It is our wish to continue with the Department of Transportation, Mr. Chairman.

Department of Transportation

Thank you. The Department of Transportation is on page 8, task 9. The Minister responsible for this department is Mr. Antoine. Mr. Antoine, do you have opening remarks?

Minister's Introductory Remarks

Mr. Chairman, Members of the Legislative Assembly, I am pleased to present you with the Department of Transportation's O and M and capital budget for the 1996-97 main estimates.

The department's projected expenditures for 1996-97 are $101.3 million consisting of $59.3 million in its operations and maintenance budget and $42 million in the capital program. Compared to the department's expenditures in 1995-96, this is a $1.9 million reduction in O and M and a $3.3 million reduction in capital for a net budget reduction of $5.2 million.

I want to emphasize that Members of the Resource Management and Development committee played an important role in shaping the budget we are considering today. In a spirit of goodwill and cooperation in difficult times, I have accepted and incorporated all of the committee's recommendations in this budget.

On the issue of division, the Department of Transportation was well along in planning for its resource requirements following division. Further preparations for division are on hold until the implications of the federal government's recent announcement on the incremental funding available for division have been more fully considered.

Over and above its original target, the committee asked the Department of Transportation to cut an additional $2.5 million from its budget for this year. This made it necessary to eliminate some projects. Several projects were scaled down in size and the work on others phased in over a number of years.

Since the Rankin Inlet tank farm project is on hold until the Keewatin Resupply Steering Committee has made its recommendations, I am proposing that the tanker moorings be deferred until 1997 and, in its place, a number of community wharves and local access road projects be advanced to 1996-97.

I want to say that directing the reductions in the department's budget has not been an easy or pleasant task, especially when I consider the impacts that go beyond the department. Over two-thirds of the Department of Transportation's expenditures are made through contracts with parties outside the department. The department itself directly employs over 300 people. Contract expenditures from the department's O and M budget alone, not counting

the employment generated through its capital program, indirectly employs another 200 people. The budget reductions have resulted in the elimination of 29 positions within the department. I know the reductions will result in similar losses outside the department, but I have no way of determining the exact impacts.

In the Agenda for Change, the Premier presented the priorities of this government for securing the financial future of the Northwest Territories, improving our quality of life and making new economic opportunities for northerners. In his Budget Address, the Minister of Finance spoke of the importance of partnerships in pursuing opportunities for our economic development. Mr. Chairman, the Department of Transportation has much to contribute in achieving these directions. Despite the fiscal cutbacks, I see many opportunities for the department to advance our economic development in partnerships with other stakeholders with whom we share common objectives.

Our economy, quite literally, moves on our transportation system. Building the transportation system we need in the Northwest Territories is a long-term project that we will accomplish by working at it steadily, one small piece at a time. In the details of a single budget year, we must never lose sight of the mature transportation system and the prosperous northern economy that remain our true goal over the long haul. As a government and a department, putting our financial affairs in order might slow us down but our goal and direction remains the same.

Mr. Chairman, I think this is the larger and more positive context in which we should look at the Department of Transportation's budget for 1996-97. On this note, I would be pleased to go through it with the Members. Mahsi, Mr. Chairman.

Thank you, Mr. Minister. The committee that reviewed the particular department will make opening remarks. Mr. O'Brien.

Thank you, Mr. Chairman.

Standing Committee On Resource Management And Development Comments

It is my pleasure to present the comments of the Standing Committee on Resource Management and Development regarding the Department of Transportation.

The committee supported a number of reductions brought forward by the department. The majority of these come from restructuring or reworking existing contracts. Included in this list are airport contracts for Cambridge Bay, Iqaluit, Resolute Bay; highway contracts for the Fort Simpson and

'-Wrigley area; and, the ferry contract in Fort Providence. In addition to this, the committee supports staffing cuts at regional airports in Fort Smith, Inuvik and Cambridge Bay.

Overall Budget

The committee recognized that this department's budget made up almost 50 per cent of the entire resource management envelope, but felt that Transportation did not go far enough in reducing its overall bottom line. To that end, the committee recommended that the Department of Transportation cut an additional $2.5 million from its overall 1996-97 budget. The department responded by cutting $677,000 from operations and maintenance costs and $1.823 million from capital spending.

Rankin Inlet Tank Farm

The Members noted that this project had been placed "on hold" until such time as the Keewatin Resupply Steering Committee could complete its review and provide recommendations to the government.

With this project on hold, the committee was surprised to see a $900,000 capital project for deep sea tanker moorings in Rankin Inlet in the department's 1996-97 main estimates. When questioned in April 1996, the Minister explained that this project was in fact "on hold' and that a plan was being developed to defer the tanker mooring project to 1997-98. In its place, the department planned to advance a number of smaller projects scheduled for 1997-98 to 1996-97. The committee agreed with this swap and felt that this option would make the best use of resources while waiting for the report of the Keewatin Resupply Steering Committee.

Mr. Chairman, the committee was pleased to see that the Minister did take the request of the committee seriously and did put these changes in place. I appreciate that.

The committee, therefore, recommends that the $900,000 Rankin Inlet deep sea tanker moorings project be deleted from the Department of Transportation's 1996-97 main estimates and replaced with the following: construct community wharf project, Arviat, $250,000; harbour enhancements, Iqaluit and Apex, $200,000; access road, Nahanni Butte, $200,000; access road, Baker Lake, $100,000; access road, various communities, $150,000.

Division

In its initial review, the committee recommended that the department not proceed with the planned transfer of PYs to Nunavut until incremental cost negotiations were finalized with the federal government. The department responded by stating that no substantial costs would be incurred until negotiations were completed. The committee was concerned with this statement and questioned what amount the department considered as substantial. The committee, therefore, recommended that the Department of Transportation not incur any costs related to the transfer of PYs to Nunavut until negotiations are completed with the federal government.

That concludes the remarks of the Standing Committee on Resource Management and Development on the Department of Transportation. Thank you, Mr. Chairman.

Thank you, Mr. O'Brien. The process allows for general comments. Before I go into that, I would like to ask the Minister if he wishes to bring in the witnesses. Mr. Minister.

Yes.

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

I don't know if they are here.

Do we agree that the Minister will bring in the witnesses?

Agreed.

--- Agreed

Thank you.

Welcome to the committee. For the record, Mr. Minister, will you please introduce the witnesses?

Thank you, Mr. Chairman. I have with me the assistant deputy minister of Transportation, Bruce Rattray; and, Masood Hassan, director of transportation planning.

Thank you. General comments. We are reviewing the Department of Transportation. Do you want to get into detail?

Agreed.

--- Agreed

Line By Line

Corporate Services

Corporate services, operations and maintenance, total operations and maintenance, $7.948 million.

Agreed.

--- Agreed

Ferries

Thank you. Ferries, operations and maintenance, total region, total operations and maintenance, $3.95 million. Agreed?

Agreed.

--- Agreed

Thank you. On page 8-12, detail of capital, ferries, buildings and works, Fort Smith, total region, $618,000.

Agreed.

--- Agreed

Thank you. Total buildings and works, $618,000.