generate revenue from other airports as well. The amount of money that we generate, revenue from those airports, though, is a small fraction of what it would cost to run all of those other airports. It's only Yellowknife that has enough traffic volumes that we would consider this type of initiative to see if we can move forward with the business case and have the revenues and expenditures balance off.
In addition to that, there is also the capital budget, and as capital needs at airports come forward we would bring those projects forward through the capital planning process. Thank you, Mr. Chair.
Thank you, Mr. Neudorf. Mr. O'Reilly.
Thanks, Mr. Chair. I was hoping to actually get the number, but I'll try to look it up here myself in between questions.
Are there any plans by the department, then, to introduce airport improvement fees at any other airports in the Northwest Territories? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister.
Thank you, Mr. Chair. No, there is no intention of doing that at any other airport. Thank you, Mr. Chair.
Thank you, Minister. Mr. O'Reilly.
Thanks, Mr. Chair. Thanks to the Minister for that response. So can the Minister just tell us a little bit more about why the department is not willing to consider a phase-in of the fees? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Minister.
Thank you, Mr. Chair. So we don't want to phase in these fees; first of all, it would create uncertainty for air carriers and travellers if we did a phased-in approach. The phased-in approach would mean that a significant operating subsidy would have to be maintained from the taxpayer, so that's another reason we wouldn't want to do it, and a phased-in approach implement would result in a delay in the ability to make necessary capital improvements. Thank you, Mr. Chair.
Thank you, Minister. Mr. O'Reilly.
Thanks, Mr. Chair. So did the department look at whether a phased-in approach would help buffer the cost of living increase caused by these increased fees? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Mr. Minister.
Thank you, Mr. Chair. As I've said in House, one tenth of 1 per cent is the increase of the cost of living. We don't believe that the phased-in approach would make any kind of difference on that. Thank you, Mr. Chair.
