Thank you, Madam Chair. I move that consideration of Tabled Document 325-17(5), Supplementary Estimates (Infrastructure Expenditures), No. 3, 2015-2016, be now concluded and that Tabled Document 325-17(5) be reported and recommended as ready for further consideration in formal session through the form of an appropriation bill.
Thank you, Ms. Bisaro. The motion is in order. To the motion.
Question.
Question is being called. The motion is carried.
---Carried
I would like to thank the Minister and his officials. I’ll turn the floor over, then, to Minister Miltenberger for his opening comments on our next bill, please.
I am here to present Supplementary Estimates (Operations Expenditures), No. 2, 2015-2016. This document proposes an increase of $50.7 million in operations expenditures for the 2015-2016 fiscal year.
The more significant items are:
1.
a total of $24.5 million for the Department of Environment and Natural Resources for the increased costs incurred during the 2015-2016 fire season. Twenty point nine million dollars of this amount was approved by a special warrant in June 2015 and is now being included in the supplementary request.
2.
$22.1 million for the Department of Finance to contribute funding to the NWT Power Corporation to mitigate the impact of extreme low water conditions in the Snare Hydro system against NWT residents’ power costs.
I think Members will agree that this level of investment is not sustainable over the long run and that government needs to start taking steps to reducing power costs for governments, businesses and residents.
The GNWT has already made significant efforts and investments to reduce internal power consumption. However, more needs to be done to encourage our residents and businesses to do the same.
The most immediate way of doing this is to provide additional funding to programs currently being delivered through the Arctic Energy Alliance, or AEA, and to accelerate NTPC’s LED Streetlight Replacement Program.
If Members agree, 10 percent, or $2.2 million, of this funding will be committed: $1.8 million to AEA and $400,000 to NTPC programming for 2015-2016 to enhance energy conservation in the NWT.
3.
$1 million in incremental costs associated with the current year operations of the new Hay River Regional Health Centre.
I am prepared to review the details of the supplementary estimates document.
Thank you, Minister Miltenberger. I’ll ask the Members now for any general comments.
Detail.
Detail? Okay. If I could get your attention, please, to page 4 of the document. Education, Culture and Employment, labour development and standards, not previously authorized, $1.250 million. Total department, not previously authorized, $1.250 million.
Agreed.
Thank you. Environment and Natural Resources, forest management, special warrants, $20.908 million, not previously authorized, $3.635 million. Water resources, not previously authorized, $255,000. Total department, special warrants, $20.908 million, and not previously authorized, $3.890 million. Mr. Dolynny.
Thank you, Madam Chair. Again, I’d like to welcome the department here today. I guess, first and foremost, I want to extend my congratulations to the fire suppression teams that work with us, that work alongside us through our MARS agreements for doing an outstanding job this fire season. In the wake of what we’re continuously hearing as some of the heaviest drought years that this territory has seen for many years, decades, I’m very pleased that there was no loss of life and that there was very little loss in terms of buildings and dwellings.
The reason why I’m leading into that is I want to make it perfectly clear that any comments we have with respect to any money spent in this area isn’t a reflection of the people working for us or working under us. That is distant to the question at hand. The question before us is the amount of money spent in order to provide these services to protect the public and the Northwest Territories as a whole.
We know that special warrants fall under a certain category in terms of being spent, and with it should come the explanation in due course or to follow with respect to how those monies were spent. Point in question, last year when we spent well over $55 million in fire suppression as a special warrant, and we waited, as a committee and as Members, very diligently to find out what exactly was the breakdown of that over $55 million. We all waited very patiently for five or six months, only to see a fire suppression support that really talked at a very high level in terms of a bureaucratic level for policy change and performance change and the fact that we needed maybe better equipment and more sophistication to deal with the science of fire. But that report only broke down three significant numbers to literally entail the spending of an amount far greater than we would provide detail for other appropriations that this committee has reviewed.
So, many of us, including myself, were very disheartened that very little emphasis was given on writing backup as to what we actually spent our money on. It was taken by default. It was a “trust us, don’t worry.” It’s a $55 million trust us program. We can’t continue to go along this same course of action as Members of this House. We have a responsibility and a due diligence to protect the public purse and it provides a level of transparency and accountability that every one of us here has taken oath to four years ago.
That being said, I’m still a bit perplexed that we have a warrant in front of us for a number of dollars with respect to forest management and fire suppression yet very little information with respect to where that money was spent, not how it was spent or any type of breakdown.
I know there was some dialogue going on behind the scenes with the department and myself, as a Member. We had some discussions in the backroom P and P, Priorities and Planning, with respect to how can we better do this. The onus was put on the Members of that committee to come up with a list of areas of opportunity. I find that to be a bit problematic that I, as a Member, or even a committee is expected to come up with the parameters of how the money is spent. This is something that should be provided to us by the purveyors and stewards of the people’s spending. So I will throw this back into the department here today in terms of how can they provide, and in what way can they provide, a better and more fulsome approach to breaking down these numbers and providing more of a public discourse in how the money was spent and have a certain standard we can use from year to year so we can completely understand how efficient or inefficient, as it may be, in terms of we are spending hard-earned tax dollars to fight the fires of the Northwest Territories.
Again, to the Minister and to the department: Is there a list of measurables, in terms of accounting measurable, that we can use to clearly articulate the volume of money that we spend? Thank you.
Thank you, Mr. Dolynny. Minister Miltenberger.
Thank you, Madam Chair. We did provide some extra information on a go-forward basis. If the request is a comprehensive, very detailed package that will capture all our costs in terms of material, fire crews, aircraft, we can commit to provide that. We can work through the committee before the next fire season, the format, to make sure it captures the needs of committee in terms of accountability and such. We can build that in so it’s not at the level where it is currently. Thank you.
I appreciate the offer of the Minister, but the Minister clearly is aware. the sands of the hour glass are dissipating quite quickly. What he’s asking for in terms of number of days left is not feasible, it’s not going to happen in time. This is going to fall on deaf ears once again. It will be picked up by the 18th Assembly, hopefully, and through some stewardship that we are going to become better people at doing this job.
This is not the responsibility of a Member. This is not the responsibility of a committee to ask the government to provide information. It should be provided willingly. This information should be provided in an accounting methodology framework which is subject to the right type of scrutiny for the amount that’s being asked on behalf of us to approve.
Again I will turn it back to the Minister: Will he commit his department before the 18th Assembly to provide a complete listing of accounting breakdown for money spent, not only for this past calendar year but go back to last year’s $55 million, and provide some level of accounting other than three or four large numbers to make up that which is really, at this stage, close to $80 million of taxpayers’ money spent on fire suppression? Yet, I can tell you on one hand, Madam Chair, how many numbers I got to approve that spending.
Will the Minister commit to provide Members of this House and also commit that there is a transition piece for the 18th Legislative Assembly so this question does not need to be asked by future Members of the 18th Assembly?
As we speak, the folks will be pulling together a package that we will put on the table and provide to committee members. It will be part of the record on a go-forward basis. We will do what we can for last year, but we’ll do this year for sure. I will commit to that. We’ll make it part of the record that that will be the expectation for all further supplementary or special warrant appropriations. Thank you.
I appreciate the Minister’s offering. I will take it with much enthusiasm. Unfortunately, it may not help us a lot today. It’s important, as we said, on a go-forward basis that Members on this side of the House, if we’re dealing with any type of appropriation, it doesn’t matter the dollar figure and especially when it does matter with specific large numbers, such as we have before us, that Members are well informed to the point that we can make good decisions for the people that we serve. I take this information with respect and I look forward to the expedient performance of the department in following through with what they’re offering. Thank you, Madam Chair.
Thank you, Mr. Dolynny. Next on the list I have Ms. Bisaro.
Thank you, Madam Chair. I have a question on this page, as well, with regard to the forest management item and the fire suppression. Before I get there, I do want to make a comment about the impact the total amount of these supplementary estimates, the operations expenditures, are having on our budgeting, so to speak, the impact on our finances.
Prior to this supplementary estimate, this request for $29.8 million, we had a supplementary reserve. We set one up every year. We had about $23 million in our supplementary reserve. So you take the cost of this particular supplementary expenditure and it puts us in the hole some $26 million. You and I, Madam Chair, in our household budgeting wouldn’t be able to put ourselves in the hole without getting ourselves into hot water and perhaps having to sell something off to pay for the deficit.
I appreciate that we have extraordinary circumstances, but either we need to increase our supplementary reserve in anticipation of extraordinary circumstances happening and the supplementary reserve is supposed to deal with the extraordinary circumstances that come up year to year. But we almost seem to be using the supplementary reserve for whatever it is we need it for and then when we come up against really extraordinary expenditures, such as fire suppression costs and/or low water surcharges for electricity, then we put ourselves deeply in the hole. It doesn’t seem to really matter, and I know it has an impact on our financing because we have to borrow more money. It increases our costs on any number of things.
I would like to state that I think we are getting too free with being overdrawn in our supplementary reserve and I would caution Members and the Department of Finance to be really careful, more careful than they already are, about the impact all these expenditures have on our bottom line.
With regard to the special warrant and the $3.6 million that is being asked for fire suppression, thankfully we had a better year this year than we did last year, so we’re not being asked to approve as much as we were asked to approve last year in a supp. However, I looked at the total cost of fire suppression this year and it comes out to some $57 million. Last year, I believe, it was quite a bit higher. It makes me wonder again, in terms of budgeting, we know we’re liable to be stuck in a drought situation for another year or two, maybe three or four – hopefully not – but I again ask, why don’t we budget the amount of money we are going to need more closely to the amount of money we actually end up spending?
When I first started, our fire suppression budget was a minimal amount. I think the amount in the budget was for an absolute perfect year and I think it’s gradually been increased somewhat but I think we still under-budget what we require for fire suppression and I would like to ask why we don’t put in a better number, a number that’s closer to reality when we’re budgeting for fire suppression. Thank you.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Madam Chair. We are at work looking at expanding the base budget for fire suppression to make it more reflective of some of the costs. One of the challenges we face with every other jurisdiction is we are now quite routinely, at least the last few years and if you look around the world, like in North and South Carolina, for example, extreme weather events that are coming in. We’ve had some discussions, as a Finance department, about how do we best capture the pressures from extreme weather events that aren’t tied to the routine business that supplementary appropriations are designed to capture, that are going to be more and more reflective of what's happening with global warming and climate change.
I appreciate the Member’s concern and it’s ours as well. We need to capture how we account for those major events that are a very big drain on the public purse. At the same time, we want to make sure that we still use the supplementary reserves appropriately, so part of the discussion is maybe there is a separate column and a separate way to account for those and it’s not a discussion that we’ve finished having and it’s a discussion that we’ll be continuing to have with committee, as well, as we accept the reality. Most of us would accept the reality that extreme weather is now upon us. I think every jurisdiction in the country is facing that, it doesn’t matter which province or territory. Thank you.
Thank you, Minister Miltenberger. Ms. Bisaro.
Thanks, Madam Chair, and thanks to the Minister for his comments. I’m really pleased to hear that the department is starting the discussion and is looking at ways to avoid us overspending our supplementary reserve by half as much as what it was in the first place. So, I’m glad to hear that. I was going to say any guess is going to be better than what we’ve got, but I guess an educated guess, a better educated guess is going to be I think better for us in the budget in the long run. So, just a comment. Thanks, Madam Chair.
Thank you, Ms. Bisaro. Next I have Mr. Bromley.
Thank you, Madam Chair. I think we had three separate hits before we finally got to our final number on fire suppression costs last fiscal year. I’m wondering: do we know if this is the last one or do we anticipate whether there could be more supps for fire suppression for this fiscal year. Obviously, it would be handled by the 18th Assembly. Thank you.
Thank you, Mr. Bromley. Mr. Miltenberger.
Thank you, Madam Chair. We anticipate that this is the final supp that will be required. Thank you.
So, what would be the final amount for this year for fire suppression?
Thirty-two million dollars. Thank you.
Thank you. I think last year, the largest year we had on record, obviously, it was a challenge. We were a little more prepared this year as a result of having that experience. But I know there was a comprehensive review done by the department on the performance during our ’14-15 year that I’m sure we drew upon for the ’15-16 year. I wonder if the Minister could tell us any areas that we improved our performance and perhaps our proficiency as a result of that previous year’s experience. Thank you.
One of the big areas has been on the preparedness with emergency firefighters and extra crews that were trained and standing by and ready to roll that were there right from the start last year. The year before last we were gearing up just because of the unprecedented nature and trying to recruit emergency firefighters. We had an amazing response, but this year we’ve kept it in place. We’ve worked on the training, so we now have a cadre of trained emergency firefighters. We’ve worked a lot on our communications. We’ve had the benefit this year of the weather that worked in our favour. We’ve had some good work with Buffalo in terms of their large land-based air tanker ready to go, the Electra, after a long struggle to get it certified. We anticipate having that one, plus hopefully another one for fire season, which will give us two state-of-the-art land-based aircraft that will help us.
Every year there’s a MARS meeting, as well, about all the work that goes on between provinces and territories to see if there are any improvements in terms of equipment as well as the movement of staff and equipment.
So, all in all, I think we’ve learned some valuable lessons, the big one for me being the communication and having emergency folks ready so we don’t have to rely as much on outside resources. Thank you.
Thanks to the Minister for that response. Will we be doing another one this year? Is there an intent to do that? Maybe the Minister commented on that and I missed it. I am just wondering if this is something we now do annually. Thank you.
Yes, Madam Chair. The intent is to do a similar territorial-wide debriefing on the performance and issues and things that need to be identified to follow up on. Thank you.
Thank you, Minister Miltenberger. Anything further, Mr. Bromley?
I did have some comments on the climate change related aspects of this, but I think since this is happening more and more often and coming up repeatedly in this supp, I’ll just save it and talk about it later. Thank you.
Okay, thank you. Environment and Natural Resources, forest management, special warrants, $20.908 million; not previously authorized, $3.635 million. Water resources, not previously authorized, $255,000. Total department, special warrant, $20.908 million, not previously authorized, $3.890 million. Agreed?
Agreed.
Thank you. Moving on to page 6, Department of Finance, deputy minister’s office, not previously authorized, $22.129 million. Total department, not previously authorized, $22.129 million. Mr. Dolynny.
Thank you, Madam Chair. It gives me great pleasure to finally get to this part of the budget, which has been talked about here in the media for a number of weeks at the end of August and early part of September when residents were notified that the government took a lead action in trying to mitigate the low water expenditures or low water issue at Snare and Bluefish and took it upon themselves to give a bit of a bird’s eye view of what was about to come here today. This has been big in the making and I’m glad we are finally having an ability to talk about this appropriation in its full consideration.
First and foremost, just to give a bit of a background, I’ll allow the Minister to maybe give us information indicating… The Public Utilities Board had a hand in offering, from what we heard in conversations on the floor of the House here, extensions.
Can you give an idea of what exactly was going on between the department and the Public Utilities Board in terms of these so-called extensions during this last drought season and what did that mean in relationship to the appropriation we have here before us today? Thank you.
Thank you, Mr. Dolynny. Minister Miltenberger.
Thank you, Madam Chair. As the appropriation for the previous low water surcharge was spent, the Public Utilities Board wanted to know, given the fact that the low water issue was continuing, what was the intention of the government and what was the intention, then, of the Power Corporation to respond? Were we going to raise rates or was there going to be some other accommodation made. We were monitoring the volumes of flows, the needs, the extent of the low water, and we wanted to be as clear as possible and see what was going to happen. So they wanted to know fairly early in June, if my memory serves me correctly, and we subsequently got three extensions. After the third one it became imperative that we give the PUB some indication by the end of I think it was August, that we were given the latitude of a final six extra days. So we finally had to make the decision to give them the information that they requested, which would become part of the public record in terms of the operations. Thank you.
Everything that we do here is to provide facts for the public to understand the money that we’re spending on their behalf, and as the Minister indicated, there was correspondence given to Members. I don’t believe that information, in terms of public utility letters, is in the public domain. But I know that Members on this side of the House received some correspondence just in the last week or so, which puts Members in a bit of a handicap situation because we weren’t made aware of the correspondence to and fro between the Public Utilities Board and the department. Can the department confirm if this is indeed true? Is there any proof that the department shared high-level information with any of the committees here, both EDI, Economic Development, or Priorities and Planning with respect to pertinent information leading up to the appropriation and the announcement in the early part of September? Was there anything given to committee members to believe that there was something imminent in the works? Thank you.
There was ongoing discussion in just about every venue about the ongoing water and the need to make a decision. When we finally reached the point of having to make a decision, there was a letter written to committee and followed subsequently a couple of days later by the public announcement about that matter. Thank you.
So, again, things are coming down to some more clarity. That’s an August 31st deadline that Members were made aware. Prior to that I can assure Members here and those listening in, Regular Members of the committee here weren’t fully aware of the severity and the gravity happening behind the scenes. Of course, we all understood there were low water issues. I mean, we’re quite observant in that regard, but Members were somewhat handicapped, as I said, in terms of having this type of information. Now that we have this information and now that we’re discussing this here today, I guess my question is, as a Member of this committee, how did we deal with low water issues for the last year since the last time we put a $20 million subsidy back in the hands of NTPC? In the last 12 months, what has NTPC done in order to control its demand management of diesel and what were those savings and how was that quantified? Thank you.
As we were dealing with the low water, we were also burdened with a major retrofit of one of the big turbines out at Snare, which is costing in the many millions of dollars. At the same time across the system, if that’s the question, we’ve done things like push for the conclusion in the thermal small communities that the transfer or the completion, sorry, the replacement of existing high use, high cost of sodium vapor lights, streetlights with LED lights. We’ve, of course, worked with the government to put in alternate energy replacements with solar batteries; we’ve concluded the operation in Colville; we’ve entered into power purchase agreement with Lutselk’e and Bullfrog Power is another example. We’ve funded the final work to see what it would cost in Deline for mini hydro. We also are continuing our work in Inuvik with Storm Hills and another site to see the viability of wind. We’ve just taken part in helping sponsor a major North American Micro Grid Conference that’s going to as well give us a great opportunity to see the technology and the financing support and the opportunities that exist across North America with businesses as everybody gets more and more involved in the opportunities presented by renewable resources, switching to alternative energy resources.
As well, we’ve also made efforts into areas where we do have some hydro surplus to offer up that hydro to communities like Fort Smith, Hay River and Res that are on the grid down there at a wholesale rate to help cover their costs as communities. Thank you.
Thank you. I liked the Minister’s reply. I know they’re doing lots of work behind the scenes and I applaud their actions and I encourage them to continue.
We will get that information. NTPC tracks it to the litre and we’ve already indicated that we’d be prepared to compile that on an as required basis, monthly, quarterly, whatever is the wish of committee to provide that information so that we can see how it goes over the course of this fall and winter. Thank you.
Thank you, Minister Miltenberger. Ms. Bisaro.
Thank you, Madam Chair. I, too, would like to comment on this extraordinary expense and I have to say that in hearing that we were spending up to $29 million for a low water surcharge, I wasn’t surprised. I can’t argue with this particular expenditure, I can’t argue with the dollar amount, but I can argue the process. As was stated by Mr. Dolynny, Members really didn’t have any opportunity to consider this expenditure before it was complete. Sure, there was a letter from the Premier dated August 31st. I think Cabinet was well aware and the Premier should have been well aware that Members were not meeting at that time. We weren’t scheduled to meet in committee until about the middle of September. I think Cabinet is well aware that we don’t see correspondence immediately, that it’s sent out.
Also, in late July, early August, I think there was an article in the paper, an interview with NTPC suggesting that we had low water and suggesting that there was going to be a requirement to spend the money. So again, I wasn’t surprised when I read that this was coming, but I really feel strongly that we needed to be better informed as Regular Members.
So this particular expenditure, and I have to say again, this is $22 million, which is pretty much the full amount of what is putting us in the hole in terms of our reserve. Again I reiterate that we need to plan better, particularly in terms of our electricity, but in terms of expending money in general. Thanks, Madam Chair.
Thank you, Ms. Bisaro. We are going to, I think, report progress here fairly shortly. I will let him answer you, but that clock is wrong. It’s actually five minutes to six right now. Mr. Miltenberger.
Thank you, Madam Chair. The Member articulately laid out her concern on a previous item similar to this one and we had a good discussion. We agree that we need to try to count better. It’s very difficult to anticipate things like low water, the duration and such, but we are looking at how we can better account for the money and the increasing number of extreme weather expenses that we are being obliged to deal with. Thank you.
