Thank you, committee. Sergeant-at-Arms, if you would be kind enough to bring our witnesses into the Chamber.

Minister Beaulieu, if you could be kind enough to introduce your witnesses for the record.

Thank you, Mr. Chairman. To my immediate right is Paul Guy, deputy minister of Public Works and Services. To my immediate left is Steve Lewis, director of corporate services; and to my far right, Laurie Gault, director of Technology Service Centre.

Thank you, Minister Beaulieu. Ms. Gault, Mr. Guy and Mr. Lewis, welcome back to the House. Committee, we’ll open up the floor to general comments. With that, I have Mr. Bouchard.

Thank you, Mr. Chair. I just wanted to make some brief opening comments. Public Works and Services has been working on the shared services and procured shared services and we’ve been trying to work out some of the details on this process. I guess overall I support the concept of centralizing or regionalizing some of this purchasing. You know, in the Hay River area we’ve been able to get some of those positions and do some of that stuff.

I guess I’ve been hearing some concerns, and there are some growing pains of going back to this process. I say “back” because I think the government used to do this a long time ago, centralized purchasing. I guess there are just some growing pains between the link between Public Works and Services and the departments and some of the people supplying the products, whether it be northern manufacturers, which we recently had a meeting with as well as some of the people who supply it. I’ve heard the Department of Health from the people that supply equipment to the health service.

I guess I’m giving a little bit of time to Public Works and Services to deal with the growth and the learning curve of learning these departments and how those people have to learn some of the specialties of the individual departments. I understand there’s a link between the department and shared services, but I’m not sure exactly how that works with the department as far as the specs. Some of these people that have been supplying to the health field have been training some of those departments, some of the health departments, some of the people in the regions that this is what they need, but this is what we provide, this is what’s available, whether it’s a hospital bed or whether it’s a specialized tub. Like, there are a bunch of specs that they need.

So I know there’s a learning curve for shared services to get up to speed on some of the specialty stuff from each department. When we deal with Transportation, for example, of a plow truck, what’s required in a plow truck? Because I think some of the stuff has been there for years as far as the Department of Transportation knows what they want, but now they have to go to shared services and explain that. So there’s a little bit of a learning curve, and if the Minister could just talk about where the shared services is going in learning and getting up to speed in that link between departments and the procurement side of it.

I’m glad to continue to see the deferred maintenance slowly going down. I don’t know the actual number when we started in this Assembly, but I know the number has been going down pretty steadily. So, obviously, we’re happy with the new health centre in Hay River and I think that alleviates some of the deferred maintenance.

Just looking through my notes from the business plans, one of the things was e-waste. I know we continue to look at ways of dealing with the e-waste. I know the government goes through a lot of e-waste and I know we’ve been trying some pilot projects, but I think we just need to commit to fixing it, to taking it on. I know, through my private side, a lot of that e-waste is being shipped south now. I think they’re doing that in Fort Smith. So, I mean, I

think the government needs to come in on getting rid of some of that e-waste and not letting it go to the landfill and not letting it go into surplus, because most of the time it ends up in the landfill after a few things have been taken from it. So I think we need to commit, as a government, to getting rid of the e-waste, get a full recycling program going on it. I know Public Works is dealing with a lot of that because they end up with the surplus assets.

The other one that I know Public Works and Services I’ve been trying to send them notes whenever space comes available and decentralization, and I guess if we can get a little bit of an update on where Public Works is doing assessments in the communities, the smaller centres of their office space available. I even recently heard of Simpson, looking at opportunities there for more office space. Where does the department see that going forward? I think the department is one of the key links in decentralization as far as office space is concerned. Obviously, Housing is for housing issues and other departments as far as getting their positions decentralized. So that’s an area of concern, and I know Public Works is engaged with that decentralization.

So, those are my main concerns with this department. Thank you, Mr. Chair.

Thank you, Mr. Bouchard. We’ll turn it over to the Minister for a reply at this time. Mr. Beaulieu.

Thank you, Mr. Chairman. I just want to give a few comments on each of these areas and I’ll have the deputy minister provide some detail.

The procurement shared services from the government’s perspective is something that is very positive. We consider it to be very positive for industry as well. It does consolidate the contracting, tendering and so on. We have offices now in the various locations across the North that handle the procurement services for all of government and all the departments, plus the NWT Housing Corporation. We feel that it’s going to improve the quality of our contracting and our tendering process, something that the government looked and felt was the way to go to bring efficiencies to the government and effectiveness.

The Deferred Maintenance Program, yes, each time we bring new assets into the government and dispose of older assets, our deferred maintenance comes down. We also do major mid-life retrofits on buildings and reduce the deferred maintenance in that way. So, as I indicated in my opening remarks, deferred maintenance, seven or eight years ago, started over $470 million and it’s down to about $270 million. So we are bringing our deferred maintenance costs down, but immediately as we introduce new buildings into the government

inventory, the deferred maintenance on that building starts to accumulate until which point we do either a mid-life retrofit or do a replacement.

As far as e-waste with the GNWT itself, Public Works and Services has been dealing with the electronic waste of the GNWT, our own employees, for the past 10 years. We have had relationships with organizations in Alberta. We take all of the computers or any of the electronic waste that comes from the public service and we deal with it. We send it down south. We have an organization down south that deals with our electronic waste. The bigger e-waste program for the general population is going to be something that the Minister of Environment and Natural Resources introduces now as part of the recycling program that is run by ENR.

Specific to office space and housing, I could talk about the amount of market housing that the Housing Corporation is going to put out there in the communities for market housing not necessarily targeted specifically at decentralization but for office space. I will have the deputy minister, if need be, provide a little more detail on these four areas and also some specifics on the office space. Thank you, Mr. Chair.

Thank you, Mr. Beaulieu. Mr. Guy.

Thank you, Mr. Guy. Continuing on with general comments, I will go to Mr. Yakeleya.

Thank you, Mr. Chair. My comments will focus around three major things for us in our region. I want to make comments to the Minister. The first one is around Sahtu, which is a stand-alone region within the department, DPW. Our regional office is up in Inuvik. There are plans to have a manager of some type in the Sahtu region. We have employees in the region, yet we still have to call Inuvik, to the higher levels of authority. I want to not only talk to this department but other departments within government. My region wants to become a stand-alone region. With all the challenges our region has, I think it is high time that we stop having other regions take care of us by having the regional office outside of the Sahtu.

I certainly have had an earful from people in my region asking why this still continues today, having our region call outside to do things within our region. I’m looking forward to some type of reason other than to hear reasons why they can’t move positions or create positions in the region. We have to get away from that type of message and say, yes, we can do it, let’s look at it. Is it a possibility? Yes, we can, type of attitude. If it can be done in that direction, I’d like to see it. Hopefully, within the life of this government and the 18th government, the

Sahtu becomes a stand-alone region with the proper positions of authority and the proper support from this government to look at a stand-alone region in our area. I want to say that’s a big one for me within DPW.

I want to thank the Minister for working with the contractors in the region on the new health and wellness long-term care facility in the region. I see a little bit of activity happening there now, so it must be that things are happening. I look forward to that project continuing and moving to a place where we would look at cutting the ribbon and having the facility open and see people moved into the facility.

I appreciate the Minister’s effort and the department’s to complete Tulita’s tank farm. It’s working well and I look forward to seeing an overall evaluation, almost an audit on the project. Where did the expenditures go? Did we support the community in having those dollars go into that project? Accommodations, vehicles, and basically how it went. It’s more of a look at the project itself.

I certainly appreciate the new biomass projects going into the communities in the North and the schools in Tulita and Fort Good Hope. I look forward to those biomass projects with the support of the contractors knowing they can do the work in our communities, Norman Wells, Fort Good Hope and Tulita. We have some pretty good contractors and I certainly support our northern contractors being flexible enough to see if they can do the work. I think our government recognizes doing business further north does cost a bit more; however, I think we have provisions in our work that allows for additional cost. Sometimes we need to just be a little more flexible with regard to getting more northern contractors on board. I think it’ll take some negotiation to make that happen. I wanted to say that to the Minister. These are my comments. I don’t have any other comments in the details. I just wanted to make comment to the Minister that I’m looking forward to a time where the DPW’s office and the project are finishing off the new wellness and long-term care facility.

Thank you, Mr. Yakeleya. Minister Beaulieu.

Thank you, Mr. Chairman. We have had discussions internally on how the Sahtu region operates in as far as Public Works and Services goes. We would strongly look at placing an area manager into the region. We have other areas where the activity has not been as high as other bigger regions and we have placed area managers into these other areas. An example is Deh Cho. We’ve placed an area manager in Simpson who actually reports to the regional office from the South Slave; however, it becomes quite independent. This is what the Member wants to see, that the Sahtu region become more independent and less reliant on going to other regions in order to get their support.

Right now, we have only 10 PYs in the Sahtu out of I believe it’s 57 total PYs for the Beaufort-Delta/Sahtu regions. Looking at a position as area manager we see as step one giving us a look at how a region could look in the future. As the volumes increase, as the Member said, there have been lots of activities with new schools and now the new health centre, and we’re bringing people down from Inuvik. If the volumes increase in the Sahtu, we could look at the next step of moving to maybe an area manager that reports to Yellowknife or something into the future. Not necessarily going to

a regional superintendent but maybe giving an area superintendent with more authority and more independence.

The new health centre and long-term care in Norman Wells. A lot of the material is arriving on the winter road so the activity is picking up. We also are gearing up for very heavy activity in the construction of the Norman Wells Health Centre long-term care facility this summer. The Member should see this building going up fairly quickly this summer. I don’t have the exact schedule with me as where we’re expecting to be. The construction will occur this year, then it will be closed, and then they will be working on the inside of the building, and the building would be substantially completed and ready for occupancy in August of 2016. That’s something that we’re shooting for.

The expenditures on that building and where the expenditures occurred, who benefited from the expenditures is something we can do. We can track that. It’s a negotiated contract.

On the other question about the project that was completed with PPD, a tank through the PPD tank farm, again, we would be able to look at the expenditures. I think the Member is asking that we audit the expenditures and so on, on that project, and we can provide that info.

Comments on the biomass. We are seeing that it may be feasible to have biomass in the Sahtu. We’re looking to turn some of the buildings that exist and putting biomass boilers into, I believe it’s the schools in Good Hope, Norman Wells and Tulita. Then, of course, the new long-term care health centre is also going to have a biomass furnace as the primary heat source.

Thank you, Mr. Beaulieu. Next on my list I have Mr. Blake.

Thank you, Mr. Chair. I just have a few opening comments here. It’s been brought to my attention that the communities that I represent, specifically Aklavik and Tsiigehtchic and even McPherson, would like to see a lot of the contracts that are through Public Works, whether it’s for maintenance or work that needs to be done in the community. In many cases, I see a clause under the contracts that state that it has to be within 50 kilometres of the community, and that’s what the communities would like to see on a lot of these contracts specifically for maintenance. A lot of this can be done within the community and that’s what the leadership would like to see in the future here. It gives opportunities to the people in the community who have small businesses to get some of these contracts here, because that’s something that the people would like to see, is to try to keep some of these funds in the community to give the residents the benefit.

Thank you, Mr. Blake. Minister Beaulieu.

Thank you, Mr. Chairman. We will look at ways to increase the local content in our contracts in those three communities that the Member represents. There are some as and when contracts as well. We’d look at trying to get as much local involvement as possible. We’re not sure about the geographical restricted tendering process. We have some MOUs in place as larger government with the Gwich’in, and so in addition to that maybe we may not want to do the geographical restricting on the contracts because it also benefits the government to have as much of the as and when’s and the smaller contracts done by local people because of the response time and so on, and we support that and we will look at all ways to increase the local content and those contracting from this department.

Just one more thing. The garage and office space in Fort McPherson. It’s been in the same location for over 20 years now that I remember. It’s possibly even longer. What are the plans to replace that building and have a new up-to-date office space and workshop for the employees?

We are going to have some detail on that for the Member. I just want to give the deputy minister an opportunity to get some of the details here. We usually follow a process ourselves. Public Works is usually pretty up to date on their own warehousing needs and office needs, so I’m sure that if it’s a building that, as the Member indicates, is well over 20 years old, that we have it in the queue for possible replacement or a major retrofit, but we don’t have the details with us, unfortunately, Mr. Chair.

So, if you will get that information for me, is that what he’s saying?

We would be pleased to provide that information to the Member.

Thank you, Minister Beaulieu. Next on my list is Mr. Dolynny.

Thank you, Mr. Chair. I would like to welcome the department here today. It’s nice to see some familiar faces.

I do have some general comments, and if I have the time when we get to detail, I might drill down a little bit more.

There are a couple of areas, just as observation, to wet my whistle, so to speak, in terms of department performance in the last year.

One of them is under the procured shared services. This is basically one year under our belt on this consolidation of buying and savings. The concern I have is have we seen any type of significant savings by consolidating this under one roof? It may be a difficult question to answer, but it was one

of the pillars or guiding goals of the department in making it a bit more cost effective for the government. So at this stage, if there are any preliminary cost savings for having this consolidation of procurement, that would be of help to this Member here.

The only other comment I have with respect to how the year went, from an MLA’s perspective, as an MLA, of course, if things go astray or off the rails, we are probably one of the first people who get notified as to if there are other issues. One of the common comments that I got from a number of different companies was that they were quite unsure what happened in this last year. We tried to consult with a lot of our stakeholders. Some of the arrangements in the past were that some of the businesses were given a heads-up for RFPs and stuff like that, and during this year some of that did not transpire. Of course, we as a government put our ads out in the paper and everything else. But some of the processes that a lot of the companies had in place, they were given a heads-up that an RFP was coming, “keep your eyes open for it” and everything else. So we may have upset a few businesses out there that may have had a traditional heads-up that RFPs were coming their way. I am assuming it was lessons learned in a lot of cases, that they are going to tune in more as to how we are going to be opening up procurement. But it was an observation that I had to share at this juncture with the department here.

Occupational health and safety has always been a huge part of what I do here to make sure this government has a strong safety culture. Whether we want to answer in general comments or not, I will bring it up in the directorate again, is what strides have we taken to augment our Health and Safety Program, moving it to the next level, which I know there has been a desire to do so from department to department? But quite frankly, Mr. Chair, we know full well that we have had some issues in some of these areas and they end up in the court system, and the courts have been dictating themselves where we are as a government with respect to our safety and safety culture. So, again, any update as to what our progress has been in the last year on occupation health and safety would be appreciated.

With the new energy functions coming up here, and I have spoken in the House under the term of fuel services, which is the old petroleum products division, and I do applaud the department for recently announcing the decreases in fuel in our communities, eight to nine cents respectively. I think that is a marketable goal and attainable success, and I do want to applaud the department for doing that. My question is the transparency around that. How do you come up with those calculations, and how are those calculations derived? More importantly, how transparent is it to

the public and Members on how those changes come about and when the changes are the other way, when we start seeing increase? How does this new fuel service division, how will they be communicating with Members of the Legislature as well as members of the public?

We know that there has also been a recent RFP that was issued for the complete replacement of our phone systems. Again, we can talk more in detail when we get to the TSC function. I have been reading anecdotal reports in media that there were going to be significant savings for us to do this, and I have heard things in the media that up to $6 million in savings over 10 years, which I thought was a bit on the high end. But maybe I could get some clarity as to what are the perceived savings in replacing our government phone systems in the long course.

You know, Mr. Chair, for lack of better words, these are just some of my opening observations with the department, and of course, if I don’t get enough reply in general comments I will definitely be posing them in detail. Thank you.

Thank you, Mr. Dolynny. Minister Beaulieu.

Thank you, Mr. Chairman. The procurement shared services is a process that I described previously. We received a lot of positive comments from the decentralized tender desk, the regional desk. We intend to continue to monitor the procurement shared services. We believe that we have increased the quality of tendering. We work with all of the departments. We will be doing internal audits on the procurement shared services so that if there is anything that we think we could improve on in this type of procurement, we will do it.

The occupational health and safety, I will have the deputy minister provide a little more detail.

Energy functions we have done for many reasons that we talked about. We have the conservation, the developing of the policy, the programs, energy programs for the communities and for businesses through the Arctic Energy Alliance. Again, if the Member is wanting to get more specific details on the energy, the consolidated energy division, then we will have the deputy minister provide that.

Fuel services is posted how we come up with our prices. Whether or not we are going to determine buying forward, if we think it is the thing to do, there is a certain price of fuel… Right now we could determine what we would pay if we bought fuel for July, as an example. We would go to a company and buy fuel for July, and if that fuel… It’s called hedging, as the Member knows. So we can hedge up to 70 percent of our fuel purchases for what the government purchases. It’s something that we have our people watching the price go up and down and what the rack price is for fuel when we purchase it,

when we ship it in and so on. It’s quite a complex process, but we post it, how our prices come about. If we think the prices need to be brought down in the future, we will bring them down. If we think the prices need to be brought up, we will bring the prices up. It’s all on the fact that we don’t profit on the prices. It’s the cost of the product, the transportation of product and community distribution. Of course, our staff that are needed to purchase the fuel and get the fuel into the communities are all charged to the fuel price that we sell at the end.

After the deputy minister provides some more detail, I will have the director, Ms. Gault, provide the information on the new phone system, including what we think the savings will be. Thank you.