May 22, 1996

GOVERNMENT SERVICES ESTIMATES COMMITTEE

Pursuant to Standing Order 87, Mr. Wally Andersen,

M.H.A. (Torngat Mountains) substitutes for Mr. Doug Oldford, M.H.A. (Trinity

North).

The Committee met at 7:00 p.m. in the Committee

Room on the 5th. Floor of the East Block.

MR. CHAIRMAN (Wiseman): Order, please!

We can get started then. My name is Ralph Wiseman,

I am the Chairperson of the Government Services Committee. Tonight we will

review the estimates of the Department of Works, Services and Transportation. So

I want to welcome the Minister and his staff. Hopefully your stay here this

evening will be pleasant and rewarding.

As I did last night, I will introduce my Vice-Chair

who is Mr. Jack Byrne; and I will ask the other members to introduce themselves

beginning with Mr. Smith.

MR. SMITH: Gerald Smith, the Member for Port au

Port.

MR. ANDERSEN: Wally Andersen, the Member for

Torngat, sitting in for Doug Oldford.

MR. FRENCH: Robert French, the Member for

Conception Bay South.

MR. SPARROW: Anthony Sparrow, the Member for

Placentia and St. Mary's.

CHAIR: Thank you.

There are pretty well standard rules we have set

down and practiced over the years. We have set time aside from 7:00 p.m. to

10:00 p.m. We will see what happens when ten o'clock comes. If we are finished

before that, fine; hopefully we will.

We will have the minister, if she so desires, have

opening remarks, to introduce your staff and take fifteen minutes to tell us

about your department, if you so choose, or you may choose to go into questions.

The Vice-Chair will respond for fifteen minutes,

and we will have the other MHAs ask questions for ten minutes; and we will

interchange, back and forth.

Madam Minister, if you so desire, I would like for

you to introduce your staff. Before you do, I want the people who are asking the

questions and the people who are answering to identify themselves for recording

purposes.

MR. J. BYRNE: Mr. Chairman, with respect to the

time, 7:00 p.m. to 10:00 p.m.: Is there a maximum of three hours allotted for

each department for committee meetings?

CHAIR: Well, there are three hours allotted. If

at 10:00 p.m. we need some time to finish up, we could go on until 10:30 p.m. If

it is going to take longer we may look at rescheduling it for another time.

MR. J. BYRNE: So we can go into a second

meeting, another three hours, if we so wish? I was under the impression, as

somebody who has done it last year, that there are just three hours allotted and

that is it. Right or wrong?

CHAIR: Well, we cannot very well say. We have

allotted three hours, yes. There have been three hours allotted. But in a case

where all of the questions have not been asked and all the answers not given,

then we are certainly, as a Committee, going to look at what we should do. That

will probably depend more on you than on me, Jack, since you are asking the

questions.

Madam Minister, if you so desire.

MS BETTNEY: I will start by introducing, then,

some of the officials who are here with me, who are the senior officials in the

Department of Works, Services and Transportation. The Deputy Minister, Clyde

Granter, is sitting to my right; to his right is the Assistant Deputy Minister

in area of Works and Services, George Greenland; and to my left is Terry

McCarthy, the Assistant Deputy Minister for Transportation. To Terry's left is

our budget person. Ramona Cole is the Director in the area of Finance.

All of these people have been involved in the

development of the whole budget process, both from its early stages which

preceded my involvement, and certainly Mr. Granter's involvement, through the

whole revision process and development process that has taken place in the last

two months, as well. I would anticipate here this evening that the questions you

would ask, if I do not have the answers, I am sure that one of the officials who

are here should be able to supply the information in the detailed fashion that

you are looking for.

I say to you that in developing this budget during

the time of my involvement has been a difficult process and a detailed process,

to try and go back into our department and find the kinds of savings and

efficiencies which were required of all ministers throughout all departments. To

put that into a little bit of context for you, as the officials have informed me

through the budget process, we are not starting this year to kind of do this

process. There has been a major exercise for the last two years which involved

some significant restructuring throughout the Department of Works, Services and

Transportation. So there had been a fair bit of work done prior to this budget

exercise to streamline the work of the department, and, in fact, considerable

downsizing has taken place throughout the department, and also a regionalization

has taken place throughout the department over the past couple of years.

In looking at the exercise this year, we really had

to approach it from the perspective of what were the things that, as a

government, we needed this department to be able to perform, and what resources

did we absolutely have to have in order to maintain those key and vital

functions. I think we have managed to do that, but I would say that upfront so

that everybody can recognize that there are things we have had to let go of,

there are things we are not funding to the extent they have been funded in the

past. It is simply a question of choices, and of trying to ensure that when we

use the resources we have at our disposal that we are using them on what we

consider to be the most essential functions and the things which people

throughout the Province need the most.

Just a couple of highlights and then I will just

leave it at that for questions. I think it is clear through the Budget Speech,

and the information you have been provided with, that there have been a few

areas where we have focused. The Trans-Labrador Highway certainly is an area of

priority for government, and it is reflected in the allocation of funds that we

have put into the Trans-Labrador Highway with $8 million being provided there.

The whole area of roads and transportation, as I've

learned in two months, tends to be an area that consumes the attention of the

department and the minister in this position. So again, despite the fact that

there is limited funding for capital projects, there is still significant

roadwork that will be taking place across the Province through the combination

of different agreements that we have from the federal Road to Rails agreement,

through the regional trunk roads agreement which is part of it and, of course, a

much smaller amount than in the past, but still some dollars in the area of the

provincial roads program.

One item which we did decide to put back into the

budget this year which had not been funded last year was the calcium chloride

program. That was in recognition of the fact that people who have gravel roads

running through their communities had experienced a lot of difficulty last year

when that was not available to them. That has been a priority, to try and find

the money to reinstate that. We have included that in the provincial roads

program.

One other point I would make is, the funding that

is included in the budget for the ferry service, particularly for a replacement

vessel for Bell Island: We can talk about the details of how that works, but

again it was considered and included as a priority to maintain the second run on

Bell Island. That has required that there be a significant capital allocation to

accommodate that.

I'm going to leave my opening comments there and

put it back to you folks.

CHAIR: Thank you very much, Minister.

We will go now to Mr. Byrne, the vice-chair.

AN HON. MEMBER: (Inaudible).

CHAIR: Do you want to use up the fifteen

minutes, if you so desire?

MR. FRENCH: It doesn't matter.

CHAIR: No, okay.

MR. FRENCH: I guess we are ready.

I'm going to start on page 67 and I'm going to

start with the Minister's Office and Salaries. In the 1995-1996 Budget it was

$158,800, and it is now $166,300. Just some quick rationale for the increase

there. Is that just because of step progressions in salaries?

MS BETTNEY: I would think, given the amount

that we see there, the increase of $8,000 overall, that it would be normal step

increases allocated to some of the staff. Of course, some of the new ones coming

in, that would not apply to.

MR. FRENCH: Under Purchased Services: I'm just

curious as to what the Purchased Services are. We have gone from $10,900 down to

$3,700. We budgeted $3,700 for $1995-1996. It went up to $10,900, and now we are

back to $3,700.

MS BETTNEY: Generally entertainment. Is there

anything specific, Ramona?

MS COLE: The reason for the revised being up

partly is because of the transportation conference that we held here last June.

The minister hosted a couple of functions there. That would account for the

revised being up a bit. Thirty-seven hundred dollars is the standard allocation

that is put into each minister's office for entertainment.

MR. FRENCH: In Executive Support, again

Salaries, we budgeted $500,600. That ballooned to $698,600 and now we are back

to $443,400.

MS BETTNEY: The reason for the increase there

is the severance package associated with the change at the deputy minister

level. That came out of last year's budget figures. The decrease then that you

see this year, reflects the fact that we have eliminated an ADM position in the

department. So we now have two ADMs where last year there would have been three;

and prior to this, there would have been three.

MR. FRENCH: Two hundred and fifty thousand -

MS BETTNEY: No, that would be coming from the

$500,600 budgeted figure down to the $443,400 figure. Is that correct, Ramona?

You jump in and tell me of I am (inaudible).

MS COLE: The ADM position was worth $86,000;

that is gone. There has been a secretarial position that was moved in from

another area which makes the difference only $60,000.

MR. FRENCH: Okay, but the $500,600 to the

$698,600?

MS COLE: That is the severance pay for the

previous deputy minister plus some holiday pay that he had accumulated over the

years.

MR. FRENCH: So his severance package was close

to $200,000?

MS COLE: Well, his vacation pay that he had

accumulated was significant. About $70,000 of that was his vacation pay; he

didn't take a lot of time off while he was working.

MR. J. BYRNE: Who was that? What position was

that?

MS COLE: The former deputy minister, Mr. White.

MR. FRENCH: Transportation and Communications;

I am just curious as to exactly what that covers off, $31,900?

MS COLE: That will cover travel and telephone

costs related to the minister's office.

MR. FRENCH: Okay.

There will be times when I won't bother with

salaries because I can hopefully figure some things out for myself. On the next

page - as I go through tonight I am probably going to ask a fair number of

questions on Grants and Subsidies in Purchased Services. I did the same thing, I

guess, last night. Purchased Services keeps coming up to me, as I get time to

analyze the Budget a bit more. Maybe we should have a department that does

Purchased Services because it seems to be, you know, in every department of

government and I think we spend a lot of money here.

MS BETTNEY: If I could just comment on that: In

a lot of the categories of the Budget where you will see Purchased Services, as

it refers to the kinds of things we do, that is where you will find a lot of

contracts and areas where we have gone to private services, to privatizing some

of what we are doing. So any of the contracts that we have for snow clearing,

for roadwork, for buildings, for construction, for cleaning, all of those, get

categorized in that lump called Purchased Services. So you will find it much

different as we go through in different sections of the Budget; but that is

generally what it reflects.

MR. FRENCH: Yes. Under Purchased Services, in

1.2.02.06, $303,100. Can you give me a rough idea what that might be?

MS COLE: All the photocopier rentals for the

whole department are in there. Any maintenance agreements on photocopiers,

telephone costs, basic telephone costs for most of the areas in the department

are all included there. Training for some of the staff, printing charges, any

printing that is done for the whole department, comes through that specific

account.

MR. FRENCH: So that would come out of the

Administrative Support?

MS COLE: Yes.

MR. FRENCH: Property, Furnishings and

Equipment: We had $27,000 budgeted in 1995-96, that went to $42,700 and now we

are down to $14,000.

MS COLE: It was just a reduction that we took

in the department. We had to cut so we decided we would cut back on those

purchased office supplies.

MR. FRENCH: Is this earmarked for any

particular purchase?

MS COLE: No. That $14,000 actually covers all

property, furnishings and equipment for the whole department, so it does not go

a long way.

MR. FRENCH: What about the $42,700?

MS COLE: The $42,700 included a vehicle that we

bought last year, and some general office furniture.

MR. J. BYRNE: Why was the vehicle bought?

MS COLE: It was bought for one of our

chauffeurs.

MR. FRENCH: In Policy Development and Planning,

the salaries have gone down roughly $35,000. Is that because of lay-offs?

MS BETTNEY: We have eliminated some positions

there. Some of them were vacant positions, but we have also eliminated one

position which was filled, which I think represents about the amount that you

are referring to, $36,000.

MR. FRENCH: In Grants and Subsidies, $210,500:

What would that be for?

MS BETTNEY: We provide a grant to the HUB for

operating the transportation system for the disabled. That is $94,500. We have a

couple of other committees that are transportation type committees, Atlantic

Provinces Transportation Committee and a technical advisory committee. There is

sort of a stipend that is associated with participation in those committees and

that totals, between the two of them, another $100,000 roughly.

MR. FRENCH: So the members who would serve on

these committees would get some kind of an honorarium?

MS BETTNEY: No, these would be staff who would

serve on these committees representing the department, interprovincial

committees at a technical level. Can you give me an example, someone?

MR. McCARTHY: Well, the second one, the

Transportation Association of Canada: All provinces of the country are members

of the Transportation Association of Canada, and you pay really a membership in

that association, and it is based on the population of the province, the

proportion that you pay to that association.

The other one is the Atlantic Provinces

Transportation Commission. It is a commission funded by the four Atlantic

Provinces and some private funding. A staff person would sit on the board as

part of his regular duties.

MR. FRENCH: So, if he had expenses it would

come out of this?

MR. McCARTHY: No, it would come out of his

regular -

CHAIR: Can we go back? When you are speaking,

it is important that you identify yourself for recording purposes so that we can

pick it up. It is okay with Bob because Bob has been recognized, but when you

start to answer the question -

MS BETTNEY: I will direct the question to one

or the other of the staff, and I will name them. Terry.

CHAIR: Yes. If Terry would just identify

himself when he speaks, or your deputy.

MR. FRENCH: Phil Wall had to do a lot of that

last night, Terry.

MR. McCARTHY: The travel costs going to

meetings would come out of that employee's regular travel allocation. It happens

to be the policy development and planning office guy who sits on this board, and

his travel costs to those meetings would come out of this.

MS BETTNEY: That would be associated with the

Transportation and Communications section.

MR. McCARTHY: Right.

MS BETTNEY: The travel would be allocated to

that.

MR. FRENCH: I am having some difficulty

following that. If it is for people who serve on boards, say, within the

department, then would we still pay them a stipend or would we not?

MS BETTNEY: No.

MR. FRENCH: We would not?

MR. J. BYRNE: Well, what is the $100,000 for?

MS BETTNEY: I think I will go back again. I

will give an example from a municipal perspective that strikes me as being very

similar. As a member of the Federation of Canadian Municipalities, communities

pay a prorated amount to be members, based on population. As Terry explained, to

be members of the Atlantic Provinces Transportation Commission, we pay a

participation of membership fee to be part of that. That is based on the

population of the Province, and the other provinces pay their share.

So in the case of the APTC, you are looking at

$72,000, which is what it costs us to be a member of that commission. Now, when

there are expenses associated with our staff attending those meetings then the

travel and expenses would come out of transportation and communications that are

allocated in the Budget for their area where they work. There is no other

honorarium, additional compensation, given to the staff to sit on these bodies.

MR. FRENCH: Okay, because earlier, Madam

Minister, you said we pay a stipend, or I thought that is what you said anyway.

WITNESS: I don't think so. It may have been

another question maybe.

MR. FRENCH: I think we will go on to

Administration and the Salaries: That is, I guess, the employees who work in the

maintenance division of your department. So the salaries are pretty

straightforward to me.

Again, Transportation and Communications, $181,300;

up by approximately $30,000 over last year.

MS BETTNEY: I am going to ask Ramona. Can you

comment on the specifics of that, please?

MS COLE: Yes, that is travel related to our

supervisors, the transportation of supervisors and superintendents. Because of

the restructuring we have actually cut out some positions in different areas of

the Province. The remaining employees have to travel to get to the other units

moreso than they would normally have to, so we put a little bit extra in there

for their travels.

MR. FRENCH: Okay.

Again, Minister, on the Salaries: It is just a

small decrease of roughly $100,000. Would that have been because of lay-offs,

say, over the past twelve months? Would that be why? I am gone back up again -

MS BETTNEY: We are into 2.1.01?

MR. FRENCH: Yes, or 2.1.01.01., Salaries.

MS BETTNEY: The way I am reading it there is we

have a slight increase and I believe that is a result of the restructuring and

reallocating of some positions that were not previously in this

section of our

budget. So some positions moved and the salaries associated with them are now

coming out of this particular

section of the Budget where they had not been. I

think it is one position that we are talking about.

MS COLE: Two clerical.

MS BETTNEY: Two clerical.

MR. FRENCH: Okay.

Grants and Subsidies here, $200,000.

MS BETTNEY: That refers to two specific areas:

One is trail grooming that is done in Labrador. That accounts for $140,000.

MR. FRENCH: What did you say that was?

MS BETTNEY: Trail grooming. There is a

section

of a trail in Labrador that runs from - Terry?

MR. McCARTHY: It runs from Red Bay to

Cartwright on the Southern Labrador coast.

MS BETTNEY: We provide funds to groom that

during the wintertime. The remaining amount there is for local roads boards in

the amount of $60,000 which we provide in grants to local roads boards to do

some small work in those areas.

MR. FRENCH: We still have local roads boards?

MS BETTNEY: Yes, we do.

MR. FRENCH: Do we have very many? I did not

know there were any that existed any more.

MR. McCARTHY: We have about a dozen or so on

the Labrador coast and a few in the isolated communities on the South Coast of

the Province.

MR. FRENCH: I thought they had all gone.

Under Support Services, $712,300 for Transportation

and Communications.

MS BETTNEY: Ramona, I am going to ask you to

speak again, please.

MS COLE: That again relates to travel costs for

staff in that area. The staff in that area are the people who are in the units

and who do tend to travel around the whole road network to do their work. So

there is a fair amount of travel involved in that one.

MR. FRENCH: So these would be like foremen or

superintendents, that type?

MS COLE: That type plus the frontline people

who do travel.

MR. FRENCH: Yes, okay.

I am just curious about Property, Furnishings and

Equipment. It was $8,600, it went to $11,800 and now it is $4,300. Are there any

plans to buy anything in particular with that or just -

MS BETTNEY: Just to respond again: Where you

see that amount across the Budget it will generally be decreased. It is just a

conscious choice that we made in trying to handle the budget reductions, to do

it in areas that wouldn't affect the service that we were providing. We felt in

the area of property and furnishings in particular, we could probably absorb

those reductions and make do.

While it doesn't reflect what our normal experience

usually is, of having to replace furniture and equipment, we feel that we will

make do. It doesn't reflect anything in particular because with a department the

size of ours it is very hard to pinpoint that amount of replacement for things

like property and furniture, but we feel we will just live within it.

MR. FRENCH: Under Traffic Engineering and

Signs, the Salaries have gone from $379,900 to $435,800. In 1995-1996 there was

$475,400 budgeted and that got revised downward to $379,900, and now we have

gone back to $435,800.

MS BETTNEY: The reduction that you see, from

what was budgeted last year to what we are budgeting for 1996-1997, reflects a

reduction in seasonal employees in that particular area, in the sign shop. It

accounts for nine and a half months of reduction in the seasonal employees. We

simply won't be making the same volume of signs that we had planned to or that

we have done in the past.

MR. FRENCH: Just for my own idle curiosity

here: Do we still supply, or does the department supply, signs to

municipalities; and if so, does it charge them for them?

MS BETTNEY: Yes, to both.

MR. FRENCH: To both, okay.

Under Supplies, it was $257,100, it went to

$325,800, and then it is budgeted for 1996-1997 at $177,100. Can you give me

some idea of exactly what we are talking about here in Supplies?

MS BETTNEY: Those two things are linked, the

reduction in the salaries and the reduction in supplies. What we are saying is

this is an area of our budget where we cut back; we won't be making the same

amount of signs, installing the same amount of signs, and we don't need the

supplies to construct them. It is an across the board decrease.

MR. FRENCH: So, in actual fact, the supplies

there are the materials you would purchase to do the signs?

MS BETTNEY: Yes.

MR. FRENCH: On to page 70. Again in Supplies in

2.1.04 there, Maintenance and Repairs, we have come from $4,758,400 to

$3,709,600. That is 2.1.04.04, the decrease.

MS BETTNEY: We are going to use a different

system in line painting this year. Again, I would ask Terry, if I go off track

here, to jump in. I believe the thrust is that we are going to go to a single

line on the highway which will still serve the same purpose of being able to

tell people whether it is a passing lane or not a passing lane, but we are

actually cutting out a certain amount of feet of line by doing that, and

consequently estimating a savings of $150,000 across the Province.

Terry, do you think you need to add anything to

clarify that?

MR. MCCARTHY: That single solid line is really

on the 50 k.m.h., 60 k.m.h., lower speed local paved roads. We will still have a

double solid line on the major highways like the Trans-Canada and the major

trunk roads.

MR. FRENCH: What else would be in there?

Because that is a very significant change, from $4 million down to $3 million.

MS BETTNEY: Which? Oh, that is part of Supplies

as well. The other aspect of that is the reduced road maintenance for the summer

period. We have budgeted a reduction of $600,000 in reduced road maintenance.

MR. FRENCH: Would that affect the maintenance

of our roads?

MS BETTNEY: Yes.

MR. FRENCH: Six hundred thousand dollars.

MS BETTNEY: Yes.

MR. FRENCH: Again, Purchased Services, gone

from $1,545,700 down to $1,277,000. What exactly is in there, in Purchases

Services?

MS BETTNEY: You are in Purchased Services,

still in 2.1.04?

MR. FRENCH: Yes.

MS BETTNEY: That is an increase that we put in

there based on our experience with the Labrador contract, the maintenance of the

Trans-Labrador Highway. We built-in an $80,000 increase in that particular item.

There is also an aspect to that related to heavy equipment. Again, Terry, would

you speak to that, please?

MR. MCCARTHY: We are taking a reduction in the

capital allocation for the purchase of new equipment, but on the other hand we

also have an increase in the purchased services area so we can go out and hire

more equipment. Some of the equipment, we would only need on a part-time basis.

MR. FRENCH: So that $1,277,000 would cover

equipment that you might rent?

MR. MCCARTHY: Right, contract out for the

equipment.

MR. FRENCH: Again it just boggles my mind

because I know in every department here we have Furnishings again. Property,

Furnishings and Equipment, $8,300; every department as you go through. Again are

we planning to purchase anything in particular here or is it just a figure that

is in there that would deal with maintenance and repairs, if we have to replace

something and so on?

MS COLE: That is basically for anything that

comes up during the year. It covers tables, chairs, desks, filing cabinets and

small office furnishings. It is never specifically allocated at the beginning of

the year because it does cover these small items. What we are attempting to do

throughout the department is continue to use the old stuff until it is

absolutely unusable any more before we will replace it. That $8,300 covers five

regional depots and whatever units report to them, so it is not a lot of money.

MR. FRENCH: No, and it may or may not be used.

MS. COLE: Exactly, yes.

MR. FRENCH: Allowances and Assistance: I just

want to know what that is for, that $150,000.

MS BETTNEY: I think everybody has to look at

this one. Terry.

MR. MCCARTHY: That is an allocation for claims

we get from people for damages, you know, that we are held liable for. It is a

set amount each year, $150,000. Sometimes if a piece of our equipment hits

someone's car and damages it, or there is a pothole, where you hit a fence while

snowclearing, or does damage to a driveway or lawn those types of things we end

up paying for. That is what that is used for.

MR. FRENCH: Okay.

Grants and Subsidies was $186,600 and is now down

to $93,300. Exactly what were they?

MS BETTNEY: That is one grant to the City of

St. John's. It is the last of five years of grants for roads that have been

taken over by the city where an agreement was reached, similar to what we do in

other parts of the Province where we bring it up to a standard or provide the

funding to do that, in return for which they take ownership and take

responsibility for it.

CHAIR: Do you need a break, Bob? I have been

letting you roll on here. I should check with the Government Members to see if

they have any questions. If not, then - do you want to go on now?

MR. SPARROW: Madam Minister, I was just

wondering where you are sort of starting to contract out - Mr. French mentioned

it earlier - has the department found much more efficiencies by contracting out

certain items? If so, can we have an example? That is a big question, but if you

had something, any particular service that may have been done by the department

once that is now done by a contractor - is there any comparison to that being of

good value to the Province?

MS BETTNEY: Perhaps, George, that is something

you can speak to, either George or Terry, but George has been with the

department and I think your

section of the department does a fair bit of

contracted services.

MR. GREENDLAND: I am not sure we have done any

comparisons, but we have moved to a situation whereby about 70 per cent of our

budget on the building side is now contracted: snowclearing, elevator servicing,

sprinkler system. We are basically down to a skeleton crew. That is something

that has just evolved; moreso than, yes, it is cheaper, no, it is not. It is to

a large extent a different way of doing business. I can safely say it isn't

costing us any more. We get good response times and we are generally pleased. As

a matter of fact, we have probably moved about as far as we can move in that

direction; to answer your question.

MR. SPARROW: Yes, and I have another question

too. Revenue - Provincial: Why is that in brackets? I'm just looking at page 70,

at the last one. Mr. French asked some questions on it.

MS BETTNEY: That is just an accounting practice

of how it is noted in the budget itself. When it is revenue and it is money

coming in, the brackets go on it, versus the expenditures, which you see are all

the rest there, money going out.

MR. SPARROW: That would be like if you sold

something to somebody, like a municipality or whatever.

MR. MCCARTHY: In Maintenance and Repairs we do

hire out the equipment to councils from time to time, and do work for councils

and others when we aren't competing with private industry. We charge them for

that and that goes into a revenue account.

MR. SPARROW: Thank you.

CHAIR: Go ahead, Jack.

MR. J. BYRNE: Thank you.

I have to cover some of the same area that the

Member for Conception Bay South did.

CHAIR: Not the same questions, though.

MR. J. BYRNE: Not the same questions, but I'm

going to have to touch on some of them.

Back on page 67, the Minister's Office, Salaries:

The answer was given that the increase of a few thousand dollars there was for

step progression for people in positions. Somebody actually phoned me last night

and told me about this, that people in the administration, the higher up civil

servants, were getting their step progression increases every six months or

every year, type of thing. I couldn't believe it because of the freeze that was

on. Is there a freeze or isn't there a freeze on with respect to salaries in

government?

MS COLE: Step progressions are still in there.

There is no freeze on step progressions. Throughout most of the civil service

you will find that people are at the top of their scale so there are very little

steps left to get. But if you have somebody who still has steps left to go on

their scale they will continue to get them on an annual basis.

MR. J. BYRNE: Would that be with the general

service also?

MS COLE: Yes.

MR. J. BYRNE: And members of the union?

MS COLE: Yes.

MR. J. BYRNE: Executive Support on the same

page, Salaries, was touched upon. You talked about severance pay. (Inaudible).

On page 68, under Policy Development and Planning,

1.2.03, the Grants and Subsidies, subsection 10, you talked about The HUB

getting somewhere around $94,500, and the membership to the Atlantic Provinces

Transportation Committee - I think you referred to that -

MS BETTNEY: Yes.

MR. J. BYRNE: - $72,000, which is basically a

membership fee. What exactly are we getting for that $72,000? I mean, you are

looking at two, possibly three positions there. When you are looking at the

angle or the attitude that government has taken over the past number of years,

with major lay offs in the civil service, when I go through the Budget - and the

same thing last night - I can see there are areas there where you could have

cut, instead of taking jobs. The question there to me is: What are we getting

for that $72,000? That is a lot of money.

MR. MCCARTHY: That grant actually was cut

$20,000 this year, from $90,000 the previous year down to $72,000 this year.

That particular commission is a commission sponsored by the four Atlantic

Provinces to play an advisory role to governments on all transportation issues

like freight rates. They are involved in the federal government initiatives on

airports and ports and service fees and a whole bunch of issues. They play a

major advisory role to government in those areas.

MR. J. BYRNE: On page 69, Administration,

2.1.01.03, Transportation and Communications, $181,300. It was explained that

the reason for that is that there is extra travel to do, I suppose, certain work

of people who had been let go from the civil service. How many positions - I

mean, you are looking at an extra $30,000 - were let go that these people would

have to cover for? That is a hard question. Do you see what I'm getting at

again?

MR. MCCARTHY: Yes.

MR. J. BYRNE: If we have to spend an extra

$30,000 on travel and you only let one person go, what was the point?

MR. MCCARTHY: I don't have the answer to that

question, sir; how many people. That particular subhead includes all our senior

people, the regional directors and the superintendents in the regions who spend

a lot of time travelling from regions to meetings with councils, development

associations and those type of groups.

MR. J. BYRNE: The answer to the previous

question was that the extra travel was to pick up the slack where civil servants

had been let go; to cover for those people. So I say, if you are going to let

one or two people go and spend an extra $31,000 - now you have to look at

priorities - does it really make sense to do that?

MS COLE: The actual reduction in positions in

that area was made two years ago. So while the salary dollars don't look as if

there has been a reduction, that was part of the first round of restructuring we

did in 1993-94. What we found was that, as a result of those positions being

eliminated the remaining people did have to travel more. So money has been put

in to cover that eventuality. The salaries are actually misleading in that it

looks like there has not been anybody else gone from that section.

MR. J. BYRNE: If that is the case, last year

you had budgeted $152,500 and you spent $153,700. You did not spend that much

more last year, you only spent an extra $28,000 over and above.

MS COLE: I think the people involved there

realized they were on restricted budgets and did not travel as much as they

could have like to have done or were requested to do.

MR. J. BYRNE: Okay. Thank you.

MS BETTNEY: The Deputy Minister also has a

comment he would like to make.

MR. GRANTER: Just looking at it, I guess, from

the broader perspective. Since May of 1995, the department has reduced permanent

staff by 182 and temporary seasonal by sixty-five. So across the system I think

it is very difficult to look at one area, and relate it to reductions in staff,

but across the system the staff reductions have been quite significant. So you

are going to find the travel requirement will increase.

MR. J. BYRNE: Thank you.

Under Support Services on that same page,

Section

03, Transportation and Communications: That was addressed earlier. It went up

from $612,000 that was actually spent last year to $712,300. If there have been

cuts in numbers, you just mentioned upwards of 200 let go, why would you need an

increase of $100,000 for Transportation and Communications?

MR. MCCARTHY: The increase there is a lot of

the increases in mobile communications in our equipment. We eliminated the

second person on our truck plows last year.

MR. J. BYRNE: Wingmen.

MR. MCCARTHY: We added mobile communication

equipment to the plows so they have communications with the main depot.

MR. J. BYRNE: Okay, I thank you.

With respect to the same section, Property

Furnishings and Equipment: $8.600 up to $11,800. I would like to know

specifically what was brought from that money?

MS. COLE: I can certainly find out for you. I

do not know it off hand.

MR. J. BYRNE: Okay. Thank you.

Page 70, under Maintenance and Repairs, Purchased

Services again: You had budgeted $897,000. it went to $1,545,700 and you are

back to $1,277,000 this year. That $1,545,000 that was spent is an extra

$600,000 basically. What did you actually buy from that?

MR. MCCARTHY: That reflects an increase in the

cost of the maintenance contracts in Labrador. We have gone entirely to

contracting all of our summer and winter maintenance in Labrador and that

reflected a changeover from doing it ourselves to contracting it out. It is paid

under this subhead.

MR. J. BYRNE: Under Snow and Ice Control, the

next section,

section 06, Purchased Services, budgeted, $2,824,400; revised,

$2,394,000; this year it is $3,271,000. I have a note here: Why such a large

increase, and what would you be purchasing?

MR. MCCARTHY: First of all, I guess, this past

winter we experienced an excellent winter, so the cost of the Purchased Services

- we do have a lot of plows and loaders on contract even here on the island. We

have a number of places on the island where there are lump sum contracts. But

especially the loader ones which are paid by the hour, that was well down this

year because we did not have any snow.

The increase in the budget is again to reflect the

increase for the winter costs in Labrador, budgeted for a more normal winter,

the $2.8 million. The $2.3 million: we saved money this year on hire of

equipment.

MS BETTNEY: That is another category where if

we have another fine winter we will come in with a lower than budgeted amount.

MR. J. BYRNE: It is not a question of coming in

lower than budgeted. You are still up $400,000, is it - $2.8 million to $3.2

million, from what was budgeted last year, which you would normally budget for a

bad winter, I would assume; yet, you are still up $400,000.

MR. McCARTHY: $200,000 of that increase is also

part of the restructuring we did in our mechanical division. We scaled down a

number of the smaller outlying repair shops to one or two mechanics, and went to

more floating of equipment to the major repair depots. As part of the downsizing

we added $200,000 to that vote to accommodate the extra floating of equipment

into the main depots.

MR. J. BYRNE: On page 71, Administration,

Transportation and Communications again: $374,000 budgeted for 1996-1997 as

compared to $310,000 that was spent last year. That is an extra $64,000. Again,

I am looking at that - two or three jobs gone. Why such an increase there?

MS BETTNEY: I am going to ask George Greenland

to comment on that. We are into the area of building maintenance and operations,

and I know this has to -

AN HON. MEMBER: Ramona.

MS BETTNEY: Ramona would be better? Okay.

MS COLE: Again, that is an area where, in the

past, even though the revised shows pretty well in line with the budgeted, it is

an area where travel and sometimes telephone costs were not adequately funded

and we ended up paying them out of other areas of the department, and travel was

kept to a minimum because they knew the money was not there.

That actual increase is not an overall increase in

our departmental budget. The regional directors responsible for those areas

would have reallocated from other areas where they could see less need for the

money.

MR. J. BYRNE: Thank you.

Under Property, Furnishings and Equipment:, $8,900

budgeted and you spent double that, $18,200, or pretty close to double. What

would that have been spent on?

MS COLE: Again, I will have to check on that.

Specifics like that, I have not made any notes on those.

MR. J. BYRNE: So you will get that information

for me?

MS COLE: I certainly will.

MR. J. BYRNE: Okay, thank you.

Under Technical Support Services, Supplies: $22,900

spent last year, up to $38,600 this year. Why would you want to budget more than

was spent last year, especially in times of such serious cutbacks in government?

MS COLE: That supplies account covers two main

areas. One is supplies for government I.D. cards and the other is first aid

supplies. We budget in there for first aid supplies that are required. As it

happens, in 1995-1996 there was not a great need for them. I guess a lot of the

first aid kits are still well stocked. We do not want to cut ourselves short in

those areas and not have the money to refill those.

MR. J. BYRNE: Don't want to cut ourselves

short.

MR. GREENLAND: That is a good expression. I

will add a comment to that.

We made a conscious decision last year not to

replace our first aid supplies and take a decrease in the budget on that item.

MR. J. BYRNE: I thought you were going to say

you made a conscious decision not to have any accidents.

MR. GREENLAND: Well, we don't have those

either, Sir.

MR. J. BYRNE: Okay. Page 72, Building Utilities

and Maintenance: Budgeted $18,530,600, spent $16,800,600, and you are budgeting

$17,480,400. I have a note here: What services, and why the increase?

MS BETTNEY: The increase that we are talking

about here -

MR. J. BYRNE: I am sorry; can I interrupt for

one second?

MS BETTNEY: Yes.

MR. J. BYRNE: What I am getting at here is the

fact that government has been cutting. We all know they are laying off. I am not

questioning that that may have had to be done, but if you spent x number of

dollars this year, why do you have to go above that? Why didn't you just go with

the same amount that you spent and hold that?

MS COLE: The reason for the revised being down,

a small portion of it, about $500,000, was actually due to utility, electrical

costs being down because of the mild winter. The other amount was a conscious

decision that we made last November and December to basically cut all

maintenance, general and program maintenance, to only essential. This year, we

have brought it back up from the revised because we really feel that we should

not keep it cut back to that lower level for two years running. It is actually

down from last year's budget because we have cut out some areas where we are

going to cut back discretionary maintenance.

MR. J. BYRNE: Thank you.

On page 73 under Administration, Purchased

Services, 06: $642,300 budgeted, revised $600,100 and now $933,000. That is a 50

per cent increase. I mean, that is quite a jump.

MS BETTNEY: I am on the wrong page. What page

did you say it was?

MR. J. BYRNE: Page 73.

MS BETTNEY: Okay. Purchased Services under

Equipment Maintenance, Administration; that's insurance.

MR. J. BYRNE: You spent $600,100 the year

before, why did it jump about $333,000?

MS BETTNEY: I presume this is tendered?

MS COLE: Yes.

The insurance premium for the previous year was

$640,000. When we went to tender for the new insurance policy, the only bids we

got for a premiums with no deductible were a little over $1 million. We were

given some options. One of the options was, or the lowest bid was $540,000 for

the basic premium and a maximum of $300,000 in deductibles paid at the rate of

up to $10,000 per accident. Also built in there is an expected increase for the

renewal in September of about 15 per cent.

MR. J. BYRNE: I was under the impression that

government vehicles were not insured.

MS COLE: They have been for the last three or

four years for public liability.

MR. J. BYRNE: When you went to tender, why was

there such a vast difference within a couple of years? Did you have a lot of

accidents? Were there a lot of accidents with government vehicles to drive that

up like that?

MS COLE: No more than the general population.

Insurance rates are going up as you know all across.

MR. J. BYRNE: Fifty per cent?

MS COLE: We actually had two bids with no

deductible and both were $1,050,000.

MR. J. BYRNE: So you mean to say my insurance

will be going up 50 per cent this year?

On page 74 - am I going beyond my time?

CHAIR: Well Jack, you are doing fine. The

government member - you don't have a question? No. Go ahead, Jack, unless you

want to go back to Mr. French? You are not getting tired are you Jack? It is up

to yourselves now.

MR. FRENCH: Okay. I have to go back a couple of

pages actually, to page 70.

MR. J. BYRNE: Mr. Chairman, it might be more

sensible, rather than his asking questions and my going over them, if I were to

interject every now and then, because he might be asking the same thing that I

am going to ask. Would you mind that?

MR. FRENCH: I wouldn't, no.

CHAIR: Well, that is no problem as long as when

you interject you might want to identify yourself because of the recording,

because we don't want to miss anything you say Jack and attribute it to somebody

else. Right?

MR. FRENCH: On page 73, the insurance,

$933,000: Was that public tender?

MS COLE: Yes it was.

MR. FRENCH: Who now carries this policy?

MS COLE: Morden & Helwig Ltd. I am not sure of

the name of the company. It is handled through Treasury Board Insurance

Division. We participate in the actual tendering and review the bids but they

make the final decision.

MR. J. BYRNE: You say it was a public tender,

or was it a request for proposals?

MS COLE: I think what they did was went out

with requests to several different insurance companies, and we got three bids

back, two of which were $1,050,000 and the other was way above it.

MR. FRENCH: Okay, back on page 70, Supplies,

from $4,758,400 down to $3,709,600: Again, what are we talking here in Supplies?

MS BETTNEY: Is that the one with the line

painting again? Are we back on that? Am I on the right page?

MR. FRENCH: Okay, (inaudible). I am okay with

that one.

MR. J. BYRNE: You did that one.

MR. FRENCH: The Salaries, under Snow and Ice

Control, are up by $364,000, maybe a little better. Any particular reason here?

MS BETTNEY: Terry, you go ahead.

MR. McCARTHY: You see the revised figure: Again

we had a good winter, so the overtime and call backs were down substantially. We

are showing an increase up to $9.4 million for this year below last year's

budget level. That reflects the eliminating of the second person on the truck

ploughs.

MR. FRENCH: Again, Purchased Services, gone

from $2,394,600 to $3,271,400: Are we talking about sand and salt and this type

of thing in here?

MS BETTNEY: That is the increase for the

Labrador contracts, as well as the business with the floats, of moving equipment

into the depots from the outlying areas for repairs.

MR. FRENCH: On page 71, Salaries have

decreased.

MS BETTNEY: In Administration?

MR. FRENCH: Yes. Is that because of lay offs?

MS BETTNEY: That is the annualization of the

reductions that we had through restructuring in 1995.

MR. FRENCH: Jack, did you ask the one about

Property, Furnishings and Equipment?

MS BETTNEY: Yes.

MR. J. BYRNE: Yes. They are going to get that

for me.

MR. FRENCH: Allowances and Assistance, from

$250,500 up to $600,000.

MS BETTNEY: That is one major insurance claim

for an injury that occurred at the public building in Corner Brook. That is the

result in terms of the liability and the payment.

MR. FRENCH: Has that claim been paid now, the

$600,000?

MS COLE: I believe it is just about ready to be

paid.

MS BETTNEY: Somebody slipped and fell, hurt

himself, sued us, and that is the result. That is this year's result.

MR. FRENCH: Must have been a massive injury,

was it?

MS COLE: Yes, it is a back injury that he

contends will keep him off work for the rest of his life. So it is factored in

there for loss of income and -

MR. J. BYRNE: Did this go to court?

MS COLE: Yes, and to appeal.

MR. FRENCH: We are getting better than the

Americans, aren't we? Under Technical Support Services, Salaries again has gone

from $417,900 to $480,800. I'm still on page 71.

MR. GREENLAND: That is basically a vacancy we

have been carrying. We didn't fill it last year. We are still carrying it in the

hopes we may fill it. It is in the area of occupational health and safety for

this division. What happened is we gave it up in the reduction in December,

hence you see the revised, $480,800 down to $417,900 and back to $480,800.

MR. FRENCH: So that position is not filled yet.

MR. GREENLAND: No.

MR. FRENCH: Supplies went from $22,900 up to

$38,600.

MR. GREENLAND: That is the first-aid supplies

we didn't buy last year, if you remember. We are buying them this year.

MR. FRENCH: Again, Purchased Services.

MR. GREENLAND: Purchased Services? I think that

is primarily building insurance. We carry all the insurance on government's

buildings, some 600-odd properties.

MR. FRENCH: Page 72, 2.2.03. Salaries have gone

- I will use the revised figure, $7,445,400 in there, now down to $7,182,600.

Again I assume that was through lay offs and so on.

MR. GREENLAND: That is primarily the colleges.

We had an average of three people on each of the campuses that we are closing.

There is an annualized cost representing that reduction. We have taken

reductions before but that is what reflected here.

MR. FRENCH: When will these actually come into

effect?

MR. GREENLAND: I think we are tentatively set

up for the end of August. So we are getting seven months I think, Ramona, this

year, seven months of salary.

MR. FRENCH: Fifteen positions?

MR. GREENLAND: Well eleven. There are some

eleven positions.

MR. FRENCH: You will have to bear with me, Mr.

Chairman, I am making some notes as I go along.

WITNESS: Well, you know, time is time.

MR. FRENCH: Go on! That's not true.

Okay, Purchased Services again.

MR. GREENLAND: Half of that I think roughly is

the electricity bill. I was hoping that we were going to hit that question just

about the time the automatic lights kick out here, but we are a bit early. Half

of that is electricity. We provide service contracts - I mentioned in an earlier

question that I answered - like snow clearing, elevator servicing and all these

service contracts, which are in here under Purchased Services.

MR. FRENCH: So you are telling me this is

lights?

MR. GREENLAND: Well lights are about $8

million, if my memory is right on this, about $8 million. The previous one,

Supplies, is heating fuel; so our bill together is around $10 million for heat

and light. Then there is another $8 million roughly for service contracts and

maintenance contracts.

MR. FRENCH: Okay. Oh, go ahead Jack.

MR. J. BYRNE: Oftentimes we drive by and we see

the left block lit up in the evenings. Is it because it is cheaper to have them

running or more expensive to turn them off?

MR. GREENLAND: This is a favourite question.

Two reasons: First of all our cleaning is done pretty well at night.

MR. J. BYRNE: Every floor at the same time?

MR. GREENLAND: Pretty well. There is a cleaner

that goes through collecting garbage and there are other cleaning crews that go

through.

The other thing of course is our lights are done in

zonal areas for that building and this building which has cut our cost

tremendously in moving partitions. We don't have to move light switches when we

do your office. Now downstairs in your wing it is a little different, but in

most of these buildings - in this room, if you look around, there is not a light

switch in it. So we can take down a partition, put it up somewhere else and we

don't have to get into wiring. Those are two of the features.

The other thing, believe it or not, when we looked

at this two years ago, we recorded about 140 people in and out of this complex

on an average weekend. So there are people in here for five minutes, there are

people here for hours, there are people for whatever business they do. I don't

pretend to know but there is a lot of traffic that starts at five o'clock. If

they come in they switch on a complete floor, half the people in all fairness:

Well I need this for the washroom, I need that for my office and the Xerox

copier is somewhere else. So the whole floor gets lit up.

On the other side, of course, when we looked at it

as well, very little of the energy we use is lost because we do capture it for

heating load. So it is not a full loss of all the lights that are on. The lights

do actually contribute to our heating.

MR. FRENCH: Okay, under Rentals, Purchased

Services, $357,400.

MR. GREENLAND: That is basically work we do in

rental property, if my recollection is correct. It is repairs and -

MS COLE: (Inaudible) that is for rentals.

MR. GREENLAND: Oh, that's the rentals; I'm

sorry, yes. We actually do rent some property outside and this is where this is

hidden in our Budget. Well, hidden is wrong, poor choice of words - located in

our Budget.

Even though we do rent for most other departments

we also rent for ourselves. The McCurdy Complex in Gander, we have rental

properties there as well.

MR. FRENCH: Okay. Page 73, Purchased Services

again, $302,500 down to $60,000.

MR. GREENLAND: The normal here is the $75,000

you see. These are our Professional Services and Purchased Services together. It

is $75,000 we carry for work in leased accommodations. The $300,000 last year,

well the difference, was for fitting out the government service centres which

were set up around the Province. We actually had to carry a vote for furnishings

in that. We used modular furniture in those, Clarenville, Grand Falls, Goose Bay

and St. John's. So that's last year's vote. If you had gone back to the

1994-1995 you would find $75,000.

MR. FRENCH: Okay. Under Administration,

Salaries have gone from $1,221,400 to $978,900.

MS BETTNEY: That is the annualization of our

restructuring and the savings.

MR. FRENCH: The other one of course was

insurance.

On to page 74, again Salaries is down a couple of

hundred thousand dollars. Is that through lay offs?

MS BETTNEY: The restructuring.

MR. FRENCH: Might I ask here: These are lay

offs that have already taken place and they are not new ones to come?

MS BETTNEY: That is right.

MR. FRENCH: Supplies, in 2.3.02, from

$8,305,600 down to $8,117,100.

MS BETTNEY: Ramona, did you wish to...?

MS COLE: That is the area where we put money

for gas for the vehicle fleet and parts for repairs to vehicles belonging to all

government departments, not just our own. We have been reducing the vehicle

fleet whenever we can, and as a result we can see a reduction coming in the

number of parts and the amount of gas that we use.

MR. FRENCH: Under Heavy Equipment, it says

Property, Furnishings and Equipment, $4 million.

MS BETTNEY: That is the reduced funding for

heavy equipment purchases, and I believe that is linked to the earlier increase

in the rentals that we referred to; reduced on this side, we aren't buying as

much, but reflected as a lesser increase on the actual rentals of heavy

equipment.

MR. FRENCH: I just wonder, if we are going to

use $4 million for equipment, why don't we just call it equipment?

MS BETTNEY: Treasury Board has this system of

doing the Budget which sets consistent categories across all departments.

Sometimes it is a bit of a stretch to make them fit all of the individual

circumstances of each department, and I think that is what you see reflected

here. If each department were to set out its own terminology you would have

vastly different budgets coming in from each one. I think it is a consistency

issue you see here.

MR. J. BYRNE: You made a statement there that

the $4 million, as reflected in the rentals earlier on, is a decrease here in

what you are purchasing for heavy equipment, but you also said it is a decrease

in rentals. Wouldn't it be the reverse of that? Wouldn't it be an increase in

rentals and a decrease -

MS BETTNEY: Yes, sorry if I said it that way.

What I meant to say was we aren't spending as much in purchasing heavy

equipment. Consequently we do have an increase in our rentals budget.

MR. J. BYRNE: On that same section, under

Revenue - Provincial, you have $125,000 budgeted, revised $420,000 and then down

to $125,000 again. Where did that extra $295,000 come from?

MS BETTNEY: Terry.

MC. McCARTHY: Last year we made two decisions.

One, we decided to get rid of all dozers in our fleet. We had a number of old

dozers that we were spending a fair amount of money on keeping them in repair.

We auctioned them all off. Now if we need a dozer we go out and rent if from

private industry.

The second one was we used to screen all of our own

winter sand, or the majority of it, and we made another conscious decision to

contract that out, and we sold off the sand-screeners that we had.

MR. FRENCH: Page 75, Salaries. Again I guess

this was part of restructuring from $1,725,000 to $1,667,300.

MS BETTNEY: Yes, that is two senior positions

which were eliminated from this division, four positions in highway design, and

another one in the soils lab.

MR. J. BYRNE: On that there: It seems that a

lot of the sections are having a fair decrease in the salaries. I think it was

the deputy minister who mentioned that there were 180 jobs and 60, 200-odd. That

amount of money has been saved from a couple of hundred positions; in every

section in this department?

MS BETTNEY: Ramona, did you wish to comment?

MS COLE: Yes. Some of the salary dollars that

you are seeing here are the annualization of restructuring in previous years.

The 182 plus the 65 is since May of 1995. The restructuring on the

transportation side actually started two years before, so some of this reduction

in salary dollars is annualization of those. Those positions aren't included in

the total that Mr. Granter mentioned earlier. I think over the past three years

there have been more like 400 positions.

CHAIR: We are just saying positions. Is there

any clarification needed in terms of positions or jobs? When we say positions,

what do we mean?

MS BETTNEY: Well, the two. What we mean by -

CHAIR: A position not filled or an actual

person who was working?

MS BETTNEY: It means, yes, an actual person in

the case of this category here, but it also means that the position is

eliminated from our departmental budget. The job is gone, it is not carried as a

vacancy, it is eliminated from the budget.

CHAIR: Now, the clarification I wanted: Was the

position actually filled or was it a position that was there vacant and

eliminated? That is the kind (inaudible).

MS BETTNEY: These were filled positions that

are eliminated.

CHAIR: Okay.

MR. J. BYRNE: They had to have been filled some

time or there never would have been a position.

CHAIR: Not necessarily so, Jack.

MR. FRENCH: Anyhow, we have to move on.

Under Supplies in Administrative Support, we have

gone from $137,700 down to $75,100?

MS BETTNEY: Again, this is an area where we

have cut back in terms of the design work that we will actually be doing. The

supplies that support that work are fairly costly and with that design not

taking place we have had a proportionate reduction in actual purchase of

supplies. We have the people doing the work so they don't need the supplies.

MR. FRENCH: So, where is our design work being

done now, in-house or out-house?

CHAIR: Could you rephrase that question?

MR. FRENCH: I am not so sure. Over the years,

we all remember that big turnout there in Gambo, so I would put that one in the

out-house category (inaudible) now. Well, outside of the department then?

MR. McCARTHY: All of our highway design work is

still being done in-house. This Supplies account is for things like transits,

levels, medians and some survey equipment that we are using. We feel we are

fairly well stocked with modern equipment and we can take a reduction in the

supply account in this area.

MR. FRENCH: Okay. Purchased Services, $10,800

down from $52,200.

MR. McCARTHY: Purchased Services in this case,

in this subhead, would be contracting out for professional services.

AN HON. MEMBER: (Inaudible).

MR. McCARTHY: Right.

MR. FRENCH: Okay, Property Furnishings and

Equipment, $74,100 down to $48,900: I would like to know what's in there.

MR. McCARTHY: That's the equipment for our

soils lab and supplies used in the testing of asphalt and crushed materials that

are used in the field inspection, you know our soils lab on LeMarchant Road.

MR. J. BYRNE: So basically, you are cutting it

from what was budgeted in 1995-1996 to 1996-1997 - it is almost a 50 per cent

decrease. Is that some indication that they will be doing 50 per cent less work?

MR. McCARTHY: It is not 50 per cent less work

but our overall budget is down over the last couple of years, yes.

MR. FRENCH: Project Management and Design,

Salaries were down a little over $200,000. Again, is that through restructuring

of positions?

MR. GREENLAND: The answer is yes.

MR. FRENCH: Okay. Transportation and

Communications has gone up from $48,000 to $87,000.

MR. GREENLAND: Basically, we have been carrying

around $100,000 and last year again we made a conscious effort to reduce our

travel and a lot of things were put on hold; so we are back to an $87,000-vote

for this year.

MR. J. BYRNE: You can't make a conscious

decision to put everything on hold again for another year and create another two

jobs maybe?

MR. GREENLAND: The difficulty here is we still

have work to do when we did not do some of it last year, to be candid with you.

MR. FRENCH: Is it work that has to be done?

MR. GREENLAND: It is work that is ongoing and

you will see when you get to our (inaudible) our numbers are down, but we do

have a number of projects that we have to have finished this year. A couple of

them involve a considerable amount of inspection time around the Province, and

of course, it is travel time.

MR. FRENCH: Again Property, Furnishings and

Equipment, from $22,000 down to $4,000.

CHAIR: We will hear the answer on that, Bob,

and then we will let -

MR. GREENLAND: Basically, we are just going to

try not to buy anything, I guess, to be candid with you. I think we have enough

engineering equipment to take us through. We have had some reductions in staff,

and we will cross our fingers.

MR. FRENCH: Would this be a good time, Mr.

Chairman, for a smoke break?

CHAIR: Yes, I was just going to go into my

announcement. Usually we look at taking a break at 8:30 p.m. Because of my

addiction it is almost compulsory.

MR. FRENCH: Realizing you have to go out doors,

of course.

CHAIR: Yes. Unless you guys get finished in

time.

MR. J. BYRNE: No, no! I can keep it going until

8:30 p.m. and then you can have a break if you like. Then we can come back and

we will just continue on. I have a lot of questions yet.

MR. FRENCH: So do I.

MR. J. BYRNE: Although, I am going through

faster than I thought I would.

CHAIR: Okay, we can go until 8:30 p.m. and then

we will take a break. Hopefully you guys can speed up. If you do not mind me

asking, which one of you guys (Inaudible).

MR. J. BYRNE: I am.

CHAIR: Okay. Go ahead, Jack!

MR. J. BYRNE: You do not smoke do you?

MR. FRENCH: Me, no, I am just looking after

Ralph's interest.

CHAIR: Myself and him represent the same town,

you have to understand that. We have to look out for each other.

MR. J. BYRNE: We will go to 8:30 p.m.

MS BETTNEY: Are we moving to page 76?

MR. J. BYRNE: Yes.

CHAIR: Of course, the Minister of Works,

Services and Transportation is very important to our area also.

MR. J. BYRNE: With respect to Administrative

Support, Salaries: "Appropriations provide for the engineering support of all

capital road projects," - engineering support. Salaries, $6,330,400 down form

$6,575,500 budgeted, $6,448,000 revised: Where would these positions be? It is

for engineering support, is it? Across the Province or is it in the Engineer

Department?

MS BETTNEY: Both. There is a seasonal layoff of

engineering staff which would be headquartered here in the building. There is

also the elimination of four regional positions that account for approximately

$100,000.

MR. J. BYRNE: Has there ever been any - well,

we have a new minister, I know, but the staff may be able to answer - serious

contemplation or discussions with respect to privatizing some of the engineering

work being done for government?

MS BETTNEY: We have had discussions on that,

even since both of us have come to the department, so I will ask Clyde to

comment on that.

MR. GRANTER: There has been discussion, I

think, ongoing for years. There has never been a clear indication that it would

be to the financial benefit of the government, but it is not something that we

intend to let die. We intend to continue to probably accelerate discussions with

the engineering community to see if there is a way to sort of, through some

partnering arrangement, at least go through an experimental stage here, to get a

fix on whether we can do it more cheaply by contracting out.

MR. J. BYRNE: I do not know why that question

came to me, because when I was going through this and saw the decrease in the

salaries and what have you - I really do not know why I asked the question, and

I am not supporting it one way or the other. I just thought that you may be

thinking about privatizing the engineering.

MS BETTNEY: We will be looking at it. We are

examining the viability of it.

MR. J. BYRNE: If that is the final decision,

that you would decide to privatize this service, would it be tendered? Would

there be a request for proposals? Would it be, who knows whom that get the work,

type of thing?

MS BETTNEY: For a professional service of this

nature, there is a process that is dictated by The Public Tender Act.

MR. J. BYRNE: Professional services are exempt.

MS BETTNEY: Well we go through a bid process

usually inviting three bids. I think the difference being from a normal public

tender that you are not bound by the lowest bid because you are dealing with a

kind of service where you have to be able to evaluate it from a quality

perspective and from degrees of variation that are very difficult to control in

a lowest bid situation. So again it would be our intention, if we find through

whatever means that we choose to test this, that it is the route that we wish to

follow, that we would be certainly opening it to the whole construction,

engineering, business community to try and find the best possible deal for

government, a combination of expertise, service and cost.

MR. J. BYRNE: Thank you.

MR. FRENCH: Can I just ask a question here? If

that does transpire - and I realize government does not have to tell us in

Opposition their business - is there some way that I could be notified, as a

critic of transportation, that this was going to be become a reality?

AN HON. MEMBER: Before it became a reality?

MR. FRENCH: Yes.

MS COLE: I don't see any reason not to.

MR. GRANTER: I don't see any reason why not to

either. One point of clarification I would like to make here is that we would

not be contracting out the entire engineering capability within the department.

You need enough in-house to administer, to be sort of knowledgeable about what

is going on.

MR. J. BYRNE: Quality control and what have

you.

MS COLE: That is right.

MR. J. BYRNE: Okay.

Under the next section, page 76, Improvement and

Construction - Provincial Roads, Supplies, $300,000 budgeted, $610,000 spent,

and $300,000 budgeted. Why was there a $310,000 increase, and what was it spent

on?

MS BETTNEY: Do one of us have an answer?

Ramona, do you have one?

MS COLE: Generally in the area of the capital

road construction, the total allocation is budgeted on the best estimate that we

can make at the time as to how it will be spent. Generally it does not fit the

budget exactly, but on the bottom line the projects still total the same amount,

or if they go over we can pinpoint the specific -

MR. J. BYRNE: But that is over by 100 per cent.

MS COLE: Yes, but we can pinpoint the specific

on the project, but it might not necessarily - we could find out what makes that

go up, but the $300,000 budgeted would have been just an estimate at the time,

at the beginning.

MR. J. BYRNE: I know that, but usually

estimates are reasonably close.

MS COLE: If we can find out what makes up the

$610,000 for you -

MR. J. BYRNE: I would like to know that.

Also, on Property, Furnishings and Equipment -

MR. FRENCH: Excuse me! Could I just interject

here? The $300,000 that we intend to spend, that is just for supplies?

MS COLE: Yes.

MR. FRENCH: That is not work?

MS COLE: No, supplies, survey pegs and stuff

like that.

MR. FRENCH: What are we talking about in

supplies?

MR. McCARTHY: Basically, Supplies in that

account would be the survey pegs, things the field crews are using in laying out

the construction projects.

MR. J. BYRNE: That $610,000 again: There would

not be any vehicles or anything purchased there, would there?

MR. McCARTHY: There wouldn't be any vehicles

purchased, but we do have leased vehicles. We use leased vehicles on

construction, and that would reflect in the purchased services area.

MR. J. BYRNE: Okay. Are you going to

investigate that and get back to me?

AN HON. MEMBER: Yes.

MR. J. BYRNE: Thank you.

Under Purchased Services, $11,765,000 budgeted,

$13,165,000 spent: That is $1,800,000, somewhere around there, over and above,

and now they have roughly $5 million budgeted. What are these services, why the

increase, and why the decrease?

AN HON. MEMBER: What is it?

MR. J. BYRNE: Both. There is an increase and a

decrease.

MR. McCARTHY: The increase last year reflected

the first instalment of the federal freight rate subsidy program. When they

eliminated the freight rate subsidy, the Province was given $3 million of

federal money which had to be matched by an equal amount from the Province, and

that was added after the budget was done last year.

The decrease this year reflects the decrease in the

overall improvement in the construction budget.

MR. J. BYRNE: Isn't that a strange location or

place to put that in the budget? You are talking about freight subsidies?

MR. McCARTHY: Well, it was compensation to the

Province of $3 million because they eliminated the subsidy program, and the

Province chose to spend that money in transportation, highway improvement

projects, and it had to be matched dollar for dollar by the Province, to spend

it on highway improvement projects.

MR. J. BYRNE: And the decrease? We are looking

at an $8 million decrease from what was spent last year, not $3 million.

MR. McCARTHY: That is the contract payments

that reflect the decrease in our budget for the Provincial Roads Program this

year.

MR. FRENCH: So what are we spending the

$4,965,000 on?

MR. McCARTHY: That is the actual payments to

the contractors for the actual construction work.

MR. FRENCH: Is this work that is going to go to

public tender?

MR. McCARTHY: Yes.

MR. FRENCH: Can we get a list of the roads and

bridges that are to be done?

MS BETTNEY: At this time that is in the process

of being finalized. I anticipate it going through Cabinet within the next two

weeks and then it will be made public after that approval.

MR. FRENCH: I would hope then that our petition

that we presented today will be given consideration.

MS BETTNEY: It will be taken under advisement.

MR. FRENCH: So the decision has not been made

then as to exactly what we are going to pave or what bridges we are going to be

building?

MS BETTNEY: Obviously, at this stage of the

budget, and at this stage of approvals, we have developed a list of projects

that we are proposing and putting forward for approval under The Provincial

Roads Program. The final approvals are not given yet.

MR. FRENCH: Will they be ready before the House

closes?

MS BETTNEY: Yes.

MR. J. BYRNE: On the same line: So you are

saying that basically it to be spent on road construction this year, is less

than $5 million?

MS BETTNEY: The actual budget figure for

Provincial Roads is $6 million. That reflects some carry over projects from last

year, and the amount that you see here.

MR. J. BYRNE: What about the Road for Rails

Agreement?

MS BETTNEY: That is different. That is coming

up in the next one.

CHAIR: We are going to take a break now until

about 8:45 p.m. I am doing it, Jack, because I am sure that you people want to

stretch your legs and relax for a few minutes. Not me, I am just trying to be

accommodate you, right.

MR. J. BYRNE: No problem.

CHAIR: Okay, so 8:45 p.m. There is coffee down

in the Caucus Room downstairs. There is no smoking down there. You can go down

there and have a coffee or whatever.

MS BETTNEY: Thank you. I do not think I will

have a coffee though.

Recess

CHAIR: Order.

Okay, Bob.

MR. FRENCH: I would like to go back to page 76.

There is one that Jack missed and it was, again, one of my favourites, Purchased

Services, $100,000. Just tell me what that is briefly, please.

MS BETTNEY: Under which category?

MR. FRENCH: It is under Pre-Engineering.

MS BETTNEY: Under Pre-Engineering, Purchased

Services.

MR. McCARTHY: That is, we contract out for

investigations for brick footings and engineering work associated with

construction.

MR. FRENCH: Okay. In Property, Furnishings and

Equipment - I don't know if we have asked this one, on the $50,000 in 3.2.03.07.

MR. McCARTHY: That is equipment they would need in

the field offices on the construction project maintenance.

MR. FRENCH: Page 77, Highways - Transportation

Initiative: I will ask this question first I guess, minister. The federal

government under the transportation, is this the Roads to Rails?

MS BETTNEY: Yes.

MR. FRENCH: Okay. I am assuming in 1996-1997, we

are going to spend $26,042,600?

MS BETTNEY: No, actually if you look down to the

Revenue - Federal, $34 million for the transportation initiative on the Trans

Canada Highway, that is the figure.

MR. FRENCH: Okay, have we decided or has the

government decided exactly what work is going to be done under this?

MS BETTNEY: Yes, that was announced in the last

sitting of the House. I believe that was brought in under the last sitting of

the House and the list of projects were provided. They are tendered and I think

some of them are actually in progress. We have a copy of that list available

that we can give you if you wish.

MR. FRENCH: I probably have it, although I don't

remember now. More than likely I have, but I would appreciate getting a copy if

I could please.

MS BETTNEY: Yes.

MR. J. BYRNE: Some of those contracts were just

let this past week or two, weren't they? In certain areas -

MR. McCARTHY: No, most of those contracts have

been let now for some time. I mean tendering started back in January actually

for those projects.

MR. J. BYRNE: But there was an announcement

recently on contracts for the Outer Ring Road -

MS BETTNEY: They were awarded.

MR. J. BYRNE: Awarded, that's what I am saying. I

meant awarded, okay.

MR. FRENCH: If I might just go back to page 76,

3.2.03.10. It says Grants and Subsidies, last year we spent $1,052,400 and this

year we are spending zero. What would that have been for?

MS BETTNEY: Ramona, would you just like to comment

on what it was in the past, what the general category refers to and the fact

that we don't have any in there this year. Then if there are specifics you can

probably follow it up later.

MS COLE: Okay. I think Terry may be even able to

speak better to this one than I can. The money that is in there has been in

there in the past and it is to provide grants to communities and municipalities

to take over roads. Am I right on that? Considering the low level of total

funding available this year, we don't think that we can turn over any roads to

any municipalities in 1996-1997.

MR. FRENCH: You are missing an opportunity.

Under Regional Roads - Transportation Initiative,

again this is a part of the federal government, another initiative with the

federal government?

MS COLE: Yes, that is the other part of the Road

for Rails Agreement. The upper section, the highways, is the Trans Canada

Highway, and this refers to what we call the trunk roads agreement.

MR. FRENCH: Can we get a copy of both of those?

WITNESS: Yes, I will give it to you now.

MR. FRENCH: Okay, thank you.

Transportation and Communications, $200,000.

MS BETTNEY: That copy is not ready? Well can we

update it and provide it tomorrow? Okay, we will provide it tomorrow.

MR. FRENCH: If you could send us over a few copies

tomorrow we would appreciate it.

MS BETTNEY: Which page are we on?

MR. FRENCH: We are on page 77, Regional Roads -

Transportation Initiative, 03. Transportation and Communications, from $420,000

down to $200,000.

MR. McCARTHY: Again, that is an estimation of the

travel costs and phone costs associated with those construction projects.

MR. FRENCH: Okay. The next one under that,

$500,000 for Supplies up from $160,000.

MR. McCARTHY: Again, it is just an estimation of

the supplies needed to carry out those construction projects.

MR. J. BYRNE: That is interesting. With respect to

Transportation and Communications, the one above: You went from $200,000

budgeted to $420,000. Why such a large increase?

MR. McCARTHY: The $200,000 has been a pretty

standard figure we have been using. The $420,000 is the actual at the end of the

year, what we actually spent in that.

MR. J. BYRNE: But why was there that much spent?

Why was it $220,000 above the estimate? It is double what the estimate was? If

that is the case, what you are saying, there should be $420,000 budgeted this

year? There must be an abnormality in there somewhere?

MR. McCARTHY: It was a poor estimate to begin

with. This year, even though we got about the same amount of money, the projects

are bigger. You know, less projects generally mean you have less, that type of

cost.

MR. J. BYRNE: Above, in the

section Highways -

Transportation Initiative, under Supplies you budgeted $500,000, you spent

$276,000 and you have $500,000 again, which is probably the reverse of what is

down below. Why was the full $500,000 not utilized?

MR. McCARTHY: Obviously it was not needed. So we

did not need to spend it and we did not spend it on that particular item. The

controlling figures, the bottom line, the $30 million, if it does not get spent

in Supplies it means more money will get spent in actual construction. So we

control the bottom line as the main control.

MR. J. BYRNE: I don't know if you are missing my

point here, but let her slide; go on.

MR. FRENCH: Terry, Property Furnishings and

Equipment, $100,000: What are we buying here? Under Highways - Transportation

Initiative there is $100,000 up top, and there is $150,000 down in Regional

Roads Transportation. So somebody might want to answer both the one time. There

is $100,000 in one and $150,000 in the other.

MR. McCARTHY: That one is, you know, equipment

that is used on the construction project, the actual equipment in the field. It

would be methylene chloride and other things we use in the asphalt area, in the

granular area.

MR. FRENCH: Okay, up to the top, the $100,000.

MR. McCARTHY: Yes.

MR. FRENCH: The same thing?

MR. McCARTHY: Yes.

MR. FRENCH: On page 78, Strategic Highway

Improvement Program: "Appropriation provided for a joint Federal-Provincial

initiative for highway improvement projects," in Purchased Services there are

$3,725,000.

MS BETTNEY: Again this is a 50/50 project that we

are involved in with the Federal Government. The actual amount that we will be

spending in this area is $4 million. That represents $2 million federal and $2

million provincial. That is the amount that will be spent on the bridges in

Labrador this summer.

MR. FRENCH: So all of that is spent in Labrador.

MS BETTNEY: The $4 million is bridges in Labrador,

yes.

MR. FRENCH: I know why Wally is so quiet now.

MS BETTNEY: Right.

MR. FRENCH: I understand you now, Ralph. Now I

know, Ralph, you were right.

MR. J. BYRNE: You are getting $8 million for a

road up there.

AN HON. MEMBER: (Inaudible)

MR. FRENCH: Alterations and Improvement To

Existing Facilities, Purchased Services, $5,935,000 down from $12,680,000: What

exactly is it for?

CHAIR: George Greenland or the Minister.

MR. GRANTER? Do you want to say something to that?

MS BETTNEY: No, I will sit quiet, if you like to

respond to that.

MR. GRANTER: I think I can answer it partially.

The completion of Philip Place is included in that $5 million.

MR. FRENCH: Can I interject on this one?

CHAIR: Yes.

MR. FRENCH: What is the long-range plan for Philip

Place, besides blowing it up?

MR. GRANTER: Philip Place will be occupied by two

departments, the Department of Mines and Energy and the Department of Forest

Resources and Agrifoods.

MR. FRENCH: So they will move of this building

here? Will the ministry stay in this building or will that move?

MR. GRANTER: My understanding is that the

ministerial suites, I think you are referring to, would move to Philip Place.

MR. FRENCH: I just raised that from my own

perspective. I thought it was always good if we had all the government

departments and the ministers under the one roof. I think some years ago that

was the ultimate aim, to bring everybody kind of under - now we seem to be

moving in the opposite direction, I guess.

MR. J. BYRNE: Can I butt in here?

MR. FRENCH: Yes.

MR. J. BYRNE: On that same section, 3.3.01: You

have under Professional Services $1.5 million budgeted, $1.8 million spent, and

you are down to $400,000. Why the extra $300,000 over and above what was

budgeted?

MR. GREENLAND: We aren't unlike the highways in

that we are driven by the bottom line capitals. These are positions - we do. We

take our budget for the project and we make our best guess at what the salaries

will be on the Professional Services. Professional Services can go up or down

because they are based on a percentage of the work we do. The $1.8 million would

have still been the same bottom line, basically. Well, actually it would have

been reduced a bit.

This year our project is down to $6,435,000 in total,

and of that amount we are allowing $400,000 for Professional Services, which

will pay the balance of the fees for Philip Place and some other

engineering/consultant fees we expect to have for other projects.

MR. J. BYRNE: Further to that, I notice in the

Alternations and Improvements to Existing Facilities, you had budgeted

$8,725,000 and you spent $12,365,000. Is that almost a $4 million increased cost

to the renovations of Philip?

MR. GREENLAND: No, no. Back up to the $14,600,000,

if I might. You are netting the revenues out which are throwing the numbers off.

If you go back to the $14,600,000, which was the amount voted, we actually spent

$14,580,000. This year we are reduced to $6,435,000. Now you get into recharge

to other departments and you get into revenues, which kind of distort the number

if you look to the bottom line.

MR. J. BYRNE: Back around that same question,

though. I was expecting the Philip Place or the Philip building - and I have a

note here on the next section, 3.3.02, Development of New Facilities:

"Appropriations provide for the construction of new buildings and the extension

of existing facilities owned and operated by Government Departments and

Agencies." I had a note here: Question the Philip building and budget versus

what was spent. Is there or has there been an increase in the cost or the amount

of money budgeted for the renovations to the Philip building? Is there an

increase? Actually, what was budgeted and what was spent on the Philip building?

MR. GREENLAND: Philip Place is not finished. We

are at the moment looking at a potential - and I say potential - increase of

about $200,000 over our original total budget of three years ago. We are

budgeted at $7.8 million and we expect it to be $8 million.

I should point out, we have not yet asked for the

extra $200,000 to go from $7.8 million to $8 million. We are still under budget

and ahead of time but we have some other things to solve.

MR. FRENCH: The $100,000 for Professional

Services: I guess that is design work.

MR. GREENLAND: No. Professional Services in

category 3.3.02.05, salaries relate here to on-site supervision. We have a

practice of putting on site our, not an inspector, sort of a manager, a clerk of

the works, depending on what your background is.

MR. FRENCH: No, I was talking more about the

Professional Services.

MR. GREENLAND: Professional Services are actual

fees paid to outside consultants for design, supervision, and so on.

MR. FRENCH: The $200,000 in under Professional

Services under 3.3.03.05, $200,000 down there.

MR. GREENLAND: You have lost me for a second.

MS BETTNEY: That is Advanced Planning - Studies.

MR. GREENLAND: I am sorry! Advanced Planning -

Studies, yes.

MR. FRENCH: Would that be the $200,000 you might

be over budget on the other project?

MR. GREENLAND: No. We have sufficient funds in the

Alterations and Improvements to Existing Facilities to finish Philip Place.

There is no question there. The $200,000 is part of an advance planning block

which we have traditionally carried. As you look back you will see it was $1.5

million in the previous years. What we traditionally do, and we have said to

government: In the building construction, we do a design one year and

construction the following. So we often have planning dollars ahead of

construction dollars.

MS BETTNEY: Gentlemen, what this represents and

what you see here, is the fact that with $200,000 in advance planning you can

look ahead to next year and realize there won't be major construction of

buildings that we do the design for internally.

MR. FRENCH: Page 80. This is in Air Subsidies now,

4.1.01. Grants and Subsidies, from $905,000 down to $90,000.

MS BETTNEY: That represents the air subsidy in

Labrador prior to this year, prior to December of 1995. Is that correct?

MS COLE: The air passenger subsidy in Labrador was

eliminated on October 31, at the end of the contract.

MR. J. BYRNE: Is that the one to Atlantic? Is it

Atlantic?

MS COLE: Labrador Airways.

MR. J. BYRNE: Labrador Airways.

MR. ANDERSEN: Is that the one that (inaudible) in

the riding of Cartwright - L'Anse au Clair?

MS BETTNEY: Yes.

MR. ANDERSEN: Okay.

MR. J. BYRNE: Why did it go from $760,000 to

$905,000? That is $245,000 more than what was budgeted.

MS BETTNEY: I will comment and, Ramona, if I get

off track you can interject. The nature of this subsidy was based on passenger

use. There was an increase experienced even up to the time that the subsidy was

eliminated. The projection was that it was going to increase even more. What

that shows is that there was an increased draw on that passenger subsidy during

the period that it was in effect in 1995. When the revisions were done to the

budget at that time we felt it necessary to eliminate that subsidy. What is left

there in the 1996-1997 budget now simply reflects the subsidy that we provide to

Harbour Deep for passengers during the winter.

MR. J. BYRNE: What impact has that had on the

transportation in that area, the numbers of people travelling back and forth no?

MS BETTNEY: I don't have figures on what it

represents in terms of increased or decreased travelling, if that was the intent

of your question. I have received representation from, particularly, the

District of Cartwright - L'Anse au Clair on the impact on the cost of travel to

people in the area. The department is still reviewing some of the figures that

the district, and Labrador in general, has provided in their representation on

this issue. I don't have figures yet on actual increases or decreases in

passenger travel.

MR. FRENCH: Under Airstrip Maintenance, 4.1.02,

Supplies, $227,000.

MS BETTNEY: That is a re-allocation from equipment

maintenance. Ramona, please comment a little bit more.

MS COLE: In past years the diesel fuel used in the

equipment on the fourteen airstrips on the Coast has been included under

equipment maintenance. That is where most of our gas and fuel supplies were

included. We just thought it would reflect a better representation of how much

is spent on the airstrips if it was moved to that area, so we put the funding

for it in there. (Inaudible) the original budget, but....

MR. FRENCH: The $54,000 for Purchased Services?

MS COLE: That would be for any required repairs to

runways on the airstrips, minor repairs.

MR. FRENCH: Under Airstrips, 4.1.03, Professional

Services has gone from $16,100 down to zero. I guess that is if you need

anything done. Under that it says Purchased Services, $695,000.

MR. McCARTHY: That would be contract work. We

offer a contract for improvements and upgrading to the restoration of the

strips.

MS BETTNEY: Again, if you would note, there is

federal revenue associated with the capital upgrading to the airstrips.

MR. J. BYRNE: Just out of curiosity. The $695,000:

I mean, is there that much maintenance on the airstrips every year?

MR. McCARTHY: We have fourteen strips on the

Coast. As part of the federal agreement when it built those strips, the federal

government funds 100 per cent of the cost of restoring those strips. It has to

replace the gravel surface about every five years or so, so lighting and those

type of things are, you know, restored.

MR. J. BYRNE: Basically, if we didn't spend that

money on airstrips we wouldn't get any.

MR. McCARTHY: Correct, sir.

MR. FRENCH: On page 81, Administration, 4.2.01,

Professional Services, $8,000. I notice too that salaries are up a bit.

MS BETTNEY: That is a transfer of a position into

that particular part of the budget, from the White Hills into this particular

area, associated with running the interprovincial ferry system.

MR. FRENCH: And the $8,000 for Professional

Services?

MR. McCARTHY: That is for the hiring of naval

architects from time to time when we need someone to do an assessment of one of

the ferries for us.

MR. FRENCH: Okay. Under Ferry Operations, Salaries

has gone from $6,446,600 down to $6,000,500: Is that through restructuring?

MS BETTNEY: The main item there that you see

reflected in the decrease - I would not say main - part of it would be the

elimination of over-time for captains on the ferry services. The remainder of

that - Ramona, is there a major item that you can attribute that to?

MR. McCARTHY: Last year we had a special one-time

service on Bell Island for the Centennial. We had an enhanced service during the

summer months which cost us extra. In addition, with the takeover of the service

on the South Coast, the problems we experienced with contractor getting some of

the boats in service, we were down there with our swing vessel, and the swing

vessel last year was used pretty well full-time. Normally it is only budgeted

for about six months of the year.

MR. J. BYRNE: With respect to the elimination of

over-time for captains, obviously that was quite a substantial saving.

MS BETTNEY: It was approximately $100,000.

MR. J. BYRNE: Did any captains resign and move on

to other positions because of that over-time question?

MS BETTNEY: Captains have moved on to other

positions. Whether there is a direct relationship, I do not know.

MR. FRENCH: Still under the Ferry Operations,

Supplies is up, Purchased Services is up, Grants and Subsidies is up, and Debt

Expenses is down. So we will probably take those three first.

MR. McCARTHY: Those figures reflect the takeover

of the South Coast ferry services. We took them over last year in the middle of

June, part way through the fiscal year. This year we now have to budget for the

full year, so that reflects the increase in fuel costs and operating costs for

those services. The Purchased Services is the additional cost of refits, more

boats. The Grants and Subsidies is the actual payment to the private operators

we have on the South Coast annualized over the year.

MR. J. BYRNE: With respect to that issue, with the

South Coast ferries and the increase here in expenditures: Was it last year that

there was $30 million or $50 million given to government by the Feds for the

South Coast ferry, and they used it to help balance the budget. Now we are going

to see government having to come up with the money each year. I mean, I know we

have Federal revenue there, but how would you address that concern?

MS BETTNEY: This was part of the overall plan

here. It was certainly the recognition that in buying out the South Coast ferry

service and making provision to operate it ourselves as a Province that we would

be significantly reducing the cost of that service on an annual basis. Of

course, as you indicated, there was a lump sum payment to the Province

associated with our buying out the service and being prepared to provide it

ourselves. We estimated at the time that we would be able to provide the service

on a annual basis. Terry, on the actual figure.

MR. McCARTHY: The agreement was basically based on

that we could operate the services for $2.8 million annually.

MS BETTNEY: Two point eight million dollars

annually. What we are seeing from now, having the actual ferry service in

operation, is that we should be able to provide that service annually for $2.4

million. So this is not unexpected or unanticipated. It was certainly budgeted

for and recognized that that will be an ongoing expense that we would incur for

providing the service.

MR. J. BYRNE: You said that you could provide the

service for a reduced cost?

MS BETTNEY: Yes.

MR. J. BYRNE: Cost to whom?

MS BETTNEY: What it was costing Marine Atlantic

and the Federal Government.

MR. J. BYRNE: So we did it as a favour for Marine

Atlantic, we took over the South Coast ferry system. Is that what you are

saying?

MS BETTNEY: No, that is not what I am saying.

MR. FRENCH: I hope we don't do them any favours.

MS BETTNEY: In fact, what we did was look at this

area of service and recognize that there was a cost associated with providing it

to Marine Atlantic and to the federal government. We looked at the overall cost

and its long-term cost to the government and thought that there could be a way

to provide this service more efficiently. Our department felt that certainly we

had the capability to be able to provide it more efficiently, and on the basis

of that be able to obtain cash settlement for the extended service that would be

to the benefit of the Province. In obtaining the arrangement that we have of the

cash buy-out which was $55 million, and the impact that that has on the debt in

the current Budget, we feel that financially it was a good deal.

MR. J. BYRNE: But in the long haul, if we are

going to be spending - it is $2.8 million a year now, next year it will be up to

$3.2 million and five years down the road it will be $4.5 million and blah,

blah, blah. In a very short period of time that $55 million that we use which at

the time it was said that it would go into a fund and basically run the

operations of the South Coast ferry off the interest of that money, is not going

to be there. So in the long haul it is going to cost the people of this Province

money to help balance the Budget of $55 million. That has to be the case.

MS BETTNEY: Well again, it depends on how you view

financial management. If you take the $55 million, invest it and look at the

annualization of that and the interest that would be gained, I am not sure what

the exact figures are, but it certainly is sufficient to compensate the

operation of the service. Now the fact that you take it and put it into an

operating deficit or debt retirement, you are still having an offsetting savings

in terms of finances to the Province, because you will be carrying charges on

that debt.

MR. J. BYRNE: I believe that you are really

playing with numbers because in the long haul, if you are providing that service

for $2.8 million now, what will that be in five years, ten years, fifteen years

or twenty years down the road? You are going to pay more money. How can you not

say that? I can see the rationalization, the last time it was a quick $50

million bucks thrown in to help balance the Budget.

MR. McCARTHY: The agreement was based on an

initial cost of $2.8 million for us to operate the service. The effect of

inflation was taken into the long-term calculation and the value of money in

justifying that it was an excellent deal for the Province to take this money and

operate that service.

MR. J. BYRNE: I would not argue with the case if

you had taken that $55 million and set it aside in a fund and just used that,

and the interest from that. But to pay it down on debt retirement, the money is

gone - well we can talk philosophically about what the arguments are, I suppose,

to a certain extent.

MR. FRENCH: Page 82, Ferry Terminals, Purchased

Services, up from $301,000 to $480,000: What are those?

MR. McCARTHY: That is for major repairs to any of

our terminals and breakwaters that we have in connection with the ferry

services. Last year we only spent $301,000. Again, it was a conscience decision

in October, when the Budget crunch came, to freeze that money for the remainder

of the year as a saving.

MR. FRENCH: Okay, Ferry Vessels, Purchased

Services, $500,000.

MS BETTNEY: Of the $500,000, $200,000 is to be

spent on the refit of the Katherine so that it can continue to be used as

a second run for this summer. The remainder - are we talking there, the -

MR. McCARTHY: The remainder, the $300,000, is for

MS BETTNEY: That's a breakwater?

MR. McCARTHY: No, it is for any kind of a major

item that would come up in connection with any vessels that would be over and

above your normal refit; if you lost an engine or that type of major expense

that is over and above your normal refit items.

MR. FRENCH: Property, Furnishings and Equipment,

$2,800,000: Is that the first payment on the new ferry for Bell Island?

MS BETTNEY: What that represents is the amount of

money that we have allocated to go out to the market to see what we can get in

the way of a used ferry. Our first option in going -

MR. FRENCH: It is for Bell Island?

MS BETTNEY: Well, in going out to the market what

we will be looking for, in the first instance, is to see if we can find a used

vessel which would serve the Fogo Island run better than the Beaumont Hamel

does currently. If we are successful in doing that we will be able to shift the

Beaumont Hamel to the Bell Island run, and Bell Island is quite satisfied

with that kind of arrangement. As I say, this amount of $2.8 million reflects

what we have the ability to dedicate to that this year. It will all depend on

what is available on the market, whether we are successful in obtaining: (

a) a

vessel that would do a better service on Fogo and, if not, a second vessel for

Bell Island.

MR. FRENCH: Just as an observation here, I guess,

and down the road I would certainly - I raised a question in the House one day

of the Marystown Shipyard supposedly having its own private financing in place

to actually construct a new ferry. Is that still an option that is being

considered?

MS BETTNEY: In order to go the route of building a

new boat, the estimates that we have to do an ice strengthened vessel that would

be appropriate, say, for the Fogo Island run, the lowest estimate is in the

vicinity of $18 million. This kind of money just would not finance building. So

what we are saying is we cannot afford to build; we are prepared to look at

used, if we can bring it in within this kind of cost estimate for this year, and

obviously knowing that there would be some continuing allocation of funds as

well.

MR. FRENCH: Okay, just let me be the devil's

advocate here: What is there is no vessel available?

MS BETTNEY: We will have to re-examine our options

at that time.

MR. FRENCH: Then what would happen to the $2.8

million?

MS BETTNEY: If we do not purchase a vessel, it

will not be spent.

MR. J. BYRNE: So the preferred option at this

point in time is to get a replacement vessel for Fogo and take the Beaumont

Hamel for Bell Island? That is the preferred option. If you cannot get -

MS BETTNEY: Assuming there is something on the

market that fits this price tag.

MR. J. BYRNE: If there is nothing on the market to

fit that price tag there is an option with the Marystown situation, or to

purchase another one elsewhere, but you will want to replace the Fogo Island

ferry first?

MS BETTNEY: No, I would have to say, just to be

clear about it, in going out to the market we are going to have to go out and

look at both together, I would say to you. We will be going out possibly through

a broker - and again, Clyde, you can jump in here. The market is such that it is

a very specialized market. There is a certain way to determine what is available

worldwide. We would be going out to say, here is what we are looking for, to a

broker, and I think it would be a one, two situation where we would be saying:

This is what we prefer, go and see if there is anything there, but at the same

time, if not, see if there is anything that would give us the second vessel to

replace the Katherine . So it will very much depend on what is available

as to what they come back with and what we can afford.

MR. FRENCH: So this $2.8 million is not buying a

new vessel?

MS BETTNEY: No, that represents what we could put

into a down payment this year.

MR. FRENCH: Under that there are Debt Expenses of

$668,000. What debt are we servicing here?

MS COLE: We have long-term financing agreements in

place on the Beaumont Hamel and the Gallipoli , twenty-five year

agreements. I think we are probably half-way through on each of them, and that

is the principle portion.

MR. FRENCH: Then in actual fact we have probably

ruled out the proposal on the Marystown Shipyard.

AN HON. MEMBER: Yes.

MR. FRENCH: Under Government - Operated Aircraft,

Salaries has gone from $1,811,700 to $1,928,400, a change on both ends there.

MS BETTNEY: We were able to obtain a contract just

within the last couple of months to refit - it is a contract with Canadair - to

refit a couple of CL-215s, and we had to hire on mechanics to do that work. So

again you will see revenue that is offsetting that cost.

MR. J. BYRNE: With respect to the salaries: I am

just curious as to how many pilots we have in the system who work for the

provincial government, and how many aircraft?

MS BETTNEY: I am going to have to defer that

question to somebody else.

MR. McCARTHY: I don't have the answer as to

exactly how many pilots we have on staff.

MR. J. BYRNE: How many aircraft?

MR. McCARTHY: Aircraft: We have six CL-215s; we

have 2 Cansos; we have the King Air Ambulance and we have a spotter aircraft,

Cessna, used in the forest fire program.

MR. J. BYRNE: What about helicopters?

MR. McCARTHY: We do not have any of our own

helicopters; that is all contracted.

MR. J. BYRNE: These are all contracted. And the

pilots?

MS. COLE: What we have on staff are four permanent

positions for pilots, but we hire seasonal for the waterbomber. The permanent

pilot positions are for King Air, and I assume the Cessna maybe has some

permanent people. The waterbombers are a seasonal operation, so we hire on in

late April, I believe, mid-April.

MR. McCARTHY: Yes.

MS. COLE: And lay off at the end of September.

MR. J. BYRNE: With respect to those people who are

seasonal pilots as you refer to, do you have the same people recalled each year?

MR. COLE: Yes.

MR. McCARTHY: Yes, they have recall rights each

year.

MR. J. BYRNE: I am trying to think here now, what

kind of salary would a pilot make. It seems to me, you would think a pilot with

his or her credentials would be looking for a permanent, all year around job,

type of thing?

MR. McCARTHY: The waterbomber is a seasonal

operation, actually six months out of the year, and a lot of those guys - while

it is snowing here it warm elsewhere - they move around in the industry to other

areas. They are free to do what they like while they are laid off from us, but

they have recall rights in the spring.

MR. J. BYRNE: I could not see them being laid off

six months of the year on UI.

MR. McCARTHY: Some of them are.

MR. FRENCH: Transportation and Communications,

$1,043,000: What is that for?

MR. McCARTHY: The waterbombers are stationed all

around the Province during the summer. That is to pay the travel and the hotel

and accommodations for the pilots and the aircraft mechanics who are out during

the summer on this firefighting program.

MS. COLE: If I could interject something here.

There is also an amount in here of about $750,000 that relates to air ambulance

costs outside the King Air and the Grenfell operation, when we have to go

outside and contract for those.

MR. J. BYRNE: Just out of curiosity. Last year, I

think, we sent one or two planes to Quebec or Ontario somewhere where they had

forest fires. Do we bill those people for that?

MS. COLE: Yes, that is the revenue shown.

MR. FRENCH: The Supplies, $1,172,300, up by about

$122,000. Exactly what are they for?

MR. McCARTHY: That reflects the contract we were

successful in getting to do a major, what we call, sea check on two of those new

waterbombers actually belonging to the Province of Quebec. We tendered on the

contract and got it.

MR. FRENCH: Purchased Services, $712,000.

MS BETTNEY: What I am looking at here, as I know

it, are outside repairs and overhauls to engines and props, as well as insurance

cost for the aircraft; funding provided for that.

MR. FRENCH: Grants and Subsidies, $2,117,600.

MS COLE: That is the subsidy to the Grenfell

Regional Health Services to operate the air ambulance outside of the King Air

area.

MR. FRENCH: Down under Aircraft Acquisition -

Waterbomers, last year we spent $7,166,000. I assume that was to buy new

aircraft, and we are not planning to purchase any in this fiscal year.

MS BETTNEY: Correct.

MR. J. BYRNE: Can I just interject? Revenue -

Provincial, $385,000. I imagine that was the sale of the older aircraft.

MS BETTNEY: We sold off an old Canso.

MS. COLE: Two.

MS BETTNEY: Two Cansoes.

MR. J. BYRNE: Where they put up on tender or what

way where they sold off?

MR. McCARTHY: We went out to tender and hired a

broker to sell the aircraft and they were sold through a broker. We tendered for

the broker then he went around where there were contacts and sold the aircraft

for us.

MS BETTNEY: This is somewhat similar to - you

know, the flip side of what we are doing when buying a used vessel, a boat. It

is a kind of specialized market and you usually do work through brokers on

something like this.

MR. FRENCH: Page 84, Government Purchasing Agency,

5.1.01, Salaries is up, $1,284,900 to $1,311,200.

MS BETTNEY: We had vacancies. I believe there was

a director's position at the - no, that wasn't a director's position.

I'm thinking of Printing and Micrographic Services.

Ramona, do you want to comment? It was vacancies.

MS COLE: It is only a small amount of money. It

was probably one buyer position that was vacant but we do still hope to fill it.

We have had a freeze on as you know and we haven't been able to fill them.

MR. FRENCH: Professional Services was $45,000, it

is now $30,000: What are talking about here again?

MS COLE: That is the auctioneer's fees. The

Government Purchasing Agency basically handles all the auctions for government.

Up until 1995-1996 we followed a practice of basically storing a lot of old

office furniture and equipment. That was costing us money to store it, so we

decided early in 1995-1996 to have more frequent auctions. We have a contract

with an auctioneer whereby we pay a certain percentage of the revenue, of the

take. Last year we actually spent $45,000. Because most of the old surplus

furniture is now gone we think we will spend less this year on it, we will need

less number of auctions.

MR. J. BYRNE: Can I interject? What percentage do

you give the auctioneer?

MS COLE: I don't have the numbers right here, and

the percentage varies based on the type of equipment. There is a certain

percentage for heavy equipment auctions, there is a certain percentage for

office furniture. There was a new contract, I believe, just recently in the last

few months and I don't know what the details of it are. I think under the old

contract it ranged somewhere from 2 per cent to 6 per cent, depending on the

type of equipment that was sold.

MR. FRENCH: Purchased Services, $184,300. Exactly

what is that for? It is up by $24,300.

MS BETTNEY: Go ahead, Ramona.

MS COLE: That covers advertising. The bulk of it

is for advertising. GPA goes out and does all of our tenders for us, so that

would cover a fair chunk of that.

MR. FRENCH: Jack, I think you have one question

down further, before I go on to the next page.

MR. J. BYRNE: Yes. With respect to 5.1.01.12,

Information Technology. You had $271,400 budgeted, you spent $337,400, and you

have budgeted $345,500. This Information Technology program has been ongoing in

government for the past number of years. I just have a note here: How long is

this going to continue, spending this kind of money on the Information

Technology program?

MS COLE: The money that has been spent there in

the past is for the purchasing system, the regular ongoing production costs for

the purchasing system. It is a computerised system. The reason that it is

increased is because we are in the process of implementing a new system called

the CAMMS, Computer Assisted Materials Management System, which will give us the

added benefit of being able to provide some supplier information which we hope

to be able to use for supplier development. So if you have somebody who wants to

start a small business in the Province they can go to the Government Purchasing

Agency and get some more detailed information on what the demand is for specific

types of products.

MR. J. BYRNE: Was that the only

section that

covered Information Technology with this department?

MS COLE: No. There is Information Technology money

in other divisions, and basically it is computer costs for operating our ongoing

systems.

MR. J. BYRNE: Yes, but how much longer are we

going to spend that kind of money to get a system that would basically suit the

requirements or needs of the government in, say, the next five to ten years? Are

we going to have to continue to spend $350,000? I mean, in every department -

last night in the Department of Finance, every subhead was Information

Technology.

MS COLE: It isn't for development, or a lot of it

isn't. Every now and then you get an amount for development, but most of those

expenditures are for ongoing production costs, ongoing running of the system. We

have to pay NISL to actually operate the systems for us.

MR. J. BYRNE: Now we are getting to it, NISL. I

should go back the past few years, I suppose, and make some comparisons, before

NISL took over. That might be interesting. Anyway, thank you.

MR. FRENCH: Page 85.

MR. J. BYRNE: Oh no, I'm sorry, on page 84: Can we

continue?

Under Supply Centre, 5.1.02, Supplies, you had

$575,900 budgeted, you spent $725,900. The first question is why the difference.

Secondly, estimated for 1996-1997 you have $779,300. Why the increase? In

particular, if this is for government supplies, generally for all government

departments, I suppose, Works, Services and Transportation, when government is

decreasing, when we saw 204 civil servants in this department alone let go, and

there have been thousands over the past few years I suppose - this year in

particular it is up to 1,500. Why would we be budgeting a larger amount of money

for supplies when the actual size of government is decreasing?

MS BETTNEY: Do you want to try that one?

MR. GRANTER: I will have a stab at it. I think a

big part of that relates to the actual increase in prices for things like paper.

MR. J. BYRNE: A good answer.

MS COLE: Well, that is the bulk of it. The

supplies that are included here are what we order through the Supply Centre for

all government departments. Most government departments for things other than

photo copier paper and printed forms, go and order themselves. So the money is

within their own departments. This is basically photo copier paper, printed form

across government, the typical voucher forms and this type of thing. The cost of

a box of paper last September increased from $24.75 to $42.50; as a result there

was a big increase.

If you look down below, Revenue is also up by $200,000

because whatever we spend on that paper we recharge back to the other

departments when we ship the paper out to them.

MR. J. BYRNE: Yes, okay, increased cost to paper

or what have you. With 1,500 people in the civil service, and more, if you look

at the figures that have been quoted over the past, say, three or four years

since I got involved with this, you are looking at maybe 2,000 people less

filling out those forms, so obviously there have to be less forms to be filled

and less forms required or what have you.

MS COLE: That is not necessarily the case. There

are not necessarily less forms to be filled out, it just means that the people

who are left have to fill out more.

MR. J. BYRNE: They fill them out faster.

MS. COLE: Well they have to fill out more.

AN HON. MEMBER: They spent longer hours.

MS BETTNEY: Some of the people are driving trucks

and not filling out forms.

MR. J. BYRNE: I am disappointed in that one.

MS BETTNEY: It is getting late, Jack.

MR. FRENCH: Page 85, Salaries, from $760,500 to

$839,800. Why the increase?

MS BETTNEY: Yes, that is the area that I started

to refer to earlier where we have been carrying vacant positions in the Print

Shop, and anticipating that we have to staff the Print Shop and bring it up to

the normal component. There has been a director position at Printing Services

that has not been staffed over the past year. One person actually has been

carrying the major bulk of the management of the Print Shop operation. We will

have to staff that to a normal level.

MR. FRENCH: Under Supplies, from $408,900 down to

$389,400: We are talking about I guess supplies for the Print Shop.

MS BETTNEY: Yes, anything special.

MS. COLE: No, that is a pretty well standard

reduction.

MR. FRENCH: Purchased Services - here we go again

- $384,000 to $434,600.

MS BETTNEY: The funding that is in there is for

maintenance agreements on printing equipment. I cannot say offhand what the

reason is for the increase. I would assume that the maintenance costs are going

up. We can check it out and see what the details are.

MR. FRENCH: Okay.

MR. GREENLAND: Just let me add to that: The

equipment is getting so old now that we almost, well not almost, we have to have

parts made when something breaks. So we are into increasing maintenance cost.

MR. FRENCH: Under Mail Services, Salaries again

has increased by $17,000.

MS BETTNEY: Again that is a vacant position. You

will note, it is the same as what was budgeted in 1995-1996.

MR. FRENCH: Transportation and Communications,

down from $446,600 to $116,700.

MS BETTNEY: That is a change in accounting

practices with relation to the Department of Social Services, and it just

reflects the fact that now it will be coming out of their budget, not ours.

MS COLE: If you look below, the revenue is also

down.

MR. FRENCH: Purchased Services, up to $179,000

from $118,500.

MS COLE: Maintenance agreements again on the

equipment, and the equipment again is getting a lot older.

MR. FRENCH: Jack's favourite, Information

Technology, $27,900 down to $500.

MS COLE: Yes, the $27,900 in the past was actually

part of the maintenance agreements. We had it included under the wrong main

object and this year we have budgeted for it properly.

MR. FRENCH: Okay, page 86, Realty Services,

Salaries, from $196,900 down to $163,700: I guess that's just adjustments in -

MS BETTNEY: Yes.

MR. FRENCH: Then down under the Queen's Printer,

we go by $30,000-odd.

MS BETTNEY: That's right, there was a vacancy in

the Queen's Printer as well which was being covered off by the person who was

doing the management of the print shop. Again, as I said, it is not a situation

that we can allow to continue indefinitely.

MR. FRENCH: So that person now works directly for

the Queen's Printer?

MS BETTNEY: In the Budget - go ahead George.

MR. GREENLAND: What we have is really the Queen's

Printer acting as a director of Printing Services and also I think one other

management position and graphic supervisor as well. So we basically have two

management positions vacant and one individual doing his best to hold down the

fort. As the minister says, we have to take some action in this regard in the

near future.

MR. FRENCH: Okay, Purchased Services from $175,500

to $190,500.

MS COLE: Most of that would be for the actual

printing of The Gazette, the legislation and the requirement for 1995-1996 which

was down a little bit on revised. We were trying to ensure that we did not

overspend.

MR. FRENCH: Okay. Grants and Subsidies, from

$400,600 down to $300,600.

MS BETTNEY: Okay, you are over on Pippy Park?

MR. FRENCH: Yes.

MS BETTNEY: Again, that is simply a Cabinet

decision to reduce the funding allocation for the grant to the Pippy Park

Commission.

MR. J. BYRNE: Can I ask a question on that one? If

they are down $100,000, is there any thought that you know of being given to a

user pay system in the park to make up the difference?

MS BETTNEY: I have met with the chairman and, of

course, it is up to the board and the directors to determine how they will

absorb the reduction in the funding that they have. I do believe they are

looking at some alternatives with respect to revenue generation but they have to

be careful to preserve the integrity of what the park was intended to be. George

do you wish to comment because you are involved with that board?

MR. GREENLAND: Yes, I am not quite sure what you

mean. If you mean a general user fee, if you want to walk through the park, I

think it is fair to say no.

MR. J. BYRNE: Ski trails in winter -

MR. GREENLAND: There are some opportunities we are

exploring as a commission to see if we can raise some revenues by having the

private sector go into the park and run some of these things. We are looking at

concessions, a possible small increase in the trailer park which is a big

revenue generator for us, and we are involved with the Public Golf Association,

with a canteen if you want, I think halfway through the golf course this year.

So we expect to raise a few more dollars and we have to cut some expenses.

MR. J. BYRNE: Since you are familiar with that,

what kind of a budget does it take to operate the park?

MR. GREENLAND: Well this number is throwing me off

a little but the general operating budget is in the range of $1 million;

$400,000 traditionally has come from the government and about $600,000 is raised

in outside revenue. That is our current account, the operating budget.

MR. FRENCH: Under the Capital, Park Development,

from $400,600 down to $300,600.

MS BETTNEY: Again, we are going through a process

there of needing to acquire property. We are simply reducing the amount of

capital that we have available for that purpose this year and they will adjust

their acquisition accordingly.

MR. J. BYRNE: With respect to the acquirement of

property, how much land is actually available in the park at this present time

for C.A. Pippy Park to purchase because I know there are restrictions on

development there?

MR. GREENLAND: I am not sure. I cannot r