The Committee met at approximately 9:10 a.m. in the Assembly Chamber.

CHAIR (Forsey): Good morning, everyone.

First we will begin by introduction, and before we get into the minister's report we will also call for the adoption of the last minutes. We will begin by just the introduction right now, Minister.

MR. HEDDERSON: We will just go around.

CHAIR: Yes.

MR. HEDDERSON: Tom Hedderson, Minister of Transportation and Works and Minister Responsible for Housing.

MR. SIMMS: Len Simms, CEO and Chair of the Board, Newfoundland and Labrador Housing Corporation.

MS MOFFATT: Kate Moffatt, Executive Director of Program Delivery and Planning, Newfoundland and Labrador Housing Corporation.

MR. KENDELL: Dennis Kendell, Executive Director of Regional Operations, Newfoundland and Labrador Housing Corporation.

MR. LAWRENCE: Tom Lawrence, Chief Financial Officer of the Housing Corporation.

MS VOKEY: Sharon Vokey, Executive Assistant, Transportation and Works.

MR. SCAPLEN: Roger Scaplen, Director of Communications, Transportation and Works.

MS MICHAEL: Lorraine Michael, Signal Hill-Quidi Vidi.

MR. BUTLER: Roland Butler, the District of Port de Grave.

MR. LODER: Terry Loder, MHA, Bay of Islands.

MR. BUCKINGHAM: Ed Buckingham, MHA, St. John's East.

MR. DINN: John Dinn, Kilbride district.

MR. POLLARD: Kevin Pollard, MHA, Baie Verte-Springdale.

CHAIR: Clayton Forsey, MHA for Exploits, and Chair.

I will ask for a motion for the adoption of the minutes of May 10 for the Department of Finance, Public Service Commission, and the Office of the Chief Information Officer.

Moved by Ed Buckingham.

MR. BUCKINGHAM: A small change, Mr. Chair, on it, under the people who are attending.

CHAIR: Yes.

MR. BUCKINGHAM: Under the people who are attending, Joan Tilley, Executive Director, OCIO, is actually Jean Tilley.

CHAIR: Okay.

On motion, minutes, as amended, adopted.

CHAIR: I ask for the subhead, please.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01., Newfoundland and Labrador Housing.

Thank you, Minister, and your staff, for showing up today. When you are responding to questions, it probably would be a good idea to mention your name just for record purposes. Usually, we give fifteen minutes or so for each questioner, and if they want to pass it to the next member if they want to take a break, that is fine. Decisions are usually made amongst both parties.

When we finish with Newfoundland and Labrador Housing, we will take a short break and go into Transportation. Is that okay with you, Lorraine and Roland? Okay.

Minister, you can do your intro.

MR. HEDDERSON: Thank you, Mr. Chair.

Again, welcome to everyone this morning. We certainly will have an opportunity now to go through the budget details with regard to the Housing Corporation. Again, Budget 2010 has kept social housing high on the government's priority list and allocated something to the tune of $28.2 million to Newfoundland and Labrador Housing for the coming fiscal year. This is, I guess, a testament to the government's commitment to achieve goals set out in our social housing plan, Secure Foundations, that we released in August of 2009 after a great deal of consultation and deliberation. That set the tone and the direction for years to come.

We have $27 million allocated to housing infrastructure projects, affordable housing and increased maintenance. Something like $17.6 million of that funding has been invested to modernize more than 2,300 housing units. That is probably close to a 300 per cent increase in funding under this program since just three years ago.

The 2010 investments also include $6.8 million in a federal-provincial affordable housing program to build an additional 230 rental housing units for seniors, persons with disabilities and persons requiring supportive services. A $1.4 million investment will increase Housing's annual maintenance budget to something like $10.2 million.

Budget 2010 also provides $1.2 million to bolster the home heating allowance which helps low-income housing tenants contend with rising heating costs, and a further $1.2 million investment will make possible the construction of four new housing units in Nain, in Northern Labrador.

Of course, the people at Newfoundland and Labrador Housing are excited to be able to be given the opportunity to continue with the good work that they have been doing over the last number of years and, indeed, over the years. The Newfoundland and Labrador Housing Corporation is an important entity, one that will stand the test of time as we move forward to make sure that we are providing social housing to those most in need.

It is interesting to note that a good deal of our funding, especially our program funding, does find itself into rural Newfoundland, but understandably most of our units are located – or a lot of our units, I guess, Len, I should say, not most - a lot of our units are contained within the St. John's area, for example.

OFFICIAL: Almost 60 per cent.

MR. HEDDERSON: Sixty per cent of them are here, so naturally a lot of our funding for maintenance and improvement will be going in those areas, but the need is there both in rural and urban Newfoundland and Labrador. Of course, our programs, we often talk about building units and that sort of thing, but programming is also a key component of where we are in making sure that with our subsidies for rent and heat and repairs - a lot of people forget about our repair program. In many cases, the good work of Newfoundland and Labrador Housing is touching many of the families throughout Newfoundland and Labrador.

Is there a need for further work? Absolutely. We continue to lobby hard within government for the tools and resources that we need at Newfoundland and Labrador Housing to continue to build on the solid foundation which is reflected in our housing plan.

Having said that, obviously we are here so that all present can have an opportunity to ask questions of me and my officials, as well as the Chair, to get, hopefully, a better understanding of where we are going, whence we have come, and where we are hoping to end up.

So with those words, Mr. Chair, I will pass it along to you and to our MHA colleagues.

CHAIR: Thank you, Minister.

Roland, do you want to start?

MR. BUTLER: Thank you very much.

First of all, Minister, I want to welcome you here this morning, and the officials from Newfoundland and Labrador Housing, and to say that it is always a pleasure to be able to deal with people who have a great concern for our constituents. I know we do not always receive what we call and look for, but I have to say, as I said in the past, we get the greatest co-operation from the officials at Newfoundland and Labrador Housing.

Also, I would like to introduce the young lady to my right: Vanessa Templeton, Researcher at our office.

Minister, under the heading 1.1.01., Housing Operations and Assistance, I know the funding is listed under Grants and Subsidies. I was wondering if you can give me a breakdown and, I guess, in particular what the increase of the $4.779 million will be allocated towards this year. Is it in the one program or in various programs?

MR. HEDDERSON: I think the bottom line there is fifty-four million, seven hundred and some-odd thousand dollars. That is the annual grant that comes from the Newfoundland and Labrador Government to fund any number: obviously, our operational budget, some one-time funding and any new priorities.

I am just going to turn it over to the Chair because I would like for him to go down through, basically, those three categories and identify where we are going at this particular time.

MR. SIMMS: Thank you, Minister, and thank you, Mr. Butler.

As you may know, the revenue sources for the Newfoundland and Labrador Housing Corporation come basically in three forms. One, there is a CMHC funding grant that is ongoing as a result of a social housing agreement signed back in 1997-1998, which is diminishing since then by approximately $7 million. We get rent from our tenants, and the funding that we get from the provincial government basically just comes in a grant form. That is why there is only one line, I guess, in the budget.

The increase really just represents an increase in more provincial funding toward all our programs and operations and so on. It might include a new – well, some additional funding for the housing units in Nain, for example, $1.2 million. That would all come under the form of a grant, and additional funding for maintenance, which was also $1.4 million, I think it was. That all shows up in the grant. It is essentially just an increase in the Province's contribution toward the total budget of the Housing Corporation.

MR. BUTLER: Okay.

Under the same heading, down under 01. Revenue - Federal, it shows that it was budgeted $2.9 million last year, nothing under the revised, and nothing this year. I am just wondering if you can give me a little explanation on that.

MR. HEDDERSON: As you know, with the feds, dollars decline with each passing year. The Chair just referenced, back in I think it was 1997-1998 we did have some sort of an agreement, but devolution has taken place and every year we lose a certain amount of money, which we in the government try to then make up.

Just to explain where it has disappeared to, or what that is, I again pass it along to the Chair here.

MR. SIMMS: I guess, essentially, the simplest way to explain it is that the revenue back in 1997-1998 when the social housing agreement was reached between the two levels of government at the time, the grant that was coming from CMHC to the Housing Corporation was $55 million. Today, I think it is roughly $47 million or $48 million. So it is overall, in that length of time, a $7 million decline. Governments have in recent years, fortunately, picked up the slack. We put it in our budget request each year and say we lost $1 million from the federal government; would you please put it back in? That is what they have done.

One day, that $55 million, which is now $47 million or $48 million, down the road – 2038 I think is the end date for the agreement – some government down the road, or governments between now and then, hopefully, would have to pick up the slack and the loss of funding. Otherwise, your own portfolio of 5,000 houses or whatever it is could pretty well fall apart. That is why we are putting a fair bit of money, last year and this year, into the repairs and renovations of our existing portfolios in order to make sure they are sustainable for a longer term.

MR. BUTLER: Thank you.

Regarding the Residential Energy Efficiency Program – and I think you mentioned last year, Mr. Simms, that there was remaining in that program somewhere around $3.2 million or something - I was just wondering, what is the current status of that as we speak?

MR. SIMMS: The current status is – yes, it was a two-year program with a total of $6.9 million less the administration cost because we had to hire some staff and things of that nature. Last year, the program went very successfully and we are in the second year of the program right now, which just started in January. Applications were available on-line or at the offices, and things of that nature. All 1,000 applications have been approved – the first 1,000. It was first-come, first-served.

It was a two-year pilot project. It is a program of the Department of Natural Resources. We were asked to deliver it because it is delivered – we had gotten some expertise down at Housing in delivering home repair programs and RRAP and things of that nature, so we would deliver it in the same sort of way.

The exciting news about it is, it confirms pretty well what advocates frequently have been saying in the past. I remember my good friend Bruce Pearce – and Lorraine's good friend Bruce Pearce, I am sure, and maybe yours too, for all I know - Bruce used to frequently lobby and advocate that the government needed to bring in some kind of an energy efficiency program, so the government did. We got the results from a portion of the first year of successful or completed programs, and of the 400-and-some-odd clients that we did an analysis of, the actual facts are - his words – true; there is a savings found; because the auditor goes in beforehand and goes in again afterwards, after the work is done. Eight-five percent of the work that was required, incidentally, was for insulation, basement insulation in particular. The auditors have gone in and done an assessment of this. The fact now is that they have found there is approximately a 32 per cent savings on annual home heating costs on those 413, and in dollars it translates to a savings of about $745 a year. So, it has fabulous results. Where it goes from here, of course, will be up to the Department of Natural Resources to put forward a request, I guess, and see if the government wishes to pursue it.

Incidentally, associated with that, just as an aside, if I may, for years the 5,500 units that Newfoundland and Labrador Housing has, its own housing units, public housing units, I discovered, I guess, just a couple of years back, that most of our houses never had insulation, after all these years. So we implemented, last year, a policy to include in the scope of work - either work that is done by our own workforce or work that is done by contractors - to include, now, insulation in the basements. In fact, we have had responses, I think, from people who have said it made a difference in their homes. It is a long way to go, but we are going down that road; and we are doing it in partnership, by the way, with some great organizations.

Choices for Youth have a little project where they are using some of their young people that they have at their facility, and we are helping them train in co-operation with our union, CUPE, and ourselves. We are providing some materials. They have done some training, and we are giving them a group of homes that they can go in and work on and put insulation in, and so on. We are doing the same thing down your way, I think, with CONA, now that I think about it. I do not know if that answers your question.

MR. BUTLER: It does. It is good to hear that the program is doing the work that people thought that it would be doing.

With regard to insulation in the houses, I understand that fully because there was an incident out our way a few years ago. A guy got up in his attic and the insulation was there but it was still in the bundles; the contractor never put it out.

MR. SIMMS: Exactly. Yes, exactly.

MR. BUTLER: Anyway, now that we know this program - and I know you said it was only a two-year pilot project and it is conjunction with the Department of Natural Resources. I was wondering, have you or your officials had any contact with them, to relay to them how good this program is, and will they be refinancing it and assisting with it to go on in the future?

MR. HEDDERSON: Yes, indeed. We are working closely with Natural Resources because, as you know, basically we do the low income and they do the general population. We are comparing results, and when it comes up for a decision we will be working closely with them in making sure that we are presenting to government the results of this, and the successes that we are experiencing, and also give the need; because, obviously, with just the two years, we will not get to the needs of everyone. Hopefully, with next year's Budget, this will be an item.

MR. BUTLER: With regard to the Provincial Home Repair Program – there are a couple of little questions, and I will put them all into one there - I was just wondering, what is the current status of the wait-list? I am wondering, are we still on track? Because we were thinking that the wait-list might be eliminated by, I think it is next year. How old are the applications that are there now? I know it has gone a long ways from a few years ago when you used to have to wait five or six years. Now they are down to –

MR. HEDDERSON: Absolutely. I remember my days as a younger MHA and dealing with particular wait-lists.

Again, as I pointed out earlier, the planning that goes in to trying to alleviate wait-lists and that - and we have been very, very successful with this particular program. As you know, I think last year you asked basically the same question, for the status, and we are on track. For more specific details, Mr. Chair -

OFFICIAL: Turn it over to (inaudible).

MR. HEDDERSON: Yes, he is my stat man.

MR. SIMMS: Thank you, Minister.

The RRAP is roughly about $10.8 million; 93 per cent of that is in rural Newfoundland, or I would say outside St. John's, which is generally considered by many to be rural, even though there are some larger centres, so it is mostly a rural Newfoundland program. It is probably the most popular program that we have down in Housing. It is certainly the one that we get the most calls on from MHAs or their offices, and things like that, and from citizens.

The profile is still the same; it is a sixty-one-year-old senior who lives in a house that is at least thirty years old out in rural parts of the Province. The delivery of the program is progressing as we had hoped when we asked for increased funding from the Province. At the time, they doubled their contribution to the program to help us to reduce the wait-list and to eliminate it, essentially. Eliminating it means you are delivering a program to the applicants who apply in that current year. Our target, I think, was 2012-2013, if I am not mistaken - maybe it was 2011-2012 - but we are moving along that road. We have dropped from 4,200 down to 2,500 or 2,600 or something right now.

It depends on which regional office you are dealing with. Some offices are actually dealing with current year applications, and have already gotten there. Most are probably dealing with 2009 applications, which are getting there. I cannot think of any that may be still dealing with 2008; there might be the odd one. Progress is being made and we expect to be on target by 2012-2013 to be delivering to applicants in that current fiscal year, so it would be a big improvement.

There are other things you would like to do with that program, but until you are able to serve those who have been waiting for a long time, it is hard to – you would like to increase the grants and things of that nature, which we have done for disabled, by the way, in one portion of the program.

MR. BUTLER: I was wondering if you could give me an update on the status of the six new affordable housing projects that were announced earlier this year; I think it was February 19.

MR. SIMMS: Six new affordable housing projects. The trouble with this is, this is a federal-provincial program and announcements are co-ordinated with the federal government. Sometimes projects are well and away and our minister is ready but it is hard to get – and this is not meant to be a criticism, I suppose, although it is, I guess, in a way; it is too late now - it is hard to get them on track.

You would like to be able to tell MHAs of projects in their districts, and things like that, but we are bound by the agreement not to go out and announce it. Sometimes the local developer who is doing the project will do an interview with the local paper and they have already announced it and there is still no official announcement.

When you say six, I am not certain which six you are referring to. I can give you maybe a higher level summary and then maybe you can narrow it down for me?

MR. BUTLER: No, that is fine.

MR. SIMMS: Under the Affordable Housing Program, this most recent one, last year and this year – it was a two-year program – the total expenditure was about $26 million, roughly $26 million. We allocated that: half for non-profits and half for the private sector.

We had enough funding, out of the 120 private sector applicants that we had, to fund forty-two projects across the Province during this two-year period. We funded just about all of the non-profit applicants that we had. Maybe one, I think, we did not fund. There are forty-two under the program that will be completed and have to be completed by March of next year – that is private sector – and I think there are one, two, three, four, five, six, seven, eight non-profit ones, mostly providing supportive housing services. That would be ones like the Stella Burry project, and Marguerite's Place here in this area.

MR. BUTLER: Yes.

MR. SIMMS: Most of the supportive housing projects, sadly, are here in this area. I think we have one in Corner Brook, the Canadian Mental Health Association, and hopefully one in Goose Bay this year, the Mokami Status of Women who are trying to develop a project up there. We have funded that, or at least we have given them conditional funding. Again, it is not yet announced. I do not know if I have overstepped any bounds on that part, but what odds?

MS MICHAEL: Could I just ask a question?

MR. BUTLER: Yes, go right ahead.

MS MICHAEL: So, are you saying that all of the money, then, has now been allotted through those forty-two and nine?

MR. SIMMS: Yes.

MS MICHAEL: Okay, great.

MR. SIMMS: The way it works, Ms Michael, is that there is a process where we use a point score system and use three staff people: a finance person, an engineer, and the affordable housing manager. They assess all of them, because you get so many applications. When they meet the line - it does not mean that the ones that were not picked did not have good projects; we just did not have the money to cover it all - they are notified then that they are conditionally approved and they can start to go get their work done, because they have work that they still have to do. The towns and the municipalities have to get permits and they have to do an environmental assessment, et cetera.

We cannot claim the federal funding share until we give final approval. We cannot give them final approval until they get back to us. So, we work with them and try to move it along. Once it gets final approval then we can claim the funding, but in essence once they get conditional approval they can start moving their projects. Some are further along than others. Of the forty-two, I think there are twenty-six in the private sector ones that are finally approved. So, they are moving along quite nicely. The others, we are pretty confident we will get there.

The non-profit ones, as you would understand, are probably a little longer and we try to work with them a little more because they do not have the capacity. We did provide a full-time salary for an engineering technician to work with these groups to enable them to develop their plans, their tendering documents and things of that nature. That has been very helpful. I forget his name now - Keith O'Neil. I think this year we have three who have been finally approved.

OFFICIAL: Yes.

MR. SIMMS: Yes, three that have been finally approved but not yet announced, but they are finally approved.

Does that answer your question?

MS MICHAEL: Yes, it did.

Thank you very much.

MR. BUTLER: I have one other question. Then we can move to Ms Michael.

I think last year there was an increase provided for a million dollars for the Homelessness Fund -

MR. SIMMS: Yes.

MR. BUTLER: - to provide wraparound service. I was wondering, what was last year's experience with this fund?

MR. SIMMS: It did not provide an increase; it provided a first-time Provincial Homelessness Fund. That was one of the items that came up when we were doing our consultations to develop the provincial housing strategy which we unveiled in 1989. One of the things they asked for, and that the Department of HRLE talked to us about as well, was that we should try to seek funding for our own Provincial Homelessness Fund.

HRLE, as you know, provides operational funding to all of these groups that help people who have complex needs. The federal government, through Service Canada, has a program with some capital funding, albeit not a lot. It was suggested to us that maybe we should go seek, as part of our housing strategy, a new initiative. We did and the government listened to our proposal and provided us with a million dollars for a Homelessness Fund, our own Provincial Homelessness Fund.

It is all capital oriented and it is meant to provide additional capital funds to non-profit groups who provide services for complex persons who might otherwise be homeless or whatever. Most of the larger groups in the first year accessed that program. They were well aware of it and they accessed just about all of the $1 million, so we now have a second year and we are also trying to broaden. This is something I should mention to everybody, because you can perhaps mention it to your own constituencies. The bigger groups, the bigger organizations that have the capacity and know how to get the money have been able to access this. We limited the amount that they could get to $200,000, but this year we said, with the bigger ones having received a couple of hundred thousand it does not mean they cannot get another couple of hundred thousand if they need it and if they have a desperate need.

We have also broadened the requirements and guidelines so that if you have in your community any organization, let us say a church that provides a soup kitchen for homeless people, or a food bank, or a clothing shelter or something like that in the basement of their church or the basement of their parish hall or whatever, and they needed a bit of money to build a storage room or some shelving – $10,000 or whatever – that kind of thing would be funded under this Homelessness Fund.

We have broadened it even more than you normally would. We are a smaller Province; you have a smaller number of larger groups. We have not really said no to too many of the larger groups, but we have not had any input from the smaller groups. In fairness, we have not promoted it or talked about it very much. We just had this finalized recently. The minister will probably be notifying MHAs of this with a little more information on the fund.

I think it is certainly worthwhile; there is no question about that.

MR. BUTLER: Excellent.

CHAIR: Okay.

Lorraine?

MS MICHAEL: Thank you.

I do not really have much more, because all of the ones that Roland brought up, obviously, were questions that I had as well - those areas - but just a couple of short ones.

That was good information with regard to the Provincial Homelessness Fund. Of course, I am in a St. John's district where I think all of the major groups know about it.

MR. SIMMS: Yes, they all got their $200,000.

MS MICHAEL: They all got their $200,000, right.

There is just one thing I want to know. Under the maintenance budget - I am really glad to see more money going into the maintenance budget this year, as I am sure you are.

MR. SIMMS: Yes, I am.

MS MICHAEL: What will that do to help with the backlog? Where are we with regard to the maintenance stuff? Do you see it getting really dealt with this year in a big way?

MR. SIMMS: Yes, it has been a bit of a struggle. Last year was a bit of a struggle, mostly because the cost of materials and all those sorts of things have just skyrocketed. Plus, we have run into, in the last couple of years in particular, aside from the mould and asbestos abatement issues that we dealt with, and began to deal with two or three years ago, now suddenly – not suddenly, I suppose, but in the last couple of years, where we are doing some major renovations and major redevelopment projects in some of the older parts of the city in particular, we have struck oil.

The environmental hazards associated with that underground when you are doing work have cost sometimes $100,000 - on the Marguerite's Place project, where we gave them the land, they then asked us: Would you mind cleaning it up? So we did. It turns out it was almost $200,000 because of this oil stuff. That all, unfortunately, has to come out of the regular maintenance budget and that is part of the reason we look for more money.

The other thing was: we have units that have been boarded up, I guess, for want of a better term, for a long time. I think there was something like sixty of them in the portfolio over the last long number of years. Of course, we were always trying to assess whether it was feasible to take $60,000 or $70,000, which is what it would cost for a lot of these. The ones that were boarded up were ones that had foundation problems or major mould situations and required serious money to put them back into the portfolio. It is a lot cheaper than building a new house, I agree, but there were other issues and other things and you were trying to spread your funding out, so it really never got looked at closely until last year and again this year.

This year we will have – we have some tenders out already – thirty-two out of sixty-three that are already ongoing, being fixed, or tenders awarded, or they are approved to be awarded for this year. Eleven of these are in areas where there is very little demand, so they are not on the priority list. There is another fifteen or so, I think, that we still have to try to find funding for. Whether we get that done this year or next year or not, I do not know, but we will be putting another thirty or so back into the portfolio.

MS MICHAEL: Good.

MR. SIMMS: Secondly, on the major renovation projects, you will also note - and I know you know that some of those bigger housing units have been boarded up to do major renovations.

MS MICHAEL: Right.

MR. SIMMS: Thus, we have had to move the tenants into other units of ours, into units that they are reasonably satisfied with for the time being - in fact, some of them stay there - but that means there are sixty or seventy of our units that are not available for housing needs.

MS MICHAEL: That is right.

MR. SIMMS: This year we are going to change our process a little so that what we will be doing is: we will be doing the building envelope on the building first; that is the windows, sidings, doors, and the roof.

MS MICHAEL: Right.

MR. SIMMS: Then, in the winter, we will put our men and our women inside, our carpenters inside, to do the kitchen cupboards and the bathrooms and so on, and do it that way. In that way, they will not have to move outside the house.

With the projects that we have, where we have people already moved out, we are hoping to get most of those finished this year and be able to move back and pick up those seventy or eighty units, which we can definitely use, no question about it.

Our biggest problem is not with families or needs of people who need three-bedroom houses. That is not an issue for us; they will all get a place sooner or later, within the year we always say, but for ones and twos –

MS MICHAEL: It is hard.

MR. SIMMS: – it is a real struggle and it is a real challenge to figure out. We just came from a – you don't mind if I elaborate a little bit?

MR. HEDDERSON: Go right ahead.

MR. SIMMS: We just came from a best practices consultation with New Brunswick, Nova Scotia and P.E.I., our counterparts, last week in New Brunswick, and also attended a community-based conference where Shannie Duff spoke, as a matter of fact, and they are all having the same problem. Rent subsidies are one answer, if you can get landlords who are reasonable; because, if they do not gouge the tenant, they are going to gouge the corporation or government agency for sure.

It is an ongoing challenge, and probably one of the biggest challenges that we face, because 90 per cent of the people on the wait-list need one and two units; 90 per cent of our portfolio is for three bedrooms or more. So, if you put two in a three-bedroom, you on the Auditor General's bad books and on the front page of his annual report.

MS MICHAEL: Yes, it is a battle.

MR. SIMMS: Yes.

MS MICHAEL: I know, even for us, when we have a real problem area trying to get somebody in, it is somebody who is looking for a one or two bedroom.

MR. SIMMS: Yes.

MS MICHAEL: Yes, they are the ones.

In that context, though, I want to do what Roland did, and that is to once again, as I have done before, thank your staff for the great co-operation that we have. I still am amazed. Sometimes I will think my consistency assistant has an impossible case on her hands, and she will come back in ten days or so and say: The person has a unit.

I also applaud very much - because we have had a couple of cases where this has happened - where women in particular, and children, are in dangerous situations because of violence, that they go to the top of the list. I think that is so extremely important.

MR. SIMMS: Thank you.

MS MICHAEL: I want to recognize that as well, because I have certainly had constituents….

MR. SIMMS: Thank you. I will pass it on.

MS MICHAEL: Yes, please do. It is very important that happens. It means so much, when somebody calls in, that Marianne can say: We will have no problem; you will be taken care of by NLHC. She can say that with confidence because of your policy.

MR. SIMMS: We are very close to Marianne.

MS MICHAEL: Yes, I know. I know she keeps at you.

MR. SIMMS: She does, yes.

MS MICHAEL: I really do appreciate that particular part of your program.

I think I have just one more question for Len. Under the PHRP, the rental programs where you have the money for the Rental/Rooming House, the conversion, or after conversion, of non-residency property into affordable housing, et cetera., what are the amounts in this year for that part of the program?

MR. SIMMS: I do not know what the total amount is -

MS MICHAEL: Okay.

MR. SIMMS: - because it all comes under that $10.8 million. I do not think we have that breakdown. I can get it for you.

MS MICHAEL: If you could send that to us, that would be great. I am sure that everybody on the Committee would like to get that information.

MR. SIMMS: So, you would like to know the total amount and then also how it is allocated?

MS MICHAEL: How it is allocated, yes.

We have the figures for 2008-2009 -

MR. SIMMS: Yes.

MS MICHAEL: - but we do not have them for last year. We may not have asked for them. So, if we could have the update.

MR. SIMMS: Something tells me it is $12,000 per unit, but I am not certain of that, so it is best to get the information. I will have Kate call Marianne and pass it on to you.

MS MICHAEL: Okay, that would be great. Thank you.

This might be more for the minister than for the Chair, but we were hoping to see an increase in rent supplements in this year's budget, Minister. Are you looking at that issue?

MR. HEDDERSON: Obviously, when we go forward – I was just checking with the Chair because, again, we would like to see more. Going into a budget process that was one of the things that we were not successful in, but that does not mean that does not go back on the table for future years. It was about budget process, about looking at priorities and the amount of cash and so on. Your point is certainly well taken.

MR. SIMMS: (Inaudible).

MR. HEDDERSON: Yes, go ahead.

MR. SIMMS: Two years ago the government did increase by 50 per cent the Rental Supplement Program, which had been the same for twenty-five years. Kudos to them for that, but it would be nice if we had more.

MS MICHAEL: Because the issue of –

MR. SIMMS: We used to have 1,000 for twenty-five years; now we have 1,422.

MS MICHAEL: Fourteen hundred, yes, that is right.

MR. SIMMS: Of which seventy-five of them we gave directly to Stella Burry and the Canadian Mental Health Association for their purposes.

MS MICHAEL: Right.

MR. HEDDERSON: This helps us in the areas, of course, where we do not have our units. Obviously, we understand the need for that and we will continue, as a corporation, to put forth to government the need. Hopefully, we can see some results next Budget.

MS MICHAEL: Right. Certainly, the sudden – and it is, in a big way, sudden – lack, serious sudden lack, of affordable housing for low-income is really in a critical state. I do not think I need to outline that for you; I think you know that.

It is one thing that could quickly address that issue if there were more supplements. There are other things that need to be done outside of this discussion to get at the affordable housing issue, but one thing that could help would be more supplements; there is no doubt about that.

MR. HEDDERSON: To just get out of the drain, the Chair just whispered to me that he would like to ask you a question.

MR. SIMMS: Is that okay?

MS MICHAEL: Sure.

MR. SIMMS: I am just wondering: Have you done any research, or do you have any knowledge of rental allowances that some jurisdictions have? Are you familiar with those at all?

MS MICHAEL: Yes, Susan is the researcher who does the housing; I suspect Susan does have that information.

MR. SIMMS: Because there are jurisdictions - not many, but Ontario, for example, provides a rental allowance of $100 a month to anybody who qualifies under, I do not know if they use the poverty reduction amount or whatever -

MS MICHAEL: The poverty line, I think, yes.

MR. SIMMS: - and it is meant to be just a little hand up to help somebody who is out there looking for a place and finds an accommodation on their own. It can be a costly program, I would suspect, but we are doing some research on it as well under our own housing strategy.

MS MICHAEL: That is right.

MR. SIMMS: I just wondered if you had any -

MS MICHAEL: No, I have not spoken necessarily with Susan about it, but I know of it from when I lived in Ontario. I was aware of it from my days living there.

With regard to the affordable housing, the federal-provincial initiative, of course, was a two-year program. What is the talk about that being renewed?

MR. SIMMS: We have ongoing dialogue with it because they actually did announce two years ago it was extended for five years, but the funding allotment was only confirmed for the first two.

MS MICHAEL: Right.

MR. SIMMS: Then, of course, the stimulus came on top of that. It was great for these past two years; we had a $26 million program. Normally, our per capita share is about a $5 million-a-year-program. My guess would be, once discussions are finalized for the remaining three years, we will probably have a smaller program, a $15 million program or something like that. I am only guessing that.

The minister attended his first federal-provincial ministers' meeting in Ottawa back in December and made a presentation himself; I think it was the first day he was appointed. I do not know where he got the information but, anyway, he was well armed.

So, yes, negotiations are going on with all the PTs and the federal department. The minister finally got engaged - the federal minister - after three or four years of attempts. We are hoping - they have told us and they have said publicly that they are going to extend it. We are having our discussions. The provinces have all submitted a joint proposal, I think, isn't it, Kate?

MS MOFFATT: Yes.

MR. SIMMS: Yes, we have submitted a joint proposal. We are hoping to hear by March, anyway, if not before, but by March for sure.

MS MICHAEL: It would be good news.

MR. SIMMS: For another three years.

MS MICHAEL: For another three years, it would be great.

MR. SIMMS: It will be good news. It will be a smaller amount of money, but everything is good, whatever you get.

MS MICHAEL: Right.

That is all my questions. I very much want to thank Mr. Simms and his staff for the information.

CHAIR: Thank you.

Are there any more questions?

MR. BUTLER: I just have a couple here.

I was just wondering: Have there been specific work plans developed to implement the Secure Foundations social housing plan?

MR. SIMMS: Yes. That is what we are all about.

MR. HEDDERSON: Basically, everything emanates from that

That is where we are; because, obviously, like a home, you have to have a solid foundation, and the principles that are contained in that, obviously, are directing our strategies and our directives.

You might want to just get a little bit more specific.

MR. SIMMS: Yes, I think that is what he is wondering: Are there any specifics to it? Because the plan is a visionary thing –

MR. BUTLER: Yes.

MR. SIMMS: - tenure and guidelines and so on. So, yes, in the first year, last year when it was announced, then Minister Taylor announced six or seven initiatives –

MR. BUTLER: Yes.

MR. SIMMS: - all of which were the ones that were asked for by the stakeholders. So we put everything in there that we could in the first year and then, this year, the items that were in our Budget, like new units for Nain, that was to serve an Aboriginal community; the increase in maintenance, it is all about keeping our own structures in half decent condition; the other additional funding that was put in there, the heat subsidy increase, for the first time in twenty-five or thirty years we got a heat subsidy increase for everybody, and we use what the objectives and goals are in the housing strategy Secure Foundations to seek funding each year when we go through the budgetary process. We look for three or four or five items and we usually – well, this year we got three, so we are pretty happy about it. Those are specifics.

Occasionally I am asked to give a presentation on the program, the Secure Foundations housing plan. I did one recently for the Status of Women Council in the Province, and I then outlined the specifics and so on and so forth. The requirement is for the minister to give a report every two years, and he will be doing one of those - this year or next year?

MR. HEDDERSON: Next year.

MR. SIMMS: Next year. Every two years he has to give a report. In that will be -

MR. HEDDERSON: Again, in the interim - because I know both of you do have good contact with the Chair and with the officials, because I know it is a work in progress as we try to come to grips with some of the challenges - I am sure the Chair is always open to presentation or a sharing because, again, it is an important component. I am sure that any questions that you have with regard to where we are going, direct to the Chair would be the place to go.

MR. BUTLER: My last question, Mr. Chair, is under 1.1.02., Housing Operations and Assistance. I know last year the Budget was $1 million, Revised to $1 million, and this year it is $1.2 million. I am just wondering; I guess you figure the $200,000 this year will be sufficient to carry out the program and any additional –

MR. HEDDERSON: Is that the two duplexes?

MR. SIMMS: That is the units in Nain.

MR. HEDDERSON: Yes, that is Nain.

MR. SIMMS: That is the four new units in Nain.

MR. BUTLER: So the $200,000 is what that is for? There is an increase of $200,000 over last year.

MR. SIMMS: I am not sure, specifically.

MR. HEDDERSON: I thought they were earmarked for the – the $1.2 million is the cost of the units. So I guess that is where it is showing up. Am I correct on that, Tom?

MR. LAWRENCE: That is a Capital Budget item; therefore, it does not go from year to year. The $1.2 million is for the new units in Nain, just for those four new units.

MR. BUTLER: Okay. So the $1 million last year, I thought it was just a carry-over or something.

OFFICIAL: (Inaudible) something else.

MR. LAWRENCE: Yes.

MR. BUTLER: Okay, all right.

MR. SIMMS: I see what you are saying now.

MR. BUTLER: Yes.

MR. SIMMS: It is not an increase of $200,000.

MR. BUTLER: No.

MR. HEDDERSON: No.

MR. SIMMS: The million last year was for something separate –

MR. BUTLER: And the $1.2 million is totally –

MR. SIMMS: – and the $1.2 million is something else this year.

MR. HEDDERSON: Yes, that is our Capital.

MR. BUTLER: Thank you.

I would like to thank the officials this morning.

MR. HEDDERSON: Thank you.

CHAIR: Are there any more questions?

Call for the subhead.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01.

Shall 1.1.01 carry?

SOME HON. MEMBERS: Aye.

On motion, subhead 1.1.01 carried.

CLERK: Subhead 1.1.02.

CHAIR: Subhead 1.1.02.

Shall 1.1.02 carry?

SOME HON. MEMBERS: Aye.

On motion, subhead 1.1.02 carried.

CHAIR: Shall I report the totals carried?

SOME HON. MEMBERS: Aye.

On motion, Newfoundland and Labrador Housing Corporation, total heads, carried.

CHAIR: Shall I report the Estimates of the Newfoundland and Labrador Housing Corporation carried without amendment?

SOME HON. MEMBERS: Aye.

On motion, Estimates of the Newfoundland and Labrador Housing Corporation, carried without amendment.

CHAIR: Okay. Thanks, everybody. Thank you, Minister.

We will take a ten minute break, as agreed. It may run into fifteen, but we will try for ten.

MR. HEDDERSON: Thank you, Mr. Chair.

CHAIR (Forsey): Welcome back, everyone.

This is a continuation of the Transportation and Works Estimates. We do have the same Estimates Committee; however, Minister, we will ask you to introduce your staff, or they can introduce each other. When you are responding to questions, it would be nice to give your name for record purposes. If you want to give us an overview, Minister, as well, of your department before we start questions. I will have to call for the subhead first.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.0.1., Transportation and Works.

Minister.

MR. HEDDERSON: Tom Hedderson, Minister of Transportation and Works, and Minister Responsible for Housing.

MR. SMART: Bob Smart, Deputy Minister of Transportation and Works.

MR. GOSSE: Gary Gosse, Assistant Deputy Minister for Transportation branch.

MR. MOORES: Weldon Moores, Assistant Deputy Minister, Strategic and Corporate Services.

MR. SCAPLEN: Roger Scaplen, Director of Communications, Transportation and Works.

MR. K. ANTLE: Kevin Antle, Director of Financial Operations.

MR. G. ANTLE: Gerry Antle, Assistant Deputy Minister for the Works branch.

MR. ALEXANDER: Paul Alexander, ADM for Marine.

MS VOKEY: Sharon Vokey, Executive Assistant, Transportation and Works.

CHAIR: Okay, Minister.

It is the same Committee.

MR. HEDDERSON: Okay.

In the interest of time, obviously, just looking at our Estimates book, we have a lot of ground to cover. Just in starting off, first of all, obviously the Department of Transportation and Works are in every nook and cranny of this Province providing very essential services, whether it is our ferry services, our transportation services, our housing or our buildings, and we do have a group of dedicated individuals throughout the Province who are carrying out the work.

Again, moving forward, I am very, very pleased that we were able to continue in the bent that we are in under this particular government and giving us the dollars that we need to continue with our infrastructure strategy, with our transportation strategies, and the replacement of our ferries. There are a lot of things involved in this particular one.

I am just going to defer to our members opposite, looking at the clock and making sure that we give the time, and maybe reserve just a few minutes at the end if I just want to clue up. So, again, I pass it back to the Chair.

CHAIR: Roland, do you want to start the questions?

MR. BUTLER: Okay.

Thank you, Minister, and I welcome a new group of your staff members.

I am going to go into some follow-up from some of the issues that I have probably asked questions on last year and the year before, just for a quick response. I know the TODS program is administered by – the programming is through Government Services. I had an opportunity recently to meet with a gentleman who – I mentioned this to the Minister of Government Services and I think he agreed to meet with him. Whether he did or not, I do not know.

The gentleman, like I said, has those big signs, the ones you put the letters on. It is not a painted sign. Apparently, his signs were taken down and he could not find them. Then someone with your department at one of the depots – and I will not mention any depots anywhere because I do not think that is fair. He can do that if he wishes. He came to find out that the signs were taken to a site, a hole was dug, and his signs were buried, $25,000 or $30,000 worth. Now, that is the story he gave me.

I was just wondering - whether the minister is aware of it or not. I was just wondering: Is that the policy? Is that what you do when you take signs down, or do the people come and pick them up, or what?

MR. HEDDERSON: They must have been expensive signs. Did you say $25,000?

MR. BUTLER: That is what he told me, $25,000.

MR. HEDDERSON: Twenty-five thousand dollars worth of signs buried?

MR. BUTLER: Those big ones, with the legs on them.

MR. HEDDERSON: Yes, but you would have to have about a thousand of them.

MR. BUTLER: No, they are more than $1,000 each.

MR. HEDDERSON: I know we do put them up and we do take them down. Somewhere in between we store them, or obviously if they are –

MR. BUTLER: That is what I was wondering: What is usually done with them?

MR. HEDDERSON: I will just go to Gary to see where we have our buried signs.

MR. GOSSE: People who own these signs that are to be removed have been given advance notice to remove them or they are going to be removed. The direction that we have been given is, if we have to take them down, to destroy them so they do not have the opportunity to go back up again.

MR. BUTLER: Destroy them?

MR. GOSSE: Yes.

MR. BUTLER: Okay. That is the answer I am looking for.

Minister, I know I asked you about this before in the House: Class 4 roads. Why I bring it up again today, I know there are a couple of roads in my district, and I am sure they are right throughout the Province, and the Department of Natural Resources, through the Agriculture branch, are doing some work on them because there are eight or nine farmers in at the end of this road. They are spending some money putting new culverts in, and ditching, and I know they are not going to have enough money to finish the roads. I was just wondering, once more, if both departments - and I know this was done before, that both departments came together and did a bit of work on the roads so that the farmers, the berry farmers and the vegetable farmers, can get over those roads. I was just wondering: Is there anything that you plan to do with another department, probably, to help complete those roads?

MR. HEDDERSON: Yes. Any road construction, obviously, with any department - Municipal Affairs - if they ask our advice or sometimes our help, we are only too glad to pitch in there. The resource roads, I think they are tendered out, if I am not mistaken, Gary; they would be tendered out and that sort of thing.

Under the Class 4, of course, a review has been done. As we move forward we are looking at case by case. There are some situations where there are obvious ways that we can link into a part of a road or the end of a road or something like that, but it is always on an individual basis. The results of that - I am just going to refer to my deputy or to my assistant deputy just to talk a little bit about that review and where we are with it.

MR. SMART: We are undertaking a review of Class 4 roads, and there are quite a few. Gary could probably quote you the exact number of kilometres involved here, but for us to just simply take on all Class 4 roads really takes the resources away from the Trans-Canada Highway and all the other main roads that we do.

As the minister indicated, where issues do arise with respect to Class 4 roads we consider them on an individual basis to see if there is merit in us assuming or reassuming control and maintenance of the road. In a lot of cases, for us to maintain maintenance on the road, it has to be large enough to take our equipment. We cannot snow clear roads that are narrow, that do not have sufficient turnaround. So they are basically dealt with on a case-by-case basis. If a good case can be made as to why we should maintain it and how many permanent livyers are on the road and so on, we look at it on that basis.

MR. BUTLER: Those roads in particular, they are up to standard because they were always plowed and maintained previously, right?

MR. HEDDERSON: Be careful there, Roland; because they are Class 4 roads, we would expect it to be what, Gary? At a standard where there is ditching and – if you could just pick up on that point.

MR. GOSSE: What we require for us to be able to maintain a road is a driving surface approximately eight-and-half metres wide; that allows our equipment to go down and get back out safely. We require turnaround at the end. We require ownership of the right of way, which is typically twenty metres wide, ten metres each side of the centre line, and we require proper drainage infrastructure to be put in prior to us considering taking over. We also need two permanent livyers, as a minimum, on the road before we would consider it. Just for your information, there is about 400 kilometres of Class 4 roads in the Province.

MR. BUTLER: Like I said, those roads before, culverts were put in by the department and ditching was done. So they are up to that standard anyway, but it was just that they were dropped.

My next question is, I am wondering - and I know this is before the courts but I am just wondering - have you heard anything with regard to the case that went to the Supreme Court on the closures of the depots?

MR. HEDDERSON: It is still before the courts, so obviously that is as much as I can say.

MR. BUTLER: Okay, so there is no word on that.

Last year, and I think the year before - I think this is the year that everything was supposed to be finalized, and that was the Geographic Information System. I think the minister, and I have my notes here from last year - or, not the minister; I think it was yourself - mentioned that everything was just falling in place and this year should have been finalized. I was just wondering if you could give me an update.

MR. HEDDERSON: Gary, just a quick update.

MR. GOSSE: I guess our base for the GIS, Geographic Information System, is in place. It is running quite well. There is a multitude of information that we can garner from the system now.

As far as being finished is concerned, there are always ways to add on and improve. There are more databases that you can add on to our GIS system. Those are some of the things that we are looking at right now. For example, you can add in an accident database where you can go in and pluck out information on any particular accident or any particular piece of roadway related to a number of accidents and so on.

MR. BUTLER: Very good.

With regard to the two new ferries, I think it was mentioned last year that the plan was that one would go to Long Island, Little Bay Islands, and the other one to St. Brendan's. I was just wondering: Has anything changed there, and what is the expected date now? I know there were dates given last year, and probably they are coming fast upon us now when they would be available. I am wondering if you could give an update of when those two vessels that are in Marystown would be finished for service.

MR. HEDDERSON: Nothing has changed with regard to the bringing in of these ferries. The Long Island system would be the first choice, St. Brendan's the second, barring any unforeseen circumstances, I say to the member, because obviously things can happen, but they are coming out pretty close together. We have been tracking the progress, and I will just get my ADM, Paul, to give you an update if he could.

Paul?

MR. ALEXANDER: The current delivery dates are October and December: October 8 and December 17.

MR. BUTLER: My next question, Minister, I am just wondering if you can give an update on the status of the Torbay Bypass. What is the expected completion date of that out there?

MR. HEDDERSON: Again, just point it out, Gary, very quickly.

MR. GOSSE: The Torbay Bypass, the subgrade work on the bypass itself has been finished. The widening and repaving of the five-lane section between RCAF Road and the Jack Byrne Arena has been contracted now. We expect construction to start within the next week to two weeks. The paving contract for the bypass will be tendered publicly within the next month to six weeks and we are hoping for – well, we are targeting completion this fall.

MR. BUTLER: Thank you.

Minister - I think this is probably through your department - could you just give an update of the status for the exterior, the renovations to the building here? I know there is a nice bit of work going on, and I am just wondering: Is that going to continue? What is the overall plan? Will that continue right throughout the building or is it just that section for now?

MR. HEDDERSON: We took that section, of course, to get in there, to do the repairs and to see what we were getting into. In going in, obviously, we were very successful in getting it put together. We found some encouraging signs as to the integrity of the structure. There is some rot around the windows, but again I will just ask Gerry to take us through where we are and where we are going.

MR. G. ANTLE: Yes, we completed the first phase; we call it our mock-up phase of the window replacement. The work uncovered some issues, nothing too serious. We intend to tender the replacement of the remaining windows very shortly. We expect to have it completed somewhere around late 2013, likely 2014.

MR. BUTLER: Thank you.

Just another update, I guess. What is the status of the redevelopment of the Sir Richard Squires Building in Corner Brook?

MR. HEDDERSON: Gerry.

MR. G. ANTLE: The Squires Building is intended to be the next phase. We tendered the first contract last fiscal; it was for a minor area of the ground floor. We intend to tender subsequent renovations, the second contract, within the next month. The renovations should be complete in about two years' time.

MR. BUTLER: I notice the Auditor General - and I guess the Auditor General reports on a lot of things from time to time as well - went into it about the aging fleet, and we understand that anyway; we all know the ages of the vessels.

I think it was in this year's Budget - not referring to the two that are being built now, and I think there is a third and fourth also being mentioned, but there were five others. I think there were five for the –

MR. HEDDERSON: Six.

MR. BUTLER: - South Coast, and one for Labrador.

MR. HEDDERSON: Yes.

MR. BUTLER: I am just wondering if you could give me a report on that. What are the plans there?

MR. HEDDERSON: Basically, just to run down, of course, two on the skids ready and hopefully out to us before year's end. Those are going to St. Brendan's and to Long Island-Bay of Islands. There is one in the works to follow – the same type of a boat. We have the propulsion system, we are seeing how the progress is going, and I guess in a little while we will make the transition to get that one moving.

Another boat for the replacement of the Fogo ferry, that is in the design stage right now. I will get Paul to go over the dates with you when I finish.

The smaller ones, which are the five that we referred to on the South Coast and one in Labrador, right now - we had initially put out a tender for the services, and found out there were no boats available. What would have happened then is they would have to be constructed, and it is obvious they would be constructed outside of the Province. We basically did not want that to happen, so we drew back on those. We are in the process now of following the direction of government, which is to direct the construction of these six ferries within Newfoundland and Labrador. Paul or Bob will talk a little bit about where we are in that particular stage.

The other one that we have to look at is, of course, the Straits with the Apollo. The tender for that is at the end of this year, I believe. We may look for an extension there while we are considering then what kind of service we are going to be putting across between St. Barbe and Blanc-Sablon. Obviously, the boat that we are building for Fogo, that design may be appropriate but again we are not getting too far ahead.

So, Paul and Bob, did you want to pick up there?

MR. SMART: Bob Smart, Deputy Minister.

Just on the five smaller vessels for the South Coast and the one for Labrador, we are going through a process now of developing the procedure we will use to build those vessels in the Province and how we will go out to local shipyards and invite them to submit proposals. We have various options there, whether it is a public tender, whether it is a Request for Proposals, or whether it is a request for Expressions of Interest. We are now working through the details of exactly how we will go about engaging local shipyards to build those boats for us.

Over the next month or so, I would expect that we will make the determination as to what the process is and then invite proposals to get on with it.

MR. BUTLER: Mr. Chair, we can go to my colleague now, if you wish, for a few – do you want to take that time, Lorraine, if you are ready?

MS MICHAEL: Sure.

I will do one more in the ferry line. Is there, in the longer-range plan - because obviously it is not in the shorter-term plan because you have outlined what that is - any thought to Bell Island? I find the neglect of Bell Island bemusing. I just do not understand it: people who, on a daily basis, have to go back and forth for their living and have to go through what they go through. What are the plans, Minister, with regard to the Bell Island ferries?

MR. HEDDERSON: Well, when we look at the Bell Island ferry, obviously there are two ferries going back and forth so the redundancy is built into that, and the size of the boat seemed to be okay to take care of it. Again, it is all about scheduling and the demands, and perhaps increased demands.

Those are the two really newest ferries that we have, I would say to the member. One was built in 1985 and the other one was built in 1990 or 1991; I think they came on stream in 1992, and they do have shelf life left in them, obviously. The needs that we have, we are looking at running through, as I just pointed out to the other hon. member, that basically is our strategy, our six small, medium and large. When we take care of the needs of Fogo and the Straits and so on, obviously we will be turning our attention to Bell Island and look at what we are going to do with regard to those two ferries as well.

We are in a situation right now where we are right in a construction stage of replacement. As we retire ferries and that sort of thing, and get closer, I am sure that we will try to find ways to provide a service that is adequate to the needs of Bell Island.

It is legendary, as you well know.

MS MICHAEL: I do.

MR. HEDDERSON: I think all you need to do is go back in time and find that there have been challenges. We hope that we are meeting those challenges and dealing with it.

As you also know, right now I just have one swing vessel, really, which is the Nonia, and the Winsor serves Fogo. If the Winsor goes down, my only choice is to take one of the boats off Bell Island, which is the Beaumont Hamel, and to replace it with the Nonia, and we see what ramifications that might have. We had the Nonia on one particular occasion break down and we only had one boat.

What it is, admittedly, we are running these boats to their maximum. That is not good, either, simply because you need to take some time for regular maintenance and resting the boats. It is the same way as your vehicle; if you are just flat out year after year, every day, the maintenance cost of keeping it going and the frequency of breakdowns will be obvious.

Your point is well taken. Obviously, we are working through what we can do. The unfortunate thing about ferries is that you just cannot order them like a fire truck or whatever; you have to put them in construction, which usually takes a couple of years.

So those are the challenges that we have, and basically we are working through them. The best thing that we can do is to continue to work with the Bell Island ferry committee and try to make sure that we inform them of what things are happening and also to put contingencies in that can get them out of rough spots.

MR. SMART: Can I just add one thing?

MR. HEDDERSON: Yes, if you would.

MR. SMART: Bob Smart, Deputy Minister.

Just to add one comment to the minister's, a lot of our issue on Bell Island lately is not all ferry related; it is dock related. We have significant wharf infrastructure in Portugal Cove and Bell Island, and a lot of delay that we are encountering lately has to do with the very significant wharf redevelopment we are doing on Bell Island. We basically have two jogs, as they call them, for two boats going back and forth. With the wharf remediation underway we only have one, so that automatically limits how quickly the vessels can dock.

That is a very big part of the existing problem. It is not just the vessels; the wharf, actually, is the biggest problem right now, and we will have that resolved within a matter of some weeks when the remediation is complete.

MS MICHAEL: I appreciate that, and I thank you for pointing that out.

I am just wondering, with regard to the boats themselves, just from the perspective of being in the general public and hearing how often one of the boats is down, not counting when they are needed because of another boat being down, is the maintenance of the current ferries with regard to the respective ages of each one on par with what would be expected from a ferry of that age, for example, or are they down more frequently than one would expect, or has that assessment been done?

MR. HEDDERSON: With regard to the age, obviously, the newer the boats the less maintenance and the less refit you would have to do simply because of the newness or the age of it. That is the problem that we are having now, because our costs of refit and repair are way up here where they should not be.

Naturally, when we put a boat in, no matter what it costs, to some degree, we have to fix it in order for that boat to come out under inspection. I have no doubt when they come out of there that they are up to where they should be, safety-wise and otherwise, but the costs are really, really escalating - and the time that it takes to repair them.

We took a boat out last year, because when we put her on to get her refit, the costs of refitting - because you basically have to take her right down to, I do not know what you call it, the chassis or the gunnels or whatever - it just was not worth it. So we decommissioned that one. That, again, put us in a little bit of a hole because that is a boat that we could use as a swing vessel, but we insist, and Transport Canada insists, that when they go in - because there are regular inspections. That is why the Winsor has to come off now, because the tanks need to be certified. We have no choice but to take her off and to certify her. Then, once she goes in dry dock and they take her out of the water, we are hoping that everything is fine; but, if it is not, she does not come off until basically we are satisfied that everything is done that is needed to make sure that boat is seaworthy, if you want to put it that way.

MS MICHAEL: Then the Bell Islanders suffer during that, because the swing boat will then be used when the Winsor comes off.

MR. HEDDERSON: Yes, indeed.

MS MICHAEL: That system is not working. It is not.

MR. HEDDERSON: No, it is not. That is why we have, as quickly as we can, like I said - we have so many needs throughout the Province, and it was not overnight, as we all know. The last ferry that was built in Marystown was in 1992, and had that policy continued we would have a fleet now, but all of a sudden we have to go in – and I just named off how many boats? Ten boats, was it?

MS MICHAEL: I have the list.

MR. HEDDERSON: That we are trying to – and, like I said, our newest boats just happen to be the ones that are on Bell Island. We are looking at replacing those as we get down through the rest of them.

MS MICHAEL: Many years down the road.

MR. HEDDERSON: Yes, indeed.

MS MICHAEL: Okay, I will not push it any further.

MR. HEDDERSON: I think you can sense a little bit of frustration on my part, too.

MS MICHAEL: Right.

MR. HEDDERSON: Because, again, it is just what I am dealing with. You have a fleet that is aging. We want to make sure that they are safe, but we also want to make sure that the services – and usually it is like the ocean: if something goes wrong with one, that ripple effect occurs.

MS MICHAEL: Oh, I understand.

The only other general question I have - there will be a lot of line item questions, but the only other general question I have - is with regard to the bridges in the Province. I think the bridges are a big issue, and I am just wondering if we could have an update on the state of bridges. Which ones are of special concern, strategy for replacement, et cetera, with regard to the bridge situation?

MR. HEDDERSON: Yes. Just to lead into it, obviously bridges are very, very important simply because they are stationary structures and a lot of traffic is going over them. We have inspected all the bridges at one particular time and, depending on the age, we do them one or two times a year, whatever is required to ensure – and, of course, over the last number of years we have dedicated specific funds to knock off a lot of the bridges.

For example, one of the biggest projects that we are doing now is the lift bridge in Placentia. I think it is in the vicinity of $20 million.

MS MICHAEL: It is a big one.

MR. HEDDERSON: It needs to be done, it has to be done, and we are trying to incorporate it. As these bridges come up, there is no question - if you notice in some of the roadwork that we are doing, these are givens - if the bridges are identified as having some sort of a risk that we cannot mitigate, we replace them. There is no question about it.

Now, with regard to the bridges, I am going to refer to Gary just to take us through.

MR. GOSSE: Yes, we do have a bridge inspection policy. Our bridges are inspected on a risk-based system. They are mandated to be done a minimum of once every two years. If we have particular concerns, of course, we do them more frequently.

This year we are doing in excess of $30 million worth of bridge repairs and replacements. We do take bridge safety very seriously. We do not allow them to get to the stage where we have serious concerns with them. We address them far before that.

MS MICHAEL: Great.

MR. HEDDERSON: Is there a particular bridge or bridges?

MS MICHAEL: No. I am just, in general, interested because of the last time that the AG talked about the bridges. I wanted to get an idea of where things were now over the past few years.

MR. HEDDERSON: Exactly. Okay. We have a list of them, if you are interested in those.

MS MICHAEL: Well, it would be good to have the list.

MR. HEDDERSON: Yes.

MS MICHAEL: Okay, thank you very much. Maybe the other members of the Committee would like to have that list as well.

Thank you.

That is all my general questions. I could go into lines unless, Roland, you want to start doing some line items?

MR. BUTLER: No, that is okay.

MS MICHAEL: Okay.

Now, there are a lot of line items because you have quite a portfolio here.

MR. HEDDERSON: Certainly, and that is why I say, in the interest of time, I am putting out to my officials to try to keep my commentary as close - because it is an opportunity for you to ask my officials. They are on the ground and into the details.

MS MICHAEL: I will not be asking small amounts, but things that are jumping out at me.

MR. HEDDERSON: Sure. Small or large, we will take them all.

MS MICHAEL: Okay, very good.

The first one then would be 1.2.03. Strategic Human Resource Management, subhead 01. I notice that the difference between the estimate budget last year and the revision is $231,000. There was $231,000 more spent in Salaries last year. It looks like a temporary thing because this year we are back down to the same estimated budget, more or less, as last year.

MR. HEDDERSON: Yes, there are two training officers, I understand. Is that correct?

MR. MOORES: There are two training officers that we had hired, and that was why the Revised was up.

MS MICHAEL: Okay. They were just required for one year. What was the nature of their training? Who were they training?

MR. MOORES: I would have to check that. They would be training our equipment operators and also our contract people on projects.

MS MICHAEL: Okay. Thank you very much.

Under 03. subhead in the same section, Transportation and Communications, once again there was a big increase. It looks like a one-time thing, $150,500.

MR. HEDDERSON: That was relocation of employees and, of course, all of the relocation costs would be charged to us.

MS MICHAEL: What was the program that caused the relocation?

MR. HEDDERSON: What is the relocation on those?

MR. SMART: Actually, relocation expenses we pay when we recruit new people. If we hire a person from Corner Brook for a job in St. John's, we pay to relocate them, or sometimes we hire out of Province, so they are the relocation expenses we pay for people that we hire.

MS MICHAEL: But you had such an increase last year and you are back down to your estimate this year of only $39,800 again. Was there any particular reason why there was so much more relocation last year? Because you did not anticipate it, and it is $150,000 more than what you had budgeted.

MR. SMART: It is difficult to anticipate, actually, because we do not know at the beginning of the year how many jobs are going to become vacant in the department, how many engineers might leave, and how many more we might have to recruit and where we might recruit them from, so it is difficult to anticipate. This year could very well be $100,000 as well, but for budget purposes - seeing as we cannot specifically say to Treasury Board we are going to relocate ten people - if we cannot give a very specific answer, well, they lowball it basically. It is very hard to project what it is going to be.

MS MICHAEL: Okay. Thank you.

The next one, 04. Supplies, once again the Budget was only $4,500 but it was overspent by $220,000. What was that expense? That is a big piece.

MR. HEDDERSON: Yes, it is a big piece.

MR. SMART: Do you want me to go?

MR. HEDDERSON: Yes, you go through that one.

MR. SMART: It is predominantly protective clothing and protective devices, like things to protect our workers against hearing impairment in our depots, things to protect our workers against eye damage, to give them safety goggles and so on. Last year we put a particular emphasis on acquiring these types of things, particularly hearing and eye safety protection. We found money elsewhere in our budget, put it into here and purchased those things last year.

MS MICHAEL: You do not anticipate a major thing like that this year?

MR. SMART: Well, we sort of stocked it up last year and have the bases covered. We do not think we will need to do it again.

MS MICHAEL: Okay, thank you very much.

Again under the same major head but 06., Purchased Services, this was not an item prior to 2010 but all of a sudden there is major Purchased Services. What is it that is covered under that? Because you did not have expenditures in 2009-2010, but this year we have a Budget and there was no money basically in here last year. What are you anticipating?

MR. SMART: In Purchased Services or Property, Furnishings and Equipment?

MS MICHAEL: It is under Purchased Services for me.

MR. HEDDERSON: Yes, I do not think there is much of a difference here.

MS MICHAEL: It is 06.

MR. HEDDERSON: There is no difference there unless you go back. How far back are you going?

MS MICHAEL: Up here.

MR. HEDDERSON: In 2009-2010 we spent $374,000 and I think we are down to three –

MS MICHAEL: I am looking at Purchased Services –

MR. SMART: Which is $370,000 -

MS MICHAEL: - which in 2009 - I am sorry, it is my mistake. I am very sorry about that.

MR. HEDDERSON: Yes, that is about training and development and -

MS MICHAEL: No, I am reading columns incorrectly.

MR. HEDDERSON: Okay, not a problem.

MS MICHAEL: I am sorry about that.

MR. HEDDERSON: Not a problem.

MS MICHAEL: Thank you.

Let's move on. Let me make sure I do not get my columns mixed up here this time. If we could look to 1.2.06.07., Property, Furnishings and Equipment, it is under Capital, 1.2.06., there was $350,000 allocated last year, nothing of that was spent, and then $150,000 this year. Was that allocation expecting something to happen that did not happen?

MR. HEDDERSON: Gary?

That is one of your bridges.

MS MICHAEL: One of my bridges.

MR. GOSSE: The appropriation we had there for last year was for the acquisition of a bridge management system. We are still struggling with what the rest of the country is doing, and working with other jurisdictions to determine what the best approach is for a bridge management system for the Province. We do not expect that to happen this year. We are working with our colleagues in other provinces to collectively come up with the right approach.

MS MICHAEL: You have allowed some money for that work that you are doing. Is that what the $150,000 is for, or is that for other -

MR. GOSSE: That is correct.

MS MICHAEL: Okay, thank you very much.

Under 2.1.01.01., once again Salaries, there is a $283,000 variance between the Budget and the revision. What was that? Because this year we are back down to what was budgeted last year, more or less.

MR. HEDDERSON: Yes. Approximately $160,000 would be severance and the rest of it, I guess, for temporary employees to meet some operational requirements that we needed.

MR. SMART: Just to elaborate, because the question may come up on salaries throughout the budget, you will see a number of changes in our salary accounts; we move money around during the year. If we have to pay more money on snow clearing, we will move money from here over to there. So that is happening. The other thing to keep in mind is that in the 2009-2010 fiscal year there were twenty-seven paydays.

MS MICHAEL: Yes, I realize that.

MR. SMART: In 2010-2011 there are twenty-six.

MS MICHAEL: Right.

MR. SMART: So that changes the budget, but then on top of that there are salary increases in 2010-2011. Our salary budget in total is basically the same this year as last year, and our staff levels are the same, although you will see maybe a lower expenditure in one account but it is up in another account as we move it around throughout the year.

MS MICHAEL: Well, I guess I just get curious when I see that in one year, when you have $283,000 more than what you had budgeted but then that $283,000 is not in this year. It is more than what was budgeted; that is why I question it.

MR. SMART: Yes. The biggest thing, as the minister –

MS MICHAEL: The answer of severance and temporary workers is the answer, I think, that explains what I am looking for.

MR. HEDDERSON: That is a good portion of it.

MS MICHAEL: Yes, that is what I am looking at, the difference between the revision and what was budgeted.

Under subhead 03. Transportation and Communications, again the revision was $290,000 more than the budget, whereas this year we are back down to more or less the same budget. Was there something unexpected?

MR. HEDDERSON: There were a couple of new positions, I think. Was it maintenance positions?

OFFICIAL: (Inaudible).

MR. HEDDERSON: For travel. Yes, it was all travel.

MS MICHAEL: So added to the travel expenses?

MR. SMART: Bob Smart, Deputy Minister.

The opening of the Trans-Labrador Highway has increased our expenses in that regard, at least in the first year, where we had to have more people on supervising the maintenance and the opening of the road, and so on and so forth.

MS MICHAEL: Sure.

MR. SMART: We would hope it would drop back to normal again in 2010-2011.

MS MICHAEL: Thank you very much.

Under subhead 05., the same major head, Professional Services, nothing was budgeted but $200,000 was spent, and there is nothing budgeted for this year. What was that expense?

MR. HEDDERSON: That was consultants on our Geographical Information System, the GIS.

MS MICHAEL: The GPS - or GIS, rather.

MR. HEDDERSON: So that would have been one time?

OFFICIAL: Yes.

MR. HEDDERSON: One time.

MS MICHAEL: Okay, thank you.

Under this one, subhead 10. – I am just curious - what are the Grants and Subsides for? It is not a lot, but I am just wondering.

MR. HEDDERSON: These are some local road grants that we give out. Are these on islands, or…?

OFFICIAL: (Inaudible).

MR. HEDDERSON: Yes, like on an island, and rather than send the equipment in, we give the money to the people and they take care of their own roads.

MS MICHAEL: Sure.

MR. HEDDERSON: It could be a skidoo track, or not a skidoo track but an ATV track or something like that, so where there are really no roads.

MS MICHAEL: Right.

MR. HEDDERSON: It might not necessarily be on an island.

MR. SMART: François (inaudible).

MR. HEDDERSON: François, and these.

MS MICHAEL: Right. Understood. Thank you.

MR. HEDDERSON: Last year I think we had a little bit extra that we needed to put in there.

MS MICHAEL: Okay. I want to make sure now that I do not cross over lines here.

Under 2.1.03.06., Purchased Services, $2.8 million was budgeted and an overspending of $200,600. I just want to know what that extra was, or was it something unanticipated.

MR. HEDDERSON: Purchased Services, is that what it was?

MS MICHAEL: Purchased Services, yes, subhead 06.

MR. SMART: Under 2.1.03?

MS MICHAEL: Under 2.1.03, Maintenance and Repairs, subhead 06.

MR. SMART: It is predominantly the increased cost of road maintenance contracts, particularly on the Trans-Labrador Highway. Our roadwork on the Trans-Labrador Highway, virtually all of it, is contracted out.

MS MICHAEL: Right.

MR. SMART: The opening of Phase III increased the number of kilometres of road to be maintained.

MS MICHAEL: Sure, okay. Thank you very much.

Of course that is why your estimate is up now, because you do have more maintenance.

MR. SMART: That is right.

MS MICHAEL: As I said, I am only going with major things that I see, that I would like an explanation for. Under 2.1.04., Snow and Ice Control, subhead 06., the budget last year, the estimate, was $8.6 million, it was under spent by $1.5 million, more or less, but this year the budget is now up to $9.4 million. If we could just have an explanation of why the increase of $774,000 when you under spent last year.

MR. SMART: This is snow and ice control. This year was a pretty good winter. You can see that in the number; the costs are down.

MS MICHAEL: Right.

MR. SMART: We are expecting next winter to be normal again. On top of it being a normal winter, this accounts for the contractors we hire, again predominantly on the Trans-Labrador Highway to do snow clearing, and there is an escalation provision in their contracts that their cost, obviously, goes up from year to year.

MS MICHAEL: Thank you.

Roland, do you want to ask some?

MR. BUTLER: If it is okay with you.

MS MICHAEL: Yes, it is.

MR. BUTLER: Okay.

I am going to jump ahead a little now, rather than continue on where my colleague started. Under 3.2.04. and 3.2.05., the Canada/Newfoundland and Labrador Infrastructure Framework Agreement, for instance, under Salaries there, I know $2.6 million was budgeted and $1.8 million revised, under 01.

MR. SMART: Bob Smart, Deputy Minister.

Under 01., it basically just reflects that our level of activity was down. If you look at the total there - $41 million budgeted versus $36 million - it is just that some road projects in highway rehabilitation did not advance as fast as we thought they would. Therefore, the expenditures under that activity are down a little bit. That is essentially just a delay in projects.

MR. BUTLER: Okay.

Under the same heading there, 01. Revenue - Federal, I notice you budgeted $16 million and it is down to $3.5 million. I was just wondering if you could make a note on that.

MR. SMART: On the federal revenue, the amount that the federal government is going to put into the projects that are cost-shared is predetermined and very specific. When we actually get the money it sometimes changes.

In this case we budgeted to receive $16.2 million, but by the end of April we had only received $3.5 million; therefore, some of that money will get received in this fiscal year. Some of the revenue we anticipate in this fiscal year, we probably will not get until next fiscal year. We will get all our money eventually, but we will not necessarily get it on the schedule that we thought we were going to get it.

MR. BUTLER: Okay.

I guess the same thing under 3.2.05 - they were very slow on that one - $7.9 million and you got $680,000. That is under the federal revenue again, right?

MR. SMART: Yes.

MR. BUTLER: Yes. Okay, Sir.

I think in the Budget this year - and maybe I am wrong - Donovan's overpass, Kenmount Road, that was announced this year, wasn't it? Is that proceeding this year?

MR. HEDDERSON: That is there: $4 million. That is the Kenmount; Placentia lift bridge; we got a diversion out of Pinware; Team Gushue Highway; and I think something like six other projects.

MR. BUTLER: Thank you.

Under 3.2.09., that is the Labrador Highway, I was just wondering if you can give us an update on Phase I, the widening and the hard-surfacing, or Phase III, what remains to be done there, and how that is progressing.

MR. HEDDERSON: I think we will go with Gary on that one.

MR. GOSSE: On Phase I of the Trans-Labrador Highway, which is the section of highway between Happy Valley-Goose Bay and Wabush, the widening and hard-surfacing project, this year we will tender the last of the contracts for the widening. After this coming construction season, everything will be either widened or under a contract to be widened. Right now, we have 166 kilometres either paved or under contract to be paved, or hard-surfaced, and we will be tendering another eighty kilometres to be hard-surfaced this year.

MR. BUTLER: Very good.

MR. GOSSE: On Phase III, the road has been finished or open to traffic. We have approximately $10 million worth of work left to finish the piece that is currently under construction, but it will remain open to traffic.

MR. BUTLER: Thank you.

Where are we with the construction of the weigh scale facility on the Labrador West end of the Trans-Labrador Highway? What is the completion date? Maybe it is completed. It is not, I don't think, is it?

MR. SMART: Bob Smart, Deputy Minister.

We are in the process now of getting the tender ready. We have money in the budget to do that project; it is approximately $3 million. We are in the process now of putting together the package to tender it. The hope is that the work can be completed before the end of the year. That is the schedule we are working on, to get it done this year.

MR. BUTLER: Under 4.2.04., Ferry Terminals, under Purchased Services, I know it was budgeted $1.4 million and it was revised to $480,000. I was just wondering if you could let us know what accounts for that shortfall that is listed there.

MR. GOSSE: Gary Gosse.

That is primarily associated with (inaudible). It just did not get as far advanced as we had hoped.

MR. BUTLER: Okay, thank you.

We understand that there are currently no terminal facilities for Little Bay Island, and I think in Shoal Arm there are no waiting room or washroom facilities. I was just wondering, has anything been considered to bring those standards up to a little higher level?

MR. SMART: Bob Smart, Deputy Minister.

It is not only those locations, actually; there are several other locations, and we have looked at what the cost would be to do it. The latest one we have done is down in Burgeo, for that ferry service, where we did invest in a new terminal facility.

We have looked at the others, and balancing those requirements off against the need to do the remediation of the wharves - the wharves are essential to make the ferry services run, so our emphasis at this point in time is more on replacing the boats and replacing the wharves to get the service running smoothly, but we have not forgotten about the need for terminals; we just are not budgeted to do any new ferry terminals this year.

MR. BUTLER: Another thing that has been brought to our attention from time to time is an automated service where they can get in contact and get the information on the schedules, or whether ferries are running on schedule, and things like that. Is anything like that being planned for those smaller areas?

MR. ALEXANDER: Paul Alexander, ADM for Marine Services.

We currently have a public information officer and we run a 1-800 number that is accessible to anybody who wants to ask. We also maintain a Web site that is current. Beyond that - are you asking about a reservation system of some sort?

MR. BUTLER: No, I did not know if there was one that covered everything. So, there is a number that they can call, regardless of what ferry service it is in the Province?

MR. ALEXANDER: Absolutely, yes, that is right.

MR. BUTLER: Minister, I know I asked you this question in the House the other day with regard to the workers on the Winsor, and not only the Winsor but other boats. Since that time we have had phone calls; individuals are calling and saying: Look, we have worked there for thirty years; we have never had a layoff before when the boats go on refit.

I am just wondering if you could elaborate a bit more on it.

MR. HEDDERSON: The thing about it is that this been into effect the last number of years, and Paul will talk a little bit more about it, but some of them who have been working there thirty years probably never – because, obviously, if a boat goes off on refit, there are bumping rights. So, I do not know if that is what the story is. We would have to look at the individual cases.

Paul, I guess you have a little bit more history than I.

MR. ALEXANDER: It has become standard practice over the last few years since we set up the Marine Branch and started managing these services properly and fiscally responsibly. We do, however, keep the staff on the ferry vessels for refits that are required to progress the work. The staff that are not deemed required to do the work are laid off; but, as the minister said, they have bumping rights.

MR. BUTLER: I think the number was around $15.9 million for redevelopment of the RNC headquarters at Fort Townsend. I was just wondering, what is the overall status of this initiative?

MR. G. ANTLE: Gerry Antle, Assistant Deputy Minister for Works Branch.

Your question was the status on the project right now?

MR. BUTLER: Yes.

MR. G. ANTLE: The second contract package is out to tender at this point in time. It should be closing within the next couple of weeks.

MR. BUTLER: Very good.

I think I have one other one; there may be some other things. I want to go back, and you will laugh at this one probably, but back to the signage again. I know I got my answer and I was satisfied that you destroy them. I am just wondering, like this individual, those big signs are costly - the figure I was using was $25,000 - would you destroy something like that? He can take it and probably put it up on private property, but you do not get that opportunity do you?

MR. HEDDERSON: The notice goes out. If they want to take the chance to leave it there - obviously, when we are instructed to take it down but the notice has already gone out, he or she has the option to take it down themselves and put it somewhere else, or put it on their shed.

Gary, that is the way I understand we handle it. The signs that we take down, we are not going to deliver them to whoever owns them. They have already been given notice. They have been given time to take them down. If they do not take them down, then obviously they are at their own peril.

MR. BUTLER: Why I ask that - I know politics has nothing to do with business on the side of the highway, but - there were times I have had my signs taken down but they would call and say: Your signs are up here in the yard; come and get them.

MR. HEDDERSON: Well, you must know the people in the yard because you must be getting special service.

MR. BUTLER: Anyway, I will leave it at that. If my colleague has others - I will just glance through my paper and if she does not have any, that will be it.

MS MICHAEL: I will just run through my sheets and see, because Roland did ask some of the questions that I had. I know there were a couple of major ones I wanted to ask about.

Under 2.2.03., Building Utilities and Maintenance, subhead 06. Purchased Services, I am just curious about the downward movement of the budget. Last year it was under spent by $667,000, approximately. This year the budget is $1.2 million less than it was last year. What normally does Purchased Services under that cover, and why is it sort of going down? I am not complaining, I am just -

MR. SMART: That is essentially the budget for fuel and electricity and so on for government buildings. We make a projection at the beginning of the year as to what we think is going to happen to fuel prices, what we think is going to happen to electricity prices. Sometimes we hit it right on the mark and sometimes we are off a bit. Prices did drop a bit compared to when we started last year, so it is our expectation that they might just stay down a little bit, which is why the number is well over. It is just fuel and electricity pricing.

MS MICHAEL: When you say maintenance - because maintenance is covered there - does that include the cleaning of the buildings as well or is that somewhere else?

MR. SMART: No, that would not be here; this is purely fuel and electricity.

MS MICHAEL: Okay. Thank you very much.

Under 2.2.06., Building Acquisition, you did not budget for it but you spent $607,000. Was that a piece of property or something that you bought? In this year you are budgeting $5.4 million. Could you tell us what you are expecting to be doing with that money?

MR. HEDDERSON: We are in the process right now of purchasing a couple of buildings. I do not want to say what buildings because, obviously, that is something that the client – we are in negotiations on that right now. Again, it is to try to cater to the need of government space, and we are leasing a fair bit of it. It was cheaper for us to go out and try to purchase these two buildings. We are anticipating that they were – and they are here in St. John's, by the way.

MS MICHAEL: I know there is a big need for office space in the city; there is no doubt about that.

MR. HEDDERSON: Yes.

MS MICHAEL: Okay. Thank you very much.

Under 2.3.02. Maintenance of Equipment, 04. Supplies, there was an over expenditure of $1.5 million last year. I am just curious; was there something extra special that occurred? Because you are budgeting the same now as you did last year. The over expenditure of $1.5 million –

MR. SMART: That refers to fuel costs and replacement costs, and basically maintenance; the supplies for the maintenance of our vehicle fleet. We were under budgeted last year at $14.2 million. That budget was cut pretty tight when we went into the Budget process. Throughout the year we identified savings elsewhere in the department, so we were able to buy more supplies and restock some of our inventories for spare parts and so on, on our trucks. That is essentially what it is. We took advantage of savings we had elsewhere to stock up our inventories.

MS MICHAEL: Which I presume you plan on doing again this year, if needed, looking at the budget.

MR. SMART: If we get towards the end of the year and we have some savings, we will probably restock again as well.

MS MICHAEL: Well, I suspect you will, looking at your budget. You do seem to have savings. Every department does; I am not just saying you.

Under 3.2.03.05. Professional Services – now, this may have to do with the Trans-Labrador; I do not know - the Budget was only $50,000 but the revision was $320,000. That is a big jump.

MR. SMART: Are you referring to 05?

MS MICHAEL: Professional Services.

MR. HEDDERSON: Subhead 05., is it?

MR. SMART: Subhead 05., yes.

MS MICHAEL: Under 3.2.03.

MR. HEDDERSON: Under 03., was it? It is 03?

MR. SMART: Oh, 03.

MS MICHAEL: Yes, 3.2.03. Improvements – Provincial Roads.

MR. HEDDERSON: Okay.

MS MICHAEL: Under the Professional Services, which is subhead 05., the over expenditure was $270,000.

MR. SMART: That is consulting fees. We generally do most of our design of highways and bridges in-house, but when it comes to things like the Placentia lift bridge, which is a very specialized structure, we actually go outside and engage consultants. So that reflects an increase in the cost of consultant fees on some of those specialized projects.

MS MICHAEL: Right. I suspect under Purchased Services, because there was a big variance there last year, too, of $1.1 million, would that be in the same area of reasoning?

MR. SMART: In terms of Purchased Services?

MS MICHAEL: Yes. It was overspent by $1.1 million last year.

MR. SMART: The Purchased Services is actually contracts awarded for road construction. You will see a decline in road construction expenditures under this particular subhead, but under other subheads like the Trans-Labrador Highway and our infrastructure programs you will see an increase. The total roads program for the department is still at about $235 million or $240 million.

MS MICHAEL: Right.

MR. SMART: Although this component is down, another component is up. That is actually road contracts.

MS MICHAEL: Okay. Thank you very much.

Under the Grants and Subsidies, who is it that gets this money, under Grants and Subsidies in the same section?

MR. SMART: We do, on occasion, enter into agreements with municipalities where they will actually agree to take over a road that we own, and they maintain it in the future and they snow clear it. We negotiate an arrangement and we actually give them compensation to take the road. So that reflects a provision for negotiation of road transfers.

MS MICHAEL: Okay, thank you very much.

Just a general question – well, particular but general - under 3.2.08.; I guess it is two sections. I will ask it for that and I will refer back, 3.2.08. I am not going to go into every single line there because there is a lot of under expenditure. This is part of the Canada Strategic Infrastructure Fund. I am assuming a lot of work just did not get done, and I am assuming that would be the same thing -

MR. HEDDERSON: That is the bypasses: Torbay, Conception Bay South, and I think the old CSIF program.

MS MICHAEL: Okay.

OFFICIAL: Yes, some odds and ends.

MR. HEDDERSON: Odds and ends -

MS MICHAEL: Yes, so it is all the ongoing –

MR. HEDDERSON: Yes, but the two bypasses are the main ones there. That is obviously a two to three year project and we are finishing them up.

MS MICHAEL: Sure.

Then, just backing up to 3.2.05., which again is the Canada/Newfoundland and Labrador Infrastructure Framework Agreement, the same thing, a lot of under expenditure, but I am assuming it is ongoing projects.

MR. HEDDERSON: Yes. That is consulting fees again, where we have overestimated what we would need, or the work was not done.

MS MICHAEL: Yes, from the looks of it, because every single line is under spent by large amounts. So I am just assuming that is the ongoing projects under those two agreements.

Under 3.2.10. Land Acquisition 07. - it is only the one subhead - $5 million was budgeted and only $1.5 million was spent and this year you are just estimating $2 million. Did you have an expectation, when you put in $5 million, of something that you were going to purchase?

MR. HEDDERSON: It is all roads, but in particular the delays in the Team Gushue and the Torbay bypass delayed us, obviously, dealing with the land acquisition. So, even though we budgeted for it, it is the same story: if the work is not carried out then we do not get to it and it is just pushed out to another year.

MS MICHAEL: I am assuming that the land did not cost as much as you thought it was going to cost, is that it?

MR. SMART: What you find - and this is acquiring land for roads - what we have found, and I guess we have learned, is that it takes an extremely long time to settle these land acquisitions. So, yes, the price of the land may have gone up and we may acquire more land this year, but how much we will actually pay for the land is probably two years down the road before it actually gets settled with the landowner.

MS MICHAEL: Okay. Thank you.

Under 4.2.03. Coastal Labrador Ferry Operations, subhead 04., the Budget was $7.5 million, and an over expenditure of $1.1 million.

MR. HEDDERSON: The pilot project for year-round service, that is the difference there.

MS MICHAEL: Okay. That is what I thought but I wanted to check it out.

Under 4.2.04. Ferry Terminals, 06. Purchased Services; what would the purchased services be in that heading?

MR. HEDDERSON: I missed that one, sorry.

MS MICHAEL: You do budget a fair bit. You budgeted $1.4 million.

MR. HEDDERSON: Do you want to take that, Paul?

MR. ALEXANDER: That was just delays in some of the projects we are getting ready for the new ferries coming in.

MS MICHAEL: I did not get all of that, Paul, I am sorry. Could you just repeat it?

MR. ALEXANDER: It was just deferred money because of delays for projects, getting wharves ready and services ready for new ferries coming in, because there was a little bit of delay in receiving the new ferries.

MS MICHAEL: Great. Thank you.

One last one, 4.3.03., subhead 07., there was no budget last year but $28.6 million was spent, and this year we are up to $58.3 million. I think I know what some of that expenditure is, but could I just have a breakdown of the expenditure under 07?

OFFICIAL: The water bombers (inaudible).

MS MICHAEL: Water bombers.

MR. HEDDERSON: I will get Bob just to go down through the dollars there.

MS MICHAEL: Yes.

MR. SMART: Yes, there are a couple of things in there. It is predominantly water bombers. We had not reached a deal with Bombardier prior to the start of 2009-2010 so we did not budget for it, but we did reach a deal throughout 2009-2010, so we had special warrant funding for payments on our water bombers last year. This continues the payments on our four new water bombers. In addition to that, it includes the payment of about $8 million for the acquisition of a new air ambulance –

MS MICHAEL: A new air ambulance.

MR. SMART: - that we will take receipt of in November or December.

MS MICHAEL: Right.

Will the payment on the water bombers continue past this year, or was it just –

MR. SMART: Yes, the payment on the water bombers will continue for – we will take receipt of two water bombers this year, and we will take receipt of two more next year. So next year will be the final payments on the water bombers.

MS MICHAEL: Very good.

Thank you very much.

I think those are all of my questions.

CHAIR: Thank you, Lorraine.

Do you have any more questions, Roland?

MR. BUTLER: I have a couple. One is for clarification, and I think my colleague asked this one; it goes back to 2.2.06. There was nothing budgeted for last year under 07. Property, Furnishings and Equipment; then it says, Revised $607,000 and then $5.4 million. If I am not mistaken, I thought the answer that came back said that you could not release the names of the buildings because this was still being negotiated. During the lockdown we were told that the $607,000 was for a down payment. We were told which two buildings it was. I am wondering, is that correct or are negotiations still ongoing? Because the buildings were named that you had purchased.

MR. SMART: The request of the vendor that we are purchasing the buildings from, their request and part of our contractual arrangement in our offer to the sale and purchase offer, we did agree that we would not announce anything with regard to the sale or purchase of these buildings until the sale is actually concluded, and it is not concluded yet. There are still some outstanding issues. We have not actually closed the deal here yet, so we did agree with them. I do not know who would have pointed it out in the lock-up, but we do not feel at liberty to be saying. You obviously know which ones they are, but we do not feel at liberty to tell you.

MR. HEDDERSON: I do not want to put it in the record.

MR. BUTLER: I will not tell anyone. No, no, but the officials who were there, who were locked down, I guess they were financial people or whatever; so, when you ask them questions this is the response they gave. Then I was wondering if they told us the right answer or what. Anyway, I accept your explanation and I will close the page.

The last one I have is 4.3.03., Government-Operated Aircraft. I noticed under the Budget last year there is nothing listed and then there was $28 million. I was just wondering what that was for.

MS MICHAEL: That is the water bombers.

MR. BUTLER: Oh, you asked. That is the water bombers, okay.

MR. HEDDERSON: Yes.

MR. BUTLER: The air ambulance - I knew $50.3 million was for the four water bombers and the $8 million for air ambulance - I wondered what that entailed, that $8 million. Maybe you have already – if you said that, that is fine.

MR. SMART: Included in that $58.3 million is the purchase of a new air ambulance at a cost of about $8 million, maybe a little bit less than $8 million, but in round numbers it is about $8 million.

MR. BUTLER: Thank you.

Those are all of my questions. I thank the minister and his staff.

CHAIR: Thank you, Roland.

Now we will call for the subheads.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01.

Shall 1.1.01 carry?

SOME HON. MEMBERS: Aye.

On motion, subhead 1.1.01 carried.

CLERK: Subheads 1.2.01 to 4.3.03 inclusive.

CHAIR: Subheads 1.2.01 to 4.3.03 inclusive.

Shall they carry?

SOME HON. MEMBERS: Aye.

On motion, subheads 1.2.01 through 4.3.03 carried.

CHAIR: Shall I report the Estimates of the Department of Transportation and Works carried without amendment?

SOME HON. MEMBERS: Aye.

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

CHAIR: Thank you very much, Minister, and the Committee, because this is our last one. I find them always informative and beneficial. The staff, thanks for your co-operation.

I will ask for a motion to adjourn.

MR. BUTLER: So moved.

CHAIR: So moved by Roland Butler.

Thank you very much.

On motion, the Committee adjourned.