Thank you very much, Madam Chair. Just some general comments on the capital plan or the capital acquisition plan as a whole. The plan that is before us is the largest capital acquisition plan that this Assembly has seen to date and represents quite a substantial amount of money. I think what the red flag for me here is: who did not go through the difficult process of making difficult decisions to decide what this government could handle as far as commitments that were to be made and projects that needed to go forward? Because I think for me what the question there is: can the NWT handle this much work to be done, and can the GNWT handle this much work on the books?

I think that brings me to my next point, which is that a substantial amount of this acquisition fund, over half of this acquisition fund, is actually carry-overs from the previous year. I think this brings forward for me quite a bit of questions, one of which I put forward in a written question to the Minister. I know that the Minister might not have that information right away or at her fingertips. It makes me question: where are we lacking in capacity, or why is the government not able to get the money out the door? I think it's really important that we are able to spend money that we are holding aside for an acquisition because that is a substantial amount of money that is tied up in the capital acquisition plan that is not being able to be spent within the Northwest Territories.

Then I think of different places, like my colleague MLA from Yellowknife North was speaking about today, which is: our municipalities are screaming for money right now, and a lot of that is tied up in this acquisition fund. I think my colleague, again, from Yellowknife North mentioned that, if the GNWT all of a sudden decided not to fulfill its obligations as far as its education funding formula, what if, looking at it another way, the federal government all of a sudden decided not to fulfill its obligations to the GNWT with its territorial financing formula? I feel like what is happening with municipalities is really quite similar to that. We have laid out a formula of funding that is supposed to go to municipalities, and the GNWT is not able to fulfill that obligation. That is another concern of mine.

My third concern, Madam Chair, is the ability of the GNWT to get this money out the door. However, getting money out the door is not just about checking boxes. Getting money out the door is about making sure that we are building a strong and vibrant northern economy. It's really important that, when money is going out the door, it is benefitting northern business, it's benefitting northern residents, and that it is money that is growing our local economy, our local GDP, and, in turn, it creates people who pay for sports teams, it creates people who volunteer for the SPCA, and really ends up increasing the quality of life for all Northerners. I think that not only is my concern that this is such a huge plan but also that this money is spent locally, here in the Northwest Territories. Thank you.

Thank you, Member for Kam Lake. Did the Minister want to respond?

Thank you, Madam Chair. I think, with respect to the carry-overs, this is a conversation that has begun and has already been had. I think on that one, Madam Chair, I do want to wait and make sure I have all of the necessary information that is still coming to me, as the Member notes that there is a written question right now that is seeking quite a lot of detail about the state of our carry-overs and where we are at. I do think there is more to come on that, and I think it is still an important conversation to have. I am sorry that I am putting it off, but I do think it's important to actually have the full information in front of us in terms of numbers before we have it.

I was making a number of notes because there were quite a number of comments. The money that we are putting into the capital acquisition plan does not necessarily mean that it's money that does not go to something else. Quite a lot of the time, especially on the larger projects, those projects have to get approved year over year by this Assembly. The money is tied up in the large projects, but it's tied up in large projects that are already underway. It's just that the way our Assembly functions is that we must approve it year over year for those projects to continue. Just keep that in mind, as well, as some of those larger projects go forward and, not even just large projects, even some of the medium-sized projects, as well.

Then, if you have a carry-over, can you just take the money and essentially pick it up and drop it somewhere else? Madam Chair, we can't because, again, we're approving it year over year here, because it's being approved by the Assembly. Once it's approved by the Assembly, it's not for an individual department to pick up and say, "We're not sure we can deliver on X, Y or Z, so we're going to pick it up and put it somewhere else." Once it's approved here, it stays associated to the project where it's approved until it comes back here.

In the last comment with respect to being spent locally, Madam Chair, the question around procurement and procurement in all its forms: procurement when something's gone out to tender, but also negotiated contracts, sole source contracts, manufacturing policy, BIP. All of those things are part of the procurement review that's already under way and getting ready to get really started this fall. I couldn't agree more that we want to make sure we're spending locally, but it's an opportunity to actually point out that on these larger scale programs and projects and needs really is what it is, needs of the Northwest Territories, we are going to have to find the balance between how to maximize benefits for the northern businesses while still delivering on infrastructure where we are so far behind. I think that's a great place to end, and I'll end, as well. Thanks, Madam Chair.

Thank you, Minister of Finance. I will go to Member for Frame Lake.

Thanks, Madam Chair. I have a number of comments that are similar to what my colleague before just mentioned. This is the largest ever capital project at $451 million. I don't think it's quite correct to say that, anyway, there is a relationship between what we spend in O and M and what we spend on capital. It's something called the Fiscal Responsibility Policy that requires an operating surplus on our O and M side. Programs and services, we have to have money left over from that to allow us to spend up to 50 percent of that on capital projects, so there is a relationship. Quite frankly, I think it's out of whack right now. We're spending too much on capital. Some of my reasons are the large carryovers that have increased significantly over time, and as I understand it, about 50 percent of this capital budget is carryovers. That means we can't spend the money. Something is happening that is preventing us from spending that money.

In the fiscal update that was delivered by the Finance Minister on Friday, the operating surplus, which is what we can spend on capital, saw, and the Minister said, a catastrophic decline because of COVID from $203 million to $60 million. That means $30 million is supposed to go for capital spending. Yes, I guess we have some matching federal dollars in here somehow, but how do we make up the $140 million drop in the operating surplus, and still have a $451 million capital estimates before us? I just don't get it. How do we make up that loss? We're going to have to go into debt. I just don't understand it.

What we have seen in the five years that I have been here is an increase in our debt as a government. We see an increase in our borrowing limit with the federal government. The Minister said on Friday that the borrowing limit, even though we just got it increased to $1.8 billion, there's only $538 million left in the borrowing limit. How could we ever possibly hope to do the large infrastructure projects, whether it's the Mackenzie Valley Highway, the Slave Geological Province, the Taltson expansion, when all we have left is $538 million? I just don't get it.

My colleague mentioned the growing carryovers. I asked in the last Assembly for that to be tracked carefully so that we actually understand the reasons for that. I'm not sure that a system is yet in place to do that. Is it because we've maxed out our contractor capacity; the ability for our economy to do the work that the government intends to do? Is it cash flow issues? Problems with our capacity to actually get out the door? We have no reason, no understanding of that. If you don't track it and understand the reason, we can't work on how to fix it.

The other thing that is starting to happen is that these federal infrastructure programs are starting to drive what we're doing with our capital budget. It's not just driven by our needs anymore. It's driven by federal dollars being dangled in front of us that are being used, in many cases, for large infrastructure projects.

I think all of this really points to me to overspending on our capital budget, particularly on the large capital projects. My colleague also mentioned our inability to actually show that there's real benefits to some of the large infrastructure projects in my view. You don't have to look any further than the five years' worth of contracts that I asked the infrastructure Minister to put together. Those have now been tabled in the House. Slave Geological Province work over the last five years and Taltson hydro expansion. Less than 10 percent of that money actually stayed in the North. Why are we doing these projects if only 10 percent of the money is staying in the North? I just don't get it. Even if we want to continue to spend, the large amount of money in the capital estimates, how do we make sure the money actually stays in the North? While a procurement review is going on, we have contracts; the work on these two big projects shows that the money is not sticking here, and all of this during a pandemic? How can we actually get the money out the door and spend the money? I just don't get it. It just doesn't seem to make any sense to me.

This overspending on capital, it does come at a cost. There is a relationship. I talked about it at the beginning, how we have to run a surplus in O and M. In programs and services, we have to keep that under control to spend money on capital. While we're now overspending on capital, that means we're not spending money on programs and services. The kinds of programs and services I want to see our money spent on are things like childcare, education, addictions, income assistance, getting our people out of poverty. That's the kind of spending that our government can and should be doing, not overspending on capital projects. Cutting back on spending in those key areas so we can spend more money on projects that don't actually benefit the North. There's something wrong with this picture.

There are a couple of things, specific things that I want to say. Look, there is good spending in here, but there's not enough in some areas. The one area, in particular, that I don't believe that there's enough spending on is housing. We have a $60 million co-investment fund that our government could access, but we expect NGOs to go out and have bake sales and raise money to match that money or for the housing corporation to make internal cuts to its programs and services and scrimp and save to come up with money to help fund our access, that co-investment fund? That's wrong. We approve money at the drop of a hat for the big infrastructure projects for the 75 percent matching dollars. No questions asked. Where is the Housing Corporation trying to get money to match the money that's in the co-investment fund? It's not in here.

The other area that I think needs to be a big infrastructure project, if we are to pursue one, is making sure that we have affordable and accessible Internet and telecommunications for all of our residents. That's not found in the budget. There is some money, perhaps, for extending the Mackenzie Valley fibre line to Tuktoyaktuk. That's great, but at the end of the day, there's no distribution system in Tuktoyaktuk. People can't take advantage of it. We already have a $90 million Mackenzie Valley fibre link that does not allow for high speed access in all the communities that it passes by. We need a lot of work done on that, and we've seen the results of that with the pandemic and trying to do distance education. That project can and should be in here, but it's not.

All of that to say, Madam Chair, that I have a lot of difficulty supporting these capital estimates. If there's not more money put in here for housing, I will be voting against it. Thanks, Madam Chair.

Thank you, Member for Frame Lake. Minister of Finance, would you like to respond?

Thank you, Madam Chair. I am not going to try and go through it line by line. There is obviously quite a lot in the Member's comments, but just to touch on a couple of items if I might, Madam Chair. Importantly, with respect to housing, the housing infrastructure budget isn't in this budget at all. The housing infrastructure budget is in the operations and maintenance budget in the form of a transfer that they get through the Department of Finance, so this just simply is not the occasion when anyone is going to be able to review the Northwest Territories Housing Corporation's operations or their capital budget. I can't put more housing infrastructure money in here because it's a different budget, which I recognize is a bit difficult, maybe, to then sort of scope out as we do this, but this is currently the way our system has been designed and structured.

With respect to Internet, Madam Chair, similarly, there is money in here for some of the infrastructure projects surrounding broadband and broadband expansion. There is more money that, again, comes in through operations and maintenance, but to ask for the Government of the Northwest Territories to become an Internet service provider is quite a different thing altogether. That, again, is not necessarily something that is going to be contemplated in an infrastructure budget, right now or on the fly.

Then, with respect, Madam Chair, to just why we're doing some of the big projects and the balance that is there and to what extent it is federally driven, we are so far behind. We are, if I recall correctly, the farthest behind out of every jurisdiction in terms of both the amount of infrastructure we have and in terms of the age of the infrastructure that we have, and that applies to the schools and to the health centres. It applies to our housing. It applies to our roads. Yes, these are large projects, and yes, some of that is federally driven, but I don't think it's for lack of need. Obviously, each department will have to go through what their contribution is to making up that need, but I wouldn't want to let it be any mistake. Every single project in here, there is some departmental need that is being met, and very often with federal dollars. Thank you, Madam Chair.

Thank you, Minister. Member for Tu Nedhe-Wiilideh.

Thank you, Madam Chair. When I reviewed this earlier, it made me really think about history, our history in North America, and how everything always comes full circle. You look at the 1920s where there was a big boom, and all of a sudden, the 1930s, there is the Great Depression. You look at how the Canadian and US governments dealt with that. What they did to get through that depression was: they put lots of money into their infrastructure. That's what they did. They kept their people working. That's what I really feel is going on right now; everything comes full circle.

I agree with my colleague from Frame Lake on a lot of his comments, but I think a lot of it, right now, I think we're going to have to go in that direction, to start moving in that direction for infrastructure and start catching up where we can, not to sit here and complain. When I talk about these things, I will try to find some solutions, and for me, I really think that we really need to get our northern businesses involved more. Ten percent, that means 90 percent of our monies are going south. That's insane. I really believe that we have lots of talent in the North, and we really need to capture that and to do whatever we can. I've been saying it. I've been saying it like a mantra: keep the money in the North.

It is going to require some policy reform, I believe, in terms of BIP and that sort of thing, and the way I look at it is that it may seem like a big mountain right now. The way I look at it is: how do you eat a bull moose? One small bite at a time. That's how we have to look at things like the business centre policy. We have to look at this and do what we can because, right now, we are not, and we are not treating it with the urgency that it deserves. This is something that I think we can get ahead of in the life of this Assembly.

Working with our Indigenous partners, their business arms, for me, I think there should be a pecking order that we should look at. I think that we should be having our contracts, having our Aboriginal business, then northern business, then Canadian business, and then other, but it should be really pushing for keeping the money in the North. That's our first and foremost thought when I look at how we are investing in our infrastructure.

Going back to that, I looked at some of the items here. I looked at funding some of the schools and stuff. I don't want to sound like I'm anti-Yellowknife because I'm not. My girls go to school here. In the riding I serve, Tu Nedhe-Wiilideh, that covers Ndilo, Detah, Lutselk'e, and Fort Resolution, and I'm happy that some of the schools, some work is going to be done in the schools. I think that there are some retrofits that need to be done in Ndilo. They don't even have a proper gym, there. I'm going to be pushing for that, because the community of Ndilo have really been pushing for that. The other schools in the Yellowknife area get to look at their nice, big gyms with their banners up on the wall and the various sports that their kids can celebrate, but they can't do that. It's just down the road, here, and that kind of bothers me. Our school in Deninu K'ue, it's been a while since there has been any sort of maintenance. It's a very old building. That got me thinking.

With that, I think I'm not satisfied with what I'm seeing right now, and I am with my colleague from Frame Lake. I'm not going to be voting on it the way it is right now, unless there are some significant changes. Again, we're going to be discussing it in the next little while, but we will get to that when the time comes. With that, marsi cho, Madam Chair.

Thank you, Member for Tu Nedhe-Wiilideh. Minister of Finance, would you like to respond?

Madam Chair, the $451-million proposed capital budget brings with it 990 estimated full-time equivalent jobs, so there is quite a lot of potential here to really have a significant impact at a time when, as the Member has just pointed out, there has been a lot of concern around economic downturn. This plan does have a lot of possibility in it. We've broken it down in different ways between different communities. The goal isn't to spread the dollars in some sort of fashion where we parse it out by community but to ensure that every community's needs are being met.

With respect to schools, for example, using a framework of understanding where those needs are and trying to address the most critical ones first. There are always needs. There are so many needs. As I said in my last response, we are so far behind in our infrastructure that every community is going to have needs, and we are doing our best to catch up. Obviously, the point of having it on the floor is for us to have that debate and have that balance and make sure we try to not overlook a need and try to hit as many needs as quickly as possible. Thank you, Madam Chair.

Thank you, Minister. Are there any further general comments? Member for Yellowknife North.

Thank you, Madam Chair. I echo many of the comments made by my colleagues, and when I look at what we're planning to spend on infrastructure, we're spending $450 million this year. Then, it's going to decline to $364, $282, $275. It's clear we're planning to decline our infrastructure investment because, as the Minister points out, our operating surplus is declining. We are marching toward our debt wall, and we are expected to hit the second debt ceiling we asked for in this Assembly.

I guess what this reflects is a Cabinet presenting a budget where hard decisions have not been made. I recognize that this Cabinet inherited a capital budget with over half of it being carry-overs. That's not a great position to be in. I recognize we passed one budget, and the agreement was that it was largely a status quo budget. I struggle to pass this capital budget knowing that all of the other ones will be smaller, or should be smaller, going forward, and we know that we are probably not going to spend all of this money. We're going to tie it up, and it's going to get deferred.

Second, my other concern is: as I mentioned earlier today, we are consistently underfunding our municipalities. I have no doubt that our municipalities are one of our best economic returns on investments. I know they will spend that money in their communities. I don't have any concerns about them going down South. I don't have concerns about them not hiring local. It is a great return on investment. I believe we need to increase municipal funding by $5 million. This is a $450-million capital budget; I believe we can find that money. I am willing to take it out of our own department of infrastructure's $292 million. Now, I also recognize in some sense this is robbing Peter to pay Paul. I know we have a massive infrastructure deficit. I know we have some of the oldest infrastructure, but we as the GNWT are much better suited to go to the federal government. We have the ability to take on debt. We have the ability to lobby, to get those 75 cent dollars. Most of our community governments are overworked, and they don't have the time to begin even writing a proposal to the federal government. I will not be voting in for this capital budget unless I can see an increase to municipal funding.

The second thing I want to see is an increase to housing. Housing is one of those rare pieces of capital we can build that I think will actually save us money. We know that housing people keeps them out of the justice system, it makes them healthier, and our health budget is ballooning, so if we can house some more people maybe our health outcomes could increase. Madam Chair, I don't believe the work has been done on this capital budget to assess how we are going to stop this trend of turnovers, how we are going to stop running into our debt wall before the life of this Assembly, and I don't believe the work has been to connect our capital budget and our operating budget. To me, if we can house our people, we can save money in health. It's one of the few areas where the input can directly decrease the costs of another department.

Lastly, Madam Chair, I think there is a lot of work to be done in the overall assessment of how we are spending our capital. I know there is great work to be done on the Business Incentive Program. I know there is great work to be done on procurement. I have faith in this Minister to get this work done. My concern is that we're going to spend $450 million, and that work won't be done. I don't see why we can't defer some of this capital, spend it in subsequent years when the Business Incentive Policy is revised, when our procurement is revised, we can level out our capital spending and make sure every single dollar going out has a proper economic analysis attached to it and is under our new procurement regime. I got a great commitment from the Minister to speed up our work on procurement, but right now, we are asking to spend the largest capital budget in GNWT history and possibly, according to this, the largest capital budget in the life of this Assembly, without having done our procurement review. Thank you, Madam Chair.

Thank you, Member for Yellowknife North. Minister of Finance.

Madam Chair, at the risk of starting to repeat myself here, again, housing is going to be complicated. It's not that there can't be a way to have that conversation here, but the Northwest Territories Housing Corporation's budget doesn't flow into the capital plan the way that would make it easier, frankly, to have this conversation. I'm sure we can find solutions to that. Similarly, with respect to the funding and municipalities, there is O and M funding for municipalities, which is what has the largest sort of gap in terms of the study that was done to where it's at now and no doubt why this is, of course, part of the mandate of this Assembly is to make up that gap.

The infrastructure funding, it's not to say that that doesn't have its challenges, but that's only one part of that gap. Again, the entirety of the solution involves both budgets, not only this one. Again, on procurement, it's challenging in that that comes back to the operations of ITI and Finance in support, as opposed to necessarily the actual substance of what's in this infrastructure budget. I understand that that's the challenge of having two different budgets that operate is the needs of the one budget require the actions in the other. I'm listening, and I'm taking notes, Madam Chair. We'll see how far we can get. Thank you.

Thank you, Minister. Member for Yellowknife North, did you have any further comments? Member for Hay River South.

Thank you, Madam Chair. I'm just going to make some comments, and I don't really need any response to save time. When I look at the budget, it kind of reminds me of when I go into a grocery store while hungry. I come back out, and I end up with a whole bunch of spoiled food. At the same time, I realize that we have to do something, and the reality of the North is that we do have limited resources here with respect to businesses and workers. We keep saying that we want Northern businesses to get all the work, we want all our people to be working. We do have enough, there is enough in here to keep us going probably for years. We have to also be real about the capacity of the North. I think that's important when we're looking at this budget, these capital projects. We have to make sure that what I'd like to see we focus on areas that we're deficient in. There are things in there already. We do know we need municipal infrastructure. It would be nice to see some tourism facilities like makerspaces. One important thing is long-term care facilities, very much needed, especially in Hay River. The other thing is treatment centres. We talk about it, but it's always better to put them down South. Those are some of the areas that we should be looking at, as well.

With respect to contracts, I'd like to see them broken down to where smaller businesses can actually have a piece of them. That's one complaint I get quite a bit is that they don't have that opportunity. The other thing to ensure is that when we're looking at these capital projects that we can consider the training component, as well. We always have that opportunity to ensure that some of them will go on, and in two, three, four years, we'll have tradespeople, which we drastically need here in the North. I know that personally, from being in business. We throw this out there. There is lots in there. We all want to see maybe funds put into different areas. We want to see different projects. We want projects for our communities, but at the same time, we have to make sure we're doing what our people need at this moment in time and concentrate on that. I just ask the Minister and Cabinet to look at that and consider where our needs really are with respect to this. Thank you, Madam Chair.

Thank you, Member for Hay River South. Are there any further questions or general comments to the capital budget? Member for Great Slave.

I'm just going to say I think we need more infrastructure, and I'd like to see the Dempster and ITH rehab in here, as well. Thanks.

Thank you, Member for Great Slave. Minister of Finance, do you want to respond to that?

[Microphone turned off] ...down, Madam Chair.

---Laughter

Thank you. Are there are any further general comments to the capital budget estimates? All right. Seeing no further general comments, we will take a short five-minute break, if that's okay with you. Five minutes.

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All right. We will now call this committee back to order. The committee has agreed to begin with the review of the Legislative Assembly. Mr. Speaker, do you wish to bring in any witnesses?

Yes, I do.