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May 5,

GOVERNMENT

SERVICES COMMITTEE

Pursuant to Standing Order 68, Eli Cross, MHA for Bonavista North, substitutes

for John Dinn, MHA for Kilbride.

Pursuant to Standing Order 68, Randy Edmunds, MHA for Torngat Mountains,

substitutes for Tom Osborne, MHA for St. John's South for a portion of the

meeting.

The Committee met at 6:05 p.m. in the Assembly Chamber.

CHAIR (Forsey):

Good evening everyone. My name is

Clayton Forsey, MHA for the District of Exploits and Chair of Government

Services Committee.

This evening Mr. Eli Cross, the Member for the District of Bonavista North, will

replace Mr. John Dinn, the Member for the District of Kilbride.

What I will do now first is do introductions.

Before we do, I would just like to inform the Committee, and at the

request of the minister as well, that we will do Labrador and Aboriginal Affairs

before we do Transportation and Works.

Before we start I will ask for introductions.

I will start on my right with Paul.

MR. LANE:

Paul Lane, MHA for the District of Mount Pearl South.

MR. LETTO:

Graham Letto, Researcher.

MR. EDMUNDS:

Randy Edmunds, MHA for Torngat Mountains.

MR. MORGAN:

Ivan Morgan, Research, NDP Caucus.

MR. CROSS:

Eli Cross, MHA for Bonavista North.

MR. K. PARSONS:

Kevin Parsons, MHA for Cape St. Francis.

MR. PEACH:

Calvin Peach, MHA for Bellevue district.

CHAIR:

I will say that George Murphy is supposed to be here, but he has family sickness

and could not make it. It just was

not very good. The recorder will

just record for the NDP.

Minister, if you want to do some introductions.

Also, if someone besides yourself is speaking or responding to a

question, please identify yourselves each time for the person who is doing the

recording because that way then they can identify where you are as well.

Minister.

MR. MCGRATH:

Nick McGrath, MHA for Labrador West, Minister of Transportation and Works, and

the Minister Responsible for Labrador and Aboriginal Affairs.

MR. MEADE:

Brent Meade, Deputy Minister of Transportation and Works.

MR. GOSSE:

Gary Gosse, Assistant Deputy Minister for the Transportation Branch of

Transportation and Works.

MR. GRANDY:

Cory Grandy, Assistant Deputy Minister for the Works Branch of Transportation

and Works.

MR. BOWDEN:

Keith Bowden, Executive Director of Works Branch, Transportation and Works.

MR. SMITH:

Paul Smith, Assistant Deputy Minister, Strategic and Corporate Services.

MR. HARVEY:

Max Harvey, Assistant Deputy Minister of Marine Transportation Services.

MR. GOVER:

Aubrey Gover, Deputy Minister of Labrador and Aboriginal Affairs.

MS MCGRATH:

Marietta McGrath, Executive Assistant to Minister Nick McGrath.

MS TRICKETT:

Wanda Trickett, Departmental Controller for the Labrador and Aboriginal Affairs

Office.

MR. BOWLES:

Ron Bowles, Assistant Deputy Minister of Labrador and Aboriginal Affairs.

MS BARNES:

Janice Barnes, Executive Director of Labrador and Aboriginal Affairs.

MR. ANTLE:

Kevin Antle, Departmental Comptroller for Transportation and Works.

MR. BARFOOT:

I am Scott Barfoot, Director of Communications, Transportation and Works.

MR. MCGRATH:

Okay, thank you very much everybody for coming out.

I appreciate you taking the time after a busy day.

It was certainly a busy day for me.

For everybody else I would like to say thank you for giving up your time

this evening on both sides.

As Clayton mentioned, we will be doing Labrador and Aboriginal Affairs first.

That is the smaller of the two departments.

That way I will be able to excuse the staff from Labrador and Aboriginal

Affairs once we are finished with that.

In saying that, you are certainly welcome to stay if you wish.

Also, this is Estimates and I would appreciate it if those asking questions

would focus on the Estimates. I

really do not want to get into policy.

If you want to get into policy I can either do that in the House of

Assembly, or you can set up a separate meeting with me, and I will do my best to

answer questions. This is Estimates

and I prefer to stick to the Estimates.

In saying that, I turn it back to you, Clayton.

CHAIR:

Okay, before I call for the subheads I would like to ask for a motion to approve

the minutes of the last Government Services Committee meeting which was on April

15. It was for the Department of

Service Newfoundland and Labrador, Government Purchasing Agency, Workplace

Health, Safety and Compensation Review Division, and Office of the Chief

Information Officer, Executive Council.

MR. PEACH:

So moved.

CHAIR:

I will get you now in a second.

Moved by Calvin Peach.

MR. EDMUNDS:

Seconded.

CHAIR:

Seconded by Randy Edmunds. I forgot

my own colleague.

On motion, minutes adopted as circulated.

CHAIR:

I will ask for the subhead for Labrador and Aboriginal Affairs.

CLERK (Ms Barnes):

Subheads 2.5.01 through 2.5.03 inclusive.

CHAIR:

Subheads 2.5.01 through 2.5.03 inclusive.

CLERK:

Do you want the clock?

CHAIR:

Oh yes. By the way, each person

will have

CLERK:

The minister gets fifteen minutes.

CHAIR:

Yes, he is finished so we will do ten minutes.

Actually, it is only you guys so we do not have to worry about the time.

Talking about time, we usually have three hours allotted so hopefully we will be

finished within a three-hour period.

Hopefully we will.

If there is nothing else we can start with you, Paul, or Randy.

MR. LANE:

(Inaudible).

CHAIR:

Oh did you? No, you are finished.

MR. MCGRATH:

Yes, we are going to do Labrador and Aboriginal Affairs so Randy is the critic

for Labrador and Aboriginal Affairs.

CHAIR:

No, we do not need the clock. Okay,

Randy.

MR. EDMUNDS:

I am just going through a few line by line here.

There is not a whole lot there so there will not be a lot of questions.

I do have a few probing questions, status updates.

I am sure it is directly related to the Estimates, Mr. Chair.

Under 2.5.01, Executive Support, 01, Salaries, it shows a decrease from 2013.

A further decrease was in the revised to almost an $80,000 difference in

2.5.01.01.

MR. MCGRATH:

Okay, the explanation for the decrease was where there was a reconfiguration of

Labrador Affairs back to Labrador and Aboriginal Affairs, some of the funding

for Salaries went to Municipal and Intergovernmental Affairs.

Intergovernmental Affairs was within Intergovernmental and Aboriginal

Affairs, so that makes up for the difference.

The salary went into Municipal and Intergovernmental and Aboriginal

Affairs. There was also money there

which reflects savings for a position vacancy.

MR. EDMUNDS:

Okay, and 02, Operating Accounts, it does not show any expenditures there for

Professional Services in 2013-2014.

MR. MCGRATH:

In 2.5 where?

MR. EDMUNDS:

In 2.5.01

MR. MCGRATH:

Subhead 2.5.01, Professional Services?

MR. EDMUNDS:

Yes.

MR. MCGRATH:

That is anticipated external consulting services on issues that may arise during

the year, and that is $6,000. I am

not sure what your question is there.

Because we did not spend anything, is that what you are questioning?

MR. EDMUNDS:

Yes.

MR. MCGRATH:

Okay, the reason there was no spend there, sometimes we budget for Professional

Services if we happen to need them.

This year there was no need for outside consulting services so we did not have

any spending there.

MR. EDMUNDS:

Okay. The reason I ask that is

because of the line just beneath it where there is actually an increase in

Purchased Services. You budgeted

$14,000 and your actual was $8,100, and then you revised again for this year's

budget for $14,000.

MR. MCGRATH:

We saw a savings there due to less spending then was anticipated.

There was a revision there of $8,100.

That reflects projected expenditure from the year-end.

In actuals we saved $3,700, or sorry, $4,400.

We did not spend as much. In

moving the money around we actually came in lower.

MR. EDMUNDS:

Okay. Operating Accounts 2.5.02,

line item 02. There is a marginal

difference there between what you budgeted for last year, what your actual was,

and a proportional increase this year from $377,900 to $441,900.

MR. MCGRATH:

So we are looking at 2.5.02 in Employee Benefits?

MR. EDMUNDS:

Under 2.5.02, line 02, Operating Accounts.

MR. MCGRATH:

On 2.5.02.02 is Employee Benefits.

MR. EDMUNDS:

Okay.

I am going to jump ahead here to 2.6.01.

My question is: What happened to the Intergovernmental and Aboriginal

Affairs Secretariat for this year, there is nothing budgeted?

MR. MCGRATH:

You are gone to 2.6.01, in the Salaries.

MR. EDMUNDS:

The whole

section there has nothing budgeted for this year.

(Inaudible) dissolved?

MR. MCGRATH:

Again, with the revision of the IGA going into Municipal and Intergovernmental

Affairs, all of that salary would go into Municipal and Intergovernmental

Affairs.

MR. EDMUNDS:

Okay.

I will just go back for clarification there, 2.5.02, Purchased Services; you

spent $242,000 but you are looking at a marginal increase of $309,600.

It is 2.5.02 under Operating Accounts, Purchased Services.

MR. MCGRATH:

The revision there of $242,600 reflects the projected expenditure from the

year-end of $89,000 and as of April 15, 2014, the actual for 2013-2014; we did

not consume this projection. So in

actuals at the time we stood in with $233,700.

MR. EDMUNDS:

I think that is all I have on the actual numbers in these Estimates, but I have

a few questions and some of them I might have already asked you.

I have a list of them here.

You have said you may not choose to answer them, there may be a better place,

but a lot of this is status updates.

The first one is

MR. MCGRATH:

As long as they are Estimates, I have no problem answering them.

MR. EDMUNDS:

The first one is on the status of the RFP for Lab Marine Services and why it was

delayed until May 30.

MR. MCGRATH:

Okay, I have already answered that.

I will answer it for you.

Basically, the answer that I gave you the last time was that when we put out

RFPs for contracts, especially as big as the RFP for the Labrador Marine

Services, quite often we get contractors that will come back and have specific

questions. In this particular case

we did have contractors come back and ask questions, so in fairness to all

bidders, what we do is we put an extension on there so that those questions are

shared with all of the contractors and we then give everyone equal opportunity

to get those answers.

MR. EDMUNDS:

I have also asked you about a contingency plan for the proposed breakdown with

The Northern Ranger .

Now, the company says that they may have the engines ready by July; you

are hoping for the end of June. The

question is: What if the company is right and it runs into July before the

engines are installed? What is the

contingency plan?

MR. MCGRATH:

Right now we have the old engines taken out of

The Northern Ranger .

One of the engines is en route, the second one will be en route shortly,

and as soon as they get the first engine in they will start to install that

engine. I have been informed that

The Northern Ranger is quite capable

of running on the one engine. So if

that is the case, what we would do is we would operate

The Northern Ranger with the one

engine and then have the specific crew there to install the second engine en

route.

As you and I just had a discussion, it may be mid-July before you will need her

anyway; but, just in case, I have had conversations with my senior officials to

have a contingency plan in place so the service will run on time.

MR. EDMUNDS:

The engines can be installed without putting her on dry dock?

MR. MCGRATH:

You will need one engine installed and she would have to go into dry dock for

that but then a lot of the work for the second engine can be done while she is

running, and then she may come out for a very short time to do the specific work

that would need to be done in dry dock.

MR. EDMUNDS:

I am hoping that you are right and the company is wrong.

I am just throwing that out there.

The calcium program in Labrador: What was the cost of the program before it was

cancelled?

MR. MCGRATH:

The cost of the calcium program provincially was $600,000.

It was not paying for itself and it was not working, so a budgetary

decision was made to cancel the calcium project.

MR. EDMUNDS:

Who determined that it was not working?

MR. MCGRATH:

We have specialists in place and again, as I say, it was a budgetary agreement

that it is not the dust you see that is dangerous, it is the dust you do not

see, the finer dust you do not see.

It was determined that budgetary-wise it was not worth continuing.

MR. EDMUNDS:

Okay.

On Labrador I am the critic for Labrador and Aboriginal Affairs.

What work is planned for Route 510 from the Quebec border to Red Bay for

2014, for this upcoming year?

MR. MCGRATH:

Right now, during the Easter weekend, actually, I had staff work diligently

through the whole Easter weekend doing quite a bit of maintenance and repair

work there. There will be no

upgrading or paving done on that

section of the highway.

We are concentrating on the upgrade and widening from Red Bay to

Cartwright Junction, and on the other end concentrating as you know, I have a

tender out now for eighty kilometres from Happy Valley-Goose Bay on the other

side of the bridge coming south towards the Cartwright Junction.

We will be having maintenance crews monitoring very closely Route 510 from

L'Anse au Clair to Red Bay, and when the weather permits we will be going in

when we can get hot patch in there and doing repairs as necessary.

MR. EDMUNDS:

Okay.

I do not know if this is a question for the minister, but given the fact we are

down to one Crown Attorney now in Labrador, aside from Lab West

MR. MCGRATH:

The fact that we are down to sorry?

MR. EDMUNDS:

To one Crown Attorney with the justice system, not including Lab West are

there going to be any plans to fix this or to rectify this situation, or are

there going to be further delays in justice delivery to what is already

existing?

MR. MCGRATH:

I would not comment on any Justice questions through Transportation and Works,

nor Labrador and Aboriginal Affairs; but if you would like, I can certainly pass

the question on to the Minister of Justice.

MR. EDMUNDS:

Okay. A few months ago you actually

put out a request for transportation priorities in the districts and we have

submitted what we thought were priorities.

We are just looking for an update on the priorities that you received

from us prior to the Budget.

MR. MCGRATH:

That is a policy question, but I can answer it for you.

What we do is we go out to everybody and we ask what the priorities in

the districts are so that we can form an inventory of the top priorities in the

forty-eight districts throughout the Province.

What we do then is we take all of those priorities plus the work that we as a

department have recognized needing to be done, and we build that inventory.

Then we sit down, myself and the senior officials, and I work with the

budget that I have then to try and prioritize where we feel the money is best

spent.

As you know this year one of the things that we have done is we have started

with larger contracts and getting out larger tenders over larger periods of

time, which the end result hopefully will be that we get more work done for less

money.

MR. EDMUNDS:

Okay. What is the status of the

family resource centre for St. Lewis?

MR. MCGRATH:

Again that would not be a question for Labrador and Aboriginal Affairs.

MR. EDMUNDS:

What is the status of the New Dawn Agreement?

MR. MCGRATH:

That is a policy question, but if you want to be a little more precise because

the New Dawn Agreement is.

MR. EDMUNDS:

Well they are in between Agreement-in-Principle and the final agreement.

I am just looking for an update on the status of where that agreement

lies right now.

MR. MCGRATH:

As you know in 2011, on November 18, I went in to Natuashish and signed the

Agreement-in-Principle then as the Aboriginal Affairs Minister.

We have been working very closely since then with the Innu Nation to get

the finalization of the New Dawn Agreement in place between the Innu Nation, the

federal government, and the provincial government, and will continue on that.

As soon as that is ready to go we will finalize the agreement.

MR. EDMUNDS:

Okay. Has there been any movement

or do you plan to move ahead on the land claims proposals that have been tabled

by NunatuKavut?

MR. MCGRATH:

I will not answer that. That is

definitely a policy question and you know.

What I will say to it is that from an Aboriginal perspective the provincial

government will certainly negotiate, talk with, and consult with the NunatuKavut

Community Council. Until the

federal government recognizes their rights to land claims, then the provincial

government really has nothing to negotiate with them.

MR. EDMUNDS:

Okay, are there any plans to address the fact that the Internet capabilities are

maxed out on the North Coast and the South Coast?

MR. MCGRATH:

Again that is a question for IBRD.

We talk about it on a regular basis and identifying it is something that we have

already done. We realize the

incapability there. That would be a

question for the Department of Innovation, Business and Rural Development.

MR. EDMUNDS:

Okay, I just have one more question.

Prior to finalization of the Nunatsiavut Land Claims Agreement I think

all three governments or levels of government signed off on a land use plan and

that plan is still being discussed.

I am just wondering what the holdup is with the finalization of the land use

plan?

MR. MCGRATH:

That is very much a policy question because we are working on policies.

I did have a meeting with President Leo and the former Premier

Dunderdale. When Premier Marshall

came in as the leader I also had a meeting with President Leo to bring him up to

speed on the land use agreement.

This is something that we are working our way through.

There is a process, but we are working our way through it.

MR. EDMUNDS:

It is to my understanding that the courts have ordered one plan and the Province

is looking at two; one for Labrador Inuit Lands and one for LISA.

This is after the fact that everyone signed off on one land use plan.

That is the reason I am asking for an update on that.

MR. MCGRATH:

It is a policy. Aubrey, I am going

to turn that over to you if there is an update you can give.

I would not want to get into too much detail.

MR. GOVER:

Well in fact, Minister, we are having a meeting with the Nunatsiavut Government

in Nain on Thursday to discuss working towards a single land use plan for the

entire Labrador Inuit Settlement Area. That

work is ongoing. Subject to weather

and flights we will be in Nain on Thursday.

MR. EDMUNDS:

Okay, thank you.

CHAIR:

That is it?

MR. EDMUNDS:

Yes, that is it for me.

CHAIR:

Okay, Minister

MR. MCGRATH:

Excuse me Clayton if I could just make a final comment on that.

We have made quite a bit of progress in working and collaborating with

the Nunatsiavut Government there. I

am pleased that things are moving forward.

CHAIR:

Randy did go into subhead 2.6.01 there, Intergovernmental and Aboriginal Affairs

Secretariat. That comes under your

department, correct?

MR. MCGRATH:

That would now be under Municipal and Intergovernmental Affairs.

CHAIR:

Okay, so what we called for in the beginning is correct.

I did not stop Randy when he asked a question because I was assuming that

we may have missed it, but that is fine, the subheads that we asked.

OFFICIAL:

That was part of restructuring.

CHAIR:

Yes, okay. Now I will call for the subheads.

We are finished with Labrador and Aboriginal Affairs.

CLERK:

Subheads 2.5.01 through 2.5.03 inclusive.

CHAIR:

Subheads 2.5.01 to 2.5.03.

On motion, subheads 2.05.01 through 2.5.03 carried.

CHAIR:

Shall the total carry?

On motion, Department of Labrador and Aboriginal Affairs, total heads, carried.

CHAIR:

Shall I report the Estimates of the Department of Labrador and Aboriginal

Affairs carried without amendment?

All those in favour, aye'.

On motion, Estimates of the Department of Labrador and Aboriginal Affairs

carried without amendment.

CHAIR:

Thank you, Minister, for that one.

MR. MCGRATH:

Thank you Randy.

CHAIR:

They can leave, yes, sure.

MR. MCGRATH:

Okay, thank you very much.

CHAIR:

Okay, we will do Transportation and Works.

We will call for the subheads for Transportation and Works.

CLERK:

Subheads 1.1.01

CHAIR:

Subheads 1.1.01 through to?

CLERK:

through 4.3.03 inclusive.

CHAIR:

To 4.3.03 inclusive.

Paul, are you ready?

MR. LANE:

Yes. Okay, thank you.

Minister, under 1.2.02, under Salaries, Operating Accounts, Purchased Services.

MR. MCGRATH:

Okay.

MR. LANE:

In 2013-2014 you had budgeted $188,000, it came in a little bit over, just

slightly, no big deal. Now you are

down to $136,300 for this year. Why

the reduction of $60,000 or $55,000, whatever?

MR. MCGRATH:

Okay, the budget decrease relates to the reduction initiatives decisions and to

eliminate interdepartmental billings.

What we did basically is we had departments that were billing back and

forth to one another and we found that there could be a savings there, so now

rather than billing back and forth we built it in.

There is no billing back if I were to send something to the Queen's

Printer, for example, they would send me a bill and then it would be invoiced

and I would pay it that way; now the billing is cut out.

MR. LANE:

Okay. Is that a reduction in an

actual position or something like that?

MR. MCGRATH:

No, basically it just cut out red tape.

MR. LANE:

No position? It is just a more

efficient way of doing things.

MR. MCGRATH:

That is correct.

MR. LANE:

Okay, good.

Now we are going to move over to 2.1.01, again Purchased Services.

MR. MCGRATH:

You are going back now, are you?

MR. LANE:

No, I am going ahead: Road Maintenance, 2.1.01, Administration and Support

Services. Under Purchased Services

you budgeted $523,000 last year but actually went significantly over, to

$799,000, and now we are back down to $490,000.

There was a large expenditure that occurred last year that was not

budgeted for.

MR. MCGRATH:

Basically that was training staff for the lift bridge in Placentia.

MR. LANE:

Okay. It was $260,000 to train some

staff on a lift bridge?

MR. MCGRATH:

Sorry, and also the electrical costs for the lift bridge itself.

MR. LANE:

Okay. I was going to say that is

some training.

We are going to move over now to Maintenance and Repairs, 2.1.03, Salaries: $7.4

million is what was budgeted and it was actually $9.12 million and this year

$8.6 million. Salaries were up

quite a bit last year and it is going to be reduced somewhat this year but still

higher than what was budgeted last year.

MR. MCGRATH:

Basically the reason for the increase there is summer maintenance on the roads

and there was a small amount for the payment of the $1,400 credit paid during

Christmas, the signing bonus, but most of it is through summer maintenance

projects.

MR. LANE:

So additional summer maintenance than what you had budgeted for?

MR. MCGRATH:

That is correct, yes.

MR. LANE:

Okay.

On that same

section 01, Property, Furnishings and Equipment, you had budgeted

$8,300 but actually spent $41,000 and now we are back to $8,300.

So there was like a $33,000 bump last year.

MR. MCGRATH:

That one, I am not quite sure why that is.

Paul, do you know right off hand; if not, we will get an answer for you.

MR. SMITH:

The nature of Property, Furnishings and Equipment generally is harder to predict

in the precise year what you need, so there is some miscellaneous equipment and

whatnot associated with the programs.

That is simply a situation whereby in that particular year there was a

demand for more property, furnishings and equipment of various types.

I am not sure exactly right now what types would be into that, but that

is simply the explanation for it.

MR. LANE:

If we could get the details I mean, it is five times what was budgeted and now

we are back down to what it was before.

If we can get that, it would be great.

Under 09, Allowances and Assistance, $100,000 budgeted, last year you only spent

$25,000 and we are budgeted $100,000 again.

So you only used one-quarter of what was budgeted last year.

MR. MCGRATH:

That has to do with damage claims.

We put $100,000 out there for the budget for damage claims and fortunately, this

year, damage claims were lower and we only used up $25,000 of that.

MR. LANE:

What do you mean by damage claims?

MR. MCGRATH:

Damage claims could be damage that we do to someone else's property.

MR. LANE:

With your equipment and stuff, is it, you mean?

MR. MCGRATH:

Yes.

MR. LANE:

This is not like somebody hitting a pothole, and then going after you and suing

or anything like that?

MR. MCGRATH:

It could be that if they can prove it

MR. LANE:

It could be that too?

MR. MCGRATH:

that we were actually at fault.

MR. LANE:

Okay.

MR. MCGRATH:

Yes. It could be a snow drift

hitting your garage door.

MR. LANE:

Okay. Judging by all of the

potholes around, it is going to be up this year.

Subhead 2.1.04, Snow and Ice Control, under Supplies, $25.6 million budgeted,

but $29.3 million was the actual, and now we are back down to $25.9 million.

There is about a $3.5 million bump there.

MR. MCGRATH:

That is all due to the cost of salt.

It is really difficult to judge exactly what salt is going to cost and

throughout the year, there was an actual increase.

MR. LANE:

Okay.

They are all done on separate tenders, aren't they?

Do you tender out for salt each highway depot or is it done one big

MR. MCGRATH:

No.

MR. LANE:

It used to be done by each.

MR. MCGRATH:

It used to be, but part of the spend analysis is if we put it out in one bulk

and that is one of the ones that we did this year, hoping to decrease the cost.

MR. LANE:

Okay, but it actually went up instead of down right?

MR. MCGRATH:

It is volume rather than price that is driving it up.

We bought more salt this year.

MR. LANE:

You bought more, so there was more volume?

MR. MCGRATH:

Yes.

MR. LANE:

Okay.

Still under Snow and Ice Control, 02, Revenue, you were expecting $3.4 million

last year and again this year, but last year you only had revenue of $2.8

million. There was a $600,000

shortfall on what was projected.

MR. MCGRATH:

One second now, Paul. Which

section

are you in now?

MR. LANE:

I am still under Snow and Ice Control, 2.1.04, under provincial revenue.

You had predicted $3.4 million last year and again this year, but you

only had $2.8 million. So there was

a $600,000 revenue shortfall there from what was predicted.

MR. MCGRATH:

Basically, the revised reduction is in revenue and that is due to unanticipated

decrease in revenue from community councils for their snow clearing, their salt,

and sand purchases.

MR. LANE:

So they did not use as much or they purchased it somewhere else or whatever?

MR. MCGRATH:

I do not know if they purchased it somewhere else or not.

MR. LANE:

You do not know? They just did not

purchase as much from you.

MR. MCGRATH:

They did not purchase as much from us.

MR. LANE:

Okay.

Moving on to Building Maintenance, Operations and Accommodations, 2.2.01, under

Salaries you had budgeted $4.2 million and it actually came out to be $4.5

million, closer to $4.6 million; we are up to $4.5 million.

So there are some additional positions, I guess, hired last year than

what you anticipated and you are going to keep them, is that it?

MR. MCGRATH:

No, basically what that is, is severance pay and the $1,400 bonus.

MR. LANE:

Okay, so that would have been severance from when there were positions people

laid off and so on, you paid them out severance.

MR. MCGRATH:

Almost $270,000 was in severance pay and the rest would have been the $1,400

bonuses.

MR. LANE:

Okay.

Operating Accounts, 02, $625,000 projected, the actual was $700,000 and this

year we are down to $481,000.

MR. MCGRATH:

Where are you now? What line

number?

MR. LANE:

Line 02. We are still under 2.2.01,

Administration, 02, Operating Accounts.

It was $625,900 projected, actual was $700,700, this year you are

predicting $481,000. There is a

decrease of a couple of hundred thousand dollars there, a little more.

MR. MCGRATH:

The big difference there is due to increased travel requirements and increased

communication costs. It is due to

the level of transportation and communications costs.

They are basically in-line with the other fiscal years.

MR. LANE:

That is why it went up to $700,000.

MR. MCGRATH:

Yes.

MR. LANE:

This year you are down to $481,000, so you are not going to do as much

travelling or communications this year.

MR. MCGRATH:

What we have there, we have a reduction resulting from the procurement that we

have been working on over the past year with the procurement project.

This is retention of consulting firms to identify areas where

efficiencies could be identified.

We are hoping to see some significant savings there.

Also, there was an increase in the meal allowance rates.

MR. LANE:

Okay.

Subhead 2.2.02, Building Utilities and Maintenance, under Transportation and

Communications you had budgeted $74,200, the actual came in at well, not

double, but $53,000 more, this year you are budgeting $80,000.

Why the increase last year?

MR. MCGRATH:

We had a lot more travel, a lot more increase in travel and communication costs

for staff. There was a lot of

training done this year, and the necessity there was to have staff travelling

for different

MR. LANE:

What type of training would that involve?

MR. MCGRATH:

What examples could I use here?

MR. LANE:

Is it like safety training or stuff like that?

MR. MCGRATH:

Yes, mostly safety training. One of

the best examples I could use would be the water bombers.

The new water bombers all had to be completely retrained.

MR. LANE:

Okay.

MR. MCGRATH:

They have to go out of Province for that.

MR. LANE:

That would be out of Province for that.

Okay.

MR. MCGRATH:

It may not all be out of Province travel, but some certainly would.

MR. LANE:

Some could, yes, because it would not be available here.

MR. MCGRATH:

For the water bombers, they have to go to North Bay, Ontario.

MR. LANE:

It makes sense. Yes, okay, that is

fine.

Just a couple of lines down, Purchased Services, $34.6 million budgeted, actual

was $33.3 million. You spent about

$1.3 million less than budgeted.

MR. MCGRATH:

Yes, most of that sorry?

MR. LANE:

First of all, you spent about $1.3 million less than what was budgeted.

MR. MCGRATH:

Yes. Most of that is through our

leased properties, and leases have expired.

We feel it was not necessary to renew all of the leases, and that is the

savings we saw through that.

MR. LANE:

Okay.

MR. MCGRATH:

It may have downsized in some departments, or in the leased properties that we

had.

MR. LANE:

Okay. So you have more leased properties this year, because this year it is

jumping up to $35.8 million. There

is a $2.5 million increase for this year.

MR. MCGRATH:

That is the Captain William Jackman Hospital, and the Hoyles-Escasoni.

MR. LANE:

Okay.

Under this Building Utilities and Maintenance, is any of this related to this

building, Confederation Building, and the ongoing projects for this building,

the exterior and

MR. MCGRATH:

No, that will come up later.

MR. LANE:

That will come up under another category?

MR. MCGRATH:

Yes.

MR. LANE:

Okay.

Projected revenue, a couple of lines down.

You projected $1.4 million, the actual is $950,000.

That was $460,000 less than projected, yet this year you are projecting

$1.73 million. Why down last year

and why up even more this year, given it was down last year?

MR. MCGRATH:

It went down last year because we did not implement a program that we had talked

about implementing last year with the parking meters.

So once that goes into implementation, you will see that increase come on

next year.

MR. LANE:

Okay. Can you explain to me, like

parking meters for what?

MR. MCGRATH:

The parking meters on the public parking lots that the provincial government

owns. We are looking at bringing

them on par with the rest of the Northeast Avalon parking meters.

So the fines for being parked in expired parking meters will be on par

with the rest of the meters within the Northeast Avalon.

MR. LANE:

The fines are going to go up on meters at government buildings?

MR. MCGRATH:

That is correct.

MR. LANE:

That is hospitals and all government buildings and whatever, is it?

MR. MCGRATH:

No, I think it is just this building right here.

The hospitals, for example, are on a different system now.

MR. LANE:

Okay. When you say in line with the

rest of the Northeast Avalon, we were charging lesser fines here in this

building

MR. MCGRATH:

Yes, ours were much less here.

MR. LANE:

than you were doing at some other government building?

MR. MCGRATH:

Downtown, for example.

MR. LANE:

Is that right?

MR. MCGRATH:

Yes.

MR. LANE:

Pardon?

MR. MCGRATH:

With the city, so we want to come online with the City of St. John's.

MR. LANE:

Okay. So it is not a case of our

buildings here having one fine, our building in Clarenville having a different

fine. It is just that we are

raising the fines for government parking lots to coincide with, say, an expired

meter on George Street. Is that the

idea?

MR. MCGRATH:

Sure.

MR. LANE:

Or Water Street, anywhere, but basically a higher fine for when the meter

expires.

MR. MCGRATH:

Yes, and it is just bringing it in-line with the rest of the Northeast Avalon.

MR. LANE:

Yes, with what the city is doing.

Okay.

Not to belabour it too much, but when we look at that amount that is a pretty

significant piece of change here.

Those meters would be at all government buildings, it is not just this one.

For example, we are projecting we are going to collect $1.7 million here

on this parking lot this year in fines?

MR. MCGRATH:

No, it will not be all fines, Paul.

I should let you know that some of that will be cost recovery on the Offshore

Safety and Survival Centre through the Marine Institute.

We are working on some stuff there that we should see some cost recovery.

MR. LANE:

Okay, if you could explain that one to me.

That is out in Foxtrap, right?

MR. MCGRATH:

Yes.

MR. LANE:

Can you explain to me how we would be getting money for what?

Recovering costs on

MR. MCGRATH:

We are looking at some amalgamations.

MR. LANE:

Of what, programs or?

MR. GRANDY:

The Foxtrap facility, while it is a Marine Institute operation, right now TW is

responsible for maintaining the building.

We are in discussions right now with Memorial University to be able to

recover our costs of operating that facility on their behalf through their

programs. So we are in discussions

now with Memorial University on ways that we can do that.

Right now, while it is a MUN program

MR. LANE:

Yes, it is our building.

MR. GRANDY:

It is our building. Transportation

and Works is operating the building.

It is coming out of our costs, out of our budget.

So we are trying to discuss with them to get that money from their

program as revenue to offset our operating costs.

MR. LANE:

In order to do that, I will ask the question, does that mean if I am doing a

program like firefighting, it used to be, I suppose it still is.

Firefighting used to be done out in Foxtrap.

In order to recoup that cost the university does not have money trees

or whatever, so I would assume they would have to tack that onto the program.

So if I am doing a firefighting course now, then my tuition rates are

going to go up I am just saying in theory in order for the department to

recover those funds. That would be

the only way available would be through the students, wouldn't it?

MR. GRANDY:

That is part of our discussion with them as to what impact that would be on

their programs, but for the most part the programs offered out of that facility

are for the offshore. So I would

not be able to speak to your question on whether they do firefighting up there

still or not, but the vast majority of the programs operated out of that

facility are at the offshore survival training centre.

It is those programs through the Marine Institute.

MR. LANE:

Okay, but the programs, whether it is firefighting or if it is offshore, if

there was an increase and it had to be recovered, is it companies that are

putting people are we charging, say, Hibernia and they are putting their

company through or are these individual people?

In other words, what I am looking at is a student who is not getting

sponsored or paid for by a company, his or her tuition rates are going to go up

because we need to recover this money.

MR. MCGRATH:

That is a decision that would be made by MUN.

Those decisions would be entirely up to the university.

MR. LANE:

How they recover the money is their issue, the bottom line is you want to

recover your funding?

MR. MCGRATH:

Yes.

MR. LANE:

Okay.

Under 2.2.03, Rentals, $65,000 was budgeted, only $7,000 was actually spent,

that was the actual, and we are budgeting $65,000.

Obviously, we did not rent that was under Professional Services, under

Rentals. Some consulting that you

were going to get done did not happen last year but you are predicting it will

happen again this year. Is that

basically?

MR. MCGRATH:

Well, as I commented, in a lot of the leases that will be expired we will not

need as much consulting fees. So

that one contributes to the other.

MR. LANE:

Can you explain to me what that has to do with a lease?

MR. MCGRATH:

If we are having less in the earlier column, I said that a lot of leases are

coming up for expiration

MR. LANE:

Yes.

MR. MCGRATH:

so we are not leasing as many properties, therefore we will not have as much

consulting done with less properties, so we will see that savings there.

MR. LANE:

Yes, but you are budgeting the same amount.

You are budgeting the exact same amount; it is just that last year it was

down. There must be some lease or

something that did not happen that now is happening.

MR. MCGRATH:

Yes. We only used $7,000 this year,

as you can see, but the $65,000 we will keep there in anticipation that we may

need consultants for adapting a space.

MR. LANE:

Again, I am just trying to understand.

In terms of renting a space, what would a consultant have to do with

renting a space? You are renting a

space, you get a lease, and you pay the money for it.

Why?

MR. MCGRATH:

Quite often we will call on a consultant to give us a layout.

MR. LANE:

A layout of what?

MR. MCGRATH:

Of the space that we are looking at renting.

We will get a consultant to come in to determine how much space we will

actually need.

MR. LANE:

You have an office, to use an example, you are going to set up an office

somewhere and you are saying, okay, we have five employees or whatever, and then

it is either going to be open to the public or it is not.

Then there is the need for a receptionist or no receptionist and a

washroom, and all of that good stuff.

We have to pay a consultant basically to say here is the size of the

office you need and the number of spaces or whatever.

Is that what you are telling me?

MR. MCGRATH:

Quite often we will do that because in the department it is very difficult to

retain the engineering staff and consulting staff to be doing a lot of that

in-house. We try our best, but

quite often it is cheaper to go outside and hire a consultant.

MR. LANE:

All right, it just seems a little odd to me.

Maybe it depends on the size of the space, the number of people or

whatever, but I think if you were to look at a lot of private businesses and so

on, when you set up an office you do not necessarily spend that kind of money

for a consultant to tell you how many cubicles or offices you need and whatever.

Unless there is something else I am missing here, I just find that a

little unusual in terms of spending money.

Salt Storage Sheds, 2.2.04, under Operating Accounts, 02.

So $1.4 million budgeted and spend last year.

This year we are going up to $2.4 million.

There is a $1 million increase under Operating Accounts, Salt Storage

Sheds. That is Capital though isn't

it?

MR. MCGRATH:

Yes.

MR. LANE:

Okay. You must be putting up some

new buildings or something are you?

MR. MCGRATH:

Yes, we have to replace most all of our salt storage sheds.

I think there are sixty-two throughout the Province.

We have been doing so many each year.

MR. LANE:

Okay.

MR. MCGRATH:

Because as you know, now the salt has to be covered.

There has to be a deck and everything for it, so we are working through

that process.

MR. LANE:

Okay. That makes total sense, but I

guess the question would be if you were doing $1.4 million, now you are doing

$2.4 million if you are doing so much every year, why are we upping it a

million, almost doubling it this year?

MR. MCGRATH:

Trying to get through it, basically.

MR. LANE:

Just trying to

MR. MCGRATH:

Increasing the amount that we are doing.

MR. LANE:

Okay.

When you are doing this, I would assume you look at the condition of all of the

buildings, you could do a priority list in terms of what is in need of the most

repair and you pick it off that way.

Is that generally the?

MR. MCGRATH:

That is correct.

MR. LANE:

It seemed like the rational approach, okay.

All right, moving on; 2.3.01, Equipment Maintenance, under Purchased Services we

budgeted a little over $1 million, only spent $650,000.

So about a $400,000 savings or money not spent.

This year we are budgeting $821,000.

Why the decrease over the budgeted amount, and then of course this year's

number?

MR. MCGRATH:

Because we were very good and went out and got better rates on our insurance.

MR. LANE:

Insurance, okay.

MR. MCGRATH:

Yes.

MR. LANE:

We got better rates last year, and now they are going to try to get some of

their money back this year. Is that

the gist of it?

MR. MCGRATH:

Again, that is something that changes all the time.

MR. LANE:

Yes, once they have you then they can probably up it a little bit.

Okay. That is all insurance,

that is what that is?

MR. MCGRATH:

That is all insurance, yes. That is

the vehicle fleet insurance, though.

MR. LANE:

Okay.

Is vehicle fleet insurance I would assume that is all tendered through the

Public Tender Act, right? That does

not yes.

Under 2.3.02, Maintenance of Equipment, Purchased Services, budgeted last year

of $766,000, the actual spend was $1.5 million.

So that is double, or pretty much almost double.

MR. MCGRATH:

Basically, a lot of that is increased cost in getting equipment repairs done.

Quite often trying to retain our mechanics is very difficult, especially

in the economic boom right now, and we have to get work done outside of the

government shops.

MR. LANE:

Okay. So this is all outside of our

own employees. You have to sub it

out to different companies and so on.

MR. MCGRATH:

Yes, trying to retain the employees is very difficult there in certain areas in

the Province.

MR. LANE:

Yes. That is a big jump.

We had to use a lot more of them obviously.

This year you are budgeting $1.06 million.

Does that mean we are not planning as much maintenance?

Or does it mean that we have more employees who can actually do the work

this year than we had last year and therefore we are not anticipating spending

as much? Why the projection?

MR. MCGRATH:

Again those are numbers that are budgeted numbers.

We are hoping to get as much in-house done as we possibly ca, but that

could change depending on the calibre of work that will need to be done.

MR. LANE:

Yes. I do understand to a great

degree I suppose the rationale. I

can seem to recall in reading the Auditor General's report, and I stand to be

corrected on it, there were some issues with a lot of stuff being put in perhaps

for emergency under the department.

If something breaks down and you need it on the road, you need to get it fixed

as soon as possible. Therefore a

lot of times it was not tendered out or maybe not three quotes received.

Does that happen a lot? I can

understand perhaps in some of the more remote areas where you may be limited in

the number of contractors who are out there, mechanics who can do the work.

In the Greater St. John's area when there are perhaps more of them, do

you generally say every time we are in a pinch we are going to this particular

contractor and you use him or her all the time?

MR. MCGRATH:

In the procurement process we will try to negotiate with contractors and you

used the example of the greater metro area, that we are using the same one again

to get a better price. If you are

out in a remote area, a rural area and you lose your exhaust system, for

example, or your driveshaft, that would be considered an emergency and you may

have to avail of emergency for that.

MR. LANE:

Yes, but as best we can around here we do try to tender it out I guess.

MR. MCGRATH:

Yes.

MR. LANE:

In terms of that, sticking with the tender for a second, have you considered or

do you have it in place to say, in terms of the tenders, we will have a

tendering process whereby we put out for bids and say in the case of an

emergency, at any given time, put in a bid and then we will always use you for

the rest of the year, type of thing, based on your low bid.

Is that how it is done now?

MR. MCGRATH:

Yes, we always had that clause.

MR. LANE:

Okay. The only times that we see an

exception of that really is in the remote areas where you have to get who you

can and that is it.

MR. MCGRATH:

Yes.

MR. LANE:

Okay. Under 02, Revenue, you had

anticipated $350,000 in provincial revenue, but only got $25,000, and this year

$50,000. What was the big loss in

revenue?

MR. MCGRATH:

Fuel costs were one thing and vehicle maintenance.

MR. LANE:

Under revenue?

MR. MCGRATH:

Sorry, Paul. You are on M27,

Related Revenue.

MR. LANE:

I am under 2.3.02, Maintenance of Equipment, provincial revenue.

It said $350,000 is what you had anticipated last year, but you only had

$25,000. Now this year you are only

anticipating $50,000. There is a

big source of revenue gone there somewhere.

MR. MCGRATH:

Yes, and that was a reduced revenue that we were receiving from other

departments for vehicle repairs.

MR. LANE:

Okay, why aren't you receiving it anymore?

They are doing it themselves or what?

MR. MCGRATH:

Where do we stand on that Gary? We

are trying to maintain as much of our own as we possibly can.

MR. LANE:

You were expecting other departments to come to you to repair their vehicles and

you would charge them for it. That

did not happen because they were going out to other private contractors and

getting the work done instead of coming to you?

You did not have the employees probably.

MR. MCGRATH:

It is a capacity thing.

MR. LANE:

Okay, it all makes sense. It all

adds up after a while.

I will keep going. Tom, are you?

MR. OSBORNE:

Carry on until you are ready.

MR. LANE:

All right. Subhead 2.3.03,

Equipment Acquisitions, under Property, Furnishing and Equipment, last year you

budgeted $4.1 million, spent $4.2 million, which is really no big deal in the

big scheme of things. This year you

are planning on spending $8 million, which is not quite double but almost

double, as to what you did last year.

MR. MCGRATH:

That increase there is a one-time funding reduction that occurred last year.

Basically we would allot so much money for new vehicles every year.

Last year we did not do that.

Now we will go back to it.

MR. LANE:

Okay, so if we were to go back then to say, 2012-2013, we would have seen a

number at around $7.5 million, $8 million or whatever.

MR. MCGRATH:

Yes.

MR. LANE:

Okay. Last year as a restraint

measure you did not purchase much and now spending is up there again.

That is all vehicles, is it?

MR. MCGRATH:

And heavy equipment.

MR. LANE:

Heavy equipment. Just a general

question around that, how often do you replace vehicles?

Do you have a standard template that says after X number of years they

are replaced automatically? Is

there a vehicle replacement plan is what I am asking?

MR GOSSE:

Our target on our heavy equipment, and we will focus on the plow trucks, is a

maximum of twelve years old and we have over 300 in the fleet.

There is a certain percentage that we roll over every year in order to

keep our fleet at twelve years or newer, which is kind of the industry standard

on a piece of heavy equipment like a plow truck.

On our loaders and other heavy equipment along those lines, twenty years is

about the industry standard so that is the goal we target there.

Then on light vehicles I believe it is seven years or 200,000 kilometres,

and you take that out of your fleet and renew it.

There are standards that we work around and try to achieve.

MR. LANE:

Okay, so there are these established standards.

You have somebody then, whether it is yourself, Gary, or whoever, who

sort of has a flow chart or something for lack of a better term perhaps, and

looking at okay this is all of our equipment, the inventory, this is how old

it is so this needs to be replaced and then you try to stick to that.

Is that the idea?

MR. GOSSE:

We have an equipment management system so we can track the ages of all our

equipment.

MR. LANE:

It is all on the computer?

MR. GOSSE:

Yes, correct.

MR. LANE:

In terms of our fleet, is the fleet in good shape within those standards?

Are we behind? Are we doing

better than others?

MR. GOSSE:

Our plow trucks are meeting the twelve-year-old cycle for replacement.

MR. LANE:

Okay, so what about the other ones?

MR. GOSSE:

Some of our heavy equipment is a little older than twenty years but we are

working on that.

MR. LANE:

Okay. With the twenty years, if we

go past the twenty years and what have you, are we getting into potential safety

issues and stuff like that?

MR. GOSSE:

Once we get beyond the twenty years then it cost us more to keep them safe.

We do not use them if they are not safe.

If they are not safe we take them out of the fleet anyway.

What it does, once they get to a certain age, and twenty years seems to

be the right number for heavy equipment, it costs more to keep them safe for use

on the highway.

MR. LANE:

Yes, because everything starts going, right?

MR. GOSSE:

Correct.

MR. LANE:

Yes, okay. Well you have a

replacement plan. That is a good

thing.

Total: Maintenance of Roads and Buildings, it was $161 million budgeted; $170

million was the actual this year, now $171 million.

So there is a $10 million increase there in terms of the Total:

Maintenance of Roads and Buildings put in for this year, right?

MR. MCGRATH:

Yes.

MR. LANE:

In terms of that, what would necessitate you could argue it is good, we are

going to put more money into maintenance of roads and buildings and so on, but I

guess it is just part of the budgetary process and everything here, given the

fact that we would be running a deficit and so on.

One question, why would you spend more, right?

MR. MCGRATH:

Yes, and if you go down through the list here, you can see there are a number of

things here that relate to that extra $10 million.

When you are talking $161 million, $10 million is a very small number of

an increase.

MR. LANE:

Yes, okay.

In terms of the roads portion of that, I am not seeing it here per se, maybe it

is somewhere else, but it does say roads and buildings.

How much additional money went into roads this year versus?

MR. MCGRATH:

That is later in the, as you work through that.

MR. LANE:

That is later, even though it is covered here.

Okay.

Tom, are we still good or do you want to?

MR. OSBORNE:

Whenever you are ready.

MR. LANE:

It does not matter to me. I will do

a couple more and then we will move on.

Subhead 3.1.01, Salaries, under Supplies you budgeted $120,000, you spent half

of that, and this year we are going back up to $120,000 again.

MR. MCGRATH:

Again, we budgeted to $120,000.

This particular year we happened to need less a requirement for engineering and

drafting supplies. We anticipate

next year we may need engineering and drafting supplies again, so we budgeted

for that.

MR. LANE:

Okay.

Purchased Services, $39,000 budgeted last year, again this year, but last year

the actual was $104,000. That is a

$65,000 increase, which is more than double, for sure yes, triple.

MR. MCGRATH:

The increase there was for repairs to equipment, and also there were electrical

costs for installing traffic installations.

MR. LANE:

I am sorry, for installing?

MR. MCGRATH:

Traffic installations, when you are putting in new lights, for example.

MR. LANE:

Traffic lights?

MR. MCGRATH:

Yes.

MR. LANE:

Where would we be putting in traffic lights?

That is usually in municipalities, isn't it?

MR. MCGRATH:

Not necessarily. Gary, where

MR. LANE:

Where would we do traffic lights, I am just wondering?

MR. MCGRATH:

If you come down to

MR. LANE:

That we would be responsible for?

MR. GOSSE:

We have traffic lights on the Torbay Bypass, for example.

That is two new installations just into the system.

We have them in CBS, we have the lights on the Harbour Arterial.

MR. LANE:

Okay.

While you mentioned the Harbour Arterial, I am not sure if it falls under here

or not, but just as a general question.

Is there any particular reason why, when you are on the Harbour Arterial

say you leave Mount Pearl and you are driving down, the first half of the

lights are off, they are never on,

and then you get to a

section where every second light is on.

I can see that may be a cost savings, but why are you driving in total

darkness for the first

section and then it gets light as you get closer towards

the? Is that a cost-saving

measure?

MR. GOSSE:

No, it is not a cost-saving measure.

There is a short there underground somewhere.

We could not find it in the winter because everything was frozen in the

conduits. So, we are having our

contractor and part of this cost is associated with that.

We are having our contractor go back again now to try to find that short.

There are two different circuits there.

One comes from the east, one comes from the west.

Obviously, the one on the west is the one with the short.

MR. LANE:

Okay.

MR. GOSSE:

We have just been unsuccessful

MR. LANE:

So you are going to be looking at

MR. GOSSE:

Absolutely.

MR. LANE:

Okay.

MR. GOSSE:

We tried repeatedly over the winter.

MR. LANE:

All right, that is good to know. It

just dawned on me; I thought I would throw it in there because I have actually

had a couple of constituents who asked about that.

Property, Furnishings and Equipment, $25,900 budgeted last year, again this

year, but last year only $1,900 spent, so a savings of $24,000.

Again, that was just part of the restraint in the last budget, is that

MR. MCGRATH:

Well, basically we did not need it.

It reduced requirements for engineering and lab equipment is what that was.

We did not need it, and we passed the savings on.

MR. LANE:

Okay. So this year you are going to

need it again.

MR. MCGRATH:

Well, we budget for it. We do not

know last year we looked and we did not need to replace it, but you need to

budget for it just in case.

MR. LANE:

Yes, just in case you need to.

Moving on down to 3.1.02, Project Management and Design, under Purchased

Services, $2.7 million was budgeted, spent $2.8 million, actually it was less

than a million, but this year $3.2 million.

Basically, we spent about $100,000 more last year.

This year it is going to be up another $400,000-plus under Purchased

Services. What services are you

going to be purchasing that you did not purchase last year?

MR. MCGRATH:

Most of those extra costs came from higher than anticipated advertising printing

costs for putting (inaudible).

MR. LANE:

That was what happened last year, the slight bump?

MR. MCGRATH:

Yes.

MR. LANE:

What about this year, it is going up to $3.2 million?

MR. MCGRATH:

That is the building insurance.

MR. LANE:

The building insurance.

MR. MCGRATH:

Our building insurance is going up.

MR. LANE:

Okay. Back there the vehicle

insurance went up, and this year now the building insurance is also going up.

MR. MCGRATH:

Yes.

MR. LANE:

Is that the same insurer for vehicles and buildings, by the way?

MR. MCGRATH:

Again, it goes out on tender.

MR. LANE:

Does that go out separately? Would

you do one tender for vehicles and a separate tender for buildings, or do you do

one? I know you are into bundling

now these days. Why would you not

bundle all the insurance in a tender and save money that way, or try to?

MR. MCGRATH:

Paul, you would have to check with Finance.

They do all of the tendering for insurances.

MR. LANE:

They do all the tendering for insurance.

MR. MCGRATH:

We can find out for you, if you would prefer.

MR. LANE:

Yes, okay.

Yes, because I guess it would include all vehicles.

You would be responsible for more there would be more vehicles in the

system than falls in your department

MR. MCGRATH:

Definitely.

MR. LANE:

but all the buildings do fall under your department, right?

MR. MCGRATH:

No, not necessarily. Once a

building is commissioned I will use a hospital, for example.

Once a new hospital is commissioned, and I will use the one in my

district in Labrador West, when we commission that over now later this summer

that goes into Health.

MR. LANE:

To the health care authority.

MR. MCGRATH:

So they are responsible then.

MR. LANE:

Okay.

MR. MCGRATH:

We get it back when they are finished with it.

MR. LANE:

There you go, it is their worry then.

So 3.2.02, that is pre-engineering for future road projects.

Under Purchased Services you budgeted $40,000, only spent $15,000 and

this year we are up to $40,000 again.

MR. MCGRATH:

Sorry, Paul, can you give me that question again?

MR. LANE:

Yes, no problem. It is under

3.2.02, the pre-engineering work for road projects.

Under Purchased Services, $40,000 was what was budgeted for last year and

again this year, but last year you only spent $15,000, so there is a $25,000

differential there.

MR. MCGRATH:

Again, that was where we did not purchase as many, so the cost on insurance went

down.

MR. LANE:

Did not purchase as many what?

MR. MCGRATH:

I am sorry, vehicle rentals; we had lower purchased services requirements.

We did not go through as many rentals as we normally would go through.

MR. LANE:

Maybe I am a little confused here.

What it says in the explanation here is, Appropriations provide for

pre-engineering work for future road projects.

That does not say anything about vehicles.

So, I am wondering why we are talking about vehicles, unless I am missing

something here.

MR. MCGRATH:

When we are out doing engineering work, we quite often may rent vehicles to go

out there. There was less work done

this year, so we had less reason to rent the vehicles to be out there.

MR. LANE:

Okay, I got you. So we have a fleet

of vehicles, but, in addition to our fleet of vehicles, we are also renting

vehicles besides that.

MR. MCGRATH:

At times, yes.

MR. LANE:

I am just trying to understand how it all works.

Why would that happen, because some of your vehicles break down, so you

need to rent one? Is that the idea?

MR. MCGRATH:

It could be a maintenance issue or it could be that you are in a certain area of

the Province where your vehicle has gone one way within a certain district; for

example, if I have a vehicle in Grand Falls and that vehicle may be gone down to

Buchans and I also have a job that is happening down in Bay d'Espoir.

Normally, I would not need two vehicles; but in a case like that, trying

to expedite it, it is cheaper to rent a vehicle.

MR. LANE:

Okay.

Another question on that then, and it does relate to cost because we are talking

about the number of vehicles we are renting versus owning and so on, but when

you have vehicles in your department I do not have any solid evidence other

than, I will say, hearsay, someone had mentioned to me one time.

If you have a certain number of vehicles in any given location that

belongs to the department, do those vehicles belong to the department and

everybody at that particular office or location, or is it assigned to a person?

The reason why I say that and there were a couple of occasions where a member

of the general public would mention this to me, just sort of in chatting, and

say it is ridiculous the fact that I know such and such in one of the government

buildings or whatever and here they are renting a vehicle when there is a

vehicle or two vehicles on the parking lot, just sat there, that could have been

used. Even though they might be

sharing a depot or whatever, because it belongs to one department versus another

department or one person versus another person, they cannot share it.

I guess the bottom line is that if you had two or three government employees, or

even a couple different departments perhaps, and they are operating out of one

government location, they have two or three vehicles and some guy needs a

vehicle to do something related to their job and the other guy, who might be in

a different position, maybe not in the same division, yet he is on holidays or

he is not using it no, you cannot use his vehicle.

So now we have to pay for a vehicle to sit on the lot while, at the same

time, we are renting another vehicle.

Now I do not know if that totally accurate, but that was the scenario that was

described to me on a couple of occasions.

So I am just wondering: With the vehicles, would you try to share

vehicles amongst staff, amongst departments, if you are utilizing a particular

facility?

MR. MCGRATH:

Most definitely. We do that all the

time in my department; that is what I will speak for.

Most vehicles are assigned to particular people.

For example, Gary would have a vehicle assigned to him; but if someone

within the department needs a vehicle for a specific purpose, Gary would be the

first one to say, as would anyone else in the department, that look, the vehicle

is there. Because it is assigned to

a particular person within the department, they pool all the time and a last

resort would be to rent a vehicle, but there are several situations where it is

actually cheaper to rent a vehicle than have another purchased.

We certainly do share the vehicles on a regular basis.

MR. LANE:

Yes, I get that. That would be

within your department?

MR. MCGRATH:

Within my department, I will not speak for another department.

MR. LANE:

Because you manage all the buildings, with the exception of the hospital, but

most of the government buildings, there would be government buildings, I assume,

around the Province in different communities or areas where there could be

somebody there from Transportation and Works and there could be somebody else

there from some other government department or whatever and you might have a

vehicle and the other person could have a vehicle and you are all operating out

of the same office, even though you are different divisions or departments or

whatever.

In that particular case, where it is not interdepartmental, I wonder could it be

a case like if you had another person there in a different department could the

employee say look, I want to borrow your vehicle because we are both government

employees.

MR. MCGRATH:

I do not have an issue with that, but it sounds like speculation you are

basing it on hearsay, so I really have no comment on that.

MR. LANE:

Okay.

Subhead 3.2.03, Salaries, $4.5 million was budgeted you only spent $3.4 million

and this year $7.6 million. That is

under Improvements Provincial Roads, repair and maintenance of provincial

roads. Salaries are going up big

time from what it was last year.

MR. MCGRATH:

This past year was an extraordinary year.

As you know, we had a fatality on our highways and there was a stop-work

order put in place which brought the wages down significantly due to very little

overtime as well as an awful lot of lost work.

Every one of our road crews employees had to be retrained and certified,

so that shows the big difference this year and we are hoping to have the extras

out this coming year to get back on par.

MR. LANE:

Okay. That would explain the

reduction from $4.5 million down to $3.4 million; that is a $1.1 million dollar

reduction. I can see that, but

assuming that that did not happen with $4.5 million last year and $7.6 million

this year, it is like $3 million more this year.

MR. MCGRATH:

Yes, and we put an awful lot of extra roadwork out there this year.

The normal budget is around $59 million or $60 million; this year it is

$81 million, so that is going to take extra personnel to be out there to get the

extra work done.

MR. LANE:

I thought the roadwork was done by contractors, not our employees.

MR. MCGRATH:

Some of it is, a lot of it is done by but all the maintenance in our summer

program, we are going to see a huge increase in staff this year.

MR. LANE:

Okay, so there is big jump in staff doing maintenance.

I would assume if you are redoing a road, you are going to hire a

contractor and you are going to put out tenders, so this is basically almost a

doubling of the amount of staff doing maintenance work like potholes and smaller

jobs like that. Is that the idea?

MR. MCGRATH:

Yes.

MR. LANE:

Is that brush clearing too?

MR. MCGRATH:

Brush cutting may be tendered out, but we do all our summer maintenance work.

We will be hiring extra engineers, for example, to go out there.

All of our patching we will be doing ourselves and upgrading on roads.

We will be having extra personnel there for that road maintenance.

MR. LANE:

Okay. In terms of the number of

MR. MCGRATH:

I am sorry, Paul, this is road construction.

MR. LANE:

What I am reading here now, and correct me if I am wrong, it says,

Appropriations provide for repairs and maintenance of Provincial roads, bridges

and causeways. It does not say

construction here, it says repairs and maintenance.

With $4.5 million budgeted last year, this year it is $7.6 million.

That is a huge jump in Salaries.

You are doubling up on the number of people filling in potholes and doing

whatever according to this.

MR. GOSSE:

What you are looking at here is our Provincial Roads Improvement Program so this

is all contracted work. This is not

pothole patching. These are the

tenders that we call for repaving, putting in new culverts and so on.

The salary component of that is a straight ratio of the total program.

When you increase the number of projects and the amount of work you are

doing, you need more materials inspectors, you need more surveyors, and you need

more technicians and engineers looking after the work that is on the ground.

That is what that is.

MR. LANE:

Okay. I am going to say we

basically doubled up compared to last year.

Maybe it is not quite doubled but practically doubled up on the number of

provincial government employees managing, if I can use that terminology loosely,

all of the roadwork that is going to be done.

MR. GOSSE:

Managing the roadwork, you also have people in the scale house weighing

materials, you have people on the road signing that the loads and material are

actually delivered to the site.

These are all the checks we do to make sure that we are getting the work done

that we are paying for.

Some of those are labourers, some of them are engineering aids behind the

surveying instrument, some of them are technicians, and some are engineers.

Some are materials inspectors out testing the asphalt.

The more work you do in the same period of time, then the more people you

need to look after that work and make sure we are getting what we are paying

for.

MR. LANE:

Okay, that all makes sense.

MR. GOSSE:

It is the whole contract administration piece.

MR. LANE:

That makes sense. It is just

following along with the fact that you are doing so much more roadwork this

particular year than you did before.

MR. GOSSE:

Correct.

MR. LANE:

Now you need all these extra government staff to make sure that it is done

properly.

MR. GOSSE:

That we are getting what we are paying for, absolutely.

MR. LANE:

Well, yes, that is what I would mean by properly, but yes.

Even on that I guess that was just an overall Cabinet budgetary decision

to say we are going to spend all this additional money on roads and stuff this

year, in a deficit year.

MR. MCGRATH:

I had asked for $852 million, I am spending $81 million.

MR. LANE:

Okay, yes, perfect.

MR. MCGRATH:

Perfect would be $852 million.

MR. LANE:

Yes. The next one under

Transportation and Communications, $500,000 was budgeted.

You spent just half of that at $250,000, and this year we are going up to

$884,000. That is a huge jump from

what was spent last year. That

falls under Improvements Provincial Roads.

MR. MCGRATH:

Basically what we had there was less than anticipated staff travel,

communication requirements that is what brought it down for the road

maintenance projects last year.

MR. LANE:

What do you mean? Okay, so $500,000

and you only spent $250,000. What

kind of staff travel would be involved in that?

MR. MCGRATH:

With that number where we had the stop-work order in place again this year, that

would have brought the number down.

If we were not doing the work, then we did not have the staff out there to do

the work. It would have brought it

down. They are not moving as much

when there is a stop-work order on it and that is the significant difference

there.

MR. LANE:

When we talk about staff travel and I am just trying to understand this.

If I was working in the Greater St. John's area or whatever, and then

there was this stop-work order, that would not really impact travel.

I would just leave my house and drive to work like everybody else.

What is the travel? I am

just trying to understand.

MR. MCGRATH:

What you are not understanding is there was a stop work order put on all the

provincial highways. There are

10,000 kilometres of provincial roads that we are responsible for.

We are not responsible for the roads in the metro region; we are

responsible for 10,000 kilometres of highway and roads throughout the whole

Province. To cover those 10,000

kilometres, you have to do some travelling.

If there is a stop-work order on those 10,000 kilometres then you stop

travelling.

MR. LANE:

Okay, so everything was shut down.

MR. MCGRATH:

Everything was shut down.

MR. LANE:

I did not realize that everything was shut down like that.

MR. MCGRATH:

A full stop-work order on the complete Trans-Canada Highway.

MR. LANE:

Okay.

CHAIR:

Okay, Paul and for the Minister, we have one girl in audio, so we are going to

give her five minutes. If anybody

wants to get up and shake a leg, go to it.

Recess

CHAIR:

Okay, if everyone is ready, we can get back to it.

Paul, you finished up on 3.2.03, Improvements Provincial Roads.

MR. LANE:

Salaries, yes, and I am going to continue on.

CHAIR:

Professional Services, I think, you were on.

MR. LANE:

No, Transportation and Communications was the last one I did, wasn't it?

Yes, so now Supplies.

Under Supplies $350,000 was budgeted, just $250,000 spent and this year we are

going to spend $590,000, so almost $600,000.

That is a pretty big jump.

What are we?

MR. MCGRATH:

Basically, the same thing again with the stop-work order in place last year,

there was a lot less spent.

MR. LANE:

Okay.

MR. MCGRATH:

Now we are getting back on track.

MR. LANE:

Okay.

Now, Professional Services, the next one, $34,700 was budgeted, $59,000 this

year, but you spent $200,000 last year in Professional Services.

MR. MCGRATH:

With the stop-work order came all of that training and consulting.

MR. LANE:

Training, right.

The next line Purchased Services, $34.8 million budgeted, $26 million spent and

this year $59.4 million. That is a

huge amount of money there: $30 million.

MR. MCGRATH:

Again, I will mention the stop-work order there.

What that was, was contracts not getting completed.

Thus, looking at it this year, why we wanted to get the tenders out

earlier and that went to the Heavy Civil Association, hopefully, to cut out all

carry-overs in the future.

MR. LANE:

Okay, so that is people bidding on work and not getting it done in time, for

whatever reason?

MR. MCGRATH:

Yes, but I will say that this past year, going down to the $26 million, was

partly uncontrollable because of the stop-work order.

MR. LANE:

Yes, okay.

MR. MCGRATH:

In saying that, going to the $59,495,000, we are hoping that there will be no

more carry-overs. Our goal is to

cut out all carry-overs.

MR. LANE:

Okay.

Grants and Subsidies, $1.3 million budgeted and spent last year; this year only

$300,000. That is a $1 million

differential.

MR. MCGRATH:

There was a budget allocation that was $300,000 for community grants and $1

million for brush cutting services.

The grants were paid up until April 8.

Now the brush cutting is moved; we have increased that to $2 million.

MR. LANE:

The $1 million differential is the brush cutting that has moved somewhere else?

MR. MCGRATH:

Moved up to Purchased Services.

MR. LANE:

Under Purchased Services?

MR. MCGRATH:

Yes.

MR. LANE:

Why would it be under Grants and Subsidies you just happen to move it a

different

MR. MCGRATH:

What we used to do there before for the brush cutting it was almost like

make-work projects, we would go out to smaller and that is cut out because it

was very ineffective to be giving out a grant and they would go out with their

chainsaws and stuff. We found that

it just was not working, so now it is gone to the different method of the brush

cutting where you see the big machine go in and cut it down and mulch it.

MR. LANE:

I recall seeing, over the last couple of years, these big machines actually.

I have not actually seen, like you said, the make-work projects or

whatever you want to call them. I

have not noticed people on the side of the road with chainsaws, as you say, in

the last few years. That was years

ago that used to happen, but you are saying that did happen last year.

MR. MCGRATH:

Gary, do you want to take that one?

MR. GOSSE:

Up until two years ago there were actually people out on the side of the road

cutting with chainsaws and even burning the brush was done in the fall of the

year; but that was, as the minister said, very ineffective so we have moved to

all contracted brush clearing. The

$1 million that was in Grants and Subsidies, which surely was grants at the

time, has been moved up into Purchased Services, but we have also parked $2

million for brush cutting over the $1 million that was done (inaudible)

MR. LANE:

So there was actually $1 million worth of work done last year by people with

chainsaws and stuff?

MR. GOSSE:

Not last year. Last year was the

first year that we did it all with contracted services, even though the money

stayed in Grants and Subsidies.

This year we corrected our budget allocations and moved it from Grants and

Subsidies into the Purchased Services.

MR. LANE:

Okay, so it was just that you had it in the wrong place last year and now you

are moving it to the right place

MR. GOSSE:

It was just a carry-over, I guess, from historically where it was.

MR. LANE:

All right, now it makes sense.

Thank you.

I guess the final line there then is Total: Improvements Provincial Roads; $41

million budgeted, $31 million spent, so the $10 million difference is the

stop-work order I take it, and this year you are doing $69 million worth of

roadwork.

Subhead 3.2.04, Canada Strategic Infrastructure

Fund, highway maintenance and rehabilitation projects to be cost shared with

the Federal Government. You

budgeted $1.1 million, only spent $200,000.

Is that impacted by that stop work order as well?

MR. MCGRATH:

Yes, that was the larger projects that were stopped, one in Central, one in

Western.

MR. LANE:

Why are we only doing $557,000 this year then?

Why a $500,000, $600,000 difference from what was budgeted last year?

Last year you budgeted $1.158 million.

I understand the difference that it was only $200,000 because of the stop

work order, but you would think if you had the federal grant and the money to do

the work last year you would see it picked up this year and that $557,400 would

be more like $1.557 million.

MR. GOSSE:

The salaries component, the federal share or the cost-share program does not

give us it gives us a total sum of money.

We divide that up as we see the need, to cover salaries or supplies, or

transportation and communications and so on.

What you would see there last year, salaries are generally just a straight ratio

of the total program. Last year,

for some reason or other, we were over budget on salaries.

It ended up being 10 per cent of the total, when 5 per cent is really

about the right number, which is what it is for this year.

It was just an overstatement of the salary requirement last year

originally with the $1.158 million.

MR. LANE:

Okay, all right. So you overstated

what

MR. GOSSE:

We overstated the salary, so we

MR. LANE:

Now you are realistic and that is what it probably should be, okay.

MR. GOSSE:

We fixed it this year.

MR. LANE:

Okay. Then the $200,000 was because

of the stop work order.

MR. GOSSE:

That is it.

MR. LANE:

Okay.

This stop work order would not impact if we were going to get federal funds to

do work, we would still get it. If

we could not do it last year, we would not lose that money.

We would just carry it over, right?

We would not lose out on anything.

MR. GOSSE:

No, that is just cash flow adjustments in the cost-shared program.

MR. LANE:

Okay.

Transportation and Communications, $173,000 budgeted, only $16,000 spent.

Is that again into the same thing?

MR. MCGRATH:

Yes.

MR. LANE:

That was overstated slightly as well?

MR. MCGRATH:

Exactly.

MR. LANE:

Okay.

Professional Services, $20,000 budgeted last year, we only spent $5,000, but

this year we are going to do $99,000.

Is that because of all the extra work we are doing?

MR. MCGRATH:

Yes. Again, last year the reason

for the huge decrease there, we did not need to hire as many consultants.

MR. LANE:

Yes, and this year we are doing more work.

MR. MCGRATH:

Yes.

MR. LANE:

Okay.

Purchased Services, again, the big drop last year from what was budgeted is

because of the stop work orders.

MR. MCGRATH:

Yes. Then there is an adjustment

there bringing it in line.

MR. LANE:

Yes.

Operating Accounts is the same thing?

MR. MCGRATH:

Where are you gone now?

MR. LANE:

The next one 02, Operating Accounts.

MR. MCGRATH:

Yes, that is your total of everything involved.

MR. LANE:

Yes, that is the total. That is the

big okay.

That really put us behind, that stop work order.

A lot of work and stuff never got done because of that.

MR. MCGRATH:

Yes, but there are certainly no apologies.

I was the Minister of Service NL at the time.

It was a necessity, and your background concerning how important

Occupational Health and Safety is

MR. LANE:

Absolutely.

MR. MCGRATH:

it had to be done.

MR. LANE:

Yes. There is no argument from me

on that one.

MR. MCGRATH:

Good.

MR. LANE:

We can agree on some things.

Subhead 3.2.05, that is Canada/Newfoundland and Labrador Infrastructure

Framework Agreement.

Appropriations provide for highway rehabilitation projects

Again, that is cost-shared money.

So $998,000 budgeted, only $500,000 spent, and this year $1 million.

So that is the same thing again?

MR. MCGRATH:

Exactly. Yes, if you go down

through those columns you will see

MR. LANE:

Yes, and all the other columns, Transportation and Communications, Supplies,

Purchased Services, it is all the same thing.

All of those numbers went down because

MR. MCGRATH:

Yes.

MR. LANE:

Okay. There is no need to belabour

that.

Subhead 3.2.06, highway construction projects to be cost shared

Okay, this is Capital. Under

Professional Services, $600,000 budgeted, spent $1 million, and this year down

to $544,000. Obviously, there was

something fairly significant that was done last year that was not anticipated.

Now you are back down to

MR. MCGRATH:

Well, with the projects we were working on, the consulting fees that we were

hiring for some of the projects, that really drove the prices up.

That was the design.

MR. LANE:

Say that again.

MR. MCGRATH:

Hiring consultants for design work.

MR. LANE:

Hiring consultants for design work, for all the extra work you are doing this

year, you mean?

MR. MCGRATH:

No. Well it may be this year, but

when certain projects are in a certain stage and I will use the long-term care

here in St. John's, for example.

Once that gets into a certain stage, you are going to be hiring extra

consultants for the design work that you would not have needed the year before,

you will not need in the following year.

Once you get into certain

MR. LANE:

You did not anticipate it last year, though, because you only budgeted $600,000

and spent $1 million.

MR. MCGRATH:

We ended up getting more design work done than we thought we would.

MR. LANE:

Than you thought you would be getting done.

Okay.

Federal revenue, last year you had anticipated you were going to get $47

million, you only got $5 million.

That is like $42 million less than what was anticipated.

This year you are expecting half of that at $25 million.

MR. MCGRATH:

That is a cash flow thing. It is

just moving the money around from one to another.

We anticipated that we would be spending the $47 million.

We did not spend it.

MR. LANE:

You did not spend it.

MR. MCGRATH:

Yes, you are just moving cash flows around.

MR. LANE:

This is not an expense. This is a

revenue item. This is $47 million

that you expected to get from the federal government; you only got $5 million.

This is not you spending money.

This is the federal government not giving you $42 million.

MR. MCGRATH:

Because we did not have the need for it that year.

MR. LANE:

Okay.

MR. MCGRATH:

It is just a cash flow that would move when you do need it.

MR. LANE:

Again, that money is not going to get lost, because this year there is $25

million.

MR. MCGRATH:

No, it is just a cash flow movement.

MR. LANE:

Okay.

In addition to the $25 million being spent here, there is another $17 million

sitting around, if you will, that could be spent next year, that we have access

to and we are not going to lose.

MR. MCGRATH:

Exactly. Yes.

MR. LANE:

Okay, that is fine.

Subhead 3.2.08, Improvement and Construction Provincial Roads; under Salaries,

$998,000 was budgeted, only $410,000 spent, and $576,000 this year.

Is the drop in terms of the stop work order, too?

MR. MCGRATH:

There was a drop, actually, in staffing requirements because we did not have the

completion in some of the construction that we had anticipated.

MR. LANE:

Because of the stop work order?

MR. MCGRATH:

Not necessarily because of the stop work order.

MR. LANE:

No? Okay.

MR. MCGRATH:

It would have had some effect on it but

MR. LANE:

Okay, but this year we are still only going $576,000, even though we had

budgeted $998,000 last year?

MR. MCGRATH:

Yes.

MR. LANE:

We are not planning on doing as much in that end.

MR. MCGRATH:

Yes, in that particular area.

MR. LANE:

In that particular area. Okay.

Purchased Services, $15.6 million budgeted, less than half of that spent.

Now we are back up to $14,073,000.

MR. MCGRATH:

Again, that is based on project delays for different reasons.

The stop work order did have some effect on that.

Now we are trying to get it back in.

MR. LANE:

Okay.

Moving along here; 3.2.09, Canada Strategic Infrastructure Fund, $1.1 million

budgeted and spent last year. This

year it is down to $784,000. So

that

is a decrease of about $350,000.

MR. MCGRATH:

The reason for the decrease to the $784,000 is the level of activity within the

projects.

MR. LANE:

Okay.

Professional Services: $200,000 budgeted, $280,000 spent and this year half of

that budgeted, $140,000.

MR. MCGRATH:

Again, that is Professional Services, engineering services and stuff, so it

depends on where you are in the projects.

MR. LANE:

Okay.

The last one for me I am going to pass it over to my colleague here under

Purchased Services $17 million budgeted, $10 million was the actual, and this

year we are budgeting for $8.7 million.

MR. MCGRATH:

Again, the decrease was lower than anticipated expenditure requirements on the

construction projects.

MR. LANE:

Compared to $17.1 million this year we are only spending $8 million, so we are

spending a lot less under here.

MR. MCGRATH:

Yes, because of where we are with certain projects.

MR. LANE:

Okay.

That is it for me. I am going to

pass it over now to my colleague for St. John's South.

CHAIR:

Yes, Tom, go ahead.

MR. OSBORNE:

Thank you.

Minister, under Trans-Labrador Highway, I have just a couple of questions on

that. If I understand correctly, I

think it is $7.3 million to cover the cost of paving the additional sixty

kilometres of Phase I. Is that

correct?

MR. MCGRATH:

Yes.

MR. OSBORNE:

Okay.

You have bundled that with some additional work.

MR. MCGRATH:

I did.

MR. OSBORNE:

Okay, can you show me in the budget the additional work?

MR. MCGRATH:

The additional work was just put out at tender and that is part of the $81

million that is there. That tender

is out now, closing on May 14. The

tender is actually for 145 kilometres.

You have eighty kilometres leaving Happy Valley-Goose Bay going south to

the Cartwright Junction. You have

the sixty kilometres between Churchill Falls and Happy Valley-Goose Bay.

You have 2.2 kilometres in Hamilton River Road, approximately 2.2

kilometres, and then there is a small amount, a little less than 2 kilometres,

of chip seal that has to be replaced.

The chip seal was one of the projects that was first monitored doing the

Trans-Labrador Highway. That tender

is out and closing on May 14.

MR. OSBORNE:

What budget line is that? Is that

under the Trans-Labrador Highway?

MR. MCGRATH:

That would not be in this.

MR. OSBORNE:

Pardon me?

MR. MCGRATH:

That would not be in here, would it? Where

is that, Gary?

MR. GOSSE:

It would be under Purchased Services.

MR. OSBORNE:

So the bundled work is under the Trans-Labrador Highway as well?

MR. MCGRATH:

Yes.

MR. OSBORNE:

The additional part of that?

MR. MCGRATH:

Yes.

MR. OSBORNE:

That is under Purchased Services?

MR. MCGRATH:

Yes.

The Hamilton River Road, we went through that earlier, but again the Hamilton

River Road was retendered and that is the reason that is before

MR. OSBORNE:

Okay. What budget line is the

Hamilton River Road?

MR. MCGRATH:

Do you know which line exactly, Gary?

MR. GOSSE:

Subhead 3.2.03.

MR. OSBORNE:

Okay. That would be under Purchased

Services here?

MR. MCGRATH:

Yes.

MR. OSBORNE:

Okay.

Is the full appropriation there for the Hamilton River Road or are there other

things under Purchased Services there?

MR. MCGRATH:

All kinds of things there.

MR. OSBORNE:

Okay, so what is the total amount for the Hamilton River Road?

MR. MCGRATH:

Until the tender closes, we will not know.

MR. OSBORNE:

You do not have a rough idea or a rough estimate?

MR. MCGRATH:

I do, but I will not be saying until the tender closes.

MR. OSBORNE:

I cannot squeeze it out of you?

MR. MCGRATH:

You can, but it is going to take a lot nice try, though.

MR. OSBORNE:

Okay.

You said I could, so there is always hope.

MR. MCGRATH:

Anything is possible.

SOME HON. MEMBERS:

Oh, oh!

MR. OSBORNE:

I am just looking at the 2012-2013 budget for the Trans-Labrador Highway and we

had $2.290 million and there was

MR. MCGRATH:

Which line are you on now, Tom?

MR. OSBORNE:

That is under last year's, same thing, 3.2.01.

Do you have last year's budget there, Minister?

MR. MCGRATH:

No.

MR. OSBORNE:

You don't?

MR. MCGRATH:

No.

MR. OSBORNE:

I knew we were better prepared on this side of the House, just an observation.

MR. MCGRATH:

We have access to it; I just do not.

Go ahead and ask your question.

MR. OSBORNE:

Okay so under last year's budget there was $2.290 million budgeted and the

revised was $1 million.

MR. MCGRATH:

Yes.

Gary, do you have an explanation for that, please?

MR. GOSSE:

You are looking at 2012-2013, is that right?

MR. OSBORNE:

I am, correct. I am just wondering,

under last year's, why there was less than half of the money that was budgeted

actually spent.

MR. MCGRATH:

We will get clarification on that and get back to you on it.

MR. OSBORNE:

Okay, because I am noticing as well that under the 2013-2014 Estimates, again

there was about half of what was budgeted was actually spent for Salaries.

MR. GOSSE:

On the Trans-Labrador Highway we have had difficulty recruiting our own staff.

So you will see a fairly large expenditure there under Professional

Services because we have had to hire consultants to look after the work for us

on the Trans-Labrador Highway. We live

in hope of recruiting our staff, so we budget for it.

MR. OSBORNE:

Okay. The reason I am wondering is

because we had $2.29 million budgeted in 2012-2013, only spent $1 million, then

in 2013-2014 we had $2.335 million budgeted but only spent $1.15 million.

Now the budget is gone up this year to $3.792 million.

MR. GOSSE:

That is correct. Last year it was

the same issue with recruiting our own staff to do the work, so we went with

consultants.

This year the work is a little closer to Goose Bay, so we are a little more

optimistic that we will be able to get our own staff to do the work closer to

the Goose Bay area. We have

budgeted for the salaries on that premise.

MR. OSBORNE:

Okay.

Transportation and Communications, under 3.2.10, in 2012-2013 there was $400,000

budgeted and only half of that was spent at $200,000.

In 2013-2014 there was $400,000 budgeted and only $150,000 spent and now

we are gone to $665,000.

MR. MCGRATH:

Gary, can you take that?

MR. GOSSE:

The same issue: less staff, less requirement for communications and travel.

If we were successful in recruiting the staff that we needed, we would

have used all of the budget associated with staff employment.

We were not successful in doing that; therefore, we used less in

communications and we used less in travel.

We had less people travelling on the road.

It was all done through our consultant.

MR. OSBORNE:

Without going through the numbers for Professional Services, I mean we have the

same situation there on the discrepancies between last year's Estimates and

budgets and this year's?

MR. GOSSE:

When we did our budget we had to budget for what it was going to cost us to

retain our consultant, but the cost came in a little less as a result of our

RFP. We budget for what we think it

is going to be, but the competitive bid process sometimes allows us to see a

little savings here.

MR. OSBORNE:

Okay. The Land Acquisition under

3.2.11, do you have any idea on where you are intending or hoping to purchase

the land?

MR. MCGRATH:

Give me that question again, Tom, please.

MR. OSBORNE:

Under 3.2.11, the Land Acquisition.

MR. MCGRATH:

Yes.

MR. OSBORNE:

I know that is a normal year to year thing for government, but I am just

wondering what area you are at?

MR. MCGRATH:

It is all over. That is a budgeted

amount that could be anywhere in the Province.

MR. OSBORNE:

Okay. There are no specific plans

in place for land purchase other than the day-to-day?

MR. MCGRATH:

Well, again, the $2 million is based all over.

It is a budget amount that we put in for the Province.

MR. OSBORNE:

Okay, all right. I guess the point

is there are no specific plans at the moment?

MR. MCGRATH:

No specific plan.

MR. OSBORNE:

No specific plans for land acquisition?

MR. MCGRATH:

Not right now, no.

MR. OSBORNE:

Okay, just back to the Trans-Labrador Highway for a moment.

The first tender call, the sixty kilometres for Phase 1 was not included

in that. Are you able to tell me

why?

MR. MCGRATH:

Basically, when we were packaging it together there was a little bit of tweaking

that had to be done there. The

other one was ready to go as I explained this afternoon in the House.

I had a very small window there; I had a tender ready to go.

When I decided that the best way to move was to get this sixty kilometres

bundled in with it, we had a little bit of wording to change there.

That was why.

MR. OSBORNE:

Okay. You were not anticipating

pulling that contract at the time the Budget was done?

MR. MCGRATH:

No.

MR. OSBORNE:

Okay. What work will be completed

on Phase 2 in 2014?

MR. MCGRATH:

On Phase 2, as I said, we have tendered now for the

MR. OSBORNE:

Hamilton River.

MR. MCGRATH:

No, we have tendered for the eighty kilometres from Happy Valley-Goose Bay going

south to Cartwright Junction. We

have tendered for the sixty kilometres between Churchill Falls and Happy

Valley-Goose Bay. There is other

work that we have tendered for widening and upgrading from Red Bay going north

to Cartwright Junction.

MR. OSBORNE:

Okay. Under 3.3.02, I am just

wondering what buildings. You have

$690,000 there estimated to provide for the construction of new buildings and

the extension of existing facilities.

Are you able to give some indication as to what your plans are?

MR. MCGRATH:

There was a delay in the depot. The

depot was in Roddickton and Whitbourne, and the hangar I think in Gander.

There was a delay in it.

MR. OSBORNE:

The $690,000 is for those projects?

MR. MCGRATH:

Yes.

MR. OSBORNE:

Okay. That is under Salaries.

Just for clarification for Hansard it is 3.3.02 and it is Salaries.

MR. MCGRATH:

Those Salaries are covering the management of those projects.

MR. OSBORNE:

Okay. Looking at 2012-2013 we had

budgeted $325,000 for Salaries under that

section and there was only $51,500.

Last year we budgeted $800,000 and only $60,000 was spent.

Again I am seeing a trend there of $325,000 being estimated in 2012-2013

and only spending $51,000, and last year budgeting $800,000 and only spending

$60,000. I am just wondering what

the explanation would be for that?

MR. MCGRATH:

Cory.

MR. GRANDY:

I do not have 2012-2013 right in front of me.

MR. OSBORNE:

Okay.

MR. GRANDY:

The Salaries in these subheads are for charging off salary costs that are

associated with the specific capital projects.

We call it recharging. We

have recharged to the capital budget so that time spent on a capital project is

charged appropriately to that capital project.

The $690,000 that is budgeted for this year would apply to the capital projects

that we plan on undertaking this year.

There are several depot replacement projects in that, as well as work on

the Gander hangar as the minister said.

MR. OSBORNE:

There seems to be a trend though of budgeting high and spending very low.

MR. GRANDY:

I can speak specifically to the past year.

The previous year I would not be able to speak to, I do not have the

details. I was not in the

department to know exactly what projects were in that 2012-2013.

I know last year we did not get out of the ground as quickly as we had

hoped on some depot replacement projects.

In Whitbourne and Roddickton we had a tender award late in the construction

season; therefore, there was not much project management activity that was able

to occur in last year's construction season.

The salary costs associated with that project would also be down.

The salary cost, basically, has a direct relation to how much we are

spending on Purchased Services which is where the construction spend is.

MR. OSBORNE:

Okay. I know under Professional

Services in 2012-2013 we had $1.65 million and only spent $170,000.

Last year, the budget was $4 million and only spent $210,000.

This year we are estimating $3.475 million.

I see a trend there of budgeting very high and spending very low.

MR. MCGRATH:

One relates to the other as we just said. If we were not moving forward with the

projects then we were not getting the consultants to come in.

That would have brought the price down.

We budgeted for it, did not get the work to where we thought it would be,

and so we did not have to hire the consultants to get the work done.

MR. OSBORNE:

The work that was anticipated in 2012-2013 did not get done?

MR. MCGRATH:

No, not as much as we would think.

MR. OSBORNE:

Was that carried over to 2013-2014 and then still did not get done?

MR. MCGRATH:

Do you want to take that Cory?

There are different issues that would affect it, capacity being one of them.

Just finding the people to get the work done has been a big issue and it

is slowing down projects, but we still have to budget for it.

MR. OSBORNE:

Okay. Are you able to find out for

me what projects were scheduled there for 2012-2013, and what projects were

scheduled for 2013-2014 versus what projects are scheduled for 2014-2015?

MR. MCGRATH:

Remember, these projects are in phases but we can get that, no problem.

MR. GRANDY:

I can attempt to answer part of that question now on 2013-2014 if you like.

You asked would the money be carried over.

The answer to your question is yes.

The contract that we awarded late in the season last year, again for

depot replacements at Whitbourne and Roddickton, that work is carried over to

this year. As well, there are other

depot replacement projects; Victoria Cove being one and my memory is slipping,

but we can get you further details on that but again

MR. OSBORNE:

Under these headings and subheadings if you could indicate for the 2012-2013

year what projects were scheduled, and again for the 2013-2014 year what

projects were scheduled and now for 2014-2015.

MR. GRANDY:

We can provide that.

MR. OSBORNE:

We had some banter back and forth, Minister, on the Bay d'Espoir and Baie Verte

highways in the House. I appreciate

your answers in the House and so on, and you're welcome for the media coverage.

With the cash flow constraints and that is part of what the banter back and

forth was about there, and I know under the multi-year projects the cash flow

constraints that are there. In

speaking to some contractors I did not speak to all of them, but I did speak

to some and they have some concern about the cash flow constraints, first time

seeing those I realize these are multi-year projects.

With the cash flow constraint there and understanding your response that

if they want to do more work than the cash flow constraint allows they are

welcome to do it, they just will not get paid until next year's budget; do you

foresee any difficulties or problems as a result of the cash flow constraint?

MR. MCGRATH:

I acknowledge the fact that you spoke with some of the contractors and I also

compliment you for trying to speak with all of the contractors.

With the cash flow restraints we sat with the contractors and explained

to them exactly the way that the project would be working.

I will not get into detail for more bantering, but the whole purpose of

bundling these large projects together is to try to move forward.

We always hear you are doing a kilometre, a kilometre, and a kilometre,

and we are not moving forward. That

is the whole purpose of that, and the Bay d'Espoir Highway is the best example I

can use.

Now by putting out the large contract, we feel it was the right way to go and we

sat with contractors and explained to them exactly the process that would take

place. They were quite happy with

that project happening that way and some of the contractors came back and

questioned: With the cash flow projection, can I go beyond that so that the

beginning of the next fiscal year I have that cash?

That is entirely up to a contractor if they want to do that.

We do not anticipate that as a problem; we see that as a plus.

Then, in the following year, they can continue to move forward and the

cash is right there. On April 1,

they have their cash, and that is how that works.

When we spoke with the contractors, they were quite content with that.

I think now that I have straightened them out after our bantering, they

are quite content again.

MR. OSBORNE:

Okay. Well, not all of them; I will

say that for the record.

I understand and I publicly support the multi-year projects and giving

contractors the ability to plan well ahead, do the engineering and whatever they

need to do well in advance because they know what work is on the books this year

and next year. Based on the work

that is projected or supposed to be done this year, does the cash flow

constraint limit them in the ability to carry out everything that is supposed to

be completed by September of this year?

MR. MCGRATH:

Again, I am confused; maybe you can explain to me.

You keep using September of 2014.

I am not sure where you are coming up with that.

MR. OSBORNE:

That is in the tender document that a certain portion of the work and it gives

specific

MR. MCGRATH:

By 2014?

MR. OSBORNE:

Yes, absolutely. It is in the

tender documents.

MR. MCGRATH:

I will have a look at that.

MR. OSBORNE:

A certain number of kilometres

MR. MCGRATH:

Remember, the cash flow is exactly what we are saying; it is a projected cash

flow. It is sitting with the

contractors and explaining the whole process to them.

They did not have issues and we do not anticipate an issue.

MR. OSBORNE:

I do not think any of the contractors had an issue with the multi-year project

aspect. I think everybody who wants

to see progressive work and I use that word progressive very lightly are

thinking very liberally about what they can actually do.

I am sorry for the puns.

Seriously, there are a specified number of kilometres that has to be completed

by September of 2014 and a specified number of kilometres that would have to be

completed by September of 2015. The

concern that some of the contractors raised was that the number of kilometres

that they are bound to complete by September of 2014, they feel that that work

would potentially go beyond what the cash flow constraint is.

MR. MCGRATH:

Again, we project cash flows on historical data is what cash flows are projected

on. I am not quite sure where you

are going with that.

MR. OSBORNE:

Okay.

I do not know if there is an easier way to try to explain it, but if there is a

specified number of kilometres that have to be done and contractors are

concerned that the cash flow constraint, the amount of money that they can be

paid, is less than what their costs will be to complete the work that they have

to complete this year.

MR. MCGRATH:

Yes, I understand you are saying that, but they have not conveyed that to us and

we do not anticipate that at all.

MR. OSBORNE:

Okay, well they have conveyed it to me.

Now maybe the winning bidder did not have a concern with it, but I know

that other contractors that I spoke with did have that concern delighted with

the multi-year project; concerned with the cash flow constraint.

MR. MCGRATH:

They are more than welcome to come and talk to us.

MR. OSBORNE:

Part of the reason maybe they did not I am not sure is that the ones that

spoke to me asked not to be identified because they are concerned that it might

affect their working relationship with government.

That is unfortunately a reality of anybody bidding and looking for work.

MR. MCGRATH:

Brent, do you want to speak to that?

MR. MEADE:

Yes.

When we decide to take the approach of large projects, multi-year projects, and

early tenders, we had extensive engagement with the Heavy Civil Association to

talk about how we were to begin to redesign our approach to road tendering.

In those discussions we made them aware in multi-year that we would

project cash flows over those two-year projects.

They were not at all surprised with that.

In fact, they agreed with it, because they knew that most projects of

those size Bay d'Espoir, for example would take a couple of years to finish.

Now, where the line is drawn in terms of cash flow projection, yes, maybe some

contractors could debate: Well, I could get more than that done than what you

are saying. Others would say: No, I

think I can work with that. In the

main what Heavy Civil is telling us is that they agree with the multi-year

projects you acknowledged that as well and they agree with the cash9 flow

projections we have there.

It is a way for us to manage our roads program.

It is a way for the industry to manage their mobilization, and the

bidding that they will do on a number of projects.

The thing about early tendering and the thing about the cash flow

projections is that when they are bidding, they can then determine the level of

effort they are going to require to do any number of projects in the Province

this year.

So that was, for us, the number one objective: How do we align ourselves with

industry so they have an ability to sit down and better bid and then plan, when

they are successful on the bidding, to complete that work?

That was our objective. The

Heavy Civil Association was in full agreement with our approach on this.

So, if there are dissenting contractors, to be quite honest, we are not

hearing them. We have had extensive

consultations with the board of Heavy Civil and they have been very, very

supportive of the approach we have taken.

MR. OSBORNE:

Again, I do not think they have an objection to a cash flow constraint per se, I

think it was with the amount of the cash flow constraint.

Whether or not, and time will tell maybe there is absolutely no reason

for concern but I think on these projects time will tell whether or not the cash

flow constraint was limiting. I

believe that some contractors, it may have affected their ability to bid when

they saw the cash flow constraint number.

MR. MEADE:

We have seen very robust bidding on these projects.

We would have seen the bidding that we would have expected, and the

pricing that we would have expected.

To date, again, we have not heard that concern.

The reality of it is that contractors will weigh all of those issues, but

there are many, many more pros to what we have done here than there would be any

perceived cons from the industry.

To your point of time will tell. I

would suggest to you that as a department we are open to seeing how the early

tender process unfolds this year and how it leads to us getting work mobilized

and completed. Secondly, in the

multi-year, I would concur with you, that let's see how this works.

Maybe next year we do need to adjust cash flows on it a bit more.

Maybe we do need to do that, but what we have committed to is open

dialogue with industry around those processes to see how it unfolds.

Maybe later in the year we will get some feedback on how some things were

very, very positive and how some things we could improve upon.

Again, I would say to you that the feedback we have had to date has been very

positive and very productive in terms of a relationship with industry.

MR. OSBORNE:

Okay.

MR. MCGRATH:

Also, to that point, when we met with Heavy Civil Association I had agreed that

I would meet with them at the end of the season for that exact dialogue, that we

will meet and compare notes to see: Are the changes that we are making working?

If not, how can we improve on them?

If so, the status quo will stay status quo.

We will be meeting with them in the fall of the year to go over those exact

things. Right now, in the regular

meetings we are having, they are very enthusiastic with the approach we are

taking. In January, when we

announced this, and in our regular meetings with them, they seemed quite

pleased.

MR. OSBORNE:

Okay.

Minister, how much was spent on Confederation Building repairs to date, any

indication?

MR. MCGRATH:

What line number are you going to?

MR. OSBORNE:

That is just a general question.

MR. MCGRATH:

A general question. The budget was

$51 million. Right now, the budget

is at $55 million.

Cory, do you have those with you?

MR. GRANDY:

(Inaudible).

MR. MCGRATH:

It is $56 million, sorry.

Do you have those pictures, Cory? I

am going to share some pictures with you.

They say a picture tells a thousand words if I could get the Page to

pass these over.

When we took the exterior brick off the tower of the building, what we found

underneath was frightening.

Basically, it was a matter of an emergency decision that we had to invest an

extra $5 million to fix what you are about to look at.

When the building was built under a Liberal Administration back in the

late 1950s, you will see the type of work that they did back in the late 1950s.

Any scrap that was left over is in the tower of this building.

Those pictures will speak for what you are about to see.

There is no way I could justify covering that up without I did not want

to cover that up without it being remedied.

Needless to say, by looking at the pictures you can see it is a safety

issue. So that did put an extra $5

million onto the building repairs.

MR. LANE:

Is any asbestos involved in this?

MR. MCGRATH:

Pardon me?

MR. LANE:

Was there any asbestos issues?

MR. MCGRATH:

No, there was no asbestos.

I would appreciate it if those were passed back to me.

I do not want those to leave the room.

I wanted to share them with you because I did want you to see exactly

what we are dealing with, but I would appreciate it if they were passed back to

me. If the Clerk would be so kind

as to collect them after they have seen them.

OFFICIAL:

(Inaudible).

MR. MCGRATH:

Paul, there is some asbestos around the mechanical and the electrical.

So, that, too, we have to deal with.

MR. OSBORNE:

How much has been spent to date? Is

that the $56 million figure you had mentioned?

MR. BOWDEN:

We have spent approximately $43 million to date; $42 million to $43 million.

It is anticipated another $12 million to $13 million to take us to the

$55 million, $56 million range.

MR. OSBORNE:

I can see why you put the blue windows on, though, because some of the bricks

are red.

MR. MCGRATH:

I wanted you to see those. I really

wanted to highlight the red bricks.

If you notice, the red ones are much smaller than the blue ones.

MR. OSBORNE:

There are no blue bricks. I am

waiting for the next phase of the building.

I am wondering if we are going to put red windows with the blue ones, but

time will tell.

MR. MCGRATH:

No comment.

MR. OSBORNE:

What is the cost to repair and replace the windows that have already been

installed?

MR. MCGRATH:

Pardon me? I am sorry.

MR. OSBORNE:

What was the cost to repair and replace the windows already installed?

I know the figure that you mentioned involves other work but the

MR. BOWDEN:

We do not have that number broken out.

It is a single contractor for the masonry repair around the windows, and

the openings and the windows. So it

is not split out windows alone. The

total piece spent to date is around $42 million to $43 million, which leaves us

the remainder to be spent in the current year to finish it in 2014-2015, to take

us up to the $55 million, $56 million number.

The windows themselves are not broken out as a specific, distinct from the

surround or the masonry work that is being replaced as well.

MR. OSBORNE:

I wanted to talk a little bit more about the blue windows.

Some of them, we understand, were defective.

Can you elaborate on that?

MR. MCGRATH:

There is talk that some of the windows were defective.

The contractor has been made aware of that, and they are under warranty.

So anything that was defective will be replaced.

It had nothing to do with the colour.

MR. OSBORNE:

At no additional cost?

MR. MCGRATH:

At no additional cost. They are

under warranty.

MR. OSBORNE:

One would argue that is the reason they were defective, though, Nick.

Can you tell me the final cost of the Labrador West Health Care Centre?

MR. MCGRATH:

It will come in, in the I am proud to say this because I was the Chairperson

for the planning committee for the hospital when we were starting to build it,

and I said then it would be

MR. OSBORNE:

I am proud to ask the question. I

was the Health Minister who announced that, by the way.

MR. MCGRATH:

Yes, I remember, and I told you then that it would cost around $95 million.

If I am not mistaken, the price is very close.

It is at $90 million right now.

I am hoping to find another $5 million to go into it, so it will put me

right on the mark.

MR. OSBORNE:

So, $95 million is

MR. MCGRATH:

Ninety million.

MR. OSBORNE:

Yes, but you are estimating $95 million?

MR. MCGRATH:

No, we are estimating $90 million.

MR. OSBORNE:

Okay.

OFFICIAL:

You also did a demonstration.

MR. MCGRATH:

I did two demonstrations, which again, I am very proud to say that the

government listened and that is why we have a $90 million project almost

finished. I chaired both

demonstrations and spoke very vocally on behalf of the people of Labrador West.

I am very proud to say it.

OFFICIAL:

So did I.

MR. MCGRATH:

I know. You were there.

MR. OSBORNE:

The construction of the new ferries, is that on schedule?

MR. MCGRATH:

The construction of the new ferries is very much on schedule.

The keel placement on the first ferry will be in August, and the steel

cutting for the second ferry will be in August.

Both ferries are right on schedule.

MR. OSBORNE:

The deadline for the RFP for the Labrador ferries was extended.

MR. MCGRATH:

Yes.

MR. OSBORNE:

Can you explain the reason?

MR. MCGRATH:

I spoke on that earlier. Mr.

Edmunds asked the same question.

Basically what happened there, with a tender of that magnitude you get some

contractors who come back and ask specific questions.

When we get a contractor who comes back to ask questions we like to share

the information with all bidders.

We extended it by a month so they could go and get the information they needed

there.

MR. OSBORNE:

Okay. On the

Norcon Galatea , can you tell me how

much was spent on that in total?

MR. MCGRATH:

In repairs?

MR. OSBORNE:

No, the government's

MR. MCGRATH:

In our contract?

MR. OSBORNE:

Yes, the government's contract.

MR. MCGRATH:

Max, can you take that, please.

MR. HARVEY:

The charter cost for the Galatea ,

there were three elements to the total cost.

One was the charter cost, which was about $814,000.

The crew cost was about $400,000.

It was crewed by our crews.

The other cost was fuel, which was about $100,000.

That was the Galatea .

MR. OSBORNE:

Do I understand correctly, some of the contracts for external ferries are an

all-in price?

MR. HARVEY:

The contracted services, for example, on the South Coast, are the vessel and the

crew; we will pay for the fuel.

Yes, some are all-in. The

Galatea , we chartered the bare boat.

It was basically a bare boat charter, and we provided the crew and paid

for the fuel.

MR. OSBORNE:

Okay, was there an amount in addition to that for potential repairs or

maintenance?

MR. HARVEY:

The Norcon , when we did it, we

negotiated that they would be responsible for all maintenance except the

day-to-day greasing of certain elements of it.

Yes, I think it was $25,000 a month for that.

MR. OSBORNE:

Okay, that is over and above the amount you have already mentioned?

MR. HARVEY:

It should be included prior to that (inaudible).

MR. OSBORNE:

It is included in the $814,000?

MR. HARVEY:

Eight hundred and fourteen thousand dollars, yes.

MR. OSBORNE:

How many trips in total did that make on the Bell Island run?

MR. HARVEY:

I do not know how many trips it made.

I will say that it did experience difficulties.

I would say that, by far, the majority of trips that it did not make were

because of operational considerations due to wind or surge.

That was very typical of when it was the

Hamilton Sound . At that time of

year, when the high winds were there, they had trouble operating because it did

not have a bow thruster, and the surge, tide, and wind conditions there are

problematic for the vessel.

MR. OSBORNE:

Are you able to get me the total number of trips made?

MR. HARVEY:

Yes, I can.

MR. OSBORNE:

Just a rough estimate, would you say that it was tied up 50 per cent of the

time?

MR. HARVEY:

I will get the numbers. It was a

very difficult fall and winter, absolutely, but I do not have the number.

MR. MCGRATH:

We will get the numbers.

MR. OSBORNE:

Okay. Were there any staffing

issues? Were there any difficulties

around staffing, and that led into some of the time it was tied up?

MR. MCGRATH:

I made a comment in my

preamble that we would stick to Estimates.

These are policy questions that you are asking.

Certainly, if you want to have a meeting we will give you all the answers

to your policy questions, but we are here for Estimates.

I do not want to get into policy here at Estimates.

I am more than willing to sit with you in a private meeting and answer

your questions on policy.

MR. OSBORNE:

Okay. I think this does tie-in to

the cost of operation of the ferry and the effectiveness of the ferry though.

MR. MCGRATH:

You are getting into policy. If you

want to have a private meeting on policy, I have no problem with that.

MR. OSBORNE:

What is the status of the ferry contract for La Poile to Rose Blanche?

MR. MCGRATH:

Max.

MR. HARVEY:

The tenders are in. There was one

bidder. We are just doing the final

evaluation on that. It has not been

awarded yet. That contract will

start mid-June.

MR. OSBORNE:

Okay. Just a couple of other

questions; has the total cost of providing I will not call it twenty-four

seven snow clearing, but the ability to have call back or on-call for times that

we do experience weather difficulties and to ensure that the highways are safe?

MR. MCGRATH:

This is something that we monitor on a daily basis throughout the season.

If we feel that it is necessary then we provide that service, but to come

out and commit to a twenty-four seven service just for the sake of anticipating

that we are going to need it, we do not do that.

We will continue to monitor and if we feel it is necessary for the

service to be there then we provide it.

MR. OSBORNE:

Is there any plan to increase the level of service based on feedback and some

highways not being done for several hours and so on.

MR. MCGRATH:

As I said, we will continue to monitor it.

It is something that we monitor on a regular basis.

We will continue to do that and provide

the services we deem necessary.

MR. OSBORNE:

Okay. I guess one final question on

that, are there any plans to expand that service?

MR. MCGRATH:

Again, I told you it is something that we are monitoring, so the plan is to

continue to monitor.

MR. OSBORNE:

It has probably been monitored for years though.

Okay, I think those are all of questions for now.

CHAIR:

Okay.

MR. OSBORNE:

Yes, sorry, one final question, Mr. Chair.

The moose detectors on the highway, can you tell us the cost to date of

operating the moose detectors?

MR. GOSSE:

The cost of operating the detector systems themselves is zero.

The only cost we have paid, or incurred for those detection systems right

now is the original purchase and installation cost.

MR. OSBORNE:

What was that?

MR. GOSSE :

It was $1.6 million