Debates of October 21, 2024 (day 30)

Date
October
21
2024
Session
20th Assembly, 1st Session
Day
30
Speaker
Members Present
Hon. Caitlin Cleveland, Mr. Edjericon, Mr. Hawkins, Hon. Lucy Kuptana, Hon. Jay Macdonald, Hon. Vince McKay, Mr. McNeely, Ms. Morgan, Mr. Morse, Mr. Nerysoo, Ms. Reid, Mr. Rodgers, Hon. Lesa Semmler, Hon R.J. Simpson, Mr. Testart, Hon. Shane Thompson, Hon. Caroline Wawzonek, Mrs. Weyallon Armstrong, Mrs. Yakeleya
Topics
Statements

Question 325-20(1): Project Cost Overruns

Thank you, Mr. Speaker. Mr. Speaker, I'd like to get to the bottom of these cost overruns that I brought up in my Member's statement. Can the Minister of Infrastructure speak to what appears to be a systemic problem with how we're budgeting projects? Let's start there. Thank you.

Speaker: MR. SPEAKER

Thank you, Member from Range Lake. Minister of Finance.

Thank you, Mr. Speaker. Mr. Speaker, there was a number of challenges that arose in 2019 or post 2019 where budgets and projects that were in the past Assembly -- actually two Assemblies ago now, then run up against COVID. There was a number of delays and as really I think everyone out there, whether it's government procurement or private procurement, saw increases in the huge numbers in terms of what kinds of impacts fuel had, inflation had, interest rates had, labour market challenges had, and the government is no stranger to that. So what we saw across the private sphere certainly impacted us as well and the projects that we had, again, 18th Assembly moved forward under delay and wound up with significant overages. So that has been a systemic problem but it's a systemic problem that didn't just affect our government. It's affected governments everywhere in Canada. It's affected private residents. It's affected private businesses. And we're certainly no stranger to it.

What we've done, Mr. Speaker, to support some change, we've already introduced an increase in planning and an increased focus in planning. We've brought back ADMs, we brought back peer review groups to actually make sure that when we go forward with a budget now that we know that that budget's more accurate. Thank you.

Speaker: MR. SPEAKER

Thank you, Minister of Infrastructure, not Minister of Finance. Sorry about that. Oral questions. Member from Range Lake.

Thank you, Mr. Speaker. Mr. Speaker, the two portfolios are closely intertwined so I understand the confusion there. Because when Infrastructure can't manage its projects or can't predict these projects, it impacts the finance side. Our entire operational surplus wiped out because of cost overruns largely driven by capital costs, especially around NTPC, which is this Minister's -- within this Minister's remit as well. So why does NTPC continue to fail to bring its costs under control, continue to post these large cost overruns that are driving us into short-term debt? Thank you.

Speaker: MR. SPEAKER

Sorry, colleagues. That kind of infrastructure/power corp, can you rephrase the question to be Infrastructure.

Yes, thank you, Mr. Speaker. The Minister of Infrastructure perhaps can speak to -- let's -- or sorry, you've given me a pickle. But structural -- so the structural debt of the power corporation, I suppose, whichever Minister wants to answer that question, I'll leave it in your hands.

Speaker: MR. SPEAKER

Okay, colleagues, I should have said this at the very beginning of my oral questions. We need to focus on the Minister and the set of questions. We can't be moving from department to departments. Even though the Minister is Finance and Infrastructure and the power corp, we need to focus on the set of questions which was Infrastructure. I'm going to allow the Minister to answer this, but this will be the last time I will allow it. Thank you. Minister of power corp.

Slash Finance. It is a pickle, Mr. Speaker, thank you. So first of all, Mr. Speaker, the challenges that are being faced in the Northwest Territories Power Corporation that are certainly impacting the Department of Finance are not exclusively related to cost overages relating to different projects. There's a significant amount of impact from low water which is a situation entirely outside of my control or really that of anyone else in this House. We have been in a situation where the Snare plant has been burning a significant amount of diesel and in a situation where during -- because of the overhaul, the amount of diesel being burned down in the south is being burned at a rate that is much higher with the cost volatility of diesel since COVID. I don't have the numbers in front of me right now but it's a significant amount that is entirely related to that effect right there. Thank you, Mr. Speaker.

Thank you, Mr. Speaker. And I apologize for the confusion. Mr. Speaker, how are we going to -- like, what is the Minister's solution to at least forecast these costs better so we're not constantly blowing up our operational surpluses and going to Ottawa to increase the credit card? How can we put a plan in place or a system in place that allows us to control these better? Because whatever's been done to date isn't working. Thank you, Mr. Speaker.

Thank you, Mr. Speaker. Mr. Speaker, I really appreciate that question. NTPC is very conscious of the fact that they play such a critical role in the Northwest Territories. There's a lot happening on this front. Right now they are working on a continuous improvement initiative which is meant to help manage their project management -- or to improve rather the project management. So, and coming from that one of the things is to look at the Inuvik project and do a bit of a lessons learned, do a bit of a post review of what went wrong and what could be done better. A lot of things went right. It is now a project that's providing significant energy to the Inuvik community and a lot of what went wrong wasn't necessarily strictly within their control again. All of which is to say, though, there's a lot of opportunity to learn from that project. That process is underway. It will feed into the continuous improvement initiative.

And last but not least, Mr. Speaker, there is also a desire there to do a better job of trying to grow the industrial base load. The sales have been simply flat for too long for NTPC; in fact, long before my time in this House at all. We need to change that if we're going to make a real movement in terms of having growth in the revenue, and that is also some work that's underway. This last year was the first year that the power corp attended one of the roundups out in Vancouver. It was an opportunity to try to improve their balance sheet. So lots happening on that space. And thank you, Mr. Speaker.

Speaker: MR. SPEAKER

Thank you, Minister of Infrastructure. Final supplementary. Member from Range Lake.

Thank you, Mr. Speaker. Mr. Speaker, is it time for -- as we're on the power corp, is it time for the board to be -- private board to be -- or public board to be reinstated without deputy ministers to steer the power corporation towards sustainability and towards running the company like a business rather than a department? Thank you.

Thank you, Mr. Speaker. Mr. Speaker, I, again, appreciate that feedback as well. That work in fact is underway. I'd like to -- very happy to commit to get an update to this House, to the public, as to where we're at on that. The expectation I have is that there will be perhaps two deputy ministers who remain given that this is Crown corporation that does rely significantly on public dollars to help stabilize our power rates but otherwise looking to get professionals into that space who understand the energy space, who understand the complexities of the energy space, and who are in a position to run this power corp hopefully even better than it's being run now. So, again, that work's underway, and I'm happy to get a more detailed timeline over to Members. Thank you.

Speaker: MR. SPEAKER

Thank you, Minister of power corp. Oral questions. Member from Sahtu.