May 19, 2004 GOVERNMENT SERVICES COMMITTEE

Pursuant to Standing Order 68, Ms Charlene Johnson, MHA for

Trinity-Bay de Verde, replaces Mr. Bob Ridgley, MHA for St. John's North.

Pursuant to Standing Order 68, Ms Yvonne Jones, MHA for Cartwright-L'Anse

au Clair, replaces Mr. Oliver Langdon, MHA for Fortune Bay-Cape la Hune.

The Committee met at 9:00 a.m. in Room 5083.

CHAIR (Manning): Order, please!

I call the meeting to order and welcome the minister and his staff here.

Before we get into a couple of items, we need to adopt the minutes of the

last meeting of the Government Services Committee, which was held on Monday, May

17, with the Department of Finance. Could I have a motion to adopt those

minutes?

MR. ORAM: So moved.

CHAIR: So moved by Mr. Oram, seconded by Mr. Andersen.

All those in favour?

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Motion carried.

On motion, minutes adopted as circulated.

CHAIR: Everything is being recorded for Hansard. How the mikes work here

is: You press talk and your red light will come on, and you press talk again

when you are finished so you will not have interference from some other speaker.

We ask that you identify yourself, if you are answering a question, for the

record. Some people here are not familiar with the recorder, so identify

yourself when you are answering a questions. Once I get the names straight, I

will try to call you by your name, but just in case I miss you for some reason

or another.

Once again, I would like to welcome the minister here. Maybe what we will do,

Mr. Minister, before we start, is maybe go around the table and let people

introduce themselves. It might be easier, everyone doing that.

Mr name is Fabian Manning, MHA for Placentia & St. Mary's. I am Chair

of the Government Services Committee.

MR. ORAM: Paul Oram, MHA for Terra Nova.

MR. SKINNER: Shawn Skinner, MHA for St. John's Centre.

MS JOHNSON: Charlene Johnson, MHA for Trinity-Bay de Verde

MR. MOORES: Weldon Moores, ADM for Works, Transportation and Works.

MR. HEALEY: Keith Healey, Assistant Deputy Minister, Strategic &

Corporate Services.

MR. OSMOND: Don Osmond, Deputy Minister of Transportation and Works.

MR. RIDEOUT: Tom Rideout, Minister of Transportation and Works, and

Minister Responsible for Aboriginal Affairs.

MR. MERCER: Cluney Mercer, Assistant Deputy Minister, Transportation.

MR. DUTTON: Sean Dutton, Assistant Deputy Minister, Labrador &

Aboriginal Affairs.

MR. SWEENEY: George Sweeney, MHA for Carbonear-Harbour Grace.

MS JONES: Yvonne Jones, MHA for Cartwright-L'Anse au Clair.

MR. ANDERSEN: Wally Andersen, MHA for Torngat Mountains.

MR. TILLER: Gary Tiller, Director of Human Resources, Transportation and

Works.

MS OATES: Lori Lee Oates, Director of Communications, Transportation and

Works and Aboriginal Affairs.

MS HANRAHAN: Denise Hanrahan, Director of Finance, Transportation and

Works.

MR. BYRNE: John Byrne, Manager of Budgeting, Transportation and Works.

CHAIR: I just advise the people at the back table, if there is a question

that arises during the Committee meeting and you are required to answer a

question, the minister will make his mike available for you to do so.

I ask the Clerk now to call the heads of the department.

CLERK: 1.1.01.

CHAIR: I guess what we will do, if it is okay with the Committee members,

is that we will leave open the whole department so you do not have to follow

just one head, and if there is a question anywhere within the department it

might be easier, and then at the end of it we will just call all the heads

together instead of taking one by one and going back and forth. Is that okay

with everybody?

We will recognize the minister now. If the minister wants to make some

opening comments, we will go from there.

MR. RIDEOUT: Thank you, Mr. Chairman, and colleagues, members of the

Committee.

First of all, let me say that we are pleased to be here to present the

Estimates of the Department of Transportation and Works and Aboriginal Affairs

this morning. We will do our best to answer whatever questions you have, and if

we do not have the information we certainly will undertake to provide any detail

that we can provide this morning to the Chair so that it can be disseminated to

the Committee.

I will be very brief in my opening remarks on the Transportation and Works

side of my responsibility. Of course, for people who have been involved with the

department before, it is a huge department and it impacts every community and

every person in the Province, from roads to public buildings to ferry services,

you name it. Almost every day this department, in some way or another, is in

your face, not always in a positive way but we are trying to do the best we can

with the resources that are available to us.

We are pleased this year that we have an additional $7 million on the capital

side in our provincial roads program. That will go some distance to helping

improve the situation.

We are hoping that we will be able to come to an agreement with the federal

government sooner rather than later on funding under the Infrastructure Program.

There is still $24 million left in Round 1 funding under the Canada

Infrastructure Program. We have made proposals to the federal government for the

utilization of that $24 million. Of course that is fifty-fifty dollars, by and

large, so it comes out to a program close to $48 million if you look at it from

that perspective. We are proposing that $18 million of the $24 million left in

Round 1 funding be spent on the Trans-Labrador Highway and the remaining $6

million be spent on major trunk roads in the Province. We made that proposal to

minister, Mr. Effort, but we still don't have any commitment on sign-off. I am

kind of hoping, with my fingers crossed, that it will happen before a federal

election gets called, because if it doesn't it is not going to happen during.

Nevertheless, we still don't have a commitment on sign-off, despite the fact

that we have presented a detailed list of projects that we would like to do.

In addition to the Round 1 funding that is remaining in the Canada

Infrastructure Program, there is about $50 million available to the Province in

identifying projects that we would like to utilize that funding on. That is

Transportation.

We have done a major restructuring of the department on the marine services

side and we now have marine services under Transportation responsible to Cluney

Mercer, who is the ADM for Transportation. We are optimistic that a number of

the problems that were in existence in the marine services side, we will now

have more capability to address them. We put the day-to-day routine management

of the marine services sector out to the regions. Wayne Ricks, Regional Director

in Grand Falls, for example, and his people are now responsible for marine

services out in the central region, and so it goes around the Province. So, we

are hopeful that day-to-day, hands-on management of the Marine Services division

will have positive impacts on the operations.

Works were responsible for public buildings on the Works side. If other

departments are into construction of hospitals and public buildings and so on,

then we do that as a client basis for those departments.

In Aboriginal Affairs, this is quite an historic year from Aboriginal Affairs'

perspective. We will have the LIA ratification vote on the twenty-sixth and, you

know, there is a lot of optimism that, finally, after thirty-something years of

negotiation, that there will be a ratification of the agreement with the

Newfoundland and Labrador. In addition to that, we are carrying on negotiations

with the Innu Nation where we had begun negotiations with the Government of

Canada for expansion of the Conne River Reserve, and we are prepared to enter

into negotiations with the Labrador Metis Nation if their land claim application

I think that is just a brief overview of the many facets that we are involved

in, in those two departments. Perhaps I will leave it there and we can go into

details when the Committee is ready.

CHAIR: Just for clarification with the Committee members, Transportation

and Works and Aboriginal Affairs, do we want to leave it all open, any questions

or do you want to take one part of it and do another, or do you just want to

leave the whole thing open in regards to the entire department?

AN HON. MEMBER: Two separate issues.

CHAIR: Two separate issues. Which one do you want to deal with first?

AN HON. MEMBER: (Inaudible).

CHAIR: Transportation? Okay, that is fine with everybody. So, we are

going to deal with Transportation and Works.

Whoever wants to ask questions first, go ahead.

Mr. Andersen.

MR. ANDERSEN: To start off, subhead 1.1.01, Minister's Office: Under

that particular subhead, just one question, Minister. There is a very small

increase, but yet an increase, in Salaries under Minister's Office. One would

think that at a time with reductions and so on, there would be a decrease. I

know it is small, but why the increase?

CHAIR: Mr. Rideout.

MR. RIDEOUT: Thank you, Mr. Chairman.

The increase is due the annualization of prior years' salaries. There are

salary increases that were built into everybody's salaries and annualized year

over year. That accounts for the increase. The Minister, the Secretary to the

Minister, the Executive Assistant to the Minister, those staff allocations have

annualized increases, up to and including this year, built into them. That is

what accounts for the increase.

MR. ANDERSEN: Under heading 1.2.01, General Administration, page 73,

Employee Benefits have increased by $1,500. Why the increase?

MR. RIDEOUT: Keith?

MR. HEALEY: The budget is actually the same year over year. Last year, in

fact, there was a saving there of $1,500 on the revised. We just didn't spend

it, we saved it.

MR. ANDERSEN: Transportation and Communications have increased by

$10,000. Why the increase?

OFFICIAL: That is 03, right?

MR. ANDERSEN: Yes.

MR. HEALEY: The same answer, that the budget year over year is the same,

but in the year ended, March 2004, we in fact saved $10,000 in the budget for

that year.

MR. RIDEOUT: And then added in the same amount as last year for this

coming year. That is the explanation, Mr. Chairman.

MR. ANDERSEN: Purchased Services increased by $2,000.

MR. RIDEOUT: Mr. Chairman, the same explanation. There was $2,500

budgeted last year, $500 was spent, and we are budgeting $2,500 again this year.

Whether we spend it or not, we will let you know this time next year, but it is

the same line item as last year.

MR. ANDERSEN: We will move on to page 74, 1.2.02. Again, Administrative

Support. Minister, an increase in Salaries of $193,000. That would be 1.2.02.01.

MR. RIDEOUT: The estimates are up due to a reallocation of student

funding. The student budget, I think, is $199,000.

MR. HEALEY: Part of the reason for that increase is that our student

budget had been allocated to individual divisions throughout the department, and

to manage that in a better way we consolidated that into this account and it is

under our HR division.

MR. RIDEOUT: It is the same amount of money but regrouped in a different

place rather than out over several subheads. Is that the -

MR. HEALEY: Yes. It is the exact same amount of money for students.

MR. RIDEOUT: You will notice as well that our Revised is down and that is

due to retained vacant positions as a result of the hiring freeze.

MR. ANDERSEN: It is kind of interesting when the whole Revised would be

down, yet Salaries are up.

MR. RIDEOUT: The explanation for Salaries being up is twofold. One is the

annualization of increases that comes every year as a result of negotiated

increases with the public sector. The second one is, as provided by Mr. Healey,

ADM., in that we took all of the - in previous years, funding for student

employment was spread out to different divisions in the department. This year,

for administrative purposes, we put it under one subhead, which is here.

MR. ANDERSEN: Okay. Then we will move to 02., under the same subhead. We

are looking at a decrease of roughly $560,000 in Employee Benefits.

MR. RIDEOUT: Mr. Chairman, that is due totally to increases in workers'

compensation costs, benefits that we have to pay to workers, what is called

Workplace and - the official name? I always call it workers' compensation, but

I think we know what we are talking about, the Workplace, Health and Safety

Commission. This is a cost that we have to pay to workers' compensation on

behalf of employees who have been injured and are receiving therapy or drugs

that are not covered by the ordinary drug plan, physio and that kind of thing.

So, it is benefits paid to workers' compensation on behalf of injured

employees.

MR. ANDERSEN: But the big decrease over last year?

MR. RIDEOUT: Pardon?

MR. ANDERSEN: There is a big decrease over last year?

MR. RIDEOUT: Decrease?

MR. ANDERSEN: Yes.

MR. RIDEOUT: Go ahead, Keith.

MR. HEALEY: The decrease I think you are referring to is the fact that we

retained last year's budget. We did not increase the budget, notwithstanding

the Revised was up.

MR. RIDEOUT: Oh, I see what you mean.

MR. HEALEY: The budget is the same.

MR. RIDEOUT: Yes. We budgeted the same amount, Mr. Andersen, in this

fiscal year, $1.7 million, as we budgeted last year. However, in fact last year

we spent, as you pointed out, an additional $500,000 in premiums to workers'

compensation. I guess the whole idea is we have no way of knowing how many

injuries or whatever that we are going to have in the course of a fiscal year.

So we budgeted the same as we did last year, hoping for the best, and if the

best does not happen and the worst happens, then we will have to find more

money.

MR. ANDERSEN: The next item down, 03. Transportation and Communications

increased by $36,000.

MR. RIDEOUT: Three eighty-three it reduced, right?

MR. HEALEY: Actually, the budget, in fact, has been reduced and that was

done through a cost-savings on our cellphone plan. We evaluated all our

cellphone plans in the department and found that, by rejigging the particular

plan that individuals had, we were able to save $50,000, and we carried that out

and therefore reduced our budget

MR. ANDERSEN: Again, it is not a decrease; it is a increase.

MR. HEALEY: Well, it was budgeted last year, Mr. Andersen, at $383,000.

The Revised actually came in at $297,000. This year we are budgeting $333,000,

which is a decrease in the amount budgeted of $50,000.

MR. ANDERSEN: Okay, let's go down a little further to Purchased

Services. Again, we see a big increase of $167,600.

MR. RIDEOUT: Again, it is matter of whether the glass is half empty or

half full. Last year, the department budgeted $227,000 under this particular

head. The actual spending, the Revised, was $182,000. This year we are budgeting

$227,000, the same as last year. So the budget figures in the amount budgeted

are the same. Whether the spending will be more or less will depend on how the

year unfolds, but the budget figures year over year are the same.

MR. ANDERSEN: So all the ones that are increased, if it holds through

from last year's budget, then I guess you will have a pretty good surplus at

the end of the year, Minister.

MR. RIDEOUT: Well, if you look at the bottom line, the total on

Administrative Support, Mr. Andersen, you will see that last year the department

budgeted $5.7 million for that vote. The Revised was actually $6.1 million, so

there was a bit more spent than was actually budgeted. This year the total

amount budgeted under this subhead is $5.5 million, so we are hoping to have

some reductions in the overall amount spent under Administrative Support year

over year.

MR. ANDERSEN: Minister, under subhead 1.2.02., out of your overall

projected budget there, do you have any idea how many people will be gone from

just this branch of this department?

MR. RIDEOUT: Do you have that, Keith, or would Gary have it?

OFFICIAL: Four positions.

MR. RIDEOUT: Four management positions?

MR. HEALEY: There are actually four positions -

OFFICIAL: (Inaudible).

MR. HEALEY: Oh, I am sorry! I was including the other one. In this area,

there is only one position. It is indeed a management position and it is being

done through retirement.

MR. ANDERSEN: I will move to item 12, Information Technology. That has

decreased by almost $500,000.

MR. RIDEOUT: The estimates are down here due to reduced IT program

allocations from the ITM Division. There has been a budgetary change. I think

the previous government started this last year where you give account of your

tangible assets in a different way than was done in previous guidelines. That is

a technical thing that I don't profess to understand.

Keith, do you want to speak to that, please?

MR. HEALEY: I will try. In fact, I guess through the Comptroller's

Office in Treasury Board they have made some changes as to how they are going to

account for certain expenditures in an effort to better identify long-term

assets. As a result of that, in this particular account, for example, there is

$155,000 which last year would have been voted here as a current account but is

now being voted separately - on the next page we will see it - as part of a

capital account.

The total actually for the current year for IT is $577,600 as opposed to the

$781,000. That is a normal year over year fluctuation in terms of need for

system development and so on.

MR. ANDERSEN: We will move on to Policy Development and Planning, 1.2.03.

MR. RIDEOUT: Transportation and Communications?

MR. ANDERSEN: Yes, page 74, an increase again in Salaries.

MR. RIDEOUT: Salaries? So, it is 01 you are looking at, is it?

MR. ANDERSEN: Yes. Again, $20,000. In almost every subhead there seems to

be an increase in Salaries.

MR. RIDEOUT: Last year, there was $381,000 budgeted and $410,000 actually

spent, and this year we are projecting $402,000. The Estimates are up because

there was a transfer of a salary funding from another activity, which is 2.2.02.

Keith, do you want to explain that?

MR. HEALEY: Yes -

MR. RIDEOUT: There is funding actually saved in 2.2.02. as a result of

that, I understand.

MR. HEALEY: Yes, it is much like the student money that, in fact, there

was a position in another division in the department that was actually working

through this division so we just corrected the budget and transferred the money

into here. That is the reason for it, but overall it is not an increase for the

department.

MR. ANDERSEN: Minister, I wish you would not give good answers like that

because you took away my second question.

Let's go to Grants and Subsidies.

MR. RIDEOUT: Number 10., right?

MR. ANDERSEN: Yes, 10., decreased by $40,000.

MR. RIDEOUT: The Grants and Subsidies, there has been a reduction. It was

$189,000 last year and we actually spent $189,000. We are proposing to spend

$149,000 this year. I believe it was the Transportation Association conference

here in St. John's last year and that was a one-time expenditure of $30,000 so

we do not have to account for that this year.

OFFICIAL: It was $60,000.

MR. RIDEOUT: Sixty thousand dollars.

OFFICIAL: Going down to $30,000.

MR. RIDEOUT: It is going down to $30,000, right.

MR. ANDERSEN: Again, if we just move back a little further up to 03.

under Transportation and Communications, there is an increase again.

MR. RIDEOUT: Again, it depends on what you want to say, whether the glass

is half full or half empty. It was $45,000 budgeted last year; $27,000 actually

got spent. We are budgeting $35,000 this year, which is actually $10,000 less

than was budgeted last year. This is a reduction in the actual amount budgeted

due to cost controls and expenditure reductions.

CHAIR: Excuse me, Mr. Andersen, but your time is up.

The opening speaker gets fifteen minutes and the remainder will get ten and

ten, okay?

Mr. Sweeney.

MR. SWEENEY: Let's skip over to road construction,

section three.

MR. RIDEOUT: What page are we on, George?

MR. SWEENEY: That would be page 81.

MR. RIDEOUT: Page 81?

MR. SWEENEY: Yes.

I would imagine, Wally, you would want to keep going on your section.

MR. ANDERSEN: Yes.

MR. SWEENEY: Minister, under 3.1.01., Administrative Support and Design,

the Salaries there decreased by $219,500.

MR. RIDEOUT: Yes, there was an elimination of four staff positions under

this subhead.

MR. MERCER: This is correct, there were four positions in the Highway

Design Division. They were vacant positions. There were no people displaced. It

was a reduction exercise associated with smaller capital programs.

MR. SWEENEY: So you say there were no people displaced?

MR. MERCER: No, these positions were actually vacant.

MR. SWEENEY: They were vacant all along?

MR. MERCER: Yes.

MR. SWEENEY: Under Transportation and Communications in the same subhead,

$12,500, can you give me an explanation for that?

MR. RIDEOUT: Again, the Revised is down. Last year there was $88,000

budgeted and we actually spent $76,000, and we are budgeting the same amount

this year, $88,000. The Revised was down due to expenditure controls that we put

in place towards the end of the fiscal year.

MR. SWEENEY: Under the same heading, 04., Supplies, Supplies increased by

$31,100. I find that rather strange when the Salaries were decreased in that

particular section.

MR. RIDEOUT: Actually, Mr. Sweeney, Supplies were budgeted to be $120,000

for last year and we spent $89,000, so there was a saving. We are budgeting the

same amount, $120,000, this year as was budgeted last year. So we, in fact, had

a savings of close to $40,000, I guess, under that particular vote.

MR. SWEENEY: From last year.

MR. RIDEOUT: Yes.

MR. SWEENEY: The point is, if the number of positions have been increased

in that particular section, why would you budget Supplies to be the same amount

as last year?

MR. RIDEOUT: Well, Supplies - Cluney, I guess you could give the answer,

but my view would be that the number of positions has nothing to do with the

amount of supplies that you are using. This is the sign place you are talking

about?

MR. MERCER: That is correct. The supplies are for the division. It is

also for supplies that go out to field offices that look after capital projects

as well as some things that are associated with pre design, design work, and

those sorts of things in the design division. As a matter of fact, the positions

that we eliminated were vacant. Nobody was there last year. That number would

tend to fluctuate year over year, depending on the size of the projects that you

have to do design work on.

MR. RIDEOUT: In other words, there is no correlation between the salary

vote and the supply vote. Those salary positions were vacant last year. We still

budgeted the same amount of monies as we are budgeting this year.

MR. SWEENEY: It sounds good.

3.1.02, Project Management and Design. Salaries again; salaries were

decreased by $71,900.

MR. RIDEOUT: Yes, there was a transfer position from this particular vote

to 2.2.03. That is the one we talked about earlier when we were responding to

Mr. Andersen. This just reflects the - it is the same amount of money, Mr.

Sweeney, but it is under another subhead. This position was transferred to a -

MR. SWEENEY: So, where did this one come from, this position?

MR. RIDEOUT: Can you speak to that?

MR. MERCER: This position was one which was involved with policy work on

the Works side originally, and as we tried to consolidate ourselves around

Policy and Planning it was felt that position should be located in our Policy

and Planning group, so we did that. However, the salary vote remained where it

was for awhile until we came to this current fiscal year. So, we took care of

that matter this year and did the switch.

MR. RIDEOUT: Under the administrative thing, really. Right?

MR. SWEENEY: Okay. The same heading. Transportation and Communications

increased by $29,000. Why would we have an increase there?

MR. RIDEOUT: Well, again, I keep saying this glass is half empty or half

full. We budgeted $59,500 last year - or the previous government did. The actual

expenditure was $30,500. We are budgeting the same amount this year as was

budgeted last year. Whether it will be spent or not remains to be seen. It was

down last year because there was a reduction in moving expenses. So, we budgeted

an amount, which is $59,000. Whether we spend it, or do not spend it, will

depend on how much relocation and so on goes on this year, but we are budgeting

the same amount as we budgeted last year.

MR. SWEENEY: We will have to wait until next year.

MR. RIDEOUT: We will have to wait until next year to see what the Revised

is. It might be up, it might be down.

MR. SWEENEY: Okay. Let's move over to road construction, under

Administrative Support. Salaries increased by $1,198,100. It seems like a large

increase.

MR. RIDEOUT: Yes, and we expect that to be because there is going to be a

greater Provincial Roads Program this year. The Provincial Roads Program is

increased by $7 million. We have a $30 million provincial program, so therefore

there will be a requirement for additional people in administrative support to

carry out that program.

Do you want to add anything to that?

MR. MERCER: Yes. As a part of the $30 million program, approximately 10

per cent of that is associated with contract preparation and contract

administration. If your program increases from, say $24 million last year to $30

million this year, then the support function for salaries and looking after

projects out in the districts would go up proportionally. That is where the

difference is.

MR. SWEENEY: Is it fair for me to assume then that to say the extra $7

million will not go to the roads, that the $1.198 million will come out of that

$7 million?

MR. RIDEOUT: No, this is a current account figure. The $7 million will

show up in its entirety in capital - I think, doesn't it?

MR. MERCER: The $30 million will go with the accrual accounting system.

The road improvements that used to be capital, part of it now associated with

resurfacing roads under this budget process is listed as current account. Any

new tangible, capital assets that are put in place, through replacement or new

construction, are actually classified now as capital. Part of the $30 million

program, you will see here in the Budget, $26 million of it is actually current

account now because of the accrual accounting process.

To administer that $26 million worth of work, a part of that is the

engineering salaries that are paid out to survey staff, to engineering

technicians, to project supervisors who are out supervising the capital work, or

the road improvement work as it is being done. That is a part of the block

funding associated with the program, and historically have been in the range of

about 10 per cent.

MR. RIDEOUT: And that has always been the case.

MR. MERCER: That has always been the case.

MR. RIDEOUT: If you had a $23 million program last year, then about -

MR. SWEENEY: That is $2.3 million.

MR. RIDEOUT: Yes.

MR. MERCER: Two point three million went to administer that program.

MR. RIDEOUT: That is right, a $30 million and about $3 million.

MR. SWEENEY: When you said $26 million from the $30 million, tell me the

difference.

MR. MERCER: Because of accrual accounting and the way tangible assets are

set up, $26 million of the $30 million would be related to improving existing

assets, and $4 million would be associated with replacing or creating a new

tangible asset. For example, if we replace a bridge then the new bridge is

actually a capital.

MR. SWEENEY: So, new construction versus repairs?

MR. MERCER: New construction and replacement construction. If you replace

an old bridge with a new bridge it is going to give you a new capital asset that

has a life for, say, seventy-five years. That is actually a capital account

item, as opposed to a current account item.

MR. SWEENEY: The $26 million minus the 10 per cent will be improvements,

like resurfacing?

MR. MERCER: That is correct.

MR. SWEENEY: The $4 million, 10 per cent of that goes to office

administration as well?

MR. MERCER: That would be administration as well, and that is no

different than in past years. That would be to administer capital projects that

involve either constructing or replacing a capital asset.

MR. SWEENEY: So, in actual fact, we are going to get $27 million on our

highways?

MR. MERCER: We will have a $30 million program, just as we had a -

MR. SWEENEY: What will actually be laid down in tangible form, pavement

or bridge repairs or whatnot?

MR. MERCER: Actually, the way tangible capital assets are determined, the

actual administration costs and the design costs of putting that asset in place

is also a part of the tangible asset.

MR. SWEENEY: What we will see - as Kelvin Parsons said, what Joe

Chesterfield would actually see would be $26 million worth of work, the other $4

million being used up internally.

MR. RIDEOUT: That is the same as it always was.

MR. MERCER: It would be roughly 10 per cent, so it would actually be $3

million out of the $30 million. It is $27 million worth of physical work that

you would see.

MR. RIDEOUT: That is the provincial roads program. In addition to that,

of course, we have the cost-shared programs under some infrastructure program

like the Goobies paving, the bridge by Norris Arm, the bridge on the West Coast.

There are a number of those.

MR. SWEENEY: Ongoing stuff, yes.

MR. RIDEOUT: Well, the stuff that was just tendered, but it was under the

old remaining infrastructure program that we inherited from the previous

administration. Those projects are going ahead now and mostly all of them are

tendered, aren't they?

MR. MERCER: That is correct. There are a couple of more left. What the

minister is referring to is some cost-shared projects that are under the

Strategic Highway Improvement Program. You will see in the budget items there,

there is a little better than $15 million associated with projects this year,

some of which are ongoing now as well.

MR. SWEENEY: How much of that $26 million or $27 million is going to go

into the Trans-Canada? Is that a separate fund again?

MR. RIDEOUT: This year -

MR. SWEENEY: I know in your

preamble you said that you were hoping to get

a federal roads agreement.

MR. RIDEOUT: Well, there is an infrastructure pot of money there that we

are hoping to get an agreement to tap into. We do not have to get the agreement

to - we are not negotiating a new agreement. The pot of money is there,

identified. The only haggle is, what are you going to do with it? We have

suggested splitting off $18 million to go into the Trans-Labrador Highway and $6

million for projects on the Island.

To come back to your question, this year, in terms of the Trans-Canada, under

the Strategic Highway Program that Cluney just referred to, the

section from

Goobies to Bellevue area, that has been done under that program. The overpass

there in Long Harbour, that has been funded under that program. There is a

bridge over - what is the name of the river out on the West Coast?

OFFICIAL: South Branch.

MR. RIDEOUT: - South Branch, that has been funded under that program, and

there is a piece of road from Flat Bay to Fischells, that has been funded under

that program, and the Penstock Bridge at Norris Arm has been funded under that

program. That is about it for the Trans-Canada.

MR. MERCER: There were two other projects previously approved through the

Cabinet process that were also completed last year under that program. That was

the construction of an overpass at Port aux Basques, as well as the replacement

of an overpass at Deer Lake on Route 430 going to the Northern Peninsula.

CHAIR: Thank you, Mr. Sweeney. Your time for now has expired.

Mr. Skinner.

MR. SKINNER: (Inaudible).

CHAIR: Thank you, Mr. Skinner.

Ms Jones.

MS JONES: Thank you.

Just a couple of questions. First of all, coming out of your

preamble,

Minister, you talked about the extra dollars under the federal-provincial

agreement. I think you said there was something like $24 million left there.

MR. RIDEOUT: That is still in round one, yes.

MS JONES: Is there an expiry date on that funding?

MR. RIDEOUT: No, not that I am aware of; it is budgeted by the federal

government. Is there an expiry date?

MR. MERCER: When the program was announced by the federal government, I

believe, in the 2000 federal budget, it was identified as a ten-year program.

They have since topped it up, and that is what the minister spoke to, in respect

to part two. So, I think they are certainly looking at, at least, a ten-year

time frame, maybe even a perpetual program that would be topped up from time to

time.

MS JONES: Can you tell me what the name of that program was, the proper

name of it?

MR. MERCER: It is the Canada Strategic Infrastructure Fund, or it is

commonly referred to as CSIF.

MR. RIDEOUT: Under that program -

MS JONES: That was the same one that would have been used to do St. John's

Harbour?

MR. MERCER: Yes, that is right.

MR. RIDEOUT: I was just going to add, before you did, actually, that

under that program it is not just necessarily transportation infrastructure.

There has been the harbour cleanup; there have been water problems in municipal

affairs that have been addressed under that program. It is not specifically

transportation, but we have historically gotten a share of it.

MS JONES: Okay. Why is there a problem accessing the remainder of the

money?

MR. RIDEOUT: How do I address that? I do not want to be unkind or

anything. At the political level in Ottawa, there does not appear to be a

problem. I have met with Mr. Efford and he agrees with what we want to do, to

split off eighteen for the Trans-Labrador Highway and six on the Island.

Lawrence O'Brien agrees. Everybody agrees, at the political level. There seems

to be resistance in the bureaucracy. The guidelines as they currently exist

would not have money spent anywhere except for the Trans-Canada, not even the

Trans-Labrador Highway or the Northern Peninsula Highway or the La Scie Highway,

or the Argentia road. None of those, according to the guidelines in Ottawa,

would qualify for funding. When Mr. Rock was minister and the previous

government was in place, my understanding is that there was a wink and a nod

between the two levels of governments that: Province, you go ahead and do what

you want to do and we will not interfere.

We have tried to have the wink and the nod continue, but so far we do not

have a sign of it. I do not know if you want to add to that, but that is my

understanding.

MR. MERCER: Maybe I might say a little bit more as well, and certainly

just clarify one point for the minister. The way the federal bureaucracy looks

at this is in terms of the National Highway System, and they define that in our

Province as being the Trans-Canada Highway and the Argentia Access Road.

Across the country there are other routes that are designated as part of the

National Highway System which was agreed upon by a council of deputy ministers

and endorsed by the ministers over, I guess, more than ten years ago. There have

been ongoing attempts to update the National Highway System across the country.

Thus far it has continually resulted in failure, primarily because the federal

Department of Transport Canada is very concerned that the propositions being

forwarded by the provinces do not fit what they feel would be the National - the

national - Highway System. The guidelines that are there are fairly clear, and

the provinces have been arguing for years that those guidelines prevent them,

prevent the provinces, from targeting the money in ways that the provinces would

wish to target it.

We are not alone in this. Many other provinces all feel the same way. The

latest attempt, as late as a month ago, to bring more consensus to this took

place in Ottawa in April. Once again, it failed. So there is an ongoing problem

of trying to persuade Transport Canada that the National Highway System should

fit around other provincial priorities.

MS JONES: Have all the other provinces accessed their Phase II funding,

that are eligible under that program?

MR. RIDEOUT: I cannot answer that. I do not know.

MR. MERCER: I do not believe that they all have, no.

MS JONES: Okay, because I was under the understanding as well, a year

ago, that this was a done deal pretty much and that monies would be transferred.

When you said it still was not done, I was a little bit surprised at that.

MR. RIDEOUT: Just to elaborate for a second, if you do not mind. After we

were sworn in as the government and were briefed on those matters, the Premier

asked me to be the lead minister on this transportation strategic initiative

fund. So I began the process by meeting with Mr. Valeri, and some time after

that we began the process. Then Mr. Efford and the MPs - despite the fact that

the letter and the list of projects that we would like to do is up there, we

have had no communications from Mr. Valeri's office since the letter went up.

So, we are, kind of, still hanging fire on it.

MS JONES: Also in your

preamble you talked about the day-to-day

management of Marine Services out of the regions of the Province. Now, I know

that Mr. John Baker has been let go from your department, who was the previous

Director of Marine Services. Is there a new Director of Marine Services within

the department?

MR. RIDEOUT: First of all, Cluney Mercer has responsibility for all

transportation modes, including Marine Services now. And you are right, John

Baker was Executive Director of Marine. The position has now been - it is filled

by Tom Prim. What is the style? How is it styled? Director of -

MR. MERCER: Mr. Prim's position is Director of Transportation Services.

MS JONES: So those were all modes of transportation, I would say.

MR. MERCER: No, just -

MR. RIDEOUT: Marine.

MR. MERCER: - just to Marine and the Air Services.

MR. RIDEOUT: That is right, the Marine and the Air Services.

MR. MERCER: The Air Services being a very small part.

MR. RIDEOUT: But the day-to-day management, Yvonne, of the marine

services will now be run out of the regions.

MS JONES: Yes. Do you want to tell me about that? Are they new positions,

new offices that you opened, or -

MR. RIDEOUT: No. For example, in Central, which is the one I am most

familiar with, the manager on a day-today basis was Walter Pumphrey. He is still

there. Here on the Avalon it is Ben Hammett. Harry Pardy in Labrador. Those

positions were always there but they dealt directly with headquarters in the

past with John Baker. So, what we are going to have them do now is deal directly

- in the case of Walter Pumphrey, he answers directly to Wayne Ricks. In

Labrador, they will answer to Dion Tee. We are hoping by that, we will have more

of a hands on in the region, management approach, than everything ending up on

somebody's desk here in St. John's. That is the idea behind it.

Cluney, do you want to elaborate on that?

MR. MERCER: Just to give you a little bit of history, I guess. Prior to

1997, the marine services on the Island then - because the marine services in

Labrador was dealt with by Marine Atlantic, but the marine services were

delivered through the four regional offices with the regional director being

primarily responsible at the regional level with support staff, as the minister

has indicated, like Mr. Pumphrey out in Central, Mr. Hammett here on the Avalon.

So, basically, what we have done is taken marine and fitted it into the large

structure that we have out there that deliver road programs, thereby having a

lot more resources dedicated to providing a marine service.

MS JONES: Okay. So, basically what has happened, the same people are out

there in the same regions. They will just answer to a different person. They

will answer to their regional directors as opposed to a director within the

department for the Province. That is my understanding.

MR. RIDEOUT: That is correct, yes, and that is the way it was back in the

early 1990s.

MS JONES: I am not going to go through all the salary piece. There are an

awful lot of positions in your department, but what I would ask is that -

already this morning in questioning by my colleagues, the Member for Torngat

Mountains and the Member for Carbonear-Harbour Grace, you guys outlined a number

of vacancies that had not been filled, a number of positions that have been cut

from the department. I would like to ask that you table for us a copy of all the

positions that will be removed from your department; any positions that are

budgeted for that are presently vacant and not been filled to date. I ask that

this information be tabled to us before our final debate of concurrence on the

Budget in the House of Assembly, which will be probably within the next week.

MR. RIDEOUT: That information is readily available and can be provided

and will be provided to the Committee. I can say this, when you take out the

vacant positions that were in the department I think we ended up with

redundancies or layoffs of eighty-seven people. We are hiring back the

maintenance supervisors in new positions, so the net effect for the department

at the end of the day will be fourteen positions. That is what it was when we

did it up, fourteen. That may change.

MS JONES: Fourteen positions or fourteen people who will be laid off?

MR. RIDEOUT: Fourteen people.

MS JONES: Okay, but how many positions will be redundant or cut

altogether?

MR. RIDEOUT: I am leaving out the maintenance supervisors, but I know

there are three or four in stores. If you know it, Keith -

MR. HEALEY: Yes, I can give you the global number without the -

MS JONES: Yes, because I would like to have it tendered so I can see the

exact positions that have been cut.

MR. RIDEOUT: We will do that, yes.

MS JONES: Just in a whole number, if you would.

MR. HEALEY: We are talking in the range of ninety positions, seventy

staff, and, as the Minister indicated, sixty-four of those are eligible to come

back in other positions. Some of those will be seasonal.

MS JONES: Now, the maintenance supervisors, I understand, will not be

automatically rehired from the ones who are laid off. I understand that the

skill classifications that are required for the jobs have been changed. Is that

true?

MR. RIDEOUT: Well, there is a process here. Can we get Gary to come up,

because the process if fairly complicated. I must say, I find it complicated

myself. It involves the Public Service Commission.

MS JONES: Didn't you create it?

MR. RIDEOUT: Well no, I didn't create how we are dealing with it. There

is a process here which involves the Public Service Commission and a clearing

house and that kind of thing, that Gary is living with every day. Maybe he could

enlighten all of us, including me.

MR. TILLER: We have had consultations with the Public Service Commission

and there is going to be a three-stage process for filling these newly created

positions.

The first stage is going to be a competition restricted to those individuals

who were impacted by the Budget exercise, those being individuals directly

related to the maintenance supervisor positions, engineering technician

positions, and the superintendent of operations positions. Through the Public

Service Commission those people will be eligible to apply for these new

competitions and will be assessed for the positions. We are optimistic that

through that process some of these new positions will be filled.

The second stage of the process will the Public Service Commission Job

Clearing Center, in which the Public Service Commission will identify those

people who are permanent employees through this exercise who are eligible for

this new competition. They will also be assessed, and again we presume that some

of those positions will be filled through the Clearing Centre. Any of those

positions that are not filled through either of those exercises will then go to

a regular internal government job competition that will be open to all employees

of government as well as those on layoff status, those people impacted by this

exercise, to apply. Hopefully, the remaining positions, if there are any at that

time, will be filled through that internal job competition.

There is a potential for a fourth piece. If, after those three, all the jobs

still are not filled, then there is a public competition which will be

advertised through the provincial media and anybody is entitled to apply, and we

hopefully will fill any balance, if there are any, through that.

MS JONES: That will take about a year, by the time you get all of that

done, won't it? How long is that going to take? You have to go through four

different stages to fill those positions.

MR. TILLER: Our plan is to have it completed by - well, with the

exception, if there is a public competition, if there is a need for a public

competition, that is -

MS JONES: The three stages.

MR. TILLER: The three stages, by the end of June.

MS JONES: Okay.

CHAIR: Ms Jones, your time has expired.

MS JONES: Yes.

CHAIR: Mr. Andersen.

MR. ANDERSEN: At this time, Mr. Chair, he is here filling in for Mr.

Sweeney. While I do not agree with it, I will give up some of my time to let him

ask a few questions.

AN HON. MEMBER: Under duress.

CHAIR: There are a lot of things Mr. Reid does that we do not agree with.

AN HON. MEMBER: Other than that, you are welcome, Gerry.

MR. REID: Thank you, Mr. Chairman.

It is good to see that I get a better welcome from you than I do my

colleague.

CHAIR: You never have to worry about your enemies, (inaudible) friends.

MR. REID: I want to first of all thank you, Minister, for allowing me the

opportunity to ask some questions.

I noticed yesterday afternoon - late - that you sent out an advisory or a

clip that you had the situation on Long Island settled. Does that mean that we -

when I say we, Fogo Island and Change Islands - will get the Sound of Islay ?

MR. RIDEOUT: Yes, that is what it means. The Island Joiner is now

on route to St. Brendan's.

MR. TILLER: She should have gotten there by around two this morning,

(inaudible) arrival date.

MR. RIDEOUT: So the configuration that we hoped to have in place Sunday

will hopefully be in place today and Fogo Island will have the Sound of Islay ,

and the Earl W. Windsor will start limping its way into St. John's. We

have our fingers crossed that it is nothing more complicated than an oil seal,

but we won't know until she gets out of the water.

MR. REID: Well, I hope so.

So, you haven't determined the

schedule yet? Because we are just started

into the peak of the processing season out there and it is very important. The Earl

W. Windsor used to take six tractors. I think, combined on both of those,

now we can take what, four? I think it is three or four on the Sound of Islay

and one on the Hamilton Sound .

OFFICIAL: You can probably take two on the Hamilton Sound . It

depends on the height, because you have some height restrictions, so two and

three would be the maximum, provided they fit, of course.

MR. REID: We have had problems with the Hamilton Sound , depending

on the tides and stuff, because, while they may fit, if the tide is low and she

has to go up, she will hit. Hopefully, if we find there are backups in trucks

not being able to get to the plant, or away from it, you might be able to rejig

the

schedule later on?

MR. RIDEOUT: We will do anything and everything to make it as practical

as we can, as long as the traffic there will run, and -

MR. REID: Within reason.

MR. RIDEOUT: Within reason, yes.

MR. REID: If someone is deliberately going to miss a run or whatever,

obviously, if it does not -

MR. RIDEOUT: We are saying the same thing to St. Brendan's. My

colleague has already been in touch with me on that. If the traffic is there, we

will run it, and hopefully this is short term rather than anything extensive.

MR. REID: I have heard from my district this week that, in the past, when

someone has been ill or off, we have replaced those workers with call-ins. I

have been told this week, that is no longer going to be the practice. Is that

correct?

OFFICIAL: Which workers?

MR. REID: It could be any of them, as far as I know.

OFFICIAL: The ferry workers?

MR. REID: Yes, I am sorry.

OFFICIAL: Actually, we have to replace ferry workers if they are off

sick. We are mandated under ship safety to have a minimum crew size.

MR. REID: That is right.

OFFICIAL: So there is certainly no initiative -

MR. REID: What if they take an unscheduled day off, for another reason?

Are they still going to be replaced?

OFFICIAL: If they are off sick, if they call in sick, they will be

replaced.

MR. REID: Yes, but if they take the day off, annual leave?

OFFICIAL: Annual leave? Well, that is even easier to handle because that

is a scheduled thing.

MR. REID: So that is not true, which is good -

OFFICIAL: That is absolutely not true.

MR. REID: - because it affects the number of passengers you can take.

OFFICIAL: Absolutely.

MR. REID: Okay, that is good.

MR. RIDEOUT: It is amazing, really, as a brief comment, I suppose, the

situation is so fluid that rumours fly everywhere. The other day, I had a call

saying the rumour was that we were moving our Transportation headquarters from

Grand Falls to Gander - never seen the radar screen, as far as I know, but yet

it is out there floating around.

MR. REID: Well, I am glad that is not happening because with the smaller

vessels (inaudible) we are not going to get the capacity. I know in the past we

have run into it when you put a bus aboard, with eighty students on it, that we

have had to try and hire extra employees to accommodate the number of people who

have been on the vessel; because there is a restriction, like you said. Anyway,

that is not (inaudible).

MR. RIDEOUT: The other thing we are looking at too, Gerry, in that

regard, is trying to develop a casual call-in list of employees for our ferry

operations. Right now it is a management nightmare, as you know, if somebody

calls in close to a shift time, trying to scramble and find somebody. If we had

a casual call-in list, something like substitute teachers, to use a comparison,

you know, the list is there, they are trained, they are skilled, and they are

probably available if they are not doing something else, we think that would

help out the management who are out there.

MR. REID: We have some on Fogo Island, and we have lots more if you need

them, who have the MED courses and all the rest of it.

MR. RIDEOUT: They could be good seasonal jobs.

MR. REID: Oh, definitely.

MR. RIDEOUT: We are actively pursuing that now. Cluney and I have had

discussions on it and we are pursuing it.

MR. REID: On the rates, Yvonne said you created something there a while

ago. I don't believe you created the mess we have with our rates this year. I

think that was Dr. Death or someone. The Premier promised the people when he

went to Fogo Island, and also in his Blue Book, that he was going to bring ferry

rates in line with road transportation, which would mean from Fogo Island to

Farewell, I suppose, $0.50 in any vehicle. Instead of having the rates

eliminated, we have actually gotten what the Minister of Finance said, a 25 per

cent increase in the next four years, starting with a 10 per cent increase this

year. Obviously, everyone in my district is opposed to those rate increases.

The Minister of Finance said there was a 10 per cent increase this year. Can

someone explain to me how he calculates that? I will give you two examples. The

fare for an adult passenger on Fogo Island went from $5.50 to $6.50 this year,

and by my calculations that is more than 10 per cent. It is more like 18 per

cent. For our seniors, on the same trip, it went from $3.00 to $3.50 which is 16

per cent or 17 per cent. I don't know if that was another misquote that the

Minister of Finance made on Budget Day or not, but he did say it.

MR. RIDEOUT: Let me say a couple of things on that, Mr. Chairman. Yes,

the fare increases are a budgetary item and they were looked at in the context

that, in terms of passengers and passenger vehicles, there had not been an

increase in the provincial ferry rates since the early 1990s. In terms of

commercial traffic there had not been an increase since the mid-1980s. Even

though the cost of the service was continuing to increase, there had not been

any corresponding increase in the tariffs.

In terms of the percentage, the percentage will at the end of the period be

25 per cent. It is 10 per cent and then it is rounded to the nearest quarter, I

believe is the way it goes.

OFFICIAL: No, not the nearest quarter, it is rounded up to the highest

quarter.

MR. RIDEOUT: To the next highest quarter. If that is 15 per cent or 16

per cent this year, what it means is that in the last year there will be no

increase. It will be done so that the increase is 25 per cent over the period of

time, but there could be a variance, Gerry, in year over year on that. That

means the next year's one will be lower or some people will get no increase at

all in the last year. That is the way we have calculated it out, isn't it?

OFFICIAL: That is correct.

MR. RIDEOUT: If I am wrong on that, you can -

OFFICIAL: That is correct. Just to clarify it, I guess part of the reason

for that is that at the kiosk at each of the ferry terminals we do not have -

MR. REID: (Inaudible) change.

OFFICIAL: Right. Making change is difficult. We don't have debit

machines and those sorts of things.

MR. REID: You should have rounded them down instead of up.

OFFICIAL: I guess we did what we did historically, we rounded up, and

that is what we did this time.

MR. RIDEOUT: We are adamant in saying that the tariff increase will be 25

per cent. It won't be 27 per cent of 28 per cent of 29 per cent.

OFFICIAL: That is correct, and I will just use the example, Mr. Reid, of

the $3.00 fare: 10 per cent of $3.00 is $3.30, so it got rounded up to $3.50.

Next year a 5 per cent increase again, so it is a 15 per cent increase, and 15

per cent of $3.00 is $3.45. Rounded up it is $3.50. In fact, in 2005-2006, there

will be no increase.

MR. REID: I never did understand how these ferry rates operate even when

I was in government myself. I think Change Islands to Farewell is about the same

distance as Bell Island to Portugal Cove. How do you calculate the difference

between the rates for Change Islands and Bell Island? Is there distance

involved?

OFFICIAL: Yes, I have done a little bit of research since I have been

involved in marine, and in fact back in the mid-early 1990s when our proposed

rate structure was put in place the distance was incorporated. You are correct,

the return trip from Farewell to Change Islands is roughly five kilometres,

approximately the same as Bell Island.

MR. REID: Yes. The rate for vehicle and a driver to Bell Island is $5.50

and it is $15.00.

OFFICIAL: Correct. Part of the reason for that, of course, is that when

that rate structure was developed back in, I believe it was, 1994-1995, there

were proposed rate increases for all of the ferry services. What happened is

that some of the rate increases occurred in some locations, and in other

locations they did not because of public lobbying and that sort of thing.

AN HON. MEMBER: Bell Island being one of them.

OFFICIAL: Bell Island being a prime example. I think Premier Wells -

MR. REID: Because they are closer to the Confederation Building, and I

remember the demonstrations. That doesn't make it fair. Clyde didn't make it

fair, and neither are we, or you.

MR. RIDEOUT: That is right, but I want to add to that. What we have

decided to do - again, Cluney and I have had discussions on this and I have

given instructions - we are doing a full review of our tariffs (inaudible), what

factors should go into determining the fare. We are bringing in - I think we are

looking for somebody outside - a consultant to look at the whole fare structure

for us, Gerry, because, you are right, it is not fair. Bell Island can put 1,000

people around this building any day of the week and governments of the day

listen to that, but Fogo Island cannot, and certainly Labrador cannot. As a

result, when the last round of increases happened in the 1990s, pretty well all

of them got done, I think, except Bell Island, wasn't it? Bell Island didn't

get done, I know that, and the record shows that, and that is why there is this

variance - so significant a variance - that you have identified between the

trips of the same distance. I have instructed Cluney to get people to look at

that for us and try to put some balance back into it.

MR. REID: Especially in light of the fact that they get twenty trips a

day and the maximum we will get is five.

MR. RIDEOUT: Now, we also have to keep in mind, in fairness, that the

Bell Island operation is, I guess, the only one, really, in the Province, that

you could stall as a commuter operation. That is a factor that has to go into

the balance as well.

MR. REID: I would appreciate, when you are doing that review, if you

would look at the cost for transport trucks.

MR. RIDEOUT: We will look at it all, yes.

MR. REID: Because it is my understanding that some of the transport

trucks that are going back and forth to Fogo Island are three times as long as a

vehicle - a car or a truck, a pickup truck - and they are paying five to six to

seven to eight times as much, and it is not based on weight; it is based on

space on the ferry. We are putting companies out of business.

I have dealt with a couple of individuals who live on Fogo Island - you

probably know them - fellows who operate a trucking company. One of them has

eight vehicles, and with the fishing season on right now he has at least eight

vehicles travelling back and forth there each day, and I think he is paying

somewhere in the area of $160 a trip, or something, for a transport truck. That

is a lot of money, especially with a 25 per cent increase on it, and everyone is

going to feel the cost of that because obviously the price of goods on the

Island will go up. Not on that, but it is having a negative competitive impact

on the plants out there, because they have to pay the trucking or the ferry

fees. Someone has to pick it up. It is not good in that light, so if you could

have a look at that when you are reviewing it, it certainly would be

appreciated.

I know there are a number of truckers who would like to have a chat with you

about it, because I gave them a commitment that at least we would look at it.

MR. RIDEOUT: I had representation from, I don't know if it was the

Independent Truckers' Association, but it was one of the associations anyway,

about the rates; they wanted them rolled back or frozen. I said: Look, I can't

give that commitment. This is a Budget item, it was announced in the Budget, and

it is in place until the government, as a whole, decides to do something

different. We will do this review of the tariff for the whole Province, our

provincial ferry system, and see if, at the end of the day, we can't have

something that is more consistent and more equitable than what we have right

now.

MR. REID: I think Weldon has some information on my courthouse in Fogo.

MR. MOORES: While there are some offices closing in the building, we have

no intention of closing that building. Certainly, that is where it sits at this

point in time.

MR. REID: Good. Thank you.

The hospital on Fogo Island, you fellows own that, the Department of Works,

don't you?

MR. RIDEOUT: We don't operate it. I suppose we did oversee the building

of it, did we?.

MR. OSMOND: I would have to check to see if we actually own it, because

there are different owners depending upon the circumstances sometimes.

MR. REID: Any idea when it is going to be ready for occupancy?

MR. OSMOND: That would be up to the Department of Health to determine.

MR. REID: The Department of Health. I cannot get an answer out of her.

MR. RIDEOUT: Weldon, are we the owners of the building, do you know?

MR. MOORES: (Inaudible).

MR. REID: Nobody knows. Don't you own all government buildings?

MR. RIDEOUT: No. Some board owned buildings and that we don't own.

MR. OSMOND: I should think that we do this one. I know when the land was

purchased we purchased it, so I would think we probably have title to the

property.

MR. REID: I suppose you are aware there is still an expropriation battle

on that land, are you? That is a difficult one.

OFFICIAL: Once the hospital goes operational, it will be operated, unless

they change the board structure, by the Central board. The Central board is the

one that will make the determination of when it will be operating.

MR. REID: I imagine that everything in that was contracted, even the

beds, right?

OFFICIAL: It was all brought by public tender.

MR. REID: It is a brand new facility. Apparently they came with twenty

beds and set them up some time ago. Under the cloak of darkness the other night

someone out of Gander came with a van, slunk into the hospital and stole ten of

them. They were gone on the first boat off the island the next morning.

MR. RIDEOUT: Slunk, is that a good word?

MR. REID: I don't know, it sounds good. It sounds better than sneaked,

snuck or snook. Anyway, they took ten of the beds and they are gone, but it won't

happen again. There is an alarm system out there now set up on the island

amongst its people.

The causeway, Minister, on Twillingate Island, we are still getting letters

about that one.

MR. RIDEOUT: We are certainly going to be looking at capital repair work

on the Elliot Causeway, Gerry, when I am putting my capital budget in place for

this year. I know is it on the list that you submitted and it certainly will be

considered. I haven't got it finalized yet, nor is it ready to go to Cabinet

really. It has been delayed a bit, but we are hoping to have it done by around

the end of the month.

MR. REID: The surface of that is such now that it is dangerous. Not just

the guardrail, but the surface has gone such that people are swerving all over

the place. If it were cold now we would probably have more casualties.

Seriously, the surface has just disintegrated over the winter. That is it for

me.

Oh, what about the Long Island causeway? Are you going ahead with that?

MR. RIDEOUT: It is deferred indefinitely.

MR. REID: Deferred indefinitely. Does that mean cancelled?

MR. RIDEOUT: I did not say that, but it is deferred indefinitely.

MR. REID: That is a good choice of words.

That is it for me.

CHAIR: Thank you, Mr. Reid.

Welcome back, Mr. Sweeney.

MR. RIDEOUT: Mr. Chairman, can we have a short little break?

CHAIR: How short is short, because you cannot figure out what deferred

means?

MR. RIDEOUT: Is it short indefinitely?

CHAIR: Okay, we will give a short five minute recess. How is that?

Recess

CHAIR: Order, please!

I will call the meeting back to order. Mr. Andersen is up next.

MR. ANDERSEN: Thank you, Mr. Chairman.

We will go back to page 75, under Mail Services. We see that Salaries has

increased by $56,000. Why the increase?

MR. RIDEOUT: Actually, budget over budget, the Salaries increased from

$412,000 to $434,000. So, it is not that amount, but if you are looking at the

difference between $412,000 Budget last year and the $378,000 actually spent,

again, the estimates are up due to the annualization of prior year salary

increases. The Revised was down because of reduction in overtime expenditures.

The reason it is up over $412,000 last year to $434,000 this year is prior year

salary increases.

MR. ANDERSEN: Then if you go down to .06, Purchased Services, an increase

of nearly $64,000.

MR. RIDEOUT: With all due respect, Mr. Andersen, the Budget figure last

year was $179,000 and the Budget figure this year is $179,000. Now, there was a

difference in the Budget last year and the Revised actually spent, and that was

because there was a freeze on discretionary spending, and there was $40,000 for

the new mail sorter which was not done. So that explains the difference in

Budget and Revised, but budget over budget last year and this year are the same.

MR. ANDERSEN: So, if you look a lot of these subheads, which was the

revised budget for last year as to what you are putting in this year, that if

you do come in, basically, the same as last year at pretty much that you

budgeted at, you will have a hell of a good surplus of money.

MR. RIDEOUT: Well, we are not budgeting for that. I mean, there were

certain discretionary items in a number of subheads that were not proceeded with

last year. For example, like I mentioned, the mail sorter, which will very

likely be proceeded with this year.

MR. ANDERSEN: We will move on to 1.2.05. If we look at Information

Technology, $155,000, is that a new expenditure?

MR. RIDEOUT: No, this is that reclassification of tangible capital assets

business again that Mr. Healey explained to us earlier. Keith, do you want to -

MR. HEALEY: Yes, that is correct.

MR. RIDEOUT: - elaborate on that because, like I said, I do not profess

to understand it. It is not new money. It is the way present budgets are

currently reclassified.

MR. HEALEY: That is correct, minister. In fact, that $155,000 under last

year's accounting would have been shown in 1.2.02.12. As I explained before,

that total then would have been $577,600 as compared to the $781,000 which we

had last year. So, it is just a reclassification from current account to capital

account, that $155,000.

MR. RIDEOUT: So, it is an accounting procedure?

MR. HEALEY: Yes.

MR. ANDERSEN: Again, that would be my next question. If we look at

1.2.05, an increase of $155,000, again (inaudible) I was going to revert to

1.2.02 where there was a decrease of almost half a million dollars. In

1.2.02.12, again, there was a decrease of $492,000 but then when you turn the

page you see an increase of $155,000.

MR. HEALEY: Yes, that $155,000 offsets part of the $400,000 decrease. As

I say, year over year the IT budget is not always the same. If we complete a

project in one year, we do not get funding to develop it in the next year.

MR. ANDERSEN: Okay. We will move on to 2.1.01, under Salaries we see a

decrease of $558,000 and, at the same time, Purchased Services has increased by

$395,000. Is this for layoffs or for contracting out?

MR. RIDEOUT: On 01, on Salaries, Mr. Andersen, the estimates are down due

to expenditure reduction. There has been a consolidation of engineering support

staff and the elimination of five superintendents of operations which is part of

the announcement that we made a few weeks ago.

MR. ANDERSEN: You say five?

MR. RIDEOUT: Five superintendents of operations, yes. Our revised is up

by $119,000. You notice in the budgeted there was $6.3 million, the revised is

almost $6.6 million, and the revised is up due to severance payouts of $119,000

approximately. That is the explanation on the Salaries items.

Under 06, Purchased Services, the estimates are up to reflect funding for -

we are putting in a new system called Road Weather Information System, RWIS, and

the total program is $433,400, which we are cost-sharing fifty-fifty with the

federal government through Transport Canada. That system enables us to have

high-tech monitors in the roadbed that will tell us when is the optimum time to

apply salt and other winter maintenance operations. The City of St. John's has

been using this system now for the last two years and it has made tremendous

progress. There are other provinces into it as well. We have made the decision

this year to go forward with installing that system. We are negotiating now the

final details of the agreement with Transport Canada. That is why there is this

increase in the Purchased Services vote, to provide the money for installing

this system throughout the Island and Labrador.

MR. ANDERSEN: Grant and Subsidies, under 2.1.01.10, decreased by almost

$500,000.

MR. RIDEOUT: That is $240,000 budgeted and there was $750,000 spent?

MR. ANDERSEN: I am talking about 2.1.01.10.

MR. RIDEOUT: Grand and Subsidies.

MR. ANDERSEN: Yes.

MR. RIDEOUT: Budgeted was $240,000, and the revised last year was

$750,000. The government budgeted $240,000 and actually spent $750,000, and this

year we are budgeting $300,000. There is an increase of $60,000 over the amounts

budgeted, from last year of $240,000 to this year $300,000. The revised, the

amount spent, is another matter, if you have questions on that.

MR. ANDERSEN: The question is: What is it for?

MR. RIDEOUT: Well, in 2004-2005 the snowmobile trail grooming grants of

$240,000 were paid to the development associations of Eagle River, White Bear,

Battle Harbour, and the Towns of Makkovik, Rigolet, Postville, and there were

local road grants of $60,000.

Revised is up due to a one-time purchase of graders for Northern Labrador.

That is why the big increase in the Revised figure, Mr. Andersen. The grader for

Postville was $133,200; Rigolet $144,500; and Hopedale $129,700.

MR. ANDERSEN: Didn't that money for these graders come out of the

Labrador Transportation Initiative Fund, which is totally separate from...?

MR. RIDEOUT: Yes - don't ask me to explain the accounting; Keith can -

but there has to be a flow through of cash. We do it and then, I guess, the fund

is paid back.

If you go down to the same subsection, Mr. Andersen, 02, you will see Revenue

- Provincial $510,000 comes back, so when you get down to your bottom line that

comes off; but, for accounting purposes, you have to put it out on one end and

take it back on another, but you are right, it does end up eventually comes out

of the LTIF.

MR. ANDERSEN: Okay, because under 2.1.02.02., that was a question I had.

Where is the $475,000 provincial revenue coming from?

MR. RIDEOUT: That is from the LTIF.

MR. ANDERSEN: Okay.

Under 2.1.02., under Salaries we see a decrease again of roughly about

$24,000.

MR. RIDEOUT: Sign Shop?

MR. ANDERSEN: Yes.

MR. RIDEOUT: Again this was an expenditure reduction initiative. There

was a position here, I believe, Cluney, a clerical position that was eliminated.

MR. ANDERSEN: Under 2.1.03., under Salaries, we see a decrease of pretty

well over a million dollars. Why is this?

MR. RIDEOUT: Expenditure reduction initiatives, realignment of resources

from salaries to operating accounts; this is where they allowed us to keep the

salary money for road maintenance, wasn't it?

OFFICIAL: That is correct.

MR. RIDEOUT: We had a situation in our road maintenance program where we

had all kinds of salary dollars - not all kinds, but significant salary dollars

- and over the last number of years a situation developed where there was money

for salaries but very little money for materials, so we had a bunch of people

out there with no crushed stone and all those kinds of things to do maintenance

on our roads. We reviewed that this year and offered to do some - we also had

some imbalances in the system where you had more operators than you had

labourers, or in some situations you had more labourers than you had operators,

and operators will not do labourers work and vice versa.

We tried to bring some balance to the system where we would eliminate some of

those salaried positions but requested to keep the savings to go into our

maintenance operation so we would have more money for material, and Treasury

Board and Cabinet allowed us to do that. As a result, there is a million dollar

reduction in salaries but that million dollars turns up in this Budget in those

figures in maintenance material program expansion.

Cluney, have I explained it properly?

MR. MERCER: Yes.

MR. RIDEOUT: I know that is the intent, and that is what happened.

If you go down to Supplies, Mr. Andersen, you will see that there is an

additional million dollars in Supplies, and that is where the savings from the

salary rejigging went. We saved money in Salaries but Treasury Board allowed us

to keep it for materials and supplies so that we can hopefully do a bit better

job maintaining road maintenance.

MR. ANDERSEN: Okay. We will move on to 2.1.04.

MR. RIDEOUT: Under 2.1.04, Snow and Ice Control.

MR. ANDERSEN: Yes. Again, Salaries decreased by $125,000.

MR. RIDEOUT: Actually, last year the Budget amount was $10.6 million and

the Revised, we actually spent $10.8 million, and we are budgeting this year

$10.7 million, so our actual Budget figure has increased over last year, and

again that is due to the annualization of prior year salary increases. We are

not budgeting less money; we are budgeting more money than the previous budget

year and our Revised, I guess, would reflect overtime and that kind of thing.

OFFICIAL: Severance payouts.

MR. RIDEOUT: And severance payouts. So the budget is actually slightly

more, Mr. Andersen, than it was budgeted last year.

MR. ANDERSEN: But the actual amount of money that was spent last year,

though, what you are forecasting this year is less.

MR. RIDEOUT: Yes, the Revised is less because there was $180,000 spent

last year in severance payouts that we will not anticipate paying out this year.

MR. ANDERSEN: If you move down the line to Supplies, again, a tremendous

decrease here. We are almost -

MR. RIDEOUT: Yes, last year there was $11.7 million budgeted, actually

$12.7 million spent, and this year we are budgeting $11.4 million, and that is

explained due to expenditure reductions in the elimination of road maintenance

on Class 4 cabin roads. Remember, that was in the Budget announcement? We

announced that we were not going to do summer or winter maintenance after this

spring on Class 4 cabin roads, so that accounts for the saving.

MR. ANDERSEN: If we move on to Purchased Services, we are looking at

probably, I guess, from the revised last year to almost three-quarters of a

million dollars. Does this mean that some road maintenance will not be

maintained on some of our provincial roads?

MR. RIDEOUT: Yes, it is the elimination of the winter road maintenance

contract from Red Bay to Lodge Bay, $1.5 million. Remember it was announced in

the Budget that for the next few seasons that road would not be kept open in the

winter? That is the savings that would result from that, $1.5 million.

MR. ANDERSEN: Minister, what is your plan for that road?

MR. RIDEOUT: Well, the plan is to build a depot in where the trouble area

is. That is the first part of the plan and that way you would not have to be

moving equipment - how far is it, Cluney, to get into - perhaps you can give the

technical details here.

MR. MERCER: Well, there is about eighty-three kilometres between Lodge

Bay and Red Bay. The most difficult area consists of about a forty-three

kilometre

section in the middle. So, in the absence of not having facilities, a

depot in that problematic area, a fair amount of time is spent, actually,

travelling equipment in from both ends, from the Red Bay end and the Lodge Bay

end each and every day. The terrain is very barren. There is no protection. The

first sign of weather turning to the worst, then the crew or crews have to, for

their own safety, head back out. So it is translating into an inefficient

operation. So, to make it efficient, what is needed is a facility to have its

men and equipment so that when conditions are conducive to working, then they

are able to work in the tough area without having to travel up to thirty

kilometres to get to it. If you are talking about travelling with a snowblower

and a loader, I mean that is a little better than a walking pace. So, it takes

quite a bit of time to traverse that -

MR. ANDERSEN: Minister, I am sure that my colleague from Cartwright-L'Anse

au Clair is going to ask questions but, again, what you have announced in the

Budget that the road will be closed during the winter months for the next five

or six years?

MR. RIDEOUT: I do not know if it will be five or six years. I mean, it is

an item that would be revisited in the Budget on an annual basis, I would

suspect, but we are progressing with plans to construct a depot and have men and

equipment in the center of the problem area where they would not have all this

travel back and forth that Mr. Mercer has mentioned.

We have two or three depots that have to be built as the Trans-Labrador

Highway progresses in Labrador. Then the plan is to proceed with tender calls

for, in this case, winter maintenance. We are planning to call tenders over a

longer period of time so that contractors would have a longer period of time to

amortize their costs and so on. So, that is the general long-term plan that we

are working on.

MR. ANDERSEN: Minister, as you are well aware, the road from Goose Bay to

Cartwright was held up because of, I guess, concerns and talk of the alternate

route.

MR. RIDEOUT: Right.

MR. ANDERSEN: A lot of people, I think, agree with the alternate route.

Everybody will do it to help save the Sandwich Bay watershed and a lot of fish

(inaudible). In the meantime, minister, don't you think it would be more

appropriate for you and your government to sit down with the people in the

riding of Cartwright-L'Anse au Clair - after all the great difficulty that

road has caused - to discuss the possibility of an alternate route? Because what

people are saying is that maybe if there were a winter road further inland than

the problems that we have in that

section of road, which you are going to close

- I can only say to you, minister, that for all the years they have lived in

isolation, to come back out now after such a long wait to cut that road off,

then I would compare it to taking the road around Goobies and destroying about

two kilometers of the road and saying to the people of Newfoundland: Well, you

carry on and do your business the best way you can. That is a similar thing.

Why wouldn't the government take the approach that - obviously, from all

the concerns that we have - and I think all people realize it - that there are

things we can do. Rather than wait, why wouldn't your government or your

department take a role and work with the people in that area to discuss an

alternate route, whether it be a winter road?

MR. RIDEOUT: Well, there was some discussion on the winter road proposals

back, I guess, first when we became the government. The advice which I received

is that the professionals in the department did not think that the proposals

would make much difference, if any, to the overall operation. That piece of road

that was closed for sixty-six days last year, I think it was closed for

seventy-two days the year before. So, it is not the fault of one government or

the other. It is the fault of the elements. The traffic offering at the moment

is very low but, obviously, that will increase when Phase III of the

Trans-Labrador Highway is completed. Our plan is to try to use that time to have

something in place that is of a more permanent nature that would do a better job

of keeping that

section of road open. It is always going to be difficult. I do

not think anybody is going to try to get around that but we do think that with

the capital improvements on the depot and new equipment contracts and so on, we

can substantially improve it for the time when the traffic offering is going to

be significantly higher than it is at the moment. So, that is the kind of

thinking process that we have gone through.

Cluney?

MR. MERCER: Yes, I just want to add; in addition to the two things the

minister just mentioned, we also have to look at - you know, some of the rock

cuts are, indeed, giving us some trouble as far as filling in with snow because

the rock cuts are six and seven metres deep. As the minister alluded to, last

year there was a suggestion of going over the top of some of the rock cuts. When

you are going to have two sections of road to maintain, maybe a better approach

may be to, in fact, implode some of the rock cuts to widen them out so that the

wind can come in and come back out again, from a technical perspective, as well

as raising the grade up so the amount of depression that is going to fill in and

the width of the depression is a lot larger. The wind can swoop in and swoop out

and you would not have this problem that we have with rock cuts. I think to

address the problems that are up there, so you can do it as most efficiently as

possible, it is going to require, I guess, some action on a lot of fronts; not

only the depot and not only the long-term contracts, but doing something with

rock cuts as well. If, in fact, there are sections of the road, a certain number

of kilometres that may need to get realigned, that may very well be the most

economical way to go. What needs to happen is that, over the next little while

there will be a detailed analysis done of that problem area with a view to, how

do we deliver the service most economically? I think that is a challenge that we

will face over the next short while.

MR. ANDERSEN: The last part that I will say on this is that, when you

look at the upkeep of the road that has been there for years on the South Coast

of Labrador, down as far as Red Bay, from my understanding they have never had

any great difficulty over the years keeping that

section of the road open.

Except for the forty-three kilometres, the rest of the road from Port Hope

Simpson on down right through to Cartwright, there is very little difficulty in

keeping the road open. As a matter of fact, the road right from Happy

Valley-Goose Bay right to the Quebec boarder, no problems whatsoever. Obviously,

the Alaskan highway - again, it is a parcel of land here that is about

forty-three kilometres. I do not think that anyone should have to wait for any

long period of time to have that fixed because, Minister, it was there last

year, it is there this year, and, regardless of when you come back, that is

going to be there again. I think good consultation with the people down there,

to me, I think there could be a far better resolution to the people than the one

that is being proposed by your government.

MR. RIDEOUT: Well, we are not abandoning the thing and doing nothing. As

Cluney outlined, and as I outlined, we have a plan to address and correct as

much as we can the problems that we are facing with that particular

section of

road. The location of the road itself is done now. There was a lot of debate

before the road was actually built, about the route, whether is should go the

coastal route or whether it should be further inland, I believe, in through the

Pinware River Valley, but those decisions are taken now and the road is where it

is and we have to try to do the best we can with the resources available to us

to address it. There is not much point of having it closed for sixty-odd days

this year and seventy-odd days last year. You have to try to address it, and we

are going to be trying to address it in the ways that we have outlined,

certainly in terms of advice from people in the area.

The Combined Councils have spoken on this matter a number of times that I

have met with them, in the few months that I had been the minister, and they

have offered their view as to possible solutions, and what should be done, and

that kind of thing. We have heard advice from people who are familiar with the

area, as well as our own people and the contractors in the area, so we propose

to try to correct it over the next while.

CHAIR: Thank you, Mr. Andersen.

Ms Jones.

MS JONES: Just to go back to a couple of sections that Wally was

covering, on page 76, 2.1.0.1., you guys announced in the Budget the weather

information system, $430,000 for a three-year project, that would total $1

million. Is that $1 million over the three years or is that $1 million annually

and the other $570,000 would come from the federal government?

MR. RIDEOUT: I will ask Cluney to give the detail on that.

MR. MERCER: The program is actually a $1.2 million program over three

years, and that is a total program cost of $1.2 million, 50 per cent of which

would be shared revenue from the federal government, so it is a 50-50 shared

program.

MS JONES: So the feds will actually put $600,000 into the program.

MR. MERCER: Yes.

MR. RIDEOUT: That is for equipment, isn't it?

MR. MERCER: That is for equipment and installation of the hardware.

MS JONES: Under 2.1.01.10. Grants and Subsidies, you said $240,000 of

that will be for the snowmobile grants in the North Coast and South Coast of

Labrador. Is that money clawed back from the Labrador Transportation Fund?

MR. RIDEOUT: I don't think so.

MS JONES: No?

MR. RIDEOUT: No?

MR. MERCER: No, it is not. As a matter of fact, just to clarify,

actually, the $300,000 budgeted in 2004-2005 is the amount this year for

snowmobile grants. If you recall, there was $60,000 that had been taken out for

a grant to White Bear Development Association as a result of some repairs that

had been done in a previous budget; that has been now restored again.

MR. RIDEOUT: That is put back, yes.

MS JONES: For this year?

MR. RIDEOUT: Yes.

MS JONES: So, they will actually get their grant this year?

MR. RIDEOUT: They will get the full amount this year because, as you

know, there was an arrangement negotiated by -

MS JONES: Well, I was not aware, no, until the Combined Council meeting.

MR. RIDEOUT: Right. My understanding is that there was an agreement

reached between certain parties, that is how it would be done for this past

year, but that has passed now and this year we will go back to what the regular

situation was.

MS JONES: So, the full funding will be restored to the original amounts

for all the associations?

MR. RIDEOUT: Yes, that is correct.

MS JONES: Okay.

The local roads grant there, the $60,000, who is eligible for that?

MR. RIDEOUT: Small isolated communities that have kind of a walking road.

For example, on the Island what comes to mind is Southeast Bight. Yes, I know

they have - I had a letter from them just recently. Generally they have a local

roads committee or something, I think, don't they, Cluney, and we give them

small amounts of money for local road maintenance? I will ask Cluney to speak to

it a bit further.

MR. MERCER: Yes, that is correct. There is an actual list that we could

actually provide, I guess, of the communities that receive, or have historically

received, local roads grants. They are usually not large sums of money. They

are, like, you know, $3,000 or $5,000 that they do to upgrade their walkways and

that sort of thing. In your area, I believe Norman Bay may be one of the ones

that receives that grant - I am not exactly sure - but those -

MS JONES: They didn't have a road until last year.

MR. MERCER: - those types of communities.

MR. RIDEOUT: Whether they had a road or not, they may have had bridges or

walkways or trails or something that they (inaudible).

MS JONES: Well, they had a path.

MR. RIDEOUT: A path, yes. That is what we used to call it, too.

MS JONES: They have only had a road in the last year; the government

built a road in this community. Yes, if you could table where those grants are

going. Are decisions made this year on where the money is going to be spent?

MR. RIDEOUT: No.

MR. MERCER: No, they have not been made. I guess it has been historical

in the past, that those who qualify have typically gotten, year over year over

year, a certain designated amount of funding based on the number of kilometres a

footpath or a local road that they have.

MS JONES: Okay. If you could provide me with the information, I would

appreciate that.

MR. RIDEOUT: We will get that for you.

MS JONES:

Section 2.1.03, I think it is, wherever we are. I want to make

sure I am in the right place here. Purchased Services, 2.1.04, the winter road

maintenance for Red Bay to Lodge Bay.

MR. RIDEOUT: That would be 06, right?

MS JONES: Yes, 06, Purchased Services.

MR. RIDEOUT: Purchased Services, yes.

MS JONES: A couple of questions, I guess, further to what my colleague

for Torngat Mountains has already raised, and to say to you, Minister, that I am

not at all pleased with your decision to not proceed with any effort, even, to

snow clear the eighty-three kilometres of road between Red Bay and Lodge Bay

within this fiscal year. It certainly does not sit well with my constituents by

any means.

I represent a district where people have spent most of their lives in

isolation of one another. It is only in recent years that we have had the

privilege, we feel, to be able to have road connections between our communities.

We feel that there has been no effort, and very little thought, put into your

decision. I guess it is a chance for you, today, to tell me how much thought you

did put into it, by first of all telling me who you consulted with before you

made the decision to close the road, and where did you get the advice, where did

the recommendation come from?

MR. RIDEOUT: Well, I take responsibility for the decision, as minister. I

consulted with my officials on this problem of the Red Bay-Lodge Bay road on

numerous occasions, sometimes on a daily basis over the past winter. This piece

of road was closed for sixty-six days this winter, and seventy-two days during

your watch last year. It is not something that we are not aware of.

In terms of advice on how to approach it, I think we have outlined here this

morning our long-term approach to this. We are going to construct a depot more

in the center of the problem area, we are going to do a longer term tender, and

we are going to perhaps widen the rock cuts and raise the grade. We do have a

plan.

As I said, this will be done on a year to year basis. In the interim, with

the present traffic offering on that piece of road, we think that this decision

is warranted at the present time. It is not meant to be long term and it will

not be long term, but in the interim we will be working to try to make

improvements so that when we do get back to doing winter maintenance on that

section of road, hopefully we will be more successful in having it open for

longer periods of time or closed for shorter periods of time than it has been in

the past.

That is the view that my officials have shared with me and with which I have

concurred. Consequently, these are the decisions that have flown from that.

MS JONES: The announcement that was made in concurrence with the Budget

that the

section of road would be closed until Phase III of the highway is

completed no longer stands. You are telling me -

MR. RIDEOUT: I do not remember what the wording of the Budget was now but

whatever the wording of the Budget was, that is what it is, but we are not going

to wait until the opening of Phase III before we start the process of trying to

fix this. That process is underway at the moment and will carry on over the next

few years.

MS JONES: You said that you have a plan, can I ask that you table the

plan? I would like to have a copy of it and -

MR. RIDEOUT: What do you mean table the plan? The plan at the moment is

discussion -

MS JONES: I would like for you to give me -

MR. RIDEOUT: Written notes of the plan, is that what you mean?

MS JONES: You just told me you have a plan. You just said: I have a plan

to deal with that. I would like to have a copy of the plan.

MR. RIDEOUT: The plan is as we articulated it here this morning. Now,

whether that is committed to a hard copy or not, I cannot say. I have not seen

it. I mean, this is what we have talked about. This is what our plan is. This is

what we are hoping to do. This is the plan.

MS JONES: Can you tell me the time frame in which you will move to

implement it?

MR. RIDEOUT: I said that this will certainly happen over the course of

the construction of Phase III. We are not going to wait until the end of the

construction and the opening for this to happen, it will happen over the course

of that.

MS JONES: Is there any money budgeted for this year to start addressing

the problem?

MR. RIDEOUT: I cannot say that there is something particularly earmarked,

can you?

MR. MERCER: No. Given that the

section of highway is associated with the

Trans-Labrador Highway, then it would only be reasonable that the Trans-Labrador

Highway Initiative Fund be utilized to put depots in place as they were for

other depots in Labrador and to carry out improvements to rock cuts and that

sort of thing, I guess as was proposed under the previous Administration. So,

there would be a request that would have to go forward to the LTIF Board for

that to occur.

MS JONES: Minister, am I to assume that you do not think expenditures on

this road should come out of the general revenues of the Province?

MR. RIDEOUT: Well, it will at the end of the day, as it will on every

piece of road that has been constructed out of the Labrador Transportation Fund;

as the fund will, in the very near future, run out, as you know. The whole road

maintenance and ferry contracts will be the responsibility of the current

account for the whole Province. So, that will happen. In the meantime, in terms

of improving some of the capital assets that we will require in the future -

like building depots - we are proceeding to determine how many, where they

should be, and beginning the process of getting them built.

MR. MERCER: If I may, just for clarification, the road maintenance is

actually a current account item now. The summer and winter maintenance of the

roads are current account items, they are not taken out of the fund.

MR. RIDEOUT: They are not back billed.

MS JONES: I am aware of that, and that is why I was asking: Is the work

that has to be done on that

section - I am understanding from your comments that

the only way these depots are going to get done, any rerouting is going to get

done, or any of the rock cuts are going to get fixed is if the money comes out

of the Labrador Transportation Fund.

MR. RIDEOUT: What you should be understanding, with all due respect, from

our comments is that while the fund is in existence, capital improvements - like

building new pieces of road, Phase III has been funded, the bridge across the

Churchill River. While the fund exists, capital improvements will be billed back

to the fund. Maintenance has not been billed to the fund now; it is being

carried out, out of current account and general revenue. When the fund ceases to

exist, then any capital improvements that are needed, when the fund is gone,

will have to come out of the capital budget that is assigned to the department

each year. Winter and summer maintenance will come out of our current account

operations and be funded by the general revenue of the Province. While the fund

exists, than the fund can be billed for new road construction, depots and that

kind of thing. That has happened up until now.

MS JONES: What is going to be the closure dates on that road?

MR. RIDEOUT: The closure dates?

MS JONES: Yes. When will there no longer be any snow clearing? For

example, when do your snow clearing contracts start? In November?

MR. RIDEOUT: In November, yes.

MR. MERCER: Yes, the snow clearing contracts run from November 1 through

to the end of April.

MS JONES: What is the period when there will be no activity on that

section of road? Will it be from November to April?

MR. RIDEOUT: That is the general idea, I think, isn't it?

OFFICIAL: Yes.

MS JONES: I think we all recognize that most of the problems on that road

are in February and March, and very seldom - actually, I don't know if there

is a year that we have actually had to see a full closure of the road before the

end of January, other than maybe it might have been a day or two before they got

it cleared. So, obviously I would like to see a commitment for snow clearing in

November, December, January and April, in those four months, because there is

absolutely no reason why it cannot be done in those four months. February and

March, I know it has been trial and error. I will be the first to admit. I live

there, I use the road on a regular basis, and I have flown over it hundreds of

times when it has been blocked, and I know every single worker who works on that

road, personally, and I have talked to all of them in trying to find a solution,

in trying to look at options and so on. They will tell you, as well, that there

are four months out of the year that there is absolutely no reason why you

cannot keep that road open.

The ferry service will run, we know, until January 3; we are hoping until the

middle of January, but I guess that is a decision you will have to make at a

later date. There is no reason why we should not have access. If we get a

snowfall in November, which is not unusual, to have a snowfall in November, that

could block a

section of that road, but in a day it can be cleared; but, if

there is no one to clear it, it could be blocked for two weeks before it melts

in the month of November. For people not to have access to it, that would be

wrong.

I want to ask you, Minister, to reconsider your decision. I would like to ask

you to reconsider your entire decision, but at the very least reconsider your

decision to not provide the services for November, December, January and April,

and I ask that you reinstate it for those months at a minimum.

MR. RIDEOUT: Well, we certainly will undertake to look at the past and

see what the historic situation has been. I take your view as your present it,

that perhaps it does not get as difficult to handle until maybe the February

month - and that was the situation this year, I agree with you. I mean, it was

pretty well up to February by the first time we lost access -

MS JONES: For three years pretty well.

MR. RIDEOUT: Yes - and then it just became everybody's nightmare after

that, but we will certainly look at November, December, January and April and

see what the historic patterns have been. I am not in any position to make a

commitment today, but I certainly will have Cluney and his people look at it and

give me advice as to what the possibilities might be.

MS JONES: Because you would, in essence, be cutting off all access into

that area for goods and services, and that is not acceptable, definitely not

acceptable. We have to get all of our stuff in by ferry across The Straits, and

for us to have to get it as far as Red Bay and try and get it up by snowmobiles

and all that kind of stuff, it is absolutely ludicrous, when it will only cost,

in my estimation, probably just a few thousand dollars just to keep it open

during those months. You would not be paying much more in November and December,

I would not think, than you would be paying anywhere else on the Northern

Peninsula or anywhere else to keep the road open during those months.

The tender call for winter maintenance, you are talking about having tender

calls that would extend for a longer period of time. Will there be a tender call

this spring for winter maintenance?

MR. RIDEOUT: Is the contract out now for winter maintenance?

OFFICIAL: Yes, the existing contracts up there have both been extended

until the end of September. We will, in the next couple of weeks, be going to

tender with one new contract for a longer period of time; or, it will give us

the ability to extend for a longer period of time. It will have option years in

there so that the contractor can finance equipment, capitalize it over a longer

period of time, and hopefully translate into a better price for government.

MS JONES: I think right now they are tendered at three-year contracts?

OFFICIAL: That is correct.

MS JONES: So you are talking what, five years?

OFFICIAL: I would think, preferably, longer than five years. I would see,

certainly, when Phase III of the Trans-Labrador Highway is completed,

strategically you should be looking at ten-year contracts, five, with options

for five. This time around, I think it would be prudent to look at a contract

that would coincide with the expected completion of Phase III, so that when

Phase III is completed you can look at the whole dynamics of that

section of

road from Red Bay all the way to Goose Bay and break it up into what would be

appropriate contracts. You want your new contact to be, the one that we are

going to call, to certainly be ending when Phase III is about to be opened.

MS JONES: So, any contract that will be called this summer, will it

include the Red Bay to Lodge Bay

section of road for winter maintenance?

OFFICIAL: It will not include Red Bay to Lodge Bay for winter

maintenance. It will include it for summer maintenance, but that is not to say

that it could not be done within the contract if government so decides to extend

the service for months like you have asked for: November, December -

MR. RIDEOUT: It does not preclude that happening, the contract

(inaudible).

MS JONES: Okay, that is what I wanted to know.

CHAIR: Ms Jones, your time has expired.

MS JONES: With the co-operation of my colleagues, may I continue until I

finish this 2.1.04., Mr. Chairman?

CHAIR: That is fine with me, if your colleagues will go along with that

on your side.

MS JONES: Does anybody have a problem?

AN HON. MEMBER: (Inaudible). Go for it.

CHAIR: There is support on that side; (inaudible) your own side.

MS JONES: I don't think I have any problem on this side.

CHAIR: They have no problem on that side.

AN HON. MEMBER: There is no problem on the other side yet.

CHAIR: Continue on.

AN HON. MEMBER: As long as I get my full ten minutes.

MR. RIDEOUT: It is not coming out of your time, right, George?

MR. SWEENEY: That is right.

MS JONES: You said that you had advice that told you not to proceed with

winter roads on that

section of highway. Can you tell me where the advice came

from?

MR. RIDEOUT: From officials in the department.

MS JONES: In your department?

MR. RIDEOUT: Yes.

MS JONES: Did you get advice from the contracting company that has been

clearing that

section of road for the past three years?

MR. RIDEOUT: I did not personally. I do not know whether that was a

factor in advice that officials gave to me, or not, but I did not personally

speak to the contractor.

MS JONES: Minister, I do not expect you to answer for any of your other

colleagues but I will ask the question.

The Member for Lake Melville has made statements in meetings in Labrador, and

also at the Combined Councils of Labrador, in meeting with delegates to the

convention, that the reason the road from Red Bay to Lodge Bay took the pattern

of design that it did was influenced by myself, as a member, and that I had

greatest control over the route that road took, and had a great deal of input

into the engineering and the design. He said that his information was confirmed

within your department.

I guess I am asking you, as the minister, your officials, any of them - I am

sure they have been in the department for a long time, as long as I have been

around here - to table for me any information within your department that

solidifies his perspective and the view that he has expressed to people. If

there are any letters, any correspondence, any proposals, any engineering plans

I drafted myself, anything that is in your department that would solidify and

verify the position that has been espoused by the Member for Lake Melville, I

would like to have that tabled as soon as they possibly could get the

information for me.

MR. RIDEOUT: As a general comment, of course, you are right; I am not

going to be drawn into making comments on comments made by other members -

MS JONES: And I do not expect you to.

MR. RIDEOUT: - whether they are on my side of the House or the other side

of the House; but, as a general view, I will say this - and I said it earlier

this morning - when the highway was proposed, the original proposal, I think,

from the department and some engineering companies and that at the time, was

that the road should go up through the Pinware River Valley. It would be more

sheltered and less difficult to keep open in the winter, and that type of thing,

but there was representation made by local people, I understand, and I do not

know about yourself, whether you were in politics even at the time, but I do

understand from officials that there was representation made by people, groups,

to bring the road closer to the coastal route, for obvious reasons. The

connections to the communities would be shorter, and so on. That brought with

it, of course, other problems that we have talked about here this morning.

I have never heard that discussed internally, since I have been the minister,

in a way to lay blame. It has just been a factual matter of what, in fact, did

take place, and consequently that is the situation that we end up with today. If

there is anything in terms of correspondence or things of that nature, I have no

problem with that being provided, but, as a general comment, that is what I

understand to have taken place before my time, and perhaps even before your

time. I do not know when the decision was actually made on the route, but that

is what I understand to have transpired.

MS JONES: I would appreciate that. The only reason I raise the issue

today is that it did become an issue of public debate. It was in the public

airways in which I found myself having to defend my own position, and I take

great exception to that when there has been no proof to verify or solidify the

comments made by the member. The mere fact that it was noted that the

information came from your department, Minister, is the reason why I am asking

that it be tabled and that I have an opportunity to look at the same

correspondence that anyone else would have looked at in terms of making that

accusation or reference.

The other thing that I will say is that -

MR. RIDEOUT: Just before you go on, if you don't mind, just to be

clear, officials in my department will readily say and back up that the intent

for the route was something other than it is now. It was representations from

people, individuals and maybe organizations, who wanted the route moved closer

to the present route, to the Coast. We will readily admit that. Now, going any

further than that and blaming it on an individual or a political representation

or something, I cannot comment on. It certainly is well known in the department

that the departmental route is not what ended up to be the route, and that

happens quite often.

MS JONES: Yes, and quite often that will happen. We are seeing that

happening on the Phase III of the Trans-Labrador Highway now where you have

intervener groups for environmental, conservation or other reasons, who want to

see a different access than that which has been designed by your department and

your engineers. We have seen it in many sections of road across the Province, in

Grand Falls, on the West Coast and in the Pasadena area. My district is no

different. The difference here is that I have been looked at as being personally

liable for this and I take great exception to it. I have no experience

whatsoever with engineering and don't proclaim to have any.

I can only say to you that, at the time I was a member of the Opposition and

if I could have that much influence over you now, Sir, as an Opposition member,

as I was accused of having at that time, I would think that I am sitting pretty,

I wouldn't have to be here talking about roads being closed, would I?

Anyway, if you could get that for me, I would appreciate it.

MR. RIDEOUT: As I said, we will do the search and if there is anything

there we will certainly provide it.

MS JONES: All right. I am not going to move on to another section, I will

turn it over to my colleague and come back to the other pieces after.

CHAIR: Thank you, Ms Jones.

Mr. Sweeney.

MR. SWEENEY: Thank you, Mr. Chairman.

Page 83, Minister, Road Construction, 3.2.04.48, Recharged to Other Projects,

I notice that comes up there a few times throughout the details. What does that

mean, Recharged to Other Projects?

MR. RIDEOUT: I will get Cluney to give you the details, Mr. Sweeney, but

the Revised is up due to increase recharges for salary components of projects.

That is the note that I have, but can you explain that in more understandable

language, simpler terms?

MR. MERCER: Mr. Sweeney, this goes back to, I guess, what we talked about

earlier with respect to the engineering, the administrative part of the roads

program. The salaries there is $3 million. The salaries for road improvements

goes into one big pot of money, if you will, and as that money is paid, it is

charged through a journal voucher process to realign it with the proper project,

individual contracts. So it is merely the recharging of engineering

administrative salaries for the Roads Improvement Program to the appropriate

project.

MR. RIDEOUT: So I take it to be - like, for example, if we were doing a

million dollars worth of road work out in your district, and maybe it was in

five projects, there are a couple of engineers and technicians and so on

administratively assigned to make sure that work is done. The administrative

cost of that would be charged off with the project that we are doing in

Victoria, or the project that we are doing on Harbour Drive in Carbonear or

whatever. Is that how it boils down?

MR. MERCER: That is correct, yes. That is the whole idea of recharge. It

is coming out of a large pool of money being recharged to projects associated

with that program.

MR. SWEENEY: So that, in fact, those practices do not show a deficit?

MR. MERCER: No, not at all.

MR. SWEENEY: That is accounts payable?

OFFICIAL: It is sort of like a receivable.

MR. MERCER: Yes, so it is coming out of one account really, going into

another.

MR. SWEENEY: I have trouble keeping my Visa statement straight so -

MR. RIDEOUT: Don't go confusing him with $3 million.

MR. SWEENEY: Yes, that's right. Don't go throwing in that kind of

money there on top.

There are a couple of questions I am going to ask - I notice that it is 11:35

a.m. I am going to ask these questions with regard to the Services Division. I

notice there is a new name change on the department this year, it is

Transportation and Works; Services is missing.

MR. RIDEOUT: Many of the services that we were doing are moved out. For

example, Government Purchasing Agency has been reassigned to your old department

of Government Services and Lands. The Queen's Printer has gone to that

department. So a number of the services that we were doing have been reassigned

to other departments. We are principally now a Department of Transportation and

Works, which is public works really.

MR. SWEENEY: Is there any way that I can get a copy, or the Committee

here can get a copy of the breakdown of what was transferred to where because we

have been so used to Works, Services and Transportation that I just -

OFFICIAL: It is only two I think, isn't?

MR. RIDEOUT: That is the only two, is it?

OFFICIAL: Government Purchasing Agency, which was the big one of course.

That was a fair size operation, as you know, and the Queen's Printer was the

other one, wasn't it? We still have the mailroom and our public buildings, so

it was just those two.

MR. SWEENEY: That is simple enough.

That budget was transferred over -

MR. RIDEOUT: Well, GPA is gone out of our budget now. I guess it appears

in Government Services and Lands, and whatever the cost of the Queen's Printer

is gone as well.

MR. SWEENEY: That is reflected in - certainly, it would not be reflected

in this statement. That would come up under Government Services.

MR. RIDEOUT: For the new fiscal year it will be, because we had it - I

suppose it stayed in ours until - what, the last of March, Keith?

MR. HEALEY: Yes.

MR. RIDEOUT: Then April 1 the new fiscal year will reflect it in the new

department.

MR. OSMOND: If I may, minister. All of these statements have been changed

to reflect as if it had always been that way. So you will not find revised and

so forth for last year in here for those two entities that have been transferred

out. You will find those now in -

MR. SWEENEY: As though it always happened?

OFFICIAL: Yes, as through it was there forever. Magic isn't it?

MR. SWEENEY: Yes, it is amazing how much you can do with numbers.

Projects that were approved last year, are they going ahead or -

MR. RIDEOUT: Under capital projects?

MR. SWEENEY: Yes.

MR. RIDEOUT: If there are any carry-overs they are taken care of, aren't

they? Are there any approved that were not tendered or anything?

MR. MERCER: There were a couple approved that were not tendered, but they

were approved through a Cabinet process last year. So they are listed as a

carry-over, even though they were not tendered. There is also about $2 million

worth of expenditure associated with projects that got partially completed last

year and will be fully completed this year.

MR. RIDEOUT: Do you have a particular project in mind?

MR. SWEENEY: No. There was one, minister, I have to say, that has been a

source of frustration for me, and it is not a capital project. It is a very

small project, but whatever seems to happen, Cluney it is regarding Freshwater.

There is a turn in Freshwater, Ted Butt's Turn - and I hate to get parochial

in these meetings but it has been a source of frustration. There was a press

release sent out by I do not know but two previous ministers saying that was

going to be done. I think, in one instance, the wrong place was done.

MR. RIDEOUT: The (inaudible ) turn.

MR. SWEENEY: Yes, but people just do not go away. You know what

constituents are like, and they just keep coming back to me, but there is a turn

there and the guy's house is getting washed out. All it takes is a little bit

of asphalt to bank the turn, and that is what I am saying. It is not a capital

project but is seems like it always gets to be a big deal somewhere along the

way.

I will pursue that at a later date, but there are other ones. A colleague of

mine asked me about another one on the West Coast, to mention it here today. As

long as they are carried over, fine, that is no big deal.

The other thing I want to raise here is Harvey Street, Harbour Grace. Now

that the bypass road is completed, what is the status or where will the status

be on that? I do not expect an answer from you, Minister, right now, because

obviously you have been on the job seven or eight months, but it was a topic,

Cluney, some time ago, and I think there was a committee supposed to be in place

to -

MR. MERCER: Just to give an update, I guess, for the minister's benefit

as well, and those at the table, there were some discussions last year through

the former Minister of Municipal and Provincial Affairs, with representation

from the Town of Harbour Grace, knowing that, I guess, the Town of Harbour Grace

has been told a number of years back that when the bypass was completed the

department would look at transferring the old part of Route 70 over to the town.

They have a number of major issues with respect to water-sewer infrastructure,

the road; it is getting to the point where it needs to be resurfaced, so there

was a concerted effort being looked at to co-ordinate, I guess, the work that

Municipal Affairs would fund along with the town as far as the underground

infrastructure and getting the road resurfaced and then having the town take it

over. There was, I believe, one meeting that I attended in that regard. There

was some design work being done by the town's consultant, but since then there

have been some engineering estimates completed by him, by the consultant. Other

than that, there has not been a meeting since.

MR. SWEENEY: No, there is a bone of contention out there with the whole

community, and about twice a day I get a call from different people who have had

car damage or whatever from it.

Anyway, Minister, I will go back to this here now, Regional

Roads-Transportation Initiative, 3.2.07.

MR. RIDEOUT: Which page are you on, Mr. Sweeney?

MR. SWEENEY: Subhead 3.2.07 is on page 84.

I understand there is a shortfall for this initiative of over $8 million,

almost $9 million.

MR. RIDEOUT: Can you point me towards -

MR. SWEENEY: No, I am just talking in general terms of the initiative

itself. Is that true? I have heard that there is a shortfall, and that we are

waiting for more money from the feds to go into that.

MR. RIDEOUT: Can you explain what you mean by a bit more?

MR. SWEENEY: I think there was an agreement at some time to do some

regional roads.

MR. RIDEOUT: Cluney, can you explain that?

MR. MERCER: Under the Roads for Rail Agreement - I will call it that -

there were really two agreements. When the Province gave up the railway, there

were two agreements. There was an agreement associated with the National Highway

System, which was the Trans-Canada Highway and the Argentia Access, and there

were projects identified under that agreement totalling $400 million, and then

there was a Regional Trunk Roads Agreement which dealt with roads off the

National Highway System, that enabled us to build roads like the CBN Bypass and

the CBS Bypass. There were about a dozen or more specific projects identified

within that agreement, with a block of money to go towards that project.

Some projects, of course, have progressed more over that fifteen-year life of

that agreement. Some projects came in higher than the budget that was allocated,

and there were some projects that came in under. For instance, the Conception

Bay South Bypass was included to be completed all the way to Seal Cove.

Unfortunately, because of other demands on other projects, and some money being

moved around, and some projects coming in higher, that had been completed prior

to the CBN Bypass work proceeding, when we concluded the agreement last year we

did not have enough money to finish that last six kilometres. As far as any new

money forthcoming under that agreement, I am not aware of any and I do not think

the agreement provides any avenue for the Province to get any money under that

agreement.

MR. SWEENEY: I guess the next question is: Is there an initiative in

place that we are looking for more money under the regional roads?

MR. RIDEOUT: The Strategic Infrastructure Program, that I mentioned here

this morning, there is $24 million left in round-one funding. We are trying to

get approval on projects in that. We think our share of the second-round funding

is around $50 million. We have sent up proposals on that, and that is the kind

of initiatives we would be looking at addressing.

CHAIR: Mr. Sweeney, your time has expired.

MR. SWEENEY: My time is up? Amazing! There is nothing to ten minutes, is

it?

CHAIR: It flies when you are having fun.

OFFICIAL: Just like down in the House, you are worrying about what you

are going to say for twenty minutes and it is gone before you get a chance to

say it.

MR. RIDEOUT: How can I ever spend twenty minutes on that, right?

OFFICIAL: That's right.

CHAIR: Just to advise Com