Thank you, Mr. Chairman. Mr. Chairman, the Department of Public Works and Services is continuing to forsake its past of being a provider of services and evolving towards being an administrator of services. Through various user say/user pay initiatives, the department expects to transfer almost two thirds of its current $88 million budget to other departments. Some of the services presently provided by PWS will be privatized. Most, however, will continue to be provided within the government but on a chargeback basis.

On user say/user pay, the whole user say/user pay concept has generally met with approval from the Committee, requiring those who use a service to pay for the service and often, to dictate how that service will be provided, will undoubtedly provide greater efficiencies and cost-savings to the government operations. However, Committee members still have some concerns in this area. While devolving authority and responsibility to the clients of services has many advantages, some members have expressed concern that inefficiencies may result from loss of economies of scale, from decentralization and from other details of the implementation of these initiatives.

As the Committee has said before, these initiatives should not be used merely as an excuse to download programs onto others. The goal should always be more efficient provision of services with the limited resources available. Off-loading must never be a substitute for more efficient, internal initiatives if they exist. The government must do more to ensure that these initiatives will not be more expensive than retaining the provision of services and working to provide those services more efficiently. As well, the government must be careful not to over-estimate the savings from these initiatives. Committee members understand that money transferred from PWS's budget to departments' budgets to pay for these services, will be reduced due to anticipated savings. However, the reductions must not be too high. If only 60 percent, for example, of the funds for a service are transferred to a department, and the department is not able to realize a 40 percent savings in that area, the remaining funds would have to come from other departmental programs. This would not be acceptable, Mr. Chairman. Public Works and Services should work closely with other departments to ensure that this does not happen.

On the petroleum products privatization, the committee expressed concern about the proposed privatization of petroleum products storage and sales. Members are concerned that fuel prices could rise upon privatization and would like more detail on how the GNWT plans to regulate this area. In addition, Members are concerned that once privatized, northern communities could receive fuel of inferior quality and this could lead to a host of new problems. Based on these concerns and the lack of information received from the government, the committee made the following recommendations. Recommendation 1: the Standing Committee on Infrastructure recommends that the privatization of petroleum products storage and sales not proceed until Committee Members have had an opportunity to review at a minimum the cost benefit analysis of the proposed privatization, detailed description of the anticipated end result of this move and responses to committee concerns regarding fuel quality and price. It was further recommended that GNWT take no further steps towards privatization, including a decision on the request for proposal, until such time as the above information is made available to Members and Committee so that the concerns are addressed.

Mr. Chairman, the Committee noted the government maintains ownership of the Northwest Territories Power Corporation because affordable, reliable power is a necessity here in the north. Members feel that affordable, reliable supplies of fuel are as much a necessity. As a result, some Members discussed the possible advantages of NWTPC taking over the delivery and sales of fuel. This move could result in the best of both worlds, privatizing to take advantage of a more efficient private sector, and retaining ultimate public control over the provision this essential service. Since NWTPC is at present the largest consumer of fuel in the north and since NWTPC often has its own storage tanks located within PBTs tank farms there would be many efficiencies to this possibility.

The Standing Committee did note that NWTPC was one of 33 firms expressing interest in taking over some or all of petroleum products storage sales responsibilities. The government's response was that once requests for proposals were issued, any proposal from NWTPC would be evaluated using the same criteria as all other proposals.

Some additional information: In addition to the above, Members would like the Minister responsible for Public Works and Services to provide written briefing material on the following, an explanation of grants in kind given by the department generally and specifically related to the office complex in Fort Resolution, and a summary explaining the use of the project officers by the Department of Transportation, along with a brief explanation of the relationship as it relates to the Rankin Inlet air terminal project. Some of this information, Mr. Chairman, has been forthcoming from the Minister. With that, Mr. Chairman, is the Infrastructure Committee Report on the Department of Public Works and Services. Thank you, Mr. Chairman.