Thank you. Is it agreed that we deal with the Department of Government Services? Agreed?

Agreed.

---Agreed

Thank you. Government Services and Public Works. Mr. Minister, introductory remarks.

Department of Government Services and Public Works, Introductory Remarks

Thank you, Mr. Chairman. I am pleased to appear before the Assembly today to review the proposed 1993-94 capital budget for the Department of Government Services and Public Works.

As a service department, our mandate is to provide a broad range of services to other departments, boards and agencies. With the consolidation of the two departments on August 4, these services can be better coordinated and more effectively delivered.

As Members know, the department manages the construction of other departments' capital projects. In 1993-94 the department will manage about $80 million worth of capital projects. For its own programs, the department is requesting $12.2 million for 1993-94.

More than half of the department's capital is required for petroleum product facilities. Much of the rest will be spent to upgrade other government assets and to invest in energy conservation projects that will yield ongoing savings.

Before I get into the details of our budget I want to describe some of the ways that the department is cutting costs and ensuring that more government dollars remain in the north.

The department is including contractors in the design stage on a pilot project in each region. Through this process the facility designs will better reflect local needs and use local workforces and equipment more efficiently.

This is an extension of the design-build approach which the department has developed. Contractors are asked to respond to a description of needs by submitting a design-build proposal. This allows contractors to hire consultants and to take advantage of building techniques and materials that they are familiar with and which meet unique regional conditions.

The limitation of the design-build method, however, is that many of our small northern contractors are unable to manage both the design and construction process.

The department also works with building authorities to implement code requirements in a way that keeps costs down without compromising the code's intent. For instance, recent talks with the Fire Marshal resulted in modifications to the water storage needs for sprinkler systems and modified qualifications for the welders.

Our project staff coordinate with Housing Corporation staff when projects can be sequenced to provide more continuous training and employment and reduce administration costs.

Some coordination also occurs with the Department of Transportation when there are opportunities for sharing and reducing administration overhead.

The technical service division has been organized to provide better planning and program assistance to clients. This helps identify where reduced facilities will meet the client's program needs and where shared facilities will cut total G.N.W.T. capital spending.

Members will recall that during the review of our 92-93 capital plan, concerns were expressed with the $1.2 million price tag for Arctic Bay Hamlet office. I am pleased to report, through the combination of these efforts and cooperation with M.A.C.A. and the Hamlet Council, the Department tendered this project for $750,000.

Mr. Chairman, decentralization project management continues to be a priority. The department plans to be fully decentralized in all regions in time to deliver the 1994-95 capital plan. Also, consultants are being encouraged to set up offices in regional centres.

Most important, Mr. Chairman, are the savings to be achieved by developing a trained northern workforce. The department is promoting and coordinating the training of northern construction workers on a number of fronts.

Mr. Chairman, although there are increased opportunities for northerners to benefit from the government's construction programs, I believe that more can be done. I have made this my highest priority.

We are working with the Department of Education and the Housing Corporation to develop a government-wide strategy for training northerners in the construction trades. The first year of the Construction Worker Training Program is going well. All reports, so far, from the contractors, trainees and communities, have been positive. The goal is to develop a local base of semi-skilled labour leading to increased long-term employment in construction. All participants are local aboriginal people. I am pleased to report that the trainees have completed the classroom portion of their training and are now working on the projects.

The department will continue to use special construction approaches which include, negotiated contracts, invitation to tender and construction management to increase local employment. These approaches are being used on about 15 per cent of the projects this year, Mr. Chairman.

N.W.T. Construction Association is concerned that the reduced Capital Construction Program and the department's special approaches to construction will erode their business opportunities.

I wish to assure this committee, however, that if the department balances the need of the construction industry with the need to enhance local training for the mutual long-term benefit of both northerners and the industry, the number of these projects is actually very small, so in most instances, established contractors still receive most of the sub-contract work on these projects.

Mr. Chairman, as you know, the Business Incentive Policy was significantly revised this year and new measures approved for implementation this past June. There will be three full-time staff to administer and monitor the policy and to follow up on complaints. The department is holding information seminars and attending trade shows in all regions to explain and promote the new policy. The response from the contractors has been good and staff have been working with other departments to ensure wide use of the policy.

Those are some of the ways the department has reduced the cost of capital projects and increased northern business and employment opportunities.

I will not describe the details of the department's budget requests.

About $2.4 million is required to upgrade and repair government buildings and works, $600,000 is requested for energy conservation capital programs. This program decreases energy consumption in government buildings through minor projects such as, upgrading heating and lighting systems to make them more energy efficient. Through decreased utility costs, all expenses are paid back in three to five years.

About $350,000 will be spent to complete the shut-down of Iqaluit's central heating and distribution system. This $2.9 million project will reduce the government's annual heating costs by about $2.1 million.

About $250,000 will be spent to upgrade the ventilation system in schools to address the sick building syndrome. Many of our schools were designed in 1981 building code with reduced fresh air needs to save energy dollars.

Several of these systems must now be upgraded to new building code standards. Other buildings will also be upgraded to meet the new code requirements. These building upgrades, costing between $100,000 to $150,000 include the Brown Building in Iqaluit, the Milton Building in Fort Simpson, and the Laing building in Yellowknife.

A request of $361,000 is to replace 18 vehicles for Renewable Resources, Health and this department. The department is reviewing the capital standards and criteria for vehicles.

The department is requesting $1.25 million for its accommodation services budget. This funding requirement is driven by the need of departments for office space which is allocated according to the seven year office plan. The department is reviewing the office standards and will develop a new plan that will be presented to the Assembly in February.

The department will spend $1 million on the Community Dust Control Program in 93-94. This program helps control dust on community streets for health and safety reasons. Over the next three years, this program will be devolved to the communities that expressed an interest. In 1992-93 it was devolved to 16 communities.

The petroleum products revolving fund provides heating oil, gasoline, diesel, naphtha and aviation fuel to 45 communities not served by private sector. Fuel storage needs are growing rapidly as fuel product demand has grown four per cent per year for the past five years. This growth and demand is mainly due to new community infrastructure. The department is, therefore, requesting $7 million for the construction of petroleum product facilities. About $6.55 million will be spent on fuel storage facilities in seven communities.

Tank farm construction will start in Clyde River, Snare Lake and Coral Harbour. The Paulatuk tank farm will be completed next summer. Construction will continue on the Gjoa Haven facility with completion scheduled for 1994/95. The department will do the final inspection of the Coppermine airport facility and will complete the design for the Arviat tank farm. The department requires $450,000 to replace fuel delivery vehicles in Rae Lakes, Coppermine, Pond Inlet, Clyde River and Coral Harbour.

The department requires $180,000 to upgrade the mainframe computer hardware and to expand the data communications network to keep pace with growing demand for these services. Thank you, Mr. Chairman.

Thank you. General comments. Comments from the Standing Committee on Finance, Mr. Antoine.

Standing Committee on Finance Comments

The standards directive will be reviewed. However, the government response was confusing in that it talked about presenting the strategy during the Legislative Assembly review of the 1993-94 capital in February, 1993 rather than November, 1992. It indicated that the standards were presented to S.C.O.F. in Norman Wells and accepted by the committee. To be clear the standards were not accepted by this committee in Norman Wells or anywhere else, the committee expects that a strategy for office and renovations standards be approved by the Assembly reflecting current fiscal realities by March 31, 1993.

It is the standing committee's understanding that there are economies of scale to be achieved by having one agency. For example, the petroleum products division should take responsibility for tank farms in the communities, rather than continuing with the current system where the N.W.T. Power Corporation builds and maintains their own separate tank farms. This would result in cost savings to the territorial government.

Therefore, Mr. Chairman, I move that this committee recommends that the Department of Government Services and Public Works and the Northwest Territories Power Corporation develop an action plan for consideration with the 1993-94 Main Estimates, to move towards the use of common tank farms to achieve cost savings. Thank you, Mr. Chairman.

The motion is in order. Question has been called. At the moment we do not have a quorum. The motion is in order.

Question.

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Mr. Antoine.

Thank you, Mr. Chairman. It is the committee's understanding that the majority of the communities have local contractors responsible for the delivery of petroleum products. As a result, we expect that those contractors would be responsible for purchasing delivery equipment rather than the petroleum products division. This is apparently not the case in many instances.

Thank you. The motion is in order. To the motion.

Question.

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Mr. Antoine.

Thank you, Mr. Chairman. Every time the committee reviews the government's main or capital estimates, the question arises why is this department still responsible for the Sanikiluaq power plant? Every time the answer comes back it is that the department and the N.W.T. Power Corporation have not been able to come to an agreement on the transfer. The committee fails to see what the problem is. The Sanikiluaq power plan appears to naturally fall under the Power Corporation's mandate.

Therefore, Mr. Chairman, I move that this committee recommend that the Cabinet provide political direction to transfer the Sanikiluaq power plant from the Department of Government Services and Public Works to the Northwest Territories Power Corporation during 1993-94. Thank you, Mr. Chairman.

Thank you. The motion is in order. To the motion.

Question.

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Mr. Antoine.

Thank you, Mr. Chairman. That is it for the Standing Committee on Finance's comments and recommendations. Thank you.

Thank you. Any other general comments relating to this particular matter? We will go to detail. Is it the wish of the committee that we go to detail? Agreed?

Agreed.

---Agreed

Directorate

Thank you. Page 08-11, detail of capital directorate, buildings and works, headquarters total region $65,000. Agreed?

Agreed.

---Agreed