May 11, 1998                                GOVERNMENT SERVICES ESTIMATES COMMITTEE


Pursuant to Standing Order 87, Wally Andersen, MHA for Torngat Mountains, substitutes for Gerald Smith, MHA for Port au Port.

The Committee met at 9 a.m.

CHAIR (Wiseman): Order, please!

For the record, my name is Ralph Wiseman, Chair of the Government Services Estimates Committee. The purpose of our meeting this morning is to review the estimates of the Department of Works, Services and Transportation. The members of my Committee are Mr. Jack Byrne who is the vice-chair, Anthony Sparrow, Wally Andersen and Mr. Doug Oldford.

I want to welcome the minister and his staff this morning. I will say that usually we give the minister fifteen minutes for opening remarks. The vice-chair has fifteen minutes to respond. We will interact back and forth with the members on questioning.

Minister, you can start by introducing your staff this morning and then we can proceed.

MR. MATTHEWS: Thank you, Chair, and thank you for having us this early in the week and this early in the morning. I am going to start by letting my staff introduce themselves so that we will get their titles right, and so that you will hear their voice at least once during the proceedings today. The Deputy Minister is to my immediate left, Barbara Wakeham. I know for sure who she is. She is the boss.

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

MR. MATTHEWS: I trust, Chair, you will respect your constituent in a fashion this morning that will get us through this in an efficient manner.

CHAIR: Absolutely.

MR. MATTHEWS: Don.

MR. OSMOND: Don Osmond, Assistant Deputy Minister of Works.

MR. BAKER: John Baker, Executive Director of Marine Services.

MR. ENGLISH: Alex English, Budget Manager.

MR. MURPHY: Gordon Murphy, Director of Human Resources and Financial Operations.

MR. WHITE: Keith White, Executive Director of Roads.

CHAIR: I should add, Minister, before we go any further, that when your officials are responding, for identification purposes that you state your name.

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

MR. ASHLEY: Joe Ashley, Executive Assistant.

MR. CROCKER: Ralph Crocker, Political Assistant.

MR. MATTHEWS: Thank you, staff. These are the fine people from the department who will be able to assist us this morning in answers that may be in some detail beyond what you would normally ask me directly. However, I will do my best to get us through it in a timely fashion.

The Department of Works, Services and Transportation of course is the largest operational department in government in terms of budget, and it is the largest department in government in terms of raw bodies that we have on staff directly within the central agency. Many other departments of course are run more through boards and that sort of thing, but in terms of direct staff involvement we are the largest department with the largest budget on that account.

We are really a compilation of at least three previous departments that used to exist at one point in time or other in government. We really do what departments once did, such as one that was once known as the department of public works done; we are the old department of highways to some extent; and we are the department of government services in large measure, in terms of some of the things we do. Of course, some of these activities in that area have been spun off to a new department, the Department of Government Services and Lands.

Our mandate is really fourfold. First, in terms of corporate services, general administration, human resources, financial operations, policy and planning and special technical engineer projects. We have that side to us. We have the roads branch that Keith White is primarily responsible for. We have the works branch which comes under the assistant deputy minister, to a large extent, Don Osmond. Then of course we have our marine services division which is the division that runs our ferry services, and now has taken on the additional responsibility of the south coast services and the Labrador marine services.

In essence we have been a department of government probably unlike some other departments where we have been really growing or expanding in terms of our mandate, while at the same time shrinking somewhat in terms of raw employee numbers and budgets to lay against the responsibilities that we have. I guess by way of comparison, in 1990-1991 we had a staff compliment of 2,590. Today we have about 2,016 people working in the department, for a decrease of 33 per cent. At the same time our operational budgets have decreased by about $17 million while our mandate has expanded.

Let me explain that a little bit. We have traditionally had highway construction and maintenance and that sort of thing with us. We have always done the capital construction of public buildings for government. We have had the other responsibilities, such as the government purchasing agency, responsibility for the government tendering act, responsibility for the Pippy Park Commission, and those sorts of things.

In the last year or two we have taken on new responsibilities and I will just mention them so that we can put it in perspective. As a result of the devolution of ferry and marine services from Ottawa, we have taken over the responsibility for the south coast ferry and marine transportation services. We have taken full responsibility for the marine services on the South and North Labrador coasts. We have taken on responsibility of course for the fairly significant Trans-Labrador Highway project. We have taken over from the Health Care Corporation last year responsibility for the redevelopment of all their facilities in St. John's.

A completely new piece of business for us, starting last year, about June or July, was taking over responsibility for all of the school construction projects in the Province. Previously, school boards looked after their own area in terms of capital construction, renovations and those sorts of things. As a result of the down sizing from twenty-seven to ten boards we have taken over that responsibility through the new school construction Corporation, and that is a major piece of work, or a major new responsibility, that we will have ongoing within the department.

It has been a challenge, and the officials in the department, to the benefit of government, have faced those challenges of less bodies, smaller budgets and broader mandates, and we continue to operate, in my judgement, in what would be a professional, efficient and effective manner so that we get the job done.

We of course do a fair bit of work on behalf of other departments of government. We manage space requirements for all the departments of government and some other government funded bodies. We do light vehicle fleet management for other departments, including ourselves. We also manage and look after the vehicle maintenance requirements of the Royal Newfoundland Constabulary. There are a whole array of activities that the department engages itself in because of being included in our mandate that you would not normally think of off the top of your head, if you were thinking about what we do over at Works, Services and Transportation.

It is a big operation, a big piece of work and, I might say, a department that is well staffed with very professional, very focused and very dedicated people who know what their task is, who know what it takes to get the job done, and who operate and executive efficiently and effectively.

Both the Deputy Minister and myself have been in the department, for myself, just a year, and I guess for the Deputy Minister just under a year, last June. I went over there last May 8. It has just been a year for me and a little less than a year for the Deputy Minister. Don has been in the department a little less than that, John even a little less than Don. I guess it was not arranged this way, but we are all new boys on the block in the front row. Everybody else has been around a little longer, although Keith has had a change of responsibilities. We are new on the front lines this morning, but we are not new, particularly the staff, to government. I hope that we can answer any questions that you might have with respect to policy, with respect to programming, or with respect to actual dollars and cents as a result of your perusal of the line items in the budget.

I don't think, Chair, I need to take any more time other than to say we are happy to be here. We look forward to the interaction with the Committee this morning in terms of moving through the proceedings.

CHAIR: Talk on for another minute or two, we have a bit of a problem with the switch. The recorder, Kevin, had to pop upstairs for a minute or so, so we cannot make the switch. (Inaudible).

MR. MATTHEWS: What you are saying is that we cannot start the proceedings because we don't have the recording capabilities hooked up yet.

CHAIR: It is hooked up, it is just that he won't be able to identify without being here. He identifies from up there who the speaker is.

WITNESS: He has a machine but he is gone upstairs.

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

We are responsible for pretty well everything good that happens, and we are definitely responsible for everything that goes wrong. You will notice this year we have the air conditioning working a month ahead of schedule in the Chamber, as we have in the rest of the building, as a result of our early spring.

MR. J. BYRNE: (Inaudible).

CHAIR: We have two committees on the go this morning.

MR. MATTHEWS: Jack, Christmas time is a time to be out of here anyway. Whatever it takes to get you out, we are committed to it.

CHAIR: We have two committee hearings this morning and they had some technical problems at the Committee room, so Kevin has just gone up to do some adjustments.

MR. MATTHEWS: When will we know when he is back?

I guess there is not much more we can say, because the Committee does not want to start questioning for sure until we get recording capabilities up there. I suppose I could tell you that we run seventeen ferry services this year with twenty boats. We look after thirteen airstrips in Labrador. There was an announcement last week with respect to them, Wally, that indicated about a $4 million commitment by the feds over the next five years to upgrade them and enhance them. With the smile on your face this morning, Wally, I know nothing will come from your lips except a dribble of honey.

CHAIR: Order, please!

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

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

CHAIR: Mr. Byrne, you may proceed.

MR. J. BYRNE: Thank you, Mr. Chairman. Thank you, Minister, for your introduction. Just a quick question for Mr. Baker. Are you the same Mr. Baker who used to be with Marine Atlantic?

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

MR. J. BYRNE: I may as well go on from there. With respect to the south coast ferry system, Minister, a couple of years ago you privatized that. There was, I think, something like $50 million taken out of that that was supposed to be put away in perpetuity for the operations of the south coast ferry system - I suppose the interest off that - to help operate it. Where is government planning on coming up with that amount of money for the budget? Because it was a one-shot deal to help balance the Budget a couple of years ago. What is the status of that system down there now? How is it operating?

MR. MATTHEWS: The south coast ferry service? There were some changes in the service in the lifetime my predecessor's predecessor. I think Minister Efford was there when that happened.

In terms of how the funding that Ottawa transferred to us to offset our responsibility in perpetuity for running it, where that money is, it basically sits with, I guess, the Department of Finance or with government in general. We build into our budget, for operational purposes every year, the cost of running that ferry service. Is your question -

MR. J. BYRNE: I thought that money was gone, though. I mean, it was utilized to help balance the Budget the year before last or last year.

MR. MATTHEWS: Yes, it went in. You are saying that the money went into the Consolidated Revenue Fund. That being the case, or assuming that is what happened with it, government then finds the money every year out of its Consolidated Revenue Fund or out of its budgeted allocations to run the service. Are you asking me how much we spend on that service each year?

MR. J. BYRNE: No.

MR. MATTHEWS: It is funded out of government revenues as any other service would be.

MR. J. BYRNE: Lewisporte, the privatization of the system from Marine Atlantic for Labrador. Have you had any complaints or concerns with respect to the operation of that system lately? Because I have received a few and I have not brought them forward yet. I'm just wondering how it is working.

MR. MATTHEWS: Probably I should tell you where we are. We went to the private sector after consultations and that to find an operator. We identified an operator and made an award to the Burry marine group. They subsequently declined to accept it within the appropriate time frames, and then we awarded it to the second lowest bidder, 10663 company, which is really Woodward's.

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

MR. MATTHEWS: Just about an extra million dollars, yes. Actually, Burry's were on the low end of what we thought the budget would come in at. The Woodward group, including Puddister's and Crosbie's, came in at about where we thought it should be originally. There was a third bid, it was $1 million higher than that again.

Anyhow, the new operators are in place. They have taken responsibility for the service. They are operating out of Lewisporte, really along the same lines that the service was operated out of there over the past few years. What will happen with that service is that there will be a decrease requirement for it consistent with an increased road transportation system in Labrador. For the next year or two or three, as I mentioned to the Chamber of Commerce when I spoke to them last week in Lewisporte, essentially they won't see much change in Lewisporte except that there will be a new operator with probably some new employees working there.

In the Lewisporte area there will not be much of a change that will be obvious to the people in the town, or to the people who use the service, the shippers, like Lewisporte Wholesalers and everybody else in that area, and across the Island, who use it to ship product into Labrador. We will see some changes in terms of scheduling because we have announced a fixed schedule as opposed to a load-and-go schedule and those sorts of changes, but they are operational in nature more than anything.

MR. J. BYRNE: You mentioned in the House I think, with respect to a question that I asked, the cost to move freight per kilogram to Labrador. You said it was actually cheaper for some and would cost more for other weights, I suppose, depending on once you get to a certain level. It crossed my mind at the time that if they were doing that, obviously the rates for the lesser amount of material that would be moved under a certain weight would go down and the rates that went up were for the bigger volumes. Is there any truth to my assumptions?

MR. MATTHEWS: No, the rates did not go up for anything, the rates stayed the same. What we have done was reduce the tariff for under fifty kilo packages -

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

MR. MATTHEWS: - but above that there was no increase. There was no increase for passenger rates this year, no increase for freight rates, no increase for any of the services cost-wise. There was a slight decrease in the under fifty kilo package rate, there was a slight decrease in the jockey fee for loading cars on and off the boat by $10. I think these were the only two. There was a slight decrease between municipalities. We are offering them a 50 per cent rebate on equipment that they move in solely for their own purposes. It is not for subcontractors or contractors, but if a municipality wanted to bring in, let's say, a front end loader to do something, then we would give them a little break.

All of the package of reductions that we offered - there were five initiatives announced. The total cost of all these initiatives, we judge, would be in the $100,000 range, John? Yes. They were not big adjustments but they were significant to the people on the Coast, in that it indicated, number one, the rates were being held in most cases and slightly reduced in some smaller areas.

MR. J. BYRNE: With respect to the company that pulled out, who bid on the work and decided not to take it. I asked you a question in the House with respect to the deposit fee.

MR. MATTHEWS: Yes.

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

MR. MATTHEWS: Fifty thousand dollars, yes.

MR. J. BYRNE: Has government actually received that $50,000?

MR. MATTHEWS: We received the $50,000 when they tendered. That was part of their tender documents and that normally is forfeited to the Crown upon -

MR. J. BYRNE: Has it been forfeited?

MR. MATTHEWS: We have not refunded it so we still have it, I guess. Deputy Minister, John? Yes.

MR. J. BYRNE: You say you have not refunded it. Are you planning on refunding it? Are you definitely keeping that money?

MR. MATTHEWS: No, we have no plans on refunding it. The company, like any other company that puts in a bond and that takes a contract, or is awarded because they are low, and then for whatever their own reasons don't take it, would lose that deposit. They can always come to government and make representation to have it considered, but I have not heard or seen any representation from them. Have we had any, Deputy Minister? No. Essentially, the short answer is that it is forfeited.

MR. J. BYRNE: Port aux Basques, the Marine Atlantic situation. Can you give us any more of an update on what is happening there? A couple of weeks ago we knew it was pretty much of a to-do in the media type of thing. Are we going to get more jobs out of Moncton or not?

MR. MATTHEWS: The last major media event that happened with respect to the Marine Atlantic relocation of headquarters was the meeting that the president and C.E.O., Rod Morrison, held with the council in Port aux Basques.

MR. J. BYRNE: Six jobs.

MR. MATTHEWS: At that point he announced there would be, in addition to what was announced by Minister Collenette the first week in April, an additional six jobs that were going to be contracted out, I believe, in Moncton that are now being relocated to Port aux Basques.

Essentially, the announcements that have been made are the plans for Marine Atlantic's readjusted service. While we are not happy at all as government with what has happened, the town of Port aux Basques is prepared to work with a committee that Marine Atlantic agreed to sit on, and that what we have agreed to participate in, to insure: number one, that the adjustments to the service in terms of their announcement will happen: number two, to make sure that the splitting of the headquarters, as they would consider it, between Sidney and Port aux Basques happens in a fashion that they announced; and number three, to see where we go beyond there.

The marine headquarters issue is not only the Port aux Basques, it is basically, a Newfoundland issue. Because Marine Atlantic has no reason to exist at the moment other than to provide ferry services to Newfoundland. As I said once outside the House, in the case of ferry services we run Portugal Cove to Bell Island. All of our interaction is with the commuters committee on Bell Island. Portugal Cove only happens to be the place it leaves from, and in this instance we are the Bell Island. Sydney is really only the staging point because we have to have a place to leave from and go on to the mainland. That is the position of government and that is the position we have been taking to government.

MR. J. BYRNE: Are you saying that from government's point of view the battle is over, it is done, (inaudible) are not doing anything else?

MR. MATTHEWS: No, I wouldn't say the battle is over and done. I think on the contrary I have said that we are going to be keeping a very close eye on what Marine Atlantic does. The fact of the matter is it is a federal responsibility at the moment. Everything else marine-wise the feds have devolved to the Province: the South Coast services, the Labrador services. The only thing left that the feds are running, essentially, is the Port aux Basques-Argentia three boat-three port ferry services. We haven't, as government, contemplated asking the feds to talk about taking over that service, because it is a major service, and it is a constitutional responsibility that the feds have, and we have no intention of letting them off the hook easy or early, or if at all.

MR. J. BYRNE: You just led into my next question, actually. I made a note here. It says: the federal responsibility under the Terms of Union. We know the history of that. Are there any discussions, thoughts, plans, anything at all, with respect to looking at privatizing the Port aux Basques system?

MR. MATTHEWS: No, there are no discussions ongoing with the federal government on that issue at all. I am sure that if the feds were thinking in that direction, or if we were thinking in that direction, it would have come out in the discussion that has gone on over the last month with respect to that service. The bottom line at the moment is that it is their responsibility, it is their obligation, and we are not talking to them or considering talking to them.

MR. J. BYRNE: I don't like the phrase "at the moment." You are saying this is a federal responsibility at the moment. That to me is like: Right now it is, but who knows what is to come.

MR. MATTHEWS: It is now and the Province has no position, we have not considered, and we have no plans, on pursuing any discussion with them with respect to us taking it over or them doing it differently. We would like for them to do it differently in terms of how they run Marine Atlantic, where they operate Marine Atlantic headquarters from, and where they do their procurement and business from, we would like to see that changed. That is the area that we are focusing on at the moment.

MR. J. BYRNE: The Bell Island ferry system. Are there any discussions or conversations on the go with respect to any changes for that system? I know that a few years ago there was quite a ruckus over the rates and what have you. I think there was a three or five year plan put in place with respect to increases.

MR. MATTHEWS: Ferry rates, yes. Three year, (inaudible)? We are going into the third year this September, I think.

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

MR. MATTHEWS: Yes. There was a three year ferry rate series of increases announced three years ago that were to roll out over a three year period. They have kicked in for the most part on all the services, as was announced.

In all of the services we have always said to the commuter committees in those areas - because each year they resist the rate increase - this: If you can suggest a way to us that we can keep the costs down so as to not have to put in effect the increase, or all of the increase that we have announced, then we are prepared to work with you. Some of the services or some of the commuter committees have said, in effect: Yes, we are prepared to take less trips, or we are prepared to have a different level of service in order to keep the rates down. In a few instances we have gone along with that, but for the most part the commuters, the people who use the service, want the same level of service, want the same number of trips, want the same opportunity to move back and forth as they have always had. For the most part that has meant that we have had to put in place the rate increases that have been announced to be rolled out.

On the Bell Island service, the major change that will happen this year is that the Katherine has come out of service because it has basically outlived its usefulness. We will be replacing it eventually with the Hamilton Sound first and then the Beaumont Hamel.

Essentially, as a result of us being able to purchase not a new ferry but a used ferry from the federal government for $300,000, we are now going to have a new and larger ferry over in Fogo and Change Islands. We are going to have a newer and larger ferry for the Bell Island service because we are moving that one up from Fogo. By all accounts, all of the services that we are offering or proposing, new services to these two areas in particular, seem to have been met with a high level of acceptance. Because everybody gets a better service, particularly the people in Change Islands, Fogo and the people on Bell Island, as a result of us buying a boat and giving each area a bigger service than they have had before or a bigger vessel to run the service.

MR. J. BYRNE: Thank you. A different topic altogether now, the fleet of light vehicles. I think it is 869 or something vehicles. I will ask you questions in the House on this. The concern that the Auditor General had was with respect to the tracking of the vehicles, the usage, and the credit cards and stuff. Do you have a handle on that yet, really?

MR. MATTHEWS: Yes. I will ask the Deputy Minister to comment on it, but essentially the answer I gave you in the House was that yes, we have had some trouble tracking because our computer systems were not up. Yes, we put in some extra money in our budget this year for new and enhanced computer systems. Largely we are managing fleets for other departments. I would not say we are at the mercy of other departments, but we certainly need the cooperation and assistance of the departments who are using all of these vehicles to provide us with the information, and to maintain the type of record keeping that has to be kept, in order for us to be able to ensure that the fleet is properly managed.

Deputy Minister, there were a couple of other comments that came out of the Auditor General's report that probably you can comment on.

MS WAKEHAM: As the minister said, we have improved our vehicle maintenance management system, which is our computer system. We have sent notifications to all of the departments right now telling them that we want more timely reporting in terms of changes within the fleet itself.

There was an issue with respect to the credit cards. The credit cards were not being used. In fact, what was happening is that we were waiting for a catch-up on the invoices that had come out from (inaudible) before. So they were just kept in the inventory so that we could have a trace in terms of the actual number and the actual utilization.

We are confident, and the Auditor General seems to be satisfied, that the measures we have taken right now to get a handle on some of the criticisms that were levied last year have been taken care of. I expect that we will not have the same problem next year.

MR. J. BYRNE: Just a comment. I worked with government twenty years ago. We did not have a computer system, just a manual receipt, or whatever the case may be, and I do not remember any problems that way. With computers it should be so simple to arrange something like that, to have a good system in place I suppose.

You mentioned the health care system this morning. Are you guys responsible for the transportation within the health care system with respect to the ambulances and what have you?

MR. MATTHEWS: Only the air ambulance service is our responsibility. All of the other ambulances are run by the -

MR. J. BYRNE: The health care corporation.

MR. MATTHEWS: There are some hospital based ambulance services, there are some community based services, and there are some private operators. There are three types of services in the road ambulances, but we carry the vote, the budget and we manage the air ambulance service. It is the same thing with our water bomber fleet. We manage and run them, but actually we manage it on behalf of other on line departments. It is a unique situation, where we carry the budget but they order up the service. Sometimes the challenge is to make the budget that we have fit the level of service that they ask that we provide. The air ambulance has always been a challenge to meet within budget, but budgets are not the thing that drives the air ambulance service. Obviously if they need somebody to be flown it is done.

MR. J. BYRNE: Is the Department of Works, Services and Transportation responsible for the vehicles with the RNC?

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

MR. J. BYRNE: Do you purchase the vehicles also for the RNC?

MR. MATTHEWS: No, they purchase their own vehicles in their own budgets, don't they, Deputy Minister?

MS WAKEHAM: Yes, we just do -

MR. MATTHEWS: We just fund the maintenance out of our shops for them.

MR. J. BYRNE: Because I am after hearing some horror stories with respect to the vehicles the RNC are driving, some of them with over 300,000 kilometres on them, motors gone, transmissions gone, and bodies in poor shape. I just hear all kinds of stories about that. I was going to ask a question - but if you don't purchase them you wouldn't know - with respect to how many new vehicles they have versus vehicles with 200,000 and 300,000 kilometres. These guys are involved in high speed chases and they need good equipment.

MR. MATTHEWS: I guess Justice would be the ones who would know what their fleet - we would know what their fleet complement is. We would know the number of vehicles they have because we do the maintenance on them, we sustain them for them, but in terms of purchasing new units and replacing their units, I don't think that is in our budget. That is in the budget for the Departmental of Justice. I believe this year they did have some budget allocations for new vehicles, but it is really not our vote, it is not in our budget.

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

Okay, let's go right through the estimates now. On page 67, Minister's Office, 1.1.01.01. Salaries have gone up by $32,000 over what was budgeted. Why would that be?

MR. MATTHEWS: Over what was budgeted?

MR. J. BYRNE: Yes.

MR. MATTHEWS: Basically because there was some severance pay involved that was attached to the former minister. We had a deputy minister - of course, the deputy's wouldn't be in there. It was revised up due to severance of the former minister and the former minister's staff. This year, of course, all of the votes are up for salaries because there is an extra pay period this year. There is a twenty-seventh pay period in the system.

MR. J. BYRNE: An extra one, yes. Transportation and Communications under the same section, $42,700 up to $49,700. That is an extra $7,000.

MR. MATTHEWS: As I said, the whole mandate of the department has increased and there was some extra travel last year as a result of some things that had to happen. We had a fire in St. Barbe and we had to get up there fairly quickly to deal with the problems. These sorts of extraordinary types of travel costs sometimes drive the -

MR. J. BYRNE: When you are putting a budget together and looking at Transportation and Communications, I know you are looking at certain trips that would be planned out during the year, but wouldn't you include in your budget any extra funds for that type of thing? We shouldn't have to -

MR. MATTHEWS: The budget is always best guess or best estimates, based on traditional usage within the department for requirement for ministers and their staff to travel. Some ministers travel with less staff than others. Some ministers travel less than others. On the other hand, the extraordinary things sometimes drive our budgets out of whack. I spent more last year - I shouldn't say I spent more, but it was a combination of two ministers in the department spending a little more than we had in the budget.

The other issue that the Deputy Minister reminds me of that drove that budget up was the requirement to be in Labrador more than we had planned with respect to the Trans-Labrador Highway; a combination of that plus the marine service that we had to go into about. I was in Labrador last year half a dozen times talking about the marine service, talking about the Trans-Labrador Highway program, and various announcements regarding it. I expect this year we will have more costs in that regard. Yet in terms of the total budget we have tried to hold the line on it.

MR. J. BYRNE: Thank you. Section 1.2.01.01, Executive Support, Salaries. I know you mentioned an extra pay period this year, but to go from $354,000 up to $493,900 up to $554,500, I mean, that is an extra $200,000.

MR. MATTHEWS: Yes. We have added a couple of new positions, an Executive Director of Transportation and Highways, and an Executive Director of the Trans-Labrador Highway project. We put a dedicated person on that project, Terry McCarthy, to quarterback the whole thing. The other thing we have done is we have taken a person, as a result of having to take over the Health Care Corporation's redevelopment, George Greenland, and put him solely on that project. We may charge that back eventually to the Health Care Corporation, but the fact of the matter is as a result of the expanded mandate that I referred to in my opening comments we have two new executive director positions in effect in the department, and one less assistant deputy minister in the department. We have a net of one new position plus secretarial staff to support that position. That is where the difference is there.

The deputy reminds me, and I should note it for you, that a fair chunk of that happened to be for severance last year for the Deputy Minister who left the Public Service completely.

MR. J. BYRNE: Yes, but that would be the money that was spent out of the $493,000 cost.

MR. MATTHEWS: No, that is why the revision from last year budgeted to last year revised. The additional positions are the reason why it is up to what it is here this year. You will notice as you go through the subheads that there are probably more subheads down in terms of actual budget than up, but that is one that has gone up significantly because of the changes at the executive level.

MR. J. BYRNE: Page 68, 1.2.02.02, Administrative Support, Employee Benefits. You had budgeted $1,101,500 and it went up to $1,501,500. I know you had some staff changes but that is $400,000 over and above budget. That is a lot of money.

MR. MATTHEWS: Yes, and that was directly related to new and additional costs for Workers' Compensation Board premium payments.

MR. J. BYRNE: There must have been a lot of injuries, were there?

MR. MATTHEWS: I do not know why it is up so high and those payments can be explained. Alex or Gordon, do you have a comment on that?

MR. ENGLISH: It is up by $400,000 because of a payment that didn't get though in a previous year that carried over into this year. It was a late payment that missed the cut off from the previous fiscal year. That is the reason for the biggest portion of that, but medical costs are up as well, as the minister said.

MR. J. BYRNE: If you had budgeted $1,101,500 I would say that was pretty close to what was budgeted the year before. Are you saying that that, say, $1 million that was budgeted a year before, you had only paid $600,000 the year before?

MR. ENGLISH: Yes, $700,000 I believe. We missed a couple of months on payment. Workers' Compensation were under some restructuring and didn't get their invoices in on time, and it took a little longer to get it though the system. Unfortunately.

MR. MATTHEWS: Who knows, this year we are budgeting only the same amount as was budgeted last year, so that is really a -

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

MR. MATTHEWS: - function of accounting that caused that to happen.

MR. J. BYRNE: Under .06, Purchased Services, you had $274,400 budgeted and you spent $256,600. Every year I have a problem with this one in every department on that. No, I'm thinking about another one now. Can you explain that one to me?

MR. MATTHEWS: Purchased Services?

MR. J. BYRNE: Yes.

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

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

MR. MATTHEWS: What is it spent for?

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

MR. MATTHEWS: Spent to purchase services.

MR. J. BYRNE: Yes, which services?

MR. MATTHEWS: What items go under that sub?

WITNESS: Printing costs, photocopier rentals and repairs to equipment.

MR. J. BYRNE: Okay. Under 1.2.02.12, Information Technology, $733,700 budgeted, and you had $1,092,300. That is $300,000 more.

MR. MATTHEWS: Yes. It was revised up due to the purchase of the equipment required for the installation of the Oracle inventory system and to upkeep and replace our other computer equipment. That is the explanation that I have. If you want more detailed information I'm sure the officials can tell you why it went from one amount to the other. It was budgeted at $733,700 last year, it went up to $1,092,300, and we are still budgeting this year less than we budgeted last year. If you want additional information (inaudible).

MR. J. BYRNE: Yes, I am curious on that one, because I will tell you why. Over the past few years we have been talking about having a tight budget. In every department we are looking at that kind of money being spent on information technology. Granted, I understand the importance of computers and what have you, and work with them. In the meantime, if you held for one year the existing systems that you have in place now you could probably save the government money. If this department is spending $1 million, you could probably save $10 million or something.

MS WAKEHAM: The Department of Finance and Treasury Board has changed to a new financial management information system which is using the Oracle. As a result of that we are one of the departments, because of size, that have a lot of systems that have to be re-worked and brought into the Oracle system. We had a fairly large increase in our requirements for the Oracle system. Some of the other departments you will see this year will also have increases, but ours is a lot larger because of the nature of the department.

MR. MATTHEWS: Obviously, we still need to do some things in order to be able to, amongst other things, manage our fleet better as the Auditor General pointed out. We recognize that and we have to get on with it.

MR. J. BYRNE: Under section 1.2.03.10, Grants and Subsidies, you had $202,500. It went up to $244,000. What are those Grants and Subsidies for?

MR. MATTHEWS: It was revised up because of a second special van provided to the Hub.

MR. J. BYRNE: That was the increase, but what is the rest of the amount for?

MR. MATTHEWS: In that vote?

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

MR. MATTHEWS: 1.2.03. Where are you looking, what line?

MR. J. BYRNE: It is above Information Technology, Grants and Subsidies, .10.

MR. MATTHEWS: Grants and Subsidies. It went from $202,500 to $244,000. I think that was the new vehicle. We gave the Hub extra money.

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

MR. MATTHEWS: They got in trouble.

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

CHAIR: The question is: What did the rest of the money go to?

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

MR. MATTHEWS: Oh, the rest! We had been already providing some grants to the Hub, so their normal allocation is in that. Is there anything else in there other than the Hub?

MR. ENGLISH: We pay the Atlantic Provinces Transportation Commission a $60,000 grant, a operating grant to TAC, which is the Transportation Association of Canada, of $42,000, and an operating grant for the Hub of $94,500.

MR. J. BYRNE: The Transportation Association of Canada, you said?

MR. ENGLISH: Yes.

MR. J. BYRNE: What is all that about? Why do we need to spend $42,000 there?

WITNESS: Keith.

MR. MATTHEWS: That is our membership, I guess, in the Association?

MR. WHITE: Yes. The Transportation Association of Canada is a national body that sets the standards for road construction, design principles, highway signage, things of that nature, to make them national.

MR. J. BYRNE: Standardization across the Country.

MR. WHITE: Yes.

MR. J. BYRNE: Thank you. Page 69, Administration and Support Services, 2.1.01.12, Information Technology. You had $27,400 expected, it went up to $180,800, and now down to $159,200. That is the same answer as the last time, is it?

MR. MATTHEWS: Yes, it is up.

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

MR. MATTHEWS: This is due to a project to replace the department's highway maintenance management system and the equipment maintenance system. It is essentially the same explanation as was over in the other subhead.

MR. J. BYRNE: Traffic Engineering and Signs, 2.1.02.03, Transportation and Communications. You had $11,500 budgeted and it went up to $47,500, and back to $11,500 this year. That is $36,000 more.

MR. MATTHEWS: It was revised up due to radio costs in our heavy equipment. Now that is a substantial figure. I do not have the details of the extra cost, but I am sure one of the officials or the Deputy Minister would have them.

WITNESS: There were increased costs to have a communication system in Labrador, the Trans-Labrador Highway. We have taken over maintenance of extra mileage that used to be looked after by Newfoundland and Labrador Hydro, so we have additional costs associated with radio communications.

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

WITNESS: It is a one-time cost.

MR. J. BYRNE: With respect to this also, .04, Supplies. You have $177,100 budgeted and you spent $50,000, and this year it is up to $177,100 again. Why did it drop? If it dropped down to $50,000 this year why do you have to have it budgeted so high, over three and a half times?

MR. MATTHEWS: Gordon, or Alex.

MR. ENGLISH: That basically has to do with the way the accounting is performed for the sign shop. We will make signs for other departments. In other words, we have to buy the supplies, we manufacture the sign, and then through cost recovery we will charge the other departments.

MR. J. BYRNE: Yes, but that is not answering my question, though. I can understand $177,100 if this is what was needed, but you only spent $50,000 last year, and it is back up to $177,100 this year, which is three and a half times what you spent last year.

MR. ENGLISH: I think it fluctuates from year to year of how much signage work we do for other departments and how much cost recovery we will get.

MR. J. BYRNE: I have questions with respect to signage and the materials used in signs. When I was mayor of Logy Bay-Middle Cove-Outer Cove we asked Works, Services and Transportation to do our signs for us and we would pay them, I suppose, whatever the case (inaudible) works that way. All the materials that you get for those signs - the 4x4s, the 6x6 posts, the big sheets of plywood - how do you get that material? Where do you get it? Do you go out on tender? What is the story?

MR. ENGLISH: Yes, through public tender.

MR. J. BYRNE: All public tenders. Page 70, 2.1.03.09, Maintenance and Repairs, Allowances and Assistance. You had $150,000 budgeted and it went up to $170,000. Why the increase, and what is Allowances and Assistance for?

MR. MATTHEWS: Alex.

MR. ENGLISH: That is for out of court settlements for damage claims, where a snow -

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

MR. ENGLISH: Yes.

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

MR. ENGLISH: Again, it fluctuates from year to year.

MR. J. BYRNE: 2.1.04.01, Snow and Ice Control, Salaries. You had $9,445,200, it went down to $8,245,200, and it is back up to $9,696,800. That was a big drop, and then a big increase. That has something to do with one of the answers you gave me earlier, I would believe.

MR. MATTHEWS: It probably has to do with the good winter we had. We saved a fair bit of money last winter -

MR. ENGLISH: We saved quite a bit of money in overtime.

MR. MATTHEWS: - on salaries and on material. We saved a couple of million dollars actually, I think, was it, Alex?

MR. ENGLISH: Yes, we saved approximately $1.4 million in salaries and another $300,000 or $400,000 in Purchased Services.

MR. MATTHEWS: A couple of millions of dollars was a result of a good winter.

MR. J. BYRNE: That is the next one I was going to hit on, actually, .06, Purchased Services. You had $3,638,400 budgeted, then $3,102,100, and then up to $3,855,700. The same thing, because you buy less materials such as salt and sand and stuff, I suppose. Is it?

MR. ENGLISH: That is where we would hire outside contractors to give us extra assistance. Because of the winter we didn't need to have the same level of hiring.

MR. J. BYRNE: Page 71, 2.2.01.01, Administration. I had Salaries highlighted, but forget that. Technical Support Services, 2.2.02.06, Purchased Services. You had budgeted $424,000, down to $265,500, then up to $399,000. What are the services?

MR. ENGLISH: That is the savings for lower billing insurance costs. We insure I think the figure is over $1 billion worth of buildings. The tender came in I believe last year a lot less than we expected.

MR. J. BYRNE: You just popped something in my mind. You say you insure buildings for over $1 billion? So you are saying that -

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

MR. J. BYRNE: A billion dollars, yes. On these buildings, I would imagine they are throughout the Province - St. John's all right across in different communities. The Department of Works, Services and Transportation doesn't pay any taxes on these buildings to the municipalities and they don't give any grants to move taxes, do they? If the municipalities ever got to the point where they could tax your department you would be hit pretty hard.

MR. MATTHEWS: If the municipalities could tax government for the value of the buildings like they tax others. The municipalities do get consideration by government through the Department of Municipal and Provincial Affairs. You would know more about that than me, being an ex-mayor, with the MOGs and those other types of grants that have been shrinking -

MR. J. BYRNE: From $46,000 down to $26,000 this year. Getting less all the time.

MR. MATTHEWS: Yes. That is a bigger issue than just Works, Services and Transportation.

MR. J. BYRNE: Definitely, there is no doubt there. On page 71, 2.2.03.01, Building Utilities and Maintenance, Salaries. Again, I touched on Salaries there, but it is going to be the same answer all the time for Salaries, isn't it? In .04, Supplies, it was $1,720,000 up to $1,850,000. Now it is $1,871,300.

MR. MATTHEWS: What subhead?

MR. J. BYRNE: 2.2.03.04.

MR. MATTHEWS: Supplies again.

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

MR. MATTHEWS: What was the explanation?

MS WAKEHAM: That was an increase in the heating fuel cost.

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

MS WAKEHAM: We have to maintain them. That means we have to heat them.

MR. J. BYRNE: Figure that out. Page 72, 2.2.06.05, Alterations-Leased Accommodations, Professional Services. What are those Professional Services?

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

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

MR. MATTHEWS: What type of Professional Services is what you are asking about, is it?

MR. J. BYRNE: Yes. What is that? Painting, renovations and stuff like that?

MS WAKEHAM: No, that would be for appraisals that we are doing on changes within the buildings. They are very small costs associated with the appraisals.

MR. J. BYRNE: On page 73, 2.3.01.06, Administration, Purchased Services. We were at $935,000, then down to $620,000, and back up to $785,000. What is that all about?

MR. MATTHEWS: Where are you again?

MR. J. BYRNE: 2.3.01.06, Purchased Services.

MS WAKEHAM: The answer to that again is dealing with vehicle insurance, the changes in the cost. What happened was that we ended up getting lower costs as a result of the territory changes in some of our vehicle insurance.

MR. J. BYRNE: I thought that the government did not insure their vehicles. I was under the impression once before that government did not have their vehicles insured, that they would just as soon pay out if there was an accident, rather that the costs involved.

MR. MATTHEWS: That used to be the case many years ago, but I don't think it is the case anymore. Is it?

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

MR. MATTHEWS: We carry insurance now.

MR. J. BYRNE: When did that change?

MR. MATTHEWS: (Inaudible) we had insurance on the Harvey Road building when it burnt. We are still trying to settle the claim, but the point is we carry insurance.

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

MR. MATTHEWS: Yes, as I say, we carry insurance on vehicles and buildings, as far as I know. Don't we?

MS WAKEHAM: It is public liability only, not collision.

MR. J. BYRNE: For 869 vehicles? Alright. In 2.3.03.07, Heavy Equipment, Property, Furnishings and Equipment. You budgeted $4 million, spent $4 million and this year you have $2 million.

MR. MATTHEWS: We had to make up a $5.2 million budget shortfall this year as a result of Program Review, so this year our vote for Heavy Equipment was cut by $2 million. It is not something that I don't think the department can sustain year over year, but we can sustain it this year as a one-time reduction in purchase of new equipment.

MR. J. BYRNE: You mean to say you spend $4 million each year on the purchasing of new equipment? Would that be like ploughs, graders and that kind of stuff?

MR. MATTHEWS: That is traditionally what we have been budgeting.

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

MR. MATTHEWS: Equipment replacement, yes. It beats up a lot of equipment in the run of a year.

MR. J. BYRNE: Page 74, 3.1.01.04.

MR. MATTHEWS: Supplies?

MR. J. BYRNE: Well, it is .04 and .06, actually. What happened to .05, I wonder? Anyway. Administration Support and Design, 3.1.01.04 and .06.

MR. MATTHEWS: Supplies, and Purchased Services?

MR. J. BYRNE: Yes.

MR. MATTHEWS: Last year we were up by $20,000 there on Supplies and we are budgeting $20,000 more this year. Just increased costs, basically. I do not know if there is anything -

MS WAKEHAM: We are sharing drafting supplies.

MR. ENGLISH: That is just a reallocation. They moved $20,000 from the Property, Furnishings and Equipment into their Supply account.

MR. J. BYRNE: Because when you look at the Salaries, they dropped by $300,000, and yet you have purchased more supplies and more purchased services. It should be the reverse. Do you know what I mean?

MR. ENGLISH: That is where they buy a lot of the supplies for the engineers who are working on the roads projects. While the salaries here may have dropped, the program has expanded, so they would need the same amount of engineering equipment.

MR. MATTHEWS: Subhead .04 is up by $20,000 and subhead .07 is down by $20,000. That is the explanation, Alex, that you are giving, isn't it? Yes.

MR. J. BYRNE: Page 75, Pre-Engineering, 3.2.02.06, Purchased Services. It is right across the board. That is just engineering fees?

MR. WHITE: That covers things such as geo-technical investigations. If we are doing a new bridge site we may have to go out and drill for geo-technical information, and consultants' reports associated with that. That is what is covered under that item mainly. It is strictly pre-engineering, pre-construction investigations.

MR. J. BYRNE: Page 76, 3.2.03.03, Improvement and Construction-Provincial Roads, Transportation and Communications. You budgeted $130,000 and it went up to $250,000. That is an extra $120,000. What is the story on that? That is almost double.

MR. MATTHEWS: Why did we spend more money there, gentlemen?

MR. ENGLISH: If you look at the next three or four activities, these are our major road capital activities. We budget those at a bottom line. So you have a $19 million program or a $29 million program, and the allocations to the subheads are at best guesses during the budget process. The actuals actually appear in the revised.

MR. J. BYRNE: The same thing goes for Supplies. The $11,000 in there for Professional Services, that was not budgeted at all. What would that be for?

MR. ENGLISH: We may have had to hire a consultant for a small project.

MR. J. BYRNE: Grants and Subsidies, .10. You had nothing budgeted and it went into $1.5 million, and it is $300,000 this year.

MR. MATTHEWS: Was that the Labrador airlift subsidy? That is the brush cutting program, I am sorry. That was an allocation of funds that government voted during the year to do some additional brush cutting in the Province's highways and roads. It was not contemplated in the original budget, but it was a special warrant (inaudible) vote during the year.

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

MR. MATTHEWS: You probably did yes, most districts benefited from it. You can spend almost as much as you like year over year, it seems to me, from what I have seen in the one year I have been there, in brush cutting. There is always a requirement to do more in that area.

MR. J. BYRNE: Thank you. 3.2.04.04, $500,000 budgeted for Supplies, and you spent $129,000, and it is back up to $500,000 this year.

MR. ENGLISH: Again, we look at the program in total and we make a guess at what supplies will be needed, or what professional services or what purchased services. These subhead amounts are at best guesses, because the budget is prepared in this format before we even go to tender.

MR. J. BYRNE: Just a question now when you say that. It is best guesses, and that has been referred to a few times. At the end of the year, how do you usually pan out with your budgets with respect to the overall budget, what had been estimated to be spent and what you actually spent? Does it balance out?

MR. ENGLISH: In a program like this the important thing is the $29 million, that you don't blow your program cost.

MR. J. BYRNE: I am just wondering when it comes on to the end of March (inaudible).

MR. MATTHEWS: We monitor our budgets month over month and we know where we are in terms of our total budgets and in any one particular area. If we find that we need more money in one area and we have savings in another area, we can transfer around within our budget. Last year at the end of the year we had budget savings, actually in large measure because of our good winter, $2 million. That is what gave the Minister of Finance and Treasury Board a little better (inaudible).

MR. J. BYRNE: When you say last year, do you mean 1996-1997?

MR. MATTHEWS: No, 1997-1998.

MR. J. BYRNE: Which is now.

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

MR. J. BYRNE: Yes, I know. Because you really wouldn't consider winter being over until the end of March or sometime in April, really. You (inaudible) get your overall savings that were really budgeted.

MR. MATTHEWS: Most of the savings we got last year because most of the winter, of course, was from November to March last year.

MR. J. BYRNE: It was. In 3.2.05.03, Regional Roads-Transportation Initiative, Transportation and Communications. You had budgeted $200,000 and it went up to $345,000. That is $145,000 more, that is over 50 per cent more.

MR. MATTHEWS: Yes, and the next one you will see is down considerably. These are costs within the programs, I guess, Alex, as you just mentioned and they are all estimates. We go to tender and we get our prices in, and then we reallocate based on what the actually costs are. The big thing, as Mr. English has said to you, is that we have to keep within our budget in terms of the total program.

MR. J. BYRNE: I know that, but if you look at one, Transportation and Communications, that is up by over 50 per cent. Supplies is down by about 60 per cent.

MR. MATTHEWS: Supplies are down by 200 or 300 per cent.

MR. J. BYRNE: Whatever. It is like there is contradiction there, do you know what I mean? One going against the other. If you think one is down they would both be down, and if one is up both would be up, type of thing. What happened?

MR. MATTHEWS: Is there anything significant there, Alex?

MR. ENGLISH: Again, unless Keith can come up with an answer...

MR. WHITE: It would probably help if you knew exactly what these items covered. Transportation and Communications is essentially travel costs for our survey crews. Supplies is things such as survey pegs, anything the survey crews need: the instruments they use, the chains, tapes, level rods, these sort of things. Professional Services is consultants' fees, if we have a need to retain consultants. I mentioned about pre-engineering. We have occasions to do drilling for geo-technical information. Even during construction there are times we still need to do those sorts of investigations. During construction it would be covered under Professional Services there. Purchased Services is the contract payments, and then Property, Furnishings and Equipment is just that.

MR. J. BYRNE: The work that you mentioned, survey crews, supplies and materials, has the department ever thought about putting that out to private practice instead of having to hire their own people on?

MR. WHITE: That has been studied quite a few times in the past.

MR. J. BYRNE: I am getting too close to home here now, but sometimes when I see survey crews on the highway I see four or five people. That is a crew. Private industry would do that for probably about half the staff. Anyway, so be it.

MR. MATTHEWS: It is a privatization issue.

MR. J. BYRNE: Yes, and it is too close for me to be asking questions, really. In 3.2.05.06, Purchased Services, you have $22,500,000 budgeted, you spent $23,550,000, and this year you are dropping it by $5 million down to $18,450,000. Why such a drastic drop? 33 per cent.

MR. MATTHEWS: Why are we down from $25 million to $21 million, is that your question?

MR. J. BYRNE: Down from $23,550,000 which was spent last year, and you are dropping it to $18,450,000 this year, which is a $5 million drop.

MR. MATTHEWS: Yes. Like I say, our provincial roads program is going to be down quite a bit this year because we are spending less money on it, less payment to contractors for -

MS. WAKEHAM: Purchased Services is all payments to contractors under the various roads projects.

MR. J. BYRNE: It is actually construction of the roads like -

MR. MATTHEWS: Yes, building the roads.

MS WAKEHAM: The actual payments, the actual invoices for building the roads. So the roads program is down this year from what it was last year, so the actual payments to the contractors are down.

MR. MATTHEWS: We are down about $5 million in our provincial roads program this year. That is the bottom line.

MR. J. BYRNE: I thought you were going to be spending more money on roads this year.

MR. MATTHEWS: In total, but that is largely because of the Trans-Labrador initiative where we are spending about $36 million.

MR. J. BYRNE: That gives a false picture really, doesn't it, with respect to what has normally been done on roads?

MR. MATTHEWS: No. When we announced it we announced there would be $36 million in Labrador, we announced there would be $16 million in the provincial program, and there is about $56 million in the Roads for Rail Agreement. In other words, the federal agreements.

MR. J. BYRNE: When you are speaking of roads something just popped in my mind. I am thinking about the twinning, the Trans-Canada Highway, out around Whitbourne area, from the extension where it is stopped now a few miles east of Whitbourne. You are going to be going on through. What are the final plans for that area? Are they going to twin it, are you going -

MR. MATTHEWS: We are stopped now in the Triangle Pond area I think it is, right Keith?

MR. WHITE: That is correct.

MR. MATTHEWS: The original plan was to twin it right to the Argentia access road, which was really stopping at the Irving service station there, because that is right at the corner, we will say.

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

MR. MATTHEWS: There has been a lot of discussion and resistance to that in terms of four-laning it along that business section and the implications for the business community. We do have some real problems there to address. We have this intersection at routes 80 and 81 into Whitbourne to address, so as a result of that we went back and had a look at it. There are a couple of options. We can curtail the twinning somewhere east of that business section; we can go on to the Argentia access as was originally planned.

These are the two basic options, but if we do stop it east of the intersection we still have to do something to address that intersection there in Whitbourne and Blaketown. For what it is worth, I have a Cabinet paper ready now to go to Cabinet with recommendations as to what I think we should do there. We will be able to clarify that issue within the next month or so, probably less than that.

MR. J. BYRNE: That is basically as much as you can say about it if you have a Cabinet paper.

MR. MATTHEWS: Yes. There were I think nine or eleven options developed by the engineers. Keith can tell you what the pros and cons of all the options were, but I do not think it is budget related in the first instance. You know, there are talks about -

MR. J. BYRNE: It is budget related because it is going to cost money. Everything is budget related, I suppose.

MR. MATTHEWS: Well, yes. There were talks about a fly over where you would go two lanes on the back of the business community and two lanes on the front of it. There are all kinds of options looked at, but the bottom line is we either twin it to the Argentia access, or we stop probably two or three kilometres east of that and do some different things like realignment, overpasses and the like.

MR. J. BYRNE: With respect to 3.2.06.06 Trans Labrador Highway, Purchased Services. There was $15 million last year, $33 million this year, and you just referred to that. Does that $33 million include any of the $15 million that was there last year, or has that $15 million been spent?

MS WAKEHAM: There is $36 million being spent on the Trans-Labrador Highway. There is some carryover there, but for the most part it is all new money that is going into it. This is payments to the contractors again.

MR. J. BYRNE: This $33 million.

MS WAKEHAM: Yes.

MR. J. BYRNE: So in actual fact there will be $48 million spent on it.

MR. MATTHEWS: There is a $60 million project from Labrador West to Goose Bay and most of that project will be done this year. There will be a small bit next year, $12 million. Depending on how much they get done this year there could be a carryover, if winter comes early and they do not get all the work done and it gets carried over, as you know.

MR. J. BYRNE: What condition would that road be? Say you have your $60 million spent. To what level will that road be, class A, pavement, what?

MR. MATTHEWS: It will be a 9.5 metre wide gravel road. Because essentially I think what it will be... Keith, I don't know whether you would describe that as a class A. Is it described in those terms?

MR. J. BYRNE: Ready for pavement.

MR. WHITE: Yes, we class it as a class A gravel road, 9.5 metres wide as the minister said, with a crushed gravel surface on it.

MR. J. BYRNE: Thank you. Strategic Highway Improvement Program, page 78, 3.2.07.06, Purchased Services. You had $3,725,000 budgeted last year, you spent $4,800,000, and there is none this year. (Inaudible) money gone?

MS WAKEHAM: The program is finished. It was a federal-provincial roads program. Purchased Services is the same thing, which is monies to contractors. That program is over with. There was some increase in the expenditure and it was found within the overall federal-provincial budget that we have for roads.

MR. J. BYRNE: Did the Province have to come up with that extra $1 million or did the feds pay so much of it? (Inaudible) breakdown.

MS WAKEHAM: No, the federal program has a set of envelopes, so when there are changes in programs - a project will come in a little bit cheaper than what we estimated or there is one that is over -, so there is always a shifting back and forth to cover it off.

MR. J. BYRNE: 3.2.08.07, Land Acquisition, Property, Furnishings and Equipment. There is $2.5 million across the board. That is for land acquisition for widening of roads, or what have you.

MR. MATTHEWS: That is expropriation costs.

MR. J. BYRNE: Page 78, 3.3.01, Alterations and Improvements to Existing Facilities. I see right there you have subsection .05 and .06: Professional Services, $300,000 up to $585,500; and Purchased Services, $3,400,000. You spent roughly that, but this year you have $4,325,000. What is the story on all of that? 3.3.01, subsection .06 really I suppose, the big one, and .05.

MR. MATTHEWS: That whole section has to do with the renovations and energy retrofit projects for buildings owned and operated by government agencies. I guess we are just planning on doing more work in that area this year in terms of the energy conservation projects. Don, I don't know if there is anything you can add to that.

MR. OSMOND: No, Minister, that covers it. I guess the reason for Professional Services being up a little bit higher was there was a larger number of smaller sized projects, and you get a lower economy of scale of course when you are doing that sort of thing.

MR. J. BYRNE: Thank you. Page 79, Development of New Facilities, 3.3.02. Again, I had Professional Services, from $750,000 up to $1.8 million. That is over double. Purchased Services went from $8.9 million down to $4.8 million and it is going back up to three times that. What is on the go here? That sounds like a lot of money.

MR. MATTHEWS: These are new facilities. This has all to do with out capital program for next year. Don, probably you can -

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

MR. MATTHEWS: - be more precise in where these went up and down and why. Which projects are involved, I guess, is the question.

MR. OSMOND: The major change from the $8.9 million to the $4.8 million is as a result of the Gander Hospital not proceeding to the same extent that one had hoped. Some of the money then was subsequently transferred to Grants and Subsidies, for example, which were to the St. John's Health Care Corporation, North Haven Manor, and some other health care facilities. As well, some went back up to Professional Services where some work preparatory to this year was begun.

MR. J. BYRNE: So the $4.8 million last year was a decrease. What about the $15,857,000, what is that money being spent on?

MR. MATTHEWS: I guess Melville Hospital is brought into there, isn't it, Don?

MR. OSMOND: Yes, sir. Lake Melville Hospital is the biggest one, $9.5 million, and we are hoping to have a go at Gander this year. That makes up $5.6 million. Those are the biggest ones.

MR. J. BYRNE: Thank you. Advanced Planning-Studies, 3.3.03.05, Professional Services. From $200,000 up to $500,000. Why?

MR. MATTHEWS: There is more activity this year in our capital budget than there has been for a long time. We announced the six health care facilities, and we are also wanting to build a new youth remand centre. We have to do some planning toward that. As a matter of fact, I think there was $300,000 dedicated to that in our budget this year. We have not done a lot of capital projects over the last four, five or six years because we have not had the money, and that is translated into a pent-up demand. There are a bunch of projects out there. We would like to do a couple of courthouses that have been on-again, off-again for four or five years. They did not get announced this year.

The new youth remand centre is a critical one, and one that we are going to do some planning on this year. I think, Don, there is $300,000 in there for this year?

MR. J. BYRNE: Page 80, AirStrips, 4.1.03.06, Purchased Services. You had a budget of $195,000, you spent $599,000, and this year it is up to $970,000. There seems to be a pretty dramatic increase there.

MR. MATTHEWS: (Inaudible) maintenance on the airstrips?

MR. J. BYRNE: It says Purchased Services.

MS WAKEHAM: That is contracted work for maintenance on the airstrips.

MR. MATTHEWS: In Labrador?

MS WAKEHAM: Yes.

MR. MATTHEWS: The Labrador airstrips. That cost we -

MS WAKEHAM: It is all cost recovery.

MR. MATTHEWS: That is all cost recovered from the federal government because they have the responsibility for those airstrips.

MR. J. BYRNE: You are going to be spending four times what was budgeted last year. The airstrips must be in pretty bad shape, are they?

MR. MATTHEWS: The feds announced last week that they were spending $3.7 million or $3.9 million, was it, Wally, on the airstrips over the next four or five years? They have done an audit of the airstrips and they need some work done on them. Yes, they have to be kept up to date, but it is cost recovery. The feds pay it and we do the work for them. We manage it.

MS WAKEHAM: The difference in the Estimates too is that the federal government does not audit the airstrips every year. They only come in every couple of years and audit it. You end up getting a larger inventory of requirements for upgrading.

MR. J. BYRNE: Page 81, Ferry Operations, 4.2.02.6. Again, Purchased Services there, up from $4,540,600 to $19,868,300.

MR. MATTHEWS: Yes. We are into the Labrador coastal services which are going to cost us $10 million or $11 million this year, plus the Straits of Belle Isle service, which we have always had.

MR. J. BYRNE: If you part with, say, the Labrador service (inaudible) mentioned that time, $11 million or something?

MR. MATTHEWS: The Labrador marine service will probably cost more than $11 million. Is that a net figure, Deputy Minister?

MS WAKEHAM: The budget is $15.6 million for the coastal Labrador service, including the contract to go from Puddisters for the St. Barbe to Blanc Sablon.

MR. J. BYRNE: I might be missing something here now, it might be so obvious. If you had $4.5 million budgeted for it last year, which you could operate it for last year - now it has gone up to $19 million.

MS WAKEHAM: No. What has to be understood is that when we were waiting for the transfer of funds from the federal government we were operating until the fund was set up and then we cost it back off to the fund for the Trans-Labrador Highway fund that was set up, the Labrador fund.

MR. MATTHEWS: The Trans-Labrador initiative fund.

MS WAKEHAM: We did not know exactly what kind of cost we were going to incur and we were waiting for the accounting process to go in place for the Labrador service. Once that went in we journey vouchered it. That is why your revised figure is showing $19 million.

MR. J. BYRNE: Yes, but you must have had a figure on it for previous years of how much it costs to operate that service.

MS WAKEHAM: We did not operate the service in previous years, the federal government did.

MR. MATTHEWS: We did not operate it, Marine Atlantic operated it.

MR. J. BYRNE: Marine Atlantic. Okay, I got you now. Where are we benefiting there?

MR. MATTHEWS: I am sorry?

MR. J. BYRNE: Where are we benefiting?

MR. MATTHEWS: Where are we benefiting?

MR. J. BYRNE: If the feds were paying for it before, now we are paying for it.

MR. MATTHEWS: The arrangement with the feds was for a $340 million cash settlement, if you like, plus acquisition of a couple of boats and infrastructure. We took over responsibility. The deal is that we are going to spend about $190 million to build Phase I and Phase II of the Trans-Labrador Highway. The balance of the money sits in an account that is set aside physically or literally, and the interest off that account, the balance of the money in the account, will run the services forevermore. Now there is one phase of the Trans-Labrador Highway we have -

MR. J. BYRNE: We hope.

MR. MATTHEWS: Oh, yes. One phase of the Trans-Labrador Highway we have not even identified the funding for yet, and that is Phase III from Goose Bay to Cartwright. As the roads go through Labrador the requirement for marine services is going to go down. I think last year there was an 8 per cent or 8.5 per cent decrease in the traffic off the Island last year - or shipments, John, was it? - into Labrador. This year we are predicting probably up to another 15 per cent decrease.

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

MR. MATTHEWS: Yes, so the time will come when there will be no ferry -

MR. J. BYRNE: (Inaudible) increases or decreases, yes.

MR. MATTHEWS: There will be no requirement for services on the South Coast of Labrador, and the North Coast will probably be mostly serviced out of Goose Bay once the road is done.

MR. J. BYRNE: Yes, that's the plan, all right. Page 82, Ferry Vessels, 4.2.04.06, Purchased Services. You had $275,000, and $275,000 again, and this year it is $1.6 million.

MS WAKEHAM: We had $1.3 million set aside for the revamping of Hull 109 which is the Prince Edward that we bought. That had to have some repairs made to it but we got it for $300,000. It was a $28 million vessel. We had to (inaudible).

MR. J. BYRNE: That is going to be done next year, is it, that work?

MS WAKEHAM: Yes. The thing is that we put the contract out and this is a carryover in terms of the work being completed. It has to carry it in this year.

MR. J. BYRNE: Who is going to do the work?

MS WAKEHAM: The work is being completed now. It should be finished by the end of May, and then we will be putting the ferry in operation in the Fogo Island (inaudible).

MR. J. BYRNE: Who is doing the work, though?

MS WAKEHAM: Who did the work? Who was it contracted to? Burry's. Dockyard.

WITNESS: The St. John's Dockyard.

MR. J. BYRNE: That is what I was getting at. I was wondering if it was done here on the Island.

MS WAKEHAM: Everything that is going to happen is going to be done here.

MR. J. BYRNE: You should not say that, now, see, because I know something different and I am going to be asking him about it soon.

MS WAKEHAM: To the best of our ability we are making sure that the work is done in Newfoundland.

MR. J. BYRNE: That's good.

MR. MATTHEWS: You notice the next line we were carrying $2 million year over year to try and find a ferry. This year we do not need to carry that because of course we have found a boat, and $1.6 million will put it in top shape.

MR. J. BYRNE: 4.3.02.01, Government-Operated Aircraft. Salaries were $1.6 million, then $1.6 million, and it is up to $2,003,800 this year. That cannot be the same situation as you explained earlier.

MR. MATTHEWS: Sorry?

MR. J. BYRNE: Under 4.3.02.01, Salaries, it went from almost $1.7 million up to $2,003,000. That is a $300,000 increase, but I do not see that as being the same situation as what you explained earlier in Salaries.

MR. MATTHEWS: No, the twenty-seven pay periods were only part of it. What is the balance of that?

MS WAKEHAM: In April of last year what happened was they changed the regulations under the Canadian Aviation Regulations that required different down times with respect to mandatory, and we had to put money into the account to increase the crew time.

MR. MATTHEWS: Now, that has been somewhat changed back as of this year. They have relaxed the regulations.

MS WAKEHAM: They have relaxed the regulations in terms of the mandatory down time, but they have changed the number of scheduling changes from a forty-two day to a thirty day, so that we have an impact in terms of the actual crews that are available for our bomber fleet and for our air ambulance.

MR. MATTHEWS: The bottom line is there are a lot more staff involved, a lot more services.

MR. J. BYRNE: Transportation and Communications, .03, $1,043,000 up to $1,481,500. That is roughly the same, related that way.

MS WAKEHAM: Basically it is because we had to - and we ended up with a bit more charters as well. Again, it was a problem with the changes in the regulations. They have now told us that they will not hold us to the mandatory down time and the eight hours which were causing us to do a lot of contracting out, but they still have some changes within the aviation regulations themselves.

MR. J. BYRNE: Page 84, 5.1.01. I had Information Technology highlighted again there but we have already gone through that in another section. 5.1.02.01, Queen's Printer. Salaries went from $59,100 up to $98,100. Is there more staff hired on there?

MR. OSMOND: Actually what has happened there was there were several illnesses within the existing staff and we had to hire some assistants to replace them.

MR. J. BYRNE: .06, Purchased Services, from $190,500 up to $262,400. Why would that be?

MR. OSMOND: That is due to extra printing costs.

MR. J. BYRNE: Extra printing costs for what?

MR. OSMOND: I could not give you too much on the specific side, but generally speaking where we are acquiring some printing being done outside, or the costs of materials and so forth that have been purchased for printing services.

MR. J. BYRNE: Thank you. Page 85, 5.1.03, Printing and Micrographic Services. I just have one question, on Property, Furnishings and Equipment, .07. You had $30,000 that wasn't budgeted last year nor this year.

MR. OSMOND: That was a new piece of equipment that was purchased.

MR. J. BYRNE: I am just curious now. You had a new piece of equipment that was purchased and it was not budgeted for. It would almost be considered an emergency, I suppose, to purchase it that year. Wouldn't you think? Or wouldn't you wait till the following year to purchase it?

MR. MATTHEWS: Was it a breakdown, Don, or was it just a new piece that they had to have?

MR. OSMOND: It was a new piece that they had to have. I think it had to do with some previous equipment that was not working properly. It was purchased out of savings, actually, that were developed elsewhere.

MR. J. BYRNE: Thank you. 5.2.01.10, Park Operations, Grants and Subsidies. It was $200,000, went up to $300,000, and is down to $100,000.

MR. MATTHEWS: That is the grants to the Pippy Park Commission. Program Review caused their grants to be projected going downwards. Last year because of the first year in the reduced budget they needed some extra money to run their operation so we found some new money for them that was not budgeted. That would put it up to $300,000. This year we are only looking at $100,000.

MR. J. BYRNE: Basically, you took it from this year's budget for last year for them.

MR. MATTHEWS: No, not really.

MR. J. BYRNE: Well, really, (inaudible) -

MR. MATTHEWS: We found it in last year's savings.

MR. J. BYRNE: Thank you. Page 86, 5.2.02.10, Park Development, Grants and Subsidies. It went from $200,000 to $260,000, then to $100,000.

MR. MATTHEWS: They are down to $100,000 this year too. We are putting less money into Pippy Park all the time. They are going to get some new revenues from the golf course that is run up there. Because we have said to them: We can't give you as much money so you better generate some revenue on your own. I think they will be okay, but we will not see the Pippy Park Commission in a circumstance where they can't meet their obligations in terms of grounds' keeping and the other programs they run. It is going to be a little tougher on them.

MR. J. BYRNE: One other question. Can you just give me an update on the Outer Ring Road? Where it is to, what is happening this year, and when is it going to be completed? That is planning on going into the White Hills, isn't it, over there right up on the top of the Janeway?

MR. MATTHEWS: The outside date for completion of all of the projects under the Roads for Rail Agreement is 2003 with a wrap-up year in 2004. I believe that is the right date. Keith?

MR. WHITE: Back a year, 2002, (inaudible).

MR. MATTHEWS: The year 2002, and the wrap-up year 2003. All of our projects have to be completed by then. This year, as you know, the road bed was put in and a few years ago from Kenmount Road up to the Cove Road. Last year we did two or three structures and this year we are doing two more structures and commencing the paving. We fully expect by the end of this construction season to be able to use the Outer Ring Road effectively from Kenmount Road all the way to at least the Allandale Road interchange.

While we did not budget this year for the structure on the Portugal Cove Road, if we can find enough money in our Roads for Rails money we will probably call that structure. I would like myself to be able to get to the Cove Road this year. I think, the officials tell me, they have called contracts that will guarantee us to get to Allandale Road?

MR. J. BYRNE: To Allandale. Where will you access Allandale Road from?

MR. MATTHEWS: Right in front of the golf course, right here just (inaudible).

MR. J. BYRNE: By the Fisheries building.

MR. MATTHEWS: Yes, in that general area.

MS WAKEHAM: (Inaudible).

MR. J. BYRNE: School, college.

MR. MATTHEWS: It will get you to there. Beyond that, next year we will have to, obviously, think about getting it out to the Cove Road and carrying on down to the East End. Then we have the Goulds bypass that is in our plans to start. There is a lot of work to be done over the next two or three years in order to complete that project. We have basically pushed other projects farther ahead according to the allocation that was given in the Roads for Rails for these projects than we have this one, but the time has come to move more aggressively on this Outer Ring Road, and we are doing that this year.

MR. J. BYRNE: Possibly next year you could see access off Torbay Road onto the Outer Ring Road, do you think? Is that a possibility?

MR. MATTHEWS: Keith, what would it take to get us to the Portugal Cove Road area? I am pushing the officials to get to there, but they know the reality of what we can do. I told him the facts, you tell him the truth.

MR. WHITE: It is tough to get in 1999 right into Torbay Road. The structure itself at Torbay Road is a tricky one, because we have to go with the Outer Ring Road underneath the existing road, and it is a four-lane road there now.

MR. J. BYRNE: Under the existing Torbay Road?

MR. WHITE: Yes, so the logistics of it are going to be kind of tricky. While we will be attempting to get it on stream as soon as possible, to get that interchange at Torbay Road completely in use it will probably take to the year 2000. We could still have traffic to Torbay Road but not underneath and the other side.

MR. MATTHEWS: You are talking Torbay Road, is it, not Portugal Cove Road?

MR. WHITE: Torbay Road, yes.

MR. J. BYRNE: Torbay Road, yes.

MR. MATTHEWS: That takes us going to the airport, we will say, and out to Torbay Road.

MR. WHITE: Yes.

MR. J. BYRNE: I suppose you are still looking forward to petitions on the Goulds bypass, are you?

MR. MATTHEWS: No, I am not looking forward to them, they are wasting their time. We are going to do it as soon as we can.

MR. J. BYRNE: I know, that is the part of it. (Inaudible) for me. That is a part of being in the House of Assembly.

MR. MATTHEWS: (Inaudible) said it, now. The Member for Ferryland said last week in the House he has no more petitions on the Goulds bypass road.

MR. J. BYRNE: Thank God. Anyway, thank you for your time.

CHAIR: Thank you, Jack. I will now ask the Clerk to call the heads. How come you never had any questions before, Mr. Andersen?

MR. ANDERSEN: I am sort of surprised you let the Member for Cape St. Francis go on for an hour and a half without any interruption. I have a couple. I have one with regard to the subsidies for the community councils, the 50 per cent discount in shipping of big equipment on the boats. Minister, you said that if they go to a contractor it will not take place. For example, if the community council in Makkovik puts out a tender and they want to do some repairs to the roads in Makkovik, if they put out a tender call and it is won by whoever, that they will not avail of the 50 per cent of the discount to get the heavy equipment in?

MR. MATTHEWS: No, the intent, Wally, was to give a little bit of relief. The whole bundle of benefits, those reductions, only comes to about $100,000. That is the tariff on the under fifty kilo packages, the jockey charge, and the rebate to the municipalities. It isn't sort of a given. What it is is we have given our Labrador manager the discretion that when municipalities are bringing in equipment solely for their own use, not through subcontractors or general contractors, that they would get a bit of a break on the freight rate. I think that is the concept. So you are right, it is not applied to subcontractors.

MR. ANDERSEN: The Labrador manager is John?

MR. BAKER: Yes.

MR. ANDERSEN: Are you the Labrador manager?

MR. BAKER: We will have the regional people that will be able to have the discussion to be able to reduce those invoices, but in the past, as you are aware, the communities have from time to time had the benefit of getting a grader or a dozer or something of that nature at a very reasonable cost, only to be faced with a very high cost of transportation. This is why we took this into consideration now to help them in that way.

MR. MATTHEWS: If they wanted to buy a piece of equipment or something like that, if they were buying a piece of equipment for their own use, this helps them out with transportation. It does not affect subcontractors.

MR. ANDERSEN: 4.1.01. I just want to check. It must be a printing error. It says here: "for the winter foodlift subsidy and subsidization of air service to remote areas of the island." I was just wondering if that included the subsidies that we introduced into Coastal Labrador that we (inaudible).

MR. MATTHEWS: Yes, that is what they are, that is the winter food -

MR. ANDERSEN: So that would include Labrador as well? Alright. 5.1.01. Minister, I know that you had meetings in certain parts of Labrador regarding the tendering act. I know that small companies in the riding of Torngat Mountains were unable to avail or to place tenders because the majority of the tenders that went out from Works, Services and Transportation were issued in three newspapers. They were the local one in St. John's, the Telegram, The Western Star -

MR. MATTHEWS: The Evening Telegram, The Western Star, and the local newspaper.

MR. ANDERSEN: Also the one out of -

MR. MATTHEWS: Goose Bay?

MR. ANDERSEN: No, the third one they used was out of the one in Windsor-Grand Falls.

MR. MATTHEWS: The Advertiser.

MR. ANDERSEN: There are no local newspapers in our riding. I know last year there were houses built by Newfoundland and Labrador Housing and other agencies. There were two local contractors in Nain, and by the time they found out the deadline for the contract had already passed. So again, I wonder was there anything done within your constitution or in the tendering act that could alleviate this problem, or give the people up there a fair chance?

MR. MATTHEWS: Not so far, I guess. One of the things that was recommended to us in our consultations - and if we bring forward amendments this session it will probably be included - is having tendering by electronic means, so that we can go on the web site. I am not sure that will be much of an advantage. It depends on the ability of the contractor in terms of picking these things up and picking them off. I don't know if there is anything, Don, that has consciously been done to address their situation. If they missed it, I guess they missed it because they were not aware of it through the circulation of the newspaper.

MR. OSMOND: There are ways for them to access them. There are services out there that provide information on all tenders from government. They can be mailed to individuals, they can be faxed, or they can be sent by way of the web, or however. There are in fact two local companies that provide that kind of service. One is called BIDS and the other one is called PODS. Certainly the bidders in your district could subscribe to those services. They are not that much money, several hundred dollars I think a year. They will be able to also target the kinds of tenders they might like to bid on. Rather than everything coming to them, they will just receive those that in fact might be of interest to them. Eventually with time as well, as the minister indicated, once we get into electronic tendering more so, one can access the web if you have the equipment at any time and pull down anything that you want to see that is of any particular interest to you.

MR. MATTHEWS: These systems that Don is referring to are not systems they have to subscribe to, but a lot of people on the Island use them. They are like using an agency to assist you so that somebody will be pulling off all the tenders that relate to your type of industry, and it saves you the trouble of doing it yourself. They keep an eye out for you and you pay for the service. That is really how it works, isn't it, Don?

MR. OSMOND: Yes sir.

MR. MATTHEWS: That is one way that contractors in your area could probably know more about what is going on where they are isolated. I do not know of any other solution, Wally, I really don't.

MR. ANDERSEN: Basically then, if the question is asked to me again from people in my riding, then the answer -

MR. MATTHEWS: The bottom line is that -

MR. ANDERSEN: - is to find the best way possible.

MR. MATTHEWS: The bottom line is that everything has to be tendered over $7,500 that we do through government or the agencies, Newfoundland and Labrador Housing Corporation or whoever, and they are required at the moment to advertise in a generally circulated newspaper. That is why we use the newspapers. What we are suggesting, at least at the officials' level, is that we should broaden that so that not only newspapers could be used but also the web site or other electronic means. These agencies that Don referred to as the PODS crowd and BIDS are really private companies set up to analyze everything that government puts out to tender, and they convey that information to all of their subscribers.

So, if a small contractors in your area was, for the sake of a few hundred dollars, tied into one of these agencies they would be assured of getting notification of, say if they are interested in housing construction, everything that comes out. Not only on housing, but everywhere that is government related, both federal and provincial I guess. They would get federal and provincial because these agencies monitor federal tender calls as well as provincial tender calls. They may not be aware of the service, Wally, but certainly the best full-proof method of knowing they can get it -

MR. ANDERSEN: There is a fee involved, is there?

MR. MATTHEWS: Yes, it is user pay. Government does not pay for the service, it is a private sector service. If you want more information on that I suggest you speak to Don at your convenience. Because it is a problem, like you say, if anyone is operating in an area where there is no newspaper. That is notionally the same problem of a lot of people here on the Island in small towns or communities.

CHAIR: Okay, Mr. Andersen. Thank you. Mr. Sparrow.

MR. SPARROW: Mr. Minister, I only have one question. Now that Marine Atlantic is just serving the Newfoundland market have you any idea of the federal subsidy on the service? How much of that federal subsidy goes towards the Argentia run?

MR. MATTHEWS: The cost of Marine Atlantic's operation in Newfoundland is about $60 million a year. It works out now I think to be a $28 million subsidy, $32 million cost recovery. In other words from the tariffs) and fares they charge. It is almost a 50-50 split now in terms of Marine Atlantic's overall cost as between the revenue they generate and the federal subsidy. I do not know how much of that, John, relates to the Argentia service. Would you know?

MR. BAKER: No, I don't happen (inaudible).

MR. MATTHEWS: I don't know what breakout is. It would certainly be several million dollars. What do they operate in there, from June to September, is it, into Argentia?

MR. BAKER: Yes, that is right.

MR. SPARROW: Thank you.

CHAIR: I take it there are no more questions.

On motion, subheads 1.1.01 through 5.2.02, carried.

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

CHAIR: Before we clue up, I would ask that somebody second the minutes of our May 7 meeting.

On motion, minutes adopted as circulated.

CHAIR: Minister, on behalf of the Committee I would like to thank you and your officials for appearing this morning. You have been very impressive and precise in your answers, and in fact have covered the Estimates in totality. Thank you very much for being here.

MR. MATTHEWS: Thank you, Chair. I would like to thank my officials for their contribution and the good information they gave you. Thank you, Mr. Byrne, for your aggressive line of questioning. Thank you, Mr. Sparrow, for being so short in your line of questioning. Mr. Andersen, you were somewhere in between. I am surprised you did not ask for money for your community roads.

The Committee adjourned.