Thank you, Mr. Chairman. The Minister noted in his address to the committee that the department has entered into two capital cost-sharing programs with Transport Canada for airport and marine upgrading worth $18 million between 1990 and 1997. Spending on Arctic airports will more than double in 1994-95, to $4.5 million and $5.9 million in 1995-96. Major airport construction next year will be carried out at Coppermine, Rankin Inlet, Fort Good Hope, Pelly Bay, Snare Lake, Pangnirtung and Sanikiluaq.

The committee is also pleased to see the department's program for improving harbour facilities and constructing breakwaters. Various projects are planned, especially in the Baffin and Keewatin regions.

The committee noted the inclusion, for the first time, of a marine resupply terminal for Rankin Inlet in the 1994-95 capital plan. There is $50,000 allocated for pre-engineering studies and $1.5 million for its construction. Recoveries from Transport Canada are half that amount.

Substantiation for the project identifies Rankin Inlet as the hub for bulk fuel in the region and refers to the Keewatin resupply study as the basis for the decisions. The committee has since been informed that the study team for the Keewatin resupply study are continuing with a detailed study of resupply options selected by the Keewatin resupply steering group. Further results are expected to be presented in the new year. The committee will not approve the commitment of funding for this project until such time as all options have been fully assessed and reviewed.

Motion To Extend Sitting Hours, Carried

Mr. Chairman, I would like to move that we extend sitting hours until we conclude the Department of Transportation.

I recognize what the Members are saying, however I think it's important to point out that even though this study isn't completed, it is clear from the study that there is close to somewhere in the region of $2 million worth of savings if we reallocate the POL products from Churchill to Rankin Inlet. This year alone, based upon the changes we made to moving POL from Edmonton by truck, from Winnipeg to Churchill by train and from Churchill to the communities and reversing that when we moved the POL products from Montreal to Churchill, there was $1.8 million in savings. So, in defence of this investment, I have to say that out loud. There was $1.8 million worth of savings between that, and between what we did in Pelly Bay and the movement of the freight into the Baffin region. Pardon me.

---Laughter

It's important to understand that right now what we're endeavouring to do here is to take a hard look at the costs of moving the POL products from Montreal directly into Rankin Inlet and then out from Rankin Inlet into the other communities.

Right now 43 per cent of the total fuel oil products reside in Rankin Inlet. Therefore, we move it twice. That's a fact, that's not fiction. We move it from Montreal to Churchill, Churchill to Rankin. We would save the costs of moving that freight from Churchill to Rankin by making this move, that's all I'm saying. There is also somewhere in the region of $300,000 to $400,000 worth of storage fees that get built into the price of POL products that we pay the federal government because I believe it's Supply Services in Churchill, federal Supply Services.

So, I'm not disputing the need if you want to complete this study. I'm not disputing that one bit. I support the fact if you want us to delay the project, but I want to make it clear that we can save significant dollars based upon the research we've already done. About 43 per cent -- let me repeat it -- of fuel oil resides in Rankin Inlet. We are moving twice, simply by moving it once there has to be a saving. There is some requirement in the area to put some deep water facilities in there. The only thing I would ask is that we need the $50,000 on the front end to complete the study to your satisfaction and that we're prepared to leave the project until 1995. But you know, I want to make it clear that it's done on economic grounds and no other reason. Thank you.

Again, Mr. Chairman, I don't have the benefits of the Finance committee on the information they have. I'd like to ask with regard to the Keewatin resupply study, it should be concluded by the new year. Who is doing that study? Is it the government that's doing that or a private group?

The study is being done internally by the Department of Transportation. It has a steering committee made up of regional groups. Also, one of the major shippers is on that steering committee, NTCL, because it has an interest, obviously, in any changes that have to take place there. Keewatin Regional Council is involved. Keewatin Inuit Association is involved. The two MLAs are involved. The Keewatin Chamber of Commerce is involved. The initial part of the study, which I provided to the standing committee, indicates that there is clearly significant savings in the first phase of changing the POL products from Churchill into Rankin Inlet. We're also looking at the possibility of dry cargo down the road, but in the first phase it shows that there's close to $2 million worth of savings. Thank you.

Okay, there's just one other, this is just a comment, Mr. Chairman. That is with regard to, again, the study that is being done. There was a study done with regard to the transportation strategy. Recommendations were made with regard to the targeted highways that should be priorized by this government. I would hope that this study that is going to be coming up would also be used by the Finance committee to influence their decision, but if it doesn't then perhaps I could see a situation in which, although maybe the study prefers Rankin, maybe Iqaluit would be the best place because Dennis is on the Finance committee. So, I don't want studies being done and just ignored by the Finance committees to suit their own interests. That's all, Mr. Chairman.

I think I can say with a great degree of comfort that this study is going to be able to clearly demonstrate, to the Members of the House, significant savings in the way in which we transport POL products. I think I can say to the House with a great deal of comfort that these savings would be equally distributed. I mean, it's going to impact on everybody if there's a significant saving. Again if I can just repeat, just for everybody's benefit, just by making the one move to transport POL products into Baffin and into Keewatin, saved us $1.8 million. That's a fact. That's not some mysterious number, that is real. We did make some overtures last year, under the former Minister -- I believe it was you, Mr. Whitford -- where we managed to bring in a shipment to Pelly Bay and we did it again this year and there was some saving there. So the intent of this initiative, is to complement that savings. But I concur with the standing committee, we will

complete the study. We will bring it forward to the committee and I am confident that you will see the reason for doing it.

Thank you, Mr. Chairman. The intent of this motion is to allow the Minister to complete the study in order to justify the expenditure for these pre-engineering studies. That is why we asked for this pre-engineering study funding of $50,000 be deleted from the budget until the study the Minister is doing can justify the need and to indicate there will be a $2 million savings.

Maybe I haven't presented the case as well as I should have. Could I call for a five minute time out to gather my peers amongst me?

Agreed.

---Agreed

Mr. Chairman, in the break that you graciously gave us, we had some discussions and I think we're still somewhat at odds, Mr. Chairman. The suggestion I made was because this bill will not kick into force until April 1, 1994, and the Department of Transportation has assured us in the break that the study will be completed between mid to late March, the suggestion I made was that it remain the budget, that we bring the study back to the winter session, and if at that time the Standing Committee on Finance is not happy with the results of the study, we would undertake to amend the capital budget at that particular time, prior to the new fiscal year. I think Mr. Todd agrees that if the study doesn't work out, the money would have to come out of the budget anyway.

The reasons we're saying that is, this is a cost-shared project with the federal government under the $10 million program that was announced last November, which Mr. Todd had negotiated with the federal Department of Transportation. We have no wish to give up in any way, shape or form, some $750,000 in federal funding that would be involved in this particular project.

By leaving it on the books, it would give us time to work out that particular aspect, if it was going to happen without -- as we see it -- endangering that federal funding in one fell swoop by taking it out of the budget. My understanding, Mr. Chairman, is that this might not be acceptable to the Standing Committee on Finance. I would like to know, for the record, if they would entertain such a compromise, Mr. Chairman.

Mr. Chairman, I believe the Standing Committee on Finance is concerned with the process. We understand that once we conclude the Department of Transportation's capital budget, there doesn't appear to be any mechanism for deferring this particular item. We could defer it, I agree, but we are requesting that it be deleted.

Mr. Chairman, I think the comments and concerns of the Standing Committee on Finance are that if we leave it in the budget now, once we approve this capital budget for Transportation, it's approved. Once we approve that particular line, it's approved. There's no method for taking it out at the end of March. What we are asking is that this funding for the pre-engineering study, $50,000, be taken out now until the study is completed by the Minister. If the study justifies that and does save this government $2 million, then we won't object if the Minister and the government came in either through a special warrant or a supp.

However, if we leave it in the budget now, we're saying regardless of the study, you can have this pre-engineering money to address this resupply terminal. I believe that's our concern. We want a study that states, yes, this resupply terminal will save the Government of the Northwest Territories $2 million to look at this resupply terminal in Rankin Inlet to avoid bringing the fuel twice to the Keewatin. Thank you.