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.