Bill C-530 (Historical)

An Act to amend the Northwest Territories Act (borrowing limits)

This enactment amends the Northwest Territories Act to allow the Commissioner to borrow money up to a certain limit without the approval of the Governor in Council.

Northwest Territories Act

[Dennis Bevington, NDP, Western Arctic, NT]

moved that Bill C-530, An Act to amend the Northwest Territories Act (borrowing limits), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to have an opportunity to stand here today. It is the first time I have had the opportunity to put forward a private member's bill for debate. It is certainly something that I am sure every MP looks forward to in his career here in Parliament.

Members of this House have heard me say many times how the people of the Northwest Territories want to be masters in their own land. I think this is something people in every province aspire to.

I have spoken about how the NWT is a mature jurisdiction and should not be controlled by Ottawa. Members have also heard me mention that the people of the Northwest Territories know that their requirement for infrastructure is one of the keys to building a better north, a more prosperous north, a north that can better share its wealth with the rest of Canada.

Bill C-530 is a small step towards achieving these aspirations. As many members already know, the Northwest Territories is a creation of this House, much like Canada was a creation of the British House of Commons.

Currently, under the Northwest Territories Act, before the NWT can borrow any money it must first ask permission of the federal cabinet. By practice, the cabinet has set a limit on the amount the NWT may borrow. Currently the limit is $500 million. This is a recent increase from the previous limit of $300 million, an increase that took years of lobbying, persuading, and hard work to achieve.

Unfortunately, when the lobbying started all those years ago, $500 million was sufficient. Today it barely meets the needs of the NWT and will not be adequate for the future.

However, even though it was nowhere near sufficient, because the funds were so badly needed when the limit was increased in 2007, the territorial government said in a press release:

This is a significant step in providing the GNWT with flexibility to make strategic investments in infrastructure to improve the lives of Northerners.

It was not enough. What my bill does is provide the Northwest Territories with a line of credit they can use to finance the building of vital infrastructure, ensuring that our territory progresses in a good fashion.

My bill provides a formula for borrowing based on gross revenues applied every year. The figure we have set is 70% of gross revenues. If my bill passes, the Government of the Northwest Territories will be able to borrow up to 70% of its gross revenues for that year, in totality. The debt is in totality, of course. That would be the total debt that it is allowed to hold: 70% of the gross revenues of any particular year.

What is the government going to do with this borrowing power? Canada has many aspirations for the Northwest Territories and its development. We have heard the Minister of the Environment speak eloquently many times about the Mackenzie Valley pipeline.

Part of what we need to do to develop the Mackenzie Valley pipeline is develop a Mackenzie highway. This will cut the cost of the pipeline, and it will be an essential component of our vision of the Northwest Territories. Connecting all the communities of the Mackenzie Valley with an all-weather road would reduce living costs for residents, open up the rest of the Mackenzie Valley, and provide the opportunity for planned and careful development of our resources.

This is essential to us, but it is expensive. The Taltson hydro project is another example. We are moving ahead quickly to provide hydroelectric power to the diamond mines, which provide large amounts of revenue to the federal government as well as jobs and business opportunities in the Northwest Territories. However, the costs are very high because they use diesel fuel for all their power needs.

We propose that the Taltson hydro project go through an environmental assessment, but its cost is in excess of $500 million. Without better fiscal capacity within the Government of the Northwest Territories, it is going to be difficult for the people of the Northwest Territories to own this resource.

So once again we see the need for the Government of the Northwest Territories to have flexibility in fiscal capacity in order to accomplish projects that actually are self-financing, such as the Taltson project. Even if a project is self-financing and is owned by the Government of the Northwest Territories, it goes against its borrowing limit. So we are shackled right now by this borrowing limit that is in place.

Another example is the road to Tuktoyaktuk, which the previous Minister of Indian Affairs and Northern Development thought was a great project. He put money into the feasibility work that was going on, which got the project up to a point where it could go to an environmental assessment. It is a $100 million investment to tie in Tuktoyaktuk with Inuvik. This would give us year-round access to the port of Tuktoyaktuk on the Arctic Ocean, something that will assist in every fashion with the development of the north.

Where is the money going to come from for this? How can the Government of the Northwest Territories make arrangements with the federal government on shared projects or work together with other interests to create these projects without available fiscal capacity when it needs it?

There are many more examples, such as the need to upgrade the Liard Highway, at about $50 million, in order to bring tourists into Nahanni National Park. This government supported its expansion two years ago, but we need to improve access into the area in order to make that world heritage site available to Canadians and create a tourist opportunity greater than we have today.

Through these vital infrastructure projects and many others, the Northwest Territories will be able to begin developing its full potential.

Infrastructure is important, but we also need to look at our communities. Many communities need infrastructure in order to provide a comparable standard of living with other communities across this great nation. We want that for our communities. We need to invest in our communities to make that possible.

These are some of the fundamental reasons we want to see a change in the borrowing limit. We need the money. We need the opportunity and fiscal capacity for our government to be able to do this.

Why should we trust this government?

The negotiators for the Government of the Northwest Territories and Canada have recommended the acceptance of a draft agreement in principle that would transfer administration and control of lands and resources from Canada to the Northwest Territories. We call that “devolution”. There is much work to be done on this yet. There are many parties in the Northwest Territories that have to come together on this agreement, no doubt. However, this is the closest we have come in a very long time to getting an agreement.

Once devolution is complete, the people of the Northwest Territories will become masters in their homeland to a greater extent than before, and to an extent that is almost similar to that of the provinces. But to reap the benefits of devolution, we need to invest in our territory. This is not going to happen without that investment. My bill provides a vital tool to achieve that.

The first line of the AIP says:

WHEREAS, to enhance the ability of the Government of the Northwest Territories to serve the interests of its constituents

That is my reason as well for bringing forward this bill. It is not in the interest of the people of the Northwest Territories to have to have its government come forward on regular intervals to beg Ottawa for an increase in the amount it has to borrow. This is not responsible government. This is not the kind of relationship that we want to have with Ottawa. This is not the way that Canadians should be treated in this land today.

On March 26 of this year, Moody's Investors Service gave the Northwest Territories an Aa1 rating. This rating is the second highest, and in terms of credit risk, it places the NWT in line with most of the provinces, and in fact higher than many of the provinces. This is the second year in a row that Moody's has issued the NWT such a high rating.

Moody's rating takes into account recent developments related to the Deh Cho Bridge project. So a project that was somewhat controversial is under this rating. The credit opinion notes that Moody's had already included the Deh Cho Bridge liability in its calculations of the NWT's net direct and indirect debt, reflecting the government's debt-like obligation to make periodic availability payments. As such, formal assumption of the related debt is not expected to alter the NWT's credit profile in a material way.

According to Moody's, the rating reflects:

prudent fiscal policies that have, over the past several years, limited debt accumulation. A well-developed fiscal framework (including a Fiscal Responsibility Policy which guides the NWT's fiscal policies and use of debt) should help to ensure that the debt burden remains low and affordable.

The NWT's fiscal responsibility policy mandates how the NWT may borrow. The policy guides NWT's fiscal policies and use of debt and includes guidelines respecting the type of activities for which debt can be issued, as well as limits on total debt and debt-servicing costs to ensure affordability.

What a remarkable thing for a small territory to do.

Under this policy, affordable debt is considered the level of debt where the corresponding annual debt servicing payments do not exceed 5% of total annual revenues. Infrastructure debt has to be paid off within 20 years. Debt for self-liquidating investments will be repaid from new revenues such as user fees, tolls, or expenditure savings. Debt incurred to finance repayable loan programs will be repaid from cash generated from the loan repayments and corresponding interest revenue.

Our territory is responsible. It is acting in a manner that many other provinces should emulate. Yet, at the same time, we do not have the fiscal capacity to do the things that we need to do for our territory.

I hope that Parliament will join with me in giving the Northwest Territories the tools it needs to build a strong and beautiful part of Canada.

In the words of the Hon. Floyd Roland when he was minister of finance:

This borrowing limit flies in the face of the principle of territorial political autonomy. It reflects an outdated and unreasonable view that we cannot make sound financial decisions on our own.

My bill would bring an end to this outdated and unreasonable situation.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I want to thank the hon. member for Western Arctic, who is someone I know well from across the aisle here. I have served with him on a number of parliamentary committees, including Canada-Japan, and he does a fine job there.

However, I am a little confused about the private member's bill that he brought forward. We do not always get a time slot to do so, so I would think one would be particular about what one would bring forward.

I agree with him that development of the north is very important. However, I am not sure if he understands that the Government of Canada is now discussing these particular issues with all three territorial governments, the Yukon, the Northwest Territories and Nunavut. Those discussions are ongoing and include the issue of borrowing levels.

So my question for the mover of this private member's bill is, who in his territorial government has he spoken to about this issue, and has he received agreement from them? Am I missing something that he knows about this issue that we do not know and that the government is not already doing?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I have had numerous discussions with the Premier of the Northwest Territories and the finance minister of the Northwest Territories on this very subject. In fact, on CBC Radio this morning, the finance minister indicated that he thought what I was going ahead with was a good idea because it would actually provide a legal framework for changing the legislation that guides the borrowing limit. If the government wants to review the borrowing limit, what a good time to do that.

However, what we want out of this is legislation changed so that the borrowing limit truly is put in stone, so that as the government grows larger and we take on more responsibility and our gross revenues increase, we will have an orderly progression in the size of our debt. These are things that are useful.

If the member thinks this Parliament is not here to discuss this type of issue, then I think he is missing the point. We do not want bureaucrats in the backrooms deciding how this is going to happen. This debate in Parliament lays it out clearly for all people to hear.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I listened to my colleague and I will have a chance to come back to that during my floor time. However, I am impressed and I would like my colleague to talk about revenues.

I take a close look at all bills that are introduced, especially those relating to Indian affairs and northern development, because I am the Bloc Québécois critic for that portfolio. I was surprised to learn that the Northwest Territories' 2010-11 budget was $1.357 billion. That is more than many countries, yet they have to come to Ottawa for authorization to borrow money.

That does not make sense. Can my colleague explain?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, the Government of the Northwest Territories is a creature of this Parliament. It was formed under the Northwest Territories Act. Within the NWT Act, there is a clear paragraph outlining that any debt that the Government of the Northwest Territories wants to take on has to come through an order in council.

It is the same for the Yukon and for Nunavut. However, with the Northwest Territories, we have right now the opportunity to do much more in terms of developing our economy. We need to invest in the economy. We need to move forward. It is time to take this step away from the colonialism that is evident with the NWT Act and move toward responsible government.

This is part of our evolution. It is a small part. It is a small issue but a very significant one right now and I trust that parliamentarians can get behind this and support it, because it will build a better Canada, a Canada that speaks to the rights of every Canadian, to equality in their legislative assemblies and the rights of responsible government.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I thank the House for the opportunity to speak against this disappointing NDP proposal.

Before addressing the specifics of this proposal, let me reiterate our Conservative government's strong support for the Northwest Territories as well as the other territories.

Federal support for the territories is at an all time high. For the territories, this totals almost $3 billion in 2010-11, an increase of a whopping $766 million from the previous Liberal government. This is helping to ensure the territories can provide essential public services, such as health care and education. In the words of the finance minister of the Northwest Territories, Michael Miltenberger, this commitment of long-term growing support has provided “much needed relief”.

Additionally, as part of our overall northern strategy, we have taken numerous other measures. For instance, to help offset the higher cost of living in the north we have increased the northern residents deduction by 10%, representing nearly $10 million in annual tax relief for northern residents. This was a much welcomed move.

Yellowknife Mayor Gord Van Tighem heralded it as “something we've been asking for for a significant period of time. The move will mean more spending into local economies and further reduce the cost of living”.

Inexplicably, the NDP member for Western Arctic voted against it and deeply disappointed his constituents.

Quoting from an editorial in the Yellowknifer, it states:

—a boost for the Northern Residents Tax Deduction...It is not a whole lot is a whole lot more than previous Liberal governments ever gave. Despite enormous budget surpluses and the voice of a...the Liberals never lifted a finger to increase the tax deduction, even after years of steadily rising costs...it would have been best had [the member for Western Arctic] swallowed the pill and voted with the government.

Unfortunately, that pattern of disappointment among northerners has continued with the NDPs last minute support to keep the long gun registry and, here today, with a poorly thought out NDP proposal.

Let me be clear from the outset. Our Conservative government respects territorial governments, especially on matters that directly impact them, like their borrowing limits. We are already actively working and consulting with all three territories about their borrowing limits.

Earlier this year we initiated a review of the operation of the territorial borrowing limits with all three territorial governments. This review will ensure consistency in the accounting or debt instruments between the borrowing limit and the territorial government's own public accounts, as well as ensure territorial governments are clear about their authority and can make appropriate decisions about their borrowing. Moreover, we are focusing on the borrowing limits of all three territories, not just one. We are actively engaging all three territorial governments.

This NDP proposal would effectively toss aside this consultation process and impose a solution that territorial governments would have no involvement in crafting. As such, we fundamentally believe that such an issue should only come from a consultation process and a careful review and government to government dialogue.

There is a long tradition in Canada of federal-territorial matters like this being discussed directly between governments. It would be grossly inappropriate to push this tradition aside, pushing aside territorial governments on matters that directly affect them and dictate to the territories through a private member's bill considered only in the federal Parliament in far away Ottawa.

While the NDP may disagree, we believe it is important to be sensitive and to be engaged directly with the concerns of all three territories. That is why we are working collaboratively with their governments in the current review, and we will continue to do so in the future.

To that end, our government strongly believes the review currently under way and the spirit of our collaborative work with all three territorial governments should be allowed to continue. This is a sign of respect.

On the other hand, to unilaterally impose a new borrowing limit on a territorial government without even consulting it, as this flawed NDP proposal would do, is not a sign of respect. That has been demonstrated in the extremely muted and skeptical reaction we have seen to this proposal since it was first introduced last June.

For instance, I note that Northwest Territories Finance Minister Miltenberger has not endorsed this proposal publicly. Likewise, other regional politicians, like Deh Cho councillor Tom Wilson, have even publicly voiced caution about it. Let me pause here to provide a bit of background.

First, through the Northwest Territories Act, the NWT government is required to have its borrowing approved by the Governor-in-Council. Similar provisions are included in both the Nunavut Act and the Yukon Act. Each territory is free to borrow up to the total borrowing limit established. I should note the federal government does not review individual territorial borrowing decisions within the limit. Such decisions are the territorial government's alone to make.

This existing framework sets fixed borrowing limits for each territory to operate within, providing them with certainty about their authority to borrow and the development of their fiscal plans. I underline once again that this is a framework that applies to all three territories equally.

This unsound NDP proposal we are dealing with today, on the other hand, would give one territory preferential treatment, completely ignoring both Yukon and Nunavut. Our Conservative government understands all territories should be considered equally when speaking of borrowing limits, which the NDP proposal clearly does not.

Another problem with this faulty NDP proposal is that it would tie the borrowing limit of the Northwest Territories to total estimated revenues. However, total estimated or projected revenues can and do change significantly, even from year to year. This is especially true for resource-based territorial economies.

While territorial governments are accustomed to this variation, this troubling NDP proposal would unilaterally expand the consequences of this variation for territorial decision makers and their borrowing. This would not be helpful. What is more, it is not even feasible.

For example, how would this estimated revenue number used to calculate territorial borrowing limits be generated? What information would be used? When is the estimate to be done and by whom? Does the federal government have to review this information? Does it have to agree with it? How will the Auditor General review it to ensure that it is transparent? The NDP proposal provides zero answers to any of those key questions.

For the information of parliamentarians, let me remind them how limits are currently set. A territorial government's own economic and fiscal outlook, chiefly the revenues from the economic activity within each of the territory's borders, forms a primary consideration. This is an objective and a prudent way to establish borrowing limits as it reflects the actual economic reality of the territories themselves.

On the contrary, this misjudged NDP proposal would not make revenues from economic activity within a territory the chief consideration. Rather, it would create an artificially elevated combination of territorial tax revenues along with various federal government supports, both temporary and permanent. This would include territorial formula financing, support for health care and even one-time initiatives.

In summary, the NDP proposal would unilaterally impose an unworkable, uncertain and unequal framework on the territorial government's borrowing authority. This is not in the best interest. The territories would and should be opposed.

What is more, our Conservative government has already undertaken a more responsible and respectful course of action by working with all three territorial governments to review the borrowing limits collaboratively.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I am delighted to rise to speak to the bill. I have a lot more to say now that the Conservatives have spoken to it. What they have said about it is shocking.

There are 13 jurisdictions in Canada, 10 provinces and 3 territories, where people govern themselves in a great nation. They are responsible for their own actions. They are responsible for their own legislation and for governing themselves on a number of matters, except those of national importance. Why would anyone be opposed to a bill that would give more of that authority, more equality to those 13 regions, to treat them as responsible governments?

That is why I fought hard to get the devolution agreement for Yukon through Parliament. Yukoners wanted to have the decision making in their territory, just as people in all provinces do. People in Ontario, Nova Scotia and Newfoundland and Labrador are no more capable of making decisions about their future than are the people in the Northwest Territories or, indeed, Yukon and Nunavut. We should treat these as mature and responsible governments, and not be paternalistic toward them.

The way the system works now, unlike the provinces which go into debt, the territories need to have a limit set by Ottawa, an arbitrary limit set by cabinet, which I believe at the moment for the Northwest Territories is $500 million, and that could change. It depends on the particular cabinet. As the member said, it was a long, protracted process to make that change, which is obviously quite a hindrance on the government of the Northwest Territories.

The bill would take it from an arbitrary decision of cabinet to a specific percentage of their revenue to the amount they want to borrow. It is 70% of their revenues, which is a very modest amount of debt. It is far less, be it a third or a quarter, proportionately, than the deficit of the present federal government, which has the biggest deficit in history, and the huge debt the Conservatives have assisted in accumulating.

Until 10 minutes ago, of all the consultation I did, I had not heard a single complaint about the bill. No one could possibly think of a reason as to why we would not improve the system for the government of the Northwest Territories.

I want to describe a scenario of the Northwest Territories, because the 40,000 or 50,000 people who are watching may not know what it is like there. They may not know some of the conditions that the government of the Northwest Territories has to deal with, has to govern and why the need loan financing. It is a huge area, bigger than Europe with very few taxpayers and a lot less infrastructure than there is in southern Canada. A lot of communities are not accessible by road. The airports need upgrading and there are no harbours. It is very hard to access, to develop and to govern. It is also very expensive to provide health care. The Northwest Territories needs a government with good resources and the capability to at times get loans, which would be much more modest than those of the federal government.

There is great wealth in the Northwest Territories, but people have to access that wealth. Therefore, the territories need money for infrastructure which is very expensive. The few people who live there could not afford that infrastructure. Once they can access that wealth, then they can reduce their dependency on taxpayers in southern Canada, because they would be creating more revenues for themselves and for Canada from the development of those resources.

There are first nations governments there, the Inuvialuit, the Gwich'in, the Sahtu, the Tlicho. They already have land claim agreements or self-government agreements. They have sufficient areas of land, but they need access as well to that land and could certainly be helped in some cases.

Nahanni National Park was a good example of tourism access to a wonderful site. There are some mines in the far north at the Arctic Ocean that could certainly be opened if they had road and port access. In the Northwest Territories, because there are no roads, development has to be done by ice roads. Many mines cannot open because they do not have power. That could be provided through loans by the GNWT to its energy agency.

The Mackenzie Valley highway would increase tourism not only there but in my riding, as well as supporting the development the member talked about. Put on top of this a new change, climate change, which adds a dramatic and huge cost to the Northwest Territories government because the ice roads that used to be used and the ice bridges that they need to do development are melting earlier, are less reliable, so they have to come up with solutions for that. It is causing mines to flood and building foundations to shift, and roads and sewers are all affected as the permafrost melts. There is a huge cost for adaptations.

The reason I was so disappointed in the government's speech was that it asked why now, when there are ongoing discussions on these issues with the GNWT. Perhaps if it were another government we would not go ahead with this. We might wait for that. We will leave it up to the member. I am recommending we go to committee to hear the witnesses at this point. We are in support of it going to committee. We might not go ahead if we thought those things were going to be successful and guaranteed, just because a government member said the Conservatives were dealing with it, but it does not follow what has happened in the past.

The Prime Minister promised he would never tax income trusts. What happened? They were taxed. He promised three armed icebreakers for the north. Where are they? He promised on national TV a port for Iqaluit. Where is it? If we could believe the government's word on these things in the north, then that would be a fine process. Hopefully the Conservatives do come up with something so that this bill is not necessary, but my understanding is that this will be another way for the member to ensure this needed change gets done.

The parliamentary secretary talked about resource revenues dramatically changing so that this would not work. He should perhaps try giving more of those resource revenues to the Government of the Northwest Territories because if it were getting them then it would have a dramatic effect, but it is not getting those resource revenues.

The member said it would treat the three territories differently. If we did not allow the three territories to be treated differently, we would not have a devolution agreement in the Yukon, which makes it virtually most of the powers of a province, totally different from the other two territories. My understanding from talking to those governments is they actually have different levels of borrowing powers at the moment. So that is a totally uninformed suggestion.

With regard to the conditions that the parliamentary secretary suggested that the Conservatives needed to know to set these limits, imagine telling the government of Quebec that it would have to give us this and this and we will tell it how much it can borrow. That is ridiculously paternalistic. The current government has the largest debt and deficit in the history of Canada. It is far more than the borrowing that is asked for by this responsible Government of the Northwest Territories. It is not an unreasonable quest to send the bill to committee.

I was going to be totally positive in this speech until I heard the ridiculous comments by the government. We should stop being paternalistic. There are 13 jurisdictions in Canada that have responsible government. They should be provided with the tools they need to deal with that. If they use this debt level, which is a very low, modest level, they have to pay it back. It does not cost the Government of Canada anything. I am all in favour and supportive of treating the people in the three territories as the responsible governments they have shown they can be and that they deserve to have.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am not sure if you remember, but I believe you were chair of the Standing Committee on Aboriginal Affairs and Northern Development when we first started talking about a study on the economic development of the north and on the constraints and difficulties that entails. We are just finalizing that study, which began almost two years ago. Like the hon. member for Yukon, I admit I was extremely surprised at the reaction of the Parliamentary Secretary to the Minister of Finance to the request from the New Democratic member for Western Arctic, a request that seemed perfectly legitimate to us.

The advantage of private members' bills is that they require us to do some research, to analyze and try to understand the problem. There is a difference between a government bill and a private members' bill. A private members' bill is introduced to solve a problem to the satisfaction of the party concerned.

In the Bloc Québécois, when we read Bill C-530 for the first time, we wondered what it was all about. We did not know this problem existed. We now realize that one of the main challenges involved in the economic development of the north is the fact that the inhabitants of that region are not autonomous. They cannot develop and have a vision for the future without the government's permission.

It is pure paternalism. Have we had gone back to the days of colonialism? The state steps in and tells the people how to develop the region. It says it cannot lend them a lot of money and that it will wait and see. If we want these territories, Yukon, the Northwest Territories and Nunavut, to take control of their own destiny, then we have to at least give them the chance to develop. One way to do so is to increase their borrowing capacity.

Let us draw a parallel. We have a credit card that we pay off on time every month. The bank or financial institution that issued the card writes to us after six months to say that, because the balance has always been paid, our credit will be increased. It is done automatically.

In a modern society, companies write to us to increase our lines of credit. That is usually what happens. Not only do the Northwest Territories pay their debts, but they also even have a small surplus at the end of the year. In the 2010-11 budget, their projected surplus is $35 million. Their projected income is $1.357 billion and their projected expenditures are $1.293 billion. If that is not an administration that respects itself, takes responsibility and looks after its own development, then I do not know what is.

In short, the Bloc Québécois will vote in favour of sending this bill to committee to be studied.

I would very much like the Parliamentary Secretary to the Minister of Finance to come to the committee to repeat what he said today. I do not think he would dare do so. It is not possible. It is paternalism in the extreme. How can—I was going to say nation, and I will say it—a nation, a territory like the Northwest Territories develop? They have mines. I looked into that because that forces us to work. We have worked. We have done our homework. They have not done their homework. It is clear that the parliamentary secretary has not done his homework.

We just have to look at the expansion plans for the Taltson hydro project. A power plant like that produces electricity. Of course to build it, money must be borrowed. We thought about our own dams in James Bay, in Quebec. We borrowed money to build them, but we have since seen a return on our investment. The Taltson power plant was explained to us. It is a run-of-the-river hydroelectric plant. It uses water that flows through the river. This hydro development on the Taltson River could replace 114 million litres of diesel and 320 kilotonnes of greenhouse gas emissions. Now I understand why the Conservatives oppose the bill. They might no longer be able to sell their oil in the north. If that is why, they should say so. Imagine that. When we hear things like that and read things like that, it does not make sense.

The purpose of the bill is to promote the economic development of Canada's north. The Northwest Territories want development. They want to stop having to come to Ottawa to beg the government, under section 20, for the opportunity to borrow a little more. They will be able to pay it back, but they have to ask permission from their grandfather, their big brother, their great-uncle or someone in Ottawa. I hope this government will understand. That is not the way to develop these lands.

If we want Yukon to address this issue, we need to do exactly what the member for Yukon said in the House. If the Northwest Territories want to develop, they need to do something about it. We will answer questions. We will go to committee. We will bring witnesses forward. We understand that anything can happen, but we cannot refuse and say that we do not want to hear anything about it from the outset. I think that this is an interesting bill. It allows us to put a finger on one of the major problems of economic development in the North. One of the problems that has been mentioned by nearly everyone in the North, including people in the Northwest Territories, is that no one is capable of long-term planning. This bill, if it is passed, will allow them to develop.

We have studied this bill. We said it today and we will say it again. We hope that this bill will go to committee. With all due respect for my colleagues in the governing party, I hope that they will not come before the Standing Committee on Aboriginal Affairs and Northern Development with the same opinion that the Parliamentary Secretary to the Minister of Finance expressed today because they will find their hour before the committee to be very long.

That is why we will make sure this bill is studied in committee.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I congratulate the hon. member for Western Arctic for his work on Bill C-530. He is also an extremely hard-working and determined member of Parliament and the citizens of Western Arctic are getting extremely good value re-electing him time after time as their member of Parliament.

I was very surprised by the speech of the government member. He is normally a very restrained and thoughtful speaker but today he is out of character. It demonstrates that the government has run up the white flag on this bill. I think it can see that the three opposition parties will be voting together and will have sufficient votes to send it to committee and well it should be because it is a very well constructed and very good bill.

The parliamentary secretary fails to understand his role and the government's role in Parliament. The fact is that the Canadian government or any government for that matter in the parliamentary system survives at the pleasure of Parliament. The parliamentary secretary has one vote in the House as the member for Western Arctic does. This Parliament is a sovereign body. The parliamentary secretary has no right to berate any member of the House for simply doing his or her job. That is what the member was doing.

I was very impressed with the speech by the member for Yukon. He rightly came to the defence of the member to put the government in its place and make the government understand what its role really is.

The member for Yukon pointed out that there is a devolution agreement already in place for Yukon. It separates it from the other territories to a certain degree because there is a different level of authority between one territory and another.

Another issue that we need to deal with is that we are at second reading of the bill. Second reading of any bill is to deal with the principle of the bill. We are not supposed to be spending our time in our speeches going through the minutia of the bill and discussing it clause by clause and point by point. The whole reason for second reading debate is whether or not members agree or disagree with the principle behind the bill.

That is why I argue many times in my own caucus that on second reading if we agree with the principle then we should be supporting the bill. I think, by and large, more often than not we should be voting together in Parliament to support bills at second reading if we agree with the principle.

What the government has done tonight is to simply to say that it does not even agree with the principle. We just had the Prime Minister a few months ago go up to the Arctic and talk about Arctic sovereignty and how we need to spend gazillions of dollars there to keep the Russians at bay and all the other enemies that he sees out there at bay because we want to be able to extend our arguments for sovereignty over minerals and oil exploration as far north as we can.

That is what the bill would do. The bill would facilitate our goal of extending our sovereignty in this country. That is another reason that I am very surprised and disappointed at the parliamentary secretary's response to the bill. The bill does not ask for a lot. It asks that a territory to be able to extend its borrowing capacity.

I want to reference something the member pointed out in his speech, which is that on March 26, Moody's Investors Services gave the Northwest Territories a AA1 rating, which is the second highest rating and places the Northwest Territories in line for credit risk with most of the provinces. This is the second year in a row that Moody's has issued the Northwest Territories such a high rating.

I know how important Moody's Investors Services and all these rating agencies are. These are world-class rating agencies. They rate securities, bonds and governments.

I was a member of the legislature in Manitoba for 23 years and before that I worked as an executive assistant to a minister in the Ed Schreyer government, which was elected first in 1969. Finance ministers of all provinces care a lot about Moody's and the other financial houses in terms of their ratings. They routinely get on a plane two or three times a year and go cap in hand to New York to be interviewed by representatives of these investment houses in order to get that all important good credit rating. They know that if their credit rating slips, the borrowing costs will be a lot more and it could mean a lot of money. This is very good news that the Northwest Territories has the capacity to get a credit rating like this.

The other issue concerns what it is borrowing. Is the federal government somehow lending the money, putting up the money and guaranteeing the money? The member has explained how the territory has always paid its bills and operates very fiscally responsibly. We would wish that the government would do the same.

There is another issue that the territories might look at, if this bill is successful. I think it will be successful with the Bloc, the Liberals and the NDP voting for it. It is just a matter of time before we actually get this bill passed. However, there are a lot of creative financing possibilities and opportunities that jurisdictions and provinces can take upon themselves. I will give an example.

Twenty years ago, in 1986 in Manitoba, the government looked at selling bonds. Some of our backbench MLAs, one of them in particular, one of my former colleagues, suggested in the caucus that we sell Manitoba government bonds, that we sell Manitoba Hydro bonds. Guess what? Two years later, Manitoba Hydro was issuing its own bonds to citizens of Manitoba.

Does that not make a lot more sense than borrowing money in New York or on the foreign market, or perhaps even with a foreign exchange and other currencies? We have all been burned on currency exchanges over the years by borrowing in Swiss francs, Dutch guilders or German marks. What we did, which is what other provinces have done, was take out the bond right in Manitoba. We had Manitobans buying our bonds and keeping the money in the province. The interest on the bonds was staying in the province.

I know, for example, that Air North airlines in the member for Yukon's riding is a big success story. It has its headquarters, its commissary and its flight crews in Whitehorse. It is a real asset to that community. Even its financing is very positive, as far as I am concerned, because it sells shares to people in Yukon.

When I was up there last year, I talked to a person who worked as a server in the local hotel. She is thrilled with Air North because she bought $5,000 worth of shares, she gets one or two free flights a year, and she gets a return on her investment. That is the type of local investment that we want to encourage within our local jurisdictions, and that can be done. It is not the Conservative approach that everything needs to be done through Goldman Sachs and other financial houses on the advice of these houses on foreign markets.

The member who is on the finance committee may laugh about that, but there are many ways to raise funds. We are saying that if we give people a local stake in their enterprises, we will see a much more solid enterprise in the long term.

I have not even begun to go through the notes that I have with respect to this debate. The parliamentary secretary got me to respond the way I did. I really did not expect that kind of attitude from the government. As the member for the Bloc said, I sure hope the government does not have that attitude when the three opposition parties pass this bill on to committee where it belongs.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper.

The House resumed from November 3 consideration of the motion that Bill C-530, An Act to amend the Northwest Territories Act (borrowing limits), be read the second time and referred to a committee.

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, I appreciate the opportunity to speak against this somewhat disrespectful, paternal and unilateral NDP proposal.

Before discussing this proposal, I would like to emphasize that our Conservative government has been a strong supporter of the Northwest Territories and all territories since taking office in 2006.

Indeed, federal support for territories under our Conservative government is at an all-time high. For the territories, this totals almost $3 billion in 2010-11, a significant increase of nearly $800 million since 2005-06 under the former Liberal government.

This long-term growing support helps ensure that territories have the resources required to provide essential public services, such as health care, post-secondary education, and other services that families depend upon.

We have done much more to benefit the north as part of our ambitious northern strategy. For instance, we created the Canadian Northern Economic Development Agency, headquartered in Iqaluit, with district offices located in Whitehorse and Yellowknife.

This landmark new regional development agency has a specific mandate to deliver federal programs specifically tailored to the needs of northern Canada. This is helping ensure a stronger more dynamic economy for northern families and businesses by directly empowering northern workers and businesses to take advantage of the resources and opportunities that exist in our own backyard.

I note that the creation of the Canadian Northern Economic Development Agency was very well received in the north. For instance, the Northwest Territories Chamber of Commerce applauded the move by stating:

This is a huge step forward that will place us on an equal footing with the rest of the country.

Regrettably, the NDP member for Western Arctic voted against this landmark development. This followed his equally stunning opposition to increased tax relief for his constituents, when he voted against increasing the northern residents deduction. Little wonder more and more northerners are becoming more and more disillusioned with the NDP.

For many, this was cemented with the NDP's decision to ignore and punish northerners by rescuing the flawed long gun registry. Today's paternal proposal will only further contribute to that disappointment with the NDP among northerners.

Let me be clear from the outset, what the NDP is proposing here is an outmoded and paternalistic approach to federal-territorial relations that is more characteristic of a long ago era. For what the NDP would do with today's proposal is unilaterally have the federal Parliament in distant Ottawa impose a new borrowing limit framework on the Northwest Territories through a private member's bill.

The NDP would do this with absolutely no consultation with, and no input from, the territorial government itself. The member did mention to me just before this speech that he has since spoken with someone, however, to my knowledge, I cannot confirm that.

This is no way to address federal-territorial issues. This is not consistent with modern federal-territorial relations. More importantly, this is not consistent with our Conservative government's collaborative approach to federal-territorial relations.

We have worked and will work in partnership with our territorial partners when addressing issues that directly impact them, such as borrowing limits. Indeed, in a concrete demonstration of that, last year our Conservative government actually initiated a joint review of borrowing limits with the territorial governments.

As I mentioned, this review is underway and, unlike this flawed NDP proposal, we are focusing on the borrowing limits of all three territories, not just one territory in isolation.

I find it troubling and bizarre, frankly, for the NDP to suggest that Yukon and Nunavut be excluded for a review of territorial borrowing limits. To endorse this questionable NDP proposal would toss aside this joint, collaborative effort for a unilateral approach imposed by the federal Parliament in Ottawa.

I would hope all parliamentarians would have more respect for Canada's territories than to endorse such a dismissive course of action. I ask parliamentarians to respect the ongoing review. Respect and allow the collaborative and positive work with all three territorial governments to continue. Not surprisingly, there has been exceedingly little support in the north for the NDP's proposal since it was unveiled last year.

I note and underline for parliamentarians that the Northwest Territories government has refused to lend its support for it. Even more damning, many other regional politicians are publicly questioning the NDP's unilateral action here.

I want to share with this Parliament in Ottawa what MLAs in the Northwest Territories are actually saying about this NDP proposal word for word, as reported in their Hansard of last November.

First, I ask you to listen to Dave Mackenzie, MLA for Kam Lake. He said:

--I’m surprised that our Member of Parliament for the Western Arctic is down in Ottawa trumpeting Bill C-530...The residents of this Territory would like to know who gave him his marching orders or, Mr. Speaker, is he marching to the beat of his own drummer?...To my knowledge, our government has never talked about a percentage of expenditures as a debt limit. The federal government is currently analyzing and reviewing the debt limits of all three northern territories. Please, let’s let them do that work.

Here are the words of Robert Hawkins, MLA for Yellowknife Centre:

Who had given the Member of Parliament marching orders to act on our behalf?...Who has he talked to in this particular government? My concern is, of course, he has not talked to me and I’ve looked around and only heard of one person he has specifically spoken to, and I’m not sure if that was any more than water-cooler talk at the time.

Finally, listen to what the NWT's own finance minister, Michael Miltenberger, had to say:

--we have indicated to the Member of Parliament for the Western Arctic that it’s his right to pursue a Private Member’s Bill...But we have made it clear that we have embarked upon a process with the federal Finance department and the other two territories to review our borrowing limit. That’s the process we’re engaged in. That’s the process we are committed to. That’s what we are paying attention to. That’s where we see the issues with our concern of the borrowing limit being addressed and it’s the one we’re fully engaged in...The Member of Parliament has a track that he’s on but we’re not involved in that.

Before concluding, I would like to take a few moments to delve in more detail into some of the NDP proposal's many shortcomings from the policy side.

Mainly, the proposal would set the NWT's borrowing limits at 70% of its estimated revenues for a given fiscal year, beyond which governor in council approval would be required.

This sounds simple enough, but there is one glaring problem: the NDP does not speak for the elected NWT government.

How do we know the NWT government actually supports a 70% limit? How do we know they do not support maintaining the current limit? Or, getting rid of the limit altogether?

Again, we have no idea as this made-in-Ottawa NDP proposal was concocted with no formal consultation with the NWT.

The member for Western Arctic's paternal and unilateral NDP approach to relations with NWT and the other territories is something Parliament must reject.

I ask Parliament to stand up for a more principled and appropriate approach on this issue by supporting the ongoing review being conducted collaboratively between the federal and territorial governments.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Speaker, I appreciate the opportunity this afternoon to speak to this very important motion by my colleague from the Northwest Territories, the member for Western Arctic. I say that because I have watched him work over the last two sessions of the House as he has represented so ably and actively his constituency, all those who live there and all those who govern that wonderful territory. I have nothing but admiration for the efforts he has made to gather all of the background documents, statistics, and information that were necessary to place the bill in front of us here today.

In the member's own words, from the speech he made introducing the bill, “It is one of the keys to building a better north, a more prosperous north, a north that can better share its wealth with the rest of Canada”.

I am disappointed in the speech that was given by the member for Saint Boniface a few minutes ago, particularly the way she maligned and tried to lessen the importance of the work the member is doing and to somehow suggest it is less than in keeping and in tune with what the Northwest Territories wants for itself. She had some misinformation in her presentation. For example, she mentioned a member of the Northwest Territory government as Dave Mackenzie when in fact that member is Dave Ramsay.

I know that the member for Western Arctic has the support of the Government of the Northwest Territories and he is working in consort with them as they work with the government on devolution. I was there when he spoke to the finance minister, Michael Miltenberger, and I know of the support and enthusiasm of that very important member of that government for this initiative and how he sees this as adding to its ability to make those investments that will be necessary if it is actually going to be able to take advantage of the devolution that is taking place.

I want to speak for a few minutes about the member for Western Arctic to make sure people understand that this is a member who did not just by chance somehow arrive here, through some fluke of an election. The member has worked long and hard. He was born and raised in the Northwest Territories, knows the Northwest Territories, knows the people and communities of the Northwest Territories intimately, having served for over 10 years as the mayor of the wonderful town of Fort Smith. He served on the green funds council of the Federation of Canadian Municipalities which worked with him to better the lot of municipalities in the territories. He served as a special adviser on energy to the premier of the Northwest Territories. He also served as a board member on the Northern River Basins study and as a federal government representative on the Mackenzie Valley Environmental Impact Review Board. The member who has introduced the bill before us that we debate here today also served as a former chair of the constitutional development steering committee for the Western Arctic, and as co-chair of that committee, where the member learned how passionate northerners are about increasing their autonomy and becoming a jurisdiction equal to the provinces.

Bill C-530 is a small but very important step in this increased autonomy. It is something he has thought long and hard about, worked very hard on, and believes in passionately. He has consulted with and has the support of some very important officials in the Northwest Territories government.

As background for the people listening, in case they were put off by the member for Saint Boniface in her diatribe before us here today, the Northwest Territories has a government which evolved from a committee of bureaucrats at Indian and Northern Affairs to a full-fledged, democratically elected government with full ministerial responsibility.

From 1897 to 1905, the Northwest Territories had an elected government resembling a province, but in 1905, after the provinces of Saskatchewan and Alberta were created, what was left of the Northwest Territories slipped back to the status of a colony. The member wants to remove it from that. For the next 60 years a commissioner and an appointed territorial council ran the territory from Ottawa.

In the 1950s, a return to an elected government for the territories began. In 1951, the Northwest Territories Act was changed to permit three elected members from the Mackenzie district to join the four appointed members and the commissioner on the territorial council. At this time the council also began to alternate its sittings between Ottawa and the Northwest Territories.

Between 1955 and 1966 the powers of the territorial council were gradually increased, and by 1966, elected members formed the majority on the council.

In 1967, the administration of the Northwest Territories moved from Ottawa to Yellowknife. In 1975, the territorial council became a fully elected body and its member began to call it the legislative assembly the following year.

In 1965, following consultations across the territories, the federal Carrothers Commission recommended a gradual increase in territorial responsibility through the setting up of a working territorial government. The Carrothers report had a lot of influence. In 1967, Yellowknife was made the capital of the Northwest Territories and the first commissioner to be permanently based in the territories was appointed.

Many province-like responsibilities were taken over from the federal government in the following years. This included such things as education, housing and social services. Other responsibilities like health care, forest management and fire suppression were taken over in the 1980s. Crown lands, oil, gas and mineral resources continued to be administered by the federal government.

Responsible government gradually developed after 1975. In that year the first two MLAs were appointed to the commissioner's executive committee. The executive committee later became the executive council or cabinet of the territories.

In 1986, Commissioner Parker turned over his last cabinet responsibilities to elected MLAs, a step that was authorized by the minister of Indian Affairs and Northern Development under the Northwest Territories Act. This step marks full, responsible government.

Since the 1980s, the government of the Northwest Territories and the other territorial governments have gradually won the right to attend federal-provincial meetings along with the provinces. The GNWT now also participates in the western premiers conference and the annual premiers conferences. However, territorial governments are not counted for purposes of a formal amendment to the Constitution of Canada under part 5 of the Constitution Act, 1982.

Why the need for Bill C-530? The requirement that a mature government, like the Northwest Territories, must come to Ottawa, cap in hand, requesting permission to borrow is a holdover from the days when the territories were administered by a committee of bureaucrats from Indian and Northern Affairs.

The territories government has a long history of balanced budgets and being responsible. Today it prudently administers $1 billion-plus budget. It is time Canada treated the Northwest Territories like the mature jurisdiction it is.

I urge members of the House, as they do all other provinces and jurisdictions in this great land, to trust this territory. Trust the member of Parliament for Western Arctic who has been sent by the people of the Northwest Territories to this place to speak on their behalf, as he does so well, day in and day out in this place. He asks us to allow the territory to have borrowing power so it can make the investments it needs and the infrastructure that will be necessary when devolution finally and ultimately takes place.

I hope that members of the House will ignore what was said by the member for Saint Boniface previously and look at Hansard to see what the member for Western Arctic said when he introduced this bill and what I have said here today, and vote in favour of this important initiative.

[The Acting Speaker, NDP, Denise Savoie]

The hon. member for Western Arctic, for the sponsor's right of reply.

[Dennis Bevington, NDP, Western Arctic, NT]

Madam Speaker, I will comment briefly about my participation with the Government of the Northwest Territories prior to my mission with respect to this bill. This bill was given to the Government of the Northwest Territories. I attended meetings with the premier of the Northwest Territories and the finance minister.

When we talk about what is going on here in terms of the dialogue over this bill, we must remember that the Government of the Northwest Territories has a gun to its head with respect to an improved borrowing limit. The NWT legislative assembly has talked about this issue. If the Northwest Territories does not get its borrowing limit approved because all of its borrowing powers are taken up with self-liquidating loans. Most of it is self-liquidating, but it still counts against its borrowing limits. This is a problem.

Under my bill, the Northwest Territories would be able to borrow up to 70% of its estimated annual revenue. This would give it an ongoing increase as the government increases in size.

My bill proposes a process that is a common practice in other jurisdictions that exist under legal statutes in Canada, like municipalities exist in provinces. That is where the Government of the Northwest Territories is at. All of its authority comes out of the NWT Act.

Discussions are underway with the territorial government concerning the borrowing provisions in the Northwest Territories Act. Unless these discussions lead to an amendment to the act, they are nothing more than a continuation of the current colonial process. The federal government does not have the authority to give the Northwest Territories more autonomy with the process it has entered into. The NWT Act needs to be amended. My bill, taken in a non-partisan fashion, would provide that authority to the federal government if it wants to participate in it.

The parliamentary secretary argued in the first hour of debate that my bill could not be supported as the government prefers to treat the three territories the same. That is not a defensible position considering that in the last two weeks the Minister of Indian Affairs signed a devolution agreement in principle with the Government of the Northwest Territories while refusing to talk with Nunavut about a similar devolution agreement. Yukon has not expressed the need for a change to its borrowing limit. We all have different requirements. We are three different territories, three completely different jurisdictions.

It has never been clear to me why the federal government must approve territorial borrowing. The letter from the Parliamentary Budget Officer indicated quite clearly:

With respect to Bill C-530, our review indicates there will be no incremental costs arising from adoption of these legislative amendments.

This is not an issue of cost to the federal government. This is a political issue about the nature of the type of control that the federal government holds over the territories.

With a gun to his head, what can our premier say to the government if we do not go ahead with this? The NWT is in a very difficult position. If we can come to grips with what the real issues are, what the real needs are for our three territories, then we could come to better solutions for the people of the north.

There is no solution for the people of the north other than amendments to existing legislation. Without this bill, the Conservative government does not have the legs to do what it needs to do for the Northwest Territories.

I plead with all members to send the bill to committee where officials of the Government of the Northwest Territories could tell us about its borrowing limit problems. The NWT government can tell parliamentarians where it stands. By approving this bill at second reading we would accomplish that. We would give a voice to the Government of the Northwest Territories here in Parliament.

I plead with all members to support this bill and get it to committee.