Yes, thank you, Mr. Chairman. Perhaps I could have picked a better day to bring my departmental estimates forward, but here I am, and I am pleased to introduce the 1992-93 capital estimates for the Department of Municipal and Community Affairs. Mr. Chairman, the department is proposing capital estimates totalling $36,351,000 for 1992-93. Priority continues to be placed on the building of new water and sanitation infrastructure and improvements to existing infrastructure, which amounts to about 43 per cent of our proposed capital estimates, or $15,699,000. Most of these resources are allocated to water supply and treatment, water distribution, and

sewage collection systems.

Another nine per cent, or $3,234,000, is proposed for the construction of new arena facilities. Such facilities allow our athletes to prepare effectively for the Arctic Winter Games and other competitions, while providing healthy and socially worthwhile community activities for our youth and for community residents in general.

A further seven per cent, or $2,602,000, is planned for the provision of mobile equipment for road maintenance, public health, and fire protection. The equipment retrofit approach to funding mobile equipment continues to be cost effective in maintaining asset usefulness while developing the capability of municipal work staff to repair community mobile equipment.

Mr. Chairman, a further seven per cent of this budget, or$2,571,000, is identified for the planning, design, upgrading or reconstruction of community roads. In this work, the Department of Public Works frequently assists by providing engineering and contract management services to local governments.

A further three per cent, or $1,224,000, is proposed for technical and financial assistance to carry out site development. The associated drainage and landfill schemes help facilitate the development of logical community design and promote a safe and healthy environment.

The department's capital resources in 1992-93 do not address all identified basic needs and infrastructure requirements to address current community population growth and the ongoing replacement of aging capital infrastructure. However, I believe that the department's comprehensive capital planning process has identified, through consultation with local councils, the most urgent needs as represented in these proposed 1992-93 capital estimates. Those are my opening remarks, Mr. Chairman. Thank you.

Thank you, Mr. Minister. Before I call for general comments, I wonder if the Minister would like to bring in any witnesses at this time.

Yes, if I may. I have two witnesses I would like to bring in.

Is this committee agreed that the Minister bring in witnesses?

Agreed.

--- Agreed

Proceed, Mr. Minister. Could you introduce your witnesses for the record?

Yes, thank you, Mr. Chairman. I have on my right Mr. Al Menard, deputy minister of Municipal and Community Affairs, and Mr. Vern Christensen, assistant deputy minister in charge of capital planning. Thank you.

Thank you. I wonder if the chairman of the finance committee would like to make any opening remarks. Mr. Todd.

Comments From The Standing Committee On Finance

Thank you, Mr. Chairman. Yes, I would. Mr. Chairman, the standing committee on finance, in reviewing theMACA budget, was quite concerned that the program departments must have more input into the standard of facilities we are building, particularly where the cost of construction appears to be excessive. The departments cannot abdicate their responsibility to ensure that we get the best value for money. Clearly they must communicate to DPW what their requirements are.

It was our observation that, for example, the cost of constructing hamlet offices -- we calculated specific instances where some of these hamlet offices were coming in at $318 to $381 to $382 per square foot. This was not including the time costs of Municipal and Community Affairs, Public Works, and hamlet staff. We feel these kinds of square footage costs are unreasonably high and are perhaps due to excessive standards that are being delivered, and we think that the program departments should be more intimately involved in determining these standards. We also know that hamlets have said for years that if they were allowed to control some of the capital projects, as has been suggested to some extent with the Strength at Two Levels report, they could do a better job at perhaps a more economical cost.

Another concern was with respect to facilities larger than what a community is currently entitled to. We were told that in one particular case, the community would pick up the difference. It is the contention of the standing committee on finance that indirectly the GNWT ultimately pays, and that these oversize facilities have correspondingly higher operating costs. It is the standing committee on finance's contention that this is not consistent with government policy, and frankly unfair to other communities.

The Arviat water supply we talked about is planned for construction in 1993-94 when we know the potential health problems faced in that community, and I am not specifically talking about E-coli. We are talking about others, and we know the history of that community and its problems associated with water reservoirs and water supplies. We feel this matter is an urgent one and the department should give it its immediate attention.

With respect to MACA's budget, we are going to recommend the following, and this will be done later on in resolution form: that consideration be given to advancing the Arviat water supply improvements in 1992-93; that communities be provided with basic recreational facilities, and only the basic recreational facilities based upon MACA's own criteria and according to the policy that is currently in place. We feel that cabinet should develop a policy to bring about costs closer to those experienced by the private sector, and ensure that government standards are not unreasonably high. It is the contention of the committee that a number of these buildings, if they were in design/build or some other way of doing things, could be built at a far lesser cost, and in fact provide the department with more money to do more.

We feel there has to be a closer relationship between Municipal and Community Affairs as the client department, the local authority, hamlets and Public Works as the professional advisers, to work together to achieve better value for money spent; consider new ways in which to build some of these capital projects that will ensure the maximization of local labour and control as Mr. Morin, the Minister of Public Works, talked about earlier last week; and support, of course, the local general contractors in that particular region.

We were told by people that MACA has recommended alternative approaches for some years that have not been taken. These alternatives should be pursued vigorously. Departments like MACA should have the flexibility to use other options, other than Public Works, for capital project management. Anyway, as they say in biblical terms, "Here endeth the lesson." Thank you, Mr. Chairman.

Thank you. General comments. Mr. Gargan.

Thank you, Mr. Chairman. Mr. Chairman, I agree with some of the things that Mr. Todd is saying; not all of them, but some of them. One of the things that keeps coming up is with regard to recreational facilities. One of the things that I would like to see, with Mr. Todd's support I hope, is to see -- we do need a policy and we do need the size of facilities, but also if the community is serious about having those facilities they should be doing their part, too, prior to any facilities being established in the community. In most communities you have to pay a portion of the cost for any capital recreation facilities. When we had that building built in Fort Providence we paid $280,000.

One of the things that the community has requested is for a two-sheet curling rink. It is happening but it is happening in 1994-95, I believe. The community, Mr. Chairman, already has their portion of the money in the bank waiting for that day to come. They have $180,000 right now and their portion required, if the capital structure is $492,000, is $197,000, which they could have by that time.

The community should be doing some of their own revenue raising too. Of the projects that came up during the last eight years that I have been a Member, most of them were allocated. I do not know the success rate of the community actually picking up the rest of the tab, or if it has been successful. When I look in the capital there are several communities who make contributions but for the size of the projects, similar to Providence, they are paying far less, at least half, of what they are expected to pay. I think that is unfair. Either you have it the same across or do not have it at all.

I would like to thank the Minister and his department -- since the direction was given by the Government Leader to have the Members involved with the planning and design and infrastructure of communities, the community of Fort Providence has been doing a community plan. They have not come up with a final report but we do have copies of the process that we have been working toward at public meetings. The only difficulty that we are experiencing, Mr. Chairman, with regard to that, and I think it should be noted by the department, is that we are using consultants from Edmonton.

Shame, shame!

It costs the community to have workshops. They have one option, they go into the community and say,"This is what we have come up with," and it costs the community money, because they go back with some other plans and they come back with that one plan again and there is really no focus on -- "Well, we have three options here, what is your option?" The consultants are good for that and it costs the community a lot of money to do that. I think it should be noted because the government is spending quite a bit on it and the community is also wasting a lot of money just to support consultants for doing this work.

Mr. Chairman, the other one is that on January 29 we were at the Hay River Reserve and we met with Mr. Evans and Jim Haining, with regard to planning for the next four years on what we see as a priority for the communities. I believe the Minister received a letter from me with a motion which was recommended by your department that if you have a priority list that you want to implement, then have the communities come up with a motion supporting that. We have done that. One of the priorities for the reserve is for them to be considered within the next four years, to see if they could get a recreation facility on the reserve.

We have $700,000 this year for Fort Providence which is for a water treatment plant. That was in the works for about five years and this was supposed to be the year that they were getting it. We have been living with a small tank that supplies the water trucks. The floor has been caving in, and last year Municipal and Community Affairs put a little money into the plant itself because it was not very stable. There were holes in the cement that had to be covered with gravel and general patch-up work to ensure that the operation and delivery of water would be adequate for that one year. I am glad that we are finally going to be getting a new plant.

The community of Fort Providence has also suggested that because the government is in a deficit position, and that we are in restraint, they have decided that at this point in time -- if we look at the capital books from the previous years it says that Fort Providence, for example, will be getting a treatment plant. There are a number of years where there is approximately two million dollars, until 1997, for a core water and sewage service. Because of the financial situation of the government they have decided that there is no urgency for something like that to go ahead and we could back off on it. Whenever the opportunity arises where there is financial stabilization by the government they will wish to be considered for a core water and sewage system. That is their wish.

I thought I should let you know that the community has been able to compromise to say that they are willing to make this sacrifice and continue with their water delivery services and sewage services. The only thing that I want to tell the Minister is that we are short on the delivery of water services, and for the pump-out systems too. Because of the demand we have people working two shifts, working overtime, working on Christmas and on holidays. I would just like the Minister to know that we probably need the third water truck pretty soon if we are going to keep up with the demands of the community. Thank you, Mr. Chairman.

Thank you. General comments. Mr. Nerysoo.

Thank you, Mr. Chairman. I want to make a couple of remarks with regard to this particular department. I know from the Minister's statement that one aspect of community development that is important is the matter of drainage, in terms of land developments and municipal developments. I just wanted to ask the Minister if he could deal with his other colleagues, the Minister responsible for Public Works and the Minister of Housing, to address this particular matter. There have been some concerns that have been raised previously, in some of the municipalities, about who is actually responsible for making the decisions about drainage, and who is responsible for actually constructing or placing those systems into the community, and who is responsible for paying for it. In some instances there seems to be some confusion as to who is supposed to pay for it and I would ask, not necessarily criticize the process as it is right now, but ask that the Minister try to resolve some of those particular matters with other Ministers so that we do not have some of the problems that we are now encouraging.

I also wanted to ask the Minister and his department officials, whether or not you could seriously consider reviewing the capital budget and, in some cases, dealing with private enterprise, providing some of the facilities or requirements that are outlined in the document. I note, for instance, in one particular case a staff house in Arctic Red River; that particular project is to be considered this year. Not that I am opposed to the idea of that funding, but ask whether or not there might be another way of considering leasing, for instance, a unit if the band was to build it or if somebody else was to build it, at less capital cost, but taking into consideration the ongoing O and M. I just note that because we are in a situation now, financially, we have to look at all of the alternatives possible, and I would ask you if you could at least consider that. It may not be possible but I would ask that you consider it. I would ask you to consider that in a number of the other projects that are being considered in the document. Maybe you can deal with those other issues first.

In dealing with this last issue, I do not want to put anybody in an awkward position here but I want to address this matter, and unfortunately I was in the chair yesterday when the Housing Corporation was up. I would ask the Minister to review whether or not we could, when there are reproduction requirements in the NWT, whether or not we could ensure that if there are companies in the North that can deal with reproduction of blueprints and community plans, that companies in the North can be given an opportunity to receive some of those kinds of contracts. I do not want to put any body in an awkward position but I would like the Minister to at least consider that and to deal with it appropriately,

Mr. Chairman, I am going to ask the same thing of the Minister responsible for the Housing Corporation through a written letter, and also the Minister of Public Works. Thank you.

Thank you. Mr. Minister.

Mr. Chairman, perhaps I could just briefly acknowledge the Member's comments on the staff housing lease-back option in Arctic Red, and the blueprint production through the private sector, and just say that I have noted his concerns and that option in Arctic Red will certainly be pursued if possible. We are committed to using private companies to do that blueprint work wherever possible. Thank you.

Thank you. General comments. Mr. Arvaluk.

Thank you. Mr. Minister.

Mr. Chairman, I am not sure how much detail you want me to go into in general comments, but I will just briefly say that we are aware of the problem. We are working with both communities on this issue at this very moment. We are looking at how we can meet the community concerns, which we believe may be able to be addressed in part by operator training, and the particular blade that the Cat is equipped with. I look forward to visiting those communities soon with the honourable Member, and we will then be able to discuss the issues directly with the councils. I do want to say we acknowledge there are special snow problems there, and we are committed to finding a satisfactory solution by working with the community and the Member. Thank you.

Thank you. General comments. Mr. Todd.

Thank you, Mr. Chairman. If I may, I would just like to elaborate a little bit on our thinking when it comes to looking at alternatives in terms of the project management component of MACA. MACA's budget capital is significant. It has an impact on every community across the Territories. I have not taken a historical look at the costs. This time around I just took a look at the costs that came before us. It appears to me that if the current trend of these kinds of costs of buildings continues, we are just simply not going to be in a position to do very much. I realize there are certain rules and regulations, and policies if you want, with respect to DPW being the operational arm to delivering a product, but it is my belief that you should be given more latitude to look at alternatives, and it may be that if we can convince the powers that be this year, that if nothing else we run one or two or three experimental projects where you handle it yourselves in whatever manner you choose to do, whether it is design/build or lease -- that is another option that could be considered. And I believe in some cases, in the community of Iqaluit for example, the curling rink is leased through the municipality So some of these ideas have got to be considered.

It is not a question of, "Can we?". We have got to look at other ways of doing things so we can get more efficiencies of scale. We have to take a hard look at what our standards are. We do not want to build square boxes all over the country, but at the same time, if we get too complicated and let too many fingers in the pie -- it appears to me that in some ways the architects -- and I do not want to sound critical of architects -- are driving up, to some extent, the capital costs without any consideration for the financial limitations of this government. Never mind the ability to build them, because if we are going to use, as I said last week, the territorial budget as an economic instrument then no one of us can abdicate our responsibility in terms of making it simpler, if I am making sense to you. If it is an economic instrument and we have to

find a way to do the building, whether it is an arena or a community hall or a new hamlet office, we have got to remember that if we are going to involve more Northerners, and I am confident we will, then we have got to design and take a look at our capabilities for building as well, never mind the direct costs.

So I would urge you to take control of some of your capital projects, seek approval through the cabinet to do some experimental pilot projects, or whatever the term is, and let us do some cost comparisons and 1) see if we meet the standards and quality that we want and; 2) see if there is a significant savings. If there is not, then we stand corrected, but if it is done right -- in my experience and in discussions I have had with people across the Territories, there can be savings. That is all we are trying to say.

But I think, more importantly, aesthetically buildings have got to be pleasing, no question of that. But one of the problems we had in the past with the NWT Housing Corporation was that -- and the current Minister of the Housing Corporation spoke many times in the House about it -- buildings became so damned complicated that nobody could build them. It was all outsiders that had to come in. You had to be a mathematician to understand the plumbing and ventilation systems. I think that is another factor you have to take into consideration. If you make it too complicated, then it will limit, to some extent, our ability to maximize the northern content to the projects.

So MACA, with the size of its budget and its responsibility to the community level, runs parallel in some ways and even more so than the Housing Corporation, and therefore it has to view what it does in that light, in terms of an economic instrument, getting some activity going, making sure that we have maximum Northerners involved in it and getting more for less I think we can get more for less by taking some steps to do that, and I would encourage you to negotiate or whatever you have to do to get some freedom to do some of these things. Thank you.

Thank you. Mr. Minister.