Debates of February 1, 2006 (day 20)

Thank you, Mr. Speaker. Mr. Speaker, in follow-up to Mr. Braden’s questions today, I would like to ask the Premier some questions about this letter of comfort that he provided just so that there is clarity about it, because I don’t think the public knows too much about it. As the Premier indicated, it was brought to our attention prior to it going out. My reaction to it at the time was Imperial Oil and the producers were asking about certainty and comfort on taxation, royalties about the future and going ahead with their project. I would like to ask the Premier, do we set the royalties that are going to be paid by gas producers in the Mackenzie Valley? Do we have control over the Crown lands over which the pipeline is going to run to assess taxes to the proponents? Thank you, Mr. Speaker.

Thank you, Mrs. Groenewegen. The honourable Premier, Mr. Handley.

Return To Question 317-15(4): GNWT’s ‘Letter Of Comfort’ To Mackenzie Valley Pipeline Producers

Thank you, Mr. Speaker. No, we don’t set the royalties and, no, we don’t have authority over the Crown lands. But what the company wanted before they invested $7 or $8 billion was to know what was going to happen post devolution. Were we going to be ambushing them with some weird and expensive royalty regime? They wanted some certainty. What were we going to do post devolution? That is the context in which we answered the question. Thank you, Mr. Speaker.

Thank you, Mr. Handley. Supplementary, Mrs. Groenewegen.

Supplementary To Question 317-15(4): GNWT’s ‘Letter Of Comfort’ To Mackenzie Valley Pipeline Producers

Thank you, Mr. Speaker. It’s nice to know that the industry has such confidence that we are going to actually get devolution in our lifetime.

---Applause

I want to ask the Premier also, the letter that he wrote and signed, I would like to know if it’s binding on future governments. Is it binding on aboriginal governments? Is it binding on the federal government? Thank you.

Thank you, Mrs. Groenewegen. Mr. Handley.

Further Return To Question 317-15(4): GNWT’s ‘Letter Of Comfort’ To Mackenzie Valley Pipeline Producers

Mr. Speaker, no. This is a letter of comfort. This is not a contract or something that is binding on a future government. We make it very clear in the letter that there is nothing in this letter that should be construed to somehow fetter the discretion of future governments, nor does it fetter the discretion of aboriginal governments. It’s a letter of comfort saying here is what the government of today’s position is with regard to a stable fiscal environment. That’s as far as it goes. It’s not fettering this one. It is certainly subject to any legislation that we may pass here. That was clear in the letter and in the discussions leading to the letter. Thank you, Mr. Speaker.

Thank you, Mr. Handley. Supplementary, Mrs. Groenewegen.

Supplementary To Question 317-15(4): GNWT’s ‘Letter Of Comfort’ To Mackenzie Valley Pipeline Producers

Mr. Speaker, then, to the assumption that somehow we were giving away the farm with this letter of comfort, I sort of fail to see what we have actually given them. I think the letter has integrity and it has intention attached to it, but I don’t think it’s like a province that sold their power to the U.S. -- a certain province we know -- for years to come. They are going to be stuck with an agreement forever. I don’t think it’s anything like that. So in an effort, then, to clarify how this letter was interpreted or responded to by the Producers Group, I just wish the Premier could put it in context in terms of our intentions, their intentions and how this might have propelled them to go ahead with their hearing process. Thank you.

Thank you, Mrs. Groenewegen. Mr. Handley.

Further Return To Question 317-15(4): GNWT’s ‘Letter Of Comfort’ To Mackenzie Valley Pipeline Producers

Mr. Speaker, when Imperial and its partners invest $7.5 billion, that’s a lot of money. It’s enough money to run our whole government for seven years. When they invest that much money in one project, they want to get as much comfort as possible on a bunch of fronts. One of them includes the federal government and they’ve been negotiating with the federal government on that and they had a letter of comfort with the federal government for some outstanding issues. They also realized that we are negotiating devolution and resource revenue sharing. We will become more province-like within the life of this pipeline if not before the pipeline. They realize that is going to happen. So they want some comfort from this current government on where do we stand. Do we have some plan to somehow levy some tax on them? We made it clear to them that this is not binding on anybody. This is not a contract. It is simply a letter of comfort to say we are responsible, we are grown up, we will be fair to you, we will be fair to everybody. We believe municipalities will be fair when they levy municipal taxes, and we believe aboriginal governments will be fair when they negotiate fees for crossing their land. Mr. Speaker, this is simply a letter of comfort. I don’t understand some people who see bogeymen around every corner who are afraid that this letter of comfort is somehow…Mr. Speaker, I realize the Member who asked the question understands what this means as a letter of comfort. That’s all it provides. It’s not binding as a contract. Thank you, Mr. Speaker.