Thank you, Mr. Chair. The rationale for not moving forward on this project is because it wasn’t ready to start construction as we had initially planned, because there was a functional review of the facility that would include some enhancement and some renovations and things of that nature.
We are still quite keen to move ahead with this project. We still think that it is of high priority. The Department of Education is moving forward with their functional review. We expect to do the design. We will put emphasis on getting the design done, and I can certainly commit that I will take it to FMB for consideration as soon as we have all the pieces together.
Right now we are not in a position to do that. The project is not ready for approval, because we don’t have all the parts — all the pieces, all the design, all the planning — that needs to be done. However, if we can get this thing put together, the intention is not to hold this project back. The intention was to defer it until we could get all necessary parts of this so that we can get approval. I certainly can commit to bring it to the Department of Finance, the Finance Minister and FMB for consideration, if it’s ready prior to what we had initially planned. Up to now we have figured it would take all of this year to get all that compiled.
Thank you, Minister McLeod. Mr. Bromley.
Thanks.
Thank you, Mr. Bromley. Next on my list is Mrs. Groenewegen.
Thank you, Mr. Chairman. Just to be very clear, certainly I’m in support of making sure that if we are going to have a midlife retrofit on the Diamond Jenness Secondary School, it incorporates everything that we would like it to incorporate.
I’m not suggesting that we should take a band-aid and put it on a building and then close your eyes and cross your fingers and hope for the best for the next 35 years. I do want to see it incorporate all things. I’m just having a hard time accepting that from what I heard — when the Ministers, Education, Public Works and Services and everybody came down there, the deputies, and looked at that school — about high priority, red flag; “Let’s get on with it.” I have a hard time reconciling that to this being pushed back this far in the capital plans.
I’m encouraged to hear the Minister say that if the work gets concluded that needs to be concluded — the consultation, the design — in fact this government would be prepared to bring forward an expedited, fast tracked, accelerated version of this project. Second to this I hope that everybody in Hay River who might have a part to play in getting this project the kind of approvals and the kind of input you’re talking about is listening, because this is a very significant commitment that I’m hearing here today. We don’t want to be responsible for dragging our feet or slowing the process.
But I do want to ask about the financial implications of this. If this can be moved forward, are there any financial constraints that could see this project set back?
Thank you, Mrs. Groenewegen. Minister Miltenberger.
Thank you, Mr. Chairman. The Members have the plan. If there are going to be things moved around or moved up because it’s in everybody’s interest, then we are going to have to try to make the adjustments to make that happen.
Minister McLeod indicated that by the time all the program reviews are done with Education and all the other design work is done, what is currently budgeted for the project may not be…. The figure may change. At this point the commitment is that we’ll make every effort, as we’ve done with other schools like the one in Yellowknife. If it proves up, then we can move this forward. We can adjust our budgets to do that, and if it is in everybody’s interest, then we will do that. That is an approach we will take when this is brought forward to FMB.
Somewhere back a few answers I heard somebody say that there was a possibility that some work could possibly be undertaken. I was talking about the phases of the project and where things that need upgrading or retrofitting or changing — if anything could be undertaken while the kids are away the whole summer — to start looking at these things. I had mentioned ’09. I like the answer I got to the ’09 question, because I heard it was possible.
Then when other people started talking about accelerating, it got a little bit wishy-washy there. Let’s just talk about the possibility for ’09. If — and I know that sounds hypothetical; that’s the big if in here — program review is done, the money is there, and we can look at doing this in the least disruptive way possible for the education of the high school students in Hay River, is some of the work a possibility for ’09? If so, would the Finance Minister be bringing back the details of the scope of that work in February? Thank you for approval.
If the educational program or functional review is completed on time and if Public Works gets the document and can do their design work around what is going to be required for an educational footprint and if that is done in a timely way, as the Minister of Public Works and Services has indicated, he will bring that forward to FMB for their consideration. The Member is correct that if there is, through this process, an opportunity to start doing things in a phased in way, which is why this project is laid out with the money that is there, and if there is a possibility to phase it in at a more accelerated way over the coming summer of ’09–10, we’ve all committed to making every effort to get that done.
Thank you. To Mr. Hawkins’ questions about whether modern day formulas would mean smaller classrooms than we have now, I want to assure Members that we can’t get classrooms smaller than what we have right now. So it would be, as Mr. Aumond said, that in some cases it would mean smaller classrooms and some cases the reverse. In this case, it would be the reverse, because you can’t get classrooms smaller and more dysfunctional in that sense from what we have right now in Hay River South at Diamond Jenness. Some of you have seen them. There is not even a proper dividing wall between the classrooms. It was back in the day when they thought that some movable partition was a good idea so they could open classrooms up. Even the sound area between the classrooms is an issue. I’m not worried about any kind of formula diminishing the size of the school there.
There probably are some areas in Diamond Jenness that are of questionable value, like the stairwells, for example, which seem to absorb a tremendous amount of space, but without tearing the building down and going with a completely new design, you’re not going to really be able to avoid that.
I think personally, from what I know, it seems like the school is worth saving. It is a landmark in the community, but I am concerned about the continued deterioration. When you look at this technical evaluation and you look at some of the pictures of some of the things around the foundation, the water, the drainage, some of the capping on the roof that is causing water to not drain away properly…. I understand the idea of not throwing a lot of good money after bad if you’re fixing things that are going to be ripped out or changed or substantially altered. I still believe that if we’re going to stick with the main school, the structure of the school the way it is, there are things that could be identified and that could be done that are going to stop the deterioration of some of the areas of the school that are going to address some of the potential prior issues.
I think that if there were a fire in that school today, you would have some serious issues and gaps appear with respect to penetration through firewalls, doors that aren’t rated for fire. I think you’d see some really significant damage, and that is the kind of thing you want to avoid. That’s the kind of thing that with minimal investment you can address.
I know it is more challenging than just having a contractor being in the school and handing it over to them for a period of time and being able to do everything at once. I know it is more challenging, but if there were a way of trying to be stewards of this asset and putting things first that kind of shore up areas where there could be deterioration with time, I would be very much in support of the Department of Public Works looking at those and getting started on this project sooner than later.
Thank you, Mrs. Groenewegen. More of a comment; no real question. Next on my list is Mr. Krutko.
Thank you, Mr. Chair. Just following up on the Diamond Jenness school. There have been two technical review studies done since 1980; 1996, I believe, was the last one. I know for a fact that this thing has been on the drawing board in the past, has been scheduled in regard to our capital planning process, and it continues to keep being bumped forward versus trying to do something with it. I think it is important as a government that we do everything we can do to bring this project to fruition or allow it to see the light of day.
There are some major technical challenges to that facility. It is 35 years old. I have gone through the facility myself and also have seen the reports that have come out on that facility. I think we have to do everything to ensure that we have a quality of education, also ensuring that the safety and well-being of the students and the teachers are our first priority. Especially with facilities which are 35 years old, there are a lot of health issues surrounding it in regard to the types of materials that were built 35 years ago. Now a lot of those materials are registered as hazardous materials.
I’d like to ask to the Minister again, knowing this has been previously approved and now it has been deferred forward, knowing the amount of work that has been expended over the years in regard to the amount of study, the amount of reports, the amount of assessments…. There were plans in place to look at alternative space while the construction took place; I know that took place. So a lot of dollars have been expended on this project, a lot of work done by Public Works and Services. I’d like to ask the Minister: do you have the cost breakdown on how much money has been expended to date on the Diamond Jenness School, and why is it that it continues to be bumped ahead?
Thank you, Mr. Krutko. Minister Miltenberger.
Thank you, Mr. Chairman. For the benefit of the Member let me just restate that we’ve made a significant number of commitments between Education and Public Works and the Financial Management Board to work to see if we can move this project with all alacrity, to get it and see what is possible by this coming year, ’09–10, in the summer. But there were a number of ifs, as the Member from Hay River is aware. I’ve asked Mr. Aumond if he could speak to the issue of how much has been expended to date on the Diamond Jenness project.
Thank you, Minister Miltenberger. Mr. Aumond.
Thank you, Mr. Chair. With respect to the capital project on the books today and in prior years, we’ve spent $100,000 developing this project, most of which is still yet to come once we receive the education plan that we just finished discussing.
I know that within the last two years there were plans in place to move this project ahead and do it in different phases, that you were going to do a certain aspect of construction in regard to the mechanical side of the building, another phase looking at the shop and whatnot, so that you can still functionally use the facility.
But at some point you’re going to have to look at an alternative space. That plan was already in place. It was already contemplated to move on that. There was a lot of planning and research in regard to how we were going to construct this facility in different phases. That work has already been done. I think it is important to realize that we as a government have already talked to the divisional board of education. We’ve talked to the Town of Hay River; we’ve talked to the MLAs. I know that those discussions have taken place. Again I’d like to ask: why is it that there is no movement on this file yet? We’ve been talking about this for years.
Thank you, Mr. Krutko. Minister Miltenberger.
Thank you, Mr. Chairman. Just to summarize once again, there is movement on this project. The functional review that Education is doing for their program requirements is going to be concluded, hopefully, by the end of October. We’ve committed for Public Works and Services to take a look at that and do their design work once they know what the educational footprint is going to look like. If all those pieces go in sequence and there are no extensive delays for whatever reason, then we’ve committed to the Minister of Public Works, who has indicated he’d be prepared to come to FMB, if there’s a plan or ability for us to move faster than is currently laid out in the capital plan, looking to see what’s possible from a phased in approach as laid out, as Mrs. Groenewegen indicated in her comments, we will.
Again, Mr. Chairman, in the 15th Assembly a lot of work was put into this project and moving it ahead. It was done by the Minister of Education, the Minister of Public Works and the MLAs, and it was on the drawing board to move ahead.
Something has happened between the 15th and the 16th Assemblies, where this project has basically moved totally off the game plan that was put in place in the 15th Assembly. This was supposedly moving forward during that period of time. A lot of work and a lot of reviews took place. There was a plan in place to move on this project. We have the reports. We have had the assessment. It has gone to Cabinet. It has gone by way of these reviews between the MLAs, the Department of Education and the Department of Public Works. It’s gone through every step that had to be taken so that it can proceed, but for some reason it seems like there’s a bottleneck in the system somewhere, that this project has not been given the tools it needs to proceed. What we’re asking here is: can we proceed with this project in a timely manner so that they don’t have to wait until 2010 or ’11? Can we do it sooner?
Mr. Chairman, I’m of the opinion and I believe on record that we’ve already committed to that process.
Well, if he’s committed to moving on this project, that’s what I want to hear.
Thank you, Mr. Krutko. No real question. There’s nobody else on the list, so we’ll go back to Mrs. Groenewegen.
Mr. Chairman, I have a motion.
Go ahead, Mrs. Groenewegen.
I move that this committee defer further consideration of the activity Education and Culture under the Department of Education, Culture and Employment, Capital Estimates 2009–2010, on pages 7-7 and 7-8 at this time. Thank you.
The motion has been distributed. The motion is in order. To the motion.
Question.
Question is being called.
Committee motion carried.
We’ll defer pages 7-7 and 7-8 under Education, Culture and Employment, and we’ll move along to Public Works and Services on pages 4-4 and 4-5. Is committee agreed?
Agreed.
Okay. We’re on page 4-4, Public Works and Services, Activity Summary, Asset Management, Infrastructure Investment Summary, Total Infrastructure Investment Summary: $17.22 million. Mr. Krutko.
Thank you, Mr. Chairman. In regard to the office facility for Inuvik I’ve been making inquiries as to the vacant space available in Inuvik and what effect this could have on the market. I’ve been told that there is roughly a 7 per cent vacant office space rate in Inuvik, excluding the Perry Building, so here you’re looking at about another 3,200 square feet. Right now there are probably about 10,000 square feet of vacant office space in Inuvik, so unless we can prove that there’s going to be no market disruption by putting a building of 47,000 square feet in Inuvik and that it won’t have an impact…. I believe it will have an impact. In regard to the space that I’m referring to, that space is vacant as of today.
I’d like to ask the Minister what we have done in regard to the review of the possibility of an independent market disruption survey to see exactly what the implications of this project are for the retail market in Inuvik.
Thank you, Mr. Krutko. Minister Miltenberger.
Thank you, Mr. Chairman. There’s been no formal assessment done of the nature that the Member has characterized.
In regard to ourselves and the individuals who have made investments in the retail market and also to the amount of vacant space, with the economic situation we find ourselves in today dealing with banks, we must also realize that someone has to pay for the roughly 10 per cent vacant office space. Somebody’s got to cover the O&M costs of those facilities that are vacant. I think the cost is going to be a burden to those businesses that have made that investment. It’s crucial to realize that for any facility this government has a policy in regard to market disruption. In order to do justice to that market, we should ensure that we do a thorough assessment and review to ensure that the impacts on those businesses are minimal.
We had a similar situation that I mentioned happen here in Yellowknife with the federal government putting a federal building in Yellowknife. They went out of their way to do a basically independent assessment of the market in Yellowknife by way of the retail market, to give some comfort to the industry. I think that in regard to this proposal that we’re looking at for Inuvik, we shouldn’t do anything less than what’s been done by the federal government, and we should also realize that we do have a policy in place for that particular item.
I’d like to ask the Minister: is there a possibility that we take the time, do the study and ensure that we note that there will be no effect on the market, like I stated? Right now there’s about 7 per cent vacancy in Inuvik. Also, the three floors in the Perry Building have not been brought into this calculation. I think there is an argument to be made that we have to do justice to the individuals, the companies that have made this investment. Of course, someone’s got to pick up that extra cost of overhead and maintain that vacant space, because we’ve still got to heat it. We’ve still got to provide the overhead to sustain those businesses. So can the Minister commit to that?
The top floors of the Perry Building are unusable, which is one of the reasons there was a move. The lease proposal that was put to the government had over the life of the lease a $38 million premium attached to it, which is very significant. Available space in Inuvik, from what I understand, is scattered over a number of buildings. There’s not one concentrated place that would allow the government to bring together the resources as they’re currently planning. However, I’d ask Minister Michael McLeod if he wants to add anything further to this issue.
Thank you, Minister Miltenberger. Minister Michael McLeod.
Thank you, Mr. Chairman. This is a real significant issue for us, and it has been for some time. We need proper office accommodations for the employees in Inuvik. We don’t have very many government facilities in the community; 93 per cent of our portfolio is leased.
It’s starting to be a challenge now that we can’t identify any new facilities to move to. We have certainly a large number of issues with the Perry Building. There’s a possibility we may be evicted. MACA is housed in an old federal government warehouse. It’s 45 years old. We have air quality concerns. We have security issues with some of the income support offices. We really don’t have a lot of choices.
There’s a comparison being made by the Member that the federal government did a market disruption analysis in Yellowknife, which is not a fair statement, because there are no facilities vacant in Inuvik that we can identify. Yellowknife has vacant space, and there is market disruption only if there is competition. In this case we can’t find it. We need a balanced investment. We need to have some of our own accommodations for employees so that we’re not held to a huge cost factor when it comes to rental space because we don’t have any choices.
We have committed to the developers in Inuvik that we’ll continue to rent the same amount of space from the private sector as we did prior to the closing of the Perry, and we will commit to that. I think this is a good project, and it’s something that we can’t ignore. The facilities that we currently accommodate also don’t have barrier free access. That’s a concern. So we need the appropriate space in Inuvik, Mr. Chairman. That’s why we’re bringing this forward. It’s not that we want to move away from some of those current agreements. We’d like to keep those. But there’s still not enough, and our current facilities are just not appropriate.
Mr. Chairman, this was an issue that came forward that I raised in regard to the Department of Environment moving out to Shell Lake. They were saying they don’t know how they’re going to fill that space. That space is still vacant. No one has moved into that space in regard to the Department of Environment relocating to Shell Lake. There’s also the Professional Building in Inuvik which has a floor that’s basically vacant. So out of that, there’s almost 7,000 square feet of office space that’s vacant in Inuvik. I know that in regard to the Perry Building, that basically was a question of structural soundness of the building and how much weight was being distributed on the different floors. That’s why Public Works is on the first floor. Yet there’s still a cost associated with those three floors being vacant in Inuvik, regardless if anybody is in there or not.
When you’re talking about moving Public Works and Services, the Department of Education, Culture and Employment, the Financial Management Board Secretariat, Municipal and Community Affairs, the Beaufort-Delta Health and Social Services Authority by way of setting up a health clinic, for me that’s a lot of bodies and a lot of space that’s going to be required in regard to where these people are going to come from. If you have a market that can only sustain, say, 10,000 square feet and you’re adding another 10,000 to the market, you do have more space that you have on the open market, which will cost someone not having the ability to maintain that space.
Right now there’s 7 per cent vacant office space in Inuvik, from what I was told this morning. So how can you use the argument without doing a survey to state that basically there isn’t going to be an effect on the market when you didn’t even do a survey yourself? All I’m asking is that we as government take the time to do an independent review and survey on exactly what space is available, where the space is, who owns that space. Putting 47,000 square feet of office space into Inuvik, what impact will that have on the market?
Thank you, Mr. Krutko. Mr. Miltenberger.
Mr. Chairman, we know what space is available in Inuvik. We know that it’s in small quantums scattered across the buildings that are available, that there’s no single space that’s big enough. We know that the one offer that we did have had a $38 million premium attached to it. We know that our current portfolio is 93 per cent leased, 7 per cent that we own. That is a balance not recommended by anybody in terms of having a balanced portfolio so that you can have room to move and adjust your needs and not be caught or held to the fact that you’ve got no flexibility because all your eggs are in one basket.
In regard to the question about Shell Lake and other specifics, I’ll ask Mr. Aumond to reply, if he could, please.
Thank you, Minister Miltenberger. Mr. Aumond.
Thank you, Mr. Chair. The space that was previously occupied by ENR actually is being fit up for the Inuvik Community Learning Centre, who will be going in there in January.
The Member is correct, though. There is the third floor of the Professional Building that is available, and it has 157 square metres of space but does not have barrier free access. The office building that we are proposing is only 37,000 square feet, not 48,000.
Thank you, Mr. Aumond. Next on my list is Mrs. Groenewegen.
Thanks, Mr. Chairman. Well, that makes me feel a lot better — only 37,000 square feet.
I think it is incumbent on the government — if they want to spring an office building into the capital plan at the eleventh hour that’s not even in the five year capital plan and want to drop this into the mix basically with no notice — to make very compelling arguments for why they need this money to build this new office building in Inuvik. I think they have failed the test in terms of making that argument. I hear a lot of information, but saying that there isn’t a single location in Inuvik with 37,000 square feet…. Well, surprise, surprise. That is a small town. What small town has 37,000 square feet of space sitting waiting to be rented to the government? What small town has 37,000 square feet of office space in one location?
I don’t think the analysis has been done. I don’t think the assessments have been done. I think the economy is such in Inuvik right now — if I could be so…. I’m not there personally, but I think that things are perhaps in a bit of a holding pattern right now, waiting to see what’s going to happen with the pipeline. I think there aren’t a lot of private companies probably looking for space right now that the government may vacate, just because I understand that the level of activity is not what it normally is in Inuvik right now. There may be better timing for the government to build 37,000 square feet of office space than there is right now.
I guess also, to the issue of fairness and distribution of capital dollars, it would be nice to collocate 37,000 square feet of people and services in one building in Inuvik, but is it absolutely necessary? I mean, in all towns — and even in Yellowknife — government services and offices are distributed throughout the community. It’s never been a mandate or a policy of this government to try to collocate a whole lot of different activities into one building.
If there is such a savings and such a good argument to be made for building this in Inuvik and for having all of this under one roof, that argument will still be good next year, you know, as opposed to renting from the private sector. That argument will still be good next year. I don’t have any qualms about deferring this project until there’s been a full assessment done. I mean, we’re talking about…. People need room to spread out, and they need comfort and they’re in old buildings.
Well, like I said before, let me tell you about an old building in Hay River where it’s not comfortable and we’re trying to educate children. You know, teachers have to go to work, too, and they have to work in circumstances that are not good. So the business of this being an old building doesn’t really…. Old building? Some government employees in old buildings doesn’t really have a big impact on me.
I mean, if there’s an issue of safety, that’s different. If there’s an issue of security, that’s different. Our highest priority when our capital projects are prioritized is the protection of people. I haven’t heard of any health or safety threats to the folks that are distributed around various locations in Inuvik. I understand the Perry Building, perhaps on the higher floors, has been condemned, for lack of a better word — it’s not accessible — but I’m not so certain that the ground floor has the same kinds of issues.
Like I said, there could be very, very good reasons for this, but I don’t feel that the case has been made for this coming onto the capital plan the way it did and just being so urgent that we have to move on it right now. I would rather defer it by a year. If the arguments are very good, they’ll still be good a year from now.
I don’t really have any questions about it. I think, you know, Mr. Krutko has done a very good job of sort of canvassing the issues. The fact that there are 120 million bucks, probably, in capital going into Inuvik this year, and now we want to put another in excess of $20 million into Inuvik…. I think there are a lot of other regions, a lot of other communities that are also interested in capital in their communities, in their regions. I don’t think we need to overload Inuvik with a hundred and whatever it turns out to be — $150 million in capital.
There is an issue of fairness and distribution and equity. I think it’s the role of this government to ensure they assess all the needs and spread things out and pace development in one community in such a way that the local economy can even pick up and absorb and benefit from some of that development. You have too much going on in one community at one time. What happens is you end up having to import your trades and import a lot of your labour. If you pace that over a period of time, I think it’s more beneficial to the community as well.
Anyhow, for me, Mr. Chairman, I haven’t heard the compelling argument that needs to be made to pass the test of this being an urgent capital project to come onto our books and be supported at this time. That’s my position on it. It’s more of a comment than any question.
Thank you, Mrs. Groenewegen. More of a comment than a question, but if the Minister wants to respond. Minister Miltenberger.
Thank you, Mr. Chairman. We’ve listened carefully to the discussion. The Member’s indicated her opinion. She’s stated it for the record, and I appreciate that.
Thank you, Mr. Miltenberger. Next on my list is Mr. Beaulieu.
