Thank you. Tabling of documents. Item 14, notices of motion. Item 15, notices of motion for first reading of bills. Item 16, motions. Motion 7-13(4). Motion will remain on the order paper. 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 with Mr. Ningark in the chair. This is in regard to Committee Report 1-13(4) with Mr. Ningark in the chair.

Do we agree we will be discussing the Committee Report 1-13(4) after the break? Thank you.

-- Break

As I stated earlier, we are discussing Committee Report 1-13(3), Report on the Proposed

Amalgamation of the NWT Housing Corporation and the Department of Transportation and Public Works and Services and I would like you to recognize the chairperson of the Governments Ops, Mr. Roy Erasmus.

Thank you, Mr. Chairman. The Standing Committee on Government Operations has reviewed the Proposed Amalgamation. It is our feeling that since 1991 the government has already undergone numerous structural changes, including amalgamation, privatization, and decentralization. There also is a vigorous deficit management plan in place which has caused major upheaval for the staff and as well uncertainty. We believe that there is a need to provide some stability to allow the staff and the public to absorb and implement the many changes that have been introduced.

This would also benefit the private sector, which has been affected, by decreased government and individual spending. Additionally, it is clear from the responses to the consultation that the department did and the experiences of individual Members that there is not strong support for this proposal. It is clear that the public and the staff would rather see disruption of current services kept to a minimum. Mr. Chairman, the Government House Leaders clearly indicated that the Deficit Management Plan for 1997/98 is not dependent on this amalgamation. Also, there may be opportunities to reduce duplication among the three departments in terms of program operations, without amalgamation. For example, there may be a way to coordinate a tendering process without needing to amalgamate. They could also coordinate community level training, They could also coordinate the efforts of the staff working on community empowerment in each of these departments.

Many initiatives have already placed a tremendous workload on the Assembly, the Cabinet, and the staff. In the last year, we have begun a number of initiatives which span many departments, such as income reform and user say/user pay. There is also the fast approaching reality of division, which is less than 800 days away now. We feel the government needs to focus its energies and resources on a longer, as smooth a translation in 1999 as possible. The committee feels that in the future, the new governments of Nunavut and the western territory may wish to consider such an amalgamation. However, at this point, we believe that the Cabinet and government departments are better to focus their and our energy on the many other initiatives facing us over the next two years. Thank you.

Thank you, Mr. Erasmus. I believe Mr. Arlooktoo was the lead Minister in this proposed amalgamation. Therefore, I would like to recognize Mr. Arlooktoo. General comments. Mr. Arlooktoo.

Mr. Speaker, as the Minister responsible for looking into the amalgamation of the three departments, what I would like to do is, first, very quickly, go over several main points of why we are trying to amalgamate the departments. The reasons behind the rationale, et cetera. And, then give Members a chance to comment if they wish on what I have to say. My plan is not to debate the issue at length but what I would like to hear from Members is, perhaps, a little more clearly some of the reasons for the recommendation, so I can go back to Cabinet with a clear recommendation for Cabinet to make a decision on.

Mr. Chairman, the question has often been asked, why do we want to amalgamate the departments of Public Works and Services, Transportation, and the Housing Corporation. We said in the beginning, this is not a new idea, it is an idea that has been toyed around with for quite a number of years. The last two Assemblies felt that it is something that was worth looking into but never took any action. So, what I will do is I will go through six points that I have notes on. They are very short, and take it from there.

The first point is, that the amalgamation fulfils the Legislative Assembly's goal to produce a more efficient and effective government structure. It reduces costs from a reduction in senior managers. It reduces the management levels. It reduces duplication in common functions in three departments. The examples that I gave during the committee hearings were that the three departments have essentially the same type of financial policy planning, administrative and human resource services in each department. Those could be amalgamated and stream-lined.

The third point that I made during the committee hearing is, that amalgamation is a step in preparation for division. Each of the two smaller governments in the east and the west would inherit a less expensive government structure. As I said in the plans, in the committee hearings, if amalgamation goes through, our plan is to establish eastern and western headquarters units in order to ease the transition of the new governments. By doing this it would be possible to increase local expertise in program management in both sides of the Territories.

Another point I made, that it would be easier to adjust the amalgamated department to the final Nunavut and western government structures than it would be if government has to start from the present system. Which is to say that because we will have two smaller governments, it would be easier for them to deal with smaller, more efficient government structures than at the beginning of their new terms, having to amalgamate.

The fourth point I made is about cost savings. What the Finance Minister told the Committee is true, this is not a cost cutting exercise, but savings would result from an amalgamated department. We have estimated the savings to be $3 to $5 million annually after the initial year of adjustments. It is understood that during the first year of amalgamation, there are costs from lay-offs, costs if there are office changes, et cetera. The conservative estimate of cost savings if this was to go through was $3 million annually and up to $5 million. As we have been hearing in the past few days, this money is badly needed for support of critical programs that may have to be cut.

Therefore one thing we have to ask ourselves is, what is more important to our government? Programs and services that provide direct benefit to northerners, like hospitals, teachers, social workers, et cetera, or more government administration and bureaucracy. That is something we have to weigh.

The fifth point I made was, that amalgamation supports our community empowerment initiative. Presently, communities, when they deal with infrastructure, have to deal with three separate departments, the three that we are proposing to amalgamate. With an amalgamated department, the communities would have to negotiate with only one department, and you can take it from there the further ease and expense.

The final point that I tried to stress during the two meetings that we had was that this amalgamation represents good government. I told MLAs, that it is our job as government to fix what can be fixed today. We should not simply pass the difficult parts of the job on to the next government. The question that I asked is, as I said before, what is a government there to do? I said government is there to deliver services and programs. It is there to make sure the hospitals run if you are sick, you get treated, for your kids to go to school. If you do not have an income for income support to help you get through until the next time. That is what a government does. The extra jobs and the economic spin-offs from what a government does are just that spin-offs. They are very important, mind you, for the communities that they are in. As I said many times with the decentralized, at least, is that, we have recognized that and that is something that we cannot just throw away. It is, to me, a secondary issue. I said I would keep it brief. I do not want to get into a big debate of the different points, but as I said, as the Minister responsible for this proposal, I am the one that has to go back to Cabinet with a clear recommendation for Cabinet to consider, and perhaps a little further discussion and suggestions would certainly help. Thank you.

Thank you. I would like to now open to general comments around the table. The three Members who have indicated they want to speak are Mr. Picco, Mr. Krutko, and Mr. Ootes. Mr. Picco.

Thank you, Mr. Chairman. Mr. Chairman, the amalgamation process has been on the back burner for the past several months and has come to a head over the past couple of weeks. It is very difficult for this Member to give approval for this amalgamation based on the logistics, the administrative as well as the employment aspects, which seem to me to be unclear. An example, Mr. Chairman, was the impact on the staffing levels in our communities. How many people might be losing their jobs based on amalgamation? Unless those numbers were spelled out and clear, it is very difficult to be able to give carte blanche to the government to amalgamate. I guess another point was, Mr. Chairman, from my perspective, before division I do not think it is logistically feasible to enter into an amalgamation of three departments that the new government of the western territory and Nunavut might decide should not be amalgamated. Thus, having to de-amalgamate them after they were amalgamated in less than 798 days. For those reasons, Mr. Chairman, I could not endorse the amalgamation plan. Thank you, Mr. Chairman.

Thank you. On the list, we have Mr. Krutko, Mr. Ootes, Mr. Henry, and Mr. O'Brien. Mr. Krutko.

Thank you, Mr. Krutko. Mr. Ootes.

Thank you, Mr. Ootes. I have not given Mr. Minister, Goo Arlooktoo, the benefit of responding to Members. There were no direct questions to the Minister, however, there were implications of questions. I need direction from the Committee. Do I allow the Minister to respond to each Member's general comments? The Minister is indicating he wants to speak. Mr. Minister.

Mr. Chairman, I do not necessarily need to respond to every Member but I would not mind an occasional chance to clarify some areas. I will do that in very quick order. Some of the Members asked about the impact on staffing levels in the communities. The plan as we have it -- and I have to qualify this because we were following a process where since October we talked about what this new department is going to do as it deals with infrastructure. We avoided trying to design the infrastructure first and then figuring what it is going to do because that is always something that creeps into your mind. As it turns out, learning from past mistakes and looking at other proposals that went ahead before, that is not the right way to go.

The way you do it is to figure out first, what is this department going to do and that will guide you to what it will look like, keeping in mind that you have to minimize the impact on staff. As it turns out the Housing Corporation does not have any staff in the communities. There is staff with the Housing Corporation in Yellowknife and in the regional centres and the district office and a couple of area offices. The Department of Transportation in Nunavut is mostly in the regions. The airports in each community are mostly run by the hamlets and therefore are hamlet employees. Public Works and Services has some maintainers in the communities which would continue.

The question about if we were to do this now would the two new governments have to de-amalgamate, I think the term was. I am trying to be as objective as possible on this and if you really think about it, after division you are going to have in Nunavut, a government that takes care of 27,000 people and in the west a government that takes care of 30,000 people. Very small amounts of people and if you really took those numbers and put them down south, they are no more than small towns.

Each of these departments do carry pretty high levels of bureaucracy. In fact, I believe why a lot of these concerns have been brought forward, is that our bureaucracy in the NWT is large, and has become a fairly large political force compared to the rest of the population, which is something you would not see down south. I am not saying it is a bad thing, I am just saying that is what it is. The other issue about our RWED Department savings, I do not have any information on that but I would imagine that the Minister of that department could provide that. An amalgamation is not necessarily lay-offs across the board as one of the Members suggested. There would be a smaller bureaucracy.

For example, what we suggested is, one deputy minister instead of three and you can subtract from there the fewer staff that would be required. It is true that the reductions probably would be in Yellowknife and some of the regional centres, but not in the communities. One last thing I would say is to the question about not enough time. It is probably the opinion of Members that there is not enough time, but in fact it is us and the bureaucracy saying we can do it. We can reorganize and we can make the government more efficient in this time. We can show you that it is possible. That would be my comments.

Thank you. Mr. Minister, you have indicated you wanted the occasional chance to get in there. So, would you be able to signify when you wanted to speak. I

believe you also indicated you are not willing to get into a big debate in your initial remarks. Let me know when you want to get in there. Okay? Thank you. I have Mr. Henry and Mr. O'Brien. Mr. Henry.

Thank you, Mr. Chairman. The Minister asked for some comments and reasons why the Committee were opposed to amalgamation. Just to keep my comments short, I would refer to this document which has been tabled in the House and I think it is a reasonably good summary of the reasons why the Committee could not support the initiative at this time.

One other item I would draw to the attention of the Minister. It was discussed today in the House, the Minister of Finance talked about time to division, and time is money and he suggested that time is much more valuable than money is because of the shortage of time left prior to division. I would suggest that was probably a large determining factor in the Committee's response and reason for shelving this at this time. That is not to say that there are not initiatives that the Minister proposed with a couple of departments that could not proceed. There is no reason why one of the department's, for example Public Works, could not take on the design and project management of infrastructure, whether it is tank farms, or schools. That work can still be done for a department on a cost recovery basis. The user pay initiatives are a good example of that. The different departments can amalgamate their resources and provide services accordingly.

I think if the Minister wants a response to bring to Cabinet, I think the most strong response that I could offer to him is during this discussion of amalgamation I did not hear one ordinary Member speak in favour of this initiative. I would suggest that it has been really well looked at and if the Minister does want some ammunition, if you will, to take to Cabinet. There is not support for this at this time from this side of the Legislature at least. Thank you.

Thank you, Mr. Henry. I have Mr. O'Brien and Mr. Miltenberger. Mr. O'Brien.

Thank you, Mr. Chairman. I will be brief. I do have problems with the proposed amalgamation. It has been my experience and the experience of my two communities of Arviat and Baker Lake have only seen pain from the other amalgamations that have been carried out. As I mentioned earlier today, there were five positions that were taken out of Baker Lake when the Health and Social Services were amalgamated. In RWED, we also lost some ground there and it is my feeling that we would also suffer from the proposed amalgamation of these departments. At this point in time, it is not something I can support. I think we should leave it for the new Nunavut government to deal with.

Furthermore, again I am going back to some of the other departments that were amalgamated in my area, the amalgamation seemed to be carried out on the backs of the smaller have-not communities. The benefits seemed to run downhill to the regional centres. Until there is a re-focusing of where the benefits are going to go, it is difficult for me to support this amalgamation, or any others that take away from the smaller communities. Thank you, Mr. Chairman.

Thank you. General comments. I have Mr. Miltenberger and Mr. Steen. Mr. Miltenberger.

Thank you. Before I recognize Mr. Steen, Mr. Minister do you want time here? Mr. Minster.

Mr. Chairman, the only thing I would add is, yes, indeed there has been a lot of change. To meet our deficit reduction targets, there have been reductions, there have been some lay-offs, some program cuts, et cetera. I think, on Monday, the Finance Minister will deliver the budget and we will get a much clearer picture of what is to come. I hear what the Members are saying and, like I said, I am trying to be as objective as possible and when I listen to Members talking about more money for drug and alcohol programs and the smaller amounts of money and saying those are important, but at the same time, let us not make some departments more efficient, even though it is clear we would be saving money. Although it is true it is not part of the deficit reduction program that we have in place, it does provide some opportunity for some flexibility, I would think. That is all I would add.