Minister Miltenberger, please introduce your witnesses, please.
I have with me Mike Aumond, deputy minister of Finance; and Sandy Kalgutkar, deputy secretary to the FMB. Thank you.
Thank you, Mr. Miltenberger. I would like to open the floor to general comments on Tabled Document 246-17(5), Supplementary Estimates (Operations Expenditures), No. 4, 2014-2015. Mr. Bromley.
Thank you, Mr. Chair. I understand this came about as a result of new accounting procedures required by whoever sets those things. I don’t know whether it’s the Auditor General or what. I am happy to see this. I think our government is too. They realize these liabilities are real and are out there, and it’s nice to have some assessments on which to base what the costs are going to be in the future and today.
I understand that there are two components to this. One is assessing existing sites in a little more depth, rather than just knowing they exist and they do have some degree of liability. We are now trying to quantify that a little bit. We’re also adding in sites that were worked on before, non-operating sites.
In terms of the assessment of work that’s been done on estimating costs of cleanup of sites that we have done in the past, what degree of confidence do we have in those? How deep did they go? Do we expect when we get around to doing the work, we will need more work? Is it likely that these are conservative estimates and there is some chance the final cost will be less than what the current appraisal is? Thank you.
Thank you, Mr. Bromley. Deputy Minister Aumond.
Thank you, Mr. Chair. Based on the work today, we are pretty confident we are understanding what the costs for remediation might be for these sites. However, the one caution I would put out there is, through past experience, one really never knows until you get on the site and start undertaking the work to find out what you are really faced with. We have all three phases of site assessments completed before we put together the cost of remediation. Other than what you might expect to happen to inflation to different components between today and then when we actually get around to remediating the sites, we’re pretty confident in the numbers we have.
Thanks for that response. So, did we do any fieldwork on this? Was there an attempt to build in the area of contamination, the degree of contamination, the depth of contamination, that sort of thing, in toward building these estimates? Thank you.
Yes, we did. In particular there are four or five new sites that we actually undertook some fieldwork, some site assessment work on the field, which accounts for about 58 percent of the increased costs that we’re proposing to add today. Thank you.
That’s good to hear. I guess my last question is: So, operating sites, they are not included here. I believe we have another system, security deposits, financial security deposits and so on to look after those when if a mine is abandoned or the company goes bankrupt, which we know happens all too often, we will end up picking up that cost. But I’m wondering, in the consideration of what would go in here, do we include or should we be including, or is the mandate from the Auditor General or whoever is setting these standards, does it include consideration of operating sites for which we have not collected full financial security? Thank you.
For the purposes of this report, the assessment does not include any sites associated with devolution. Either closed sites or operating sites, as the Member stated, are assessed by the various regulatory agencies and they have security assigned to them. What we have here are for those sites that are on Commissioner’s lands prior to and after devolution came into place. Thank you.
I understand that these are sort of two separate questions in a way. I guess, in terms of registering our liability for our public accounts, which I believe is a part of this exercise, how would those be handled where securities have been assessed but not collected or secured for operating sites? How would that be accounted for?
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chairman. What will happen in the broad sense is the $25 million will be booked and will be able to be tracked through the public accounts on a yearly basis. We’ll look at the ongoing work during the year.
Thank you, Minister. Mr. Bromley.
Thank you, Mr. Chair. I’ll leave it at that. I can inform the Minister of instances where those in fact have arisen, but that’s another discussion. I’m happy to leave it for now.
Thank you. Committee, we’re taking general comments on Tabled Document 246-17(5). General comments. Ms. Bisaro.
Thank you, Mr. Chair. I have some questions. I presume that’s acceptable? Thank you. I don’t have major concerns, but I think I need to ask some questions to ensure anybody who is listening to this and wondering about this great expense, to ensure that they understand what this is all about. The Minister stated in his opening remarks that this is a one-time expenditure, but I would suspect that we would see that it’s entirely possible with new developments happening, and/or the discovery of contaminated sites which we haven’t yet discovered, that we would see another one-time increase.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Mr. Chairman. We have a fund and an amount of money before the House that we’ll book. It will draw down against that amount of money, roughly at about $2 million a year. Though we don’t think it will happen, should we stumble across a number of sites that we didn’t know existed that have significant costs attached to them after assessment, we would look at how it would draw down against the money we have. If we start we reach the point because of either increased development, sites coming to light that we weren’t aware of, then we would follow the due process to come back to ensure that we met the new standard.
As to the exact amount of money, I wouldn’t want to hazard… It would be inappropriate for me to hazard a guess on what may happen that far down the road. Thank you.
Thanks to the Minister. Yes, I’m not surprised that you don’t want to guess, either, as to the amount. So, just to confirm, at this point we think that we have found all the contaminated sites, both operating and non-operating on Commissioner’s land in the NWT. Is that right? Thanks.
When I use the term “Commissioner’s lands,” I’m thinking it’s the land that we’ve taken over since devolution, but I think those are called Territorial lands. So we think we’ve found all the sites on Territorial lands and Commissioner’s lands, just to confirm for me. Thank you.
On all those lands, except where there is an existing permit that was already granted. But for the most part, yes.
Thanks. I’ll change direction a little bit here. This is a non-cash item, as the Minister said in his opening remarks and he kind of alluded to a bit in talking to Mr. Bromley about how do we pay for this stuff. So, we’re recording a number of $25 million-and-some. It’s non-cash at the moment, but how do we pay for this $25 million? Because we’ve said we have $25 million of remediation work to do. So, how do we pay for that? Do we have a reserve, or are we accumulating money over a period of time? How do we end up with $25 million to do the remediation work whenever it needs to be done? Thank you.
There are two things. We’ve booked the number, a fixed amount as a liability that we have responsibility for, and we’ve built into our yearly budgets to the base at this point roughly $2 million a year to start working away at the remediation of the various sites as the work plan dictates. Thank you.
Thanks to the Minister for that. I just have one last question. It’s my understanding that the public sector accounting principle that we are coming into adherence with applies to non-operating sites.
Could I get confirmation on that and could I also get confirmation that our number includes both non-operating and operating sites? Thank you.
Thank you, Ms. Bisaro. Deputy Minister Aumond.
Thank you, Mr. Chair. The standard applies to both operating and non-operating sites. Thank you.
Thank you, deputy minister. Ms. Bisaro.
Thanks, Mr. Chair. Okay, I guess I misunderstood the other day, but that’s good. Thanks, Mr. Chair.
Thank you. Committee, we are taking general comments on Supplementary Estimates (Operations Expenditures), No. 4, 2014-2015. Is committee agreed to go into detail?
Agreed.
Supplementary Estimates (Operations Expenditures), No. 4, 2014-2015, Department of Finance, operations expenditures, office of the comptroller general, not previously authorized, $25.337 million.
Agreed.
Total budget, not previously authorized, $25,337 million.
Agreed.
Committee is agreed we’ve concluded Tabled Document 246-17(5). Agreed?
Agreed.
Ms. Bisaro.
Thank you, Mr. Chair. I move that consideration of Tabled Document 246-17(5), Supplementary Estimates (Operations Expenditures), No. 4, 2014-2015, be now concluded and that Tabled Document 246-17(5) be reported and recommended as ready for further consideration in formal session through the form of an appropriation bill. Thank you, Mr. Chair.
Thank you, Ms. Bisaro. The motion is on the floor and the motion is being distributed. To the motion.
Question.
Question has been called. The motion is carried.
---Carried
Committee, we will move on to Tabled Document 247-17(5), Supplementary Estimates (Infrastructure Expenditures), No. 2, 2015-2016. I’ll go to the Minister responsible. Minister Miltenberger, do you have opening comments?
Thank you, Mr. Chairman. I am here to present Supplementary Estimates (Infrastructure Expenditures), No. 2, 2015-2016. This document provides for an increase of $65.8 million to the capital budget. The most significant items in this supplementary estimates are:
$61 million in capital carry-overs for the completion of infrastructure projects. This represents a carry-over of 20 percent of the previous year’s capital plan, which is the lowest in the past 10 years. These costs are offset by an equivalent lapse of infrastructure funding in the 2014-15 fiscal year; and
$1.6 million associated with the revised acquisition schedule for the new air tractor fleet.
I am prepared to review the details of the supplementary estimates document. Thank you, Mr. Chairman.
Thank you, Minister Miltenberger. Minister Miltenberger, I’m assuming you still have the same witnesses. Committee, we’re reviewing Tabled Document 247-17(5), Supplementary Estimates (Infrastructure Expenditures), No. 2, 2015-2016. General comments. Mr. Bromley.
Thank you, Mr. Chair. I don’t really have specific questions, so I will keep my comments to general remarks here. I really would just like to acknowledge that the great majority, probably 95 percent is carry-over from largely infrastructure projects, and it is indeed a great amount, $67 million. But on the other hand, it’s down in percentages in what our carry-over has been for the last several years. It’s been up to 30 to 35 percent and this year it’s down to 20 percent, and I’d like to acknowledge that we did a good job in the previous year at completing our infrastructure projects, or at least advancing to a greater degree than normal. I know that’s a result of some focus on that area, and I’d like to acknowledge that progress.
I’ll leave my comments at that, and I look forward to any further comments from my colleagues. Mahsi.
Thank you, Mr. Bromley. General comments. Ms. Bisaro.
Thanks, Mr. Chair. I just have a few comments, as well, and I feel the same as Mr. Bromley. Although, from what I understand, the amount of carry-over this year in terms of dollars is larger than what we carried over last year. The percentage of our total capital budget has gone way down, by about 10 to 15 percent, I believe. So, I think that is an indication that we are being a little bit more realistic in what work we can do, and I think the departments are getting out ahead of the game, so to speak, and making sure that the projects that they get capital money for are, as much as possible, being done. I just urge the government to keep that up.
I think the less money we have in carry-overs, the better. There are always extenuating circumstances, so they’ll always have carry-over. But this year I think has been a good year.
I have a couple of concerns with some of the carry-overs, but I’ll leave that until we get to detail. Thank you.
Thank you, Ms. Bisaro. Mr. Dolynny.
