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

[Floyd Roland]

Yes, and we've done the same. We've agreed that we need to put them in place so that they can be partners in this development. With the pipeline in place, the federal government will make $86 billion from that development. So the investment will have a healthy return. We hope to see this happen.

[Greg Rickford, Conservative, Kenora, ON]

Sure, and we support and understand it. These funds are provided under the community economic opportunities program, I believe. My understanding is that these are first nations and Inuit community organizations that have identified economic development opportunities in their own communities.

[Floyd Roland]

Correct.

[Greg Rickford, Conservative, Kenora, ON]

So it's coming from those communities, and they are making applications to CEOP because they've identified their priorities.

[Floyd Roland]

As the Government of the Northwest Territories, we have given more and more authority to municipalities and first nations. Through our work in capacity-building, we have been able to empower them to make their own decisions on their priorities. It's been good.

[Greg Rickford, Conservative, Kenora, ON]

To the extent that the federal government is involved in those programs, it could be said that the federal government recognizes the importance of the communities, particularly first nations communities. I have 42 in my riding, and they are identifying their important projects and priorities.

[Floyd Roland]

There is always going to be a relationship with the federal government here in the Northwest Territories. We are very diverse and spread out. Without a partnership, one that is planned and made together, we would continue to build the rest of the territory and Canada piecemeal, and that is a dangerous way to go.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Rickford and Mr. Premier.

Mr. Bagnell.

[Larry Bagnell, Liberal, Yukon, YT]

I understand you on the devolution issue. Our leader understood too. Mr. Michael Ignatieff was here in the summer. In his press conference he listed this as a high priority, if not the highest priority. Even after devolution takes place and you have all the powers of a province, as the Yukon does, there are still some areas where the federal government can help out. There are still some federal programs that the federal government gives to the provinces.

I'd like to hear you talk a bit more about roads you might need from federal infrastructure ports—there's not much to talk about ports. You could also talk about restoring culture, the museum funding that has been cut, the northern living allowance, food mail, or the extraordinary health funding that is expiring. Is there anything we can do to help the Dehcho claim? What about affordable housing or training? Would you like the federal government to help you out with any of those areas, in the same way that it helps the provinces?

[Floyd Roland]

We've moved ahead in a number of significant areas, and the partnership with the federal government made some difference. It's hard to measure in a short timeframe, and they could be rather short, from two to four years. In our case, we are mandated every four years for election. We've fortunately been around a while—by the end of this term it will be 16 years. We've seen things move, and we've kept pushing our initiatives, through a number of governments.

Devolution resource revenue sharing is going to help us to implement a workable solution for developing the north and receiving the benefits of that development. Some of these benefits continue to grow in the north, and we continue to make key investments in infrastructure. The Dempster Highway goes through the Yukon and connects the Northwest Territories to my part of the territory up in Inuvik.

Once you have that type of infrastructure in place, the cost of living, business activity, and investment increase, while costs drop significantly. We need to put resources into projects like the Mackenzie Valley Highway to build this territory and become a more productive partner.

[Larry Bagnell, Liberal, Yukon, YT]

What about the topics I mentioned that are outside devolution? Do you have any ideas on how we could help you out with them?

[Floyd Roland]

There's a long list there, but the partnerships that we're building in the north with the first nations and aboriginal governments will help us in dealing with those things and putting them in the right order of importance.

We see that there is a need for infrastructure investment and governance structures. We are always going to have a relationship with the federal government. Even with devolution resource revenue sharing, we're going to need a relationship with the federal government.

[The Chair, Conservative, Bruce Stanton]

All right then.

We will now go to Mr. Lévesque.

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

First of all, gentlemen, I sincerely hope that you secure your administrative independence. I know what that would mean to you. As a Bloc MP, I also hope that you also secure loan guarantees from the current federal government to meet your needs. Perhaps that would give you some credibility, from an administrative standpoint, in the eyes of lenders. We've been asking the same for Quebec for eons now.

Mr. Vician, in your report, you discuss hydroelectric power. Have you evaluated the NWT's hydroelectric potential?

Would 53 or 56 megawatts be enough to meet your current and future needs, or could you generate and use additional hydroelectric power?

[Peter Vician]

Thank you, Mr. Lévesque. Thank you for that question.

The number I gave you was specific to one project, the Taltson project. It's a small number, and as you know from your great projects in Quebec, it's really just a piece of the puzzle.

Our potential for hydroelectric development is well over 11,000 megawatts, essentially one of the Le Grande elements in Quebec, and I've had the opportunity to see many of the sites in this work. We see that potential as being very important, not only for the Northwest Territories, but more so for Canada. We barely would use that potential.

We see a potential in the long term for an export market. Water, being one of those fundamental renewable resource energy supplies, is the kind of shift that we should be making. We think the federal government needs to participate at the beginning with us in Taltson, and also be with us in the long-term planning for a hydroelectric strategy for the whole north in Canada.

Thank you.

[The Chair, Conservative, Bruce Stanton]

You have one minute left.

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

What are your expectations as far as CanNor is concerned? Can this agency meet some of them?

[Peter Vician]

Mr. Chair, yes, we've supported CanNor's formation. We see them being an important vehicle in supporting both aboriginal economic development and public economic development in a broader sense. It's important that the federal government maintain a presence in the economic agenda of the north, as it has in the rest of the country. As the premiers indicated, CanNor has a big job ahead. But we're there and we're continuing to work with them.

Thank you.

[The Chair, Conservative, Bruce Stanton]

Thank you.

Merci, Monsieur Lévesque.

I want to thank all of the members and our guests here today for helping to inform this report. Premier, I must say it's a great honour to have you here, sir.

I'd also like to take this moment...I have information that we have at least one other MLA with us today, Mr. David Ramsay, who is also the chair of the Standing Committee on Economic Development and Infrastructure. Is that right?

Are there any others? I didn't want to miss anybody, but we're delighted to have you with us here, Mr. Ramsay, as well.

We'll now suspend for approximately 10 minutes, and we'll resume immediately after that. Thank you.

[The Chair, Conservative, Bruce Stanton]

We'll resume with our second panel now. I will just explain to members, before I introduce our witnesses, that we are still awaiting Ms. Cynthia James, who is the chair of the Dehcho Economic Corporation. She had confirmed and so may be en route.

You may recall that what was originally scheduled for the first panel included Mr. Merven Gruben, VP for charter communities, hamlets, and settlements of the Northwest Territories Association of Communities, the organization representing municipal governments here in Northwest Territories. Mr. Gruben was unable to join us, but we are delighted to have Mr. Terry Kruger. Mr. Kruger is the communications and policy coordinator. He has indicated to us that there may be some things we may not be able to cover in their entirety, but he has offered to take back any questions that remain unanswered today or, if there are further things that we as a committee are looking for, to get responses for us.

When we realized that some of the original invitees for the second panel were unable to come, we invited an organization called Alternatives North, which was an alternate, ironically enough, for this second panel. Alternatives North is an organization here in Yellowknife that deals with the social fabric and the social well-being of the community, particularly on issues of social justice. We are delighted to have Mr. Doug Ritchie from Alternatives North with us.

Let's begin with our two panellists, and we'll hope that Ms. James joins us in progress. We'll begin with Mr. Kruger.

Normally, gentlemen, we go with a five-minute presentation or thereabouts. We'll do those each in succession, and then we will go to questions from members.

Mr. Kruger.

[Terry Kruger, Communications and Policy Coordinator, Northwest Territories Association of Communities]

Good morning, and thank you. Welcome to Yellowknife. As you noted, our vice-president, Merven Gruben, is unable to attend, and I extend his apologies.

We appreciate the opportunity to appear before the committee today to share some of our views about building the Northwest Territories.

For some background, the NWTAC was formed in 1967, and today we represent 27 communities that are home to approximately 97% of NWT residents.

[The Chair, Conservative, Bruce Stanton]

Mr. Kruger, because we're doing simultaneous interpretation, please keep to a good, steady pace; you don't need to rush. That way, our interpreters will be able to get their text correct for the benefit of the members.

[Terry Kruger]

Okay.

The NWT's 33 communities are small and spread out. The tiniest is Kakisa, in the Dehcho, population 55. The largest is Yellowknife, home to just over 19,000 people. Just nine of our communities have 800 people or more; only five have more than 1,000 people; among the rest, the population averages about 327 people.

There are plenty of challenges facing the Northwest Territories, but this is also a very exciting time. For the first time in years, national leaders are suggesting a vision of Canada that points to a vibrant north, where the maple leaf flies proudly, where our youth see boundless opportunities, where the north's vast resources are developed in a responsible manner that protects the land, provides jobs and wealth for northerners, and helps power the Canadian economy.

Not since Prime Minister John Diefenbaker championed northern development in the late 1950s has Canada paid so much attention to the Arctic. Even so, all Canadians, not just northern Canadians and our political leaders, need to understand the vital role the Arctic plays and can play in the future of our country. Much of our national identity is tied to the notion that we are a northern region. Yet how many Canadians have ever travelled north of the 60th parallel? How many Canadians have actually seen an inukshuk on the tundra? How many have tasted a lake trout reeled in from the depths of Great Slave Lake, or muskox harvested from Banks Island, or know how much oil flows every year from Norman Wells? Average Canadians know very little about the place that we northerners call home.

We're thrilled by the strides taken in the last two years, with millions of dollars for infrastructure investment, establishment of a regional stand-alone economic development agency, a new icebreaker to assert Canadian sovereignty, and extension of Canadian environmental laws and shipping regulations into Arctic waters. A geo-mapping program is proving to the world that mineral and energy resources in the Canadian Arctic are ours. We're also seeing enhanced presence by the Canadian military, particularly in Nunavut. Most importantly, the focus on the north is being seen by all political parties as necessary investment in nation building and the assertion of Canadian Arctic sovereignty. There appears to be widespread support that the north's time has come.

While we welcome the dollars and the place the north now has in the minds and hearts of Canada's elected leaders, much needs to be done. Over the course of your investigation, you will hear many suggestions, whether it be development of world-leading information technology, infrastructure investing in northern research, building northern intellectual and professional capacity by establishing a degree-granting university, or attracting new Canadians to live and work in the north. It can be difficult to know where to begin.

The first step is to understand what is required to bring northern services and infrastructure up to national and international standards. We believe that building the northern economy starts with one foundation: strong, healthy, and sustainable communities, where people have good water, affordable housing and power, jobs, and can live healthy lifestyles. Only with that can we attract the professionals we need and retain our current residents to give our youth the belief that if they complete high school and earn a trade or go to university, there is a job waiting for them here at home, where the quality of life is comparable to what they may experience in the south.

To get there, we have identified four areas: transportation infrastructure, community infrastructure deficit, federal funding programs, and the importance of northerners having a say in our future.

The idyllic image that many Canadians have of northerners paints us as a resourceful, hardy lot, where minus 40 is no big deal. We are hardy, and minus 40 is a fact of life in the winter, but we lack the many basic amenities that southerners take for granted and we are forced to get by with creative solutions. Take our ice roads, made famous recently by the History Channel production Ice Road Truckers. These transportation links were born out of necessity from the need to haul large quantities of fuel, food, and other supplies into remote mine sites and communities. Air transport was and is very expensive.

Surely this isn't the vast roads program that will open up exploration of vast new oil and mineral areas envisioned by Prime Minister Diefenbaker in 1958. Half of the NWT communities don't have year-round road access to this day. Many rely on a short winter ice road season or on once-a-year barge delivery for a year's supply of heating fuel and building supplies. While we don't expect roads to all our communities, transportation costs are the biggest barrier that must be torn down.

Our member communities believe that completing the MacKenzie Valley Highway from Wrigley to the Dempster and from Inuvik to Tuktoyaktuk is a crucial step. In May, our members endorsed two resolutions calling for just that. In October the Canadian Chamber of Commerce also endorsed a resolution for completion of the MacKenzie Valley Highway—what they refer to as the North-South Trans-Canada Highway. The Federation of Canadian Municipalities policy statement on northern and remote issues says this: “Existing transportation networks significantly impede economic competitiveness and quality of life in northern communities.”

The impact completing the MacKenzie Highway would have on the NWT would be enormous: 14,000 person-years of employment during construction; 160 permanent jobs, a possible 20% increase in tourism; greater access on mobility and enhanced quality of life for MacKenzie Valley and Delta residents, a reduction in the cost of living; and savings of $1.5 billion to $2.2 billion for exploration and well development for the oil and gas industry if the MacKenzie gas project proceeds. It could also lead to expansion of the electricity transmission system in the NWT, something that would bring lower-cost hydro power to communities that now burn diesel to generate power. Fiber optic cable lines could hard-wire high-speed communication links.

The cost of the highway is expected to be about $1.8 billion, but that's a small price to pay for the billions of dollars that could be generated in oil and gas and mineral development. Some reports suggest that the payoff could be 86,000 person-years of employment and a $58.9 billion boost to Canada's gross domestic product.

In September, we welcomed nearly $1 million to do preliminary work on an all-weather road linking Tuktoyaktuk to Inuvik. This is an important step to living up to the Diefenbaker vision of over 50 years ago. We hope it doesn't end there and continues with the next step: completion of the MacKenzie Valley Highway that was promised by Canada in 1972.

We're not just lacking transportation infrastructure; our communities need help too. In 2007 the FCM reported that across Canada the municipal infrastructure deficit had climbed to $123 billion. This is a snapshot of what community governments identify as their infrastructure funding needs, the cost of maintaining and upgrading existing municipally owned assets. They called it a crisis.

If things were bad in the south, they're even worse here in the north. In 2004, a report prepared by our association, in partnership with the GNWT Department of Municipal and Community Affairs, suggested that the NWT infrastructure deficit was $186 million. In late 2008, that deficit was believed to be near $400 million. Those needs include recreation facilities, fire protection equipment, roads, solid waste sites, and other municipal buildings—infrastructure that is essential to improving quality of life and providing a base to build a sustainable economy.

Thanks to the territorial new deal for NWT community governments, responsibility for infrastructure development and guaranteed annual funding was transferred to community governments, starting in 2007. Our communities have taken charge of addressing their infrastructure needs. Even so, we depend on programs such as the federal gas tax fund and Building Canada, but these also bring challenges, such as the community's ability to fund its portion.

Again we'd like to quote the FCM:

If Canada is to prosper, municipal infrastructure investments must support the economic potential of our cities and communities. For this to happen, financing must reflect the long-term nature of infrastructure investments, which will require a long-term investment plan with agreed-upon priorities.

We also want to express the important role communities play on the front line of Canadian sovereignty in the north. Canada can undertake a major infrastructure initiative using military infrastructure as the backbone. Military investment should be developed with civilian and private sector interest in mind and should form the foundation for long-term development. Our Arctic neighbours in Sweden, Norway, and Finland have used military investments to strengthen local economies. In Alaska, Fairbanks and Anchorage emerged as substantial cities thanks in part to military investments over the past 60 years. We're starting to see that in Nunavut now, with a naval refuelling base in Nanisivik and plans for a training base in Resolute. But the western approaches to Canada's Arctic must not be forgotten.

To build on the economic base of the north will take stable long-term funding from Canada. As I noted, the gas tax fund and Building Canada are excellent examples of what works.

What doesn't work is per capita funding. It sounds fair, and maybe it is in southern Canada, but the north's small population and high costs combine to make it unworkable. For example, when Canada introduced the recreational Infrastructure Canada or RInC program earlier this year, our communities were excited about the possibility of getting enough of the $500 million to address repair and upgrading of their recreational facilities. The first round of funding amounted to $189,000 per territory based on a per capita funding arrangement. Some people called this swing-set money.

The NWT didn't seek any of the first round of funding, and it all went to projects in Nunavut. In the second round of funding, 22 NWT communities applied for RInC grants. Seven projects were approved, worth a total federal contribution of $550,000.

To illustrate why per capita funding is insufficient, I want to compare building costs using a formula that our insurance program uses. We've calculated the square foot cost of construction for a typical construction garage with metal cladding and concrete floor for three Alberta cities and four NWT communities. That garage would cost about $134 per square foot to build in Calgary, $124 in Edmonton, and $120 per square foot in Grand Prairie. It is much higher in the NWT. In Fort Smith the cost per square foot is about $164, in Yellowknife it is $160, while it's $208 in Inuvik, and $314 in Sachs Harbour.

You also have to consider this. In some communities, if you need a crane to undertake some work, it needs to be shipped by sea lift or summer barge. You may only need the crane for three weeks, but it's likely there until the sea lift the next year.

This summer we wrote Indian and Northern Development Minister Chuck Strahl to explain the situation, and he said this in his reply:

Your letter makes a strong case for the distribution of funds in the North on a basis other than per capita. I fully agree that building costs in the North are much higher than the national average, and existing recreational infrastructure is less well developed. I have and will continue to communicate this point to my colleagues.

It's also necessary to point out the challenges of dealing with the federal bureaucracy. We understand there are accounting rules and reporting procedures that must be followed. However, it can be challenging for a community to complete a complicated application form when they only have a few days to do the job. Even if we can get through that, we have to wait months to hear back, watching the extremely short building season slip away.

[The Chair, Conservative, Bruce Stanton]

Are you just about finished, Mr. Kruger?

[Terry Kruger]

About half a page.