Undoubtedly the reason this Minister is such a great Finance Minister. The federal government has committed 60 percent of the project, 67 percent, $200 million. Obviously that’s not full cost. In fact, the federal government has said explicitly that anything beyond this must fully be paid for by GNWT. Am I correct in assuming that if we are $40 million or $50 million or $100 million over, that would be fully the responsibility of the GNWT?
The $200 million contribution by the federal government is their final contribution to this project. It will be up to us to manage the project successfully with our investment to hit the $299 million.
We know that the Minister of Transportation has said this project would not proceed if there was anything less than 75 percent. Where does that put us?
Thank you, Mr. Bromley. Mr. Ramsay.
Thank you, Madam Chair. The fact is that we have the additional $50 million which puts their contribution to $200 million. It isn’t quite 75 percent as we had expected. It’s 67 percent. At the end of the day, the Members of this House will decide whether or not the project is to proceed. That is where that is at.
I suspect we can conclude a little more than that, but I’ll leave it at that. I would say, also, that clearly is not 67 percent. It’s $200 million. In fact, as the costs go up, the proportion paid for by the Government of Canada goes down, despite the fact that the Minister indicated that the project would not proceed unless it was 75 percent. That’s an observation, but a concerning one. Is there not a policy, could I ask the Minister of Finance, that we’ve generally adhered to in the past where the Government of Canada in fact pays for the road building and GNWT pays and looks after maintenance of them?
Thank you, Mr. Bromley. Mr. Miltenberger.
Thank you, Madam Chair. There is no policy. In the days of yore when the federal government was the major player on the scene, of course they had much greater responsibility. There is no formal policy that dictates the federal government has some type of responsibility to cover 100 percent of new roads.
Thank you, Mr. Miltenberger. I haven’t heard that saying in a while, in the days of yore. Mr. Bromley.
Thank you, Madam Chair. I believe that’s true. It was a policy in the days of yore. It certainly is not any longer. What concerns me is, as time goes by, the proportion being paid for by the federal government declines steadily. Of course, this is all within context. I’m not just complaining about the cost of the road or anything. This is within the context of the other priorities that we have and the infrastructure deficit that we’re building as we choose to pour it all into this one project.
The Minister has noted that he thinks we can afford this. We are making decisions for the 17th Assembly. Unfortunately, we are also making decisions for the 18th Assembly here, just as the 16th Assembly pushed us into increased debt, albeit with a little bit of a raised debt limit for the 17th Assembly. This is an uncomfortable trend to see. I again just don’t generally support that approach of this Minister of Finance who has been common to the two.
I just want to comment, too, on the geotech work. I understand it is to focus on the cost of the bridges as well as the proving up, hopefully once and for all, the gravel resources. How many bridges and water crossings are we talking about?
Thank you, Mr. Bromley. Minister Miltenberger.
First let me just make a quick comment, if I may, in response to the comments about the fiscal and financial health of the Government of the Northwest Territories.
We’re one of the best run jurisdictions in the country, top three. We have an Aa1 credit rating. We have one of the best debt-to-GDP ratios, revenue-to-interest ratios in the country. We are pushing ourselves fiscally because we have a lot of things to do as a territory and we’re not prepared to sit back and be overly cautious. We’re careful and prudent, but we know we have to do things. As a government, we are managing ourselves, which is why we have an $800 million borrowing limit. We have an annual GDP of over $4 billion a year, almost $5 billion.
For the Member to say that we’re not well managed financially by this Legislature and by the government is inaccurate, and I will assume that his comment about what a good Finance Minister I was previously was, the sincerity metre didn’t register very highly. So I won’t take that as something that I’d feel all warm and fuzzy about. I’ll ask Mr. Neudorf if he would speak specifically to the number of bridges and crossings.
Thank you, Minister Miltenberger. Mr. Neudorf.
Thank you, Madam Chair. The work we’ve done to date indicates that there would be up to 63 stream/river crossings of the highway. The majority of those would be through culverts, so 53 of the 63 would be a culvert, you know, a metre and a half all the way up to five-metre diameter culverts. That would leave about 10 bridges, and again, eight of those short-span, one long-span, and then the most significant would be a crossing of Hans Creek, about a 100-metre-long bridge.
Thank you, Mr. Neudorf. Mr. Bromley.
Obviously, for a project of this magnitude, significant work has to be done there. Just in response to the Minister’s response, I didn’t say it was bad. I said the trend of increasing debt is not something I’m happy with. The decisions that are being made that end up with that result.
I’d like to comment a little bit on the dreams, you know, that we want to be doing things. In fact, that’s probably the biggest source of my concerns, is that I am totally convinced we could be doing things, and I’m totally convinced we have the capacity within our people and the resources to do them. I’m wondering, what have we looked at in terms of real economic development, development to develop the economy in this region, which I’d dearly love to see, that generates lasting jobs rather than, according to the government, 42 long-term jobs over 45 years and the loss of thousands of person years in relation to oil and gas development. What work have we done to actually develop the economy in these regions? This area, which is a fantastic area in terms of its people – it’s spectacular – its potential in many ways. What have we done to shift away from these large, costly megaprojects and actually do things that really do help the people and provide the long-term, sort of, economic development that we’d like to see?
Thank you, Mr. Bromley. Now we are really straying even from talking specifically about this highway. I’ll let the Minister respond, though.
Madam Chair, once again, the debate by Members that live in the regions where they have just about all their infrastructure needs met and asking people in the northern part of the territory and the Beaufort-Delta, why do you need a road, it’s a sinkhole, it’s not worth investing up there. That, as Northerners, somehow we do not consider you worthy putting in things that we take for granted, the road, the bridge, the Ingraham Trail, the bypass road. That type of infrastructure which we take for granted here somehow becomes a megaproject that’s not economically viable in the northern part of the Territories. It is something I can’t get my mind around to accept as a valid issue.
We are going to spend about $60 million to $80 million. Let’s talk about the fibre optic line. It’s going to make Inuvik one of two places in the world that’s going to do remote sensing, that we know in Kiruna, Sweden, it’s built up an industry in Kiruna worth about $100 million to $150 million a year. We are working on a joint venture structure with the Aboriginal governments. That project is underway and will be well along construction in the life of this Assembly. We’re going to continue to do all the other work that we do supporting local business. We will see what happens with the resource sector. There are plenty of other opportunities in the region but they need infrastructure, which gets us back to roads.
Thank you, Minister Miltenberger. Next I have Mr. Dolynny.
Thank you, Madam Chair. Again, since we’ve opened up this debate beyond the $5 million, I’m going to spearhead my conversation on that premise as well.
I’ve got to give a lot of credit to IRC and the people of Beaufort-Delta for putting on a very good program bringing this project to light. They were very well organized, and I believe that they deserve a lot of credit for bringing it forward. Where I find a problem is I don’t think our government was in line with the project. By that I mean the fact that we’ve asked and always asked from a Minister, whether it’s the Minister of Finance, the Minister of Transportation, to be totally upfront about this project right from the get-go. Show us the numbers. Show us the math. Show us the risk. Not only us, but show the public that information, as well, so that we can make an informed decision when the time comes.
I’m going to read you a passage very quickly here from March 5, 2013, from Minister Ramsay, and it says: “It is this Assembly that is going to ultimately make the decision on whether the project moves forward or not. All this information is going to be made available to both Members and the public.”
Members have received information, but what made it very difficult was we were hampered, we were put on gag order that we couldn’t share this information, not even on the floor of the House. We couldn’t even go outside the floor of the House to talk about this project, and it’s a great project. As I said, a lot of hard work has gone on behind the scenes and I pass a lot of credit for all the people behind the scenes in making this happen.
It comes down to a couple of areas, and we talked a bit about the math that we had before us. Again, depending how you look at it, if my calculations are accurate, we’re on the hook for $99 million, but we’ve already put $12 million, so we’re in it for $111 million. If you put that in the premise of the big picture, that’s 35.7 percent, and the feds are in it for 64.3 percent. Those are hard numbers. We can dispute it as much as we want, but we’re not at 75/25, that’s for sure. And you know what? That’s the numbers. And I can go forward with that, as long as we know that there are numbers out there and that the public hears those numbers.
The other part of this exercise is the fact that the public has not seen the risk of this project, and I want to take a minute here to talk about that. I brought this up in the Committee of the Whole deliberation last week, and I told the Minister of Transportation of the day, if I had to pull up, and I did pull up in front of him the Department of Transportation website. The last information that was given to the public that was published on their website was May of 2011. That’s 22 months old. Since that time, since last week the Department of Transportation added the EIRB final report, which it says January 2013, but that was just added there. The public has not seen anything for 22 months.
Now, there may have been discussion in here, and there have been reports in the media, but this is the Department of Transportation telling the public what’s going on in this project, and I scathed the department and the government here for not sharing when they could have been sharing all along. Now we’re faced with a dilemma of having to authorize $5 million, and on top of that, I’m sure we’re going to be talking some other contributions of a significant capacity later on today, and the public still does not know the risk.
My first questions are about the risk. Can the department indicate to me what are the major risks? Again, in terms of categories of risk, I’ve talked about a risk matrix. I can’t talk about a document that’s not tabled. What I’m going to talk about is the document that I have in front of me here, which makes it very difficult, but I’m going to do that. There are risks to this project, and I think people need to know what those risks are. My question to the Minister here is: How many of those are considered very high risks? How many high risks do we have in this project? Of the total risks that were assigned to this project, how many are of very high risk?
Thank you, Mr. Dolynny. Minister Miltenberger.
Thank you, Madam Chair. First, if I may, before I turn it over to Mr. Neudorf, the EIRB website contains all the information that the Member said was lacking from the Transportation website. The Transportation website had a link to the EIRB. We made a commitment to providing a plain language summary of the risk matrix. We’ve done that. We were asked a couple of hours ago. We’ve had staff working hard to get that done. That will be tabled tomorrow. The committee has it before them in committee so we could have this fulsome discussion. In regard to the amount of high risk issues, I’ll ask Mr. Neudorf to respond.
Thank you, Minister Miltenberger. Mr. Neudorf.
Thank you, Madam Chair. As the Minister had indicated, we have had a risk matrix and we’ve had it for a while. It is a living document, one that we will be reviewing very regularly and updating it as additional information comes in and as the project moves forward. There are 40-some different risk categories that are looked at in the matrix and a number of them are high risk. We look at both the impact of that and then the level of the risk, so how likely it is to occur, and if it does occur, what’s the potential impact. You put those two numbers together and we come up with an evaluation to determine what might be high risk. Thank you, Madam Chair.
Thank you, Mr. Neudorf. Mr. Dolynny.
Thank you, Madam Chair. We seem to be speaking in general terms here and I guess I’ll ask a question. If there were 41 risks out there in this project, and there were 18 of those risks that were deemed extremely high, is that a concern for a department if that is indeed a hypothetical ratio? Would 18 out of 41 be considered a problematic ratio moving forward? Thank you, Madam Chair.
Thank you, Mr. Dolynny. Minister Miltenberger.
Thank you, Madam Chair. This is a complex, large-scale project over very challenging terrain. There are a lot of risks and we’re concerned about all of them. Our job is to identify them, mitigate them, manage our way through them, and take all the steps necessary in getting the project done within budget to be aware of what those risks are so that we can move forward in a careful, planned way. I’ll ask the deputy if he wants to add anything further.
Thank you, Mr. Miltenberger. Mr. Neudorf, I didn’t get if you wanted to add anything. Okay, thank you. Mr. Dolynny, please.
Thank you, Madam Chair. I guess to put this on a comparison level of large-scale projects that we do know of, and this goes back to the Auditor General of Canada who did an evaluation of the Deh Cho Bridge and indicated that there were some serious gaps in the risk matrix of that project. So I’m using that as a comparable tool. Is 43 percent of high risk moving forward on the project deemed a concern for the department to move forward with? Is that a reasonable question?
Thank you, Mr. Dolynny. Minister Miltenberger.
Thank you, Madam Chair. There is no set ratio. What is set is that there’s a project that we’re proposing to build from Tuk to Inuvik over challenging terrain. As we go forward, we identify the risks and we mitigate them. The $299 million and the contingency have given us room to capture that and, we believe, allow us to proceed with the project and bring it in on budget. Thank you.
Well, I guess we didn’t get a response to that. I guess we’ll ask that question once – if I’m hearing correctly – this information is tabled. Unfortunately, this information is going to be tabled after the requirement of a decision to be made on the floor of the House before then. It’s very, very unfortunate.
I’m going to use the last remaining of my time to once again indicate my dismay and my dissatisfaction of, being a Member of this committee, not being able to have this information tabled well in advance. This information could have been available to public. It could have been available to Members to be able to discuss this with constituents, with elected officials, and with First Nations governments and with many different stakeholders. Unfortunately, this information was only privy to the hands of Members. Whenever information was brought forward to the House, it was deemed confidential or deemed hypothetical in nature. I just don’t understand, given the fact that we had a golden opportunity to be transparent, to be upfront and to be forward-minded with a project of this magnitude, why this government, why this department, why also the Department of Finance chose not to be forthcoming on this project with the numbers. It would have saved a lot of time, energy and concern on behalf of Members. Thank you, Madam Chair. I appreciate allowing the last few seconds as a comment. Thank you very much.
Thank you, Mr. Dolynny. Next on my list I have Mr. Bromley.
Thank you, Madam Chair. I just want to pick up where I left off there. The Minister was claiming that I said the people of this region were not worthy, and various other twists to my words. I thought I remembered saying the people were spectacular and the region was spectacular, and they have huge capacity up there if they are involved in real economic development. It does seem to be a feature of this government that they often twist words and make our comments sound as if we have no trust in our people and stuff like this, but I do want to point that out, that in fact I was saying that the people were indeed worthy, and worthy of better than a road like this. That is just an aside there.
The maintenance costs are something again that has been a concern. We have got some information on that, but there didn’t seem to be understanding that, in fact, the road, especially in the more northerly portions, does go over a zone of remnant glacial ice. I believe that was what my colleague Ms. Bisaro was referring to. This is the remnant Wisconsin Glacier. I believe the department officials certainly know that this is the case.
Another high risk factor, of course, is this is the zone where the greatest impacts from climate change are known to be occurring. The rate is very fast and the degree of warming is extreme. To what degree, I guess recognizing and combining these factors, the fact that this area over which the road is being built has not just got permafrost, it has substantial ice lenses that are more than ice lenses, they are remnant chunks, vast chunks of Wisconsin Glacier in combination with the degree of warming in the order of 15 degrees that can be expected, Celsius, in our winters. Can the Minister comment on that aspect of it? Thank you.
Thank you, Mr. Bromley. I’m going to let the Minister think about his answer to that question while we take a break for supper. Thank you.
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Welcome back, committee. I will call committee back to order. We’re on page 5 of Supplementary Appropriation, No. 3. Continuing on with questions I have Mr. Bromley. Mr. Bromley, I will give you the full 10 minutes here.
Thank you, Mr. Chairman. I had posed a question, if you will recall, to the Minister. Would you like me to repeat that question?
We’ll ask the Minister first if he’s prepared to answer it. If not, we’ll get you to repeat or rephrase it. Mr. Miltenberger.
Thank you, Mr. Chairman. If I could get the indulgence of the Member to repeat it, please.
Duly noted. Mr. Bromley.
Thank you, Mr. Chairman. I did think the instructions of the Chair were for the Minister to take a break to prepare an answer. Just kidding, Mr. Chairman.
I think the Minister, first of all, didn’t respond to my colleague Ms. Bisaro accurately when she asked about the glacier ice on the road, and I think he now understands that, in fact, there is remnant Wisconsin Glacier ice in the northerly parts of the route proposed for this highway. Obviously, we know from our experience with highways throughout the Northwest Territories that this translates to dollars, especially when we’re talking maintenance of highways.
Of the many high-risk factors that have been identified – and I think I’ve heard of about 18 or something like that – climate change has been identified as one of them, which makes sense because this highway goes through the zone of the biggest climate impact and the impact is warming, which, when warming interacts with those large parts of remnant glacier ice, we’re talking about very, very serious costs.
I know the Minister is familiar with the situation with climate change. In fact, it’s getting considerably worse and more dire as the months now go by. The literature is clear. In fact, we’re now learning that the polar ice cap is starting to break up right here during the month of March, months before normal. This year, for the first time ever. Very scary business for scientists that know about these things; apparently not to the public or this government.
My question was, given these juxtaposition of serious factors here with great amounts of glacier ice, a great degree of climate warming predicted, what are the consequences and how can we address this risk without affecting the cost of the highway?
Thank you, Mr. Bromley. We’ll go to Minister Miltenberger.
Thank you, Mr. Chairman. The Member, at one point, asked as well about the economic benefit of the road. The $2 million a year maintenance budget could be seen as it will employ local people and local contractors, so that will be one of the ongoing benefits.
In regard to how do we mitigate the impact of going over these areas where there are remnants of glacial ice and ice lenses, I’ll ask Mr. Neudorf to respond.
Thank you, Minister Miltenberger. Mr. Neudorf.
Thank you, Mr. Chair. The presence of permafrost is one of the significant issues that have to be dealt with in the design, and we have done much work on that already. When we go from 85 percent to the 100 percent final design, we will continue to look at that. There are about 12 kilometres of the total 137 kilometres that, based on the initial terrain analysis, will be more problematic, so we will have to be more careful in the design and in the construction approach to ensure the protection of the permafrost underneath that area.
We will be doing some additional drilling and geotechnical work in those areas. That will be then kicked into our next design stage and we will ensure there’s appropriate design for protecting the permafrost. The road itself, we have to maintain a certain amount of fill in order to protect the permafrost underneath. That is the way that you do that, so there’s no cutting, there’s no digging in as part of the road construction at all. It’s just a fill and hauling material in and filling over top of the tundra.
Just a final point on permafrost, this is an area where the permafrost is colder. In southern portions when you get into more discontinuous and if you have a few degrees of warming, it does tend to affect the permafrost more than in the northern climates where the permafrost is generally a little bit colder, so it can withstand a little bit of the changes from climate.
Thank you, Mr. Neudorf. Mr. Bromley.
Of course, warming is also double the rate in this area compared to down south, and so we will be seeing impacts of that that are not on the road itself but that will connect to the road in an insidious way, and so there will be costs from that. But I am learning that so now the work to be done is not just the 50 bridges and so on, or 60 river crossings and 10 bridges, but it’s also to deal with this highly problematic 12 kilometres, and we have not designed the highway yet on how to deal with that 12 kilometres. Have I got that correct?
The exact details of how we will construct the road and finalize the design over the top of those 12 kilometres are still to be determined. We have built in some assumptions about what we’re going to do about that. Additional fill or insulation are two of the most common ways to mitigate, so there is an allowance for those. But we do, as part of the detailed design, need to confirm exactly the conditions and then we will finalize the design.
I appreciate that additional information. This is a zone of a lot of thaw slumping. Is this area flat? Is it, fortunately, flat, or is it a bit rough that we’re going through and what’s the susceptibility to the thaw slumping?
