Thank you, Mr. Speaker. First of all, I would like to acknowledge the very original and astute observations of our colleague, the Member for Yellowknife Centre, in his statement and question this morning.
This is indeed a significant part of our work. It is a very important part of our work and it is one that is, I think, something that could use a very serious review and a lot of improvement, Mr. Speaker. Essentially what I'm concerned with, as we undertake our budget process, is the way we approve capital spending and the subsequent increases in costs that really seemed to have overtaken much of what we do.
Mr. Speaker, capital spending in less bureaucratic terms is bricks and mortar. It is the roads, the buildings, the water and sewer systems, the tank farms that we build in our communities and across our territory. It is also renovations and upgrades. It is computer systems. It is equipment. It covers a lot of territory.
In our process of review and evaluation and ultimate approval, Mr. Speaker -- and this is one that's quite unique to our consensus system of government -- all committees and all Regular Members are shown by departments their projections for the kind of projects they would like to see, the kind of costs that are going to be involved. We start this process in September at our committee level, Mr. Speaker, and through the course of the winter and then leading up to where we are now, we have a constant hand in tuning those projects. Ultimately, as we have been going through day by day here, we review, we probe, we challenge, and eventually, Mr. Speaker, we are asked to vote on the approval of these projects. We approve them in good faith. Mr. Speaker, the good faith is that what we are shown in budget documents and projections is what we will get for the cost we approve. We are spending taxpayers' money, Mr. Speaker, and we take this very seriously.
But I want to indicate that our faith and our trust in this process is shaken of late because of very serious variances in the end cost. Far too many projects are coming in way over budget, Mr. Speaker, and in the course of the year far too many projects are brought in as new or emergency.
This current year, Mr. Speaker, according to the budget documents that were presented to us and are available to the public, the capital spending allocation for the year 2006-2007, the year we are just closing out now, is going to be 50 percent above what we originally started with, Mr. Speaker. Back in March of 2006, we approved a capital allocation spending of $110 million. It is going to be $170 million. All in the space of one year. A 50 percent increase. Mr. Speaker, that tells me that something is wrong with the way we are conducting this process.
It seems as if we are not really approving capital projects and budgets, Mr. Speaker. Rather, it seems that all we are doing is approving the start or the beginning of a project with the end cost to the taxpayer widely and sometimes even wildly out of sync with what we are shown in the beginning.
For example, Mr. Speaker, a very difficult project for me still to come to terms with in terms of the amount of money that we spent is the North Slave Correctional Centre here in Yellowknife. Originally presented, I understand at around a $35 million project, ballooned to $49 million; almost a 50 percent increase and a multi-million dollar hit on our cash flow.
Mr. Speaker, in information that's readily available, recent information readily available to us. We also see various projects like a water supply system proposed to us at $400,000 which in six months has ballooned to $1.6 million; four times the cost presented to us to begin with. A tank farm, a fuel tank farm originally projected at $1.6 million is now $4.2 million. Mr. Speaker, we've been building tank farms in this country for decades now. How is it that we don't have enough of a handle on how to do it that we come up with a project, which I believe is not yet complete, but it's triple the amount of money in the space of six months?
Mr. Speaker, we know that within various departments, and it sort of goes back to the information that I presented earlier, that this current year we will surge our capital spending allocation from 110 to 170 million dollars. Just to give you a bit of a sample in some of the departments: Public Works and Services is projecting in the six-month period since the beginning of the current fiscal year, their capital allocations are going to jump from 9.2 to 17.1 million; Health and Social Services, Mr. Speaker, from 13 to 20 million; Education, Culture and Employment from a
$28 million project to $45 million in the space of six months.
Mr. Speaker, I'm not going to get into an analysis of this information, although that is really where I'm going. But what we're looking at is a blend of existing, of proposed and new projects that are brought in over the space of time and, of course, I'm sure that there are good and viable explanations that can be brought forward for each project and each cost overrun. But, Mr. Speaker, my point here is not to get into an exercise of singling out individual projects or departments, but rather to step back from a higher level to look at the way we are told about a project at the beginning of the year and why in so many cases, Mr. Speaker, the end result bears very little resemblance to the original story.
Mr. Speaker, I bring us back to the fact that we are dealing with taxpayers' money. The questions that we need to pursue in our whole approach to capital spending, and it's now in the hundreds of millions of dollars, Mr. Speaker, and I want to underline that this is not something that I think we can just begin to tweak or rejig a little bit. We really have to, on a departmental basis, at a planning and staffing and an approval basis, we have to step back and ask some big questions. Why is our costing, budgeting and approval system so wonky? What can be done to bring more certainty into the process? What is causing this, Mr. Speaker? Is it poor or inadequate estimating? Is it poor planning on the role of the folks who design or scope out these requirements and then design the solution? Is it lack of skills or resources within our own organization?
Mr. Speaker, what is the impact of the chronic labour shortage that we're facing in the NWT and across western Canada? What is the impact of the shortage of materials, the expanding costs of raw materials around the world? What impact do our demands for administration and accountability have on the eventual cost of a program, and what about the impact of things that are sometimes not within our control, things like the cost of freighting or weather or other factors?
Mr. Speaker, when things go wrong, who do we hold to account? Our staff? Contractors? Suppliers? Mr. Speaker, we have to ask, what about ourselves here in the Legislative Assembly? Sometimes are we too anxious to see projects designed and booked and started with too little care and attention to due process to getting value for money, for taxpayers' money, Mr. Speaker?
This Assembly and the departments that report to us have got to get a handle on this aspect of our expenditures and our planning and our commitments. Mr. Speaker, I do not believe that we have time left in the mandate for this Assembly to undertake the kind of systematic and thorough review that I believe we need, but our successors in the 16th Assembly should look at this very closely early in their term, Mr. Speaker, to get control on this very vital, very expensive part of our spending, our taxpayers' spending and our accountability to them. Thank you, Mr. Speaker.
---Applause