Thank you, Madam Chair. I would like to use the opportunity now to speak to a couple of the other items on the list. I will start with the infrastructure projects that are seen as carry-overs. Frankly, I have been saying it for a number of years, that I am still convinced that the Department of Finance, through FMB, is allowing the capital budget to grow in the Northwest Territories in a manner that we can’t sustain. What I mean by that is we are taking on more projects than we can get done. I don’t consider an average 35 percent a good average of capital carry-overs. You will hear that some years we were less and you will hear that some years we were more. Really, what we are doing is prescribing projects that we know we can’t do, I could say today. I am sure the Finance Minister could say today that the 2012-13 carry-overs will be about 35 percent, with great confidence, I am sure. Why? Because we have a history of this. We are approving more money. We are allocating more money against our debt limit to be able to respond to capital investments in a manner that we just know we can’t satisfy. We know that the workforce out there can’t sustain them and certainly respond to our needs. At the same time, when we approve a capital project and we know we can’t fulfill it, we also know that we run the potential risk of overruns and other problems associated with that. If we were preparing for those, then I question the estimates that we have provided for those capital projects.
The issue here is we knowingly are supporting in our next capital budget on a potential basis, obviously, that we will be prescribing ourselves one-third of our budget that we cannot fulfill. That begs the question: Why are we committing that money?
We have many good projects that need to be fulfilled. Many community governments, communities and government departments have many requirements that we all like to meet and certainly help them out. If we know we can’t fulfill them, I’m not even sure why we put them to the capital budget that particular year.
The Department of Finance, through FMB, has to take a stronger approach on approving projects that we know we can’t fulfill. Some projects on these particular lists haven’t even started. Some have only been merely started. Some, in my view, when it is 90 percent done, and they have to come back for a little extra money, sorry, time to spend the money, that, to me, is what capital carry-over is really meant to be, some work needed to be finished or refinished, a contract needs to be fulfilled properly. Those types of delays are reasonable. Usually they come with reasonable suggestions, but when you will see projects on the list that haven’t been started or they have been barely started… I think there was one that was only a few hundred dollars spent. I can’t imagine what
the heck that was. Someone bought a binder for the potential project that they maybe started. It’s ridiculous when I think about how much is really being spent. We are doing two-thirds of the work. We are saying two-thirds of our work is good. That is our objective, but first we pass a large capital budget.
Transportation, of course, we know is the lion’s share of this, but there are other capital projects that could get better focus. It’s all about allocating capital dollars properly. The issue is that it’s not about taking away projects that are important or necessary, whether the view of the community, the Aboriginal government that we partner with or the needs of infrastructure within the government system. It’s not a question of suggesting that these needs are necessarily important or relevant. It’s just about prudent spending.
It is my view that we, or I should say, as we know, our capital budget is driven by our surplus. There is supposed to be a cap on it, of course. That money is then matched by borrowed money. What we are doing is we are allocating commitments publicly that chew down our borrowing limit, even though we may not technically spend the money but we have actually made technical commitments on paper.
We have often heard the phrase “not real money.” Well, we may not spend real money, but we committed real money. That is a burden on our books. It certainly is a burden on the citizens that have great hopes that these projects are coming in a timely way.
Many people fought for many of the capital projects that are within our capital budget. They have struggled with the fact that they are not easy things to get in. I don’t have to look to Mr. Yakeleya too often to not hear the story about how Colville Lake deserves a washroom. How many times do I hear that? I know it’s a complicated problem. It’s not a complicated solution, but it is a complicated problem. Quite frankly, let’s get them a toilet. But I understand the problem comes with having a vacuum truck and disposal needs. Yes, there are issues. It’s not as simple as just plugging in the water and everybody will be fine. We have real partners in our communities that can work together and make these solutions. We have projects that I think should get fulfilled while others sit and wait to be expended.
I think the whole philosophy of capital carry-overs needs to be revisited. Of course, they will always tell us we’re always looking at them. Do we have the staff to do these things? That is another question.
Certainly, we can only expect so much. There are only so many hours in the day and our expectation of our staff working beyond their capacity is probably very unreasonable. Are we preparing
ourselves by providing more projects than our staff are able to fulfill? It’s not a question of competency, it’s a question of reality. We only have so many project officers. We only have so many contract experts. We only have so many people who can produce and review these particular things once they are out. We have to do implementation, follow-up. There are so many gambits to…once just even agreeing to a capital project is a big deal. It is followed with a mountain of process and paperwork afterwards.
The question is: Is it partnered up fully? This is not just simply saying we are approving one-third too much in capital projects. It’s also about looking at ourselves and saying, are we prepared to do these things. We’re not. Whether it is community planning, preparation through staff or whether it’s just good philosophy on work. I don’t know. There are a lot of problems associated with this. Quite frankly, it needs to be visited with a sharp pencil and asterisk and some serious, sober thought by asking ourselves are we doing more than we can really achieve. I think we set ourselves up for failure. Of course, as we promise the community that, oh, you will get this water truck in 2011 and they don’t get it because we didn’t plan for the barge that year or the contract went out so it sits another year and people get very upset. People are counting on these things. If you are wanting a grader in a small community such as Ulukhaktok, you have to be planning for these types of things. You have to be thinking about these types of things. Do we have the staff with the ability and time to do these things? Maybe not in all cases. In some cases we are so busy with other consuming projects. You may hear from the Minister, well, we will refocus energy when we take some of these big projects off the table. You know what? It seems as if we…
One of my constituents has a funny little saying. He always says he just finishes a renovation project just in time to start another one. I think the point of this one is we will just finish one project and just wonderfully dovetail into another one. The work continues, the need continues, absolutely. I’m not in a particular spot to say these projects are unworthy. I think they’re all worthy in their own situation. If it was up to me, though, I think, and I know, there isn’t committee support, I really wish there was, to delete a few of these things and say, look, if it was that important, why didn’t you kick it off and get it started? We hear about how important projects are and then the government will tell us how important projects are, and they’ll come with their little business model and say the community really wants this, whether it’s the local education board or the local community government or the department staff couldn’t live without this. Then the next year you find out they hadn’t even started it. Where does that put us? It puts us with the question of did they
really need it? This capital budget coming this fall will happen and we’ll hear the same story: This project is so important. It’s so important in the community, it’s so important to the government, it’s so important to the organization. If we don’t fulfill this obligation, the sky will fall. Yet, I have no doubt, and I would like to be proven wrong, that next year we’ll be looking at a carry-over of another approximately one-third of our capital projects.
The capital projects process needs to be revisited. Yes, it will hurt some feelings and I understand that, but if we set it as a structure that we could truly, objectively meet, I think people will be respecting that. Industry will be prepared. If we’re trying to build too much and we know that the contractors don’t exist, then why are we getting behind projects that we know we can’t meet? We’re building false expectations. At the same time, we don’t want to create a false industry with, well, we have all these projects this year, but then they gear up and won’t be there the following year. People need to plan accordingly, and a spread out capital budget spreads out the spending. That type of philosophy is a good base for people to work with. They can see projects come on the horizon, they can plan accordingly. Don’t vamp up. We’re almost creating a boom and bust cycle by our own plans that we know we can’t fulfill.
That’s why it’s so important to ask ourselves are we saying we’re going to do more than we can. Two-thirds of our capital budget has gone through. Quite frankly, that says we can only continue to do two-thirds of the job. I would have hoped, as I said earlier in my example, it’s just a simplified example, I understand there’s complicated cases around it, but the last thought I’ll leave you is the fact that, as I said, 90 percent of a project is an example of reasonable expectations that we had to carry over a little extra money. That’s the type of philosophy we should be targeting with. When you come to the table with stuff that’s zero or 1 or 2 percent of the project hasn’t been spent, that tells me that the system is being abused and the process is not being fairly fulfilled.