Thank you, Mr. Chairman. I am pleased to present the 1996-97 main estimates for the Department of Public Works and Services. The department's budget for 1996-97 is $98.643 million. This represents a 13 per cent decrease in funding from the 1995-96 revised main estimates.

A total of over 458 person years are included in this budget, which is down from the 516 person years last year. This is an 11 per cent reduction.

These figures do not represent all of the resources of the department. Two major areas of our operation are funded by other means.

The fuel oil revolving fund operates on a cost-recovery basis. Its expenditures for 1996-97 are estimated at $51.07 million. Built into the revolving fund cost projections for 1996-97 are estimated savings of $1.7 million in the cost of fuel purchases as a result of recently awarded resupply contracts. The division will have a staff of 30.9 person years, which is a reduction of four person years from 1995-96.

The development and operation of government computer systems is operated on a chargeback basis, with a budget for 1996-97 of $5.375 million and 29 person years. This represents an approximate 10 per cent reduction from the previous year.

Over the next 18 months, Mr. Chairman, both of these operations will be privatized. This reflects the government's commitment to use its resources to stimulate business development. Wherever possible, we will obtain our services from the private sector and promote the best method for delivery of services.

Public Works and Services provides support for many of the resources that will be devolved to communities as part of the community empowerment initiative. The department will be working with Municipal and Community Affairs to ensure that this process works smoothly.

In order to implement these changes effectively, the department will be reorganized, both at headquarters and in the regions. This will ultimately reduce the number of supervisor levels and the number of managers by half. Last week, the number of management positions at headquarters was reduced by one-third. The department no longer has assistant deputy ministers and five of the existing divisions have been consolidated into two. This process will be continued over the next few months at the regional level. The total cost savings of these changes will not be clear for a few months, until the organizational design is complete and approved. I will report back to the House in the fall.

Mr. Chairman, a transition team has been created to steer the department's privatization, user pay and community empowerment initiatives. This transition team is temporary and will phase itself out over the next two years.

This fall, the department, along with Education, Culture and Employment, Transportation and the private sector, is sponsoring the first-ever northern pre-engineering program at Aurora College. Students in this program will work toward careers as engineering technologists.

With the changes in this budget, and through the user-pay initiative, the customers of Public Works and Services will have more authority to acquire services themselves. For example, the local contract authority limit has been increased from $1,000 to $5,000. In 1996-97, the department has already moved on the user-pay initiative by transferring the responsibility for telephone services to user departments.

One of the department's ongoing responsibilities has been the administration of the business incentive policy. A major consultation effort has been under way over the past two years to improve the policy so it provides better support to northern companies. While Public Works and Services will continue to apply this policy in its contracts, the authority and the resources associated with the program are being transferred to Economic Development and Tourism in recognition of the policy's potential for economic development.

Mr. Chairman, the Department of Public Works and Services will be a much smaller organization as we move towards division, and I believe that the transfer of responsibilities will be a positive approach to making effective use of public funds.

That completes my opening remarks, Mr. Chairman. I will be pleased to answer Members' questions.