This is page numbers 2989 - 3034 of the Hansard for the 19th Assembly, 2nd Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was know.

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Mackay

Thank you, Madam Chair. So as the Minister mentioned, the budget is 10.6. The Member is correct, we did provide a number for what IS actually spent last year. I don't have that number in front me but I believe it was in correspondence with the committee. But I'll turn it over to Mr. Courtoreille to give any further information he might have. Thank you.

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The Chair

The Chair Lesa Semmler

Mr. Courtoreille.

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Courtoreille

Thank you, Madam Chair. I don't really have anything further to add other than I believe there was additional information provided to standing committee on this front, and I think there was some ongoing correspondence to try to firm up future capital estimate budgets for the Housing Corporation to better reflect that number. Thank you, madam Chair.

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The Chair

The Chair Lesa Semmler

Thank you. Member.

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Kevin O'Reilly

Kevin O'Reilly Frame Lake

Thanks. I've got other questions but I need to move on to my comments, thanks.

Madam Chair, I voted against the last capital budget and I intend to do so again on this one. I think we are spending too much money on capital. We're going into debt at a greater rate than any other -- any time that I've ever seen in my six years in past governments as well.

$150 million, this is what the Minister said yesterday, $150 million in this budget alone is for roads, and this budget shows us spending $10.6 million on housing, when housing is a priority for this Assembly, and certainly for myself, many of the Regular MLAs, this is completely out of balance.

You know, so we're spending 30 percent of our total capital budget on roads alone. That's what the Minister said yesterday. We're going into debt faster than ever. I listened carefully to the Minister's fiscal update an September 15th. We're not just on the precipice of a fiscal cliff, Madam Chair; we're going over the cliff right now.

You know, you look at the slides from the Minister's presentation on September 15th, capital expenses are outpacing total revenues. GNWT deficit is permanent when the federal capital is removed. Growth and debt is outpacing everything. 17.2 percent per annum over a period of years, no intent to actually raise any more revenues. We gave away $21 million in a significant discovery licence that could have been potential revenues. We've cut small business tax. We're going over the cliff. We're starting going over the cliff, and I don't sense that this government is doing anything to stop that. And the money that we do have, we're not even spending on the right priorities, Madam Chair.

I'm going to be voting against this, and I'm very frustrated that I don't have any time left on the clock. Thanks.

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The Chair

The Chair Lesa Semmler

General comments. Member for Yellowknife North.

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Rylund Johnson

Rylund Johnson Yellowknife North

Thank you, Mr. Speaker. I'm looking here at a $500 million capital budget, and I think the question we all need to ask ourselves is how are we going to pay for this?

We know our fiscal responsibility policy allows us to pay for 50 percent of this with debt and based on all of the previous public accounts, it's quite likely that 50 percent of this will be paid for by debt.

It's worth noting that about $200 million of this is federal dollars. I think that fact is important because it shows that we are still largely driven by federal priorities. But also the allure of 75-cent dollars is largely a myth. We're actually operating at 40-cent dollars from the federal government when we look at what is being funded. I don't think the hard work has been put in to the capital budget to make those tough decisions and to prioritize maximum spending.

We also know that this is a capital budget that, in many ways, is still the last Assembly's capital budget and is still driving the last Assembly's priorities, and that's just the reality of some of these long-term infrastructure projects. They will be on the books for many many Assemblies to come.

A bit to the kind of procedural aspects, I don't believe we actually have any sense of what this capital budget will cost us. And I mean that in a number of ways.

There is $47 million largely for long-term care facilities in this but we know that long-term care beds, each bed costs over a hundred thousand dollars a year to operate. We also know our health authority is running a massive deficit. I don't know how we are building those beds without having proper costing to be provided in the operations budget for the health department already running a deficit.

We know that there's $84 million in here largely for roads, and we know that roads cost a lot of money to maintain, and our current roads are not being maintained properly. We know our deferred maintenance budget for all of our capital is just millions and millions of dollars in debt. Our infrastructure is crumbling, and here we are building more.

I don't believe hard decisions have been made. I don't believe there's a connection between capital and operations that this government has taken seriously. Every time we add capital, that means a cut to an operation's budget. That is the way to look at it. It could mean debt, which is just a cut for a later time. But when we spend money here and then when we don't include the money to actually maintain that infrastructure, we are just setting ourselves up for disaster.

There's a couple of projects that are continuing on for the Power Corp, over $200 million worth of Power Corp infrastructure for the complete cost of projects, here - the Fort Providence transmission line, and Inuvik wind, most importantly. But we know our Power Corp's infrastructure is billions of dollars in debt. We know that when we build infrastructure for the Power Corp, it's not revenue generating. Ratepayers are -- it's cost passed on to ratepayers in increases in rates.

Building a line to Fort Providence may be a good idea, but the people of Fort Providence are not paying for that line. It is not anything that actually makes us money. We all know there is a massive infrastructure deficit. We know the state of our infrastructure is in terrible state. We know our fiscal cliff is approaching, and it is an unsustainable path. However, when I look at the disconnect between our government's priorities, the operating budget and this capital budget, I just can't help but think that proper thought and strategic direction was not put in it. I think that is no more apparent than the two percent of this budget that is going towards housing.

Housing is a priority of this Assembly. It is a priority of every single Member in here. And only two percent of this is to build new houses. I cannot reconcile that fact with the political priorities of this House, Madam Chair.

And for some reason, we treat housing completely different. If we -- you know, we are spending $21.7 million for schools in this budget, and then we go and ask the school boards or the department to find the O and M to run those schools. For housing, we don't do that. We are so concerned about 2038 and the O and M for operating housing, and we do the math every time we build a housing unit, whether we have the funding to maintain it.

And yet here we are with 500 other million dollars where we've done none of the math. We've not done the math on what it costs to make sure that we're not having a differed maintenance backlog. We have not done the math to make sure that our highways and bridges are properly maintained. There is an obsession that we can just build capital and it doesn't -- and it maintains itself.

We need to make sure that every time we build something, the O and M is there, the care and maintenance of there -- is there, and that's not being done. The only place it seems to be even considered is in housing, and that's why we won't build any more housing.

So Madam Chair, I am frustrated that once again I see $10.6 million as a somewhat made up number for housing, and I can't seem to get the Housing Corp to actually build more housing.

I would gladly cut two percent of this budget to double the Housing Corp's two percent. But I guess I will start with a question. Thank you for indulging me.

Can the Minister of Finance give me a sense of what the O and M cost is of this capital budget is. If we build this $500 million worth of infrastructure across a variety of departments, how much money should we reasonably expect to see increased in the operating budget. Thank you, Madam Chair.

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The Chair

The Chair Lesa Semmler

Thank you, Member. Minister.

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Caroline Wawzonek

Caroline Wawzonek Yellowknife South

Thank you, Madam Chair. Madam Chair, that question is not as simple as it sounds on first blush. There is a variety of different types of infrastructure in this budget. There are deferred maintenance budgets that are sitting in, for example, the Department of Infrastructure as there are also budgets available in some of the other departments for provision of health care services or education. Some of the infrastructure that we need to deliver on is so that those projects, the programs and services can continue to function.

So certainly, there will be some projects where there are obvious connections and obvious costs that can be accounted for. And I've previously committed, and I'm happy to commit here, that we do want to start including an O and M schedule in the future infrastructure budget to the best of the ability that we can. But it's not simply saying, you know, dollar for dollar, it's going to be X amount. Depending on what the infrastructure item is at play will determine what the costs of the O and M are and sometimes you simply have to make the investments in the infrastructure, or you can't deliver the program or the service. So I appreciate the frustration, and I hear it. But it's not going to be as simple as all that.

Again, with that said, we're going to try -- not try -- we will be including an O and M schedule. Hopefully it starts to get some of the answers that the Member's seeking. Thank you.

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The Chair

The Chair Lesa Semmler

Thank you, Minister. Member for Yellowknife North.

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Rylund Johnson

Rylund Johnson Yellowknife North

Thank you, Madam Chair. The rest of my comments and the points that I made in my opening remarks, I will illustrate through each department that each of these projects comes with long-term commitments of O and M, which is simply not room we have fiscally. So no more further questions. Thank you, Madam Chair.

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The Chair

The Chair Lesa Semmler

Thank you, Member. Member for Great Slave.

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Katrina Nokleby

Katrina Nokleby Great Slave

Thank you, Madam Chair. First, I just want to say I do agree with me colleague about looking ahead and being proactive on operations costs when we are making our infrastructure and capital plans.

I want to say that I'm actually pleased to see a large infrastructure investment going forward. One thing when economies are bad, that governments do, is they build infrastructure. It's a way that we can keep people in the Northwest Territories employed over the next while as COVID really does make our future quite uncertain, particularly our economic future going forward.

Another piece that keeps striking me is that the cost of building houses is only going to escalate and is escalating currently due to the lack of supplies, etcetera. Not having roads only creates more expense for our territory to build houses. So if we have the roads to move the materials around easier, it will be easier for us to build houses in the long run. So I think I don't have a lot of optimism sitting here two years in where we're at with our housing and whether or not we are going to achieve that priority. Therefore, second to that, I would say invest in the roads. We have a lot of construction companies in the North. We have a lot of labourers and skilled labourers that work on road and apprentices. To me, this is the way we can make it through the COVID economic downturn.

And having just come back from the climate change conference, I don't have a lot of -- having been an ice engineer on the ice road, I don't have a lot of faith that we're going to be building ice roads going forward. So to me, investing in roads right now is smart.

We often just heard it yesterday, or the other day, the time to have built the ice road -- or sorry, the road to the diamond mines was 20 years ago. So do we want to be sitting in 20 more years with no ice roads saying where we should have built roads 20 years ago.

So more of a comment than a question, Madam Chair. But I would like to say that I think this is the only way we can move forward in the next while. Thank you.

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The Chair

The Chair Lesa Semmler

Thank you, Member for Great Slave. Member for Thebacha.

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Frieda Martselos

Frieda Martselos Thebacha

I just want to reiterate some of the -- what is said by my colleague from Great Slave. The economic recovery from this pandemic is extremely important. New infrastructure is important. Economic growth is important. And I do not necessarily agree with a couple of other comments that were made by my other colleagues because I feel that, you know, this pandemic had a great effect on the Northwest Territories, especially with the -- economically, and the only way we're going to recover is making sure that people have something to look forward to, and infrastructure is part of that, apprenticeships. The whole getting people back to work. New infrastructure means new things for Indigenous governments and private industry. And this is the way to go. And I totally agree with the comments that were made by the Member from Great Slave. Thank you, Madam Chair.

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The Chair

The Chair Lesa Semmler

Thank you, Member for Thebacha. General comments. Member for Hay River South.

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Rocky Simpson

Rocky Simpson Hay River South

Thank you, Madam Chair. Myself as well, I encourage spending on highways and more specifically the Mackenzie Valley Highway. That project has been going on since I was -- I worked on part of it when I was 16 or 15 years old for crying out loud so you know how long ago that is. A hundred years ago. But, you know, we -- if we want to move ahead, we got to -- we need -- you know, we have to do something major.

You know, having a highway and opening it up is going to, you know, encourage investment in the North and encourage, you know, more development. It's also going to allow, you know, those stranded communities that don't have highway access with the ability to, you know, participate in -- you know, in what we have on the main highways system.

When we talk about -- you know, there was comments about made about housing as well. And I agree that, you know, we need housing. But, you know, to get that housing, you know, it can't just be a government project. It has to be solved by the private sector, by Indigenous governments, and through employment of Northerners through infrastructure expenditure.

And what I'm hoping and expecting that, you know, those sitting across from me are, you know, talking with their counterparts with the federal government, going to them with some sound proposals to ensure that we find the money to pay for this. Like, we are a creature of the federal government. That's what we are.

So I don't mind -- I don't mind spending the money. You know, all areas needs some support. But if we don't push some type of development and push infrastructure, we're just going to be a social state. Thank you.

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The Chair

The Chair Lesa Semmler

Thank you, Member from Hay River South. General comments. Thank you, Members.

Seeing that there are no further comments, we will proceed to the detail of the tabled document beginning with the Department of Finance.

The committee has agreed to forego general comments on each department so does the committee agree that we will proceed to the detail contained in the document?

Committee, the Department of Finance begins on page 26, and we will defer the department's totals and review the estimates by activity summary beginning on page 27 with information items on page 28. Are there any questions, comments? Member for Frame Lake.

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Kevin O'Reilly

Kevin O'Reilly Frame Lake

Thanks, Madam Chair. On page 28, the mineral administration and registry system, can someone tell me what the total cost of that is going to be, or ballpark figure. Thanks, Madam Chair.

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The Chair

The Chair Lesa Semmler

Thank you. Minister.

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Caroline Wawzonek

Caroline Wawzonek Yellowknife South

Thank you, Madam Chair. Madam Chair, if I might suggest if we could stop the clock briefly. I was hoping to switch my witnesses out, and I don't want to take time away from the Member to do that.

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The Chair

The Chair Lesa Semmler

Which?

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Caroline Wawzonek

Caroline Wawzonek Yellowknife South

Chief information officer Rick Wind will be joining us, please.

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The Chair

The Chair Lesa Semmler

Okay. Sergeant-at-arms, would you please change the witnesses.

All right, thank you. Minister, just introduce your witness again for the record.

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Caroline Wawzonek

Caroline Wawzonek Yellowknife South

Thank you, Madam Chair. Madam Chair, this is chief information officer Rick Wind.