Thank you, Mr. Chairman. The mandate of the Department of Public Works and Services is to design, construct, acquire, operate and maintain buildings, works and equipment and implement energy efficient projects in buildings and works required for the government to deliver its programs and services, provide a system of specialist services that enhance the efficiency of government departments and make essential petroleum products available for sale to the public where these are not provided by the private sector.

The Standing Committee on Resource Management and Infrastructure reviewed the department's 1999-2002 business plan on November 24, 1998, and the department's draft 1999-2000 Main Estimates on March 21, 1999. Committee concerns during review of the department's business plan centred on the government's contract awarding process, competition with the private sector, proposed retention of the Laing Building, Year 2000 compliance and Nunavut service contracts, incorporation of full cost recovery and a cost-plus in all contracts. These issues continued to concern committee Members during their review of the department's draft Main Estimates.

The draft 1999-2000 Main Estimates showed proposed declines in most programs and activities in comparison to the 1999-2000 business plan projections with the exception of a $5,000 increase in funding for systems and communications. Capital expenditures remain essentially flat with a projected $7,000 or a 0.48 percent decrease from the business plan.

Committee Members noted during the review of the department's draft Main Estimates that a significant portion of the department's overall revenues is the result of computer charge back services to Nunavut. This $2.2 million in projected revenue represents a major portion, or 59.77 percent of the department's projected revenues of $3,681 million. Eventually, the Government of Nunavut will be able to service its own computer needs.

Awarded contracts. Committee Members expressed concern during the business plan review that some contracts were awarded to southern contractors over equally qualified northern contractors. As a result, the committee recommended that clear-cut explanations be given to unsuccessful bidders, and as with the federal government, GNWT officials should be made available to bidders for further discussion. A description of this process and related items were provided to the committee prior to the review of the Main Estimates.

However, in the business plan review exercise, Members were also concerned about the number of contracts that were awarded under the different awarding processes. The committee looked forward to receiving a summary report that details the number and amount of contracts that were awarded as the result of a tender, request for proposal, sole source, or negotiated award process in the past year. This item was addressed prior to review of Main Estimates. In an effort to bring a greater degree of clarity to the contracting issue committee Members requested a briefing on contracting methodology used by this department and other departments.

Competition with the private sector. The committee noted that the government is already competing or is proposing to compete with the private sector in areas of petroleum products, ongoing and real estate development, ongoing and anticipated to escalate. Members pointed out the Laing Building, originally scheduled for sale or demolition, will now be renovated and retained by the government for its own offices. This is likely to contribute to the oversupply of office space in Yellowknife. The committee looks forward to receiving a confidential briefing by the Minister that will answer the Members' concerns regarding the Laing Building and the Yellowknife Office Space Plan.

Conflict of interest guidelines. The committee noted during its review of the department's business plan that many employees are not covered under the current conflict of interest guideline. The current guideline only applies to high-level employees. The committee requested further information about conflict of interest guidelines for all employees. This concern arose from the Inuvik arena project where a non-management PWS employee resigned from the arena project management committee, comprised of municipal, MACA and PWS personnel, to take a managerial position with the consulting firm for the project. The department has addressed the Inuvik arena project issue and suggested that general conflict of interest concerns may be more appropriately redirected to the Financial Management Board Secretariat.

Year 2000 compliance. The committee expressed its concern that year 2000 compliance may entail unforeseen consequences despite the ongoing efforts by the government to minimize its effects. Further, committee Members noted that technical personnel should be available during the changeover period to rectify any unanticipated events. The department replied that there would be staff on standby during the changeover period.

Nunavut service contracts. Committee Members were concerned whether full cost recovery plus the standard service fee of 6.5 percent has been and will continue to be incorporated into each Nunavut contract. Further, the committee was concerned about the lengths of the contracts and potential layoffs due to the completion of Nunavut contracts. The department has advised that cost recovery plus a standard service fee of 6.5 percent is incorporated into each Nunavut contract, and the contracts range from six months to two years. As well, there will be no layoffs due to the completion of Nunavut contracts and any staff reductions will be the result of natural attrition. That concludes the committee's report. Thank you.

Agreed.

Thank you, Mr. Chairman. The Department of Public Works and Services used to do all the maintenance in the communities, all of the government buildings, they had a program in place. They had people working for the department in pretty well every community through community empowerment. Some communities have taken over that function. Has there been any review on whether or not the same level of services are available to those buildings? For example, you had a maintenance schedule, you had a formula set up on, let us just use a school, for example. There was a formula set up if you had hardwood flooring in the school, that, that hardwood flooring would be refinished every so many years, let us say five years or whatever it was, and then it would still be a safe flooring for the kids of the school to use. My understanding is, some of the things I am hearing from my communities is that just prior to the transfer, those maintenance budgets were cut a year ahead of time so that they cannot maintain the buildings properly. Has the Minister looked into that? Can the Minister shed any light on that issue?

Thank you, Mr. Chairman. Virtually every community is different. In some of the communities, we have very little involvement now. The contracts are working quite well. Other communities, we continue to have a significant amount of involvement as much in providing support and coaching as well as in planning some of the work. It varies from community to community. We have not done an overall review of the successes or the failures associated with community empowerment. I think we consider ourselves still to be in the very early years of it and all of the communities were anticipating that we were going to maintain some level of involvement for a period of time yet.

In terms of the budgets, as you know, we have had to deal with budget cuts virtually every year since the early 90's, since 1991, so I am not surprised that communities are concerned about the level of funding they have in order to carry out the work. The department is also concerned about the level of funding it has to carry out the work in the remaining communities. This has been an issue for us, but we have, in all cases, turned over the amount of funding that we have available to carry out the work in the community to the community when we have asked them to do work. We have not withheld funding.

Thank you, Mr. Chairman. Through community empowerment, when the communities take over the work that needs to be done at the community level they normally hire people in the community to do the actual work or they take it on as a municipality or whatever, band council or whoever, and normally before those maintenance people were reporting to a regional person that had qualifications to actually supervise and actually ensure that, that work was being done as well. Now they are reporting to the community councils that are people that run for council. They may or may not have that qualification to oversee that work, so are there any checks and balances or can they draw on DPW to supply that service of checks and balances for their communities?

Mr. Chairman, yes, as I mentioned earlier, we do still have a level of technical expertise that we are prepared to share with the communities. In some cases, we draw that from those individuals working in other communities, but we do have some capacity to provide some technical support and guidance in planning and carrying out that work. We always anticipated that we would continue to provide that function, at least for a period of time, while communities became more skilled in the delivery of their own programs. In terms of the long term, again every community is different, so it is hard to generalize on empowerment issues. Each community has its own stage of development and its own strengths and weaknesses. We fill in and try and support to the limit of our resources, as required.

Thank you, Mr. Chairman. I know ultimately that Resources, Wildlife and Economic Development are ultimately responsible for the Business Incentive Policy. Does this department still ensure that the Business Incentive Policy is being followed and does it fully support that policy?

I do not have much to add. It is the policy of the government and the Business Incentive Policy is a policy of the government. Our department is one of the principle contracting departments and yes, we do our best to comply with the policy. In doing that, we have ongoing training and support for our own people in ensuring that they understand how the policy is applied and to ensure that they, in fact, are applying it.

Thank you. There are many different types of communities in the western Arctic. There are those that are on the road and those that are off the road. There are also those that have winter roads and some of the communities are fairly isolated with barge service once a year. For example, the community I represent, Lutselk'e, gets a barge once a year through NTCL. The level of the maintenance person in there, the mechanic does an excellent job on the equipment to keep it up and running, but it is a very isolated community. Is their equipment replaced at a faster rate than, for example, an on-road or a community that does have winter road services, as well as barge service because when something breaks it is very expensive to fix? Is there a formula that you use or how do you say, okay that equipment in Lutselk'e should be replaced in many less hours than, for example, in Fort Resolution or a community on the road?

Mr. Chairman, we essentially apply the same standards to all the communities with respect to equipment. While there are guidelines to tell us approximately when it would require replacement, ultimately the decision is based on the condition of that particular piece and an evaluation of that particular piece of equipment. The guidelines we use tell us approximately how many hours of use on a piece of equipment gives us a guideline in terms of the amount we are prepared to spend on repairs for a piece of equipment of a certain age, but it is a general policy across all of the communities. Certainly on a small community in an isolated location that does not have backup equipment, we would be judging that particular case somewhat differently than a community that had easy access and where it was relatively easy to get in and get a mechanic and get parts in to do repairs.

In general, the standard or the guideline that we follow is, it really is a guideline, it is to help us forecast when equipment is likely to require repair. I know from my previous experience with Transportation that, in fact, we have done trades on equipment from community to community. If it looks like a piece of equipment still had useful life in it, but it was likely to require a higher level of repair, then we would move it some place where we had better support. It does not happen often because of the difficulties of moving large pieces of equipment around the territories, but certainly we have made some arrangements in the past where it seemed to make sense in that particular instance.

Mr. Chairman, we are carrying a few more positions than we originally forecasted in our division plan. I would say the number is probably ten to 12 right now. We started out as a headquarters department with probably 20 some odd positions more than what we intended to go on with post-division. Some of these now, the numbers have been reduced largely because of moving individuals into new positions or some people have left the government and moved on into other positions themselves. We are down to about probably ten or 12 positions in the department as a whole. These positions are not a problem to us at the present time because, for the most part, we are still providing a significant number of services to Nunavut and are recovering the cost for carrying those positions from those service agreements. We are anticipating that, certainly for the next year, carrying the additional positions is not a problem for us.

Mr. Chairman, again our strategy in terms of dealing with these positions is, wherever possible, to allow individuals a good opportunity to transfer into vacant positions that will be required on an ongoing basis. We still have some expectation that some additional positions we will be able to accommodate within the future organization. In addition, we do anticipate that over the next couple of years some additional individuals will leave the department for one reason or another, either to take up positions in other departments or to move elsewhere. That is kind of a natural development in the organization. My guess is, at the end of the day if we have some positions to deal with there may be one or two, but it is not going to be a significant issue for us.

Mr. Chairman, when we get into the detail of the budget a little bit later, there is a line item dealing with charge backs from Nunavut. Our best guess is that is a little underestimated for the coming year. In our discussions with the Nunavut Department of Public Works, Telecommunications and Technical Services, I think they underestimated the difficulties they were going to have in terms of trying to provide a full range of services, so my guess is that the figures we are quoted in the budget detail will be somewhat low and that we will actually recover some additional revenues in addition to that.

Mr. Chairman, that would be on page 31 of the department's budget, 5-31. Excuse me that is an error. I am corrected, it is page 5-30.

Mr. Chairman, I am afraid the plan is turning out to be a little bit more of an exercise than we had anticipated and that is largely because of the situation with respect to the departments and staff in Yellowknife being quite dynamic. We are having increasing difficulty in trying to forecast what the different departments' requirements are going to be over the next number of years. Part of that is due to departments simply coming to terms with the post-division structures and trying to figure out what the implications of division have been on their headquarters organizations. Part of it relates to the need to continue to provide services, for Nunavut, the continued need to have staff to provide some of those services and the number of departments that are continuing to negotiate arrangements with the federal government for joint delivery of services, for example, or other program changes or adjustments. What we found is that it has been very difficult to pick a point in time when we can say this is what the picture looks like and this is how we are going to do it. We kind of refocused a little bit and downsized our expectations of a planning document here and we are really starting to deal with requests on a case by case basis. We have some reasonably firm information on a few departments that we

need to deal with in the short term and we will be proceeding with those, but in terms of a longer term plan, we need some additional stability in the organizational structure of the government before we can actually really develop any kind of plans comparable to the plans that have been done in the past. Again the Minister has indicated that we would be prepared to provide a more detailed briefing. It is hard to provide that in a short answer and we would still be pleased to do that, but as I say, it has become an increasingly difficult target at the present time to try and achieve.

I cannot speak to the specifics of Aklavik, but in general, there has always been a concern with respect to transfers to individual communities about their ability to provide the kind of full range of services. That is largely because we, as a department, were able to spread the costs of positions over a large number of communities and were work planning as a component of it, we would have an individual who plans work for ten or 12 different communities. Providing that same level of expertise for every individual community is simply, there are not enough resources to be able to do that, so the solutions really have to be community specific solutions. In some cases, there are existing hamlet foremen that are already providing a significant number of services and the addition of the assets previously maintained by Public Works was not a significant change in what they were already doing. Those have worked out, obviously, well. In situations where there was not previously much in the way of previous involvement in significant maintenance work, there was not an established planning capacity within the community, then that has to be looked at the time the transfer agreements are negotiated and we have to be a little bit innovative in terms of how we deal with it.

In some cases, the communities may simply be too small to be able to effectively carry out the range of functions that are required to be carried out, but each community is a little bit different and, again, I do not know the specifics of the negotiations that took place in Aklavik and what the issues there were, but certainly trying to provide sufficient resources for all communities to be doing the types of work that we have been doing has been a real challenge.

As the Minister says, there are a number of different approaches that we can take. Certainly, on an annual basis in virtually all of the regions we will tender for as and when trade services, for example, to carry out maintenance activities. Now, they are usually tendered out based on the regional centre

and, for example, in the Inuvik region, there will be a number of contractors that will bid on, whether it is plumbing or electrical services, they will bid for the work.

If we know there is a contractor in a small community that is already located in the community and is in a better position to deal both quickly and less expensively with a particular issue, then we will typically use that individual and, as the Minister says, that is typically considered if it is a small dollar value of work or on a case by case basis we can justify that as a sole source contract because they are there and ready to do the work and, if they are the only contractor in that community, then we can deal with them as a sole source and that is typically what we do. If for some reason they are unable to respond, then we have the fall-back of an established contract that may be of more regional interest or regional scope. On other jobs, if a particular item of work is sufficiently large we may decide to separate it out and do a tender on it. So there are a number of different approaches that can be taken if we know there are qualified contractors available.

Yes, Madam Chairperson. In regard to Fort McPherson we have a contract with the local co-op, not with Arctic Co-op Limited. That particular contract is for ten years. It runs until August of 2001. It was awarded, obviously, years ago so it has a bit of tenure left on it. In the community of Fort McPherson we provide only diesel services, no gasoline services are provided through the GNWT. There is a private distributor in the community. We do not compete with anyone in terms of gasoline sales. Further to that, I believe there is some consideration being given by the different groups within Fort McPherson to looking at an opportunity to amalgamate and to bring forward a proposal to perhaps provide the service independently of government and we have started some discussions with them on that matter.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Agreed.

Thank you, Madam Chairperson. In terms of the number of affirmative action candidates that we have in the department, we have approximately 59 who would be considered P1 so that is approximately 30 percent. We have four candidates that are women in non-traditional positions, that is about 2 percent, and then indigenous non-aboriginal, we have 29, that is about 15 percent for a total overall of about 46 percent who qualify as affirmative action category.