Government Services Committee — Department of Tourism — 4 February 2018

2018-02-04

Newfoundland and Labrador — Committees

April 18, 2002 GOVERNMENT SERVICES

COMMITTEE

Pursuant to Standing Order 68, James Walsh, MHA for Conception Bay East &

Bell Island, substitutes for Yvonne Jones, MHA for Cartwright-L'Anse au Clair.

The Committee met at 9 a.m. in the House of Assembly.

MR. SWEENEY: We have to do a little bit of housekeeping first. My name is

George Sweeney and I hope that in a minute or so I will be Chair. We have to

elect a Chair and a Vice-Chair.

CLERK: First of all we should call the Committee. This is the Government

Services Committee.

The first order of business is the election of the Chair. Do I hear a

nomination for Chair?

MR. WALSH: I nominate George Sweeney.

MR. ANDERSEN: Seconded.

On motion of Mr. Walsh, seconded by Mr. Andersen, Mr. Sweeney is elected

Chair.

CHAIR (Sweeney): The next item on the agenda would be Jack Byrne being

moved as Vice-Chair.

MR. SHELLEY: So moved.

MR. WALSH: Seconded.

On motion of Mr. Shelley, seconded by Mr. Walsh, Mr. Jack Byrne is elected

Vice-Chair.

CHAIR: What I would like to do first is introduce the Committee members:

Mr. Jim Walsh; Mr. Wally Andersen; Mr. Paul Shelley; and Mr. Jack Byrne.

Minister, would you like to introduce your officials?

MR. LANGDON: My name is Oliver Langdon and I am the Minister of Municipal

and Provincial Affairs, Minister also for Housing. I will ask all of the

different people here from the Department and Housing to introduce themselves.

MR. SMART: Bob Smart, Deputy Minister of Municipal and Provincial

Affairs.

MR. DEAN: Leslie Dean, Chairman and CEO of the Housing Corporation.

MS MARSHALL: Mary Marshall, Chief Operating Officer of the Newfoundland

and Labrador Housing Corporation.

MR. CONWAY: Jim Conway, Chief Financial Officer of Newfoundland and

Labrador Housing.

MS COLE: Ramona Cole, Assistant Deputy Minister of Municipal and

Provincial Affairs.

MR. ROSE: Baxter Rose, Assistant Deputy Minister of Municipal and

Provincial Affairs.

MR. CHURCHILL: Wayne Churchill, Assistant Deputy Minister of Municipal

and Provincial Affairs.

MS HAMMOND: Lynn Hammond, Director of Communications, Municipal and

Provincial Affairs.

MR. CURTIS: Ken Curtis, Manager of Financial Operations, Municipal and

Provincial Affairs.

CHAIR: Just a little technicality I think we should iron out first: We

have a little bit of a change now. We do not have our technician up in the

balcony anymore. I think it is Kevin this morning who is down in the basement.

Before you speak, make sure your light is on in front of you. Try to give Kevin

a heads-up on who is speaking and when.

I will ask the Clerk to call the first head. What I would like to do, if we

can for the sake of expediency, is start and go down through one head at a time.

Minister, would you like a few opening remarks?

MR. LANGDON: Not too long, because I think we have all been here before.

The whole idea is to present the Budget to the House and to the Committee. I

want to thank the Committee for being here this morning. I am sure there will be

a lot of technical questions here about the Budget that I will not be able to

answer, that is why we have all of these people behind me. These are the people

that I depend on, as minister, within the department and with the Housing

Corporation to deliver the programs for government. I am very pleased that they

are here.

The department is wide-ranging. We are responsible for the Fire Commissioner's

Office, Emergency Measures, Housing and Municipal Affairs. So, it encompasses a

lot, it is a very big department. We are here to answer any questions that you

have. If there are any that we cannot answer, we will pledge to get an answer

for you. Hopefully, at the end we will be able to pass the Estimates for the

department.

Thank you very much.

CHAIR: Thank you, Minister.

If you would like to start.

Jack Byrne.

MR. J. BYRNE: Thank you, Mr. Chair.

I would like to thank the minister and his staff for showing up here this

morning. We do have a number of questions. They may take a bit of time,

actually, but we will see what we can do.

Under the Minister's Office on page 229,

section 1.1.01, the Salaries of

the department: Last year it was budgeted for $266,000, it went up to $272,800

and this year it is $249,700. Can anyone explain why the differences there?

MR. LANGDON: In the Revised Budget, $272,800 from $266,000, one of the

guys who worked with me was unfortunate last year when he broke his leg and he

was off for fourteen weeks and we had to have somebody to replace him. That was

the increase in that particular head. This year, with the reduction within the

department, the 5 per cent or 8 per cent that we are looking for, that is why

the number is $249,700.

MR. J. BYRNE: What position would that have been?

MR. LANGDON: Executive Assistant.

MR. J. BYRNE: Executive Assistant?

MR. LANGDON: Yes.

MR. J. BYRNE: With respect to

section 03, Transportation and

Communications had $51,900 budgeted, went up to $59,400 and back down to $51,900

this year. Why the extra $8,000?

MR. LANGDON: Well, I tell you, when I became minister back in February of

2001, I made it a point to travel to as many councils as I could and to meet as

many people as I could. Like last night, myself and Bob were out to South River

and Clarke's Beach and we have done a fair bit of that right across the whole

Province. So that is why you see an increase of about $8,000 in traveling. This

year, again, with the budget restraint, 5 per cent or 8 per cent that we have

been asked to do, we are back to the original budget numbers again.

MR. J. BYRNE: Do you expect to stay within that budget this year?

MR. LANGDON: I am hoping to, yes.

MR. J. BYRNE: The next one, 04, Supplies, $3,400 budgeted and up to

$8,900 revised, that is an extra $5,500. Simply put, it is over double,

two-and-a-half times. Why would that be?

MR. LANGDON: (Inaudible) for me. Ken Curtis can probably fill in more

with regard to the increase into the purchase of various types of supplies. I do

not know, Ken, if you can add any more than that. That is the note that is

prepared for me here.

MR. J. BYRNE: I did not hear the answer to be honest with you.

MR. LANGDON: I am sorry. This increase reflects an increase in the

requirement to purchase various types of supplies. What these are, I cannot tell

you, but I am sure that Ken Curtis could probably answer that particular

question for you. Ken is up in the back here.

MR. J. BYRNE: Two-and-one half times. I mean, would it be furniture or

supplies or, actually, what?

MS COLE: That covers things like promotional supplies. Each year, when

there are the celebrations, we have different things to hand out to people who

visit the Province, or when we go outside the Province we bring out promotional

supplies, jackets and pens and that sort of thing. The increase last year would

have been for the Marconi supplies.

MR. J. BYRNE: Thank you.

Before we leave the Minister's Office, we also have Purchased Services

which went from $3,700 up to $19,000. That seems to be exorbitant there. Why

would that be?

CHAIR: Ramona.

MR. J. BYRNE: What would the services be?

MS COLE: That would be for hosting meetings with different councils and

whatever, if we had to pay for the meeting rooms and that sort of thing. Again,

a lot of it is related to the Marconi celebrations. Anybody who came into the

Province, we would have, you know, provided them with a dinner or that sort of

thing. So, it is mainly promotional stuff.

MR. J. BYRNE: Thanks.

The department knew that the Marconi celebrations would be going off that

year. Why would you not have budgeted, you know, a proper amount for that? Or

are the expenses being transferred from the Department of Tourism to Municipal

Affairs?

MS COLE: They have not been transferred from the Department of Tourism.

It is difficult at any point in time to predict what you are going to spend on

promotional items throughout a year and you just sort of go with it. If it is a

higher expenditure than you had budgeted, then we find the money somewhere else

within the department to transfer into it.

MR. J. BYRNE: Yeah, but that is high, it is five times more than what you

had budgeted, you know.

The other point, before I leave the Minister's Office, is: Can we get a

breakdown of the staff within the minister's office, you know, the positions,

the people holding the positions, and the political staff versus, say, the

regular executive staff for the department and, basically, their salaries also?

Would that be a big problem to get? I do not expect to have that here now, but,

you know, could you supply it to us later on?

MR. LANGDON: In my office, for example, I have an executive assistant.

The salary for that is $49,294.

MR. J. BYRNE: The problem with getting it here now, of course, is we have

to write it down. If you could just supply it for us?

MR. LANGDON: Oh, yes, I can get that for you.

MR. J. BYRNE: By the time this Hansard is transcribed and all that, it

could be months down the road. It would be nice if you could just supply the

information.

MR. LANGDON: I will not give you the numbers. Mr. Byrne, were you looking

for something different than what is in here?

MR. J. BYRNE: I am just trying to get a handle on the political staff

versus, you know, what would normally be in a department. I am going to be

asking this to every department.

MR. LANGDON: Yes. I can tell you the political staff that I would have. I

would have an executive assistant and, I guess, a political assistant, if you

want to call it that. They call it secretary to the minister. In the department

there is a full-time media person or communications person and there is an

assistant to her. So that is it, four people.

MR. J. BYRNE: Why I am asking this now is not to point the finger at you,

as minister, or anything like that, but it seems not to be consistent in the

various departments is all I am getting at.

MR. LANGDON: In my case I have an Executive Assistant which every

minister would have, I have a political person, you can call them political

secretaries, like every private member would have, there is a communications

person in the department which every department would have and there is an

assistant communications person. That is all we have.

MR. J. BYRNE: Thank you.

With respect to the next heading, General Administration, 1.2.01, Executive

Support, we have Salaries there,

section 01, $502,900 budgeted, revised at

$497,600 and this year you have $491,900 budgeted. So there is a drop of $10,000

from last year. Is there somebody being laid off within the department there? It

cannot be, because $12,000 certainly would not be a salary.

MR. SMART: It just reflects the general reduction in our salary budget

that has been prorated throughout the department; a reduction of approximately 5

per cent against our salary budget. We just take a piece of each salary budget.

Where we will actually save the money remains to be seen. We might say that we

will save it in divisions where we have vacancies, but for the purposes of

budgetary presentation, given that we do not know where those vacancies will be

at this point, we just have a general reduction across all salary accounts in

the department of a certain amount.

MR. J. BYRNE: Under

section 03,Transportation and Communications, $46,900

budgeted last year and this year and basically that is what was spent. I have

always had a problem with Transportation and Communication and another one over

the past number of years and I have not gotten to it yet. This is computers and

what have you, the amount of money that has been spent within government itself

on computers. Transportation and Communications: Can we get some kind of a

breakdown on how much is spent on communications and how much is spent in

transportation?

MR. SMART: Sure we can get you that, yes.

MR. J. BYRNE: On page 230, Administrative Support: I do not know, Mr.

Chair, if you are going to breaking it up into time and give me ten or twenty

minutes, whatever the case may be, and then go on to someone else. That is up to

you.

CHAIR: Let the Vice-Chair ask his question and the other fellows can

follow in line. If it is fifteen or twenty minutes, then so be it.

MR. J. BYRNE: What I am saying is I have more than fifteen or twenty

minutes. I probably have hours; seriously, you know. It is up to yourself.

CHAIR: The Chair is pretty flexible to members, within the time

restraints that we have, Mr. Byrne.

MR. J. BYRNE: Okay. Thank you.

As I said, in Administrative Support, subhead 1.2.02, page 230, it says,

"Appropriations provide for the management and control of the financial,

human resource, information technology and general operating activities of the

Departments of Municipal and Provincial Affairs, Government Services and Lands

and Industry, Trade and Rural Development."

How did it arise that funds would come from Municipal Affairs to go to these

other departments? Why is that?

MR. SMART: Actually, this is not uncommon in the structure of government.

Our Human Resources Division, if I only wanted to take that as an example, there

is only one Director of Human Resources for three departments, there is only one

Director of Finance.

MR. J. BYRNE: Is that a recent thing?

MR. SMART: No, that is probably three or four years ago.

MR. J. BYRNE: I was not here.

MR. SMART: Those central services units, as we call them, were part of a

streamlining initiative several years ago to serve more than one department. It

has to be budgeted somewhere so it is all budgeted in Municipal Affairs, but the

people in Municipal Affairs serve three departments on Information Technology,

Finance and Human Resources.

MR. J. BYRNE: If I were to look at Government Services and Lands, which I

will later on - it is in our committee also - this Administrative Support, there

would be no money come out of, say, Government Services and Lands for this?

MR. SMART: Well, not for Human Resources, Information Technology and

Financial Operations. They may have some other administrative support mechanism,

but, no, it would be here as opposed to there.

MR. J. BYRNE: Thank you.

Under that same subhead, 1.2.02.03, Transportation and Communications there,

there was $189,000 budgeted, you spent $157,000 and you are back up to $189,200

this year. If you only spent $157,000 last year, which is $32,000 less, and you

know the restraint that government is under, why would you not just leave it at

$157,600 this year in the Budget?

MR. LANGDON: The decrease last year was due to - and this relates

primarily to Government Services and Lands, I believe - a new accounts

receivable collection process that was put in last year to be more aggressive,

we will say, on the collection of outstanding accounts. That was late being

implemented last year, therefore you saw a reduction in the expenditures. We

expect it to be up and running for the full twelve months. It is the level of

activity that was late starting last year.

MR. J. BYRNE: The same thing, Administrative Support, 06, Purchased

Services, you budgeted $63,800 and you spent $71,500 and you have $63,800

budgeted this year. I am just curious. Those Purchased Services, what would they

be?

MR. SMART: Ken Curtis could probably give you a list of what is covered

by the Purchased Services account. It is a variety of things.

MR. CURTIS: That basically covers photocopier rentals in the department,

printing costs throughout the department, any sort of repairs to equipment, and

just general purchased services of that nature.

MR. J. BYRNE: You say the cost of photocopier rentals. Wouldn't it be

cheaper to buy these things? Every year we spend that kind of money on rentals.

Wouldn't it be cheaper to buy and have a maintenance contract to take care of

these things? I do not know who can answer that.

MR. CURTIS: Generally, what we found is it is more cost effective to

lease them out because you get a better per copy cost. In the long run it seems

to work out to be cheaper.

MR. J. BYRNE: Under Information Technology,

section 12 there, we see

$338,700 budgeted, spent $515,900, and it is back down to $317,400 this year

which is even less what you had budgeted last year. Why would that be? That is

$180,000 more or something for Information Technology. It seems to me - and I

was not at the estimates hearings last year, I was not on the committee - that

every year in every department there just seems to be an abnormally high amount

of money spent on Information Technology. Does anybody want to address that?

MR. SMART: Information technology is more and more a way of doing

business and you will certainly see increased expenditures. In this particular

case, what you are seeing in the revised expenditure is a special effort, an

extra effort we made last year, to bring on stream what we refer to as a

Municipal Information Management System. It is a system that includes a lot of

detail on the financial statements of municipalities, a lot of detail on the

water systems of municipalities, a lot of detail on the infrastructure of the

approximately 300 municipalities in the Province. Given that we are moving into

a three-year capital planning process as announced in the Budget, we thought it

essential last year that we expedite that piece of this particular information

technology program. So we moved extra money into our information technology

budget, made a special effort last year to get that up and running. This year we

will move back into general operations and it will continue on, but it was a

special development effort put into this last year to get it up and running.

MR. J. BYRNE: Are you saying, this year we will not see an increase in

the amount of money budgeted for Information Technology?

MR. SMART: Not under this particular category, no. We can always spend

more money on refining these data bases that help us do our work more

efficiently. If we got partway through the year and we were able to identify

some savings elsewhere in the department, would we like to make another

investment in this program? We would, but...

MR. J. BYRNE: This program, though, is just within the department itself.

That has nothing to do with any of the municipalities?

MR. ROSE: Well, it carries municipal information. At some point, rather

than the municipalities sending us financial statements and budgets, we would

like to have them be able to put them in themselves. This hooks up Governments

Services and Lands and Environment, as well, on things like water quality and

boil orders and so on. They are all tied up in this program.

MR. J. BYRNE: Basically what you are saying is eventually all the

municipalities, the ones that are computerized, will be able to do everything

electronically instead of with paper.

MR. ROSE: We would like to get there, yes. We are not there yet, but that

would be the objective.

MR. J. BYRNE: Yes, it makes sense. Thank you.

Under Total: Administrative Support there, you had $2,734,000 last year,

$2,900,000 spent and $2,767,000. That is the $200,000 difference. Okay, thank

you.

Page 231, Support to Municipalities, 2.1.01, the first one I have highlighted

here is Salaries. You had $831,900 budgeted, spent $1,061,600 and $876,000 this

year, which is more than was budgeted last year by some $45,000. Yet you spent

almost $200,000 more in the Revised column there. Can you tell me why that would

be and can you give me some indication of the number of employees in that

section?

MR. LANGDON: That increase from $831,900 to $1,061,600 was due to a

payment of severance, annual leave and redundancy to an employee who retired

during the year, a decision to fill a temporary position and the realignment of

staff within the department.

MR. J. BYRNE: So the severance that was paid out was to one individual?

MR. LANGDON: I do not know for sure. I have to go back to Ken Curtis on

that.

MR. CURTIS: That was one person who retired during the year.

MR. J. BYRNE: Yes, but the severance that was paid out, it looks like it

was $171,000. It is $230,000 over. I am just curious as to how much was

severance. Was it one person who got paid severance, how much was it and what

position was it?

MR. CURTIS: It was one person who got it. I recall it was severance and

annual leave. It was around $50,000 that that person got in severance and -

MS COLE: The reason the revised is up so high: During the year we had

some restructuring within the department where we moved the reporting structure

for the engineering services out in the regional offices to head office through

the ADM of Engineering Services. What happened there was that the original

Budget and this year's Budget have been restated for those positions having

come out. The revised was based on the actuals which were based on where the

payments were made, and for the last fiscal year they were made out of that

previous activity. That is why the revised is still up.

MR. J. BYRNE: The minister said that severance was paid out. Can I get a

breakdown of the severance that was paid out, the position and really some

explanation of that? You explained that here to me now about things being moved

around and that, but it is nice to be able to see that in writing, what that

was, an explanation of that.

MR. CURTIS: Okay, we will do that. In addition, in that as well there is

a temporary position that was filled. I do not know what the position would be

but we will get that information.

MR. J. BYRNE: With respect to that, if there was a temporary position

filled, wouldn't you think that would have been budgeted in Salaries and it

would not have had to blow up to be more than what was budgeted?

MR. SMART: Not necessarily. We budget, in a division, we will say, for

ten people to be there on a full-time basis. If someone gets injured or is sick

and goes off on sick leave, which is with full pay, and we have to employ a

replacement, well that is an additional cost in the salary budget. If they left

and just left a vacancy and did not get paid, it would balance out, but many

times we have to replace for people who are on paid leave.

MR. J. BYRNE: Under section, 2.1.01.05, Professional Services, you had

budgeted $17,500, spent half of that, $8,400, and none budgeted this year. What

were those Professional Services and why would they not be needed anymore?

MR. LANGDON: The number of participants in a certified program from

municipal managerial personnel was below average in 2001-2002. I am not sure if

it would be - Baxter or Ramona could probably fill in.

MS COLE: We have been sponsoring a program through Memorial University

called a Certificate Program in Municipal Administration whereby we have had to

pay some of the costs of doing it. The actual take up on it was a lot less

during the year than we had expected which is the reason the revised is down.

The reason there is no money in the next year's Estimates is because the

Municipal Training and Development Partnership has now taken over responsibility

for that. We do fund the Municipal Training and Development Partnership to some

extent, but they will actually do the process of sponsoring those.

MR. J. BYRNE: Thank you.

Under Municipal Finance, 2.1.02., again Salaries, 01, $200,000 budgeted, it

went up to $304,000 and down to $225,000 this year. Would someone like to

address that and give us some idea of the number of people in those positions

and why the difference of $104,000?

MR. SMART: Well, when you look at all these salary amounts, I mean, you

basically need to look at the department as a whole. Money moves around during

the year in salary accounts. We move people from one division to another

division. If we move people, we have to move the salary dollars with them. So,

that is what you are seeing there in revised; realignments of staff or the

engagement of temporary employees. In 2002-2003, there is an element of

restraint built in there, as well.

MR. J. BYRNE: That position, that $104,000 or whatever was moved around

there, could you let us know what that position was and where it came from?

MR. SMART: Sure. We can get you that.

MR. J. BYRNE: Okay, thank you.

Now, Employee Benefits - now this may sound petty, but $100, what would that

be? It is hardly worth putting in there, you know.

MR. SMART: It is hardly worth putting in there, but to keep the account

open they will just make a nominal provision. We may transfer money in there

later in the year if we have a need and we want to do something on the Employee

Benefits side.

MR. J. BYRNE: Thank you.

On page 232, Policy and Planning, again under Salaries, 01, budgeted

$129,700, spent $107,400 and you are up to $189,300. Now, a few minutes ago you

were saying that in the last subhead, under Salaries, there was a bit of

restraint there, yet you are increasing here. When you look at the Budget that

was presented, there are going to be, from what I can understand anyway in the

Provincial Budget, some 300 people out of the system, excluding Health and

Education. Why would there be an increase of some $60,000 there this year?

MR. SMART: In the case of Policy and Planning, it is primarily a

realignment of staff which takes some staff from other sections in the

department and moves them into our Policy and Planning Division. If we move

staff in, we move their salaries dollars with them.

MR. J. BYRNE: So, we will see in some other

section here where the

salaries have dropped?

MR. SMART: If you add up the entire department and factor out the fact

that there is some provision for salary increases built in, the net effect will

be, yes, throughout the whole department a decrease in the real salary budget.

Some divisions are up, some divisions are down, but the net effect for the

department is a decrease.

MR. J. BYRNE: There will be no new positions within this department?

MR. SMART: That is correct. No filled ones. We may have positions that

are vacant but they would not be filled.

MR. J. BYRNE: Under that section, Policy and Planning, 03, Transportation

and Communications, you budgeted $5,200, up to $16,700, three times, and back

down to $8,000 this year. It seems to me that Transportation and Communications

is a subhead that is in every department, from what I can see, and it is played

around with a lot. Can anybody explain why that would be up three times there?

In other areas it is up similarly. Why is it that it is often that subhead that

is -

MR. SMART: In crafting a budget, the first things you try to save and cut

on are things like travel and transportation and communications. As you get into

the year and you have a requirement to travel related to business, whether it is

around the Province or to go to Ottawa, you have no choice but to transfer money

in. Again, you are transferring it from other sections of the department and,

while this one may be up, a supplies account, a transportation account, or a

purchased services account, somewhere else in the department had to be reduced

in order to put the money here. It is difficult to anticipate.

In our case, we have a number of special initiatives underway through policy

and planning. Our review of the municipal operating grants system that we are

doing with the Federation of Municipalities and Municipal Administrators is not

a level of activity or a level of travel that we anticipated when we put the

Budget together in the first place. Things like that come up and you just cannot

foresee it. You enter every budget with a view to saying, well, we will not do

any travel this year, but it does not work out that way.

MR. J. BYRNE: Thank you.

Under

section 5, Professional Services, you had no money budgeted yet you

spent $9,300 and have $2,500 budgeted for this year. What would those services

be that were $9,300?

MR. LANGDON: One of the things that we have been encouraging and is

happening in a lot of instances is, there are a number of municipalities that

have decided they want to share services like administration and whatever. There

are a number of areas across the Province, such as the Member for Bonavista

South's district, Port Union, Catalina, Little Catalina, and we have engaged

the services of former Deputy Minister, Clarence Randell, to look at that. In

East Port we have engaged the services of former Assistant Deputy Minister, Art

Colbourne, to look at that. When we did the budget last year we did not

anticipate that, so that is where those costs would come in, to have those

people do the work in those different regions.

MR. J. BYRNE: I am glad you brought that up because - and Ramona would

know about this, I would think, and we have discussed it recently, myself and

the minister - some years ago, when the former Minister, Art Reid, was there,

the towns down our way, Logy Bay-Middle Cove-Outer Cove, Torbay, Pouch Cove,

Flatrock and Bauline, had a number of meetings with the then minister who

committed to paying for a study for those five towns to look at the benefits of

sharing services. That was committed to a number of times. The former Deputy

Minister, Bob Noseworthy, was familiar with it. All the time we were being told:

Listen, we are waiting on the criteria to be developed. Now, I find out there

are two or three other areas within the Province where it is actually being done

and the five towns down our way, that came in and proposed it, are still on the

back burner. I appreciate what the minister said, that if the towns come forward

now it will be done right away.

MR. LANGDON: Absolutely! The thing is, these initiatives that we are

naming here, the four or five across the Province, people have come to us, and

if we have a request from the five communities down your way to do that, then we

will ascertain that and work with the towns to make it happen.

MR. J. BYRNE: I have already discussed it with a number of the towns

there and I think it is something (inaudible).

MR. LANGDON: I will await your response to the towns on that and you can

contact me in the House or at the office.

MR. J. BYRNE: I think there are services that certainly can be shared and

money could be saved. There is no doubt about that.

MR. LANGDON: Absolutely! I mean there is a duplication of services in

many, many instances. That money that is being spent there could then be put

back into the community to improve the services within the region.

MR. J. BYRNE: Thank you.

On that same page, 2.2.02, Urban and Rural Planning, again Professional

Services,

section 05 there, $25,000 budgeted, $15,000 spent and you are up to

$17,000. What would those services be?

MR. LANGDON: It is really, in a sense, the planning studies, I guess,

within the communities themselves, municipal boundaries and that; you know,

where there are not as many requests for the municipalities to change boundaries

to expand it or whatever. That reflects that. Again, it would be very, very

difficult, in a sense, for me or any minister to realize if the town of Bauline

would come in, or Pouch Cove or Flatrock or Torbay, to change their town plans

and so on. So we budgeted $25,000 for it. There was actually $15,000 taken up.

We figured this year, all things being equal, we would budget for about $17,000.

I mean, at the end of the year, again depending on the requests, that could be

$25,000.

MR. J. BYRNE: So, you are saying if the towns wanted a boundary change or

a plan change?

MR. LANGDON: A plan change is what I meant.

MR. J. BYRNE: Thank you.

On page 233, Engineering Services, 2.3.01, Salaries, $906,800 budgeted, you

spent $585,000 and it is back up to $852,100 this year. Those are some drastic

differences there. Does anybody want to address that?

MR. SMART: There are a number of things in Engineering Services,

actually, one being the realignment of staff. We used to have our engineering

people in the field reporting to the regional offices in the field. They now all

report directly into our Engineering Division. The other thing that has happened

here is, as part of government's source to tap water initiative we have

engaged additional staff in the engineering

section - I guess you would call

them water technicians - that are engaged to look at water systems throughout

the Province. There are a number of things going on with staff. There is an

increased number of staff in engineering plus a realignment of staff.

MR. J. BYRNE: The water technicians you mentioned, how many would you

have hired on? These are new staff, I would imagine.

MR. SMART: I think we have three or four, Wayne?

MR. CHURCHILL: Three.

MR. SMART: Three additional ones.

MR. J. BYRNE: When you went from $906,800 to $585,000, what did you say

happened there? Obviously, you let people go or you moved them around in that

division, then you hired new people on.

MS COLE: If you remember back in Support to Municipalities, we discussed

the situation there with the realignment, the change in the reporting structure

for the engineering staff. The two budgets have been adjusted for that, but the

actuals were still based on where they were being charged for that fiscal year.

In this case here, the two budgets have been adjusted for the engineering staff

who now report to the ADM of engineering, but the revised figure is still based

on the actual, because they continued to be paid out of the other account during

the year.

MR. J. BYRNE: These three technicians, when were they hired on?

MR. SMART: Several months ago.

MR. J. BYRNE: All these positions were advertised?

MR. SMART: Oh, yes.

MR. J. BYRNE: Thank you.

I do not want to seem to be repetitive, but I will go back down to

Transportation and Communications again - I am going to get the same answer

every time, aren't I? It is $108,900, down to $65,000 and up to 93,300.

MR. SMART: You are going to see the same thing there. Aside from the

realignment, the fact that we do have new staff and new water technicians will

increase our Transportation and Communications this year compared to the actual

expenditure for last year. These people are employed to go around the Province

and be in communities looking at water systems, providing training and so on. We

would expect an increased level of activity in Transportation and

Communications.

MR. J. BYRNE: Thank you.

Section 05, Professional Services, $19,000 spent, $23,000 budgeted, and down

to $10,000 this year. What were those services and why the differences?

MR. SMART: The reduction in professional services for 2002-2003 is a

restraint measure. We had to reduce our operating budget and this is one of the

areas where we decided to make a reduction.

MR. J. BYRNE: The services themselves, what were those services?

MR. SMART: In that section, engaging of engineering consultants primarily

to do various studies on water supplies. In some areas of the Province, in many

cases municipalities do this directly themselves and we fund them through

capital works, but in certain areas of the Province where we can be of

assistance we have actually engaged a consultant to have a look at some things

for us.

MR. J. BYRNE: The next one, Purchased Services, budgeted $3,500, spent

$10,500 which is roughly three times what you budgeted. What were those

services?

MR. SMART: Again, it is primarily with respect to advertising and gearing

up to put three new water technicians in place and the set-up costs associated

with that. There is an initial set-up cost in setting up any operation. We would

hope that now that we have it set up and those offices stocked it will be a more

normal expenditure. That was an extraordinary item, to get that effort going in

accordance with that source to tap water quality initiative.

MR. J. BYRNE: I just want to finish this page and I think the Member for

Baie Verte wants to ask a few questions. Industrial Water Services 2.3.02,

Professional Services, $151,100 budgeted $151,100 spent, $110,000 budgeted this

year, $40,000 less basically. Is that just due to the cutbacks and what were

those professional services?

MR. LANGDON: As you know, there are many water supplies in the Province

that were industrial water supplies owned by the government Department of

Municipal Affairs. In many instances what we are doing now is we are replacing

the systems in the municipalities and bringing them up to par, so that at the

end of the day we will not have the need to do as many of them. We are replacing

them, I think, in such places as Marystown, Port Union, Comfort Cove, Ramea and

other places where we had those industrial water supplies. We are bringing them

up to standard and then passing them over to the municipalities. So, in that

sense, that is why there would not be as much of a cost.

MR. J. BYRNE: Thank you.

In the Amount to be Voted, 02, Revenue - Provincial, we had $626,500 this

year. That is what it is going to cost the Province? Is that what you are saying

here?

MR. ROSE Pardon?

MR. J. BYRNE: That $626,000, is that actual revenues coming in?

MR. ROSE: Yes, these are revenues from the sale of water. These

industrial water systems provide water to industrial enterprises, as well as

communities in some case, at a certain rate of fifty-five cents per thousand

gallons, I think. So, this just reflects the normal revenue amount?

MR. J. BYRNE: Thank you.

I pass it over to the Chair for now.

CHAIR: Would anyone else like to have turn before we turn it over to Mr.

Shelley?

MR. ANDERSEN: Mr. Chair, I was going to ask some questions but when I

listened to the questions and heard the prompt and efficient answers given by

the minister and his staff, like the Member for Cape St. Francis, I could sit

down for hours and just listen to the answers. So, I will donate my time to Mr.

Shelley.

CHAIR: Mr. Shelley, without further ado.

MR. SHELLEY: I am glad to hear the member say he is willing to sit down

for hours because he may very well be doing that.

Mr. Chair, thank you very much.

I certainly have a few questions, as critic here this morning, for this

department. I want to thank the minister and his staff for being here, because

there are always lots of questions when it comes to municipalities. I have some

particularly to the headings but also some general questions, I guess, on

Municipal Affairs that I will probably ask today.

I will start on page 234 with Municipal Financial Assistance, subhead,

3.1.01, "Appropriations provide for the payment of Provincial contributions

towards interest charges..." I would just like to, first of all, expand a

little bit on ... "other expenses on municipal debt relating to water and

sewer..." What is meant by the other expenses?

MR. SMART: Under Debt Servicing?

MR. SHELLEY: Yes.

MR. SMART: Well, there are any number of expenses. This reflects the

payments that we make to the Newfoundland Municipal Financial Corporation,

basically. It is not only the interest payments on the debt, but when you

refinance loans there are various charges you have to pay and so on. It is

primarily just the interest portion of the repayment of our loan and some

additional. Like any bank, there are always additional charges when you are

doing your mortgage above and beyond the interest, so there are some additional

fees.

MR. SHELLEY: Yes, those are the other expenses you are referring to.

Now we will go to line 11, Debt Expenses of $24,412,000 to the revised of

$24,950,000. That is a slight amount, but this year there is an increase on the

estimate. Could you comment on that?

MR. SMART: The increase for this year essentially reflects an increased

level of activity on municipal infrastructure. The more money we spend on water

and sewer systems and water treatment plants and so on, the more money we borrow

through the Newfoundland Municipal Financing Corporation, therefore the more we

have to pay back. When you see debt service costs increasing it is essentially a

reflection of an increase.

In terms of the difference between budgeted and revised, variations in

interest rates on refinancing of loans can - there are hundreds and thousands of

loans, actual loans, that make up this number so it varies from time to time

based on interest rates.

MR. SHELLEY: I understand. That is why I did not ask on the revised

amount because that is only a small amount, but when it comes to the amount for

this year that is quite a bit. So that is the increase of the activity on the

debt financing.

MR. SMART: Yes.

MR. SHELLEY: Okay. In Municipal Operating Grants: I have to make a

comment on this. First of all, I understood and I read the day of the budget how

much it was this year and I did not make a public comment about it and I

certainly did not know how much was in the budget. My point, and I will refer to

it again for the record, is that - and I will just give a ballpark because I did

not bring down the numbers. In 1995-1996 it was somewhere near $42 million. It

is now $21,500,000, so it is half. That is about a 50 per cent decrease, and I

want to be corrected on that if I am wrong, but I believe that there is about a

50 per cent decrease since about 1995-1996. Is that correct?

MR. LANGDON: That is about right, I think.

MR. SHELLEY: Is that right? Well, that is the point I was making.

Sometimes, when you get into public comments back and forth, either myself or

the minister or whoever, the point is that I have talked to municipalities,

smaller communities to larger communities. I can give examples: Pacquet, a small

community in my district, used to have about $52,000 in MOGs in 1996 and today

they are getting about $27,000. So it is half. In the last five or six years

they have been decreased. I can give another example. Twillingate, that I had a

call from the other day, are saying they went from $410,000 in 1996 to today

when they are getting, if I remember exactly, $209,000. So it is about half

again there. I am sure there are more examples around. The point being made is

that these municipalities have lost operating grants by about 50 per cent since

1995-1996.

MR. LANGDON: There are other factors that would help to change that

perception, for example, debt restructuring. Since 1995, and including this

year, we are putting approximately $48 million out to those small

municipalities. There have been more capital works over the last number of year,

in the last two years in particular, with a variable rate, for example. We have

talked about that. In your own district, in Burlington, they probably got a half

a million dollar contract and they ended up paying about 6 per cent of that

which would be $30,000. The provincial government has taken up a lot of that.

In addition to that, one of the things that I looked at when I became

minister here was the Municipal Operating Grant. The Municipal Operating Grant,

as you know, is a triangle reversed. Because we have a small number of large

towns on top and the large majority of small towns at the bottom; the regular

triangle. When you look at the Municipal Operating Grant it is just the reverse,

the larger towns get the bulk and the smaller towns are (inaudible). That is why

we have engaged the Newfoundland Federation of Municipalities who are with us

and the Newfoundland Administrators Association. We are working with that, with

Baxter, who is taking the lead from the department here, to work out a system

whereby these might be more equitable.

I cannot tell you what the outcome of that would be right now because that is

still in the planning stages. I would think that later this fall we should be

able to unveil, with the Federation of Municipalities, a new structure, if you

wish, for Municipal Operating Grants and how these would be somewhat changed but

yet, at the same time, probably be able to find new measures for new sources of

taxation for the municipalities or whatever. It is all in the planning stages,

so at this stage I cannot give you any more details than that because I am not

apprized of any more myself. It is not that I do not want to give them to you,

but it is a fact that it is a project in progress and until such time as it is

all done, then the Municipal Operating Grants will remain the same for now.

MR. SHELLEY: I understand and I do know that it is ongoing with the

Federation of Municipalities. I have spoken to them. I do know it is an ongoing

process, but I still refer back to the point you made earlier. I understand

there is more in infrastructure and so on. The biggest reason for that,

minister, as you know, is because it dilapidating so quickly, it is so old and

you are trying to keep up to that. I understand the challenge that is there, but

that is still not a tradeoff for a community - I will just use the example again

of a community like Pacquet. When they lose $27,000 it might not sound like a

lot to us right here. Actually I know it sounds a lot. You understand how much

it is to a community that size because you are dealing with them on a daily

basis. Twenty-seven thousand dollars to Pacquet is a lot of money.

MR. LANGDON: I know, but if we do a water and sewer project for them for

this year and let's say it is half a million dollars, the way the variable

structure is it will more than pay up for - not more than pay up, but it will

alleviate some of the dollars that they would have had to operate further

infrastructure.

MR. SHELLEY: Absolutely, but at the same time, of course, they will have

a portion of that water and sewer, which they want, but they will have to pay

too. I suppose the best word you can use is tradeoff. At the same time that

crunch money is MOG money, because that is what they refer to it as at councils,

and I am sure to you too, crunch money. It is $10,000, $15,000 or $30,000 to a

small community. To a community like Twillingate $200,000 is a lot of money;

Baie Verte, Fleur de Lys, whatever you want to speak on.

I guess the last point I will make on the MOGs is this, the importance of it.

I suppose, in keeping with the government's own philosophy on equalization

from Ottawa, that is how I have used it, as an analogy. If the Government of

Newfoundland is saying to Ottawa, don't decrease our equalization payments and

transfers because we are losing population, well small municipalities are saying

the same thing to the provincial government. I know because I have gone through

that complicated process of the MOGs and, believe me, I do not like sitting down

doing the mathematics on it either. I do know that population is related to the

MOGs. It is one of the factors that contributes to the amount of money in MOGs.

Is that right?

MR. LANGDON: For this year and last year we did not take into account any

population decline. What they had is what they got.

MR. SHELLEY: I understand that from your statement, publically, too. My

point was that the amount was dropped and we have to put into the factor, when

the Federation of Municipalities and your department are dealing with this new

system, I hope now, or newer calculation, that that is a major factor, because

as communities, they are not all dying. There are some that are hanging in there

and working hard, because they lose 100 or 200 people, which is a lot of people

to some of these small communities, that that is not a factor that drives down

their MOGs. That is what I wanted to drive home here and to understand, because

when we talk publically, you make a statement and I make a statement, we really

never get back and forth to get to a point like this. That is why I use this

opportunity. I strongly support that communities losing population should not

get the negative impact of an MOG.

MR. SMART: The services still have to be provided.

MR. SHELLEY: Yes, absolutely!

Now, on Special Assistance: First of all, I have to ask a question on the

revised amount for last year because that is fairly significant. You are only

talking about a total of $5 million and you get an increase of over a million on

the revised. I will ask that question first. What was the reason for that?

MR. SMART: Well, on the revised we were allocated additional money

because the special assistance requests that we received from various sources

were just up. Therefore, additional money was allocated and we spent additional

money.

MR. SHELLEY: I can understand that. There are probably some that are

looking for the extra money.

WITNESS: We still have a list.

MR. SHELLEY: I know you do and I have a list too.

MR. SMART: For example, for King's Point.

MR. SHELLEY: Yes, absolutely! That is something necessary and good to do

and it is important.

MR. SMART: You have a lot of firefighting equipment and things of that

nature tied up and, in fact, this particular Special Assistance vote, I would

suggest, is probably what keeps the volunteer fire sector in this Province

going; breathing apparatus, bunker suits, communications equipment. This is

generally where all of that gets funded from.

MR. SHELLEY: But, there is also the Fire Commissioner's Office and the

money that comes from that to go to fire departments. So, this money in Special

Assistance that goes to fire departments is above and beyond what comes from

fire commissioners' requests?

MR. SMART: Well, the Fire Commissioner's Office makes recommendations

to us. The money does come out of here. The Fire Commissioner has very little in

the way of grants to give out to fire departments. He makes the recommendation.

We take the money out of here.

MR. SHELLEY: It comes out of that Special Assistance. Now, this is what I

am getting to. The amount allotted out of the Special Assistance fund last year,

have you broken that down yet and can you break it down for me?

MR. SMART: We could break it down for you between how much was fire

suppression, fire equipment, how much was chlorination kits for municipalities

and how much was water studies. Yes, we can give you a breakdown, if you are

interested in it, on how this gets allocated.

MR. SHELLEY: I would like to see that, because I will say this, that

amount of money critical to fire departments or whatever you are doing - because

we will talk about the chlorination and water things and so on in a little

while. Most of the money that I received in my district, 90 per cent if I am not

mistaken, was towards water services and so on. I got a little bit when I came

with an emergency situation for King's Point and things of that nature. All I

am looking for, as any member would be, and I know the minister would like it

like this, is the fairness of it. If I am going to be told as a member, like any

member in this House, that when this Special Assistance is allocated that it is

done fairly, I do not want it to be done under the understanding - when I used a

portion of my money last year through your department it was through the

improvement in water services. I did not know there was so much available. I

will tell you now, I did not know there was so much available to go other ways.

MR. SMART: If you looked at the $4.8 million for 2002-2003, we do not

allocate an amount for water versus an amount for fire versus an amount for

chlorine test kits, we do not allocate it upfront. This, basically, responds to

the requests we get from municipalities. It turns out that most of them are

water related, most of them are fire related and so on. We would not, for

instance, say, out of $4.8 million we have allocated $2 million for fire and

$1.5 million for water. We do not allocate it that way at the beginning of the

year. It is request driven by municipalities, basically.

MR. SHELLEY: Well, I would like to see, because from the information that

I have it was not very evenly distributed. I understood the priority of this

type of Special Assistance was good quality water first of all, the number one

priority. That is what I have always understood. Then things would come next,

like fire service protection or an emergency van or that type of thing. I did

not know it was for things that I have a list of, that I did not think should be

there. I do not want to give a list of it here this morning.

I believe that that fund should be, as I have always believed it should be,

an emergency on water safety which was the priority and then emergency equipment

like fire equipment and so on. Anything else after that - as a matter of fact, I

do not know if some of it should have been there at all. So, I am asking: That

$4.8 million for this year, is the priority on, again, water quality, safe

drinking water and emergency things such as fire equipment?

MR. SMART: That is generally what you would expect, although on your

point - and I can understand your view, that it is primarily water and fire and

so on that takes priority. If someone asks for $5,000 for a playground for a

group of kids in a community now, is that a priority? Sure it is.

MR. SHELLEY: I hope it does not depend on who asks; let me put it that

way.

MR. SMART: No, it does not. I mean there are any number of them.

MR. SHELLEY: I could come in here with a big list this morning and go

through it. I have that list. I don't want to do that, I just want to clarify

that the minister I have been dealing with has been fair in dealing with me. As

far as the big list I have seen, I would want to be treated as fairly as anybody

else, and any member should be.

MR. LANGDON: I think that makes sense. I think, since I have been there

from February of last year, I have been as fair with people as possible and I

have been upfront with people. The Member for Cape St. Francis would come and

ask me for something for his district and in many cases I have been able to

accede to the request, whether it is the Member for Conception Bay South, the

Leader of the Opposition or whoever. I have not turned anybody away and I have

tried to be fair and equal with whatever funds we have had. I think that is the

whole idea of being here.

MR. SHELLEY: That is why I am asking that here this morning. I guess the

key word here minister is understanding. If I had understood last year that I

could come and get $5,000 for a Zamboni in La Scie out of this money- because I

did not think I could, not out of this type of funding. I thought this was for

chlorination, which I asked for and got, and I credit you for that, and for the

emergency van in King's Point. I am not saying that a playground is wrong. I

am saying that the understanding - and I have the understanding now. That is

fair enough and I will deal with the minister as I have done. If that is the way

it is going to go, so be it, but it has to be all around, which you always say,

from here to there to wherever.

MR. LANGDON: That is the way and I want to be able to treat everybody

fairly.

MR. SHELLEY: I just wanted to bring that up this morning and clarify it.

As far as $4.8 million budgeted this year in the Estimates: Is that because

you see increased spending in that or because of the demand you had last year?

Why would you raise it that much? I am glad you did. I was hoping it would be a

bit more, but I know you are strapped for money. Do you estimate that the debt

demand is higher for that type of thing?

MR. SMART: We could spend more than $4.8 million. We never have enough to

meet all of the demands from municipalities and various groups, but this is the

amount that we managed to get. It could have been reduced, it could have been

increased. In looking at the overall budgetary position of the department, we

were able to get $4.8 million in this account and that is what we work with.

MR. LANGDON: If I can make a comment. I think, from the Department of

Municipal and Provincial Affairs, we have done pretty well out of the budget

considering. We were able to announce at least $260 million, probably it might

go as much as $300 million, for everything, infrastructure, roads, recreation,

fire protection or whatever the case might be over the next three years, and

then being able to get, on top of that, another $12 million for debt

restructuring. The group that I have behind me here put together a good plan and

I was able to convince my own colleagues in government we needed it. As I said,

considering, I am very much pleased that we have these services that we can

provide to the people of the Province. They are much needed. I would like much

more, probably triple what we already have, but I mean there are fiscal

restraints that you have to work within. I think, overall, it has been half

decent.

MR. SHELLEY: Yes, I understand that. I will leave that one there.

Before I go to the next heading, I have to raise this issue, and be on record

for saying the same thing I have said for probably the last five or six years in

these estimates, job creation. This past winter, of course, some had to be put

in place for a very real reason - and I say this to be on record again because I

have been on record as saying it many times. I wish I never had to ask for job

creation again. I hate dealing with it and I hate helping put it out. It drives

my office wild. I almost lost my own assistant this winter because of it. It is

crazy. I do not want to ask for it. I hope we never have to put it out, but the

reality - and I have said this when some critics publically take this on. I have

supported government in that we have to do it right now. We have to do probably

next year. Hopefully, if things can turn around, we will not have to because it

is the lowest form. This year there was some spent in my district and other

districts on the Northern Peninsula and different places around.

You know, when you are dealing with these people on the front lines, which we

do as members, and I know the minister does too, when a person comes to you who

has worked hard, we know there are people in the system for different reasons. I

will not get into that, but there are legitimate hard-working people who went

away to work. I have one example. I always use the lady from my district,

fifty-four years old, who worked for twenty-five years in the fish plant, who

needed three more weeks, and who left her family and traveled to Nova Scotia but

still came back one week short. Was I ever glad I could get her one week work so

she could qualify for EI. I hear the Ottawa criticisms and so on, but the bottom

line - that is one example, I could give you thousands, and I am sure the

minister has lots of them.

This year, when we did this job creation, I kept the numbers of people who

came back so much too short. I am still left with a handful of people, fifteen

or sixteen people. One fellow was twelve hours short - that is as low as it went

- and he is still twelve hours short of qualifying for EI. We still have people

up as far as two and three weeks. That is a handful. That is an example of a

group, to give you an example of what is happening.

Is there job creation for this spring? Is there talk of it and so on?

MR. LANGDON: As you know, from our department, we did not have any funds

for the job creation. It was done through Industry, Trade and Rural Development.

Our department was a mechanism under which the thing was distributed across the

Province. There is no funding in the department for us to do job creation now. I

do not know if you were to speak to the Minister of Industry, Trade and Rural

Development -

MR. SHELLEY: I am going to do that, but I asked you because you have done

it in the past.

MR. LANGDON: The thing is, we have the mechanisms in place whereby we

could have a distribution of it, an administration of it, as we did - I think I

signed off all the letters for people who would have gotten work in your area,

but the money did not come from us. I do not know if there is anything up there

now or not, but we certainly do not have any money for it, not right now.

MR. SHELLEY: You talked about suggestions and I was trying to put forward

something that you think could work.

MR. LANGDON: Sure.

MR. SHELLEY: I have always believed that if we know the reality, that for

the next two or three years there is still a little bit of job creation going to

be needed to get you through the spring, if we are going to spend - what was it

spent this year, I cannot remember?

MR. LANGDON: I have no idea.

MR. SHELLEY: Let's say we know for the next two or three years that $5

million is going to spent in job creation. I mean, you need time. We have gone

out this year and tried to put things together in a week to try to put together

a program. I believe, if we are going to foresee that for two or three years -

say if there is going to be job creation this spring, then the council and the

development association should have known in December that they will be getting

x number of dollars. Then they can plan a decent project; not that we have not

done some good ones. There are bad ones but there are some good ones too, like

helping the fire department rebuild or whatever they are doing out there. There

are some good ones and there are bad ones. The point being, you could give some

advanced notice to the people we are going to use on the ground. We could have a

council now in Fleur de Lys working on ideas as to what they can do

constructively as opposed to rushing out in the middle of the winter. You know

that too, minister.

That is my suggestion, if you are looking for suggestions. If we are going to

do that, give as much notice as possible. As a matter of fact, if we are going

to do something at the end of May this year let's get on the ball with it now

and find out if there is going to be $2 million, then go to the Development

Association and say: You have $50,000 coming a month from now. At least you

would give them that time. We did not even have a week this year to get ready

for that. It is something that we should be looking at. If there is money for

job creation, I think it is going to be needed this spring to help people who

are left short. Hopefully it won't be that much, because I am looking to do

things in the spring in my district like other members are. I think there might

be two or three weeks of job creation that might be needed for a handful of

people to get them over the hump and then hopefully plan for next year.

MR. LANGDON: Like I said, you talk to the minister on that. We can

administer it through this department, that is not a problem.

MR. SHELLEY: Yes.

Now, the next page, 235, Municipal Infrastructure, the first one, subhead

3.2.01, Municipal Infrastructure on payment of provincial contributions, it

says, "...principal owing on municipal infrastructure projects relating to

water and sewer systems, road construction...", and so on. First of all, a

comment on that. From what I understand, most of it - I do not know what

percentage -will be going towards water and sewer.

MR. LANGDON: Well, there are three or four parts to the program this year

as you know. The first is a multi-year capital works program, and that is for

the larger towns because the larger towns want to be able to do systematic

planning within their municipalities. We have talked to practically all of the

towns now that want to get into that type of program.

MR. SHELLEY: What is the percentage breakdown on that one?

MR. LANGDON: Fifty-fifty.

MR. SHELLEY: That is the fifty-fifty one, right?

MR. LANGDON: Yes.

These are the larger towns that do have the wherewithal to do that and there

are no small towns entering into the multi-year capital works program.

The other one is the Canada/Newfoundland Infrastructure Program and that goes

primarily to the smaller towns because there again the provincial government has

the ability to, through the variable formula, to pickup the large majority of

the cost of that. That program is primarily $30 million a year. Last year I

believe that was 90 per cent plus that was in water. There were a few dollars

kept aside for waste management. We still have to do that. We have to deal with

the Conception Bay North problem and waste management right across the Province.

Other than that, it was there.

The regular Municipal Capital Works Program, which is $28 million, again is

primarily for water. This is again where you put in your fire trucks and you put

in your roads, where in the municipalities if you tear up your roads for water

and sewer they have to be paved and so on. That is done through that program.

Bob, what other things am I leaving out?

MR. SMART: (Inaudible).

MR. LANGDON: It is primarily for water, but there are extenuating

circumstances. The Member for Baie Verte talked to me a couple of days ago about

one of the towns in his area. You look at individual towns and if they can

afford the work on a 50/50 basis then you go ahead and do it. But primarily it

is a water thing.

MR. SHELLEY: With the Canada/Newfoundland it is one-third, but basically

it is one-third federal and then the Province picks up a little more. Now what

percentage-

MR. LANGDON: In some instances, depending on the formula that was done in

the department, depending on the tax that was charged, the water and sewer

rates, the mill rate and all the other things, your population base, it could be

the provincial government picking up as much as 90 per cent, as we did for the

town in your area last year. That 90/10 really calculates out to be about 7 per

cent, because you are looking at 10 per cent of sixty-six and two-thirds. So, 10

per cent of that would be about 7 per cent. So for a $30 million project you

would be looking at the municipality paying back about $70,000.

MR. SHELLEY: The local service districts: That fits in there a bit

differently.

MR. LANGDON: You talk to the Federation of Municipalities and all of the

others and in many instances the people in the local service districts pay very

little tax to the community compared to the town councils. Some of those local

service districts are larger in size than the regular council you would have in

some other communities. What we have said to the local service districts is

that, if you come to us and look for a project of say $10,000 or whatever, we

think it would be fair that the Province pay 70 per cent and the local service

district pay 30 per cent.

MR. SHELLEY: So it is 70/30 now.

MR. LANGDON: What we have said to them, though, for the local service

districts: Some of that 30 per cent, if you want to do it in kind, then you are

able to do that. In some instances, certainly municipalities where they want to

do something with their community hall or they want to do something with their

water supply, if they have been able to engage the services of someone, friends

of theirs who have a backhoe, to put it in for them, if they want to give some

free hours themselves, they can count that in to the 30 per cent. So that is

some flexibility for them. If the town has to pay a certain portion of it, then

I think everybody right across the board should have to pay something as well.

There is nothing more difficult than if you went into, let's say, Baie Verte

and they are paying $700 a year and next to them there is a local service

district and they pay for nothing. It does not seem right to the small

communities like Pacquet or Burlington. You can see where we are coming from.

MR. SHELLEY: I have known that argument for quite awhile, yes.

In 3.2.02, Canada-Newfoundland Infrastructure Program, under the heading on

Grants and Subsidies, on the revised for last year, could you explain that, why

it went from $10.6 million to $3.3 million?

MR. SMART: It reflects the last year; 2002 was really the first year of

this program. There was a lot of gearing up. What the reduced level of

expenditure was showing is the program got off to a slower start than we would

have anticipated. You will see that in 2002-2003 we are picking up the slack

from last year plus what we are doing this year. We are full steam ahead.

MR. SHELLEY: That was my question. I hope that we didn't lose that,

that it is still banked and carried over.

MR. SMART: No, no. It is still there. We just did not get to spend it in

that year, we just carried it over and spent it in the following year.

MR. LANGDON: The problem with the Canada-Newfoundland Infrastructure

Program is that every one of those projects have to be approved by Environment

Canada. It is a headache in the least, but we have no choice because if you

tender the project and start the work before they approve it, they will not

participate. So you have to wait.

MR. SHELLEY: That is it for a little while anyway.

Thank you.

CHAIR: Mr. Byrne.

MR. J. BYRNE: Thank you.

On page 234, (inaudible). Just a few quick questions. With respect to the

debt relief: the municipalities have all been notified of the criteria involved

here, or have they, with respect to the application and what is required of them

to qualify for this debt relief?

MR. LANGDON: Yes. I do not know all the details but Keith Warren from my

department works with that. I would think so and I think that the $12 million

that we have this year for debt relief will take care of another fifty-one

communities. I stand corrected on that by the officials. I think it will

probably take care of all the communities that are out there looking to having

their debts restructured. Is that what you were looking for?

MR. J. BYRNE: The problem I have with this is that I do not believe any

of the municipalities - and Ramona might know this - have applied for this debt

relief. Have they not qualified for it or what is the problem?

MS COLE: When the debt relief program started two years back, there was a

list of about 170 municipalities who were in very serious financial situations.

They were the ones we targeted. We started with that list and we tried to do the

worst off ones first. Basically, they were all notified to say that they were on

the list. Anybody who was not on that list - you know, there wasn't sort of an

open invitation to anybody to come in and apply for it. If, in the course of the

last few years, another town has come in to us that looks to be in a very

serious financial situation, we have asked Keith to add them to the list and to

go out and have a chat with them to see if we can help them out.

MR. J. BYRNE: How many are there now? What is on the list now?

MS COLE: There are still about 170. A few went up and a few went down.

There were a few who were on our original list based on the fact that their debt

servicing ratio was high but who did not need assistance. There was one in your

district, in the Cape St. Francis District, in that category who, even though

their debt servicing rate was very high, were managing quite well and through

restructuring could just carry on and continued to do so. We have dealt with, I

guess, about 120 of those and there are around 50 left.

MR. J. BYRNE: A few years ago I was after the towns in my district to

refinance which the department was promoting, type of thing, and it was only

this past year that two did. Is one of them one of the towns you are referring

to?

MS COLE: I am not sure which two restructured.

MR. J. BYRNE: Pouch Cove and Torbay.

MS COLE: Yes.

MR. J. BYRNE: The other thing I wanted to mention is, when the towns

refinanced - and most towns when they had their loans through the Municipal

Financing Corporation, up around 14 per cent, 15 per cent, 18 per cent and19 per

cent rates, had these refinanced. When they refinance, of course, the debt now

goes to the municipality and this comes off the books of the Province. How much

money has come off the bottom line for the Province since this started

happening, since towns started refinancing? Ultimately, I suppose, government is

responsible.

MS COLE: Yes. It would have come off the books of the Province. It would

have been reflected in our records, in the books of the Province, as owed by

that municipality anyway. So, it would not have been owed by the Province. The

fact that it was through NMFC meant that if they defaulted on it obviously,

government was left holding it. I am not sure of the exact amount now, but we

can get that for you. Government's share of any of those projects still

remains on our books and we are still paying on an annual basis on those through

our debt servicing activities.

MR. J. BYRNE: When the towns borrow through the Municipal Financing

Corporation, it is usually, I suppose, guaranteed by government, so it would be

a debt. I am just curious.

MS COLE: Yes.

MR. J. BYRNE: When you are looking at the provincial deficit, how much is

not being shown on the provincial deficit now that really should be there?

MS COLE: We can get that number for you and provide it to you.

MR. J. BYRNE: Thank you.

The other one is the Municipal Operating Grants that was touched on. The

Member for Baie Verte mentioned that there was forty some million dollars back

in 1995. But in the late 1980s and early 1990s the Municipal Operating Grant was

up around $60 million. It is down now to, basically, a third of it. The minister

mentioned a little while ago that it is not likely there is going to be any

increase in those grants anywhere in the near future. You went on and mentioned

also that this was kind of a give and take with respect to the infrastructure

program. When a municipality gets money for a water and sewer project, it is two

completely different purposes, versus losing $40,000, $50,000 or $100,000 that

they would have for the operations of the municipalities. I mean, you really

cannot make that comparison.

MR. LANGDON: I beg to differ, because if you have a small municipality -

and we can take, again, an example from the Member from Baie Verte, up in

Burlington. They had a situation, up until two years ago, before we changed the

formula, where if they had a water and sewer project that would cost a half a

million dollars, it was 50/50. It would cost them $250,000 to be able to do that

project. So in many instances I did not even come to ask because I knew that

communities could not do it. Now what we are doing is, if there is a $500,000

project, the town is assuming $35,000. The provincial government is picking up

$465,000 of it. You would have to go a long way, in a sense, you would have to

double and probably triple your Municipal Operating Grant one way or the other

because the taxes have to be paid by the people in the town. The thing is, if

you do not get it from your operating grant, that it is being compensated for

you through water and sewer and through other projects, then it might not offset

100 per cent but it does help offset some of the decrease in the Municipal

Operating Grants.

MR. J. BYRNE: I will accept that. I could argue that, but there is no

point really, I suppose.

With respect to the Canada/Newfoundland Infrastructure Program, you mentioned

the formula, that small towns could end up being paid 90 per cent, for the

smaller municipalities type of thing. Do the municipalities have that formula?

Has that been sent to them?

MR. LANGDON: I couldn't say. I don't know. I don't know if I have

ever seen it.

MR. SMART: Certainly, the Federation of Municipalities understands and

had input into how we develop those particular - formula might be a bit of a

strong word, guidelines is more like it. Sure, the Federation understands and

when we talk to municipalities, as we do a lot, they certainly seem to

understand that there are various cost-sharing ratios that they can qualify for.

It is not very complex. It is based on the size of the municipality and it is

based on their tax rate. Generally, I would say municipalities in the Federation

understand how that ratio works.

MR. J. BYRNE: So there wouldn't be any problem having it sent, the

criteria or the guidelines, for us to get them? I would appreciate it if we

could get them.

MR. SMART: No.

MR. LANGDON: The thing about it is that there is no preference shown to

Burlington over Gaultois in my way, or another town. The thing is, it has been

developed by the department in consultation with the Federation of

Municipalities. It is uniform, so there is no tinkering with it on my part or

anybody within the department..

MR. J. BYRNE: I am not even suggesting that. All I want is the

information for my town.

MR. LANGDON: We can get you that.

MR. J. BYRNE: To make sure they are aware of it so they can take

advantage of it if they can.

Page 236, Water and Sewer Servicing - Coastal Labrador, subhead 3.2.03.05,

Professional Services; we budgeted $590,000, spent $515,000 and this year it is

up to $1.4 million. Does anybody want to comment on that, and what are those

Professional Services?

MR. LANGDON: This increase reflects an anticipated increase in federal

funding for water and sewer projects in Coastal Labrador communities. The

federal Treasury Board is expected to approve these additional funds by the end

of April. Also, funding is provided for projects carried over from 2001-2002.

The decrease is due to delays in completing some water and sewer projects due to

the shortness of the construction season in Labrador. Again, these savings were

carried over to 2000-2003 in order to conclude these projects.

WITNESS: Are you going to add more to that, Bob?

MR. SMART: No.

MR. J. BYRNE: If the feds do not come through with their portion - what

portion is their portion?

MR. LANGDON: Wayne could probably -

MR. CHURCHILL: Professional Services in this case refers to the

engineering phase or the consultants who are hired to put in water and sewer in

Rigolet. This is for the native people, five native communities in Labrador.

That is what this money is for. As far as the federal contribution, if you look

there it is that $8 million, Revenue-Federal. Most of it is coming from the

federal government, and it is a 70/30 split, I think.

MR. J. BYRNE: Purchased Services?

MR. CHURCHILL: Purchased Services: Engineering fees.

MR. J. BYRNE: Page 237, Emergency Measures, 4.1.01, no money budgeted for

Salaries. The $228,600, that was for Gabriel, I suppose, was it?

MS. COLE: The September 11 (inaudible).

MR. LANGDON: And we are expected to recover that, by the way.

MR. J. BYRNE: Pardon?

MR. LANGDON: We are expected to recover that.

MR. J. BYRNE: Purchased Services, same thing?

MS. COLE: All the increases (inaudible) related to the September 11 th

situation. Tropical storm Gabriel was covered under the next activity down,

Emergency Planning.

MR. J. BYRNE: What was the biggest cost in Purchased Services? You had

$1,410,600.

MS. COLE: That would have covered accommodations and meals and any other

supplies that we provided to those people who were diverted to the Province and

had to be put up for five or six days.

MR. J. BYRNE: Accommodations: Which accommodations are you talking about?

MS. COLE: Plane crews were put up in hotels. Most of it would have been

food and supplies and whatever, but there were some accommodations included in

there.

MR. SHELLEY: Could I ask a question on that?

CHAIR: Mr. Shelley.

MR. SHELLEY: Just on that point, the plane crews were put up, but most of

the people, where did they stay?

MS. COLE: Most of the people were put up in the schools and in the church

halls and those sorts of places.

MR. SHELLEY: So, the plane crews were put in hotels.

MS. COLE: The reasoning for that was the airlines requested that, because

the plane crews had to be ready to take off whenever the approval was given, and

they had to be well rested, obviously, because they could not get -

MR. SHELLEY: I have no problem with that part of it. What I am wondering

about is: Why wouldn't the airlines offer to pay for their crews?

MR. LANGDON: We paid for the passengers, we did not pay for the crews.

MR. SHELLEY: One point four million for accommodations and food, I would

just like to know how that was broken down. That is a lot of money.

MR. SMART: If you want to look at it, the actual expenditure by the time

we get this all paid for is going to be closer to $2 million. What it does work

out to is about $20 per day per passenger, which is pretty cheap.

MR. SHELLEY: What are the numbers? That is what I wanted to know.

MR. SMART: When you take in the number of passengers here, it basically

cost us $20 to $25 a day to accommodate these people and that is because school

gymnasiums, civic centres and arenas were used. There were not a lot of hotel

bills paid. This is primarily food, transportation, communications, bussing,

things of that nature.

MR. SHELLEY: Nobody is questioning the help, I assure you, just the

itemized costs and the basic costs of transportation. The number of people that

were here, have you got that number?

MR. SMART: I used to have that number.

MR. SHELLEY: Approximately.

MR. SMART: The number of people was $12,000 or $14,000.

MS COLE: Across the Island.

MR. SHELLEY: Across the Island. That was everything, right, here?

MR. LANGDON: Yes. I think it was about $6,000 or $7,000 in Gander.

MR. SHELLEY: I am certainly not questioning spending, I am just curious

on the breakdown and the cost of it.

MR. LANGDON: We have, you know, made representation to the federal

government to pick up the tab for us and I think that they will.

MR. SHELLEY: That was my next question. So, that is going to happen.

That is it for me. Sorry, Jack.

MR. J. BYRNE: Thank you.

Under Emergency Planning, we have - let me see which is the most curious one

here? - Supplies, $36,000 budgeted, $215,000 revised, budgeted $415,100 this

year. Can anybody explain that to me?

MR. LANGDON: Yes. That is 04, Supplies?

MR. J. BYRNE: Yes.

MR. LANGDON: You know that only recently we announced, and I did a press

release with Gerry Byrne, that the Province was going to get approximately a $1

million project this year, 70/30, I think, with us and them, where we would set

up ten sites across the Province for hazardous materials response teams. We are

in the process, in a sense now, to set these up and to announce them. That

reflects the provision of additional funds in order to purchase equipment which

will be required in setting up those hazardous response teams throughout the

Province.

MR. J. BYRNE: Thank you.

On page 238, Disaster Assistance, Property, Furnishings and Equipment, $1.4

million budgeted, $4,300,000 spent and $2 million budgeted this year.

MR. LANGDON: Yes, that is Gabrielle. That estimate provides for the final

claims which will probably be paid out with respect to the flood damages caused

by hurricane Gabrielle in September, 2001. It also provides for the receipt of

the balance of the federal revenues related to the claims which have been paid

out to individuals, businesses and municipalities. So, the total project,

Gabrielle, when it is all said and done will probably cost us about $5 million;

the Gabrielle thing. Out of that, the federal government will probably pick up

about $3.4 million and the Province will pickup about $1.6 million.

MR. J. BYRNE: This $2 million, though, budgeted for this year. I mean, I

can see the $5 million.

MR. LANGDON: Yes, because it is all not done yet, see. Some of the claims

were not done by March 31. We are hoping to be able to wrap up the whole program

by the end of May or early June. I think that is correct.

MR. J. BYRNE: It will probably be over $6 million, then?

MR. SMART: There were also mixed in here, some previous claims with

respect to hurricane Louis, I think the name was, and there was a storm surge.

So, in addition to the hurricane Gabrielle and the flooding, there was also some

cluing up on other claims we have had in the past on the South coast, primarily,

and so on.

MR. J. BYRNE: Okay, thank you.

On page 239, Fire Commissioner's Office, there are some extra costs there,

but one that I am pretty interested in, actually, is that the Fire Commissioner's

Office was relocated to Stephenville or Grand Falls somewhere?

MR. SMART: Deer Lake.

MR. J. BYRNE: Deer Lake. Since that time, which was last summer or last

fall, September or whenever, the Fire Commissioner has probably spent 90 per

cent of his time in St. John's. It has a lot to do, I would imagine, with the

emergency Gabrielle and September 11. I would imagine he has his home in Deer

Lake now and he is here in St. John's, and I would imagine there are

significant extra costs with respect to staying in St. John's with

accommodations, food, claims or whatever the case may be, that anybody in that

situation could put forward to government. Could anybody address that with

respect to, have there been extra costs and how much?

MR. LANGDON: I will leave the extra costs probably to the other people

within the department, but the Fire Commissioner has not yet moved to Deer Lake,

officially moved that is. Within the department, because our emergency measures

person has retired and is no longer there, we are looking at the Fire

Commissioner to do two jobs, to assume the Fire Commissioner's job plus the

Emergency Measures Organization chief person. We are looking to Treasury Board

to approve that for us, and if that happens we will then hire a Deputy Fire

Commissioner for the Deer Lake office. So, the Fire Commissioner has not moved

as of this point.

MR. J. BYRNE: That may be a good idea, and I would not argue against it,

but are you telling me that the Fire Commissioner has not put in any claims for

accommodation since he has theoretically moved to Deer Lake and has been in here

since September?

MR. LANGDON: I cannot answer that.

MR. SMART: I would expect that when he goes to Deer Lake he puts in a

claim because he has a house in here and he does not have one out there. So when

he goes to Deer Lake he would be on travel status and put in a claim for travel

expenses.

MR. J. BYRNE: Thank you.

I do not really have anymore on that page. I have finished with subheads to a

certain extent, but I have a number of questions that I want to ask aside from

the subheads.

Have there been any expenses charged to the Department of Municipal Affairs

that were incurred, in whole or in part, by the Premier's office, charged to

the department in any area of that department?

MR. LANGDON: Again, I do not know the details to it, but if the Premier

would have gone to do some particular function within any district that had to

do with municipal affairs, I do not know if it has been charged off to that or

not. I guess I would have to ask Bob about that. To my knowledge, I do not think

there have been any done.

MR. SMART: No.

MR. J. BYRNE: Have there been any consultants hired by the department

over the last fiscal year without going to public tender and, if so, who were

they and for what purpose? What were the expenses?

MR. LANGDON: I would look at the consultant first, I guess. I do not if

you would want it put in that name of commissioner. When we hired fellows like

Clarence Randell, Art Colbourne or whoever to do some work for us down to Port

Union or on the Northern Peninsula or into Eastport, we did not go out and

advertise and put that in the paper because these were small contracts and the

people that we wanted were speciality people. The thing is, there would be no

point in sending a person down to Port Union or down to Eastport who did not

have some municipal background. It is the same thing if we are looking at the

thing for Fogo. Other than the consultants, I do not know.

MR. SMART: Other than those types of consultants, the ones we would use

would be engineering consultants and you usually engage an engineering

consultant based on his knowledge. If the engineer built the water system or the

sewer system in Rigolet or somewhere like that and we needed someone to look at

the water and sewer system, we would quite likely go back to the engineers that

were involved in the initial project rather than go to tender and have to get

someone to start from square one. Other than that I cannot think of anything.

MR. J. BYRNE: Professional Services: Under the Public Tendering Act you

cannot hire professional people without going to tender. Can I get a list of

those individuals that were hired by the department in the past fiscal year and

the projects they worked on and the amount of the contracts?

MR. LANGDON: Sure.

MR. J. BYRNE: Thank you.

MR. WALSH: I have a couple of points.

CHAIR: Mr. Walsh.

MR. WALSH: Just a question for clarification: Would it be customary in

any municipality, for example - in my own I know, for example, we have an

engineering firm in one municipality, we have a different one in a different

municipality, and a different one in a third. Is it customary in municipalities,

and I guess even with the department, if an engineering firm who has actually

completed the drawings and done all the work, when something goes wrong - I

think in our municipalities we tend to call back the people who actually did the

work and are familiar with it. Is that pretty well what you are saying you are

doing?

MR. SMART: Yes.

MR. WALSH: So, if someone was in Rigolet or Nain and they put in the

water and sewer services, if the system was going to be expanded probably or,

indeed, if something went wrong, that is the group you would call back.

MR. SMART: Yes.

MR. WALSH: If I understood you correctly, you are saying that you would

call them back because, one, they have the most familiarity with it and, two,

the people on the ground would know them as opposed to if you went to tender.

Sometimes the need is immediate, which would cause a problem. Also, am I correct

in hearing what you said, that in those cases the one most familiar at the end

of the day is probably going to be the cheapest?

MR. SMART: Yes.

MR. LANGDON: The other thing, too, if I can make this point, there are a

number of municipalities, as the member from Cape St. Francis would know, that

will ask to have their engineers changed from time to time. If they ask, then I

do not have any right to say, no, you cannot do that. That happens in a number

of instances, where communities are not satisfied with one consulting engineer

and they have asked for another.

MR. WALSH: My only reason for asking was, I was wondering if, when we do

that in municipalities, if maybe we were doing something wrong, but it is

customary to stay with the engineering firm that you have.

Thank you.

CHAIR: Mr. Byrne.

MR. J. BYRNE: Thank you.

With respect to professional engineers, we are quite familiar with how they

operate, the hiring of them, and the professional consultants, but what I am

asking for is a list of all consultants that have been hired by the department,

not just the professional engineers. It could be lawyers, it could be anybody.

MR. LANGDON: (Inaudible).

MR. J. BYRNE: Consultants and individuals that you have spoken of,

anybody who would have been hired within the department for purposes other than

staff that are working there now, non-contract we will say.

I touched on this before with respect to the debt relief and I do not believe

that I asked, but could we get a list of the towns that have qualified for debt

relief, when they qualified and how much they qualified for? I imagine you would

have it at your fingertips because you had that 170 list anyway. That should not

be a big thing.

Projects that have been funded under the Municipal Capital Works Program that

have not been directly related to water and sewer projects: You mentioned that

last year, say, some 90 per cent were for water. Is that correct or did I

misinterpret it?

MR. LANGDON: Under the Canada-Newfoundland Infrastructure Program, you

mean?

MR. J. BYRNE: Under the Municipal Capital Works Program? There are three

programs, right?

MR. LANGDON: There is a Canada-Newfoundland Infrastructure Program, there

is a Multi-Year, there is Special Assistance and there is a water program. So,

there are four different subheadings within the department.

MR. J. BYRNE: What I would ask for is under the Canada-Newfoundland

Infrastructure Program and the Capital Works.

MR. LANGDON: Under the Canada-Newfoundland Infrastructure Program, I

think there was 90 per cent plus that went to that. In Capital Works, I do not

know offhand, but we can get that for you.

MR. J. BYRNE: The ones that had not been directly related to water and

sewer is what I am asking.

MR. LANGDON: In Capital Works, yes, we will have a look at it.

MR. J. BYRNE: The Canada-Newfoundland Infrastructure Program has a

mandate to support the creation of green municipal infrastructure. Is that

correct? Have there been any investments in any projects that are not directly

related to water and sewer systems and solid waste management?

MR. LANGDON: Under the Canada-Newfoundland Infrastructure Program, the

answer is no. Right, Bob?

MR. J. BYRNE: No?

MR. SMART: Well, other than if related to a water and sewer project, you

also had to pave the road after you did the water and sewer project. There might

be a bit of that. Other than that, the Canada-Newfoundland Infrastructure

Program is all green; no recreation or anything of that nature funded through

the Canada-Newfoundland Infrastructure.

MR. J. BYRNE: The Minister of Environment recently announced a new policy

with respect to a ten-year program with respect to the landfills, a new policy

there which is probably pretty positive, I hope, if it works out. Has there been

any study done with respect to the cost implications for municipalities? We have

Robin Hood Bay down there now with a lifespan of maybe another ten years. Every

ten years apparently there is another ten years, type of thing. Let's say they

come up with a new dump or landfill out in the Central Avalon somewhere and

everybody is going to go in there. I mean, the cost involved in that for the

municipalities is going to be high, expensive for the gas alone. Have there been

any studies done there with respect to that type of thing, the cost to

municipalities?

MR. LANGDON: That is what the committee is involved with. They have

municipal representatives and the environmental representatives all involved in

that Avalon waste thing. Once they have identified a site, then you will have

the technical people, probably even from Torbay, Mount Pearl and St. John's,

to look at all the technicalities of what it would cost per ton and recycling

and how much the government would have to, probably, put up in capital

construction in order to make this all work. That is in the process. It will

probably be, I would think, later towards the end of this year before all these

figures are then derived at. That is one of the things that they are looking at

and, from what they are saying, if you can find a point within the Central

Avalon area in close proximity, say, to St. John's and Mount Pearl, CBS,

Paradise and Torbay, then you can bring the garbage or waste from as far away as

the Burin Peninsula and the Bonavista Peninsula. They are looking at that. Now,

at the end of the day, if it is not economically viable to do so, then they will

have to change their plans. I think it is much too early to be able to say to

you what it is going to cost. That will all be cost out and we send it to the

municipalities before anything has happened.

MR. J. BYRNE: Thank you.

With respect to the Municipal Assessment Agency: Some municipalities have

questioned over the years the cost of these assessments. Is there any plan or

any idea if the assessments to municipalities will be increasing in the next

year or two or five?

MR. LANGDON: The Municipal Assessment Agency now is run by the towns

themselves. It is an agency outside of us, it is an arm from us. I think Bob

sits as a government representative on that particular board. We have had

representations from different communities where the municipality thinks that

these fees are high. They are in the process now, as I understand it, of going

through that and reevaluating that. So hopefully by the convention time this

fall they might have something in place, a new structure, if that is the new

word, as to what it would cost. They are actively doing that, is my

understanding.

MR. J. BYRNE: Also, with the assessment agency there were always

complaints that they were so far behind when it was part of Municipal Affairs,

as much as three years behind trying to get assessments done. I remember when I

was Mayor that was the problem. Has that improved with the new agency, do you

know?

MR. LANGDON: I cannot tell you. Bob, you would probably know.

MR. SMART: Yes, it has actually. I think the assessment agency is up to

date on all assessments. I think it is a three-year time cycle. I mean, they do

not reassess every property in the Province every year, they are on a three-year

cycle. Yes, they are up to date and it is a whole lot more expedient as a

Municipal Assessment Agency than it was as a division of the department, we will

say.

MR. J. BYRNE: I can remember that every three years you were supposed to

have one done, I believe, at the time, but it could be six years, actually,

before you would have it done, and that was a major problem.

What measures have the department taken with respect to the water quality in

the communities? You hear a lot about the complaints now.

MR. LANGDON: Last year, as you know, we budgeted $1.8 million for water

quality and we spent more than $8 million. There is another $10 million in the

budget this year for water quality so that makes $18 million over the last two

years. The provincial government, for the chlorination and disinfectant system,

will pay up to $100,000, 100 per cent by the Province, to improve, to repair,

and to make sure that these systems are up and working. One of the things that

we have, from the Department of Municipal Affairs, talked to the Federation of

Municipalities about, is that once we have all these systems in place, if we use

the same process, if you wish, to maintain them within the next few years we

will be back doing the same thing again.

What we have talked with the Federation about is having, depending upon the

geography and the cluster of the communities and so on, one person fully trained

with a University degree or whatever the case might be and then have that person

or two people to look after ten or twelve water systems and make sure that

everything is done perfectly, the equipment is running right and so on. In the

meantime, while we are doing that, the Department of Environment are doing

seminars right across the Province to train the people who are already there. I

think, from where we are and the federation thinks as well, that with 300

municipalities, some of them really, really small, they cannot hire on the

personnel they would like to be able to look after their own. So in that sense,

I think a regional basis type thing would be the best route to go.

MR. J. BYRNE: Who will pay for these individuals?

MR. LANGDON: Well, the thing about it is, if say fifteen or twenty

communities or twelve communities came together, they wouldn't have to pay

anymore for service than they are doing individually now. Take that and put a

thousand dollars in this community, too, from the other, depending on the size,

put it together then you have a couple of units and you can pay two water

technicians who are fully trained to run the system. I think that is the best

way to go and I think that unless we go that route, then all the dollars that we

spend would probably not, within four to five years, see the full use of the

improvements that we have made.

MR. J. BYRNE: Would this not put an extra demand on the people who would

be doing the testing of these water supplies?

MR. LANGDON: Well, if that were the case, if you had a person who was

fully trained and looked after ten or twelve different water sources or

different communities, then that particular person, fully trained, could take

some of the samples and that could then help the Department of Environment and

the Department of Government Services to expedite and collect the samples which,

in some cases, is not being done now.

MR. J. BYRNE: Thank you.

We have heard a lot lately in the media with respect to Harbour Grace and the

dump and the problem they are having out there. What has the department done to

address that? Basically, it is environmental first but it is also municipal.

MR. LANGDON: In fact, it is interesting that you should ask me that

question. About two weeks ago, I think, or last week, I invited all the mayors

from Conception Bay North into the meeting because, at the end of the day, the

waste does belong to the communities, not us. What I pledged to do from the

department was to help them find an alternate site once they, themselves - they

formed a committee by the way. Don Coombs, the mayor of Harbour Grace, has

chaired that committee. They are looking at contacting Placentia and contacting

Sunnyside, because those two particular waste areas could accommodate them for

the next couple of years. You are looking at two years anyway before you have

the new waste site up and running.

What I said to Don, and he agreed in the meeting - there were fourteen or

fifteen of them there - was that they would like to be able to close the

incinerator tomorrow. We know that it is coming in November, but rather than

wait until the day that it is closed down and nothing done, just over the next

month or two make sure that there is a smooth transition from when you close it

down as to where the new site would be. So Don is chairing that and he told me

that he would get back to me because if there are extra costs and so on, we want

to be able to work with the municipalities on that.

MR. J. BYRNE: So, you expect that to be resolved by November?

MR. LANGDON: Oh, I expect that to be resolved probably within a month.

MR. J. BYRNE: Okay.

On August 7, 2001, the department launched a municipal awareness campaign.

How much did that campaign cost and is it ongoing? What is the budget for that?

MS COLE: That municipal awareness campaign is done in conjunction with

the Federation and they pay a fair portion of that cost. I am not sure, but I

believe our contribution towards it was about $10,000. We can certainly check

that out for you and get back to you on that.

MR. J. BYRNE: That would be just a one-shot deal or it is going to be

ongoing?

MS COLE: Each year, actually, we have a municipal awareness campaign and

I believe this year it is scheduled for May sometime. It is probably going to be

in the spring. They usually are in the spring, in April or May, and last year

because of the municipal election coming up in September, it was thought to be

more timely to do it in August where you could get some people interested in

possibly running for councils.

MR. J. BYRNE: I have a few questions that I am going to have to read here

now.

According to CBC Radio, on April 15 th a multi-million dollar

program designed to help the homeless had been tied by bureaucratic squabbles .

As part of the National Housing Strategy the federal and provincial governments

are putting in $15 million each but none of the money has been spent. Liberal

MHA, Jim Walsh, says the problem is a disagreement on how the money should be

used. Newfoundland and Labrador wants to use the money to refurbish existing

housing units, some of which are close to being condemned. Federal officials

want to build new housing units in the downtown core of major cities across the

country. Can the minster provide an update on the status of these talks? When

will the program be announced? How many of the units are close to be condemned?

What about the status of other units?

MR. LANGDON: I tell you, it all goes back, I guess, to last fall when

myself, Mr. Dean and Mary Marshall were at a minister's conference in Quebec

City when the program was announced. There were concerns that we had, as a

Province, not only us but Manitoba and Atlantic Canada groups, because the

program originally - and I will ask Les or Mary to fill in some gaps for me when

I am finished. The Canada Mortgage and Housing Corporation wanted the program

primarily to be done with new units, build new units. What we said was: We have

a number of units, quite a number, in St. John's probably about 6,000, in the

Province round 6,000.

MR. J. BYRNE: How many?

MR. LANGDON: Six thousand units. What we have said - and we were able to

convince Gagliano at the time - is that it would not make any sense for us to

demolish a unit and build a unit. We would be no further ahead at the end of the

day. So we and the Atlantic Provinces, particularly, and Manitoba said to Mr.

Gagliano: We would like to be able to modify that program somewhat to be able to

do major structural repairs, some down in the east end of St. John's in the

Virginia Park area. He said in the meeting that we had with ministers, yes, we

would do that. Now, the minister changed in a Cabinet shuffle and he was no

longer there, so when we went back to do our agreement with the federal

government, the bureaucrats of Canada Mortgage and Housing Corporation kind of

said: That is not exactly what it was and we have not really changed from where

the program was in the beginning. I had a meeting with my counterparts in

Atlantic Canada about a month or so ago, and Les and those were there and we

were going as a unified front. I think there has been some progress made since

that particular time because we want to be able to nail down the program and be

able to do the work.

Les, if you would fill in some more gaps for me.

MR. DEAN: I think the minister has captured the highlights but I think,

just in context, when the framework agreement was reached in Quebec City last

November all of the ministers, along with the federal minister, agreed that this

National Affordable Housing program should be broad enough or sufficiently broad

in scope to accommodate the priorities of the different provinces and

territories as well. It was in that context in the Quebec meeting that Minister

Gagliano agreed with the spirit and the objectives that were discussed around

that time.

Essentially, where we find ourselves today is having to revisit that

understanding that was reached at the political level. CMHC, of course, which is

the principle housing agency within the federal government, the officials there

appeared to have taken a different perspective on what was agreed to in the

ministers' meeting than what the provinces understood to be the case. We, over

the next week or so, will be having further discussions, along with the Atlantic

Provinces, with CMHC officials and hopefully we will be able to reach a common

understanding on what was, in fact, agreed to at the ministers' meeting.

MR. J. BYRNE: The minister made a statement a few minutes ago that he had

some 6,000 units across the Province. I know, in the City of St. John's and

maybe in some other communities in the Province, some eight or ten years ago the

Department of Newfoundland and Labrador Housing took responsibility for a lot

the CMHC units across the Province and now we are saying they are looking for

this money to basically refurbish some of the existing units. By the Province

taking responsibility from the feds on a lot of these units, how much did that

contribute to the fact that a lot of these units need to be refurbished because

obviously the money was not put in to maintain and upkeep these. I know

Newfoundland and Labrador Housing has a program to try and keep the units up but

obviously there could not have been enough money allocated for that.

MR. DEAN: The program that we are talking about here is not the regular

maintenance where you put in windows and so on.

MR. J. BYRNE: Oh, I know that.

MR. LANGDON: Some of those units have some major structural rot or

whatever, so that has to be done. I cannot answer all of the details from the

dollar side of it, but Les may be able to fill you in on that.

MR. DEAN: Under the devolution agreement, of course, CMHC continues to

provide an annual supporting grant towards the Province, but essentially what we

have is largely a two dimensional problem. Number one, a lot of the original

housing that was built by the old St. John's Housing Corporation in the 1950s

down on Froude Avenue, Empire Avenue and that area is in need of modernization.

Then a significant number of the units that were built in the 1970s, during the

energy crisis, need to be refurbished. A significant number of these properties

need to be upgraded. What we have said is, it is not that we want to direct all

of the funding that would be available under this Affordable Housing Agreement,

but we think, in terms of priority, we should carve out a dollar amount which we

would negotiate with CMHC to deal with that problem. In fact, Mr. Byrne, other

provinces have the same problems to varying degrees. British Columbia, for

example, has a condo issue out there. It is not a localized problem to the

extent that only we want to deal with it.

MR. J. BYRNE: But you are talking about the homeless. I think this all

came from the homeless, I suppose, with respect to the bigger cities, type of

thing, people living on the streets and what have you. I have no problem with

the program. I hope it is successful.

Just to move on now. I am jumping around a bit because we do have the housing

to do yet, but these are probably some of the questions that will be involved

with it anyway. To jump to something completely different now, the St. John's

Harbour cleanup: How much money has been spent on that so far from the

department and how much is budgeted for this year for that?

MR. CHURCHILL: The total spent to date on the St. John's Harbour

cleanup has been $10.5 million.

MR. J. BYRNE: That is provincial money?

MR. CHURCHILL: No. The first amount that was approved was one-third under

the old infrastructure program of $4.5 million and after that it is 50/50 with

the city.

MR. J. BYRNE: So, how much is budgeted for this year coming?

MR. CHURCHILL: Nothing.

MR. J. BYRNE: Nothing?

MR. CHURCHILL: No.

This was just to change the outfall down in the Waterford River area. They

put in the new outfall down there.

MR. J. BYRNE: That is installed now?

MR. CHURCHILL: That is installed and that is what they spent that money

on.

MR. J. BYRNE: So, what are we waiting on now? Feds?

MR. CHURCHILL: We are waiting on the feds now for the $93 million that is

required to build a plant down there.

MR. J. BYRNE: We touched on this one before. I seem to be jumping over

it, but I will soon be finished anyway, to be honest with you. Gabrielle again,

back to that. We did touch on that. Is there a way we can get a breakdown, I

suppose, of the amount of claims, how much they were, that type of thing?

MR. SMART: The number of claims was 1,158. We can give you the exact

number of claims, what the average claim cost and what the total cost was, sure.

We will windup or hope to wind-up the whole process in June. Most claims are now

settled, over 1,100. We still have a few outstanding commercial claims to deal

with.

MR. LANGDON: Municipalities where they had problems, that has been signed

off as well.

MR. J. BYRNE: One other here now. I would imagine there are a fair number

of municipalities in arrears that have been caught up on, I suppose, with the

help of the department with respect to the debt retirement assistance program.

Can I get a list of the number of municipalities in -

MR. SMART: That are in arrears?

MR. J. BYRNE: - that are in arrears and how much they are in arrears?

That is public information, I would assume.

WITNESS: Yes, that is available.

MR. J. BYRNE: Okay. Now, I can go on to Newfoundland and Labrador Housing

because I do not have a lot of questions. I am pretty well almost finished

anyway.

CHAIR: Yes, go ahead.

MR. J. BYRNE: Something I brought up before when I was the critic for

Municipal and Provincial Affairs with respect to Newfoundland and Labrador

Housing Corporation is - and I thought it was going to be changed. I was told

here in these Estimates that it would change. This is what we got, one page. I

mean we have $10 million being spent and that is it. Nothing on salary

breakdowns, nothing on anything. So how can we ask questions? There it is there,

one page, $10,110,000; that is it. I had notes here about the breakdown and the

salaries. We cannot even ask questions on it, what positions are there, what

staff are there and what do the staff do, the things that you normally ask with

respect to other departments; with respect to transportation, communications,

advertising and properties. I mean, there is nothing, so how can you ask

questions on it?

MS MARSHALL: (Inaudible).

MR. J. BYRNE: Please? I have asked for this before.

CHAIR: Mary Marshall.

MS MARSHALL: What is shown in the Estimates represents the grant that the

Housing Corporation receives from the Province. It is the full total of the

funding that we receive that is actually voted on in this House and that is why

that is what is reflected in the Budget book that comes from the House. If you

look at the expenditure of the Housing Corporation or the revenues of the

Housing Corporation, we get approximately $60 million from our federal

counterparts. We generate about another $20 million in interest and rental

revenues and there are some other revenues that we generate ourselves through

our own operation. Basically, the Province of Newfoundland and Labrador

contributes approximately 10 per cent of our funding. That is why that is

reported that way.

MR. J. BYRNE: Yes, I can understand that. I know that because that is the

answer I had before, I think, a few years ago. Again, if you look at the $10

million, that is all we have there, $10 million. We do not have anything on

salaries, employee benefits, transportation, supplies, purchased services or

professional services, anything like that. If you look at it, we do not have

anything on the breakdown of the number of units and how much is being charged

for the units.

Really, I find myself in a position here where I cannot ask questions like I

have been asking in the Department of Municipal Affairs, making comparisons of

so much budgeted for maintenance, so much budgeted for repairs, so much budgeted

for all these things, you know, how much you are charging for the units, why are

you charging a certain amount in comparison to the market out there; all kinds

of stuff like that, that cannot be asked because I do not have the information

to ask the questions.

MR. SHELLEY: The question is: Why isn't it there?

MR. J. BYRNE: I asked for it before and I was told it would happen.

MR. LANGDON: That is a good question. I mean, the Department of Municipal

Affairs has all the breakdowns and all the headings and all that stuff. I will

say to you that I will undertake to see why it is not there and be able to

provide you with an answer and probably with the information as well. I did not

realize until late yesterday, when this stuff came, that all of the headings and

things were not here like they are in Municipal Affairs. I will ascertain to

find out why and get back to you.

MR. J. BYRNE: I appreciate that, because you have different divisions

here. I know you have a maintenance division, a real estate division and an

assessment division. You have all these things and there is not a thing here.

You have staff in all those divisions. It is all well and good to say, I

suppose, that it is only $10 million coming from the Province, but the minister

is ultimately responsible for it.

MR. LANGDON: Absolutely! What we have not in front of us here is a full

picture of the operation of the Newfoundland and Labrador Housing Corporation as

to what we would have in Municipal Affairs. I do not know the answer to that now

but I will get the answer for you and talk to you in the House on that.

MR. J. BYRNE: Because you could easily break down all the divisions such

as you have done here?

MR. LANGDON: Absolutely!

MR. J. BYRNE: With that, I just want to say thank you to the minister and

to the staff for the answers. I and my colleague from Baie Verte have gone

through this and we are doing anything different here than we are going to do

with any department. As a matter of fact with Works, Services and Transportation

I will probably be much more detailed on it. I want to say I appreciate you

being here, I appreciate your answers and thanks from me.

CHAIR: Mr. Shelley, are you finished?

MR. SHELLEY: Just a couple more on housing. Because there is not a lot

there, I would like to ask a question on - it is for different reasons, to

enable persons to reside in rental units or to build or to maintain. Can you

break down for me, out of that $10 million, approximately - I do not even want

to know exactly. People fixing up their own homes: How much of that $10 million

generally goes to that portion?

MR. DEAN: Are you asking what percentage of the $10 million sustaining

grant or are you asking what percentage of the money that is allocated to the

Provincial Home Repair Program goes towards these items?

MR. SHELLEY: Of the grant.

MR. DEAN: We could calculate. The Housing Corporation will spend this

year about $10.5 million on the rural home repair program. Of that,

approximately $7.5 million is by way of outright grants and approximately $ 3

million or $3.5 million, give or take, is by way of the repayable loan portion.

The $10 million, in terms of the sustaining grant, that is not broken down on an

itemized basis. Really, at the end of the year, when we do our financial

statements - and these are authorized by the Auditor General's Department - we

basically submit our draft budget to Treasury Board and, in there, the draft

budget will then show a projected shortfall, in this case, this year,

approximately $10 million, and then that becomes basically the sustaining grant

to cover the shortfall. It is not broken down on an itemized basis as such in

terms of the $10 million sustaining grant.

MR. SHELLEY: I understand that.

I have to ask this question. I have been told by the office that handles my

district, for example - I was just wondering if there was anywhere else. I want

some answers on the criteria on this. They are telling me now that they are

handling emergency only and that although the budget is approved that their

funding is not available yet to do anything beyond that. What can I get from

that? I do not understand that.

MR. DEAN: I will ask Mary Marshall to clarify, but towards the end of the

past fiscal year, which ended March 31, 2002, it is true that the demand on this

program continues to exceed the funding that is available. Of course, we are

required to maintain a balanced budget. Towards the end of the past fiscal year,

because of the significant demand on the program, we had to basically not so

much limit but sort of be more diligent in terms of how the applications were

approved, and in that context the priority, of course, was given for emergency

needs, emergency repairs. Now that we are into the new fiscal year - this was a

three-year program that was announced by government three years ago and we are

into the final year of the program and approximately $9 million or so of ne

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