Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. Will those charges be part of, then, the financial report that the Minister is going to bring forward for the public briefing, these four double-hulled barges? Thanks, Mr. Chair.
Thank you. Minister.
Thank you, Mr. Chair. Yes, we can do that as well. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Thanks. I don't have any further questions at this point, Mr. Chair, but I thank the Minister for those commitments and look forward to getting the information in a public forum. Thanks, Mr. Chair.
Thank you. Next, Mr. Nadli.
Thank you, Mr. Chair. Mr. Chair, it is very concerning in terms of what is happening way up north. We, in the southern Northwest Territories, you know, have the highways to transport our goods and services to our communities, but unfortunately, people that live way up north, a lot of their goods and services have to be brought in by barges, or sometimes, in this extreme example, flown in because they don't have any other choice. I really sympathize with my colleague, who spoke in terms of ensuring that, you know, people from those communities got some answers.
My question is very basic, and maybe the Minister had an opportunity to provide some very strong rational reasons in terms of why MTS has to be situated in Hay River. It just makes sense at this point that the centre of operations should be considered, perhaps, in the Beaufort Delta so that, you know, operations could easily be made and adjustments be made.
My question is to the Minister: why does MTS, the base of operations, need to be based in Hay River? Mahsi.
Thank you. Minister.
Thank you, Mr. Chair. As I have laid out before, first of all, how are you going to haul millions of litres of fuel to Tuktoyaktuk? We can do that. That's by truck. Trucking is going to cost you a heck of a lot of money to get the fuel up there, way more than it ever is going to be on a railhead to bring it to Hay River. The terminal is there. It is the most northern railroad in Canada.
We also have, as I said, the Synchro Lift there, which is millions of dollars of assets to build something like that up there, to be able to lift the barges and the vessels out of the water to do maintenance and repair on them. It just clearly makes sense to operate out of Hay River logistically. If a guy sat down and did the numbers on the freight alone, just to haul fuel to Tuktoyaktuk wouldn't make sense. It is all done on sheer volume.
Fuel is the whole reason for MTS's existence to start with, and deck freight became an extra. Fuel is a necessity that had to be shipped to all of the northern communities and the DND sites, and that is the largest percentage of our revenues. I can't see where Tuktoyaktuk being the head port would make any sense, besides a contingency location at this point. Thank you, Mr. Chair.
Thank you, Minister. Mr. Nadli.
Thank you, Mr. Chair. I would like to thank the Minister for providing that insight as to why the base has to be in Hay River. The Minister speaks very confidently in terms of how decisions were made to ensure that the base continues to exist in Hay River, and he makes reference to, you know, the volume of trucking and the costs of, perhaps, the railroad.
If there have been studies, could he make, perhaps, those studies and analysis to committee level in this House? Mahsi.
Thank you, Mr. Nadli. Minister.
Thank you, Mr. Chair. I am going to need him to repeat his question.
Thank you, Minister. Mr. Nadli.
Thank you, Mr. Chair. My question was: the Minister makes reference, very confidently, to transportation through the trucking industry in terms of bringing fuel to Hay River, by railroad as well, and also, he seems to suggest that there has been some analysis, and whether there has been some studies in terms of cost comparisons as to an existing base in Hay River, as opposed to, perhaps, an option like Inuvik or Tuktoyaktuk as a base of operations for MTS. Would he share those studies and findings or analysis with the committee? Mahsi.
Thank you. Minister.
Thank you, Mr. Chair. This is only our second operational season. We haven't looked at those things yet. If the Members remember correctly, we bought this thing in December, and we had to have it up and running by the following May, which we did, and we made a profit the first year, with all of the challenges that we had around that, with one-time costs associated with bringing boats back down from the High Arctic to insurance and Lloyd's of London and inspections and staffing and crewing. There was a huge challenge around that, and the department pulled it off and got our first year done.
We are into our second season. This is our second season; I need to stress that. We are still trying to fully appreciate all of the assets that we have accumulated and the cleaning up of the facility and trying to manpower up and find the most cost-effective way to run this operation, but at this point, we have not sat down already. Just because we have had an unfortunate event this year with heavy sea ice that has come down and caused us not to be able to deliver to three communities, we are not going to scramble here to set up operation in Tuktoyaktuk. That is not the case.
We are always looking for effective ways to change things. We are taking some lessons learned, as I have said, from this, and we will continue to look at that. At this point, you know, I cannot see Tuktoyaktuk being on the radar to move our whole operation there. Thank you, Mr. Chair.
Thank you. Mr. Nadli.
Thank you, Mr. Chair. My last question is, you know, I live in Fort Providence. The ice goes out about May 12th or thereabouts, and then it follows, maybe, from there, north to Inuvik within a two-week period. The river is pretty well open within that period of time, but unfortunately, Great Slave Lake ice persists to keep the lake frozen, and MTS, their operations have to stand still during that time, while the river is flowing freely.
The point that I am making is that there have been changes in river breakups. We are seeing changes in terms of the sea ice flow up in the High Arctic, and my question is: how does MTS consider climate change in developing its operational plans, the examples I just made?
We are seeing changes. The Northwest Passage is becoming more passable for ocean liners, and things of that nature are happening. Surely the department through MTS has considered those operational factors.
Thank you. Minister.
Thank you, Mr. Chair. As I have said earlier in my questioning, I said we were going to do a regional contingency plan on the Department of Infrastructure to help mitigate these extreme events, and that is where we would probably have a look at this. That is why we are having a look at the Beaufort region, and I have committed that we are going to do that. Thank you, Mr. Chair.
Thank you, Minister. Nothing further from Mr. Nadli. Next, I have Mr. Blake.
Thank you, Mr. Chair. To your statement, I know you mentioned some high water in July, and I have seen it first-hand myself. I noticed a couple of buoys that were in places that they shouldn't be near Tsiigehtchic. How long did it take the department or the Coast Guard to realign those buoys along the Mackenzie River after they were moved out of place by the extremely high waters in the first part of July? Thank you.
Thank you, Mr. Blake. Minister.
Thank you, Mr. Chair. Without getting the exact timing, my understanding is it took the Coast Guard about ten days to reposition the buoys. Thank you, Mr. Chair.
Thank you. Mr. Blake.
Thank you, Mr. Chair. It is good for us in Tsiigehtchic because we get all this driftwood in all the communities, we don't usually get that in the spring, but it always makes everybody wonder. As to early part of June, we get the breakup and high waters. People are always wondering why we don't see barges along the river until, like, towards the end of July. That question always comes up.
It seems like it is a little later than what it used to be, but I am sure, to rebuild all these barges, old stock, can we see major improvements once we get these new barges that are supposed to be on order, and how long will those barges take to be ready for shipping? Thank you, Mr. Chair.
Thank you. Minister.
Thank you, Mr. Chair. We have talked a little bit about these double-hulled barges in my statement, about the funding that we secured with the federal government for the $19.5 million and had questions on our contribution.
The one nice thing about these, for the people that didn't get to attend the MTC opening in Hay River, we actually had a picture of the barges, and I think we actually have some of the drawings, and maybe I will commit to bringing them to our briefing as well so that Members can get a better understanding of these new designed barges. They are going to be able to haul all types of fuel on there. They are designed for that. They are double-hulled. There are four of them, and we will be able to put deck cargo on them.
In a case like this year, instead of having different trips going to the communities, and particularly the High Arctic, we will probably be able to service maybe, not only one, but maybe two communities with all their fuel and all their deck cargo in one trip. That is going to make a significant difference to the delivery times into the coastal communities. Thank you, Mr. Chair.
Thank you. Mr. Blake.
Thank you, Mr. Chair. I am aware there are also other barging companies, like Cooper Barging, for example, or Bob's Welding. Those are two of the bigger outfits.
When we are a little busier than usual, like it seems we were this summer, do we make use of those other companies as well to service the smaller, closer communities, whether to Inuvik or near Fort Simpson? Thank you, Mr. Chair.
Thank you. Minister.
Thank you, Mr. Chair. Companies like these two that the Member is referring to, they service a different market and do different types of work. Cooper's Barging, for example, maybe a lot of people don't realize, but they don't haul fuel. Their barges are only set up for deck cargo.
Companies like these, too, that the Member is referring to, they service a different market and do different types of work. Cooper’s Barging, for example, maybe a lot of people don’t realize, but they don’t haul fuel. Their barges are only set up for deck cargo. In rare, extreme cases they have hauled fuel on top, but they would be in a tanker. Generally, we don’t interfere with each other’s businesses. We both conduct our own businesses, and there is a market for that. Thank you, Mr. Chair.
Thank you. Mr. Blake.
Thank you, Mr. Chair. That is all for now. Thanks.
Thank you. Next, Mr. Thompson.
Thank you, Mr. Chair. I am just trying to get a clear picture of this, here. When we talk about $22 million in cash reserve, can you please explain what that reserve is? Is it cash? Or is this equipment? Or is this product? Or is it a combination of everything? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Mr. McCormick. Thank you.
Thank you, Mr. Chair. The $22 million is the approximate bank balance for MTS as of today.
Thank you, Mr. McCormick. Mr. Thompson.
Thank you, Mr. Chair. Can Mr. McCormick explain the bank balance? Is this a liability? Does this involve the equipment? Is that $22 million in cash? Is that what it is? Or is this assets and product? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Mr. McCormick.
Thank you, Mr. Chair. The $22 million is cash. That is money that was generated through MTS operations over the past two years. Thank you. Mr. Chair.
Thank you, Mr. McCormick. Mr. Thompson.
Thank you. Mr. McCormick, I am getting a little confused here. What is the $875 when it is in the revolving fund? Thank you.
Thank you, Mr. Thompson. Mr. McCormick.
Thank you, Mr. Chair. The $870,000 would be the accumulated surplus that is sitting in there. That is the statement of operations or the income statement side and transfers over to the balance sheets. We would have $22 million in cash. We would also have some offsetting liabilities for accounts payable, those sorts of things, and that include the money that would be owed to the GNWT for the original asset purchases that would be netted off of that.
I just want to clarify, as well, that that $870,000 that is currently sitting there does include our contingency as of now for the commitments we have made for the air freight that is going on right at this moment. Thank you, Mr. Chair.
Thank you, Mr. McCormick. Mr. Thompson.
Thank you. When the Minister and department is going to be coming to committee to present, will we have the actual bottom line what money we have? When I’m hearing $22 in the bank and $875,000 here, I mean, it sounds like we have $22,875,000 minus liabilities and that. Now, I’m sitting here, trying to understand this. If we look at the liabilities, we look at the assets and depreciation of the equipment and that, our numbers actually go down, if I am understanding this correctly. Can the Minister or Mr. McCormick please clarify? Thank you, Mr. Chair.
