Thank you. The Member for Hay River is seeking unanimous consent to deal with this motion today. Do we have any nays?

Nay.

There is one nay. Item 16, motions. We have one nay. Item 17, first reading of bills. Item 18, second reading of bills. Item 19, consideration in Committee of the Whole of bills and other matters: Bill 8, Bill 11, Committee Report 1-13(3) ... Sorry, item 18, second reading of bills. Mr. Todd.

Thank you, Mr. Speaker; my apologies. Mr. Speaker, I move, seconded by the honourable Member for Nahendeh, that Bill 13, Loan Authorization Act, 1996-97, be read for the second time. Mr. Speaker, this bill authorizes the Commissioner, or a Minister acting on behalf of the Commissioner, to make loans to municipalities for the 1996-97 fiscal year.

Thank you for your indulgence, Mr. Speaker.

Thank you. Your motion is in order. To the principle of the bill.

Question.

Question has been called. All those in favour? All those opposed? Motion is carried. Bill 13 has had second reading and, accordingly, stands ordered to a standing committee.

Item 18, second reading of bills. I would like to advise the House that, by the authority given me by Motion 3-13(3), I have set the sitting hours, until further ordered, to be Monday to Thursday at 1:30 p.m. to 6:00 p.m. and 6:30 p.m. to 8:30 p.m., and Friday 10:00 a.m. to 2:00 p.m. These sitting hours will be effective with today's sitting.

Item 19, consideration in Committee of the Whole of bills and other matters: Bill 8, An Act to Amend the Income Tax Act; Bill 8, An Act to Amend the Income Tax Act; Committee Report 1-13(3), Standing Committee on Government Operations Report on the Review of the 1996-97 Main Estimates; Committee Report 2-13(3), Standing Committee on Infrastructure Report on the Review of the 1996-97 Main Estimates; Committee Report 3-13(3), Standing Committee on Resource Management and Development Report on the Review of the 1996-97 Main Estimates; and, Committee Report 4-13(3), Standing Committee on Social Programs Report on the Review of the 1996-97 Main Estimates, with Mr. Ningark in the Chair.

Thank you, Mr. Chairman. We would like to continue the review of Bill 11, Appropriation Act, 1996-97, and, since Mr. Kakfwi is out of town, propose to move on to Public Works and Services.

Do we have the concurrence of the committee that we will move on to Public Works and Services?

Agreed.

--- Agreed

Department Of Public Works And Services

Thank you. We will take a 10-minute break and resume after. Thank you.

--- SHORT RECESS

Thank you. The committee will come back to order. We will be reviewing the Department of Public Works and Services estimates and Bill 11. The Minister responsible for Public Works and Services, if you wouldn't mind providing your opening remarks. Mr. Arlooktoo.

Minister's Introductory Remarks

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.

Thank you, Mr. Arlooktoo. Chairperson of the Infrastructure committee, which reviewed the department, has opening remarks. Mr. Picco.

Do we have a quorum, Mr. Chairman?

Yes, 13 is a quorum so we do have a quorum. Mr. Picco.

Standing Committee On Infrastructure Comments

Thank you, Mr. Chairman. It is my pleasure to present the comments of the Standing Committee on Infrastructure, regarding the Department of Public Works and Services.

The standing committee noted, with approval, the significant reductions in proposed capital spending by the Department of Public Works and Services. Committee Members recommended only small further reductions in the amounts proposed for office accommodation capital improvements. However, the committee felt that the department was able to handle further reductions in operations and maintenance spending. As a result, the department was able to trim about $4 million further in proposed expenditures over the review process.

This department is moving away from its traditional role as an actual provider of services to government and municipalities, towards being a coordinator for providing these services. As a result of this trend and the spending reductions forced upon all government departments, many of the reductions in this department relate to the project management function. Committee Members recognize that the department will need fewer staff in this area. However, reductions should take place in an efficient manner. The department should discuss project management needs with other departments, to ensure that the best use is made of the government's existing staff and other resources.

In February, the Premier announced a number of privatization initiatives, mostly within this department: petroleum products; computer systems and services; property management; and, community resupply operations. The Standing Committee on Infrastructure has discussed these proposals with the Minister and his staff, and is looking forward to seeing the detailed plans for privatization as soon as they are complete. Therefore, the standing committee recommends that no privatization initiatives be implemented until the detailed privatization plans have been reviewed by the appropriate standing committee. In this case, privatization plans for petroleum products, computer systems and services, property management and community resupply operations should be forwarded to the Standing Committee on Infrastructure before implementation.

While committee Members agree with the Premier that the government should get out of government functions that can be handled better by the private sector, the standing committee wants to ensure that any privatization initiatives are done in the right way, for the right reasons. Privatization should be a way to provide better service for lower costs, and if a given privatization initiative does not meet that test, it should not be implemented.

Related to privatization was a concern noted by committee Members regarding the petroleum products stabilization fund. This fund is in a deficit position of approximately $2 million, and the deficit is apparently growth. The standing committee recommends that privatization of the petroleum products division not take place without a plan to recover said deficit.

The standing committee also welcomed plans by the department to invoke a user-pay strategy for services provided by the department. Making client departments and other organizations pay for services rendered is more likely to encourage efficient use of these services. This policy is already being implemented for telecommunications costs, and the standing committee recommends that the user-pay concept be implemented in other areas as soon as possible.

This is especially important when it comes to services provided to communities by this department. If the communities are receiving services without having to pay for them, they will not have any incentive to reduce costs and operate more efficiently. The user-pay concept must be implemented with communities as well as with client departments, in order to strengthen the government's message of community empowerment.

analysis of the costs of this policy to be provided by the department as soon as the analysis is complete.

While the standing committee recognizes that many benefits have accrued to the NWT business community as a result of the BIP, we also recognize that we can't afford to do everything we want to in the current fiscal climate. Therefore, the standing committee recommends that the government include reducing total costs to government as a prime objective in its plans to change or replace the business incentive policy.

That concludes the comments of the Standing Committee on Infrastructure. Thank you, Mr. Chairman.

Thank you, Mr. Picco. Before we move on, Mr. Enuaraq, I apologize. I should have recognized you before I recognized Mr. Picco. The point of order to make sure there was a quorum in the House was noted. I apologize for not having recognized you before I recognized Mr. Picco. Mr. Picco, I take it you had a very good English literature teacher. I liked the way you read the remarks, it was good. Thank you.

According to our procedure, we will get into general comments. Before we get into general comments, I would like to ask the honourable Minister if he wishes to bring in the witnesses. Mr. Arlooktoo.

Yes, I have a couple of witnesses I would like to bring in.

Do we have the concurrence of the committee that the Minister will bring in the witnesses? Agreed?

Agreed.

--- Agreed

Sergeant-at-Arms, please bring in the witnesses. Thank you.

Mr. Minister, for the record, please introduce the witnesses to the committee.