Thank you, Mr. Chairman. Mr. Chairman, it's my pleasure today to present for your consideration the Department of Transportation's proposed main estimates for 2006-2007 fiscal year.
The Department of Transportation's core business is to operate and maintain the territorial public transportation system. The largest part of the department's proposed main estimates for 2006-2007 is $57.8 million, excluding amortization, is committed to the ongoing day-to-day costs of operating this system.
The department's budget for 2006-2007 details an increase of 7.2 percent compared to the current year's main estimates. This budget increase is required to cope with traffic growth, a rise in the price of material and to address our aging infrastructure. This is required to ensure that we are able to continue to provide a safe and reliable transportation system for all users.
The Northwest Territories has experienced tremendous growth in resource development activities related to diamonds, oil and gas. This positive and welcome economic development has generated significant growth in our traffic on our transportation system.
Over the past decade, the traffic on the highway system has increased on an average annual rate of 3.3 percent. Last year alone, commercial traffic passing through the Enterprise weigh scale increased by 23 percent. In the air mode, traffic at our six largest airports has arisen to an average annual rate of seven percent for the past two years. This traffic growth has meant that more maintenance effort is required at our airports and on our highways. The cost to operate the transportation system has also grown over the last year due to rising materials, along with more competition for construction equipment and contractors.
The third significant factor that has contributed to the proposed addition to the operating budget is the age of our infrastructure. The highway system is aging with many critical structures in need of rehabilitation or replacement. These structures include culverts, bridges and roadway services. Additional funding is being proposed to address these critical needs.
The Department of Transportation's capital acquisition plan is focused on rehabilitating and replacing aging infrastructure while preparing the transportation system for the continued rise in traffic associated with resource development. For the 2006-2007 fiscal year, the department's capital acquisition plan has a total budget of $46.3 million. It is important to point out that over one-third of our proposed total capital budget is funded by the federal government under cost-sharing agreements.
In the highways budget, the main estimates for 2006-2007 propose a capital budget of $35.6 million. With the help of a 50/50 cost-sharing agreement with the federal government under the Canada strategic infrastructure fund, the department has scheduled $22.5 million in reconstruction projects on Highways No. 1, 4, 7 and 8, as well as the Mackenzie Valley winter road. These highway system upgrades will improve the system's capacity to support the influx of traffic associated with increased oil and gas and diamond activities. It would also help to prepare the transportation system for the heavy traffic that will be generated by the Mackenzie gas project.
In 2006-2007, $6.2 million is proposed for Highway No. 1. These improvements are directed towards the Kakisa River Bridge and granular resurfacing, grade and drainage improvements from kilometre 188 near the Highway No. 3 junction to kilometre 457 at the Liard ferry crossing.
On Highway No. 4, the department has proposed $2 million for reconstruction on the highway between Prelude Lake and Powder Point. Highway No. 4 carries a high volume of traffic all year round. This route becomes even more critical during the winter months with heavy resource traffic related to the diamond mines. In the current winter road season, the joint venture that operates the winter road is projecting that 9,500 truckloads will travel up Highway No. 4 to resupply the diamond mines. This number represents the highest resupply volume to date for this route.
Efforts also continue on Highway No. 7. There is $2.5 million proposed for improvements to the highway between the B.C. border and Fort Liard.
The department plans to continue the reconstruction of the Dempster Highway with a proposed budget of $5 million. The work proposed will be focussed on the highway section between Fort McPherson and the Yukon border.
Since the year 2000, the department has been working on improving the Mackenzie Valley winter road and extending the operating season through the installation of permanent bridges over stream crossings. Significant improvements have been made. As pointed out by the Member for the Sahtu, you can now drive this route and balance a cup of coffee on the dash without spilling a drop.