Mr. Chairman, we do have a concession agreement for the Deh Cho Bridge Corporation to build a bridge. They have been drawing down as the project proceeds.
Thanks, Mr. Chairman. Yes, I had heard that there were some contractors, rather small contractors, local contractors, that there maybe was an issue with the cash flow on the project and some people who weren’t getting paid. I was just wondering if any of that has been brought to Minister McLeod’s attention. He is the MLA for that area. I was wondering if there were any financial problems being encountered with the drawdown and disbursement of funds to subcontractors. Thank you.
Mr. Chairman, this is really not an issue for us to intervene on. It has been raised by some of the contractors that the payment to them was not as quick as they would like. There has also been concern that our approval process is very rigid in terms of having all the required approvals. This is a project that falls under the Canadian Bridge Code and everything has to be approved for quality assurance and stamped and signed off. It can be fairly lengthy in some cases. I am not aware of any subcontractors that have not been paid. It is an issue we have raised with the Deh Cho Bridge Corporation and their subs. So as we did a review of the work done, the issues over this past year, and this is something we have asked them to look at improving. Thank you.
Thank you, Mr. Chairman. Yes, building a bridge, I imagine there are some pretty stringent issues of code and regulation and so on. I am certainly glad to hear the Minister say that our government wouldn’t consider circumventing any of those on any discretionary basis. So I suppose that is a good thing. I had just wondered, from the rumours I heard, if there was any issues of cost overruns or financial difficulties that might necessarily involve this government at some point in time. That was mainly what I was getting at. Thank you.
Thanks, Mrs. Groenewegen. I didn’t hear a question. We are on page 11-41, information time, work performed on behalf of others continued, $1.605 million.
Agreed.
Agreed? Next page…Actually, we are done the detail. We will go back to page 11-7, which is the summary page. Department of Transportation, department summary, operations expenditure summary, $97.060 million. Agreed?
Agreed.
Is committee agreed that we’ve concluded the Department of Transportation?
Agreed.
Thank you, committee. I think next on our list we were going to review…Sorry. Thank you, Mr. Minister. I will thank your witnesses as well and get the Sergeant-at-Arms to escort them out of the Chamber. Thank you.
Committee, our next item of business was Tabled Document 17-16(3), Supplementary Appropriation No. 3, 2008-09. Before we go into that, we’ll take a break.
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Okay, colleagues. I would like to call Committee of the Whole to order. We have before us for consideration Tabled Document 17-16(3), Supplementary Appropriation No. 3, 2008-2009. Does committee agree?
Agreed.
I will call on the Minister of Finance for opening remarks. Mr. Miltenberger.
Thank you, Mr. Chairman. I am pleased to present Supplementary Appropriation No. 3, 2008-2009. This document outlines additional appropriations of $17.833 million for operation expenditures and $6 million for capital investment expenditures in the 2008-2009 fiscal year.
Major items for operation expenditures include:
$5.1 million for costs associated with Northwest Territories residents receiving hospital and physician services outside of the Northwest Territories;
$2.8 million for the increased costs associated with the new contractor between the Government of the Northwest Territories and NWT physicians;
$1.6 million for increased costs associated with children in residential care outside the Northwest Territories;
$1.2 million for increased costs associated with the Territorial Power Subsidy Program.
The major item for capital investment expenditures is the $3 million to advance construction of an all-weather road from Tuktoyaktuk to gravel source 177, a Building Canada Plan project.
Mr. Chairman, I am prepared to review the details of the supplementary appropriation document. Thank you.
Thank you, Mr. Minister. Any general comments? Before I go to that, Minister Miltenberger, do you have witnesses you would like to call?
Yes, Mr. Chairman.
Does committee agree?
Agreed.
Thank you, committee. I will ask the Sergeant-at-Arms to escort the witnesses in and the Minister to introduce them. Thank you.
Minister Miltenberger, please introduce your witnesses.
Thank you, Mr. Chairman. I have with me Margaret Melhorn, deputy minister of Finance, and Sandy Kalgutkar, deputy secretary to FMB.
Welcome to the House. General remarks. Mr. Abernethy.
Thank you, Mr. Chair, just to be consistent with statements or comments that I made during the review of supp one and the review of supp two in the previous budget session, we had talked about the previous supp amount of $25 million, $15 million of that was taken and rolled back into the departments and I believe, and at the time many of my colleagues believed as well, that that was to help the department’s plan so they wouldn’t have to come forward with as many supps, which left $10 million for supps to come forward. Between the first and second supp we had spent $6 million, leaving us with around $3 million. When I go through this, this supp, on the operations expenditure side is $17.88 million, which is significantly higher than the $10 million we started with and $3 million we had left. When I go through it I see a lot of that money is actually a nil effect to the GNWT because money is coming from other sources, but there is still about an $11 million hit against our $3 million that we had available, which actually puts us a long way over what we’d originally allocated for supps for the ‘08-09 fiscal year. So I’d like the Minister to explain that and talk a little bit more about that, given that we had hoped that we wouldn’t go so high over the supp.
I think the total now with this $11 million is going to be around $18 million, which is less than the $25 million we had in previous years, but it’s really $18 million plus the $15 million that we gave the departments already so that they didn’t have to come back. So we’re talking about $33 million that the supp would have been this year if we hadn’t changed the way we were doing things.
Mostly this statement is as a reminder that we had not wanted to go so high in supps and if we’re going to do this in the future, and I think we’ve already done it or it’s proposed for ‘09-10 to go to this similar sort of supp breakdown, we need to make sure that the departments are actually thinking about what their future expenditures are going to be. Some of these things in here -- and we’ll talk to them individually as we get to them -- I think could have been predicted. Not all of them I think are surprises. A supp is supposed to be for surprises, things that we can’t plan for. I think as we go through this one in particular, because it’s just so much money, I think we can identify ones that the department should have been able to plan for to some capacity even if it had been a projection. I’d like to not see this much in the way of supps coming in for the ‘09-10 fiscal year, and this is only number three, I know there’s going to be a number four. So we’re even going to be higher by the time we’re done.
So just some comments and I’d like some clarity on what our intentions are with the $10 million supp fund once the Minister does his response to our general comments. Thank you.
Thank you, Mr. Abernethy. Any further general comments? Thank you, committee. Mr. Miltenberger.
Thank you, Mr. Chairman. Mr. Chairman, over the last five years this is the second lowest amount of supps if you look at the list that we gave you, including the $15 million that was already apportioned out. I think ‘04-05 was probably the year that was slightly lower. Every other year was significantly higher.
I take the Member’s comments. We’ve had this discussion about the process and it’s not surprises so much as we targeted areas where we know that there’s costs we may not control, and rather than build in estimates into the budget, which can be imprecise, the direction has been to departments to in those areas where, like some of the hospital health costs come back when you’ve spent the money, or as you’ll notice in some of the information that we’ve given you there is some significant cost increases from some of the out-of-territory suppliers.
We’re always interested, this is a new process where we took $15 million and carved it up among the departments. We would like to be as precise as possible, as well, and we’re very interested in working with committee to figure out what’s the best way to be as accurate as possible in this area. Keeping in mind all the years that I have been around, even before we came in government there always seemed to be these types of costs in government. Thank you.
Thank you, Mr. Miltenberger. We’ll move on to detail if committee is agreed.
Agreed.
We’ll start on page 5, Legislative Assembly, operations expenditures, Office of the Clerk, not previously authorized, $120,000. Is committee agreed?
Agreed.
Total department, not previously authorized, $120,000. Agreed?
Agreed.
Moving to page 6. Executive, operations expenditures, executive offices, not previously authorized, executive operations, $163,000.
Agreed.
Total executive offices, $163,000.
Agreed.
Moving to page 7, Executive, operations expenditures, Human Resources, not previously authorized, directorate, $526,000. Mr. Ramsay.
Thank you, Mr. Chairman. Mr. Chairman, I know my colleague Mr. Abernethy was talking about departments and things that they could anticipate coming in the years I’ve been here, and years previous to that, my knowledge of collective bargaining with the UNW is something you can almost script. Every three years you’re going to have negotiations. You can go back and find out what you spent your money on three years ago and budget accordingly. I’m not sure why the $276,000 shows up via supplementary appropriation. I think it should be something the department budgets for every three years. They know it’s coming. It’s like clockwork; it’s going to happen and you should budget accordingly.
The $250,000 for a physicians’ contract, that’s something I believe we should know is coming as well, but that I can accept a little bit more readily than the contract negotiations with the UNW. I think we need to get a handle on what those costs are and budget for them and it shouldn’t come through a supp, Mr. Chairman. Thank you.
Thank you, Mr. Ramsay. Not a question, but Mr. Miltenberger.
Thank you, Mr. Chairman. Mr. Chairman, this is one of the cases where the department was instructed to come back once the funds had been expended and there was an exact amount. The costs aren’t the same from Collective Agreement time to Collective Agreement time, nor are the folks that we hire to be negotiators or the costs that they may charge. I’ll maybe ask Minister McLeod, responsible for HR, to speak a bit more about the process. Thank you.
Thank you, Minister Miltenberger. Minister Bob McLeod.
Thank you, Mr. Chair. As the Minister of Finance has indicated, the previous Financial Management Board direction has been that the cost of collective bargaining not be included in the base budget primarily because the costs don’t occur every year and they are variable from one collective bargaining cycle to another. So, for example, collective agreements could last from two years to four years. So it makes it difficult to predict when funding will be required.
But on a personal level, I should serve notice that we’ll be seeking ongoing funding for collective bargaining, because we feel that we should be in a much stronger position if we had base funding for collective bargaining built into our budget and we’ll be seeking funding for that purpose in the future. Thank you, Mr. Chair.
Thank you, Mr. McLeod. Mr. Ramsay.
Thank you, Mr. Chairman. If that’s the case and this is just the Department of HR, if that’s the case and the government’s attitude towards budgeting: figure out what it costs and come back to us later. That change in how we fund the supp reserve and going from $25 million to $10 million, that’s just not going to work. Obviously departments are going come back for more than $10 million. Specifically I’d like to ask the Minister, through you, Mr. Chairman, what exactly did HR spend the additional supp money on if they don’t have any money to be spending on the contract negotiations? Thank you, Mr. Chairman.
Thank you, Mr. Ramsay. Minister Miltenberger.
Thank you, Mr. Chairman. According to the information that we’ve provided, there was $120,000 on corporate human resource services; employee services for $600,000; for increased costs associated with employee medical travel and dental costs, $400,000 for that; and addressing the pay and benefits backlog, $300,000, and they have $80,000 put towards the Human Resource Strategy and policy. Thank you.
Thank you, Mr. Chairman. What is the Minister’s strategy for dealing with the lowering of the supp reserve to $10 million, given the fact that you’re going to let departments continually come back for more money? How are departments going to be kept in check so that the $15 million that was dispersed or is going to be dispersed again next year to the departments, how are we going to maintain that departments use that money for what they say they’re going to use it for and we’re not overspending our supp reserve by eight to 10 million dollars? Thank you.
Thank you, Mr. Chairman. As I indicated when we previously met, we are of course looking for the advice of committee and Members. This is a new process, this is the first year. So we had the discussion over do you budget estimates into your actual budget or do you wait for them to come back.
I would point out, as well, that the growth of government is probably the lowest it’s been in this budget than it’s been in many a year, thanks to the work that was done in the last budget and carried forward to this budget. We’re very sensitive to trying to control our costs, especially now where we expect our revenues to be squeezed significantly. So we’ve chosen a path where we put the $15 million in. If upon review after one year and we want to make adjustments, we’d be more than happy to and interested in the feedback from committee and suggestions. Thank you.
I appreciate the Minister’s offer for suggestions. I’d be willing to take him up on that. Maybe we should be taking a look at the business planning process in its entirety and holding departments more accountable for what material is provided to Members during the business planning process and saying no. I mean, if FMB or Cabinet doesn’t want to say no, maybe the Regular Members would say no to some of this extraordinary spending that’s coming forward. I mean, that’s the type of discussion that we’re going to have to have, Mr. Chairman. Thank you.
Mr. Chairman, FMB does say no with some regularity. They have a fairly tight hand on the purse strings, but we know that there are pressures in program areas that are important to all of us. The issue of the business planning process we started with capital planning, last year we split it out for the first time and I agree with the Member where we want to look at how things are working and if we have to adjust and fine tune and we should be looking to do that before we get too far into spring. Thank you.
Thank you, Minister Miltenberger. Next I have Ms. Bisaro.
