Thank you, Mr. Chairman. Mr. Chairman, first of all, the Minister mentioned I might have a couple of remarks with respect to the high cost serving area proceeding. The Member is correct. The department does support the type of initiative that the service provider in Inuvik has undertaken to provide services in that community that NorthwesTel has not been able to provide. We are certainly open to those types of initiatives. I believe that service provider did actually participate in the hearings in Whitehorse and made a strong case. My understanding is that he presented a very strong case for support of those types of initiatives.
The only concern I would have is that such initiatives, opening up the basic services to providers in individual communities, cannot degrade the level of services provided in other communities that are too small to attract the interest of service providers on their own. We need to make sure that the basic services are available in all communities. CRTC now has to wrestle with whether or not that can be done while still allowing some competition for basic services in some of the larger communities. The concern has been raised within the community and elsewhere about the problems with cherry picking with larger communities such as Yellowknife, Hay River, Fort Smith and so on. Providing competition in those services may in fact be able to reduce costs and provide a wider range of services.
There is a concern that it would degrade the availability of services in some of those other smaller, higher cost centres. That is the only provision and the only concern that I would have with respect to wholehearted support of local competition for services in communities. With respect to project management and the cost of capital projects, the department does play a key role in managing those costs. It does not do it on its own. It does it in cooperation and with the support of its clients and also in cooperation and support of the consulting industry and the rest of the construction industry. With some of those items we have a greater degree of control over than others. We spend a great deal of time reviewing design drawings that are provided by our consultants to ensure that, in fact, mistakes are not made to ensure that they adequately address program needs, and to look at identifying lower cost solutions to particular design problems. A great deal of our effort is put into those areas.
We also put a great deal of effort into managing the individual contracts when they are awarded for the construction, to ensure that the contractor is building the project as it was specified, and that they are making cost-effective decisions when they are determining the approach that they are going to take on the construction. There are areas where we do not have control over, for example, the significant cost increases that have resulted from the boom in construction that has taken place in Alberta. There is a very significant drain of trade resources out of the Territories and into projects in Alberta. That does cause us to have to pay higher costs for the trade services that we require in order to attract them up here. We have also suffered from some material and equipment cost increases, a result again of the higher volumes of work going on in other areas. We do not have the ability to address those issues directly. As they occur, we make our clients aware of them and encourage them to take that into account when they are building the budgets for those various projects.
We also work closely with our clients in terms of establishing those budgets at the beginning of projects. We have different relationships with our various clients. In some cases they have internal resources that they use to develop projects, project budgets and project scopes. In other cases, we provide those services to them. The level of communication back and forth has a direct impact on the accuracy of the initial budgets that have been established.
Finally, I point out that projects do change and evolve as they develop. As project programs are developed early on, the client departments work with Public Works in order to define their requirements, their needs, as accurately as they can. However, as the project then moves into the design stage, other opportunities arise, other requirements. We become aware of how the project will look in the end, how the facility will look in the end. It becomes much easier for them to identify which areas are deficient, which areas need to be changed, which areas they need to invest further in. Some of those changes actually occur during the design stage. That is just the natural course of a project as more information gets put on paper in a form that is easier to understand. It becomes an exercise of making some individual decisions as to whether or not the budget or the program needs will take precedence. Those are a number of areas that we find the department has to work with its clients closely to ensure that the projects are defined accurately at the beginning and are managed throughout. Various players have different roles to play in it, and ultimately, the success of the project depends on all the players working together.