Regular Members continue to have concerns about the government's new Corporate Capital Planning (CCP) process introduced during the review of the 2002-2005 business plans. The long-standing practice of this government was to rank capital projects in a five-year infrastructure acquisition plan by department. Government departments were asked to prepare essential lists of necessary infrastructure projects within their respective departments, and priorities were assigned based on need within the departmental capital budget.

Rather than operating from individual department infrastructure budgets, the CCP process has one capital target with all projects from all departments competing for the single pot of available funding. This competition or evaluation process is based upon a primary rating criterion which ranks capital projects in the following order: protection of people, protection of assets, protection of the environment, financial investment considerations, and program needs or requirements. Each project is then considered by secondary criteria founded on the following factors: scale of impact, severity of impact if the project is not completed, urgency of the project and the ability to mitigate. All government capital projects are subject to this new funding approach.

A Capital Review Committee, comprised of deputy ministers, determines which projects should be presented in the capital plan based upon this model. In our report on the review of the 2002 - 2003 Main Estimates, the committee stated:

Committee members concurred with comments made by the Standing Committee on Governance and Economic Development in its review of the 2002-2005 draft business plans that this new capital planning process "may leave communities and Regular Members without effective input" and furthermore, that "these criteria, especially the protection of people, may lead to projects from larger centres being placed before the needs of smaller communities."

The standing committees remain concerned about the lack of effective input from Regular Members and community leaders.

In considering the new capital planning process on a broad level, committee members observed the process may have a variety of inherent flaws including:

1. The process of ranking projects by priority, which is led by the protection of people and protection of assets, unfairly penalises less developed and populated communities. Public sector spending is often the exclusive economic driver in our smallest communities. A more responsive approach that recognizes the social benefits of capital spending in small communities should be adopted.
2. Many Members are concerned that because of the current structure of the CCP, a number of capital projects in large communities have continued to receive funding at the expense of capital investment in smaller communities.
3. Although final accountability for management of the public purse ultimately rests with Ministers, the membership of the Capital Review Committee is comprised in its entirety of deputy ministers. With this approach, Ministers may never know about all of the projects proposed, or which ones were "dropped" from consideration.
4. Regional representation on the Capital Review Committee is non-existent. All of the deputy ministers are Yellowknife-based and may not be as intimately aware of regional needs.

In response to concerns raised during the standing committee's review of the 2003-2006 business plans, the Premier made a commitment to consult with Members and thoroughly review the CCP process. The Standing Committee on Accountability and Oversight reminded the Premier that the Regular Members should be consulted on any proposed changes to the CCP prior to the introduction of the 2003-2004 Main Estimates in February, 2003. This would have ensured that input from Regular Members was incorporated into the final capital expenditure process prior to the finalization of the 2003-2004 Main Estimates. Despite reservations expressed by Members and concerns raised by standing committees, the government has pressed forward with the corporate capital planning process for assigning priorities to the projects presented in the 2003 -2004 Main Estimates.

Members of the Standing Committee on Social Programs were surprised to see that several significant capital projects, which do not appear to be consistent with the needs identified in the 20-year plan or in prior years' Main Estimates, appear in the 2003 -2004 Main Estimates. Members were not given clear reasons - other than the application of the new process - as to why the government has approved one project over another.

For example, Members are unclear as to why there have been significant changes both in scope and in the start date of the Fort Smith Health Centre project. In addition Members pointed out that although student housing replacement and upgrading was identified in the 2002 - 2003 Main Estimates, it was identified as a territorial initiative. In the new main estimates, however, the student housing budget has both doubled to over $5 million and is concentrated in Fort Smith. Members have not seen enough detail of the ranking process to agree the government is justified in placing the need for student accommodations in Fort Smith above the pressing need in Inuvik and Yellowknife. Finally, Members of the Social Programs committee expressed their concern that a new $10 million dollar correctional facility for women is being proposed when the government has failed to provide information to the committee outlining the inadequacy of the current facility.

The Standing Committee on Accountability and Oversight discussed the capital projects in question and noted the further information provided to committees did not convince Members that the current priority assigned to these capital projects was justified. The standing committee forwarded a letter to Minister Handley explaining their concerns about these projects and recommended their removal until such time as the government had fully justified their inclusion to the Regular Members.

The government responded to the standing committee in a letter of February 7, 2003. Unfortunately, it would appear that the government plans to continue with its initial plans despite the misgivings of the Committee. The government provided no further information that convinces Regular Members that due process is being followed. The first criterion for the decision on capital projects is that of the protection of people. The committee has yet to be convinced that the significant increases in capital projects for Fort Smith meets that test.

The government pointed out that much of the resources allocated for these projects are actually future years' spending and will therefore remain a part of the capital plan for the next government to review.

The committee recognizes that future years' spending is beyond the control of this Assembly, however, the committee is also aware that once projects are placed on a long-term plan it becomes more difficult to remove or change them. Projects become institutionalized, money is spent developing master plans and architectural renderings and communities expect that the projects they see will be coming in the years laid out. Given the timing of the election this year, the next Assembly may not have time to review the draft main Estimates in the same detail we have had this year. It is too late to remove these projects from the main estimates now, but committee members remain concerned that the government has not been able to justify them staying in the plan.

Members hope to ensure that the new standing committees for the 15th Assembly are aware of this committee's concerns. Returning Regular Members will raise these issues as soon as possible in the new Assembly, and hopefully will either receive proper justification for including the projects as priorities, or vote them out of the estimates in favour of more urgently-needed projects.