Mr. Bromley.
Thank you, Mr. Chair. I just wanted to do our annual check on the Deh Cho Bridge here. The interest is $8.166 million. I don’t see that changing over years. Is that just something we pay in perpetuity here? Thank you.
Thank you, Mr. Bromley. Mr. Kalgutkar.
Thank you, Mr. Chair. Unfortunately, we will be paying over the next 30 years. As I’ve stated before, the Deh Cho Bridge debt, our bond is based on real return bonds, so the amounts do change every fiscal year depending upon the rate of inflation. What’s in the budget in 2014-15 and in 2013-14, we’re not anticipating that significant of a change, so I just left the budget as is for 2014-15.
Again, just for my simplistic understanding here, we don’t anticipate the general amount to change over the course of those 35 years or whatever. Is that correct?
The payment on the Deh Cho Bridge debt is not anticipated to change over the next three or four years. As we start paying off the principal balance and as the rate of inflation increases, then the payment will likely start increasing as well. Thank you, Mr. Chair.
Thanks to Mr. Kalgutkar. I’m not even going to go there. Thank goodness my payments on the house go down when I pay them off. The Mackenzie Valley fibre optic link, I see we spent $7 million. Have we laid an inch of line yet? Thank you.
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chairman. No, we’re still looking at a completion date of the second quarter of 2016. We’re just in the process of going through the candidates that applied and made the cut through the request for proposals. Thank you.
Thank you. So we’ve spent $7 million thinking about it. Do we have an estimate yet on the total costs for this project?
Thank you. We’ve been actively pursuing this project since late in the 16th Assembly when we got the initial papers together, we made our initial contact with P3 Canada and we started building the case to, in fact, commit ourselves to this project. So in regards to the detail, I’ll just ask Mr. Kalgutkar to speak to that since this is his file and he’s leading the charge. Thank you.
Thank you, Minister Miltenberger. Mr. Kalgutkar.
Thank you, Mr. Chair. As Members are aware, we’re trying to procure this project under a P3 type procurement. So what the $7 million represents is to finance some of the pre-development costs that are usually associated with a P3 project in ’13-14, then once the project becomes operational in 2016 the $7 million will be used to finance the debt and other operating costs that has been incurred by the P3 partner. It’s what typically is called an availability payment to the P3 entity. At the same time, when the fibre is operational, that fiscal year we’ll have to book the capital costs of the fibre onto the GNWT books as well. So that should happen in the 2016-17 fiscal year. Thank you.
Thank you, Mr. Kalgutkar. Mr. Bromley.
Thanks for that information. I assume that means we don’t know what the cost of the project is, the total cost of the project. The Minister mentioned we’ve been working on this since the 16th. I don’t see any expenses listed in previous years, but perhaps we’ve already spent $10 million thinking about this project. So I’ll look forward to discussing the financial side of things on this project in committee I guess.
I see an interest expense listed of $4.8 million down from $5 million last year and it doesn’t say what that’s for. Probably I’m supposed to know, but I don’t. Thank you.
Thank you. Just to close the loop on the Mackenzie Valley fibre link, as the Minister referred to, we are in the procurement process right now and we should be at a stage to get indicative pricing on the project sometime within the next few weeks, and at that time we will check in with the Standing Committee on Priorities and Planning again just to give them an update of where we are with the project. Right now the apex of the project is estimated to be between $65 and $70 million, but we’ll have a better sense of what that is sometime in mid to late March and in accordance with our policy we’ll be back in front of committee to assess whether we continue or not.
In terms of the interest expense, that is related to our short-term interest expense. If Members recall, a couple of years ago we had a top-up to our short-term borrowing limit from $175 million to $275 million and that increases us to be consistent with that increase in that limit. Thank you.
Thanks for the additional information on the Mackenzie Valley fibre optic link. This is a project that I think everybody supports and we’d love to see it get done as expeditiously and efficiently as possible. Are we expecting to spend more this fiscal year once we do have all of this information in? I assume that would be through a supp. Thank you.
The $7 million that are representing the main estimates, is this the budget? We are obviously not spending to that level yet. Again, once we get a better sense of the indicative pricing on a project sometime in March and we are back in committee, we will have a much clearer picture of how much this project is going to cost us. At that time, we will make a decision whether to continue or not. Just to confirm, there will be no additional money requested this year. Thank you.
Thank you, Mr. Kalgutkar. Next I have Ms. Bisaro.
Thank you, Mr. Chair. I had a question with regards to interest expense as well. I thank Mr. Bromley for asking the initial one, but I guess I would like to know, considering that we are expecting a drop in our revenues, we keep talking about that, some $38 million, is that going to have an impact on our short-term borrowing? Is this figure for interest expense, the estimated amount; is it liable to be less than what we now anticipate the interest costs to be for 2014-15? Thank you.
Thank you, Ms. Bisaro. Mr. Kalgutkar.
Mr. Chair, the amount of our interest expense largely depends on when we enter into a cash deficit position. Currently, we are perpetually in a cash deficit position starting September. If that line crosses earlier, then we will obviously incur more interest costs, but the current forecasts are that we will likely be slightly under the $4.8 million. Thank you.
Mr. Chair, thanks to Mr. Kalgutkar for that. My other question has to do with the program review office. This is being or has been transferred, will be transferred into the Department of Finance from the Executive where it now sits. I read the description of the program review office on page 5-20. It doesn’t really read the way that I thought the program review office was described to us in the 16th Assembly. It seems to be less a section or a division to find efficiencies in government and more one which is going to sort of assist departments with evaluation and accountability and so on. I would like to know from the Minister, has there been a shift in the function of the program review office? Is it now more supportive of other departments in making sure that they have evaluations that go along with any new program and that they have evaluations that evaluate programs that are currently in place? Or does it still have the function and is it a large… I will leave it at that. I will ask the second question later. Thank you, Mr. Chair.
Thank you, Ms. Bisaro. Minister Miltenberger.
Mr. Chair, it has to do, and will continue to do, both its taking on more responsibility as it comes over to under the direct supervision in the Department of Finance. The program effectiveness, efficiencies are going to be critical pieces. We’re hard at work. One of the projects under refocusing government, for example, is also we are continuing to work away at red tape. We are getting requests from other departments to have programs reviewed, agencies reviewed for the effectiveness, organizational design, efficiencies. That work will continue. We are asked to review and are assisting reviewing parts of operations of government like Health and the issues related to pharmaceuticals. We have a whole range of interests and that program review office is involved, and will continue to be involved, and will be tied more closely with all the other working parts of Finance that are also involved to some degree or other in program effectiveness and efficiencies. Thank you.
Mr. Chair, thanks to the Minister for the explanation. I do have to say that I know that committee recommended that the program review office stay within the Executive. We didn’t feel that it should be transferred to the Department of Finance. I think there is a risk that it will lose its function of properly evaluating programs and services and that it will be used more as a tool from simply a financial standpoint. I think that’s a fairly large risk.
My second question has to do with the output, I guess, of this office. Certainly in the 16th Assembly, there were a number of programs that were reviewed and a number of reports that came from this particular office. We, as Members, were able to see them and read them and make some comment on them. Since I have been here in the 17th Assembly, I don’t believe we have had any reports for the program review office. We certainly heard that they’ve been working on this, that and the other thing. I don’t get a sense that there’s been any report or any review that has ever been finished.
I would like to know from the Minister if he can give us a bit of an idea as to what work the program review office has finished and what reports are available for us, as Members, to have a look at. Thank you.
Thank you, Ms. Bisaro. Mr. Kalgutkar.
Mr. Chair, the Member is right; there has been some work currently going on in the program review office. We did some work for the Sport North Rec under MACA. We’ve assisted the Department of ITI with facilitating the review of the Business Development Corporation. There is work that we are currently doing, including some major work like the government’s model of the Yellowknife Airport. Thank you, Mr. Chair.
So there is nothing which Members can see that that has been finalized to date, or is there? If there is, can we get it? Thank you.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Mr. Chairman. We will just confirm the commitment made from the Minister of ITI that ITI is currently finalizing their work on the report that was done on the BDIC. I recollect the Minister made a commitment to that. In due course, it will be shared with the committee and the recommendations and such reviewed and discussed for feedback. That is one of the ones that are most closely ready, I believe, to have that type of sharing. The other thing is we’ve provided the three-year proposed work plan looking for feedback and the Premier, as well, made a commitment in this House to sit down with committee to talk about how the next steps for the program review office looking at their feedback and how do we incorporate that into the operations of the program review office. Thank you.
Thanks to the Minister. My last question has to go with something which I think is being reviewed by the program review office, but I don’t think I heard it mentioned. If I did, I apologize for not listening properly. Is the program review office currently undertaking or doing a review on Aurora College student housing? Thank you.
Thank you, Ms. Bisaro. Mr. Kalgutkar.
Thank you, Mr. Chair. Yes, that is correct.
When might that be done? When could we expect to see the results of that review? Thank you.
The initial draft of the report is scheduled to be completed early in the spring of 2014, so we will probably anticipate it in May of 2014. Thank you.
Mr. Chair, thanks to the Minister and his officials. I am done.
Thank you, Ms. Bisaro. Next I have on the list Mr. Dolynny.
Thank you, Mr. Chair. I have a motion.
Go ahead, Mr. Dolynny.
Thank you, Mr. Chair. I move that the committee strongly recommends that the government undertake a comprehensive review of the form, function and operation of the program review office; and further, as part of the review process, that the government consult with Regular Members to allow an opportunity for a broader perspective on the effectiveness and efficiency of the office; and furthermore, that the government provide the results of the review of the Standing Committee on Government Operations prior to the review of the 2015-2016 Business Plan.
Thank you, Mr. Dolynny. The motion is in order. To the motion. Mr. Dolynny.
Thank you, Mr. Chair. I appreciate the ability to bring this motion forward. It should be no surprise to the Cabinet or the Premier that I’m doing that. I brought this issue up, and so have many other Members over the years, and I actually brought it up last week in the House.
The program review office has been considered important just as of late, and I’ll get to that in a second. In fact, I just want to backtrack a little bit here. In the Finance Minister’s opening budget address, I went back and looked through every line and not one line in there mentions the words program review office. It’s one of those things that is just embedded in the, I guess, moral fabric of what happens behind government closed doors and somehow Members are supposed to somehow understand that things are going on and at some point in time, I guess Members of this committee will be notified.
Ironically, in the last couple days and even mentioned in the Finance Minister’s opening address to the Department of Finance, the program review office is not mentioned one time, two times, but five times, so now all of a sudden it’s an important element of the overall functioning of Finance. All the while, I think it’s because I think the department is aware that the committee has raised some serious concerns and questions in the last couple days.
This office was established in 2008-2009, and it was specifically done for the government of the day to target program review. It had a very clear mandate. It was to determine effectiveness, make recommendations, eliminate, reduce and improve. These are values I stand by and I don’t think anyone in this room would differ on that. If you look further in the business plan of 2009-2010, it said – and it was put on-line and it’s available for everyone to go see it if they want to Google it here – that the monitoring and reporting was to be promised to be made available on-line. Well, that’s never happened. To this date, there is nothing that has ever been produced, published that the public actually has seen. This has been, in my mind, and I think I used the term in one of my Member’s statements, this is a private army of ombudsmen working and dedicated to our Cabinet, and now it’s being moved to the budget, treasury and debt management area.
We’ve heard the Minister of Finance indicate that there was a reaching out from the Premier to the Members of this committee. Well, may I remind Members of the House that reaching out occurred about a year ago, and it was asked for our input. Committee provided input. We had a list of priorities that we asked this program review office to undertake. We have not received one correspondence as of that request. This is not a current issue. This is something that is not being readily available to Members and least of all not being readily available to the public as it was stated publicly in earlier program review offerings.
The taxpayer has spent, since its inception, my rough calculation is about $4.5 million, and in my humble opinion, $4.5 million, I think, goes a long way in communities. I think you can do a lot with $4.5 million in communities. You know what? I believe that the savings that this program review office could undertake, in my humble opinion, to be found within the respected departments themselves and financed accordingly.
Why do we need a separate office that works, really, undercover? I’ll use the cover of almost secrecy, because we don’t know what’s going on. I’ve learned more about the program review office in the last 24 hours than I did in the last 12 months. That should say something about this office, and it should be a concern to everyone in this House, and it should be a wakeup call for Cabinet and it should be a wakeup call for the Department of Finance. This is a consensus government. This is not party politics, and if there is an office that is supposed to work for the people, then why aren’t we sharing this information?
Transparency, accountability and protection of the public purse, those are just words, but they actually have meaning, and they have meaning to many of us on this side of the House. I believe this program review office really, I guess, touches on some of those areas in a way to which I think it deserves a motion because of the fact that we’re not seeing transparency, not seeing accountability, and I do question our public purse if it’s value added and money well spent.
To be perfectly honest, I would have a better inclination to actually delete this completely out of the budget. If I had the opportunity to, I would, but I know I probably didn’t have the strength of the committee on that. But I just want to let Cabinet know that this is something that I wish I could be doing right now, is deleting this right out of the budget, and no disrespect to the people working there. I even know people that work in that office, and that it takes a lot of work to bring to the House those types of comments, especially when it involves people, but I’m talking about protecting of the public purse. Sometimes you have to rise to the occasion as a legislator, and I think this motion does speak to this.
I might have other Members weighing in on this, but clearly this is a very strongly worded motion. Hopefully that gets the attention that it does deserve and, hopefully, we see some efficiencies in design, and I’m expecting that we see resolve.
Thank you, Mr. Dolynny. To the motion. Mr. Hawkins.
Thank you, Mr. Chairman. I share much of the concerns raised by Member Dolynny and thank him for the opportunity to bring the motion forward to talk about it.
I was part of the group in 2007 that was enthusiastically behind this initiative of the program review office and was genuinely optimistic that it would find savings, and it would be designed in a manner to look at savings in sort of a microscopic type of way, forensic, let’s go through these things, what does this mean, what does it affect, how does it have an impact on other things. Once that type of issue and question was qualified, and certainly quantified, it would be brought to the political machinery to just now say, look, here are your choices: red pill or blue pill. This one leads you in one direction and this one sends you right back to where you are. Quite frankly, I was kind of hoping that we’d get those types of things, but we never really did. I never felt that from its inception that it did that.
I think in a lot of ways what it did was it found pet projects to work on, and I agree that they’re great philosophical, political questions to look at, but I think at the end of the day it didn’t really look at trying to chew the costs of government on, ask the question why if we had this policy in place for 20 years and by golly, we just keep renewing it because, and because was sometimes the worst answer, but that seems to be why we’re doing stuff. I mean, I’ve had good, robust discussions with Minister Miltenberger about how do we trim things in government and all we do is we add, we add, we add, and he teases Members back about wanting more, and you know, that’s true too. But, like, when do we look at reducing programs and when do we talk about them and how do we talk about them? We never have that type of discussion, and that, in my view, is what the program review office was all about. It was about to ask those questions by saying, is this the policy our government wants to continue to follow? Is this the road that we need to be on?
I think that this program review office, we need to be asking ourselves, is it doing what we originally wanted it to do? I’m not sure it is. I think that it’s sort of down-periscope-approach on solving problems, I mean, they need to come to the surface once in a while, come to committee, and I’d say come to committee and get committee’s direction. I understand committee is a challenging sort of beast in itself, 11 opinions, different ways, and oddly enough, even though it’s 11 members, you probably leave with 12 different directions.
It is a challenge; I fully recognize that. But frankly, I never felt that we’re getting the value of this office in the direction we wanted, and I can tell you, we’re doing PTR, and some will say, well, geez, that came out of the program review office. Well, I can tell you, many Members never felt good about that from the start.
I can tell you that there was a robust thrust against the idea about the building downtown. It became a challenge. It just seems like in the end they just do what they want at the direction of Cabinet, and I’m not convinced a lot of this stuff that they’re looking at are really about the core intent, so I think it really needs a real review as to why it’s there, as to have that heart to heart and ask ourselves, are these people in this program better served somewhere else, and only a review will be able to do that.
I’d like to leave my colleagues guessing which way I’m going to vote, so we’ll wait for the final count on a recorded vote, obviously. Thank you.
Thank you, Mr. Hawkins. Next I have Mrs. Groenewegen.
Thank you, Mr. Chairman. I’d like to thank Mr. Dolynny for bringing this motion forward. Had it been a motion to delete the program review office I would have supported it. I will support this one, though, which is an interim measure, I guess, to look at what the program review office actually does.
I also was part of the Regular Members’ committee who sat down at the beginning of the 16th Assembly and thought there must be some areas where we could improve on the efficiency, eliminate redundancy and duplication. We thought there were places to find money in the system. That was the intent behind the program review office. We thought of all kinds of ideas. We had a big, long list of them. But the legacy of the program review office is a $40 million office building in downtown Yellowknife, at a time when this government espouses and says they’re going to look at decentralization. There are private buildings that have been built as well. I think of another one downtown that as soon as it was built it was filled up. It’s like build it and they will come.
Anyway, I’m not just unhappy about that. I’m just unhappy with… I don’t see the program review office actually looking in the government departments.
When somebody said they’ve set up frameworks within the departments to measure outcomes, hey, that’s bureaucratic stuff. I don’t know about that. I don’t know about that kind of stuff. I mean, that’s not where I live. Where I live is things like we suggested like how many NorthwesTel phone lines and fax lines are in the walls of government offices and cubicles that have been rearranged and we’re still paying a monthly fee. Well, that was one small thing, but I was predicting it would result in tens of thousands of savings. I don’t know what the actual outcome of that was. But I thought they would be proactive. I thought the program review office would follow the instructions of the political will of the day and actually look proactively for areas that we could…
We don’t have that opportunity as Regular Members. We’re kind of on the outside looking in. We approve a budget, but some of it is in very, very large amounts, very large line items, very large categories of money that we’re voting. We don’t actually get to see what’s going on a lot of time at the levels of the bureaucracy. I thought that was what the program review office was about. I supported it and I haven’t seen a lot of that.
I think that the PTR recommendations could have been done in house by Education. I think that there’s lots of capacity in departments themselves, that if we were to get that specific and say, okay, look at this or look at that, I think departments could handle that themselves, so one wonders why there is a separate shop for a program review office at this time.
Now, do I think there are positions in the government that if we knew about every single one of them we might wonder about, that we might question that we’re spending money on? Yes, probably, but this is actually a visible group. This is actually a visible shop that we can see this is how much it costs; this is how many employees are working in this area.
I’m sure there are other places that there could be money saved, as well, but this is obviously not the shop that’s going to be telling us about that. They’re not going to be coming forward and telling us, so I don’t know what our actual window into some of these areas where there may be savings, I don’t know what it is for us on this side of the House. Maybe some of the passive restraint direction that’s going to be given by the Finance Minister to departments, maybe that is some area where they will find ways to save money in the departments; I don’t know. But I think as an interim, at the very least, if we’re not going to delete the program review office, I’m saying let’s give it a chance, let’s review it, let’s hear the case for having it, for its existence for the investment that we make in it and then I will be all ears, listening to what that case is.
So, I think this is what this motion is about here today, it’s kind of a softened we’re open to hear, maybe there needs to be some more direction provided. I don’t know if the program review office is out there on their own without maybe the kind of specific direction that they had initially that they may still need. I will be listening. I will genuinely be listening to hear what it is they do, but I do support this motion. Thank you, Mr. Chairman.
Thank you, Mrs. Groenewegen. Next on my list is Mr. Moses.
Thank you, Mr. Chair. Although I don’t have the whole history of this program review office, I think that you’ve heard today from Members of the 16th Assembly that the initial attempts at putting this program review office in and the reasons behind it were not fully met. However, the history that I do have, just after we got elected to this House, was in February of 2012 we had a presentation from the Executive and there was a lot of cost savings, in the amount of, I believe, $17 million. The moment that committee made a recommendation to government to do anything to this cost savings or even reallocate some of those cost savings into another program, which we start seeing these budgets now and that’s early childhood development, government didn’t want to make those changes and they fought against it. We got it done and now we’re seeing some of these things moving forward.
The history that I have with it, we try to make the recommendations. We’ve even heard that what good is having a program review office if we’re not going to follow up on the recommendations. Well, when we try to do them, government puts a halt to that. We’re not seeing any reports coming out of this program review office. You can see the frustrations that Members of the 16th Assembly have on this side of the House.
What we see when we go through the main estimates, we see other programs and services that need more support. We have small communities that need a little more support, or we have programs and services right now that do need to be enhanced, while we have a service department out there that isn’t holding up their end of the bargain. Even if we had that report, that kind of information or even yearly updates, that might have a change in here.
In terms of deleting it, I was a little cautious on going that far. I was hoping to give the office another chance. I think we’re at a point now where we’re hearing all this information about fiscal responsibility and we’re hearing things about passive restraint. In fact, I think the departments might be doing a good job in that themselves, looking at ways they can save dollars. In that sense alone, I don’t know why we need the program review office.
We also have the Auditor General. When we give recommendations to the Auditor General from the Government Operations committee, they look at that and move forward with it.
As one of my colleagues said earlier, we did give recommendations from this committee for the program review office to get some areas of interest and I don’t believe we had any correspondence back.
From my little history, I think dollars here could be spent in other areas, especially all the work that we’ve been doing, all the briefings that we’ve getting from Education, Culture and Employment, from Health and Social Services, from all departments. I think that moving forward this is a very strong recommendation toward government and I will be supporting the motion. It’s about making decisions in this House and sometimes they are tough decisions and we have to do what we think is best for the public purse and the people that put us in here and expect us to spend the dollars in the best way possible.
With that, Mr. Chair, I will be supporting the motion. Thank you.
