Debates of March 1, 2006 (day 39)

Thank you, Mr. Chair. Mr. Chair, the Northern Strategy money that we’re flowing out to communities for their use, we have set some guidelines as to impact on future expense by government. I gave them a fair bit of latitude as to what they have selected as being important to them and where they would identify this money for, what they would identify the money for. We’ve got a number of examples of projects that have rolled in. For example, on the Hay River Reserve, they are looking at an arbour, a cultural camp, recreation equipment, and an adult education centre. They are looking to expand their day care and come up with a community comprehensive community plan, work on their commercial cooking facilities and some training. Fort McPherson is looking at expansion of their community complex as well as government offices and youth elders’ interpretive centre. In Whati, they are looking at things like community capacity building, hydro project work, youth centre, and boardroom equipment. In Gameti, they are looking at design and build of some traditional cabins, convert an old gym into a community workshop type of work. Wrigley is looking at equipment itself, repair equipment, fuel dispensers for jet B fuel, a possible sawmill and a community hall, some money towards that. So there is an idea of where communities are putting some money. As those plans roll in, they will provide us with those types of details. Thank you.

Thank you, Mr. Roland. Page 10, Municipal and Community Affairs, operations expenditures, community government, $15.090 million.

Agreed.

Total department, special warrants, $120,000.

Agreed.

Total department, not previously authorized, $20.462 million.

Agreed.

Page 11, Public Works and Services, operations expenditures, asset management, not previously authorized, $598,000. Mr. Braden.

Mr. Chair, I think this is the first time in this bill that the information comes up about the rise in fuel prices and the impact it is having on our current year’s budget. People will remember, with some horror and trepidation, Mr. Chair, the way fuel prices skyrocketed last summer and fall. We are now seeing the impact of it on our operations. I believe this whole supp here, the cumulative impact on various departments is $4.3 million in unforeseen fuel costs. In this particular page, $281,000 attributed to or connected with Public Works and Services’ issues.

Mr. Chair, I have several questions in this area. To begin with, the information provided says that this is a request for funding resulting from the rise in fuel prices in the NWT since 2003. How is it, Mr. Chair, if we are looking at a supp for the budget of the fiscal year 2005-06, we are going back three fiscal years here, Mr. Chair?

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chair. Mr. Chair, in the area of the fuel prices in the NWT, the Member is correct; the cumulative impact of this supplementary appropriation in fuel prices is almost $4.3 million. The area where we talk about impact from 2003 is we haven’t given departments an ongoing increase, so what we have dealt with them in other ways is to give them a one-time offset or a partial offset to that, but not have adjusted budgets since 2003. We did a price comparison since the year 2003 to 2005-06 and now, measuring that impact, we have agreed that we will have budgets adjusted to match the 2005 numbers. So what we are seeing is, because even though there was some offset in the past, it was one time and it didn’t adjust their budgets. It gave them a bit of relief in that area. So what we have had to do now is to actually make the increase increment from the price of fuel back to 2003 to what it is now in this supp going forward, 2005. We have had to make those adjustments for the departments. Thank you.

Thank you, Mr. Minister. Mr. Braden.

Thank you, Mr. Chair. Mr. Chair, what sort of prevented or stopped the Minister or the government from making actual adjustments and putting appropriate fuel cost increments into the budgets? It seems unusual that we let something lag for as much as three years making sort of stopgap corrections for here and there, but for three years, Mr. Chair, we just sort of let this one slosh around and we are now finally actually making a true adjustment. It seems a little unusual from the fiscal policy point of view or fiscal prudence, Mr. Chair.

Thank you, Mr. Braden. Mr. Minister, please.

Thank you, Mr. Chairman. Mr. Chairman, as I stated earlier, we did provide departments relief through previous supplementary appropriations to cover their increased costs for I guess a certain time period where we’d come to a position where we had to increase our budgets without adjusting the long term. It was felt at the time that because of the volatility of the market, that we had to give it some time to see if, in fact, things were going to continue to climb or settle down. As we see it now, the prices did get very high there for a bit and have come down a certain degree, but we feel, at this point, it will remain at a higher level than was previously adjusted for and we’ve now come forward making the request to go forward on this.

I guess, as well, we should indicate in this area what we’ve done is we’re adjusting the budgets for departments. We’ve given them this year’s requests, but we’ve advised departments that they will get 50 percent of this increase going into the next budget year, but we expect them to make some changes in their operations around the use of energy to make up the rest of the difference. Thank you.

Thank you, Mr. Minister. Anything further, Mr. Braden?

Thank you, Mr. Chairman. Okay, I think I have a handle. So it was the sort of the price of volatility. I like what I just heard, Mr. Chairman, in that departments have been extended, if you will, half of the forecasted increment, but some obligation has been put on them to find ways to avoid or replace the other half. I like that. That’s putting some responsibility on managers toward our energy agenda.

Mr. Chairman, when it comes to dealing with the fuel and the volatility of it, we just went through a bill earlier in this session directed toward the petroleum products division, which would enable them to do some, I don’t know if I’ve got the right words here, some forward purchasing, some price hedging, and enable us to get some more control over the cost of fuel products that we put into our PPD communities. Do we have any similar mechanism whereby, say, the district education authority operating under our watch can cut a fuel supply deal, a forward looking fuel supply deal and lock some prices in? I guess what I’m asking for here is, are we really using every tool in our toolkit to get some predictability to use forward purchasing mechanisms and become more aggressive on our fuel pricing or our fuel cost issues, Mr. Chairman? Are we doing everything that we can here, Mr. Chairman?

Thank you, Mr. Braden. Minister Roland.

Thank you, Mr. Chairman. Mr. Chairman, as the Member pointed out, within this sitting we just passed a bill that would allow the petroleum products division within Public Works and Services to buy futures, as we would call them I guess, price hedging on the futures market on the commodities we need for our communities. That does give us, I guess, more tools in our toolbox to be able to try and lessen the impact of increased costs for fuel in the communities served by the petroleum products division. There is some risk in that. For example, if we just use the previous year’s occurrence, the price for a lot of our products, we know the trend for when increased prices come in and when they start to settle back down again. But this last year that we operated in and last summer we saw a lot of spikes and increases when traditionally it was fairly quiet. If we’d bought at a time when prior to that, we probably would have been pretty good. We would be okay in that area, but if we’d bought just as the market was climbing, and as we’ve seen now the market is starting to come back down, then we’d be on the other side of the equation. So it is a further tool. There is some risk to it and we’re going to have to ensure as we prepare for our next resupply situation that we’re watching the market to see if in fact there’s a trend going one way or another, and if it would be wise to buy futures in that time, or would it be wise just to wait until we get closer to the date. I mean, there’s some flexibility in the timelines we can do this. It’s a matter of months to -- I could be corrected on this -- 18 months. Thank you.

Thank you, Minister Roland. Mr. Braden, please.

Thank you. So say for our regular government departments, the housing authority through ECE, through schools, hospitals, et cetera, in order to use this futures option, would we also have to pass more legislation or other legislation enabling those agencies to do that on our behalf, or as we just did with PPD? How would that work, Mr. Chairman?

Thank you, Mr. Braden. Minister Roland, please.

Thank you, Mr. Chairman. Mr. Chairman, the reference to the previous bill might have some impact on us. It wouldn’t be in those communities that are served by the petroleum products division. Where we get our fuel and bring it into the community that would have an impact on our schools and our health facilities in a sense that if we’ve got a better price, then that affects that community. Where we are in the communities that are serviced by the private sector, that would have no impact. Thank you

Thank you, Minister Roland. Page 11, Public Works, operations expenditures, asset management, $598,000, total department, $598,000. Agreed?

Agreed.

Page 12, Health and Social Services, operations expenditures, health services programs, not previously authorized, $716,000, community health programs, $752,000, total department, $1.468 million. Mr. Braden, please.

Mr. Chairman, under community health programs just shy of a half million dollars is identified for contributions to additional costs associated with the increased number of children receiving services under the Child and Family Services Act and to providing services for children in southern facilities due to an increase in the number of placements. This is quite a…It’s a lot of money on its own and I’m wondering if the Minister could give us some idea in terms of percentage or ratio this, as I say, almost half a million dollars, how much of an increment is this in what was forecasted for this particular area here, Mr. Chairman?

Thank you, Mr. Braden. Minister Roland, please.

Thank you, Mr. Chairman. Our information was total area including all health authorities and the department falls in the area of $6.7 million. Thank you.

Thank you, Minister. Mr. Braden.

Okay, thank you, Mr. Chairman. So a bit under 10 percent. I guess I’m wondering what is the cause of this? Is this a trend? You know, when you look at the dollar amount here, a half a million dollars worth of additional un-forecasted services for children in care, it seems to me that it represents a lot of kids having difficulty. What’s the cause? Is this a trend? Are we going to be seeing continued sustained increases in this area? Can the Minister shed some light on what’s causing this, Mr. Chairman?

Thank you, Mr. Braden. Mr. Voytilla, please.

Thank you, Mr. Chairman. There’s two items here that the Member is referring to. One is just a number of children in care increasing, which is the $240,000, and then there’s $227,000 for the costs associated with specific children placed in southern placements. The southern placements of 227, there’s actually a specific to children that were placed this year and the funding increase associated with that. Overall, $240,000 for children in care pertains to an increasing trend in the number of the children in care and the costs of dealing with that. Based on the information that the departments have provided us about the growth rate, the growth rate in the last number of years has been significant. In 2002-03 there was a total of 911 children receiving services. In 2003-04 it was 935. In 2004-05 it was 1,009. So what we’re seeing is a trend increase in the number of children in care and that’s leading to these increased costs.

Thank you, Mr. Voytilla. Mr. Braden.

Mr. Chairman, okay, so we have some explanation of the numbers here is the cause. What’s going on in communities, in families, in societies, or is it in the way we are enforcing or intervening? Do we have new laws or something that’s causing this surge? That’s what I’d like to get a little bit of understanding of, Mr. Chairman.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, the Minister of Health and Social Services may be able to provide more of that background as to the specific causes, or at least the best estimate under the department’s case, the causes for these type of increases. Thank you.

Thank you, Minister Roland. Minister Miltenberger.

Thank you, Mr. Chairman. Mr. Chairman, the fundamental issue, of course, is children in need of service and often protection. It’s done in a number of ways. The laws were changed a number of years ago so that it didn’t always require the children be taken into care, but there is foster care arrangements, there’s support and services to parents and families while a child is in care, there’s just general services to children, youth and their families if their child requires service but remains in the family home, there’s adoption subsidies to support special needs of a child who was in permanent custody of the director of family and children services, which is the special needs children. So there’s a number of voluntary support agreements trying to assist parents, as well, as they deal with children that may have behavioural problems or some other challenges that they’re trying to deal with. Thank you.

Thank you, Minister Miltenberger. Mr. Braden.

Thank you, Mr. Chair. That’s all.

Thank you, Mr. Braden. I’m on page 12, Health and Social Services, operations expenditures, health services programs, not previously authorized, $716,000, community health programs, not previously authorized, $752,000, total department, $1.468 million. Agreed?

Agreed.

Thank you. Page 13, Department of Justice, operations expenditures, community justice and corrections, not previously authorized, $464,000, total department, $464,000. Agreed?

Agreed.

Thank you. Page 14, NWT Housing Corporation, operations expenditures, NWT Housing Corporation, not previously authorized, $56,000, total department, $56,000.

Agreed.

Thank you. Page 15, Education, Culture and Employment, operations expenditures, education and culture, not previously authorized, $1.874 million, income security, $2.749 million, total department, $4.623 million.

Agreed.

Thank you. Page 16, Department of Transportation, operations expenditures, airports, not previously authorized, $721,000, highways, $658,000, page 17, continued, ferries, not previously authorized, $565,000, total department, $1.944 million.