Thank you, Mr. Chair. It is my pleasure to present the Department of Transportation’s proposed main estimates for the 2014-2015 fiscal year for consideration.
The primary business of the department is to operate the NWT public transportation system and provide for the safe, secure, accessible and reliable movement of people and goods between communities. The activities undertaken by the department also protect the infrastructure investments already made in our transportation system. The department’s work is balanced with meeting the increasing needs of communities and industry that are reliant upon our network of roads, winter roads, ferries and airports to achieve the goal of social and economic growth.
The department is proposing a budget of $126.2 million for 2014-2015 to maintain service delivery and to provide for modest improvements. In total, the department is proposing an 8 percent increase of $9.1 million from this year’s main estimates. This figure includes an increase in annual amortization expenses of $2.5 million, resulting from additional capital assets expected to come into service up to 2014-2015, $3.8 million in other adjustments, and forced growth valued at $3.8 million including Collective Agreement increases of $800,000.
The increase to the O and M budget is primarily the result of forced growth initiatives to cover the increasing cost of delivering contracts for highway and winter road construction and maintenance, community airports, increased regulatory
requirements across our airport system, and improvements to driver and motor vehicle licensing services.
Of the $3.8 million in forced growth initiatives, $1.1 million will address the cost to maintain Highway No. 3, a major route into the NWT experiencing maintenance challenges due to increased traffic pressures and permafrost degradation. The proposed budget includes $426,000 in forced growth to provide for increased operation and maintenance costs associated with the road licensing and safety computer system, called DRIVES. This important driver and vehicle licensing system enables the collection of over $9 million in commercial revenue and provides an operating platform to continue expanding on-line driver and motor vehicle services, such as on-line registration recently announced.
A total of $3.8 million in other adjustments were approved during the fall sitting of the Legislative Assembly. Of that sum, a one-time allocation of $2.4 million will provide for engineering and construction work to deliver a permanent repair required on the Inuvik Airport runway. The department implemented emergency repairs last fall when an area of the runway surface failed due to changing underground conditions. Engineering studies and design work are being undertaken to determine the cause of the surface failure and to identify a long-term solution for implementation in 2014-2015.
Other adjustments of $1.4 million will provide for crews, equipment, fuel, and supplies required to accelerate ice bridge construction and to extend ferry operations at the Fort McPherson and Tsiigehtchic river crossings on the Dempster Highway during the fall freeze-up. Overall, commercial vehicles endured fewer days of interrupted service than in previous years, from historical counts of 70 to 80 days, reduced to about 30 days. The extra days of ferry service were particularly important to resupply liquid natural gas and propane to the Inuvik region. The department is currently evaluating the operations from last year to incorporate lessons learned into the future operations.
For 2014-2015, the department is projecting a total of $74.5 million in revenue and recoveries. This amount includes a transfer payment of $46 million from the Government of Canada for the Inuvik-Tuktoyaktuk Highway Project. The department has signed the final federal funding agreement, received all land use permits and water licences, concluded land tenure and royalty negotiations, and has negotiated a design-build contract with a local company. The highway project is an important first step to realizing the long-term goal of an all-weather road through the Mackenzie Valley corridor. The department is enthusiastic to begin
constructing the largest and one of the most challenging infrastructure developments ever undertaken by the Government of the Northwest Territories.
Meeting the 17th Assembly’s priority of improving economic development opportunities is critically linked to investing in transportation infrastructure. The need for improvements to transportation infrastructure was highlighted last winter when the department’s regional operations in the Deh Cho and Sahtu experienced a marked increase in industrial traffic due to resource development. In anticipation of increased pressure on the winter road system this coming winter, the department worked directly with industry to accelerate the construction of ice crossings, strengthen the winter road surface, and increase the level of service to extend the operating season to the latest possible date in the spring. At the same time, the department is also working to improve safety by increasing the number of enforcement patrols on the winter road, improving our Mackenzie Valley winter road driving guide, and working with industry to ensure the safe movement of heavy loads. To achieve these improvements, the Financial Management Board approved a four-year target adjustment of $169,000 per year to fund casual highway maintenance supervisors and highway transport officers assigned to the Mackenzie Valley winter road. One supervisor will be based in Fort Good Hope, one in Norman Wells and two highway transportation officers will work out of Hay River.
The proposed main estimates also include forced-growth funding of $570,000 to provide Wekweeti residents with annual winter access to resupply the community with food and fuel at reduced costs and provide mobility for residents.
These are very brief highlights of the Department of Transportation’s proposed main estimates for the 2014-2015 fiscal year. I am confident the proposed budget will allow the department to continue providing for the safe and reliable operation of the NWT transportation system. I am looking forward to 2014-2015 and the exciting work the department will be doing, such as developing a multi-modal strategy and rolling out additional on-line driver and motor vehicle services to better serve our clients.
I am also confident that in 2014-2015, the federal government will provide support for our Corridors for Canada III funding proposal under the new Building Canada Plan to strengthen our transportation system, which is critical to a strong and prosperous future for all of us. Corridors for Canada III proposes an investment of $600 million across all regions of the Northwest Territories over the next 10 years. Strategic investment includes upgrading and rehabilitation work proposed on all eight all-winter highways, including Highway No. 7 and Highway No. 8; completing reconstruction of
the Detah access road, replacing the Inuvik air terminal building, and moving forward on the Mackenzie Valley Highway Project including completing an environmental assessment, and construction of the Bear River Bridge. Ongoing investment to our transportation system will lower the cost of living in our communities; enable and promote economic development such as oil and gas, and tourism; create jobs for Northwest Territories residents; and maintain the safety and integrity of the transportation system into the future.