Debates of October 25, 2004 (day 27)

Thank you, Mr. Minister. Ms. Lee. Oh, Mr. McLeod.

Thank you, Mr. Chairman. My officials assure me that we have negotiated very aggressively and we have a good deal with CATSA. We had initially indicated and our position was to have all of our costs recovered. There was some work done at the airport in 2003, which was funded 100 percent. In this case, a lot of the work that was done inside the building required us to give up some of our space in the terminal building. It also required an addition to the facility, which would take up some of the aircraft parking and it also would require us to provide some new space for parking that we are losing. So as a result of this project moving forward, it forced us to look at a number of different things and anything outside of the facility, outside of the actual building, CATSA was not willing to cover. So in order for us to be able to accommodate the growing pressures, the traveling public that goes through this facility at the projected rates over the next while, we had to look at an expansion. I don’t have the specifics to what other jurisdictions are getting. All I have is the reassurance from my officials that we still have a significant project that is comparable to other jurisdictions. Thank you.

Thank you, Mr. McLeod. Mr. Braden, your time has expired. I will go to Ms. Lee.

Thank you, Mr. Chairman. Perhaps one suggestion I could make that would maybe discourage the Cabinet from approving these special warrants in between sessions when we are not here is to have session every month. We could have one week a month and then they’ll have to bring all their expenditure approvals to us. We’ll just have a Cabinet meeting with 19 Members so that we don’t have a special warrant for $4.6 million where we have absolutely no say whatsoever. I mean, I was crying fowl over $115,000, now we are dealing with multimillions. That’s one suggestion, which will go, I’m sure, unheeded.

---Laughter

But to the airport expenditure, Mr. Chairman, I don’t know what transpired that made it such an emergency item here, and I guess the Minister and Ministers McLeod and Dent have been working hard to explain this. One of the fallouts from this is the restaurant contract at the airport; the requirement for extra equipment and whatever that they need to be put into the airport, that didn’t come about just this summer. That has been an ongoing project nationwide and internationally at every airport since September 11th. That didn’t just pop up on us and it’s not a surprise, but for some reason I guess they’ve been negotiating for three years and finally they got to it. The irony of it all is that the Department of Transportation let out a contract for the restaurant at the airport just this spring and they signed a contract for five years for a restaurant. It was only about three months after these people had been running a restaurant they get told actually there will be no restaurant under the new plan, there is just going to be fast food. The deal with the restaurant speaks to me about one part of the government not looking at what another part of the government is doing. There is the Department of Transportation, it’s interested in looking after the airports, making sure it’s meeting the standards and all of that. I don’t know how that happened. I would like to know if the Minister is aware of any damages. Are we responsible for living up to the agreements under this restaurant lease, Mr. Chairman? Thank you.

Ms. Lee, that is a bit of an aside from what we are talking about, but I will allow the question. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, I’m not aware of the terms and conditions in the contract for the restaurant space, nor am I aware of what the plans are for that space through this. So perhaps I could refer the question to Minister McLeod.

Thank you, Mr. Dent. Mr. McLeod.

Mr. Chairman, the Member is right; we did sign a five-year agreement with a company here in Yellowknife to provide food and beverage services, and I’m not aware of the fact that we did indicate to them that we will no longer be using a restaurant, because we haven’t made that decision yet. Right now we are in the process of doing a retail concession study along with a customer satisfaction survey, and we are doing a cost assessment as part of the request for proposals. So we have not decided at this point that we will not have a restaurant. We are more in a situation where we will be making a decision based on what is more cost-effective and what does the general public require and why. It may be a food court, but it may be a restaurant. There is no decision to terminate the contract with the company at this point. Thank you.

Thank you, Mr. McLeod. Ms. Lee, further questions?

Thank you, Mr. Chairman. I think I'm on the verge of doing three to zero here. It is in line with this because of the fact that this whole money for renovations to allow for an explosive protection system and different conveyor belts to make sure that all the baggage could be X-rayed and stuff, that is the money that is being sought here. It is that renovation that is requiring the Department of Transportation to look at all of the configurations in order to fit everything in. I am encouraged to hear that the Minister and his department are having talks with the proprietors of the restaurant to see if the contract that they had entered into could be lived up to. I think there's a question as to what kind of services they are able to provide or they thought they were required to provide, and whether or not it's similar to what the department has in mind. But I would encourage the department and the Minister to do anything they can to try to live up to that lease if at all possible.

The second thing is an issue about the added fees that would have to be levied to the businesses at the airport. Mr. Chairman, as I recall, it hasn't been that long since we increased the levies for the users at the airport. I think it was within the last two or three years, and the increase was quite substantial and it has had a very negative impact on the businesses. With the skyrocketing oil prices, I'm sure that is impacting heavily on the airline carriers. So it will be an extra cost on top of extra operating costs. At the time it was felt that the government had to make that tough decision, but I really don't believe there are enough numbers of operators out there to have a large enough base for the government to rack up a lot of money. So that's one area of concern that I need to express in light of what this government has to do, and the fact that this government has to pay a lot more money than what the federal government is prepared to pay to undertake these renovations that we are being required to do. I guess that's more of a comment, and I just wanted to express my view on that. Thank you, Mr. Chairman.

Thank you, Ms. Lee. Mr. Braden.

Thank you, Mr. Chairman. I'll pick up where I left off a few minutes ago, and that was to explore the negotiation that we undertook with CATSA, the Canadian Air Transport Security Authority. Minister McLeod assures us that his officials negotiated aggressively and we got the best deal, but that doesn't answer my question. How do we know we've got a deal that's at least comparative with other similar sized airports? Have you done the analysis? Have you got the comparisons to show that Yellowknife is at least being treated on an equitable basis for the investment that we're going to get in this from the national people? I want to see some proof here that we do indeed know we're getting a square deal. Thank you.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. I don't have any detail on the negotiations, so perhaps the Minister, if he doesn't have it with him, could commit to get the information to committee members about the details on the negotiations.

Thank you, Mr. Dent. Mr. McLeod.

Mr. Chairman, I don't have the proof that the Member is asking for in terms of documents, so I would have to commit to providing that at a later time.

Thank you, Mr. McLeod. Mr. Braden.

Thank you, Mr. Chairman. I'll take that, but I think the criteria that I have here is I want to see that Yellowknife and the Northwest Territories is within range of the requirements that are being imposed on airports across Canada.

A couple of other areas in here have to do with the timing of this. Of course, so much of this was forced by the tragedy of 9-11, but that goes back three years now. Now we have this accelerated plan. The government was caused to approve a special warrant on June 30th, four months ago. I would like to know when did the planning and the scoping really start in earnest for this project, and when do we have to have all this installation completed? What's our planning time frame here to completion? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Mr. Chairman. In terms of when this was initially started, the Minister already said today that we were advised, and he believes in December of 2003, of the necessity to add the equipment. I suspect that the department, over a period of months, developed a more detailed plan when they came to understand just how much space that equipment was going to take up in the existing building. The deadline to have it in operation, or else all airplanes leaving Yellowknife may not land at another national airport, is the beginning of January 2006. So we have just over a year before flights from Yellowknife would not be allowed to land at other national airports unless this system is in place. For instance, what's happening right now is that the work is already underway for the parking lot. The annex for the air terminal building tender will close on October 28th, so that's later this week. The passenger terminal improvements and hold bag screening construction tender closes on November 9th, and the apron construction will be tendered later this year. So in order to meet that January 2006 deadline, a number of parts of the project have had to be advanced, and again that points to the reason for the special warrant rather than coming to this session of the Assembly to present it. Thank you, Mr. Chairman.

Thank you, Mr. Minister. Mr. Braden.

What kind of communications or information flow has there been with stakeholders, the tenants at the airport, passengers or anybody else who is involved with this? What kind of a program of information has been put out on that to date? Thank you.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Perhaps I could ask the Minister of Transportation to answer that.

Thank you, Mr. Minister. Mr. McLeod.

Thank you, Mr. Chairman. Mr. Chairman, we have been working with a stakeholder group for some time over the last while to assess the passenger terminal facility here in Yellowknife, and we had plans to look at this facility and to make assessments on the passenger terminal building and the CATSA requirements. We had talked with program staff, air carriers and CATSA technical staff. Initially we had looked at long-term plans and had confirmed that we would be looking at development on the west side of the airport, however, as I indicated earlier in my response, the notification came last winter to us indicating that we had to have the baggage and passenger screening devices in place by 2006. So we have talked to a number of the stakeholders. We have informed the carriers. We have not sat in the airport and informed passengers as they’re passing through. No, we have not done that. But we have talked to a number of the carriers. We have talked to the technical people from CATSA and the program staff. Thank you.

Thank you, Mr. Minister. Mr. Braden.

Thank you. The area that concerns me the most of this whole project, Mr. Chairman, has already been flagged by Ms. Lee, and that is the mention in the bill of an airport user fee of $6.6 million out of the total $11.2 million that will be somehow assessed and collected. Six-point-six million dollars is an extraordinary amount of money to assess on the, I think, relatively small number of users for this airport. I recall in some briefings, Mr. Chairman, that we were told Yellowknife is actually a very busy airport compared to others in Canada for the number of passenger movements. That may well be true, but we have a relatively small population that are very frequent fliers. I think what we’re going to see through whatever kind of an airport user fee system is designed, is that a relatively small number of passengers are going to be paying an extraordinarily large portion of such a fee. Six-point-six million dollars coming out of mainly the Yellowknife economy, if you will, to pay for this project.

Mr. Chairman, what concerned me most at this stage was that while the government is ready to spend $3.4 million and has awarded tenders and they’re going to be closing within days and a whole bunch of stuff is going on, we do not have the outline of any kind of a program here that says how we’re going to get $6.6 million from the travelling public. In that sense, Mr. Chairman, this is a really bad piece of work, I think, to present to us at this point because it is so poorly outlined. We have no information whatsoever on which to base the merits of this. You’re asking me as an MLA here just to say okay to $3.4 million in special warrants, when the expectation is that $6.6 million is going to come out of the general public and there’s no plan whatsoever for how this is going to be done. It’s where I really have to draw a line in here in terms of the preparation, the thinking and the planning that has gone into this. It is not a good piece of work and that’s the question that I guess I put to the Minister. What is your proposal for $6.6 million and how do you anticipate that we’re going to make this palatable? Thank you.

Thank you, Mr. Braden. Mr. Dent.

Thank you, Madam Chair. First of all, I think it’s important to remember that the $6.6 million is over 10 years. So it’s about $660,000 a year. I don’t believe the Minister has a final plan yet for how that money would be raised, whether it’s from landing fees or an airport improvement fee. Mr. Braden suggested we have a small number of users. In fact, a couple of years ago there were 300,000 plus passengers through that air terminal building. So even if it was a couple dollars a head, you would pretty much raise that amount in an airport improvement fee. But perhaps we can ask Mr. McLeod what his timetable is for determining how that money would be raised because, as I understand it, it hasn’t been set yet.

Thank you, Mr. Dent. Mr. McLeod.

Thank you, Madam Chair. Madam Chair, as directed by Cabinet, the department is currently working on a decision paper for cost recovery. We’re targeting the end of November to bring that forward. The number that we’re targeting to recover is $6.6 million, as the Minister indicated, over 10 years. At the present time there are already fees, as has been indicated. However, these two fees that are being collected now, the terminal fees and the landing fees, are well below the rates in southern Canada. Those are the areas we’re looking at with the possibility of airport improvement fees. So we have a number of options in front of us. That decision hasn’t been made. We have to take it to Cabinet and we’ll be bringing a paper forward by the end of November.

Thank you, Mr. McLeod. Mr. Ramsay.

Thank you, Madam Chair. I’ll pick up where my colleague, Mr. Braden, left off. I’m really concerned, as well, about this $6.6 million and Cabinet’s decision. I would like to know what the rationale was in Cabinet to go forward with this thing under the cost recovery plan without a plan. Here we have a $6.6 million expenditure that Cabinet basically approved through this $3.4 million special warrant with no plan, no consultation and, again, Madam Chair, no public consultation, no public debate on this issue. To me, Madam Chair, this is wrong. I’d like to ask the Minister what was Cabinet’s rationale for proceeding with this without a plan on the cost recovery? Thank you.

Thank you, Mr. Ramsay. Mr. Dent.

Thank you, Madam Chair. At FMBS, not Cabinet, there was some discussion of an airport improvement fee. The Minister has proposed that he be given the opportunity to come back and look at what the other options might be. By the way, that’s not part of this supplementary appropriation. What you have here is the expenditure. That’s what is before you today. For the $6.6 million it has been proposed that that be accomplished through cost recovery. The way in which it would happen has not been finally set. Thank you, Madam Chair.

Thank you, Mr. Dent. Mr. Ramsay.

Thank you, Madam Chair. I know some of my colleagues were asking questions earlier; that $3.4 million is included in the $6.6 million, is it not, Madam Chair? Thank you.

Thank you, Mr. Ramsay. Mr. Dent.

Sorry, Madam Chair. Could I get the question repeated, please?

Thank you. Mr. Ramsay.

Thank you, Madam Chair. The total project of $11.2 million includes $4.6 million from CATSA and $6.6 million that’s going to be recovered. The $3.4 million is part of the $6.6 million, is it not? Thank you.

Thank you, Mr. Ramsay. Mr. Dent.

Thank you, Madam Chair. The $3.4 million is part of the $11.2 million. We’re actually expecting $2 million from CATSA this year, so $1.4 would actually be more likely the GNWT’s out-of-pocket expense this year.

Thank you, Mr. Dent. Mr. Ramsay.

Thank you, Madam Chair. I guess it’s splitting hairs, but, again, we’re going into this and once you start the renovations at the airport -- and they’ve already been started, Madam Chair -- you enter into the full expenditure and you also have to take into account the cost recovery of that expenditure. I don’t think the Minister’s response was good enough, in my mind, Madam Chair, in terms of what Cabinet’s rationale for proceeding with a project that’s $11.2 million and, by anybody’s best guess, could go off the rails quite easily as other capital projects have and end up costing the government $13 million, $14 million, $15 million, and then is the cost recovery of that money going to be born on the backs of the travelling public? Again, I’ll draw the Minister’s attention to the fact that there is no public debate. None. It costs enough in terms of travelling out of Yellowknife by air.

Absolutely, it’s very expensive. You can fly from Edmonton to Europe for the same amount of money that it cost to travel from Yellowknife to Edmonton. If we are going to increase that cost at all, I think that’s a huge step, Madam Chairperson, in terms of people's affordability on travelling out of Yellowknife, or even travelling into Yellowknife, and I don’t think it’s fair to the public that this debate never had a chance to be discussed in public. It’s not the way things should have happened, and again I’m disappointed that Cabinet would go down the road of full cost recovery and FMB would go down the road of full cost recovery on this $6.6 million without any type of public discourse on this issue.

Shame, shame.

It is a shame, it really is. Thank you, Madam Chairperson.

Thank you, Mr. Ramsay. Mr. Dent.

Thank you, Madam Chair. I guess it’s important to point out the decision on cost recovery or how it’s going to happen hasn’t been made, so there are opportunities -- and you are having it right now -- for some comment and some debate. But I think it’s important to remember that when this was approved on June 30th, the fiscal situation that we were looking at was quite severe.

We had, not that long ago, gone through a budget session. Members will recall that the Minister of Finance in his budget address announced that we would be looking at next year's budget -- the one that will be coming up this coming January or February/March -- there would be a significant reduction. Departments were being challenged to reduce their budgets. All of us had recently been given that direction when the call letter went out for the business plan process, that we were going to have to give up money through all of our departments. So the question when the Minister of Transportation came forward and said well, if we don’t do this, no one is going to be able to fly from Yellowknife to any one of the national airports in Canada as of January 2006. We have no money, how do we do it? So the issue of where we would find the money was one that was actually front and centre, and certainly I don’t think Mr. Ramsay would say that we should have cut the money out of the school or some other important public project in order to pay for this, but we had no choice but to pay for the money if we wanted the public still to be able to travel.

So at that point the decision was made that it had to be done on cost recovery. If the Minister is to propose that it comes forward as an airport improvement fee, legislation would have to come before this House. Members will have a chance then if that’s the way in which it’s going to be handled, to discuss it and debate it at that time, if that’s what the Minister proposes. But he has an opportunity now to take a look at what makes the most sense, in order to try and accomplish this through cost recovery. But Members want to provide some advice, I’m sure he would welcome what advice you have and will take that into account as he’s considering what the options are for coming up with that $6.6 million. Thank you, Madam Chair.