Thank you, Mr. Roland. Oral questions. The honourable Member for Kam Lake, Mr. Ramsay.
Mr. Speaker, as I mentioned earlier, I listened quite closely to the Premier’s Budget Address yesterday and questioned him a little bit earlier today on the Deh Cho Bridge project. I’m wondering, and I think the public is wondering, as well, why the single largest piece of public infrastructure built here in the Northwest Territories didn’t get one iota of a mention in his Budget Address. Perhaps the Premier can offer an explanation to me and to the public on why that omission was made.
The Hon. Premier, Mr. Roland.
Mr. Speaker, with all the questioning and answering on the process for quite a number of years, I thought the members of the public had had enough. The project is in place, construction is happening, trucks are moving, loaders are working, and people are being paid to go to work.
There is also the amount of the discussion we had, as was made by Member Bromley, that the Budget Address.... I guess I could have been here for a lot longer going into much more detail about all the specifics. The fact is, when you take O&M and our capital expenditures, it’s almost $1.3 billion of expenditures. We didn’t talk about near enough of it, and that’s where we’ll be able to discuss that. That’s where it didn’t get mentioned.
Mr. Speaker, in the Budget Address there was no shortage of small announcements — $100,000 here, $200,000 there. So you would think on a project the size of the Deh Cho Bridge project that $165 million, committing the government for the next 35 years to expenses, and a bridge that supposedly — and I have yet to be proven wrong — is going to increase the cost of living.... The government says it's going to decrease the cost of living here in the North Slave region, but I beg to differ. I find it very strange that the government would leave a project the size of the Deh Cho Bridge out of this year's Budget Address. There's no question there, Mr. Speaker, but perhaps the Premier would like to comment on that.
Mr. Speaker, I'll work with the Member on the next Budget Address. Oh, wait. I won't be doing another. Thank you.
Thank you, Mr. Roland. Oral questions. The honourable Member for Weledeh, Mr. Bromley.
Just briefly on the clarity and so on of the budget, I'd like to just get some clarity. The Minister says that the GNWT intends to realign $135 million in expenditures. For clarification, does that mean cut, or is he realigning it some other way? Maybe disappearing it or something.
Thank you, Mr. Bromley. The honourable Minister of Finance, Mr. Roland.
Mr. Speaker, I think if we just did an example from Mains to Mains, or even Revised Mains to Mains, we'd see that from Mains to Mains of ’07-08, as a practice of budgetary process, we're growing by 5.5 per cent, if you take out the one-time bump-ups for trucks that have been put in place and so on. So when we're talking about realignment, there's going to be a portion that we need to cap, or manage our growth of government. So there will be some reduction — Members are talking about reductions in different levels of programs — and an impact on some of our employees. But we want to reinvest money in the Northwest Territories, as well, and that's where we've come up with the $75 million figure of reinvesting that in the Northwest Territories in key priority areas that departments will have to be accountable for and show that they've made an investment, not just throwing more dollars into existing programs that are sometimes questionable.
I acknowledge that I'm really dense on this stuff, but let me just read the sentence again: The GNWT intends to realign $135 million in expenditures with $75 million to be reallocated to those spending priorities. What is the difference between “realign” and “reallocate?”
Mr. Speaker, as we put this plan in place, we looked at a $135 million overall reduction. Seventy-five million dollars of that would need to be reinvested in our priorities. As we put this plan together, it clearly shows we've not met our targets, and in the fact the budget still grows. So it's pretty hard to put it into the reduction scenarios that the unions have been talking about, and that's our initial language as well. We're having to manage our growth and find some dollars from in the system to reinvest. Of course, those who are affected in the delivery of those programs, as well as receiving those programs, see that as a direct reduction. It’s a matter of our language, I guess. We could have talked about the target of a $135 million reduction and out of that, $75 million looking for reinvestment.
That would certainly be clear language and understandable, which would be a refreshing change here. Just one more clarification. On B-5 there's a graph in the Budget Address, and it lists components of change, strategic initiatives and other initiatives that I think total $72 million according to the paragraph under “Expenditures” on the same page. What's the difference here between strategic initiatives and other initiatives, and are those outlined somewhere that's accessible?
Mr. Speaker, I know the Ministers will be available for all the detailed questions Members may have in each department of those initiatives that are affected. In this part, as the government has prepared the budget — as I stated earlier, I believe it was yesterday — in the budget process when we talked about the normal business planning cycle, letters go out to departments in June and August and capital gets added. That is all put together and presented to Members in September for review and reporting back, and then Cabinet takes that back and makes some changes. We present a budget in February or March. That's a typical year process. So some of this work — the other initiatives — was in fact beginning to be looked at and talked about by previous Assemblies, and we’ve looked at that work and they aligned with our priorities. But the strategic initiatives are the ones that flow out of the work that we did starting this government.
Thank you, Mr. Roland. Oral questions. The honourable Member for Hay River South, Mrs. Groenewegen.
I wasn’t planning to ask any more questions, but after the Finance Minister offered to let Mr. Ramsay help him write his next Budget Address, for one minute I thought he was serious. I thought I had seen a little evidence of something called working together. I believed him, and then he said, of course, “Oh yeah, I won’t be the Finance Minister next time.”
I don’t know who the Premier and Finance Minister hired to write his speech this year, but we seem to be having some trouble with the language in it. We’re having a little difficulty understanding it. As Mr. Bromley said, maybe we’re just dense on this side of the House. But in the interest of clarity, we have the budget paper, economic review, fiscal review. Would it be possible to add to that? In the interests of people understanding why we are making these reductions, if we could include a fiscal forecast in this, that would lay that out for the next several years.
Thank you, Mrs. Groenewegen. The honourable Minister of Finance, Mr. Roland.
Mr. Speaker, I believe that would be good advice. We talk about it as Members. We shared that, our fiscal strategy, the years of projections, what goes into our projections and using our relationships. For example, our first year of budgeting comes from numbers we know we had from the federal government. We build on that with estimates. So yes, I can't see why we can’t put that in place.
Thank you, Mr. Roland. Oral questions. The honourable Member for Mackenzie Delta, Mr. Krutko.
Mr. Speaker, my question is to the Minister of Human Resources. In light of the budget cuts and positions and whatnot, you have individuals who are making less than $30,000 cut through this process. For people living in communities, with $30,000 you're struggling as it is. Then to take whatever little seasonal job they have away and save $30,000, it will probably cost you $30,000 just to deal with the processing of this person.
I'd like to ask the Minister: have you looked at seasonal positions and looked at alternatives for those seasonal positions, where you’re only looking at saving $30,000, and can you reinstate it knowing that it's not going to have a major difference in regard to the reduction for the savings this government is going to have? If anything, it will probably cost you more. So have you looked at those individuals who are in the area of $30,000 and exactly what that is going to prove by way of these budget cuts?
Thank you, Mr. Krutko. The honourable Minister of Human Resources, Mr. McLeod.
I know that seasonal workers are very important to the communities. Just to be very clear, maybe the Member could clarify what types of positions he is talking about. Is he talking about firefighters? Is he talking about highway workers?
Mr. Speaker, I’m talking about the marine equipment maintainer assistant’s position in Fort McPherson for the Abraham Francis Ferry on the Peel River. This individual has been with the organization almost 30 years. He's making $30,000 a year as his main source of income. He has a large family. Yet as a government, we're trying to say we don't need you anymore; you've been with us for 30 years, but maybe it’s time to go. Yet we think we're going to save $30,000. I think if anything we should be giving this individual a medal for hanging in there as long as he has and maybe trying to let him know we’re going to give him a pension or something before we kick him out the door. So I’d like to ask the Minister — that’s the position I'm talking about — is there any way that position can be reinstated?
As I talked about earlier, we do have the Staff Retention Program. The Department of Human Resources will work very closely with the department responsible for marine operations to work with the affected employee with the objective of retaining him and finding him a similar position somewhere in the Northwest Territories.
Mr. Speaker, I'd like to know: as the so-called seasonal positions are being cut, are those individuals eligible for a pension from this government for services which are seasonal?
Employees that are seasonal-indeterminate obtain benefits on the same basis as any other indeterminate employee.
Thank you, Mr. McLeod. Final supplementary, Mr. Krutko.
Mr. Speaker, the importance of marine operations, especially in my riding where we depend on two ferry services, and also the number of individuals we see having to be hired from southern Canada because we cannot find those individuals…. Has the Minister looked at the possibility of training and whatnot for these individuals? We're short of engineers; we're short of captains; we're short of people. Yet in order to fill those positions, we have to hire in some cases from overseas.
I'd like to ask the Minister: have you looked at the possibility — I know there's money in the budget for training for those particular positions — of whether that individual could be offered an opportunity to train for one of those positions?
Originally I grew up in Fort Providence, and I know that a number of people have been trained to work on marine operations. So I'm sure similar arrangements for training opportunities could be made available in the Member's constituency. I know the department has identified $100,000 that they're making available for marine training. Perhaps we can work together so that this individual could take advantage of that.
Thank you, Mr. McLeod. Oral questions. The honourable Member for Weledeh, Mr. Bromley.
Mr. Speaker, I'd like to follow up on my Member's statement this morning about using local resources to meet some of our basic needs. I'd like to talk about food. As everybody knows, food costs are rising rapidly around the world, and the Northwest Territories is no different. The quality of food is declining and the availability of food is going down as the impacts of climate change and other factors are felt. Our soils are less productive and so on. I think the public really expects a new approach in dealing with these sorts of things, and I think there are lots of opportunities for win-win approaches and responsible solutions.
What new and comprehensive programs are identified in this budget to promote local production of food? That's to whoever is appropriate.
Thank you, Mr. Bromley. Premier Roland.
Mr. Speaker, the area of agriculture, I believe, falls under the Hon. Bob McLeod, so I'd redirect that.
As the Member indicates, having been born and raised in the Northwest Territories, I do know that producing your own food is certainly one way of reducing the costs. At one time every family that lived in the community had their own garden plot, and this is something the department has attempted to encourage. We do have a program where we assist communities to develop their own gardens and to start growing their own food, and we assist them to do so.
Mr. Speaker, that’s certainly a project that I’m aware of. It’s pretty modest; it’s not taken up very well. I’ve been working with the community of Fort Providence myself indirectly through non-government organizations on these issues. Every community is full of people that require food, so we need a comprehensive, well-thought-out, well-laid-out program across the Northwest Territories that encourages this. There are challenges in different areas, but there are huge opportunities just the same.
Once again I’m asking what new comprehensive programs are being put in place with this budget to address the need for local food production that will also address many of our problems in the North.
We are in the process of negotiating an agrifood agreement with the federal government. Once that is concluded, then we will be able to communicate what we’ve been successful in negotiating to the communities. Production of food is certainly something we want to encourage and to see continuing to grow.
Mr. Speaker, again I’m talking local here. It would be great to see the federal government involved, but I’m talking the Northwest Territories communities; I’m talking about our own people. We need to be doing this ourselves. We need to provide the leadership. We have small communities; these are not huge bunches of people out there. We have demonstrated productivity of our land back in the ’60s and ’50s and ’40s.
Will the Minister and Cabinet commit to putting together comprehensive plans to meet our basic needs like the food situation? Let’s start with this Minister and food.
Mr. Speaker, what the Member raises is certainly an objective that we’ve been working to achieve, and we are talking about our own people in our own communities. As the budget indicated yesterday, there are a number of strategic initiative committees. I think the Managing This Land Strategic Initiative will be looking at the whole area of agriculture, and we would look at identifying dollars that are available for investment with agriculture. If the committee comes out that it’s a priority — and I certainly think it is — then we’ll be doing more in this area.
Mr. Speaker, I hear a tendency to think as if this is a complex situation and so on, and big agriculture…. I’m sure there is a role for agriculture here, and we obviously need to support it a lot more. But there are a lot of local situations that could be addressed without that.
You know, we’re pouring huge subsidies into our communities because of these situations.
Will the Minister also commit to looking into requiring some service from the people that we’re subsidizing and that are able to take advantage? In other words, we cannot continue to support rising costs. Why not start requiring some service that actually enhances skills and capabilities and allows people to develop the potential for pursuing their own economic development? Again, a new approach is needed.
Mr. Speaker, I’m not sure if the Member is talking about workfare or something where people who are on income support should be put to work. But there have been a number of different programs over the years, and I guess we’d have to check to see whether they’re still in existence. I recall IRAP, for example, where you would get money to do projects, but you could only hire people that were on income assistance to do the work. But certainly I think that any program where we can help people acquire new skills, I’d be supportive. I’d certainly be willing to look at it.
Thank you, Mr. McLeod. Item 12, petitions. Item 13, reports of standing and special committees. The honourable Member for Nahendeh, Mr. Menicoche.
Mr. Speaker, I move, seconded by the honourable Member for Great Slave, that the Report on the Review of the Report of the Auditor General of Canada on the NWT Housing Corporation Public Housing and Homeownership Programs be deemed read and printed in Hansard in its entirety.
Thank you, Mr. Menicoche. The motion is on the floor. The motion’s in order.
Motion carried; Committee Report 2-16(2) received and deemed read.
The Standing Committee on Government Operations held its public review on the Report of the Auditor General on the Northwest Territories Housing Corporation’s Public Housing and Homeownership Programs on March 4 and 5, 2008. The committee would like to thank the Auditor General, Ms. Sheila Fraser, and her staff for their excellent work in preparing the report and in assisting the committee with its review. We would also like to thank the President of the Northwest Territories Housing Corporation, Mr. Jeff Polakoff, and his staff for appearing before committee.
General Comments
The Standing Committee on Government Operations is a new committee of the 16th Legislative Assembly. Its mandate includes the examination of the annual financial statements and public accounts of the Government of the Northwest Territories and the reports of the Auditor General. The committee firmly believes that public accountability is the foundation of good governance.
The performance audit on the Northwest Territories Housing Corporation was requested by Motion 17-15(4) of the 15th Legislative Assembly and adopted on March 2, 2006. The committee shares the concerns expressed in the motion on whether the NWT Housing Corporation is making the most effective use of its resources to address the need for adequate, accessible and affordable housing and whether the quality and relevance of the business plans, Main Estimates and other documents put before the Legislative Assembly and its committees are adequate and appropriate.
The performance audit of the Housing Corporation covered the period between 2005 and 2007. The Auditor General’s report was tabled during the second session of the 16th Legislative Assembly on February 15, 2008. The auditors reviewed how the NWT Housing Corporation manages its public housing and homeownership programs, and how it conducts its planning and reporting.
The public review with the Auditor General and the President of the Housing Corporation provided opportunities for further exploration of the issues and shortcomings identified by the auditors. It is the intent of committee to ensure that the recommendations of the report are addressed and that measurable improvements to the housing programs are initiated. Ultimately the Housing Corporation needs to deliver on its mandate of reducing the number of NWT households in core need of housing assistance and report on its progress toward this goal.
The report makes 11 recommendations addressing three major areas of concern:
the management of the public housing program;
the management of the homeownership program; and
the planning and reporting conducted by the NWT Housing Corporation.
The management of the Housing Corporation agreed to all of the audit recommendations. This is a positive first step towards improving the corporation’s program and operational management. However, the committee found some of the management responses to the recommendations too broad and vague. The committee was also disappointed with the lack of additional detail provided by the president of the corporation during the public review.
Recommendation
The Standing Committee on Government Operations recommends that the Minister table a detailed action plan no later than October 2008 outlining how the Northwest Territories Housing Corporation will address the recommendations of the audit report.
Furthermore, the Standing Committee on Government Operations recommends that this plan outline the following details:
specific measures for actions addressing each recommendation;
an explanation of what each of the specific actions addresses;
progress measure for each action;
timelines for each action or measure; and
organizational responsibility and accountability assigned to each specific action.
The committee recognizes that some of the Housing Corporation’s challenges stem from the past and have accumulated over time. The committee also acknowledges that the Housing Corporation has put considerable effort into its draft Framework for Action 2008–2011. However, the document does not sufficiently address the recommendations of the Auditor General. While the President of the Housing Corporation committed to a strategic plan, priority setting and more details within the Framework for Action, Members remain concerned about the corporation’s intent and willingness to implement details for specific measures recommended by the Auditor General.
During the public review with the Auditor General and the president of the corporation, Members emphasized that the draft framework is very ambitious but requires further details that prioritize the actions and initiatives identified. In the current environment of fiscal restraint it is evident that not all actions can be undertaken simultaneously, so prioritizing the initiatives is of utmost importance. Committee agrees with the president of the corporation that the Framework for Action should serve as a roadmap for the Housing Corporation as well as an accountability document to the public and stakeholders. Therefore, the information needs to be clear with real goals that are tangible, achievable and measurable.
Recommendation
The Standing Committee on Government Operations recommends that the NWT Housing Corporation prioritize its Framework for Action to specifically address the audio report recommendations while focusing on its primary mandate: reducing the number of NWT households in core need of housing assistance.
The committee acknowledges that it will take a certain amount of time before measures show progress and the final goals are achieved, particularly in some of the more challenging areas like rent and mortgage collection. The committee understands that the Housing Corporation has already increased communication with, and operational support for, the Local Housing Organizations (LHOs) and district offices. The committee was also pleased to see that the corporation has policies and procedures in place to guide the allocation and operation of its programs.
However, the committee is concerned that the greatest shortcomings identified in the audit were related to insufficient monitoring, analysis and follow-up to ensure established policies and procedures are actually being followed. There is also some history within the corporation of not acting on findings identified through internal auditing, past reports of the Auditor General and concerns expressed by stakeholders.
Recommendation
The Standing Committee on Government Operations recommends that the Minister provide periodic updates on the progress of the implementation of the actions through status reports to the appropriate standing committee.
Public housing program management
The public housing program is mostly delivered through the 23 community-based LHOs. However, the Northwest Territories Housing Corporation retains the ultimate responsibility for the management of these programs, ensuring that they are delivered fairly and efficiently.
The auditors acknowledged that the corporation, district offices and LHOs have policies and procedures in place. Some LHOs are applying these guidelines consistently, while others do not always follow existing policy and procedures.
The Auditor General identified adequate monitoring of LHOs as a main issue. As the corporation has given most of the operational responsibility for public housing to the LHOs, it is up to the Housing Corporation to ensure that policies and procedures are followed. More rigorous monitoring, analysis and independent spot-checks are needed to ensure the information that the corporation receives is accurate and that LHOs conduct business as they should. For example, non-compliance with the point rating system may lead to public housing being delayed, denied or allocated without justification and documentation.
Members agree with the Auditor General’s concern that there is no appeal process in place allowing clients who believe they were treated unfairly to raise their issues. During the deliberations with the President of the Housing Corporation, the committee was pleased to learn that an appeal process is under development and is presently being discussed with stakeholders, and that the corporation anticipates introducing this appeal mechanism in 2009.
The audit findings also reveal incidents of non-compliance with the annual inspection requirements and inaccuracies in annual condition ratings. These shortcomings may affect the quality of the public housing stock as well as future maintenance and budget requirements. Adequate maintenance of public housing units is crucial for the protection of the GNWT investment in public housing. Regular inspections and maintenance also ensure that public housing continues to be available to households in core need.
The efficiency of the operation is essential for the sustainability of public housing in the communities. The committee does not believe it is acceptable for LHOs to accumulate deficits as a result of low rental collection rates and to finance deficits through the deferral of maintenance and repairs.
In order to reverse this negative trend, it is crucial the Housing Corporation monitor and provide practical hands-on support to the LHOs. The committee agrees with the audit recommendation that this support should be based on the needs of each community and should continue until sufficient capacity has been built. The committee was pleased to hear that the president recognized this need for support as an essential management responsibility of the corporation, and not as a shortcoming of the LHOs.
Recommendation
The Standing Committee on Government Operations recommends that in order to deliver the public housing programs in a fair and equitable manner and to sustain the programs over time in a cost-effective way, the corporation monitor the district offices and LHOs in order to ensure that policies are implemented, rent is collected and operational and financial controls are in place.
The committee further recommends that specific measure for monitoring and support be tailored to the LHOs’ needs, based on risk assessments of their compliance with existing policies, procedures, rent collection and financial management, with the level of practical support, supervision, frequency and detail of these monitoring activities being tailored accordingly; and furthermore, that the Housing Corporation report on these activities, targets and progress in their action plan and periodic status reports.
Homeownership programs management
Homeownership programs are delivered through the five district offices. The Northwest Territories Housing Corporation retains the management responsibility and therefore has the obligation to ensure that programs are delivered fairly and equitably, within the economic means of the organization while contributing to the objective of reducing the number of households in core need. Similar to the public housing programs, the corporation has policies and procedures that guide the allocation of homeownership assistance.
The audit findings show that the district offices are not sufficiently monitored for compliance with policies and procedures when allocating homeownership assistance. The committee was disheartened to learn that uncollectible mortgage rates climbed to 88 per cent in 2007, meaning that of the total $16.5 million in outstanding mortgages, $14.6 million would not be paid. Of further concern was the fact that an unknown number of uncollectible mortgages are for houses without land tenure. The corporation needs to identify and address these issues in its strategic plan and measure its progress against targets in its periodic updates and annual reports.
As part of its overall management responsibility for the delivery of the housing programs, the Housing Corporation needs to provide operational support to district offices and LHOs where required.
Recommendation
The Standing Committee on Government Operations recommends that in order to deliver the homeownership programs in a fair and equitable fashion and within economic means, the Housing Corporation monitor the district offices to ensure policies are implemented and mortgages are collected.
The committee also recommends that a program evaluation of homeownership programs be carried out to verify how much existing programs contribute towards the goal of self-reliance and the reduction of households with core housing needs; and further, that such program evaluation be on-going, timely and measureable against specific targets.
Planning and reporting
The auditors found that the NWT Housing Corporation had not completed its strategic plan for meeting the housing needs of Northwest Territories residents. The committee discussed the importance of a strategic plan with the President of the Housing Corporation, stressing that all elements of NWT housing programs need to be included in this document. The goals of the corporation need to be clearly defined with measurable outcomes and linked to the corporation’s mandate and programs.
The lack of risk assessment and risk management was also discussed during the public review with the President of the Housing Corporation. The audit findings acknowledge that while the corporation identified some risks in its business plan, there was no indication of how these risks would be addressed or mitigated. Members were also concerned that other risks like decreasing rent and mortgage collection rates were not addressed with adequate details that would allow monitoring of progress over time.
Another risk with potentially significant financial impact for the corporation is the declining Canadian Mortgage and Housing Corporation (CMHC) funding. The committee recognizes that the Minister is addressing the need for federal support at a political level with his federal, provincial and territorial counterparts. As the CMHC funding sunsets in 2038, the GNWT still needs to plan for taking on the fiscal responsibility for the public housing stock, should these political initiatives not materialize into new federal dollars.
Recommendation
The Standing Committee on Government Operations recommends that the Housing Corporation include a risk management component in its strategic plan that:
identifies and analyzes the risks for the NWT Housing Corporation;
plans for specific actions with details addressing the identified risk;
includes measure to report on the success of the action plan; and
evaluates how the risks are mitigated in a timely fashion.
The audit findings also detail that the corporation needs to improve its performance measurement and reporting. During the public review, Members repeatedly pointed out that performance indicators should include targets,
outputs and outcomes allowing for progress to be examined over longer periods of time. Targets and indicators used in different documents, like the business plan, the Framework for Action and the strategic plan, need to be linked, allowing for reporting consistency, comparison and true progress measurement periodically and over time.
Recognizing that the Housing Corporation relies on the NWT Community Survey and Census Canada for data on households in core need, the committee agrees with the recommendation of the Auditor General of Canada that the corporation should include information in its periodic reports on the reduction of households in core need. This could be done by including information on the construction of new housing units and the repair and renovation of existing units followed by a more comprehensive report on the reduction of households in core need based on the community needs assessment once it is completed.
Conclusion
The committee recognizes the challenges the Housing Corporation is facing in meeting the housing needs of NWT residents. Members also acknowledge the commitment of the Local Housing Organizations and district offices to deliver housing programs in the communities. After concluding the public review of the Report of the Auditor General on the Northwest Territories Housing Corporation, Members are hopeful that the organization is willing and motivated to address these challenges. The committee trusts that the Standing Committee on Economic Development and Infrastructure will consider the outcomes of this performance audit, public review and committee report when reviewing business plans, legislation and other documents concerning the Northwest Territories Housing Corporation in the future.
Recommendation
The Standing Committee on Government Operations recommends the government provide a comprehensive response to this report within 120 days.
