We have a quorum, so let’s reconvene Committee of the Whole.
We are on page 7-7. Does the Minister have witnesses?
Yes, Mr. Chairman.
Does the committee agree?
Agreed.
Can I get the Sergeant-at-Arms to escort the witnesses in, please.
Minister Miltenberger, can I get you to introduce your witnesses, please.
I have with me Ms. Melhorn, deputy minister of Finance and FMB, Mr. Michael Aumond, deputy minister of Public Works and Services, and Mr. Russ Neudorf, deputy minister of Transportation.
Thank you, Minister Miltenberger. We are on page 7-7, Education, Culture and Employment, Activity Summary, Education and Culture, Infrastructure Investment Summary, Total Infrastructure Investment Summary. Mr. Krutko.
Thank you, Mr. Chair. One of the issues that I see coming to light here is that we have a major capital layout in regard to capital projects, but there also has to be a socio-economic component too. And it is capital layout that is out there ensuring that the communities benefit from these projects, not only from the infrastructure itself but also jobs and business opportunities. More importantly, it also ensures that communities do have an opportunity to build capacity around these projects by way of apprenticeship programs — getting people trained in different areas, either in regard to carpentry, wanting to be an electrician or whatnot.
The only opportunity for lot of our communities is these projects, which come along once in a while. Especially with projects in my riding in the past, I know for a fact that these contracts were negotiated in regard to that particular emphasis being put on those community projects. In Fort McPherson, Tetlit Zheh Construction did that project. The project at Aklavik was a joint venture between the aboriginal community and the aboriginal corporation.
Again, the whole emphasis around these major capital projects is to stimulate the local economies and not have somebody just swoop into town, get the contracts, bring their trailers into town, set up a camp and not use any of the community’s private sector hotels and whatnot. I think it is important that this government cracks down on the practice that’s out there now in regard to how these contracts are being laid out. Sure, you get requests for proposals, but when you start telling communities, “Well, sorry; we don’t think you’ve got the capacity, and you can’t negotiate a contract, and it has got to go to one company in the Northwest Territories,” I think we are really undermining the whole emphasis of developing our economies.
I’d like to ask the Minister of Finance: what are we doing as government to track these capital projects to ensure that local contractors are benefiting from these contracts and not simply on the sidelines watching someone else do it?
Thank you, Mr. Krutko. Minister Miltenberger.
Thank you, Mr. Chairman. The government tracks all the contracts, and they issue reports. We have negotiated contract policies. We are of course interested in partnerships. As well, we consider joint ventures. One of the reasons that we had BIP initially was to try to support and maintain local businesses. We track all that information through the work that we do to compile all the contracts the government is engaged in over the course of the year.
Mr. Chairman, one area that’s pretty obvious is…. People who got into a B & B business or a local hotel are struggling to keep their doors open. They’ve taken the risks and set up these businesses in our small communities, yet people continue to come in and set up their own camps. Again, they’re not using, under our policy in regard to using local businesses, local entrepreneurs to accommodate their services in these contracts.
Why is it that there’s a loophole there that has continued to be avoided with the so called policies this government has? They allow that practice to continue, which is that we’re not using the local hotels, local B & Bs. People are actually going into communities, bringing in their own camps and not using those particular businesses that are established in our communities.
Mr. Chairman, the general rule, of course, for the Government of the Northwest Territories is to support and use local resources, to purchase locally as much as we can and use the local services.
If the Member has specific examples or projects or contracts that could be looked at, we would be better able to speak to that in more detail, but clearly, we have a general interest, as does the Member, to make sure that much of that money that we have is spent in and stays in the North.
Well, the project that comes to mind, just offhand, is the Tulita project. The Tulita community corporation has a hotel. It wasn’t used. They brought in a camp. Same thing in regard to Fort Good Hope. There’s a hotel there that’s owned locally. In Fort McPherson they’ve been building a municipal facility; again, there’s a hotel there that wasn’t used. There are also individuals who have B & Bs established in those communities, and they’re not being used either. So just on that knowledge that’s out there right now, if you’re telling me that that’s not being allowed, well, it’s pretty obvious that it is being allowed. So there’s an issue to clamp down on this type of practice.
I’d like to refer the question to Mr. Aumond, to speak to the Tulita school specifically.
Thank you, Minister Miltenberger. Mr. Aumond.
Thank you, Mr. Chair. With respect to the Tulita school project the intent was to try and stay in the hotel, but the hotel was full with some longterm residents — some teachers, I believe — who were staying in the hotel for a while. That was the intent. The only alternative for accommodations in Tulita for that project was to bring in a camp.
That’s it for now. Thanks.
Thank you, Mr. Krutko. Next on my list is Mrs. Groenewegen.
Thank you, Mr. Chairman. My questions are going to continue today on the area of the negotiated contract for the Inuvik schools replacement and also, I guess, follow up somewhat on the questions I was asking in the House today that the Premier answered.
In question period a few days ago I asked the Minister of Education if the contract had been awarded for the Inuvik schools replacement. I was told that it had been. Later on in Committee of the Whole, upon further questioning actually, I found out that it was a letter of award and it wasn’t the actual contract that had been signed.
I want to question a bit more about the process for the authority that the Department of Public Works and Services has to have in order to enter into such an agreement, such a contract. I will set aside for a minute, perhaps, conflicting legal opinions about whether that letter of intent or letter of award is legally binding or not. We’ll just set that aside for a minute, because there may be a difference of opinion about that.
In terms of the process is there a record of decision? How does the Department of Public Works know that they have the appropriation authority to enter into an agreement with a contractor for the provision of a piece of infrastructure?
Thank you, Mrs. Groenewegen. Minister Miltenberger.
Thank you, Mr. Chairman. If it’s within the money and follows the process, then the department proceeds apace to award the award contracts.
The letter of award that we’re talking about includes money that is yet to be voted on in this appropriation bill that’s before us right now. I’d like to ask Minister Miltenberger if he could clarify that. As far as I know, we haven’t voted on the Department of Education, Culture and Employment appropriation yet for this next phase of the Inuvik schools replacement, yet the letter of award includes that.
Let’s just suppose for a minute that it is legally binding. Isn’t there anything that comes from the FMB or from the Cabinet that would indicate a record of decision that would allow PWS to enter into that contract?
Thank you, Mrs. Groenewegen. Mr. Aumond.
Thank you, Mr. Chair. The department had the authority from the Financial Management Board, up to a certain limit, to award a contract, and that’s where our authority is.
With respect to the appropriation level it is a condition of the contract that was attached to the letter of award that the Member brought up that any expenditure made pursuant to the contract has to be approved by the House. Then there are further clauses, if there’s no money available, on how that would be resolved between the contract authority, which would be ourselves, and the contractor.
Is there an actual record of decision from the Financial Management Board, signed off by the Minister of Finance, I would suppose, or someone acting for the Minister of Finance which would grant that appropriation authority up to that limit Mr. Aumond is speaking about?
Thank you, Mrs. Groenewegen. Minister Miltenberger.
Thank you, Mr. Chairman. There is a record of decision.
Can the Minister tell me: what was the date of the letter? I don’t have the letter of intent or the letter that’s been referred to interchangeably as the contract or letter of intent or letter of award. I don’t have that letter in front of me. What’s the date on that letter?
We’re just going to check the file here. I think it’s July 4, 2008.
Now, supposing that this particular appropriation under ECE gets approval in this House, then the next step will be to draw up and finalize a contract with the party to whom the letter of intent was sent.
I was trying to get at whether there was a significant amount of time between when the letter of intent was sent and when we were talking about this in the House. Then I was going to suggest that perhaps it could have just waited rather than get us into this quasi, possibly legally binding, agreement. But I see there’ve been several months in between: August, September, October — three months. Maybe the Minister could tell me: if the price and the details have not been confirmed yet, why would the letter of intent have been sent out three months prior to the discussion in this House on the voting on the appropriation?
Thank you, Mrs. Groenewegen. Mr. Aumond.
Thank you, Mr. Chair. Agreement on a price has been reached, and that price is still the same as it was back on July 4. There are some details with respect to security and bonding that still need to be worked out, as I mentioned earlier.
The amount of money the Member is alluding to.... We have money in 2008–2009; we wouldn’t be looking for any extra money in 2008–2009, nor any more money in 2009–2010 that you would have seen in the 2008–2009 Capital Estimates. The extra money that would be included in the amount we’re discussing is for 2010–2011 and 2011–2012.
I know that RODs from FMB and Cabinet are protected and privileged information, but I was wondering if the Minister of Finance could please tell us who signed the record of decision to proceed with this contract.
Thank you, Mrs. Groenewegen. Minister Miltenberger.
Thank you, Mr. Chairman. I don’t have that record of decision with me, so I couldn’t speak specifically, but I could get that information.
Thank you very much. I would appreciate that. Again, just to process: when I asked about Ministers providing letters of support for negotiated contracts in their communities — and Ministers getting involved in discussions about capital projects in their communities at all, I suppose, negotiated or otherwise — it was kind of alluded to that I should know, having been in Cabinet, that there is a process. Something that’s a bit curious to me is that if a Minister provides a letter of support to Cabinet for a negotiated contract for a project in their community, does that Minister then leave the room when there’s any discussion related to that project in the Cabinet room or in FMB?
I guess the reason I ask that, then, is because I find it curious that this morning, when I was asking questions about this negotiated contract — and I did not direct my questions to the Premier — the questions were not referred to the Minister of Public Works and Services but to the Premier. It’s just an interesting point I want to make: if this was being discussed in the Cabinet Room, the Premier and Finance Minister remove themselves from the room, but when it’s brought up here in the House and there’s a defence to be made for a specific capital project, in fact the Premier would take the questions.
It was on two things this morning. It was on the office complex and this negotiated contract for the schools replacement. That happened two times this morning in the Assembly here. I just wanted to say that that’s curious to me, in terms of process.
Could the Minister of Finance please tell me who owns Dowland construction?
I understand the majority owners are the Inuvialuit.
Thank you. Does the Minister know if the Inuvialuit beneficial shareholders benefit directly from any IRC business interests?
I didn’t quite get the question. Could I ask the Member to repeat it, if she’d be so kind?
Thank you, Minister Miltenberger. The time has expired, but I’ll let Mrs. Groenewegen re-ask the question.
Thanks, Mr. Chairman. Mr. Miltenberger said that Dowland construction — the majority is owned by the Inuvialuit. I just wondered if the Minister was aware if the Inuvialuit beneficial shareholders benefit directly, monetarily, from the IRC business interests.
That’s a level of detail into the internal workings of the IRC and the Inuvialuit that I’m not privy to.
Thank you, Minister Miltenberger. Next on my list is Mr. Beaulieu.
Thank you, Mr. Chairman. Just looking at the page for Education, Culture and Employment, I see the various school projects. I just wondered if there was a possibility of getting the school in Hay River, DJSS, started earlier by moving the exact same budget one column over to the left, to get all the projects started. It seems like all of these school projects I’m looking at here are going to be started this year, and then there’s some work continuing in Inuvik and also in Fort Good Hope and St. Joseph, except for Hay River, where there seems to be a one year delay. I’m wondering if the government would look at just advancing that project by one year as well.
Thank you, Mr. Beaulieu. Minister Miltenberger.
Thank you, Mr. Chairman. If ECE completes their program reviews through the education side and it’s determined that it’s in the best interests for all concerned that we proceed, then we’ll of course consider that, the same as we did with St. Joe’s here in Yellowknife.
