Industry Committee on Nov. 23rd, 2016

[Robert McLeod]

I'll ask the health minister if he can expand on that a bit.

[Glen Abernethy, Minister, Department of Health and Social Services, Government of the Northwest Territories]

Quickly, when we did our analysis, it was determined to be cheaper in the long run. It would have been $1 billion if we'd paid for it and run it over 35 years. We are contracting them to do food services, security, and a few other services in the building for 30 years—property management—and they're going to do the property management on our old building for 35 years.

At the end of the 35 years, it all reverts to us. It will be $750 million by the time we're done, compared to $1 billion if we'd done it straight up.

[Brian Masse, NDP, Windsor West, ON]

That's an interesting way of doing it, actually.

[The Vice-Chair, Conservative, Earl Dreeshen]

Thank you very much, Mr. Masse.

Now, Mr. Arya, you have five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

Thank you, witnesses. It's an honour to have you here.

As I mentioned, I had the pleasure of visiting Yellowknife this past August. I really enjoyed my stay there. I visited the beautiful legislature building and the museum. I also noticed that a new hotel is under construction. Related to that, how do you think the tourism industry is doing, and what are you doing to improve that sector?

[Robert R. McLeod]

Thank you.

The tourism sector is defying all of the downturn in the economy. It's the fastest growing part of our economy. In the last few years, especially since Canada received approved destination status from China, the interest of the Chinese in coming to the north has been substantial. In the past six years, since that status was approved, we went from zero to more than 10,000 Chinese coming to visit us.

Before that, we had the traditional forms of tourism, which was what we would call the rubber-tire tourists who come camping and pull their trailers. We also had a lot of hunting and fishing. More recently we've had more adventure ecotourists. But with the aurora, first we had the Japanese—more than 17,000 Japanese come on an annual basis—and now the Chinese have brought that up significantly. With the downturn in the Canadian dollar, tourism has also increased substantially.

We continue to grow by leaps and bounds, and the biggest thing that's holding us back now is the lack of hotel rooms and infrastructure.

Also the Inuvik to Tuktoyaktuk highway, which will open in the fall of 2017, will be part of the Canada 150 celebrations, and we expect to have a significant increase in tourism because it will be the first time Canadians can drive from sea to sea to sea. You will be able to drive to three oceans, at your pleasure, so we expect that will add to tourism in the north as well.

[Chandra Arya, Liberal, Nepean, ON]

From tourism, Premier, I'd like to go to the future of the Northwest Territories with regard to attracting other Canadians or immigrants. Do you have any plans on that?

[Robert R. McLeod]

We've been in the unfortunate situation where we've had a decrease in the population. We were probably the only jurisdiction in Canada to have a decrease, for about 10 years. They were not significant decreases, maybe in the neighbourhood of 100 to 500 people annually. More recently, last year, we had a bit of a turnaround from the last few years, and our population grew by 0.5%. We've had some very modest goals on increasing our population. We've endeavoured to increase our population by 2,000 people over five years, and obviously it's in our interests to increase our population, because with our territorial formula financing agreements with the Government of Canada, the more people we have, the more money we get.

We've been trying to find ways to attract people. We have a lot of jobs, but it's expensive to live in the Northwest Territories. We've been looking at immigration. We'd like to have a lot more immigration into the Northwest Territories. We're starting to become very multicultural, and we're starting to turn in the right direction with some of the modest increases in our population.

[Chandra Arya, Liberal, Nepean, ON]

Concerning the mining and oil industries, I believe there has been a bit of decline during the last couple of years. Where do you think that is going?

[Robert R. McLeod]

Mining is the largest part of our economy. The north was built on mining, primarily gold mining. Now 40% of our economy is based on mining, and it's all diamonds. We have four diamond mines. We export over two billion dollars' worth of diamonds annually.

For oil and gas, with the downturn in oil prices, every oil and gas producer in the Northwest Territories has pulled out of the north, so we have no activity other than in Norman Wells, which has been there since 1939, before the war. We're very concerned, and as I said earlier, we have tremendous oil and gas potential. We have over seven billion barrels of oil and about 100 trillion cubic feet of natural gas that's still all underground. Certainly the fact that there's nothing going on in exploration is a cause for concern.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to move to Mr. Nuttall for five minutes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Mr. Chair.

Thank you, Premier and your delegation, for being with us today. I have a couple of questions.

Mr. Schumann noted there's a quota for eggs, for instance, in your territory. Is there enough quota right now, or do you have to bring them in from outside?

[Robert R. McLeod]

Thank you.

In the Northwest Territories we've had to fight. We had to go to court to get the egg quota because of supply management. Even with the recent signing of the agreement on internal trade, we can't get our foot in the door. We wanted to get into dairy, chickens, turkeys, and I think beef, but we can't get in because of supply management.

We went to court and we have the egg quota, and we produce a lot of eggs now. We can supply our own needs and we export the rest. We're still having problems in terms of selling throughout the north, because a lot of vendors have their own suppliers.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Would you say that is an ongoing issue for you? Is it increasing the cost of food, etc., up there for you, because in a lot of cases it sounds as if you have to transport the goods in rather than their being produced there?

[Robert R. McLeod]

We also have challenges with land claims. Not all the land claims are settled in the Northwest Territories, so the most fertile agricultural lands are in the southern part of the Northwest Territories and there are still land claims to be negotiated and settled. We think there are significant opportunities for agriculture in the north. In the old days, every community used to grow their own vegetables to offset the high cost of living. We're moving back to that through the help of government programs. I think 28 of the 33 communities are now back to growing their own vegetables in some capacity. The move to greenhouses, and so on, is resulting in growing on a much larger scale.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

I have a couple of other questions, two specific ones.

With the announcement of a carbon tax coming down the line, fully implemented by 2022, has your administration been able to calculate what the cost will be to implement that within your jurisdiction?

[Robert R. McLeod]

That's part of the reason we're here. We already live in a very high-cost environment. We've already had some significant discussions with the Government of Canada, and we've all agreed that we will work together on this, especially since the northern territories are the most impacted by climate change. We see the effects of climate change every day. We have a very good idea of what's involved.

Right now, as we said, 25 of the 33 communities rely solely on diesel. If we introduce a carbon price, we feel we should only do that if we have a way to get us off diesel.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Are you looking for an exemption?

[Robert R. McLeod]

We are in discussions. I think we have made the case that the north is unique, and we have to be treated differently.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Has the Government of Canada communicated any plan or targets for job growth within your jurisdiction? In your work with them to date, is there a target to grow the economy by a certain percentage, or to grow the number of jobs up there? I know doctor shortages, etc., exist in that area as well. Is there a target being set by the Government of Canada that you are working toward?

[Robert R. McLeod]

We have been doing some labour market work and some labour market research. We normally enter into labour market agreements with the Government of Canada.

I'll ask Minister Moses to go into more detail on that. Thank you.

[Alfred Moses, Minister, Department of Education, Culture and Employment, Government of the Northwest Territories]

The GNWT just did its first ever comprehensive labour market report and assessment of needs. Over the next 15 years we're going to be looking at something on the order of 36,000 jobs in the Northwest Territories. We've developed a “Skills 4 Success” action plan to address some of those in-demand jobs.

Going back to the immigration question, we're developing an immigration strategy as well to work on filling some of those jobs. We met with Minister McCallum on how we can do that. We have increased our immigration over the last few years, and with that report and the Skills 4 Success, we're also doing a strategic plan with our post-secondary institutions to make sure that we're providing the programs and services to meet those needs.

There are a lot of things in place that we want to use to try to increase the population, but also to get our own residents into the jobs and to get that skill development that's much needed.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Sheehan.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much for that presentation, Mr. Premier and ministers. Thanks for everything that you have done for your territory and thanks for everything that you're going to do, as you've demonstrated.

Mr. Nuttall asked the first question I was going to ask, about the labour market, which you've answered as well. That's really important, noting that these construction projects will take a lot of labour to do.

But to segue from that, we just finished a manufacturing study. What does the manufacturing industry look like up in the Northwest Territories? What are the opportunities and challenges?

Would someone like to answer that?

[Wally Schumann]

Before I was elected I was spearheading the manufacturing group of people that we have organized. The Government of the Northwest Territories is developing a manufacturing strategy.

Our manufacturing group of people in the Northwest Territories is probably surprisingly small, but it's very diverse, from building our own windows to modular construction not just of camps but also of housing units. We have a tank manufacturer in the Northwest Territories—actually, a couple of them. We have a gentleman in Yellowknife who just designed an innovative energy wall solution, a new type of insulation system.

There are a number of people, then, who are doing manufacturing, but we're trying to develop a strategy to move forward on ways to get people to be more innovative and to bring more creative solutions to help diversify the economy of the Northwest Territories. It's something we're working on, and we're hoping to have the strategy done by next fall.