We will continue on with the Department of Public Works and Services. Does the Minister have any opening comments? Mr. Steen.

Thank you, Mr. Chairman. Mr. Chairman, my opening comments for Public Works.

Mr. Chairman, I am pleased to present the Department of Public Works and Services main estimates for the fiscal year 2002-2003.

The estimates propose a department operations and maintenance budget for 2002-2003 of $41,300,000, and a capital acquisition plan of $3.8 million.

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

• • The operation and maintenance of infrastructure;
• • Participation in the safe water initiative;
• • Management of capital construction projects;
• • Safety and inspection services;
• • Leasing of government offices;
• • Provision of records management services; and
• • Monitoring and intervention in northern and national telecommunication proceedings.

The department also manages an additional $100 million on behalf of its clients through a number of revolving funds, chargebacks and capital transfers. Through the use of these funds, the department provides computer and data communications services for government offices throughout the Territory, fuel services for 16 communities, and renovation and construction of critical building infrastructure.

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.

I would like to take a moment to mention a few of those services.

The many successful building and infrastructure projects are often taken for granted, but I would like to mention today the new Inuvik Regional Health and Social Services Centre and the Aklavik Health Centre, which are under construction this year, the community office complex in Rae Lakes being built by the local community development corporation, the new correctional facilities going up in Inuvik and Yellowknife, and the water supply projects in Tulita and Fort McPherson. These are all important community and regional projects that will contribute in a positive way to achieving the government's long-term objectives. Public Works and Services is a vital part of the team responsible for delivering these projects.

Public Works and Services also provides information systems and 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 of secure and reliable information and communication systems.

Another important role for this department is to be a key member of the GNWT team responsible for ensuring the quality of community drinking water. Working closely with the Departments of Health and Social Services and Municipal and Community Affairs, Public Works and Services provides technical support for the design, construction, operation and maintenance of community water systems.

Finally, I would like to mention 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 PWS works with them to carry out this essential service.

The department strives to provide fuel services on a break-even basis. In 2000, this required an increase in retail prices to keep pace with rising costs of fuel and transportation. In December, 2001, the government decided an increase was again needed. The effective date was set for February 1, 2002. Discussions with concerned communities and Members of this Assembly prompted a second look at this decision. In response to these concerns, the scheduled increase was rescinded.

Mr. Chairman, Public Works and Services tries to be responsive and will continue to provide a high level of support to departments and to the people of the NWT. The budget we are reviewing today will contribute to achieving this objective.

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

Thank you, Mr. Steen. At this time, I would like to ask the chair of the committee responsible for overseeing or reviewing the department's main estimates, Mr. Roland.

Thank you, Mr. Chairman. The Department of Public Works and Services' -- or PWS, as we call it at times -- mandate is to provide services, support and leadership in the areas of: asset management, procurement, records management, computer systems and telecommunications, community fuel provision and community water systems.

The Standing Committee on Governance and Economic Development met with the Minister and his staff to review the 2002-2003 draft main estimates on January 17, 2002.

The department proposed an increase of $233,000 in its operation expenditures. The increase is due largely to a $183,000 increase in the department's amortization estimate and a $50,000 increase in other subsequent FMBS approvals.

During the review of the main estimates, the Department of Public Works and Services stated that they were contracting out 88 percent of their work. The committee pointed out that many communities are now capable of independently contracting out major infrastructure requirements. Some members asked whether there was a need for a $30,000,000 department that appears to be largely managing the contracting of projects as opposed to actually constructing them.

The committee has in the past noted that municipal agreements are extremely limiting to communities in their ability to either complete necessary repairs using their own forces or to contract out for the work to be done. The contracts currently state that Public Works and Services must complete the repairs with or without notification of the community and that the department may then bill the community for their services. The community then has no option but to pay the bill presented, despite the fact that they may have been able to complete the repairs with their own staff and equipment at far less cost.

The committee stated that present municipal contracts are out of date and require re-negotiating. The department initially stated that it was up to communities to approach the department with a request to re-negotiate. Upon further questioning, the Minister committed to providing communities with new draft agreements.

The committee looks forward to seeing an update in the summer of 2002 on the response of communities to the new draft agreements and the number of which have signed agreements.

Given recent events in the south regarding the safety of water supply, the committee requested assurances that all municipal workers responsible for water maintenance systems are fully qualified and trained. The department stated that training to national standards is done by the Northern Territories Water and Waste Association. Site-specific training is then supplemented by the Department of Public Works and Services.

The department also stated that they are currently reviewing equipment, facilities, employee qualifications and operating procedures and policies.

Further discussion in the area of safe water supply revealed that while roles and responsibilities between departments may have been clearly identified within the government, there is still confusion in the communities about this complex system. When problems arise, communities are often directed from one department to another without a clear understanding of the responsible department. The committee is looking forward to seeing the results of the department's review.

The committee remains concerned about the completion of environmental audits. The department replied that it has 22 sites on its list for clean up, mostly tank farms. They also stated that all first priority sites would be cleaned up next year. The committee looks forward to seeing a progress report during the next business planning process.

Mr. Chairman, that ends the Governance and Economic Development's report on Public Works and Services draft main estimates. Thank you.

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

Thank you, Mr. Chairman. Yes, I will.

Does the committee agree the Minister may bring in witnesses?

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

Thank you, Mr. Chairman. Mr. Chairman, on my right is Mr. Bruce Rattray, deputy minister of Public Works and Services. On my left is Mike Aumond, director, petroleum products.

Thank you, Mr. Minister. Welcome, witnesses. General comments? Detail? Page 5-9, directorate, operations expense, total operations expense, $6,972,000.

Asset management, operations expense, total operations expense, $32,645,000. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, under asset management, activity responsible for planning, design, construction, operation and maintenance of buildings, I would like to know from the department, with the increased economic activity in the large communities, at least, what is the department finding as a result of that increased activity and, as I see it, increased costs in communities to have construction done? Are the department's planning targets or the targets it uses for estimates in construction coming in with the percentage? I know there has been discussion of a 10 percent figure. Is that still the rule of thumb?

The Minister responsible for Public Works and Services, Mr. Steen.

Thank you, Mr. Chairman. Mr. Chairman, in general, as the Member stated, that is still the case. We are still experiencing roughly a 10 percent increase in cost. It is reflected in the tenders and the bids we receive. I will ask Mr. Rattray if he wishes to elaborate a little on that.

The deputy minister, Mr. Rattray.

Mr. Roland.