Thank you, Mr. Dent. Final supplementary, Mrs. Groenewegen.

Thank you, Mr. Speaker. I still think it's a red herring and it's a cheap way of making a case, to keep referring to one or two young offenders in the facility down there when it has been almost at capacity for quite some time now, to justify a $1.5 million savings and keep referring to one or two. It's just to throw it out there in a way that creates a misconception and it's just a red herring. In fact, that facility has been well utilized in the past year and I would like the Minister to admit that. Thank you.

Thank you, Mrs. Groenewegen. Mr. Dent.

Thank you, Mr. Speaker. In fact, that facility has been the only facility that's had male young offenders in it since March of this past year, so March 2004. The reason for doing that, Mr. Speaker, was to ensure that we placed all of the open custody young offenders in the one facility as a means of saving some money. We can't close the facility in Yellowknife, it's a dual facility, half of it is for secure custody and the other

half is open custody, we can't achieve the same level of savings. We did reduce the costs over the course of the last year by not utilizing the open custody section at the North Slave facility. So all of our open custody inmates have been kept at the Dene K'onia. At the end of the day, we can achieve a bigger savings by shutting down the one facility completely. Thank you, Mr. Speaker.

Thank you, Mr. Dent. Item 6, oral questions. Item 7, written questions. Item 8, returns to written questions. Mr. Clerk.

Thank you, Mr. Clerk. Item 8, returns to written questions. Item 9, replies to opening address. Item 10, petitions. Item 11, reports of standing and special committees. Item 12, reports of committees on the review of bills. Item 13, tabling of documents. Mr. Clerk.

Thank you, Mr. Clerk. Item 13, tabling of documents. Item 14, notices of motion. Item 15, notices of motion for first reading of bills. Item 16, motions. Item 17, first reading of bills. Item 18, second reading of bills. Item 19, consideration in Committee of the Whole of bills and other matters: Bill 15, Tlicho Community Services Agency Act; Bill 17, Modernization of Benefits and Obligations Act; Bill 19, Appropriation Act, 2005-2006; Bill 20, Supplementary Appropriation Act, No. 3, 2004-2005; Committee Report 9-15(3), Standing Committee on Accountability and Oversight Report on the Review of the Draft 2005-2006 Main Estimates; Committee Report 10-15(3), Standing Committee on Governance and Economic Development Report on the Review of the Draft 2005-2006 Main Estimates; Committee Report 11-15(3), Standing Committee on Social Programs Report on the Review of the Draft 2005-2006 Main Estimates; Committee Report 12-15(3), Standing Committee on Rules and Procedures Report on the Review of the Report of the Chief Electoral Officer on the Administration of the 2003 General Election; Minister's Statement 86-15(3), Northern Strategy; Minister's Statement 88-15(3), Update on Oil and Gas Development in the NWT; Minister's Statement 89-15(3), Community Leaders' Conference Report: Preparing for the Pipeline; Minister's Statement 90-15(3), Social Impacts of the Mackenzie Gas Project; Minister's Statement 91-15(3), Preparing for the Mackenzie Gas Project; and, Tabled Document 108-15(3), Nation Building: Framework for a Northern Strategy, with Mrs. Groenewegen in the chair.

I call Committee of the Whole to order. We have a number of items on the agenda before us today. What is the wish of the committee? Mr. Menicoche.

Thank you, Madam Chair. The committee wishes to consider Bill 15 and Bill 19, Supplementary Appropriation Act, 2005-2006.

Thank you, Mr. Menicoche. Mr. Menicoche.

Thank you, Madam Chair. Yes, we wish to consider Bill 15 first and then Bill 19.

Thank you. Is the committee agreed?

We will do that right after we have a break. Thank you.

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Welcome back, committee. We will go to the departmental estimates of Transportation. We will go to the Minister to provide the opening comments. Is that agreed?

Thank you. Mr. Minister, please proceed with your opening comments.

Thank you, Mr. Chairman. Good afternoon, Members It is my pleasure this afternoon to present for your consideration the Department of Transportation's main estimates for 2005-06. The department's proposed budget for 2005-06 contains an operations and maintenance budget, excluding amortization, of $54 million. This is an increase of .8 percent over last year's main estimates. The department's proposed 2005-06 capital program is $51.4 million. This is an increase of 7.6 percent over last year's main estimates. I would note that almost half of the

capital program, $21.3 million, consists of contributions from the Government of Canada.

To help the government manage its fiscal position, the Department of Transportation has identified $1.1 million in expenditure reductions. By internal reorganization and the re-assignment of duties and responsibilities, the department has managed to reduce its staff requirements by six full-time positions. It has also scaled back its financial contributions to the community marine and local access road programs. At the Fort Providence and Dempster Highway ferry crossings, the department has revised its seasonal freeze-up procedures to save money on fuel and the physical wear and tear on the ferries.

We have taken these restraint measures to cut back on the costs of operation with, I believe, the least inconvenience or disruption to the public.

While the Department of Transportation has had to find ways of reducing its costs, it has been successful in searching out additional sources of funding, mainly from the federal government, that will go towards badly needed capital improvements in our transportation infrastructure. As the committee members know, the Mackenzie gas project will put huge new demands on the territorial transportation system. At the same time, work will also begin during the 2005-06 fiscal year on the construction of the third Snap Lake diamond mine. The new capital funding comes just at the right time to help meet the demands of these resource development projects.

All of the equipment, material and supplies needed for the Mackenzie gas project will have to move over our transportation system. I am pleased to advise the committee that the proponents of the Mackenzie gas project and the Department of Transportation are already working to plan the transportation logistics and have the transportation system ready for the heavy traffic the project is expected to generate.

With Transport Canada and the territorial Bureau of Statistics, the Department of Transportation is studying the long-term implications for the transportation system of a growing hydrocarbon energy industry. The Department of Transportation needs to plan for the demands on the transportation system that will come once the pipeline is built.

The main estimates for 2005-06 allocate a capital construction budget of $40 million to the highways program. With the help of 50/50 cost-sharing contributions from the Canada strategic infrastructure fund, the department has scheduled $32 million in reconstruction projects on highways No. 1, No. 3, No. 4, No. 7 and No. 8 as well as the Mackenzie Valley winter road.

I look forward in the 2005-06 fiscal year to the completion of the reconstruction and paving of Highway No. 3 between Rae-Edzo and Yellowknife. This will come as a great relief to everyone who has ever travelled it and especially to the growing number of people who drive daily between Rae-Edzo and Yellowknife.

Aside from reconstruction, the department's capital program also includes $8 million in projects aimed at preserving the highway infrastructure. The highway system is aging and the lifecycle repair or replacement for many of its capital structures, culverts, large and small bridges, are passed or coming due. These expenditures are necessary to keep our highways in good operating condition and maintaining the value of the public's long-term investment in the highway system.

The last revision of the department's Highway Strategy was completed in November of 2000. In 2005-06, the department will update the Highway Strategy to take into account the developments over the past five years and to give special attention to the seasonal and all-weather highway connections to the smaller communities.

As I have previously announced, as of the end of this fiscal year, the Department of Transportation will no longer deliver the Community Airport Radio Station, CARS, program on behalf of NAV Canada. The department and NAV Canada have been working to make an orderly transfer of the CARS program to a private sector contractor. The transition is proceeding well and the CARS service will convert to private sector delivery on April 1, 2005, without disruption to the air carriers to the communities they serve.

Since the terrorist attacks of 2001, transportation security has become a high priority concern as never before. Almost immediately at airports, passengers and their hand carried luggage were subject to more rigorous and intrusive inspections. The Department of Transportation had to make renovations at the Yellowknife Airport to accommodate the new security inspection procedures.

The regulations of the new Canadian Air Transport Security Authority, CATSA, now require that all checked baggage accompanying passenger flights must be inspected for explosives. The new explosives detection equipment must be installed and operational at the Yellowknife Airport by January 1, 2006. In addition to the security requirements, the Department of Transportation decided that it made sense to renovate for the projected growth in passenger traffic moving through the terminal building. Therefore, an extensive, three-year renovation project has begun at the Yellowknife Airport that will meet the terminal's security requirements as well as its future traffic requirements.

The new concern with transportation security is not limited to the air mode. The Department of Transportation has been working with its provincial, state and territorial counterparts to establish new security standards and procedures for the issuance, storage, retrieval and exchange of motor vehicle records and documents. The Council of Ministers responsible for Transportation and Highway Safety have formally agreed on new international standards and protocols for the administration and control of motor vehicle records across North America. The Department of Transportation will introduce a new territorial driver's licence during the 2005-06 fiscal year. The main estimates provide a one-time cost of $700,000 for the purchase of new equipment and $300,000 for implementing the more secure administrative procedures.

Very briefly, these are the highlights of the Department of Transportation's main estimates for 2005-06. The committee can see that the main estimates include a good many projects and initiatives that the department expects to accomplish over the next fiscal year.

In closing, we expect 2005-06 to be anther year of growth in the traffic at our airports and on our highways. Over the past decade, the traffic carried by our transportation system has grown significantly. Keeping the system in

good repair while meeting the demands of heavier traffic is the department's greatest challenge. Based on the department's past performance, I have every confidence that the Department of Transportation is equal to that challenge. Thank you, Mr. Chairman.

Thank you, Minister McLeod. I will go to the chairperson of Governance and Economic Development for the standing committee's comments. Mrs. Groenewegen.

The Standing Committee on Governance and Economic Development met with the Minister of Transportation and his staff on January 17, 2005, to review the Department of Transportation's draft main estimates for 2005-2006.

The Department of Transportation's mandate is to provide for the safe, accessible and reliable movement of people and goods throughout the Northwest Territories.

Deh Cho Bridge Corporation

The Deh Cho Bridge is being built through a public/private partnership arrangement between the GNWT and the Deh Cho Bridge Corporation. The Deh Cho Bridge Corporation will raise the capital, design, build, operate and maintain the Deh Cho Bridge. The Government of the Northwest Territories will pay the corporation for the bridge over a 35-year period, largely from toll revenues collected from the traffic crossing the bridge and savings from discontinued ferry operations and winter road construction.

The Deh Cho Bridge Act authorizes the Minister of Transportation on behalf of the government to enter into a concession agreement. The concession agreement gives the concessionaire, the Deh Cho Bridge Corporation, the right to operate a section of the public highway for 35 years. The concession agreement is also a private business deal between the Deh Cho Bridge Corporation and the government.

The committee is uncertain how many of the agreement's details will be released publicly. This concerns the committee because the cost of the Deh Cho Bridge may exceed the current estimate of $57 million. Some estimates indicate bids could go as high as $75 million. A tender package for the bridge has yet to be developed. The price of raw steel has also risen substantially since the project was proposed.

A significant cost increase to construct the bridge could impact and increase the bridge tolls the GNWT has to collect to pay for the bridge. An increase to the tolls may mean communities north of the bridge may have to pay more for goods and services than current prices, that are already high due to transportation costs.

Transparency and accountability must be maintained in this and any future public/private partnerships.

Recommendation

The committee recommends that it be given the opportunity to review the concession agreement before it is finalized;

And further, that the government declare a maximum dollar figure, above which it will reconsider its involvement in the project.

Airport Development

Mr. Chairman, traffic is increasing at the major airports in the Northwest Territories. NAV Canada data shows that there has been an overall seven percent increase in aircraft arrivals and departures. This means that just under half-a-million passengers traveled through NWT terminal buildings. In the future, DOT anticipates an overall further three percent increase in airport traffic.

In order to accommodate this growth, the Yellowknife Airport may have to expand. However, land is at a premium and there is only a small land reserve to the west of the airport on which it can expand. Otherwise, the airport is bordered by a highway, a lake and valuable infrastructure.

Moreover, private corporations, the city and the federal government all have an interest in the land immediately adjacent to the airport, and not all of this development is conducive to airport activities.

This committee feels that it would be unfortunate if the airport were prevented from expanding because of a land shortage. Not only could this adversely affect the economic growth of territorial industries like tourism, but it could also force the GNWT to pay millions of dollars by having to relocate the airport to a larger area.

The committee recommends that the Department of Transportation exercise caution and work with the City of Yellowknife to protect the interests and the future needs of the Yellowknife Airport.

Runway Extension Research

The Japanese spent an estimated $16 million last year in the Northwest Territories. However, the NWT is not the only place in the world from which to view the aurora borealis. The NWT is going to have to be competitive with other circumpolar destinations if it wants to continue to reap the benefits of Japanese tourism. Fairbanks and Whitehorse can accommodate direct flights from Japan, but the Yellowknife Airport cannot.

Extending the runway in order to accommodate circumpolar flights was looked at as part of the Yellowknife Airport development plan. Although the existing runway currently meets the needs of the carriers, extending the runway could be very advantageous to tourism by allowing direct flights to land from Japan or anywhere else in the world.

The committee is very interested in the potential of this initiative and will be reviewing the work and research on expanding the airport runway.

Combined Services Building

DOT is building the combined services building in order to amalgamate several of the activities that the department undertakes. The committee commends the Department of Transportation for this amalgamation, but believes that the department could go one step further by combining the DOT yard with the combined services building. It is located in close proximity to the highway and, therefore, convenient to house highway equipment.

In order to preserve resources and the limited land at the airport, the committee would like to encourage DOT to consider co-locating their highway and airports buildings.

Community Aerodrome Radio Station Program

At the end of this fiscal year, the Department of Transportation will no longer deliver CARS, the community airport radio services, on behalf of NAV Canada. The department has worked with NAV Canada to orderly transfer the CARS program to a private sector contractor. CARS will convert to private sector delivery on April 1, 2005.

When the Department of Transportation operated the CARS program, it provided air navigation services at 17 airports and accounted for more than 30 full-time jobs at the community level in the NWT.

The committee recommends that the Department of Transportation work closely with NAV Canada and the new contractor to ensure services continue to be delivered at a high level and that northern contractors and northern employees are used to continue to carry out the work.

Highways Chipseal Overlay Project

The Department has a $3 million a year budget for their highway chipseal overlay project. With that $3 million, DOT maintains and rehabilitates existing chipseals.

The committee is unsure of the value of repairing chipseal when road widening, ditching and culverts are needed. On Highway No. 6 out of Fort Resolution, for instance, the highway is narrow and heaving and there are no ditches. This section of road does not have any chipseal overlay to repair. Reconstruction dollars are what is required in order to undertake improvements to protect the safety of the cultural camps, schools and residents that use this road everyday. In the interest of public safety, highways should always be built with budgets attached to them for maintenance and repair.

Recommendation

The committee recommends that the Department of Transportation revisit their chipseal overlay project and look at diverting these funds to much needed highway reconstruction projects. Thank you, Mr. Chairman.

Thank you, Mrs. Groenewegen. At this point in time, we'll ask the Minister if he wishes to bring in witnesses.