PDF Version

May 4,

GOVERNMENT SERVICES COMMITTEE

Pursuant to Standing Order 68, Jerry Dean, MHA for Exploits, substitutes for

Betty Parsley, MHA for Harbour Main.

Pursuant to Standing Order 68, Barry Petten, MHA for Conception Bay South,

substitutes for Keith Hutchings, MHA for Ferryland.

The

Committee met at 5:36 p.m. in the Assembly Chamber.

CHAIR (Edmunds):

Okay, we're going to get

started here now. First of all, we're going to make a motion to adopt the

minutes from the last meeting, held April 26.

motion to adopt the minutes from the Government Services Committee, April 26,

2016?

MR. KING:

Moved.

CHAIR:

Moved by Neil King.

Do we

need a seconder?

CLERK (Ms. Barnes):

No.

CHAIR:

Okay. Questions or comments?

Shall

it carry?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, minutes adopted as circulated.

CHAIR:

We're going to do some

introductions, and we've got some substitutions I'll bring them up after the

introductions then we'll call for subheads. We'll go the minister and ask you

to introduce your staff, and I also ask that before they speak into the mic that

they introduce themselves for the listeners there recording in the broadcast

booth.

Introductions from the Government Services Committee, starting in the back.

MS. HALEY:

Carol Anne Haley, MHA, Burin

Grand Bank.

MR. DEAN:

Jerry Dean, MHA, Exploits.

MR. KING:

Neil King, District of

Bonavista, home of the Trinity Pageant.

MR. FINN:

John Finn, MHA, Stephenville

Port au Port.

MS. DRODGE:

Megan Drodge, Researcher, Official Opposition caucus.

MR. PETTEN:

Barry Petten, MHA for

Conception Bay South, and Transportation and Works critic.

MS. WILLIAMS:

Susan Williams, Researcher, the Third Party.

CHAIR:

Okay, thank you.

I would

just like to point out before we get started that the Member for Exploits, Mr.

Jerry Dean, is substituting for the Member for Lewisporte Twillingate, Derek

Bennett, who will be here in about an hour, who is also substituting for the

Member for Harbour Main, Ms. Betty Parsley. And Derek Bennett will be coming in

at approximately 8 o'clock, if we are in fact still here.

we're going to go through the Estimates procedure by subheads, and we shall vote

on the subheads once they're completed and move on. We won't worry about the

clock, we'll let the clock run through and hopefully we'll be finished well

within the three-hour time frame.

I call

for the subheads.

CLERK:

1.1.01.

MR. HAWKINS:

We'll do introductions

first. I'd just like to make a few comments then we'll get into the subheads.

I'm

going to let you guys speak into the mic.

MS. COMPANION:

Lori Anne Companion, Deputy Minister, Transportation and Works.

MR. SMITH:

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

MS. MCCARTHY:

Charlene McCarthy, Departmental Controller, Transportation and Works.

MS. FANCEY:

Jody Fancey, Executive Assistant to Minister Hawkins.

MR. BARFOOT:

Scott Barfoot, Communications, substituting for Jacquelyn Howard.

MR. HARVEY:

Max Harvey, ADM, Marine and Transportation.

MR. GRANDY:

Cory Grandy, ADM for Works.

MR. BREEN:

Seamus Breen, Executive Director.

MR. HAWKINS:

Thank you.

Before

I make a couple remarks, this is my first Estimates. It's a new experience for

me. We'll work through it. I'm sure it's a new experience for the Member

opposite, although I think you may have been in as an EA and sat in on some of

the Estimates before, so you know

MR. PETTEN:

(Inaudible.)

MR. HAWKINS:

Okay.

I think

most of the Members on the government side, this is probably the first-time

Estimates for you folks in TW, but now you've had some experience in going

through it before. I'm sure the Member of the Third Party it's no new experience

for her. I'm sure you've been here before.

Anyway,

as I mentioned, this is my first experience with the Estimates. I certainly want

to thank everyone for this opportunity tonight to talk a little bit about the

Estimates that's contained in this particular budget and, hopefully, be able to

explain some of the line-by-line items, if you so desire to do that, and have

some discussions. If I'm not in a position to answer all of them, which I'm sure

I won't be, then I do have my staff that will certainly answer the questions for

you. If in fact we don't have the answer, we'll get it for you.

The

department's core functions are design, construction and maintenance of roads

and bridges; the operation and acquisition of marine passenger vehicle and

freight services; design, construction and maintenance of provincial buildings;

maintenance and operation of airstrips; acquisition and management of leased

space; and acquisition and disposal of land and buildings. The department is

also responsible for a tendering process for mail services, the vehicle fleet

and, of course, security services. Currently, there are just over 1,517 active

employees: 970 permanent, 379 seasonal and 162 that are temporary.

Given

the nature of the work of the department, safety must be paramount in everything

we do at all times. This is certainly a priority for me and we're working to

create a safe work environment for all of our employees, contractors and the

general public.

I just

want to go on record as saying that my first day in office, as a minister, I

made it very, very clear to my staff that safety would be priority number one

going forward and that every one of our employees who leave their home in the

morning is expected to be able to return to their family in the evening. So

we're going to make sure that a safe work environment is what we're all going to

strive for to ensure that our employees are safe during their work day.

The

department's gross expenditure budget for 2016-2017 is $499 million, which is

almost $98 million less than last year's budget. This is primarily as a result

of the infrastructure-related projects being fully or substantially completed.

I just

wanted to mention a couple of them. These include final payments for two new

ferries; the final payments for the new water bombers that we had; completion of

the funding commitment to the implementation of category three landing system at

St. John's International Airport; and significant progress on the wharf upgrades

to accommodate the Legionnaire on

Bell Island and Portugal Cove run. These projects have now been funded out and

so we were able to take that out of our budget.

Substantial funding has been maintained for roads-related infrastructure,

including $62 million for the 100 per cent provincially funded projects, as well

as the $125 million where we'll be leveraging federal revenue of approximately

$78 million.

As we

go through the Estimates for the Department of Transportation and Works, you

will note in many areas a change from previous budgets due to the line-by-line

review that was undertaken. Like every department within government, we have

taken steps to rightsize our budget and to work within the budget that we are

allocated.

There

will be a few areas tonight I'm sure the Member opposite will question with

regard to some of the changes and you'll probably hear the answer more than once

that it's because of averaging over the last five years. We've done a lot of

work with that. Areas that we've identified that there are some differences,

what we've done is decided to go back over the last five years and then we've

averaged out a costing on that. So probably that answer will come several times

tonight.

This

means conducting our monthly reviews of our overall spending and regularly

reviewing our overtime and travel and generally conducting an enhanced due

diligence on where the money goes. We will also be undertaking a real estate

asset management plan to ensure that we review government's real estate

portfolio and determine how best to enhance its public value.

Throughout our session, if there's anything we're unable to answer for you, we

will certainly provide these answers as quickly as possible.

So, Mr.

Chair, it's all yours.

CHAIR:

Thank you.

Mr.

Petten.

MR. PETTEN:

Thank you, Mr. Chair.

Minister, do you mind if I we'll do the line by line, but I have some general

questions that I'd

MR. HAWKINS:

Listen, you know me, I'm

free and easy and if I can answer it I will. If I can't, I'm sure my good people

will.

MR. PETTEN:

Yes. I know I lucked out on

the two fellows I'm critic for. You're doing the better ones. I got lucky, yes.

I'll

probably just do the line by lines, move along on that, and then I have some

questions. Maybe we'll do what subheads did we call?

CLERK:

Sub one.

MR. HAWKINS:

Shall we do the Minister's

Office first?

CHAIR:

Yes, Executive and Support

Services.

MR. PETTEN:

Okay. I'll ask some general

questions.

Why are

the Salaries higher in '15-'16 than expected?

MR. HAWKINS:

Well, in the Minister's

Office, of course, you would probably know, there were significant more staff

with regard to EAs. So we've eliminated those positions. I have one EA, and I

think in some of the budgets we included some with regard to there was some

question. Sometimes we were wondering if the CAs were included in that, but in

this particular case we eliminated one of the two executive positions and there

were some pay steps in response to staff turnover. So that's what we basically

did, eliminated that.

MR. PETTEN:

Okay.

I'd

rather go to some general questions first because I haven't got a whole lot

there in that section.

So,

24-hour snow clearing

MR. HAWKINS:

Do you want to go line by line or do you want to wait until we come to the

24-hour snow clearing section?

MR. PETTEN:

Well, we're only into

subhead 1.1.01. I don't have a whole lot in that section, so I figured I'd

insert some

MR. HAWKINS:

I can answer those questions for you but I think the 24-hour snow clearing will

be reflected later with the budget item.

MR. PETTEN:

Okay. That's fine, yes.

You

went down through your employees, so how many compared to last year? What's the

difference in your employees from this year to last year in the department?

MR. HAWKINS:

Well, I'll tell you what we

have done. We have no one that's going to be laid off, according to what we've

had. We've had some attrition. We've got 16 positions each year for the five

years. So they will be right now, the 16 positions will be through attrition.

MR. PETTEN:

Okay.

MR. HAWKINS:

So that's part of that.

If you

want to just talk a little bit about the 24-hour snow clearing; as you know,

with the removal of the 24-hour snow clearing there will not be a dedicated crew

24 hours. As you know, of course, too, that's only in certain areas of the

province. Not all the province had 24 hours.

Right

now, in determining the exact number of people that will be impacted by that,

we're not sure, because what happens, there are a number in that crew but each

year there may be some that will not be recalled, or there may be some that when

we actually recall, they've gone and found other jobs. So it's a seasonal piece.

Over the years there have been, historically, a lot of changes within that.

Right

now, it's almost too early to say, okay, there are going to be exactly five

people that's going to be replaced, or 10 people that's going to be replaced.

What we will be looking at, the closer we get to that, we'll be able to know how

many will be coming back on recall and that sort of thing.

Is that

satisfactory for staff?

MR. PETTEN:

Yes.

You say

you got 16 positions per year under the attrition plan. So this year, are there

any positions lost through the 650 positions announced in the budget, which was

core it was 200, I'm trying to get the numbers right 200 from the core civil

service. Were there any positions lost in that?

MR. HAWKINS:

Well, I just mentioned that

I think there are 25 or 26 for the 24-hour snow clearing.

MR. PETTEN:

That's where they're all

coming from, is it?

MR. HAWKINS:

So when we get closer to

that I can't tell you right now how many of those 25 or 26 will be impacted

because, again, like I said, every year it seems to be different.

staff is telling me that sometimes we recall and not all of them are coming

back. Some people find jobs, because it's only a seasonal piece. That's what's

going to be impacted with the snow clearing, but to get the exact number, we're

not going to say how many I can't tell you how many bodies will be physically

not there that are there this year.

MR. PETTEN:

Sure.

those positions, though, there are no other lost positions within the department

outside of snow clearing?

MR. HAWKINS:

No, other than and I think

I'll let my staff speak to this, but I think we have had a practice of some

vacancy positions and that sort of thing. Over the five years, we tried to move

those through the system.

MS. COMPANION:

No other positions, other than the attrition numbers, which were vacant

positions that would have been already taken from our budget. It's just we had

to find the PCNs and we wait for them to become vacant. The 26 positions, which

we don't really know if that will be actual people or not until the fall comes,

but nobody knows.

MR. PETTEN:

Will they actually be

removed then, the PCNs? That you identified, will they be removed from the

budget all together or it will just be the positions moved? Do you know what I'm

saying? Just the people or everything, the dollars and the

MS. COMPANION:

When the attrition plan was put in place, the money was taken out of our budget

for five years for the 16 positions that TW is responsible to take out. It's

already gone from our budget by the time we get our new budget. So throughout

the year we have to account for that money, as positions become vacant,

determining whether we can hold that position vacant and use it towards our

attrition. So the money is gone.

MR. PETTEN:

What about those positions

that may be lost through the snow clearing positions?

MR. HAWKINS:

That was part of the

Government Renewal Initiative that we put in there. That 24-hour snow clearing

has been removed from our budget.

MR. PETTEN:

Okay. Which includes the

positions, salary positions?

MR. HAWKINS:

Which includes the

positions; absolutely.

MR. PETTEN:

Okay.

I have

one more question under the Minister's Office there. It seems like a lot of

salary savings. I know you reduced one of those positions.

MR. HAWKINS:

Which one are you at?

MR. PETTEN:

I'm at Salaries.

MR. HAWKINS:

Still on the ministerial

one?

MR. PETTEN:

Yes, that's the subheading

we're under, yes.

I see a

drop of $108,000 from the revised to this year's estimate.

MR. HAWKINS:

There was a projected

revised budget that was put in at $311,700. That was actually what was spent.

The revised original budget was only $282,000. Included in that, we do have, as

I said before, the removal of one of the executive assistants and anything

having to deal with that, any salaries and severance.

course, with the changeover in government, there were severance costs that were

payable that went out to three staff members in the Minister's Office because of

the changeover. So if you take the severance cost for the three staff members,

the removal of the executive assistant position, then we should be close to that

amount.

MR. PETTEN:

Okay.

That's

all the questions I have on 1.1.01.

MR. HAWKINS:

What's that?

MR. PETTEN:

I'm telling Mr. Chair that's

all the questions I have on 1.1.01.

CHAIR:

Okay.

CLERK:

(Inaudible) go 1.1.01 and

you end with that.

MR. HAWKINS:

Go through all the ones.

CLERK:

(Inaudible.)

MR. PETTEN:

We called all of them.

That's what I was asking earlier.

CHAIR:

(Inaudible) to 1.2.03.

MR. PETTEN:

Okay, sorry.

CLERK:

(Inaudible.)

MR. PETTEN:

Okay.

A long

day; a long week.

Under

1.2.01, whose Salaries are included here? Who makes up those Salaries of $1.167

million? What positions and what I should say what division?

MR. HAWKINS:

You're on 1.2.02 now?

MR. PETTEN:

1.2.01.

CHAIR:

1.2.01.

MR. HAWKINS:

Okay.

MR. PETTEN:

1.2.01.

MR. HAWKINS:

The Salaries: deputy

minister, Assistant Deputy Minister of Works, Assistant Deputy Minister of

Transportation, Assistant Deputy Minister of Strategic so all your deputy

ministers would go into that our Director of Communications, our media

relations and so on.

MR. PETTEN:

Okay.

Transportation and Communications; again, I guess that's just travel for those

positions I'm assuming we're talking about travel for staff.

MR. HAWKINS:

Yes, and as you know we have

significantly reduced that because we've removed any discretionary travel.

Obviously, that's going to be impacting. The travel requirements are going to be

less for our staff. There was also some delay in the replacement of one of our

ADMs for roads for Works.

MR. PETTEN:

Works, yes.

Very good.

1.2.02,

under Administrative Support.

MR. HAWKINS:

1.2.02, yes.

MR. PETTEN:

What caused the Salaries to

increase?

MR. HAWKINS:

In which one? From where to

where?

MR. PETTEN:

On the Salaries line in

1.2.02. The Salaries increased to $1.692 million this year. $1.358 million

well, they went up to $1.746 million.

MR. HAWKINS:

Yes, so the adjustment in

Salaries was due to some of the changes in the funding levels in the

departmental salary budget, going through the JES step increases that happened

through that evaluation that the government did. And, of course, we previously

had an unfunded communications piece, I think, as well. There was an unfunded

communications position that we've included in that.

MR. PETTEN:

So you're saying that cost

is mainly due to JES and that.

MR. HAWKINS:

Yes. So we're pardon me, I

am sorry about that.

The

other, of course, is the funding for the Occupational Health and Safety staff

has been moved from the Project Management and Design division to the

Administrative Support. There's a switchover there. It's been changed out to

this particular line, so you can see the differential there.

MR. PETTEN:

So how many new staff was

added to there? You're saying that was Occupational Health and Safety staff?

MS. COMPANION:

There's a director and four Occupational Health and Safety consultants that have

been in place since the fall that are doing inspections of our worksites.

MR. PETTEN:

This would be one and two,

wouldn't it?

MS. COMPANION:

They were previously funded under another subhead.

MR. PETTEN:

Right.

MS. COMPANION:

So we appropriately moved them under the Corporate Services. So you'll see, when

we get down through, there'll be a $300,000 reduction somewhere because we put

it there.

MR. PETTEN:

Employee Benefits; I think I

may know the answer to this one being there. Employee Benefits seem fairly high.

MR. HAWKINS:

Which one is that?

MR. PETTEN:

It's under your

MR. HAWKINS:

Employee Benefits?

MR. PETTEN:

Yes, 1.2.02. There's no

difference, it's right across the board. But that seems to be

MR. HAWKINS:

That's pretty standard

across because of workers' compensation payments that are year to year to year.

So that's going to be consistent across the board on that.

MR. PETTEN:

Okay. Not cheap, is it?

Purchased Services, in the same subhead; why did that grow? Why was the revised

why was there an increase in that and now it's gone back to the

MR. HAWKINS:

Of course last year it was

revised. The actual spending came in at $185,000. The $136,300 under the

Purchased Services, these are pretty much standard services that we have. It's

part of the averaging piece again, so we've kept it at the $136,300. So we

basically restored it to what the usual average is on that one.

MR. PETTEN:

I guess why it was such a

jump in

MR. HAWKINS:

Well, last year, $136,000 to

$185,000; it was higher-than-historical expenditure levels, implementation of

the government's new printer strategy. All printer toners were purchased from

Supplies. And these costs are now included in the contract costs for printing,

so they were included in there.

MR. PETTEN:

And Revenue; where does this

come from, the Revenue line there?

MR. HAWKINS:

Revenue there is

miscellaneous revenue received from the department each year and based on

average revenue amounts from prior years. That's an amount that we consistently

have in there. It's from the forfeited security bids. If my note serves me right

here, it's also ferry claims, insurance related to prior years, workers'

compensation related to prior years and late salt delivery penalties. That would

be some of the revenue stream.

MR. PETTEN:

Okay, under 1.2.03, the next

one down.

MR. HAWKINS:

1.2.03. Okay.

MR. PETTEN:

Not a lot, but it seems like

Salaries are growing. I'm looking at the numbers and I'll ask the question now

and probably that's my own answer. I guess that's another one of those

MR. HAWKINS:

JES.

MR. PETTEN:

JES, yeah.

MR. HAWKINS:

Higher step levels.

MR. PETTEN:

We've seen a lot of that.

MR. HAWKINS:

Yes.

MR. PETTEN:

The Professional Services

seems to be what's that, the revised amount of $22,000. Is that just one time

MR. HAWKINS:

That was a one time.

Apparently on that Professional Services, TW entered into a professional service

contract to develop options to accelerate the delivery of the health care

infrastructure through the Partnership BC on that P3.

MR. PETTEN:

Oh, okay.

MR. HAWKINS:

That would have been there.

Of course, that's not going to be included in the budget this year.

MR. PETTEN:

No, okay.

Grants

and Subsidies in this, where do they go?

MR. HAWKINS:

It's the Transportation

Association of Canada annual fee.

MR. PETTEN:

Oh, okay.

On this

section, too, I'll just ask you a general question I guess. Has there been any

work done on a fixed link study, feasibility study for the fixed link to

Labrador?

MR. HAWKINS:

No, not in this

section

there's not.

MR. PETTEN:

In the department in

general?

MR. HAWKINS:

Not before this year.

MR. PETTEN:

Okay.

MR. HAWKINS:

It will be in the budget for

a fixed link.

MR. PETTEN:

Next year. There's no money

this year.

MR. HAWKINS:

No money in last year's

budget. There will be money in 2016-2017.

MR. PETTEN:

Okay, but that's later on in

the under 1.2.04, Mail Services, is there one less position or something

there?

MR. HAWKINS:

Yeah, there's a vacant

position we're not filling.

MR. PETTEN:

But it was vacant, was it?

MR. HAWKINS:

Yeah. We've taken it out.

MR. PETTEN:

Okay.

Minister, under 1.2.05, I'll just ask a general question because it pretty well

takes the full it seems like there was, it was $150,000 budgeted, and then

we're down the line of $10,000 now this year. I guess it is appropriations. It

says, Appropriations provide for the purchase of tangible capital assets.

That's realty is it?

MR. HAWKINS:

That particular, if I

remember correctly, budget allocation was covered unanticipated capital

expenditures piece and, during the fiscal year, capital expenditures associated

with the bridge management system in the department. So what we have done now is

realigned where as part of the budgeting division, there was a dropped balance

review in these and we weren't using it. So we decided we would take that out as

a dropped balance and we'd remove it.

MR. PETTEN:

It just wasn't being spent.

MR. HAWKINS:

Yeah.

MR. PETTEN:

Okay.

CHAIR:

Okay.

Call

for subheads.

CLERK:

1.1.01 through 1.2.05

inclusive.

CHAIR:

Shall 1.1.01 through 1.2.05

inclusive carry?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, subheads 1.1.01 through 1.2.05 carried.

CLERK:

2.1.01.

CHAIR:

2.1.01.

MR. PETTEN:

Thank you, Mr. Chair.

I have

a question again. Why are the revised salaries higher in 2015? They are $500,000

less this year $504,000, I guess than what they were in the revised figure

for last year.

MR. HAWKINS:

The deficit relates

primarily to unfunded severance and retirement costs. The severance that was

paid out is reflected into that revised budget.

MR. PETTEN:

Okay.

MR. HAWKINS:

We've basically gone back

now to more historical levels that we had for that particular salary piece.

MR. PETTEN:

That's the reason the

salaries are less in general this year, you've budgeted down?

MR. HAWKINS:

Correct.

MR. PETTEN:

Is there a vacant position

causing that to be down like that?

MR. HAWKINS:

No, it's not a position.

It's more overtime related.

OFFICIAL:

A reduction in overtime.

MR. HAWKINS:

Yes, Okay.

There

is a reduction in the overtime piece, so it's reflecting that. We're trying to

eliminate overtime.

MR. PETTEN:

Good luck with that.

MR. HAWKINS:

I know.

We got

to stick with it.

MR. PETTEN:

Yes, that's right.

Transportation and Communications, what caused that to go over budget?

MR. HAWKINS:

Transportation and

Communications; again, last year there was a purchase of safety equipment for

the workers no, that's the wrong one. You're on the Transportation and

Communications piece?

MR. PETTEN:

Yes.

MR. HAWKINS:

Okay.

That

one is projected transportation costs are in line with historical expenditures.

The department has a structural deficit in this area and the funding is used to

cover essential staff travel, vehicles and equipment. Last year, under the

revised budget, it was up by $300,000 and now we've restored it back to

historical levels of $1.3 million.

MR. PETTEN:

Was there anything cut to

get it back to

MR. HAWKINS:

Was there any reason why it

would have gone that extra $300,000, or did we know?

MS. COMPANION:

It was just travel and expenditures for running this program. The budget for

2016-17 is at $1.3 million, and we hope to reduce travel.

MR. PETTEN:

That's how you're hoping to

save $300,000?

MS. COMPANION:

Well, we will save some, yes.

MR. PETTEN:

So what kind of travel would

that be?

MS. COMPANION:

It's travel for staff going back and forth to job sites; going to Placentia from

here doing the lift bridge. This is for road maintenance. So it's all the travel

they do within their region to projects.

MR. PETTEN:

Okay.

It adds

up, doesn't it?

MS. COMPANION:

Yes.

MR. PETTEN:

Under Purchased Services,

that's a fairly big number, I guess. What types of services are included in the

Purchased Services?

MR. HAWKINS:

Yes, thank you.

There

is an increase in that particular Purchased Services. It's a result of the

reallocation of some of the funds within the department's operational funding

envelope. We're just changing around some of that. Also, the increase includes,

we're reprofiling $50,000 from Supplies in this activity as recommended in the

line-by-line drop fund analysis. So we're just doing a bit of shifting on that.

There is also, the remote weather information system contract is charged to that

activity as well.

MR. PETTEN:

What's that, the remote ?

MS. COMPANION:

That's the road reports.

MR. PETTEN:

Okay. So that comes out of

that line as well. Okay.

Grants

and Subsidies; again, what is that money?

MR. HAWKINS:

There's a Grants and

Subsidies piece there, local roads grants. It's determined it's more feasible to

provide a local grant for road maintenance to isolated communities. That's a bit

of money that we have in there. Dollar value of the grants paid out annually can

vary significantly, and I'll refer to staff if you want specific examples. It is

a small amount, but if you wanted specific examples I would not be able to tell

you exactly what communities would be impacted.

MS. COMPANION:

It's for small communities

where they don't have roads, and it's easier for us to provide some funding for

them to maintain their own infrastructure than for us to provide it. There are

five or six communities, and it's the same ones regularly.

MR. PETTEN:

We give them money? The

department gives them money to do their roads?

MS. COMPANION:

Yes, we do.

MR. PETTEN:

Okay.

MR. HAWKINS:

I would assume it's under

extenuating circumstances that they find themselves in for those communities,

for sure.

MR. PETTEN:

While we're in this section,

in the Road Maintenance

section I guess, there are a couple of questions I

wanted to ask about road construction. It's probably a good time to ask that in

this division.

The

Robert E. Howlett, that was deferred. Is that deferred indefinitely or ? It was

cancelled, right.

MS. COMPANION:

Robert E. Howlett at the

Goulds Bypass

MR. HAWKINS:

Yes.

MS. COMPANION:

it was deferred indefinitely.

MR. PETTEN:

That's cancelled

indefinitely, right?

MR. HAWKINS:

Yes.

MR. PETTEN:

Or that's cancelled?

MR. HAWKINS:

Well, it's cancelled for

now. Right now, there are some issues there that we had to deal with when we

looked at the Goulds Bypass. Part of that, of course, was through an

environmental study.

The

City of St. John's had some concerns because, as you know, it's very close to

the watershed area. I think the former Minister of Environment looked at the

project and said the only way he would give the go ahead for that would be under

certain conditions, and I think the conditions he outlined in his letter would

certainly require a significant amount more planning.

At that

particular time, when we looked at this and the infrastructure piece, the

business case just was not there. I think in order to proceed on that particular

project you would obviously need to have to look at a new route or look at new

ways to make sure you're mitigating any risk that would be involved in the

watershed area.

I know

the City of St. John's certainly wanted a full environmental plan in place to

ensure that the integrity of the watershed area was protected. So when we looked

at it, in our infrastructure piece, we felt the project was nowhere near

including in our infrastructure in the foreseeable future.

Having

said that, there's no reason why in the out years later on we could not have

some further discussion and look at putting together, if, in fact, there's a

business case for that and if we can be assured there can be an environmental

impact plan put in place. So on that particular project there's a significant

amount of work that needs to be done.

while we're saying it's not in the cards right now, that doesn't say it never

will be, but I think there's a significant amount of work that needs to be done

before we're at that point.

MR. PETTEN:

How much money was spent on

that, up-to-date, before it was cancelled?

MS. COMPANION:

There wasn't any funding spent to date on that before it was cancelled.

MR. PETTEN:

There was no money spent on

that?

MS. COMPANION:

No.

MR. PETTEN:

No engineering? Was there

engineering design work done?

MS. COMPANION:

There might have been $100,000 or $200,000, nothing of any

MR. PETTEN:

No clearing done?

MS. COMPANION:

There might have been some clearing. I don't know if the clearing was done or

not. I'd have to check.

MR. PETTEN:

I thought there was clearing

done, if my memory serves me right.

MR. HARVEY:

I don't think any of this just surveys were primarily done. I know there were

a couple of options they looked at after. There was no fundamental construction

or clearing done that I'm aware of, but we'll check it out and we'll get back to

you.

MR. PETTEN:

Yes, I'd appreciate that.

The

City of St. John's issue, if that road was redesigned and alleviated their

concerns, because that probably was the biggest issue, if my memory serves me

right, like you said, it's cancelled for now but it's something you would

revisit if certain things changed, is that .

MR. HAWKINS:

I have no problems in having

further discussions. Right now, with the requirements we have and the amount of

work that was done, the potential risk that was involved, looking at all the

options that were there and the lack of the business case that was put on the

table at that time for this, we're not near that position to be able to make a

decision on that.

As a

matter of fact, I had a brief chat with MHA Hutchings this afternoon and he

asked the same question. I said right now it's not in the cards. However,

circumstances could change. I know there are a number of restrictions, criteria

within that letter from former Minister of Environment that there would have to

be a significant amount of work that would have to be done in order to make that

work.

It's

not a discussion I wouldn't be open to having going forward, but right now it's

not in the cards.

MR. PETTEN:

The amount of money being

spent, can you let me know, could you give me that figure another time, please?

MR. HAWKINS:

We can do that.

MR. PETTEN:

2.1.02 under Sign Shop.

There's a drop in Salaries. Is there a missing position here?

MR. HAWKINS:

The salary piece, that's a

term we're using, we're going from $132,000 revised to $152,000. It's a salary

recharge rate on some of the infrastructure projects we have. We do have a fair

amount of infrastructure this year. So that's just a recharge rate on that that

we're just changing. So it's not an extra position.

MR. PETTEN:

It was at $200,000, now it's

down to $152,000. So you're saying there was extra money in the budget?

MR. HAWKINS:

That was the recharging

rates on that. Of course, the adjustment for the salary allocations is going to

be due to changes in funding levels and departmental salary budget. Of course,

then there are, as well, the same things through that JES evaluation piece done

by the province. There are some increases in that and then it moves through

that.

The

deputy minister said there was a vacant position through the attrition that we

didn't filled there.

MR. PETTEN:

Okay.

MR. HAWKINS:

Or I should say you didn't

fill.

MR. PETTEN:

I'm just looking there now

under Supplies. I assume the Sign Shop, most of the supplies they would carry

would be for making signs, right?

MR. HAWKINS:

Yes.

MR. PETTEN:

One third of the budget is

less.

MR. HAWKINS:

Yes.

What

we've done in this particular case is there was a drop balance review in that

particular line item. So what we've done is decided to sort of bring it in line,

so we did a I think it was a $90,000 cut that was in the drop line piece. We

put it to what we fell would be realistic in that piece there.

MR. PETTEN:

Would there be less signs

though as a result of that? I know the signs

MR. HAWKINS:

Signs, traffic counters and

there are a few others things. My understanding is, historically, we have not

spent the money in that particular area and every year it seemed to be a dropped

line. So in order to bring it in line we decided we would cut $90,000 from that

and sort of bring it to more of what would be realistic in spending in that

area.

MR. PETTEN:

Okay.

The

Revenue line here, would that be followed under TODS or are people paying for

signage? Is that where you get revenue at a sign shop? Do you do signs for

MR. HAWKINS:

That $150,000, that's the

TODS, revenue tourism oriented signs, advertising, whatever those beautiful

signs on the highway tell us.

MR. PETTEN:

The fingerboards.

MR. HAWKINS:

Fingerboard.

MR. PETTEN:

Speaking of TODS, what's the

update on that? Where are we with that now? Has there been anything changed and

anything new to report on that?

MR. HAWKINS:

No, nothing has changed.

MR. PETTEN:

That's not a good thing. I

knew where it was.

MR. HAWKINS:

At the moment.

MR. PETTEN:

At the moment, yes.

We had

deadlines, if I'm not mistaken, I'm trying to remember now, bringing everyone

into compliance, I guess. Are we still charging for are people still coming in

and getting permits for those signs and paying a fee? Is that still what our

operation is permitting on the roads? We're still in the old, new system?

OFFICIAL:

Right.

MR. PETTEN:

We haven't really fully gone

into TODS, but we've removed where it used to be a Volkswagen on the side of the

we haven't gotten very far.

MR. HAWKINS:

We got it replaced by the

bus.

MR. PETTEN:

Yeah.

Maintenance of roads and buildings, 2.1.03, under Salaries there

MR. HAWKINS:

Which one are we on?

MR. PETTEN:

We're on 2.1.03, Maintenance

and Repairs.

MR. HAWKINS:

All right, we're on the

right one. That salary piece again, that's the infamous JES adjustments on the

salary piece there.

MR. PETTEN:

Even though it dropped by

$320,000, but then went up by almost $500,000 this year that's still the JES

costing that much? Why would it drop last year?

MR. HAWKINS:

Actually, I guess the

original budget was aimed at $9.6 million; it came it $9.3 million. Now whether

that was something they were expecting it to be higher than that, but obviously

there was a $300,000 difference in that. So I don't know if we do have an answer

for that.

MS. MCCARTHY:

It was a turnover of staff.

MR. HAWKINS:

So Charlene is telling me

there was a turnover in staff which would have accounted for that difference in

whatever it was $323,500.

MR. PETTEN:

Under your Allowances and

Assistance, what is that?

MR. HAWKINS:

Allowances and Assistance?

MR. PETTEN:

Yes.

MR. HAWKINS:

We are looking at in this

one here, funding is annually for the settlement of outstanding damage claims.

MR. PETTEN:

Pardon me?

MR. HAWKINS:

Outstanding damage claims.

MR. PETTEN:

Okay.

MR. HAWKINS:

We have damage claims in.

I'm not too sure if we keep up with that, but anyway, that's the amount that's

there. Last year it looks like there was $59,400 spent. So we've levelled it off

at $60,000 for this year.

MR. PETTEN:

So under 2.1.04, that salary

savings, is that reflected in the removal of 24-hour snow clearing?

MR. HAWKINS:

You're right on. You're a

smart man, I tell you. That is it.

MR. PETTEN:

That is it.

Supplies and Purchased Services, Supplies are all over the place, and I realize

under Snow and Ice Control that's mostly salt

MR. HAWKINS:

Salt and sand.

MR. PETTEN:

I'm might be going to answer

my own question now see, you shouldn't ask questions (inaudible) know the

answer.

But

sometimes that's tenders that are included for batched tenders, correct? Is that

still done? You tender for municipalities sometimes? That's why that figure is

not

MR. HAWKINS:

Maybe I should say correct,

instead of shaking my head. They can't pick up sign language down there. They

can't see me shaking my head.

MR. PETTEN:

Seeing we're into Snow and

Ice Control, a couple of other questions on the 24-hour snow clearing I'll ask

you now I guess. I know that we always went before by the old method of 4:30 in

the morning to go out or 5:30.

MR. HAWKINS:

It is 4:30 a.m.

MR. PETTEN:

In the event of emergencies,

what would be the protocol for that? I mean we have our depots and that. What

would happen 2 o'clock in the morning when they're all off shift? Are there

people on standby? Are staff going to be on standby, paid for that (inaudible)

MR. HAWKINS:

We will have supervisors

that will be monitoring. As well of course, you know that I'm using this term

loosely in the fact that I think in the latter number of years, for the most

part, a lot of our forecasting is getting a lot better with regard to prediction

when snow is coming and that sort of thing. I think that we will be a little bit

more conscious of what's going to be happening if there's expected snow to be

falling and the amounts and levels.

We have

to realize that between 10 o'clock at night and 4:30 in the morning, although

there are really three pressure points in the province when it comes to travel

and that's around the major airports that would be certainly in the St. John's

area, the Gander Airport area and the Deer Lake-Stephenville Airport area

because the flights come in late at night. I think we need to be aware of that

and we will be certainly monitoring the situation.

We're

not anticipating too much disruption. As I said earlier when I started, safety

is still number one for us. I think it's a priority for us and I think we need

to understand that we're going to be pretty cognizant of the fact that if we

remove the 24-hour snow clearing that measures will be place so that if there is

a continued storm or if there's a pending storm and we know it's coming, then we

will have the adequate staff and crew in place to make sure that we do have

those areas covered and that those times will be covered.

MR. PETTEN:

So your staff, your

supervisors, there'll be someone on at all times during the winter?

MR. HAWKINS:

No, they won't be the 24

hours.

MR. PETTEN:

My question is simple: 2

o'clock in the morning when everyone is home in bed and we get snow unexpected,

black ice and snow and people are leaving to come home, leaving any hour to go

out over the road to wherever what's in place for that?

MR. HAWKINS:

I guess these sorts of

questions become, at this point in time, hypothetical but when it actually

happens, it won't be hypothetically. There's nothing that we have, even during

the day, that we can totally mitigate all aspects of ice or whatever the case

may be. So what we are do, there are policies in place that we have, certain

amounts of centimetres of snow and all that sort of thing.

What

we'll do is monitor that. I think I mentioned that there are really only three

areas of the province that we do have snow clearing for 24 hours. So the

majority of the province never, ever had 24-hour snow clearing. I guess what

we'll do is implement the same sort of measures that we have in areas that are

presently not covered under the 24 hours and we will run the program that way.

I think

it was done in a pilot project, and I think in probably 2011 it went from a

pilot into a full 24 hours in those areas. So it's something that's been in

place for four or five years. When you're looking at where do you make your cuts

and what do you look at, I guess it would have been easier for us to not make

any cuts; but when you are looking at what services you cut or how do you cut

these, when we looked at some of the areas in the province that are not covered

with 24 hours, we said this is possibly one.

And

what we've had in the last two or three years and maybe next year, who knows,

we might have snow starting in November and have a snow storm every day from

November on; but I think the last two or three years we've noticed that there's

been less and less snow in November, December and January. So in a lot of these

cases, we've had dedicated crews that no matter if there are any weather

conditions or not, the dedicated crews are in the depots and are being paid. I

know that's an area that we looked at.

MR. PETTEN:

Okay.

I come

over to 2.2.01, Building Maintenance, Operations and Accommodations.

Transportation and Communications, why ?

MR. HAWKINS:

In that particular one

there, we went through a number of years we never, ever seemed to have enough

in that Transportation and Communications. It was always under budget every

year. So historically we looked at it and said, okay, let's do some averaging on

that. We did the five-year averaging and put in $572,000 because it used to come

in more on those levels versus what they always budgeted. So that's basically

what we're doing there, averaging it out. It was always under budget every year.

MR. PETTEN:

Okay.

Maybe

I'll do 2.2.02, and I got a couple of

MR. HAWKINS:

2.2.02.

MR. PETTEN:

I got a couple of general

questions. It may follow either or both of them.

Under

Salaries, why such a drop in the estimated, and now it's gone back up by

$800,000?

MR. HAWKINS:

Yes. The jump from the

original budget to the revised budget was vacancies, and there were some delays

in recruiting on some of the essential positions we had. So they weren't filled.

The

adjustment in salary allocation from 2015-2016 to 2016-2017 is changed to some

of the departmental salary budget allocations. They're now properly reflecting

some of the anticipated expenditure levels. Again, part of that comes back to

some of the JES readjustments in salary as well. So we're not replacing any of

those vacant positions. It's a matter of some readjustments in that.

Let's

see, I think we might have and I'm just reading my note here. Funding was

previously allocated for the following vacant positions: two labourers, one

maintenance repairer, one tradesperson and one security guard. It was

reallocated to other higher-priority salary requirements in the department. So

they were readjusted in that.

MR. PETTEN:

Okay.

Another

question, I noticed you have no Employee Benefits budgeted. I know it was only

$3,300 used. It wasn't a huge amount anyway, was it?

MR. HAWKINS:

Yes. That, I think, had to

do with some training for our security staff in 2015-2016.

MR. PETTEN:

Okay.

Purchased Services, that's a pretty big figure, $33 million. What's included in

that?

MR. HAWKINS:

That Purchased Services,

we're looking at HVAC controls, fire protection, overhead doors, pest control.

General program maintenance all fall into these purchased services provided to

government owned and some leased premises. That would fall under there and we do

have I think that would probably go into a funding envelope put into that

purchased.

We're

good with that?

OFFICIAL:

Yes (inaudible).

MR. HAWKINS:

And snow removal,

electricity, cleaning services, water rates, garbage removal. She knows all the

answers.

MR. PETTEN:

I was just going to say, you

got a good deputy. You know that, do you?

MR. HAWKINS:

I should have gotten her to

answer all the questions.

MR. PETTEN:

I know all about her, yes. I

just said to, Megan, she got him prepared.

MR. HAWKINS:

Don't tell anybody else. I

know this is recording, but I have the best.

MR. PETTEN:

We know that; me and David

Brazil know.

Revenue, what is this revenue line? Is that rent or ?

MR. HAWKINS:

Yes.

MR. PETTEN:

It's rent?

MR. HAWKINS:

This would be St. John's

Airport, we have some rental there. Public buildings

MR. PETTEN:

It's income from rent.

MR. HAWKINS:

It's a rental fee. We

(inaudible) for Central Laundry and

MR. PETTEN:

Okay.

MR. HAWKINS:

And I think there's just a

little small bit, there might be some meter parking, meters that we use. That

would be some of it too.

MR. PETTEN:

Okay.

I have

a few questions based on this

section here, separate ones if you don't mind.

Hoyles-Escasoni Complex, what's the status of that? Is it on the market?

MR. HAWKINS:

Yes. Part of my answer to

that question is once I'm through this budget process we're going to be engaging

in a real estate optimization plan. Part of that optimization plan is

identifying properties we have. We're going to look at proper disposal, how to

get the best dollar for what we have. We know that some of the properties, the

longer they stay vacant the less attractive they become.

So that

will be something that I'll be putting together very shortly, and the

Hoyles-Escasoni house will certainly be part of that discussion and part of that

plan. We do have other properties throughout the province that we will be

looking at and certainly trying to optimize the best return.

Also,

of course, what we will be doing as well, as an exercise we have, is an

inventory of all the leased properties we have. Part of my responsibility in

looking at that as well is looking for areas where we can save money. Any vacant

spaces that we have we will certainly be addressing all those.

That's

a larger piece of work, and that will be starting very, very soon. As a matter

of fact, I was supposed to have my first meeting today at lunchtime, which got

pushed out. I didn't get it, but that's something that's going to be moving

fairly quickly.

MR. PETTEN:

Are you planning on doing

any of these sales this year? Is that a plan or ?

MR. HAWKINS:

My plan is to move them as

quickly as possible.

MR. PETTEN:

Yes.

there any for sale right now, or is everything just kind of held until you do

your

MR. HAWKINS:

Well, as you know, there was

a tender out on Escasoni, and we did receive an offer on that. I'm looking at

that offer, and we'll make a decision within the next month or so on how I want

to move forward on that. I guess I will make that available fairly quickly.

MR. PETTEN:

Are there any ongoing talks

to bring more government offices into government buildings?

MR. HAWKINS:

Absolutely.

MR. PETTEN:

There is?

MR. HAWKINS:

Absolutely. I'm looking for

every way that I can save a dollar.

MR. PETTEN:

Okay.

I have

an example. We have the Labour Relations Agency for instance

MR. HAWKINS:

I'm looking for every way

that I can save a dollar.

MR. PETTEN:

We'll be all out in the

parking lot after this, Megan.

MR. HAWKINS:

I'm beginning to sound like

the Finance Minister now, pardon me

MR. PETTEN:

I won't comment.

MR. HAWKINS:

but we really do have to

do and I think it's important an inventory of what we have, and that's

certainly an exercise for me to really look at what we have and address what our

requirements are. If, in fact, we do have areas that we can consolidate, then

that makes sense.

MR. PETTEN:

Are there any anticipated

revenues this year from any of these sales? Are they incorporated into the

budget or will this be it?

MR. HAWKINS:

I think I know where you're

going.

MR. PETTEN:

Yeah.

MR. HAWKINS:

I understand fully where

you're going, but I think for me, as minister, it's important for me not to make

any knee-jerk reactions for the sake of saying we need to get this pocket of

money into the budget and this pocket of money into the budget.

I think

for me it's important to analyze, to look at opportunities, to maximize our

opportunities and that's an exercise for me. Right now, the most important thing

for me is not necessarily to divest of that property for the sake of divesting

so that I can come up with a certain figure. For me, it's looking at how I want

to divest that property to gain the best value for the budget.

In a

roundabout way I may not have answered your question, but I know where you're

going on this. I just want you to be clear that for me, as minister, it's not

necessarily a fixed amount that I want to put in that budget, but I want to find

and maximize my potential in getting the best value.

MR. PETTEN:

Okay. That's fair enough.

I have

some generic questions and I'll try to get through a lot of this fast. I know a

lot of the fluctuations seem to have paralleled through all the sections you

know, you have JES, you have

MR. HAWKINS:

Yeah, a lot of it is through

JES or the averaging piece.

MR. PETTEN:

A lot of it is repetitive.

MR. HAWKINS:

We've gone through this line

by line and like I said, I don't want to be repetitive in my answers, but,

again, in a lot of cases it is the JES and the five-year averaging that we

applied to the budget line.

MR. PETTEN:

2.2.03.

MR. HAWKINS:

2.2.03.

MR. PETTEN:

It might be a generic

question but under that does the department have rental contracts? I know it

just has it there as rental income.

MR. HAWKINS:

So where are we looking at?

Which one, the Rentals there?

MR. PETTEN:

There's nothing really says

here of any you know.

MR. HAWKINS:

That's leasing costs

incurred by the department. That would be moving expenses, minor maintenance

related to government leases and that sort of thing. That would fall under the

Rentals.

MR. PETTEN:

There is no revenue

generated from this

section at all, right?

MR. HAWKINS:

No.

MR. PETTEN:

Okay.

Maintenance of Roads is a big section.

MR. HAWKINS:

Uh-huh. Well, there's almost

10,000 kilometres of them.

MR. PETTEN:

I've got all the roads and

the water.

MR. HAWKINS:

And I told you in the House

the other day I got 1,500 requests valued at $1 billion.

MR. PETTEN:

I know. I've got to try to

be nicer.

2.3.01.

MR. HAWKINS:

2.3.01, yes.

MR. PETTEN:

Purchased Services.

MR. HAWKINS:

Yeah, salt sheds.

MR. PETTEN:

Under Administration?

MR. HAWKINS:

Is that the one?

MR. PETTEN:

2.3.01, Administration.

MR. HAWKINS:

Where am I to?

MR. PETTEN:

Purchased Services is down.

I know it's closer to the revised amount. Is this another one of rightsizing

your budget?

MR. HAWKINS:

That's only equipment

MR. PETTEN:

It's at $681,000 now. It was

at $821,000, but then the revised last year was $670,000. Is that a rightsizing

exercise as well?

MR. HAWKINS:

No, the surplus in that one

is due to savings on the vehicle fleet insurance policy. So there's a change on

that.

MR. PETTEN:

Okay. A better deal.

MR. HAWKINS:

Well, a better deal or

better performance, one or the other. Let's hope it's better performance to give

us a better deal.

MR. PETTEN:

With any luck.

Under

2.3.02, your Salaries decreased in the revised, but then they went back up. Is

that new positions?

MR. HAWKINS:

No, that one is unfunded

severance costs and unfunded reclassifications.

MR. PETTEN:

Okay.

I guess

Purchased Services there again seems to be pretty well all over the place, I

guess.

MR. HAWKINS:

Well, that one there, the

Purchased Services are we still on the same one?

MR. PETTEN:

2.3.02, yes.

MR. HAWKINS:

Yes, that's the one with the

fleet, the vehicle insurance policy thing.

MR. PETTEN:

No.

MR. HAWKINS:

No.

What are we on now?

I can't

keep up with you. You're going too fast.

MR. PETTEN:

You have better notes than I

have.

MR. HAWKINS:

Holy mackerola.'

All

right, so now we're on to I've got to get these numbers or new glasses or

something. What was the question? Sorry.

MR. PETTEN:

I was saying Purchased

Services seems to have a lot of fluctuation there; $1.1 million budgeted, $2.5

million spent.

MR. HAWKINS:

Yeah. I'll tell you what's

happening in that particular situation. We're really not keeping up with vehicle

replacement policy because we never seem to have enough money in there to

replace vehicles. So, as a result of that, a lot of our fleet is getting older,

and with the wear and tear on them we're finding that we're always repairing

older vehicles.

Rather

than being proactive and trying to get new funding for that, we're running into

some issues of having to repair some of the older vehicles. That cost seems to

be escalating as our vehicles seem to be aging more and more.

MR. PETTEN:

Okay.

Revenue; where would revenue come from under Maintenance of Equipment? Where

would you get revenue there? Towns, I guess, is it?

MR. HAWKINS:

We do work for other

departments. They would replace small amounts for fuel and vehicle maintenance

from other departments, if we're doing the work for them. It's only a small

amount.

MR. PETTEN:

Okay, I got ya.

2.3.03.

MR. HAWKINS:

2.3.03.

MR. PETTEN:

What happened to that

$125,000? We're only seeing $13,000 was Revenue?

MR. HAWKINS:

Periodically, we do some of

the old and obsolete equipment and we get rid of that. So that would show up on

this as a revenue.

MR. PETTEN:

Okay. That's makes sense.

I'm

done there now wait now.

CHAIR:

Okay.

MR. PETTEN:

Just a second there now.

MR. HAWKINS:

Do we ever take a recess or

is that ?

MR. PETTEN:

Yeah, I'm good on that

section.

CHAIR:

Call for the subheads.

CLERK:

Subheads 2.1.01 through

2.3.03 inclusive.

CHAIR:

Shall 2.1.01 to 2.3.03

inclusive carry?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, subheads 2.1.01 through 2.3.03 carried.

CHAIR:

Okay, we're going to take a

short break to give the Broadcast booth some time to catch their breath.

MR. HAWKINS:

What do you mean Broadcast

booth? What about up here?

MR. PETTEN:

Yeah, what about us?

CHAIR:

We will come back and we

will resume until we finish or until 8:30 p.m. comes around, whichever comes

first.

Recess

CHAIR:

We're going to get started

again.

Construction of Roads and Buildings.

I call

for the subheads.

CLERK:

3.1.01.

CHAIR:

3.1.01.

MR. PETTEN:

Are we just doing that one

subhead that we called?

CHAIR:

We'll do 3.1.01 to 3.2.02

and then we'll call the subheads.

MR. PETTEN:

Okay.

Under

Administrative Support, there's not much in the line, but Grants and Subsidies,

there's nothing there really now. What's the

MR. HAWKINS:

It's zipped out.

MR. PETTEN:

That's gone, is it?

MR. HAWKINS:

Yes, that was the Canadian

Standards Association, I think. Am I correct on that? We're not doing that?

OFFICIAL:

It's moved up into Purchased Services.

MR. HAWKINS:

Okay.

See,

she has all the answers. It's moved up into the Purchased Services, the $3,500

for that.

MR. PETTEN:

You're much better off than

a lot of the other ministers, I tell you.

MR. HAWKINS:

What's that?

MR. PETTEN:

You're way better off than a

lot of the other ministers.

MR. HAWKINS:

Thank you for that.

MR. PETTEN:

Don't tell them.

MR. HAWKINS:

I won't tell them that.

OFFICIAL:

(Inaudible).

MR. PETTEN:

3.1.02, Project Management

and Design, I note there's a big drop in Salaries.

MR. HAWKINS:

Reorganization of the

Occupational Health and Safety staff that occurred during 2015-2016.

MR. PETTEN:

I found it, didn't I? You're

almost going to be done now.

MR. HAWKINS:

That's it.

MR. PETTEN:

I had to keep going to find

that.

MR. HAWKINS:

Yeah, right, got to look for

it.

MR. PETTEN:

I have some generic

questions on this one. So I'm just going to ask some other line, Revenue. Where

is that coming from?

MR. HAWKINS:

Obsolete equipment, sale of

equipment.

MR. PETTEN:

Last year we never sold much

equipment?

MR. HAWKINS:

No, $12,000 worth.

MR. PETTEN:

You anticipate that much but

you don't know what you're going to get.

MR. HAWKINS:

We're going to look for the

other $38,000 this year, a few pencils and pens.

MR. PETTEN:

Yeah, I'll help you with

that one. Do up a list.

I guess

under Purchased Services, just a generic question again. What's included in

that?

MR. HAWKINS:

Let me just see, we're going

from original down to we cut $1 million off. That was training courses,

seminars. The projected revised figure under the Tendering and Contracts

Division, there was insurance premiums of $1.4 million, estimated deductible

expenditures, $650,000. So there are some readjustments in that piece for

Purchased Services.

MR. PETTEN:

I have some questions now on

new builds, I guess Project Management and Design.

MR. HAWKINS:

Yes.

MR. PETTEN:

Mobile middle school it's

better if I ask you a general overall question. Where is that in the scheme of

things?

MR. HAWKINS:

Well, in the scheme of

things, my understanding is there is going to be a redesign and we're not going

to be constructing it as originally anticipated. I think up to this particular

point in time, if I'm remember correctly, we spent $24,000 on the site selection

piece. That's all the money we spent on that. I think now there's just a

rescoping of that and some redesign changes.

MR. PETTEN:

So the site selection is

done?

MR. HAWKINS:

The site selection was done.

That was the only thing that was done.

I have

to refer to Cory on that one for exactly where we are on that.

MR. GRANDY:

On the design contract, the only work that was completed was some site selection

activities, but as the minister said, the project is being rescoped, as not a

new build, not a new school, but an extension to one of the existing schools in

the area.

MR. PETTEN:

So that's the change of

plans. It's going to be an extension, as opposed to a new build, correct?

OFFICIAL:

Yes.

MR. PETTEN:

Is there any timeline for

that?

MR. HAWKINS:

We're just pulling out that

infrastructure piece that we had planned on that.

MR. PETTEN:

Okay. Well, I can ask

another (inaudible).

MR. HAWKINS:

Yes, we'll give you the year

on that.

MR. PETTEN:

The tender for planning and

design was awarded in October. How much is remaining? Was there anything done in

that tender?

MR. HAWKINS:

Just for the site, $24,000

was the

MR. PETTEN:

How much?

MR. HAWKINS:

Twenty-four thousand dollars

was the amount that's been spent.

MR. PETTEN:

That was part of the tender?

That's all that was done out of the tender?

MR. HAWKINS:

That's all that's been done

for the site selection.

Cory,

correct?

MR. GRANDY:

Yes.

MR. HAWKINS:

That's it. That's all that's

been done.

MR. PETTEN:

But there was design work

included in that but that was not was it? I guess my broader question is what

was included in the tender that was awarded in October and what was done? What

was in the tender and what's been

MR. GRANDY:

The contract that was awarded that you're referring to in October was for the

design of that school. The only work that was completed, to date, was

approximately $24,000. That related to site selection work. Work on that

contract now has been suspended because the scope of the project has changed.

MR. PETTEN:

Is there any cost to the

department if you suspend it after the tender being awarded?

MR. GRANDY:

No, the way the contract was

structured, following the four-stage infrastructure process, it gives government

the ability to terminate the contract, stop the work on the contract, at various

decision gates.

MR. PETTEN:

Okay.

MR. GRANDY:

So we stopped it at one of those early decision gates. The only expenditure

would have been the $24,000.

MR. PETTEN:

Okay.

Where

are we now? The extension piece, is there any

schedule for that? Timelines for

that?

MS. COMPANION:

Yes, there is some work that's supposed to happen on that this year. You

wouldn't see it in here though because that's in Education's budget, the

Department of Education's Estimates.

MR. PETTEN:

But there's no actual

timeline on when that extension will be done, though, is it?

MS. COMPANION:

I'm going to have to defer

to Cory.

MR. GRANDY:

There's nothing carved in

stone at this point in time. The first step will be re-scoping that extension.

MR. PETTEN:

Paradise middle school; that

one was also deferred, but that was deferred I have that much on my list. It's

deferred two years. What is the status of that?

I have

some recollection from my time there, but what work has been done on the tender?

Has the design work been done on that school? I know there is an actual site for

the proposed school, correct?

MS. COMPANION:

I'm going to defer to Cory.

MR. PETTEN:

Okay.

MR. GRANDY:

I don't have the figures on

that particular one in terms of how much work has been done to date, but it's

similar in terms of the status, the place that we were at in that work.

We were

doing some site selection work. There was not a final decision made yet in terms

of what the preferred site would be, but some of the early work has been done.

But, as you said, there's a deferral in that project.

MR. PETTEN:

I mean when these are

deferred, Education obviously deferred them, correct?

MR. HAWKINS:

They recommend and we build.

MR. PETTEN:

The next one on the school

in Gander, is this going to be ready for September 2017?

MR. GRANDY:

Yes, to have occupancy in

September 2017.

MR. PETTEN:

September 2017.

St.

Peter's Junior High; what's the current status of the extension and the

renovations?

MR. GRANDY:

I'm going to have to

apologize because I get mixed up in the St. Peter's Primary and the St. Peter's

Junior High. Barry, you're asking about the junior high.

MR. PETTEN:

Junior high, yeah.

MR. GRANDY:

That's the one that's under

construction now. What's your question exactly?

MR. PETTEN:

What's the current status of

the extension? Is it going to be completed by 2017 or sooner?

MR. GRANDY:

I don't have the detailed

schedule with me tonight. That is something we can follow up on, if you would

like us to. I don't have that information here right now.

MR. PETTEN:

Okay, thank you.

Megan

just reminded me about the elementary. We're doing an extension on that too for

all-day kindergarten, correct?

MR. GRANDY:

St. Peter's? Yes.

MR. PETTEN:

Elementary. Is that going to

be ready?

MR. GRANDY:

We're into the design stage of that extension right now. The Department of

Education would have other contingency plans in place for full-day kindergarten.

So if you have questions on that specifically for this September 2016, they will

be better prepared to speak to that. TW is not managing those preparations.

MR. PETTEN:

Yes, but it won't be ready

for this September, obviously.

MR. GRANDY:

The extension for St. Peter's Primary is not for this September, correct.

MR. PETTEN:

No, and you're not sure

about next year.

MR. GRANDY:

No, not

MR. PETTEN:

Well, hopefully.

I'm

gone down to 3.2.02 now so I'm going to call them.

MR. HAWKINS:

3.2.01.

MR. PETTEN:

3.2.01.

MR. HAWKINS:

Do you want the 3.2.01 there

now, Road Construction piece?

MR. PETTEN:

Actually, I'm going to go

down and skip down to in under Road Construction, 3.2.03, Improvements

Provincial Roads.

MR. HAWKINS:

3.2.03.

Moving

right along. Okay.

MR. PETTEN:

The Salaries.

Again,

that figure is up and down; $6.3 million to $4.4 million to $5.2 million.

MR. HAWKINS:

Yes, we've put $5.2 million

in. Basically, that's block funding to do our summer work program. We are doing

a fair amount of work this year. And of course, as you know, the $62 million

worth of tenders for the roadwork is what we're allocating for the province. The

tenders have been out; the first block of tenders for the first $18 million from

last year carry-over and the $10 million from this year mostly.

Some of

the tenders are coming back and we've already been able to award some of these

tenders. And the other block, they all have been out. The tenders are out and

we're anxiously waiting for the awarding of these tenders.

there is going to be a fair amount of work done. Obviously, not as much as we

would like to have done with all the requests that we have, but we do have $62

million in the budget for that. And basically, as I mentioned, I think there's

about $18.2 million that we carried over from last year, some of the projects

that didn't get completed before the end of the year. So what we've done is

we've taken part of the funding $18 million out of our funding for this year

to finish up these projects.

Anything else to add to that?

MR. PETTEN:

One other question on

3.2.03. Transportation and Communications; why is that only half of what it was

last year? Is that less travel again or is that the plan or the hope?

MR. HAWKINS:

Let's see.

MR. PETTEN:

Down to $500,000, revised

was a million dollars. It's still $358,000 below what was

MR. HAWKINS:

I guess in that area we're

just budgeting for that. It's the scope of the program that we have there. We've

tried to align the scope of the work to the travel requirements that we feel we

have. We think we can do it in the $500,000 range that we have there, I think

it's $501,400.

MR. PETTEN:

I'll flip over to 3.2.04

there now.

I guess

more of a general question. I know this is the Canada Strategic Infrastructure

Fund. Is that what we always refer to as build Canada? Why is there no money in

this year's amount? Was that just something that's expired or

MR. HAWKINS:

Correct me if I'm wrong, is

that wrapping up the old Building Canada Fund, the legacy fund that we had

there?

OFFICIAL:

It is.

MR. HAWKINS:

So we're just finishing that

out. That will take care of that piece there.

MR. PETTEN:

Now, 3.2.05, is that the new

build Canada?

MR. HAWKINS:

The New Building Canada

projects will be in that. What we've done is we've allocated, I think, part of

that $6 million of the $6 million revenue coming in, we're hoping to get $5

million under the New Building Canada Fund. What we've done in our

infrastructure piece is we've put in, I think it's $5 million for the next five

years I think it's over the next five years per year.

So we

will monitor that one closely. As you know, of course, in discussions with the

federal minister over the previous years there were some restrictions with the

Building Canada Fund that really impacted rural Newfoundland. We were only able

to access funding for a lot of the larger centres that had 10,000 vehicles.

So I

think probably on four different occasions I really pleaded with the minister to

remove that restriction. I guess it's probably about two weeks ago now we've

been notified that they removed that restriction. I think we're down to like

1,000 vehicles. So that's significantly changed some of the areas we can look at

under the Building Canada Fund.

The

other positive thing that we're trying to work through and of course, you get

to Municipal Affairs and they have their roadwork as well in the Building Canada

Fund with small communities and roadwork they do as well with Municipal Affairs.

One of the things that we're also able to work through was under the original

restrictions it prohibited Municipal Affairs from getting some of the funding

under roads.

What

has happened now, most of the projects that Municipal Affairs sent up would have

been in the waste water. The federal government now is looking at moving some of

that waste water infrastructure funding out of the Building Canada Fund and into

the Green Fund. If that happens, then it's going to free up some more money.

Even

though some of the budget is reflecting what we thought was going to happen,

there may be some more flexibility when we get into further discussions on what

we can access through the Building Canada Fund. So there may be some other

opportunities for us to access some more funding there.

MR. PETTEN:

Okay.

3.2.10,

Trans-Labrador Highway

MR. HAWKINS:

3.2.10? Yes.

MR. PETTEN:

It is a lot of generic

stuff.

MR. HAWKINS:

Okay, the Trans-Labrador

Highway one.

CHAIR:

3.2.10?

MR. HAWKINS:

Yes.

MR. PETTEN:

How many kilometres of roads

have been paved this year?

MR. HAWKINS:

How many kilometres will be

paved this year, and you talking about the Trans-Labrador Highway?

MR. PETTEN:

Yes.

MR. HAWKINS:

Cory will probably be able

to answer that for you exactly because I don't know exactly the number of

kilometres. But I just wanted to let you know that again that's another area we

had a fair amount of success because previously, as you know, when we looked at

Labrador, the federal government had restrictions placed on roads of $45

million. And we asked for that to be removed because of the fact that we felt it

didn't adequately address some of the needs that we had in Labrador.

So they

removed that cap. And, as a result of that, we were able to put in $63.5 million

for the Trans-Labrador Highway to work on the two phases left. Of course, that

will leverage another $63 million, so there's going to be a fair amount of money

into that that we can do a lot of work.

Specifically the exact kilometres, I don't have the answer to that. I don't

know, Max, I might be putting you on the spot too on that one.

MR. HARVEY:

That project is not approved yet. It's still up for approval. There are a number

of phases there that include widening and asphalt surfacing phases, and I

believe two of 80 kilometres stretches are for asphalt and one for widening this

run.

MR. PETTEN:

Land Acquisition

MR. HAWKINS:

Where are we?

MR. PETTEN:

Sorry, 3.2.11.

MR. HAWKINS:

3.2.11.

MR. PETTEN:

Yes.

MR. HAWKINS:

Okay.

MR. PETTEN:

I will probably ask the

question, but answer them all Land Acquisitions, is this for the purchase of

land, for road construction? Is that what this is, expropriations we will call

it?

MR. HAWKINS:

No, it's actually

expropriated property. When I took over as minister and started to review some

of the outstanding expropriations that we've done, we've never adequately been

able to keep up with even coming close to compensating. So this year I requested

that we put $2 million into that so we can try to at least make some ground on

catching up and trying to compensate for some of that. Some of them have been

there for years.

MR. PETTEN:

Yes, I understand that.

I'm

down now to 3.3.01 now. Salaries, why are they over by $400,000 last year?

MR. HAWKINS:

I think that's more of an

accounting line. Charlene, did we move some on that?

MS. MCCARTHY:

Basically the way the

allocations are done under Alterations is it's a block of funding. Unfortunately

in '15-'16 there was too much taken out of the salary line and it has resulted

in this overage. What happens here is we have people throughout the department

that work on different projects and we recharge their salaries; it is part of

the accounting function that we have to properly cost the projects. So if

someone is legitimately working on a project, we have to recharge. So that's

where that overage came from.

MR. PETTEN:

Okay.

I am

going to go up now to your Transportation Services, Air Support, 4.1.02

MR. HAWKINS:

So you want to do the threes

first?

CHAIR:

Okay, we will do the subhead

first.

MR. PETTEN:

Oh, sorry.

CLERK:

3.1.01 through 3.3.02

inclusive.

CHAIR:

Shall 3.1.01 through 3.3.02

inclusive carry?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, subheads 3.1.01 through 3.3.02 carried.

CHAIR:

Transportation Services.

CLERK:

4.1.01.

CHAIR:

4.1.01.

MR. PETTEN:

I haven't got a lot of

questions on this one actually. The 4.1.02 section, Professional Services, I

guess it was something that wasn't obviously budgeted for

MR. HAWKINS:

Where are we now?

MR. PETTEN:

On 4.1.02, Airstrip

Maintenance.

MR. HAWKINS:

4.1.02, Airstrip

Maintenance.

MR. PETTEN:

There's nothing budgeted

last year but there was $103,000 expenditure and now it's $25,000 this year.

MR. HAWKINS:

Yeah, that was under

Services I think that was some consultant work that studied some of the

restricted instrument procedures at some of the airstrips in Labrador. That was

like a consulting fee that we had. What we've done is we won't be incurring that

cost this year, so we just put in $25,000. If we do have some consulting pieces

of work, then we just put that in there.

MR. PETTEN:

Okay.

This

Revenue it says federal, is that landing fees or is that

MR. HAWKINS:

Yes, that's towards the

federal funding for the airstrip in Natuashish. That will be a revenue stream

there. I don't know for sure if there is anything else.

MR. PETTEN:

4.1.05.

MR. HAWKINS:

4.1.05.

MR. PETTEN:

I guess just a generic

question on that full section. There $10 million sorry, not $10 million. There

was $9 million in the revised was it $9 million?

There

was nothing budgeted and nothing estimated for this year, yet there were

expenditures. What basically is it?

MR. HAWKINS:

If I remember correctly that

had to do with some because we had some federal funding for the airstrips in

Labrador, I think they provide $1 million. I think that last year for some of

the smaller ones we bought some snow blowers and a few things like that. That

would be in the cost of $254,000.

MR. PETTEN:

Two hundred and fifty-four

thousand dollars.

MR. HAWKINS:

Two hundred and fifty-four

thousand dollars. And then we had offsetting revenue.

MR. PETTEN:

Right.

MR. HAWKINS:

So that is where you would

find that.

MR. PETTEN:

There's nothing budgeted

this year or is that spend as you need? There's no estimated expenditure this

year?

MR. SMITH:

The way that agreement works on the various airstrips in Labrador on the federal

agreement is that we provide, I guess, a business case each year to the federal

government pretty much setting out what we propose as repairs and maintenance

with respect non-salary repairs to the airstrips.

Typically, they're current, so they're ongoing maintenance-type repairs. Last

year, we actually determined that the best value would be to purchase some of

those snow blowers. They're Capital so you would see those in another activity

there where there was no budget last year.

would expect capital would be the exception. So again, this year we'll carry on

budgeting on a current basis. Of course, if there's an identification of any

capital this year or subsequent years, we will then get a budget transfer and

account for it in the Capital field.

But if

you look at both activities together, you'll see it's basically a million

dollars Capital, Current for the same purpose.

MR. PETTEN:

Okay.

Now

we'll go to Marine Operations, I guess, 4.2.01

MR. HAWKINS:

Can't wait for this one.

MR. PETTEN:

This should be good. We'll

need another couple of hours.

I'm

afraid to ask anything in the House on that. This is not (inaudible). I want to

ask and I'm afraid.

MR. HAWKINS:

Yeah, right. You know

MR. PETTEN:

I could be going all day.

MR. HAWKINS:

You know better, right, on

that one.

MR. PETTEN:

Yeah, we'll be blamed,

that's the

MR. HAWKINS:

I don't blame.

MR. PETTEN:

I know, but everyone else

does, so then I'll have to listen to it the rest of the day.

We have

a good laugh, me and the former minister. We have a good laugh, yes.

The

MV Veteran , just a generic; what is

the status of the Veteran ? I wouldn't

ask that in the House though.

MR. HAWKINS:

I just want to know how much

the House is censored with regard to my comment on that.

MR. PETTEN:

Turn off the mics.

MR. HAWKINS:

Listen

MR. PETTEN:

Saves the best for last.

MR. HAWKINS:

I still feel like we're

working through that. This is just an absolute total nightmare it's been a

total nightmare. As you know, of course, it has been out of service 62 per cent

more than she's been in service.

Obviously, there are some systemic problems that have to be fixed. She's

currently in St. John's now. I keep shaking my head on this, because I mean

Rolls-Royce is supposed to be the best engine in the world.

MR. PETTEN:

Absolutely.

MR. HAWKINS:

Obviously, there are some

structural deficiencies somewhere that have to be addressed. I've engaged in

discussions with Damen. I don't know if I'm at liberty to say how aggressive I

have been.

I've

been extremely aggressive with Damen. We're working through, what I would

consider, some solutions that I think as a minister I need to be confident that

I have the assurance in place that when that vessel's released I use the word

released from captivity in St. John's, it will provide the service we paid for

and the taxpayers of Newfoundland and Labrador paid for, and that we will have

uninterrupted service going forward. Until I'm confident that will happen, I'm

certainly not interested in having the vessel go back and only be back in

service for another couple of weeks and then off again and creating other

problems.

So we

do have a timeline in place that if all goes well we're expecting to the end of

May to have the work done. Our experts in the field will be engaging in

discussions with the experts from Damen and the experts from Rolls-Royce and

determining and having to have some assurance that we have corrected this

problem once and for all. Certainly, we need the same assurance that the

Legionnaire will not incur the same problems that the

Veteran has been incurring.

It's certainly been a challenge. Of all the challenges that I've had as

minister, I think that's been probably the one that has created the most

heartburn for me.

MR. PETTEN:

Blame it on the former

MR. HAWKINS:

What's that?

MR. PETTEN:

Blame it on the former

fellow.

MR. HAWKINS:

No, I don't blame it on

anybody.

MR. PETTEN:

It's unfortunate, yeah.

MR. HAWKINS:

Listen, we can do the blame

game forever, but the bottom line is we have what we have. And we've got to make

sure that we can be confident that the money we've invested is going to provide

a service for us. If not, then that's a discussion for another day.

MR. PETTEN:

Fair enough.

I'll

ask you another couple of generic questions and then I'll flick through some of

the line-by-line stuff. I think you're well versed in this stuff.

Wharf

upgrades on the expectation of the

Legionnaire, any timelines on that? There are two different contracts, Bell

Island and Portugal Cove.

MR. HAWKINS:

I was afraid you were going

to ask that question.

MR. PETTEN:

I think you knew I was going

to ask that question.

MR. HAWKINS:

One of the things I hate

doing is timelines because they never seem to materialize. All I can say is that

we did run into some problems last year with winter coming on. We're continuing

to get the work done as expeditiously as possible, without trying to set some

sort of a time frame for the completion of that.

I don't

like setting timelines on that, but I just want to let you know that throughout

the summer we will be continuing the work in that, to getting those wharfs up to

accommodate the Legionnaire.

MR. PETTEN:

So the summer, it won't be

done before.

MR. HAWKINS:

But I'm telling you it's not

going to happen. It will not happen this spring, I'll tell you that, as it was

indicated.

We'll

be working through the spring and we'll see how always, when you do a

construction on something that's not new, there are always the unknown factors

that seem to always stick it's ugly head up sometimes. It's very difficult.

All I

can say is the commitment we have is that we're going to work as expeditiously

as possible to get that operational.

MR. PETTEN:

What about the

Legionnaire , is the warranty still

going to be when will that take effect? When she's in service, even though

she's ?

MR. HAWKINS:

That is part of my

discussions I'm having with Damen.

MR. PETTEN:

Okay, because she's over

here now somewhere

MR. HAWKINS:

She's floating.

MR. PETTEN:

Yes, that's good. She's not

down in the dockyard.

OFFICIAL:

Minister, I'm a marine engineer by trade, so you can utilize my services.

MR. HAWKINS:

Oh, really. Do you need to

be compensated?

OFFICIAL:

That would be (inaudible).

MR. PETTEN:

One other, again on the

ferries. What is the status? Where are we with swing vessels?

MR. HAWKINS:

That's another good

question.

MR. PETTEN:

I do know marine, right.

MR. HAWKINS:

Yes, you do.

MR. PETTEN:

I'm not allowed to ask it.

MR. HAWKINS:

We have the

Sir Robert Bond that is pretty much

not available for any service and that will probably be part of our disposal.

We were

also looking at the same sort of scenario for the

Earl Winsor but with the difficulties

we've encountered with the Veteran ,

we felt it would be prudent for us, at this time, to do the necessary work. The

Earl Winsor , now on dry dock, is

being tested.

As you

know, of course, Transport Canada, after a certain period of time they have very

stringent tests that need to be done. Of course, the

Earl Winsor is going through that.

Part of that is the steel structure and how solid the structure is and all that.

So they're going through all those tests.

What

we've basically done is we made a decision that until we have full confidence in

the Veteran , we felt it would be in

our best interest to bring the Winsor

back rather than put it up for disposal right now. What we're doing with that is

it's probably going to be running somewhere between $500,000 and $1 million to

do repairs on that. That's something that's ongoing.

The

Sound of Islay , we were looking at

the option of disposing of that vessel, even though the years it's probably

surpassed its years.

One of

the other things with the federal government that I engaged in a fair amount of

discussion with is try to explain to them that we do have in Newfoundland and

Labrador, we do have limited when it comes to transit. Really, only St. John's

would have a transit system. So I tried to argue to include the ferries into

that. Of course, they didn't include it into that but they have included ferries

into the Building Canada Fund, which is some way possibly for us to access

funding.

Once we

looked at that, because we did do a costing on the

Sound of Islay and I think it came in

at probably somewhere I think it was $5 million, Max?

MR. HARVEY:

That's for your total.

MR. HAWKINS:

It came in at $5 million,

and we looked at the longevity of the vessel, how many years were left. If we

had to incur a cost of $5 million, then it probably would not make sense for us

to do those repairs for the length of time it would be available.

Now

with the change in the criteria in the Building Canada Fund, we may be able to

access half of that money. So then that changes the dynamics a little bit. Right

now we are in discussions on how we want to move forward with the

Sound of Islay as well.

You

know, we are somewhat restricted with our swing vessel options now because of

the fact that we thought with the Veteran

and Legionnaire we would have a

reliable service in place and we would probably not have had the same need and

requirements for the swing vessels, but with lack of confidence right now in

that, it certainly changed the picture a little bit. We've changed focus on

that. We wanted to move forward on that. So that's part of a discussion we're

having.

MR. PETTEN:

It's challenging, though,

isn't it?

MR. HAWKINS:

What's that?

MR. PETTEN:

It's challenging.

MR. HAWKINS:

It is indeed.

course, people who are living on an island expect to have the service. There's

nothing worse than a disruption in services. It's not acceptable. I can only

imagine the people that depend on the ferry service for work and commuting. It

has to be the most frustrating thing in the world. I know if we get a snow day

and can't get around how frustrating it is, but when you have to face these

challenges I fully understand how frustrated people are.

MR. PETTEN:

Absolutely.

I'm

going to go to 4.2.02. I just got a couple of quick questions there.

Thanks

for those answers, by the way.

MR. HAWKINS:

No problem.

MR. PETTEN:

I noticed your Salaries went

up in revised by $1.3 million and then they dropped back by $1.3 million $1.1

million and then they dropped by $1.3 million.

MR. HAWKINS:

Yes. The drop back, again,

there were a couple of issues there with the increased piece, and that was

unfunded severance we put in there.

The

drop back from $18.6 million to the $17.3 million, and the drop back from the

revised $17.5 million, what we're doing is we're reducing any overtime that we

would have had there. We're trying to get a handle on some of the overtime

pieces there.

MR. PETTEN:

Okay.

MR. HAWKINS:

So we're reducing that and

MR. PETTEN:

Okay.

notice Supplies, there's a fairly big, significant drop in Supplies from

MR. HAWKINS:

Well, you know, part of that

and if any of you have any further questions on that. Our ferries, and that's

an exercise I'm going to have to engage in, in probably June or July, because,

as you know, our ferries are subsidized to a range of 95-96 per cent, 97 per

cent, and we're introducing some new rate changes. Even with the rate changes,

we're still going to be subsidizing our ferries to a rate of about 94 per cent.

Some of

the ferries, even though the scheduling piece we have in place, there are some

runs that are at capacity, there are other runs that are not even close to

capacity. So part of what I'm going to do, I'm going to try to engage some

discussion with the ferry committees and provide the statistics and the numbers

to them and tell them, look, these are the runs you have, boom, boom, boom,

boom. These are the numbers you have, and we'll look at ways to be more

efficient and be able to have a better

schedule that can accommodate the

majority number of people in the times when they need it. So there's going to be

some rejigging on schedules.

MR. PETTEN:

Okay.

noticed on the revenue

part in the provincial ferries, this $2.9 million as

opposed to $2.2 million, is that the fee increase reflecting an extra $700,000?

MR. HAWKINS:

Correct.

MR. PETTEN:

Okay.

4.2.03, again, we see a drop in the Supplies

section there of a million dollars.

MR. HAWKINS:

Yes.

Again,

in those areas you'll see some of these reflect in the reductions. One of the

measures we have is in the freight service to Labrador, to the Northern Coast of

Labrador. We've reduced it to a set rate of 169 days. It varied between, I

think, 181 or 179 to anyway, I think we've sort of cut about 10 days.

MR. PETTEN:

Less trips?

MR. HAWKINS:

Well, no, just 10 days. I guess that would reduce trips as well, right,

depending on how it's going. However, what we've done is we've put 169 days into

that. We will not tell them when to go and when to stop. They know they'll have

169 days and then they'll determine, based on ice conditions and when they want

to finish their schedule. So there's a little more clarity with the number of

days versus what was there before.

MR. PETTEN:

Okay.

4.2.05,

Purchased Services, $5.8 million this year, it was almost $13 million last year.

MR. HAWKINS:

Am I ahead one?

MR. PETTEN:

4.2.05.

MR. HAWKINS:

Sorry about that. What was

the question?

MR. PETTEN:

Under Purchased Services,

this year it's $5.84 million, last year it was budgeted $12.7 million and the

revised was $9.3 million.

MR. HAWKINS:

That's where you'll see the

Bell Island changes.

MR. PETTEN:

The what?

MR. HAWKINS:

The changes to Bell Island,

the wharf.

MR. PETTEN:

Oh, okay.

The

province has spent $7 million to date from $12 million, correct? Is that about

right?

MR. HAWKINS:

Yeah.

MR. PETTEN:

Under 4.2.06, I think I

might know the answer to this; I just want to make sure. The Revenue federal

and provincial there under Ferry Vessels.

MR. HAWKINS:

Which one was that?

MR. PETTEN:

4.2.06, under Ferry Vessels.

MR. HAWKINS:

Oh, that's our tariffs that

we are going to get back.

MR. PETTEN:

There was monies paid in

MR. HAWKINS:

Yeah, we were in a contract.

Of course, you know the way in which it was supposed to have been paid. We went

into a contract to have it done on a monthly it was $106,000 per month versus

having to pay all that money up front and we were still able to get the

licensing in there.

MR. PETTEN:

Yes.

MR. HAWKINS:

We've been continuing those

payments and we'll continue those payments until it's gazetted because we have

notification from the federal government that the tariffs will be remitted back

to us, but I think you have to go through a gazetted process to make that legal.

Is that the right word to use?

So what

we'll do is we'll continue to pay the monthly payments until that's gazetted and

then we will get that back.

MR. PETTEN:

Does that money come back to

the department or the general

MR. HAWKINS:

I'd say it would come back

to general.

MR. PETTEN:

General.

MR. HAWKINS:

I'm sure the Finance

Minister will be looking after that one; looking for it.

MR. PETTEN:

There's something not fair

about that, is it?

MR. HAWKINS:

No, I'd take it. I need it.

I could do another half of a road, half a kilometre.

MR. PETTEN:

4.3.02, water bombers fall

in this section? Am I right?

MR. HAWKINS:

What's that?

MR. PETTEN:

Is this where water bombers

would be?

MR. HAWKINS:

Yes, that's our water

bombers.

MR. PETTEN:

Okay.

haven't got a lot on the line by line that's really I have a couple generic

questions for you there pertaining to the water bombers.

How

many do we have available now?

MR. HAWKINS:

There are five.

MR. PETTEN:

Where are they located?

OFFICIAL:

There's one in St. John's, Gander, Goose Bay and one in Deer Lake.

MR. PETTEN:

What is the status of our

old we still have old water bombers that are no longer

MR. HAWKINS:

Two.

MR. PETTEN:

Two, right. Are we still

renting space for them to be stored?

MR. HAWKINS:

I apologize, I can't answer

that question. I hate when I can't answer a question, but I will refer it to

Cory.

MR. GRANDY:

The 215s, the older water bombers, they're in the unheated hangar space in we

refer to it as Hangar 21 in Gander. They're not in the same facility as the

heated hangar space where the new 415s are located.

MR. PETTEN:

We pay rent for that though,

right?

MR. GRANDY:

Hangar 21 is a long-term, relatively low-cost lease from the federal government.

The federal government owns Hangar 21.

MR. PETTEN:

The heated space is the

expensive one, correct?

MR. GRANDY:

Hangar 22 is a private space, yes.

MR. PETTEN:

Are we disposing of them or

is there a plan in place for disposal?

MR. HAWKINS:

Yes.

MR. PETTEN:

There is?

MR. HAWKINS:

Yes.

MR. PETTEN:

What do you do? How do you

dispose of them? Do you just put them out on auction?

Stumped

you again?

MR. HAWKINS:

Well, I'm going to Cory.

MR. PETTEN:

How do you sell a water

bomber? Who is looking for a water bomber?

MR. HAWKINS:

(Inaudible) would be yes,

like disposal and option and pricing. Maybe I should know this; I don't even

know the condition, I'm ashamed to admit that, whether they're I use the word

flyable or if it would just for parts.

I'm

going to let Cory answer that question. When he answers that question, I will be

learning it as well and I will remember it.

MR. PETTEN:

No problem.

MR. GRANDY:

I think part of the answer relates to what the minister spoke about when he

spoke about the Bond . There are a

number of assets that the department is looking at disposal of. We'll be going

through an exercise to determine the best way to get best value for all those

assets.

I think

the 215s may have market value, their locations in the world. So we'll be

exploring all those opportunities to get best value.

MR. PETTEN:

Okay.

Revenue

federal and provincial, what is that? Where does it come from?

MR. HAWKINS:

It's from outside parties

for the use of water bombers. Anytime we have to utilize that for other reasons

would fall into that category.

MR. PETTEN:

You charge

MR. HAWKINS:

I'm grasping on straws for

that one again.

MR. PETTEN:

You charge for the use of

water bombers?

MR. HAWKINS:

No.

MR. SMITH:

One of the big parts there, and maybe unfortunately is timely now, is that at

times there have been instances where our water bombes would be deployed to

other jurisdictions and they'd cover the cost. That has happened in the past.

So,

accordingly, we incur the cost but then through a cost-recovery agreement,

reciprocal agreements between or amongst jurisdictions, they basically write us

a cheque to reimburse us. We're not really charging revenue. It's simply a cost

recovery.

MR. PETTEN:

Okay.

We're

almost done. I think basically this is going to be a general question on 4.3.03,

Air Services. There's nothing in the budget lines for this 2016 under

MR. HAWKINS:

We paid for our water

bombers here.

MR. PETTEN:

That's what that was, the

payment of the water bombers?

MR. HAWKINS:

They're paid for, done.

MR. PETTEN:

Okay, I was figuring that

had to be a purchase.

MR. HAWKINS:

Yes.

MR. PETTEN:

Okay.

MR. HAWKINS:

If you look at that little

piece of related revenue there, and I think that's where it would come up with

the disposal of the two surplus ones that we have, Cory, I'm assuming.

OFFICIAL:

Yes, that is correct.

MR. PETTEN:

Is that what you're hoping?

MR. HAWKINS:

That's a targeted amount.

MR. PETTEN:

That's your target?

Well,

I'm done, but I just want to say before I wrap up, thank you very much.

MR. HAWKINS:

Thank you.

MR. PETTEN:

You're very obliging, and

your answers were great, and I thank everyone I know most everyone, but thank

you for your time, and I appreciate it.

Thank

you, Minister.

MR. HAWKINS:

Thank you, I appreciate it.

CHAIR:

Okay, I call for the

subheads.

CLERK:

4.1.01 through 4.3.03

inclusive.

CHAIR:

Shall 4.1.01 to 4.3.03

inclusive carry?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, subheads 4.1.01 through 4.3.03 carried.

CLERK:

The total.

CHAIR:

Shall the total carry?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, Department of Transportation and Works, total heads, carried.

CHAIR:

Shall I report Estimates of

the Department of Transportation and Works carried without amendment?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, Estimates of the Department of Transportation and Works carried without

amendment.

CHAIR:

Okay, the next meeting of

the Government Services Committee shall be Tuesday, May 10 at 9 a.m., Finance

and OCIO.

Motion

to adjourn?

MS. HALEY:

So moved.

CHAIR:

Adjourned.

motion, the Committee adjourned.