Thank you, Mr. Bouchard. I’ll go to Mr. Guy answer that.
Thank you, Mr. Chairman. In terms of this project I think most of our landlords, if not all of them, are aware that we’re moving forward with this project. There has been a lot of discussion, certainly at the working level, with our leasing staff, our property management staff, with their day-to-day contacts with the landlords and I don’t think there’s any surprise in the landlord community in Yellowknife that we are going ahead with this project.
So is Mr. Guy’s referral thinking that they’re in favour of it?
I don’t know whether they’re in favour of it or not. We’ve never had any real official correspondence from any one particular landlord whether they support the project or not. Obviously they are concerned whenever somebody wants to build office space in a place where they have a large piece of the market and they would be concerned that perhaps there would be some impacts. However, we did do a lot of work to demonstrate that the impacts would not be significant, particularly in the Yellowknife market, and we have not really had any significant concerns raised.
One of the other concerns that I have in the briefing I received is the government’s assessment that we need to keep a certain percentage ownership versus rental. They referred to a lot of southern numbers. I’d like to just ask the department if they actually considered the cost of doing business in the North, which would be quite a bit higher and that we’re probably pretty close to where we should be as far as the ratios. Those people who do lease from us do have a lot more costs in their operations. Did the department look into that?
That’s a good question. Yes, we did look into those costs. We took into careful consideration the operating costs of buildings in the North. We have a fair amount of experience within the department because we do operate and maintain a number of buildings here, as well, across the North and we have a quantity server and cost estimate staff within the department to look at those issues. When you look at these particular buildings here in Yellowknife, many of those high costs of operating in the North are transferred to us through the leases. We pay all the O and M on the buildings, for example. The heating costs, the electrical costs, all those higher costs are already outside of the lease costs that we have. We pay those directly.
My next question is more of a comment or a concern. My concern is: Has the department looked at the future demands of departments in the Yellowknife area? My concerns are that the space that we’re emptying right now may be swallowed up by the future demands of departments. As everybody is aware here, a few years ago we had division. There was probably a lot of empty office space. Now we’re full again. I’m just wondering if we’re going to have that same problem three to five years from now, that we’re going to be full again and going to have to build another building. Did the department look at all the territorial government departments’ needs right now?
This particular project we looked at the needs of our existing portfolio and our existing inventory. We did take into consideration the office space that we occupy today.
So, for my clarification, we never looked into future departments’ needs in the upcoming years. These office spaces that we’re clearing out, potentially may be clearing out, may be filled in by other departments that are squeezed right now.
We do have a Yellowknife office plan that looks at the office space needs and we do reconcile it every year with departments and take into consideration departments’ future needs.
Really what we’re looking to do here is rebalance our portfolio. Our portfolio is very unbalanced in favour of leased facilities right now. This building is a small step towards rebalancing our portfolio.
This government being fairly new, I guess, has the department looked at the new priorities of this government? Namely, decentralization and some of the effects that that would have on office demands in the Yellowknife area.
Thank you, Mr. Bouchard. Mr. Lafferty.
Mahsi, Mr. Chairman. This particular project, of course, as you know, is a preapproved project from the last Assembly. The priorities and goals and objectives of this 17th Assembly will definitely take into effect as we move forward on the new projects within the 17th Assembly government, for sure.
I guess in closing I don’t have any questions, but I do have concerns with this project. This government has indicated, and discussed it last Assembly as well, that decentralization was an issue and they’re still looking to increase – from what I can tell – more office space in Yellowknife area, which from what I understand doesn’t seem to discuss anything about decentralization and they’re not willing to discuss that at all. I have a problem with the fact that government is getting into where the private sector should be involved. Being a pure businessman, I guess, and now a politician, I have a problem with a lot of this issue. Thank you for your time.
We agree that we need to take those goals and priorities into consideration and we are mindful of the cost factor, as well, when it comes to leasing. There has been an increase of 40 percent. We have to find ways of cost savings. This, again, is preapproved from the previous government. Now the 17th Assembly will be mindful of what the Member is referring to. He has brought up his concerns and issues, and even transferring the positions into the region has been talked about as part of our goals. We’ll have to be mindful of that within the departments.
Thank you, Mr. Lafferty. We’ll go on to questions from Mr. Bromley.
Thank you, Mr. Chairman. I just want to follow up and thank Mr. Hawkins for his support. I, of course, did not mention anything about selling art; I talked about display and exhibition of art. Nor did I mention anything about free space. I, in fact, mentioned that Heritage Canada is interested in partnering and paying for this infrastructure. I just wanted to express my appreciation for his support there on my main points.
I think there’s been a good discussion on this need for a good policy. One of the priorities for this government is diversification of our economy and I think it’s well understood that the arts are a real opportunity to make progress on that diversification. Certainly featuring, displaying, promoting arts is a real opportunity, given that they typically don’t have the infrastructure themselves. It’s on that basis that I think we would like to see a policy.
I appreciate the Minister’s suggestion that the Executive would be the appropriate one for this. I guess I would just like to ask the Minister if he would take this forward to the Executive and seek this sort of policy for new GNWT infrastructure from now on across the NWT at 1 percent or something like that in support of the arts.
I think, although I did not ask for free space in the infrastructure in Yellowknife, I think in some of our small communities where they don’t have many opportunities at all it would not be out of line to consider providing free space for the display of arts in our government infrastructure.
Thank you, Mr. Bromley. Any response from the Minister? Mr. Lafferty.
Mahsi, Mr. Chairman. When it comes to partnership, of course, Heritage Canada has been very proactive with partnering with the GNWT on various partnership and cooperation agreements and contributions. We also work closely with NGOs for them to find spaces. That doesn’t necessarily have to be within GNWT buildings as well. I already did commit to the Members that a priority discussion that we can have at the Cabinet level is this whole art space area. When we talk about that, it’s also 1 percent increase cost to the factor as well. We’ll have to keep mindful of that. We are talking about additional space to what we have. I did commit already that this will be brought forward as our discussion.
Thank you, Mr. Lafferty. No further questions. Page 5-4, Public Works and Services, activity summary, asset management, infrastructure investment summary, total infrastructure investment summary, $5.976 million. Agreed?
Agreed.
Page 5-7, Public Works and Services, activity summary, Technology Service Centre, infrastructure investment summary, total infrastructure investment summary, $1.405 million. Agreed?
Agreed.
Page 5-10, Public Works and Services, activity summary, petroleum products division, infrastructure investment summary, total infrastructure investment summary, $3.86 million. Agreed? Mr. Bromley, question?
Thank you, Mr. Chair. I had indicated I would like to follow up on the specifics by division and so I will here, very briefly.
The proposal for a tank farm to increase capacity and upgrade, code upgrade, and I understand there are some serious challenges, structure challenges that need to be corrected in this community. I’m happy to see that work being undertaken. But I do want to stress again that there are opportunities to avoid the costs of in this case doubling the storage capacity and, of course, with that, the ongoing costs of forever trying to meet the new environmental standards and so on.
The community of Tulita has winter road access. It’s directly on the Mackenzie River. It’s one of the easiest communities to deliver to, of course. It’s a real, perfect opportunity for reducing our use of fossil fuels. It’s surrounded by forest and they could use the jobs, I’m sure. I can check with my colleague on that, but I bet they could use the jobs in that community. This is a real opportunity where, again, this project demonstrates the high cost of ongoing, and increasing and predictable costs of relying on fossil fuels when we clearly have some alternatives that are available. Those are not solely, of course, the responsibility of this department. This department is helping in that direction, but I think the Minister is answering for the government so I have to ask this question: Why aren’t we avoiding these costs? And while I’m at it, what are the costs of doubling this infrastructure in terms of capacity volume both for gasoline and for diesel versus the cost that’s maybe in a percentage term versus the cost that’s being put to upgrade it to proper code level? Thank you.
Thank you, Mr. Bromley. We’ll go over to Mr. Guy.
Thank you, Mr. Chair. I don’t have the specific cost breakdown, but generally I would say the majority of the costs associated with this project are related to the code upgrade and the civil works associated with upgrading the liner and the berm around the facility. The additional package does add some cost but it’s not a majority of the proportion or it’s not proportional to the cost. I could perhaps ask Mr. Vandenberg to provide more clarity or detail on that. Thank you.
Thank you, Mr. Guy. Mr. Vandenberg.
Thank you, Mr. Chair. At the moment I can’t provide much more detail than is in the capital plan project substantiation at this time. Mr. Guy is correct; most of the costs will be involved not in increasing the capacity but replacing much of the dilapidated infrastructure, including the berms, the earth works, an operator shelter and a variety of other equipment within the facility.
Thank you, Mr. Vandenberg. Mr. Bromley.
Thank you, Mr. Chair. That’s really it. I’ll be happy to leave it there. Again, there is a strong government-wide aspect to this. This department is responsible for the results of a policy or lack of it and it’s an opportunity that I am highlighting at this time. I appreciate that opportunity and I’ll leave it at that. Thank you.
Thank you, Mr. Bromley. Mr. Hawkins.
Thank you, Mr. Chair. Just a quick question. He was mentioning about the berm and I’m just curious: Do we end up booking these as liabilities under our environmental file or do we, at this time, when we do replacements, remediate them? That said, do we actually remediate them on site or do we actually remove the soil completely as the contaminant from the area? I’m just trying to get a sense of how we juggle that or deal with that booking. Because, I mean, I could be not correct on this observation, but through my short time on this earth I’ve seen very few berms that are around tanks that don’t have any hydrocarbons in them. I have yet to see one – I’ll say it that way – that doesn’t have problems. I’m just curious on what we end up doing with that environmental liability. Thank you.
Thank you, Mr. Hawkins. We’ll go to Mr. Guy.
Thank you, Mr. Chair. That’s a good question. We have a lot of tank farms, in addition to this one, in our portfolio. We have a regular process to go around and do environmental site assessments on each of these facilities to determine whether there is any contaminant or any environmental liabilities associated with them. We book those liabilities with the Department of Finance as environmental liabilities, and any of the cleanups are funded through the Environmental Liabilities Program. In this particular case, I’m not aware of any environmental liabilities on this tank farm. Thank you.
Although I’m not Mr. Bromley – I don’t wear a green cape to work with the environmental symbol on it – I do care equally about some of these particular concerns, and I’m just curious as the opportunity when we do this do we ensure that we tackle this particular problem rather than booking it against a particular liability. But I think Mr. Guy said there isn’t a particular problem at this spot, if I understood him correctly, but maybe… I see him waving his pen not in a mean gesture way, so I suspect he would like to reply. The issue for me is I’m just curious on how we address that particular problem only because it was mentioned and it sort of piqued an interest. Thank you.
We do have an ESA, I believe, on this particular tank farm. I don’t know what level of detail of contamination there is, but as we get into the work, if we do discover any unknown contamination during the construction project, we do address it during the project at that time, and there is contingency funding in the project for those types of unforeseen circumstances. Thank you.
Fair enough. That’s both important to me and I’m sure that’s very important to the community. Like I said, I heard it and it did pique a bit of interest on how we address that. Thank you very much.
Thank you, Mr. Hawkins. Public Works and Services, activity summary, petroleum products division, infrastructure investment summary, total infrastructure investment summary, $3.86 million. Does the committee agree?
Agreed.
Thank you. I would ask Members to return to 5-2 for the department summary. Public Works and Services, department summary, infrastructure investment summary, total infrastructure investment summary, $11.241 million. Does the committee agree?
Agreed.
Thank you very much. Since that concludes Public Works and Services, does the committee agree that consideration of the Department of Public Works and Services is completed?
Agreed.
Thank you very much. I would like to thank Minister Lafferty and his team today, Mr. Vandenberg and Mr. Guy, for their time. If that’s the case, we’ll ask the Sergeant-at-Arms to escort the witness out. Thank you for your time today.
Thank you, committee. We agreed earlier today we will be covering the Department of Education, Culture and Employment. Is that still agreeable?
Agreed.
I would ask the Minister responsible for Education, Culture and Employment, Mr. Lafferty, if he has any opening remarks or if he wants to bring his witnesses into the House.
Yes, I do, Mr. Chair.
I would ask the Sergeant-at-Arms if he wouldn’t mind escorting the witnesses into the Chamber, please.
Thank you, committee members. I would like to again welcome the members to the House. I will ask Minister Lafferty to please introduce his witness.
Mahsi, Mr. Chairman. I have with me Mr. Dan Daniels, deputy minister, Education, Culture and Employment. Mahsi.
