Thank you, Mr. Chairman. I would recommend the committee consider Bill 2. I would further move that committee agrees we extend sitting hours to conclude consideration of that item.

There is a motion on the floor to deal with item 2 and also extend committee of the whole until this item has been concurred with. All those in favour? All those opposed? The motion is carried. We are dealing with Bill 2, Supplementary Appropriation Act, No. 3, 1999-2000. Members, you will find the bill in your binders. We will go to the Minister of Finance first for his opening comments on the bill. This will be followed by general comments on the bill by Members. Once general comments have been concluded, the committee will determine if they agree to go into detail of the bill. The Minister will be asked if he wishes to bring in witnesses, with the concurrence of the committee.

The process for the detailed review of the supplementary estimates include a detailed, page by page, review of the document, which is behind the bill in your binders. Once the committee has concluded the detailed review, the committee will go to the bill for a clause-by-clause approval process. After the conclusion of the clause-by-clause consideration, the bill will be reported.

We will begin by asking the Minister responsible for Finance if he would like to make opening comments on this matter.

Thank you, Mr. Chairman. Supplementary Appropriation No. 3 requests authority for additional appropriations of $9,026,187, made up of $4,111,154 for operations and maintenance expenditures and $4,915,033 for capital expenditures. Approximately $5 million of the new supplementary funding requirements will be offset by new revenues, recoveries or other means. As a result, the net funding requirement is $4 million. These requirements are within the estimated supplementary reserve established in the budget and will not change this year's forecasted deficit of $34 million.

The operations and maintenance supplementary appropriation requirements include the following major items:

1. $1.3 million for the Department of Health and Social Services to meet the salary obligations arising from finalization of the new Hay Plan job evaluation ratings for nurses and social workers.
2. $1.1 million for the Department of Finance to address the increase in anticipated interest costs of short term borrowing to meet government financial commitments.

The capital supplementary appropriation requirements include the following major item:

1. $3.6 million for the Northwest Territories Housing Corporation to address capital requirements associated with:

• • the three-month extension of the Minimum Downpayment Assistance Pilot Project;
• • independent housing and repair programs in Fort Liard;
• • construction of two independent housing units in Tulita; and
• • the private home owner pilings repair initiative in Inuvik.

This requirement is fully offset by a recovery from the Northwest Territories Housing Corporation's 1998-1999 operations and maintenance surplus.

Mr. Chairman, I am prepared to review the details of the supplementary appropriation document. Thank you.

Thank you, Mr. Minister. General comments to Bill 2. Mr. Roland.

Thank you, Mr. Chairman. I have a concern with the use of special warrants, especially knowing that special warrants could be used in the area of urgent requirement, emergency or is considered in the best interest to the public. That last part can be defined in a fairly broad sense. Knowing that this is a carry over from a previous 13th Assembly, I think it is just a matter of passing on the information and concern to the Finance Minister.

Hopefully, as we go through our own budget cycle and the interim appropriation process comes upon us, this will be considered in future supplementary appropriations. Although the method of carrying these forward is of concern, I think they have been developed in the last number of months, so I do not intend to go into great detail with the Finance Minister in this area. I just want to raise a concern of the actual use of special warrants versus not previously authorized in those areas. Hopefully the Minister will be able to have some remarks on that as we go through this supplementary appropriation. Thank you.

Thank you, Mr. Roland. Mr. Handley, do you wish to reply to that?

Mr. Chairman, no, except to agree with the Member that this is a carry over from the last government. I certainly intend to be very diligent in ensuring we abide by the intent and the wording of what special warrants should be used for. Thank you.

Thank you, Mr. Minister. General comments? If there are no more general comments, I would like to ask if the Minister wishes to bring in witnesses.

Yes, Mr. Chairman, I would like to bring in witnesses.

Mr. Chairman, on my right is Lew Voytilla, Secretary to the Financial Management Board Secretariat.

I would like to draw the Members' attention to page 5. We will be dealing with detail. We are on page 5, dealing with detail Executive, operations and maintenance, special warrants, not previously authorized, Executive Offices, Minister's Office, $73,000. Mr. Roland.

Thank you, Mr. Chairman. Will the Minister inform us as to the requirement for a special warrant in this situation? Thank you.

Thank you, Mr. Roland. Mr. Minister.

Mr. Chairman, the requirement in this case was one where the party involved had paid out the money and required to be reimbursed. I guess that fits within the definition of public interest.

Thank you, Mr. Minister. Mr. Roland.

Thank you, Mr. Chairman. Who owns the building the Native Women's Association is occupying? Thank you.

Mr. Minister.

Mr. Chairman, it is owned by the Government of the Northwest Territories.

General comments? Detail: Executive, operations and maintenance, special warrants, not previously authorized, Executive offices, Minister's office, $73,000.

Cabinet Secretariat, special warrant, $189,250. Mr. Roland.

Thank you, Mr. Chairman. The special warrant used in this situation was for the legal costs to do with the electoral boundaries. It was an ongoing process, so could the Minister inform me as to why, in this particular case, it comes under special warrant? Thank you.

The Minister of Finance, Mr. Handley.

Mr. Chairman, this particular warrant was not really an ongoing process. It is a situation in which there was an appeal of a court decision.

General comments. Mr. Roland.

Thank you, Mr. Chairman. Can the Minister explain further? I guess in my mind it took up a fair bit of time in the previous Assembly, so it was not a new issue, like a forest fire all of a sudden raging out of control. Thank you.

The Minister responsible for Finance, Mr. Handley.

Yes, Mr. Chairman, it was very difficult to predict whether or not there was going to be an appeal. Also, there was a fair bit of debate on the responsibility of the GNWT in supporting this issue. It was controversial at the time.

General comments. We are on page 5, Cabinet Secretariat, special warrant, $189,250.

We are on page 6, Executive, operations and maintenance, labor relations and corporate services, special warrant, $457,000.

Thank you. Budget evaluation, not previously authorized, $150,000. Mr. Roland.

Thank you, Mr. Chairman. In this particular situation, we are changing to a new accounting system. I guess as a government we are being forced to change over by the public sector accounting board. But we have known for a couple of years that this was a direction governments were going in. Why would this not have been put into the planning process? Thank you.

Thank you, Mr. Roland. Mr. Handley.

Mr. Chairman, this issue is one that we did not become aware of until after the main estimates were done for the current fiscal year. Following that, even after we knew we were going to be moving in this direction, we still needed time to figure out what it was we were going to do and how we were going to do it. This was too late for the main estimates for 1999-2000.

In budgeting and evaluation, $150,000, not previously authorized. Mr. Roland.

Thank you, Mr. Chairman. Although it was too late to make it for this budget cycle, has the staff not been aware of this for almost two years? Thank you.

Mr. Minister.

Yes, Mr. Chairman, I think the staff were aware two years ago or so, but it was not clear as to how it was going to be handled, or what the recommendations were going to be. That decision only came about in the last year.

Thank you, Mr. Minister. Mr. Braden.

Thank you, Mr. Chairman. I am wondering if the Minister could advise whether this $150,000 would be an ongoing human resources cost to administer a new system, or is this a one-time expenditure to basically set something up? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Minister of Finance.

Mr. Chairman, this $150,000 is a one-time expenditure. Having said that, there are going to be ongoing costs as we get the new accounting system put in place for tangible capital assets. Any future requirements will be built into the business planning process.

Thank you, Mr. Minister. Mr. Miltenberger.

Thank you, Mr. Chairman. I would just like the Minister to clarify the comment of the ongoing costs, especially as it pertains to the development and adding on of positions. With PeopleSoft, we end up with an additional 12 staff built into a service system that was just replacing an old one. For some reason, we now have all these extra staff because the system does not seem to be doing what it was supposed to.

We have this particular one with tangible assets, as well as the one with the pension plans, all of which have significant, ongoing human resource costs. Can the Minister indicate to us how they are going to link those together, so they do not keep dealing with these in a piecemeal fashion, but it is part of the broader business planning process? Thank you.

Mr. Minister.

Mr. Chairman, I do not think this one should result in a lot of staff increase, in fact, of any staff increase. There is no intention to set up a division or a section that is going to deal with tangible capital assets. The costs we will incur come about as we implement the system and we need to do an accounting of all our assets and figure out what the amortization period will be for them and how the system will be structured.

Once it is in place, it will be run out of the departments. From my knowledge of the system, which I admit is probably limited, it appears to be a system that is going to save us money many times over by doing proper replacement and maintenance of the assets we have. But there is no intention to create a whole division to manage this new accounting process. Thank you.

The Member for Thebacha, Mr. Miltenberger.

Thank you, Mr. Chairman. The Minister is aware, as am I, that the road to hell is paved with good intentions. We have heard of the optimistic goal before. The reality is we have found that things that were supposed to save us money and be done with existing resources are not doing that.

I refer once again to the PeopleSoft system, which I have been watching. This strikes me as having the same kind of potential as the pension plan move to be repatriated to the Northwest Territories. I will just note for the record that I hope the Minister's best intentions come true. I will be watching closely to see that is done with existing resources. Thank you.

Mr. Minister.

Mr. Chairman, it is good advice. I also hope my best intentions come true. Thank you.

Thank you, Mr. Minister. We are on page 6, budget evaluation, not previously authorized, $150,000.

.Total department, special warrants, $646,250.

Not previously authorized, $223,000.

Page 7, Finance, operations and maintenance, treasury, special warrant, $1.12 million. Mr. Roland.

Thank you, Mr. Chairman. Again, in the area of special warrants for short term borrowing costs, does the Minister have information available regarding when payments become due on our line of credit, which I believe this points toward? Thank you.

Minister of Finance.

Mr. Chairman, we have overdraft provisions with both the Royal Bank and with the CIBC in order to get the best rates. In overdrafts with the Royal Bank, they are due on the 15th of each month. With the CIBC, it is on the 1st of each month.

Thank you, Mr. Minister. Mr. Roland.

Can the Minister provide a little more information? We have agreements with CIBC and Royal Bank to get the best deal possible, but again, a special warrant is a situation where I see it as being urgently required. Was this the case? Did a certain timeline come upon us that we have to do this, or could it not have come in as not previously authorized? Thank you.

Minister of Finance, Mr. Handley.

Mr. Chairman, this was a difficult one to predict in advance. I think the reason for it was we underestimated the interest costs we would incur. Two things came about that caused that to happen. One being the equal pay payout. I think there was some retroactive pay on salaries that also had an impact. Thank you.

Comments. Mr. Roland.

Thank you, Mr. Chairman. Was there a date that came about that made this a requirement for a special warrant when it came to paying this? As a special warrant, was there a certain timeline that we came upon that we had to pay this? Thank you.

Minister of Finance, Mr. Handley.

Yes, Mr. Chairman, I do not know the specific date, but certainly by mid-fall or early fall, we realized we were going to be short and would have to take this action.

We will deal with Finance, operations and maintenance, treasury, $1.12 million.

Total department, special warrants, $1.12 million.

We are now on page 8, Health and Social Services, operations and maintenance, health insurance program, not previously authorized, $262,000. Mr. Roland.

Thank you, Mr. Chairman. Can the Minister inform us of the particulars of this $262,000? Which group of physicians was it for? Thank you.

Minister of Finance, Mr. Handley.

Mr. Chairman, this is a three percent fee increase that was negotiated between the Department of Health and the physicians in the Northwest Territories. It is not a collective agreement situation, it is one where the department negotiates with the physicians. It covers both salaries, but also other expenses the physicians would incur. This one came in too late for the main estimates, but it is basically $212,000, which is a global three percent increase and another $50,000 that was agreed to for continuing medical education for the physicians.

Thank you, Mr. Minister. Mr. Miltenberger.

Thank you, Mr. Chairman. Are these fee-for-service cost increases? Is that what you said? It is not a collective agreement? So are all the physicians in Yellowknife fee-for-service, or do we have salaried doctors as well?

The Minister responsible for Finance, Mr. Handley.

Mr. Chairman, this is for increases to the medical fee schedule, so it is for everything the doctors do. In answer to the second part of the question, we have both salaried and fee-for-service doctors.

Mr. Miltenberger.

Thank you, Mr. Chairman. Just for further clarification, is there a mix in Yellowknife, or is that fee-for-service in Yellowknife and salaried doctors in the communities?

Mr. Handley.

I believe there is a mix of salaried and fee-for-service doctors in the Northwest Territories, but I do not know if the Minister of Health can clarify that. I am not exactly clear on it.

Thank you, Mr. Minister. Mr. Miltenberger.

Thank you, Mr. Chairman. I will wait to get into that level of detail when we have an opportunity to meet with the Department of Health. I have one more question regarding these negotiations for physicians' fees. Are they based on any kind of regular timeframes, or did they feel they were getting overworked and underpaid? Did we go back to the table due to the doctor shortage to make sure we keep our employees happy? Or is there a set timeframe for review of this kind of negotiation?

Mr. Handley.

Mr. Chairman, the fees are reviewed periodically. I do not believe it is on a schedule, I think it is based more on a situation where we either have to bring our physicians and the fees they charge in line with what is going on in the rest of the country or we face some other sort of circumstance. There were, in the recent past, a couple of reductions in fees that caused our doctors in our situation to be less than attractive compared to the rest of Canada.

We are on page 8, Supplementary Appropriation Act, No. 3, dealing with Health and Social Services, operations and maintenance, health insurance program, not previously authorized, $262,000.

Community health programs, not previously authorized, $1.3 million. Mr. Miltenberger.

Thank you, Mr. Chairman. Cabinet seems to be in a hurry here, so I will make my questions short. By taking two job classifications, the nurses and social workers, and changing them, is there a ripple effect in terms of costs and upward pressure on all the other salaries? This Hay Plan system was supposed to bring all the different jobs into line. If, by taking two out in an arbitrary fashion, have we skewed the whole system and is it going to put upward pressure across the board on all the costs and all the job classifications? Thank you.

Minister of Finance, Mr. Handley.

Thank you, Mr. Chairman. The government continually does interdepartmental assessments of the potential impact of any increases to particular categories of workers. In this case, any kind of impact that there would have been, I do not believe that there was any, would have been taken into consideration as we did the interdepartmental checks.

Mr. Miltenberger.

My recollection of the overall new job evaluation was negotiated with the UNW to, in fact, address one of the outstanding issues in terms of pay equity. This change was made subsequent to that. Is there a role for the UNW, or does that only happen during the collective bargaining process? Is there an ongoing agreement and a working committee that keeps track of this to make sure it is done in such a way that it does not get, if I may use the word in its proper intention, bastardized so it would lose its benefit? Thank you.

Mr. Handley.

Mr. Chairman, there is a provision in the Collective Agreement for dealing with disputes with regard to this matter. The government is going through the process of reviewing the job classifications. We have already done the excluded ones and are now working on the unionized positions.

We are dealing with page 8, community health programs, $1.3 million.

Total department, not previously authorized, $1.562 million.

Page 9, Justice, operations and maintenance, law enforcement, not previously authorized, $65,000.

Community justice and corrections, not previously authorized, $246,967.

Total department, not previously authorized, $311,967.

Page 10, Education, Culture and Employment, operations and maintenance, advance education and careers, not previously authorized, $300,000 negative.

Total department, not previously authorized, $300,000 negative.

Page 11, Transportation, operations and maintenance, airports, not previously authorized, $358,937.