Yes. Thanks, Madam Chair. I was in the last Assembly, and one of the reasons why they were being amalgamated was basically a cost-cutting, cost-saving exercise. Some people did lose their jobs, and I know there were efforts made to try to retain people through whatever the name of that policy is that GNWT has. There were less people working for Infrastructure than there was for the two separate departments. I'm just trying to square that with adding more money into the budget two or three years later to try to rectify this. It just doesn't seem to make any sense to me. Maybe someone can take another run at it. Thanks, Madam Chair.
Thank you, Member. Minister of Infrastructure.
Thank you, Madam Chair. Yes. This was amalgamation a number of years ago where public works and department of transportation were put together. I'm not sure the history on that, and I'm just going to look at ADM Brennan to see if he knows some of the history. I'm looking between my deputy minister who might have been there the longest? Thank you, Madam Chair.
Thank you. Is it going to be ADM Brennan? Okay.
Sure, yes. Thanks, Madam Chair. When amalgamation happened, and I was around then so I can speak somewhat eloquently to it, I hope, it did happen quickly based on the Cabinet decision to amalgamate the two departments for some reason, which I don't really know myself, but cost-cutting is as good as any other reason, I'm sure. When the budgets were formed, trying to amalgamate two big departments in a hurry, there were definitely some challenges going forward. The department has been looking at some, internally, how do we allocate resources to the people who are there. Yes, there were some positions cut during that time, but the positions that were left over weren't funded properly because errors were made in moving the budgets into the proper location at that time. Those errors have not been corrected until now. We're starting to address some of them in this budget here. Thank you, Madam Chair.
Thank you, Mr. Brennan. Member for Frame Lake.
Thanks, Madam Chair. If there's any lessons to be learned from that is: you don't amalgamate departments quickly and think you're going to save a bunch of money. Yes. That's kind of what I was saying in the last Assembly. Okay, been confirmed. Thanks, Madam Chair.
Thank you. Member for Great Slave.
Thank you, Madam Chair. When we had the Premier in front of us to talk to us about Executive and Indigenous Affairs, I asked where payouts to former deputy ministers would be found, and she mentioned that they would all be found within the individual departments' budgets, so would this be where we would find payouts to deputy ministers or former staff in this area of the budget? Thank you.
Thank you, Member. I will let the Minister answer if that's correct?
That's correct.
Thank you. Member.
Thank you, Madam Chair. We, at least, see $500,000 change for the last line items in compensation and benefits, and I see about $1 million in total to these areas. Just more of a comment. Thank you.
Thank you. I will take that as a comment. Any further questions? Corporate management. Any other questions? Member for Kam Lake.
Thank you very much, Madam Chair. Just a couple of questions. Last year, when we did this exercise, we touched briefly on the topic of tracking carryovers, and I'm wondering: typically, on an annual basis, what percent of Infrastructure's entire budget becomes a carryover to the next year? Thank you.
Thank you. Minister.
Thank you, Madam Chair. That was the question I had about an hour ago in terms of some of our summary costs, and when we get to the front page, we look at -- it's mostly, Madam Chair, because of an accounting structure, and how the Department of Finance allows us to put some of the budgets on our estimates. I am going to ask ADM Brennan to be able to summarize that. It's kind of hard to explain how the budget is comprised. Thank you.
Thank you, Minister. Mr. Brennan.
Thank you, Madam Chair. Carryovers are essentially a capital item on capital projects, when we don't spend money, but you request a carryover. On the main estimates, there are no carryovers, except there were provisions to come for supplementary funding if you have a federal agreement where you can carry money over. Generally speaking, there are no carryovers in this budget except as it ties to federal O and M funding. Thank you, Madam Chair.
Thank you, Mr. Brennan. Member for Kam Lake.
Thank you very much, Madam Chair. Sorry, I am breaking up my questions more today because I got some flak for that last time. There was discussion last year about a project tracking system in order to be able to track the carryovers that are happening. My assumption would be that this would come out of the O and M budget through department management, and I am wondering if that is budgeted for within this year's O and M through department management. Thank you.
Thank you. Minister.
Thank you, Madam Chair. Yes, it is.
Thank you. Member. Any further questions?
No, I'm happy. Thank you.
Are there any further questions under Infrastructure, corporate management? Seeing no further questions, please turn to page 240. Infrastructure, corporate management, operations expenditures, 2021-2022 Main Estimates, $7,898,000. Does committee agree?
Agreed.
Thank you. We will now move on to regional operations. This is one where we are going to jump ahead a little bit. All right, committee. This is regional operations, beginning on page 250 to 253, but there are a whole bunch of informational items. If they pertain to this department, you can ask them on those for now. Do I have questions on regional operations? Member for Yellowknife North.
Thank you, Madam Chair. I am looking at page 251, and we spend $32 million a year on leases. If I go to the information item on 263, lease commitments, it's $12,124,000. Can I just get clarification of the difference between those numbers? I want to understand: how much a year are we spending on leases? Is it $32 million a year or $12 million? Thank you, Madam Chair.
Thank you. Minister of Infrastructure.
Thank you, Madam Chair. We are looking at the proposed budget, so we are asking an increase of $1.5 million, which brings us up to $32,601,000, and these are costs associated with Child and Family Services. It also includes some of the leasing funds for Education, Culture and Employment, some of the temporary student housing that has ended.
To answer the Member's question, it is an increase of $3.4 million in terms of that. There are a number of things involved, some of the Stanton legacy, the long-term care facility, the lease cost associated with Child and Family Services, Education, Culture and Employment, some of the temporary housing. There are a number of variances in the budget in terms of how we justify the increases. Thank you, Madam Chair.
Thank you, Minister. Member for Yellowknife North.
Thank you, Madam Chair. I was just waiting for my light to turn on there. I guess the question I am asking is... [Microphone turned off]
All right. Member for Yellowknife North. Sorry. Just wait. How's this? Go ahead, Member for Yellowknife North.
Thank you, Madam Chair. I understand we have added the ECE and Child and Family Services leasing. I am not opposed to adding. When we need space, we need it. What I am trying to understand is: on page 251, we spend $32 million on leases, but on 263, we spend $12 million on leases. I just would like to understand the difference between those two numbers. Thank you, Madam Chair.
Thank you, Member for Yellowknife North. Minister.
Thank you, Madam Chair. I thought I was clear in explaining how much we did spend, but obviously not. I will get ADM Brennan to speak to the other page that we are referring to. Thank you, Madam Chair.
Thank you, Minister. ADM Brennan.
Thank you, Madam Chair. The question the Member is asking, I think, is the $12 million commitment on the leases page. That is our actual base rent that we pay on our annual leases. The additional money, which gets us to $32 million, so another $20 million or so, is actually the O and M cost, with the utilities and maintenance and other types of activities that we have to pay as part of all of those leases to get to the $32 million that you saw on page 251. Thank you, Madam Chair.
Thank you, Mr. Brennan. Member for Yellowknife North.
Thank you, Madam Chair. There is a lot of money being spent here. I'm trying to understand it. The $35 million in utilities on page 251, that would be, essentially, the O and M for the buildings that we own, not the leases? Thank you, Madam Chair.
Thank you. Minister.
Thank you, Madam Chair. Yes, that's correct.
Thank you. Member for Yellowknife North.
Thank you, Madam Chair. I will just reiterate my previous comment. I think that there is $32 million being spent here, and a hard look needs to be taken at it and then updating that policy. Can I get an explanation for the $5 million increase to highway operations, what that is going to accomplish? Thank you, Madam Chair.
Thank you. Minister.
Yes, Madam Chair. The highway operations increase of $4.6 million includes the $400,000 for the internal reallocation for the maintenance on the Inuvik-Tuktoyaktuk highway from winter roads as the budget is no longer needed, that's significantly changed; the $536,000 incremental increase for Highway No. 8 maintenance; and the amortization adjustment for the highway asset. I'm just going to double check the number here for highway maintenance. The variance is a surplus due to the amortization expense. It was lower than expected in a previous year because of delay in capital assets and also being pushed into service by about $4.4 million. Thank you, Madam Chair.
Thank you. Member for Yellowknife North.
Thank you, Madam Chair. I was hoping the Minister would help me understand what the threshold -- in our capital budget, there are a number of highways things. Sometimes, there is chipsealing; sometimes, there is completely rebuilding a highway, a bridge -- just kind of understanding the threshold of what this $85 million of highway operations is spent versus when it all of a sudden gets kicked into becoming a capital expense, what that threshold is. Thank you.
Thank you. Minister.
