Thank you, Mr. Speaker. I wish to report to the Legislative Assembly that the Standing Committee on Accountability and Oversight has reviewed Bill 17, An Act to Amend the Legislative Assembly and Executive Council Act, and wishes to report that Bill 17 is now ready for consideration in committee of the whole as amended and reprinted. Mr. Speaker, I request unanimous consent to waive Rule 70(5) to have Bill 17 ordered into committee of the whole for tomorrow. Thank you, Mr. Speaker.

Thank you. The honourable Member is seeking unanimous consent to waive Rule 70(5) to have Bill 17 ordered into committee of the whole for tomorrow. Are there any nays? There are no nays. The item is now moved into committee of the whole for tomorrow. Item 12, reports of committees on the review of bills. Item 13, tabling of documents. The honourable Member for Weledeh, Mr. Handley.

Thank you, Mr. Handley. Item 13, tabling of documents. The honourable Member for Inuvik Twin Lakes, Mr. Allen.

Thank you, Mr. Speaker. Mr. Speaker, I wish to table the following document entitled 2000 Annual Report, Public Utilities Board of the NWT. Thank you, Mr. Speaker.

Thank you, Mr. Allen. Item 13, tabling of documents. The honourable Member for Nahendeh, Mr. Antoine.

Thank you, Mr. Antoine. Item 13, tabling of documents. Item 14, notices of motion. Item 15, notices of motion for the first reading of bills. Item 16, motions. Item 17, first reading of bills. Item 18, second reading of bills. Item 19, consideration in committee of the whole of bills and other matters: Bill 16, Bill 19 and Bill 20, Committee Reports 5-14(3), 6-14(3) and 7-14(3), with Mr. Krutko in the chair.

By the authority given the Speaker by Motion 4-14(3), the House is resolved into committee of the whole to sit beyond the time of adjournment until the committee is prepared to report.

Welcome to committee of the whole. We are dealing with Bill 16, Bill 19, Bill 20, Committee Report 5-14(3), Committee Report 6-14(3), Committee Report 7-14(3). What is the wish of the committee? Mr. Dent.

Thank you, Mr. Chairman. I would like to recommend that the committee continue with consideration of Bill 19, Committee Reports 5, 6, and 7 concurrently, specifically to examine the budgets of the Department of Public Works and Services, followed by Finance, and the Legislative Assembly; then perhaps conclude Bill 19.

Does the committee agree?

We will take a short break.

-- Break

I will call the committee back to order. We are reviewing the Department of Public Works and Services. I will ask the Minister if he has any opening comments. Minister Steen.

Thank you, Mr. Chairman. Mr. Chairman, I am pleased to present the Department of Public Works and Services main estimates for the fiscal year 2001-2002.

The estimates propose a department operations and maintenance budget for 2001-2002 of $39.2 million and a capital acquisition plan of $1.9 million. The department will have 185 positions funded within the appropriation.

These resources will be used to provide critical support services to departments and communities, including:

• • the operation and maintenance of infrastructure;
• • management of capital construction projects;
• • safety and inspection services;
• • leasing of government offices;
• • provision of record management services; and
• • monitoring and intervention in northern and national telecommunication proceedings.

As other departments work to achieve government objectives by delivering direct services to our residents, Public Works and Services provides necessary technical and professional support to those departments.

Mr. Chairman, there are many examples of the kind of support Public Works and Services provides to departments as they attempt to achieve an appropriate balance between:

• • the expectations of our residents for high quality services;
• • the practical constraints of operating in our difficult northern environment; and
• • the limitations of our current budgets.

The success of many building and infrastructure projects is often not fully recognized or acknowledged. I would like to mention today:

• • the new Inuvik regional health and social services centre, which is in the design state this year;
• • the construction of the community office complex in Rae Lakes, which is being carried out by the local community development corporation;
• • the $5 million renovation of the Princess Alexandra School in Hay River; and
• • the water supply projects underway in Tulita and Fort McPherson.

These are all critical community and regional projects that will contribute in a positive way to achieving the government's long-term objectives.

Another important role of this department is the provision of essential fuel services. Through the petroleum products revolving fund, Public Works and Services funds the provision of heating fuel and gasoline in communities where a commercial operation does not exist. This includes providing safe tank farms in these remote locations, as well as contracting with and training local fuel delivery agents to provide the services. These agents have an important function in their communities and Public Works and Services works with them to carry out this essential service.

During the year 2000, the price of fuel on the world market increased and the government was forced to include these changes, as well as other cost increases, in the prices paid in communities. In some locations, these higher fuel prices prompted local people to propose taking over the fuel services for their area. For example, services in Tuktoyaktuk were privatized in the year 2000. The department continues to discuss commercialization with other communities and regions.

Finally, Public Works and Services provides information systems and technical communication services for use by the government. More and more, the ability of the government to provide services to northern residents is dependent upon the availability and quality of these systems. The government is already benefiting from the recent installation of a fibre optics network between government offices and health and education facilities in Yellowknife. These circuits provide improved capacity and speed, while saving the government $450,000 over three years.

Because of departmental expertise in telecommunications, Public Works and Services also represents the interests of the government and all NWT residents in hearings before the CRTC. Many years of work have recently borne fruit with our input contributing to the opening of competition for long distance services in the NWT and lowering of rates for long distance calls. I think that this is a good example of the low profile work of Public Works and Services, which has a high profile impact on the lives of all people in the NWT.

Mr. Chairman, the proposed budget is comparable to last year's budget. Public Works and Services expects to continue to provide a high level of support services to departments within the same budget. No major changes have been proposed for the new fiscal year.

Mr. Chairman, that concludes my opening remarks. I would be happy to answer any questions Members may have. Thank you.

Thank you, Minister Steen. I would like to ask the committee responsible for overseeing the department under review if they have any comments on the department's main estimates. Mr. Roland.

Thank you, Mr. Chairman. The Standing Committee on Governance and Economic Development met with the Minister and his staff to review the Main Estimates of the Department of Public Works and Services on January 23, 2001. The department is divided into four ongoing activities: directorate, asset management, systems and communication, and petroleum products. The committee noted a $462,000 increase between the previous year and the 2001-2002 Main Estimates. The recent collective agreement with the UNW is projected to cost the department an additional $896,000 for the upcoming fiscal year. The committee also noted that the department plans to decrease the number of staff by eight.

Functional Audit

In its report "Review of the 2001-2004 Business Plans", the committee made a recommendation that a functional audit be performed upon the Department of Public Works and Services. Changes in government, which include community empowerment, privatization initiatives, user pay, aboriginal self-government, and the formation of Nunavut, have resulted in a new operating environment. The committee was of the opinion that it was time for government to review the present delivery of petroleum, oil and lubricants, capital purchases, records management and asset management programs.

Since the review of the business plans, the department proposes to add a senior policy advisor position to research the role and relationship of the department in regard to self-government and look at different models of service delivery. A questionnaire has been sent to clients in an effort to determine the "shape" the department will have to assume to reflect client needs. However, given all the changes in the operating environment, the committee feels this still falls short of what they wanted. The committee is of the opinion that it is time for the government or an outside agency, not the department, to review the Department of Public Works and Services to determine the best methods of delivery for services the department presently provides.

The committee recommends a functional audit be conducted to determine the best long-term delivery method for the services presently delivered by the Department of Public Works and Services.

Records Management

Also in the report Review of the 2001-2004 Business Plans, the committee recommended that the government revisit their overall approach to records management with a view to a more customer-oriented approach to suit individual departments.

To date, there has been no resolution to this issue. Departments do not feel they can conform to the Administrative Records Classification System (ARCS) that PWS wishes to implement. The committee understands the Knowledge Management Strategy will address records management and hopes that the strategy will suggest a resolution which can work for all departments.

Program and Functional Review Fee Increases

The committee notes that the department has incorporated into the main estimates, fee increases for electrical permits, boiler registrations, gas permits and elevator permits. These increases were first presented in the program and functional review. These fee increases result in an increase of $187,000 in revenues. The committee is concerned about the cumulative impact of fee increases on the residents of the Northwest Territories.

Vacant and Deleted Positions

Vacant Positions

The committee notes that salary dollars from vacant positions are being used to cover funding shortfalls in the department. As was highlighted in the Standing Committee on Accountability and Oversight's report, when positions are held vacant, programs and services suffer. Members feel that monies approved by the Legislative Assembly for salary purposes should be used for such.

Deleted Positions

The 2001-2004 Business Plans contained a list of changes in the staff positions for the department. There were nine positions deleted and one position added, resulting in a net effect of a reduction of eight positions. During the review of the main estimates, the committee observed that the net reduction of positions remained at eight.

However, upon questioning the department, the committee learned that the method to arrive at the eight deleted positions had changed. Now, the department will be deleting ten positions and adding two positions. Further to this, in comparing the list of deleted positions supplied in the business plans with the list supplied during the main estimates review, there have been changes in the positions to be deleted.

The committee requests that, as was the protocol in the 13th Legislative Assembly, Members of the Legislative Assembly be notified in writing of any deletions and additions of Government of the Northwest Territories positions in their riding.

PWS Water and Sewage Services Operating Agreements With Communities

The recent problems with drinking water quality in Fort McPherson has brought the issue of the department's water and sewage services operating agreements with communities to the forefront. In some operating agreements that presently exist, the municipality does not have the ability to have input respecting proposed costs before the costs are incurred on behalf of the community.

Essentially, as the agreement is worded, DPW can perform acts to carry out its responsibilities under the agreement, bill the community and the community has to pay, no questions asked.

Some of these agreements date back over 12 years and are not reflective of community empowerment initiatives. The Minister has stated that the department is open to renegotiating these agreements. The committee encourages the department to approach all communities with water and sewage services operating agreements and advise them that these agreements can be renegotiated. It would be in the best interest of the communities to review their contracts with DPW to prevent future incidents such as that which occurred in Fort McPherson.

Petroleum Products

Privatization Proposals

The Northwest Territories Power Corporation (NWTPC) has expressed interest in assuming responsibility for petroleum, oil and lubricant (POL) delivery in communities presently served by the GNWT. The Minister informed the committee that the department is accepting proposals for the privatization of POL delivery. However, Cabinet will not be awarding any contracts until the government has considered the recommendations arising from the NWTPC review.

The committee feels that this is unfair to individuals and groups that spend time and money developing their proposals in hopes of acquiring a contract to deliver fuel to a community when, depending on the recommendations from the review on NWTPC, that option may not be possible.

Misconceptions Regarding Privatization

The committee observed that there may be misconceptions when the term "privatization" is applied to POL. When POL delivery is privatized, the GNWT is not absolved of responsibilities. The government maintains ownership of POL assets and retains responsibility for the bulk delivery of fuel to some communities. Further, despite privatization, the government is still responsible for some environmental liabilities.

The committee requested clarification as to how the Business Incentive Policy applied to the privatization of POL in communities. Departmental staff assured the committee that the Business Incentive Policy applied.

The Minister reassured the members that part of the criteria of Cabinet, when it comes to privatization of POL, is political support. Despite these assurances, there still is concern that there may be circumstances where POL contracts are slipping through the cracks and are being acquired by non-northern businesses.

The committee noted that bulk fuel distribution is exempted from the Business Incentive Policy; a Cabinet exemption that dates back to 1985. The committee would like clarification for the situation where a contractor may submit proposals for fuel supply in more than one community using their own bulk fuel resupply and whether these contractors, who may not be headquartered inside the Northwest Territories, be exempted from the Business Incentive Policy when POL contracts are awarded in individual communities.

Service Delivery

As was done in the review of the 2000-2001 Main Estimates, the committee encourages the government to proceed with care when it comes to privatization of services, such as the delivery of electrical power and petroleum products to northern communities.

The committee supports industry but believes there must be a means of preventing companies from picking only profitable ventures and leaving high cost areas behind, resulting in a higher cost to government.

Thank you, Mr. Chairman. That concludes the committee's report on the Department of Public Works and Services.

Thank you, Mr. Roland. At this time, I would like to ask the Minister if he will be bringing in any witnesses.

Yes, Mr. Chairman.

Does the committee agree?

Sergeant-at-Arms, please escort the witnesses in. Mr. Minister, please introduce your witnesses for the record.

Mr. Chairman, on my right is Mr. Bruce Rattray, deputy minister; on my left is Ms. Bev Chamberlin, director of the petroleum products division.