Total department, revised figure, $8.928 million.

Does the committee agree that consideration of the Department of Education, Culture and Employment is concluded?

I'd like to thank the Minister and his witnesses for appearing.

I'll call the committee back to order. What is the wish of the committee? Mr. Dent.

Mr. Chairman, I'd like to recommend committee continue consideration of Bill 3 and Committee Reports 3-14(6), 4-14(6) and 5-14(6) concurrently to take a look now at the Department of Executive, the budget for FMBS.

Does the committee agree?

Thank you, Mr. Dent. Minister responsible for FMBS, Minister Handley, do you have any opening comments? Mr. Handley.

Minister's Opening Comments

Mr. Chairman, I'm pleased to be here today to present the Financial Management Board Secretariat's 2003-2004 main estimates. The 2003-2004 main estimates propose total operational expenses of $26.939 million. This is a $2.824 million, or nine percent, reduction from 2002-2003. This reduction is due to several factors.

1. Completion of the pension review project which involved deciding whether to stay in the federal superannuation pension plan. With conclusion of the project, a reduction of $2.039 million and six positions is proposed for the 2003-2004 fiscal year. This is not a full reduction of the resources provided for this project, as three positions are required to work with superannuation and insurance carriers in an effort to improve coverage and services to employees, as well as reduce overall costs to the GNWT.
2. Removal of the $1 million associated with the hydro power initiative. This work has been transferred to the NWT Power Corporation. The requirement for further resources for this initiative will be dependent on whether agreements are in place with Aboriginal governments to pursue specific projects.
3. The settlement of the equal pay complaint. The settlement outlines a three-year process to identify eligible employees, verify service, process payments, review irregular situations and make final payments. A series of changes will be made to the make-up of the equal pay team and their duties. The 2003-2004 changes result in a funding reduction of $1.250 million. The Government of Nunavut will continue to pay 44 percent of shareable costs as per the division of assets and liabilities agreement.

The secretariat's main estimates include funding increases for the following items:

1. A $779,000 increase to salary and benefits associated with collective agreement changes.
2. The addition of one position for a labour relations officer in the Fort Smith region as a pilot project to assess the impact on client service and labour management relations in adding regional labour relations services.
3. A $150,000 increase related to the issuance and monitoring of loan guarantees to support the establishment of secondary industry in the Northwest Territories related to resources development.
4. A $226,000 increase to provide pay and benefit services to the Fort Smith Health and Social Services Board and the Deh Cho Health and Social Services Board which is being funded from a transfer from Health and Social Services.

The secretariat's proposed capital acquisition plan for the 2003-2004 fiscal year includes $600,000 for information technology projects.

1. $230,000 has been included to continue the work started in the current fiscal year to review and identify potential financial information systems solutions for the government. This review is intended to provide decision-makers with sufficient information to determine whether to invest significant effort in developing a new financial system. This project is expected to cost $400,000 and be completed by March 2004.
2. $230,000 has been allocated to complete software upgrades to the existing financial information system to keep it functional while a business needs analysis for its replacement is performed.
3. $200,000 has been allocated for hardware and software development and support tools in support of a knowledge management strategy.

That concludes my opening remarks, Mr. Chairman. Thank you.

Thank you, Mr. Handley. Does the Standing Committee on Governance and Economic Development have any comments, Mr. Roland?

During the committee's review of the FMBS's 2003-2004 draft main estimates, the government's corporate capital planning process, CCP, remained a primary concern for most committee members. Committee issues that arose from its continued consideration of the CCP included:

1. The primary rating criteria, the foundation of the CCP, places a primary and secondary priority on people and assets respectively. This results in more capital funding allocated for more developed and populous communities. A number of Members commented that if this criterion remains unchanged, small communities may never see any significant funding or improvements to their infrastructure.
2. The evaluation process for the CCP is conducted by the Capital Review Committee, which is comprised exclusively of deputy ministers. The committee stated that while the decision-making process has been transferred to the deputy ministers, it is the Ministers who are ultimately accountable to the residents of the Northwest Territories.
3. A more equitable approach that incorporates an improved and more equitable distribution of capital funding to small communities must be implemented.
4. Committee members noted cost overruns in large projects have been funded at the expense of other projects.
5. In most small communities, government capital expenditures are often the sole source of economic development.

Committee members recalled that at the end of the review of the 2003-2006 business plans, the Premier at a meeting with AOC agreed to review the CCP process, taking into consideration the concerns of the Regular Members. AOC informed the Premier that it would like to comment on any proposed changes to the CCP prior to the introduction of the government's draft 2003-2004 main estimates in February of 2003. To date, neither standing committee has received correspondence or briefings on proposed changes to the current CCP from the government.

The government's IT support services will be centralized under FMBS within its new technology services centre, TSC. The TSC will be responsible for providing a centralized service desk, desktop, network, server and network authentication support services to departments. Services rendered will be charged back to the respective department, board or agency and the staff of 29 will be comprised of IT staff transferred from the departments.

Although committee members appreciated the efficiencies associated with the centralization initiative, the committee hoped that this was not another unnecessary exercise to increase staff or funding. Committee members recalled that a similar exercise in the previous Assembly was initiated and completed by the Department of Public Works and Services. The centralization initiative must ensure services are not needlessly duplicated.

Some committee members observed that there has been growth in the number of active positions and correspondent funding for the communities of Fort Smith and Fort Simpson. No increases in active positions or funding was evident for Hay River, a community in the same region as Fort Smith, which is experiencing a greater demand for programs and services.

Committee members note that many departments have made changes to their organizational structure to prepare for program and service delivery functions in line with anticipated self-government agreements. The committee is concerned that there may be increased costs associated with any realignment of programs and services along self-government lines. Committee members remarked that these incremental costs associated with self-government are the responsibility of the federal government.

To his knowledge, the Minister assured that there is no regional reorganization planned or underway. In a subsequent letter to the Standing Committee on Accountability and Oversight, the Minister confirmed there is no government-wide undertaking to reorganize its regional structures in anticipation of self-government or any other development.

During the committee's review of the Department of Transportation's capital expenditures, committee members made note of the increase in capital funding that was attributed to the Canada strategic infrastructure fund. The committee asked the department for an explanation of how the funding was accounted for within the Department of Transportation. The Department of Transportation referred the matter to the Department of Finance, who in turn referred it to the FMBS.

FMBS explained that monies from the Canada strategic infrastructure fund is accounted for within 'deferred capital contributions' of the government's overall summary of revenues and not within the Department of Transportation. However, Members later noted that funding from the federal government's airport capital assistance program is accounted for within the department under "capital recoveries" in its revenues, recoveries and transfer payments schedule.

The committee commented that the government's books should be clear, consistent and in plain language. Committee members encourage the government to adopt a standardized reporting process for revenues as well as expenditures.

Thank you, Mr. Roland. Would the Minister be wanting to bring in any witnesses, Minister Handley?

Yes, I will, Mr. Chairman.

Does the committee agree?

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

With me are Lew Voytilla on my right, secretary to the Financial Management Board Secretariat, and Rob Taggart, manager of corporate services for Financial Management Board Secretariat. Thank you.

Thank you, Minister Handley. We are looking for directorate, general comments. Ms. Lee.

General Comments