Department of Environment and Natural Resources, operations expenditures, activity, corporate management, not previously authorized, negative $104,000.

Forest management, not previously authorized, negative $963,000.

Total department for Environment and Natural Resources, not previously authorized, negative $1.067 million.

Does the committee agree that we have concluded consideration of Tabled Document 3-17(2),

Supplementary Estimates, (Operations Expenditures), No. 3, 2011-2012? Agreed?

Thank you. Mr. Menicoche.

Thank you, Mr. Menicoche. The motion is in order.

Question has been called.

---Carried

Does committee agree we’ll move on to Tabled Document No. 2-17(2), Supplementary Estimates (Infrastructure Expenditures), No. 3, 2011-2012?

I will ask Minister Miltenberger for his opening comments, please.

I am here to present Supplementary Estimates (Infrastructure Expenditures), No. 3, 2011-2012. This document outlines an increase of $400,000 for operations expenditures and an increase of $2.631 million for capital investment expenditures in the 2011-2012 fiscal year. The total supplementary request is $3.031 million.

There are four items in the supplementary estimates:

1.

$2.5 million for the Department of Transportation to start environmental assessment work on the Inuvik to Tuktoyaktuk highway project.

2. $427,000 for the Department of Transportation

for the costs associated with moving NAV Canada facilities and equipment into the new air terminal buildings in Tuktoyaktuk, Paulatuk and Sachs Harbour. These costs will be fully offset by a contribution from NAV Canada.

3. $400,000 for the Department of Public Works

and Services to provide an infrastructure contribution to the NWT Housing Corporation for

its share of the costs associated with the construction of a joint use maintenance and trade shop in Tuktoyaktuk. The net impact on government operations is nil as the funds will be transferred from the department’s capital investment expenditures budget.

4. $104,000 for the Department of Environment

and Natural Resources for renovations for office space required for the department’s lands and water division, which was established in 2011-12. The net impact on government operations is nil as the funds will be transferred from the department’s operations expenditures budget.

I am prepared to review the details of the supplementary estimates document, Madam Chair.

Thank you, Minister Miltenberger. The witnesses are already here. They have already been introduced for the record. This is a continuation. General comments. Mr. Hawkins.

Thank you, Madam Chair. One of the particular issues in this briefing note is the Inuvik-Tuk highway. I thought it would be beneficial for everyone if he provided a quick synopsis of some of the discussions that were happening. I will speak in terms of theme as opposed to specifics and allow Members to speak in favour or against or their overall position.

Some of the issues that have arisen out of the Inuvik-Tuk highway have been things along the lines of funding arrangements with the federal government to build a proportion of 75/25 being sort of the final billing. Are there other opportunities? Is the $150 million contribution firm? Members, of course, would like copies, correspondence of funding, arrangements and, of course, conditions. Typically the federal government, as we all know, will build the highway and the provincial or territorial government who then takes it over will, of course, then move to maintenance responsibility.

A lot of Members felt that the cost estimates were too broad. Members want more specific numbers. Long-term implications seem to be unknown; for example, maintenance costs, permafrost conditions, taking away from other major infrastructure properties and, of course, the list goes on.

Risk major had been highlighted. It needs to be fully developed. It includes key decision points, worst-case scenarios. The Minister identified signing an agreement with Canada as the point of no return. Members asked to be kept informed on P3 opportunities and the particular negotiations. This is void including maintenance in a P3 contract. Also to ensure that public funds stay in the North. That is a big issue, allow as many northern contractors as possible and the opportunity to benefit from the project.

Just an overall perspective, the Minister committed to keeping the committee informed which, as all Members I am sure, we certainly appreciate. Details on federal funding arrangements are key for the Minister as he has agreed to procurement processes and contract negotiations are a major issue. He responded to specific requests for technical information regarding permafrost data, route selection. He has also advised Members when project website is live, that he will obviously inform Members. I would assume he is going to inform the public as well so the public can follow this particular issue.

He has committed to providing due diligence of key project milestones and he has stressed repeatedly that, as returning committee discussed broader economic development and mineral development strategies.

Madam Chair, that is just a general overview I offer to committee and Members that I have provided a sort of a quick synopsis to highlighted themes. Many Members will have their own specific concerns which I think are important to get out on the table here today, fleshed out whether they support or don’t support or key weaknesses or areas of concern they want to highlight. Thank you, Madam Chair.

Thank you, Mr. Hawkins. Minister Miltenberger.

Thank you, Madam Chair. I thank Mr. Hawkins for the synopsis of the results of the meetings so far, and at this point I just accept those comments and the summary. Thank you.

Thank you, Minister Miltenberger. Next I have Mr. Dolynny.

Thank you, Madam Chair. I thank the Member for Yellowknife Centre for giving a brief overview. I want to kind of take that and elaborate it to a certain level here. The concept of the Tuk-Inuvik road here has become more political and emotional in nature. Sometimes we need to look at the rationale in moving forward. The benefits of the people of the Northwest Territories seem to not really have been identified adequately, I think, in terms of a lot of things we talk about cost-benefit analysis, as the Member indicated.

I want to make a point to note that the supplemental here is strictly for the due diligence. I can understand that. The bottom line here is I think a lot of Members felt here that this product has been ill prepared in nature and in some cases the selling points are definitely one in which, being of business background, I have a hard time swallowing. I think some Members do as well.

When we look at the estimated cost back in 2009, it was $2.17 million. Two years later we are at 38

percent higher. We are not even sure the ceiling of that is $300 million. We keep referencing a 75/25 split when, in reality, there is a capital of $150 million, so really we are looking more at a 50/50 split. I want to make sure that goes on record.

The business case we have is two years old. This is going back to the 16th Assembly. Again, the P3

component is still pending. Without that proper analysis, I believe the government here is going fairly blindly forward, again, under the how to due diligence. I understand that.

Maintenance costs are still not realized. The last time there was a maintenance cost estimate in 2009 this was $2 million. Today we don’t have a clue. Again, this is still something that the Members are looking forward to seeing. Again, the benefits of the highway have a potential to help with the Mackenzie Gas Project. We understand that, but again we have major companies out here that have stayed relatively silent or at least, if they have, we as Members have not heard from Exxon, Conoco or Shell or companies out there in terms of what they are going to be doing going forward.

Again, while it is likely, there is no guarantee that the Mackenzie Gas Project will proceed. We are at best guess. If it doesn’t, really the economic viability of this highway has been reduced to almost zero. Again, I want to make that also known.

Cost overruns from this government and previous Assemblies are well documented. If we use the past as our guide, Deh Cho Bridge, as a cost example, starting off at $45 million in its early days to balloon out of control at $192 million. Other large products like the Inuvik super school have significantly gone over their original budget. Bluefish Hydro Dam, roughly triple to $37 million, and $13 million has been spent in Taltson hydroelectric project with no lasting benefit in sight.

Madam Chair, I guess moving forward, my general comments are given that, all this information, we haven’t received as much proactive exposure as a government tends to offer here. Again, some of the major issues that came forward, as the Member for Yellowknife Centre indicated, risk management. I want to formulate my general comments to the fact that as of date we haven’t seen anything on risk management or anything of stature. I want to point it out that this risk management piece was a critical component of the Auditor General’s Deh Cho analysis, the Deh Cho Bridge. Again, I am hoping that we don’t repeat ourselves moving forward with this. I am going to leave it at that, Madam Chair. I am sure some of the other Members will have equal comments moving forward.

Thank you, Mr. Dolynny. Mr. Miltenberger.