Thank you, Mr. Bromley. Public Works and Services, capital investment expenditures, asset management, not previously authorized, $300,000, total department, not previously authorized, $300,000.
Agreed.
Page 6, Department of Justice, capital investment expenditures, court services, not previously authorized, $375,000, total department, $375,000.
Agreed.
Page 7, Education, Culture and Employment, capital investment expenditures, education and culture, not previously authorized, negative $3.935 million, total department, negative $3.935 million. Mr. Dolynny.
Thank you, Madam Chair. Part of our role as Regular Members is public accounts in terms of looking at cash flow and where money is coming from. This is another classic example where government, you know, you have to be very diligent on where monies are being taken from one area and put into another. I think this is another one of those negative supplementaries which is taking out of operations and now putting into capital expenditures for infrastructure.
I have a series of questions here pertaining to this amount of money. The first one is: When was the initial estimate established for the demolition of the Sir Alexander Mackenzie School, or in this case here for this supp?
Thank you, Mr. Dolynny. Mr. Miltenberger.
Thank you, Madam Chair. I would have to commit to get that from Public Works and Services. I don’t have the specific date when the first estimate was done.
It will make the next couple questions that much more difficult, but I guess in my assessment and from getting background information, this original estimate was some time ago. It was not something that just happened overnight. They would have had an assessment.
What was used as a determining point as to what this amount of demolition would have been from the original estimate? Is there a market escalator that was used to determine that amount of money?
Mr. Aumond.
Thank you, Madam Chair. There was an original environmental assessment done on Samuel Hearne Secondary School back in 2006. Subsequently, earlier this year there was a more intrusive assessment done where they actually deconstructed some part of the building to see what hazardous materials were in the building. On that basis, based on previous experience Public Works would have had with remediation or demolition projects in Inuvik, they were able to come up with an estimate and have some confidence in that. Thank you.
Madam Chair, if we can get maybe a little bit more information as to what type of confidence was put into that estimate. As, typically, market escalators are used from an original estimate and I guess brought into the future in terms of what that number could be today, can we get some insight as to what tools, what actuaries or any type of assessments were used to come up with a prediction of what this demolition would be in today’s dollars?
Madam Chair, as I mentioned earlier, a more intrusive investigation to find out what type of hazardous materials were in the school and in what quantity they were. They built their estimate based on that. I understand that the project has advanced to the point where they have a good deal of confidence in their estimate, and that I believe there was a tender that did close for that project. It has come in. I believe it hasn’t been awarded yet, but the bids were in the budgeted price. Thank you.
Madam Chair, I guess the question is, we put it to tender and we let the market decide what it is. That is one of the methodologies used. The concern I have is that this demolition amount and the taking from one pot of money and moving it to another pot of money and using it for another project, some of the substantiation sheets that we went through as Ministers and as well as Members, some differ in the amount that we see here today. Again, I am not at liberty to say what that lesser number was, but it was a lesser number than what we see here today in the supplementary appropriation bill.
Is there a rationale as why we were given in committee a lesser number and why we are seeing a higher number today? Thank you.
Thank you, Mr. Dolynny. Mr. Minister.
Madam Chair, I would ask if the Member would give me the number, I would be able to get you an answer.
We are not really supposed to make reference in the House to documents, and numbers, and information that were before committee. We can certainly speak to what is here. I believe it to be a genuinely interesting question, but I am hesitant to start digging out committee documents for reference. Mr. Miltenberger.
Madam Chair, can I ask the Member to give me the number, how much more or less it is than the numbers before us, without quoting the exact number?
---Laughter
Mr. Dolynny.
Madam Chair, the ballpark is roughly $600,000. Thank you.
Thank you, Mr. Dolynny. Mr. Aumond.
Madam Chair, I would have to confirm this with Public Works and Services, but I believe that the quantum that the Member is referring to was money that Public Works already had in their budget to undertake the investigation in the remedial investigative work and was not intended to be the total cost of the remediation. Again, I would have to confirm that with Public Works and Services, without having the number that the Member refers to in front of me.
The rationale for the question is that for probably one thing it shows is that the Members actually look at the numbers. Number two, when you have a delta or a quantum of that magnitude, it begs to ask the question as to why. I think that’s why we’re in Committee of the Whole. I do have some concerns that if a topic of discussion is being discussed in preparation for this type of venue, I’m a bit concerned that we are talking about a delta here and I really don’t have much more to say, other than the fact that I’m a bit disappointed that I’m seeing a number here today and discussions that occurred had a separate number entirely. No other further questions, Madam Chair.
Thank you, Mr. Dolynny. Education, Culture and Employment, capital investment expenditures, education and culture, not previously authorized, negative $3.935 million, total department, negative $3.935 million. Agreed?
Agreed.
Moving onto Transportation. Transportation, capital investment expenditures, highways, not previously authorized, $2 million, total department, $2 million. Mr. Bromley.
Thank you, Madam Chair. I know the major project under consideration here. We’ve had some discussion in the House on it already today. I’d like to ask what is the total amount expended on this project to date over the current and previous fiscal years not including this amount.
Thank you, Mr. Bromley. Mr. Miltenberger.
Thank you, Madam Chair. It’s $9.5 million plus the $2 million currently before the House.
I know from my participation here that we have a record of requests for dollars. Obviously, nickel and diming would not be the right term here because these are very significant amounts of money, but they are cumulative, that have eventually proved to be insufficient for the task at hand. In other words, we were told they would achieve this and they haven’t, and we’ve added and so on. I am very concerned about this project in general, as the House is well aware that this is completely in line with expectations that this cost will escalate and that we are, really, underestimating the significance of this project in terms of costs and future costs. That is certainly a concern.
My question would be: Will this be the final request to take us to completion of all of the information needed on which to base a go/no-go decision, or can we expect other requests? I assume we would have in hand as a go/no-go basis, environmental assessment cost estimates, as we heard earlier, and they would all be provided to committee, not just the lowest one, I assume, feasibility work and permitting. If I can get a response to that.
As we approach this project, the decisions made to ask for the funds in increments so that we would be reporting back to the Legislature and justifying the expenses because of the interest and concern about the project, as opposed to asking for a large amount of money and then at some point in the future coming back. We chose to come forward on an as-required basis so that we would always be before the House as a check and balance to make sure Members were fully engaged. When we conclude this final $2 million worth of work, we will have the information we need to put a package before this House and before the federal government.
Thanks to the Minister for that response. That was a good response to my question. I appreciate his perspective. My experience, as I mentioned, is a little different in terms of what we experienced on the ground. We were told what would be achieved with the dollars. It wasn’t, and they came back for more dollars. That is a concern for the project in its entire extent that we will be monitoring and that we will bring that perspective to the table for any final decision, I would expect, as I would expect Cabinet would want to consider as well. Thanks much to the Minister. That’s all the questions I had.
Madam Chair, the Minister of Transportation would like an opportunity to, as well, make a comment, with your indulgence.
Is committee agreed?
Agreed.
Minister Ramsay.
Thank you, Madam Chair. I just wanted to follow up on Minister Miltenberger’s response to Member Bromley. To the backdrop of all of this is the fact that the Government of the Northwest Territories has never had to do an EA on a project of this size and this nature. That has led us to do it incrementally. That is a component to this, too, that I just wanted to put out there.
Thank you, Minister Ramsay. Mr. Bromley.
Thank you, Madam Chair. I appreciate the Minister’s remarks. I understand that, and that’s undoubtedly a contributing factor to these underestimates and part of the point that I was raising. I understand that we’re stepping out here, so we need to bring that into consideration as we make our estimates and so on.
Thank you, Mr. Bromley. Next, I have Ms. Bisaro.
Thank you, Madam Chair. I have much the same concerns about this expenditure as does Mr. Bromley. I would like to, first off, ask the Minister, he mentioned that we have spent $9.5 million to date on this project. Could I know what amounts were spent in what years up to this point?
Thank you, Ms. Bisaro. Mr. Neudorf.
Thank you, Madam Chair. In the ’11-12 fiscal year and previous to that we had spent $5.8 million. About $1.6 million of that would have come from the federal government and the rest was from the GNWT. That would have been starting with the preparation of the initial project description report and then going into the environmental assessment, doing economic analysis, beginning all the different studies required for the environmental assessment process. In the current fiscal year, in ’12-13, we have $3.5 million to date. The majority of that would be spent on the geotechnical program, about $2 million of that $3.5 million, and then to carry on through the environmental assessment process and complete all of the studies that are required as part of that process. We, as well, are working on designs, on preliminary engineering and on cost estimates.
Thanks to the deputy minister for that clarification. I think we’ve spent almost $10 million to date on this project and we’re now being asked for another $2 million to finish what needs to be done, as the Minister of Transportation would say. I appreciate this is a large project. I appreciate it’s new for us to do an environmental assessment, but I am concerned that it’s almost like we’re, you know, Executive is coming back and kind of picking at us, you know, just a million here or $2 million there. This is the second time in this budget year that we’re being asked to put money into the Inuvik-Tuk highway. I want to be sure that we’re not throwing good money after bad, I guess, is where I’m at. I don’t yet believe that we have seen the justification for the project in total.
I appreciate the Minister of Transportation’s earlier remarks that there are decision points to come. I think it’s incumbent on each of us as Members to very seriously consider each decision point that we are presented with, and I hope we get lots of them, because it’s been said before and I agree, this is beginning to feel like a bridge project, and I sure as heck don’t want to go there.
The other thing that is concerning me about this particular $2 million request, but also all the requests that are within this supp, is that it is putting us even further in the hole in terms of our supplementary reserve. We will be, if we pass this supp as proposed, almost $10 million in the hole from our supplementary reserve. So that has an impact on our costs as a government because it will require short-term borrowing for us to deal with the ins and outs of our cash flow.
So the fact that we are so much into our supplementary reserve and beyond is in part due – a large part, I think – to this particular project, and there are a few other things, as well, but it’s not something which I recommend us doing as a matter of course, and it’s my understanding from the Finance Minister that going in the hole in our reserve is not something that he wants to do as a matter of course. I felt I needed to comment on it. So that’s all I have. Thank you.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Madam Chair. I appreciate the Member’s concern. One of the impacts on our current circumstance was the $10 million we put into this project a number of months ago. The money we spent that we didn’t anticipate was extra money on the bridge, we spent extra money on a number of different areas. But we appreciate the Member’s concern. We are still going to hit our fiscal targets, as we laid out in our fiscal plan to the Members. Thank you.
Thank you. Mr. Moses.
Thank you, Madam Chair. In regard to this supp before us, being from the Beaufort-Delta and understanding the course of the project as it has come before the Legislative Assembly since I’ve been in the Assembly, it is something that needs to be done and to get those kinds of reports brought forth so that we can make a good decision. This funding needs to actually go through the supp and get approved so that we can get those extra geotechnical studies that need to be done ,so we can make good decisions on whether this project goes through or not.
I’m not sure if this supp was not to go through, how that is going to affect the Department of Transportation, if they’d have to look at finding funds elsewhere, but this is something that I feel needs to be done. It’s something that we’ve invested in throughout the past year plus, and it’s something that I do support. I just wanted to make a comment in terms of supporting this to make sure that we do get the right studies done to make the best decisions that we need to going forth on this project. So more of a comment, Madam Chair. Thank you.
Thank you, Mr. Moses. Any further comments? Page 8, Transportation, capital investment expenditures, highways, not previously authorized, $2 million, total department, $2 million.
Agreed.
