Debates of October 17, 2014 (day 38)

I will open the floor to general comments on TD 115-17(5). General comments. Mr. Dolynny.

Thank you, Mr. Chair. I appreciate the Minister bringing forward the capital estimates for 2015-2016. Of course, I want to keep my comments as general as I can. I will base my dialogue on the presentation that I just had here.

Thank you, Mr. Dolynny. Minister Miltenberger.

Thank you, Mr. Chairman. The one variable that is yet to be finalized, and the Premier mentioned in some of the debate in the House this morning, and that is the conclusion to our request for an increase to our borrowing limit. When you look at the status quo, the debt ceiling, we’ve been working to keep a minimum of $100 million cushion between us and the $800 million borrowing limit. We are now slightly under that $100 million as a result of the latest decision to cushion and absorb the cost of the rate rider for low water on the Snare. For short-term borrowing, we think we can manage within the $275 million, but for the sake of prudence and taking away the risk that we think it should be increased to $300 million, especially as we look at the request that’s before the House to move $40 million of the Tuk-Inuvik Highway Project from next year to this year to ensure that the project keeps working and that the work gets done without any break. Thank you.

I think it’s imperative that we continuously get those updates in terms of both borrowing limits, the short-term and the long-term. I think people need to clearly understand, like balancing a chequebook, where we’re sitting at, especially with large ticket items as we have before us.

The Minister just mentioned the issue of the Inuvik-Tuk highway and what I tried to read between the lines was that it sounds like there is a $40 million accelerated payment happening in this fiscal year. Again, as a Member, I don’t want to talk about the progress of the project, I don’t think that’s in my expertise.

From what I’ve heard, they did have some challenges in their first season. They did not meet probably all of the requirements in terms of, I guess, the original contact, which is something I don’t want to talk about at this stage, but I have great faith that they’re going to continue on and do a good job in its entirety of a complete 140-kilometre stretch of road.

My concern is the fact that we are now taking money from another budget year of $40 million and accelerating it into this year. Is this our only plan of action given the fact that we know that not all the terms were met last year? Is there a way that it can be mitigated a little bit easier on our pocketbooks other than taking a $40 million hit in this fiscal season? Thank you.

Thank you. This project, of course, is funded $200 million by the federal government, $100 million by ourselves. The Government of the Northwest Territories, we’ve got that funding flow starting to work.

In response to the Member’s question, it’s not an advance. It’s going to be from money spent for work done that we are of the opinion of having had one year under our belt and seeing the work that was done by the contractor, got through the start-up issues, got the equipment going, got the staff online, local staff, got all the processes and procedures figured out that this year they will be able to do the work as has been laid out by Transportation to in fact be able to, if all goes according to this plan, which we have every reason to believe it would, is to conclude this project in three years instead of four. Hence the need to look at moving up some of that $40 million.

The intent would be for the project to start as soon as they’re able with the weather, and the concern would be that without any additional funds that they would, in all probability, run short of cash sometime late December, mid-January, which would put the project in a state of hiatus where we don’t have any money to get the work done. So this is, in effect, a good news story where we’ve got things going, and we believe now that we’ll in fact be able to accelerate the project and get the project done earlier than has been planned. Thank you.

Thank you. I do concur with the Minister. It’s always exciting news to hear that a project is going ahead of schedule, but I want to zone in a little bit on what was just said. The Minister mentions that money is spent for work done, and quite frankly, I think Members on this side of the House were led to believe that not all the work was done last season for various reasons, but again, this was the first year the group was building a road in a very trying environment, but there wasn’t all those milestones being met. So the work was not completely done so there would have been money lapsed from last year, which would be used in this fiscal year. Now, what we’re being asked from the committee here is to look at accelerating more money into the project without at least a proof of performance. Is that indeed what was being asked of Members here, that yes, we are trying to, we don’t want to hold back construction by any means, but we are being asked to bring money into a project without really having all the proof or all the matrixes checked off as being completed? So, in theory, it’s a bit of a leap of faith that we’re using public money to accelerate a project to which really has not met all the terms and conditions from year one and it sounds like we have got some pretty lofty goals for this fiscal year to complete X number of kilometres when really the track record hasn’t shown that.

I guess the level of comfort I know that some Members have on this side of the House may not be as enthusiastic as the Finance Minister. What reassurance or what guarantees would we have if indeed we’re using this money, this $40 million now and taking it from this budget year, which indirectly could affect other projects that were in the queue for supplementation or start-up, we’re now taking money from a future budget season and accelerating it here, which is of concern for a few of us here.

So I guess the question is what guarantees, if any, can be placed, if possible, that proof of performance will indeed occur by this advancement of the project and this extra $40 million from our budget? Thank you.

Thank you, Mr. Dolynny. I know the question is very detailed, but we are in general comments. I’ll allow the question to happen and ask the Minister to answer it, but if I could just remind all the Members that we’re in general details and we’ll have plenty of time to ask detailed questions. Mr. Miltenberger.

Thank you, Mr. Chairman. I was going to raise the same concern, because I could have the appropriate deputies here to have that fulsome discussion. But in regard to the question, there was no lapsed funding that we can detail to the penny where the funds were spent. Things, start-up costs, there were big-ticket items like the payment for the gravel are two that come to mind. I’d also point out that the first year was the toughest when it came to the amount of culverts and bridges and terrain to cross. So that big piece has been done and on a go forward basis it’s considerably less onerous when it comes to that type of very specialized, expensive installation of the large culverts and bridges. Thank you.

Thank you, and I do apologize. I didn’t mean to get prescriptive in the detail of that question, it’s just the topic did open up and I apologize to the House. So I’ll back up the bus here and get as general as possible.

Will this $40 million advancement in the project, does it deter from any other projects that the department had in the queue for this fiscal year? Thank you.

Thank you. No, it does not. Not in this year, not in the next year. It has no impact on the existing capital plan. As we’ve indicated from the start, this project, the Stanton Hospital and the fibre optic line are large, unique projects that are being dealt with outside of the traditional capital plan, which is focused on all the projects that have been on the list that have been reviewed extensively through the committee process. Thank you.

Thank you, Minister Miltenberger. Next on my list I have Mr. Bromley. General comments.

Bob Bromley

Weledeh

Thank you, Mr. Chair. I guess my concerns have ramped up annually based on the track we’ve taken, focus on infrastructure and money rather than people where the real potential for gains are. As I understand it from this budget and our current conditions, just starting with our current conditions, unexpected costs, $50 million for forestry, $20 million unexpected and un-consulted expenditures for further subsidies on electricity rates, $40 million indicated in this budget for the Inuvik-Tuk highway, that’s $110 million that goes against our borrowing limit and burrows into our $100 million debt limit. We need an infrastructure budget, Mr. Chair, that is embedded within our fiscal strategy, and that’s the relevance here. These are of grave concern. How many years now have we heard the Minister say we’re going to spend this, a lot, on infrastructure – this year over $300 million on infrastructure – but next year we’re going to return to normal, and we never return to normal. We continue to say, oh, yeah, no, we’re going to go for it; we’re going to bump up our borrowing limits and so on. There are really serious concerns about our approach and our capital plan in this case.

The Minister mentioned our net fiscal benefit from devolution which was negotiated at $120 million a year and now it’s $113 million a year for a five-year average. This year, I understand, it’s about $80 million. This is all relevant to this budget. We didn’t hear that that’s the case. Then there’s the population loss, all of which affects the money that we have available, the revenue from which we draw this capital budget.

When we are putting a capital budget together, we need to consider our fiscal strategy, where this fits in our fiscal strategy, and what we have is a record of significant events. This year there’s $110 million of unexpected. We don’t know what it’s going to be next year when we’re entertaining this budget, but I would say we need to be conservative, based on these sorts of events. I don’t see that happening with this. It’s always the next year.

Again, previous years we’ve heard that the capital budget will be modest the following year. Again, we have an extraordinary 300-and-some million dollars, and that’s before we start adding to that budget, which we know happens every single year, and we know for a fact that this Cabinet has other expenditures in mind that we’re not able to see clearly and discuss, and again, this is not a great basis for being able to critique a capital budget.

Meanwhile, we’re contemplating even more mega development with the Mackenzie Highway project. Again, what we’re doing is lining up to leave all these huge commitments and gaps in ability to provide for these commitments for the 18th Assembly with our compliments. Not something that I’m comfortable with.

Certainly, the $40 million on the Inuvik-Tuk highway, I think, again, that’s precursor to this budget, so I’ll leave that for another time. But there are huge issues that are not addressed in this. For example, despite the legal requirements to provide infrastructure as required by the courts for the Francophone educational system, the education budget remains at 2 percent, despite being something like 25 percent of our budget operationally. For the third year in a row, 2 percent of our capital budget for education. This despite the fact that we have schools like Sissons, 40 years old, needing tens of millions of dollars in renovations.

Again, this is not a complete budget. We know that. Either that or we’re just accepting fines from the court or something. I don’t know.

Again, this shows a focus on infrastructure despite the fact that Northerners have a record of achievement in the absence of infrastructure as long as they are given appropriate supports, and this government’s approach is to throw money at infrastructure, particularly to try and attract mega development when we know the global economy is not there. This is not going to be realized, and there are good reasons for that. Things are being undermined in a whole systemic sense and those days are gone.

The Stanton Hospital P3 Project, I know I and certainly others are questioning the P3 approach particularly given the lack of real opportunity or opportunity for real input to the P3 process and particularly at decision points which are made without input by committee. I know committee, when we reviewed the P3 policy, it did have an opportunity for input then and we were not particularly happy with the outcome of that.

I think I’ll leave it at that and anticipate providing other general comments during departmental discussions.

Thank you, Mr. Bromley. Minister Miltenberger, any reply?

Thank you, Mr. Chairman. I would like to thank the Member for his comments. I’ve been now in this Chamber with the Member, this is going on our eighth year and I just made note of one of his comments that I put quotation marks around. I never thought I’d hear him say this in the House, and maybe he’ll say I’ve taken it out of context, but I was quite struck by his comment about how we have to be conservative. That’s not something I would normally tie to the Member.

The question I would ask, and we have to ask, is: How do we build the territory, and what investments do we make, and what are those critical investments? We spend $1.6 million on programs and services. We have a very modest capital plan that we work hard constantly to supplement, and while the Member says that people are happy to live without any infrastructure improvements as long as we have programs, and sometimes you can’t do one without the other as long as we put money into programs and services, well, we are putting $1.6 million into services, and I can tell you, having been around this table now going on to my 20th year, that the capital plan is incredibly important, especially to those small communities outside of Yellowknife, all the communities outside of Yellowknife. I would suggest, in fact, for Yellowknife, because I’ve seen the intense lobbying for capital dollars in Yellowknife for Stanton, for elders facilities, for shelters, there is a significant interest. I would suggest to you, as well, that people, in fact, rely and expect the government to put capital dollars into play fairly across the territory.

What we are proposing here today was laid out four years ago, or three years ago – we’re going into our fourth year here – where we laid out a fiscal plan. Two years of fiscal discipline. We’ll manage our expenditures. We’ll try to improve our revenues, and we’ll look at beefing up the capital plan $50 million a year in the final two years. We are honouring that commitment, that plan that we laid out and was accepted by the Legislature.

Yes, we didn’t negotiate resource revenue sharing at $120 million. That was the average at that time. We negotiated a resource revenue sharing agreement that says we collect 100 percent of the royalties. Fifty percent goes to the federal government, 25 off the top goes to the Aboriginal governments, 25 of what’s left goes to the Heritage Fund, and the rest we put towards infrastructure and debt repayment, recognizing, as I said in my comments this morning, that’s a very volatile area and it will continue to be, which is why we’re keeping it out of the area of programs and services and building that expenditure into our base.

The Member said that there are other expenditures that we, the government, are not telling people about or the committee about, and I can tell you that we’ve laid out the issues in the capital plan, and we have got all the projects that we have on our to-do list laid out. We deal with issues as they occur. The $55 million for fires, the $20 million for the rate rider, the $40 million because of the project in Inuvik is going ahead and hopefully at a faster pace than was anticipated and we want to keep it going.

We also do have resources built into our fiscal framework to resolve the issue with the Francophones and the schools in Yellowknife and Hay River. I would point out in Yellowknife we do have a situation that there is more classroom space than we have students. There are declining enrolments. We have three boards. We have more school boards than makes sense, in my mind. There are inefficiencies. We have to figure out a way to put all that space to work and it’s tied into the money that’s available. So we have to have that discussion. We are hardly throwing money at capital. We fight hard, save hard, work hard to get every dollar we can so we can put infrastructure on the ground in all our communities.

The Stanton project is a big project. We have done a policy on P3. We are looking at setting up a P3 corporation building off of the work and concern and encouragement and direction from committee. While there may be questions about specifics, we have to look at this kind of approach because it allows us to do things we probably wouldn’t be able to do without that kind of partnership approach, the same as the approaches we are taking with the fibre optic line that allows us to put critical, economic infrastructure on the ground in a way that’s manageable and gives us an opportunity to make our dollars do the most work possible. Thank you.

Thank you, Minister Miltenberger. Next on my list I have Mr. Moses for general comments.

Alfred Moses

Inuvik Boot Lake

Thank you, Mr. Chair. I think we can see there is a bit of a focus and trend that some of the Members are talking about and that focuses on fiscal management and responsibility specifically with our short-term borrowing issue. I heard some questions that were asked around that issue. One concern that I have is the risk that it puts our government at when we’re having all these supps being brought before the government. With those supps, there are two big ones. I know there is one we knew was coming and that was on the news with the forest fires and that the government was going to have to take the costs on. There was another one with the rate rider issue, and the Minister alluded to another one in the amount of $40 million.

I know we’re talking about infrastructure, but there’s a bit of a theme being discussed today. Having those supps come before committee and before the House, but very little notice of time to make the right decisions and have the good dialogue and discussion on whether we approve those or not. I just wanted to bring that up as an issue for me on how we’re making decisions and spending the taxpayers’ dollars, that when big amounts in supplementary appropriations are brought before committee, that we give enough time to have the dialogue and discussion so we can go back to our constituents and see how they feel about it, and residents of the Northwest Territories.

Earlier today the Minister made some opening remarks during his Minister’s statement. He did mention that the fiscal reality is we do depend on the territorial formula financing. We also saw that the NWT population decreased this year or last year by 0.5 percent. Roughly that’s about $6.5 million, I’d say. If we are looking at that as the fiscal reality of this government, that’s something that needs to change, because that funding we use to put into infrastructure and programming.

So, just a few opening general comments to talk about where we are and some of the concerns I have as a committee member and how decisions are brought forward to our committee and concerned Members.

On the capital budget, we have some big, high-end issues coming down, the Mackenzie Valley Highway, the fibre optic link and Stanton Territorial Hospital. In the Minister’s opening remarks, he did mention that we might be looking at a supplementary appropriation in February/March with this new Building Canada project. It’s good to hear because it does take some ease off of some Members who have been really pushing for some of the big projects in the regions. It’s not only for the regions; I think it will be something that benefits the whole NWT. When that appropriation comes in, I hope there is good discussion on where the priority dollars are going, what’s going to be needed.

One thing we have had during our business planning sessions, also, is the flow and building of housing in the communities. I think we are going to see a lot of gain there for the small communities as well. I think there are going to be about 100 units over the next three years, starting last fiscal year. I think that’s going to ease some of the waiting list and some of the public housing issues that we have in our small communities.

Highways is another big one. One of the other things I wanted to bring into focus in the community of Inuvik that I didn’t really see in the business plan and no dollars allocated for it was the airport road from Inuvik to the airport. Every year there is always work being done on it and every year it continues to get into the same shape it was the year before. I want to see more dollars put in there, so the foundation is stable so we don’t have to do repairs to it every year. Just last year the runway had an issue where no flights could come into Inuvik because there was a big dip in the runway. We put that issue into the planning stages when it was built years ago and how we are going to fix that. Just the airport itself, I believe the airport is the oldest building right now in Inuvik that hasn’t seen any major retrofits, major changes, unless you want to count the time we had that big storm and the roof flew off.

---Laughter

I think the airport needs to be redone. I think it’s on the books, but it is the oldest building in Inuvik.

We are in our third year and there are still concerns. Sorry, we are in our last year and we just finished three years of doing this and we still get concerns from all the Members, whether they are small communities, regional communities or territorial communities. Those are some of my concerns, and I will have questions when we go through detail of the departments.

Right now some of the major concerns moving forward is our fiscal responsibility and management of how we are using our short-term borrowing dollars and what risk that puts the government at. Obviously, we have had some unforeseen costs, and what is this government going to do the next time an unforeseen expense comes our way? Are we going to be able to handle that issue when it’s in our face?

So, just some general comments. Thank you, Mr. Chair.

Thank you, Mr. Moses. Minister Miltenberger.

Thank you, Mr. Chairman. With regard to the issue that the Member started his statement on regarding fiscal management and responsibility, we have, over the last eight years, managed our way through some extremely traumatic financial times, including the major downturn in 2007. As we have pointed out, we have still not rebounded from that, but we manage to navigate our way through those difficult times without any program cuts or layoffs and we continue to invest in capital.

We give, in every case possible, as much advance notice as we can. For example, when the fire season was going, we sent out correspondence indicating we are going to need special warrants. I do appreciate that we didn’t have the exact number of $40 million for the Tuk-Inuvik highway or Inuvik-Tuk highway. While we had flagged it, we did not have the number that would make it a very specific and focused discussion. As soon as we got that number, we came before this House. That is a project of territorial significance. We do recognize and we have a plan that’s going to carry through the life of this capital plan that’s before House and then next year, the year after that, sorry, at this point the intent is, and the plan is, for the capital plan to go back down to $75 million a year, which everyone will discover, once again, how little money that is for the $3 billion infrastructure deficit that we do have.

The Building Canada Plan Fund, we’re just waiting for some final numbers. We have briefed committee and I would indicate to the Member that in regard to the road, the terminal building and the Dempster, those are all projects that have been identified as we’ve laid out to committee. We’re just waiting for the numbers and how the money will be spread around, but very clearly in the Inuvik region in the Member’s constituency those are some of the priority projects that are there to be addressed. I do thank the Member for his comments.

Thank you, Minister Miltenberger. We have a little bit of time left on the clock. Mr. Moses. Thank you. Moving on with general comments, I have Ms. Bisaro.

Wendy Bisaro

Frame Lake

Thank you, Mr. Chair. I have many comments. It’s hard for me to put them into sort of a cohesive commentary, but I’ll do the best I can. There have been a lot of comments in the last couple of days. We heard from the Premier yesterday in his sessional statement, we heard from the Finance Minister earlier today in his statement, we’ve got the opening remarks from the Finance Minister, we’ve got comments that have been made by members of Cabinet over the last month to two months to three months about expenditures that we will have to endure, I guess, for lack of a better word. I am seriously concerned that our fiscal strategy is in peril. Basically, I think it’s gone out the window.

There has been reference to some of the work in terms of energy and so on, and reference to things that we were working on four years ago. We were working on energy stuff four years ago and we have spent millions of dollars in the past four to five years, basically to no avail. We do not have any projects that will give us more generation and/or will give us greater transmission capabilities and I appreciate that we have to do some research, I appreciate that work needs to be done, but I think, for me, it’s symptomatic of whether it’s too narrow a view or whether it’s looking too broadly and not looking behind to see what it is we’ve left behind. But we tend to spend money and it doesn’t seem to be a problem.

Admittedly, the fire season was definitely something that was out of the ordinary, but we should be prepared for extraordinary circumstances like the fire season that’s costing us around $55 million. On top of that, within the last month, month-and-a-half, we’ve been advised that we’re going to spend an extra $20 million to reduce our power rates, and I’m all for that, that’s great, I don’t want to pay any more for power than I am already, but where is that money coming from? It’s not part of our fiscal strategy and I don’t believe that it’s something that we had waiting in the bank for us to spend. So I’m quite concerned that our fiscal strategy is being impacted by recent decisions and by recent circumstances like the fire, and that albeit we have a strategy, I don’t think the decisions that we’ve been making have been made in light of our fiscal strategy and in light of our finances. It’s mentioned several times; I think the Minister’s opening remarks stated that we have limited fiscal resources. Yes, absolutely we do and I know we have a big, long list of infrastructure needs, but again, I’m concerned about the decisions that we’re making.

A statement this morning, the Minister said we cannot rely on receiving resource revenues from the same sources forever, and that leads me to my second point, which I think I’ve mentioned every year, it doesn’t relate specifically to infrastructure, but we do not seem to have any appetite to go after a new source of revenue. If we don’t have any new sources of revenue then we are bound to keep our infrastructure budget low, presumably low, but to keep our infrastructure budget down to what apparently, according to our fiscal strategy, is acceptable. Again, I have a problem with the fact that we are within our fiscal strategy.

It’s stated in one of the statements within the last few days that we’re not going to increase taxes. I think it may have been the Minister this morning and that that commitment was made four years ago and we’re not going to change our mind. Well, circumstances change and if we lock ourselves into something that’s four years old and the circumstances change so that it’s a different set of circumstances today, surely to goodness we should open the box and consider whether or not we should change the decision we made four years ago. I have a difficult time that we will forever, at least until the end of the 17th Assembly, say we’re not going to do anything about taxes, we’re not going to increase taxes, we’re not going to increase taxes.

Just in general, I look at the summary of our infrastructure investments in the tabled document that we just received and between the current year’s capital estimates, which is $222.7 million, we’ve now in 2015 capital estimates gone up to $277.9 million. So some 55 to 56 million dollar increase, and if our resources are as limited as we are led to believe, why did we maintain our capital budget at an extra $50 million? I know it’s because we have all kinds of needs, but if our needs are needs in terms of financing and the fiscal strategy override putting money into infrastructure, I think that’s something we ought to be looking at. It’s a question which I don’t think we were even given an opportunity to consider. We were simply informed that the capital estimates would be $125 million.

The focus in this budget, for me, is weighted too heavily on economic development and on transportation projects. The highways and winter roads is $108 million out of our $277.9 million. That’s over a third, or equal to a third, and that’s too high. Like Mr. Bromley, I believe that we put too much money into projects, which presumably are going to assist us with economic development, and we’ve put not enough money into infrastructure, which is going to assist our people. I’m thinking about schools, I’m thinking about health structure, and I know there’s some money in there, but I don’t think the same emphasis is on those kinds of infrastructure investments as it is in highways and economic development.

A couple of things; the Stanton project is absolutely necessary, it needs to be done, but I am quite concerned that we seem to be committed to a P3 route. What little research I’ve done on P3s for hospitals doesn’t show me positive results. It’s totally a mixed bag, and I would say I saw more negative results from P3 projects for hospitals than I saw positive. I’m a little regretful that Regular Members didn’t have an opportunity to have greater input into the decision to go P3. We were presented with it, but we didn’t really have an opportunity to consider and to grow that advice or our own opinion as to whether or not P3 was the right way to go.

The other thing I wanted to mention, and what I see as a lack in the budget, is infrastructure for housing, and I know there’s a lot of money in housing, but I don’t know that we are targeting the money for housing the way that we should. I’m particularly concerned for housing for seniors across the continuum from supported living right through to absolute extended care. It’s a huge issue here in Yellowknife and I want to say, as an aside, that Yellowknife facilities do not just serve Yellowknife residents, they serve the territory, and I take a bit of an offence by the Minister’s response that Yellowknife lobbyists get things for Yellowknife that seem to be only for the benefit of this city. That’s not true in the least.

The other thing that we don’t have and it’s a policy that we have not to increase our public housing units. Again, that’s an issue here in Yellowknife, the wait list for public housing is huge, but we heard earlier this morning the wait list for public housing is huge also in other communities. I think it was Mr. Blake who was commenting on that. Yet we have a policy that we will not increase our public housing numbers, but we have many, many residents who need access to public housing, and specifically single people are at the bottom of the list and forever stay there. They never get to move up.

I just have a couple of questions. One question has to do with the borrowing limit. We have been told over the years that we want to maintain a $100 million cushion between what our borrowing limit is and what we actually borrow. I’d like to know, at this point, with all the changes in our fiscal strategy that we are expecting or have so far undertaken, where are we at with our borrowing limit? I’m presuming we’re going to go over it, but I’d like confirmation on that.

My other question has to do with the reserve. We set up a reserve with both our operations budget and our infrastructure budget. I’d like to know, and I guess this is a this year question, but where are we at in terms of the reserve for ’14-15 infrastructure budget? I’m presuming, again, that that’s all used up and that we are well in the hole.

Thank you, Ms. Bisaro. Minister Miltenberger.

Thank you, Mr. Chairman. The Member commented about the millions that we’ve spent, and we have, since the last government. In the last government I think we earmarked about $60 million, and this government has continued to spend additional millions on things like biomass, solar, wind, looking at other alternatives, energy conservation. We’ve spent money probing out the issues tied to the connecting of the Taltson grid and the Snare system with an intertie to the south. We took the approach that if we created a market for biomass, which we have done both with our own facilities and with the public through the rebates and incentives that we’ve put there for people to take advantage of, plus benefiting from the high cost of fuel which has given people an even greater incentive, that once we built that market we would build an industry, and we are in the critical final stages for us to be working with Aurora Pellets to conclude the agreements that are necessary to allow the development of a biomass industry in the Northwest Territories that will meet the energy needs on a biomass basis for the Northwest Territories, and that’s a $20 million project. It’s going to bring jobs. It’s going to bring all sorts of affordable energy to people in the Northwest Territories. We continue to look at things, net metering, standby charges as it comes to solar, the charrette that we’re coming up with in November. As the Premier indicated, he is going to allow us to focus not on the transmission side, which is too expensive at present, but on the generation issues and options that are there and the need to continue to invest, as a government, in that type of area. We’ve heard it now clearly across the Northwest Territories and in this House. The cost of living, energy is one of our biggest costs. We can’t turn our backs on a need to invest in energy. We’re going to, in fact, continue to invest, hopefully, even greater amounts to deal with some of these critical issues.

The Member made a comment about the impact on our fiscal strategy, and yes, as we reported to Cabinet, these issues like the fires, like the rate rider, to name two, have an impact on our fiscal strategy, but we still have built in the flexibility to manage those, though we are now slightly under the $100 million cushion that we had set for ourselves. The job of government is to respond both to what is planned and things that happen that we may not necessarily control, and by dint of our hard work collectively in terms of fiscal discipline, we’ve built in that flexibility, and I can assure the Member that all our decisions are made very clearly looking closely and constantly at our fiscal strategy, our borrowing room, long-term impacts, how do we manage all these things, all these various demands.

The Member says we should raise taxes, don’t spend so much on economic infrastructure, continue to invest more in programs and services. To me, it’s something of a conflicting message. We need to invest in economic infrastructure. I think we’ve got a lot of money of our $300 million plus the Stanton Hospital and the fibre optic line that are not roads, but I could make the strong case on the fibre optic line that it has huge impacts on education and health among other things. But we need to hit that balance. We can’t turn our back on the need for economic infrastructure. We rely on our territorial formula funding to be sure, but we still generate 25 percent or so of our own revenue.

The world is still in very shaky economic times, and increasing the tax burden at this time, as we’ve said in previous government, is not a time to add to that burden when we know that there are other things we can do to manage our way through this, and if we want to, in fact, incent people to come here, businesses and people, and we want to affect the cost of living, increasing our tax burden on people that live here seems to be somewhat counterintuitive.

Why did we keep up with the capital plan of $50 million? Why did we not just cut it back? We laid out a plan four years ago. We revisit it every year, and there was no indication from anybody or committee, any committee, that said we think we should cut the capital plan by $50 million. We would have had a very interesting discussion about that, but that was never raised as an issue. We all agreed with the plan. We had done the work to make it a reality and we are following through on that.

The issue of the Stanton P3, we can have those discussions. There have been discussions now for years with committee about P3s and Stanton, and we’ve charted out a path that allows us to, in fact, get that done and expand Stanton by 40 percent and upgrade the rest of it to 21st Century standards, and we’ve got to do it in a way that’s fiscally manageable.

I’ll leave the detailed questions on housing in regard to seniors and public housing for especially singles, as the Member pointed out, to our Minister McLeod. I would point out, though, that we’re still continuing to deal with the very significant pressures of the declining CMHC investment in the Northwest Territories and across Canada in public housing.

We have indicated that for the $40 million for the Tuk-Inuvik highway that that’s part of the project that has already been laid out. There’s a need, just for the sake of erring on the side of caution, increasing our $275 million limit to $300 million so that we can cover that off, even though we believe we can do it with the existing limit but then we’d have no flexibility at that point for short-term borrowing, which means it will be paid off as soon as April 1st hits and the budget is approved.

Our borrowing limit right now, the discussions are still proceeding with the federal government. With the $800 million borrowing limit, we’re slightly less than $100 million that we were keeping as a cushion to give us maximum flexibility for unexpected events.

Thank you, Minister Miltenberger. Continuing on with general comments, I have Mr. Bouchard.

Thank you, Mr. Chair. My question is good news or bad news, which do you want to start with? I’m going to end on a positive note, so I’ll start with the bad news, I guess.

Just like the Members here have indicated, I would have the same and similar concerns about our fiscal plan going forward. The government has spent a lot of money on fire suppression this year. Now we’re talking about an accelerated plan for the Tuk to Inuvik highway, which in one way is a good news story. We’re getting the project done quicker, but how do we afford that speed and, I guess, what gets run over by doing it faster? The problem that I’m having with these big projects is the fact that we do them, and we try to keep them on schedule or ahead of schedule, and then contractors and northern benefits get run over. When we approve these projects we think, okay, well, we’re going to have a major project for the Northwest Territories that’s going to have economic benefit for the region, for the territory. Now we accelerate it. How much more employment is there? How much more contractors or equipment has to come out of the South in order to handle that short-term acceleration? I am very concerned with that, Mr. Chair.

Mr. Bromley indicated education and the low volume of capital expenditures there. We have limited expenditures in that area, especially when people are seeing the government spending $20 million here, $40 million there. Yet some people are trying to ask for money to upgrade, not a school, but upgrade community health. Mr. Menicoche talked about that a couple of days ago. Everyone is comparing our activities to our expenditures. Every time we hear someone saying why can’t we fund a handivan when we just gave $20 million for a rate rider, we’ve got all kinds of people asking questions about that type of expenditure when we spend big amounts of money at the drop of a coin. Yet people have been begging and pleading for stuff to be on the red list for years, then we go and do major expenditures. It fits into our fiscal strategy all of a sudden. It fits into our $100 million buffer miraculously, Mr. Chair.

One of the other areas of concern are the French schools. We have a French school and we’re going to court. One of the biggest expenditures is putting gymnasiums into these facilities. Yet we can go ahead and spend $20 million or $40 million. We divide communities and school boards against each other for the minimal amounts of upgrading the French schools.

Obviously, I have concerns and questions about the air tanker upgrade. What announcements have we done? What are the costs currently? Have we looked at a phase-out approach or are we just going to go out and buy a whole bunch more new units and figure that’s going to be our solution, not knowing what those new units are going to work like? Is there a phased approach we can look at? I would be interested in hearing some of the debate on what the department has done there in ENR.

I guess on a good note, it is good to see us investing back into the territory. The capital budget has more economic development, I would think because we are going to spend more, but again, I am concerned about that accelerated process of a couple of those projects.

It is good to see us investing in chipsealing the highways. There are several roads in my riding where it’s an opportunity, an opportunity to see more tourism. Mr. Menicoche talks about Highway No. 7. We’re looking at doing some stuff there and looking at doing several highways. I’m looking forward to that.

Obviously, it’s good to see us putting into the health facilities throughout the Territories. We are completing the large-scale project in Hay River. The mistake of this government not putting in extended care beds into Hay River when they are taking them out of the existing facility is being alleviated by this current budget coming up. So those are some of the positive sides.

Deferred maintenance is dropping. The department indicated to us that maintenance that we haven’t been doing has been dropping.

It’s good to see us putting more money into our parks. In the South Slave, we see a lot of road traffic, and those facilities are very important to tourism.

I guess those are general comments, Mr. Chair. We will have specific questions on each department. Those are some of my concerns and some of my appreciations. Thank you.

Thank you, Mr. Bouchard. Minister Miltenberger.

I thank the Member for his comments. His concern about can we afford to accelerate the Inuvik-Tuk highway and the potential lost employment and extending it out over the year, the bottom line concern about the project is to get the job done. We want to keep it to budget, $299 million I think is what the budget is. The reason we went to a negotiated contract was to maximize the involvement of local contractors and local employment, which the project is delivering, I believe, in spades. But at the end of the day, it’s not a social program. The concern is to get it done. If we can get it done in three years, keep everybody employed going flat out and end up with a project that’s on budget, then I think we’d all be happy. If we deliberately let it run out an extra year and run up our costs over and above the $299 million, we would be having a whole different discussion in this House about cost overruns and why did we do that and we should be managing this project properly. So we are focusing on making sure we maximize all the northern benefit we can, and if we can do it in three years, and it’s the contractor that has come forward with that work schedule based on his and our collective experience, we think it has value.

The issue of limited expenditures in education, if you did a 10-year longitudinal look at the capital plan, I think you would see that there has been, over time, a very equitable sharing of expenditures. In the last government, I can remember the extensive, intense discussion about the big school, super-school, in Inuvik, which at that time was before the bridge, was one of the biggest capital projects we had going, plus all the other school work that has been done across the land. So it’s very difficult to look at one capital plan for one year and make a determination that somehow one particular area over another is getting shortchanged. If you take the long-term view, I think we can make the case. Overall, we manage to address the needs of all the areas of our responsibilities.

As I indicated as well, there are resources to help sort out the issue with the French schools. My understanding is there are still discussions going on, but there are resources built in to help resolve that.

The air tanker upgrades, to me, especially after this last year, are critical. It’s in the neighbourhood of $27 million. That number was made clear. We’ve briefed committee, this government, last government. We have going on its way to committee, all the detailed reports we’ve done in the last seven years on this issue. These air tanker upgrades, we know that the planes can do the work that’s necessary. We have watched them now under real life battlefield conditions here and we’ve seen them operate down south. We have some very significant problems with avgas and accessibility. It’s got lead; it’s being phased out. The tankers we have are older than most of us. Currently, the 215s are older than most of us sitting in this room. An upgrade of those tankers would cost about $120 million and it’s not a cost that I could, in good conscious, or we as a government, in good conscious, could bring forward. We are convinced that this is a critical way to go. We have to get in a queue. It’s going to take years to get these planes made and we need to be prepared. If the new normal, God forbid, is what we saw last summer, then we are definitely going to want to make sure we can assure the people of the Northwest Territories that we have the tools ready for the people, men and women in the air and on the ground, the thin line that protects us from the ravages of forest fires, that they are properly equipped to defend our interests and make sure that they protect their safety while they’re doing that.

I appreciate the Member’s comments about the things he does see as positive. The issue of highways are good. It’s a challenge. The roads are important. Some of us, our communities have no roads, and they remind us of that constantly as we talk about the investing in highways, but they are critical infrastructure for accessibility and economic development.

We are doing the job necessary, I believe, with committee assistance on health facilities. We, too, share an ongoing concern about deferred maintenance and not letting it get built up on us to the extent where it has in the past where it becomes a crushing burden and starts eating up all our capital. Thank you.

Thank you, Minister Miltenberger. Continuing on with general comments, I have Mr. Blake.

Frederick Blake Jr.

Mackenzie Delta

Thank you, Mr. Chair. Just a few comments on our capital budget. To start off, as I mentioned earlier today, a huge need for housing. I know we’ve done a good job over the last number of years replacing units, but as I mentioned, we now need to focus on adding, because our communities are growing. That’s one of the things the Finance Minister wanted to see in future years. So I think we need to prepare for that as we move forward and ensure that the people that move back have a place to stay.

Also, in other communities, for example, replacing units that have been damaged whether it’s due to fire, for example, in Tsiigehtchic a couple of years back a single unit duplex caught fire. Since then, it’s been sitting there. I think you need to replace that, as there is a demand for housing in that community as well.

Also, we’re talking highways and I know last year the plan was, as we moved forward with the Inuvik-Tuk highway, that we’d prepare the Dempster Highway. Over this past year there hasn’t been any work done on the construction aside from minor repairs. We do need to continue that. I know we are awaiting that Building Canada Plan and I can’t wait to see that move forward. A lot of people depend on that work, upwards of 50 people every summer.

Other areas as well, the Department of Transportation is thinking of upgrading one of their loaders, which is a 1976 loader. I mean, that’s almost 38 years old. For the same cost of purchasing a brand new loader and I don’t see the reason for upgrading such an old piece of equipment because the value will not be there in the next five years.

Also, as we move forward, I’m very glad to see the extension of the ferry services in Tsiigehtchic, but the community, the people that live up there know that we need a new ferry. Whether we purchase a new one or do the proper maintenance to the Merv Hardie and have it moved to Tsiigehtchic, because that Louis Cardinal is not built for operating into December, even though it did make a few trips last year. People that have worked up by Fort Providence know that this ferry is more adequate for our region and we really want to see that in place for next year.

With that, those are the few comments I have here today. Thank you.

Thank you, Mr. Blake. Minister Miltenberger.

Thank you, Mr. Chairman. I appreciate the Member’s comments, the overall support. I’m not wanting to look like I’m just pushing off his issues, but he has made some very specific comments about new units, burned units. I’ll leave those for Minister McLeod.

The issue of upgrading a 38-year-old loader as being too old, at 63 I get really sensitive about replacing things that are too old, but the Minister of Transportation will deal with that issue in detail as well as the discussion about the ferry.

The good news is, as we’ve pointed out previously to Minister Moses, with the Building Canada on an ongoing basis for the next number of years there’s going to be…

---Interjection

Sorry, Mr. Chairman, if I’ve misstated titles. I thought I said Mr. Moses. The Member, Mr. Moses, said about the Dempster Highway, raising that concern, I just wanted to confirm that, in fact, with the Building Canada Fund there’s going to be some fairly significant money on an ongoing basis to address that issue. We’re also intending to be able to address the road from the airport into town in Inuvik as well as that airport building.

So I thank the Member for his comments. We have all the pieces in place; we’re just waiting for the final signed agreements on the Building Canada Fund. That will be rolled out as we brief committee, and hopefully that will address a lot of the issues. Thank you.

Thank you, Minister Miltenberger. There’s a bit of time left on the clock here, Mr. Blake. Any other comments?

Frederick Blake Jr.

Mackenzie Delta

Thank you, Mr. Chair, and I thank the Minister. It sounds very promising. While we’re at it we could add in the Willow River. We’re still waiting to build a road up there. The community is still thinking of actually connecting to the Dempster Highway in the near future, and they feel that that can cut costs for freight and also to fly into other communities.

One more thing was the extension of the ferry. The Minister didn’t reply to that yet with the Louis Cardinal, possibly moving the Merv Hardie down there. We’re really looking forward to that and hopefully that can happen within the year. With what it did cost last year to operate, we could have fixed the Merv Hardie to 100 percent. Thank you.

Thank you, Mr. Blake. Minister Miltenberger.

Thank you, Mr. Chairman. Just quickly on a couple of the items. I understand the bridge for the Willow River is in Inuvik just waiting to be hauled over to Aklavik so it can be put in in the coming year. So, very timely as you think about it.

The extension of the ferry or the changing of the ferry, I think that’s a discussion you’ll need to have with Transportation. My understanding is there is significant differences in the ice and how hard the ice freezes up north as opposed to much softer ice and the way it freezes down on the Mackenzie at Providence, but the Minister is listening closely and he and his officials will be able to have that much more informed discussion with you than I could ever hope to provide to you. Thank you.

Thank you, Mr. Miltenberger. Continuing on our questions on general comments, I have Mr. Menicoche.

Kevin A. Menicoche

Nahendeh

Thank you very much, Mr. Chair. I’m going to have to check Hansard, but what’s not in the capital budget the last five years is the Trout Lake stand-alone school, so I’ll continue to press that matter. Earlier today in the House, or yesterday, I believe there was a commitment towards the planning studies. So, certainly the community looks forward to it and working with government to find a resolution to a stand-alone school without giving up the need for a community centre, which is valuable for the community of Trout Lake.

Also, I see in the budget there’s two level B, or level B/C health facilities being constructed, and there’s certainly the need to replace the one in Fort Simpson, and myself and the community have been trying to get some certainty around exactly when this health centre will be built. Certainly, like I said, it’s not in the capital plan, but the planning study is well underway and the community has yet to be engaged, and for something as significant a capital expenditure of this, the community has to be engaged. So I look forward to answers to that.

As well, another area where I’ve been pounding the table, of course, is expenditures on Highway No. 7, and I’m pleased to see there are contributions towards Highway No. 7 in the capital budget. I’ve always made the case that Highway No. 7, especially for the community of Fort Liard, they use that highway a lot to make a living and I’d certainly like to see continued investment in Highway No. 7.

Also, something new is the smaller communities in my constituency have been leasing older buildings for health centres. I’m pleased to see that they’re moving towards expenditure of building and the government will build a new health facility in the community of Jean Marie, and the other communities, Trout Lake and Nahanni Butte, are certainly looking to have theirs replaced. They’re older and dilapidated; they’ve got, actually, some health issues with wildlife and ant infestation problems. So it’s certainly good to have a look at that.

Also, I know that we’ve got quite an injection into housing and affordable housing units as well as public housing stock. It’s an ambitious program there. So I’d certainly like to see every effort expended in completing those projects that are slated for the 2015-16 construction year and getting them off the ground early.

With the potential Inuvik-Tuk highway increase of expenditures, I really think that we should stick to what’s planned. I know that we’ve got negotiated contracts with people up there that want to work hard and create this highway as quickly as they can, but I really believe that we’re going down the wrong road by trying to expedite it, especially when they’re asking for $40 million for this fiscal year. Not the next one, but this one, and I’m concerned about that because I believe it will impact the regions, and the communities’ ability for capital spending may be affected, because we’re so close to the short-term borrowing limit as it is, and I think if something goes wrong with government planning, I’m afraid that they’ll have no choice but to stop some of the projects that are slated for the regions and slated for the communities to make up this shortfall.

The Members have spoken about, I don’t know if they’re unforeseen, but government has seen some of those expenditures that have yet to come, and that will certainly impact our short-term borrowing. I really feel that because of our procedures and guidelines and strict spending guidelines by the Financial Management Board act, that the regions and communities may have to suffer as a result of being so close to the short-term borrowing limit and our debt wall as well. Once again, I think the communities might suffer because government wants to accelerate one project and/or other needs.

That’s my serious concern about community projects being delayed. Even though we’re talking about capital, I think it also, in a large part, affects our operating and maintenance as well. I’m concerned about that because there are other needs in the O and M that I’ve certainly been asking about, like extra nursing in Wrigley, certainly to the small communities about reviewing the New Deal and how do they manage their communities. Those are my concerns right now.

Thank you, Mr. Menicoche. Minister Miltenberger.

Thank you, Mr. Chairman. Once again, I think the Member for his comments. Some of the items that he has raised, clearly the Ministers of Education, Health and Transportation will be ready to have those detailed discussions.

I understand that the plan is to issue for the Fort Smith Health Centre some RFPs to be issued here sometime in the fall of 2014. I believe that things are proceeding at pace on that one.

As the Member pointed out, there is money put aside or identified, fairly significant money over the next few years for Highway No. 7. The Inuvik-Tuk highway, we’ll once again have that discussion. It has been raised now a number of times. I just want to restate that there is going to be no impact on other projects. The short-term borrowing is paid off at the start of the fiscal year. The longer term borrowing which we’ve used for the fire season and other issues, I mean, we’re managing that, but it’s slightly below the $100 million. I just want to, once again, reassure folks that that Tuk-Inuvik highway money, if it’s moved, will not negatively impact any other projects.

I thank the Member for his overall comments, and I’m sure the Ministers will be ready for his questions about other O and M program issues that he has of concern in regard to health and education that he’s outlined. Thank you.

Thank you, Minister Miltenberger. Does committee agree that we’ve concluded general comments?

Speaker: SOME HON. MEMBERS

Agreed.

Thank you, committee. With that, I will ask Ms. Bisaro what is the wish of committee.

Wendy Bisaro

Frame Lake

Thank you, Mr. Chair. I wish to report progress.

---Carried

Report of Committee of the Whole

Speaker: MR. SPEAKER

Can I have the report of Committee of the Whole, Mr. Dolynny?