May 11, 1998

GOVERNMENT SERVICES ESTIMATES COMMITTEE

Pursuant to Standing Order 87, Wally Andersen, MHA

for Torngat Mountains, substitutes for Gerald Smith, MHA for Port au Port.

The Committee met at 9 a.m.

CHAIR (Wiseman): Order, please!

For the record, my name is Ralph Wiseman, Chair of

the Government Services Estimates Committee. The purpose of our meeting this

morning is to review the estimates of the Department of Works, Services and

Transportation. The members of my Committee are Mr. Jack Byrne who is the

vice-chair, Anthony Sparrow, Wally Andersen and Mr. Doug Oldford.

I want to welcome the minister and his staff this

morning. I will say that usually we give the minister fifteen minutes for

opening remarks. The vice-chair has fifteen minutes to respond. We will interact

back and forth with the members on questioning.

Minister, you can start by introducing your staff

this morning and then we can proceed.

MR. MATTHEWS: Thank you, Chair, and thank you

for having us this early in the week and this early in the morning. I am going

to start by letting my staff introduce themselves so that we will get their

titles right, and so that you will hear their voice at least once during the

proceedings today. The Deputy Minister is to my immediate left, Barbara Wakeham.

I know for sure who she is. She is the boss.

CHAIR: Yes, she is my boss too, she is my

constituent.

MR. MATTHEWS: I trust, Chair, you will respect

your constituent in a fashion this morning that will get us through this in an

efficient manner.

CHAIR: Absolutely.

MR. MATTHEWS: Don.

MR. OSMOND: Don Osmond, Assistant Deputy

Minister of Works.

MR. BAKER: John Baker, Executive Director of

Marine Services.

MR. MURPHY: Gordon Murphy, Director of Human

Resources and Financial Operations.

MR. WHITE: Keith White, Executive Director of

Roads.

CHAIR: I should add, Minister, before we go any

further, that when your officials are responding, for identification purposes

that you state your name.

MR. MATTHEWS: Yes, for the record, for Hansard.

MR. ASHLEY: Joe Ashley, Executive Assistant.

MR. CROCKER: Ralph Crocker, Political

Assistant.

MR. MATTHEWS: Thank you, staff. These are the

fine people from the department who will be able to assist us this morning in

answers that may be in some detail beyond what you would normally ask me

directly. However, I will do my best to get us through it in a timely fashion.

The Department of Works, Services and

Transportation of course is the largest operational department in government in

terms of budget, and it is the largest department in government in terms of raw

bodies that we have on staff directly within the central agency. Many other

departments of course are run more through boards and that sort of thing, but in

terms of direct staff involvement we are the largest department with the largest

budget on that account.

We are really a compilation of at least three

previous departments that used to exist at one point in time or other in

government. We really do what departments once did, such as one that was once

known as the department of public works done; we are the old department of

highways to some extent; and we are the department of government services in

large measure, in terms of some of the things we do. Of course, some of these

activities in that area have been spun off to a new department, the Department

of Government Services and Lands.

Our mandate is really fourfold. First, in terms of

corporate services, general administration, human resources, financial

operations, policy and planning and special technical engineer projects. We have

that side to us. We have the roads branch that Keith White is primarily

responsible for. We have the works branch which comes under the assistant deputy

minister, to a large extent, Don Osmond. Then of course we have our marine

services division which is the division that runs our ferry services, and now

has taken on the additional responsibility of the south coast services and the

Labrador marine services.

In essence we have been a department of government

probably unlike some other departments where we have been really growing or

expanding in terms of our mandate, while at the same time shrinking somewhat in

terms of raw employee numbers and budgets to lay against the responsibilities

that we have. I guess by way of comparison, in 1990-1991 we had a staff

compliment of 2,590. Today we have about 2,016 people working in the department,

for a decrease of 33 per cent. At the same time our operational budgets have

decreased by about $17 million while our mandate has expanded.

Let me explain that a little bit. We have

traditionally had highway construction and maintenance and that sort of thing

with us. We have always done the capital construction of public buildings for

government. We have had the other responsibilities, such as the government

purchasing agency, responsibility for the government tendering act,

responsibility for the Pippy Park Commission, and those sorts of things.

In the last year or two we have taken on new

responsibilities and I will just mention them so that we can put it in

perspective. As a result of the devolution of ferry and marine services from

Ottawa, we have taken over the responsibility for the south coast ferry and

marine transportation services. We have taken full responsibility for the marine

services on the South and North Labrador coasts. We have taken on responsibility

of course for the fairly significant Trans-Labrador Highway project. We have

taken over from the Health Care Corporation last year responsibility for the

redevelopment of all their facilities in St. John's.

A completely new piece of business for us, starting

last year, about June or July, was taking over responsibility for all of the

school construction projects in the Province. Previously, school boards looked

after their own area in terms of capital construction, renovations and those

sorts of things. As a result of the down sizing from twenty-seven to ten boards

we have taken over that responsibility through the new school construction

Corporation, and that is a major piece of work, or a major new responsibility,

that we will have ongoing within the department.

It has been a challenge, and the officials in the

department, to the benefit of government, have faced those challenges of less

bodies, smaller budgets and broader mandates, and we continue to operate, in my

judgement, in what would be a professional, efficient and effective manner so

that we get the job done.

We of course do a fair bit of work on behalf of

other departments of government. We manage space requirements for all the

departments of government and some other government funded bodies. We do light

vehicle fleet management for other departments, including ourselves. We also

manage and look after the vehicle maintenance requirements of the Royal

Newfoundland Constabulary. There are a whole array of activities that the

department engages itself in because of being included in our mandate that you

would not normally think of off the top of your head, if you were thinking about

what we do over at Works, Services and Transportation.

It is a big operation, a big piece of work and, I

might say, a department that is well staffed with very professional, very

focused and very dedicated people who know what their task is, who know what it

takes to get the job done, and who operate and executive efficiently and

effectively.

Both the Deputy Minister and myself have been in

the department, for myself, just a year, and I guess for the Deputy Minister

just under a year, last June. I went over there last May 8. It has just been a

year for me and a little less than a year for the Deputy Minister. Don has been

in the department a little less than that, John even a little less than Don. I

guess it was not arranged this way, but we are all new boys on the block in the

front row. Everybody else has been around a little longer, although Keith has

had a change of responsibilities. We are new on the front lines this morning,

but we are not new, particularly the staff, to government. I hope that we can

answer any questions that you might have with respect to policy, with respect to

programming, or with respect to actual dollars and cents as a result of your

perusal of the line items in the budget.

I don't think, Chair, I need to take any more time

other than to say we are happy to be here. We look forward to the interaction

with the Committee this morning in terms of moving through the proceedings.

CHAIR: Talk on for another minute or two, we

have a bit of a problem with the switch. The recorder, Kevin, had to pop

upstairs for a minute or so, so we cannot make the switch. (Inaudible).

MR. MATTHEWS: What you are saying is that we

cannot start the proceedings because we don't have the recording capabilities

hooked up yet.

CHAIR: It is hooked up, it is just that he

won't be able to identify without being here. He identifies from up there who

the speaker is.

WITNESS: He has a machine but he is gone

upstairs.

MR. MATTHEWS: He has a machine, but he is gone.

We are responsible for pretty well everything good

that happens, and we are definitely responsible for everything that goes wrong.

You will notice this year we have the air conditioning working a month ahead of

schedule in the Chamber, as we have in the rest of the building, as a result of

our early spring.

MR. J. BYRNE: (Inaudible).

CHAIR: We have two committees on the go this

morning.

MR. MATTHEWS: Jack, Christmas time is a time to

be out of here anyway. Whatever it takes to get you out, we are committed to it.

CHAIR: We have two committee hearings this

morning and they had some technical problems at the Committee room, so Kevin has

just gone up to do some adjustments.

MR. MATTHEWS: When will we know when he is

back?

I guess there is not much more we can say, because

the Committee does not want to start questioning for sure until we get recording

capabilities up there. I suppose I could tell you that we run seventeen ferry

services this year with twenty boats. We look after thirteen airstrips in

Labrador. There was an announcement last week with respect to them, Wally, that

indicated about a $4 million commitment by the feds over the next five years to

upgrade them and enhance them. With the smile on your face this morning, Wally,

I know nothing will come from your lips except a dribble of honey.

CHAIR: Order, please!

I will now ask the Clerk to call the first head.

CLERK (Noel): Subhead 1.1.01, the Minister's

Office.

CHAIR: Mr. Byrne, you may proceed.

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

you, Minister, for your introduction. Just a quick question for Mr. Baker. Are

you the same Mr. Baker who used to be with Marine Atlantic?

MR. BAKER: Yes, I used to be with Marine

Atlantic.

MR. J. BYRNE: I may as well go on from there.

With respect to the south coast ferry system, Minister, a couple of years ago

you privatized that. There was, I think, something like $50 million taken out of

that that was supposed to be put away in perpetuity for the operations of the

south coast ferry system - I suppose the interest off that - to help operate it.

Where is government planning on coming up with that amount of money for the

budget? Because it was a one-shot deal to help balance the Budget a couple of

years ago. What is the status of that system down there now? How is it

operating?

MR. MATTHEWS: The south coast ferry service?

There were some changes in the service in the lifetime my predecessor's

predecessor. I think Minister Efford was there when that happened.

In terms of how the funding that Ottawa transferred

to us to offset our responsibility in perpetuity for running it, where that

money is, it basically sits with, I guess, the Department of Finance or with

government in general. We build into our budget, for operational purposes every

year, the cost of running that ferry service. Is your question -

MR. J. BYRNE: I thought that money was gone,

though. I mean, it was utilized to help balance the Budget the year before last

or last year.

MR. MATTHEWS: Yes, it went in. You are saying

that the money went into the Consolidated Revenue Fund. That being the case, or

assuming that is what happened with it, government then finds the money every

year out of its Consolidated Revenue Fund or out of its budgeted allocations to

run the service. Are you asking me how much we spend on that service each year?

MR. J. BYRNE: No.

MR. MATTHEWS: It is funded out of government

revenues as any other service would be.

MR. J. BYRNE: Lewisporte, the privatization of

the system from Marine Atlantic for Labrador. Have you had any complaints or

concerns with respect to the operation of that system lately? Because I have

received a few and I have not brought them forward yet. I'm just wondering how

it is working.

MR. MATTHEWS: Probably I should tell you where

we are. We went to the private sector after consultations and that to find an

operator. We identified an operator and made an award to the Burry marine group.

They subsequently declined to accept it within the appropriate time frames, and

then we awarded it to the second lowest bidder, 10663 company, which is really

Woodward's.

MR. J. BYRNE: An extra million dollars in cost?

MR. MATTHEWS: Just about an extra million

dollars, yes. Actually, Burry's were on the low end of what we thought the

budget would come in at. The Woodward group, including Puddister's and

Crosbie's, came in at about where we thought it should be originally. There was

a third bid, it was $1 million higher than that again.

Anyhow, the new operators are in place. They have

taken responsibility for the service. They are operating out of Lewisporte,

really along the same lines that the service was operated out of there over the

past few years. What will happen with that service is that there will be a

decrease requirement for it consistent with an increased road transportation

system in Labrador. For the next year or two or three, as I mentioned to the

Chamber of Commerce when I spoke to them last week in Lewisporte, essentially

they won't see much change in Lewisporte except that there will be a new

operator with probably some new employees working there.

In the Lewisporte area there will not be much of a

change that will be obvious to the people in the town, or to the people who use

the service, the shippers, like Lewisporte Wholesalers and everybody else in

that area, and across the Island, who use it to ship product into Labrador. We

will see some changes in terms of scheduling because we have announced a fixed

schedule as opposed to a load-and-go

schedule and those sorts of changes, but

they are operational in nature more than anything.

MR. J. BYRNE: You mentioned in the House I

think, with respect to a question that I asked, the cost to move freight per

kilogram to Labrador. You said it was actually cheaper for some and would cost

more for other weights, I suppose, depending on once you get to a certain level.

It crossed my mind at the time that if they were doing that, obviously the rates

for the lesser amount of material that would be moved under a certain weight

would go down and the rates that went up were for the bigger volumes. Is there

any truth to my assumptions?

MR. MATTHEWS: No, the rates did not go up for

anything, the rates stayed the same. What we have done was reduce the tariff for

under fifty kilo packages -

MR. J. BYRNE: Yes, that is right.

MR. MATTHEWS: - but above that there was no

increase. There was no increase for passenger rates this year, no increase for

freight rates, no increase for any of the services cost-wise. There was a slight

decrease in the under fifty kilo package rate, there was a slight decrease in

the jockey fee for loading cars on and off the boat by $10. I think these were

the only two. There was a slight decrease between municipalities. We are

offering them a 50 per cent rebate on equipment that they move in solely for

their own purposes. It is not for subcontractors or contractors, but if a

municipality wanted to bring in, let's say, a front end loader to do something,

then we would give them a little break.

All of the package of reductions that we offered -

there were five initiatives announced. The total cost of all these initiatives,

we judge, would be in the $100,000 range, John? Yes. They were not big

adjustments but they were significant to the people on the Coast, in that it

indicated, number one, the rates were being held in most cases and slightly

reduced in some smaller areas.

MR. J. BYRNE: With respect to the company that

pulled out, who bid on the work and decided not to take it. I asked you a

question in the House with respect to the deposit fee.

MR. MATTHEWS: Yes.

MR. J. BYRNE: I think it was $50,000, was it?

MR. MATTHEWS: Fifty thousand dollars, yes.

MR. J. BYRNE: Has government actually received

that $50,000?

MR. MATTHEWS: We received the $50,000 when they

tendered. That was part of their tender documents and that normally is forfeited

to the Crown upon -

MR. J. BYRNE: Has it been forfeited?

MR. MATTHEWS: We have not refunded it so we

still have it, I guess. Deputy Minister, John? Yes.

MR. J. BYRNE: You say you have not refunded it.

Are you planning on refunding it? Are you definitely keeping that money?

MR. MATTHEWS: No, we have no plans on refunding

it. The company, like any other company that puts in a bond and that takes a

contract, or is awarded because they are low, and then for whatever their own

reasons don't take it, would lose that deposit. They can always come to

government and make representation to have it considered, but I have not heard

or seen any representation from them. Have we had any, Deputy Minister? No.

Essentially, the short answer is that it is forfeited.

MR. J. BYRNE: Port aux Basques, the Marine

Atlantic situation. Can you give us any more of an update on what is happening

there? A couple of weeks ago we knew it was pretty much of a to-do in the media

type of thing. Are we going to get more jobs out of Moncton or not?

MR. MATTHEWS: The last major media event that

happened with respect to the Marine Atlantic relocation of headquarters was the

meeting that the president and C.E.O., Rod Morrison, held with the council in

Port aux Basques.

MR. J. BYRNE: Six jobs.

MR. MATTHEWS: At that point he announced there

would be, in addition to what was announced by Minister Collenette the first

week in April, an additional six jobs that were going to be contracted out, I

believe, in Moncton that are now being relocated to Port aux Basques.

Essentially, the announcements that have been made

are the plans for Marine Atlantic's readjusted service. While we are not happy

at all as government with what has happened, the town of Port aux Basques is

prepared to work with a committee that Marine Atlantic agreed to sit on, and

that what we have agreed to participate in, to insure: number one, that the

adjustments to the service in terms of their announcement will happen: number

two, to make sure that the splitting of the headquarters, as they would consider

it, between Sidney and Port aux Basques happens in a fashion that they

announced; and number three, to see where we go beyond there.

The marine headquarters issue is not only the Port

aux Basques, it is basically, a Newfoundland issue. Because Marine Atlantic has

no reason to exist at the moment other than to provide ferry services to

Newfoundland. As I said once outside the House, in the case of ferry services we

run Portugal Cove to Bell Island. All of our interaction is with the commuters

committee on Bell Island. Portugal Cove only happens to be the place it leaves

from, and in this instance we are the Bell Island. Sydney is really only the

staging point because we have to have a place to leave from and go on to the

mainland. That is the position of government and that is the position we have

been taking to government.

MR. J. BYRNE: Are you saying that from

government's point of view the battle is over, it is done, (inaudible) are not

doing anything else?

MR. MATTHEWS: No, I wouldn't say the battle is

over and done. I think on the contrary I have said that we are going to be

keeping a very close eye on what Marine Atlantic does. The fact of the matter is

it is a federal responsibility at the moment. Everything else marine-wise the

feds have devolved to the Province: the South Coast services, the Labrador

services. The only thing left that the feds are running, essentially, is the

Port aux Basques-Argentia three boat-three port ferry services. We haven't, as

government, contemplated asking the feds to talk about taking over that service,

because it is a major service, and it is a constitutional responsibility that

the feds have, and we have no intention of letting them off the hook easy or

early, or if at all.

MR. J. BYRNE: You just led into my next

question, actually. I made a note here. It says: the federal responsibility

under the Terms of Union. We know the history of that. Are there any

discussions, thoughts, plans, anything at all, with respect to looking at

privatizing the Port aux Basques system?

MR. MATTHEWS: No, there are no discussions

ongoing with the federal government on that issue at all. I am sure that if the

feds were thinking in that direction, or if we were thinking in that direction,

it would have come out in the discussion that has gone on over the last month

with respect to that service. The bottom line at the moment is that it is their

responsibility, it is their obligation, and we are not talking to them or

considering talking to them.

MR. J. BYRNE: I don't like the phrase "at the

moment." You are saying this is a federal responsibility at the moment. That to

me is like: Right now it is, but who knows what is to come.

MR. MATTHEWS: It is now and the Province has no

position, we have not considered, and we have no plans, on pursuing any

discussion with them with respect to us taking it over or them doing it

differently. We would like for them to do it differently in terms of how they

run Marine Atlantic, where they operate Marine Atlantic headquarters from, and

where they do their procurement and business from, we would like to see that

changed. That is the area that we are focusing on at the moment.

MR. J. BYRNE: The Bell Island ferry system. Are

there any discussions or conversations on the go with respect to any changes for

that system? I know that a few years ago there was quite a ruckus over the rates

and what have you. I think there was a three or five year plan put in place with

respect to increases.

MR. MATTHEWS: Ferry rates, yes. Three year,

(inaudible)? We are going into the third year this September, I think.

MR. J. BYRNE: Can you give us an update on

that?

MR. MATTHEWS: Yes. There was a three year ferry

rate series of increases announced three years ago that were to roll out over a

three year period. They have kicked in for the most part on all the services, as

was announced.

In all of the services we have always said to the

commuter committees in those areas - because each year they resist the rate

increase - this: If you can suggest a way to us that we can keep the costs down

so as to not have to put in effect the increase, or all of the increase that we

have announced, then we are prepared to work with you. Some of the services or

some of the commuter committees have said, in effect: Yes, we are prepared to

take less trips, or we are prepared to have a different level of service in

order to keep the rates down. In a few instances we have gone along with that,

but for the most part the commuters, the people who use the service, want the

same level of service, want the same number of trips, want the same opportunity

to move back and forth as they have always had. For the most part that has meant

that we have had to put in place the rate increases that have been announced to

be rolled out.

On the Bell Island service, the major change that

will happen this year is that the Katherine has come out of service

because it has basically outlived its usefulness. We will be replacing it

eventually with the Hamilton Sound first and then the Beaumont Hamel .

Essentially, as a result of us being able to

purchase not a new ferry but a used ferry from the federal government for

$300,000, we are now going to have a new and larger ferry over in Fogo and

Change Islands. We are going to have a newer and larger ferry for the Bell

Island service because we are moving that one up from Fogo. By all accounts, all

of the services that we are offering or proposing, new services to these two

areas in particular, seem to have been met with a high level of acceptance.

Because everybody gets a better service, particularly the people in Change

Islands, Fogo and the people on Bell Island, as a result of us buying a boat and

giving each area a bigger service than they have had before or a bigger vessel

to run the service.

MR. J. BYRNE: Thank you. A different topic

altogether now, the fleet of light vehicles. I think it is 869 or something

vehicles. I will ask you questions in the House on this. The concern that the

Auditor General had was with respect to the tracking of the vehicles, the usage,

and the credit cards and stuff. Do you have a handle on that yet, really?

MR. MATTHEWS: Yes. I will ask the Deputy

Minister to comment on it, but essentially the answer I gave you in the House

was that yes, we have had some trouble tracking because our computer systems

were not up. Yes, we put in some extra money in our budget this year for new and

enhanced computer systems. Largely we are managing fleets for other departments.

I would not say we are at the mercy of other departments, but we certainly need

the cooperation and assistance of the departments who are using all of these

vehicles to provide us with the information, and to maintain the type of record

keeping that has to be kept, in order for us to be able to ensure that the fleet

is properly managed.

Deputy Minister, there were a couple of other

comments that came out of the Auditor General's report that probably you can

comment on.

MS WAKEHAM: As the minister said, we have

improved our vehicle maintenance management system, which is our computer

system. We have sent notifications to all of the departments right now telling

them that we want more timely reporting in terms of changes within the fleet

itself.

There was an issue with respect to the credit

cards. The credit cards were not being used. In fact, what was happening is that

we were waiting for a catch-up on the invoices that had come out from

(inaudible) before. So they were just kept in the inventory so that we could

have a trace in terms of the actual number and the actual utilization.

We are confident, and the Auditor General seems to

be satisfied, that the measures we have taken right now to get a handle on some

of the criticisms that were levied last year have been taken care of. I expect

that we will not have the same problem next year.

MR. J. BYRNE: Just a comment. I worked with

government twenty years ago. We did not have a computer system, just a manual

receipt, or whatever the case may be, and I do not remember any problems that

way. With computers it should be so simple to arrange something like that, to

have a good system in place I suppose.

You mentioned the health care system this morning.

Are you guys responsible for the transportation within the health care system

with respect to the ambulances and what have you?

MR. MATTHEWS: Only the air ambulance service is

our responsibility. All of the other ambulances are run by the -

MR. J. BYRNE: The health care corporation.

MR. MATTHEWS: There are some hospital based

ambulance services, there are some community based services, and there are some

private operators. There are three types of services in the road ambulances, but

we carry the vote, the budget and we manage the air ambulance service. It is the

same thing with our water bomber fleet. We manage and run them, but actually we

manage it on behalf of other on line departments. It is a unique situation,

where we carry the budget but they order up the service. Sometimes the challenge

is to make the budget that we have fit the level of service that they ask that

we provide. The air ambulance has always been a challenge to meet within budget,

but budgets are not the thing that drives the air ambulance service. Obviously

if they need somebody to be flown it is done.

MR. J. BYRNE: Is the Department of Works,

Services and Transportation responsible for the vehicles with the RNC?

MR. MATTHEWS: Yes, we do the maintenance on the

RNC vehicles.

MR. J. BYRNE: Do you purchase the vehicles also

for the RNC?

MR. MATTHEWS: No, they purchase their own

vehicles in their own budgets, don't they, Deputy Minister?

MS WAKEHAM: Yes, we just do -

MR. MATTHEWS: We just fund the maintenance out

of our shops for them.

MR. J. BYRNE: Because I am after hearing some

horror stories with respect to the vehicles the RNC are driving, some of them

with over 300,000 kilometres on them, motors gone, transmissions gone, and

bodies in poor shape. I just hear all kinds of stories about that. I was going

to ask a question - but if you don't purchase them you wouldn't know - with

respect to how many new vehicles they have versus vehicles with 200,000 and

300,000 kilometres. These guys are involved in high speed chases and they need

good equipment.

MR. MATTHEWS: I guess Justice would be the ones

who would know what their fleet - we would know what their fleet complement is.

We would know the number of vehicles they have because we do the maintenance on

them, we sustain them for them, but in terms of purchasing new units and

replacing their units, I don't think that is in our budget. That is in the

budget for the Departmental of Justice. I believe this year they did have some

budget allocations for new vehicles, but it is really not our vote, it is not in

our budget.

MR. J. BYRNE: Thank you. Will I keep going or

what?

Okay, let's go right through the estimates now. On

page 67, Minister's Office, 1.1.01.01. Salaries have gone up by $32,000 over

what was budgeted. Why would that be?

MR. MATTHEWS: Over what was budgeted?

MR. J. BYRNE: Yes.

MR. MATTHEWS: Basically because there was some

severance pay involved that was attached to the former minister. We had a deputy

minister - of course, the deputy's wouldn't be in there. It was revised up due

to severance of the former minister and the former minister's staff. This year,

of course, all of the votes are up for salaries because there is an extra pay

period this year. There is a twenty-seventh pay period in the system.

MR. J. BYRNE: An extra one, yes. Transportation

and Communications under the same section, $42,700 up to $49,700. That is an

extra $7,000.

MR. MATTHEWS: As I said, the whole mandate of

the department has increased and there was some extra travel last year as a

result of some things that had to happen. We had a fire in St. Barbe and we had

to get up there fairly quickly to deal with the problems. These sorts of

extraordinary types of travel costs sometimes drive the -

MR. J. BYRNE: When you are putting a budget

together and looking at Transportation and Communications, I know you are

looking at certain trips that would be planned out during the year, but wouldn't

you include in your budget any extra funds for that type of thing? We shouldn't

have to -

MR. MATTHEWS: The budget is always best guess

or best estimates, based on traditional usage within the department for

requirement for ministers and their staff to travel. Some ministers travel with

less staff than others. Some ministers travel less than others. On the other

hand, the extraordinary things sometimes drive our budgets out of whack. I spent

more last year - I shouldn't say I spent more, but it was a combination of two

ministers in the department spending a little more than we had in the budget.

The other issue that the Deputy Minister reminds me

of that drove that budget up was the requirement to be in Labrador more than we

had planned with respect to the Trans-Labrador Highway; a combination of that

plus the marine service that we had to go into about. I was in Labrador last

year half a dozen times talking about the marine service, talking about the

Trans-Labrador Highway program, and various announcements regarding it. I expect

this year we will have more costs in that regard. Yet in terms of the total

budget we have tried to hold the line on it.

MR. J. BYRNE: Thank you.

Section 1.2.01.01,

Executive Support, Salaries. I know you mentioned an extra pay period this year,

but to go from $354,000 up to $493,900 up to $554,500, I mean, that is an extra

$200,000.

MR. MATTHEWS: Yes. We have added a couple of

new positions, an Executive Director of Transportation and Highways, and an

Executive Director of the Trans-Labrador Highway project. We put a dedicated

person on that project, Terry McCarthy, to quarterback the whole thing. The

other thing we have done is we have taken a person, as a result of having to

take over the Health Care Corporation's redevelopment, George Greenland, and put

him solely on that project. We may charge that back eventually to the Health

Care Corporation, but the fact of the matter is as a result of the expanded

mandate that I referred to in my opening comments we have two new executive

director positions in effect in the department, and one less assistant deputy

minister in the department. We have a net of one new position plus secretarial

staff to support that position. That is where the difference is there.

The deputy reminds me, and I should note it for

you, that a fair chunk of that happened to be for severance last year for the

Deputy Minister who left the Public Service completely.

MR. J. BYRNE: Yes, but that would be the money

that was spent out of the $493,000 cost.

MR. MATTHEWS: No, that is why the revision from

last year budgeted to last year revised. The additional positions are the reason

why it is up to what it is here this year. You will notice as you go through the

subheads that there are probably more subheads down in terms of actual budget

than up, but that is one that has gone up significantly because of the changes

at the executive level.

MR. J. BYRNE: Page 68, 1.2.02.02,

Administrative Support, Employee Benefits. You had budgeted $1,101,500 and it

went up to $1,501,500. I know you had some staff changes but that is $400,000

over and above budget. That is a lot of money.

MR. MATTHEWS: Yes, and that was directly

related to new and additional costs for Workers' Compensation Board premium

payments.

MR. J. BYRNE: There must have been a lot of

injuries, were there?

MR. MATTHEWS: I do not know why it is up so

high and those payments can be explained. Alex or Gordon, do you have a comment

on that?

payment that didn't get though in a previous year that carried over into this

year. It was a late payment that missed the cut off from the previous fiscal

year. That is the reason for the biggest portion of that, but medical costs are

up as well, as the minister said.

MR. J. BYRNE: If you had budgeted $1,101,500 I

would say that was pretty close to what was budgeted the year before. Are you

saying that that, say, $1 million that was budgeted a year before, you had only

paid $600,000 the year before?

a couple of months on payment. Workers' Compensation were under some

restructuring and didn't get their invoices in on time, and it took a little

longer to get it though the system. Unfortunately.

MR. MATTHEWS: Who knows, this year we are

budgeting only the same amount as was budgeted last year, so that is really a -

MR. J. BYRNE: Yes, that is why I was curious.

MR. MATTHEWS: - function of accounting that

caused that to happen.

MR. J. BYRNE: Under .06, Purchased Services,

you had $274,400 budgeted and you spent $256,600. Every year I have a problem

with this one in every department on that. No, I'm thinking about another one

now. Can you explain that one to me?

MR. MATTHEWS: Purchased Services?

MR. J. BYRNE: Yes.

MR. MATTHEWS: Why it is down? Why is the

revised down?

MR. J. BYRNE: What is that (inaudible) money

spent on?

MR. MATTHEWS: What is it spent for?

MR. J. BYRNE: Yes. What are the Purchased

Services?

MR. MATTHEWS: Spent to purchase services.

MR. J. BYRNE: Yes, which services?

MR. MATTHEWS: What items go under that sub?

WITNESS: Printing costs, photocopier rentals

and repairs to equipment.

MR. J. BYRNE: Okay. Under 1.2.02.12,

Information Technology, $733,700 budgeted, and you had $1,092,300. That is

$300,000 more.

MR. MATTHEWS: Yes. It was revised up due to the

purchase of the equipment required for the installation of the Oracle inventory

system and to upkeep and replace our other computer equipment. That is the

explanation that I have. If you want more detailed information I'm sure the

officials can tell you why it went from one amount to the other. It was budgeted

at $733,700 last year, it went up to $1,092,300, and we are still budgeting this

year less than we budgeted last year. If you want additional information

(inaudible).

MR. J. BYRNE: Yes, I am curious on that one,

because I will tell you why. Over the past few years we have been talking about

having a tight budget. In every department we are looking at that kind of money

being spent on information technology. Granted, I understand the importance of

computers and what have you, and work with them. In the meantime, if you held

for one year the existing systems that you have in place now you could probably

save the government money. If this department is spending $1 million, you could

probably save $10 million or something.

MS WAKEHAM: The Department of Finance and

Treasury Board has changed to a new financial management information system

which is using the Oracle. As a result of that we are one of the departments,

because of size, that have a lot of systems that have to be re-worked and

brought into the Oracle system. We had a fairly large increase in our

requirements for the Oracle system. Some of the other departments you will see

this year will also have increases, but ours is a lot larger because of the

nature of the department.

MR. MATTHEWS: Obviously, we still need to do

some things in order to be able to, amongst other things, manage our fleet

better as the Auditor General pointed out. We recognize that and we have to get

on with it.

MR. J. BYRNE: Under

section 1.2.03.10, Grants

and Subsidies, you had $202,500. It went up to $244,000. What are those Grants

and Subsidies for?

MR. MATTHEWS: It was revised up because of a

second special van provided to the Hub.

MR. J. BYRNE: That was the increase, but what

is the rest of the amount for?

MR. MATTHEWS: In that vote?

MR. J. BYRNE: Yes, 1.2.03.10, Grants and

Subsidies.

MR. MATTHEWS: 1.2.03. Where are you looking,

what line?

MR. J. BYRNE: It is above Information

Technology, Grants and Subsidies, .10.

MR. MATTHEWS: Grants and Subsidies. It went

from $202,500 to $244,000. I think that was the new vehicle. We gave the Hub

extra money.

MR. J. BYRNE: Yes, I know that.

MR. MATTHEWS: They got in trouble.

MS WAKEHAM: Yes, the $50,000 was for the Hub.

(Inaudible).

CHAIR: The question is: What did the rest of

the money go to?

MR. J. BYRNE: What was the rest of the money

for?

MR. MATTHEWS: Oh, the rest! We had been already

providing some grants to the Hub, so their normal allocation is in that. Is

there anything else in there other than the Hub?

Transportation Commission a $60,000 grant, a operating grant to TAC, which is

the Transportation Association of Canada, of $42,000, and an operating grant for

the Hub of $94,500.

MR. J. BYRNE: The Transportation Association of

Canada, you said?

MR. J. BYRNE: What is all that about? Why do we

need to spend $42,000 there?

WITNESS: Keith.

MR. MATTHEWS: That is our membership, I guess,

in the Association?

MR. WHITE: Yes. The Transportation Association

of Canada is a national body that sets the standards for road construction,

design principles, highway signage, things of that nature, to make them

national.

MR. J. BYRNE: Standardization across the

Country.

MR. WHITE: Yes.

MR. J. BYRNE: Thank you. Page 69,

Administration and Support Services, 2.1.01.12, Information Technology. You had

$27,400 expected, it went up to $180,800, and now down to $159,200. That is the

same answer as the last time, is it?

MR. MATTHEWS: Yes, it is up.

MR. J. BYRNE: That is a big jump.

MR. MATTHEWS: This is due to a project to

replace the department's highway maintenance management system and the equipment

maintenance system. It is essentially the same explanation as was over in the

other subhead.

MR. J. BYRNE: Traffic Engineering and Signs,

2.1.02.03, Transportation and Communications. You had $11,500 budgeted and it

went up to $47,500, and back to $11,500 this year. That is $36,000 more.

MR. MATTHEWS: It was revised up due to radio

costs in our heavy equipment. Now that is a substantial figure. I do not have

the details of the extra cost, but I am sure one of the officials or the Deputy

Minister would have them.

WITNESS: There were increased costs to have a

communication system in Labrador, the Trans-Labrador Highway. We have taken over

maintenance of extra mileage that used to be looked after by Newfoundland and

Labrador Hydro, so we have additional costs associated with radio

communications.

MR. MATTHEWS: Is that more of a one-time cost?

WITNESS: It is a one-time cost.

MR. J. BYRNE: With respect to this also, .04,

Supplies. You have $177,100 budgeted and you spent $50,000, and this year it is

up to $177,100 again. Why did it drop? If it dropped down to $50,000 this year

why do you have to have it budgeted so high, over three and a half times?

MR. MATTHEWS: Gordon, or Alex.

way the accounting is performed for the sign shop. We will make signs for other

departments. In other words, we have to buy the supplies, we manufacture the

sign, and then through cost recovery we will charge the other departments.

MR. J. BYRNE: Yes, but that is not answering my

question, though. I can understand $177,100 if this is what was needed, but you

only spent $50,000 last year, and it is back up to $177,100 this year, which is

three and a half times what you spent last year.

year of how much signage work we do for other departments and how much cost

recovery we will get.

MR. J. BYRNE: I have questions with respect to

signage and the materials used in signs. When I was mayor of Logy Bay-Middle

Cove-Outer Cove we asked Works, Services and Transportation to do our signs for

us and we would pay them, I suppose, whatever the case (inaudible) works that

way. All the materials that you get for those signs - the 4x4s, the 6x6 posts,

the big sheets of plywood - how do you get that material? Where do you get it?

Do you go out on tender? What is the story?

MR. J. BYRNE: All public tenders. Page 70,

2.1.03.09, Maintenance and Repairs, Allowances and Assistance. You had $150,000

budgeted and it went up to $170,000. Why the increase, and what is Allowances

and Assistance for?

MR. MATTHEWS: Alex.

settlements for damage claims, where a snow -

MR. J. BYRNE: Knocking down a fence and stuff.

MR. J. BYRNE: Ploughs and that type of thing.

year.

MR. J. BYRNE: 2.1.04.01, Snow and Ice Control,

Salaries. You had $9,445,200, it went down to $8,245,200, and it is back up to

$9,696,800. That was a big drop, and then a big increase. That has something to

do with one of the answers you gave me earlier, I would believe.

MR. MATTHEWS: It probably has to do with the

good winter we had. We saved a fair bit of money last winter -

overtime.

MR. MATTHEWS: - on salaries and on material. We

saved a couple of million dollars actually, I think, was it, Alex?

million in salaries and another $300,000 or $400,000 in Purchased Services.

MR. MATTHEWS: A couple of millions of dollars

was a result of a good winter.

MR. J. BYRNE: That is the next one I was going

to hit on, actually, .06, Purchased Services. You had $3,638,400 budgeted, then

$3,102,100, and then up to $3,855,700. The same thing, because you buy less

materials such as salt and sand and stuff, I suppose. Is it?

outside contractors to give us extra assistance. Because of the winter we didn't

need to have the same level of hiring.

MR. J. BYRNE: Page 71, 2.2.01.01,

Administration. I had Salaries highlighted, but forget that. Technical Support

Services, 2.2.02.06, Purchased Services. You had budgeted $424,000, down to

$265,500, then up to $399,000. What are the services?

billing insurance costs. We insure I think the figure is over $1 billion worth

of buildings. The tender came in I believe last year a lot less than we

expected.

MR. J. BYRNE: You just popped something in my

mind. You say you insure buildings for over $1 billion? So you are saying that -

MR. MATTHEWS: (Inaudible) over $1 billion.

MR. J. BYRNE: A billion dollars, yes. On these

buildings, I would imagine they are throughout the Province - St. John's all

right across in different communities. The Department of Works, Services and

Transportation doesn't pay any taxes on these buildings to the municipalities

and they don't give any grants to move taxes, do they? If the municipalities

ever got to the point where they could tax your department you would be hit

pretty hard.

MR. MATTHEWS: If the municipalities could tax

government for the value of the buildings like they tax others. The

municipalities do get consideration by government through the Department of

Municipal and Provincial Affairs. You would know more about that than me, being

an ex-mayor, with the MOGs and those other types of grants that have been

shrinking -

MR. J. BYRNE: From $46,000 down to $26,000 this

year. Getting less all the time.

MR. MATTHEWS: Yes. That is a bigger issue than

just Works, Services and Transportation.

MR. J. BYRNE: Definitely, there is no doubt

there. On page 71, 2.2.03.01, Building Utilities and Maintenance, Salaries.

Again, I touched on Salaries there, but it is going to be the same answer all

the time for Salaries, isn't it? In .04, Supplies, it was $1,720,000 up to

$1,850,000. Now it is $1,871,300.

MR. MATTHEWS: What subhead?

MR. J. BYRNE: 2.2.03.04.

MR. MATTHEWS: Supplies again.

MR. J. BYRNE: Yes. What is all that about?

MR. MATTHEWS: What was the explanation?

MS WAKEHAM: That was an increase in the heating

fuel cost.

MR. J. BYRNE: Heating fuel costs, for all these

government owned buildings.

MS WAKEHAM: We have to maintain them. That

means we have to heat them.

MR. J. BYRNE: Figure that out. Page 72,

2.2.06.05, Alterations-Leased Accommodations, Professional Services. What are

those Professional Services?

MR. MATTHEWS: The $15,000, you mean?

MR. J. BYRNE: Yes, $15,000, then down to $900,

and up to $15,000.

MR. MATTHEWS: What type of Professional

Services is what you are asking about, is it?

MR. J. BYRNE: Yes. What is that? Painting,

renovations and stuff like that?

MS WAKEHAM: No, that would be for appraisals

that we are doing on changes within the buildings. They are very small costs

associated with the appraisals.

MR. J. BYRNE: On page 73, 2.3.01.06,

Administration, Purchased Services. We were at $935,000, then down to $620,000,

and back up to $785,000. What is that all about?

MR. MATTHEWS: Where are you again?

MR. J. BYRNE: 2.3.01.06, Purchased Services.

MS WAKEHAM: The answer to that again is dealing

with vehicle insurance, the changes in the cost. What happened was that we ended

up getting lower costs as a result of the territory changes in some of our

vehicle insurance.

MR. J. BYRNE: I thought that the government did

not insure their vehicles. I was under the impression once before that

government did not have their vehicles insured, that they would just as soon pay

out if there was an accident, rather that the costs involved.

MR. MATTHEWS: That used to be the case many

years ago, but I don't think it is the case anymore. Is it?

MR. J. BYRNE: It used to be. When did that

change?

MR. MATTHEWS: We carry insurance now.

MR. J. BYRNE: When did that change?

MR. MATTHEWS: (Inaudible) we had insurance on

the Harvey Road building when it burnt. We are still trying to settle the claim,

but the point is we carry insurance.

MR. J. BYRNE: On buildings. I am talking about

vehicles.

MR. MATTHEWS: Yes, as I say, we carry insurance

on vehicles and buildings, as far as I know. Don't we?

MS WAKEHAM: It is public liability only, not

collision.

MR. J. BYRNE: For 869 vehicles? Alright. In

2.3.03.07, Heavy Equipment, Property, Furnishings and Equipment. You budgeted $4

million, spent $4 million and this year you have $2 million.

MR. MATTHEWS: We had to make up a $5.2 million

budget shortfall this year as a result of Program Review, so this year our vote

for Heavy Equipment was cut by $2 million. It is not something that I don't

think the department can sustain year over year, but we can sustain it this year

as a one-time reduction in purchase of new equipment.

MR. J. BYRNE: You mean to say you spend $4

million each year on the purchasing of new equipment? Would that be like

ploughs, graders and that kind of stuff?

MR. MATTHEWS: That is traditionally what we

have been budgeting.

MR. J. BYRNE: You spend it each year, $4

million?

MR. MATTHEWS: Equipment replacement, yes. It

beats up a lot of equipment in the run of a year.

MR. J. BYRNE: Page 74, 3.1.01.04.

MR. MATTHEWS: Supplies?

MR. J. BYRNE: Well, it is .04 and .06,

actually. What happened to .05, I wonder? Anyway. Administration Support and

Design, 3.1.01.04 and .06.

MR. MATTHEWS: Supplies, and Purchased Services?

MR. J. BYRNE: Yes.

MR. MATTHEWS: Last year we were up by $20,000

there on Supplies and we are budgeting $20,000 more this year. Just increased

costs, basically. I do not know if there is anything -

MS WAKEHAM: We are sharing drafting supplies.

moved $20,000 from the Property, Furnishings and Equipment into their Supply

account.

MR. J. BYRNE: Because when you look at the

Salaries, they dropped by $300,000, and yet you have purchased more supplies and

more purchased services. It should be the reverse. Do you know what I mean?

the supplies for the engineers who are working on the roads projects. While the

salaries here may have dropped, the program has expanded, so they would need the

same amount of engineering equipment.

MR. MATTHEWS: Subhead .04 is up by $20,000 and

subhead .07 is down by $20,000. That is the explanation, Alex, that you are

giving, isn't it? Yes.

MR. J. BYRNE: Page 75, Pre-Engineering,

3.2.02.06, Purchased Services. It is right across the board. That is just

engineering fees?

MR. WHITE: That covers things such as

geo-technical investigations. If we are doing a new bridge site we may have to

go out and drill for geo-technical information, and consultants' reports

associated with that. That is what is covered under that item mainly. It is

strictly pre-engineering, pre-construction investigations.

MR. J. BYRNE: Page 76, 3.2.03.03, Improvement

and Construction-Provincial Roads, Transportation and Communications. You

budgeted $130,000 and it went up to $250,000. That is an extra $120,000. What is

the story on that? That is almost double.

MR. MATTHEWS: Why did we spend more money

there, gentlemen?

four activities, these are our major road capital activities. We budget those at

a bottom line. So you have a $19 million program or a $29 million program, and

the allocations to the subheads are at best guesses during the budget process.

The actuals actually appear in the revised.

MR. J. BYRNE: The same thing goes for Supplies.

The $11,000 in there for Professional Services, that was not budgeted at all.

What would that be for?

consultant for a small project.

MR. J. BYRNE: Grants and Subsidies, .10. You

had nothing budgeted and it went into $1.5 million, and it is $300,000 this

year.

MR. MATTHEWS: Was that the Labrador airlift

subsidy? That is the brush cutting program, I am sorry. That was an allocation

of funds that government voted during the year to do some additional brush

cutting in the Province's highways and roads. It was not contemplated in the

original budget, but it was a special warrant (inaudible) vote during the year.

MR. J. BYRNE: I think we have a small one down

our way.

MR. MATTHEWS: You probably did yes, most

districts benefited from it. You can spend almost as much as you like year over

year, it seems to me, from what I have seen in the one year I have been there,

in brush cutting. There is always a requirement to do more in that area.

MR. J. BYRNE: Thank you. 3.2.04.04, $500,000

budgeted for Supplies, and you spent $129,000, and it is back up to $500,000

this year.

total and we make a guess at what supplies will be needed, or what professional

services or what purchased services. These subhead amounts are at best guesses,

because the budget is prepared in this format before we even go to tender.

MR. J. BYRNE: Just a question now when you say

that. It is best guesses, and that has been referred to a few times. At the end

of the year, how do you usually pan out with your budgets with respect to the

overall budget, what had been estimated to be spent and what you actually spent?

Does it balance out?

important thing is the $29 million, that you don't blow your program cost.

MR. J. BYRNE: I am just wondering when it comes

on to the end of March (inaudible).

MR. MATTHEWS: We monitor our budgets month over

month and we know where we are in terms of our total budgets and in any one

particular area. If we find that we need more money in one area and we have

savings in another area, we can transfer around within our budget. Last year at

the end of the year we had budget savings, actually in large measure because of

our good winter, $2 million. That is what gave the Minister of Finance and

Treasury Board a little better (inaudible).

MR. J. BYRNE: When you say last year, do you

mean 1996-1997?

MR. MATTHEWS: No, 1997-1998.

MR. J. BYRNE: Which is now.

MR. MATTHEWS: No, this is 1998-1999.

MR. J. BYRNE: Yes, I know. Because you really

wouldn't consider winter being over until the end of March or sometime in April,

really. You (inaudible) get your overall savings that were really budgeted.

MR. MATTHEWS: Most of the savings we got last

year because most of the winter, of course, was from November to March last

year.

MR. J. BYRNE: It was. In 3.2.05.03, Regional

Roads-Transportation Initiative, Transportation and Communications. You had

budgeted $200,000 and it went up to $345,000. That is $145,000 more, that is

over 50 per cent more.

MR. MATTHEWS: Yes, and the next one you will

see is down considerably. These are costs within the programs, I guess, Alex, as

you just mentioned and they are all estimates. We go to tender and we get our

prices in, and then we reallocate based on what the actually costs are. The big

in terms of the total program.

MR. J. BYRNE: I know that, but if you look at

one, Transportation and Communications, that is up by over 50 per cent. Supplies

is down by about 60 per cent.

MR. MATTHEWS: Supplies are down by 200 or 300

per cent.

MR. J. BYRNE: Whatever. It is like there is

contradiction there, do you know what I mean? One going against the other. If

you think one is down they would both be down, and if one is up both would be

up, type of thing. What happened?

MR. MATTHEWS: Is there anything significant

there, Alex?

with an answer...

MR. WHITE: It would probably help if you knew

exactly what these items covered. Transportation and Communications is

essentially travel costs for our survey crews. Supplies is things such as survey

pegs, anything the survey crews need: the instruments they use, the chains,

tapes, level rods, these sort of things. Professional Services is consultants'

fees, if we have a need to retain consultants. I mentioned about

pre-engineering. We have occasions to do drilling for geo-technical information.

Even during construction there are times we still need to do those sorts of

investigations. During construction it would be covered under Professional

Services there. Purchased Services is the contract payments, and then Property,

Furnishings and Equipment is just that.

MR. J. BYRNE: The work that you mentioned,

survey crews, supplies and materials, has the department ever thought about

putting that out to private practice instead of having to hire their own people

on?

MR. WHITE: That has been studied quite a few

times in the past.

MR. J. BYRNE: I am getting too close to home

here now, but sometimes when I see survey crews on the highway I see four or

five people. That is a crew. Private industry would do that for probably about

half the staff. Anyway, so be it.

MR. MATTHEWS: It is a privatization issue.

MR. J. BYRNE: Yes, and it is too close for me

to be asking questions, really. In 3.2.05.06, Purchased Services, you have

$22,500,000 budgeted, you spent $23,550,000, and this year you are dropping it

by $5 million down to $18,450,000. Why such a drastic drop? 33 per cent.

MR. MATTHEWS: Why are we down from $25 million

to $21 million, is that your question?

MR. J. BYRNE: Down from $23,550,000 which was

spent last year, and you are dropping it to $18,450,000 this year, which is a $5

million drop.

MR. MATTHEWS: Yes. Like I say, our provincial

roads program is going to be down quite a bit this year because we are spending

less money on it, less payment to contractors for -

MS. WAKEHAM: Purchased Services is all payments

to contractors under the various roads projects.

MR. J. BYRNE: It is actually construction of

the roads like -

MR. MATTHEWS: Yes, building the roads.

MS WAKEHAM: The actual payments, the actual

invoices for building the roads. So the roads program is down this year from

what it was last year, so the actual payments to the contractors are down.

MR. MATTHEWS: We are down about $5 million in

our provincial roads program this year. That is the bottom line.

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

spending more money on roads this year.

MR. MATTHEWS: In total, but that is largely

because of the Trans-Labrador initiative where we are spending about $36

million.

MR. J. BYRNE: That gives a false picture

really, doesn't it, with respect to what has normally been done on roads?

MR. MATTHEWS: No. When we announced it we

announced there would be $36 million in Labrador, we announced there would be

$16 million in the provincial program, and there is about $56 million in the

Roads for Rail Agreement. In other words, the federal agreements.

MR. J. BYRNE: When you are speaking of roads

something just popped in my mind. I am thinking about the twinning, the

Trans-Canada Highway, out around Whitbourne area, from the extension where it is

stopped now a few miles east of Whitbourne. You are going to be going on

through. What are the final plans for that area? Are they going to twin it, are

you going -

MR. MATTHEWS: We are stopped now in the

Triangle Pond area I think it is, right Keith?

MR. WHITE: That is correct.

MR. MATTHEWS: The original plan was to twin it

right to the Argentia access road, which was really stopping at the Irving

service station there, because that is right at the corner, we will say.

MR. J. BYRNE: I have seen the plans.

MR. MATTHEWS: There has been a lot of

discussion and resistance to that in terms of four-laning it along that business

section and the implications for the business community. We do have some real

problems there to address. We have this intersection at routes 80 and 81 into

Whitbourne to address, so as a result of that we went back and had a look at it.

There are a couple of options. We can curtail the twinning somewhere east of

that business section; we can go on to the Argentia access as was originally

planned.

These are the two basic options, but if we do stop

it east of the intersection we still have to do something to address that

intersection there in Whitbourne and Blaketown. For what it is worth, I have a

Cabinet paper ready now to go to Cabinet with recommendations as to what I think

we should do there. We will be able to clarify that issue within the next month

or so, probably less than that.

MR. J. BYRNE: That is basically as much as you

can say about it if you have a Cabinet paper.

MR. MATTHEWS: Yes. There were I think nine or

eleven options developed by the engineers. Keith can tell you what the pros and

cons of all the options were, but I do not think it is budget related in the

first instance. You know, there are talks about -

MR. J. BYRNE: It is budget related because it

is going to cost money. Everything is budget related, I suppose.

MR. MATTHEWS: Well, yes. There were talks about

a fly over where you would go two lanes on the back of the business community

and two lanes on the front of it. There are all kinds of options looked at, but

the bottom line is we either twin it to the Argentia access, or we stop probably

two or three kilometres east of that and do some different things like

realignment, overpasses and the like.

MR. J. BYRNE: With respect to 3.2.06.06 Trans

Labrador Highway, Purchased Services. There was $15 million last year, $33

million this year, and you just referred to that. Does that $33 million include

any of the $15 million that was there last year, or has that $15 million been

spent?

MS WAKEHAM: There is $36 million being spent on

the Trans-Labrador Highway. There is some carryover there, but for the most

part

it is all new money that is going into it. This is payments to the contractors

again.

MR. J. BYRNE: This $33 million.

MS WAKEHAM: Yes.

MR. J. BYRNE: So in actual fact there will be

$48 million spent on it.

MR. MATTHEWS: There is a $60 million project

from Labrador West to Goose Bay and most of that project will be done this year.

There will be a small bit next year, $12 million. Depending on how much they get

done this year there could be a carryover, if winter comes early and they do not

get all the work done and it gets carried over, as you know.

MR. J. BYRNE: What condition would that road

be? Say you have your $60 million spent. To what level will that road be, class

A, pavement, what?

MR. MATTHEWS: It will be a 9.5 metre wide

gravel road. Because essentially I think what it will be... Keith, I don't know

whether you would describe that as a class A. Is it described in those terms?

MR. J. BYRNE: Ready for pavement.

MR. WHITE: Yes, we class it as a class A gravel

road, 9.5 metres wide as the minister said, with a crushed gravel surface on it.

MR. J. BYRNE: Thank you. Strategic Highway

Improvement Program, page 78, 3.2.07.06, Purchased Services. You had $3,725,000

budgeted last year, you spent $4,800,000, and there is none this year.

(Inaudible) money gone?

MS WAKEHAM: The program is finished. It was a

federal-provincial roads program. Purchased Services is the same thing, which is

monies to contractors. That program is over with. There was some increase in the

expenditure and it was found within the overall federal-provincial budget that

we have for roads.

MR. J. BYRNE: Did the Province have to come up

with that extra $1 million or did the feds pay so much of it? (Inaudible)

breakdown.

MS WAKEHAM: No, the federal program has a set

of envelopes, so when there are changes in programs - a project will come in a

little bit cheaper than what we estimated or there is one that is over -, so

there is always a shifting back and forth to cover it off.

MR. J. BYRNE: 3.2.08.07, Land Acquisition,

Property, Furnishings and Equipment. There is $2.5 million across the board.

That is for land acquisition for widening of roads, or what have you.

MR. MATTHEWS: That is expropriation costs.

MR. J. BYRNE: Page 78, 3.3.01, Alterations and

Improvements to Existing Facilities. I see right there you have subsection .05

and .06: Professional Services, $300,000 up to $585,500; and Purchased Services,

$3,400,000. You spent roughly that, but this year you have $4,325,000. What is

the story on all of that? 3.3.01, subsection .06 really I suppose, the big one,

and .05.

MR. MATTHEWS: That whole

section has to do with

the renovations and energy retrofit projects for buildings owned and operated by

government agencies. I guess we are just planning on doing more work in that

area this year in terms of the energy conservation projects. Don, I don't know

if there is anything you can add to that.

MR. OSMOND: No, Minister, that covers it. I

guess the reason for Professional Services being up a little bit higher was

there was a larger number of smaller sized projects, and you get a lower economy

of scale of course when you are doing that sort of thing.

MR. J. BYRNE: Thank you. Page 79, Development

of New Facilities, 3.3.02. Again, I had Professional Services, from $750,000 up

to $1.8 million. That is over double. Purchased Services went from $8.9 million

down to $4.8 million and it is going back up to three times that. What is on the

go here? That sounds like a lot of money.

MR. MATTHEWS: These are new facilities. This

has all to do with out capital program for next year. Don, probably you can -

MR. J. BYRNE: So what are you building?

MR. MATTHEWS: - be more precise in where these

went up and down and why. Which projects are involved, I guess, is the question.

MR. OSMOND: The major change from the $8.9

million to the $4.8 million is as a result of the Gander Hospital not proceeding

to the same extent that one had hoped. Some of the money then was subsequently

transferred to Grants and Subsidies, for example, which were to the St. John's

Health Care Corporation, North Haven Manor, and some other health care

facilities. As well, some went back up to Professional Services where some work

preparatory to this year was begun.

MR. J. BYRNE: So the $4.8 million last year was

a decrease. What about the $15,857,000, what is that money being spent on?

MR. MATTHEWS: I guess Melville Hospital is

brought into there, isn't it, Don?

MR. OSMOND: Yes, sir. Lake Melville Hospital is

the biggest one, $9.5 million, and we are hoping to have a go at Gander this

year. That makes up $5.6 million. Those are the biggest ones.

MR. J. BYRNE: Thank you. Advanced

Planning-Studies, 3.3.03.05, Professional Services. From $200,000 up to

$500,000. Why?

MR. MATTHEWS: There is more activity this year

in our capital budget than there has been for a long time. We announced the six

health care facilities, and we are also wanting to build a new youth remand

centre. We have to do some planning toward that. As a matter of fact, I think

there was $300,000 dedicated to that in our budget this year. We have not done a

lot of capital projects over the last four, five or six years because we have

not had the money, and that is translated into a pent-up demand. There are a

bunch of projects out there. We would like to do a couple of courthouses that

have been on-again, off-again for four or five years. They did not get announced

this year.

The new youth remand centre is a critical one, and

one that we are going to do some planning on this year. I think, Don, there is

$300,000 in there for this year?

MR. J. BYRNE: Page 80, AirStrips, 4.1.03.06,

Purchased Services. You had a budget of $195,000, you spent $599,000, and this

year it is up to $970,000. There seems to be a pretty dramatic increase there.

MR. MATTHEWS: (Inaudible) maintenance on the

airstrips?

MR. J. BYRNE: It says Purchased Services.

MS WAKEHAM: That is contracted work for

maintenance on the airstrips.

MR. MATTHEWS: In Labrador?

MS WAKEHAM: Yes.

MR. MATTHEWS: The Labrador airstrips. That cost

we -

MS WAKEHAM: It is all cost recovery.

MR. MATTHEWS: That is all cost recovered from

the federal government because they have the responsibility for those airstrips.

MR. J. BYRNE: You are going to be spending four

times what was budgeted last year. The airstrips must be in pretty bad shape,

are they?

MR. MATTHEWS: The feds announced last week that

they were spending $3.7 million or $3.9 million, was it, Wally, on the airstrips

over the next four or five years? They have done an audit of the airstrips and

they need some work done on them. Yes, they have to be kept up to date, but it

is cost recovery. The feds pay it and we do the work for them. We manage it.

MS WAKEHAM: The difference in the Estimates too

is that the federal government does not audit the airstrips every year. They

only come in every couple of years and audit it. You end up getting a larger

inventory of requirements for upgrading.

MR. J. BYRNE: Page 81, Ferry Operations,

4.2.02.6. Again, Purchased Services there, up from $4,540,600 to $19,868,300.

MR. MATTHEWS: Yes. We are into the Labrador

coastal services which are going to cost us $10 million or $11 million this

year, plus the Straits of Belle Isle service, which we have always had.

MR. J. BYRNE: If you part with, say, the

Labrador service (inaudible) mentioned that time, $11 million or something?

MR. MATTHEWS: The Labrador marine service will

probably cost more than $11 million. Is that a net figure, Deputy Minister?

MS WAKEHAM: The budget is $15.6 million for the

coastal Labrador service, including the contract to go from Puddisters for the

St. Barbe to Blanc Sablon.

MR. J. BYRNE: I might be missing something here

now, it might be so obvious. If you had $4.5 million budgeted for it last year,

which you could operate it for last year - now it has gone up to $19 million.

MS WAKEHAM: No. What has to be understood is

that when we were waiting for the transfer of funds from the federal government

we were operating until the fund was set up and then we cost it back off to the

fund for the Trans-Labrador Highway fund that was set up, the Labrador fund.

MR. MATTHEWS: The Trans-Labrador initiative

fund.

MS WAKEHAM: We did not know exactly what kind

of cost we were going to incur and we were waiting for the accounting process to

go in place for the Labrador service. Once that went in we journey vouchered it.

That is why your revised figure is showing $19 million.

MR. J. BYRNE: Yes, but you must have had a

figure on it for previous years of how much it costs to operate that service.

MS WAKEHAM: We did not operate the service in

previous years, the federal government did.

MR. MATTHEWS: We did not operate it, Marine

Atlantic operated it.

MR. J. BYRNE: Marine Atlantic. Okay, I got you

now. Where are we benefiting there?

MR. MATTHEWS: I am sorry?

MR. J. BYRNE: Where are we benefiting?

MR. MATTHEWS: Where are we benefiting?

MR. J. BYRNE: If the feds were paying for it

before, now we are paying for it.

MR. MATTHEWS: The arrangement with the feds was

for a $340 million cash settlement, if you like, plus acquisition of a couple of

boats and infrastructure. We took over responsibility. The deal is that we are

going to spend about $190 million to build Phase I and Phase II of the

Trans-Labrador Highway. The balance of the money sits in an account that is set

aside physically or literally, and the interest off that account, the balance of

the money in the account, will run the services forevermore. Now there is one

phase of the Trans-Labrador Highway we have -

MR. J. BYRNE: We hope.

MR. MATTHEWS: Oh, yes. One phase of the

Trans-Labrador Highway we have not even identified the funding for yet, and that

is Phase III from Goose Bay to Cartwright. As the roads go through Labrador the

requirement for marine services is going to go down. I think last year there was

an 8 per cent or 8.5 per cent decrease in the traffic off the Island last year -

or shipments, John, was it? - into Labrador. This year we are predicting

probably up to another 15 per cent decrease.

MR. BAKER: Yes, that is for the passengers and

freight.

MR. MATTHEWS: Yes, so the time will come when

there will be no ferry -

MR. J. BYRNE: (Inaudible) increases or

decreases, yes.

MR. MATTHEWS: There will be no requirement for

services on the South Coast of Labrador, and the North Coast will probably be

mostly serviced out of Goose Bay once the road is done.

MR. J. BYRNE: Yes, that's the plan, all right.

Page 82, Ferry Vessels, 4.2.04.06, Purchased Services. You had $275,000, and

$275,000 again, and this year it is $1.6 million.

MS WAKEHAM: We had $1.3 million set aside for

the revamping of Hull 109 which is the Prince Edward that we bought. That

had to have some repairs made to it but we got it for $300,000. It was a $28

million vessel. We had to (inaudible).

MR. J. BYRNE: That is going to be done next

year, is it, that work?

MS WAKEHAM: Yes. The thing is that we put the

contract out and this is a carryover in terms of the work being completed. It

has to carry it in this year.

MR. J. BYRNE: Who is going to do the work?

MS WAKEHAM: The work is being completed now. It

should be finished by the end of May, and then we will be putting the ferry in

operation in the Fogo Island (inaudible).

MR. J. BYRNE: Who is doing the work, though?

MS WAKEHAM: Who did the work? Who was it

contracted to? Burry's. Dockyard.

WITNESS: The St. John's Dockyard.

MR. J. BYRNE: That is what I was getting at. I

was wondering if it was done here on the Island.

MS WAKEHAM: Everything that is going to happen

is going to be done here.

MR. J. BYRNE: You should not say that, now,

see, because I know something different and I am going to be asking him about it

soon.

MS WAKEHAM: To the best of our ability we are

making sure that the work is done in Newfoundland.

MR. J. BYRNE: That's good.

MR. MATTHEWS: You notice the next line we were

carrying $2 million year over year to try and find a ferry. This year we do not

need to carry that because of course we have found a boat, and $1.6 million will

put it in top shape.

MR. J. BYRNE: 4.3.02.01, Government-Operated

Aircraft. Salaries were $1.6 million, then $1.6 million, and it is up to

$2,003,800 this year. That cannot be the same situation as you explained

earlier.

MR. MATTHEWS: Sorry?

MR. J. BYRNE: Under 4.3.02.01, Salaries, it

went from almost $1.7 million up to $2,003,000. That is a $300,000 increase, but

I do not see that as being the same situation as what you explained earlier in

Salaries.

MR. MATTHEWS: No, the twenty-seven pay periods

were only part of it. What is the balance of that?

MS WAKEHAM: In April of last year what happened

was they changed the regulations under the Canadian Aviation Regulations that

required different down times with respect to mandatory, and we had to put money

into the account to increase the crew time.

MR. MATTHEWS: Now, that has been somewhat

changed back as of this year. They have relaxed the regulations.

MS WAKEHAM: They have relaxed the regulations

in terms of the mandatory down time, but they have changed the number of

scheduling changes from a forty-two day to a thirty day, so that we have an

impact in terms of the actual crews that are available for our bomber fleet and

for our air ambulance.

MR. MATTHEWS: The bottom line is there are a

lot more staff involved, a lot more services.

MR. J. BYRNE: Transportation and

Communications, .03, $1,043,000 up to $1,481,500. That is roughly the same,

related that way.

MS WAKEHAM: Basically it is because we had to -

and we ended up with a bit more charters as well. Again, it was a problem with

the changes in the regulations. They have now told us that they will not hold us

to the mandatory down time and the eight hours which were causing us to do a lot

of contracting out, but they still have some changes within the aviation

regulations themselves.

MR. J. BYRNE: Page 84, 5.1.01. I had

Information Technology highlighted again there but we have already gone through

that in another section. 5.1.02.01, Queen's Printer. Salaries went from $59,100

up to $98,100. Is there more staff hired on there?

MR. OSMOND: Actually what has happened there

was there were several illnesses within the existing staff and we had to hire

some assistants to replace them.

MR. J. BYRNE: .06, Purchased Services, from

$190,500 up to $262,400. Why would that be?

MR. OSMOND: That is due to extra printing

costs.

MR. J. BYRNE: Extra printing costs for what?

MR. OSMOND: I could not give you too much on

the specific side, but generally speaking where we are acquiring some printing

being done outside, or the costs of materials and so forth that have been

purchased for printing services.

MR. J. BYRNE: Thank you. Page 85, 5.1.03,

Printing and Micrographic Services. I just have one question, on Property,

Furnishings and Equipment, .07. You had $30,000 that wasn't budgeted last year

nor this year.

MR. OSMOND: That was a new piece of equipment

that was purchased.

MR. J. BYRNE: I am just curious now. You had a

new piece of equipment that was purchased and it was not budgeted for. It would

almost be considered an emergency, I suppose, to purchase it that year. Wouldn't

you think? Or wouldn't you wait till the following year to purchase it?

MR. MATTHEWS: Was it a breakdown, Don, or was

it just a new piece that they had to have?

MR. OSMOND: It was a new piece that they had to

have. I think it had to do with some previous equipment that was not working

properly. It was purchased out of savings, actually, that were developed

elsewhere.

MR. J. BYRNE: Thank you. 5.2.01.10, Park

Operations, Grants and Subsidies. It was $200,000, went up to $300,000, and is

down to $100,000.

MR. MATTHEWS: That is the grants to the Pippy

Park Commission. Program Review caused their grants to be projected going

downwards. Last year because of the first year in the reduced budget they needed

some extra money to run their operation so we found some new money for them that

was not budgeted. That would put it up to $300,000. This year we are only

looking at $100,000.

MR. J. BYRNE: Basically, you took it from this

year's budget for last year for them.

MR. MATTHEWS: No, not really.

MR. J. BYRNE: Well, really, (inaudible) -

MR. MATTHEWS: We found it in last year's

savings.

MR. J. BYRNE: Thank you. Page 86, 5.2.02.10,

Park Development, Grants and Subsidies. It went from $200,000 to $260,000, then

to $100,000.

MR. MATTHEWS: They are down to $100,000 this

year too. We are putting less money into Pippy Park all the time. They are going

to get some new revenues from the golf course that is run up there. Because we

have said to them: We can't give you as much money so you better generate some

revenue on your own. I think they will be okay, but we will not see the Pippy

Park Commission in a circumstance where they can't meet their obligations in

terms of grounds' keeping and the other programs they run. It is going to be a

little tougher on them.

MR. J. BYRNE: One other question. Can you just

give me an update on the Outer Ring Road? Where it is to, what is happening this

year, and when is it going to be completed? That is planning on going into the

White Hills, isn't it, over there right up on the top of the Janeway?

MR. MATTHEWS: The outside date for completion

of all of the projects under the Roads for Rail Agreement is 2003 with a wrap-up

year in 2004. I believe that is the right date. Keith?

MR. WHITE: Back a year, 2002, (inaudible).

MR. MATTHEWS: The year 2002, and the wrap-up

year 2003. All of our projects have to be completed by then. This year, as you

know, the road bed was put in and a few years ago from Kenmount Road up to the

Cove Road. Last year we did two or three structures and this year we are doing

two more structures and commencing the paving. We fully expect by the end of

this construction season to be able to use the Outer Ring Road effectively from

Kenmount Road all the way to at least the Allandale Road interchange.

While we did not budget this year for the structure

on the Portugal Cove Road, if we can find enough money in our Roads for Rails

money we will probably call that structure. I would like myself to be able to

get to the Cove Road this year. I think, the officials tell me, they have called

contracts that will guarantee us to get to Allandale Road?

MR. J. BYRNE: To Allandale. Where will you

access Allandale Road from?

MR. MATTHEWS: Right in front of the golf

course, right here just (inaudible).

MR. J. BYRNE: By the Fisheries building.

MR. MATTHEWS: Yes, in that general area.

MS WAKEHAM: (Inaudible).

MR. J. BYRNE: School, college.

MR. MATTHEWS: It will get you to there. Beyond

that, next year we will have to, obviously, think about getting it out to the

Cove Road and carrying on down to the East End. Then we have the Goulds bypass

that is in our plans to start. There is a lot of work to be done over the next

two or three years in order to complete that project. We have basically pushed

other projects farther ahead according to the allocation that was given in the

Roads for Rails for these projects than we have this one, but the time has come

to move more aggressively on this Outer Ring Road, and we are doing that this

year.

MR. J. BYRNE: Possibly next year you could see

access off Torbay Road onto the Outer Ring Road, do you think? Is that a

possibility?

MR. MATTHEWS: Keith, what would it take to get

us to the Portugal Cove Road area? I am pushing the officials to get to there,

but they know the reality of what we can do. I told him the facts, you tell him

the truth.

MR. WHITE: It is tough to get in 1999 right

into Torbay Road. The structure itself at Torbay Road is a tricky one, because

we have to go with the Outer Ring Road underneath the existing road, and it is a

four-lane road there now.

MR. J. BYRNE: Under the existing Torbay Road?

MR. WHITE: Yes, so the logistics of it are

going to be kind of tricky. While we will be attempting to get it on stream as

soon as possible, to get that interchange at Torbay Road completely in use it

will probably take to the year 2000. We could still have traffic to Torbay Road

but not underneath and the other side.

MR. MATTHEWS: You are talking Torbay Road, is

it, not Portugal Cove Road?

MR. WHITE: Torbay Road, yes.

MR. J. BYRNE: Torbay Road, yes.

MR. MATTHEWS: That takes us going to the

airport, we will say, and out to Torbay Road.

MR. WHITE: Yes.

MR. J. BYRNE: I suppose you are still looking

forward to petitions on the Goulds bypass, are you?

MR. MATTHEWS: No, I am not looking forward to

them, they are wasting their time. We are going to do it as soon as we can.

MR. J. BYRNE: I know, that is the part of it.

(Inaudible) for me. That is a part of being in the House of Assembly.

MR. MATTHEWS: (Inaudible) said it, now. The

Member for Ferryland said last week in the House he has no more petitions on the

Goulds bypass road.

MR. J. BYRNE: Thank God. Anyway, thank you for

your time.

CHAIR: Thank you, Jack. I will now ask the

Clerk to call the heads. How come you never had any questions before, Mr.

Andersen?

MR. ANDERSEN: I am sort of surprised you let

the Member for Cape St. Francis go on for an hour and a half without any

interruption. I have a couple. I have one with regard to the subsidies for the

community councils, the 50 per cent discount in shipping of big equipment on the

boats. Minister, you said that if they go to a contractor it will not take

place. For example, if the community council in Makkovik puts out a tender and

they want to do some repairs to the roads in Makkovik, if they put out a tender

call and it is won by whoever, that they will not avail of the 50 per cent of

the discount to get the heavy equipment in?

MR. MATTHEWS: No, the intent, Wally, was to

give a little bit of relief. The whole bundle of benefits, those reductions,

only comes to about $100,000. That is the tariff on the under fifty kilo

packages, the jockey charge, and the rebate to the municipalities. It isn't sort

of a given. What it is is we have given our Labrador manager the discretion that

when municipalities are bringing in equipment solely for their own use, not

through subcontractors or general contractors, that they would get a bit of a

break on the freight rate. I think that is the concept. So you are right, it is

not applied to subcontractors.

MR. ANDERSEN: The Labrador manager is John?

MR. BAKER: Yes.

MR. ANDERSEN: Are you the Labrador manager?

MR. BAKER: We will have the regional people

that will be able to have the discussion to be able to reduce those invoices,

but in the past, as you are aware, the communities have from time to time had

the benefit of getting a grader or a dozer or something of that nature at a very

reasonable cost, only to be faced with a very high cost of transportation. This

is why we took this into consideration now to help them in that way.

MR. MATTHEWS: If they wanted to buy a piece of

equipment or something like that, if they were buying a piece of equipment for

their own use, this helps them out with transportation. It does not affect

subcontractors.

MR. ANDERSEN: 4.1.01. I just want to check. It

must be a printing error. It says here: "for the winter foodlift subsidy and

subsidization of air service to remote areas of the island." I was just

wondering if that included the subsidies that we introduced into Coastal

Labrador that we (inaudible).

MR. MATTHEWS: Yes, that is what they are, that

is the winter food -

MR. ANDERSEN: So that would include Labrador as

well? Alright. 5.1.01. Minister, I know that you had meetings in certain parts

of Labrador regarding the tendering act. I know that small companies in the

riding of Torngat Mountains were unable to avail or to place tenders because the

majority of the tenders that went out from Works, Services and Transportation

were issued in three newspapers. They were the local one in St. John's, the

Telegram , The Western Star -

MR. MATTHEWS: The Evening Telegram ,

The Western Star , and the local newspaper.

MR. ANDERSEN: Also the one out of -

MR. MATTHEWS: Goose Bay?

MR. ANDERSEN: No, the third one they used was

out of the one in Windsor-Grand Falls.

MR. MATTHEWS: The Advertiser .

MR. ANDERSEN: There are no local newspapers in

our riding. I know last year there were houses built by Newfoundland and

Labrador Housing and other agencies. There were two local contractors in Nain,

and by the time they found out the deadline for the contract had already passed.

So again, I wonder was there anything done within your constitution or in the

tendering act that could alleviate this problem, or give the people up there a

fair chance?

MR. MATTHEWS: Not so far, I guess. One of the

things that was recommended to us in our consultations - and if we bring forward

amendments this session it will probably be included - is having tendering by

electronic means, so that we can go on the web site. I am not sure that will be

much of an advantage. It depends on the ability of the contractor in terms of

picking these things up and picking them off. I don't know if there is anything,

Don, that has consciously been done to address their situation. If they missed

it, I guess they missed it because they were not aware of it through the

circulation of the newspaper.

MR. OSMOND: There are ways for them to access

them. There are services out there that provide information on all tenders from

government. They can be mailed to individuals, they can be faxed, or they can be

sent by way of the web, or however. There are in fact two local companies that

provide that kind of service. One is called BIDS and the other one is called

PODS. Certainly the bidders in your district could subscribe to those services.

They are not that much money, several hundred dollars I think a year. They will

be able to also target the kinds of tenders they might like to bid on. Rather

than everything coming to them, they will just receive those that in fact might

be of interest to them. Eventually with time as well, as the minister indicated,

once we get into electronic tendering more so, one can access the web if you

have the equipment at any time and pull down anything that you want to see that

is of any particular interest to you.

MR. MATTHEWS: These systems that Don is

referring to are not systems they have to subscribe to, but a lot of people on

the Island use them. They are like using an agency to assist you so that

somebody will be pulling off all the tenders that relate to your type of

industry, and it saves you the trouble of doing it yourself. They keep an eye

out for you and you pay for the service. That is really how it works, isn't it,

Don?

MR. OSMOND: Yes sir.

MR. MATTHEWS: That is one way that contractors

in your area could probably know more about what is going on where they are

isolated. I do not know of any other solution, Wally, I really don't.

MR. ANDERSEN: Basically then, if the question

is asked to me again from people in my riding, then the answer -

MR. MATTHEWS: The bottom line is that -

MR. ANDERSEN: - is to find the best way

possible.

MR. MATTHEWS: The bottom line is that

everything has to be tendered over $7,500 that we do through government or the

agencies, Newfoundland and Labrador Housing Corporation or whoever, and they are

required at the moment to advertise in a generally circulated newspaper. That is

why we use the newspapers. What we are suggesting, at least at the officials'

level, is that we should broaden that so that not only newspapers could be used

but also the web site or other electronic means. These agencies that Don

referred to as the PODS crowd and BIDS are really private companies set up to

analyze everything that government puts out to tender, and they convey that

information to all of their subscribers.

So, if a small contractors in your area was, for

the sake of a few hundred dollars, tied into one of these agencies they would be

assured of getting notification of, say if they are interested in housing

construction, everything that comes out. Not only on housing, but everywhere

that is government related, both federal and provincial I guess. They would get

federal and provincial because these agencies monitor federal tender calls as

well as provincial tender calls. They may not be aware of the service, Wally,

but certainly the best full-proof method of knowing they can get it -

MR. ANDERSEN: There is a fee involved, is

there?

MR. MATTHEWS: Yes, it is user pay. Government

does not pay for the service, it is a private sector service. If you want more

information on that I suggest you speak to Don at your convenience. Because it

is a problem, like you say, if anyone is operating in an area where there is no

newspaper. That is notionally the same problem of a lot of people here on the

Island in small towns or communities.

CHAIR: Okay, Mr. Andersen. Thank you. Mr.

Sparrow.

MR. SPARROW: Mr. Minister, I only have one

question. Now that Marine Atlantic is just serving the Newfoundland market have

you any idea of the federal subsidy on the service? How much of that federal

subsidy goes towards the Argentia run?

MR. MATTHEWS: The cost of Marine Atlantic's

operation in Newfoundland is about $60 million a year. It works out now I think

to be a $28 million subsidy, $32 million cost recovery. In other words from the

tariffs) and fares they charge. It is almost a 50-50 split now in terms of

Marine Atlantic's overall cost as between the revenue they generate and the

federal subsidy. I do not know how much of that, John, relates to the Argentia

service. Would you know?

MR. BAKER: No, I don't happen (inaudible).

MR. MATTHEWS: I don't know what breakout is. It

would certainly be several million dollars. What do they operate in there, from

June to September, is it, into Argentia?

MR. BAKER: Yes, that is right.

MR. SPARROW: Thank you.

CHAIR: I take it there are no more questions.

On motion, subheads 1.1.01 through 5.2.02, carried.

On motion, Department of Works, Services and

Transportation, total heads, carried.

CHAIR: Before we clue up, I would ask that

somebody second the minutes of our May 7 meeting.

On motion, minutes adopted as circulated.

CHAIR: Minister, on behalf of the Committee I

would like to thank you and your officials for appearing this morning. You have

been very impressive and precise in your answers, and in fact have covered the

Estimates in totality. Thank you very much for being here.

MR. MATTHEWS: Thank you, Chair. I would like to

thank my officials for their contribution and the good information they gave

you. Thank you, Mr. Byrne, for your aggressive line of questioning. Thank you,

Mr. Sparrow, for being so short in your line of questioning. Mr. Andersen, you

were somewhere in between. I am surprised you did not ask for money for your

community roads.

The Committee adjourned.