Thank you very much, Madam Chair. I move that consideration of Tabled Document 3-17(2), Supplementary Estimates (Operations Expenditures), No. 3, 2011-2012, be now concluded and that Tabled Document 3-17(2) be reported and recommended as ready for further consideration in formal session through the form of an appropriation bill. Thank you.
Thank you, Mr. Menicoche. The motion is in order.
Question.
Question has been called.
---Carried
Does committee agree we’ll move on to Tabled Document No. 2-17(2), Supplementary Estimates (Infrastructure Expenditures), No. 3, 2011-2012?
Agreed.
I will ask Minister Miltenberger for his opening comments, please.
I am here to present Supplementary Estimates (Infrastructure Expenditures), No. 3, 2011-2012. This document outlines an increase of $400,000 for operations expenditures and an increase of $2.631 million for capital investment expenditures in the 2011-2012 fiscal year. The total supplementary request is $3.031 million.
There are four items in the supplementary estimates:
$2.5 million for the Department of Transportation to start environmental assessment work on the Inuvik to Tuktoyaktuk highway project.
$427,000 for the Department of Transportation for the costs associated with moving NAV Canada facilities and equipment into the new air terminal buildings in Tuktoyaktuk, Paulatuk and Sachs Harbour. These costs will be fully offset by a contribution from NAV Canada.
$400,000 for the Department of Public Works and Services to provide an infrastructure contribution to the NWT Housing Corporation for its share of the costs associated with the construction of a joint use maintenance and trade shop in Tuktoyaktuk. The net impact on government operations is nil as the funds will be transferred from the department’s capital investment expenditures budget.
$104,000 for the Department of Environment and Natural Resources for renovations for office space required for the department’s lands and water division, which was established in 2011-12. The net impact on government operations is nil as the funds will be transferred from the department’s operations expenditures budget.
I am prepared to review the details of the supplementary estimates document, Madam Chair.
Thank you, Minister Miltenberger. The witnesses are already here. They have already been introduced for the record. This is a continuation. General comments. Mr. Hawkins.
Thank you, Madam Chair. One of the particular issues in this briefing note is the Inuvik-Tuk highway. I thought it would be beneficial for everyone if he provided a quick synopsis of some of the discussions that were happening. I will speak in terms of theme as opposed to specifics and allow Members to speak in favour or against or their overall position.
Some of the issues that have arisen out of the Inuvik-Tuk highway have been things along the lines of funding arrangements with the federal government to build a proportion of 75/25 being sort of the final billing. Are there other opportunities? Is the $150 million contribution firm? Members, of course, would like copies, correspondence of funding, arrangements and, of course, conditions. Typically the federal government, as we all know, will build the highway and the provincial or territorial government who then takes it over will, of course, then move to maintenance responsibility.
A lot of Members felt that the cost estimates were too broad. Members want more specific numbers. Long-term implications seem to be unknown; for example, maintenance costs, permafrost conditions, taking away from other major infrastructure properties and, of course, the list goes on.
Risk major had been highlighted. It needs to be fully developed. It includes key decision points, worst-case scenarios. The Minister identified signing an agreement with Canada as the point of no return. Members asked to be kept informed on P3 opportunities and the particular negotiations. This is void including maintenance in a P3 contract. Also to ensure that public funds stay in the North. That is a big issue, allow as many northern contractors as possible and the opportunity to benefit from the project.
Just an overall perspective, the Minister committed to keeping the committee informed which, as all Members I am sure, we certainly appreciate. Details on federal funding arrangements are key for the Minister as he has agreed to procurement processes and contract negotiations are a major issue. He responded to specific requests for technical information regarding permafrost data, route selection. He has also advised Members when project website is live, that he will obviously inform Members. I would assume he is going to inform the public as well so the public can follow this particular issue.
He has committed to providing due diligence of key project milestones and he has stressed repeatedly that, as returning committee discussed broader economic development and mineral development strategies.
Madam Chair, that is just a general overview I offer to committee and Members that I have provided a sort of a quick synopsis to highlighted themes. Many Members will have their own specific concerns which I think are important to get out on the table here today, fleshed out whether they support or don’t support or key weaknesses or areas of concern they want to highlight. Thank you, Madam Chair.
Thank you, Mr. Hawkins. Minister Miltenberger.
Thank you, Madam Chair. I thank Mr. Hawkins for the synopsis of the results of the meetings so far, and at this point I just accept those comments and the summary. Thank you.
Thank you, Minister Miltenberger. Next I have Mr. Dolynny.
Thank you, Madam Chair. I thank the Member for Yellowknife Centre for giving a brief overview. I want to kind of take that and elaborate it to a certain level here. The concept of the Tuk-Inuvik road here has become more political and emotional in nature. Sometimes we need to look at the rationale in moving forward. The benefits of the people of the Northwest Territories seem to not really have been identified adequately, I think, in terms of a lot of things we talk about cost-benefit analysis, as the Member indicated.
I want to make a point to note that the supplemental here is strictly for the due diligence. I can understand that. The bottom line here is I think a lot of Members felt here that this product has been ill prepared in nature and in some cases the selling points are definitely one in which, being of business background, I have a hard time swallowing. I think some Members do as well.
When we look at the estimated cost back in 2009, it was $2.17 million. Two years later we are at 38 percent higher. We are not even sure the ceiling of that is $300 million. We keep referencing a 75/25 split when, in reality, there is a capital of $150 million, so really we are looking more at a 50/50 split. I want to make sure that goes on record.
The business case we have is two years old. This is going back to the 16th Assembly. Again, the P3 component is still pending. Without that proper analysis, I believe the government here is going fairly blindly forward, again, under the how to due diligence. I understand that.
Maintenance costs are still not realized. The last time there was a maintenance cost estimate in 2009 this was $2 million. Today we don’t have a clue. Again, this is still something that the Members are looking forward to seeing. Again, the benefits of the highway have a potential to help with the Mackenzie Gas Project. We understand that, but again we have major companies out here that have stayed relatively silent or at least, if they have, we as Members have not heard from Exxon, Conoco or Shell or companies out there in terms of what they are going to be doing going forward.
Again, while it is likely, there is no guarantee that the Mackenzie Gas Project will proceed. We are at best guess. If it doesn’t, really the economic viability of this highway has been reduced to almost zero. Again, I want to make that also known.
Cost overruns from this government and previous Assemblies are well documented. If we use the past as our guide, Deh Cho Bridge, as a cost example, starting off at $45 million in its early days to balloon out of control at $192 million. Other large products like the Inuvik super school have significantly gone over their original budget. Bluefish Hydro Dam, roughly triple to $37 million, and $13 million has been spent in Taltson hydroelectric project with no lasting benefit in sight.
Madam Chair, I guess moving forward, my general comments are given that, all this information, we haven’t received as much proactive exposure as a government tends to offer here. Again, some of the major issues that came forward, as the Member for Yellowknife Centre indicated, risk management. I want to formulate my general comments to the fact that as of date we haven’t seen anything on risk management or anything of stature. I want to point it out that this risk management piece was a critical component of the Auditor General’s Deh Cho analysis, the Deh Cho Bridge. Again, I am hoping that we don’t repeat ourselves moving forward with this. I am going to leave it at that, Madam Chair. I am sure some of the other Members will have equal comments moving forward.
Thank you, Mr. Dolynny. Mr. Miltenberger.
Thank you, Madam Chair. I appreciate the Member’s comments. This project clearly is at the early stages and we are doing frontend work so that we can, in fact, find out whether we do have a project. We need to have an environmental assessment, as has been pointed out, in order to approach the federal government about putting their money into work at work first.
In defence of the Inuvik school, I believe that project came in a year early and on budget. The Taltson project is not done yet. There is going to be value for money on that end. We are going to have a bridge that is going to last us long into the future. We have also learned many valuable lessons in the interim.
Madam Chair, with your indulgence, given the amount of time the Minister of Transportation has spent with committee, I will just defer any further comments to the Minister. Thank you.
Thank you. Minister Ramsay.
Thank you, Madam Chair. Yes, we spent a number of hours with both the Standing Committee on Priorities and Planning and EDI committee late last week and provided a presentation to committee on the requirement of the $2.5 million that you see in the supp before us today. As I mentioned to Regular Members and the committees, the money that we’re requesting is to do the due diligence. I know there have been some estimates on what the highway will cost, but if we don’t go out and do the geotechnical work and the baseline, find out that baseline information, we’re not going to get an adequate picture of what we’re potentially getting ourselves into and we need to do that work.
We’re not going blindly, as some Members have suggested, into this project. In fact, we are coming back looking for this money so that we can do that analysis, we can get the work done and we can put our best foot forward, get the environmental assessment done so that the project is at a point where as a government we can work with the feds and pursue this project. It’s a great project; it’s a project that’s going to connect the highway system in this country from coast to coast to coast. It’s something that is a priority of this government. We intend on pursuing it and it may concern some Members that we’re moving aggressively, but this is a moving project.
We have got to hit some timelines, we have got to do the work and nothing happens if you don’t go after it and get after it. I think that’s something I’d like to see happen, is us get out and get after this project. We’ve spent some time, I know Cabinet was up in the Beaufort-Delta and spent some time with the leadership up there. People are excited about this project in the Beaufort-Delta. It’s exciting from a number of perspectives. It’s going to reduce the cost of living in a community like Tuktoyaktuk. It’s going to potentially lead to further exploration both onshore and offshore for both oil and gas. It’s a project that we need to continue to support and move forward.
I guess I was a little bit concerned – and I can understand and appreciate some of the concern that Members had – people are saying we’re rushing into this, we don’t know what the cost is. But if we don’t get out and do this work, we won’t know answers to those questions. So that’s what this is all about. This is a project that has national significance and it’s an opportunity for our government to show its maturation and step up to the plate. We have a ready and willing partner in the federal government.
Some Members say that there’s a cap of $150 million. We don’t know that. We have yet to hammer out the financial arrangements, as they’ll unfold at a later date. We still have to negotiate that with the federal government, but first and foremost we have to get the project to a point where we can have those type of negotiations with the federal government and we’re going to pursue that.
This is $2.5 million on potentially an estimated $250 million project. So its work we need to do, it`s work that would be required and I hope Members see this project for what it is. It’s a nation-building project, it’s a territory-building project and it is an opportunity for this territory to show its maturity and partner with the federal government to deliver a project like this. Thank you.
Thank you, Minister Ramsay. Next on the list I have Ms. Bisaro.
Thank you, Madam Chair. I just have a few comments here in terms of the supp as a whole. It’s relatively minor in that there are only four items, I think, on here. Most of them are in and out, but we do have one very significant item and that is the request for the work to be done on the Inuvik-Tuk highway.
I’ll back up a bit. I was pleased, actually, to see that in this supplementary appropriation for capital, although its number three, it’s a relatively minor amount in terms of the number of projects that money is being asked for, a large amount, in my mind, in terms of $2.5 million for the Inuvik-Tuk highway. But I think Minister Miltenberger mentioned yesterday that he’s looking for the time when I’ll be happy with what the Finance department puts in front of me. This certainly, in my mind, is progress, positive progress. We’ve only had three supplementary appropriations for capital and this one is down from what I think I’ve usually seen.
So I just wanted to make some general comments. I have some specific comments on this particular project under Transportation, but I’ll keep those until we get there. Thanks, Madam Chair.
Thank you, Ms. Bisaro. Minister Miltenberger, no comment? Thank you. General comments. Mr. Bromley.
Thank you. Pretty much in line with the comments we’ve heard to date, Madam Chair, or to this moment. So I’ll just say that certainly the big item here, the Inuvik-Tuk highway proposed expenditure of $2.5 million, the big thing for me here is process. Although I have other fundamental concerns, which I’ll get into in the detail, this is clearly fundamental work that needs to be done, and we must have known about it for some time now and to be brought forward at the last minute and expect it to take priority when we have, in our current fiscal situation, so many priorities that are already being shelved without debate is unacceptable to me. So that’s a major process flaw here. But regardless of that, there are many, many fundamental issues that I have with this proposed expenditure for this fiscal year of which we have six weeks remaining and I will get to those in the detail. Mahsi.
Thank you, Mr. Bromley. No comment from the Minister? Mr. Ramsay.
Thank you, Madam Chair. I respect the Member’s opinion. I don’t necessarily agree with some of what the Member has said.
For him to say that there’s no debate, there is debate, this is the first step along the way, the second step along the way. So there’s ample opportunity for us to debate this $2.5 million right here today. Also for the Member to say it’s last minute, it does seem like it’s moving along quickly. It’s a big project. It’s something we support from the federal government on: $150 million. There aren’t any other substantial, huge projects going on. The Deh Cho Bridge will be concluded this fall, but other than that we’re wrapping things up on the Inuvik school. We need projects, we need jobs, we need economic activity, and this, Madam Chair, does that in spades.
Again, things move quickly. We had the election in October, we had Christmas break, we got back. On a project this size if we want to see construction start next winter, we have to move, we have to get the environmental assessment complete and we have to iron out the details with the federal government to see this project and the opportunities and benefits it will bring to the residents of this territory this coming winter. Thank you.
Thank you, Minister Ramsay. General comments. Mr. Yakeleya.
Thank you, Madam Chair. The funding that we’re going to be debating has to do a lot with the timing of the supp for the infrastructure. I have not heard one member in our community say they oppose the highway, the Mackenzie Valley Highway. We all actually support it. It’s the way that the funding is coming about to continue the work, as Mr. Ramsay has indicated, for the people of the Northwest Territories.
Also, the federal government has signalled this project as a priority through their budget. They’re saying we have $150 million and we’re starting to understand that it’s a 25/75 partnership and that it may not at the end of the day be 25/75. It might be a 50/50. So what we on our side are willing to risk, chance, is that if it does pan out to be that it’s going to cost more than $250 million or $260 million then are we willing to borrow more money? Ask us to maybe have our projects delayed for a year or two in our communities? That’s the risk.
We know there’s work that needs to get done up there. Start working. It’s a significant project. What we’ve been told is that we have to look at this project because it means work next year, which is understandable. The timing here is not really the best for us. They`ve got $2.5 million by the end of March. That gives us what, six weeks? Eight weeks? That’s the thing that we’re looking at.
I think we have learned a lot from the previous government on the Deh Cho Bridge. That bridge isn’t even done yet but we have learned and we are still learning. For some of the provinces or the federal government this project is small. This is peanuts to them. I know the Alberta government put a lot of bridges up. They use lots of money. They put roads, also, in areas. They even pave them. Sometimes you don’t even know they’ve got paved roads. I’m in the Sahtu; I don’t even know what a road is.
I guess for us, for myself – I should speak for myself – this project has the Government of Canada’s radar. We’re on their radar right now. They’re only capping $150 million. Unless our Premier and our Cabinet can go there and ask for more money and say make it a real 25/75, because you know what? We’re going to start digging into our infrastructure dollars and it’s looking like a 50/50 partnership. There’s no guarantee that this Cabinet is going to do that. The federal government is going to say we told you $150 million, that’s it. You make up the rest. That’s something we have to think about.
I know this project is close to the hearts of the people up in Inuvik and Tuktoyaktuk. As much as the Sahtu wants roads, they want their roads too, so much that they got the Prime Minister to make it a priority within the Northern Strategy. Tell Flaherty to find the money; we’re going to help them build it.
It’s the timing of this how this supp is coming through. It’s how this project is being looked at right now. It’s almost to the point where it’s a done deal. I think that we need to build the Mackenzie Valley Highway. I need to say that I hope that this supports the Northwest Territories. I’ll ask specific questions on the Inuvik-Tuk road. I think that the Dempster Highway certainly can use this money to pave that road. Dusty as hell, the Dempster Highway. We’re not even paving it. I’m sorry for my language. There are people that use that road and they don’t even pave that road.
Are we dancing to the Prime Minister’s tune? I think this road here will cost more than what I heard from the Minister. Mark my words; it is going to cost more. I just don’t know if we’re going to pay it. I hope that Mr. Ramsay goes to Ottawa and says we need more. I’m not too sure how that’s going to work. I really don’t know the consequence of us making that decision today.
I know people up in Tuk and Inuvik need work. I support them. There are some good people up there, hard workers. They need to get on with this road here. Same with Inuvik. It’s not our fault that the oil and gas economy is down in that area. I don’t know the specifics on that, why they’re not working as much as they used to work in that area. Like any other regions, they’re also starving for economic development in their communities. They would certainly love to see a $2.5 million project go ahead in their communities. We’re just not that lucky.
I’m going to leave some specifics to the detail. I’m hoping that the Assembly here has some good thoughts as to how we continue to move on this project. The timing is not great. That’s the thing that bothers me. Like I said, the majority of Members support the Mackenzie Valley Highway so much that we gave money in the last Assembly to specifically Inuvik and Tuk. Other projects in our communities also need some attention. That probably goes through the normal business plans.
I know Mr. Harper is monitoring our discussions. I hope he’s listening too. We should honour and he should honour. If he says 25/75, the Harper government should honour that formula and not get out of it and say it’s only $150 million we’re going to give you, you deal with the rest if it’s more than what we think it’s going to cost. That’s what Mr. Ramsay is saying. We need more money. Now we know what it’s going to cost us but we need more money to access funding. I hope we haven’t closed the doors on our discussions with Mr. Harper or the people of the Northwest Territories will pay. Somehow they will pay.
Thank you, Mr. Yakeleya. Mr. Miltenberger.
Thank you, Madam Chair. I appreciate the Member’s comments. Just if I could speak to some of the major points he’s made.
The federal government, Ottawa, sees the Tuk-Inuvik highway as a first step to the completion of the Mackenzie Highway. That’s very clear to us. The timing piece is important. Since we’ve been elected and we’ve had this discussion, we were elected in October and we picked a government in the middle of October, we had a capital session in December. We were also in significant discussions with the federal government about the borrowing limit and our ability to in fact engage in any kind of investment in infrastructure at all, including this project. We were not in a position at that point to say anything definitively because we had not advanced those discussions to the point where we as a government were confident that we had the commitment of the federal government to work with us and recognize our need for a borrowing limit increase.
Since December we had that discussion and we’ve had the meetings. The Premier met with the Prime Minister. I’ve been in discussions with Minister Flaherty. We do have that comfort. We do have it verbally and in writing. So we made the decision at that point that we could move on this. We don’t want to miss a year. The first available time to come back to this Assembly is where we are right now. We scheduled meetings with the committees prior to this to let them know what was happening to do the technical briefings and all the reviews. We, within a fairly compressed timeframe of this new government, have made, I believe, all the right steps to keep everybody fully engaged.
We need to do this work. We need to have a Class C or B estimate so that we can have a clear number collectively that we can look at and make a decision on how much it’s going to cost. As Mr. Ramsay indicated, we also at that point will have a discussion with the federal government based on that number and to see what the split is going to be. Those are all critical pieces. We have made every effort to do this. We, I believe, have made a strong case. We don’t want to lose a year. We have 1,300 days left. This project, in order for us to make an informed decision we need that work. The final decision will come before the House. It’s not going to be Cabinet sitting upstairs in the office just signing a deal. We’re going to have to be able to make the case to this Assembly and to the public and to the people that we’re going to spend X amount of public dollars and we’re going to spend it on this project, and this is how we’re going to manage it, and this is how we’re going to be able to finance it, and this is our portion and this is what the federal portion is going to be. We have to be able to make that case to the people but we can’t do that until we do this work.
Once again, Madam Chair, I’ll ask the Minister, who is much more intimately involved in this process, if he’d like to make any further comments.
Thank you, Mr. Miltenberger. Mr. Ramsay.
Thank you, Madam Chair. I thank the Finance Minister for that. At committee last week there were a number of questions about decision points and I think some Members were under the impression that by approving the $2.5 million we’re saying yes to the, well, if it ends up being $250 million, but that’s not the case. I can’t reiterate that enough. We are not at that point. We need to get to a point, as the Finance Minister said, where we can make an informed decision on whether we can afford it, what it’s going to cost us, and those discussions will happen in this Assembly with the Members of this House. That’s how this project will move along.
When I was at committee on Friday I gave the committee my assurances that every step of the way this is a big project. You’re looking at a $250 million estimate. It’s a big, big project and we need to be working through this project together. We need to be supporting one another and working with one another to ensure that the project does get completed and we can maximize the benefits to residents here in the Northwest Territories and people in the Northwest Territories. That’s what I intend to do and I look for that support from the Regular Members to allow us to go out and do this initial due diligence, the work that has to be done up front. As a government we have to invest some of these dollars so that we know exactly what we’re getting ourselves into and whether or not we want to get into it. It’s the price you would pay for progress.
We have to progress. If we were to backtrack on this and waste a year and lose a year, it’s just not something I think we should be even entertaining. I think we need to find this money, get the work done and move forward. Get some things accomplished here. This project is in an area where they need the jobs, they need the opportunities, and it would be welcome economic activity in that region of our territory.
Thank you, Mr. Ramsay. General comments. Next on the list I have Mr. Moses.
Thank you, Madam Chair. Just in regard to what’s been talked about so passionately is the Inuvik-Tuk highway here. Being a newly elected MLA, one of the main things that I’ve been seeing in my office lately is the increase of income support and people who are looking for jobs. I get a lot of phones calls in that regard and one way that I find that we can fix this is building a big project such as the Inuvik-Tuk highway. It gets my support in the sense that we have a lot of strong leaders in the region who are backing this, and when you have so much passion from some strong leaders, you know that a project like this will be successful and they would find a way to get it done.
Speaking to some of the comments that were made earlier, we do have a timeline. There is a short timeline to pass this bill, but there’s a timeline that we have to get this infrastructure built and we can’t lose that year. If you look in some of our other documents that we were discussing over the past couple of days, our income support has gone up close to a million dollars. The way we can look at addressing that issue is to start creating jobs for our Northerners. In discussions with people back home, our main contractor is going to be our local businesses and our local contractors doing the jobs and making sure that both Aboriginal groups are represented in these jobs when they go forward both this year and in the new fiscal year.
We’ve had our briefings. We’ve had our discussions with the Minister of Finance and the Minister of ITI. We’ve had a lot of questions, had a lot of discussions with some really strong debates, and we do have to put a little bit of money forward for this due diligence so that, like the Minister said, we decide from there if we want to go ahead with this if this road is feasible or not. I think that’s where this first step needs to take place and not wait another year and then see that it’s something that we want to go ahead and do. We should do it now and we should get the support of the Members to look at getting our people in our region off of income support and into jobs, the ones that do want to work.
As a colleague of mine said earlier, it’s going to create jobs for years. It’s going to create jobs not only in the Beaufort-Delta but right down the Mackenzie Valley for all the communities. It’s going to increase communications and it’s going to increase our people getting together and being one territory.
I know we will be getting into detail later and there will be some strong questions, questions that have already been asked and questions that have already been answered. I think that we’ll wait for those details to come up with some conclusions. Thank you.
Thank you, Mr. Moses. Next on my list I have Mr. Menicoche.
Thank you very much, Madam Chair. Just some general comments about how our government miraculously finds money for the Inuvik-Tuk highway and Betty House and the millions of dollars. I’ve been here seeking some certainty and funding for Highway No. 7 time and time and time again, yet the capital budget shows nothing for Highway No. 7. I don’t know how else to make the case that we have to spend money there. I am concerned that our priority of the Inuvik-Tuk highway will cost a reduction of any future capital dollars for Highway No. 7. I’m not too sure how we’re going to manage it and I just wanted to get it on the record that we have to seriously consider it.
A couple things that are not making sense on this project is that they’re asking for $2.5 million for geotechnical work, potentially another $2.5 million for geotechnical work next year, and now they’re saying they want to begin construction next fall. That’s impossible to do. I’m not too sure what the plan is there for the Inuvik-Tuk highway. It just doesn’t make sense. Yes, they do the geotechnical. The geotechnical has to be done, so we have to do $2.5 million this year and the next year. My concern is that should the borrowing limit, if and when it does get increased – and I’m just going to throw out a number because I’m not too sure if we can borrow up to another $300 million – that we’re going to use half or maybe more of that towards the Inuvik-Tuk highway and then we do have other projects.
You know, I made the case this week to highlight and get attention for Highway No. 7. That will be first on the red flag list, but there are other projects in other constituencies that have capital demands that are just as important. How are we going to work towards this planning of future increase of our borrowing limit? That kind of concerns me.
I think the Members have been saying that. I think the biggest concern is giving approval to the first $2.5 million puts us in a situation where we cannot back down from the future of the project. I think that’s an immediate concern. My concern is projects throughout the whole Northwest Territories and how accessible we can be towards any increase in the capital plan.
They speak about the certainty of the federal government giving us $150 million. I’m not too sure, but nobody’s been able to confirm that it is in the federal government’s budget. It was certainly in the budget speech, but did it translate into the budget? I don’t know if they’ve given us any portion of that $150 million yet and will it be in this upcoming federal budget as well. Those are the questions that I have not yet heard answered, and I certainly would like to hear them answered as we move forward.
I know that the window of opportunity for geotechnical work is narrow and small. I don’t know if you’ll spend the whole $2.5 million that they’re requesting in the next six weeks. Maybe the Minister can assure me or us that that’s the case, or are they just kind of asking for $2.5 million and are only going to spend $1 million.
The reality of the situation is that they should actually ask what they can have the capacity to do and not just grab untold millions of dollars. Because that’s my issue, is that if they’re just going to grab $2.5 million because they think they need it, and I think I need it for Highway No. 7, so why can’t I grab a million or two dollars? Their reasoning is really on shaky ground and is causing me concern, Madam Chair. Thank you.
Thank you, Mr. Menicoche. Mr. Miltenberger.
Thank you, Madam Chair. In regard to the process with the borrowing limit, once the number is clear, we will be coming forward with a suggested plan of action that will see us laying out over the next four years the steps we have to take to be able to access and put to use strategically the borrowing limit, some of the money in the borrowing limit. Keeping in mind one of the big things holding us back right now is we have to be able to provide half of the funding for capital out of our own savings coming from our operations. Right now we don’t have those savings accrued and we will have to accrue those savings over the next couple of years so that, in fact, in year three and four we can lay out a much more ambitious and affordable capital plan that will see us with the accrued savings and be able to make use of the borrowing limit, keeping in mind we also have to pay that back.
That commitment is there. That will come before the House through the due process and through all the various committees. Once that information is clear and by the time we gather for the budget session in May/June, that information, that plan will have been through, I hope, Cabinet and committee, because the number will be clear.
The other part of the strategy, of course, is the plan to try to put the federal money to use first. In order to do that we need to have the frontend work done, the environmental assessment and this other geotechnical work that will allow us to demonstrate that there is a project and that we’ve addressed the issues, the geotechnical issues, the permafrost issues, the environmental concerns that may be there, the access to granular material, all those types of things. This is a critical investment, and once again, no deal will be signed or agreed to before it comes back to this House where we can lay it out chapter and verse what the cost is and what’s affordable and is it, in our mind, doable. Is the split fair and clear and if it’s over what is being initial estimate, is the federal government prepared to move those or all the discussion items that have been brought back to this House? In terms of the commitment to the $2.5 million, I will ask Minister Ramsay if he will speak to that issue, as well, about the need for the money over the next six weeks. Thank you.
Thank you. Minister Ramsay.
Thank you, Madam Chair. It is my understanding that the work, the geotechnical and environmental work, much of that is easily done during winter months, which would require the work to be concluded prior to May. If we are looking for additional funding next fiscal year, some of that work would get done almost immediately on the heels of the work that is going to be done with the $2.5 million in this supp in an attempt to get the environmental assessment complete so that we can get to the details of the agreement with the federal government. I know the Member said some of this sounds like it is on shaky ground, but we are trying to do what we can so that we are on very solid ground. I think the work that is going to be done, geotechnical and environmental work, is work that is going to be integral to the entire project, obviously, so we need to get that work done.
We do have the $150 million commitment that was in the throne speech. We have the government’s word that they want to be our partner in constructing a highway from Inuvik to Tuktoyaktuk. They committed $150 million, but as the Finance Minister alluded to, we are a ways away from negotiating exactly what the deal is going to end up looking like. That will happen in due course, but from now until then, we have to ensure that we put our best foot forward and do the work that we need to do so that we can be at a point where we can come to the table with that EA and be able to hopefully construct a road between Inuvik and Tuktoyaktuk. Thank you.
Thank you, Minister Ramsay. Next I have Mr. Blake.
Thank you, Madam Chair. I would like to start by commending the Premier and Cabinet on the speed of following through on our priorities for the 17th Assembly. This project has been highlighted as one of our main priorities for this government. There is a time frame that we have for working up in the Mackenzie Delta/ Beaufort-Delta and that is between January and mid-April. If we are talking about holding this project until next year, by the time we get this stage of work done, it will be wasting two years of our term. I don’t think that we could put these sorts of major projects on hold just over $250 million. The day before yesterday we spent $2.3 million to a good cause similar to this.
In the Mackenzie Delta right now there is very limited work. We have six major construction companies that are sitting idle right now. There is just keeping ice roads open, maintaining highways. Our people need work. Right now we have people going to the Sahtu. They have $60 million worth of work over the next three years.
Another priority for this government is our economic expense for the territory. Now it just troubles me that to put all of these major priorities on hold over $2.5 million. It is kind of disturbing me right now. Any major project, you have to do your due diligence. That is one thing our government is trying to do here. I am in full support of this.
As I mentioned, we have a short time frame. We have about two months to get this work completed. By the fall we will have all of our information that we need for this work to proceed. Hopefully we can move this forward and support our people in the territory. They need a strong economic territory. That is one thing I believe this government, if we all pull together, we could achieve that for people of the Northwest Territories. Mahsi.
Thank you, Mr. Blake. I don’t see a response from either the Ministers. Next for general comments I have Mr. Bouchard.
Thank you, Madam Chair. The biggest concern obviously is the Tuk to Inuvik highway. I am in support of the funding. I do wish this was in the South Slave. I think we also need some of the work and some of the economic development, but I think it is better to move ahead with this project, get the upfront work done, do our due diligence. At the same point, I have some concerns to make sure that after that due diligence is done, we have an evaluation of this project. At that time we can assess whether we want to carry forward. Hopefully at that time we will have worked out our deal with the federal government on their 75/25 deal to the completion of the project, not to the maximum of $150 million.
I would also like to see the department have a plan of how they are going to implement the northern content, like I have indicated in the House before. I want this money to be spent in the North so that it cycles through the North and goes to northern contractors and northern companies. I trust that the Minister of Transportation is also the Minister of ITI and maximize the benefits to the North and that these dollars stay in the North.
My colleagues have expressed a lot of the concerns and I won’t repeat a lot of them, but I definitely will be assessing, once the due diligence is completed, whether it is viable for this project to go forward.
It bothers me a little bit to say we are going to be spending $2.5 million just like it is a drop in the bucket, but millions before we have to assess this project, but on a $250 million project there is some upfront costs that have to be dealt with.
I support the funding for right now. I think it is something that we have to go forward with right now as opposed to delaying it for a year. There are a bunch of projects throughout the North, especially in the South Slave that are always being held up by one process or another. Now we have an opportunity to maybe spend some money in the North and get some progress getting going in the Northwest Territories. They also need the work. I support the project right now. Thank you.
Thank you, Mr. Bouchard. Minister Miltenberger.
Thank you, Mr. Chairman. I thank the Member for his comments and I will defer the response to the Minister of Transportation. Thank you.
Mr. Chairman, I appreciate the Member’s thoughts on the funding. I will say that I am of the same belief that in a project of this size, the benefits, as much as possible, accrue to the businesses and the residents of the Northwest Territories and the majority of that money stays here in our economy and doesn’t end up in some southern economy somewhere. I think those are things that we need to strive towards and certainly it is my belief that we can sort out a procurement of the highway that will ensure that that happens. That is a ways away. Today we need to ensure that we can get the upfront work done, the due diligence.
I really do appreciate the Member’s support and look forward to his continued support for the Tuk-Inuvik highway. Thank you.
Thank you, Mr. Ramsay. We are going to move on with general comments. Mr. Nadli.
Thank you. I’m speaking in favour of this commitment that we’re making to ensure that the northernmost part of the Northwest Territories realizes some opportunities of ensuring that overall a development of the Mackenzie Highway is completed. I support this initiative to ensure that a major infrastructure project of that nature is realized, that it be linked to the overall development of the Mackenzie Valley Highway.
I realize the significance of the $2.5 million that’s been committed. Also at the same time I realize that it’s part of our duty as government to ensure that we do share costs of infrastructure development in parts of the Northwest Territories that are not on the mainstream highway system or as part of the mainstream link of the communications infrastructure. So this I think is going to help out people in the northernmost part of the Northwest Territories in terms of lessening the cost of living and for those reasons I support that.
Yet, at the same time, I think my colleagues on this side of this House have expressed some of their concerns in terms of the financial details lacking on how it is on the business case analysis in terms of the amount of revenue that they’re going to bring into this project in terms of the management and the expenditures are going to ensure that it’s done efficiently at the same time within a set budget. So I think those concerns were expressed by my colleagues. For the most part I think this project should be realized, but we can’t lose sight of the needs of the constituents that I represent. I know this project should not compromise the needs of my constituents of the Hay River Reserve, Enterprise, Fort Providence and Kakisa. I think their needs are equally as real as the needs of the people in the northernmost part of the Northwest Territories. But for the most part I support this initiative.
Thank you, Mr. Nadli. Mr. Miltenberger.
Thank you, Mr. Chairman. We appreciate the Member’s support. Just to reassure the Member, speaking to the borrowing limit and any additional strategic infrastructure investments, we will be coming back to this House with borrowing limit information in the plan. Clearly we have an obligation as government to make sure that whatever strategic investments are made are spread across the North and that this hopeful tide of good fortune will raise all boats, not just in one particular area. That’s a commitment of the government. Once again, I will ask the Minister of Transportation if he wishes to respond further.
Thank you, Mr. Miltenberger. Mr. Ramsay.
Thank you, Mr. Chairman. I do appreciate the Member’s comments in regard to the funding request, the $2.5 million. I just want to restate something I believe my colleague Minister Miltenberger stated earlier. The Tuktoyaktuk to Inuvik highway is the first section of the Mackenzie Valley Highway and we need to start somewhere. If we want to realize the dream, a highway in the Mackenzie Valley, this is the beginning of that. So, again, I just wanted to put that out there. We need to start somewhere and this is where we’re going to start. I appreciate the Member’s support. Thank you.
