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April 11, 2017                                                                    GOVERNMENT SERVICES COMMITTEE


 

Pursuant to Standing Order 68, Mark Browne, MHA for Placentia West – Bellevue, substitutes for Carol Anne Haley, MHA for Burin – Grand Bank.

 

Pursuant to Standing Order 68, Barry Petten, MHA for Conception Bay South, substitutes for Keith Hutchings, MHA for Ferryland.

 

The Committee met at 9:03 a.m. in the Assembly Chamber.

 

CLERK (Hammond): Good morning.

 

My name is Kim Hammond. I'm going to be the Clerk for this meeting of the Government Services Committee.

 

The first order of business is the election of the Chair. Are there are any nominations from the floor?

 

AN HON. MEMBER: I'd like to nominate Randy Edmunds, Torngat Mountains.

 

CLERK: Are there any further nominations from the floor?

 

Are there any further nominations from the floor?

 

Hearing no further nominations, the Member for Torngat Mountains is acclaimed Chair.

 

Mr. Edmunds, would you like to take the Chair?

 

CHAIR (Edmunds): Okay, thank you everyone.

 

The next of order of business, we call for nominations for Vice-Chair.

 

MR. BROWNE: I nominate the Member for Stephenville – Port au Port.

 

CHAIR: Okay, the Member for Stephenville – Port au Port has been nominated for Vice-Chair.

 

Further calls for nominations?

 

Further calls for nominations for Vice-Chair?

 

Congratulations. The Member for Stephenville – Port au Port is acclaimed as Vice-Chair.

 

First, we'll ask the Government Services Committee to introduce themselves.

 

MR. PETTEN: I'm Barry Petten, MHA for Conception Bay South and Transportation and Works critic for the Opposition.

 

MS. BONIA: Laurie Bonia, Researcher, Opposition Office.

 

MS. HAYDEN: Veronica Hayden, Office Manager, Opposition Office.

 

MR. BROWNE: Mark Browne, MHA, Placentia West – Bellevue.

 

MS. PARSLEY: Betty Parsley, MHA, Harbour Main.

 

MR. FINN: John Finn, Stephenville – Port au Port.

 

CHAIR: Okay, we'll get started here now and I'll introduce the title. And with that, we'll ask for introductions from the Transportation and Works Minister and delegates.

 

CLERK: 1.1.01.

 

CHAIR: Shall 1.1.01 carry?

 

Minister, before we get started I'd like you to introduce yourself and the rest of your department.

 

MR. HAWKINS: Thank you, Mr. Chair.

 

Minister Hawkins, Transportation and Works.

 

MS. KING: Tracy King, Deputy Minister, Transportation and Works.

 

MS. ENGLISH: Tracy English, ADM, Strategic and Corporate Services, Transportation and Works.

 

MS. MCCARTHY: Charlene McCarthy, Departmental Controller, Transportation and Works.

 

MS. HOWARD: Jacquelyn Howard, Director of Communications, Transportation and Works.

 

MR. BAKER: John Baker, ADM of Marine Services, Transportation and Works.

 

MR. DUNFORD: Joe Dunford, Assistant Deputy Minister of Transportation.

 

MR. GRANDY: Cory Grandy, Assistant Deputy Minister for the Works Branch.

 

MR. MORRISSEY: Patrick Morrissey, Budget Manager, Transportation and Works.

 

MS. PITCHER: Margot Pitcher, Executive Assistant to Minister Hawkins.

 

CHAIR: Okay. Thank you.

 

I'd like to introduce the Member for Bonavista who will be late coming in.

 

What we'll do now is give the minister some time for opening remarks and then we're going to do the line by lines.

 

MR. HAWKINS: Thank you, Mr. Chair.

 

Certainly, it's a pleasure for me this morning, along with my staff, to do our Estimates. This is my second opportunity now as Minister of Transportation and Works. I have about 16 months now of experience in this department.

 

Last year, when we did the Estimates, I think I was probably about three months in. It was certainly a bit of a daunting task at that time because it was a new experience for me having to go through Estimates. Of course, a lot of the Estimates last year that I had tried to defend were actually Estimates and forecasting from a previous administration and then looking forward in the fiscal year for our department in the new government. So that was a bit of a challenge to balance the two, but we did it and we got through it.

 

Mr. Chair, I guess this year Budget 2017 really reflects our commitment to strong, fiscal management and returning to surplus in 2022-2023. I think we've been very clear with our messaging on that and with this budget that we have. We still have significant fiscal challenges that we are addressing and within my department itself. We cover such a wide variety of services that we provide to the residents of Newfoundland and Labrador. We do have that challenge.

 

Mr. Chair, it's probably one of the few departments that I guess every single day we are touching some resident of Newfoundland and Labrador. Whether it's through our roads, through our ferries and through the services we provide, air ambulance, it's pretty much every day someone is going to be impacted.

 

As you're aware, of course, departments have focused on finding efficiencies and curbing spending. In the Department of Transportation and Works we've made a concerted effort to identify savings and absorb budget pressures within the current funding levels.

 

To be able to do this we've created a culture of enhanced financial accountability. Everyone is accountable for their budgets. Regular budget monitoring and budget preparation meetings are held to ensure that everyone is aware of the financial issues and working together to find solutions. We've focused on reducing travel costs through the use of technology. We've reviewed the application methods for salt and sand and have implemented changes to optimize the use of our salt.

 

In preparing Budget 2017, government implemented a zero-based budgeting approach which is a new approach. We have taken that approach very seriously. We built our budgets from zero and with justified continued investment. Through the process that we've gone through, we have $1.37 million in savings and increased revenue as identified in the Department of Transportation and Works.

 

Throughout this morning in our Estimates, we will find that there are a number of organizational changes and reviews. Through the process, 39 positions within Transportation and Works were eliminated and 16 positions were created because we did have some changing from department to department. So we have a total reduction of 23 positions.

 

All affected employees have been notified. Most changes will be implemented following the end of the winter season which we hope is behind us. Of course, through the review of department structure, we've identified different ways to deliver some of our services and we continue to do that. Efficiencies are so important for us to make sure that we are positioning ourselves to get the best return for the investment we are making.

 

One of the challenges that we did have last year or through 2016-2017 was the rainstorm in October. There were a number of communities that were affected by the Thanksgiving rainstorm. We did everything that we could possibly do and used every available resource to make sure we had those communities back in to having services as quickly as possible. There were 40 road beaches, 10 communities isolated due to the washouts and the road closures, and 17 communities that declared states of emergency. So we have made a significant investment, and obviously working with the federal government on some of the costing, hopefully return back to the province under the financial aid.

 

Budget 2017, we are allocating $77.2 million to the Provincial Roads Program in a five-year program. I'll certainly get an opportunity to explain more of that later as well.

 

We're seeing positive results, partly by our early tendering which is something we are taking great pride in. We're getting more kilometres, 90 kilometres of more roads done last year with $5 million less. Of course part of that, there are a number of factors, pricing, the cost of asphalt per ton less. Also, one of the key factors is getting our tenders out early and getting very competitive bids. So that has attributed to us getting more work done.

 

Of course, part of what I'll talk about this morning as well will be our $3 billion infrastructure investment over the next five years. We also have a five-year marine plan in place; a $28 million investment over the next five years, frontloading about $8 million this year.

 

A couple of the other issues I just wanted to highlight is the fact that we have made significant – I guess we have achieved more than what we expected with our leasing. I had set a target of 40,000 square feet by the end of March and we surpassed that by 2,500 square feet. I have now set a target of 110,000 square feet which we will be very actively working on. We had a target of 70,000 and I've upped that to about 110,000.

 

I just wanted to highlight a few of those achievements and investments and direction, but I also would be remiss if I did not say a huge thank you to all the men and women who work within my department for their efforts day in and day out to provide a safe and reliable transportation network for the people of this province. Mr. Chair, it was never more evident of the tremendous work that our staff put into the pride in their work then it is during the winter season.

 

I know first-hand of some of the challenges, because my brother himself worked with Transportation and Works for many, many years, and I often heard many of the stories that he relayed to me of having to use the plows, as an operator, during the winter under very, very challenging circumstances. This winter past – hopefully it's past – we've had tremendous challenges.

 

The amount of snow we had this year has exceeded anything we've had in the most recent years, and our men and women have done a yeoman job of being out there in very adverse weather conditions and blizzard conditions often. I just wanted to make sure this morning that I recognized, before we get into the Estimates, the tremendous amount of work and support that we're getting from our employees.

 

So, Mr. Chair, thank you for the opportunity to have some of these opening remarks, and now I just pass it back to you.

 

CHAIR: Okay, thank you, Minister.

 

Before I open up for questions from the Government Services Committee, I'd just like to point out that when you go to your department for technical questions from staff, that there'd be ample time to announce them just for the Broadcast services so they can identify who the speaker is.

 

Okay, with that we'll go to the Government Services Committee. What we'll do is we'll go in 15 minutes opening, and then probably 10-minute increments. If there are any questions, I'm sure Mr. Petten has the floor.

 

So with that, I will open up to questions from the Government Services Committee.

 

MR. PETTEN: There's no one here from the Third Party to ask questions, it's just us. So are we going to – last year I know the same thing happened; we ran the clock until we finished the sections and then we voted on them. I'm just –

 

CHAIR: Yeah, well we have three hours. If it takes less than that then –

 

MR. PETTEN: No, I'm just saying instead of running the clock for each section, because it's going to be pretty well open-ended. We're not going back and forth.

 

CHAIR: Okay.

 

MR. PETTEN: Thank you very much.

 

If you don't mind, Minister, I would, just before I go down through the line-by-line, a couple of general questions. I may interlude in between off and on and ask questions pertaining probably to a bigger, as opposed to the line-by-line, some general questions as well.

 

MR. HAWKINS: Yes, that would be fine. I think, if we can, we'll try to keep them through to the steps we're going through but that would be fine if we can – because that way it will give me a better understanding of exactly where I am with the answers I have.

 

MR. PETTEN: No, no, we'll still go through that but there might be some general questions as we get to the sections.

 

MR. HAWKINS: Okay.

 

MR. PETTEN: The first question I need to ask, based on your comments just then, you say there are 23 fewer positions within the department this year. If that's the number, how many people are employed with the department now today?

 

MR. HAWKINS: As of today, this morning, 1,665.

 

MR. PETTEN: And that's 23 less from last year.

 

MR. HAWKINS: Yes, the exact number of people we have working as of this morning was 1,665.

 

MR. PETTEN: Do you know how many of those are what we consider the 13-weekers?

 

MR. HAWKINS: That –

 

MS. KING: Can we come back to it?

 

MR. PETTEN: Sure.

 

Out of those 23 positions eliminated, are the PCNs also gone?

 

MR. HAWKINS: I guess Mr. Petten, for some of these – when we're looking at these, we're going through – and I think I noted that by the end of the winter season we will have all of the positions that were impacted, it will all be taken care of within our restructuring and reorganization.

 

Tracy, is there anything else to add to that?

 

MS. KING: (Inaudible.)

 

MR. HAWKINS: We're working through that piece.

 

MR. PETTEN: Out of those 23 positions, where is the bulk of those positions from? Are they management level, front line?

 

MR. HAWKINS: It's not front line. As you know, we've done a restructuring within our management structure. So you will find these positions within the higher management level. We have done some changes within our directorship as well, as we reorganized, and as that filters out. So it will be more the management, superintendent level, the director level.

 

MR. PETTEN: Okay.

 

I guess we'll start off and do the line by line now. Some questions there.

 

CHAIR: Yes.

 

MR. HAWKINS: As we work through this, you will see some of the – as an answer to the question you put there. You will see as we work through these line-by-lines some of these positions, how they're impacted. The answer will come out through those questions in the questioning on the Estimates where we've made allocations with Salaries. You'll see it.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: As we work through, you'll see these filtering out.

 

MR. PETTEN: All right.

 

Just under 1.2.02, Salaries, it's $300,000 less.

 

MR. HAWKINS: One point …?

 

MR. PETTEN: Wait now, maybe I'm on the wrong page.

 

Sorry about that. My apologies, I got ahead of myself there now.

 

1.1.01, Minister's Office.

 

MR. HAWKINS: That's my office, yes.

 

MR. PETTEN: Your office, yeah.

 

In Salaries, there's an increase.

 

MR. HAWKINS: Yes.

 

You'll notice that within the salary variance there, in 2017-2018 from last year we're looking at a decrease. It's a $5,400 decrease due to changes in the funding levels of departmental salary allocation.

 

In 2016-2017 from the projected to the revised, the projected revised variance salaries; there was a $23,000 surplus that we were able to find there. That was partly because I opted to submit travel claims rather than accept the option of receiving a car allowance. So when we did our zero-based budgeting this year we took that into consideration. I'm not taking a car allowance. We've found a surplus in that, so we've made that change.

 

MR. PETTEN: All right.

 

The next section, General Administration, 1.2.01, Salaries again on that line is $113,000 less.

 

MR. HAWKINS: Yes.

 

Between the 2016-2017 revised variance salaries we found a savings of $23,000. Again, that was partly because we delayed recruitment of an ADM in a Transportation position, so there was a little bit of an overlap there. The $142,500 decrease that we projected for 2017-2018, again, is going to be – when we talked about the executive director positions and some of the step changes for the executive, we've made some changes there.

 

The salary there includes permanent salaries; one for the deputy minister. We have four under a new structure, four assistant deputy ministers. We have now a minister of Infrastructure, we'll have an Assistant Deputy Minister of Marine and Air Services and we'll have an Assistant Deputy Minister of Operations and Strategic and Corporate Services.

 

We have Operations, we have Strategic and Corporate Services, we have Marine Services and we have Infrastructure. We're going with four ADMs. And then we have two secretaries to the assistant deputy ministers and one director of Communications. That's all the salaries we have in that $1,025,100 category.

 

MR. PETTEN: Okay.

 

Move on to 1.2.02, Administrative Support.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Again under Salaries there, it's a drop of $319,000 from the revised.

 

MR. HAWKINS: Yeah, we had projected revised of $280,000 we found in surplus. That, again, is a result of the structural reorganization that we did. Under that, there were three positions that are now reporting to the director of Policy, Planning and Evaluation.

 

So you'll see that $280,000 surplus piece, if I'm correct, will come up in Policy – most of it will come in Policy and Strategic. We've just moved one out. It's a little bit of reorganization within that structure. A portion of the salary piece will be picked up in the Policy section.

 

MR. PETTEN: You say management structures. It's a broad statement, I guess, with a department the size of TW. It's a bit confusing when you just say the term, management structures. I mean, we see here there's a – you say it's going to show up somewhere else. It is $200,000 – what, $300,000.

 

MR. HAWKINS: Two hundred and eighty thousand dollars.

 

MR. PETTEN: Yeah. For this year's budget, though, we're down to $1.92 million as opposed to $1.412 million in the revised, right?

 

MR. HAWKINS: Yeah.

 

MR. PETTEN: That brings me to $319,000.

 

MR. HAWKINS: Yeah, you're correct – well, actually, there's a decrease in the 2017-2018 budget variations of, I think it's close to $600,000.

 

MR. PETTEN: Right.

 

MR. HAWKINS: That's a structural reorganization. What we've done is we have the addition in that section of an executive safety branch, HRS department. We moved two OHS positions and a director of Occupational Health and Safety since additional support will be provided by this branch.

 

The reductions are two OHS consultants, a safety manager and we have created an OHS consultant. That will result in a net effect decrease of $153,000, so we've done a bit of reorganization.

 

I just want to make it very, very clear, we're not removing OHS. That is still a very, very important part of our entire operations. We're just doing some reorganization in that, and to make sure that we're doing the exact same amount of work as we had previously done.

 

MR. PETTEN: In essence, there have been OHS positions, though, removed from the department and replaced with a consultant.

 

MR. HAWKINS: What we've done is we've reorganized them.

 

MS. KING: Through the Human Resource Secretariat, they've established a new Corporate Safety Division. Fewer services – I guess not fewer services, but services will be provided more corporately than on an individual department basis.

 

Where we would have formally had a director of OHS, now we have a manager of Corporate Safety, but the director is in the Human Resource Secretariat. That's just how the whole system corporately is being reorganized. We're trying to manage OHS more centrally with more, I guess, front-line involvement in departments. We still have a safety section with two OHS consultants, a Corporate Safety manager as well as the OHS folks in Marine and Air.

 

MR. PETTEN: Okay.

 

Under Employee Benefits, the next line down, it's less. What, in a nutshell, is included there? Is that severances?

 

MR. HAWKINS: Well, under the Employee Benefits, of course, that would include workers' compensation payments, the claim cost only, for about 1,700 departmental staff. TW does not pay workers' compensation premiums, but we do an extended earnings loss pension. There are some claim costs only and some salary costs for some injured casual workers.

 

Included also in those benefits is Corporate Safety. We have fees associated with the fire protection officer maintaining government-wide National Fire Protection Association membership as well. These are the costs that we include in our Employee Benefits section.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: Just in the variance, we do have an increase of $2,000 in there. That's a funding reallocation increase. These are related to fees for the fire protection officer and maintaining its accreditation for the National Fire Protection Association membership, basically.

 

MR. PETTEN: So what about severance? Where would that be found there?

 

MR. HAWKINS: If there was any severance, it would be coming up into the employee – it would be in the salary piece, not into the benefit.

 

I just might add we did see a surplus in our revised. If you notice, we did have a deficit, I'm sorry, of a $167,600 from last year when we did our revised. That's simply because our workers' compensation payments were higher than expected and that resulted in a deficit. So what we're trying to do for our budget going forward is to accommodate those premiums and, hopefully, we will be able to budget within.

 

In Transportation and Works, we pay about 75 per cent of the total workers' compensation payments for government, due to the size of the workforce that we have. So sometimes trying to accurately budget for those, it's somewhat of a challenge.

 

This year under the zero-based budgeting when we looked at the cost that we've incurred, then we've appropriately or we feel we've appropriately budgeted for that workers' compensation piece going forward.

 

MR. PETTEN: So I guess to be clear, and this will help through probably the rest of the sections, severance is included in salary lines in all areas. With the elimination or those OHS positions are no longer in the department, why would the salary figure be less if severance is included in that salary line? You would anticipate it would be more, wouldn't you?

 

MR. HAWKINS: In this section here, my understanding is that there is no severance paid out for this particular area there. Am I correct on that?

 

OFFICIAL: That's correct.

 

MR. HAWKINS: There will be no severance paid out.

 

MR. PETTEN: Okay.

 

I don't want to belabour this one much longer, but I want to be totally clear. The severance from these OHS positions that were removed where would that have been paid out from? Obviously, they were entitled to severance.

 

MR. HAWKINS: There would be no severance paid out. My understanding is they were not necessarily laid off; they were absorbed within government, right?

 

OFFICIAL: They went back to their permanent jobs.

 

MR. HAWKINS: They went back to their permanent jobs. So it's not like we would be paying out a severance for these.

 

MR. PETTEN: They were on temporary assignments, basically.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Okay.

 

Transportation and Communications in this area – and I realize the safety, OHS is training and whatnot. In the past, I know that's what they did. But with less physical bodies doing it now – I mean this figure is still $20,000 more than what the revised amount was.

 

MR. HAWKINS: Yes. We realized within 2016-2017, if you notice, we did incur a surplus. Projected expenditures were slightly lower than in previous years. Of course, what we did, we eliminated – there was a floater cellphone and the elimination of some of the landlines that we had, due to reduced staffing.

 

So what we've done is reallocated. If you look, and the answer to the question going forward in 2017-2018, which is slightly up, is that we're doing a reallocation increase within a department's existing operational budget of $8,800 in Transportation and Communications funding for 2017-2018, which relates to the implantation of new corporate safety initiatives that will require OH consultants to conduct visits in Eastern, Western, and Labrador, fire inspections, fire inspector, fire protection officer, travel for management.

 

So again this is just another example of where we used our zero-based budgeting, and realizing the pressures that we would have within trying to realign some of the way in which we're doing the work. So then from the zero base we built that budget. We feel that with the amount of work and the OHS work that's needed, the increase will reflect adequately to get all that work done, particularly in the Eastern, Western, and Labrador regions when we incur more costs.

 

MR. PETTEN: Under Purchased Services, what's included in this? Again, that figure has increased by some $34,000 this year.

 

MR. HAWKINS: Yes. Under the Purchased Services we have funding – a lot of it is document storage, shredding, printing costs at the Queen's Printer and photocopying costs. I think we have 13 photocopiers; included also in that are the ergonomic assessments that we do for employees that request that.

 

And included in that as well are our public relations. This is where you'll find the Snow Means Slow and our campaign that we run during the winter, so that cost would come out of that Purchased Services, in that area. That's an ongoing program that we feel is very, very important for us because, as you know, getting the message out when in fact winter conditions warrant us driving according to conditions. So that's an area that we've invested a fair amount of money to get that program out there.

 

MR. PETTEN: Okay.

 

The revenue piece there, where would the revenue be generated under?

 

MR. HAWKINS: I'm not so sure. I hope I can explain this one. Revenue in these areas – we have delivery invoicing for salt and all that sort of thing, and sometimes there are penalties that are incurred when there's late salt delivery. These include payments, it could be from Crown corporations, forfeited security bids that we have – Tracy is there anything else that would fit into that revenue?

 

OFFICIAL: (Inaudible.)

 

MR. HAWKINS: The payments from Crown corporations related to reimbursement of travel and, of course, some salary costs incurred in the infrastructure projects, so we have a bit of flexibility there on that revenue.

 

MR. PETTEN: Because there's a substantial difference of $300,000 from the revised amount in 2016.

 

MR. HAWKINS: Yes, actually there was a surplus there, and it's an increase because any time there's a differential in revenue that means a positive move. So we had, last year in 2016-2017, come in at higher-than-anticipated revenues. Again, that was related to some of the – we had a fair number of late salt delivery penalties and there were some forwarded security bids.

 

MR. PETTEN: Under 1.2.03, the next section, Strategic and Support Services, the salary figures. There seems to be a lot of fluctuation from your budgeted, to revised, to 2017 Estimates.

 

MR. HAWKINS: Yeah. That has to do with the reorganization within Corporate Services. Information management positions have been moved from the financial services division to Strategic and Support Services and so we've had to pick up those costs.

 

Funding has also been reallocated as part of the salary planning process in 2017-2018 to fund an additional ATIPP position. We've had an additional position that was created to respond to departmental correspondence on a timely basis.

 

As you know as a former EA in this department, we do get an exorbitant amount of correspondence that comes in. Certainly, we try to address this correspondence in a timely manner. So we felt it was important for us to have a position that would respond to that as quickly as possible. That's where you'll find an increase there. Again, we included that into that particular salary structure and built it from our zero base as well.

 

As you've questioned me at the beginning when we talked about the positions changing – and I said as we go through the Estimates – throughout we'll get the reorganization piece. This is another example where we've had some reductions.

 

We changed the director of Policy position within that. Then, within the new management structure that we created, instead of the director of Policy position we have director of strategic and support services, we just categorized and changed the name. Then we have a manager of Corporate Safety and we have a manager of information management. Of course changing that organizational structure from what we previously had to what we have now, gave us a net increase of roughly about $187,000 into that particular category.

 

MR. PETTEN: Okay.

 

I see Grants and Subsidies there, a straight line across the board. What would Grants and Subsidies be?

 

MR. HAWKINS: Okay.

 

In the Grants and Subsidies there, Mr. Petten, that would include our TAC membership fee for 2016-2017. It would also include membership in the rural road association.

 

This is a good one, I'm sure we'll all get a chuckle out of this but it's important: Best Practices for Pothole Repairs in Canada. We are engaged in a research project with the Transportation Association of Canada to look at ways and best practices for pothole repairs. That would be included in that. We would give that as a grant to TAC.

 

MR. PETTEN: Thank you.

 

You might want to look for a refund on that.

 

MR. HAWKINS: If we don't get better results, right.

 

MR. PETTEN: I'll move on now to 1.2.04, Mail Services. I just have a couple there I want to get into in this section; again, the salary line.

 

MR. HAWKINS: Okay.

 

Again, within the Mail Services division we also did some reorganization in the management structure. There's a reduction of the manager of Mail Services. This now has been incorporated into and managed by Tendering and Contracts.

 

You would see by eliminating that position there are unfunded severance payments. Included in that $26,700 you see a variance from 2016-2017. That variance is due to the severance payout that we had. So now by incorporating the manager of Mail Services into the manager of Tendering and Contracts under our new structure, we're looking at a savings, in salary, of about $68,000.

 

MR. PETTEN: It's a position taken out of Mail Services and put over in Tendering, is that why the decrease in Salaries?

 

MR. HAWKINS: Well, we have removed the position of manager of Mail Services. The manager of Tendering and Contracts will now do that work. Am I correct on that?

 

MR. PETTEN: So there was a position removed from the mailroom.

 

MR. HAWKINS: Correct. 

 

That would be one of the positions that we eliminated. Yeah, it was eliminated.

 

MR. PETTEN: Okay.

 

Down under 1.2.05, Property, Furnishings and Equipment, it looks like just $10,000 was budgeted last year. There was nothing –

 

MR. HAWKINS: No, that's associated purchasing of tangible capital assets. Actually, when we went through the zero-based budget, because there wasn't a whole lot of activity into that particular line and that particular support, we were actually going to – and made a recommendation that we would have that eliminated.

 

However, on advice from Finance we're keeping $100 in there to keep the account open in case. It gives us some flexibility throughout the year. So that would have, in all intents and purposes, not shown up here other than the fact that we want to keep the account open. That's a standard figure that we put in there. That's where that $100 is coming from.

 

MR. PETTEN: The next section, 2.1 –

 

MR. HAWKINS: We've now finished –

 

MR. PETTEN: Section one.

 

MR. HAWKINS: How do we do that? Do we want to vote on the one?

 

CHAIR: No, we'll vote at the end.

 

MR. HAWKINS: At the end of all of it?

 

CHAIR: Yeah.

 

No, we're going to vote on the whole package after we've gone through all three sections.

 

MR. HAWKINS: Okay.

 

CHAIR: Yes.

 

So carry on.

 

MR. PETTEN: Carry on.

 

Thank you.

 

Under Road Maintenance, 2.1.01, again I'll go to Salaries on that one as well.

 

MR. HAWKINS: Yeah and you'll find in that one too – because that would certainly have incurred some of our restructuring and there will be some severance payouts involved in that – the $468,600 is a decrease due to salary plan adjustments completed through our zero-based budgeting process due to the changes in the funding levels in the departmental salary budget allocation. We will find a funding reduction of $84,000 related to two clerical employees, and there was a 3 per cent vacancy factor. Also, there was a reallocation of a clerk typist III position from this activity within this budget line to financial operations.

 

I guess further to that, the department has recently developed an overtime management policy that we're trying to implement to design and ensure that overtime is only worked when absolutely required for emergency situations and there may be occupational health and safety issues that come up. So we're trying to get a handle on that.

 

In this particular area as well, in the salary, it was impacted by changes in management structure. Again, as I said, we will find throughout some of these changes – so I just wanted to make sure you are aware of these changes. We had a reduction in this one of three district managers. We had a reduction of a regional administrator's position for part of the year, a regional director for part of the year, and what we've done is created a director of continuous improvement. We've created a director of road operations. We're creating a director of roads Trans-Labrador Highway. So we're going to find a net, in fact, decrease of $158,300.

 

Within this, there are not some true vacancies in there. There's about $300K that we're working through on the zero-based budget.

 

MR. PETTEN: So in this line, from your revised amount, we're down to almost $800,000. So you're saying that there's a regional administrator, regional director, a couple of your district managers –

 

MR. HAWKINS: Yes –

 

MR. PETTEN: How many positions in total, I guess, and where would they be from?

 

MR. HAWKINS: Okay.

 

Well, the three district managers and the reduction of a regional administrator, a regional director, and we've replaced them – Tracy, what's the net on that?

 

MS. KING: So the net decrease is $158,300.

 

MR. HAWKINS: $158,300 on the realignment of those positions.

 

MS. KING: And then the vacancy factors (inaudible).

 

MR. HAWKINS: Yes. So we did not fill any vacancies.

 

MR. PETTEN: But it is $794,000, so that obviously, under Salaries, would be positions. How many positions are included in that?

 

MR. HAWKINS: Well, there would have been so many vacant positions that we're now taking out under the zero-based budgeting, right?

 

MS. KING: Right, and we're also (inaudible).

 

MR. HAWKINS: Right, yes.

 

MS. KING: So as part of this, the department is carrying a 3 per cent vacancy factor in anticipation of what we know is regular employee turnover. We're budgeting that we're going to have that vacancy factor of 3 per cent here in this line this year.

 

That, coupled with the changes made in the change in the management structure, as well as the clerical positions that are moving to other areas of the department, brings you to the $468,000 decrease in the budget for this year.

 

MR. PETTEN: So where are those district managers – what areas were they responsible for?

 

MS. KING: I'm going to defer to Joe on the locations.

 

MR. DUNFORD: The district managers we have are directors. Our current director structure is we have one for the Avalon, Eastern, Central, Western and Labrador, and we have one for a director of design as well. So we're going to a director of roads, a director of operations, director of equipment and a director of continuous improvement, as well as one for Labrador. Some of these show up here, yes.

 

MR. PETTEN: There'd be two director positions as a result of those changes – two less director positions?

 

MR. DUNFORD: Yes, that's correct.

 

MR. PETTEN: So you say regional administrator that was for the Avalon Region? Is there any way we could get a list of the new structure and to show –

 

MR. HAWKINS: Not a problem.

 

MR. PETTEN: Make it clearer.

 

MR. HAWKINS: Yes, absolutely.

 

When you're trying to get it off of this thing, unless you have your flowchart thing, it is difficult to really visualize how the whole structure is working. It is a challenge for all of us, just reading off of that. But when you see the chart, it becomes a little clearer and we can do that.

 

MR. PETTEN: Yes (inaudible).

 

MR. HAWKINS: Not a problem.

 

MR. PETTEN: Under your Transportation and Communications, I notice from your budgeted 2016-2017 to this year there's a $216,000 increase.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: What would be the –?

 

MR. HAWKINS: Okay. The increase is due to – and I'm not a technical person, so I'll refer that to my expertise in this area. We do have a number of turbo hubs in areas where broadband service is not readily available, and we cover both the highway depots and ferry vessels.

 

There's a funding reallocation from the Building Maintenance for some of these licensing fees. So as part of the zero-based budget again, trying to build everything from a zero base, we found that there was a structural deficit issue in this particular line item. What we've done is we've reallocated some funding to rightsize the budget to keep it in line. I don't know if you'd need an explanation on that turbo hub, but that's basically what the increase is.

 

MR. PETTEN: Okay.

 

I know Grants and Subsidies are pretty prevalent throughout, but what would grants be under the Road Maintenance? What would be included in that?

 

MR. HAWKINS: Okay. If you look – just a second on that one there, the Grants. We have a number of small communities, Franηois, examples, Grey River, McCallum, Southeast Bight, where we give small grants to these communities to do some road maintenance throughout the summer. So it's pretty much one-offs. These are pretty much communities that – and including of course, as well, Williams Harbour, and we do give small grants. We take it out of that $40,000. It's nothing very big of a grant, but at least it's something they can do some work in during the summer.

 

MR. PETTEN: Okay.

 

We'll go to Road Maintenance now, 2.1.03.

 

MR. HAWKINS: 2.1 –

 

MR. PETTEN: Next section, yes, under Operations.

 

MR. HAWKINS: Okay, so we're skipping the Sign Shop?

 

MR. PETTEN: The Sign Shop's pretty straightforward there, yes. It seems pretty –

 

MR. HAWKINS: Yes, okay. So 2.1.03?

 

MR. PETTEN: Yes, Maintenance and Repairs, Salaries again.

 

MR. HAWKINS: Okay.

 

First of all, in 2016-2017 we realized a surplus of slightly over $400,000. Of course, that was in summer road maintenance. That was due to a delayed recruitment of some vacant positions that we had. We incurred a surplus in that area.

 

For 2017-2018, again, the salary will reflect some of the management – the planned attrition. We are looking at reductions of six operator positions for part of the year. When we look at that within the department, there is going to be a net reduction close to about $200,000 with regard to that, changes in structure there, salary.

 

MR. PETTEN: The six operators; are they –

 

MR. HAWKINS: Did I say operators? Operator supervisors, I'm sorry.

 

MR. PETTEN: Operator Supervisors? Is that what we used to refer to as MEPS?

 

MR. HAWKINS: Not the MEPS, it's the OPS.

 

MR. PETTEN: The OPS, yeah.

 

Under Supplies, I guess a question. It's not a whole – well, it's a half a million dollar variance. That's enough, I suppose. Why is that increased this year?

 

MR. HAWKINS: In the Supplies?

 

MR. PETTEN: Yes.

 

MR. HAWKINS: That's an area that we built that one. We had some reallocation of funds and we tried to build that from a zero-based budget again. In order to reflect what we felt would be inadequate budget for that line item we put the increase in there.

 

You will find that throughout sometimes when we look at the zero-based. When we look at zero-based we would hope that for the majority of line items you'd see a decrease. But there is some that if you were having a true zero-based budgeting practice and exercise, you have to make adjustments to what we expect.

 

We found in 2016-2017 that we did find a slight surplus. That was mostly attributed to last summer of not some of the various types of construction supplies such as the asphalt, pipe, gravel, paint. We didn't incur the same level of costing, but felt this year when we did our zero-based budgeting that we would certainly look at adjusting to make sure we did have an adequate amount of money into that budget to do that work during the summer.

 

MR. PETTEN: Under Purchased Services there's a decrease this year.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: What would that be attributed to? I know it was an increase from last year with the revised.

 

MR. HAWKINS: There was, if I can read this correctly – Purchased Services, we had an increase in cost. We went from $4.8 million to $5.3 million. That was increased requirements for machinery and for rentals to supplement our own equipment.

 

Of course, sometimes we're in these situations that we have to look for rentals. This is an area that certainly incurred costs there. I'm just flipping back for a moment on that because I'm trying to remember something that when I looked at this item I had a question on it myself.

 

That was the piece that I was trying to remember exactly if that would fall into that. That would be the Thanksgiving rainstorm the Thanksgiving weekend and what we did with the communities that were cut off. We just did not have adequate equipment to make sure these communities were back with all the breaches that we had.

 

We made a very, very quick decision. We thought it was important to have these communities connected as quickly as possible. We used every available piece of equipment that we had and we rented other equipment to make sure that work was done. That's why you'll see that differential there.

 

Hopefully, once all the invoices have been done for that Thanksgiving weekend, we hopefully will be able to get some of the federal funding under the financial aid.

 

MR. PETTEN: Okay.

 

The revenue line in Road Maintenance: where does that come from?

 

MR. HAWKINS: Okay, that's a good question.

 

Within that revenue line you'll find that these will come from the access fees. Sometimes if we incur costs and replacement costs of guide rails in line with previous fiscal year, some of the revenue we would get from that as well, if there are accidents on the highway and guide rails have to be replaced, we would get revenue from there.

 

But, certainly, highway access fees; I know, Mr. Petten, you've brought them up. That would be included in one of the fee increases that occurred in the budget. That's reflected in that revenue item.

 

MR. PETTEN: I don't think you've collected a lot on highway access yet though.

 

MR. HAWKINS: What's that?

 

MR. PETTEN: I don't think that figure is influenced much by the fees you've collected for highway access.

 

MR. HAWKINS: Not really, but that's where we're capturing it. We'll see how that goes.

 

MR. PETTEN: The next section, 2.1.04, my favourite subject: Snow and Ice Control.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: That one, Salaries seems to, for the better part across the board, have limited fluctuation. There's been some. What changes have occurred there? There is a decrease.

 

MR. HAWKINS: In Salaries there's an increase.

 

MR. PETTEN: Yeah, it's not big, but there is a decrease.

 

MR. HAWKINS: Yes, there is an increase; it costs us more.

 

The $174,000 is mainly attributed to unfunded severance costs that we had. You would find that as a cost, a salary cost associated with winter maintenance, the winter road maintenance program. They fluctuate based on the severity of the winter. Of course, this winter we probably had quadruple the amount of snow than in previous years, so it's been sort of a pressure area for us.

 

Having said that, I must say that we have done an extremely, extremely great job in keeping our cost within budget as much as possible.

 

MR. PETTEN: Transportation and Communications; I know last year it was budgeted at $156,000, it almost doubled in the revised, and now this year it's still $106,000 more than the original budget for last year. What's the –?

 

MR. HAWKINS: Okay. In the projected there we had, there was $131,400 that was over the – again, it's one of those areas that if, in fact, you do have worst weather conditions or whatever, it's covering off the travel requirements for staff that are involved in the winter maintenance activities.

 

Any time you do incur conditions that are more severe in one year compared to another year, you're going to run into these areas. What we've done in projecting out to 2017-2018, we've certainly realized the structural deficit we incurred last year. Again, going back to a zero-based budget and trying to reflect what the true costs are going to be, it was necessary for us to make an adjustment to address that structural deficit we were finding in that particular line items. So we're just addressing the shortfall we've had in that area.

 

MR. PETTEN: Okay. Just a follow-up on the Salaries there – it slipped my mind. You say it was severance, so were those positions eliminated or were they as a result of retirements?

 

MR. HAWKINS: To the salary deficit piece there? Of course we incurred more in Salaries than we had. So there is a deficit that's attributed to some unfunded severance costs, and that is because of some of the reallocation of salary resources.

 

So I don't know – Tracy, can we see if we can get a true explanation on that?

 

MS. KING: This is just unfunded severance as employees leave, turnover, retire. There's no change to the management structure or anything in here. It's just severance as people leave.

 

MR. PETTEN: Were those positions – were they retirements or were they elimination of positions?

 

MS. KING: There are no eliminations here. So it would just be the regular retirements or people leaving for any other reason.

 

MR. PETTEN: Okay.

 

Under Supplies, a two-part question, what's included and why the increase? From your revised, I'm going by.

 

MR. HAWKINS: Yes. The projected revised variance in Supplies, we had a surplus of $529,000. That's pretty much – and I will be anxious to see what the reflection is going to be after this winter. What happened in 2016-17, we had a fairly significant salt inventory that we had, so we didn't have to incur costs on that. Certainly, the surplus of salt and the conditions in 2015-2016 during the winter were not as severe. So that reflected in a $529,000 surplus.

 

Going forward in 2017-2018, we've done a reallocation of funds to rightsize that budget. So we made some adjustments there. That's the variance from 2016-2017.

 

MR. PETTEN: Okay.

 

Under Purchased Services, it went from $8.7 million to $10.3 million and now to $9.7 million. Why the fluctuation?

 

MR. HAWKINS: Again, as I mentioned with some of the rentals before, the $1.5 million over budget and the revised, that's attributed to the Thanksgiving storm we had. It's very difficult to budget for these items, and when they happen we have to react. In reacting to that you incur extra costs because you don't have the resources to adequately deal with these emergency situations. So that would certainly be reflected in that revised Purchased Services there.

 

MR. PETTEN: Okay.

 

Revenue is $800,000 more this year.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: What is included in that?

 

MR. HAWKINS: Okay. Again, that's reflected in change in last year's budget when we – historically, we were providing snow clearing in communities for roughly around $5,000 a kilometre, and last year there were 72 communities that were impacted by that. We really want to try to get out of providing that type of service as much as possible. So we encouraged communities to do their own tendering and looking more at from a regional approach, looking at opportunities where they could contract.

 

There were a number of communities that came in and the contracts were not realistic. The tenders came back not realistic. So we continued to provide services to these communities that could not find adequate snow clearing. We increased the rate – as you know, Mr. Petten – in last year's budget from $5,000 to $6,600 per kilometre, plus HST. So that's where you'd find that showing up in revenue from municipalities with snow clearing.

 

MR. PETTEN: Okay.

 

Your total lines, the total Snow and Ice Control this year is $53.5 million. The revised amount for last year was $53.75 million. So with the elimination of the 24-hour snow clearing model, the pilot project where you're going to refer to it, you stated it would be $1.9 million savings.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: So this doesn't reflect it here. I'm looking at $200,000 savings.

 

MR. HAWKINS: Yes. I just wanted to take a minute to talk about our nighttime snow clearing. As you know, you and I have had this debate back and forth. I'm not so sure the right terminology was used when we say eliminate, because actually what we were doing, we were eliminating the model that your previous administration had in and we changed it to the model that we had in providing services. So to the end of March, March 31, we've incurred costs for that nighttime snow clearing at $770,000.

 

OFFICIAL: Seven hundred and seventy-eight.

 

MR. HAWKINS: So $778,000. Last year, if the line items were to reflect all of that, under the previous 24-hour snow clearing that your administration had, we would incurred a cost of $1.9 million. Under the model we had this year, we incurred a cost of $778,000. With the amount of snow that we had this year compared to previous years, we were out quite often. As a matter of fact, I might even have some – if I can break it down, and I can certainly provide you with that information as well.

 

From a department perspective, looking at the 2015-2016 cost just using the HMEO labour, for example, would have been $294,000, and we incurred a cost of $84,000. Materials, even though we had more snow and we were out a significant amount of time, we went from $740,000 to $385,000. So the end result was we provided that service and it came in at $778,000.

 

Again, we can all sit back and analyze what exactly the 24-hour snow clearing services provided. When we did our analysis last year and went through the numbers and using the trigger targets that we had – as you know we put in trigger targets – in the previous year prior to our model of nighttime snow clearing using the triggers that we had, they would have been required to be out 11 per cent of the time. In other words, 89 per cent would not have been required to be out. So that's a fairly significant analysis that we use.

 

This year, I don't have the percentages when we were out. But we were out quite often when the triggers warranted it, and that's the service we provided. So when we look at the entire –as we work through the budget piece in different sections, it cost us $778,000.

 

MR. PETTEN: So you're saying as opposed to $1.9 million?

 

MR. HAWKINS: Correct.

 

MR. PETTEN: You can provide some breakdown of that to me?

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Mr. Chair, if we could have a five-minute break for the washroom.

 

CHAIR: Okay.

 

We'll carry on with section 2.2.01 when we come back, and we'll take a short break.

 

Recess

 

CHAIR: Okay, we're going to reconvene.

 

I'd like to welcome the Member for Mount Pearl – Southlands.

 

With that, we'll carry on. I think it is section 2.2.01.

 

MR. HAWKINS: Mr. Chair, before we do, the Member opposite asked a question earlier with regard to 13-week employees that we had. We do have that information.

 

Just for the record, we have 49 13-week positions. That's 49 out of our 1,665. I just wanted to get that to the record.

 

MR. PETTEN: Thank you very much. 

 

There's a lot we have to get through.

 

MR. HAWKINS: A lot yet.

 

MR. PETTEN: I have some other stuff, so I guess I'll try to fast track some of this stuff but not miss my main points.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Under 2.2.01, Salaries, the short question is: What positions were eliminated?

 

MR. HAWKINS: Restructuring and that under the Building Maintenance; we had changes in management structure. Reductions: the regional director part time, regional director of security, regional director, building manager, area manager, district engineer, area manager and a building manager. These are the positions that were collapsed.

 

From that we did a director of building operations and a manager of security. So it's going from a director of security to a manager of security which will be a lower salary position. There was an effective net decrease of $437,000 that was attributed to the changing in departmental priorities and management structure that we undertook in that section.

 

MR. PETTEN: Okay.

 

Under Building Utilities and Maintenance, 2.2.02, what positions would have been eliminated under the Salaries line there?

 

MR. HAWKINS: In that we had a surplus in our 2016-2017. That was due to vacancies and delayed recruitment of positions. We have projected out into 2017-'18 – actually it's a reduction of $400,000, a decrease of $261,000 in our budget process. That's to accommodate the zero-based budgeting. We're looking at reducing some earnings by somewhere around $250,000, in that area, and part of that is going to be to look at overtime structure.

 

What we've done, we've done a zero-based budget based on what we feel adequately addresses the salaries for the buildings, utilities and maintenance.

 

MR. PETTEN: Under revenue in that section, why such a spike on your revised amounts? From $1.3 million to $7.3 million and now it's back to $1.3 million. It's $6 million. Where does that $6 million coming from?

 

MR. HAWKINS: Well, in that section it is revenue that's from the rental of government buildings. We also divested of a steam heat to Eastern Health, I think. We sold that to Eastern Health.

 

Included in some of that would be parking meter revenue and some others, like within the cafeterias and Confederation Building. The revenue also would include the projected increase – $6 million, is the anticipated receipt of utility rebate from government-owned buildings.

 

As you know, last year we had the rebate from the Rate Stabilization Plan. So the rebates were made effective and most residential received theirs during February month or whatever. We're anticipating that there's going to roughly be about $6 million that we will be able to get from that utility rebate.

 

Also including that is the sale of the Hoyles-Escasoni Complex that would contribute to the revenue in that section.

 

MR. PETTEN: Okay, 2.2.03.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: A general question there now and then I'll ask a couple of others. Under Purchased Services, I'm just trying to figure out is that the leasing costs?

 

MR. HAWKINS: Yes, and some of that incurred, some of the cost. If you notice, when we did a variance in 2016-2017, it cost us extra money. That deficit that we incurred is mainly renting heated space in Gander for our water bombers. These are some of the rental costs that would be incurred under this line item, would go for the hangar space in Gander.

 

MR. PETTEN: Okay.

 

Is any amount included in this for the new space for the Crown Lands offices going to Corner Brook? Is that showing up here or is that going to be …?

 

MR. HAWKINS: Not to my knowledge, not in this.

 

MR. PETTEN: That will be in addition.

 

MR. HAWKINS: Not in this item.

 

MR. PETTEN: That will be additional, go forward?

 

MR. GRANDY: Just for clarity, Mr. Petten, the money that's in our line item for rentals would only be for TW space. Anything for the Crown Lands office would be in that department. All departments budget for their own leased space in their own departments.

 

MR. PETTEN: Okay, so this figure here is just for Transportation and Works space only.

 

Under the next section, 2.2.04, I just have a quick question there. The dollar figures haven't really changed. What's been done? Is there any new construction planned?

 

MR. HAWKINS: Yes.

 

Actually, as you know – and you would be aware of this – there were a number of areas identified in previous years with storage of our salt and some of our salt storage sheds, so we've been putting in trying to catch up as much as we can.

 

In 2014-2015, there was actually about $2.4 million that was allocated. We did structures in Hampden, Tors Cove and Goobies. In 2015-2016, we spent $1.4 million in Avondale and Stephenville. In 2016-2017, we again had allocated $1.4 million and we did work in Boat Harbour and New World Island. So in our budget for 2017-2018, again, we've put $1.4 million and we will be addressing two other areas in the province on that.

 

MR. PETTEN: Before I move away from this Building Maintenance, Operations and Accommodations, I know you're trying to decrease your blueprint for leased space. Like I say, this figure here that we're going to have, it will be reflected through all the other relevant departments that have leased space.

 

MR. HAWKINS: Correct.

 

MR. PETTEN: Those reductions will be seen across their line items.

 

MR. HAWKINS: They should be.

 

MR. PETTEN: Okay. I hope so.

 

MR. HAWKINS: I hope so. If not, they're not doing their zero-based budgeting.

 

MR. PETTEN: Okay.

 

The next section, 2.3.01, Equipment Maintenance – I just want to go back to one other question on Building Maintenance, Operations and Accommodations in 2.2.03. Acid sales, where would they be reflected to?

 

MR. HAWKINS: Sorry, 2.2.03.

 

MR. PETTEN: The last section we just had.

 

MR. HAWKINS: Are we getting the same number, 2.2.03?

 

MR. PETTEN: 2.2.03, the last section under Building Maintenance, Operations and Accommodations.

 

OFFICIAL: So it's in 3.3.01 because he's asking where the sales are.

 

MR. HAWKINS: All right. We will have 3.3.01, that's where you'll find that.

 

MR. PETTEN: Sorry, okay.

 

Under Equipment Maintenance –

 

MR. HAWKINS: Okay, 2.3.02.

 

MR. PETTEN: 2.3.01.

 

MR. HAWKINS: All right, 01.

 

MR. PETTEN: One quick question on that is I noticed that your Purchased Services has doubled.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Nearly doubled from the budgeted amount from last year.

 

MR. HAWKINS: Yes.

 

Okay. We had projected in 2016-2017 for $681,000, and we went to $1.1 million. That deficit was due to an overall increase in auto insurance premiums for government. The department absorbed the funding from other areas of the department. So that's where that is reflected.

 

What we've done, again in looking at the zero-based budgeting and trying to reflect an accurate amount going forward, we've reallocated all of that within this particular account from other areas of the department. Now we're reflecting that auto insurance premiums from government into this particular line item. So you'll see that variance there.

 

MR. PETTEN: Under Maintenance of Equipment, Salaries –

 

MR. HAWKINS: 2.3.02 now are we?

 

MR. PETTEN: Sorry. Yes, 2.3.02.

 

MR. HAWKINS: Okay.

 

MR. PETTEN: Under Salaries, what positions were eliminated here?

 

MR. HAWKINS: Okay. None, as far as I know. If you looked at, we did have a funding surplus due to a vacancy factor in this particular area. This is a pressure area for us. Again, I think I've probably mentioned it a couple of times in interviews I did during the winter.

 

This has to do with heavy equipment technicians and welders, particularly on the Avalon Peninsula. We find there's greater competition for these positions, and it is a challenge for us in trying to make sure that we do have an adequate number of heavy equipment technicians and welders in place. As I said, it is more from a competition, competitive environment that we find on the Avalon Peninsula versus the other areas of the province.

 

We do have in this area some challenges in adequately making sure we have these positions filled. So from time to time we will have vacancies in this area. That would be I think the best answer I can give to that question. Having said that, we do have these positions filled not to full capacity, but it doesn't cause us any real hardship. Again, it doesn't seem like we're ever to full capacity, and sometimes we go through the training process and hire and then suddenly again from that competitive nature we find they move on to other positions.

 

MR. PETTEN: Okay.

 

Under Equipment Acquisitions, 2.3.03 –

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Was there not a purchase in the last fiscal year of asphalt (inaudible)?

 

MR. HAWKINS: The recyclers?

 

MR. PETTEN: Recyclers, yes.

 

MR. HAWKINS: To my knowledge, that would have been done before last year – recyclers.

 

MR. DUNFORD: To my understanding, that would have been the year before the previous fiscal, yes.

 

MR. PETTEN: So we have them in our possession?

 

MR. DUNFORD: Yes.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: I think last year we did have equipment acquisitions. I think, if I remember correctly, we had five new snowplows, and then we had roughly about $249,000 that would have been included in light vehicles that we had. So that's the acquisitions we made in the last fiscal year.

 

MR. PETTEN: Okay.

 

I'm going to go to 3.1.02.

 

MR. HAWKINS: 3.1.02.

 

MR. PETTEN: Under Purchased Services, there's $600,000 less this year from budgeted but budget revised turned out to be almost $1 million less, and now it's back up to $400,000 and change, I guess $500,000 and change. What's the –

 

MR. HAWKINS: Again, within that particular line item, we are picking up the cost of insurance premiums, and the premiums range between $1.5 million and $1.8 million. There are, additionally, a number of – dollar value of deductible claims that is demand driven, depending on the number of incidents that occur. What we've done, we've moved, within the departments, total allocation for insurance costs through our zero-based budgeting and properly trying to identify what line items should pick this up. We have now put that into the Purchased Services line item for the infrastructure piece.

 

MR. PETTEN: Okay.

 

Now I want to go to 3.2.03, Improvements – Provincial Roads, that's page 7.12 in my book.

 

MR. HAWKINS: Okay, .03. All right.

 

MR. PETTEN: Under Salaries, we have a fairly substantial increase.

 

MR. HAWKINS: Okay. Again, as you know, we're doing a fair amount of roadwork, provincial roads program in 2017-2018. It's based on the projected amount of work that we're hopefully getting done. We're going to anticipate salary cost that would be associated with the provincial roads in 2017-2018. We're very optimistic that we're actually going to see a significant amount of work that will be done this summer.

 

MR. PETTEN: So in this section that's our roads program, our $70-some-odd million.

 

MR. HAWKINS: No. Included in this would be our provincial roads, right? Not the $77.2 million.

 

OFFICIAL: (Inaudible.)

 

MR. HAWKINS: Just for your reference – they do a lot of good work here for me – the provincial roads capital $29.1 million is reflected in 3.2.09; the $25.1 million provincial roads current is found in 3.2.03; the new Building Canada current – because we have current and capital – $10.1 million is found in 3.2.06; and the new Building Canada capital, the $12.9 million, is found in 3.2.12. So all of the $77.2 million will be reflected in those sections.

 

MR. PETTEN: Okay.

 

I'm familiar with this one actually anyway. Transportation provides engineering services to the provincial roads program, right?

 

MR. HAWKINS: Yes.

 

MR. PETTEN: It's in-house engineering that's done on all our contracts, right?

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Okay.

 

So under Purchased Services, I see a $10 million increase. It's this extra asphalt?

 

MR. HAWKINS: Well, actually, it includes a $5.3 million carryover. I don't know how much time I have to talk on that because that's heartburn for me. And it has always been heartburn, I am sure, for everybody in every government that's been in is these carryovers from one year to the next.

 

Last year, I was facing an $18 million carryover and that was one of the first things I put out there. I didn't want those carryovers, so we reduced it to $5.3 million. Hopefully, with our early tenders, getting our roadwork done and a message to industry that carryovers going forward are something we're not going to be very happy about. So included in that $9.7 million would be – if I'm correct – roughly about a $5 million or $5.3 million carryover.

 

We want to, in future years, eliminate carryovers. We want the work done in the year in which hopefully it's going to be done. So that would be part of that $9.7 million.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: We also include in that – I think we usually do a carryover of $2 million in brush cutting, so we are including that as well.

 

MR. PETTEN: Minister, if I may – I'm going to include a lot here now actually – 3.2.04 –

 

MR. HAWKINS: 3.2.04.

 

MR. PETTEN: – which is all of our infrastructure basically. I'm going to ask you a broad question now because the way this is presented in the book is kind of hard to follow –

 

MR. HAWKINS: Okay.

 

MR. PETTEN: To 3.2.10, so all this infrastructure, we got the Strategic Infrastructure Fund, the new Building Canada Fund, the Canada/Newfoundland and Labrador Infrastructure Framework Agreement.

 

I guess the generalized question is it looks to be some of these are discontinued. We're into a new funding arrangement. I'm sure this is federal infrastructure money too. I guess the Coles Notes explanation would probably be more beneficial. The Canada/Newfoundland and Labrador Infrastructure Framework, 3.2.05, is that expired? Because it looks, from the numbers, it would be.

 

MR. HAWKINS: Some of the old Building Canada Funds, we did have some projects on that. So you're looking at 3.2.05?

 

MR. PETTEN: Right.

 

MR. HAWKINS: We were cluing up – as you know, there were a number of dollars from the old Building Canada Fund. They were a couple of projects left on the legacy fund. I know it can be rather confusing because there are a lot of moving pieces within that.

 

MR. PETTEN: Yes.

 

MR. HAWKINS: If I remember correctly – and the staff can certainly jump in and correct me if I'm wrong – the couple of projects that you see there came out of the old legacy fund. It was funding that we needed to get clued up and one of them was resurfacing the Trans-Canada Highway between Lewisporte Junction and Bay d'Espoir Junction.

 

That was work that was completed and I think there was close to $7 million, maybe $8 million that would have come out of that old legacy fund. It includes Gambo River Bridge and Benton intersection as well. So some of these are concluding and work will be concluded on that. So that would be old Building Canada Fund and then now, of course, part of our projections going forward that we're continually putting business cases in – last year, if memory serves me correct, we had seven identified projects that will be moving forward, which includes some on the West Coast and some in Central area.

 

Of course, then in addition to all of that, the $55 million that was allocated for the Trans-Labrador Highway which came out of our first business plan; and our Phase II, Phase III business plans are already in Ottawa to look at continuing work on Phase II and Phase III.

 

So when we look at the new Building Canada Fund and we look at the old Building Canada Fund, as one program finishes off and the new program comes in place, there's a few moving parts there.

 

MR. PETTEN: Okay.

 

3.2.09, under Improvement and Construction – Provincial Roads, Salaries has been reduced by $1.2 million.

 

MR. HAWKINS: Yes. Again, that's part of the zero base we projected in this area. With some of the work that's been done, we've reflected that into the projection for salaries for next year. But it's not a reduction in staff.

 

MR. PETTEN: There are no staff reductions?

 

MR. HAWKINS: No.

 

MR. PETTEN: Okay.

 

3.2.11, the Trans-Labrador Highway.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: I have one general question there.

 

We're looking at $55 million for this year. That's what's been announced publicly. The $9 million that was left in the revised, we have some carry-over here, I guess, do we?

 

MR. HAWKINS: Yeah, because the first business plan we put up for this section came back and we were given a budget of $63 million which would have been cost shared between federal and provincial. We put the tender out, the tender came in. We did two separate tenders on that one. The tender came in a little over $50 million so I think we're looking at – with engineering services put in there that's where the $55 million would come up.

 

We were late getting work started last year, in the last fiscal year – the last calendar year I should probably say. This is over the next couple of years, two or three years. We'll find that work progressing and as that work progresses on that section we also have four business plans up for Phase II and Phase III.

 

There's going to be a significant amount of work that we expect we'll doing on the Trans-Labrador Highway over the next several years. That's how that $55 million is reflected.

 

MR. PETTEN: Okay.

 

Under 3.2.13, Land Acquisition, there's $2 million budgeted for Property, Furnishings and Equipment, there was $750,000 spent, I assume, and we're back to $2 million. That $750,000, I'm assuming that would have been the land expropriation for Coley's Point elementary, or would that come from Education?

 

MR. HAWKINS: Not specifically, no. That's not that. As you know, of course, we're working on appropriate compensation for that land.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: As you know, there is a significant variance between what the owner is expecting and what we're anticipating paying. That certainly is not reflected in that.

 

But, again, if I may have the opportunity, we still have a number of outstanding files that we have expropriation of property that probably goes back to the 1960s. We try to deal with them, but when you're working with a somewhat restricted budget, that's a figure that we feel adequately will provide us with some compensation when we expropriate pieces of land. There are varying rates when it comes to expropriation.

 

MR. PETTEN: That $750,000, do you have any information as to what that was?

 

MR. HAWKINS: I don't. I'm sorry, I don't.

 

We do have a list and we can provide you with that list, if you so wish. A lot of it would be highway properties that we've expropriated.

 

MR. PETTEN: Okay.

 

Moving on to Building Construction, 3.3.01.

 

MR. HAWKINS: 3.3.01?

 

MR. PETTEN: 3.3.01, yeah.

 

Under Salaries they doubled in the revised Estimates and they stayed the same this year. That would have been new employees?

 

MR. HAWKINS: No, it's another exercise in rightsizing the budget allocation not adequately reflected in previous years.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: So what we've done with this zero base, it gave us an opportunity to adequately reflect what that line item should be. That's why we made the changes there.

 

MR. PETTEN: Okay.

 

Your Purchased Services increased by over $1 million. If I'm right, this would be for the “appropriation provide for repairs and maintenance of buildings which are owned and operated by Government Departments and Agencies as well as for environmental remediation ….” It has actually gone up by $1.1 million in this year's budget, but yet the blueprint has been reduced.

 

MR. HAWKINS: You're reading Professional Services?

 

MR. PETTEN: Yeah, Purchased Services.

 

MR. HAWKINS: Purchased Services, not Professional Services, right?

 

MR. PETTEN: Right.

 

MR. HAWKINS: Okay.

 

In Purchased Services, in fact we revised it in the surplus. We had lower-than-anticipated contract costs due to some of the project delays that we had. I think we were down $467,000 from the original budget to the revised budget. So what we're doing, we're reflecting back that with the anticipated contract costs for the fiscal year coming up. We've pretty much adjusted it back and added that back into the Purchased Services. We expect to have more activity in that department line item this year so we reflected that.

 

MR. PETTEN: There's still an increase in costs.

 

MR. HAWKINS: Correct.

 

MR. PETTEN: Even though with less rental space.

 

MR. HAWKINS: No.

 

OFFICIAL: (Inaudible.)

 

MR. HAWKINS: Yeah, that's not our rentals.

 

MR. PETTEN: Pardon me?

 

MR. HAWKINS: I'm going to refer to my deputy minister.

 

MS. KING: This is for our own space, for the government footprint, not for space that we lease. This is maintenance of our own facilities.

 

MR. PETTEN: Government buildings.

 

MS. KING: Yeah.

 

MR. PETTEN: Okay.

 

With this government space, we have the Howley Building now. Is that going to be converted to another purpose? What are the plans for the Howley Building?

 

MR. HAWKINS: Well, to answer that question, again, as I said, we're looking at all space availability that we have. Any excess space that we have will be part of our plan looking at how we can improve efficiencies and minimize costs.

 

That's not a discussion that I've had yet, but we are continually looking at opportunities whereby we can utilize our own buildings that we have. An example of that is some of the changes we made last year, particularly with moving some of our departments within our West Block. That's just one example of where we're trying to utilize our availability of our own buildings. We will continue to do that, and that's part of the efficiencies we're looking at within the structures that we have.

 

So it certainly will be a discussion that we will have. It won't be an empty space. We will be looking at having that discussion.

 

MR. PETTEN: Okay.

 

Under 3.4.01, Salaries, we have $500,000 less this year than what was budgeted last year. So what positions would have been eliminated here?

 

MR. HAWKINS: Okay. In that salary piece, there's a decrease of close to half a million, at $444,000. That's due to two positions that we're removing. Of course they were related to the full-day kindergarten. So now that full-day kindergarten has been implemented, these positions are no longer available or necessary.

 

MR. PETTEN: Are they eliminated from government or are they just …?

 

MR. HAWKINS: Are they within? I could not answer that question.

 

MR. GRANDY: One of the positions was a temporary position when they were hired a couple of years ago for the full-day kindergarten implementation. It was known that project would end in March 2017. So there is one position there that is the cessation of that temporary employee; another employee that was – it was two engineering positions. The second one returned to their permanent position.

 

MR. PETTEN: Okay.

 

Under 3.4.02, School Facilities – New Construction and Alterations to Existing Facilities, those figures under Professional and Purchased Services – I guess I'll ask them together – it's $7 million less this year than what was budgeted. On the Purchased Services line, it's $40 million less than what was budgeted and $37 million was the revised. What does this include? What do these figures mean?

 

MR. HAWKINS: So you want to combine the two –?

 

MR. PETTEN: Well, I guess, it's under the same – I'd say they go hand in hand.

 

MR. HAWKINS: The $10 million surplus, it was cash flow changes on major capital projects that reflect, I guess, the actual progress on the current projects. We do have a number of schools that are completed or near completion –

 

MR. PETTEN: Yes.

 

MR. HAWKINS: – and it certainly would reflect that. Again, the variance in Purchased Services, the major capital projects reflect the actual progress, so that would be reflected in those two numbers.

 

I'm assuming I've answered that correct. I'm going to refer to Cory to tell me whether I'm right or whether I'm wrong.

 

MR. GRANDY: (Inaudible.)

 

MR. HAWKINS: He says I did okay. So I'm assuming I'm right.

 

MR. PETTEN: They don't like telling you you're wrong.

 

Under Resource Roads, in 3.5.01, you had $648,000 budgeted for Supplies, but this year it's down to $97,000 – why?

 

MR. HAWKINS: The Supplies, there was a surplus in that section; requirements for funds that would have been re-profiled. So again, that's another area we've taken from Supplies to Purchased Services. There was an error in budgeting.

 

Charlene?

 

MS. MCCARTHY: (Inaudible.)

 

MR. HAWKINS: Okay, so we just made that change to reflect it. There was an error in budgeting previously and we've now made that adjustment to reflect the accurate recording on that line item.

 

MR. PETTEN: Okay.

 

So it's like $550,000, correct?

 

MR. HAWKINS: Yes.

 

MR. PETTEN: That is what it was off by?

 

MR. HAWKINS: It was $547,000?

 

OFFICIAL: (Inaudible.)

 

MR. HAWKINS: It was $553,600.

 

MR. PETTEN: Okay, no problem.

 

MR. HAWKINS: (Inaudible) it is reflected in those?

 

OFFICIAL: Yes.

 

MR. HAWKINS: If you look to line item, Purchased Services – if you look at those combined, there's a little bit of variation there. So we just did that correction on that.

 

MR. PETTEN: Right; moved it to a different pot.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Under Air and Marine, 4.1.01 – I'm going to flip back, Minister. I just missed something there on –

 

MR. HAWKINS: Okay.

 

MR. PETTEN: – the last page we were on just then.

 

MR. HAWKINS: Which one –?

 

MR. PETTEN: We were just on 3.5.01.

 

MR. HAWKINS: Yes, okay.

 

MR. PETTEN: My question is on the bottom, it says the Total: Infrastructure.

 

MR. HAWKINS: Yes.

 

MR. PETTEN: Okay. So does all the money for all the projects in the multi-year infrastructure program come out of TW's budget is my question?

 

MR. HAWKINS: The answer to that question is no. Some of it will come out of the health budget and some of it will come out of our infrastructure budget so we won't be reflecting the – and obviously education as well will be reflected in their budgets.

 

MR. PETTEN: Right.

 

But a lot of the engineering costs come out of TW's budget, correct, for those projects? All engineering costs would come –

 

MR. GRANDY: The engineering positions are in TW, but they are charged to the appropriate capital project. So if our staff are working on a health project, their staff is charged off to that capital project and that would be in the Department of Health. Similarly for AES on some of the post-secondary projects that we're doing, and the Department of Justice as well.

 

The Department of Education, because of the merger of engineering services, that group, with TW, the education budget you're seeing that here in this book – one of the line items you just referred to earlier. But for right now education, schools are in TW, but health projects are still in Health, justice projects are still in Justice.

 

MR. PETTEN: Okay.

 

Section 4.1.01, I don't have a lot of questions here. There are a couple though. These Grants and Subsidies, this $400,000 figure, where do they come from?

 

MR. HAWKINS: Or where do they go?

 

MR. PETTEN: What are they, yes?

 

MR. HAWKINS: That's a provision of air services. As you know, we often have ice conditions and we often have weather conditions, and there may be circumstances that we need emergency passenger airlifts and that sort of thing, so that cost would be picked up there.

 

So while I'm not a fan of flat lining in budgeting, it certainly is using our best information we have. We continue to put that $400,000 in there; however, realizing that sometimes historically – and I don't like to use historically when it comes to zero-based budgeting, but in some situations to be able to get a good, accurate idea, historically those expenditures have ranged from as low as $275,000 in a year to as high as $1.2 million. So they vary, depending on what circumstances we're facing in subsidizing air services in emergency situations.

 

MR. PETTEN: So that full $400,000 was spent last year?

 

MR. HAWKINS: I would assume, because what we're doing – as you know, that's a projected revised budget. So based on the information we have so far, it looks like we will be close to $400,000.

 

MR. PETTEN: That will be spent.

 

OFFICIAL: Yes.

 

MR. PETTEN: I think that's it for that section.

 

I'll move on to 4.1.04. Property, Furnishings and Equipment under 4.1.04, there was nothing budgeted, then there was $853,000 spent, this year now there's $795,000 budgeted.

 

MR. HAWKINS: That's part of the helicopter agreement which, of course, we get federal matching funding. The revenue from the federal government is relative to the cost sharing on these particular projects.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: So in 2016-2017, we transferred some of the funds from Current to Capital. When we look at Current budget versus a Capital budget, a lot of times we were providing what we felt were capital. We were carrying Capital within Current, and it really didn't make a whole lot of sense. So we were able to work within Finance and were able to identify some of the expenditures we had in Current that can actually go to Capital. This is one example that we transferred the funds between Airstrips, Current and we went and put it to Airstrips, Capital. So you'll see that there.

 

For example, in those three situations we had, we replaced a loader and a snow blower in Mary's Harbour, we replaced a loader and snow clearing attachments in Nain and we replaced a loader and snow blower in Makkovik which of course these loaders, to me, that's capital anyway. So that's where you'll see that reflection. So we move from a current cost out of the current budget to a capital budget.

 

MR. PETTEN: Marine Operations.

 

MR. HAWKINS: My favourite topic.

 

MR. PETTEN: What?

 

MR. HAWKINS: My favourite topic.

 

MR. PETTEN: You like that one? I have a lot of favourite topics in your department.

 

MR. HAWKINS: Yeah.

 

MR. PETTEN: I see it in my sleep.

 

Salaries; what positions were eliminated?

 

MR. HAWKINS: So we're looking at – I'm assuming we're on 4.2.01?

 

MR. PETTEN: Yeah.

 

MR. HAWKINS: 4.2.01, okay.

 

MR. PETTEN: Yeah.

 

MR. HAWKINS: So, again, through our adjustments in the decreasing we did, within the management structure we had a reduction of director of ferry operations for part of the year, we had a director of marine engineering for part of the year, regional marine services manager. We did assistant marine superintendent and regional marine service manager. In our management structure changes, we created within that a director of Marine Services and engineering and we've changed a stakeholder relations manager. So we had a net effect decrease of $208,700.

 

MR. PETTEN: Under 4.2.02, Island Ferry Operations, we see there was a spike of $3 million in the revised salary figures.

 

MR. HAWKINS: Yeah.

 

MR. PETTEN: And now that's dropped back $1.6 million this year less. So what happened there?

 

MR. HAWKINS: Well, yeah, it's a good question. This is where the heartburn comes in sometimes.

 

The $3 million was actually insufficient funding with some of the issues that we dealt with, with the Veteran. And we had to put in adequate services on Fogo Island for the Fogo Island and Change Islands service.

 

With the mechanical difficulties with the Veteran, we had to incur extra cost to get the Earl Winsor back in service. As you know, the Earl Winsor was slated as a surplus vessel for us and we really didn't do a whole lot of changes to the regulatory requirements because we were dealing with it as an excess asset. With the issues and problems we had with the Veteran, we had to incur significant cost to get the regulatory requirements satisfied. Then of course, in addition to that, we incurred some extra cost in overtime for the Fogo Island-Change Islands service last year.

 

So, going forward, we've reflected a $1.3 million increase. That's primarily due to the fact that under Transport Canada regulations whenever you have a larger vessel and now, you know, when the Legionnaire comes into service, we've got to incur extra cost. We've got to have 12 additional staff for the Legionnaire itself. So these are all extra costs that we have to incur for those two vessels in particular.

 

MR. PETTEN: So under your Purchased Services there's $2 million less. With these, I would say that pertains to refits?

 

MR. HAWKINS: In the Purchased Services, going forward – let me see what we have here. That's a decrease of – is a net result of management contract increases, prior year fiscal forecast adjustment, reallocation and decrease of funding during the zero-based budget exercise. So we're reflecting that, building that budget line, again, on zero-based budgeting.

 

MR. PETTEN: In your revenue line you budgeted $3.3 million for this year. It's an increase of $400,000, or I should say $330,000 roughly.

 

MR. HAWKINS: Yeah.

 

MR. PETTEN: So does this come from this? What is this money? Fees or …?

 

MR. HAWKINS: Yeah. As you know, last year we were significantly subsidizing our ferry operations to the tune of about – prior to any changes – 95 per cent or 96 per cent. So last year, we implemented a 40 per cent increase in ferry rates. Even with the 40 per cent increase in ferry rates, we're still subsidizing most of our ferry services on the average of about 93 per cent. So these are the increased rates that you find from the increase in the rates.

 

MR. PETTEN: Allowances and Assistance, $60,000, what is that?

 

MR. HAWKINS: Okay. I'm just trying to figure that one out. I'm probably going to have to defer to Charlene on that, but it's sufficient funding that we put a zero-based analysis on.

 

Charlene.

 

MS. MCCARTHY: We pay for vehicle damages that are incurred during the year.

 

MR. PETTEN: (Inaudible) on the ferries?

 

MS. MCCARTHY: Exactly. So the $60,000 is used for that purpose.

 

MR. PETTEN: Okay.

 

Minister, you should have a line in for roads for the pothole repairs for that – I couldn't resist.

 

MR. HAWKINS: What's that?

 

MR. PETTEN: I couldn't resist.

 

MR. HAWKINS: I missed that one.

 

MR. PETTEN: She said it's for vehicle damage for people getting on and off the ferry, so you should have a line in for fixing tires and rims.

 

MR. HAWKINS: Yes, I know. Tell me about it.

 

MR. PETTEN: I dealt with it when I was there, so it's clean.

 

MR. HAWKINS: I'm still owed a tire and a rim yet, too. Join the club, I'm in there.

 

MR. PETTEN: Yes, that's right.

 

Under Coastal Labrador Ferry Operations –

 

MR. HAWKINS: So 4.2.03?

 

MR. PETTEN: Yes, 4.2.03. Why such a decrease in Supplies?

 

MR. HAWKINS: That would have been, I would suspect – there are a number of things: fuel costs, fluctuations in pricing. We also, in part of the budget, changed the scope with the passenger/freight services. We reduced the Northern Coast from 179 to 169. That would be reflected in that. So some of those changes to fuel would have certainly had an impact on that line item.

 

MR. PETTEN: Okay.

 

Under 4.2.04, Ferry Terminals, $1.4 million was budgeted this year and last, but $760,000 was in the revised amount. I know it's dealing with breakwaters and maintenance of ferry terminals.

 

MR. HAWKINS: Yes, I think part of that was, if my memory serves me right, there was a late tender that came in, giving us a surplus in 2016-2017, particularly for department repairs to a couple of our wharves: Nain, Makkovik, Hopedale, Postville, also Rigolet. I think there was a late tender that came in that certainly would have attributed to that surplus.

 

MR. PETTEN: While under Supplies, what's this $25,000 figure? There is nothing budgeted either year, yet it's $25,000 showing up in the revised amount.

 

MR. HAWKINS: Was that a consulting for ferry terminal maintenance projects and they vary from year to year?

 

MS. MCCARTHY: I think that's minor supplies that they buy for construction. Some years, they don't need any and sometimes they need some. So it varies from year to year.

 

MR. PETTEN: For what?

 

MS. MCCARTHY: Construction materials.

 

MR. PETTEN: Okay.

 

4.2.05, refits; so I guess that goes to my question I had earlier on the refits. There's $2 million less budgeted this year. I know you mentioned Earl Windsor but we also had the Sound of Islay, is it – is that the one that's being under refit now?

 

MR. HAWKINS: Yes.

 

We have nine vessels ranging in age from – well, the Legionnaire being a year old to 48 years. Again, we do have an aging fleet that we're trying to work through and part of our plan is to try to provide the best service that we can possibly can with the vessels we have. And every one of those vessels that we have, there are a lot of regulatory requirements that need to be met from time to time. And that will certainly be – we do planned refits on an annual basis, depending on the age of the vessel and the life expectancy of the vessel.

 

So we look at that and certainly try to, where possible, with regard to the Sound of Islay, we were able to make a business case for that one. Under the changes under the federal regulations – I brought the issue to Minister Sohi, because under the transit we don't qualify, with exception to the City of St. John's.

 

I had several discussions with Minister Sohi and that was how we were able to get the Sound of Islay to make a good business case for us. We are getting some federal funding on that.

 

MR. PETTEN: Under 4.2.07 –

 

MR. HAWKINS: And just as we move forward, the Sound of Islay will come up further down in our –

 

MR. PETTEN: Okay.

 

MR. HAWKINS: If we want to go to that one.

 

MR. PETTEN: 4.2.07, Purchased Services, we're under modification of Ferry Terminals. There's $5.6 million budgeted this year, $5.8 million last year, but there was $3 million in the revised. So what does this include?

 

MR. HAWKINS: Well, in this particular cost in the Purchased Services, in that area for that, most of the money in this particular budget will be for Bell Island-Portugal Cove. When we have that work completed, if you notice the Transportation and Communications, there's a significant difference in that budget item because, obviously, within we concentrated on the ferry terminals and upgrades in Bell Island and Portugal Cove this last fiscal year.

 

And once that work has been completed then, obviously, the travel cost outside of the Bell Island – Portugal Cove area will be more then, certainly within this Avalon Region. So we've forecasted for that as well because we know that we're going to incur extra cost and so part of that is reflected in the numbers that we have there.

 

And, again, under the Purchased Services, projected revised cash flow, a savings of $2.8 million; that was due to the construction delays that we had in Bell Island-Portugal Cove. So hopefully we are now past that and hopefully get that work completed fairly quickly.

 

MR. PETTEN: Under 4.2.06, Passenger Ferry Service Infrastructure, you have a budgeted amount this year of $973,000.

 

MR. HAWKINS: So .06, we're back one, right?

 

MR. PETTEN: Just the next section back, yes.

 

MR. HAWKINS: What was the number on that again?

 

MR. PETTEN: 4.2.06.

 

MR. HAWKINS: So we're going back?

 

MR. PETTEN: Yes, just the next section behind. In mine it's under the same page.

 

MR. HAWKINS: Okay.

 

MR. PETTEN: It's $973,000 budgeted this year.

 

MR. HAWKINS: Yes. Again, that's funded through the current account versus the other is through the capital account.

 

OFFICIAL: And it's for the Sound of Islay.

 

MR. HAWKINS: Yes, and it's for the Sound of Islay.

 

MR. PETTEN: 4.2.08; there's no money budgeted this year, where we had $2.6 million last year. Would that be a tie-in to the Legionnaire?

 

MR. HAWKINS: Yes, that's the tariffs.

 

MR. PETTEN: Got you.

 

MR. HAWKINS: Now we should have our money for our tariffs, or we'll have it.

 

MR. PETTEN: There was money paid to the federal government, was that reimbursed as well?

 

MR. HAWKINS: Yes, we paid $106,000 per month. I think we were doing that. So that's been now recovered.

 

MR. PETTEN: That's been reversed, okay.

 

Under 4.2.09, Provincial Ferry Vessel Refits, I see $2.6 million last year, now we're up this year to roughly $5.9 million. So what's the –

 

MR. HAWKINS: Yes. This year we have budgeted in the capital rehabilitation piece, we are going to have to do some work on the Gallipoli, continuing to work on the Beaumont Hamel, doing some minor work on the Grace Sparkes, the Hazel McIsaac and the Northern Ranger. Then we always insert a contingency amount because when we're dealing with ferries, no matter if they're old or they're new, there's always something that pops up that we have to be prepared for. So that's the extent of what we're doing this year. We have $5.8 million.

 

MR. PETTEN: Under 4.2.10, Passenger Ferry Service Infrastructure, Purchased Services there have increased by $1.7 million. What's the reason for that increase?

 

MR. HAWKINS: Well, that's the capital outlay for the Sound of Islay –

 

MR. PETTEN: Okay.

 

MR. HAWKINS: – would be included in that piece.

 

MR. PETTEN: That's kind of spread out through a lot of …

 

MR. HAWKINS: Yeah, some current, some capital, right?

 

MR. PETTEN: Right.

 

4.3.01, I see there's a little increase in Salaries.

 

MR. HAWKINS: Yeah, in that there's $34,000 extra we incurred. It was increased in – there were some requirements of overtime and backfilling costs that we incurred there.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: So we've made the appropriate adjustment for that going forward as well.

 

MR. PETTEN: Okay.

 

Under 4.3.02, Salaries, Government-Operated Aircraft, what positions? Were there positions eliminated here?

 

MR. HAWKINS: No, not to my knowledge.

 

MR. PETTEN: It's $300,000 less.

 

MR. HAWKINS: Yeah, which is – again, knock on wood, last summer we had a really good summer when it came to a reduced number of fires and so there was not a requirement for overtime. So we were able to have a reduction in $366,000.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: We had no charters either at that time.

 

MR. PETTEN: So would I be right when these – these amounts with fluctuation right down through Transportation and Communications, Supplies and Purchased Services.

 

MR. HAWKINS: Yeah.

 

MR. PETTEN: Well, Purchased Services seems flat. Would that be all tied into the fact that we had a good …?

 

MR. HAWKINS: Absolutely. It tied into savings, a reduced requirement for charters –

 

MR. PETTEN: Right.

 

MR. HAWKINS: – and reduced tie in to water bombers. So you're less fuel, less expenses, so all of that would be – all of these surpluses, it tied into that.

 

MR. PETTEN: Under Grants and Subsidies here as well, there's a flat line again at $1.285 million. So where is that? What's included in that?

 

MR. HAWKINS: Okay, let's see, Grants and Subsidies. Of course, that would be attributed to medevac services to Labrador coastal communities. We allocate $1.2 million year-over-year for that and we provide that to Labrador-Grenfell Health. So that's what we pay out to that group for medivac services to coastal communities.

 

MR. PETTEN: Okay.

 

4.3.03, I see revenue of $1.7 million.

 

MR. HAWKINS: Yes. Of course, we have five new 415s. We have two 215s –

 

OFFICIAL: Yes.

 

MR. HAWKINS: – that are excess. We don't need them anymore. Some of them – I think one is serviceable. We have parts that can be used for the 215s as well. So that's a revenue projection we put in there because we're going to be actually looking at selling the C-215 and parts that will be attributed to that. So we're hoping to realize that revenue stream.

 

MR. PETTEN: Last year it was $1.7 million, this year it's $1.7 million, but the sale is not – there's been no –

 

MR. HAWKINS: No, we didn't. We did engage discussions at one time and we felt that the return we were hoping from that agreement did not materialize to the point where we felt would be acceptable for us. So we decided not to proceed. Now we will be looking at, I guess, divesting that extra C-215 that we have and parts. We'll see how that goes. If it's not a return we feel is adequate, well then you'll probably see it come up in a subsequent budget next year as well.

 

MR. PETTEN: Okay.

 

MR. HAWKINS: I guess the bottom line is we're not giving them away.

 

MR. PETTEN: I'm getting to the end now. I had just a few general questions. I wanted to go back and check on one other section before I finish up, but while we're into talking about selling water bombers, government assets, what is the plan this year? Is there a list of government assets you have and you are anticipating selling and disposing of this year?

 

MR. HAWKINS: You mean overall assets? 

 

MR. PETTEN: I guess, yes.

 

MR. HAWKINS: Well, as you know, that's an ongoing concern of ours. One of the things, I think, when I came in the department last year in December, in my first few months, trying to determine how we wanted to move forward with divesting of assets and, I guess, one of the concerns that you have if you have assets that are not being used and the longer that you keep them, without looking for opportunities to divest them if you have no need, the less value you're getting.

 

So we're obviously seeing that because a lot of times when we have buildings or any assets that we no longer require, the longer you hold on to those assets a lot of times the value depreciates substantially and sometimes you get less return than you would have expected.

 

It's an exercise that we will continue as a department. If there are areas that we identify – the Hoyles-Escasoni certainly is an area that we moved forward to divest of that. We still have some other assets that are not being used. Right now, that's an ongoing discussion that we have, and will continue to have, to look at opportunities that we can get some return for the value that we have in these assets.

 

MR. PETTEN: Okay.

 

So there's no formalized list per se.

 

MR. HAWKINS: We don't have a list saying that July 1, we're moving this asset or whatever. That's a discussion that we will continue to have as we move forward.

 

MR. PETTEN: Okay.

 

Minister, under equipment – as we know this winter, it was an issue. Has there been any analysis done? I know mechanics (inaudible).

 

MR. HAWKINS: I guess you're talking about equipment availability. I get daily reports on equipment availability. As I said, it seemed like the more snow you have, the more you work your equipment; the end result is that you're probably going to have more pressures on breakdowns and that sort of thing. We have had some challenges throughout the winter in maintaining high levels. We'd like to be at the 80 per cent equipment availability. Overall, on an average, in the West and Central Newfoundland, we've been able to do to that.

 

On the Avalon, depending on when the snow is heavier, we tend to have more pressures on the equipment. So a lot of times our equipment availability numbers that come out, come out at 5 in the morning, 5:30 in the morning when our crews go in and do a check on what's available and they produce those numbers at that time. Sometimes, during the winter, it's come in at 57 per cent or 65 per cent, and that becomes an immediate concern to the general public. But sometimes, quite often, equipment availability could be a light that's out in the truck and they've got to repair that light. So while it might be 57 per cent availability at 5 in the morning, by 12 noon or whenever the shift is going out at 1:30 that could easily be up to 85 per cent.

 

So there's a fair amount of fluctuation when it comes to equipment availability throughout the year but, again, we've done a good job in making sure that we do have mechanics on site to be able to make those repairs. As you know, if we have pressure areas when equipment is not, we don't have adequate resources to do that, the last resort for us is to put them out to a garage to have it fixed. But the intent for us is to have all available equipment out, and that will vary because we're dealing with machines and machines break down for various reasons.

 

MR. PETTEN: Another question now: Are any depots closing this year?

 

MR. HAWKINS: No.

 

MR. PETTEN: No? Okay. That's an easy answer.

 

I'm getting almost to the end. I have two questions; I might get a no on this one, too.

 

Can you provide – our road projects, is there a formalized list of scores for all roads?

 

MR. HAWKINS: Well, you've had that question and I think I've answered it before. Again, what was important for us and for us as a government and for me as a minister is – and I've said it over and over again in all fairness – that I needed and I felt there needed to be some change with how we did roadwork or how we would do roadwork going forward. And I wanted to put a different lens on how we would do that; hence, I was sort of looking back historically on what was being done and, in a lot of cases, it was a year by year by year by year, and not knowing what out-years would be. I felt there had to be a better way of doing the amount of work that we were doing.

 

So it was for that reason I directed my staff to start looking at a different approach to doing roadwork. As you know, requests have come in – roughly about $1 billion worth of requests. Our roads need attention and we just don't have $1 billion to do it. So we've got to find a better way of doing it, a more efficient way of doing it and a more objective way of doing it. Roadwork is not something that can be done subjectively. It's not for me, as a minister, to say I have to do a road down in CBS just because the MHA for CBS feels I have to do that road.

 

It is a process that we're putting into place and I think it will eventually – there will be some issues as we go forward because everybody figures that they need all their work done in year one. So what we've done, we've had a concerted effort to do our roadwork over a five-year plan. Each year, we will announce 100 per cent of the roadwork that needs to be done for that year, and then the out-years will see 75 per cent, 50 per cent, 25 per cent and 25 per cent.

 

I think it's important for us to do that because it gives us the flexibility to be able to make changes if, in fact, through the process that we go through, there may be something that we're missing. Last year, all of our engineers came in and we went through a process where we did a qualitative assessment on the roads that were in our regions. Within that qualitative assessment we did, we looked at things such as the class of the road, the condition of the road, the social economic impact, safety issues and bundling opportunities. Then we scored those, and we went through the quantitative process after we got through that section. Then we looked at reliability and we looked at safety and we looked at usage.

 

So we took all of those numbers and we collapsed them all in. Then in the fall, we said okay, now we've done this objective analysis of what we have and the requirements that we have; let's do somewhat of a subjective look at what people in those areas – how they feel about roads in their areas. So we did the first year of our web-based analysis and we will do another one this fall, well next fall coming up, after we've gone through the summer program.

 

We had 563 responses through that web-based analysis. Eighty-three per cent of the feedback we got through that web-based approach fit exactly into what some of the decisions we're making going forward, which tells us that I guess within that analysis we did, it's a good indicator that's probably the right approach to deal with it.

 

Is it the end all, be all? It's not, and that's why we built the flexibility in there. Because we realize and I realize that I do have 40 MHAs, and to go through an exercise when you have a caucus of 29, 30, you have a caucus that historically – and I'm not jumping on anybody in particular or any government because it's probably been done forever and a day – felt that work needs to be done in my area because I'm Liberal or because I'm PC.

 

So I'm trying to change that culture of thought process, and I want to base it on the evidence we have to make the best decisions we can for no matter what riding it is. I guess, too, and part of the efficiencies we're looking at how we can better do the work. We've all heard the stories over the years; you do a kilometre in this district and a kilometre and a kilometre. That's not the most efficient way and effective way to do roadwork.

 

Part of that is trying to take that out of that, and instead of doing that it probably makes more business sense and from a cost perspective to do three kilometres in one district that really, really needs it, and probably not as much in another district that probably don't need it at the same level.

 

So it's a five-year plan. I call it really the living document because even though we know what's going to be happening in this calendar year and fiscal year, we do have 25 per cent flexibility next year to be able to work through some of these, and if there are areas we need to address, we will do that.

 

MR. PETTEN: Thank you.

 

My final question is: Would it be possible to get a copy of your Estimates binder?

 

MR. HAWKINS: As soon as I take out my little questions and my little notes.

 

MR. PETTEN: Take out your notes.

 

MR. HAWKINS: So all my other little notes, that's fine.

 

MR. PETTEN: Yeah. So on that note I want to say thank you to you and your staff for the full morning, for your answers and time, I appreciate it, and to the Committee for having to sit and listen to me and you for three hours. So I want to thank you for your time.

 

Thanks.

 

MR. HAWKINS: I think it helps us all to fully appreciate – because I don't know how some of this works, and I had to walk over yesterday and compliment the Member for Ferryland to be able to stand for three hours and speak the way he did yesterday. Certainly, it doesn't go unnoticed. It is a challenge to be able to do that. I must say this is a great exercise, it's a great opportunity.

 

I just wanted to let all of you know that if, in fact, at any time you have any questions, or any time there's something you need to know, my staff are certainly open to answering anything you need. I usually try to use – I'm not so sure it always works, but I do have an open door policy that MHAs on either side, if you do have concerns certainly let me know and I'll do whatever I possibly can to help you out.

 

MR. PETTEN: Thank you.

 

MR. HAWKINS: Okay.

 

CHAIR: Okay. Thank you.

 

Before we recall the section, I'd just like to point out that MHA Mark Browne is substituting for Ms. Carol Anne Haley, Burin – Grand Bank, and Mr. Petten is substituting for MHA Keith Hutchings for Ferryland.

 

So with that, we'll recall the section.

 

CLERK: 1.1.01.

 

CHAIR: Shall 1.1.01 carry?

 

All those in favour?

 

SOME HON. MEMBERS: Aye.

 

CHAIR: Carried.

 

On motion, subhead 1.1.01 carried.

 

CLERK: 1.2.01 to 4.3.03 inclusive.

 

CHAIR: Shall 1.2.01 to 4.3.03 inclusive carry?

 

All those in favour?

 

Carried.

 

On motion, subheads 1.2.01 through 4.3.03 carried.

 

CLERK: Total

 

CHAIR: Shall the total carry?

 

SOME HON. MEMBERS: Aye.

 

CHAIR: Carried.

 

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

 

CHAIR: Shall I report the Estimates of the Department of Transportation and Works carried?

 

SOME HON. MEMBERS: Aye.

 

On motion, Estimates of the Department of Transportation and Works carried without amendment.

 

CHAIR: Okay.

 

A motion to adopt the minutes from the last meeting.

 

Moved by?

 

MR. BROWNE: So moved.

 

CHAIR: Okay.

 

Carried.

 

On motion, minutes adopted as circulated.

 

CHAIR: The next meeting will be May 2 at 9 o'clock, Service NL, Government Purchasing Agency and Climate Change and will take place here in the Chamber.

 

With that, a motion to adjourn.

 

MS. PARSLEY: So moved.

 

CHAIR: Okay. Moved by Betty Parsley.

 

All those in favour?

 

Carried.

 

On motion, the Committee adjourned.