Thank you, Madam Chair. The Minister mentioned that 30 percent of the $7 million increase is from the mines. Can I get information as to what constitutes the other 70 percent and also could the Minister indicate as to whether or not the Snap Lake De Beers mine is included in that assessment? Thank you.

Thank you, Ms. Lee. Mr. Roland.

Thank you, Madam Chair. No, the only ones we include here are actual operating mines that we can establish a property tax on. Those that are in the works now have not been included. Just to be clear, the 30 percent increase, we would do a comparison of the 2004-05 proposed mains to the 2003-04 revised mains because this one is now being assessed and added to the assessment role, whereas we have had the prior mine already included in there. So the increase from the revised mains to the proposed mains, 30 percent of that is due to the addition of the one mine. Thank you.

Thank you, Mr. Roland. Revenues, recoveries and transfer payments, Department of Finance. Thank you.

Could I ask you now to flip back in your book to the beginning of the Finance department to department summary? Total operations and expense, $7.354 million.

Thank you. Does the committee agree that that concludes our consideration of the Department of Finance?

Mr. Roland, thank you and thank you, Ms. Melhorn and Mr. Enge, for your help in getting us through this one. Thank you.

Are we ready to now move on to the Financial Management Board Secretariat?

I would like to ask the Minister if he has opening remarks. Mr. Roland.

I am pleased to be here today to present the Financial Management Board Secretariat's 2004-2005 main estimates.

The 2004-04 main estimates propose total operation expenses of $27.377 million. This provides for a total increase from the 2003-2004 fiscal year of $518,000 and represents a 1.9 percent increase from the previous fiscal year.

The secretariat's main estimates include:

• • a $371,000 increase to salaries and benefits associated with collective agreement changes;
• • a $130,000 increase to establish an equal pay research officer position that will monitor and analyze data pertaining to the maintenance of equal pay for work of equal value in the GNWT. This position will coordinate responses to any complaints on behalf of the GNWT that might arise through different levels of government and review both existing and future pay and benefits to ensure appropriate compliance. This function has been established in response to the
• •
• • passage of amendments to the Public Service Act to provide equal pay for work of equal value for the public service;
• • a $120,000 increase to record a grant-in-kind equal to the value of the interest foregone on a negotiated settlement of a debt due from a diamond manufacturing company that became insolvent;
• • a $1.127 million increase to the Power Subsidy Program.

These increases are partially offset by:

• • a $294,000 reduction due to the winding down of the equal pay settlement implementation activity; and,
• • a $926,000 reduction for the transfer to the NWT Housing Corporation of the O and M associated with housing units transferred to them on the termination of the staff housing program.

The secretariat's proposed capital acquisition plan for the 2004-05 fiscal year includes $497,000 for information technology projects.

There is $300,000 included to purchase new, upgraded servers that will allow existing department applications to be consolidated. When completed, this initiative will reduce the overall cost to government of information technology infrastructure in place while improving quality of service to all affected departments.

There is $197,000 that has been allocated to complete software upgrades to the existing financial information system to keep it functional while a decision regarding its replacement is pending.

For the 2004-05 fiscal year, the FMB Secretariat's main estimates includes a total funded staffing complement of 130 positions; 103 in headquarters and 27 in the regions. This net decrease over the previous fiscal year of seven positions is largely comprised of a reduction of six positions at headquarters associated with the continuing revisions to the makeup and duties of the equal pay team.

That completes my opening remarks. Thank you.

Thank you, Minister Roland. Now I believe that Mr. Ramsay is going to provide the remarks on the committee's review of FMBS.

Thank you, Madam Chair. I would now like to provide the committee's report on the Financial Management Board Secretariat.

The committee met with the chairman of the Financial Management Board on February 18, 2004, to review the draft 2004-2005 main estimates for the Financial Management Board Secretariat, FMBS.

FMBS is proposing a $518,000 increase in operations expenses from the 2003-2004 main estimates. This is primarily due to forced growth in salaries and benefits and the power subsidy program, which is partially offset by expenditure reductions and the transfer of the staff housing program to the NWT Housing Corporation.

Technology Service Centre

The Technology Service Centre, TSC, was established in 2003 and provides centralized service desk, desktop, network, server and network authentication support services to departments. Before the TSC, each department had its own information technology, IT, staff providing these services.

The year 2004-2005 will be the first year the TSC is fully operational. Early indications are the centre has been successful in achieving more efficient and better-coordinated IT services across government.

Because it is early in the TSC's rollout, the committee reserves comment on the overall efficiency of the initiative. The committee notes that between FMBS and Public Works and Services, for 2004-2005, a total of $11.7 million, and 47 person years are devoted to computer services for GNWT departments. This does not include outside boards or agencies, which control their own technology budgets.

The committee will look forward to more detailed assessments of the TSC's performance during the next business plan cycle.

The committee wishes to commend the government not only for its initiative in establishing the TSC, but also for accomplishing its implementation with minimal fanfare and disruption to services. Members believe the TSC could serve as an example for other service centres the government may consider establishing in the future.

Human Resources Service Centre

The committee believes there are opportunities for the government to build on its positive results with the TSC by looking at other potential service centres. In particular, Members believe there may be much to be gained in efficiencies, better coordination and more consistent application of policies by establishing a human resource service centre.

All departments currently have their own human resource staff, which is similar to the situation that existed with IT staff prior to the TSC. There are concerns about consistency between departments, particularly when it comes to the hiring process. As well, government-wide human resources responsibilities are split between the corporate human resources division in the Executive offices and the labour relations and compensation division in FMBS. Members believe it is time for the government to restructure the way human resource services are provided on a government-wide basis.

The Standing Committee on Accountability and Oversight recommends the government investigate the feasibility of establishing a human resource service centre.

If a decision is made to establish a human resource service centre, Members would hope to see the government take a well-planned, low-key approach to implementation similar to what was used for the TSC.

Power Subsidy

The power subsidy program assists residential and commercial customers in high cost communities by paying the difference between the Yellowknife power rate and the local rate, up to a maximum number of kilowatt hours.

For 2004-2005, the subsidy is expected to cost $8.307 million, an increase of 16 percent or $1.127 million from the 2003-2004 main estimates. The total increase since the 2001-2002 fiscal year, when the subsidy program cost $5.419 million, is nearly $3 million. This means the program is growing by an average of about $1 million each year.

The committee finds this growth trend alarming and is concerned about the sustainability of the program. Approximately $4 million of the subsidy is offset by the NWT Power Corporation's dividend to the GNWT. The balance of the subsidy is paid for from general revenues. Other programs and services will suffer if the subsidy is allowed to balloon.

The Standing Committee on Accountability and Oversight recommends the government bring back to the committee, before the next draft business plan reviews, options for measures to stabilize power subsidy costs at current levels.

Loan Guarantees

The draft main estimates for FMBS include a grant of $120,000 which reflects interest the GNWT has agreed to forego pursuant to a debt settlement. The debt arose from a loan guarantee the government provided on behalf of a diamond manufacturing company that was unsuccessful in its operations. Under the terms of a negotiated settlement, the parent company has agreed to repay the principal of the loan in exchange for the GNWT agreeing to forego the interest costs. The committee learned that the total interest costs the GNWT has agreed to forego amount to $800,000 over 10 years.

The committee is very concerned that the GNWT appears to be inconsistent in its approach to collecting debts. In this case, Members wonder whether the GNWT could have taken a stronger position and insisted on repayment of the full debt, including the interest. The outcome of this case may be perceived as unfair by other debtors who have not enjoyed such leniency. It may also send a signal to the beneficiaries of the other approximately $17 million in diamond loan guarantees that should they get into similar financial difficulties they will be able to negotiate equally favourable settlements.

Audit Bureau

The audit bureau is proposing an increase of $35,000, or approximately 30 percent, in other expenses for 2004-2005 from the 2003-2004 main estimates. The Minister and his staff advised the committee the reason for the increase is that the audit bureau anticipates using some additional contract resources, in part because they are having difficulties recruiting to fill three vacancies.

This information led Members to question whether the entire function of the audit bureau could not be contracted out to an outside firm which may be able to provide the services more efficiently, and also at arm's length from the GNWT. The committee suggests the government give this serious consideration, and report its findings during the 2005-2008 draft business plan review.

Thank you, Madam Chair. That concludes the report.

Thank you, Mr. Ramsay. Would the Minister like to bring in witnesses?

Thank you, Madam Chair. I request we take a short break as we get the witnesses prepared.

Thank you. We will take a brief break and reconvene.

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Mr. Roland, for the record, could you please introduce your officials?

Thank you, Madam Chair. To my immediate right is Mr. Lew Voytilla. He is the deputy minister for the Financial Management Board Secretariat. To my immediate left is Mr. Rob Taggart, director of policy and planning. Thank you.

Thank you, Mr. Roland. Are there any general comments on FMBS, Financial Management Board Secretariat? We are on page 2-39 under the Department of Executive in your books. Are there any general comments? Ms. Lee.

Thank you, Madam Chair. Just a short comment. I do believe that the AOC committee report on the review of this budget was already read. One of the things that was mentioned there is the rationalization of a technology service centre, and I was one of the Members who felt that this was a positive step. The decision to amalgamate and centralize this function came about due to the nature of the work, where I am sure the rapidly changing technology made it necessary and made it sensible that there be some focused, central location where these services could be provided and there be some level of standardization in keeping up with the changing technology. I also noted in my discussions -- and I want to make it public and put it on record -- that the way in which this was done was very good in that there were not a whole lot of fancy studies done. It was pretty low key, but it was well organized. I believe there was a public session about the launching of this centralized service in the Legislative Assembly last fall or late last summer. Since then, I think people who are working in the government all over the place are becoming more aware of this and the phone number to call and the service requests to make. I am saying this because I do think that they should be used as an example of where a government service can be provided and changed to meet the needs of the times.

One of the things that the AOC is mentioning is the potential for amalgamating and centralizing a human resources service centre. I do believe it is the opinion of most Members that we are not looking for some big fancy studies to see if there could be a new department of personnel or a creation of a whole new arm of government, but that a human resource centre has much parallel to the TSC service in that it is something that every department in the government needs and it is something that could benefit from some sort of a standardization in its services.

The AOC report really makes recommendation to that, and I don't want to go into too much detail about this, but I would like an initial response from the Minister as to whether he is receptive to the idea of doing a very low key, but well planned centralizing of human resource services in the government. Thank you, Mr. Chair.

Thank you, Ms. Lee. Mr. Roland.

Thank you, Mr. Chairman. I would like to thank the Member for those comments. As well, I am aware that committees in previous assemblies were raising issues around that, how we would set up our functions and how much it would cost if we continued to operate with each department doing their own thing. So it is good to know that we have the support to continue down this path.

In the area of the human resources services centre, in fact, there has been some work ongoing. We've begun that exercise to look at how we can better perform and be more efficient and effective with the services we do provide. Right now I am informed that we have already begun some of the work in the area of the financial services, with seven other departments working with one group. So we have begun that exercise and we'll continue to work down that path as we go forward. Knowing our fiscal situation, we are going to have to spend our money prudently and have to be effective with that. We are looking at those options of pooling some of our resources and creating these centres that would allow us to be more effective.

As well, one of the Members asked questions in the House about, for example, records of employment. It is pretty difficult when we have to go from different departments to the central agency and make sure that we are doing it all right. So we are going to have to look at all of these options to improve on our service delivery. Thank you.

Thank you, Mr. Roland. Ms. Lee.

That concludes my general comment. Thank you, Mr. Chairman.