Thank you, Mr. Steen. Good afternoon. We are reviewing the Department of Public Works and Services. General comments? Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, some concerns were raised in the committee report with the telecommunications industry in the Northwest Territories and where the department had planned to do a submission to the CRTC hearings in support of the general idea of a high cost subsidy area. The committee agreed with that intent. As well, I would like to raise my own concerns here. The fact that in the Northwest Territories, we have some smaller companies who have proven where NorthwesTel said it could not be done. For example, in Inuvik, New North Networks installed a cell-phone system when NorthwesTel said it could not be done. We were too small of a community. It was not cost-effective. A small company has come in and been able to do it. It is operating and functional.

The concern is that yes, I agree with the idea of a high-cost serving area, but it should be open to all businesses that are providing a service in the communities, not only tied to NorthwesTel. Hopefully, that was the message that got through.

I think communications is a growing area. Services can be provided by small companies in a superior way. Hopefully, that message came through and the Minister can confirm that or speak to it.

Overall, in the Department of Public Works and Services, there has not been significant change from the interim appropriation to the main estimates. It has basically carried forward with what is there. A number of issues were raised from the report as to some of the concerns we had and Public Works and Services being seen as a service provider and having to carry its business in that sense. In fact, although it is a government department, it is providing services to all the other departments and needs to line up in that way to sell its services to other departments.

We know there are some problems in the area of information management. That needs to be improved on. We know the department was huge at one time, and has been downsized over a number of initiatives, from privatization to user-say/user-pay and so on. We know the department continues to struggle internally with the changes that continue to come its way, but I think it is something we need to see happen in the sense of the department is a service provider. That needs to be very clear. They need to be clear in what it can do and how it can assist other departments.

One thing that continually comes up is the area of cost overruns on projects. The department explained in committee that in fact, many times changes to projects that are already in the books come along late and require additional funds from departments. It seems to be the Department of Public Works and Services is laid with the brunt of blame when it comes to not meeting the targets. We suggested that it be laid out quite clearly that it is the departments that come forward with submissions and changes to the programs or capital that is initially put into the main estimates. Sometimes those main estimates are of a lower class than what they would be if they were further refined. That is another area of impact.

We always find costs go up as details are clarified between a client department and Public Works and Services. With that, I will end my general comments and wait until we get into detail. Thank you, Mr. Chairman.

Thank you, Mr. Roland. Mr. Steen, do you have any remarks to those comments?

Thank you, Mr. Chairman. Mr. Chairman, I thank the Member for his comments. In reference to the high-cost serving area, the presentation the department made in that respect, our suggestion was the high-cost serving area benefits would apply to all players, not just be specific to NorthwesTel. At least, that was the message we were trying to send out. I am not sure exactly how it was received, but that was the message we were trying to send out.

I must say that I did not have the opportunity to represent the department or the government at the hearings, as I was tied up with meetings with my other ministerial duties. Mr. Rattray was present and he could expand on that, if necessary.

With the other comments put forward by the Member referencing the cost overruns by the department on projects, I suppose you could say the reflection on the department when there are cost overruns on projects, we are very sensitive to the suggestions that the department is to blame for these cost overruns. We tried to clarify to the committee how these cost overruns take place and what the process is for approving cost overruns. To me, as a Minister, it is very important that we as a department make every effort to keep costs within budget.

However, as we said to the committee, we do not always control all of the contributing factors to the cost overruns. With that, Mr. Chairman, I would like to emphasize that the department does its best to keep these projects in budget and we will continue to do that in the future. As the Minister, I have already made it clear to my department that we have to make not only the effort, but we have to make it visible that we take our best initiatives to keep projects within budget.

I think it would be beneficial, Mr. Chairman, if Mr. Rattray spoke to what is involved in cost overruns, as we did with the standing committee. Thank you.

Thank you, Mr. Steen. Mr. Rattray.

Thank you, Mr. Rattray. Mr. Miltenberger.

Thank you, Mr. Chairman. I just have a few general comments I would like to make and I will reserve my questions until we get into detail. I recognize that a lot of the broader government process issues seem to be endemic across all departments. Specific to Public Works and Services, the issue of cost overruns has been one that has been of concern to myself as well. Estimating is an issue, but the key for me is not trying to paint Public Works and Services as the culprit or the bad guy or the whipping boy. This is a process that has flaws in it that often contribute to overruns, starting right at the community level with the groups that are involved in the project, community officers, community advisory groups, and decisions are made, costs committed to, those kinds of things contribute to cost overruns. The issue for me is that Public Works and Services should be playing a lead role, as they provide services to all departments, to look at that overall process and try to find out how do we improve it.

I will have some questions, as well, in regard to the energy strategy, specific to petroleum products. I am interested to know what is happening in regard to fuel storage and NCPC. There is discussion within the communities for eliminating duplication on the question of fuel storage. I am interested to know how much fuel is shipped north by barge. It is my understanding, for example, that routinely seven to ten percent of the fuel is left in the barge. It is also my understanding that it is a matter of practice that the boats pulling the barges north routinely use the client's fuel to fuel their barges. It is a standard practice. It has been there for some time. As we are looking at dollars, energy strategies, those kinds of issues are of significant concern. I will give you some time to look at specifics, but those are the questions I will be asking in that regard.

The concerns I had were addressed in the committee report. My colleague, Mr. Roland, has raised some of them. Those are some specific issues that I just want to give notice at this point to the Minister and his staff, what I will be asking questions about when it comes to detail.

Thank you, Mr. Miltenberger. Any comments? Mr. Steen.

Thank you, Mr. Chairman. The Member's comments are noted and we will prepare to respond at the time that we reach the activities.

Thank you, Mr. Steen. There is a full Caucus meeting planned for 12:30 p.m. Lunch will be provided. So before we get into anyone else's comments we will call a break right now and we will come back at 1:30 p.m. Thank you, Mr. Minister.

-- Break

I will call the committee back to order. We are reviewing the Department of Public Works and Services. Mr. Krutko.

Thank you, Mr. Chairman. Mr. Chairman, my concern has to do with the Business Incentive Policy. The experience that we have seen in other areas, with the Housing Corporation and also in the business community, especially in the Inuvik region where we have had a lot of problems, especially with different contracts from the different types of negotiated contracts that were in place. The problems we see with having people going back after they have concluded a contract. It is signed off and then they are called back in by Public Works on work that was approved and they had to go back and redo it.

I feel that in some cases, the people who are interpreting the policy from the department have their version of exactly how the policy should be in place or the different directives. I, for one, have dealt with a lot of different companies because of what happened. There is a real bad taste in the mouth of contractors towards the department and vice versa. It does no good for the regions, communities or even the relationship between the business community and the government.

I know for a fact that the deputy minister went up to Inuvik last year. He met with the different people within the contracting community in regard to their concerns and also within the department. So I would like to ask the Minister, has anything changed in the last year in regard to how we deal with the contracting community, our relationship with the contractors, in the Inuvik region?

Thank you, Mr. Krutko. Mr. Steen.

Thank you, Mr. Chairman. Mr. Chairman, as a Minister I am not aware of any major issues being put forward from the region, but the deputy minister was involved, both before and after his visit to Inuvik, on a continuous basis. So he could probably better respond as to whether or not there were any significant changes or whether there are still problems in the Inuvik region. Thank you.

Thank you, Mr. Steen. Mr. Rattray.

Thank you, Mr. Rattray. Mr. Krutko.

Thank you, Mr. Chairman. The other question I had was, what is the department doing through the Business Incentive Policy and its related directives, in regard to northern manufacturers? This department does do a lot of contract service work, either through managing different contracts or specifically ensuring that there are leases of buildings and maintenance that has taken place.

So I would like to ask the Minister, what is the process that they use to ensure that the policies and directives are being followed?

Thank you, Mr. Krutko. Mr. Steen.

Mr. Chairman, the department management officials are all familiar with the BIP policy and they know that they have to abide by the terms of the policy. Thank you.

Thank you, Mr. Steen. Mr. Krutko.

Thank you, Mr. Chairman. Mr. Chairman, could the Minister state exactly what the process is to ensure that the policy is being adhered to? Is there some way of monitoring to ensure that they are carrying out the responsibility of and adherence to this policy?

Thank you, Mr. Krutko. Mr. Steen.