Item 14, tabling of documents.

I will call Committee of the Whole to order and ask Mr. Allen what is the wish of the Committee? Mr. Allen.

Thank you, Madam Chair. The committee recommends that the committee review the Department of Transportation and also the NWT Housing Corporation until concluded. Thank you, Madam Chair.

Thank you. Is committee agreed?

Agreed. Thank you. We will commence with that after a short break. Thank you.

---SHORT RECESS

I call Committee of the Whole back to order. As per the committee's wish, we are going to now deal with the Department of Transportation. I would like to ask Minister McLeod if he has opening remarks.

Yes, I do, Madam Chair.

Thank you. Please proceed.

Madam Chair, it is my pleasure today to present for your consideration the Department of Transportation's proposed main estimates for the 2004-2005 fiscal year.

The core of the Department of Transportation's mandate is to operate and maintain the territorial public transportation system. Our transportation system consists of five ferry crossing services, 27 community airports, roughly 2,000 kilometres of all-weather highway, and 1,500 kilometres of seasonal winter roads. The largest part of the department's proposed main estimates for 2004-2005, some $53.5 million, is committed to the ongoing, day-to-day costs of operating the territorial transportation system. The department's budget proposal for 2004-05, excluding amortization expenses, includes a modest increase of about $250,000, or one-half of one percent, over the main estimates of 2003-04. The increase is driven mainly by the government's obligations arising in the third year of its collective agreement with the Union of Northern Workers.

It is important that I bring to the committee's attention that while the department has held its operating budget relatively constant, the demands on the territorial transportation system have steadily grown. The Northwest Territories has been fortunate to benefit from the tremendous growth in its resource industries; diamonds and oil and gas in particular. These positive and welcome economic developments, however, have generated more and more traffic that the transportation system must carry. Over the past decade, the traffic on the highway system as increased year by year at an annual rate of 3.3 percent. The department's greatest challenge has been to accommodate the consistent growth in traffic within its budgeted appropriation.

Over and above routine maintenance, like any physical asset, our system of transportation infrastructure wears out with regular use and requires lifecycle replacement and reconstruction to keep it in a serviceable condition. At the same time, the lifecycle reconstruction of the infrastructure also makes the most sensible and timely opportunity to improve or enhance the infrastructure. The Department of Transportation's capital acquisition plan aims at providing for the infrastructure's reconstruction and improvement. For the 2004-05 fiscal year, the department's capital acquisition plan has a budget of $47.7 million. Most significant, almost half the capital acquisition budget for 2004-05 consists of contributions from Infrastructure Canada's strategic infrastructure fund and the Department of Indian Affairs and Northern Development.

The Department of Transportation has been particularly successful in obtaining commitments from Infrastructure Canada's strategic infrastructure fund. Taken altogether, the contributions from Infrastructure Canada amount to $65 million over six fiscal years, of which $14.1 million is included in these main estimates for 2004-05. With the approval of the federal government, this funding has been allocated to five projects on the highway system. With these important sources of federal funding, the Department of Transportation continues to keep our transportation infrastructure in good operating condition for the public's use.

For the past 15 years, the Department of Transportation has been working steadily on the reconstruction of the 526-kilometre corridor of highways 1 and 3 that runs from the Alberta border to Enterprise, Fort Providence and past Rae-Edzo to Yellowknife. Between Rae-Edzo and Yellowknife, there are just 30 kilometres of the original roadbed left to reconstruct. In 2004-05 the department plans to award two contracts that will complete the reconstruction of these last 30 kilometres by the autumn of 2005.

---Applause

Since the year 2000, the department has been working on extending the effective operating season of the Mackenzie Valley winter road system by the installation of permanent bridges over stream crossings. With federal contributions, the work will continue in 2004-05 completing 12 bridges between Norman Wells and Fort Good Hope. In 2004-05, the proposed budget for the Mackenzie Valley winter road bridges program is $8.4 million.

---Applause

The largest river that the Mackenzie Valley winter road system crosses is the Bear River at Tulita. In 2004-05, the budget for the Mackenzie Valley bridges program includes $100,000 to begin the engineering and design work for a permanent bridge across the Bear River.

---Applause

The department plans to continue the reconstruction of the Dempster Highway in 2004-05 with a proposed budget of $5 million. This year's work is expected to complete the reconstruction of Highway No. 8 from Fort McPherson to Tsiigehtchic and start reconstruction on the section between the Yukon border and Fort McPherson.

On Highway No. 4, the department has budgeted $3 million to reconstruct the Ingraham Trail...

---Applause

...between the Yellowknife River Bridge and the Detah access road. This section of Highway No. 4 carries a high volume of traffic all year round that with heavier resource traffic in recent years becomes even more critical during the winter months.

In 2004-05 the Department of Transportation will continue its partnership with the Deh Cho Bridge Corporation to build a bridge over the Mackenzie River at Fort Providence. The people in Fort Providence, Rae-Edzo, Yellowknife and Detah, who live on this side of the river, look forward to the day of reliable, year-round, uninterrupted highway access that the bridge will bring.

The Department of Transportation has two successful programs dedicated to improving local transportation infrastructure in our communities. Under the community local access road program, the Department of Transportation makes contributions to communities to assist in the building of roads to points of local interest. With a small budget of $580,000, the department expects to support access road projects in communities such as Aklavik, Lutselk'e, Gameti, Paulatuk, Tsiigehtchic, Tuktoyaktuk, Wha Ti, Wekweti and others.

The community marine program similarly finances the installation of local boat launch and docking facilities in communities. Again, with a small budget of $300,000 in 2004-05, the department plans to build a boat launch and dock in Fort Smith, a fixed dock in Wekweti and floating docks at Nahanni Butte and Paulatuk.

In summary, these are the highlights of the Department of Transportation's main estimates for 2004-05. The proposed budget provides for the continued safe and reliable operation of the territorial transportation system on which the people and the economy of the Northwest Territories depends so much.

The transportation system is essential to our continued economic success and there is a clear need for the transportation system to meet the demands of a growing economy. We are pleased with the department's success in securing new sources of funding from the federal government. I trust that the Members are in agreement that the development of our transportation system must keep pace with the expansion of our resource-based economy. Thank you.

---Applause

Thank you, Mr. McLeod. At this time, I'm going to ask Mr. Menicoche, who is a Member of the Standing Committee on Governance and Economic Development, to read the committee's overview of the main estimates for the Department of Transportation. Mr. Menicoche.

Thank you very much, Madam Chair. I will just read that excerpt from our standing committee report. The Department of Transportation provides for the safe, accessible and reliable movement of people and goods throughout the Northwest Territories.

The Standing Committee on Governance and Economic Development met with the Minister of Transportation and his staff on February 23, 2004, to review the Department of Transportation's draft main estimates for 2004-2005.

Corridors For Canada Funding Proposal

The committee had some concerns with regard to two components of the Corridors for Canada funding proposal: the proposed improvements to Highway No. 4 -- the Ingraham Trail -- and funding for the Bear River Bridge project. They are both being paid for through a 50/50 cost-share funding arrangement between the GNWT and the federal government under the Canada strategic infrastructure funding program.

The Minister advised that the Ingraham Trail was chosen because of the traffic volumes on the road, the number of accidents, and the high traffic from resource development. The Ingraham Trail has the third highest traffic volume in the NWT, exceeded only by Highways No. 2 and No. 3.

On the Ingraham Trail, Transportation has identified $3 million a year for the next five years, for a total of $15 million. This year, it is proposed that the $3 million will be spent on reconstruction of the section of road that goes from the Yellowknife River Bridge to just past the Detah access road, and also on another section a few kilometres further down the highway.

The committee is concerned that other roads have just as high traffic patterns as the Ingraham Trail, meet all the same criteria and yet are not receiving the same level of funding. The committee asked the department why they prioritized the Ingraham Trail over the Liard Highway. The Department of Transportation reports that $12 million over the next five years will be spent improving the structural capacity of the road and the driving surface on the Liard. The improvements will start at the BC border and work northwards.

According to the department, the need to invest further in Highway No. 1 is being addressed in a number of ways, and a study is underway by Transport Canada to project increases to traffic volume as a result of the proposed pipeline. The Department of Transportation hopes to use that study and obtain more funding.

Highway No. 2 has the second highest volume of traffic in the NWT and only received $400,000 in funding last year.

The committee has also inquired as to whether or not the Ingraham Trail is intended to eventually become the long discussed all-weather road into the slave geological province. The Department of Transportation stated that this is not their decision to make.

The committee is concerned that a lot of money is being committed to this road when the future of it is uncertain. The committee would like to recommend that the department determine the long-term plan for this road for the next business planning session.

Bear River Project

The Bear River project is a part of the Mackenzie Valley winter road bridge program in the Corridors for Canada proposal.

The department states that the plan of the Mackenzie Valley Winter road bridge program is to construct

permanent structures on all stream crossings between Wrigley and Fort Good Hope.

The committee asked the department why the Bear River crossing has been chosen over the Peel River crossing. The department replied that the Bear was not chosen over the Peel. The Bear River crossing is one of the major bottlenecks on the winter road. Although a bridge across the Peel River would improve the level of service, there is no anticipated increase in economic development associated with its construction so long as a bottleneck exists on the Dempster Highway at the Mackenzie River. Also the Fort McPherson Gwich'in council is investigating the feasibility of constructing a bridge under a public/private partnership arrangement.

Finally, the committee inquired of the department if it was their intention to construct an all-weather road and what the long-term plan of this project is. The department replied that the winter road season has steadily decreased. Over the last 10 to 15 years, the season has shrunk from 12 to as little as seven weeks. The reduced access has caused problems for the oil and gas companies, local businesses and the mobility of individuals.

In preparation of the 2005-2008 business plan, the committee recommends that the department indicate more clearly how the Mackenzie Valley winter road route was chosen. The committee would also like to see how decisions were made between the federal and territorial governments to choose this particular route and provide a justification of costs given that the winter road season is only 12 weeks maximum.

Airport Projects

Norman Wells Airport

The standing committee noted that the cost of repairs to the Norman Wells airport, originally projected at $3.6 million, has increased to $7.7 million, and requested an explanation from the department. The department replied that the $3.6 million was a Class C estimate performed early in 2003 during the development of the initial airports capital assistance program application. The $7.7 million was estimated for the final application and was a Class B estimate which included widening and lengthening of the existing taxiway, airport access road improvements and new floodlighting.

The committee remains concerned about the cost increase.

Perimeter Fencing

The committee also asked about the cost difference between the perimeter fencing projects at the Hay River Airport and Norman Wells airport. The Norman Wells project is almost three times the cost of the Hay River project. While the committee understands that there is a difference in the scope of the work between Norman Wells and Hay River, they are still concerned that the total estimate for this fencing has gone from $182,000 to $ 410,000. The committee would like the department to consider if the most economical means are being used to construct the fence.

Yellowknife Airport

The standing committee asked about the tentative plans to move the Yellowknife airport terminal building and runway from their current locations to the west on the other side of the sandpits for an estimated cost of $120 million. The committee is also concerned about the businesses that had established themselves in their current locations with the intention of being close to the airport and how the move would affect them.

The department replied that the Yellowknife airport development plan has reviewed the existing traffic and the future demand over a 10 to 20-year horizon period and reached the conclusion that the existing Yellowknife airport is reaching the limit of its capacity. The apron is congested and the level of safety is compromised as a result.

With regards to the committee's concerns about what the move of the airport would do to the businesses who have built around the airport, the Department of Transportation replied that there would be a steering committee made up of the various air carriers' representatives and industry themselves would be asked to nominate representatives. The City of Yellowknife is also part of this committee.

The committee is concerned both about the funds that have already gone into renovations of the existing airport terminal and of the funds being spent on the studies and plans to move the airport to another location.

The standing committee has asked to be kept informed of any plans to move the Yellowknife airport and has asked the department to keep all of the stakeholders informed and engaged in further planning.

Delayed Project Funding

The standing committee was also concerned that the money scheduled for 2005-06 for the rehabilitation of the Yellowknife Airport runway surfaces was pushed back to 2007-08. The department replied that the $3.7 million expenditure to resurface the Yellowknife airport runway has been pushed back because of the realigning of priorities around the arctic airport projects. Extension of the runway is not in the five-year capital acquisition plan, but is part of the longer-term plan to expand the services of the airport.

Repatriation Of The Licensing Function

From the 1970s to 1997, driver and vehicle licence issuing was facilitated for Yellowknife by Department of Transportation staff and issuing in regional communities was administered through contracted issuers, usually bands and hamlets. From 1997 to 2002, the issuing service in Yellowknife was privatized and a new fee structure based on user pay was implemented.

In 2002, the licensing function was taken over again by the department. Given that one of the department's goals is to increase northern business employment opportunities in the public and private transportation sectors, the committee was concerned that businesses appear to have been dissuaded from taking on the operations of motor vehicles licensing. The department replied that in the interest of consistency in delivery of the service to the public, the DOT resumed the licensing function because qualified contractors could not be found in Yellowknife or in the regions.

The committee was concerned that perhaps the department was not offering enough money and was insisting on hours of operation that made it difficult for a small business to afford to run the licensing operation.

The committee was further concerned that it is more expensive for the government to hire staff for licensing than it would be for a private contractor. The committee asked to see a breakdown of figures to privatize the licensing function and then repatriate the function under the department again.

The department hired three issuing agents at no additional costs for the GNWT. The operations and maintenance costs were $174,000, and the revenue from the service fee is $183,000.

The committee would like to recommend that given the high cost of registering vehicles, if fees for licensing must be collected, that the department find a way for them to be specifically designated for road improvements and not disappear into the consolidated revenue fund.

Commercial Development Officer

The department is proposing to hire a third commercial development officer to negotiate, update and terminate approximately 300 airport leases that are currently outstanding. Once these leases are up to date the department expects to see an $800,000 increase to revenues. The committee suggested that this job might be done more efficiently by a private agency and asked the department to consider this matter before staffing the position. The department committed to review this issue.

Commercial Vehicle Regulations Road Weight Restrictions

The committee was concerned about the inequitable application of regulations and sporadic enforcement without prior notice to the community. A specific example of this is with regard to the weighing of gravel trucks hauling locally. The committee has also been advised that now sewer trucks and water trucks will also be weighed. Often this enforcement can contribute to higher costs of services in the community. The committee asked that the department work with the communities to make them aware of enforcement changes. The committee would also like to recommend to the department that more communities have self-weigh stations installed so that these regulations can be applied consistently across the NWT.

Seasonal Positions

The committee wished to reinforce how important seasonal positions are to the regions. Seasonal work provides much-needed training and hands on experience that is not available elsewhere. It also helps to support a traditional lifestyle by supplementing incomes from hunting and trapping.

Airport Security

The committee discussed with the Minister the current lack of inspection of carry-on luggage in Hay River and Inuvik prior to southbound flights. Members were pleased to hear the department is working with the Canadian Air Transport Security Authority to address this issue. Mahsi cho.

Thank you, Mr. Menicoche. At this time, I will ask the Minister of Transportation if he would like to bring witnesses into the Chamber.

Yes, Madam Chair.

Thank you, Mr. McLeod. Does the committee agree?

Agreed. Thank you. I will ask the Sergeant-at-Arms to escort Mr. McLeod's officials to the table.

Mr. McLeod, for the record, could you please introduce your witnesses?

Madam Chair, with me is Mr. Russell Neudorf, the acting deputy minister to my right, and also with me is Ms. Lynn Cook, director of corporate services.

Thank you, Mr. McLeod. Are there any general comments on the Department of Transportation main estimates? No general comments? Mr. Yakeleya.

Thank you, Madam Chair. Just a general comment to the Minister and his officials. A constituent of mine in the Sahtu is an elderly lady who keeps talking about the road system in the Sahtu and the need for opening up the Sahtu. I am pleased to see in the opening comments that the Minister mentioned some progressive development that is going to be happening in the Sahtu, and the need for these types of initiatives. I was pleased to read that he's...(inaudible)...some of the communities in the Sahtu in the work that's going to happen over there.

Like anything that we've been dealing with over the past couple of days with this government, still there's lots of need for improvement. One of the issues I would like to look at is on page 5. The department has two successful programs dedicated to improving local transportation in our community under the community local access road program. I know the Minister is aware that the community of Deline has a huge ice crossing that goes into the community each year. At Great Bear Lake, the ice is getting thinner and thinner each year. The elders are saying that it's getting quite dangerous now and the crossing is becoming quite a concern for the people. The road that people have to use in Deline passes right by the water intake station. They asked if I would ask the Minister if he would give some consideration to rerouting that winter road. They no longer want to see it crossing Great Bear Lake. If they could find a more suitable, safer route for the people to use for the winter road. That is something I wanted to point out on page 5.

I know there are other communities that are looking for this program to help them; however, that's a concern I need to bring to this table to voice on behalf of the Deline people.

There are other comments I would like to make later on in the budget. Right now, I just want to keep it short, and I'm glad I hear the Minister has made some comments and reference to some of the work that's going to happen with

regard to the winter road in the Sahtu. Thank you, Madam Chair.

Thank you, Mr. Yakeleya. I didn't hear any questions there, so I think I'll just move on to the next general comments. Next on the list I have Mr. Menicoche.

Thank you very much, Madam Chair. At this time I would like to address to the Minister that certainly there is some good news in the approach to his department for the 2004-04 budget year. I just want to stress at this time some of the needs for Highway No. 1 that runs towards Fort Simpson is that some of the comments that I have been receiving, particularly throughout the campaign period, was that definitely the highway has a big impact on our tourism season this year only because Simpson is on the northern loop that passes through Enterprise, Hay River, Fort Simpson and back down to the BC border. What has been happening is that there are some potholes being created and we are not too sure, for whatever reason they weren't being maintained on a regular basis. So what is happening is that people are coming up with their $200,000 motor homes, all they have to do is hit a few of the potholes and they were turning around. As a result, just like anything else, the best advertisement is word of mouth. So they are going home and they are telling their buddies that there is no sense going through there because you have your huge investment, your big motor home, and it is just going to get damaged or potentially damaged. So we believe that there was a slight impact in terms of the tourism industry because, I don't want to go so far as to say the lack of maintenance of the road because I am sure that they are doing their best, but some sections just keep collapsing even after they refill it. I would just like to stress to the Minister that it does indeed need more capital expenditures. I am not too sure how they repair those roads, but it has to be a focus the next time around.

Another interest that I would like to present is the small community of Nahanni Butte; they are looking towards improving their access to Fort Simpson and to other communities by developing their access road. There is a bit of a plan in place right now, and I think they were spending I believe around $200,000 a year towards the improvement of that road. What they are asking me is that if it is possible if we will be able to look at somehow compressing the schedule, because I think it was over six or seven years it would be before final completion. If there is somehow we could compress that and get that road at least almost semi-year-round as soon as possible. So that is one of the things I will be pitching to the Minister.

Those are my thoughts on the opening comments, Madam Chair. Thank you very much.

Thank you, Mr. Menicoche. This is going well. So far two Members have spoken to general comments and have just made general comments. Next on the list I have Mr. Braden.