Debates of October 25, 2004 (day 27)

Total department, special warrants, $115,000.

Agreed.

Page 19, Transportation, capital investment expenditures, airports, special warrants, $3.4 million. Mr. Ramsay.

Thank you, Mr. Chairman. I have spoken at length about this and I will try to keep this short. I wonder how the government can spend in this special warrant, what amounts to $3.4 million. Cumulatively, over three years, it was $6.6 million without any public debate or stakeholder consultation taking place for this expenditure. It boggles my mind, Mr. Chairman, how this can happen. In a city the size of Yellowknife with our airport being the hub of the North – sorry, Jane, Mrs. Groenewegen – the airport serves a vital function here in Yellowknife. For the government not to consult with the city of Yellowknife, the stakeholders out there, the businesses, etcetera, it really boggles my mind how this could just take place and the government can spend this money.

I do realize the fact that they are up against some imposed CATSA regulations, that they have to put the bomb detection equipment at the Yellowknife Airport, but I don’t understand how and why government can just spend $3.4 million or $6.6 million over three years without that debate taking place in public. Now we are left here at the 11th hour, Mr. Chairman, with this money already having been spent talking about a special warrant for $3.4 million. It just doesn’t make sense. I would like to question the Minister how this can happen. It just seems to be a travesty, Mr. Chairman.

Thank you, Mr. Ramsay. Mr. Dent.

Thank you, Mr. Chairman. I understand that the process of negotiating with CATSA what their contribution would be and the time table took some time and in the best of all worlds, we wouldn’t have any needs for special warrants. But by the time the agreement was reached between CATSA and this government in terms of what the structure of what their contribution would be, there was no choice but to go to special warrant for the amount of funding that you have in this supplementary appropriation right now.

It’s worth noting that the balance of the expenditure will show up in the main estimate and be subject to the usual budgetary debate and process, but because of the timing and the requirement to get started on the project as quickly as was necessary right after the final deal was reached, it had to go in this way.

I understand that within a week of FMB being advised of these negotiations being concluded, that the standing committee was briefed and while that’s no substitute for following the process that we would like to follow, in this situation there was no other opportunity to move the project forward in the speech in which it had to other than calling a special session. I don’t know if that would have been acceptable either. Thank you, Mr. Chairman.

Thank you, Mr. Dent. Mr. Ramsay.

Thank you, Mr. Chairman. I don’t know if the Minister has this type of information available to him, but when was the Department of Transportation told by CATSA that they had to install this bomb detection equipment? Could I get that information, please? Thank you.

Thank you, Mr. Ramsay. Mr. Dent.

Thank you, Mr. Chairman. I don’t have that information. The Minister may have that information. It’s not a question of whether or not this was known for awhile, it was. But the negotiations on what portion CATSA would pay went right up until the committee was advised that this was going to be an urgent expenditure. So it wasn’t a situation where there wasn’t some knowledge about the project having to go ahead, but there wasn’t a clear knowledge of what this government was going to have to pay. As I understand it, the department was negotiating to try to get an even larger portion paid for by CATSA. In terms of when we got the first notification, I don’t know, Mr. Chairman. Perhaps we could see if Minister McLeod has that information available.

Thank you, Mr. Dent. Mr. McLeod.

Mr. Chairman, I don’t have the specific date, but I think it’s around December 2003, that we got notification that there would be a requirement to put in a screening device for passengers and baggage. The date was set for January 1, 2006. Having said that, we had no information in terms of the scoping of the project, the costing of the project and who would be required to cover which portions until early this summer, Mr. Chairman, which didn’t leave us a lot of time or much room other than to go forward with a special warrant. The timing, as I stated earlier, is January 1, 2006. It doesn’t leave us a lot of room.

Thank you, Mr. McLeod. Mr. Dent, would you like to add anything?

No, thanks.

Mr. Ramsay.

Thank you, Mr. Chairman. I guess the CATSA segment of the expenditure for the bomb detection equipment, that is one thing, Mr. Chairman. I think the public could accept the fact that that was going to happen and we would need to spend a little bit of money. In the grand scheme of things, what’s happening at the Yellowknife airport, from the information that I have, is a full blown expansion, both to the apron, both to the terminal building itself and we are adding an annex. We have seen them at the Edmonton International Airport. They are ATCO trailers. They are just an add-on, Mr. Chairman. Again, I will get back to the process here. There was no consultation with stakeholders at the airport. There was no consultation with the city of Yellowknife and there was no consultation with the Members of this House. Mr. Chairman, I find that completely unacceptable.

I don’t know how else to say it, but it shouldn’t have happened this way. You can wrap it all you want in the CATSA argument and the fact that the bomb detection equipment had to go in, but the stakeholders, the city of Yellowknife and the residents of the Northwest Territories deserve better than what’s happening here and the fact that we are going to try to recoup the cost over the next few years out of airport user fees is quite alarming, Mr. Chairman. I don’t know exactly how it’s going to work with the money in user-fees coming back to the government. Is it going to go back into the general revenue into the black hole or how is that money going to be applied, Mr. Chairman? Thank you.

Thank you, Mr. Ramsay. Mr. Dent.

Thank you, Mr. Chairman. I guess to the last point first, since the money to pay for the project is coming out of general revenues, any receipts would go back into general revenues, as they should.

One of the terms and conditions of CATSA providing a contribution is that the improvements have to have a life of 10 to 15 years. Actually, CATSA says it has to have a life of 10 years. The department has projected the changes to the passenger terminal building will likely meet the needs of the travelling public for the next 10 to 15 years. So they feel they are safe on the CATSA side and are demonstrating that the building will be successful in providing the screening equipment for a life of at least 10 years, perhaps longer.

In terms of the process for recovering the funds, the department hasn’t yet proposed the final solution. It is a process where they are examining what should take place and there are a few options that I believe the Minister still has under active consideration. Thank you, Mr. Chairman.

Thank you, Mr. Dent. Mr. Ramsay.

Thank you, Mr. Chairman. Just a few more things I would like to bring up. One of the options that has been discussed was an airport improvement fee. I don’t know how we sell that to the public based on the fact that some of these improvements to the air terminal building in Yellowknife might only be around for another 10 years. I don’t know how that would work charging the travelling public an airport improvement fee for a facility that, for all intents and purposes, isn’t going to be there after 10 years. That doesn’t make a lot of sense, Mr. Chairman, and I don’t think the public would swallow that.

The other thing I wanted to mention as well is most of the Members of this House and the public are well aware of the government's budgeting practices when it comes to capital projects, Mr. Chairman. I'm just wondering what safeguards we are taking and what safeguards are in place to ensure that this project doesn't cost us…It's $6.6 million right now, Mr. Chairman, but that's over three years. This project could come back costing the Government of the Northwest Territories $15 million or $16 million, and that's my fear, Mr. Chairman, that we don't know all the numbers and it's going to be a free-for-all here for the next three years. Then we'll have a terminal building that has a life expectancy of another 10 years. It just doesn't seem to me to be a good expenditure of money if indeed the terminal building is going to be moved 10 years from now. Thank you.

Thank you, Mr. Ramsay. Mr. Dent.

Thank you, Mr. Chairman. We don't know for sure that the terminal building is going to be moved in 10 years. It may be in place for 20 years; the traffic is really the issue. The proposed renovations to the building we'll make will last for at least 10 to 15 years. It could be 20 or 25 years. There's no guarantee that there's going to be a new terminal building required in that space of time.

On the issue of cost overruns, the department, I understand, has briefed Members on what they're going to do to try and make sure that the project comes in on budget, and there are a number of steps that they have outlined by setting up sub-projects, for instance, and setting up maximum budget limits for each part of it, using the design/build process and following up with RFP documents that will outline the scope of work.

So I think the department is aware of the concern. Government is also, by and large, concerned with the cost of the projects and cost overruns. So it's something that we will all have to keep an eye on as it's progressing. But as I said, Members will have an opportunity during the regular budget session to deal with the majority of this money. What we're seeing in this process today was what was needed to be spent urgently this year in order to get the project started, after we had come to a conclusion with CATSA on what they would pay for. Thank you, Mr. Chairman.

Thank you, Mr. Dent. Mr. Braden.

Thank you, Mr. Chairman. Mr. Ramsay and Mr. Dent have covered some of the ground on this project. I should state from the outset that I, too, have some big concerns about this. On one hand, I appreciate the need to be part of a secure and responsible screening and security network of Canada, and the government and the travelling public in the Northwest Territories should accept some of the inconvenience and the cost of doing so. However, the scope of this project and the urgency in which it is being implemented speaks to some shortcomings in our system. I'd like to start with just getting a confirmation, Mr. Chairman, that the whole of the project as it is scoped out now has a total value of $14.6 million and that's made up of $4.6 million that CATSA will inject; $3.4 million that has already been spent; and $6.6 million that we're anticipating will come from the travelling public. So is it a $14.6 million overall project? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. My understanding is that the entire project will cost $11.2 million. So if you have $3.4 million here, the balance of that is what we will see through the main estimates process.

Thank you, Mr. Dent. Mr. Braden.

Thank you. That's why I asked for clarification, because the second paragraph in the bill -- and this is totally before the public, by the way, we're not popping anybody's secrets here -- the second paragraph says the total additional investment of $11.2 million comes from CATSA and, therefore, user fees, which left the $3.4 million special warrant. So I'm going to ask again, is it a $14.6 million or an $11.2 million total project? Thank you.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. The description is not entirely accurate in the supp. The total project is $11.2 million.

Thank you, Mr. Dent. Mr. Braden.

Okay, so $11.2 million. I'm just doing the math on the fly here, Mr. Chairman. We're going to get $6.6 million from the travelling public, we've been asked to approve $3.4 million, that makes $10 million. Where's the other $1.2 million coming from? Thanks, Mr. Chairman.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. Our expectation is that total expenditures will be about $6.6 million from GNWT monies, and $4.6 million from CATSA over the entire project, the $11.2 million. So in this year, we're looking at $3.4 million, and then the balance will show up in the main estimates in subsequent years.

Thank you, Mr. Dent. Mr. Braden.

I guess I would like to explore a little bit more along the line that Mr. Ramsay had started with. This is $11.2 million just to install an explosive detection system. That's the only information we're given in the bill here. I don't know very much about explosive detection systems, Mr. Chairman, but is it costing this entire amount to put in this thing or is there other stuff that's being done out at the airport in addition to the detection system? Thank you.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. Yes, there is other work being done, it's largely work to ensure that the passenger terminal building will last for 10 to 15 years, again to make sure that we meet that minimum 10-year lifespan that CATSA insists on to get their $4.6 million. If committee would like, I would suggest that perhaps Minister McLeod be asked for some information on the overall plan.

Thank you, Mr. Dent. Mr. Braden, would you like the Minister to expand? Thank you. Mr. McLeod.

Sorry, Mr. Chairman, I'll have to ask you to repeat the question.

Could you please repeat the question?

Mr. Chairman, Mr. Braden had asked for some outline of what other projects were included in the whole thing. There is about $4.6 million that's allocated to CATSA, and that's what they have agreed to supply us with. There are other projects involved in order to make sure the terminal building lasts for 10 to 15 years. For instance, there's going to be a secure hold room and washrooms, there's going to be new public access, there's going to be non-secure hold rooms and vestibules, there's going to be $600,000 spent on mechanical and electrical and so on.

So there are a whole bunch of things that are in addition to the expenditure by CATSA, and the big part of it is on paving and the apron outside. The CATSA structure causes us to expand the terminal building in such a way that we lose an awful lot of airplane parking, so there has to be a lot of work on the outside airside to develop new apron space and new parking for airliners as they're out there.

There is going to be other work done as well in order to make sure that if you are going to be spending this kind of money you need to make sure it is going to last for 10 years. There are a number of other parts to the project that have to take place. So it is broader than just the absolute minimum required, because if we did that we couldn’t be sure that we would get that 10-year life that CATSA requires for their funding to flow.

Thank you, Mr. Dent. Mr. Braden.

Mr. Chairman, this sounds good. How much then is actually being spent for the detection system in billing requirements itself and then how much for these additional up-fits, I think is the word of the day? Thank you.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. Well, $4.6 million is clearly being spent on work related to what CATSA has required. However, as a result of that work, as I said we got a significant amount of money that has to be spent on the apron and areas outside. CATSA has refused to agree that they are responsible for any of those kinds of expenses. So they are willing to pay for the changes that are required in the building to put in their equipment and…(inaudible)…changes that are required because we are putting in their equipment they are not paying for. So it’s hard to see that it’s $4.6 million for CATSA and $6.6 million for the balance, because we have to spend a good portion of that $6.6 million because we are spending the $4.6 million too. It’s difficult to do an exact calculation. That’s why the department was really aggressive with trying to get CATSA to recognize that they had a responsibility beyond the $4.6 million, but they have said they are not paying for it anywhere else in Canada and, therefore, are refusing to pay for it here as well.

Thank you, Mr. Minister. Mr. Braden.

Thanks, Mr. Chairman. There are a few other areas in this thing that I will want to get into, but with the time I have left I guess I’d like to go with this CATSA deal that we got struck with in Yellowknife. It doesn’t seem appropriate that they can be totally arbitrary about what we get and what we don’t get. I mean, every airport in Canada must be in some certain kind of circumstance. If Yellowknife’s situation was such that putting in the explosive system required a huge amount of extra work, can’t there have been some kind of allowance or provision made for that? Perhaps one way to ask this question, Mr. Chairman, is to say given our relative size and the number of passengers and things like that moving through our airport and the cost of doing all this, is the deal Yellowknife has made with CATSA in line with the deal that similar airports have, or is this one costing us more than maybe the other average Canadian airport? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. I’d like to believe that it’s as good a deal as anybody has gotten, but it would probably be best to ask the Minister responsible, Minister McLeod, to see if he can respond to provide some details of the negotiations.