Thank you, Mr. Chairman. I would like to also indicate my support for P3. Mr. Ootes summarized the various briefing materials we have received and I just wanted to comment more as well to indicate that Mr. Miltenberger had indicated that this is not free money and we still have to be careful. We need appropriate checks and balances in place to ensure that we are not mortgaging the farm, the future. We have to ensure there is transparency as the Minister of Finance has indicated and all the Members are adamant about. All of the projects should have economic viability. There has to be the essence of a shared risk. The GNWT should not be the only partner that is taking a risk. The environment also has to be looked after. If there has to be assessments done, then those should be done but we have to ensure that we are protecting the environment. Another area Mr. Ootes mentioned is the cost of preparing proposals. That has to be carefully looked at. There are, of course, success factors, such as having all key stakeholders present throughout the process so everybody is informed and can contribute. The risks should be identified up front and dealt with up front as much as possible so that the risks involved later on are kept to a minimum. Obviously projects should not take place unless the expected benefits exceed the expected costs and we have to ensure there are more benefits than costs for both the public partners as well as the private partner, which is the same as the risks. Mr. Chairman, the GNWT and the public at large have to benefit more than the cost as well, not just the private partner. Mr. Chairman, as I said, I indicated my support for this and optimism, of course, with the appropriate checks and balances in place. Thank you.

Thank you, Mr. Erasmus. General Comments dealing with Public/Private Partnerships, Tabled Document 19-13(5). Mr. Krutko.

Thank you, Mr. Krutko. General comments. Any further general comments from the Members? Mr. Ootes.

Thank you. I will now allow Minister Todd to endeavour to answer the questions. He may have been keeping notes or just reply in general. Mr. Todd.

I am prepared generally, and as quickly as I can, so we can get on to other business of the House, Mr. Chairman. First of all, I want to applaud all Members for their comments. In particular, I want to applaud Mr. Ootes for a well-laid out presentation. He has obviously done a considerable amount of work and he deserves a lot of credit.

Perhaps when we brought forward these P3 there was a great deal of excitement about it because people are looking for new opportunities and new job creation and private sector, et cetera. I would hope what I can do in my brief comments I am going to make today, is kind of reducing peoples' expectation. There is a limit to what we can do with these P3. With all due respect, when you refer to projects of a billion dollars, et cetera, that is what we are talking about here. We are talking about very, very small numbers. It is very important we say today the expectation, I have anyway, is not anywhere near any of these kinds of numbers.

Mr. Picco had indicated he was concerned we would be going beyond the capital. I want to make it clear today, the P3 as I see it, is for capital only. I think that answers some of the concerns he had. It is important projects are analyzed. Once the projects are defined, they are to be analyzed on an individual basis. We have to determine what the appropriate savings are and what the net benefit is to the government. We are prepared to do that. I am as equally concerned as everybody else in this House about the long-term costs. In fact, new governments will have to pay this. Therefore, it is critical we do have an arrangement with the Interim Commissioner in the east and an acceptance in the west of the fiscal obligations in any of these projects. I am fairly confident we can get that.

Some of the key areas of concern expressed in Mr. Ootes' presentation were the contracting policies with respect to RFPs. As I have said to him on numerous occasions in this House and I do not think I have to say it again, we are working with the NWT Construction Association. My staff spoke to Mr. Aho this morning with respect to contracting policies, in particular RFPs. We can answer the concerns about transparency with industry and the public at large.

I have had four meetings with the Construction Association. We are continuing to do that. The discussion about maybe some kind of panel or advisory board, I am not discounting that, but I have not made a decision on whether we should do that or not. If we do it, I would see it as an external board made up of possibly private sector and labour, et cetera. It is certainly under consideration. When you look at that, one of the other comments that was introduced was the need for an independent review of the process when the problems arise. We certainly have with the hiring of Mr. Coles been able to draw upon the problems associated within other constituencies. There is a great deal of learning to be gained there, which is probably another important recommendation being made. I am certainly prepared to take a hard look at that. In fact, Mr. Coles is currently reviewing some of the problems that took place, for example, in New Brunswick for the schools, et cetera.

Mr. Picco had made some reference to the public sector. I am fundamentally of the belief that the private sector on a number of occasions, not in all instances, but on a number of occasions, can do it more cost effectively than government. In fact, it can access tax concessions. It can write off its interest payments where governments cannot. You have to believe when you move on the P3 that the premise of the private sector can do it on a more cost effective basis is one of the reasons, not the only reason, for moving in that direction. At the end of the day, the overall cost to government will be less. However, I think it is important, again, as several Members said, projects have to be analyzed on an individual basis.

I do not think there will be any clear way. This is one way to do it versus another way to do it. It requires some flexibility. I hope we can do that. I do not want to go on and on, but for me, three or four key issues are: long-term fiscal obligations and affordability. We have got to, if I may, deal with each individual project as it comes forward and determine what the cost benefit is. This has to be done and has to be transparent. There is a need for transparency, so that people see the projects that have been approved. I have already said, in this House, to previous questions, that we will advertise the projects and we will discuss with industry and others what the projects are.

The need for checks and balances, as I have said earlier, I am prepared to look at and I will not commit today, but I am prepared to look at some kind of panel, some advisory board that can provide external advice or overseeing of the policy. I think that is a valid suggestion and, certainly, we are looking at the need for clear contracting policies. As I have said, we have been working on that for months. We are certainly working very diligently on the RFPs because that is one area that consistently comes up here. I do not see any other way of doing the P3 but through an RFP. If the Members have some other suggestions, I would be prepared to listen, but I do not see how you can do it any other way. What are you looking for? You are looking for private sector initiative. You are looking for private sector ideas. You are looking for private sector funding. You are looking for private sector creativity, et cetera. It is going to have to be done through some RFP and, clearly, there is going to be a need to be much more transparent than we have in the past. I am politically committing to that today.

The last issue or the main issue, for me, is the affordability issue and the fact we will be committing future governments to long-term fiscal obligations. Let us say, clearly, in this House, we are ready to do that. We do that through our lease arrangements. We do that through our capital expenditures, et cetera. It is incumbent upon us to make sure the parties who are going to be involved in the division of the territories, Interim Commissioner and the new western government, are intimately involved in the fact there will be new long-term fiscal obligations. Whether it is in the construction of the Nunavut hospital in Iqaluit or, for example, the one in Inuvik, these are the obvious ones.

In closing I would say we are still learning about the P3. It is expected by the constituency out there that they want us to move in a fairly expeditious way, so we can get some things on the ground, put people to work and get the infrastructure that is needed in the communities. I am fairly confident we can do that. I am going to commit today, after discussions with my cabinet colleagues that, obviously, the House has to be involved through the committees. We would share that all with everybody and seek their direction and advice on the projects. I want to say again. This is not a panacea for everybody's favourite project. This is not a panacea for multimillion dollars' worth of expenditures. This is just another way of adding to and enhancing our current spending in capital infrastructures. I hope in my brief response I have been able to answer some of the problems or some of the issues raised. They are valid. I have Mr. Ootes' well laid-out presentation today, and I think it is probably reflective of how we all feel, including myself. The only note of caution I would say is we have some obligation and responsibility to move relatively quickly. I may differ there, in that, we want to get some things moving in 1998-1999.

In conclusion, Mr. Chairman, I do appreciate the comments made by the Members. We will take them into full consideration. All Members will be involved. Let me repeat. All Members will be involved in the final outcome of the projects. They will be done based on the criteria set on merit and no political interference. There is certainly going to be political direction. This is why we are here. I see these projects coming forward based on need, et cetera, based on the criteria we set.

I think Mr. Picco said, which I think is an appropriate one, he probably plagiarized it from the report, but he did say, if my memory serves me correctly, that the P3 would require a shift in organizational thinking. I think that was it. I think this was from page one of the report. I am not sure. I agree with him. Clearly, there is a need for a new way of corporate thinking. The reason I bring that up is because I want to remind everybody that today, Mr. Coles is in town dealing with our senior managers, explaining what P3 are about, getting them committed to the projects, getting them to understand it means a shift in thinking, et cetera, so we are, in fact, trying to do that at the senior management level. In conclusion, gentleman, I hope I have been able to answer some of the questions and if there are any others, I would only be too happy to do it today or we can deal with it later next week. Thank you.

Thank you, Mr. Todd. About ten minutes ago, I asked the Members if there were any more general comments. I called out two or three times. There were none. Perhaps, now you want to get into question and answer period or shall we conclude? Mr. Picco, you are on the list.

Thank you, Mr. Chairman. I would like to get into some specific questions on the P3. This is a good opportunity because in reality we have not had an opportunity to debate the P3 at all. Just simple questions in question period. I would like to have this opportunity to ask some specific questions to the Minister. The Minister talked about ground rules, guidelines and some of the areas that we have had presented to us. I do not know and I cannot remember if they have been tabled in this House so that the public at large could see them. That would be one of my concerns. If it has been tabled, that is fine, but I do have some specific questions and I will begin right now, Mr. Chairman. My first question would concern the projects themselves. When will they actually be identified and when will those projects then be made known to the House and to the public at large? Would these projects be taken out of the capital plan? For example, if an arena is to be built in hard luck bay, would that project then come out of the capital plan and the monies allocated for it, so that it could go under the Public/Private Partnerships? Is that the plan Mr. Todd has been looking at? That is the question and how the projects will be identified. I will let Mr. Todd answer those two questions and I have a couple more. Thank you, Mr. Chairman.

Thank you, Mr. Picco. Hard luck bay meaning Pelly Bay. Mr. Todd.

Yes, Mr. Chairman, I thought it was Iqaluit. First of all, Mr. Chairman, we did table the guidelines for implementing Public/Private Partnerships on January 26th, sometime two or three weeks ago. Right now the deputy ministers are reviewing the existing capital plan and Mr. Picco is correct in taking a look at the potential projects that, while approved, may be able to be transferred to P3. When these projects will be identified and brought forward to FMB and then forwarded to the Standing Committee on Government Operations or all Members, I am optimistic that we can have that done later this week, meaning at the end of this week or the early part of next week, with the Standing Committee on Government Operations, in which we would invite all Members of the House. Thank you.

Thank you. Mr. Picco.

Thank you, Mr. Chairman. Mr. Chairman, if the

projects are approved within the capital plan, I will use the hard luck bay example. If the arena in hard luck bay is approved in the five-year capital plan - or in the budget of this government - for example, a line item under MACA is the arena for hard luck bay which has been approved for $2.1 million - would the Minister then take that program out of the budget or out of the approval process that has already been in place because MACA has been finished and that arena has been approved for hard luck bay. Would that project then move forward under Public/Private Partnerships? If it does, then that means, of course, that the Government of the Northwest Territories does not put the $2.5 million up front. What happens to that $2.5 million, does that go back into the budget then and is that money used for another project? What would happen? That is the concern I have. Thank you, Mr. Chairman.

Thank you, Mr. Picco. Mr. Todd.

I think that is a legitimate concern and certainly, as I said, we are reviewing right now the existing capital budgets to see if there is a potential for P3 that could free up some money to do the other initiatives that we were going to do, for example, in the housing or perhaps some other issues out there that become priority in this government. I want to assure Members that once the projects come forward, that there will be full disclosure and full involvement and, hopefully, we will be able to address all the issues that Mr. Picco and others have raised. Thank you.

Thank you. Mr. Picco.

Thank you, Mr. Chairman. Mr. Chairman, the Minister has agreed and confirmed that, indeed, the projects identified would be specific projects and if they have been approved in this budget as a $2 million line item for an arena in hard luck bay, as an example, that money then would go back into the budget to be rebased for education or any other priority that this government would identify for those capital monies. Is that correct? Thank you, Mr. Chairman.

Thank you, Mr. Picco. Mr. Todd.

Yes, that is correct, Mr. Chairman. That is how we would have to look at it. We certainly need to find the money. I would like to avoid borrowing as little money as we can and we have to find the money; for example, for the housing project which is roughly $20 to $40 million. There may be a way and means to reevaluate some of the existing capital projects. All committees, all Members would be intimately involved in a final decision being made through, as it normally is, discussions with the committees.

Thank you. Mr. Picco.

Thank you, Mr. Chairman. Following along the same line on the projects themselves, should the projects be limited per riding or constituency? For example, maybe the need in hard luck bay is great and there needs to be identified three, four, five or seven P3 projects in that constituency of hard luck bay. Would the Minister, or the government itself, be limiting P3 per riding? For example, would some ridings have four or five going on, some might not have any. There are 24 constituencies in the Northwest Territories and not all of them need a P3 project. Would it be fair to say then, that in some ridings or some constituencies, depending on need and the transparent process that the Minister talks about, that indeed, there could be more than one, two, three or four projects in a constituency like hard luck bay? Thank you, Mr. Chairman.

Thank you. Mr. Todd.

I want to say in all seriousness that anybody who thinks this is a constituency by constituency issue is dead wrong. This has got nothing to do with constituencies, per say. It has got everything to do with trying to bring about the purchasing power for the infrastructure needs of the communities, based on certain priorities. This is not a political issue. It is a policy one, a change in the way in which we build our infrastructure. The P3 projects would be done on its individual merits and the project has to be feasible. They have to bring some return at some point to the government, this one and the future one. There may well be where one constituency may get, I do not know, one or two projects and some do not. I do not think it is a question of saying the politically correct thing is to do one in each riding. That is not the way you run government. It may well be, Mr. Chairman, that there could be one or two projects in a riding versus none in the other. However, we are not at that stage right now and we will be in the next two or three days. I think it will become clear to everybody when we present it to the committees exactly what I am saying. It is nothing I am trying to avoid discussing, but I think it is a little premature because it is still being worked out at the bureaucratic level. The projects have to bring some return to the government, both short and long term. Thank you.

Thank you. Term to remember is transparency. Mr. Picco.