Yes, Madam Chair.

Thank you, Mr. Miltenberger. Does committee agree?

Thank you. I will ask the Sergeant-at-Arms to please escort the witnesses to the table.

For the record, Mr. Miltenberger, could you please introduce your witnesses?

Thank you, Madam Chair. With me is the deputy minister, Ernie Campbell; and head of forest fire operations, Bill Mawdsley.

Thank you, Minister Miltenberger. General comments on the Department of Environment and Natural Resources. Mr. Bouchard.

Thank you, Madam Chair. I just have a few statements concerning the biggest project on this budget, which is the purchase of the 802 air tanker fleet replacement. I guess coming into this Assembly, I know they talked about these

replacements for a while, so it’s kind of a process of us new MLAs starting and looking into the process of replacing these units. It’s replacing an older fleet that I think we got for minimal dollars. I guess the high cost associated to the purchase of these newer planes, and I know the department’s been looking at this for years because I know the department did some tests in Hay River, I want to say half a dozen years ago, maybe six or seven years ago where they did some water tests between the 215s and the 802s. I think this was some of the basis of some of the assessments of these 802 new bombers that we’re looking at, these smaller bombers we’re looking at purchasing.

I guess my questions are concerns with the capacity of them. They’re quite a bit smaller. Their volumes are quite a bit smaller. I guess I’m concerned with the deep canopy penetration of the units. I know we have used them in some of our firefighting these last few years because I saw them in Hay River, I think, as a tactic with other units, I guess, other bigger units. So I think those are my initial concerns. I guess the Minister has expressed to us in committee meetings and stuff like that, that they have justification of the purchase of them.

I guess my concerns also in that area is they are, you know the budget item there, they are territorial units, I do believe, and I see them down as Fort Smith here in some of the documents we’ve gotten. I just have a little bit of concern on that. I’m just wondering where we’re going to locate them and what the costs are on that one. When we have newer units, is there going to be additional cost to housing?

I guess some of the justification is that we’ve looked at the operating costs and maybe some of the potential revenue. Because we’re buying new aircraft, we might be able to lease them out. Have we looked at the potential of that revenue in the future? Those are some of my general comments, Madam Chair.

Thank you, Mr. Bouchard. Minister Miltenberger.

Thank you, Madam Chair. As the Member indicates, I think this is our third year to have seen the 802s operate under full forest fire operating conditions, under extreme forest fire operating conditions, especially last summer. They have performed admirably. The 802s would equal the impact of the four 215s that we do currently have. The four 215s, which I point out are probably 60 years old, roughly, burn fuel that is going to become obsolete in the not-too-distant future. There’s three years left on the current contract. We have at least two instances and one near incident where we actually ran out of avgas in communities, in Norman Wells and Inuvik to be specific, where the 215s were stranded on the

runway and we had to work to find other aircraft to come in and assist.

The cost of operating the new units would be considerably less than the existing fleet. It’s around $4 million a year right now to keep the 215s in the air and operational.

The fuel consumption is probably one-third and it’s Jet B versus lead-filled avgas, and the operating costs, because they’re newer planes, would be considerably less. But I’d ask the deputy if he wants to add any further detail to the Member’s concerns, or Mr. Mawdsley. Let’s start with the deputy, Madam Chair.

Thank you, Minister Miltenberger. Mr. Campbell.

Thank you, Deputy Minister Campbell. General comments. Anything further, Mr. Bouchard?

Thank you, Madam Chair. The other general comments that I had, we’ve been kicking around some of the ideas. One of the ideas is: Has the department looked at, as far as the 215s, what the plan is going forward with them? Are there discussions of selling them off? Are there discussions of maybe keeping them until we have operation? The Minister talked about three years left in the contract, but is there discussion of maybe operating the two newer units along with the 215s for a period of time this year or next year and what our capacities are? My understanding is we don’t get a whole ton of money for these older 215s but we might want to look at a mixture. On busy years like we had, the cost of running those, maybe, versus us having to hire bigger planes or the newer 415s from some other jurisdiction. Has the department looked at what we’re going to do with the 215s, and is there an option to keep them and keep them operational for a few more years to see the mixture between them and the 802s? Thank you, Madam Chair.

Thank you, Mr. Bouchard. Minister Miltenberger.

Thank you, Madam Chair. The option of selling the planes – as you know, they are not worth an enormous amount of money – is definitely one that we’re seriously looking at. On the assumption that if the budget is approved for these planes, the orders would be put in and that we anticipate that we’d have all 802s ready to go for the fire season of 2017. Until that point, we would be continuing to maintain and keep the 215s. We would start on the fire season and then, once we have the new fleet on line, we would look at what kind of disposal is in our best interest as a government.

The issue of keeping both fleets going is one of cost. So, we spend $4 million a year, roughly, and those costs are going to continue to rise as maintenance costs go up and avgas becomes scarcer for the 215s, so we’d have to keep that in the budget plus get… I could ask the deputy for the number, but the operating costs for the 802s would have to be added to that if we are going to look at keeping all the planes on as part of the fleet, which would be very expensive and I don’t think very cost effective in terms of the money. If we had the 802s and we needed additional air support, we would probably be far better off to bring in, as we have this last summer, available planes through our MARS Agreement, 415s and turbos or 215 turbos that are operational. Up to the end of 2017, we will have the 215s fully operational. Thank you.

Thank you, Minister Miltenberger. Anything further, Mr. Bouchard? General comments. Next I have Mr. Dolynny.

Thank you, Madam Chair. I’d like to welcome the Minister and the department here today. I do appreciate over the course of the better part of the year, I know the Minister has been diligent on providing much of the technical and financial assessment to committee in preparation for today. I do appreciate a lot of the background. But for a lot of people tuning in, this is a lot of new information and we’re going to be throwing a lot of technical data here at them. With that said, I think we need to go through a bit of an exercise, because I think we are embarking on a new format when it comes to fire suppression.

We know that the current fleet of CL-215s, these were planes that we inherited for, I believe, a very minimal amount of money. I heard that the transaction was a $1 bill from the federal government, and we maintained the operations of these 215s over the years. But really, by virtue of this capital process, we’re actually now getting in the business of actually buying new planes for the first time ever, when you think about it, so I think it’s important that we do the due diligence here to make sure that if this is indeed what we want to do as a government. Do we want to be in the business

of owning planes? Do we see what the economic benefit is and what the strategic advantage is for us to be the owners of very technical and expensive pieces of equipment?

Now, I know Mr. Bouchard went and talked a bit about the technical aspect, and I do have some concerns that may have not been mentioned and that I think need some response to. These 802s or amphibious air tankers, otherwise known as the fire boss, are definitely a smaller plane. Anyone who is able to Google it will be able to see online this is a very small plane and a very small payload capacity in comparison to the 215s, and I’ll talk about the 415 in a second. The concern I have, and I think Mr. Bouchard kind of mentioned, is given the nature of the fire season that we had last year, and, hopefully, we don’t have a repeat, but quite frankly, we don’t know. We know that we had one of the worst fire seasons, if not the worst fire season in the history of the Northwest Territories, and I would caution to say we probably had one of the worst fire seasons in North America vis-à-vis any other jurisdiction in Canada. So we literally have the prime situation where we could test a lot of these planes, and I know a lot of these planes through our MARS program did come up and help us fight those fires.

My concern is whether or not the 802s would stand up to the rigours of the type of fire that we had last season and dealing with that first attack mode given the smaller plane, smaller payload capacity, the fact that these planes are more susceptible to wind and wind shear, and we know very clearly that fires create their own atmosphere, fires create their own climate, and with that a lot of my dialogue with pilots who actually fly these planes have clearly indicated that the 802s, given the ferocity of a fire and the climate that a fire creates, could serve to be problematic given the type of fire we had last season. I want to at least point that out, that there are obviously advantages and disadvantages for every one of these planes that we look at.

The other concern that I do have is the ability for the 802s that when they’re flying, they’re flying by visual only and they do not have the capabilities of doing instrumentation flying, which then limits, I guess, the amount of time that these planes could be in the air fighting fires. It also could hamper the ability of these planes to go overnight, if need be, to other locations. They would have to fly during daytime only, so where, I believe, the 215s currently and a 415 counterpart do have the ability to fly what is referred to as VFR.

Going back to my original issue without getting more into specifics of the specs, I’m still a little bit on the fence here as to why the GNWT feels that we have to own these planes outright, that we’re not able to consider any type of private operation or private ownership. The department and Minister

have clearly embarked on many P3 initiatives for other investments in the Northwest Territories, such as the fibre optic line and the Stanton project, but yet it appears that this project here, we want to do it in house. I have a hard time deciding when we do a P3 initiative or when we don’t do a P3 initiative. But more importantly, what are the economic and strategic advantages for us to get into this business. Given the fact that we are entering close to our debt wall, we do not have the luxury of other jurisdictions to get in this business, and so I would probably like the Minister to comment on that as well.

Finally, Mr. Chair, with your indulgence, I’d like to spend just a second to talk about the planes that aren’t on the list today, and I know these are more expensive planes, but given the climate that we live in here and given the fact that we faced literally the most vicious fire season in the history of the Northwest Territories, the 415 aircraft is really the plane of choice when you look at it. This is the industry benchmark in amphibious aircraft, and really, if you talk to anyone in the industry and you read any brochure, you read any factual sheet in the fire suppression world, the 415s are the backbone of the firefighting missions around the world. I’m not saying that I want to spend a lot of money on them, because we don’t have the luxury. But it would be nice to hear whether or if we indeed do not have the money for a 415 plan of action, what is the strategy for potentially looking at a private company, private ownership where we’re leasing a 415 to deal with literally a very problematic climate and we’re dealing with large distances and, as I said, without putting a lot of technical issues on the floor, we are hampered by design specifically and technically with an 802 fleet.

I know I was kind of a little bit on both sides of the equation here, and if need be, I can go more into detail, but it was more of the general comment of concern. I believe the 802 is a solid plane. I want to rest assured and let the people know this is a solid plane. It might be, in my humble opinion, a bit too light duty for the type of fire and fire seasons that we could face in the near future.

Thank you, Mr. Dolynny. Minister Miltenberger.

Thank you, Mr. Chairman. I’ll go through the list and I apologize if I missed anything. To the issue of are the 802s up to the task, we’ve battle tested these planes now, not only us but other jurisdictions, but we’ve seen them firsthand in the Northwest Territories. It’s our third season, and they’ve handled everything that Mother Nature and forest fires could throw at them. They are nimble. They can operate in turn and maneuver very, very well. They are powerful. They have the distinct added advantage that they can go to shallow lakes that the 215s currently can’t.

Whereas a 215 may have to trundle off 20 minutes down the way or half an hour down the way, there are many, many times when the 802s are already back in action picking up water, hitting the fires, picking up water, hitting the fires, because they have that capacity to operate in shallower lakes.

The issue of VFR versus…instrument flight rating versus visual flight rules, sorry, it’s very rarely that it has ever been an issue. Of course, one of the key factors is the good fortune, I suppose, that during fire season we have just about 24-hour daylight, so it very seldom gets dark, and if, in fact, the visibility is bad enough because of the smoke, then nobody flies because of the risk. I’ll point people back to the ‘70s, I think it was, in Smith, as a matter of fact, where we had a collision in mid-air of water bombers and there were about four people killed, and they were in circumstances where there was almost no visibility, so it’s very problematic.

The issue of private ownership versus public ownership, we’ve laid it out for committee. The dollars, the math is very clear that in the North if we were going to look at using northern business and we wanted the northern business to pick up the $30 million and bill us back that we would pay a premium in the millions of dollars over the life of a contract so that they can, in fact, the private owner could go to the bank and get money knowing that they have a 10-year contract and over that 10 years we would have to pay back, for example, the $30 million. We demonstrated, we showed that we’d save literally millions of dollars in interest payments by us buying the planes and then putting it out as we do now, by tender or contract, to maintain and operate the aircraft without the burden of having to pay the interest payments and the paydown in the principal cost to the airlines of the airplanes. So we were of the opinion if by that approach, then every northern business that’s up here that can bid would be in a position to bid and not disqualified because it had to carry the burden of $30 million costs as part of the contact that would disqualify potentially a lot of northern participants.

If you’re going to buy a new 415, it would cost you $40 million. I don’t disagree with the Member that if money was no object we might have two 415s and four Air Tractors or some other configuration, but the reality is we need to look at the economics and how do we best protect the interest of the people of the Northwest Territories in a way that’s affordable. We believe, after extensive work, that the 802s are the best way forward and then if we have greater needs, we look at using the capacity under our MARS agreements, our mutual aid agreements with all the other jurisdictions, to bring in other aircraft as required.

In terms of the land-based aircraft that we have, for example, we’ve been leasing aircraft, as the Member suggested, because the northern aircraft

haven’t been available. So the DC-6 Electras, which are a critical land-based component, we have two built into the contract. We’ve been making arrangements to try to lease those from the South until we can get our own northern land-based planes operational and that is a very expensive proposition, but those are critical missing pieces at this point from our northern arsenal.

Thank you, Mr. Chair. I believe I’ve touched on most of the issues. Thank you.

Thank you, Mr. Miltenberger. Committee, we’ll have general comments for Environment and Natural Resources. Next on my list I have Mrs. Groenewegen.

Yes, thank you, Mr. Chairman. As has been said, the big issue on the capital acquisition for the Department of ENR is these 802s. It’s difficult to talk about them in great detail because, of course, it’s a very technical topic and one that’s very specialized. I’m sure the department has done a fair amount of research into the 802s and the suitability of them for the type of work that we seemingly need to do every year here in the Northwest Territories in fighting fires. I don’t dispute that it is time to add to what we have available here to fight fires. We hope we don’t get future years like we had this past year, but it’s not something that’s out of the realm of possibility.

I think that the Standing Committee on Economic Development and Infrastructure has spent a great deal of time talking with the department about all the pros and cons and has covered this topic very thoroughly and, as Mr. Bouchard indicated earlier, there’s been a lot of testing and a lot of trial that’s already been done with these aircraft. So, I don’t think that I have an issue with the acquisition. I’m supporting the acquisition of these aircraft with the model that is proposed by the department of the GNWT to own them and to contract for the operations and maintenance of them.

However, I do have some concerns about the department’s eventual plans to dispose of the 215s and I think that the 215s and the 802s have very, very different capacities and different roles that they could play depending on the location of the fire, the size of the fire and I know it all comes down to a matter of money. I don’t think that the 215s are probably necessarily, on any given day, worth a lot of money on the open market and I don’t know why we wouldn’t want to, if we could, and if we could afford it, have the option of using the 215s where it’s appropriate, even if they were on standby and the 802s were the main aircraft we would use to fight fire. But I’m sure the Minister will have some good reasoning for that and I guess that I’d like to hear what that is. Thank you.

Thank you, Mrs. Groenewegen. Minister Miltenberger.

Thank you, Mr. Chairman. Like every other arm of government, we are very aware of the fiscal constraints that we operate under. When we looked and we did years of work mainly with Meyers Norris Penny, looking at all the planes and it came down to also having the hat of the Finance Minister on, and as I was looking at this, what can we come forward in good conscience to tell the Legislature to make the case of what is the best way forward. The discussion was very quickly that the 802s could meet our needs at a fraction of the cost of getting four 215s or four 415s, three times, four times more for a plane that has a season that’s three months, four months long and what would meet our interests and what would we afford, what could save us money if we bought them, what’s easier on gas and what is able to do the work.

So we know that we’ll be able to keep the fleet of 802s in the air for less than what we’re currently paying to keep the 215s in the air. If we were going to pay, and it comes down to money, if we’re going to pay for the 802s and keep the 415s operational, flight ready, forest firefighting ready, then it would be if not the $4 million, it would be probably well over $2 million to $3 million a year that we’d have to add to our base budget.

Back to the issue of if the 802s are overextended as they would have been this year, or the 215s were this year, then we would be invoking the clauses in the MARS Agreement with the other jurisdictions and we would look at bringing in equipment and planes like we did from BC, Alberta, Alaska, Ontario, Nova Scotia, Manitoba, Saskatchewan, wherever they were available.

I guess the other thing to keep in mind, as well, the 802s, if we have a mild fire season, we would be able to put to use wherever they’re requested. Right now the 215s that we have in operation for us are so old and so behind the times in terms of liability and risk management that we can’t export them because the other jurisdictions do not want to have the issue of things that may go wrong, plus the access to avgas. So they’re not exportable for us, to us in Canada. So they’re basically stuck here, so standby would be a very expensive proposition. Thank you.

Thank you. When the Minister says that it would cost $2 million to $3 million to keep them on standby, that doesn’t seem like a very big price to pay for their usefulness. I mean, it has been what has served the Northwest Territories all these years. That doesn’t seem to be a very big price to pay in light of the almost estimated $60 million that it cost to fight fire this year, which was an extraordinary year, no doubt, but $2 million or $3 million to have this capacity and this ability at our disposal doesn’t seem like that much in view of the recent fire season.

So, if we’re not going to retain the 215s after 2017, well, maybe it is too early to say what we would do with them. Let me ask the Minister if he’s aware of any other type of use within the realm of government responsibility that the 215s could be outfitted or used for. Thank you