Indigenous and Northern Affairs Committee on Nov. 19th, 2009

[Andrew Robinson]

I have one final point.

I think, building on that, we've seen some organizations here, for example, the City of Yellowknife, really start to take action on climate change. They've stopped talking about it and are actually doing stuff. The city had a target of a 20% reduction, which they wanted to have by 2014. They met that target last year. They did it in four years instead of nine, and it turned out it wasn't as hard as they had thought.

We have started recommending to anyone who comes to us that on all projects they adopt a target of becoming carbon neutral, which means building more efficiently, switching to renewables like wood pellets, and buying offsets for the remainder.

As I said, we're facing a pretty bleak future with this whole climate change thing. If we can't show the world how to fix it, we can't really complain about it. We found that it's actually not as hard as it looks, once you roll up your sleeves and start doing it.

Those are my comments.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Robinson, and all of our witnesses.

Now we'll go to questions from members.

This is a pre-set order of questions that represents each of the four parties that are here on committee. Each of the allocations is five minutes for both the question and your responses. The member could put the question to any one or all of you. We let them make that decision.

We'll begin the first round with Mr. Bagnell, for five minutes. He will be followed by Monsieur Lévesque.

Mr. Bagnell.

[Larry Bagnell, Liberal, Yukon, YT]

Thank you, Mr. Chair.

Before I ask my questions, I have a comment. It has nothing to do with you--it's from the morning session--but I had asked how many hockey arenas we could build in the north with the $1 million that came from the program. I found out the cost was about $5 million for one arena.

My first question is for the northern stores. You were talking about food mail. As you know, there's been a report on it, and there was some suggestion that it actually be reduced. They'd get a big fight from me if they did that, but it was one of the options.

The three retailers said they had put some suggestions. Could you provide the committee clerk with something on that?

[Edward Kennedy]

Actually that's the submission. I can leave it with you.

[Larry Bagnell, Liberal, Yukon, YT]

If you could leave it with the clerk, he could get it to all the members. That would be wonderful.

Mr. Noseworthy, tell us a bit about the Community Futures program, its success, the number of communities that are in it in the Northwest Territories, the number or types of projects that each community funds, and where you get your funding from.

There are certainly no Community Futures in my riding. The federal government used to fund them years ago, and they were looking at funding them again. I want to know, if it is a success story, whether it is something the federal government should get into in the Yukon and in the north. So tell us a little about the number of communities, success stories, and the types of projects you fund, etc.

[Todd Noseworthy]

I didn't bring numbers with me today to be able to give that. I can probably provide it at a later date, if you want. If you get the clerk to send me a list of what you'd like to see, I'll try to get it to him.

There are seven Community Futures in what is now the NWT. In 1995, when the federal government offered Community Futures programs to the provinces and territories, the territorial government did take it on, and from what I understand, they had big plans for it. I wasn't here at the time. The territorial government has put more money in, and they have created more organizations. Of the seven, there were only two when the turnover happened.

We are providing services to all communities in the NWT. I think there are approximately 32 communities over so many million square miles. I can't remember the exact number, but it's huge.

I think there are a lot of success stories up here. I can speak mostly for my own organization. We have clients who come to us year after year for working capital-type things to be able to carry out their businesses, and we also help people finance equipment. In addition to our own financing, we help people access other financing, whether it be from Aboriginal Business Canada, the Government of the Northwest Territories, or other organizations that might be willing to fund particular ventures.

The Community Futures program is a success right across Canada, not only in the NWT. There are 268 to 270 organizations across Canada, and some have been around for 20 or 25 years. I think it's one of the federal government's crowns, or roses, whatever you want to call them. It a program that has been around for a long time, and it has had a lot of success.

I've been involved in Newfoundland and here, and I've managed three different organizations. They're pretty similar, but they all have their own differences. One thing about Community Futures programs is that you go from one place to the other and you might find they offer different services.

Because there are so many here, given the original funding that came from the federal government and what the GNWT has tried to do with that, it is not able to provide enough funding to provide comparable services to what a Community Futures typically provides down south. You have Community Futures programs in western Canada that are getting $250,000 to $300,000 in core operating money. We have Community Futures here that are getting less than $140,000 in core money, with salary costs probably being 20% to 40% higher than what they are down south, let alone the operating costs we've all been talking about.

That's why my suggestion was that Community Futures, the people of the north, and the businesses of the north would greatly benefit if the federal government would at least become a partner again.

[The Vice-Chair, Liberal, Todd Russell]

Thank you very much, Mr. Bagnell. That is your time.

We will now go to Mr. Lévesque for five minutes.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Thank you, Mr. Chair.

Good day, gentlemen.

Mr. Kennedy, I represent the riding of Abitibi—James Bay—Nunavik—Eeyou. You have stores in virtually every community in Nunavik. I once met with one of your representatives who said he hoped to see the Food Mail pilot project expanded to all northern communities. We did contact INAC because the Food Mail program was administered by Heritage Canada. We were thinking that INAC could assign responsibility for managing the pilot project to each individual community.

Preliminary studies pegged the cost of the program at $60 million or $69 million. Nothing much has happened since then. In my opinion, if we were to examine future health care costs if such a program were not implemented, departmental authorities might be convinced to bring in this program.

As far as permafrost goes, perhaps conditions vary from one region to the next. Mud isn't so much of a problem in James Bay and Nunavik. The problem is more the cracks in the ground and runoff affecting people's drinking water. Changes will need to be made quickly to infrastructures.

Mr. Noseworthy raised an important issue, namely aid to northern, remote or isolated communities. Quebec has introduced one such aid program. At one point, there was an angry outcry. Remote regions were more or less accused of unfair competition. We will most likely need your support and your advice. Perhaps you would care to share with us your overall vision, without going into detail, because that could take a while.

Speaking of CanNor and education, as I recall, Ms. Gauvin did come and testify before the Standing Committee on Aboriginal Affairs and Northern Development. She anticipated that rather substantial sums of money would be spent on education, in cooperation with the business community. Are you aware of that?

[Todd Noseworthy]

I'm not aware of the education measures that you've mentioned. I would suggest that the education measures that need to be taken up here are largely not school and college based, but they're to be done by small organizations or perhaps individual businesses.

That's why I mentioned the video conference opportunity. We have facilities, I shouldn't say throughout the NWT, but at least regionally based in the NWT that are either already up and operating or will be soon. One-on-one education could be provided there if businesses were interested, but we also need to generate the awareness that people lack the skills that are essential to success. Even though, as I've mentioned, we've offered many sessions through that video conference facility over the last couple of years, the attendance is still low. People don't take advantage of something that is free. I can only guess that they assume they don't need the education. They need to be made aware that it's there, but also that they need it and that it will help them improve somehow.

But it's good to hear that there are measures being taken related to business and education. I'm glad to hear it.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Mr. Kennedy?

[Edward Kennedy]

On the food mail issue, the total cost is not that much. I know there is a lot of concern within INAC on capping it at $55 million; I think it's $55 million to $60 million now.

By comparison, we have 35 stores in Alaska, and the bypass system they use is a subsidy system--somewhat similar. As well, the SNAP program—the supplemental nutrition assistance program—that the Obama administration has put in place is a much more significant combined nutritional health benefit to consumers; there is no comparison.

Having said that, we've also had to deal with perceptions about whether these are being passed on, whether the subsidy is actually taking place. Together with the other two co-op groups, we've given many examples, and I'll just cite some for you here. In places such as Pond Inlet, if we didn't have that subsidy, eggs would be $11.89 a dozen, not $3.89. Bread would be $10.29, not $3.39. Milk would be $28.89, not $7.25.

So it's important, but in the big picture, it's actually not that much compared with what other northern jurisdictions are doing—specifically, the United States.

What is the opportunity cost? If you were to pull it away, you could imagine what would happen to the consumption of these products. The substitution would be to pop and chips and other things.

I've looked at this closely, and I think the analysis is still somewhat incomplete. I realize a lot of people have been looking at it. Perhaps an electronic benefit card, as in the nutritional allowance program in the United States, is the way to go; it allows consumers to spend on a list of nutritious items. Whatever it is, it should be simplified, because now I think we have one or two too many regulatory, administrative pieces to the puzzle.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Kennedy.

Thank you, Mr. Lévesque.

Now we'll go to Mr. Bevington for five minutes.

[Dennis Bevington, NDP, Western Arctic, NT]

I want to thank all three for your presentations. They all raise questions.

Mr. Noseworthy talks about the need for improved tax credits. But really, the northern resident tax credit covers small businesses as well: every employee and every employer would get a benefit. We asked for 50% and we got a 10% increase to it. I'm still gunning for the other increase, which would bring this in line with inflation.

That would certainly benefit small businesses as much as any other kind of tax refund, because it puts money in people's pockets. They can spend it on business, or the owner can actually get it back. Is that correct?

[Todd Noseworthy]

As long as they don't all go south to spend it. That is a large part of the problem. Goods and services prices aren't always reduced just because there's a tax credit.

[Dennis Bevington, NDP, Western Arctic, NT]

We are in a virtual age. You're going to have to face up to the fact that people are going to go online to get what they need, if they can't get it at the prices that.... It's a competitive world.

I was wondering, Mr. Kennedy, would there be an opportunity to put the subsidy at the retail sales point, simply on the items that would be of importance to good, healthy consumption?

[Edward Kennedy]

The answer I was trying to give before is that if it had to be that, it would be better to load a benefit card than have.... The retailers have already pointed out—and we'd probably be the least affected—that it's a multi-million dollar task to change the point-of-sale system, to track these savings by item, if that's what you're referring to, at the cash register tape. We have to change our system so that they can record two prices—or three, perhaps. We would have sale price items, as we normally do, and then we would have to create another price to show the savings on the item attributable to food mail, if that's what you mean.

We could show the customer on the cash register tape, with some—

[Dennis Bevington, NDP, Western Arctic, NT]

If you go into a store that has a loyalty program, they all do that anyway. There are cash registers that sort different prices for the same item. Is that correct?

[Edward Kennedy]

That's correct.

[Dennis Bevington, NDP, Western Arctic, NT]

If you had a conversion program to allow you to convert your cash registers to do that work, wouldn't that solve the problem?

[Edward Kennedy]

No, I don't think so. I think the answer there is to ask who is going to track all this, who is going to keep track of the amounts.

If I understand the report that's being reviewed, or the analysis being provided on it, there is going to be a regime of people looking at your profit margins per item. It's not just the transparency to the consumer; behind those numbers there is an audit mechanism that is supposedly going to say that you're going to make so much money on each of those items. I find this incredibly difficult to even envision.

But also, there are much smaller retailers in the northwest—I know you're going to hear from Andy Morrison in Iqaluit—who are going to have to deal with that point-of-sale system change that you're talking about. That's the biggest hurdle, as I understand it: it's just the cost to put it in place.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Robinson, we're going to arrange for a tour of the corrections facility with the wood pellets. I had the opportunity to talk to the company that manufactures most of the wood pellets that come into Yellowknife. They run a sawmill in northern Alberta that would not be open today without the increase in customer base that the wood pellet sales in the Northwest Territories provides them with.

Could you talk about this right across the country? It's good in Yellowknife. Would it work in every other place where the main heating source is fuel oil?

[Andrew Robinson]

The short answer is yes, I think it would. We're in a unique position here in the Northwest Territories because we have a highway system that's relatively close to a system of sawmills that are producing waste sawdust. If you look anywhere throughout the northern parts of the provinces, you may have a similar system wherein there are highways but no natural gas network. A lot of these are remote, quite often aboriginal communities that have a method of getting wood waste in the form of pellets into them but don't have natural gas. The wood pellets are competitive with oil much more than with natural gas.

If you go over towards the Atlantic coast, where I grew up, in Labrador and Newfoundland, none of those places have natural gas either. So it makes total sense to be using the waste sawdust in heating.

[Dennis Bevington, NDP, Western Arctic, NT]

The federal government has just invested $1 billion to $2 billion in the production of ethanol in an attempt to reduce greenhouse gas emissions. This using of biological product is considerably less complex than the production of ethanol, and the greenhouse gas reduction returns are quite a bit larger. Is that not the case?

[Andrew Robinson]

Yes, I believe that's true. Especially in the north, our big user of fossil fuels is heat. A lot of people like to focus on electricity or transportation—which is valid in the case of airplanes—but the big thing is heat. Producing ethanol doesn't help us on that issue. I've heard recently that down in Ontario and Alberta they have tried running wood pellets through coal-fired generating stations and have found that you can run the stuff with no modifications at all. So you could convert existing coal-fired plants to run on renewable energy easily.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Bevington.

Now we'll go to Mr. Duncan for five minutes.