Thank you. Mr. Antoine.

If it is $259,000, Mr. Chairman, the capital estimates for 1994-95 show $200,000 and there are no prior year costs, nor future years anticipated. The total capital projection is $200,000, so where is the $59,000, that is not in the budget, coming from?

Mr. Minister, what about the inconsistency in the project?

There were prior year costs, I believe, of $30,000, as Mr. Christensen pointed out, and the community was going to come up with $29,000 to pay for this.

Thank you. The honourable Member for Nahendeh.

I just wanted to know if what happened in Rankin Inlet last summer is the normal process for other communities to follow now, now that this has set a precedent. Thank you.

Mr. Minister.

I'll ask Mr. Christensen. I believe this was a unique opportunity, if I remember correctly, but Mr. Christensen can explain it better than I can.

Mr. Christensen.

Mr. Chairman, in Rankin Inlet last year, coincidentally the Department of National Defence was building a forward operating location, which included the paving of the Rankin Inlet airstrip and the tarmac area. As a result, the prime contractor, Gely Gautec Enterprises, had already mobilized an asphalt plant, rock crusher and paving machine, as well as their specialized work crew to Rankin Inlet for this project.

The hamlet of Rankin Inlet wanted to upgrade what is known as the Loop Road, the main arterial road in Rankin Inlet and they had a small amount of money in their budget to cover that work. The problem they encountered, though, was that they didn't have enough granular material locally available to do the work they wanted to do. The alternative for them was to bring in a blasting and crushing operation, which the government was prepared to do, but it was going to result in a cost of about $36 per cubic metre for granular material.

They went and spoke to Gely Gautec, who, coincidentally, had a crushing operation in place in Rankin Inlet already. They were near completion of the FOL project and had a surplus of well-graded granular material available, which was in excess of the requirements for the contract they were doing for National Defence. They made an offer to the project that they could provide the material to them at $16.50 a cubic metre, compared to the alternative option that the hamlet was facing of $36 per cubic meter. If they could find additional funding, they could actually go even further and pave the whole Loop Road in Rankin Inlet, because they also had an excess of asphalt material there for about $250,000 in total.

They then approached the department to see if there was funding assistance available. All this occurred at the end of July and, once final inspections were done on the project, the contractor wanted to move his equipment out of Rankin Inlet very quickly. This left a very short period of time to evaluate the situation, but we were able to determine that paving in Hay River and Yellowknife, for similar standards, results in about $200 per linear metre. This project offered Rankin Inlet paving for about $122 per metre, which is a significant savings.

We were also finalizing our standards and criteria for road paving projects. We had been doing a study in various communities, to determine the traffic volumes and what would be legitimate criteria for paving. That was set at 500 vehicles per day, and the road in Rankin Inlet was measuring 750 vehicles, which was well in excess of the standard we were contemplating for eligibility for paving. The community was prepared to make a financial contribution, in accordance with the new MCAP provisions that are being brought in, in the new fiscal year. They were able to negotiate a cash flow for the project that we thought we could manage. As well, the engineering consultants who were used by National Defence were available to provide their expertise to the project and the municipality was able to retain them to do that.

So, when we added it all up, it seemed like a very worthwhile and unique opportunity to provide paving to an arterial road in Rankin Inlet at a very low cost. It seemed this opportunity was not about to appear again for some time and we should seize it while it was there. So, as a result, the department was able to support the project and make the arrangement that it did.

Thank you, Mr. Chairman. With an opportunity like that, I think communities should take full advantage of situations where they could do the things they want to do with the amount of funding they have. My only concern is that, when we reviewed it in the Standing Committee on Finance, there was a lot of movement in Rankin Inlet. Things were being moved up, increased, decreased and it was very hard to decipher what was going on. When we heard about the Loop Road being paved, we asked questions and it was very confusing for quite a while.

My only concern here is that if the government has spent $30,000 in prior years, it should be in the books. That is one of the concerns we had in the Standing Committee on Finance. That is what our job is, to look at what the government is doing and where they are spending the money. It has to be done by the book, and there are rules for that. I would just like to know why the $30,000 that the government spent was not in prior years costs?

Thank you. Mr. Christensen.

Mr. Chairman, we believe we just missed the opportunity of putting it in the book when we inserted the project in the capital estimates. The project should have shown a $30,000 amount for this fiscal year.

Thank you. Mr. Minister.

I think it's important to point out, and what I remember of it is that this thing was moving fairly fast. It was an initiative started by the municipality, the mayor and the secretary manager. I don't know about the $30,000 out of the books, but Mr. Christensen is probably correct. It certainly wasn't any attempt to hide any of this, it was just perhaps the fact that it was moving very, very quickly. I know I was encouraged, as an MLA at the time, to try and move this thing forward. I had encouraged the previous Minister to see if they could look at it. I don't think there was any intent to hide anything, if that's an appropriate way to put it. It did move very fast and, as I said earlier, it was an opportunity that we didn't want to slip by. Thank you.

Thank you. Mr. Antoine.

My final question is that this is an unusual situation where money -- $200,000 that we would be approving right now -- was already committed last summer for the paving of the road. I don't know if it's spent yet or not, but it's an unusual situation that we find ourselves in. Are there other ways the department could have handled this so they could have had these funds approved in the normal way?

Thank you. Mr. Minister.

From what I can see, there's no question it was unusual. It was a unique opportunity. We've said that on the front end and I'm sure they will be unique opportunities in other budgets, and there are, in the way in which we do things. I don't think, with all due respect, that we could have been able to bring it forward. It was July, it was an initiative done by the municipality. I remember being fairly aggressive myself to see if, in fact, we could secure this funding to have it done. The principal negotiators were the mayor, the SAO and Gely Gautec. I think that was the name of the company. Mr. Antoine is correct, it was unique, it was a little different, no question of that. I don't know if we could have done it any other way. It just materialized because the company had excess, et cetera. I suppose we could have gone through a special warrant.

Thank you. Total region, $2,067 million. Member for Thebacha.

Thank you, Mr. Chairman. On this particular item I recognize it was unique and it's a hamlet initiative, but at the same time the GNWT does absorb the total funding. I also recognize that you weren't the Minister at the time the decision was made, but why didn't the department look at either a special warrant or a request through supplementary appropriation under capital as opposed to putting it in this particular year's budget?

Thank you. Mr. Minister.

Those negotiations took place between the hamlet, the municipality, and Gely Gautec who then went through the department to see if they would provide the funding to do this. They had, again, negotiated a unique situation where the work was completed -- we've said that on the front end -- and the payment was on the back end, if you want, next year. I suppose we could have gone through special warrant. For whatever reasons we chose not to. I don't know what else I can say. The contractor was willing to wait for his money, the community was aggressive in pursuing the initiative, the MLA was equally aggressive because it was in his riding, as other Members have been aggressive in protecting theirs. I don't know what else I can tell you. We could have gone for a special warrant but for some reason we didn't.