We will go to page 10, school of community governments, not previously authorized, $150,000. Mr. Bell.

I am just wondering about this. I understand the training and these course materials being developed are over the budget we thought it would cost to develop them. I am wondering why we had not planned that there would be this offset earlier, and therefore show that we were going to get $150,000 from this. Is this just an accounting exercise that we needed to show this and there is nothing more than that, or did we not recognize that we would collect this $150,000 in course registration fees previously?

Thank you, Mr. Bell. Mr. Handley.

Mr. Chairman, in previous years, the funding for this program, the fees for it, would have been collected by the Association for Municipalities. Starting this year, MACA is going to operate the program and collect the fees.

Thank you, Mr. Handley. School of Community Government, not previously authorized, $150,000.

Total department, special warrants, $205,000.

Not previously authorized, $1,097,000.

We will go on to page 11, Public Works and Services, operations expenditures, asset management, not previously authorized, $350,000. Mr. Krutko.

Thank you, Mr. Chairman. My concern with this agreement is most of the communities have what they call operation and management agreements with the Department of Public Works and Services to manage water and treatment facilities. Rae-Edzo is one of them. Fort McPherson, Aklavik, Tsiigehtchic and a handful of our communities continue to have these agreements in place, because they have not either developed the expertise or the human resources to take on the management of these programs, such as the running of the water treatment facilities and the utilidors and maintenance of our buildings.

I would like to ask the Minister of Finance, who can maybe pass it on to the Minister of MACA, in the situation that we find ourselves in again in Rae-Edzo, this problem in Rae-Edzo has come back to this House several times, having to come for supplementary appropriations because of the water and sewage problems that have occurred in that community and also in other communities. Here again we are seeing that the community has devolved that authority back to the Department of Municipal and Community Affairs.

I would like to ask the Minister of Finance or the Minister of Municipal and Community Affairs, what are we doing to review the operational agreements that we have with the municipalities and with the Department of Public Works and Services, along with the responsibility that MACA has? There seems to be this ongoing expense that seems to keep coming back by way of supplementary appropriation.

I would like to know from the Minister, what are we doing to try to eliminate this problem? It seems to keep coming back time and time again. Are we going to change anything or will we continue to see this coming forth through a supplementary appropriation?

Thank you, Mr. Krutko. Mr. Steen.

Mr. Speaker, the $400,000 that the department has requested is not related to the actual charges that the Member is talking about. The information I have here is that the expenses that are identified by Public Works and Services are due to a lack of maintenance on the part of the community for the infrastructure, for the facilities. This has driven up the cost Public Works and Services is going to have to undertake in order to maintain the facilities. This is over and above what it would have normally cost the community.

Thank you, Mr. Steen. Mr. Krutko.

Thank you, Mr. Chairman. In the outline of the agreement, with regard to the Rae-Edzo water and sewage system, it says "Due to the cancellation of the custody and control agreement by the hamlet of Rae-Edzo." I am wondering, because of the cancellation of that agreement, that this expenditure, if we had qualified people and people within our municipalities that feel comfortable running these facilities, running that infrastructure in our communities, we would not have this situation where they are basically backing out of these agreements because they either cannot afford to operate them or we do not have the trained staff within our hamlet councils to run these projects.

Again, I would like to ask the Minister, why is it that we see these cancellation of agreements in place? I raised the question today in the House with you, regarding the motion that was passed at the hamlet council in Fort McPherson to pull out of the delivery of the water from the water supply to the water treatment plant in Fort McPherson.

It seems like this is an ongoing process. We either under-fund these projects or we do not allow the communities to build the expertise or have the resources to get people who are qualified to run these facilities.

Thank you, Mr. Krutko. Mr. Steen.

Mr. Chairman, the information I have here from the department is during the three years the hamlet had a care and custody agreement, Public Works and Services was not approached for technical assistance. Issues with the system operations were raised by the water licensing board, DIAND. During this period, there was a turnover in the SAO position and the hamlet was never able to address DIAND's concerns, despite promises to follow up. Further, the hamlet was unable to follow through with their plan to hire a level three operator to train local hamlet operators.

This resulted, Mr. Chairman, in a lot of lack of maintenance on the facilities on the part of the operators. The end result was that the community was in such a state that they could no longer maintain sufficient water for fire protection. I believe it was in the fall of last year that they finally decided by a motion to turn the facilities back over to Public Works and Services to maintain for them.

Public Works and Services has agreed to take it back, but we would do it at the cost identified by the department, and this includes all costs. Due to the lack of maintenance over the past number of years, it is going to cost Public Works and Services more than what the hamlet had budgeted for. The budget from the hamlet was $250,000, but Public Works and Services has identified that it will cost in the range of $400,000. Some of this work that we are going to charge back to the community would be covered by the money MACA gives to communities or the communities raise themselves.

Thank you, Mr. Steen. Mr. Krutko.

Thank you, Mr. Chairman. The Minister hit the nail right on the head. Why is it that we give municipalities $250,000 to run an operation knowing that it is going to cost the Department of Public Works $350,000? That is $100,000 difference from the money allocated to a hamlet to run a project, and then a department running a project, the cost is $100,000 more. That is exactly the argument I am trying to make. We are underestimating the cost of operating these facilities, yet the communities cannot bear that cost. That is why a lot of communities are at the point now of just having to put their hands up and say, "Sorry we do not want it, we cannot afford to continue to operate because the cost drivers running these operations are going up."

As a government, we see this coming time and time again. It has happened in my riding in Fort McPherson with regard to that project, which is an unforeseen situation where you have THMs and other effects to your water system. It seems that we do not have a process in place to address those areas where we know there are going to be unforeseen costs associated with their operation and maintenance. The municipalities with the latest formula financing arrangement that we have are saying they are not funded enough to operate those facilities.

I would like to ask the Minister to compare that $250,000 to the $350,000 from the hamlet, which is $100,000 difference. What were the cost drivers to give you that $100,000 difference?

Thank you, Mr. Krutko. Mr. Steen.

Thank you, Mr. Chairman. I thought I had already identified the cost drivers that Public Works and Services have identified. They are all related to the fact that the facilities were never maintained properly, so it is going to cost Public Works X number of dollars, roughly $150,000, to bring the facilities back up to par and then maintain them.

Thank you, Minister Steen. Page 11, asset management. Mr. Krutko.

Thank you, Mr. Chairman. I think it is pretty interesting that if you want anything done in this government and you do not have the resources within the municipal council, your best bet is to give it back to the government because they are going to get more funding to bring it up to a certain standard. Then you continue to operate it and try to maintain it with the minimum budget that you have. I think that sets a bad precedent.

If every hamlet knows this is the process you can use to get your infrastructure improved on, such as water treatment facilities, sewage lagoons and so on, every time you have a problem, drop the project and give it back to MACA. Let them bring it up to a certain standard. Let them pay for it and then take it over again after they do that. This is the precedent we are setting here. I think this is a bad precedent.

If anything, if we assist the communities, knowing they are having these problems, they did not have the trained people in place, they were not taking water samples, they were not living up to their water licence, and we did not intervene sooner, then we are in a situation similar to today, where it is costing us another $350,000. This is a cost driver that we have control over.

I think we as a government have to address this issue. We cannot continue to see the communities struggling to operate and maintain facilities with untrained people and unqualified processes, where you have responsibilities under your licences and then, at the end of the day, realize that Public Works comes to you and gives you a take-it-or-leave-it offer, where you have to either give it back to them or they are going to take it away from you. Again, I would like to ask the Minister, exactly what are you doing about changing the way we assist municipalities on running the water and sewage programs in our communities?