Thank you, Mr. Villeneuve. Mr. McLeod.

Madam Chair, the season was, in some communities, Wekweeti especially was pretty well basically the same as what we had historically. Gameti and Wekweeti of course usually have a shorter season than other communities anyway, but this year we had problems constructing the road to the community

because of the warm weather and it didn't change the fact that we still had to have equipment out there for the whole period, because we started constructing the roads the same time as we start construction. Every year we start in January if we had our equipment out there and we had the contractor in place and beginning to start construction. So it doesn't change. The equipment still has to be out there; we still have to have people out there and this year we had to have extra resources allocated to the road, we had to have lighter equipment. I think they're called Haglunds that we had to bring in that we don't normally use, but because of the thin ice we had to have lighter equipment. This is over and above the contract. It was an extra and we also had to have more people working longer hours over weekends and that created overtime requirements. So there was really no savings by not having the road open for a specific period of time. We still had to have all our equipment out there and even more so this year because we needed specialty equipment to start working on the thin ice and being able to meet the resupply requirements of the communities. It would have, I guess it resulted in a lot of savings because we weren't required to fly any of the fuel in; we weren't required to fly any of the resupply in. We did have to have more equipment on the ground and we had to have more people out there and longer hours, but it resulted in us being able to resupply the communities.

Thank you, Mr. McLeod. Back, then, to the bill as a whole.

Agreed, thank you. Does committee agree that Bill 1 is ready for third reading?

Agreed, thank you. Bill 1 is now ready for third reading.

Now onto Bill 2. I would like to ask Minister Roland, then, did you already give comments on this one? Oh, you would like to give your comments from there. Thank you. Minister Roland.

Thank you, Madam Chair and colleagues. I am pleased to introduce Bill 2, Supplementary Appropriation Act, No. 1, 2006-2007. This bill requests authority for additional appropriations of $69.246 million for operations expenditures and $45.411 million for capital investment expenditures in the 2006-2007 fiscal year.

Major items included in this request for operations expenditures are as follows:

1. $33.4 million for the Department of Municipal and Community Affairs to continue to flow contribution funding to community governments pursuant to the community capacity building initiative. These contributions are funded by the federal government's Northern Strategy trust fund. Funding for these contributions was approved and lapsed in 2005-2006.
2. $3.5 million for the Department of Education, Culture and Employment for the provision of French and aboriginal languages in the Northwest Territories. The expenditures will be offset by revenues from the federal government.
3. $3.0 million for the Department of Public Works and Services to undertake pile inspections and repairs on Government of the Northwest Territories buildings.
4. $2.2 million for increased costs resulting from the rise in fuel prices in the NWT since 2003.
5. $1.9 million for increases to the northern allowance as provided for in the Collective Agreement between the GNWT and the Union of Northern Workers.

The operational funding request also includes $15.3 million for contribution funding for the continuation of infrastructure projects not completed in the 2005-2006 fiscal period. Funding for these projects was approved and lapsed in 2005-2006.

The major request for capital investments expenditures is $40.3 million in capital carryovers from the 2005-2006 fiscal year.

That concludes my opening remarks. I would be pleased to answer any questions Members may have. Thank you, Madam Chair.

Thank you, Minister Roland. General comments. Mr. Ramsay.

Thank you, Madam Chair. I guess where I'd like to start with this is the fact that the government is lapsing a number of projects from one year to the next and, as the Minister knows, this causes me a great deal of concern. The reason I bring that up -- and the Minister spoke of it in his opening comments -- is the fact that it begs the question of what the various departments out there are doing. Are they doing all the work that they're supposed to be doing? Are they contracting what should be their responsibilities as employees out to various contractors in the hopes that they can do the work for them? What is the real issue on why, as a government, we're lapsing so much in capital projects and we're faced with this supp today? I think the Minister should explain for the record why he believes the government is lapsing so many projects this year. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Madam Chair. Madam Chair, a number of factors play in the size of this supplementary appropriation document. It is a larger amount than we normally do at this time of year. Every year we have done capital carryovers from projects that were not completed in the previous fiscal year and carried over for the following year. What we see in large increases in this amount are results, as I stated in my opening comments, the funding that's flowing to communities through the community capacity building initiative and that's over $30 million there. As well, the large amount that we've incorporated in our capital plan for Municipal and Community Affairs that would help out communities, this capital plan that was put out in 2005-06 was the start of a larger than normal. Previous years we normally spend about $50 million in new capital program. We went up to $75 million, recognizing the fact that we had a number of schools and so on that needed significant repair or replacement and those were put into

the plan. If you have one school, for example, start in that fiscal year and doesn't get the majority of funds spent, then that money is then transferred over and we could have large fluctuations from one project numbering into the millions of dollars. So there's a number of factors. One, the new capacity money from the federal government and the increase in our capital program overall. We are having difficulty, however, getting our work done in a heated environment that we are in when it comes to the economic side of the scale.

The government contracts at one time were seen as the contracts of choice that people wanted to get, but with as much activity that's happening we're having difficulty getting bidders on some of our projects. The costs on a number of the projects are coming in higher than anticipated and departments are having to go back to the drawing board or request more money and that then delays issuing contracts as well. Thank you, Madam Chair.

Thank you, Mr. Roland. Mr. Ramsay.

Yes thanks, Madam Chair. Madam Chair, I think the $40.3 million that's being carried over this year, as I mentioned, causes some concern for me and it perhaps causes some concerns for other Members, but I think that the Minister has to provide some more leadership and some more direction to the departments in order for them to carry out the work that they're supposed to carry out. As is evidenced by the carryovers this year, that work is not getting done. I'd like the Minister to give us what his plan is to make sure that departments are carrying out this work, otherwise why should we approve another capital plan next spring in our budget session if the work is just not going to get done? Like why even bother? Why don't we just put the brakes on all of our capital spending, let them finish the projects that they have and then we'll look at some more? But I think if we keep going down the path that we're going down, there's going to be a huge backlog and this work's not going to get done. Concentrate on the projects that you've got, finish them and then come back. I just want some assurances, and I haven't heard them yet, from the Minister that he'll direct the departments to carry out the work and get some work done. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Madam Chair. Madam Chair, a number of factors, as I already laid out, have built to the size of the supplementary appropriation. For example, I'll just run down and give it a department-by-department breakdown of the capital portion of this supplementary appropriation. Municipal and Community Affairs is just over $3.7 million; Public Works, $7.8 million; Health and Social Services just over $7 million; Justice, $1.7 million; Education, Culture and Employment, over $13 million; Transportation, $5 million; Industry, Tourism and Investment, $600,000; and Environment and Natural Resources just under $400,000. So that's a substantial amount of carryover. But when you look at what's happening in our communities and the increase in the capital amount that we've, as a government, approved, has had an impact with what can get done in some of our communities. A number of factors that we have to look at government-wide is how do we get more involvement from our business sector in bidding on our capital projects, how do we have competition that would result in more favourable prices? If we can't get more favourable prices, then, yes, we're going to have to review the capital program as to the dollars that are there because our dollars are capped. The capital program cannot keep growing. We've highlighted approximately $75 million in projects. If those projects don't get off and are delayed and we continue to carry over projects, the more projects we carry over, the less money is going to be allocated for future capital programming and that's something we're going to have to deal with for sure in trying to get, as I stated earlier, some involvement from our business community as to taking up this work.

As well, further to that, as a government, we've had a number of departments who were downsized in the mid-'90s because of the government's fiscal situation at the time and reduced the capital program significantly so staff that are within departments that would normally be able to do some of the plans are not there any longer, and that's why you would see the increased use of outside sources of help being consultants in a number of areas to help departments get on with the work. Thank you, Madam Chair.

Thank you, Mr. Roland. Mr. Ramsay.

Thanks, Madam Chair. According to some of the, I guess, excuses for the work not getting done, it was the consultants that were also not completing work on time or getting things done and I think the message that I do want to send, Madam Chair, to the Minister, is the work isn't getting done and I think I just want to send that loud and clear to the Minister. I don't believe we're doing enough to make sure the work does get done and I'll leave it at that, Madam Chair. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Madam Chair. Madam Chair, I already know that the work is not getting done. I'm having to carry this forward to the Assembly with a larger than normal amount in capital carryovers and we're going to have to deal with that one more in a sense that we have a capital program that has a limit to it and we are now at that limit as we move forward and if projects don't get done and we can't find new funds for newer projects, we're going to have to move forward on that and look at some initiatives of how we exactly do that. Further to that, and that's something we have to finish here, if we're going to put more forces to work here, departments are going to be requesting more funding on ongoing O and M. So that's another hurdle we would face in trying to move some of these initiatives forward. Thank you.

Thank you, Mr. Roland. Next I have general comments, Mr. Braden.

Thank you, Madam Chair. Similar to Mr. Ramsay's concerns, I was looking at the quantity both in terms of the number of projects and the dollar value that seems to be kind of accumulating from one year to the next and there is a trend, Madam Chair, based on a kind of a preliminary analysis that proves to me that we are, if you will, losing ground in this area and at least for the last three years the trend is that most projects are lapsing and more money is accumulating on the carryovers. While on

one hand certainly there's a number of circumstances that we need to look at and accept, and I'm prepared to deal with as to why this is occurring. But I'm wondering at what stage, Madam Chair, are we going to encounter some kind of a gridlock here where we are backed up with so many projects and so much money moving from one year to the next that we're going to lose sight of what needs to be done and how we are doing it? Sort of the old adage, if you will, should we really take on new projects and new initiatives when we are falling, as I say, the trend seems to be, Madam Chair, we are falling behind on looking after the ones we've already committed to.

I guess just to give you a bit of this analysis, Madam Chair, if we look at some of the departments that have the larger capital budgets, Health and Social Services three years ago lapsed 44 percent of its capital dollars. Two years ago 16 percent lapsed. So in the current fiscal years here, 65 percent lapsed. These are not small amounts of the budgets. We're not just dealing with single digits or maybe in the teens, but over half of the money that the department asked for and we approved is lapsing. So this just gives me pause, and I think my colleague Mr. Ramsay too, to say just how are we going to be able to cope with the quantity of projects and approvals and things that we'd like to do that we need to do, given our track record in completion? So if I'm going over some old ground here that Mr. Ramsay has already talked about, Madam Chair, whether there's any new aspect to my comments that the Minister would like to look at and this is in the general comment area, Madam Chair.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. Madam Chair, the issue of gridlock, when we hit gridlock, if you talk to a number of departments they would say that we are already at that stage. The capital program we approve on an annual basis does not permit us to deal with all the requests departments put in. The process would work as we do our business planning and look at our capital program. The projects that would be approved by this Assembly, we would go back to the drawing board in the sense of a capital program that may have been approved. If there isn't an actual contract tie to that project, it would go back into the mix as we review the capital projects on an annual basis as we prepare our business plans. On that basis, departments would have to then justify if that project can stay in. That goes through a number of working groups in departments, then a deputy minister review, and then it would come to the FMB table for final review before me preparing and coming into this House for final approval.

The situation we would have, and have now, is when departments feel that they have a high enough priority project that does not get the funding, it would get what we call red flagged and would be addressed to the next level. We would review that to see if we should try to find the money to improve or increase our capital program, or if we would bump another project off that program to fit something that is now more critical. That's the situation we've been in for awhile. Yes, the amount of carryover that we do ties up the dollars available. If we don't proceed with those, there is less and less wiggle room or room for new projects to be put on the books and that is a growing problem that we are going to have to deal with. We are going to have to find a way of either moving along with some of these projects or deferring them because, for one reason or another, they are not at the stage that was anticipated.

For example, if a department had requested funds for a specific project and that project then gets a change from the department aspect, they want to change some of the work that's happening in a renovation or adding to a new facility, that would go back to the drawing board, or if this Assembly directs a Minister to review the plan or take a look at for Health how to deal with the master plan, that would affect the capital plan.

That's the situation we find ourselves in. Yes, it's a growing problem we are going to have to deal with. The more we continue to carry things forward, the less that gets done in the sense of projects being completed. We must also realize many of our projects are into the multimillion dollars and would require a multi-year commitment as we move forward, whether it's health facilities, education facilities or some of our larger municipal infrastructure. Thank you.