The motion is in order. To the principle of the bill. Question has been called. All those in favour? All those opposed. Motion is carried.

---Carried

Bill 2 has had second reading and accordingly the bill stands referred to a committee. Item 19, Consideration in Committee of the Whole of Bills and Other Matters: Bill 1, Appropriation Act, No. 1, 1993-94; and Committee Report No. 1, Report on the Review of the 1993-94 Capital Estimates. Mr. Ningark in the Chair.

Perhaps we could move into the Capital Estimates, Mr. Chairman.

We will be dealing with Bill 1 and the 1993-94 Capital Estimates. Does the committee consent with the wishes of the Minister?

Agreed.

Thank you. Mr. Minister, do you have any general comments?

Mr. Chairman, in discussions with the Standing Committee on Finance we have arrived at an order of appearance and I believe the first department is the Department of Justice. The Justice Minister is ready to go with his opening remarks with regard to this department.

Does the Chairman of the Standing Committee on Finance have any presentation?

Before we proceed to the Department of Justice I think we should be seeking general comments from the House in relationship to the budget. We have some specific general motions which we would like to get passed and we want to make some committee comments rather than motions with respect to one or two things which are going forward. I would say that prior to Justice we should be asking for general comments, then I would like to proceed with the committee comments and some of what I call government-wide resolutions. Thank you.

Thank you, Mr. Todd. We will be

dealing with general comments relating to the budget. Any general comments? Mr. Zoe.

Point Of Order

Thank you, Mr. Zoe. I put that question to the floor and the Minister of Finance indicated that he was not going to make a statement at this time. Mr. Todd.

Standing Committee On Finance General Comments

Can I proceed with some committee comments with respect to specific issues and then some of the resolutions which we would like to get done? Is that agreed?

Is the committee in agreement?

Agreed.

Thank you. Mr. Todd, please proceed.

On government-wide issues we would like to make committee comments rather than resolutions on two issues.

For the first time the Government of the Northwest Territories has presented a Five Year Capital Plan. In order to make the most use of this viable information the committee believes that it should be readily available to the communities and contractors to facilitate planning, preparation and feedback. It should be recognized that this is a plan, accordingly readers should be cautioned that since plans are based on assumptions regarding future events and funding availability, actual future year projects and amounts are not committed and will vary from the information presented and the variations may be material. In addition, it is anticipated that the information disclosed will not negatively impact on the actual contract awarding prices, these are budgets, however the final contract awards will be based on open tender competitions. This is our first comment with respect to public information.

The other committee comment was on project substantiation. Again, Members were pleased to be able to refer to project substantiation sheets in the S.C.O.F. capital document to answer many initial questions. There is no question is has speeded up the process of being able to review the budget. However, when Members referred to the project cost estimate grid, the capital cost line did not contain future year amounts identical to those contained in the five year capital planning spreadsheet. In addition, recoveries and O & M costs did not appear to be completed showing all related recoveries and the ongoing O & M costs associated with capital projects.

Finally, performance measurements were not provided against which Members could gauge. For example, when we calculated construction costs per square foot for the Arctic Bay Hamlet Office, the standing committee was able to identify an area that was out of line with the industry standards which should be expected. Subsequent government action resulted in an actual tender price of $751,820 compared to the 1991 Capital Estimates of $1.115 million, or in our eyes a saving of $363,180. This was following the committee's recommendations. Our examples included tenant improvements per square foot, unit costs for a vehicle, construction costs for a housing unit. The committee feels the government should further strengthen the information provided to S.C.O.F. with the Capital Estimates by ensuring that project substantiation sheet estimates mirror the Five Year Capital Plan. The Capital Estimates should also consistently show capital costs, expected recoveries and additional ongoing O & M costs and unit performance measures such as construction costs per square foot. Thank you, Mr. Chairman.

Thank you, Mr. Todd. Do we have general comments? I am sorry, proceed please, Mr. Todd.

Thank you. I have five general motions. I would like to go through now if it is okay with everyone.

Does the committee agree?

Agreed.

---Agreed

Proceed with the motions, Mr. Todd.

In the report of the review of the 1991-92 Capital Estimates, the Standing Committee on Finance recommended improvements to the capital planning and allocation process to ensure capital expenditures are efficient, effective, economical and equitable. As an initial step the government commissioned a territorial-wide capital needs assessment to develop a comprehensive inventory of all capital infrastructure, develop a 20 year capital replacement schedule for existing infrastructure, and forecast potential growth requirements for the capital infrastructure. This capital needs assessment is intended to form the data base from which a long-term capital strategy can be developed that would include a plan for dealing with capital infrastructure deficiencies, and providing for replacement and growth needs within available financial resources. The government indicated a long-term capital strategy would be developed to be used in the preparation of 1993-94 Capital Estimates. The standing committee has not been provided with this capital program strategy, and a Five Year Capital Plan has not been put into perspective with the capital needs assessment. It is our understanding that departments have not been provided with this capital program strategy and it is not disclosed in the capital standards and criteria manual. The need for a strategic approach to the capital has been acknowledged but not provided by government. As a result, Cabinet is in no position to assure the Legislative Assembly, at this time, that the capital program has been allocated fairly and equitably. It is currently being operated with due regard to efficiency, economy and effectiveness. If this is not resolved soon, the capital program evaluation slated to take place in February, 1994 will not have basic guidelines against which to evaluate performance. This information should be provided as a preamble to the Capital Estimates.