Thank you, Madam Chair. I have with me from Finance, Mr. Mike Aumond; and Mr. Sandy Kalgutkar, deputy secretary to the Financial Management Board Secretariat.

Thank you very much. General comments from Members on the supplementary appropriation (operations expenditures). General comments? Thank you. I hear that detail over there. Mr. Yakeleya.

Thank you, Madam Chair. The supplementary operations expenses, one of the things that I have is the amount of dollars that we are going to be approving for the Department of Health and Social Services, specifically the Beaufort-Delta and the Stanton Health Authority for the deficits these two hospitals are running.

Year after year we continue to bail out the authorities, and not in thousands of dollars but in the millions of dollars. I know that the department is working hard to address this issue and there have been many plans over the years on how they are going to work on some form of financial discipline to not have these deficits. It’s been almost a practice ever since I’ve been in the Legislative Assembly. Debt has continued to run high and it’s still running high. I’m not sure what causes these deficits to go so high. That hurts the small communities because we have money going into the Beaufort-Delta and Stanton to offset their deficits, so when we want to do some programs or services we are always told that there is no money. We continue to hear the same thing of no money for certain programs we want to see in our communities.

Case in point, we are seeing $3.3 million from this government going to staffing in the Beaufort, and we will continue to do that. Like I said before, the boards are working hard to address this issue and we keep throwing them lifelines to keep them afloat and not to go too badly into a deficit. There are probably some expenditures that are needed. I’m not too sure which ones.

It raises a concern for me, for the operation. Do we have it right with Stanton? Do we have it right with the Beaufort-Delta? Who’s managing their money? What things are we not picking up that they continue to go into deficit? Will we continue to bail them out year after year? The manager knows that they can count on the government to pass supplementaries to bail them out. Is that the message that we’re giving to these two health boards?

I understand other health boards are also in a deficit. Or is that the way we’re doing business in the Northwest Territories with health? With the costs, are we not under-budgeting? Something’s happening that we’re sending the message to these two boards. If this was a private business, they would be out of business. And we continue to bail them out year after year. This is not very healthy and probably our health care is not very healthy. I have a concern about that.

Madam Chair, we’re spending close to $3 million on blood services, blood products from the Canadian Blood Services. That’s a high cost also. Probably the people that we are spending this money on greatly need it. It’s probably saving lives right now, but it adds a huge cost to this government here. We’re spending over $2 million for children outside the Northwest Territories. I’m thinking that some of these services that the children are receiving outside the Territories we don’t have in the Northwest Territories, so we’ve got to spend it outside. Not to get into the details, but that’s a heck of a lot of money. I’m not too sure that there will be

a day when we can bring these children back to the North.

I wanted to ask about the income support assistance that we have. The department’s asking close to a million dollars for a shortfall. Where was the shortfall? Is that part of the government’s operations that we budget for unexpected shortfalls, forced growth, the number of clients that we’re receiving? Is that why some people in my region are being refused when family members are asking to support them? Those are the kinds of questions that I have.

To get back to the almost $3 million for the blood services for the people that we need in the North, can’t we look at other ways where we could possibly look at a process where we can donate blood for these people? At this cost, can we pay people to give blood in the North? That’s about all I have to say, Madam Chair, with the general comments to this supplementary budget.

Thank you, Mr. Yakeleya. Minister Miltenberger.

Thank you, Madam Chair. The Member has raised a number of critical points. I would point out that Stanton and Inuvik are acute care facilities and I think there is a direct correlation to the struggles with their costs and the fact that they are running the most expensive health programs that can be offered in the health care system. I would point out, as well, the Member commented that if health was a private business it would out of business. I would suggest to the Member that if he wants to see what would happen with a private business, then he could look south of the border, the 49th parallel, and see where

tens of millions of Americans don’t have any health care coverage because they can’t afford it, and the first question they ask when you come through the door is: What’s your health care coverage and where’s your credit card?

We have a system that is not perfect, that is expensive, but it is, I still think, overall a very good business. It provides critical programs. I know the Minister of Health will expand on some of these issues.

In regard to the blood services, blood services are past the day of just donating blood at the local health centre these days. Based on the Krever inquiry and all the things that happened with the tainted blood scandal, if the Member will think back a number of years, millions were spent on the inquiry and tens of millions of dollars were spent revamping the blood services system. The instance before us in the supp today is we have some very expensive blood products required by a small number of patients that is critical to their survival. That’s where that cost comes in.

I’ll now ask the Minister of Health if he wants to elaborate. I’ll ask later, Madam Chair, with your indulgence, if the Minister of ECE would speak to the income support question. Thank you.

Thank you, Minister Miltenberger. Minister Beaulieu.

Thank you, Madam Chair. I’ll add more to the Canadian Blood Service, blood and plasma protein products. The Canadian Blood Service is a non-profit, charitable organization that provides blood and blood supply products to Canadians. However, Health Canada is responsible for regulating the blood supply system. The high cost of this item really is, like the Minister of Finance indicated, it’s actually just two people, believe it or not, which consume a large part of this budget. Plasma protein products, there are only two people using that product and it resulted in a shortfall. The costs, the blood in 2010-11 is $1.7 million which resulted in almost $1.967 million shortfall. The total cost to the Canadian Blood Service in this actual cost was projected costs in 2011-12 for the rest of this year is $2.7 million. Again, that resulted in a shortfall of $1.97 million. The budget for this product is only $743,000. It is just the actual cost that is needed to provide blood to keep these individuals alive.

Authority deficits are attributed to several factors including historical funding levels and have not kept pace with the cost drivers and/or even inflation. The two authorities, as indicated by the Minister of Finance, are the two authorities that have hospitals. At this time although we are constantly reviewing the costs, we haven’t changed the funding models of the authorities so that some of the authorities do all come out with surpluses every year and then these two that have the hospitals do have deficits.

We are looking at trying to develop a long-term solution by amending authority funding to address these structural deficits at this time. At this time, what happens often is that clients are sent from a housing authority to the hospital. The hospital here or the hospital in Inuvik will pick up the cost for that client, so the client could be from another authority but ends up in one of the hospitals. The cost is picked up also.

In addition to that, the medical travel has been transferred to Stanton. Each time there is medical travel, a solution for the various health and social services authorities would be to put the individual on medical travel, so if he ends up here and then further on to Edmonton, then Stanton picks up that cost. Stanton also has that additional issue of dealing with the medical travel and that also runs into a deficit. I don’t have the actual number, but $3 million worth of deficit in medical travel comes to mind. Again, that is a result from all of the authorities and all of the clients right across the North that do need medical travel.

The residential southern placement of children, this is children who are… We have contractual obligations for children to receive services in the residential facilities that are in the South. Right now we have 49 children that are in residential southern facilities. That is a cost of over almost $5.3 million to house and provide service. The clients that are placed in southern residential facilities for various reasons range from long-term placements for lifelong disabilities to short-term placements for treatment or transitional programs related to mental health disorders and behavioural problems. There is quite a range there of some of the children on this list are there basically on a permanent basis; some are there and they will come back. The hope is that there wouldn’t be a lot of short-term treatment and sometimes there is a lot of short-term treatment. That number goes up. Like I said, the cost of that exceeded the budget by $1 million that the Member is seeing. Thank you.

Thank you, Minister Beaulieu. Minister Lafferty.

Mahsi, Madam Chair. The income security, there has been an increase due to the downturn of our economy which increases a number of clients accessing income support across the North. They couldn’t find any full-time and part-time seasonal jobs, especially in the mining sector area. There have been some layoffs and their subcontractors as well. That is the information that we received from those industries. From April to November 2011, actual growth was around 3.8 percent, so when you put that into perspective, that is a shortfall of $944,000. That is the very reason why we are here as part of the process. Mahsi.

Thank you. General comments. On the list I have Ms. Bisaro, Mr. Bromley, Mr. Yakeleya. Ms. Bisaro.

Thank you, Madam Chair. I have a number of general comments and then I will have questions when I get to each department.

In looking at the big picture, what we are presented with here, I certainly I have to say I have questions about the way that we do our budgeting. I have certainly said it before; I am sure I will say it again. Many of these expenses that are included in this supplementary appropriation, in my mind, are expenses which we could have or should have predicted. Certainly some of them are extraordinary, but I think we tend to underestimate when we estimate our expenses. There is almost a mindset that that is okay. We will lowball the expense number because we can always go back and get more money.

This is our third supplementary appropriation for the 2011-12 budget year. I know that there were some expenses which were not foreseen at the time that this particular budget was developed, things like

changes in the Collective Agreement I think is one perhaps which might have had an impact and couldn’t have been foreseen. The documentation that we got from the Department of Finance indicates that many of these are forced growth expenditures. I look at the information we have and the indications that there has been an upward trend in costs and in usage in almost every area that was identified as forced growth. I think we really, as a government, could have done a better job of budgeting what we were going to encounter as expenses.

I have concerns similar to the ones expressed by my colleague Mr. Yakeleya around the amount of money that we are being required year after year to put into Stanton Territorial Health Authority and the Beaufort-Delta Health Authority. It indicates to me and I think the Minister kind of alluded to it, both Ministers, but we are not budgeting these two health authorities properly. We are consistently underfunding them. We are not evaluating the services that they provide and based on the evaluation then developing a budget that recognizes the costs that they encounter on a day-to-day basis because of the services that they provide. I feel really strongly that I know that the department has done some work in this area, but it is an area where, as a government and as a Department of Health and Social Services, we have to stop sort of starting to do something about it and we have to absolutely do something about it. We need to revise how we budget for these two authorities in particular.

Lastly, this particular supplementary appropriation, the net ask, the net amount of money that we are going to be asked to approve is about $8.2 million. It’s more than that in terms of the total amount of money, and when you add up all the bits and pieces – some of it we are getting from the federal government, some of it is transfers between departments – I’m concerned and it goes to my general feeling that we’re not budgeting properly. After Supplementary Appropriation No. 2, which was done in the last Assembly… I’ll back up. We normally have a reserve fund and at the beginning of the budget year. We say we’re going to place I think it was $15 million aside and we are going to use that as required throughout the budget year when there are cost overruns. After Supplementary Appropriation No. 2, we were in the hole $3.1 million in the reserve, so we spent all of our $10 million or $15 million that was in the reserve and we had gone over by about $3 million.

So we’re now adding another $8.2 million to our reserve fund. So we’re going to be in the hole over $11 million. It almost begs the question why have the reserve, why do we not just leave it at zero because the reserve number really doesn’t mean anything. We spend our reserve funds of $10

million or $15 million and we just carry on and ask for more money and ask for more money.

So, again, I have to question a lot of the expenditures that are in here. If we are constantly allowing departments to overspend, do we really know what we’re spending our money on and are we really getting the programs and services that we think we need. It’s very difficult at the beginning of a budget to say this is what we’re going to spend our money on, but when we get to zero and we have none left, well, we just go and ask for more. So how can we truly evaluate whether or not we’re efficiently and effectively spending our money?

I’ll have specific questions when we get to various departments, but that’s it for now. Thanks, Madam Chair.

Thank you, Ms. Bisaro. Minister Miltenberger.

Thank you, Madam Chair. I live and work for the day as Finance Minister where we’ll have a session in this House and Ms. Bisaro will say we’ve done a good job on budgeting and that we hit an acceptable range of budgets so that we’ll know that we’ve almost approached as close to perfection probably as we’ll ever get. But in the meantime, what we have here are legitimate requests. The Legislature of course can say no. That is our legal right, but we believe we’ve demonstrated very clearly the need.

I think all the Members that have been through the facilities, and we’ve all been through facilities, would acknowledge that the things we do and the work that we do in health and education and housing and every department that’s asking for money are legitimate. We’re paying for what we get. In fact, we all have stood in this House and in committee meetings, we’ve all heard in our constituencies that there’s need for money, more resources, more programs and we try to manage that. Yes, we set targets for ourselves and we try to meet those, but we also are realistic and come back when we know there are things that have to be funded, in our opinion.

So I appreciate the Member’s comments and hopefully over the next three budget years I’m sure we’ll continue to work on the challenge of coming up with a system that meets the needs of all the Members of the Legislative Assembly. Thank you, Madam Chair.

Thank you, Minister Miltenberger. General comments. Next I have Mr. Bromley.

Thank you, Madam Chair. I’d just like to add my voice to my colleague’s, Ms. Bisaro. I don’t see these as legitimate if they reflect bad management of the resources that we’ve had for the year. Can I just get confirmed, Madam Chair, what was our reserve? We reviewed it and

established it in the 16th Assembly. Did we establish

it at $10 million, or would the Minister know if it was $15 million? Thank you.

Thank you, Mr. Bromley. Mr. Miltenberger.

Madam Chair, it’s $10 million. Thank you.

So this negative $11.3 million, that tells me that we’ve more than doubled that, is that correct? Are we now at $22.3 million into supplementary funding? Is that correct?

Yes, Madam Chair.

I just wanted to establish those numbers to be sure. That is a flag. We did review this quite thoroughly in the 16th Assembly and we

came up with the $10 million very much explicitly and on purpose. My colleagues have already raised many points. Mr. Yakeleya has raised many points and others. I think we’ll hear similar comments as we go department to department. Typically they reflect a lack of action on prevention sides and cutting to the chase on a lot of these issues or improper funding to begin with.

So sticking with general comments there, I think I’ll leave it at that. We need to do better. I don’t agree with the Minister that, yes, this is just a regular part of doing business. To some degree it is and that is why we established a $10 million reserve. So do we tell our departments that anything over that comes out of your existing? You know, what are your priorities? What are you going to give up without sacrificing services or what? But that’s why we’re paying top dollar to our managers and I think we should be able to expect that sort of level of performance. I’ll leave it at that.

I appreciate the Member’s comments. There is constant pressure on government to do more and constant pressure in this Assembly, constant pressure from our constituents. I mean, I’ve heard it around the table: let’s add money to pave roads, let’s add money for compassionate travel, let’s add money, let’s build more, let’s do things. We have to make choices and this Legislature has the authority. If they say that we’re not going to spend this money and we’re not going to pay for it, I mean, that’s our choice. We’re saying and we’re making the case here that these are very critical programs and I don’t think it’s bad management. I think there are cost pressures in our system that have to be met. We are attempting to do that. I appreciate the Member’s comments and look forward to the detail. Thank you.

Thanks to the Minister for that response. I don’t disagree with him. There are cases when we need to respond, but there are quite a number of cases, as we’ve heard from the

comments and as we will hear as we go through this, where I think we could have done a better job and we need to start doing a better job. It’s very tough. We’re talking services now. It’s very tough to say no at this point in time when the damage has been done. So that sort of behaviour and allowance perpetuates itself. That’s what I’m talking about.

There are a number of items where I think we could probably find general agreement that we should be doing a better job, but I do accept the points the Minister has made as well. Thank you.

Thank you, Mr. Bromley. Minister Miltenberger.

No, no comment there. Thank you.