Debates of March 9, 2005 (day 52)

Good question.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, as we approve the budgets and the budget lines and the departments request an increase for a specific forced growth issue such as fuel, and if the price, for whatever reason, comes in lower than was anticipated, then there would be a surplus in that budget and it would come back to general revenue. That would be the practice. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Mr. Chairman. I think Mr. Ramsay has raised a flag on many of the same concerns or issues that I had with this. I am not going to object to these. This is a consequence of running our government as much as any businessperson or homeowner faces a consequence of keeping the fuel tank topped up.

I guess one area that I might ask about and I hope I am not duplicating something Mr. Ramsay has asked about, but are we trying to contract or buy forward with any of our fuel supplies, for any of our communities or major departments or do we more or less buy the fuel as and when needed at whatever the market rate might be?

Thank you, Mr. Braden. Mr. Roland.

Thank you, Mr. Chairman. As we’ve gone through the Department of Public Works and Services and looked at the area of POL, we would be impacted by the time we went out for resupply to the communities. That is broken down into two areas. One is by ice road and one is by barge system. So at that time, when the contracts are issued, we would have to look at the prices then and make adjustments if we found that the prices had gone up higher than we had anticipated.

For this fiscal year, we feel that we’ve done pretty good and there shouldn’t be much of a change. I believe we have just issued the contract for resupply for winter roads and are waiting to see the final numbers on that. What I am told in the area of POL, that we should be coming out in a pretty good fashion for the ending of the 2004-05 fiscal year. Thank you.

Thank you, Mr. Roland. Mr. Braden.

That’s good news on the small community side where there is a one-shot resupply window.

The larger communities, I would anticipate, overall would account for a much larger chunk and here, Mr. Chairman, I am looking at the needs of our big infrastructures; schools, airports, water treatment facilities and things like that. Here is where again, are we knowing what our annual volumes are fairly accurate? Are we taking advantage of our volume, if you will, and using every possible leverage to buy ahead and get a good price and lock things in? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Mr. Chairman. When we enter into the area of communities that have a private sector, we do not bulk purchase or purchase futures, is one way of looking at it. It’s pay as you go. When you get that monthly bill from the supplier, we would pay the invoices. So in the larger communities, where there is a private sector, it’s a pay-as-you-go area. We realize the cost to the government. One of the areas we have had to look at and plan to bring together is a broad energy strategy that will take in the concerns raised around this area when it comes to the supply of power, as well as supply of fuel for our facilities. As we are aware, in all communities, private as well as the communities where the service is by POL, government departments pay full cost. It’s not subsidized. So we would pay full cost of the supply of the fuel in that community. It’s something we are going to have to begin to deal with as we begin to see the prices of our energy continue to climb. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Mr. Chairman, I guess I am surprised, quite surprised, if I hear the Minister right that we make no attempt whatsoever to get the best deal we can from suppliers where there is a competitive private market. Did I hear that right?

Thank you, Mr. Braden. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, when we had the Department of Pubic Works and Services issuing contracts on behalf of all departments within a community, there used to be that opportunity. But as things went to user-pay/user-say, boards would enter into their own contracts. Some boards may enter into contracts to supply fuel, for example, on an annual basis and maybe they will cut a deal, but we are quite fragmented in that area now as we have gone away from the previous contracts that used to be issued and we try to secure the service in bulk. It’s something as we go forward we are going to have to wrestle with as a government. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Mr. Chairman. I won’t press this any further on this agenda tonight, Mr. Chairman. I have learned something that I certainly intend to carry into committee’s business. The GNWT should use every advantage that we can to get good value for the taxpayers’ dollar. We have every right to use the competitive marketplace to our advantage and the government, in many ways, is a major supplier and consumer of services. One, for instance, is in the rental market, Mr. Chairman. I believe the Yellowknife Housing Authority has something like 600 units under lease and yet I wonder to what extent do we use our buying power as a large tenant to get good deals. It’s in that context that I fully intend to see what our government could do to really press the case and go out there and get a better deal. I don’t have any questions, but I have learned something here tonight. Thank you, Mr. Chairman.

Thank you, Mr. Braden. NWT Housing Corporation. not previously authorized, $789,000.

Agreed.

Total department, not previously authorized, $789,000.

Agreed.

Education, Culture and Employment, operations expenditures, advanced education and careers, not previously authorized $100,000.

Agreed.

Education, Culture and Employment. not previously authorized, $497,000.

Agreed.

Total department, not previously authorized, $597,000.

Agreed.

Page 15, Transportation. operations expenditures, airports, not previously authorized, $352,000.

Agreed.

Thank you, Mr. Chairman. I would like to move a motion under Transportation, highways, operation expenditures. I move that $311,000 be added to the actively “Highways” under the Department of Transportation operations expenditures, not previously authorized, on page 15, for the Mackenzie Valley winter road. Thank you.

Thank you, Mr. Roland. The motion is just being handed out, Mr. Roland. The motion is in order. To the motion. Mr. Ramsay.

Thank you, Mr. Chairman. I am just wondering if the Minister could perhaps give us a bit of a better breakdown of what the additional $311,000 is for. All that it states here is the Mackenzie Valley winter road; it doesn’t have any detail of what the expenditure is for.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. This has come around as a result of extending the highway season for two more weeks, plus the activity on the winter road up the Mackenzie Valley has added a lot of extra maintenance that needs to be done on that area. The increased traffic as well as the extending of the season has caused the department to come in for this request. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.

Thank you, Mr. Chairman. Is this something that the department would anticipate occurring on an annual basis going forward, or is this just a one time thing? Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. This is seen as an extension. From time to time there may be requests, but the normal closure is set for March 15th of the year; that is set on an annual basis. At this time the request has been made to extend the season to April 1st. We feel that the cost that would be incurred for that portion of extending the season is in the area of $142,000 for the additional work that is required because of the increased usage for the development that is happening in that area. When you look at the increased maintenance cycles, the upgrading of the snow fills in some of the areas, when we look at the crossings and grader time in those areas, we are looking at about another $169,000 for the season. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.

Thank you, Mr. Chairman. I’m not debating the expenditure. Given the fact that it is going to extend the highway two more weeks, I think it is probably money well spent. I would just like to see it maybe being more of a permanent fixture and the fact that maybe the Department of Transportation budgets for it and tries to get the road extended until April 1st next year and the years going forward because of all the activity that is happening in the region. That would be my suggestion. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. This is an area whether it comes to the ferry service provided at river crossings, as well as winter roads. One of the things that the department is tasked to do is to operate as efficiently as possible. We find that setting the date is one of the better ways of doing that. There is always pressure to extend the season, if, for example, in the fall we have an unusually warm fall, there is a request from the trucking industry to keep those in operation for longer so that they can get the last loads up, as well with the winter road season. If we have a cooler spring as well as increased activity, there is a request to push that. It is something that we will have to play by ear, depending on seasons; and in fact if in this case if we find that there is an unusually warm spring that may impact on how long we can try to keep this open. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.

That is good. Thank you, Mr. Chairman. Thank you, Mr. Minister.

Thank you, Mr. Ramsay. Next I have Mr. Braden.

Thank you, Mr. Chairman. I just want to confirm that this request is essentially a response of overwhelming popularity to try and keep the winter road open for as long as we can. In other words, Mr. Chairman, this is not driven by an unusually long spell of bad weather when the road was closed, a lot of overflow or something that cuts into the already planned item, we are just extending it because people like the road connecting. Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Mr. Chairman. As I stated earlier, there are two factors that add up to the $311,000. One is the increased usage has caused more work to be done, increased the cycles of maintenance on the road, as well as extending it for the extra two weeks because of the increased activity in the region. So there are the two factors to that. Thank you.

Thank you, Mr. Roland. To the motion.