Thank you, Mr. Speaker. I seek unanimous consent to return to item 13, reports of committees on the review of bills.
---Unanimous consent granted
The honourable Member for Kam Lake, Mr. Ramsay.
Thank you, Mr. Speaker. I wish to report to the Assembly that the Standing Committee on Economic Development and Infrastructure has reviewed Bill 15, An Act to Amend the Fire Prevention Act. The committee wishes to report that Bill 15 is now ready for consideration in Committee of the Whole. Thank you.
I wish to report to the Assembly that the Standing Committee on Economic Development and Infrastructure has reviewed Bill 18, An Act to Repeal the Settlements Act. The committee wishes to report that Bill 18 is now ready for consideration in Committee of the Whole. Thank you.
I wish to report to the Assembly that the Standing Committee on Economic Development and Infrastructure has reviewed Bill 19, Municipal Statutes Amendment Act. Bill 19 clarifies the process in making bylaw petitions, establishes guidelines for making municipal grants, and makes other miscellaneous amendments. The committee wishes to report that Bill 18 is now ready for consideration in Committee of the Whole. Thank you.
Thank you, Mr. Ramsay. Bills 15, 18 and 19 will be moved into Committee of the Whole for consideration. The honourable Member for Mackenzie Delta, Mr. Krutko.
Thank you, Mr. Speaker. I seek unanimous consent to go back to item 5, recognition of visitors.
---Unanimous consent granted
The honourable Member for Mackenzie Delta, Mr. Krutko.
Thank you, Mr. Speaker. I’d like to take this opportunity to recognize two Pages in the House from the community of Tsiigehtchic representing the Paul Niditchie School: Vanessa Lennie and Jacob Gardlund. I’d like to thank them for their hard work all week and hopefully they had fun here, but more importantly, get an insight into what consensus government is all about. Again, I’d like to thank you for taking in the Page Program and wish you all the best as you travel back home. Mahsi.
Thank you, Mr. Krutko. If we’ve missed anyone in the gallery today, welcome to the Chamber.
Item 19, second reading of bills. Item 20, consideration in Committee of the Whole of bills and other matters: Tabled Document 4-16(5), Executive Summary of the Report of the Joint Review Panel for the Mackenzie Gas Project; Tabled Document 30-16(5), 2010 Review of Members’ Compensation and Benefits; Tabled Document 38-16(5), Supplementary Health Benefits – What We Heard; Tabled Document 62-16(5), Northwest Territories Water Stewardship Strategy; Tabled Document 75-16(5), Response to the Joint Review Panel for the Mackenzie Gas Project on the Federal and Territorial Governments’ Interim Response to “Foundation for a Sustainable Northern Future”; Tabled Document 103-16(5), GNWT Contracts Over $5,000 Report, Year Ending March 31, 2010; Tabled Document 133-16(5), NWT Main Estimates 2011-2012; Tabled Document 135-16(5), Response to the Standing Committee on Social Programs Report on the Review of the Child and Family Services Act; Bill 4, An Act to Amend the Social Assistance Act; Bill 14, An Act to Amend the Conflict of Interest Act; Bill 17, An Act to Amend the Income Tax Act; Bill 20, An Act to Amend the Evidence Act; Minister’s Statement 65-16(5), Devolution Agreement-in-Principle, Impact on Land Claims and Protection of Aboriginal Rights; Minister’s Statement 88-16(5), Sessional Statement, with Mr. Krutko in the chair.
I’d like to call Committee of the Whole to order. In Committee of the Whole we are considering tabled documents 4, 30, 38, 62, 75, 103, 133, 135; Bills 4, 14, 17 and 20; and Ministers’ statements 65 and 88. What is the wish of committee? Mr. Beaulieu.
Thank you, Mr. Chairman. Committee wishes to continue with Tabled Document 133-16(5), NWT Main Estimates, 2011-12, and deal with the Housing Corporation.
Is committee agreed?
Agreed.
Okay. With that, we’ll take a short break.
---SHORT RECESS
I’d like to call Committee of the Whole back to order. Prior to the break we agreed that we will continue on with the NWT Housing Corporation. At this time I’d like to ask the Minister if he will be bringing in his witnesses. Minister Robert C. McLeod.
Thank you, Mr. Chair. Yes, I would.
Does committee agree?
Agreed.
Sergeant-at-Arms, escort the witnesses in.
Mr. Minister, for the record, can you introduce your witnesses.
Thank you, Mr. Chairman. I have with me today, to my right, Mr. Jeff Polakoff, president and CEO of the NWT Housing Corporation, and Mr. Jeff Anderson, vice-president of finance with the NWT Housing Corporation. Thank you.
Thank you, Mr. Minister. Welcome witnesses. We’re on page 5-47, executive, operations expenditure summary, information item. Mr. Yakeleya.
Thank you, Mr. Chair. I want to ask the Minister how successful have they been in implementing their policy on negotiating contracts with the local communities in terms of putting houses in the communities. I know some places they go through the tendering process and some they have negotiated some of the work that the local contractors have. I want to ask the Minister if it’s been a successful approach or it gets complicated if you have other needs in the community that even questions are negotiated procedures.
Minister of Housing.
Thank you, Mr. Chair. We do get requests for negotiated contracts and we look at a few factors when we determine whether we’re going to follow through with the negotiated contracts. One of them, obviously, is the number of contractors that are in the community. If there are other contractors that have an opportunity to bid on the work if it goes public or if they’ve also submitted a request for a negotiated contract, we look at that. We look at past performance. If we’ve negotiated a contract before and the work and the timeliness of it has not been up to par, then that’s another factor we take into consideration.
Negotiated contracts are a way for a lot of the smaller communities especially to build capacity and what we’re finding and what we’re encouraged by is that some of the contractors in the smaller communities now have the capacity and the capability to bid on public tenders. But we continue to review each request as it comes in. Obviously, with the new building season coming up this summer we’re already starting to see some activity on that front and we’ll review them on a case-by-case basis. Thank you.
Certainly communities do look towards an opportunity to negotiate contracts when there’s support there for them to do so. Also, Mr. Chair, that some of the communities, when the packages do arrive in the communities, sometimes not all materials are in the packages and sometimes it’s difficult to get them in on a timely basis. Sometimes that hurts the contractor. It’s really nobody’s fault, it’s just the way some things are handled. Some of the contractors that I have spoken to who negotiated some of the work had said that some of the materials are not there to build a house or are missing, so they have to wait until it is ordered and go through a number of steps before it actually arrives on site. I hope this is looked upon when they are asked again if they are asking to negotiate another unit with Housing. I know there are other factors that the Minister has indicated to the House here in terms of seeing if there is a possibility if they can negotiate or they go to a tender process.
Mr. Chairman, if materials and packages arriving in the community were ordered by the NWT Housing Corporation, then it would be our responsibility to ensure that we have the replacement material in there as quick as possible. The contractors would have an opportunity to be reimbursed or compensated by the Housing Corporation, especially if it is our fault the material is not there in time. However, if it was a supply ship direct and the contractor was responsible for getting material, then it would be the contractor’s responsibility. If it is the Housing Corporation’s responsibility, then we would take all steps to ensure that we get the material there quickly and the contractor is compensated for down time. Thank you.
Mr. Chairman, the Minister is correct in terms of the responsibility once the materials are...who takes care of the materials. Sometimes it seems to be something of a glitch in my region where materials were ordered but not all materials are in the package. It seems to happen in several other communities. That raises a concern in terms of getting material, especially for ours where roads are only during the winter months, two months out of the year and the rest you have to fly material. It gets quite costly. I am glad to hear the Minister saying that other contractors are going to be compensated, that it is not their responsibility to have the materials.
I want to ask the Minister in terms of negotiating the work to the communities. It is quite difficult and challenging for some of the communities. If the negotiated contract is something that could be real each year in terms of looking at some of the difficulties that the communities have, because sometimes Housing really does a lot of work to improve its relationship with the communities. Sometimes it is very difficult for communities to meet the expectations of Housing, because it comes down to dollars in terms of the operation. Sometimes they want to do well. It just becomes very difficult for them to perform. It becomes an automatic you can’t have a negotiated contract in this community because it has been done before and it doesn’t do any good to people who want houses in the community. Sometimes it comes to a standstill.
That is what we don’t want to do. We want to build relationships with our community with Housing. Sometimes that is the only economic opportunity coming into the regions and communities. The people who come in and win the tendering process, especially if they come from outside of the community, outside the region, there are people coming from Hay River and Inuvik who are bidding in the Sahtu who are winning contracts, but the price is not very high to pay labour. They expect us to work for those types of dollars. We get complaints on both sides. On the other hand, they put houses up pretty fast. You are damned if you do and damned if you don’t. It is really difficult. At the end of the day, we want to see where our communities can benefit.
I think I will leave it at that. I know the Minister has other cases like this around the North. I guess what I want to look at is how do we do as much as we can to support the local businesses that have the capability, the resources.
I talked earlier about this young guy who is just finishing school. He wants to be an electrician. He is a really good electrician apprentice, if you could call it. He is working every day. He comes home and talks to his mom. The contractor is happy with him. He said this young guy could be a real good electrician if he can get to school if we had an apprenticeship program where he would work within the local housing association or somewhere in that area. These are things that we need to look at, I guess.
I know Housing has money just to build a house. I’m not too sure we have a real good comprehensive package that would create a career for some of these young workers in our communities such as drywalling, painting and framing. Right now the mandate is for the Minister to put houses on the ground. Whoever does them, you have to put houses on the ground. Sometimes the other mechanisms are not there to support some of the communities’ other initiatives that might be out of the mandate of the Housing Corporation. That is where MLAs get a lot of calls and saying, what can we do to help our communities? I will leave it at that, Mr. Chairman.
Mr. Chairman, obviously it would be our preference to use as much local labour as possible. Some contracts have been negotiated in the past. In some cases it may have been a project management issue where the project wasn’t done on a timely manner. Unfortunately, that hurts the local development corporation that they may have partnered up with. We continue to look on a case-by-case basis. They come forward, the good case where they may have different project management teams in place, then we would obviously have a look at it.
For those that want training, like the young person that you are speaking of, if they prove that they are quite capable workers, then it would be to the benefit of the general contractor who wins the contract to use local sub-trades where we can, and that would cut his costs down and would give people in the community an opportunity to work.
I say again, and I have said this publicly a few times, I am really encouraged by the capacity of a lot of our small town contractors to start bidding on some of the work. In one particular case, a gentleman asked for a negotiated contract, but they had the capacity to compete in an open market. For that reason we turned it down. The contract came out. This particular person won it and he won it for more than it would have been negotiated, so he obviously benefited from it.
We will still continue to try working as best we can with communities to try to utilize as much local as possible. There are some contractors from some of the larger centres that win some of these contracts, but the local contractors would have a preference to 5 percent or something like that. There is some built in, we call them, incentives but there are some built-in margins for local contractors that are bidding on work in the community. Thank you.
Thank you, Mr. McLeod. We are on page 5-47, executive. Mr. Bromley.
Thank you, Mr. Chairman. I refer to the activity description for the executive. The executive office works collaboratively with GNWT departments and agencies on government-wide strategies and numerous joint initiatives to further advance policies and programs to meet the needs of NWT residents. It also collaborates with community and government partners in addressing housing needs across the NWT.
Mr. Chair, the Centre for Northern Families houses some of the most desperate clients we have from across the NWT, yet they find themselves in a very dire financial situation threatening their viability. They provide a critical service, yet the Housing Corporation is charging them $54,000 per year and they have had to pay market rent for over a decade. There’s a severe disconnect here in the executive, Mr. Chair, a key NGO providing critical services that the Housing Corp is charging big money to for their basic space needs.
I’d like to know from the Minister -- and I note that this is not a mortgage that they’re paying, this is just a monthly lease payment -- given that they’ve already probably paid for the building at least once, and given the clear responsibility, can the Minister identify an opportunity to either offer this NGO a considerably reduced rent or simply sign the building over to them to help with their services and sustainability? Does this budget provide that flexibility? Mahsi.
Minister of Housing.
Mr. Chairman, the building which the Member speaks of, the folks that are leasing the building do have quite a good rate right now. They’re about $7.45 a square foot where the market is around $23. There’s still a fair amount of money that’s owing on the actual mortgage itself. This is one of the first times that I’ve had the opportunity to review this. I’ve just been getting an update on my briefing and my briefing notes. So it’s something that I’ll commit to the Member that I’ll have a discussion with my senior officials about. We’re looking at probably a half a million yet left owing on the building. So that would be quite a substantial sign over, if we were to consider it. But I will commit to the Member that I’ll have a sit down with the senior officials and discuss any ways possible that we can maybe help the group out.
I will point out there that they are, and always have been, very current with their lease obligations and understanding that they have some other expenses on top of that, but I’ve made the commitment to the Member, and I will have a discussion with senior officials and I’ll keep the Member up to date and seek his input. Thank you.
I appreciate the Minister’s commitment there very much. I’d like to again stress I read the department’s words, the Housing Corporation’s words that they’re going to work interdepartmentally. This is clearly an interdepartmental issue and I don’t think the Housing Corp should be expected to do this on their own. This should be a government-wide approach to resolve this situation and this would be a great way to do it. The Housing Corporation could provide the leadership. Mahsi.
I have committed to the Member that we’ll have the discussion and I’ll follow up with the officials on a number of other situations like this that we have out there. There’s opportunity to maybe have some discussions with my Cabinet colleagues and see if there are ways we can be a little more accommodating. I will commit to the Member that I’ll undertake that. Thank you.
Okay, we’re on page 5-47, executive, information item, operations expenditure summary. Agreed?
Agreed.
Moving on to page 5-49, information item, Mr. Bromley.
Thank you, Mr. Chair. I have one question on this page. I note the mortgage principal and interest payments are $9.065 million and I understand from the previous page, middle of the page, that this is on a mortgage of $56.3 million. Is that correct? Am I reading that correct? Thank you.
Mr. Anderson.
Thank you, Mr. Chairman. That is correct. The $9 million is the annual payment that we incur on the $56 million. Thank you.
I’m rather startled by that. Does the government get a very penalizing interest rate compared to any corporation or individual that I know of in Canada? I would say at a 6 percent interest rate we’d be looking at over $5 million per year on the principal. What could the interest rate possibly be to result in this situation, which means by 2038 we will have paid four times the value of the loan? Could I at least start with the interest rate? Thank you.
The interest rate on the various debts that we have range anywhere from about 2.78 percent all the way up to 19 percent on some of the projects that we have, but the important factor is that this payment is also cost shared by the federal government. So the net cost to the GNWT on the $9 million is about $1.4 million. The rest is funded through the federal government. Thank you.
That resolves any concerns I had. Thank you.
Thank you. Okay, we’re on page 5-49, information item, finance and infrastructure services, operations expenditure summary. Agreed?
Agreed.
