Thank you, Mr. Chair. Mr. Chair, I'm happy to present Tabled Document 111-20(1), Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025. This document proposes a total increase of $142.1 million, comprised of the following items:
$146.9 million for infrastructure expenditures funding for projects that were not completed in 2023-2024. This amount is fully offset by unspent appropriations in 2023-2024;
$2.3 million for the relocation of modular classrooms from Yellowknife to Tuktoyaktuk;
$2.8 million for increased costs associated with the acquisition of portables for Colville Lake;
$1.1 million for increased costs associated with the Western Arctic Research Centre Warehouse Project;
$6 million for cost increases related to the Whati Access Road. This funding is fully offset by revenues received from the federal government;
$38 million to Northwest Territories Power Corporation to alleviate financial pressures resulting from the Inuvik Wind Project cost escalations. This is offset with a decrease of $40.59 million to reflect changes in the timing of planned expenditures for various projects; and last,
A decrease of $14.5 million to reflect changes in the timing of planned expenditures for the runway extension and civil improvement projects.
That concludes opening remarks, Mr. Chair. I would be happy to answer questions that Members may have.
Thank you. Does the Minister of Finance wish to bring in witnesses into the House?
Yes, I would.
Would the Minister please introduce her witnesses.
Thank you, Mr. Chair. Mr. Chair, on my left is Bill MacKay, the deputy minister for the Department of Finance. On my right, Terence Courtoreille, deputy secretary to the financial management board.
Thank you. Does the committee agree to forego general comments?
Agreed.
Thank you. We'll review the supplementary estimates by department. The committee has agreed to forego general comments on each department. Does the committee agree to proceed to the detail contained in the tabled documents?
Agreed.
Thank you. Committee, we will begin the review with the Department of Education, Culture and Employment. Committee, please turn to page 5, Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025; Department of Education, Culture and Employment, operations expenditures, junior kindergarten to grade 12 school services, not previously authorized, $513,000. Are there any questions? I'll go to the Member from Frame Lake.
Thank you, Mr. Chair. I just wanted to ask about this Western Arctic Research Centre. I know that it was noted -- sorry? Oh, we're just on the first line; okay, I'm sorry. I thought we were going page by page. Apologies, Mr. Chair.
Thank you. We're still on page 5, Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025; Department of Education, Culture and Employment, operations expenditures, junior kindergarten to grade 12 school services, not previously authorized, $513,000. Are there any questions? There is no further questions if I remember earlier.
Continuing on, Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025; Department of Education, Culture and Employment, operations expenditures, junior kindergarten to grade 12 school services, not previously authorized -- I'll finish reading here -- to grade 12 school services, not previously authorized, $513,000. Does the committee agree?
Agreed.
Thank you. Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025; Department of Education, Culture and Employment, operations expenditures, labour development and advanced education, not previously authorized, $3,182,000. Are there any questions? I'm going to go to the Member from Frame Lake.
Thank you, Mr. Chair, and I do apologize. I just thought we were going on the pages here, but now on to this line item.
So the Western Arctic Research Centre warehouse replacement, I know that this one was one that Aurora College spent a significant amount of money on as part of the transition funding that they received. I'm just wondering if the Minister or her staff can give any clarification on how this Western Arctic Research Centre warehouse relates to transition to the university. Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, the proposed warehouse is related, really, to the research efforts and research work that is done with and through Aurora College. And more specifically, this will enlarge our total research support capacity space by 70 percent. Thank you, Mr. Chair.
Thank you. I'm going to go to the Member from Frame Lake.
Thank you. That's it for me on this one. Thanks.
Thank you. Are there any other questions? Seeing none.
Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025; Department of Education, Culture and Employment, operations expenditures, labour development and advanced education, not previously authorized, $3,182,000. Does the committee agree?
Agreed.
Thank you. Moving on. Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025; Department of Education, Culture and Employment, operations expenditures, total department, not previously authorized, $3,695,000. Does the committee agree?
Agreed.
Committee, we'll turn to page 6. Supplementary Estimates (Infrastructure Expenditures), No. 1, 2024-2025; Department of Infrastructure, operations expenditures, energy and strategic initiatives, not previously authorized, $36 million. Are there any questions? I'm going to go to the Member from Frame Lake.
Thank you, Mr. Chair. Mr. Chair, on this one I just note that, you know, there's been pretty significant cost overruns on this project, and now here MLAs are being asked to free up another appropriation for it. And I can't help but feel a bit, you know, like, we're kind of beholden to this. We don't really have much of a choice but to deal with it. But to get to the question, you know, does the department have some lessons learned and some changes to the way contracting is managed to prevent cost overruns of this kind of magnitude from happening again? I'd be curious to hear from the Minister what we're doing to ensure that cost overruns like this -- that we have mechanisms in place to stop this from happening while the project is going on so that we don't end up with overruns of an enormous magnitude, you know, at the point where the project is either implemented or most of the way forward and so we don't really have much choice but to simply kind of eat the extreme cost overruns. Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, this certainly did experience some rather significant, and in many cases, fairly unusual overruns. I mean, this was a circumstance where the funding was approved at a time prior to the COVID-19 pandemic. And this is obviously not the only project to have experienced delays as a result of that, but certainly is one. But then those delays related to supply chain, related to materials, related to labour shortages, were magnified when there was another -- there was a third party accident in terms of transporting one of the key items and then the vendor failed to supply a key item even when the item did arrive. So those are fairly unusual events.
That said, altogether, I will note NTPC is, indeed, completing a cost construction report. That is a requirement under the Public Utilities Board for major projects. It will also, I'll note, be coming out publicly when the NTPC has to participate or submit its request or report to the 2024-2025 GRA, which the public utility board has also recently required. So with that in hand, that will provide some valuable direction and insights hopefully into avoiding those aspects of this, which could be avoidable in the future. Thank you.
Thank you. I'm going to go to the Member from Frame Lake.
Thank you, Mr. Chair. Does the government have kind of a wider plan for managing cost overruns in general on contracts? Like, is there -- because, you know, it's not just this project. Obviously, we're seeing a number of different ones and, you know, this is the second set of supplementary appropriations I've seen in my short time here. And, yeah, I'm just curious. I mean, it just seems to be, you know, projects tend to balloon, you know, the costs just go up and up and up. I'm just wondering if we have any kind of planning policy changes in place or being planned to kind of get at this problem, and perhaps even just to estimate the cost of projects more accurately so we can assess them for how much they're actually going to cost when they're first approved.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, this is not -- the overages and cost escalations we're seeing on a number of key projects here in the last couple of years really are not typical and shouldn't be considered as typical. There are a number of examples to point to of projects that come in on budget and on time. And even right now, for example, the Inuvik airport project is on schedule. It has certainly caught itself back up notwithstanding challenges that initially may have occurred immediately post-COVID and then of course in the course of inflation. So I'm certainly wanting to just note that that's, again, not necessarily typical. But when they are obviously large of this magnitude, it garners a significant amount of attention for public dollars.
Couple of things. One, the capital planning process has had some significant changes just in the last couple of years. So I suggest that I'll turn that to Mr. Courtoreille to speak to that has been -- he has been the lead on it. And the point, really, has been to improve and increase the kind of planning we do so that we have better estimates and better processes to go through that. But I'll just turn to him to describe that, please.
Thank you. I'm going to go to the deputy secretary.
Thank you, Mr. Chair. As the Minister mentioned, we're going through a number of changes with the capital planning process. One of those changes in relation to this question is implementing a peer review group, and that group is going to be led by the Department of Infrastructure. And it's largely working with departments to ensure that cost estimates are robust enough before the government makes a construction decision, or before those projects are contemplated for MLA approval in our capital budgets going forward, so that those cost estimates are a true reflection of what we expect those costs to be going forward as we enter the construction phase of those projects. Thank you, sir.
Thank you. I'm going to go to the Member from Frame Lake.
That's it for me, Mr. Chair. Thank you.
I'm going to go to the Member from Yellowknife North.
Thank you, Mr. Chair. Just so we can get this on the record, can you tell us what is the cost up to this point, then, of the Inuvik Wind Project in total?
Thank you. I'll go to the Minister.
Thank you, Mr. Chair. $88 million.
Thank you. I'll go to the Member from Yellowknife North.
Thank you, Mr. Chair. And can you tell us what was the original budget? Therefore, you know, how much this project has gone over. Thank you.
Thank you. I'll go to the Minister.
Thank you, Mr. Chair. I want to make sure that I have the right number in this. Around $40 million, Mr. Chair.
Thank you. I'll go to the Member from Yellowknife North.
Okay, thank you, Mr. Chair. I mean, I echo some of my colleague's concerns there, but I just wanted to make sure that we're all clear, the scale of the cost overruns that we're talking about in this case.
And so it looks like part of where we're finding the money to pay for these cost escalations is to reduce money going into NTPC upgrades. Looks like $2 million is being taken out of that. So what kind of upgrades are we sacrificing here? Thank you, Mr. Chair.
Thank you. I'll go to the Minister.
Thank you, Mr. Chair. Mr. Chair, it's projects that I believe are generally resulting from a delay in the projects -- sorry, let me start that again.
There was a delay in some of the upgrade projects and knowing that there would be some delays, they were able to reallocate those funding. So, really, all of the projects on these lists are not cancelled, necessarily. It's that there's a recognition that there are things not happening at the pace that they were originally expected to, for a variety of different reasons, but then we're able to take that money and put that towards this area of need. Thank you.
Thank you. I'm going to go to the Member from Yellowknife North.
Thank you, Mr. Chair. And so these upgrades, are they set out in, say, an asset management plan? Like, is there a plan with scheduled upgrades that, you know, is justified based on expected, you know, life of certain parts of our assets, or are they expected -- you know, need for replacement and maintenance at certain times? Are these upgrades part of such a plan that, you know, has been thought through and listed what upgrades are required at which dates?
Thank you. I'll go to the Minister.
