Thank you, Mr. Chairman. Mr. Chairman, if I could speak, first of all, to the fee we charge for administration of the water and sewage services in the communities. In the existing agreements with the communities, the identified administration fee is nine percent. Over the past few years, Public Works has not been charging the nine percent. They were charging in the range of six percent. However, about two years ago, we got direction from FMBS that we were supposed to charge enough to recoup our costs. Public Works identified that as 16 percent. We then started charging the communities this rate, however, we thought that we could work out agreements with the communities and identify this rate in the agreements by April 1st. In response to the recommendations from the standing committees, we took this back to FMBS and FMBS agreed that we could go with what's in the existing agreements, which is nine percent. That's what our plan is at this time.

At the present time, we've made the communities aware of this and we are negotiating with the communities on new agreements. We expect that we may be able to reach signing of these agreements by the end of this month, possibly at the same time as the Beaufort-Delta conference is taking place. In relation to the communities assuming responsibility and having concerns as to the capacity to carry out and meet the responsibilities, for a number of years now, we've had a training program which certified water treatment plant people, operators, including the truck drivers, if that's who was the identified water treatment plant operator. We have programs where these people can get certified. This is an ongoing program that we've had for a couple of years in cooperation with MACA and Health and Social Services. What we are prepared to do under these new agreements, Mr. Chairman, is we would identify criteria where we could turn over more and more responsibilities to the community for water delivery as they show capacity and they have the trained people. We would not be asking them to take this on if they don't have the trained people. I believe some of these recommendations came from the Member and the departments, both MACA and Public Works, are following up on these recommendations, including having a meeting with all four community leaders in those communities that we still have water operating agreements with. Thank you, Mr. Chairman.

Thank you, Mr. Steen. Mr. Krutko.

Thank you, Mr. Chairman. Mr. Chairman, I have had discussion with the Minister on this and I think we have to have some sort of a plan in place and a strategy of how we are going to be able to, at the end of the day. It's a good one that we have to ensure that the community has the capacity and the resources to train people and take on the infrastructure that they are going to eventually take it on. The concern from the communities is the whole aspect of the liability in taking something on knowing there is a liability associated with it. What are we doing with regard to the area of liability when it comes to water treatment and the concerns communities have about not having adequate infrastructure or facilities to take it on?

I will use the example of the McPherson water problem we've had where it made some major expenditures and we turn around and get water trucks put into the community with no allowance for water trucks to be stored in a garage facility. You have to make room by moving other infrastructure, which the hamlet owns elsewhere, to find the space and then renovate existing facilities. There's no capacity to plan for more garage space in the community and also to allow for communities to realize that when you take on water operations such as the water delivery project in McPherson there is a lot of overhead. There is wear and tear on your vehicle, there's mechanical cost, and if you don't have a mechanic on staff, you are going to have to have a mechanic to do the servicing. So there are all these things that are unforeseen. I would like to ask the Minister, knowing there are some challenges out there that communities will have to take on especially when it comes to the operation and maintenance of the infrastructure, the water treatment plant, the water trucks, is that something that's going to be discussed when you meet with the communities to look at a plan with an implementation plan attached to it? Will there be such a scenario with regard to the planning for the takeover by the communities?

Thank you, Mr. Krutko. Mr. Steen.

Mr. Chairman, the particular meetings we are talking about where the community leaders are together with the department would also include officials from Municipal and Community Affairs because MACA is really the department that's funding all this. What we would do, with Public Works, is make both the community and MACA aware of what's needed before the community could be expected to take on the operation of the facilities. That's what our part would be in those particular meetings. We are already doing most of this. I think that right now, the administration from the communities is meeting with our regional superintendents on this as well as trying to address the liability aspects of this agreement.

Right now, we would have to have our agreements drawn up in such a manner that they are approved by Justice and they meet the requirements of the government. We can't give any guarantees to the communities that we don't have the capacity to do. So I presume the communities are in the same position. If they are not comfortable with signing the agreements for legal purposes, then they would be checking with their legal people as to what is required. My understanding of all this is, at the regional level, this is being ironed out by the superintendents and the hamlet administrators. So I am expecting that when we go into Inuvik at the end of the month and meet with the leaders, it's going to be pretty well all worked out. There is no doubt that MACA would be assuring that the communities won't be put in a position where they have to take on the operation without having the proper facilities and the infrastructure. Thank you.

Thank you, Minister Steen. The Chair will recognize Ms. Lee.

Thank you, Mr. Chairman. Mr. Chairman, I would like to offer some general comments regarding the computer procurement contract the department is engaged in. It's in line with what the Member for Yellowknife South already indicated. Mr. Chairman, it's really frustrating to hear about these sorts of stories over and over again where the department flagrantly and explicitly ignores its own business incentive policy. I guess it's not a surprise when the Minister has already indicated on record that he thinks the BIP increases are a cost of doing business, so it's really no surprise that this was not adhered to this time around.

I understand the department has indicated that this would not have fallen under BIP. This was a legitimate sole-source contract because of the fact that only one supplier could supply this. Mr. Chairman, that just doesn't wash. This is another case where the Minister is not paying attention to what it is they are supposed to do. They get a piece of paper in front of them. On the surface, it sounds good. The government has $1 million to spend on computer equipment and you will get the best deal if you get it from the biggest and largest company and we will save $100,000. If that's the case, we could bundle up all the money we spend on computer purchases and that could probably end up in the multi-millions and we could just call Mr. Gates or somebody in HP and say we have $10 million to spend on computers, what's the best deal you can offer us. To say we saved $100,000 is very short-sighted.

We are under such a strict budget that government departments get so much on computers and they feel pressured to do as much as they can with that computer money, but that really is not taking into consideration other important factors that government should consider. Government is not just a purchaser, I believe. The government money we spend on hiring people and buying things has a major impact on our industries and IT industry in the North is quite fragile. These contractors who try to make a living and turn a profit for their businesses, they need contracts like this to have a go at their business balance sheet. We see over and over where small businesses start a business and they do all the little projects and they have little training programs and they make thousands here and thousands there, but they can't participate in the major projects that could secure the viability of their business.

We have heard many times about government bundling projects into such a big scale, that small businesses cannot bid on it and it appears to me that this is a case where that's happened again. If the brains got together and worked out a contract proposal where it's made so big and difficult that not one small business in the Territories could take it or bid on it...It's not a hard job. But as a government it is incumbent on the government and a department like Public Works to think about what it means. They have $1 million to spend on computer contracts, should we just give it to a multi-million corporation anywhere because we are going to get the best deal?

Saving $100,000 is not taking into consideration a whole array of other things that the government should consider. Capacity building of IT industry in the NWT, there are multiplier effects on every dollar the government spends, every dollar the government spends multiplies into $3 or $4. It multiplies into different employment opportunities for people who are involved in the IT industry. It is the small computer businesses in the Territories who provide training. They provide support services to different levels of government in different communities. I don't think that DPW in a small community will call the HP guy or gal to come and fix their computers or provide network services.

I just want to put it on record that I am very disappointed that this Minister is engaged in another action that shows complete disrespect for their own policy, the government policy, the business incentive policy just as it happened with North Slave Correctional Centre. Contracts were bundled up there. It was stated by various Ministers that BIP was costing more money and that resulted in an electrician company, a long-term business, losing out on a bid on a very, very small percentage. I believe that the government or a department may gain $100,000 here or $100,000 there, but in the long run it is really sending out a negative message, a very discouraging message to small businesses that are maintaining business here.

In the long run, I think the government is losing out on the dollars anyway. The people are asking what are the consequences of government not adhering to its own policy. I don't know what the consequences are, but we are being told here that everything was above board, that this was a legitimate contract that was allowed to be outside of BIP. We could hear lots and lots of rationales and reasons why, but I think what we are really lacking is on the part of the Minister to really think about what it is they are doing or what their department is doing and evaluating pros and cons of the decisions they are making and implications that their decisions have on our businesses and our population that we should be mindful of in this Assembly.

So I was listening to the answers the Minister and the department were giving to Mr. Bell. I don't want him to have to repeat all that over again. Maybe I should ask the Minister why he couldn't have divvied up this project so more businesses could apply for it and at least give the businesses a chance to bid on it and then the department could figure out whether or not this was at all possible for northern businesses to supply. Thank you.

Thank you, Ms. Lee. Mr. Steen.

Thank you, Mr. Chairman. Mr. Chairman, first of all, I will respond from the Minister's aspect of this. I would like to assure the Member that personal opinion is not the issue here. Whether I support BIP or not is beside the point. There is a process in place that we follow. There's a process in place for both the department and the public to use if they feel there are issues in relation to BIP. If they have questions as to whether or not BIP is being followed properly, there is a committee that they can go to for advice and it's the same from the public aspect. I am told there is an appeal process, but from the Minister's point of view, I am told this is not a BIP issue. This is strictly a contract procedure that we are using. The process is allowed. I believe the department has already given an explanation as to why we did it, the way we did it. I will allow the deputy to speak to that, but I feel that most of the points were already addressed when we responded to Mr. Bell. Thank you.

Mr. Rattray, do you want to add something?

Thank you, Mr. Rattray. The Chair will recognize Mr. Dent.

Thank you, Mr. Chairman. I, too, have been contacted by people in Yellowknife that were disappointed that this has been handled this way, the contract for computer hardware. I have to say that it's unfortunate, but it seems like it's a continuing theme. It hasn't always been this department, but I certainly have a considerable number of concerns about consultant contracts that have gone out from various departments in this government for the provision of IT services. We almost always seem to set certain standards that require that a large southern firm has to be the one that's sourced to provide the service or, in this case, the hardware.

Without trying to rehash everything, I know I have certainly got to echo the concerns about supporting northern business and making sure we develop the capacity in the NWT to have some of this expertise become home grown. One of the reasons we decided we needed a business incentive policy was to encourage the development of local business, northern business. We are always listening to the Minister of Finance talk about how having more people in the NWT translates into a bigger grant. We get about $17,000 per capita.

So it continually surprises me when the government, after saying we have a business incentive policy and that we want to encourage business, and that we want to develop capacity, and we are continually talking about ways we can develop capacity in the regions and then when it comes to business, we sometimes say it's going to cost too much to do it here, we are going to have to do it another way. It's going to cost us less. That's not much different than saying, rather than buying in the North, we should buy modular homes from down South and ship them out to communities because that would be cheaper and we would get more houses that way. We might be able to do that, but we would have far fewer jobs and that might translate into less money to buy even fewer houses than what we can put up now.

So we need to take a look at the broader economic implications of not supporting northern business. Mr. Rattray has talked about buying a truck a part at a time. Well, there wouldn't be much of an after market out there for extra truck parts if people didn't do that. In fact, it's an amazing number, something like 60 percent of all new vehicles or new trucks, in particular, are modified by after-market parts. So it wouldn't be unusual to be able to find, I don't think, different parts that could perhaps work together.

I can't believe we are talking about how 25 years ago we standardized on HP. What would have happened if we had standardized on Wang or IBM or some other brand? We would have had to change. Why are we trying to say that in 25 years the technology of other hardware providers can't match what we are getting from HP, a company we standardized with 25 years ago? Of course, HP is going to say they have to provide it. They have a good contract they are going to get. I would be very surprised if we couldn't find somebody to bid on competitive hardware to HP. There is no reason you couldn't put in the tender documents or the RFP that the vendor had to make sure that all of the pieces worked before they got a substantial amount of the money. So you would be fairly well protected to make sure that it was going to happen. At the very least, by going out to RFP or tender in the North, you would at least have helped to transfer some of that technology by developing the partnerships between northern contractors and southern suppliers if the southern ones really do have to come into it.

I have often brought up issues in this House where we have been given the argument that because of the knowledge management policy, we have to do things a certain way. In my experience, in my opinion, I have seen too many occasions when people have used the knowledge management policy as a means to over spec the supply and require that large southern firms deliver the goods. I think that's a real mistake. I don't know why we keep doing it, but I can't believe 25 years after we standardized on HP, we haven't taken a real look at whether or not we need to maintain that standardization. What we brought in 25 years ago certainly isn't working today. I can't believe we are talking about the same operating system. Platforms couldn't be anywhere near the same, so what difference does it make if we standardized 25 years ago? If it's more than three years old, it's most likely outdated. That's something that we have heard from the government itself when it comes to Evergreening. So if we are Evergreening everywhere else, are you going to say we haven't been doing it here?

Mr. Chairman, I am astounded that there hasn't been any real effort -- and it's not just this department by the way, but anywhere in government -- to look at some of these major computer contracts that we let, both on the consulting side, software side and the hardware, that would allow northern companies to demonstrate that they could do the job. I think if we put the right specs out there, we would find that we could. Thank you, Mr. Chairman.

Thank you, Mr. Dent. Mr. Steen.

Mr. Chairman, I'm just going to respond to two particular points the Member brought up, then I'll have Bruce respond as well. I'd like to point out two things here. The department, in the time that I've been a Minister -- about four years now -- we've been continuously told to keep costs down; do whatever we could to keep costs down. Then when we do, we're criticized for doing it. We're saving $100,000 here, but nobody cares. They say it could have been spent better elsewhere, or the advantages would have been better or we could have seen more than $100,000 worth of benefits. I'm getting one message one way, and then another message when I do it the other way.

The second thing is, for the same four years I've been hearing from the Members that they want everybody to have the same kind of computer equipment in this government. They were criticizing the departments for everybody having their own brand of computer equipment. So here I have a department that is trying to stay within the type of equipment that they're familiar with, and furthermore, from the information I'm given, it would simplify delivery, installation, troubleshooting and warranty. Well, from my point of view, that satisfied the other point that the members have been bringing up steadily; that everybody have the same type of computers. So that's what I've been doing here, and that's why I agreed with the department's decisions. Mind you, the decision was made before it was brought to me. But that's to allow them to manage. I don't manage this thing every day, they do. But if an issue is raised, then I do look to see if we are meeting the government's policies. As far as I'm concerned, we're meeting the government's policies and we're meeting the concerns expressed by the Members. I'll ask Bruce if he has anything to add to that.

Thank you, Mr. Steen. Mr. Rattray, do you have anything you want to add to that?

Thank you, Mr. Rattray. Mr. Dent.,

Thank you, Mr. Chairman. Well, I'd love to see where a recommendation was made in this House that everybody in this government should have the same type of computer. I have no argument with economy and efficiency. I think that's exactly what we need to have. But we don't know whether or not that $100,000 has cost us six jobs. If it did, we'd be money ahead spending it. So unless the department is working hand in glove with the Department of Finance to examine in a macro-economic way what the impact is of the government's spending, I don't know that anybody can answer that question.

I don't disagree that we need to be economically efficient. I think we should. But in my experience, and I don't claim to be an expert when it comes to computers, but I have experience with 30 or 40 of them, and I have lots of different brands that work together very well. I've had different operating systems that worked together very well. So for me, it's really difficult to understand why we can't say that you have to get your specs in order, put out an RFP or a tender, and part of the conditions are that the system has to work when it's installed and has to do what it's supposed to do, and then let's see what Northerners can do. But I don't think at anywhere in this House there's ever been somebody saying that we should buy only one type of computer. At least it certainly wasn't something that I recall being discussed. I would say, from what I've seen of the computer market, there are all sorts of hardware out there that will deliver the same sort of performance. One day one brand is better than the next, and it's really hard to stay on top of which one is the best, but we should be buying whatever is the best on whatever given day the tender or RFP comes out. Thank you, Mr. Chairman.

Thank you, Mr. Dent. I didn't hear any questions there but, Mr. Steen, did you want to comment?

Mr. Chairman, I am not a computer expert either, and that's why I have to rely on the department's information that was given me. That was the advice that this was the best way to go. Maybe there is room in the department to work closer with the computer companies in Yellowknife or wherever to get a better opportunity for them to improve their businesses, and I don't argue that point. I think the department should make that effort if it's possible for them to do it. But on the other hand, I have not heard any evidence that they did not make the effort and it was not possible for the private sector to respond as to what we were asking for. So I have no problem supporting the department's decision. Thank you.

Thank you, Mr. Steen. The Chair will recognize Mr. Bell.

Thank you. I want to ask the Minister a couple of questions specific to this contract. I'm wondering if the Minister is aware that one of the local contractors in town had been working -- it's my understanding, they've indicated to me -- with the Department of Health and Social Services, spending a lot of valuable time, a lot of valuable resources in helping the Department of Health and Social Services identify their needs with regard to what eventually became this contract, their technical needs, to help the Department of Health and Social Services sort of frame up what type of equipment they would be requesting. They'd been working, I understand, for a year, and invested a year's worth of time and effort, hoping to one day have a chance to bid on this contract. I wonder if the Minister could indicate whether or not he's aware of that.

Thank you, Mr. Bell. Mr. Steen.