Thank you, Mr. Chairman. I have with me Mr. Lew Voytilla, secretary of the Financial Management Board.

Thank you, Mr. Pollard and welcome, Mr. Voytilla.

General comments on FMBS. Does anybody have anything to say? Mr. Ballantyne.

General Comments

Mr. Chairman, I have just a few general comments. This secretariat has a very difficult task. It's an infamous central agency and has to deal with all the very strongly-held beliefs of departments that they know what they're doing, that everything they're doing is very, very important and that the secretariat really shouldn't be questioning what they're doing or how they're doing it. But, there is a real need for a central function and for a group to provide some discipline on spending through government programs.

Although the Standing Committee on Finance has some constructive comments to make about how we feel things can be improved, I want to go on record as saying that I think the chairman of the Financial Management Board and the secretary of the board have done a very good job under difficult circumstances. The examples that we use aren't meant as criticism of them.

On a personal note, having studied this government and Legislative Assembly for many years, I think that this government and Assembly, like previous governments and assemblies, take on very ambitious programs. We try to do a lot of things. I think sometimes we and the public forget that there are only 65,000 people in the Northwest Territories and we really do have a very small government. The sort of things that the Ontario government can do or the BC government can do, the sophisticated programs that they can run, becomes very difficult for us to do. We can't do them all, just because we don't have the numbers.

I think what has happened over the last 15 years, and it's not just this government, but probably with every government, is we've always tried to do too many things. We've loaded down our civil service with too many tasks. When you do that, it is just physically impossible to complete all the tasks. I look at our political structures and compare that to 65,000 people in southern Canada who have a mayor, six alderman, and a small administration. They would elect part of an MP and part of an MLA, and that's it. We have a very, very complex structure to try to manage the affairs of 65,000 people.

There's a lot of pressure on our government to do the things that people see are being done in other jurisdictions. It gets very, very tough. There are some examples given in our committee report of the evaluation initiatives of the department which they weren't able to achieve. The reality is, at the end of the day, with limited resources, we have to decide what we're going to do with them. Sometimes, unfortunately, a decision is made to deal with the issues in the field and not give the resources to the central agency to evaluate what will happen there. It's too bad because, as our report said, many times the evaluation component could probably pay for itself.

The other example was that of the fall budget. I think the original intent, and it was a good one, was there was a very legitimate concern that we were having problems getting our construction done on time. I think the experiment was one that really had to happen because if we hadn't tried it, people would be still asking for it today. It wouldn't have gone away. I can't argue with the original Minister's decision and the Cabinet's decision, because they were getting a lot of criticism, to do something differently.

Two things happened with that approach. One is, unfortunately -- and this is not the fault of the secretariat or the Minister -- there are other reasons why departments were late, so we weren't able to totally achieve the major objective of the split budget. The second, and to me the most important, issue -- and why we in the Standing Committee on Finance think this issue should be looked at again -- is that though you can separate, physically and in time, consideration of a capital budget and O and M budget, the reality is both budgets are inextricably tied. The other reality is, you end up with two full-blown budget debates; one in the fall and one in the winter.

The inordinate and amazing amount of work that goes into preparation of the budget by the civil service is really mind-boggling. What, in fact, happens is that the civil service, for the weeks going into two budget sessions, essentially, is dedicated to just that and they're not free to deal with a lot of issues in the depth they probably should. I definitely think the time has come to weigh the pros and cons of what you achieve with a fall budget and what the de facto results of having a fall budget means, as far as workload. I definitely think, at the very least, it's time to review that to see if the decision that made sense four years ago continues to make sense.

I do want to say that in the next four years, this particular central agency, the Financial Management Board, the Finance Minister and chairman, are going to have an extremely difficult job. What we've seen in our system of government, not just this government but the system of government that has evolved in the territories, is that in our consensus system, the chair of the Financial Management Board doesn't have all of the institutional tools he or she needs to exact discipline on the Cabinet, though I think this Minister has done a very, very good job with the limited tools available to him to keep the Cabinet on the fiscal straight-and-narrow, and to accomplish what he's accomplished. I think he, the secretary, and their staff deserve a lot of credit.

But, I also think, that in the transitional period, I hope the Minister of Finance and chairman of the Financial Management Board will make some recommendations in the transitional document that will be going to the next government as to how the next chair and next Finance Minister will have more mechanisms to ensure that the government is fiscally responsible.

Now I know Mr. Pollard uses his wit, his intelligence and patience to talk Ministers into not spending and every technique known to Finance Ministers to achieve results, but it is very, very difficult. And, again, a reality of our system is that at the end of the day, the Finance Minister is, in many ways, accountable for those decisions because the Finance Minister is responsible for the budget. The same way that we lay a lot of accountability at the feet of the Premier and don't give the Premier all the tools necessary to do the job, that is also true with the Finance Minister.

I would just like to conclude, Mr. Chairman, I think the Finance Minister has done a good job. The recommendations we made were made with a lot of thought, and we hope they are constructive. I hope that the Finance Minister will use the wisdom of his four years of experience to prepare the next Finance Minister for the even more difficult job that it will be a year from now. Thank you very much, Mr. Chairman.

Thank you, Mr. Ballantyne. Do you have a response to those words of wisdom, Mr. Pollard?

Thank you, Mr. Chairman. Mr. Chairman, with regard to audit and evaluation, there has been some work done in that area. There are draft program design standards that have been prepared and they are ready for review by FMBS. There is a discussion paper on the evaluation policy which has been widely circulated. The work is proceeding well on the development of organizational design standards, and an evaluation of the management for results system is nearing completion.

We have also been involved with some projects with departments:

- An evaluation framework for several community mental health projects in the Inuvik region;

- An evaluation framework for the new prime fur program;

- An evaluation framework for the investing in people initiative;

- An evaluation framework for the Cape Dorset community transfer;

- A review of the student financial assistance program and the early childhood pilot project;

- An operational review of the South Slave Divisional Board of Education; and,

- An organizational analysis for the Arctic A airports transfer.

So, Mr. Chairman, we have been doing some things in that area. I have admitted that we haven't done as much as we would have liked to. We think that there are programs out there right now that need to be looked at to see whether are some efficiencies, or to see whether there are still programs that we should be embracing.

With regard to some of the other comments that Mr. Ballantyne made on the fall capital budget and the spring O and M budget, being the person that put that system into place, I tend to defend it. But I am certainly prepared to recommend that it be looked at to see just where there could be improvements made. I don't think there is nearly as much work or as many problems involved in the capital plan as there used to be, simply because with the consultation with the communities that the Premier does, a lot of that priority and jockeying for position is taken out of the system and most of the departments have their people working on these areas anyway. So a lot of the problems have been taken out.

Certainly I see less competition, either in the Standing Committee on Finance or on the floor of this House, for projects because we know in advance what the envelopes are and where projects are in the process. But I will admit that it has not worked as well as I would have liked it to have worked, with regard to getting projects under way sooner. We are getting projects under way sooner, but they are not nearly as quick as I would like them to be.

Mr. Chairman, Mr. Antoine made some comments with regard to negotiating with our unions and so on and so forth. My position on that is very clear, Mr. Chairman. There is a process in place and I have said that I would abide by that process, that I wouldn't try to bring legislation into this House, unless things got really out of hand, or they got really unreasonable. So, if Members are somewhat frustrated by the lack of progress, as they might say, with regards to reaching a collective agreement, I can assure Members that the process that is in place between ourselves and our unions is being used by both sides to the best of their ability. We haven't reached an animosity stage. We are in agreement now to go to arbitration. I didn't want to see it end up that way, I would have preferred to reach a negotiated settlement at the table, but that was, unfortunately, not to be. The union thought that our demands were too great and we thought their demands were too great, so it will go to arbitration and we will see what falls out of it. But we've certainly seen both sides using the negotiating process, the bargaining process, in good faith, but nevertheless to each other's advantage.

So, there will be transitional documents and I will be glad to work with the Standing Committee on Finance and incorporate their concerns as well. Thank you, Mr. Chairman.

Thanks very much, Mr. Pollard. Mr. Patterson.

Thank you, Mr. Chairman. Just a brief comment about labour relations. Mr. Chairman, I note that the Minister referred in his opening remarks to the escalating number of arbitrations. I am not sure what causes these growing numbers of arbitrations. My experience in the Baffin region, and my opinion, is that a lot of them result from the

failure of the joint consultation process to nip problems in the bud and resolve them before they escalate and become a very expensive undertaking for both labour and management in arbitrations. Not only expensive, but time consuming.

I know many people who have waited a great length of time for sometimes important, but sometimes relatively minor, issues to be dealt with in the arbitration process. I think it is to be avoided at all costs and I think the union would agree with this as much as managers

So I would just like to ask, Mr. Chairman, if the Minister agrees that perhaps the joint consultation process could be used more effectively closer to home, closer to the location of the job site, and whether or not this secretariat agrees that wherever possible energies should be devoted to solving problems at the local and regional level rather than having them escalate to a situation that requires arbitration.

In some cases I believe that arbitrations result when grievances are dealt with by distant headquarters personnel who don't know the people involved and don't know the local conditions that have provided a problem in the workplace, so they make decisions which may look okay by the book but are insensitive and inappropriate in the local workplace and therefore lead ultimately to arbitration.

So I would appreciate if the Minister has some thoughts about this and agrees that we should take some steps to try and solve problems before they get to arbitration. Thank you.

Thank you, Mr. Patterson. Mr. Pollard.

Thank you, Mr. Chairman. I agree with a lot of the comments that Mr. Patterson has made.

We do see a grievance start out right at the workplace level that in hindsight could have been handled there, but there may be some inexperience on the part of a manager. Sometimes we see it's emotional. Sometimes we see that it just escalated because it just got out of hand. Other times it reaches us in Yellowknife and we will say that this maybe shouldn't have gotten here.

I agree that there is a problem, and I have spoken to the Premier about regional directors possibly having more of a role in this particular area at the regional level simply because I know that there is at least one regional director right now who is saving some of these grievances from occurring, and I think that more of these things could be resolved with some better training at the local level.

When it does occur, if the regional director or someone had the ability to intervene and sort of mediate the issue, we may see fewer grievances. Grievances, if we can keep them down, will mean fewer arbitrations, Mr. Chairman.

One of the problems that we have on those arbitrations right now is that there are so many that it's time consuming and difficult to deal with all of them. The union is aware of the problem, as are we. We have spoken about it and are trying to address those issues. So I am aware of the problem and we are doing what we can to resolve it, Mr. Chairman. Thank you.

Thank you very much, Mr. Pollard. Anyone else on general comments or general statements? Do Members agree that we can go on to the detail?

Agreed.

---Agreed

Line By Line

Directorate

We are on page 02-25, Financial Management Board Secretariat, directorate, total O and M, $2.339 million.

Agreed.

---Agreed

Human Resource Management

Thank you. On page 02-26, human resource management, total O and M, $24.9 million.

Agreed.

---Agreed

Financial Management

Thank you. Next, 02-27, financial management, total O and M, $10.553 million.

Agreed.

---Agreed

Audit And Evaluation

Next, 02-28, audit and evaluation, $3.405 million.

Agreed.

---Agreed

Thank you very much. Next, on to page 02-29, details of grants and contributions, $4.407 million.

Agreed.

---Agreed

Next, 02-30, information, detail of work performed on behalf of third parties, total program, $7.402 million.

Agreed.

---Agreed