Indigenous and Northern Affairs Committee on March 24th, 2011

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

Thank you.

I want to thank the witnesses for being here.

You will easily understand my position, Ms. Melhorn. Any act of sovereignty by a territory is welcome. Obviously, we agree on what you said. We will clearly support Bill C-530 because it represents an act of sovereignty. You know my party's position. The Aa1 credit-rating that Moody's gave you is indeed very good.

I see there is some uncertainty here. I know, Mr. Forbes, that you cannot take a political stand on behalf of the Minister and that you are engaged in the discussions. However, I want to ask you a question. How much, in millions of dollars, is 76% of the GNWT's budget? How much is that exactly?

[Chris Forbes]

I do not have the exact dollar figure. I think it is over $1 billion.

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

This is the amount that the federal government transfers to the Northwest Territories for their operations.

[Chris Forbes]

Yes, exactly. But this is--

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

I understand. You also have to account for education.

Ms. Melhorn, do you think you could do without that $1 billion if your government had no borrowing limits?

[Margaret Melhorn]

Just to clarify, would we be able to borrow if we had no federal funding? I do not think so, no.

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

Okay.

Thus, you need the federal funding. I understand. Canada has a system, which is equalization. Correct me if I'm wrong, Mr. Forbes, there is legislation that requires the department to apply the federal territorial act in order to give the territories the funds they request.

[Chris Forbes]

Yes.

As I already mentioned, the act prescribes borrowing limits.

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

You said that if Bill C-530 is passed, "it could also put the federal Cabinet in a difficult situation".

I do not really understand what you mean. Up to that point, everything was clear.

[Chris Forbes]

Perhaps I can better explain what I mean.

This is about the revenue estimates of the GNWT. If, in a given year, they forecast a 5% decrease in revenues, according to the bill, this can reduce the borrowing limit for the next year.

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

I will now ask you the $6 million question: how much does the federal government get from natural resources or natural resource projects in the Northwest Territories? Do you have an estimate of these revenues?

[Chris Forbes]

Do you want a dollar figure? I do not have this now.

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

I guess it is more than $1 billion.

[Chris Forbes]

Statistics Canada has data, the balance sheet, if I may say so. I can provide you with a copy showing what the federal government pays to the territories and what it gets from-- I think it is less than $1 billion.

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

Let us assume it is less. However, we all know there are discussions about a pipeline in the Northwest Territories. There are gas, oil and mining operations. We know what to expect in the future. Finance Canada surely has estimates of the potential wealth of the territories.

[Chris Forbes]

Personally, I do not have such estimates.

There is presently some talk about devolution. My colleague may have more information about this.

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

Please go ahead, Mr. Schoenhofer.

[George Schoenhofer, Director, Devolution and Major Programs Directorate, Department of Indian Affairs and Northern Development]

Would you please repeat the question?

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

Have any studies been made to evaluate the economic development potential of the North in the areas of oil, gas and mining? Do you have a list of the license applications received? Do you presently have an evaluation of these resources? What does this represent in terms of revenues for the next five years?

[George Schoenhofer]

I'm not aware of any studies that have been done on that.

I am not sure that such reports are available.

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

But, Mr. Forbes, we can guess that--

Perhaps I will ask the question to Ms. Melhorn. I suspect you want to answer.

Are there any evaluations? I can tell you about development in northern Quebec where exploration and mining operations will produce billions of dollars in spinoffs. The territories are lucky to have gas and oil resources. I heard about the road to Tuktoyaktuk and so on. How much money are these projects expected to produce? Do you have an evaluation of the revenues to be expected from mining, gas and oil exploration and development projects?

[Margaret Melhorn]

The royalties generated from the Northwest Territories in the past few years are from the three diamond mines that operate in the Northwest Territories, the Norman Wells oil field, and some small production of natural gas. But with the construction of a pipeline along the Mackenzie Valley to the Beaufort Delta area, there is significant potential for increased revenues from the development of the natural gas in that area, but that is some years away.

The current royalties that accrue to Canada range from $100 million to $200 million, depending on the price of the commodities. That's a rough approximation.

[Le président, Conservative, Bruce Stanton]

Thank you.

[Margaret Melhorn]

Potential revenues from a pipeline would not be realized until probably the next decade and would depend on the forecast price of natural gas.

[The Chair, Conservative, Bruce Stanton]

Thank you, monsieur Lemay.

We will now turn to Mr. Bevington for seven minutes.