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Legislative Assembly of Alberta

The 29th Legislature
Second Session

Standing Committee
Public Accounts

Children's Services, Infrastructure,
Transportation, and Treasury Board and Finance

Tuesday, February 28, 2017
9:15 a.m.

Transcript No. 29-2-13

Legislative Assembly of Alberta
The 29th Legislature
Second Session

Standing Committee on Public Accounts

Cyr, Scott J., Bonnyville-Cold Lake (W), Chair
Anderson, Shaye, Leduc-Beaumont (ND), Deputy Chair

Barnes, Drew, Cypress-Medicine Hat (W)
Cortes-Vargas, Estefania, Strathcona-Sherwood Park (ND)*
Dach, Lorne, Edmonton-McClung (ND)
Fildebrandt, Derek Gerhard, Strathmore-Brooks (W)
Fraser, Rick, Calgary-South East (PC)
Goehring, Nicole, Edmonton-Castle Downs (ND)
Gotfried, Richard, Calgary-Fish Creek (PC)
Littlewood, Jessica, Fort Saskatchewan-Vegreville (ND)**
Luff, Robyn, Calgary-East (ND)
Malkinson, Brian, Calgary-Currie (ND)
McPherson, Karen M., Calgary-Mackay-Nose Hill (ND)***
Miller, Barb, Red Deer-South (ND)
Panda, Prasad, Calgary-Foothills (W)
Renaud, Marie F., St. Albert (ND)
Turner, Dr. A. Robert, Edmonton-Whitemud (ND)
Westhead, Cameron, Banff-Cochrane (ND)

* substitution for Nicole Goehring
** substitution for Shaye Anderson
*** substitution for Cameron Westhead

Also in Attendance

Hanson, David B., Lac La Biche-St. Paul-Two Hills (W)
Taylor, Wes, Battle River-Wainwright (W)

Office of the Auditor General Participants

Merwan Saher Auditor General
Robert Driesen Assistant Auditor General
Graeme Arklie Principal
Maureen Debaji Principal
Phil Minnaar Principal
Mary Gibson Business Leader, Performance Audit Practice

Support Staff

Robert H. Reynolds, QC Clerk
Shannon Dean Law Clerk and Director of House Services
Trafton Koenig Parliamentary Counsel
Stephanie LeBlanc Parliamentary Counsel
Philip Massolin Manager of Research and Committee Services
Sarah Amato Research Officer
Nancy Robert Research Officer
Corinne Dacyshyn Committee Clerk
Jody Rempel Committee Clerk
Aaron Roth Committee Clerk
Karen Sawchuk Committee Clerk
Rhonda Sorensen Manager of Corporate Communications and
Broadcast Services
Jeanette Dotimas Communications Consultant
Tracey Sales Communications Consultant
Janet Schwegel Managing Editor of Alberta Hansard

Transcript produced by Alberta Hansard

Standing Committee on Public Accounts


Ministry of Treasury Board and Finance
Ian Ayton, Assistant Deputy Minister, Tax and Revenue Administration
Darren Hedley, Assistant Deputy Minister, Strategic and Business Services
Joffre Hotz, Executive Director, Tax Policy
Lorna Rosen, Deputy Minister

Public Agency Secretariat
Bill Werry, Deputy Minister

Public Service Commission
Lana Lougheed, Deputy Minister

Ministry of Children's Services
Darlene Bouwsema, Deputy Minister
Mark Hattori, Assistant Deputy Minister, Child Intervention
Gloria Iatridis, Assistant Deputy Minister, Indigenous and Community

Ministry of Infrastructure
Dave Bentley, Assistant Deputy Minister, Properties
David Breakwell, Assistant Deputy Minister, Corporate Strategies and
Shannon Flint, Deputy Minister
Alan Humphries, Interim Assistant Deputy Minister, Health and Government
Faye McCann, Senior Financial Officer
Roy Roth, Executive Director, Learning Facilities

Ministry of Transportation
Barry Day, Deputy Minister
Wendy Doyle, Executive Director, Traffic Safety
Dale Fung, Senior Financial Officer
Tom Loo, Assistant Deputy Minister, Delivery Services
Ranjit Tharmalingam, Assistant Deputy Minister, Corporate Services and

February 28, 2017 Public Accounts PA-321

9:15 a.m. Tuesday, February 28, 2017
Title: Tuesday, February 28, 2017 pa
[Mr. Cyr in the chair]

The Chair: Good morning, everyone. I'd like to call this meeting
of the Public Accounts Committee to order and welcome everyone
in attendance. My name is Scott Cyr, the MLA for Bonnyville-Cold
Lake and the chair of the committee.
I'd like to ask that members, staff, and guests joining the committee
at the table introduce themselves for the record. I will then go to the
members on the phone lines. To my right.

Mrs. Littlewood: Jessica Littlewood, representing Fort
Saskatchewan-Vegreville. Today I am the acting deputy chair.

Ms Miller: Barb Miller, MLA, Red Deer-South.

Mr. Dach: Lorne Dach, MLA, Edmonton-McClung.

Dr. Turner: Bob Turner, Edmonton-Whitemud.

Ms Renaud: Marie Renaud, St. Albert.

Mr. Gotfried: Richard Gotfried, Calgary-Fish Creek.

Mr. Werry: Bill Werry, deputy minister, Public Agency

Ms Lougheed: Lana Lougheed, deputy minister, Public Service

Ms Rosen: Lorna Rosen, deputy minister, Treasury Board and

Mr. Hedley: Darren Hedley, assistant deputy minister, Treasury
Board and Finance.

Mr. Minnaar: Phil Minnaar, principal with the office of the
Auditor General.

Mr. Saher: Merwan Saher, Auditor General.

Mr. Fildebrandt: Derek Fildebrandt, Strathmore-Brooks.

Mrs. Sawchuk: Karen Sawchuk, committee clerk.

The Chair: Okay. For the members that are teleconferencing we
have Mr. Barnes, Member Cortes-Vargas, Ms Luff, Member
McPherson, and Mr. Malkinson. Can we get you to confirm
whether you are on the phones or not?

Mr. Barnes: You bet. Drew Barnes, MLA, Cypress-Medicine Hat.

Mr. Malkinson: Brian Malkinson, MLA, Calgary-Currie.

Ms McPherson: Karen McPherson, MLA, Calgary-Mackay-Nose

Ms Luff: Robyn Luff, MLA, Calgary-East.

Cortes-Vargas: Estefania Cortes-Vargas, MLA for StrathconaSherwood

The Chair: Is that all for the teleconferencing? Okay.
We do have a member that has just joined us here. If you could
announce yourself for the record.

Mr. Panda: Good morning. Prasad Panda, Calgary-Foothills. The Chair: All
right. I would like to note for the record the following
substitutions: Mrs. Littlewood for the hon. Mr. S. Anderson,
deputy chair; Member Cortes-Vargas for Ms Goehring; Member
McPherson for Mr. Westhead.
A few housekeeping items to address before we turn to the
business at hand. The microphone consoles are operated by Hansard
staff, so there's no need to touch them. Audio of the committee
proceedings is streamed live on the Internet and recorded by
Hansard. Audio access and meeting transcripts are obtained via the
Legislative Assembly website. Please turn your phones to silent for
the duration of the meeting.
I'd like to proceed with the approval of the agenda. Are there any
additions or deletions to the agenda? Seeing none, would a member
move the agenda, please. Thank you, Ms Miller. Let's call the
question. All in favour of moving the agenda? On the phones?
Opposed? The motion is carried. Thank you.
I'll move to the next part of the agenda, which is approval of the
minutes. Do members have any amendments to the January 24
minutes? If not, would a member move the minutes? Thank you,
Mr. Dach. Is there any discussion on the motion? All in favour? On
the phones? Any opposed? Thank you. The motion is carried.
We'll move to the fourth agenda piece. We've got the ministry
of Treasury Board and Finance here from 9:15 to 10:30 a.m. We've
got outstanding recommendations from the Auditor General and the
ministry's annual report from 2015-2016. I'd like to welcome our
guests from the ministry of Treasury Board and Finance who are
here to address the outstanding recommendations from the office of
the Auditor General as well as the ministry's 2015-2016 report.
Members should have the research report prepared by research
services, the Auditor General briefing document as well as an
updated status report on the Auditor General's recommendations
document completed and submitted by the ministry.
I invite officials from Treasury Board and Finance to provide
opening remarks not exceeding 10 minutes. Please proceed.

Ms Rosen: Thank you, and good morning. I appreciate the opportunity
to discuss the Treasury Board and Finance 2015-16 annual
report and the status report on outstanding recommendations from
the Auditor General. We will address any questions you have
regarding the Treasury Board and Finance ministry, including the
Public Service Commission and the Public Agency Secretariat, but
first I have some brief remarks, starting with some introductions.
Joining me at the table today are Lana Lougheed, deputy minister,
Public Service Commission and the Public Service Commissioner;
Bill Werry, deputy minister, Public Agency Secretariat; and Darren
Hedley, assistant deputy minister of strategic and business services
for Treasury Board and Finance.
The Public Service Commission is responsible for ensuring
Alberta has a professional, nonpartisan, diverse, and inclusive
public service that proudly serves Albertans, which is achieved by
providing expert advice, strategic leadership and stewardship as
well as developing and delivering innovative supports and services
to Alberta public service employees. The Public Agency Secretariat
collaborates with departments and public agencies to promote a
consistent approach to public agency governance, recruitment, and
compensation.There are also several senior management staff with me today
from the Department of Treasury Board and Finance, the Public
Service Commission, the Public Agency Secretariat, the Alberta
Gaming and Liquor Commission, ATB Financial, and the Alberta
Investment Management Corporation.
I'll start with an overview of the Treasury Board and Finance
2015-16 annual report. The report contains a results analysis
presenting the key highlights of the past year, financial highlights,

PA-322 Public Accounts February 28, 2017

and a discussion and analysis of results. Facing significant
economic challenges in 2015-16, Treasury Board and Finance
focused its efforts on cost-saving opportunities and revenue
initiatives; economic forecasts and analysis; debt, investments, and
risk management; and the modernization of services, tax systems,
and technologies.
The Public Agency Secretariat became part of the Treasury
Board and Finance ministry as of September 2016, so it does not
appear in the 2015-16 annual report.
Moving to financial highlights for the ministry, revenue of $25.4
billion was $1.1 billion lower than the prior year and $1.6 billion
lower than the 2015-16 budget. This lower than forecast revenue
was due to a variety of reasons, including lower corporate income
tax revenue due to the economic downturn, a decline in net
investment income due to declines in the equity markets, and a
decline in net investment income from government business
enterprises primarily due to reduced income for ATB Financial as
the economic downturn resulted in a larger provision for credit
losses and lower interest income.
Expense was $1.6 billion, $315 million lower than the prior year
and $683 million lower than the 2015-16 budget. Some of the main
reasons for the decline in expense were: the decision to eliminate
the transfer to the access to the future fund in support of overall
government spending reductions, the provision for the change in
corporate income tax allowance for doubtful accounts was lower as
there was no significant increase in the amount of aged accounts in
'15-16, a larger than expected pension recovery as the pension
obligation decreased due to reductions in inflation and salary
escalation assumptions. This has had a positive impact.
Outstanding Auditor General recommendations. Treasury Board
and Finance has 26 outstanding recommendations from the Auditor
General. Of those 26 there are 20 for the Department of Treasury
Board and Finance, three for the Public Agency Secretariat, and
three for ATB Financial.

Of the three outstanding recommendations for the Public Agency
Secretariat, a significant amount of work has been undertaken to not
only fulfill the recommendations but to also build on the foundation
of good public agency governance. The government has clearly
signalled its commitment to improving board governance,
accountability, and transparency. The consolidation of the Public
Agency Secretariat and Treasury Board and Finance in September
2016 brought together staff from Executive Council, corporate
human resources, and Service Alberta, all with experience in
governance, recruitment, and compensation practices. The Public
Agency Secretariat is developing a plan for improving the
governance, oversight, and accountability of Alberta's agencies,
boards, and commissions.
Of the 20 outstanding recommendations for the Department of
Treasury Board and Finance, there were only three that date prior
to 2014. Of those three the one regarding chief executive officer
compensation disclosure will be implemented once the implementation
of the Reform of Agencies, Boards and Commissions
Compensation Act is complete. The act received royal assent on
May 27, 2016, and regulations are to follow. Last week government
announced a new regulated compensation framework that sets base
salaries and eliminates bonuses for designated executives in 23
designated agencies. These changes bring their compensation in
line with public-sector comparators.
The other two recommendations for Treasury Board and Finance
made prior to 2014 relate to the government's annual reporting
process. Implementation of these two recommendations is close to
completion as they are being finalized in conjunction with an additional
recommendation made in July 2014 on the annual
reporting process.
Of the 17 recommendations made to Treasury Board and Finance
in 2014, 2015, and 2016, the department is proceeding with implementation.
Included in the 17 are six recommendations related to
corporate tax administration. All six have been implemented, and
the office of the Auditor General has been notified.
There is another recommendation from August 2014 regarding
oversight of the Premier's expenses which has been implemented,
and the office of the Auditor General has acknowledged the
completion of this recommendation.
Another recommendation from October 2014 is to update our
enterprise risk management system, and work on this recommendation
is under way, with a refreshed ERM framework that is being
reviewed by the executive team and work being done to provide a
government-wide standards approach to ERM across government.
There are five relatively new recommendations from 2016 all
regarding cash management for which I will now provide a little bit
of detail. We last provided an update to the Public Accounts
Committee regarding cash management on April 5 of last year. I'm
pleased to provide an update of current activities to address the
Auditor General's recommendations.
The government is making improvements to financial and other
processes to gain efficiencies which will contribute to better
information and greater visibility. There are plans under way to
update the consolidated cash investment trust fund, or CCITF. The
fund is the government's cash pooling structure that focuses on
maximizing investment returns for participants, including departments,
agencies, boards, and commissions. The objective of the
CCITF changes are to use cash currently held by participants as part
of the government's overall cash resources rather than invest this
money in the money market. These changes will also address
concerns related to the accumulation of large balances held by
participants as government will have access to this cash. The
implementation of the CCITF project is targeted for 2017-18. Once
implemented, this initiative will lower debt and debt-service costs
for government.
Implementation of a treasury management system is currently on
hold as it will be part of a new government-wide enterprise resource
planning system. The government is in the process of replacing its
IMAGIS system with a new ERP system. The implementation of
an ERP system and related financial, human resource, and talent
management modules will lead to efficiencies across government
through standardization. As the Auditor General's recommendations
to improve the province's cash management processes are complex
and have a crossministry impact, collaboration with Treasury Board
and Finance is required to ensure operational results. In addition,
the ongoing and future initiatives will collectively address the
Auditor General's five recommendations regarding cash management.
This concludes my formal remarks, and I along with my colleagues
would be pleased to answer any questions you might have.

The Chair: Thank you, Ms Rosen.
I would like to turn it over to the Auditor General for his
comments. Mr. Saher, you have five minutes.

Mr. Saher: Thank you, Mr. Chairman. The deputy minister has
talked about the ministry's initiatives to improve annual
performance reporting in ministry annual reports and also, by
extension, into Measuring Up, the government of Alberta's annual
performance report.
I'd just like to try to summarize at the highest level what it is that
the Auditor General's office is looking for and the criteria we'll use

February 28, 2017 Public Accounts PA-323

in assessing the initiatives made by the government to improve that
reporting. When we look at results analysis reporting in ministry
annual reports, there are really four things at the high level that
we're looking for: firstly, a balanced view of performance,
including both positive and negative aspects of performance;
second, that significant matters are identified and discussed; third,
the analysis should relate progress and results achieved to dollars
spent; and fourthly, there should be explanation of why actual
results differ from expected results or historical results.
I'd like to quote from – this is going back in time – the office of
the Auditor General's year 2000 public report. In that report we
said: “To work, the system needs to tolerate failure. Those
evaluating the performance of people and organizations need to
recognize that, even with the best effort, targets may not always be
met.” I would like to add to that quote from 2000 the current way
that we think in the office of the Auditor General with respect to
performance reporting. Really, the purpose of performance
reporting is not just to report performance because that's good for
the soul; the purpose of performance reporting is to learn how
performance might be improved.
Those are my opening comments. Thank you, Mr. Chairman.

The Chair: Thank you, Mr. Saher.
The time allotment format for questions for the committee members
has been adjusted for the one hour and 15-minute time slot. The
first rotation will be 10 minutes each for the Official Opposition and
the government members, followed by a seven-minute rotation for
the third party opposition. Our second rotation will be six minutes
each for these parties. With the agreement of the committee, any
time remaining will be distributed equally among the three parties.
I will now open the floor for questions by the members. Please note
– sorry – that one to two minutes will be designated for outstanding
questions to be read into the record at the end of these rotations.
Mr. Fildebrandt, please open with questions.

Mr. Fildebrandt: Thank you, Mr. Chair, and thank you all for
joining us here today to answer our questions. I'll dive right into it,
kind of following from what the Auditor General said. Treasury
Board and Finance has 26 outstanding recommendations with the
office of the Auditor General. That is a substantial amount. Seven
of these recommendations are more than three years old, which I
think is cause for significant concern. In addition to having these
yourselves, though, Treasury Board and Finance is responsible for
oversight at the government of Alberta level to ensure other
ministries implement recommendations from the office of the
Auditor General. Would you care to comment on the example set
by Treasury Board and Finance as the department responsible for
this on a government-wide level?

Ms Rosen: I think that in terms of the example set it's actually a
good example that we've set. In terms of the 26 recommendations,
the vast majority of those recommendations are not more than three
years old. They're from 2014, '15, and '16. The complexity with
respect to some of the other recommendations that are outstanding
actually requires quite a collaborative effort across government to
make improvements, and I think that there has been significant
progress with respect to moving forward on those recommendations.
Certainly, in the area of the Public Agency Secretariat there
has been some significant progress.
I'd like to ask Mr. Werry if he has any comments that he'd like
to make about those particular recommendations.

Mr. Werry: Thank you, Lorna. To be clear, the primary relationship
with many of the government of Alberta's agencies rests with
our line ministries, so we've been working very closely with them over the
last number of months to try and ensure that there is a
government-wide approach on governance, compensation, and
recruitment, and we do believe we've made some significant
progress. We do have a ways to go on the governance side in terms
of making sure that the practices are appropriate, but we do have
plans under way now to address that over the next number of
months with the completion of the ABC review, which was
launched in 2015-16.

Mr. Fildebrandt: Okay. Now, Auditor General, correct me if I'm
wrong, but just off the top of my mind – I don't have the document
in front of me – I think Treasury Board and Finance might be
number 2 out of all departments for outstanding recommendations.
I would not consider that to be a positive thing. That's very
substantial. I understand that some of these recommendations are
not easily met. Some of them are very complicated and long term.
But 26 is a very substantial number. Do you stand by your statement
that that is reasonable?

Ms Rosen: I'm not sure that I would agree that the number of
outstanding recommendations is the significant piece, particularly
given that any one review can result in multiple recommendations.
If we take, say, for example, the cash management recommendations,
of which there are five arising all from the same audit, all of
those are likely to be implemented in a coincidental time frame. I
think that the seven oldest recommendations, that are dated 20082012,
are getting very close to implementation and will require
follow-up audits from the office of the Auditor General. Of the 12
more recent recommendations, dated 2014 and 2015, there are
already seven that have been implemented. I think that to actually
classify all 26 as still being outstanding would not perhaps be
accurate because we have implemented some of these recommendations,
and they're just awaiting a review and/or follow-up by
the Auditor General.

Mr. Fildebrandt: Okay. Thank you.
In the previous Auditor General's report of February 2016 on
page 72 the Auditor General talked about use of outdated information
systems to manage cash. I know you touched on that in your opening
statement. How close are we to having – can you give us a bit of
a perhaps deadline about when you expect to have that completely
implemented and ready for a follow-up from the Auditor General?

Ms Rosen: Thank you for the question. With respect to
implementing new technologies for the management of cash, we
actually had drafted a request for proposal for a new treasury
management system. However, we've delayed the posting of that
RFP due to the decision to implement a new enterprise resource
planning system to replace images because we really do want to
leverage any new systems together. We are actually waiting for the
ERP posting to progress, and that is coming imminently. We would
see the advantages to waiting for that being the standardization of
procedures that are developed at the same time, which should
improve, then, the availability and quality of information that could
be used by a treasury management system. Doing them both
together will actually have a better result than if we get out in front
with the treasury management system.
The ERP system: the request for proposals is under way for some
of the beginning parts of the work related to that at this point in
time, and that's being led by Service Alberta.

Mr. Fildebrandt: Okay. Thank you.
I want to talk about the department's implementation of the
carbon tax on a few items here. We had asked questions to

PA-324 Public Accounts February 28, 2017

Environment and Parks, and they had referred us to you for a lot of
these items. On page 70 of Treasury Board and Finance's annual
report it refers to the fuel tax. When the locomotive fuel tax is raised
from 0.015 cents a litre to 0.055 cents a litre, was this intended to
reduce emissions of locomotives and to encourage people to use
other forms of transportation, and what other forms of transportation
was the department hoping to move that traffic to?

Ms Rosen: Mr. Fildebrandt, can you give me the reference again?
Page 70 of the annual report?

Mr. Fildebrandt: Page 70 of the Treasury Board and Finance's
annual report. The increase in locomotive fuel tax: was that purely
designed as a revenue generation tool, or was that also designed to
reduce greenhouse gas emissions?

Ms Rosen: I'm going to ask somebody from economic and fiscal
policy to help us address that question.

Mr. Hotz: The increase to the revenue . . .

Mr. Fildebrandt: I'm sorry. Could I just get your name and . . .

Mr. Hotz: Sorry. Joffre Hotz, Treasury Board and Finance.
The increase to the railway fuel tax paralleled the increase that
was done by the previous government of 4 cents per litre, so the
previous government never applied the 4 cents per litre to the
railway fuel rate. That's why the 4 cents was also brought in, to
reflect that same increase.

Mr. Fildebrandt: Okay. Thank you.
What plans are in place to adjust the carbon tax in the event that
fuel consumption does not decrease after the carbon tax has been in
place for a few years?

Ms Rosen: I'm going to ask Joffre to respond to that as well.

Mr. Hotz: Sorry. Could you repeat the question?

Mr. Fildebrandt: Yeah. What plans are in place to adjust the
carbon tax per tonne in the event that fuel consumption does not
decrease after the carbon tax has been in place for one or two years?

Mr. Hotz: I mean, right now the rate has been set by the government.
That will increase to $30 per tonne for 2018. There has been
no further announced rate increases. The government will continue
to evaluate the impact of the carbon levy.

Mr. Fildebrandt: The explicit goal of this is to reduce the greenhouse
gas emissions of Albertans by putting a price on carbon. If
consumption does not decrease, is there any plan within the
department to change the per tonnage levy?

Ms Rosen: I think it's important to be clear that consumption of
fuels is not the only initiative under the climate leadership plan to
reduce . . .

Mr. Fildebrandt: Oh, I'm not talking just about – sorry. If I could.
I'm not talking just about fuels; I'm talking about the overall carbon
tax. I'm not just talking about locomotives; I'm talking about the
overall carbon tax.

Ms Rosen: Then I think that it will require more than one or two
years to determine what impacts with respect to the reduction of
emissions actually result from the carbon levy, not only because it
takes a while to change behaviours but also because there are going to be
initiatives that are actually pursued with the revenues from the
carbon levy which in and of themselves will be emissions reducing.

Mr. Fildebrandt: But is there any actual plan to increase it beyond
what's been publicly disclosed already, beyond $30 a tonne?

Ms Rosen: I believe that there probably will be something that has
to come about if the federal government continues to pursue their
agenda with respect to rising carbon taxation because we will be
required to follow suit with the federal government.

Mr. Fildebrandt: All right.

The Chair: Thank you, Mr. Fildebrandt. That is timely.
I will remind our wonderful guests: if they could please state their
names before speaking, that would probably help Hansard.
Remember, too, that we're going through the chair and not back and
forth. Thank you very much.
I'd like to open this up to government. Dr. Turner, if you would
start, please.

Dr. Turner: Thank you, Mr. Chair, and thank you to all of you for
coming today. This is one of the most important discussions that we
can have at Public Accounts since Treasury Board and Finance
actually, I think, collects the most money and spends the most
money. I think that may be one of the reasons that you have the
most recommendations, too, but I'm just speculating.
I want to turn to what Ms Rosen referred to in her remarks as well
as the Auditor General, and that was this important announcement
that came out last Friday from the Minister of Finance that outlined
a new framework for executive compensation in ABCs. You know,
there are several recommendations from the Auditor General that
relate to this, and for reasons that confound me, the previous
government just didn't pay any attention to those recommendations
that had come up over a decade at least.
I have a few questions of you folks. Firstly, can you give us some
insight as to how the executive compensation for ABCs got so out
of hand under the previous government?

Mr. Werry: Bill Werry, Public Agencies Secretariat. I just want to
sort of speak to what we found when we began the analysis of
compensation in the ABC world and particularly with the 23
organizations that we looked at in this first tranche of dealing with
compensation matters.

What happened over time was that organizations were using a
broad set of comparators beyond the public sector and were actually
comparing salaries of CEOs to private-sector comparators in, at the
time, an economy that was moving along and growing at a very
brisk pace. That had an impact of pushing salaries up across the
board in those areas. I can't speak to exactly what went on between
2008 and now because I personally became responsible for this file
in 2016.
I can assure you that the analysis we undertook did find that there
was, really, a strong need for a compensation framework, as the
Auditor General cited. Our focus when we did the analysis was to
try to move to a compensation framework that was based on broad
public-sector comparators, trying to move away from some of the
practices that had moved in in the past around using private-sector
metrics as well. So what you've got, announced last Friday, is that
actual compensation framework based on public-sector comparators.
The other thing that we've agreed to from a policy perspective
moving forward is that this framework will be subject to review on
a regular basis because as market conditions change, as other

February 28, 2017 Public Accounts PA-325

provinces undertake different approaches to compensation, we will
need to be reviewing those matters in order to stay competitive, to
attract the best possible talent. That's what's in place now.

Dr. Turner: Thank you.
Just further to that, what sort of oversight systems are going to be
in place now that obviously weren't in place before that are going
to basically keep those comparators and the compensation at a
reasonable level for all Albertans?

Mr. Werry: First of all, we will be moving to a system of providing
ABCs with a contract template. As they set the compensation for
their CEOs, they'll be required to complete a contract template that
we'll be providing them with in the next number of weeks so that
the contracts are comparable across ABCs in a public-sector sense.
In addition, we will be, as I said, reviewing that framework on an
ongoing basis. We'll be playing that role as the secretariat in
conjunction with the host ministries, that have the primary
relationship with these organizations, so there will be a fairly robust
system of oversight based on contract templates.
The other thing we'll be introducing is contract terms. There are
a number of CEOs who have contracts that don't have any kind of
time frame around them, so we will be moving to contract time
frames that set a maximum of six years for contracts. Obviously,
those things are subject to review, and people could be renewed
after six years, but fundamentally it puts a time frame around some
of those contract provisions.
The other thing we've done is to put in regulation. The severance
provisions within all of those contracts need to not exceed 12
months, because we did see some variability. We have eliminated
as well things that are outside the kind of benefits that would be
provided in the core public service.

Dr. Turner: Thank you very much. This is, actually, I think, going
to be very well received out in the general public. We have excellent
public servants in this province, and I think that the frameworks that
those folks work under should be the ones that basically are the
underpinning of how we deal with these independent agencies,
boards, and commissions.
I want to turn just briefly to another aspect that the Auditor
General has reported on and is a big responsibility of Treasury
Board and Finance, and that's pensions. Albertans spend their lives
working and contributing to pensions, and they need to know that
when they retire, these savings are going to be there for them. In
February 2014 the Auditor General released a number of recommendations
about the pensions. Can you tell me what work has been
done to address these recommendations, and could you specifically
expand on the work you've done around risk management?

Ms Rosen: Yes. With respect to enterprise risk management it's
taken us a little while, actually, to implement enterprise risk
management for public-sector pension plans. There's been a very
significant amount of data to compile, and the number of stakeholders
that need to be consulted is actually considerable when you
look at the number of pension plans that the minister of Treasury
Board and Finance is responsible for, is the trustee for.
Discussions around our approach to risk management required us
to meet with all of those stakeholders, and some, such as the plan
boards in particular, don't meet often. They meet on a schedule, but
it sometimes takes a while for us to get on their agenda, so to speak,
in order to have a discussion of the topic.
In terms of some of the time spent waiting, it was for actual
stakeholders to compile their responses because we asked them
questions about their risk management practices. Once we had
gathered that information, it allowed us to complete a draft risk
management report and to provide information around existing risk
management practices.
It wouldn't be fair to say that there currently is not risk
management around public-sector pension plans. What was perhaps
missing was a consolidation of those plans that actually would
speak to the minister and the minister's responsibilities. So we now
have a draft framework and we have a draft report, which is actually
at this point in time in my office for review. We will be validating
that framework with the plan boards. We've taken everything that
they've given us, and we have put together a framework and a draft
report. Pending their comments we will then finalize the framework
and submit it to the minister for his consideration. So we're close
on this one.
Then on an ongoing basis risk management reporting will be
added to the mandate and roles documents for each board as the risk
management report and framework will be periodically reviewed.
We should see implementation commencing in July of this year.

Dr. Turner: Thank you very much.
I'll turn it over to my colleague Mr. Dach.

Mr. Dach: Thank you. A quick question with the little time that I
have left here in this segment. It's my understanding the previous
government allowed some pretty big bonuses to be paid to
executives in ABCs when the practice was discontinued in the core
public service and in AHS after some public outcry. How big were
the bonuses that have now been eliminated, and why do you think
the previous government failed to produce guidelines on the
payment of bonuses previously?

Mr. Werry: The practice of bonuses or variable pay or short-term
incentive pay or sometimes called pay at risk can be a very positive
compensation practice in a number of types of organizations. I think
what happened over time is that that practice moved into some
organizations who may not have been in truly competitive
circumstances. It is broadly used in competitive situations. We've
been able to take that away from those organizations that we didn't
believe were in a competitive position.

The Chair: Thank you, and thank you, Mr. Dach, Dr. Turner.
I will turn this over to the third party. Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair, and thank you to our
presenters today for providing us with some detailed information. I
just wanted to note, as the Auditor General has noted, that your
annual report contains four desired outcomes. The first desired
outcome is “strong and sustainable government finances.” Do you
feel that our current financial direction, with heavy deficits and
mounting long-term debt, is sustainable, and how will you address
that in the current and coming fiscal years?

Ms Rosen: I think that with respect to the annual report and the
sustainability of 2015-16, which is the report that is under
discussion, if we look at page 19 of the annual report, it actually
talks about what sustainability means. It means “having sustained
revenue streams through competitive, fair and effective revenue
programs and advanced tax systems.” It means having “cost saving
initiatives that limit the rate of growth in government spending to
the combined rate of population growth plus inflation,” and it
means, quite frankly, having “sound investment strategies that grow
Alberta's finances.”

If I look at those and how we fare, on the following pages of the
annual report it does highlight the results and contributions from

PA-326 Public Accounts February 28, 2017

2015-16. The efforts to monitor Alberta's tax system and the
changes implemented are documented on page 20, and I think we
can say with some pride that we actually have done a good job with
respect to monitoring the tax system and ensuring that it's fair and
equitable. The rate of return for the Alberta heritage savings trust
fund is shown on page 22, with the 2015-16 actual results of 10.5
per cent exceeding the target of 7 per cent, although I absolutely
understand the Auditor General's comment about: it's not just the
results that are important; it's also how we view these things and
how we move forward. I think that the way Alberta treats its
investments in particular is very forward looking and bodes well for
our future in terms that we're the only province with a sovereign
wealth fund, and we are protecting the principle with respect to that.
The rate of growth in spending in 2015-16 was 2.7 per cent, under
the combined rate of population growth and inflation of 3.1 per cent
as shown on page 31. I think that it's really important, when we use
terms like “sustainability,” to actually understand what that means.
Any government will go through periods of time where with
revenues that are volatile – and income tax revenue and resource
revenue are volatile – one might experience deficits, but it's the
longer term approach to sustainability that one really has to look to
for performance. I would say that we have the hallmarks of good
performance in these results.

Mr. Gotfried: Thank you, Ms Rosen.
Following up on my question, it's my understanding that debtservicing
costs may exceed a billion dollars for the upcoming year.
Now, talking about sustainability, the Auditor General previously
noted in his presentation that sustainability is the degree to which
government can maintain services and financial commitments
without increasing debt or taxation levels – that's his approach to
sustainability – with no denial by your minister regarding the
potential for future sales tax also being thrown into the mix here.
Again, just taking on the kind of debt that requires the government
to be responsible for such a high level of debt servicing before any
operational or capital budget needs can be addressed, is that
debt servicing a sustainable fiscal direction for Alberta?

Ms Rosen: I think that you have to evaluate this in an appropriate
context, and the context for us is that across the rest of Canada
Alberta still does very, very well with respect to the amount that it
spends on debt servicing and, by extension, on debt overall. I also
think that it's important to understand that it's not just through
choice that one actually looks at tax increases or the cost of services.
In tough economic times the use of certain kinds of services, the
volume, goes up. In order to ensure that we have programs and
services for Albertans that Albertans expect, one does have to make
some accommodations on an annual basis with respect to how you
actually move forward in terms of spending and revenues.
I guess, Mr. Gotfried, all I'm trying to say is that it's not an easy
answer. It's a complex situation with many different factors, and I
do believe that at this point in time we are looking at all of those
factors in looking at: what is the right mix? What's the right mix of
debt? What's the right debt-servicing level? In judging ourselves
and our sustainability, we look to see where we fit in across the
country, and we're still number one with respect to the lowest debt
to GDP across the country.

Mr. Gotfried: Okay. Maybe that leads into my third question,
which is on, you know, desired outcome 3, accountable, effective,
and efficient government. Can you please outline for the committee
what processes, programs, or incentives are in place for government
departments, individual teams, units, or employees to increase
efficiency, which I think speaks to what you were addressing in terms of
expectations of the public, and thereby control or reduce
costs? How else do you foresee that you will find any savings and
true accountability to current Alberta taxpayers or future
generations responsible for the burden of the resultant long-term

Ms Rosen: In terms of the effectiveness and efficiency of government
I think that the ministry business planning and reporting cycle,
you know, which consists of developing ministry business plans,
which do include performance measurements and indicators, assists
ministries in assessing their performance and helps them to then, as
the Auditor General indicated, look at their performance and results
with an eye to improving and getting better. I also believe that
government has set some in-year savings targets, that have been
across-the-board targets, of $250 million this year. I believe that
those kinds of exercises encourage, then, departments to look at
how they deliver services because those in-year savings are not to
be achieved through the reduction of services. They're to be
achieved through efficiency.

The Chair: Thank you.

Mr. Gotfried: Thank you, Ms Rosen.

Ms Rosen: You're welcome.

The Chair: Mr. Fildebrandt.

Mr. Fildebrandt: Thank you, Mr. Chair. I want to follow up on
some of Mr. Gotfried's questions that I'm not sure were adequately
addressed. Outcome 1 is “strong and sustainable government
finances,” and sustainability is described as “the degree to which
government can maintain services and financial commitments without
increasing debt or taxes.” We're borrowing a quarter of our
budget a year. You know, we might be spending a billion dollars a
year on debt interest payments, relatively low to other provinces,
but that's because we came from a position where we were once
debt free. But we are borrowing a quarter of our budget a year, and
we're increasing taxes very regularly. How is it possible that the
department can by any measure be meeting the sustainability
portion of this outcome?

Ms Rosen: I'm just going to repeat that . . .

Mr. Fildebrandt: I don't want anything repeated because I was not
satisfied with those answers. I'd like it addressed how, when we're
borrowing a quarter of our budget, it is at all conceivable that we
are meeting this definition of sustainable finances.

Ms Rosen: That's not the definition of sustainability that's actually
in the annual report. The definition of sustainability that's in the
annual report looks at three major pieces. It looks at revenue
streams and fair taxes. It looks at . . .

Mr. Fildebrandt: I'm defining it as defined by the Auditor General:
“the degree to which government can maintain services and
financial commitments without increasing debt or taxes.” We're
increasing our debt by 12 and a half billion dollars a year – that
would seem to be not meeting that commitment – and we are
increasing taxes every single year based on the carbon tax and
several other measures. So based on what the government is doing,
how is it possible that we are coming anywhere close to meeting the
Auditor General's definition of sustainability here?

Ms Rosen: In terms of the Auditor General's definition of sustainability
I believe that it's entirely dependent on how you actually

February 28, 2017 Public Accounts PA-327

approach this, whether it's short-term or longer term. It's about
trade-offs. It's about whether or not you want to increase revenues,
decrease expenditures, and how you actually get that mix on an
ongoing basis, and it's about looking at it longer term as opposed
to on an annual basis.

Mr. Fildebrandt: Longer term there's not even a theoretical date
to balance the budget. We're supposed to run until at least 2024,
probably beyond unless oil hits over $100 a barrel, so short- and
long-term we seem to not be meeting this. Is there any sense that
the department is going to be able to meet the Auditor General's
definition of sustainable finances?

Ms Rosen: In terms of sustainability I'm going to again point to the
fact that it is not an absolute measure and that on the basis of
comparing ourselves to other provinces across the country, we do
very well.

Mr. Fildebrandt: We're borrowing a quarter of our budget a year.
I think that's more than any other provinces.
Okay. Well, we'll move on. Page 22 of the budget lists personal
income tax, corporate income tax, education property tax, other
taxes, and then something called carbon levy all under the heading
of Tax Revenue. I think by most legal definitions the so-called
carbon levy is a tax. In the department's coming annual report will
the so-called carbon levy be listed as a tax?

Ms Rosen: The carbon levy is listed as a source of revenue.

Mr. Fildebrandt: But it's listed under tax revenue in the budget
because it meets the legal definition of a tax. Regardless of
whatever we call it, it's the legal definition of a tax. Will it be
categorized as a tax in the annual report?

Ms Rosen: In the one coming up?

Mr. Fildebrandt: Yes.

Ms Rosen: If I could ask Joffre to respond to that.

Mr. Hotz: Joffre Hotz with Treasury Board.

The Chair: Some of our members on the phone are having a hard
time hearing you, so if you can go right up close to the mike – I
apologize; I know it's pretty low there – and state your name and
your title.

Mr. Hotz: Joffre Hotz with Treasury Board and Finance, executive
director with tax policy. To the question, “Is it going to be reported
specifically as a tax or a levy?” there is no indication at this point
that it would be reported any differently than how it was reported
in the budget documents that you're referencing.

Mr. Fildebrandt: Okay. Perhaps if you can explain how it is
possible that – you know, it meets the definition of a tax, so
therefore it has to be listed under tax revenue. How is it that the
government is able to call it a levy when it fits the definition of a
tax and has to be reported with personal income taxes, corporate
income taxes, education property taxes? How is the government
able to distinguish between the two when it is listed as a tax?

Ms Rosen: I can answer that question. It fits the definition of a levy.
For the dictionary that you have looked at, if you also look up levy,
it also fits the definition of a levy, and it's what this government has
chosen to call this particular revenue stream. It's a levy. Mr.
Fildebrandt: It's listed under tax revenue. You're saying that
it also could fit the definition of a levy. But it does fit the proper
definition of a tax. Are you saying that it's able to be called a levy
for semantic reasons but not legal?

Ms Rosen: I think that it is able to be called a levy because it is a

Mr. Fildebrandt: A levy on what? Like, for breathing?

Ms Rosen: It's a levy on emission-producing fuels.

Mr. Fildebrandt: Okay. Thank you.

The Chair: Thank you, Mr. Fildebrandt.
Mr. Dach.

Mr. Dach: Thank you, Chair. I'll continue on with some of my
questions that were related to the ABCs and compensation thereof.
Can officials from the Public Agency Secretariat provide some
background on the payments of special benefits that were provided
to some of the executives in the ABCs before they were banned by
this Minister of Finance?

Mr. Werry: When we looked at the overall compensation for
CEOs in the ABCs that we examined, if you're referring to or
alluding to things that are called perks or, as I learned when I took
this file, perquisites, if you want to head to the dictionary on that
one, there were relatively modest perquisites within that bundle.
When we spoke to folks last week on this, the total of those
payments was about $30,000 for all of the CEOs. There were some
things in there that you wouldn't normally see, but they were not
large amounts, so we just chose to craft the regulation to say:
anything not especially allowed is prohibited. There were things
like duplicate housing allowances and provisions for club
memberships, but again they were not large amounts of money in
that pool.

Mr. Dach: All right. Thank you.
You've alluded to some of the perquisites that I was going to ask
about in my second question. With respect to, say, public-sector
executives who were receiving perks like golf club memberships
and access to private health care, can you share with the committee
a few other examples of where you found these perks? I'm pretty
sure Albertans would like to know. Regardless of your answer I'll
respect whatever you have to say because it's your prerogative to
answer how you wish and my prerogative to listen and accept your

Mr. Werry: Again, the kinds of things we saw: some duplicate
housing allowances, perhaps some vehicle provisions that were
above what we would see in the broader public service, some of
those kinds of pieces. But, again, there was nothing that we saw that
was egregious in that. Obviously, if it only amounted to $30,000, it
was not wildly out of line. Again, it was just part of the due
diligence in making sure we had a system that works in comparison
to the broader public sector.

Mr. Dach: All right. Thank you.
Now, I understand that the new compensation frameworks finally
set a uniform cap on severance pay that was absent under the
previous government. Can you let us know what the new cap on
severance is and how it aligns with severance pay in other ABCs
across Canada?

PA-328 Public Accounts February 28, 2017

Mr. Werry: The provisions that we've set are four weeks per year
of service up to a maximum of 52 weeks, or 12 months. That would
be seen as comparable to some other jurisdictions and perhaps a bit
stronger than some other jurisdictions. So it would be at the lower
end of severance provisions in most jurisdictions.

Mr. Dach: All right. I'll continue on. So far, Mr. Chair, we've seen
a number of important steps taken by the government to reform
agencies, boards, and commissions. If I recall correctly, 26 ABCs
were amalgamated or dissolved in phase 1. In addition, the sunshine
list was extended to cover ABCs to provide more transparency for
Albertans, and on Friday the Minister of Finance released
compensation frameworks for ABCs. Can officials from the Public
Agency Secretariat outline the work that remains to be done in
phase 2 and phase 3 and what the big-picture objectives are?

Mr. Werry: In phase 2 we'll be looking at about 144 organizations,
organizations like APEGA, the Association of Professional
Engineers and Geoscientists of Alberta, and so on. They are very
much professional regulatory organizations. In those organizations
the government does appoint public members to the board, but there
isn't a considerable amount of public money going out through
those organizations. We will be looking at those organizations from
a relevance point of view. Are they still necessary? Is the government
representation on the board appropriate? Is the public interest
being served by the work of these organizations? That's part of
phase 2, and that work will be starting momentarily.
Phase 3 will address postsecondary institutions across the
province. The Minister of Advanced Education has had a beginning
conversation with those organizations, and myself and some of my
colleagues will be meeting with them later this week to begin the
process to look at compensation in that realm along with conflict of
interest and, again, relevance and governance practices. In addition,
the organization will be working towards some practical measures
to help boards improve their governance practices on a go-forward

Mr. Dach: Okay. I'd like to drill down a little bit further into the
compensation frameworks for ABCs that were released by the
Minister of Finance this past Friday. I'm wondering if officials can
describe in some detail how the appropriate pay for executives in
the ABCs was determined, what the model was, and why the model
was chosen. If appropriate, can officials share why there was no
framework in place previously?

Mr. Werry: The approach we took was to contract a very reputable
national compensation consultancy, the Hay Group, now called
Korn Ferry, who has a proprietary instrument that looks at 200
broader public-sector jobs across Canada. Twenty-nine of those
jobs were in Alberta. We did work with them, side by side, and used
their framework to build the framework that we've put in place. It
looks at all of the jobs from the point of view of complexity and
scope and the level of financial responsibility and all those kinds of
things. So that's the way we looked at it.

The Chair: Thank you very much.
Mr. Gotfried, with the third party.

Mr. Gotfried: Thank you, Mr. Chair. I'd like to follow up again on
outcome 3 as outlined in your annual report. Alberta has the highest
weekly public-sector wage compensation in Canada, excluding the
territories. Given that we do not have the best measurable outcomes
as benchmarked nationally across various departments, it would
seem to me that there's an efficiency gap. Could you outline any
ministry plans to address the disparity as benchmarked against other
jurisdictions and possibly the private sector, as appropriate, between
employee compensation levels, ministry budgets, and outcomes?

Ms Rosen: Mr. Gotfried, in terms of the work that's currently being
done, we of course have good data now with respect to where we
sit with public-sector compensation levels compared to the rest of
the country and do acknowledge that it's a significant part of our
cost. From a perspective of understanding where we have opportunities
for efficiency, however, I think that efficiency is different
from price. From a perspective of efficient behaviour and whether
or not there are different ways that we can do things – we are
certainly looking at that as well, trying to develop initiatives to
actually look at reducing the manpower requirements through
efficiencies. In terms of looking at the price component and the cost
of the public service, we are looking at that, absolutely.

Mr. Gotfried: Okay. Thank you.
That leads me to my next question. I'd like to look back at some
of the February 2014 recommendations from the Auditor General,
and I'd like you to provide an update on the status of some of the
implementations around public pension plans. As our research team
here has previously pointed out, the implementation may have been
delayed by bills introduced under previous administrations dating
back to September of 2014, and there seems to be enough time
elapsed since then to implement these recommendations, which
could have a significant impact on public finances and sustainability.
Just an update of current timelines for implementation of some of
the public pension plan reforms as recommended by the Auditor
General would be appreciated.

Ms Rosen: I want to clarify that the recommendations around the
pension plans are not about the cost of those plans. They're about
the risks involved with pension plans and, specifically, more about
whether or not the minister in his role of trustee of those plans is
well prepared to actually understand and help mitigate the risks
around those plans.
The reason that it's taken so long is because we have a number
of pension plan boards that look at enterprise risk management, and
while pensions, by and large, are based on the same principles, there
are some variances between the pension plans, between the local
authorities pension plan, the management employees pension plan,
the special forces pension plan, and the public service pension plan.
So it was important for us to work with each one of those organizations
to understand how they evaluate their risks – how they
actually look at: what are their highest risks, what are their lower
risks, what's the likelihood of those risks occurring? – and do an
accumulation of all of that information, which we have done. We
have identified risks from all four plans, and we have got statistics
on whether or not those risks are the same, weighted the same
across all of those plans.
We've built from that a framework and a reporting mechanism
for the minister – I actually just signed off on that here this week –
which will then be going to the minister for review with a goal of
having it fully implemented by July.
I think that it's taken a while because there are quite a few stakeholders.
Pensions are serious business for people, and it's the kind
of thing where you really have to be respectful of stakeholders and
their opinions and their information, and there's really no way to
shortcut that kind of discussion.

Mr. Gotfried: Okay. Thank you, Ms Rosen.
I guess that leads me to my next question. As much as there
obviously has to be respect in terms of the commitments made
there, there also has to be respect for the sustainability of that. How

February 28, 2017 Public Accounts PA-329

does the government plan to address the ongoing issue of pension
liabilities given the assertions by the Auditor General that increased
longevity and early retirement may adversely affect pension
sustainability and that contribution rates have reached a practical
ceiling? I look at this in light of: how will this align, again with
deference to the insights of the Auditor General, with the degree to
which government can maintain services and financial commitments,
of which, of course, pensions are a significant one, without
increasing debt or taxation levels?

Ms Rosen: I want to say that right now, when we're looking at the
sustainability of pension plans, we don't have any current plans to
comprehensively review unfunded liability and benefit structure.
When we look at . . .

The Chair: Thank you, Ms Rosen. Thank you very much.
We have time for three three-minute rotations. If we could start
with Mr. Fildebrandt.

Mr. Fildebrandt: Thank you. All right. I'll keep my questions
brief, and hopefully answers could be pointed and brief as well. Last
week we had the third-quarter results come down, and it was
indicated that the government is in direct contravention of the
financial transparency act for a $1.1 billion payout for the early
phase-out of coal. The government has broken the law. Is anyone
being held accountable for this?

Ms Rosen: In terms of accountability, I think that the accountability
came from the Q3 reporting, where we were very transparent with
respect to those transactions and the fact that it put us outside of that

Mr. Fildebrandt: I wish I could get off the hook and just admit I
broke the law every time I speed.
All right. The Finance minister and members of the government
have made statements saying that there will not be a PST during the
current term of this government but that a provincial sales tax or
harmonized sales tax in some form is a possibility going forward.
Does the department have any studies currently under way or
completed about the feasibility of a provincial sales tax?

Ms Rosen: Studies, no; an assessment of what a sales tax would
generate, yes.

Mr. Fildebrandt: All right. So the government has briefings
prepared for the minister, et cetera, with different options about a
potential sales tax?

Ms Rosen: No.

Mr. Fildebrandt: What has really been done up front?

Ms Rosen: Just in terms of analyses we actually, of course, do
understand what a sales tax would generate from a revenue
perspective. That's just an economic analysis that has been done.
There's been no briefing to the minister with respect to that. There
has just been an indication that this is what a sales tax would
generate. But that was done just as a part of an overarching
economic analysis. It's just prudent. That's what Treasury Board
and Finance does. We do analyses, and we provide the results . . .

Mr. Fildebrandt: Thank you.
Back to my follow-up to the first part of the question. The government
is in direct contravention of the financial transparency act.
Did the government knowingly break the law when it made this
expenditure? Ms Rosen: No.

Mr. Fildebrandt: Then how is that – could they not reverse their
decision for that expenditure?

Ms Rosen: In terms of this particular transaction, we had indicated
at the Q2 reporting that we were looking at the appropriate accounting
treatment because the money has not actually gone out the door.
What we're talking about is an accounting transaction. There was a
position taken by Treasury Board and Finance with respect to the
appropriate accounting treatment of this particular transaction
which would . . .

Mr. Fildebrandt: At what time did the government understand that
it was in contravention of the law?

Ms Rosen: In terms of the accounting transaction . . .

The Chair: Thank you, Ms Rosen. You can respond to that in
writing if you wouldn't mind.
Mr. Dach.

Mr. Dach: Thank you. I'll finish my line of questioning in the three
minutes we have remaining. Thank you for that allotment, Mr.
Chair.In the past, compensation practices at some ABCs appeared to be
completely out of control while in others they seemed to be about
right. Put another way, there was a lot of variability. With the new
systems that are in place, are we more likely to see less divergence
in the future?

Mr. Werry: In the interest of brevity: yes.

Mr. Dach: Okay. Thank you.
Can Albertans be assured that the days of the out-of-line perks
and out-of-line pay are a thing of the past? Can we be assured that
the public paying for golf club memberships won't be happening in
the future?

Mr. Werry: Yes.

Mr. Dach: There we go.
Again, my question is for officials in the Public Agency Secretariat.
First, I'd like to applaud your work, of course, and the work of the
Minister of Finance in getting control of compensation practices at
ABCs. It was a long time coming, and it's important work. People
in my constituency are pleased to see that this action is finally being
taken, but I'm wondering whether other provinces have taken
similar action to deal with their agencies, boards, and commissions.

Mr. Werry: There's been action taken in British Columbia,
Ontario, Quebec, and Nova Scotia.

Mr. Dach: Okay. Second, previous to this past Friday and the
Minister of Finance's review of ABCs – do you know why the
previous government let ABCs set their own compensation without
proper oversight?

Mr. Werry: I really can't speak to that question.

Mr. Dach: I'll finalize with one final question. It relates to
compensation practices in ABCs and how Alberta compares to
other jurisdictions. Before the Minister of Finance made changes
this past Friday, we've seen that the CEO of the Workers'
Compensation Board will have their salary reduced by over 50 per

PA-330 Public Accounts February 28, 2017

cent. I believe they used to make roughly $900,000 a year. Therefore,
my question is: how much was the CEO of WCB in Alberta
paid relative to the CEO of WCB in Ontario, the largest province,
and more generally how have salaries in Alberta's ABCs compared
to ABCs in other large provinces?

Mr. Werry: In some cases they were directly aligned, as you
alluded to earlier. There was a good portion, probably about 50 per
cent, that were in line with other jurisdictions and others that were
above, in some cases as much as 20 or 30 per cent above.

Mr. Dach: All right. Now, for the benefit of Albertans who may be
listening to the committee proceedings today, can officials from the
Public Agency Secretariat let us know which agencies, boards, or
commissions will have their salaries reduced, by how much for each
of these CEOs, and what the expected savings are? Roughly what
percentage of CEOs will see total compensation decreased?

The Chair: Thank you for that.
If you wouldn't mind responding to that in writing.

Mr. Werry: Not a problem.

The Chair: We would appreciate that.
All right. Mr. Gotfried.

Mr. Gotfried: Mr. Chair, thank you. I'm concerned with the issue
of pension liabilities. I think all Albertans are concerned with those
liabilities as our ability to address them actually goes straight to red
ink. I'm concerned about any projections you have on possible
borrowing or cash calls, as I'll call them, that you may be
anticipating over the next 36 months to address unfunded pension
liabilities in the noted public pension plans, which you mentioned
earlier, but also including pension commitments included in other
collective agreements which are attached to the public purse.
Ms Rosen: I think that it's important to understand that we're
actually not in bad shape right now. Comparing the net assets
available for benefits to the pension obligations for each pension
plan, public-sector plans right now are greater than 99 per cent fully
funded. If we add in the future benefit liabilities but exclude the
unfunded liabilities, the public-sector plans are 97 per cent
fully funded. There was a decision made by the previous government
to take on the pre-1992 unfunded liabilities for the teachers'
pension plan, and that is a liability that still sits on the books and
will be paid off over time, over a 30-year period of time. It amounts
to $8.08 billion in 2016 and is budgeted for and paid down on an
annual basis.

Mr. Gotfried: By Albertans. By Alberta taxpayers.

Ms Rosen: Yeah.
But the plans themselves are actually in very good shape right
now, at 99 per cent funded.

Mr. Gotfried: Okay. Is that liability, then, shown on our balance
sheet at this point in time, or is that . . .

Ms Rosen: It is. The payments for the pre-1992 liability actually
show up in Treasury Board and Finance's financial statements.

Mr. Gotfried: Okay. I just have one last quick question – I may not
have a chance to get it in here – on the outstanding recommendations
by the Auditor General from October 2015. One of the issues
was unfiled corporate income tax. This is still outstanding. I'm
wondering if you've seen a rise in corporate tax filing delinquency in the
current economic situation, and how are you addressing this
troubling challenge?

Ms Rosen: I'm actually going to ask Mr. Ayton from our tax and
revenue administration to speak to that.

Mr. Gotfried: Thank you.

Mr. Ayton: Good morning. Yes. We addressed all the recommendations
and have implemented all the recommendations from
the Auditor General. Have we seen an increase or not? No, not
necessarily. We are implementing our procedures as adjusted, and
we have reinstituted the default assessments with respect to nonfilers,
so we are addressing that concern expressed by the Auditor

Mr. Gotfried: Thank you.

The Chair: Thank you, Mr. Gotfried.
We have one minute to get questions in. Are there any questions
for written response?

Mr. Fildebrandt: I have long written questions.

The Chair: Okay. Can you get in one of the questions really fast,
Mr. Fildebrandt?

Mr. Fildebrandt: Are we on written questions now?

The Chair: Yeah, we're in position . . .

Mr. Fildebrandt: Okay. Thank you.

Mr. Gotfried: I have one as well, sir.

Mr. Fildebrandt: I'll try to be quick because I've got quite a few
to read in. Given that we guarantee 100 per cent of ATB's debt,
what steps are being taken to ensure that we do not face liabilities
for taxpayers?
I have more than that.

Mr. Gotfried: Given the sustained downturn in the economy, small
and medium-sized enterprise and corporate losses, can you please
address your projections and the risk of further reduction in corporate
tax revenues in hopes of reducing our deficits?

Mr. Fildebrandt: On what date did the government become aware
that it was in violation of the financial transparency act?
On page 19 of the annual report it talks about cost-saving
initiatives. Were these recommendations in the form of a brief,
memo, meetings, report, et cetera? Will the recommendations be
made public, and can you table the recommendations?

The Chair: I would like to thank the officials from the ministry of
Treasury Board and Finance for attending today and responding to
the committee members' questions. We'd ask that any outstanding
questions be responded to in writing within 30 days and forwarded
to the committee clerk.
We will now take a break and return in 10 minutes. Thank you
very much.

[The committee adjourned from 10:32 a.m. to 10:40 a.m.]

The Chair: I'd like to welcome our guests from the Ministry of
Children's Services. My name is Scott Cyr, the MLA for BonnyvilleCold
Lake and chair of the committee. I'd like to ask the members,
staff, and guests joining the committee at the table to introduce

February 28, 2017 Public Accounts PA-331

themselves for the record, starting at my right, and then I'll go to
the members on the phone.

Mrs. Littlewood: Jessica Littlewood, MLA representing Fort
Saskatchewan-Vegreville and acting deputy chair.

Ms Miller: Barb Miller, MLA for Red Deer-South.

Mr. Dach: Lorne Dach, MLA for Edmonton-McClung.

Dr. Turner: Bob Turner, Edmonton-Whitemud.

Ms Renaud: Marie Renaud, St. Albert.

Mr. Gotfried: Richard Gotfried, Calgary-Fish Creek.

Mr. Hattori: Good morning. Mark Hattori, ADM for child
intervention, Children's Services.

Ms Bouwsema: Darlene Bouwsema, Deputy Minister of Children's

Ms Iatridis: Good morning. I'm Gloria Iatridis, the ADM for
indigenous and community connections, Children's Services.

Ms Debaji: Good morning. Maureen Debaji with the office of the
Auditor General.

Mr. Saher: Merwan Saher, Auditor General.

Dr. Massolin: Good morning. Philip Massolin, manager of research
and committee services.

Mrs. Sawchuk: Karen Sawchuk, committee clerk.

The Chair: I'd like to have the members on the phone introduce
themselves. Mr. Barnes, Member Cortes-Vargas, Ms Luff, Member
McPherson, Mr. Malkinson, and Mr. Hanson, can you please
introduce yourselves?

Mr. Barnes: Drew Barnes, MLA for Cypress-Medicine Hat.

Mr. Malkinson: Brian Malkinson, MLA for Calgary-Currie.

Cortes-Vargas: Estefania Cortes-Vargas, MLA for StrathconaSherwood

Ms Luff: Robyn Luff, MLA for Calgary-East.

Ms McPherson: Karen McPherson, MLA for Calgary-MackayNose

Mr. Hanson: David Hanson, MLA for Lac-La Biche-St. Paul-Two

Mr. Panda: Prasad Panda, MLA for Calgary-Foothills.

The Chair: Thank you.
Members should have the research reports prepared by research
services, the Auditor General's briefing documents as well as an
updated status of the Auditor General's recommendations document
completed and submitted by the ministry.
I invite the officials from Children's Services to provide opening
remarks, not exceeding 10 minutes.

Ms Bouwsema: Thank you for the introduction, Mr. Chairman.
This is the first meeting with Public Accounts for the new Department
of Children's Services, and we very much appreciate the
opportunity to respond to the Auditor General's July 2016 report on
systems to deliver child and family services to indigenous children
in care.
Before I go any further, I'd like to introduce the members of my
team here today to support me in providing answers to the questions
you are likely to have. To my left is Mr. Mark Hattori, assistant
deputy minister, child intervention. Mr. Hattori is responsible for
child intervention service delivery, policy and program development,
and quality assurance oversight. This includes working
alongside the 17 delegated First Nations agencies and crossministry
work on those areas that bring children and families to the attention
of child intervention.
To my right is Gloria Iatridis, assistant deputy minister, indigenous
and community connections. She is responsible for ministry engagement
with indigenous people, communities, and stakeholders. Her
team also supports building intercultural understanding, providing
indigenous knowledge and innovation for strategic initiatives.
Behind me I have Carol Ann Kushlyk, assistant deputy minister,
corporate services. Ms Kushlyk is responsible for the ministry's
financial management, which includes financial planning and fiscal
development, year-end reporting, and related policies and processes.
I want to start by saying that we value the input of the Auditor
General in helping us to be the best we can be. As Minister Larivee
has stated, when it comes to child intervention, we have more than
10,000 reasons to get it right, and more than 6,000 of those reasons
are indigenous children. I want to start my comments by
acknowledging that we are all working towards the same goals:
addressing the overrepresentation of indigenous children in care
and ensuring that indigenous children who receive intervention
services are safe, cared for, and receive the services and supports
they need to thrive. To that end, we have accepted all of the Auditor
General's recommendations and are in the process of implementing
them.One of his recommendations that affects all that we do is ensuring
that our interactions with indigenous children and families are
culturally appropriate. Building intercultural understanding is a
priority in the ministry. This year we have been providing cultural
training with Children's Services staff at all levels throughout the
ministry. To date 124 Children's Services staff have participated in
the blanket exercise, and 40 staff have participated in the Gently
Whispering the Circle Back residential school training.
The blanket exercise is a half-day experiential activity that
engages people's hearts and minds in the historic and contemporary
relationship between indigenous and nonindigenous peoples in
Canada. Participants overwhelmingly agree that the blanket
exercise helps them better understand the realities of indigenous
peoples.Gently Whispering the Circle Back is an interactive and
experiential two-day training session on residential schools
delivered in partnership with Blue Quills First Nations College. The
intent of this training session is to help participants understand the
historical and intergenerational impact of residential schools on
indigenous people and their communities. Participants also learn
how indigenous cultural ceremonies and healing practices can lead
to greater healing for those living through the legacies of residential
schools.Children's Services has been evaluating the training sessions
throughout the year and is continually reviewing the findings and
adjusting the training to ensure it is delivered in the most successful
way possible. We will be continuing to provide opportunities for
intercultural training in collaboration with indigenous leaders and
communities. The desired outcome will be policies, programs, and
services that support better outcomes for indigenous youth and

PA-332 Public Accounts February 28, 2017

What we do with and for young indigenous children has a
significant impact on their lives. Evidence shows that early support
services produce positive outcomes; however, these services also
need to be culturally appropriate. That is why we are updating and
refreshing our approach to prevention and early intervention
programs so they better reflect the needs of indigenous children and
their families. We will be building on our relationships with
indigenous people and working with them to ensure that the
Children's Services prevention and early intervention programs are
culturally appropriate and evidence based. This work will include
developing processes to better measure their outcomes and
effectiveness, as was recommended by the Auditor General. It is
important to recognize that everything we do in relation to
indigenous children will be viewed through the lens of the Truth
and Reconciliation Commission calls to action and the United
Nations declaration on the rights of indigenous peoples.
We are also in agreement with the Auditor General's call for a
child-centred approach when dealing with indigenous children in
care. We fully agree that all children, both indigenous and
nonindigenous, deserve the same standards of care. With that in
mind, we have undertaken a review of our current standards,
measures, reporting, accountabilities, and analysis for all children.
The intent is to strengthen and expand the focus on results for
indigenous children by specifically monitoring care plans, aligning
program standards with First Nations practice standards, and
creating reports for both indigenous and nonindigenous children in
child intervention. This will provide us more information for us to
learn from, support us to continuously improve, and will also ensure
greater accountability through more detailed public reporting.
It is worth noting that current approaches to child intervention are
showing signs of success. These approaches focus on working more
closely with families and building greater capacity within
caregivers to support a child's safety and well-being. Approaches
like signs of safety are aligned with the indigenous philosophy and
fundamental belief that people supported by family and communities
are in the best position to create the most effective
solutions for their own challenges. This discipline and rigour
support staff to better understand the differences between harm,
danger, safety, and well-being. Ultimately, it supports staff through
some of the most difficult decisions like whether a child should
remain with their family or should come into care. Since 2012 we
have seen a significant decline in the number of indigenous children
in care, and we remain committed to continuing to support families
to keep their children safe at home whenever possible.
Before I answer your questions, I think it's important to understand
the context in which much of the work of child intervention
takes place. As we talk about systems, process, reporting, and data,
we must all be aware that what we are talking about is people,
young, vulnerable people. As the Auditor General has pointed out,
many of our systems are complex, but people are complex. When
you are responding to different cultural norms, the complexity is
greatly increased.

When we say indigenous culture, it gives a sense that there is one
indigenous culture. There isn't. There are different norms, attitudes,
and values among First Nations, Métis, and Inuit, and there are
differences among First Nations themselves. We need systems that
address both commonalities and differences and are working to
make that a reality. In many cases there are also differences of
opinion amongst members of the same family as to the right thing
to do and when it should be done. Even in the most dire of
circumstances there can be disagreements on what should be done. I
experienced that same kind of challenge first-hand when I was
working as a paramedic. I'd like to share one of those stories with
you. It was a call for a nonresponsive female. When I arrived, the
patient was in cardiac arrest, and several family members were in
the room engaged in a very heated argument. Some were blocking
my access, saying that their mother would not want resuscitation
and that there was a DNR in place although they couldn't produce
the document. They said that they would sue if we attempted
resuscitation. The rest of the family was saying that they would sue
if we didn't attempt resuscitation. It was a very explosive situation,
and the patient was dying. I share this story as an illustration of how
sometimes you don't have the luxury of time. Sometimes you have
to make your decision very quickly with only the information you
have at hand.
My experience is not all that different for many of our front-line
workers. In the circumstances in which they find themselves, there
are often no easy answers. There is no guarantee that what has
worked in the past will work in present circumstances. Each set of
circumstances will require thoughtful, effective, respectful
responses, which must be made within what are often severe time
constraints. It would be nice if we could have a hard-and-fast set of
rules to be followed in every circumstance. We don't because, as
we all know, life doesn't unfold following a set of rules. In many
ways what happens within child intervention is a microcosm of the
strengths and weaknesses of our society.
The issue of adolescent suicide is just one example. Suicide is the
number one cause of death for indigenous adolescents and is an
issue that goes far beyond what can be effectively eliminated by
child intervention alone.

The Chair: Thank you.

Ms Bouwsema: I'll end there.

The Chair: All right. Mr. Hanson. Sorry. Bear with me here. I am
skipping a spot here.
I will turn it over to the Auditor General for his comments. Mr.
Saher, you have five minutes, please. Go ahead.

Mr. Saher: Thank you, Chair. The audit being discussed this
morning is the audit report on Children's Services systems to
deliver child and family services to indigenous children in Alberta.
The reason we chose to conduct the audit is that indigenous children
are overrepresented in the system. Although only 1 in 10 children
in Alberta is indigenous, 69 per cent of children in care are
indigenous.I'd just briefly like to summarize the three recommendations we
made. We recommended the department should provide early
support services to meet the needs of indigenous children and
families, and it should report publicly on the effectiveness of those
services. The second recommendation: the department should
provide each indigenous child with care appropriate to his or her
needs by ensuring that all care plans meet the standards of care the
department sets for all children. The department should report
publicly on its progress in achieving this result. Thirdly, we've
recommended the department should provide all its staff with
training on the history and culture of indigenous peoples, working
with indigenous partners to develop the training.
Thank you, Mr. Chair.

The Chair: Thank you, Mr. Saher.
All right. We'll follow the usual time allotment format of one and
a half hours for questions from the committee members. The first
rotation will be two rounds of questions with eight minutes each for
the Official Opposition, government members, followed by five

February 28, 2017 Public Accounts PA-333

minutes for the third-party opposition. Our second rotation will be
five minutes for each of these parties. With the agreement of the
committee any time remaining will be distributed equally amongst
the three parties.
I will now open the floor to questions from the members. I will
also note that one to two minutes should be designated for the
outstanding questions to be read into the record at the end of this
meeting.Mr. Hanson, are you ready to start your questioning?

Mr. Hanson: Ready to go, sir.

The Chair: Please proceed.

Mr. Hanson: Okay. Thank you, Chair. A few questions here. I'll
start that in 2008 the government of Alberta supported Jordan's
principle, yet the Auditor General noted on page 31 that “there was
no plan or documented process.” He additionally noted that you
don't even know how many Jordan's principle cases there are. So
what are you going to do to implement Jordan's principle? How
will you do it and when?

Ms Bouwsema: Thank you for that question. As of 2015 we've
been involved in a trilateral partnership with the federal government
and with the First Nations communities. That group approved an
action plan in April 2015. At that time the two priorities that they
deemed to be the most important to work on initially were, one, a
strategy to register all eligible First Nations children in care for
Indian status, and we have been making good progress on that
recommendation.As well, their second priority initially was to secure long-
ongoing, and equitable funding for First Nations designate positions
in treaties 6, 7, and 8. However, given the recent reports of the
Auditor General and the office of the Child and Youth Advocate
and other key events such as the TRC calls for action and the UN
declaration the senior officials of that partnership decided that they
should take another look at their action plan to see if it addressed
the most current recommendations and approach.
On November 29 and 30 of 2016 the partnership hosted a twoday
child and family symposium to look at the current information
and reaffirm the recommended actions. There was staff from across
the province, approximately 150 individuals, and the topics they
discussed were the TRC calls to action, Jordan's principle, the
OCYA report – and Mr. Graff was present – as well as the OAG
report, and the AG's office was also present. A report was prepared
on that symposium, and that'll be used to set priorities for '17 and
'18.As well, the federal government just on February 14 made an
announcement about how they were moving forward with Jordan's
principle. Alberta is still working with the federal government and
the First Nations on the best way to implement Jordan's principle
in our province, but the first step was the announcement from the
federal government naming the body in Alberta that was going to
be managing it on their behalf.

Mr. Hanson: Okay. Thank you. It's just that the concerning part
there is that children do continue to die in care. We need to act on
this sooner than later, and, you know, setting up more committees
probably isn't the answer. We have to put some policies in place to
protect these kids.
Anyway, going on, you had mentioned culturally appropriate
services. I'd like to point out that things are very, very different,
you know, even between treaties 6, 7, and 8, which cover most of
our province, as well as Métis settlements. Could you please define for us
what culturally appropriate services means and where the
differential is between those?

Ms Bouwsema: Thank you for that question. I think you identified
one of the key issues there, that a one-size approach does not fit all.
There are three treaty areas, there are 48 First Nations, there are the
Métis and Inuit people, and the cultural values and beliefs between
them are quite different, and we have to be respectful of everyone.
The other issue that we are faced with is that there are not very
many indigenous recognized and approved resources available for
training. We have been working very hard with our indigenous
leaders, with the elders and the community experts, to try and
rectify that situation.

We also believe that the type of training must be different in order
to make a greater impact. For that reason, Children's Services has
very much been focused on experiential learning rather than
classroom-based teachings of the past. There's the blanket exercise
training, that I referred to in my opening comments, and the
residential school training, and that was our focus for this year. In
the next year our plan is to start building off that knowledge and
focus on reconciliation. What is it? What does it mean? What is the
role that we have to play in reconciliation with indigenous people?
In addition, Ms Iatridis's division is also working on completing
a cultural understanding framework in order that we can make all
these pieces of training fit together, see where the gaps are and how
best to keep providing that, keeping the information current as we
get to learn more about those differences in values and beliefs
between all of our First Nations and making sure that our training
stays appropriate for our staff.

Mr. Hanson: Okay. Thank you.
It's my understanding that the department has received a proposal
from Treaty 8 First Nations of Alberta to open an urban office in
Edmonton to meet the needs of their children in the city. This would
help to raise the level of care. Can you explain why their proposal
has been continually turned down?

Ms Bouwsema: I'm sorry. I'm not aware of that proposal, so I'm
going to refer that question to my colleague Ms Iatridis.

Ms Iatridis: The proposal is currently under consideration. It is
something that has been brought forward to the trilateral
engagement process table, where we have representatives from the
ministry, from Indigenous Relations, from the federal government,
INAC, Health, and treaties 6, 7, and 8. Actually, that proposal is
being looked at as a more expanded approach around having an
urban office that serves not just Treaty 8 but also treaties 6 and 7. I
believe there are additional discussions taking place between Treaty
8 and INAC right now about a more specific focus on serving
Treaty 8 members who are in the urban areas.

Mr. Hanson: Thank you for that.
It seems that it would make a lot of sense to me. I know that
Edmonton is in Treaty 6 territory, but a lot of the people from Treaty
8 move into Edmonton as it's the closest big urban centre. Just
geographically the difference in lifestyles between Treaty 8 and
Treaty 6 First Nations is quite significant. It would only make sense
to me that they would have representation working with social
workers in those areas to protect the needs of their children. I'll just
leave it at that.
When it comes to the differences between the different treaties,
what kind of training recognition does your staff in the major
centres of Edmonton and Calgary . . .

PA-334 Public Accounts February 28, 2017

The Chair: Thank you, Mr. Hanson. I'm sorry. Your time is up.
I'm sure you'll get another opportunity to ask your question.
Ms Renaud.

Ms Renaud: Thank you, Mr. Chair. Thank you for being here. I
think we all understand just the incredibly complex nature of the
work, and I first of all want to say that I am very thankful for all of
the front-line workers. I have no doubt that they face very complex
and difficult situations daily.
Maybe my question is a little bit simple, but I would like to know
if you could explain to us, to this PAC, why results for indigenous
children are less favourable.

Ms Bouwsema: We think there are four variables that are relevant
to that question. One is around leadership, one is around having the
appropriate resources, one is around manageable workloads for
caseworkers, and one is around having real-time access to information
in order to influence what you're doing.
With those four variables, certainly, the creation of Children's
Services as a stand-alone ministry is allowing us to have a greater
focus on children and children's needs.
As well, in 2015-16 $37 million was added back into the child
intervention budget to help stabilize that program and to implement
specific practice training and supports that have a focus on
indigenous children.
We've also been working with both AUPE, the staff, and a
technical consultant to identify workload benchmarks and come up
with a system that will help us look at that, including travel time
and documentation and all of the other duties that caseworkers
have. That has been accepted by the staff and the union. We're
currently piloting a workload assessment management system, and
we expect it to be implemented throughout the province in the
summer of 2017.
As well, in 2015-16 the statutory director identified three key
areas of practice that would be a focus of measuring and monitoring.
They were face-to-face contact with the child, accurate
placement information, and accurate legal authority information. In
order to assist in that, we created a real-time reporting system that
identifies in the electronic system when there's missing or
incomplete data. In 2015-16 we're also breaking out our results –
that was one of the findings from the Auditor's report – so that they
are for indigenous and nonindigenous children, so we can have a
focus on that.
In '16-17 the standards review checklist will be targeting care
planning, which was also an area noted by the Auditor General.

Ms Renaud: Sure. Thank you.
I want to get a little bit more specific right now. On page 13 of
the Auditor General's report it noted, “The department uses a
variety of sources to obtain information about the needs of children
and families for programs and services, both Indigenous and nonIndigenous.

My question is: how do the research and approach to
obtaining information differ when it comes to identifying needs of
the indigenous community?

Ms Bouwsema: I think one of the things we've learned over the last
few years is that, you know, it's invaluable to involve the elders in
the communities in those discussions. As we work on those
programs and services and the training going forward, we have the
Elders' Wisdom Circle, that we use to provide input into that. We
work with the First Nations colleges like Blue Quills going forward,
and we work with our band designates and the DFNAs and our
trilateral partnership. I think we have a much stronger focus now
and an understanding that it's absolutely necessary to involve the elders
in those communities when we're making decisions on what
the best way forward is.

Ms Renaud: Okay. Has the department identified gaps in our
approach to research and needs assessment regarding supporting
indigenous communities?

Ms Bouwsema: I think I'm going to turn that one over to my
colleague as well.

Ms Iatridis: One area in the last year that we did identify was a gap
in research and having tools and resources around the challenge of
youth suicide. It is one area that we've been working closely on
with PolicyWise, which used to be called ACCFCR. This past year
they have been working on a literature review. It's also doing some
research around what tools and resources are out there to support
First Nation communities and other communities across the
province around addressing the challenges of youth suicide. That's
one area that we've identified as a gap that we are focusing on.

Ms Renaud: That's great.
Another key audit finding that was listed on page 13 is that the
department “has limited public reporting on the results of its early
support services.” On the next page, page 14, it states, “Reporting
is particularly limited in terms of how well services meet the needs
of Indigenous children, families and communities.” I have a couple
of questions about this. What do we currently report on when it
comes to early support services? What are the outcomes that we're
hoping for, and what are we measuring?

Ms Bouwsema: Thank you. I'm going to turn that question over to
Mr. Hattori.

Mr. Hattori: Thank you very much for the question. The OAG has
rightly identified that we've had some challenges in terms of what
we've been reporting in terms of early intervention and prevention
services. As a direct consequence of the audit report, we are doing
a review of all of our early intervention and prevention programming.
I'm going to be working with all of the contracted service
agencies that are in that space to take a look at, you know, how best
to look at indicators of success for preventative programs for
indigenous people. That process has already begun. We've started
the literature review, have had some conversations with indigenous
communities, to begin with, in terms of looking at a review plan.
Our hope is that by 2018 we'll be in a place to be able to work with
the contracted resources to retailor their service to a more
indigenous-aligned focus.

Ms Renaud: Okay. Can you elaborate on the point regarding
limited reporting on how well services are meeting the needs of
indigenous children, families, and communities by explaining what
that means?

Mr. Hattori: The reporting question is a good one. There are many
aspects of the child intervention system, including those programs
and services that wouldn't normally be considered in a child
intervention stream. [A timer sounded]

The Chair: Please finish your thought.

Mr. Hattori: As I just mentioned, we are looking at those services
and supports that are specifically geared towards trying to support
the resilience of kids and families before they come into a child
intervention circumstance. Then there's the reporting that is in
direct relation to the child intervention program and those kids that

February 28, 2017 Public Accounts PA-335

are in the, quote, system. So we're going to do both. We are going
to be reporting both for nonindigenous and indigenous kids relative
to what we can gather through the early intervention-prevention
component of the system and then also, as mentioned in the deputy's
opening remarks, look at the indigenous and nonindigenous kids
that are in the system and do more reporting in the child invention
system itself.

The Chair: Thank you very much for your answers.
Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair. Thank you for appearing here
today and helping us to better understand some of your challenges
and, I'm sure, the very good work being done by many of your staff.
I guess my first question is fairly high level. Have you determined
the major factors and some of the things that you can influence
which result in indigenous children in care receiving inadequate,
inappropriate, or ineffective care – of course, given the crises that
they are facing now – and a lower standard of outcomes compared
to nonindigenous children? If so, what is the plan to confront and
deal with these factors, particularly on a short- to medium-term
basis, both from a policy and a service delivery standpoint?

Ms Bouwsema: That is a multifaceted question. There are a number
of things, if you'll allow me to just talk about them, that we are

Mr. Gotfried: Sure.

Ms Bouwsema: Some of it is the work with the trilateral partnership
that we have, our work with our DFNAs and the federal
government around funding for those organizations and standards
of practice, ours matching the First Nations standards of practice
and the Treaty 8 standards of practice.
We're also doing significant work in early childhood development
and prevention, a lot of work with our parent link centres.
We've added to their contracts the need for them to complete
community profiles so they know the communities they're serving
and adjust their programs to better reflect those communities. In
fact, the parent link centres on September 9 of this past year, 2016,
held days of sharing practices to support aboriginal families. It was
a first-time gathering of all the PLCs around the province to
participate in cultural training, share promising practices, and
discuss approaches to providing services to indigenous children. As
well, in June of this year they'll be at their annual learning event.
We will be doing the blanket exercise, that I referred to earlier, the
experiential training to assist staff with that piece.
We're also working with the home visitation group, Alberta
Home Visitation Network, to establish a working group to enhance
the services that they provide to indigenous families, all geared
around trying to keep kids in their homes and not apprehend them.
You know, I think our goal with a number of things that we're
doing is to try to prevent them from coming into the system to begin
with, and so much of that is around early intervention and
prevention. To that note, too, that's not a space we own. Education
also works in that area; so does Health. There are a number of
initiatives that we're also working with them on – the youth mental
health review – so it is a very multifaceted question.
Hopefully, I've given a sense of the things we're doing.

Mr. Gotfried: It's helpful. It is very complicated to understand.
Realizing that many of the questions that we'll be asking you
today in this committee will be dealt with with the child intervention
panel, I think that one of the challenges here is that differential
in terms of outcomes between indigenous and nonindigenous children. What's
being done within the ministry today to increase
access and/or completion in terms of monitoring cultural sensitivity
training, which seems to be a real key to improving the outcomes?

Ms Bouwsema: In the ministry is the cultural training I've identified
and our switch from classroom-based training to experiential
training. We are assessing that to make sure that it is having the
most positive outcomes possible. We're also in the process of the
signs of safety program, and I did mention it in my opening
remarks. I said that we were in the process of implementing it and
would be by this summer. This closely aligns with the indigenous
thinking around family and community, supporting people who are
in crisis. We're working on that as well.

Mr. Gotfried: I think that's helpful.
I guess that, obviously, there's lots of work being done on the
front line to increase your cultural sensitivity training. Do you have
an estimate in terms of percentages of the front-line workers that
have, I guess, adequate cultural sensitivity training, from your
perspective, at this point in time?

Ms Bouwsema: Can I answer that?

The Chair: If you've got a 10-second answer.

Ms Bouwsema: A 10-second answer. Every staff member gets
mandatory training when they're first hired on, and then there are
numerous other opportunities for training. I think the big difference
right now that I'd like to highlight is that we're switching from
classroom-based to experiential training, which seems to have
greater outcomes.

Mr. Gotfried: Okay. Thank you so much.

The Chair: Thank you very much.
Mr. Hanson.

Mr. Hanson: Thank you, Chair. I'll open with my question if I can.
On page 18 the Auditor General noted that your department has
accepted noncompliance in casework and has also failed to make
needed improvements. Why haven't you addressed the issue of
noncompliance, and can you explain to us why you have let
caseworker contact compliance rates of below 20 per cent continue?

Ms Bouwsema: That's the work we've been doing around assessing
workloads for the caseworkers. It's possible that staff are
completing the required steps, but they're just not recording them.
That's where we've been working on systems. We've been working
with staff to see what will make it easier for them to record these
things. We know they have multiple demands on their time. You
know, in addition to face to face, there's travel time, there's court
time, and there's meeting with DFNA staff. We have been working
very hard to assess: what's reasonable from a workload perspective,
and how do we make it more efficient for staff to be able to record
that they are doing the things they're doing?

Mr. Hanson: Okay. Thank you.
I know that Blue Quills has got some great programs out here.
The university is in my area. I was just wondering what the percentage
of First Nations representation is on your senior management
staff and if there's representation from all of the treaties in the

Ms Bouwsema: That's a good question. I can't answer that, but I'll
turn it over to my colleague.

PA-336 Public Accounts February 28, 2017

Mr. Hanson: Thank you.

Ms Iatridis: On our executive team we currently have two
indigenous people.

Ms Bouwsema: And throughout the ministry?

Ms Iatridis: I'm not aware of the numbers. We'd have to provide
them later.

The Chair: Can we get that in writing, then?

Ms Bouwsema: Absolutely.

Mr. Hanson: Also, how does the department track visits and
contacts between caseworkers and children? In particular, what
kind of a database are they stored on? If there are different sorts of
databases, are they compiled into one specific one so that we can
keep track of that?

Ms Bouwsema: I'm going to ask Mr. Hattori to answer your

Mr. Hattori: Thank you for the question. There are two components
to looking at contact between caseworkers and kids. The first
component is the standard reviews, which the Auditor General has
commented on. That is a retrospective look at the contact between
kids and caseworkers as well as caregivers and caseworkers, et
cetera. We do have a database where we're able to track and
monitor those events, so it culminates in reporting, that I addressed
in the earlier question.
Then the second piece is what has just been mentioned as the new
improvement or enhancement to the way we are going to be
reporting, and that is in real time, timely access to information for
caseworkers and staff, where we are tracking in current day the
contact between caseworkers and kids and then accurate placement
information as well as the appropriate legal authorities that allow us
to have the mandate to be involved with any child or family.

Mr. Hanson: Okay. Thank you.
Just another quick question: can you explain to us the relationship
between your department and the DFNAs? Is it a good, collaborative
relationship, or is it somewhat broken? What kind of communications?
Do you have monthly communications with each group, and
how is that recorded and tracked?

Ms Bouwsema: I'll answer the first part, and then I'm going to ask
Ms Iatridis to jump in with some more of the specifics around how
that is tracked.
Yes, we do have good relationships with the DFNAs. They are
independent legal authorities and are responsible for all their own
staffing decisions, but we do support them to retain staff by
mentoring their staff. We provide the same sorts of training to their
staff as we do to our staff, so the signs of safety, that I had referred
to earlier. We do support their information technology systems, and
we do engage with them in case consultations as requested. I would
say that we actually have very good relationships with them.
As for the number of times they meet, I'm going to ask Ms
Iatridis to comment on that.

Ms Iatridis: I'm probably going to ask Mark to speak more towards
the DFNAs, but I will mention that through our trilateral engagement
partnership we also have under our senior officials a working
group in which we invest some resources to have a position at
Treaty 6, Treaty 7, and Treaty 8 offices, who are also our connection to
our delegated First Nation agencies. So when we're working on
our action plan and we need feedback and we need to engage with
those communities, then we go through that mechanism as one way
of getting feedback.
I'll pass it on to Mark to speak directly to the DFNAs.

Mr. Hattori: Just for context, the delegated First Nation agencies
are delegated to deliver child, youth, and family enhancement
services or child protection services for their on-reserve nations,
and that's done by agreement with the province. In terms of contact,
as per the previous comment by the deputy, we have daily contact
between our support branch and the delegated First Nation agencies
in terms of the kind of pieces that were already mentioned in terms
of support for casework and training, et cetera. On a leadership level
we meet with the delegated First Nation agency directors and with
the child and family services directors about bimonthly in terms of
program planning and delivery.

Mr. Hanson: Okay. Thank you.
I know from some of my visits that some of the DFNAs are much
more successful than others. I'm just wondering: are there any
yearly or biyearly meetings that they would have together to discuss
the successes and what's working? I know that the cases on each
First Nation are not the same, but you could take advantage of some
of the successes and make sure that they're passed on. I was just
wondering if there's any collaboration from that level.

Ms Bouwsema: Each of the treaty areas is a bit different. Treaty 6:
the DFNAs collaborate quite closely and meet on a regular basis.
Not the same case in Treaty 7, and Treaty 8 as well gets together.
So they are all a little bit different. It goes back to what I was saying
earlier about there being distinct differences between each of our
First Nations in how they like to work together and how they do
work together.

The Chair: Thank you very much.
Thank you, Mr. Hanson.
Ms Luff, are you ready?

Ms Luff: Yeah. Absolutely. Again, thanks to everyone for being
here. I really appreciate it, and I think you did a great job sort of
outlining in your opening remarks and going forward what you're
focusing on with training opportunities.
I'd just like to focus if I could on the third recommendation,
which focuses on strengthening intercultural understanding. I believe
this question has sort of been asked before, but I'm going to ask it
again. The audit found that the department hasn't clarified
its expectations for providing “culturally appropriate” services.
The report also noted that
the department does not have a working definition or consistent
explanation of its expectations in the context of providing
“culturally appropriate” services to Indigenous clients.
The report also stated that
without an agreed-upon working definition and guidelines for
practical use . . . the department cannot expect consistent
application of the concept.
Throughout the department's work they use the term “culturally
appropriate.” Given that the Auditor finds that this definition is
inconsistent, could you just clarify for me how the department
defines the term “culturally appropriate”?

Ms Bouwsema: Thank you for that question. That is the purpose of
the cultural understanding framework that Ms Iatridis's area is
working on right now, to have that consistent definition of what it
means. We expect that we will have that definition in draft form by
this summer. We are involving the Elders' Wisdom Circle and the

February 28, 2017 Public Accounts PA-337

First Nations in that work. As well, we also do a lot of work with
key partners such as Align. They represent the contract agency
sector. They, too, offer a five-day, intensive cultural awareness
training for agency staff, ministry staff, and caregivers. Their
curriculum was developed in partnership with indigenous communities
and postsecondary institutions and has been tailored to
various regions in the province.
In addition, the Alberta Foster Parent Association has developed
a two-day training session for caregivers called honouring aboriginal
children and families. It was developed in consultation, again, with
staff, elders, and the Blue Quills First Nations College and is now
available in Cree, Métis, and Blackfoot/Blood versions, which
reflects the largest group of children and families we serve.
We do, though, still think there's a need for that overall coordination
of all the training. You know, everybody is trying to
respond to this need, and that is where we see our cultural understanding
framework playing a big role for us. It also will give us an
approach to measurement and evaluation so that we will be able to
say in a year's time whether all this training is actually providing
the benefit we want it to.

Ms Luff: Great. Thank you. I think we're all probably looking
forward to seeing that framework come out.
You did just mention that it would help frame your approach to
measurement. I'm just curious. That's coming out later, so obviously
this may be a pre-emptive question, but have you thought about
what sort of criteria or measurement objectives you might be
looking at to ensure that the training is working as you are hoping
for it to work?

Ms Bouwsema: Ms Iatridis's area is leading the development of that
framework, so I'm going to refer that question to her. Thank you.

Ms Iatridis: We currently have a crossministry working group that
has been meeting fairly regularly to look at a common vision,
guiding principles, some overarching goals and objectives, and also
how to define cultural understanding. I know that there's been a lot
of debate around the term “culture.” It's beyond just understanding
culture; it's understanding the history and the challenges in the past
around indigenous people and the impacts of residential schools and
other events that have taken place. That group has been working
closely with our Elders' Wisdom Circle. We also have representatives
from indigenous people sitting on the group and recently just
had a ceremony with an elder who wanted us to start off in a good
way and wanted to have blessings for this framework that we're
developing. So we have a good group of people that will help to
define those goals and objectives and set those outcomes.

Ms Luff: Thank you.
Just a question, then – and your answer sort of leads into this. It
was noted in the report that the department responsible for this
particular recommendation has, you know, changed over time,
several times, and obviously there's a new ministry that's just been
set up. I'm just curious what your plans are for continuity moving
forward, sort of to make sure that these recommendations are all
housed in one place and, you know, not disrupted. Has there been
any disruption with the creation of the new ministry?

Ms Bouwsema: No, there's been no disruption. We take very
seriously the recommendations that have been made up until this
point. We track our progress on all of them, which ones have been
implemented, which ones we're still working on. In addition, we believe
that the child intervention panel, that is currently deliberating
and doing its work, will provide further guidance on how we
move forward.

Ms Luff: Great. Good to hear.
I guess I just have a question related to, you know, cultural
understanding in other jurisdictions. I'm just curious, you know, if
you've done sort of interjurisdictional comparisons. Obviously,
every region is different and we're going to have to consider
differences as we look at things, but has there been any sort of – in
terms of cultural understanding, is there somewhere where we see
leadership that we can look to for best practices?

Ms Bouwsema: I'm going to refer that question to Ms Iatridis again.

Ms Iatridis: We have done research. Part of the work that we were
doing around the cultural understanding framework was to
complete an inventory of all the existing training and resources that
have been developed, not just in Alberta but we've looked at places
like B.C., British Columbia. We recognize that this is not an
isolated challenge that we're working with; other jurisdictions are
dealing with the same type of challenges. We don't want to recreate,
and there are lots of tools and resources already out there. We just
want to make sure that they're most appropriate for the indigenous
people in Alberta.
Thank you.

Ms Luff: Yeah. That's great to hear. You guys are doing . . .

The Chair: I'm sorry, Ms Luff. Your time has expired.

Ms Luff: Oh, okay. Thanks.

The Chair: Thank you very much, Ms Luff.
Now we'll go on to the third party. Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair, and thank you again to the
committee. Front-line social and children's services workers are on
the front lines of assessment and care and, in my estimation, will be
the best judges of success and failure of government policy on a
first-hand basis. How are you empowering these individuals through
processes and timely, measurable reporting mechanisms to bring
forward their insights and recommendations in order to address and
mitigate the issues identified in the July 2016 Auditor General's

Ms Bouwsema: Certainly, I couldn't agree with you more. Their
input is absolutely vital, which is why we have been involving them
in things like that workload assessment measurement tool and
process that we're rolling out. We worked with staff and AUPE on
what are appropriate benchmarks there. We did involve them in
creating that real-time reporting system to help make it easier to
document what they were doing, when they were doing it. We do
have regular staff meetings, and the way that they do their practice
is in collaboration with each other. Rarely would you find a
situation where one person is making a decision without conferring
with their colleagues and their supervisors. They work in
conjunction, a second sober set of eyes, you know, just to make sure
nothing has been missed. As I mentioned earlier, people are very
complicated and situations are very complicated. As well, this panel
that is ongoing: we are absolutely encouraging our staff to bring
forward their observations and their experience to help us make the
system better.

PA-338 Public Accounts February 28, 2017

Mr. Gotfried: Okay. In your estimation, is that real-time system
and the IT support which is embedded in that working well, and is
that the feedback you're getting from your staff?

Ms Bouwsema: I'm going to ask Mr. Hattori to answer that one.

Mr. Hattori: Thank you for the question. What we know is that any
time you get instantaneous feedback, it helps to, you know, guide
your thinking, et cetera. What we've seen as a consequence of the
implementation of the timely, accurate, real-time information is that
we've seen a rise in the amounts of contact and face to face, and
staff do feel supported, that they have the kind of information that
helps them move on issues or challenges quicker versus a year
retrospective review. We have both. That's the feedback we're

Mr. Gotfried: Okay. Is that real-time work in the field well supported,
then, from the back office, as it were, in terms of noting
those either critical or crisis situations or where improvements can
be made quickly?

Mr. Hattori: That's exactly the point. When we look at the retrospective
measures, which are the standards for a practice in the
field, you know, we've had these challenges in regard to certain
metrics not meeting a desired result. So in collaboration and in
conversation with staff we've said: what would be helpful to you in
order for you to change the trajectory of some of these metrics? As
a consequence they said: you know, if we could have this
information sooner, some technology that's enabling in regard to
that, then it enables us to take back or take on the accountability for
doing our job in that role. That's how that's worked, and we have
seen increased results in regard to face to face, legal placements,
and other contacts.

Mr. Gotfried: Are they able to categorize those so that they're
addressed in a different – I mean, obviously, there are going to be
some that are more systemic issues, but is there a way for them to
classify and categorize what they're inputting into that system so
that it is brought to the heightened attention where appropriate?

Mr. Hattori: The real-time information is very specific to those
three areas that we mentioned: legal authority, placements, and face
to face. That conversation in terms of what got prioritized in terms
of real-time review was in conversation with staff. The reason why
is that, you know, we could give them a whole list of things, binders
full of things, to focus on. What we're finding is that in consultation
with staff, if you say, “What are the most key, critical things that
you want to have done at any one point in time?”, these are
manageable, in addition to the other standards that exist.

Mr. Gotfried: My last question that I probably have time for is with
respect to the feedback loops you've got in place. Is there any
opportunity to poll the clients that you're serving to also get their

The Chair: Thank you, Mr. Gotfried. If we could get a written
response to that question.
Mr. Hanson.

Mr. Hanson: Thank you. I'll try and sneak one in here. I'd asked
earlier about the levels of noncompliance in the AG report, and the
answer I got back was that it sounds like it's a fairly cumbersome
process and has to do a lot with caseload. I've also reviewed the
disturbing numbers from the office of the Child and Youth
Advocate, and I guess my question is: why did it take these two reports to
bring this issue to light? Has there been any direct
reporting from your department to the ministry over the past few
years to address these issues?

Ms Bouwsema: I am sorry. I'm unable to answer that after five
weeks in. Mr. Hattori will answer that question.

Mr. Hattori: You know, there have always been challenges in
regard to the ability of the program to meet certain metrics. The fact
that, you know, what you're seeing in the OAG report or the OCYA
reports seemingly or perceived to be the light in a dark corner, I
can't really answer that. I know that there has been prior public
reporting. That includes the OCYA dating back to, certainly, when
they became independent, and prior to that there have always been
annual reports laid upon the Legislature for their review. These are
historic challenges that, you know, we have been taking active
measures to try to address.
I think part of what's changed here is that we have, true to the
philosophy and the principles that were outlined by the deputy,
taken an approach where – again, back to: when families are in the
best position to answer their own challenges, so are staff. Our
practice principles and the practice frameworks that we're
implementing actually have been derived from the thinking and the
innovation of staff, and we are seeing results, albeit not perfect, but
we're moving in the right direction.

Ms Bouwsema: On that note, I would just like to highlight that
since between April 2012 and December 2016 we have seen a 16
per cent safe reduction in the number of indigenous children
receiving services and a 17 per cent safe reduction in the number of
indigenous children in care. The percentages might not sound high,
but that's about 2,200 children that have avoided coming into the
system. You know, it's maybe not where we want to be yet, but it
is progress in the right direction.

Mr. Hanson: Okay. Thank you.
Getting back to the reporting, is there something specific that
your department is going to do to address the caseload, I guess, and
the ease in reporting to make sure that we can boost that compliance
in reporting leading up from 20 per cent?

Ms Bouwsema: The work we have been doing is that work with the
union and the staff on the workload assessment measurement tool.
Staff are very happy with it. We are in the process of implementing
it. We expect it will be implemented across the province by this
summer of 2017, and we have implemented the real-time reporting
in the three areas that staff told us would be critical for them doing
their job.

Mr. Hanson: Okay. Thank you.
I guess my last question would be – there doesn't seem to be any
assessment, going back to page 15 of the AG report, of the $1.7
million that's provided for early intervention on reserves. Can you
tell me how long that funding has been in place, and has it been a
static amount, or has the funding increased or decreased over time?

Ms Bouwsema: I'm going to ask Mr. Hattori to answer that, please.

Mr. Hattori: The $1.7 million in terms of early intervention,
prevention programs on reserves has been a legacy program that's
– our amount of money in funding that's gone back about a decade.
Consequently, there's been very little actual change to those
programs. As part of what we mentioned in terms of the early
intervention and prevention review, it will be part of that process so
we can get a better sense of what kinds of service and supports,

February 28, 2017 Public Accounts PA-339

particularly as expressed by First Nations, would make the most

The Chair: Thank you very much.
Ms Renaud.

Ms Renaud: Thank you, Mr. Chair. A key finding, as noted on
page 17, states:
Compliance results for Indigenous children receiving services are
less favourable than for non-Indigenous children. For example,
Indigenous children . . . receiving services from regional offices
experience less-frequent caseworker contact and less-frequent
review of their care plans than non-Indigenous children.
How does the department currently analyze compliance, and how
does the department react in real time to ensure compliance for
specific children, specifically indigenous children, within their care

Ms Bouwsema: I'm going to start to answer that question. Some of
it we've talked about already: the real-time reporting that lets us
know when there's information missing from the electronic files;
also, the work to make it easier for caseworkers to document when
they've actually had an interaction with a client; the workload
assessment model to make sure that caseworkers, front-line workers
have the time to do the work that we ask them to do.
Mr. Hattori, anything you would like to add?

Mr. Hattori: I'd just like to add that on the ground, in terms of the
casework that's being done, as per the deputy's prior comment, she
did mention that these critical decisions that are made by casework
staff are done in conjunction, in a team-based fashion. We have put
in practice models that are principle based, and one of the principles
certainly is around aboriginal or indigenous experience. We are
promoting and supporting the kind of practice and behaviour on the
ground that takes a look at how you achieve best outcomes for all
kids, in particular indigenous kids given the overrepresentation in
the system. So that team-based look – we call it sometimes “third
person in” – takes another look at the casework practice of any
individual staff and says: have we done the due diligence necessary
in order to reach achievement?

Ms Renaud: Okay. Just another quick question. I think sometimes
that figuring out what the solution is is trying to understand what
the problem is. Again let me ask, as I asked at the beginning, sort
of a fairly simple question. What is or was preventing us from
meeting the unique needs of our indigenous children and their

Ms Bouwsema: I would answer that this way. I don't know if it's
so much what was preventing us – I think some of it is our evolution
of knowledge. It was a previous belief that, you know, it was one
indigenous culture that we had to learn, when, in truth, that's not it.
Maybe it's that belief that the classroom-based training that we
would give staff was the way to do it. Now we're getting much
better results from experiential training. I would say that it's the
evolution of our understanding, listening to our First Nations and
involving them in decisions around practice, around how we work
with families. I think all of those would be part of the answer.

Ms Renaud: Okay. Thank you.
How much time do I have?

The Chair: You have two minutes.

Ms Renaud: Two minutes. Okay. The Auditor General's report identifies
specific deficiencies,
which I'm sure are helpful for the department to create an action
plan, but an imbalance in compliance and a discrepancy in service
delivery have been identified by many different sources, be it the
courts, human rights tribunals, the Truth and Reconciliation
Commission, and others. It is fair to say that the deficiency in regard
to service delivery to indigenous children and families is in some
ways common knowledge. In the department's view, why aren't we
meeting these standards, and what are the barriers to compliance in
the broad sense?

Ms Bouwsema: In the broadest sense I think the biggest barrier is
the way the system is set up now, where funding comes from the
federal government for on-reserve services and, you know,
standards are set by the province, and sometimes the funding
doesn't match with what the standards are. Certainly, the Canadian
Human Rights Tribunal did highlight those gaps in policy and
programming. There's no doubt that First Nations are very
concerned about having consistent and appropriate social services
on all reserves, and they have previously called on the federal
government to increase funding.

The federal government, though, has allocated an overall number
of $634.8 million for a five-year period to enhance services for First
Nations on-reserve. In Alberta that funding flows directly to
DFNAs. We are not part of that at all. The federal government has
also committed $382 million over three years to support the
implementation of Jordan's principle, and that work has started
with them identifying who the group is in Alberta that will be
managing that for them. You know, although we're not involved in
the funding, we certainly work with both the federal government
and indigenous leaders to try and address those challenges jointly.

Ms Renaud: Thank you.

The Chair: Thank you.
Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair. Mr. Hattori, I think I'll go
back to my last question so that you don't have to do that in writing.
My question, just to reiterate, is: how are the children and families
served surveyed by your department to garner their feedback with
respect to their experience and opportunities to improve service
delivery from their perspective?

Mr. Hattori: Thank you. This is one of those areas that we as a
social services system need to improve upon. We do not have any
regularized surveying of service recipients. However, I will say
this. In the last year what we did undertake was a very specific
youth engagement for those young people who are part of our
system. We've gathered that information, the voice of the youth.
Are you going to be using that information, to your point, to be
directional in terms of policy, practice, and any potential legislative
changes that may be contemplated in the future?

Mr. Gotfried: Okay. That was a question from earlier here that I
had skipped over.
Do you have any other sort of embedded committees or even
arm's-length representative committee groups made up primarily of
indigenous members of the public to provide feedback or support
for your indigenous initiatives or feedback in terms of what you're
looking at doing before you embark upon it?

Ms Bouwsema: I'm going to ask Ms Iatridis to answer that.

PA-340 Public Accounts February 28, 2017

Ms Iatridis: One of the advisory groups that we have is our Elders'
Wisdom Circle. They actually don't represent a specific treaty area.
At the elders' request, they wanted to be a body based on their past
backgrounds and their location. So what we tried to do is to have a
representative group of elders from across the province. They're not
an appointed body; they're an informal body. But they are a
valuable body for the work that we do in that they provide us with
advice. Right now the focus has been on advising us around cultural
understanding and training, but we also received a lot of great
advice from the elders on the work around the development of
youth suicide strategy. Other areas of the ministry are able to
request appointments to meet with the Elders' Wisdom Circle if
they need advice in other areas.

Mr. Gotfried: I'm glad to hear that. In your estimation, is that working
well enough to leave it as is, or does it need to be formalized

Ms Iatridis: I believe it's working well for us. One of the other
areas that we talked about in the ministry was maybe having some
youth representatives as well on that to expand on the type of
feedback that we are receiving. We also in my area champion the
indigenous interns through our human resources program. Our
ministry has currently approximately 10 interns that also sit with
the elders. They're mentored, but they also have great feedback to

Mr. Gotfried: Excellent. That's very positive.
I'm going to turn to something maybe a little bit more negative
here. In the July 2016 Auditor General's report one of the three
areas that they focused on was early support programs. Between
April 1, 2014, and December 31, 2016, 32 of the 73 deaths occurred
at the initial intake-assessment phase, which suggests that the initial
assessment was underestimating the severity of some of the
children's situations or the propensity towards fatal outcomes. Is
the department working to develop processes or reporting around
the risk of preventable fatalities so that we can properly assess the
size and scope of this problem?

Ms Bouwsema: I'm going to start the answer to that question, and
then I'll turn it to Mr. Hattori for additional comments. Absolutely,
just like in the health care system, when something happens, there's
always an internal review process, not to find fault, but from a
systemic perspective, where are there gaps in the system, right?
Yes, we do that as well, but that's the role of the statutory director,
to look at all those deaths.
I'm going to turn it to Mr. Hattori now.

Mr. Hattori: Yes. Certainly, what is going on right now in terms
of the panel work would be to take a more in-depth look at that
particular question. I would like to say, however, that in preliminary
analysis of that data – and that's available – some of the reasons
why we were involved at that stage were as a direct consequence of
an injury. Then we took status, so then it becomes reportable. It's
not as clear-cut as saying: we had involvement, and then the child
died. We took involvement sometimes as a consequence of an

Mr. Gotfried: It's already a critical situation, then.

Mr. Hattori: Right.

Mr. Gotfried: Great. Thank you very much, Mr. Hattori.

The Chair: Thank you, Mr. Gotfried. Our final rotation will be three
minutes each for the parties. If we
can have Mr. Hanson. Are you ready to take your rotation?

Mr. Hanson: Yes, I am. Thank you, Chair. Due to the time
constraints I'd be happy to get a written response to these questions.
They're in regard to the databases and how they're used. The
department appears to use a number of databases for input of information
from caseworkers as well as office staff. What is the name
of your main database? What are the other databases accessible to
your caseworkers, and are they or may they be outdated? Do you
transfer and amalgamate the information, and if not, why not? Why
do you not change to just a single data source?

The Chair: Mr. Hanson, we do have time for written responses at
the end, so if we can let you use your time for back and forth, that
would be great.

Mr. Hanson: Okay. Thank you.

Ms Bouwsema: Thank you for that question. I'm going to have Mr.
Hattori respond to your question on databases.

Mr. Hattori: We do have one main database for casework. That is
a case management system, that is utilized by caseworkers to
support their movement or their practice through IT infrastructure.
As an example, when an intake comes in, then those events are
registered in the system, and it does flag checks and balances
towards actions that need to be taken by a caseworker at any given
point in time.
What you're seeing in terms of the new innovation that we talked
about in terms of real-time reporting is a separate database. We are
looking at how some of these systems can integrate and talk to each
other so that there aren't multiple entries into many databases. Just
for your information, the real-time information is not a database that
caseworkers have to enter into. That is tracked by us through the
main child intervention database.
I didn't catch all of the questions. I think there was a series of
them there.

Mr. Hanson: Yeah. It was more about, you know, collaborating
any entries into any specific databases. I guess the number one thing
that we're looking at, both from the AG's report and the Child and
Youth Advocate's report, is how often contact is made and how it's
being recorded and reported if there are any problems that are found
during that visit. I think that looking back, which is always easy,
it's pretty easy to see that if proper contact is made and proper
reporting is done, we might be able to alleviate some of the issues
and the deaths that have occurred. That is a major concern.

The Chair: Thank you.
If we can get a written response for that question as well.
If we can go to Ms Luff on the phone.

Ms Luff: Yeah. Thank you, Chair. You've spoken somewhat about,
you know, working with the federal government and the responsibility
of the federal government to provide funding. I know that
FCSS programs work really well in a lot of areas in my community,
but page 14 of the Auditor General's findings indicates that “there
are no FCSS programs operating on First Nations reserves.” I'm
just curious if you will be working with the federal government on
any sort of a plan to provide that type of service.

Ms Bouwsema: The FCSS programs fall under Community and
Social Services, not my ministry.

February 28, 2017 Public Accounts PA-341

Ms Luff: Okay. Do you know if there will be any sort of crossministry
work to address that issue?

Ms Bouwsema: I would say yes because we've been working very
closely with them on a number of issues, and that won't change.
Equally important is the integrated service delivery that the former
ministry of human services has worked very hard on so that, you
know, Albertans have one point of contact. I just can't speak to what
kind of negotiation they might be having with the federal government.

Ms Luff: For sure. Thanks.
I just have, I guess, some more broad questions. I'm just curious
about how programming is balanced between early support services
and child intervention. On page 15 of the AG's report it notes that
“early supports are valuable in keeping children safely with their
families and communities.” So, very broadly speaking, do you feel
that we're putting enough emphasis on upstream supports?

Ms Bouwsema: There's no doubt that here, as in the health system,
it would be best to prevent people from using any of the services to
begin with. So from that perspective, I guess my answer would be,
“No, we're not putting enough into it,” because in both of those
systems we still have lots of people using the services. However,
from the perspective of the funding that's available, we do pay
attention to what brings people in contact with our system to begin
with, and we do adjust what services are being provided to meet
those needs. Sometimes we don't have the opportunity to do any
prevention, as Mr. Hattori mentioned. Sometimes our first contact
with people is because of an accident, and it's already a family in
crisis, so then you're dealing with the effects of that rather than
before the crisis happened. We do pay attention to how we interact
with people and what stage they are at, and then we try to tailor our
programs accordingly. [A timer sounded]

Ms Luff: Okay. Thank you.

The Chair: Perfect timing. Thank you, Ms Luff.
If we could go to Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair. I'm going to ask a question
because I don't actually have a full understanding, and it relates
somewhat to my last question about preventable deaths. There is
some classification of preventable versus nonpreventable deaths,
and I would assume that the nonpreventable ones are those that we
really have had no opportunity to intervene on. Can you maybe just
explain how that classification works?

Ms Bouwsema: Again, I'll start, but then I'm going to turn it over
to Mr. Hattori. Nonpreventable deaths can also be kids who are
medically fragile – right? – who were born with a birth defect or
something that medicine can't cure.
I'm going to pass it on to Mr. Hattori to provide you with some
more details.

Mr. Gotfried: Okay. Thank you.

Mr. Hattori: Thank you. Again, this is a complex question that
seems simple. Just for the committee's context, the classification
system that's used in the child intervention system relative to deaths
is one that we have borrowed or utilized from the office of the Chief
Medical Examiner, so because of the profile of the unfortunate
pediatric deaths, they generally fall out in the same sort of general
categories as the general population. Consequently, you know,
accidents, health, et cetera, are some of the primary reasons why a
child may pass, whether it's in the general population or within our
system. When we're talking about preventable deaths, we do talk
about that from the general population perspective. However, when
we do internal reviews of circumstances of cases in our system, the
types of preventable variables that we're looking at are policy
practice, legislation compliance, so that takes a little bit of a
different nuance to that broader question.

Mr. Gotfried: Right. So there might be a different risk profile in
some of these that may be looked at somewhat differently.
You mentioned a little bit earlier, again, about the early support
programs, and I think that that's something we all understand,
whether it's in health care or in child services, as something that we
would like to see more emphasis and effort put into to reduce the
burden, I guess, on the more acute services required. Do you feel
that you have adequate resources at this point in time, from what
you're able to do, to do those early support programs, or is that a
challenge because of the acute problem that we have, which is from
our lack of diligence in that area in the past?

Ms Bouwsema: You know, I think there's always that push-pull
between where do you put your money . . .

The Chair: Thank you. If we can get a response to that question in
writing.Now I'd like to open the floor up to anybody that has questions
that they would like answered in writing.

Mr. Hanson: I'll take one more, Mr. Chair.

The Chair: Proceed, Mr. Hanson.

Mr. Hanson: Thank you, Chair, and thank you, everybody that's
taking part today. Hopefully, I'm clear over the phone. I'd like to
get back to collaboration, which I think is very, very important,
especially in respect of Jordan's principle. What I would like, as
more of a recommendation than a question, is collaboration between
the federal government, the provincial government, the First Nation
leaders and elders, getting together on a regular basis to address
some of these issues. I think that if you have all of the parties at the
table in an open discussion, you may be able to resolve some of the
issues that seem to be ongoing and have been ongoing for years and
years.Thank you.

The Chair: Do we have another question for the record?
It appears that we are done with the written response portion.
I'd like to thank the officials from the Ministry of Children's
Services for attending today and responding to the committee members'
questions. We ask that responses to the outstanding questions
from today's meeting be provided in writing and forwarded to the
committee clerk within 30 days.
This committee is now adjourned for the lunch break. Members
will be meeting at 12:45 in the Grassland Room for a briefing, and
we'll return to the record in this room at 1:30 to hear from the
Ministry of Infrastructure.
Thank you for your time.

[The committee adjourned from 12:08 p.m. to 1:30 p.m.]

The Chair: Thank you. I'd like to welcome our guests from the
Ministry of Infrastructure. My name is Scott Cyr, the MLA for
Bonnyville-Cold Lake, and I am the chair of the Public Accounts
Committee.I'd like to ask the members, staff, and guests joining the
committee at the table to introduce themselves for the record, and

PA-342 Public Accounts February 28, 2017

then I will go to the members on the phone lines. Starting from my

Mrs. Littlewood: Jessica Littlewood, MLA representing Fort
Saskatchewan-Vegreville, acting deputy chair, substituting for the
hon. Shaye Anderson.

Ms Miller: Barb Miller, MLA, Red Deer-South.

Mr. Dach: Lorne Dach, MLA, Edmonton-McClung.

Dr. Turner: Bob Turner, Edmonton-Whitemud.

Ms Renaud: Marie Renaud, St. Albert.

Mr. Gotfried: Richard Gotfried, Calgary-Fish Creek.

Mr. Roth: Roy Roth, executive director, learning facilities, Alberta

Ms McCann: Faye McCann, senior financial officer, Infrastructure.

Ms Flint: Shannon Flint, deputy minister, Infrastructure.

Mr. Breakwell: Dave Breakwell, assistant deputy minister of
corporate strategies and services at Infrastructure.

Mr. Arklie: Graeme Arklie, principal with the Auditor General's

Mr. Saher: Merwan Saher, Auditor General.

Mr. Taylor: Wes Taylor, MLA, Battle River-Wainwright.

Mr. Fildebrandt: Derek Fildebrandt, Strathmore-Brooks.

Mr. Panda: Prasad Panda, Calgary-Foothills.

Dr. Massolin: Good afternoon. Philip Massolin, manager of
research and committee services.

Mrs. Sawchuk: Karen Sawchuk, committee clerk.

The Chair: I'd also like to welcome the members that are teleconferencing.
Mr. Barnes, Member Cortes-Vargas, Ms Luff,
Member McPherson, Mr. Malkinson, and Mr. Fraser, if you could
introduce yourselves on the phone.

Mr. Barnes: Drew Barnes, MLA, Cypress-Medicine Hat.

Mr. Malkinson: Brian Malkinson, MLA, Calgary-Currie.

Cortes-Vargas: Estefania Cortes-Vargas, MLA for StrathconaSherwood

Ms Luff: Robyn Luff, MLA for Calgary-East.

Ms McPherson: Karen McPherson, MLA for Calgary-MackayNose

Mr. Fraser: Rick Fraser, Calgary-South East.

The Chair: Thank you.
Members should have the research report prepared by research
services, the Auditor General briefing document as well as an
updated status of Auditor General recommendations document
completed and submitted by the Ministry of Infrastructure.
I'd like to invite our officials from Infrastructure to provide
opening remarks not exceeding 10 minutes. Ms Flint: Thank you, Mr.
Chairman, and good afternoon. In
addition to the staff joining me at the table, I'd like to just mention
that there are several department staff sitting behind me that I may
call upon to answer some of the questions: Dave Bentley, assistant
deputy minister of properties; Alan Humphries, interim assistant
deputy minister, health and government facilities; Neil McFarlane,
executive director, government facilities; Leonid Oukrainski,
executive director, property management; and Jessica Lucenko, our
director of communications.
Alberta Infrastructure works closely with partner ministries like
Alberta Education and Alberta Health and stakeholders such as
school jurisdictions and Alberta Health Services to ensure that
families and communities have access to the modern, efficient
facilities they need. Infrastructure is held responsible for leading the
development of the government's capital plan and is also
responsible for maintaining and preserving government-owned and
-leased properties in an efficient, safe, and sustainable manner.
There are some key activities and achievements for 2015-16 that
I'd like to highlight for the committee. Infrastructure has been
working closely with our partner ministries and continues to make
progress on our outstanding recommendations from the office of
the Auditor General. Our efforts are improving the process to
evaluate and prioritize Infrastructure projects. This includes a
redesign of our capital plan process, which saw us implement
improvements such as revised submission templates, clear
stakeholder communication, additional time for review and analysis
of submissions, and setting clear, evidence-based criteria when
choosing projects for the Budget 2016 annual capital planning
process.Through the capital plan process redesign we've also established
a minister's capital committee, whose role is to review capital plan
submissions prior to the Treasury Board committee and cabinet
review and approval. The addition of this step supports our ongoing
efforts to provide the Treasury Board committee and cabinet with
relevant information that in turn ensures better informed decisions
on capital plan approvals. As part of the capital planning process,
ministries must identify and prioritize their capital maintenance and
renewal needs.
Infrastructure has been working with ministries to provide
consistent definitions for identifying these needs while also seeking
input for improving existing systems. This includes undertaking a
third-party review, a facility evaluation, auditing, and reporting
processes. Also, we have developed an asset management framework
that enables a corporate approach to asset life cycle management by
including, for example, components identifying core buildings to
government and addressing underutilization in these buildings. This
helps ensure that public infrastructure assets are properly
maintained over their lifetime. In addition, through Budget 2016
government increased the amount it will invest annually on
maintenance and renewal of public infrastructure assets.
Alberta Infrastructure works with other ministries and stakeholders
to provide the infrastructure needed to support delivery of
government programs and for maintaining and operating that
infrastructure. Looking at the hundreds of projects under way on
Infrastructure's capital side, construction of a number of notable
facilities was completed. For example, we handed over six health
facility projects to Alberta Health Services, including Edson health
care centre's acute care building; the Raymond health centre and
Taber health centre redevelopments; two renovation projects in
Calgary, the lab services in the Foothills medical centre and
vascular surgery in the Peter Lougheed Centre; and the redevelopment
of Lethbridge Chinook regional hospital, which we handed
over two months early. I'm pleased to say that in 2016 we opened
the door to 54 modernized or new schools, benefiting thousands of

February 28, 2017 Public Accounts PA-343

Alberta students throughout the province. Construction of the new
Royal Alberta Museum in downtown Edmonton continues to
progress. In fact, we celebrated a construction completion milestone
in August 2016, meaning that work could begin inside the
building to outfit the museum's galleries and exhibits while minor
finishing work continues both inside and outside the facility.
We also continue to actively engage in work to increase the
sustainability of new and existing buildings and processes. This
includes continuing our commitment towards furthering our green
infrastructure practices and processes. Supporting Alberta's climate
change leadership plan, we focused on increasing the energy
efficiency of government buildings. For instance, we expanded our
use of wind and solar power on both new and existing governmentowned
and -supported facilities such as the Pincher Creek
Provincial Building, where we increased its solar energy capacity
from three kilowatts to 13 kilowatts.
Infrastructure also continued to modernize its procurement
processes, looking for ways to increase efficiencies. An achievement
of note in this regard is that we decreased the time required to
select and retain third-party providers by prequalifying them for
recurring services of low complexity and risk.
This concludes the 2015-16 highlights and activities for Infrastructure.
On behalf of my team, thank you. I'd be happy to answer
questions from the committee.

The Chair: Thank you very much for that.
I'd like to turn it over to the Auditor General for his comments
now. Mr. Saher, you have five minutes.

Mr. Saher: Thank you, Mr. Chairman. I can give those five
minutes right back to the committee. I don't have any opening

The Chair: Thank you, Mr. Saher.
We're following the time allotment format for questions from
committee members adjusted for an hour and a quarter time slot.
The first rotation will be 10 minutes each, starting with the
opposition and government members, and then seven minutes for
the third-party opposition. Our second rotation will be six minutes
for each of these parties. With the agreement of the committee any
time remaining will be distributed equally among the three parties.
I will now open the floor to questions from members. I would
like to note that at the very end of this meeting we will have one to
two minutes' time designated for outstanding questions to be read
into the record for written responses.
Mr. Taylor, if you'd start.

Mr. Taylor: Thank you, Chair, and thank you to the committee for
coming out. On page 19 of the annual report there's a nice graph
which talks about the condition of the health facilities. It appears
that in 2014 and 2015 only 1 per cent of the health facilities were in
poor condition. In 2015-16 the target for health facilities in poor
condition was 2 per cent. Can you tell me why you plan to double
the number of poor hospitals?

Ms Flint: For a facility to be considered in poor condition, the
building must have substantial issues across several areas, all floor
wings, not just one, and several components, for instance,
mechanical or electrical. Capital maintenance and renewal funding
through the infrastructure maintenance program is provided to
Alberta Health Services on an annual basis to maintain the physical
condition of eligible facilities. Alberta Health Services develops
their maintenance priorities independently based on the need in
each zone. While these priorities do consider facility conditions, Alberta
Health Services also considers a number of other factors,
including how busy facilities are and how well they serve their
intended use. The infrastructure maintenance program is used to
fund maintenance projects such as the replacement of floors and
roofs and emergency generators.

Mr. Taylor: Thank you for that. So why have we gone from 1 to 2
per cent? It just seems to me that you've doubled it.

Ms Flint: Yes. The following is a list of 12 facilities included in
poor physical condition. Alberta Health Services has looked at this
and included several more facilities that have increased the
reference point, going from where you mentioned to increasing it.
They've done their assessment in terms of looking at the buildings
and included 12 facilities in the poor physical condition category.
Would you like me to read them off?

Mr. Taylor: Yes.

Ms Flint: One is the Calgary Foothills medical centre power plant;
Camrose, the atrium building and new ward; the Edmonton CapitalCare
Norwood north continuing care; Edmonton, Misericordia
service building; Edmonton, the Alberta Hospital Edmonton in
terms of building 6 in, specifically, the laundry; Edmonton, the
Alberta Hospital Edmonton building 18, the power plant; Elnora,
the Elnora community health centre; Medicine Hat, Medicine Hat
community health services; Ponoka, Ponoka Centennial Centre for
Mental Health and Brain Injury laundry building and material
management centre; Smoky Lake, the Smoky Lake continuing care
centre; St. Albert, the St. Albert public health centre; and Trochu,
the St. Mary's health care centre.

Mr. Taylor: Does that mean you're not repairing the Royal
Alexandra, Misericordia hospitals any time soon?

Ms Flint: This is based on the 2015-16 annual report. There is the
capital plan that is coming out in '17-18.

Mr. Taylor: Okay. On page 14 of the annual report it says that $578
million was budgeted for capital expenditures in health facilities
and that $533 million was spent. That's a difference of $44 million.
What accounted for that lapse?

Ms Flint: Sorry. Could you repeat the page number?

Mr. Taylor: That would be page 14 of the annual report, please.

Ms Flint: I am just trying to look for that. Sorry. Could you repeat
the question?

Mr. Taylor: Yeah. On page 14 of the annual report it says that $578
million was budgeted for capital expenditures in health facilities
and $533 million was spent. That is a difference of $44 million.
What accounted for the lapse?

Ms Flint: Perhaps I can turn to Alan Humphries to respond to that

Mr. Humphries: Thank you. If you also turn to page 36 of the
Ministry of Infrastructure statement of operations, you'll see the
same numbers there.

Mr. Taylor: Excuse me. Can you talk into the mike, please?

Mr. Humphries: Sorry.

Mr. Taylor: Thank you very much.

PA-344 Public Accounts February 28, 2017

Mr. Humphries: Is that better?
The same number also appears on page 36 of the Ministry of
Infrastructure statement of operations, health facility support;
$585,691,000 and $547,658,00 is the actual compared to the
budget. There was a $38 million underexpenditure due to $45.3
million being reprofiled for future years as a result of scheduling
and cash changes at Strathcona community hospital; Edson health
care facility; South Health Campus in Calgary; Fort McMurray
continuing care, which we know was moved from Parsons Creek
down to the new site in the townsite of Fort McMurray; the
Foothills medical centre; and the Kaye Edmonton clinic. That was
partially offset by additional spending on the Fort McMurray
continuing care project due to the relocation, where we had to pay
out $6 million for contract termination costs.

Mr. Taylor: So will this carry forward to next year's budget?

Mr. Humphries: Yes. Those monies were just reprofiled due to the
various construction schedules.

Mr. Taylor: Okay. Thank you.
The graph on page 19 of the annual report: is it true that the facility
condition rating you are using was ushered in by the former government?
How would this rating system compare with other provinces?

Mr. Breakwell: The facility condition index and rating system has
certainly been in place for a number of years. It's continued on. We
have certainly been doing a lot of work looking at that facility
condition index as well as at how it's been calculated. We have
found, in looking at other jurisdictions across Canada, that there is
no common methodology on how it's being described or actually
even on how it's being calculated by those jurisdictions. We've had
a third party look into the calculation methodology. We've also had
the Auditor General in some of the work they're currently doing
around the capital plan look at that information as well.

Mr. Taylor: Okay. Thank you.
On page 11 of the annual report it states: “In March 2016, the
focus shifted from exploring Public Private Partnership (P3)
opportunities to seeking other innovative ways to deliver infrastructure.”
Since it's almost been a year since this report was
published, would you please tell us what the plan going forward
will be? What other opportunities did the strategic partnership
office find, and what results has the office brought the ministry?

Ms Flint: One of the things that we have done is that research was
undertaken to determine if the P3 model gives value to government
in the development of major projects. At this time we're not
proceeding with new P3s. Existing government P3 projects such as
the southwest ring road in Calgary will continue as P3s. We have
an obligation to review all types of alternative procurement
approaches to ensure that we're getting the best deal both in the
short term and in the long term for taxpayers. Often P3s are a
process which reduce costs at the front end and increase costs down
the road and are more expensive for taxpayers.

Mr. Taylor: Is that what you found? Is that what the strategic
partnership office found, that they're not cost-effective?

Ms Flint: That is one of things that we continue to look at, but that's
one of the things that we found. In the long term we are looking at
just making sure that we're getting the best value for taxpayers and
the investment that's made in infrastructure dollars.

Mr. Taylor: On page 53 of the annual report the ministry said that
it had received only $398,000 from the federal government for
infrastructure support. Meanwhile Alberta received close to $700
million last year through the provincial-territorial infrastructure
fund. Can you explain why the provincial-territorial infrastructure
fund is not included in this amount?

Ms Flint: Yes. David will.

Mr. Breakwell: Certainly, we've been working with the federal
government to put forward the projects to account for that $700
million that you've talked about. Those projects have all gone
forward since March 2016 for the federal government to approve
the specific projects. We expect to be receiving that money for those
projects shortly. We have actually had just over $200 million of
those projects approved to date, and we've put in specific projects
for them to approve and give us the go-ahead for the other remaining

Mr. Taylor: You've spent $200 million?

The Chair: Thank you, Mr. Taylor.
Member McPherson, are you available?

Ms McPherson: Thank you, Mr. Chair. Yeah, I'm here. Thank you
to the members of the ministry that are here with us today. On page
15 of the annual report it says that “Infrastructure works with
Alberta Education and school boards [on] . . . school projects.”
What is the status of the 200 school projects identified in the annual

Ms Flint: Of the 200 school projects under way in 2015-16 five
projects were completed during the 2015-16 fiscal year. We expect
79 more projects to be completed and occupied by March 31, 2017.
An additional 69 projects are expected to be occupied by March 31,
2018, and 47 projects will be occupied in 2018-19 and beyond.

Ms McPherson: Great. Thanks very much.
What kinds of innovations were employed to make these leadingedge
projects in terms of green infrastructure and supporting the
climate leadership plan? It kind of ties into your overview of solar
highlights from earlier.

Ms Flint: Right. Today all new and replacement school projects
have been seeking leadership in energy and environmental design,
which we call or is commonly referred to as LEED silver certification.
LEED is a rating system that is an internationally recognized
benchmark for green building and sustainability. The certification
process is conducted through the Canada Green Building Council,
which is a third-party, not-for-profit national organization that was
established to advance green building and sustainable community
development practices in Canada.
In addition to meeting the minimum LEED silver points
mandated by the Green Building Council, school designs are also
required to achieve a minimum of 11 points associated with
optimizing energy performance. Although school modernization
projects do not typically target LEED certification, similar best
practices are still followed and sustainability is incorporated
wherever possible. Additionally, Alberta Education recently
approved the implementation of a solar technology initiative that
will see a solar technology system incorporated into new school

Ms McPherson: Thank you. That sounds really exciting.
I want to move on to the Grande Prairie regional hospital. I know
that this is really important to people in the area. I'm wondering
what the status of the regional hospital project is.

February 28, 2017 Public Accounts PA-345

Ms Flint: The Grande Prairie regional hospital is under construction
and is expected to be completed in 2019. When completed, the
hospital will provide a wide range of health care services, including
surgery, cancer care, and emergency services, to meet the needs of
the community now and in the future.

Ms McPherson: I understand that there may have been some
delays in the project. Is that right?

Ms Flint: Right. Some of the rationale for what's caused delays in
this project is that the project was announced before planning was
completed and a realistic scope, budget, and schedule were
established. This resulted in cost and schedule pressures. In
addition, what we saw was a high volume of construction activity
in Alberta in 2013, which made it challenging to attract construction
crews, especially for projects outside of Edmonton and Calgary.
Major redesign and retendering of key work packages were
required to reduce the cost. Mitigation strategies to deal with the
cost pressures extended the project schedule by up to two years but
resulted in reducing project cost pressures. Mitigation strategies
that the department employed included shelling some space for
future redevelopment, deferring renovations to the Queen Elizabeth
II hospital, and initiating a document co-ordination and redesign
initiative to simplify the design of the building interiors.

Ms McPherson: Super. Thank you.
Moving on to page 24, what initiatives have been completed to
achieve savings in managing public assets?

Ms Flint: Infrastructure is executing its asset management strategies,
which allow the ministry to continue to meet program needs while
realizing cost savings. To accomplish this, Infrastructure has
disposed of or listed 25 properties in 2016-17 and initiated a major
redevelopment project that will allow Infrastructure to move 550
provincial staff from leased to government-owned facilities.

Ms McPherson: Thank you.
I may have missed it. Did you say how much in savings was
realized from the initiatives?

Ms Flint: Infrastructure is on target to achieve the expected $1.1
million in savings in 2016-17 as a result of the overall management
of public assets.

Ms McPherson: Great. Thanks very much.
Why have inventories for resale on page 37 decreased from $98.8
million to $11.8 million when there have been no sales of land
inventory, as shown on page 36?

Ms Flint: Thank you. What happened was that a new accounting
presentation was adopted by ministries. This presentation change
split assets into financial and nonfinancial assets. So land
inventories for resale shown as financial are those that are expected
to be sold within the next fiscal year. If they are to be sold beyond
that, they're shown as nonfinancial.
The reason for the decrease in the land inventory categorized as
financial is due to a change in the timing of when lands were
estimated to be sold. With the downturn in the economy, sales
forecast in 2015-16 were pushed into future years. As a result, a lot
of the inventory was reclassified as nonfinancial.
Total inventories for resale, which are also on page 46, actually
increased from 2014 to 2015 as follows. In 2015 we had financial
assets of $11.8 billion; in 2014-15 those were $98.8 billion.
Nonfinancial assets in 2015-16 were $230 million and in 2014-15 were $133.
4 million. That equals a total of $241.9 million in assets
in 2015-16 and $232.2 million in 2014-15.
Faye, did you want to add anything to this?

Ms McCann: I just want to say that the land inventory did go up
because there were some additional land development activities that
took place, and then the estimate to complete the land developments
for the phases that have been approved increased. That was the
reason for the change.

Ms McPherson: Great. Thanks very much.
On page 51 it shows that there were no land sales in Parsons
Creek and no transfers under the land exchange agreement. Does
the land under development in Parsons Creek have any value now
that the market conditions have changed in the regional
municipality of Wood Buffalo?

Ms Flint: As part of the year-end processes the value of the land
under development is reviewed to determine if the cost to develop
the land will at least be recovered through expected sales. The
Auditor General audits this evaluation as part of their audit of the
annual financial statements, and Infrastructure still expects to
recover all of its investment in land development in Parsons Creek.

Ms McPherson: Okay. What is the plan for the remaining land

Ms Flint: Alberta Infrastructure will continue to hold the land
inventory and sell parcels as market conditions allow the ministry
to recover its investment in the land development. The regional
municipality of Wood Buffalo has requested to purchase a parcel of
land in Parsons Creek for a fire hall. This supports commercial
development on a parcel previously transferred to the municipality.

Ms McPherson: Okay. Thanks very much.
If we take a look at page 56, why was the health facilities
operating expense spending over budget by $7.3 million?

Ms Flint: Thank you. The $7.3 million overexpenditure is
primarily due to $7 million in payments made on the Fort
McMurray continuing care centre project after the project was
relocated to Willow Square from Parsons Creek. It went from
Parsons Creek to a site downtown in Fort McMurray. Of the $7
million approximately $6 million was for contract termination
costs, and the balance was for payments made for construction work
completed on the Parsons Creek site prior to the relocation

The Chair: Thank you, Member McPherson. Your time allotment
has passed.

Ms McPherson: That's great. Thank you.

The Chair: We will move to Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair, and thank you to our guests
here today as well for being here. Just with respect to the FCI can
you outline for us how the FCI is used to evaluate the condition of
government buildings? Can you outline the percentage of government
assets which were in good or fair condition? Is the number of
buildings in good condition increasing or decreasing?

Ms Flint: I'm going to call on Dave Bentley to respond to this
question. Maybe I'll start while he gets up to the mike. Infrastructure
receives funding for capital maintenance and renewal for
government-owned and health facilities. For government-owned

PA-346 Public Accounts February 28, 2017

facilities the facility condition index is used as an indicator of
changes in building portfolio conditions, so that changes year over
year. Deferred maintenance, which is considered in determining the
facility condition index, is one of a number of factors used in
prioritizing maintenance for government-owned buildings. Other
factors that are considered include the core building rating, the
building prime location and function, and the criticality of the
component actually requiring replacement.
For health facilities Infrastructure provides capital maintenance
and renewable funding to Alberta Health Services. Alberta Health
Services then makes choices in terms of using what they need to
inform their maintenance planning and prioritize decisions.
Maintenance funding for health facilities is based on Alberta Health
Services' priorities. While these priorities do consider facility
conditions, as I mentioned previously, they also look at a number
of other facilities such as: how busy is the facility, and how well are
they served for their intended use, for instance, in utilization and
functionality? Consideration of the facility index and other factors
is used to help ensure that a facility maintains its fair to good rating
over time.
Dave, I don't know if you wanted to add anything.

Mr. Bentley: Sure. Part of the question was sort of: for government
facilities what's the overall trend? As was reported, we've generally
seen a movement from good, so 75 per cent were listed as good in
'14-15 and 73 per cent were listed as good in '15-16. We're
anticipating that with the capital plan that's been announced so far,
the reinvestment in our existing buildings will continue to increase
over the years, and as new facilities come online as well, we'll see
an actual increase or improvement in the condition of our facilities.

Mr. Gotfried: Thank you. Another question, then, my guess would
be around – the committee research services team informed us that
there is no consistent definition of deferred maintenance used by
the department. Can you explain to us what definition you use and
if this is consistent across all government departments and physical

Mr. Breakwell: The one that Infrastructure uses is certainly
maintenance that should have been done at the point in time that it
was planned to be done as well as those that are planned to be done
over the next three years. Certainly, we have found, in looking at
the deferred maintenance, that other stakeholders may include
planned maintenance up to five years as well as what hasn't
happened. So one of the things that we are working on is to try to
get a common calculation methodology but also work with our
stakeholders so everyone is using the same methodology once we
get it in place.

Mr. Gotfried: Is there a qualitative analysis done on that? Obviously,
there's going to be some critical maintenance that could be
deferred, and then there's going to be some that's deferred which is
a bit more, I guess, discretionary. Maybe you could give me a better
sense of how you evaluate that.

Mr. Breakwell: Sure. That's the other piece that needs to be
brought in because when you look at the items that may be deferred,
it may be that at this point it's been planned that you should replace
the roof, but when you look at the roof, it doesn't necessarily need
to be replaced, so you may want to remove it from what you would
term as deferred maintenance. That type of quality evaluation needs
to occur. It is not occurring fully now.
The second is whether the facility is actually meeting its
functional and utilization needs as well. That needs to be brought
in. I think some of the review that we had from the third party has
brought all that forward, and we need to bring that to all of our
stakeholders as well.

Mr. Gotfried: Okay. When you've got deferred maintenance, if it's
gone on for a number of years, do you adjust the asset value of that
facility to reflect that, I guess, deficit in terms of the balance sheet?

Mr. Breakwell: Yes, certainly. What you evaluate is what that
asset value is, what the replacement value of that particular facility
is. Actually, the facility condition index is taking that deferred
maintenance number and dividing it by the replacement value, and
that percentage determines whether it's poor, fair, or good. So yes,
it does impact that, and actually what we have found when we've
looked across the country is that the real value or how it really
should be applied is that it just changes the amortization of a
particular facility as opposed to a reflection of how well you've
maintained it.

Mr. Gotfried: Okay. Thank you. Also, there is reference to plans
to release an infrastructure sunshine list by this government. Could
you tell us the status of that sunshine list for infrastructure?

Ms Flint: When we released the 2016-17 budget, there was an
unfunded list attached to that budget. Is that the list that you're
referring to?

Mr. Gotfried: Yeah, I think that's it.

Ms Flint: That was released as part of the '16-17 budget document.

Mr. Gotfried: Okay. And there are plans to continually update that
as required and as the status changes?

Ms Flint: As far as I know, yes.

Mr. Gotfried: Okay. That's very helpful. Thank you.
Just with respect to infrastructure, you know, obviously, you
want to avoid political interference with the best practices of
building infrastructure, and given the current economic situation
and the importance of getting dollars to work as quickly as possible
for not just shovel ready but, I would say, viable long-term projects,
have you been able to identify those projects which are both shovel
ready and viable long-term projects to get to construction as quickly
as possible? I mean, it seems that there are lots of projects that we
continually hear about, but we're not seeing dollars getting out into
the community and into the businesses. There have been some
instances, actually, of businesses closing down because of a lack of
us moving forward with some of the larger infrastructure projects.

Ms Flint: Perhaps I'll address that. One of the things that we have
done . . .

The Chair: Thank you. If you wouldn't mind responding to that in

Mr. Gotfried: I'll continue it on in my next cycle.

The Chair: Fair enough.
Mr. Panda, are you ready to go?

Mr. Panda: Yeah. Thank you, Mr. Chair. My question is to the
deputy minister's team. On page 15 of the annual report the ministry
mentioned that it has set aside some money to start the construction
of the Calgary cancer centre. When can we expect shovels in the
ground? Has the ministry identified any areas that would delay the
construction or the operation of this project?

February 28, 2017 Public Accounts PA-347

Ms Flint: To construct a new facility to accommodate comprehensive
cancer care services for southern Alberta that would
include in-patient and outpatient clinics, research laboratories, have
radiation treatment and related support services – the new cancer
site, as we announced, will be built at the Foothills medical centre
campus at lot 7 of the site if you're familiar with the site. When
completed, we actually expect it will deliver comprehensive cancer
care, education, and research in Calgary.
In late October we did release the request for proposal for the
design and construction of the cancer centre. The next significant
project milestone will be to award the contract and announcement
of the successful proponent mid-2017, and construction is expected
to begin in late 2017. Budget 2016 allocated $1.2 billion over five
years for the planning, design, and construction of the cancer centre.

Mr. Panda: You said “$1.2 billion” for five years. Thank you.
How much is it for this year? In the last report I read, it was $830
million that was allotted in 2015, but now you are saying $1.2
billion. When can we expect a public update on the status of the
cancer centre? Also, has the ministry identified any cost savings in
the build of this cancer centre?

Ms Flint: Right. What we're going through right now is the request
for proposal for the design and construction, and at that point we
will have a more robust number in terms of what we're looking at.
Because the Calgary cancer centre project will be opening beyond
the five years, that's why you don't see necessarily the full buildout
of it.
Alan, did you want to add anything else?

Mr. Humphries: I'd just like to add that the project remains on
schedule. Demolition of the existing parkade on lot 1 is taking place
right now in replacement with a new parkade, which helps us decant
parking during construction of the new facility. We're on schedule
to be open in 2024. We are on schedule to receive the bids from the
design-build proponents later this spring. As the deputy minister
just announced, I'll just mention that with the announcement of the
successful proponent coming shortly thereafter, we do expect
construction to start this fall.

Mr. Panda: Excuse me. I don't want you to repeat what she said.
She said that it's going to start late 2017, and you're saying that it
will be completed by 2024.

Mr. Humphries: It will be operational in 2024.

Mr. Panda: So it will be a seven-year construction project?

Mr. Humphries: Well, we're expecting five to six years, but then
you have to fit it out as well, so that includes installing all of the
equipment and actually operationalizing the facility.

Mr. Panda: Okay. Thank you.
I also have another question about another important city, Fort
McMurray. That's the only major city in Alberta without a longterm
care centre. As you all know, Fort Mac is not the kind of flyin,
fly-out work camp that gets to be milked by everyone in the
country. When can we expect to see ground be broken on this
important project?

Ms Flint: One of the things that we are moving forward on is a
residential facility base care centre in Willow Square. An RFP for
a master plan and bridging consultant was issued in February 2017.
That's an important first step in a series of activities over the
coming months. We will be moving forward with site investigative work this
spring for the development of a design-build RFP, with
the successful proponent selected by the end of this year, so you'll
see some activity actually happening on the site this spring.
We are actually working with the stakeholders in the region to
make sure that we have a facility that works because there are others
facilities that the regional municipality of Wood Buffalo is also
interested in putting on that site, so we're trying to make sure that
we have a master plan that works both for the continuing care
facility as well as for some of the other seniors' services that the
regional municipality of Wood Buffalo wants to offer.

Mr. Panda: Can you give me specific completion dates of this

Ms Flint: Yeah. We're hoping to have it ready by 2019.

Mr. Panda: Thank you.
Deputy Minister, on page 53 there was some mention of the
amount of money the federal government disbursed for infrastructure
support. Where is it in your statements? How much is it,
and is it in Treasury Board and Finance's statement?

Mr. Breakwell: As far as the money coming from the new building
Canada fund, the $700 million that Mr. Taylor was referring to
earlier on . . . [A timer sounded].

The Chair: You can finish your answer if you've got 10 seconds
or less.

Mr. Breakwell: It does come to the general revenue fund for the
Treasury department. That's where that money would be recorded
because the facilities that it supports are not necessarily within
Infrastructure itself. In this case it's usually projects that are done
by Transportation, as far as roads, highways, and water/waste water
projects. It'll eventually be reflected in theirs, but it does come
directly to Treasury. It doesn't come into Infrastructure's books.

Mr. Panda: Thank you.

The Chair: Thank you, Mr. Panda.
Ms Miller.

Ms Miller: Thank you, Chair, and thank you to the ministry. On
line 5 of page 56 it shows that the property operations budget was
$9.1 million higher than it spent. Can you elaborate on why this
happened? If property operations cannot spend all of its budget, is
this not an indication that they don't need all the funding they've
been provided?

Ms Flint: Thank you. The $9.1 million lapse is primarily due to
lower than anticipated utilities costs due to lower than expected
rates and a milder winter resulting in reduced consumption and also
lower property operation costs as a result of reducing service levels
for activities such as frequency of building cleaning, snow removal,
and landscaping. It's sort of a double benefit when we have warmer
winters.With respect to the question about funding in terms of: if
operations cannot spend all of its budget, is this not an indication
that they don't need all the funding? While utilities costs make up
a large portion of the property operations budget, utilities costs can
vary widely, depending on usage and rates. In 2015-16 both usage
and rates were low, resulting in reduced costs. These conditions
may not exist every year.
Infrastructure manages its spending to stay within its budget.
When costs are lower in one area, the savings may be used to offset
higher costs in another area. In 2015-16 savings in the property

PA-348 Public Accounts February 28, 2017

operations budget were used to offset higher than expected lease
costs that we were experiencing. Infrastructure also reduced property
operation costs to levels that are below industry standards, and these
reduced levels can have impacts such as deterioration of government
buildings and increased frequency of equipment breakdowns.
So available funding could be allocated to improve service levels in
order to avoid some of those implications as we move forward.

Ms Miller: Thank you.
On page 57, line 3, of the annual report it shows that the
unexpended amount for the capital construction program is $180.4
million. What is the reason for that underexpenditure?

Ms Flint: The underexpenditure is primarily due to $147.9 million
in funding that was available to be allocated to government capital
priorities not being allocated in 2015-16 and 32 and a half million
dollars for changes in project scheduling and cash-flow requirements
for projects such as the Royal Alberta Museum and the courthouse
renewable program.

Ms Miller: Thank you.
Going back to page 56, line 8.1, of the annual report, it shows
that the unexpended amount for the floodway relocation program is
$36.5 million. What is the reason for that, and can you elaborate on
what Infrastructure has done in response to the Alberta flooding and
wildfire disasters?

Ms Flint: Sure. The underexpenditure is primarily due to slower
than anticipated progress on Drumheller flood relocation and
demolition work for the Calgary and Wallaceville homes. The
unexpected amount was reprofiled to future years to ensure planned
commitments under this program were being met.
For the 2013 Alberta flooding, Alberta Infrastructure was involved
in the following initiatives: providing accommodations for recovery
staff and recovering health facilities such as the Canmore hospital,
Holy Cross hospital, the High River mental health building, and the
Drumheller hospital. We worked with the Siksika Nation on a
cleanup of the Hidden Valley golf resort, recovering and rebuilding
government facilities such as the Sam Livingston Fish Hatchery and
the High River community resource centre. The floodway
relocation program, under which the province would acquire floodaffected
homes from owners to allow them to relocate, was an
example of some of the things that we did.
For the Fort McMurray wildfire infrastructure, we were involved
in providing warehouse space for donated goods, accommodating
recovery staff, and remediating sites where provincial buildings
were destroyed; for instance, the province lost a bunkhouse and a
ranger station.

Ms Miller: Thank you.
What is Infrastructure doing to ensure that all capital projects are
delivered on time and on budget?

Ms Flint: Thank you. Infrastructure has several processes to help
ensure projects are delivered on schedule and on budget.
Infrastructure, with its stakeholders, is doing more upfront planning
and issues management during implementation so that we identify
the risks and strategies to mitigate those risks. We conduct
feasibility studies and develop business cases to define scope,
market conditions, and life cycle costs for the project, and we assess
site readiness and suitability for the intended use, allowing for early
detection of additional costs prior to purchase of the property. For
instance, if we found that there was remediation work that had to
be done, if we do early site planning, we can detect that and build
that into the project as we move forward. Also, we're ensuring that any
impacts on milestones and
deliverables are managed with stakeholders through increased
communication as we move forward on any projects.

Ms Miller: Thank you.
Okay. Given that the Auditor General's recommendations on
capital planning have been outstanding since 2007, what is being
done to address these capital planning recommendations?

The Chair: If we could get a written response for that question, that
would be great. Thank you very much.
Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair. I just want to go back to my
prior line of questioning. I'm going to just put out a little
background. I spent about an hour and a half with a company called
Keystone Excavating in Calgary. It was a large excavating
company. They told me that one of the reasons that they have made
a decision to shut down their operations was because of the lack of
progress on some of the larger projects which they have the capacity
to undertake. It's certainly not the only reason but certainly one of
the big reasons. They referenced the cancer centre, they referenced
the ring road, and they referenced the green line in Calgary and said
that the slow progress on those and the promises that have been
taking place for anywhere from six to 18 months have caused a huge
problem for economically challenged companies, financially
challenged companies, particularly in the Calgary area.
My question, I guess, to you is really more from a high level:
what can your department do to get these projects moved ahead
more quickly so that we don't have companies actually deciding
that operations are no longer viable for them because there's not
enough work coming through in spite of significant promises of
how infrastructure spending is going to stimulate the economy?

Ms Flint: Thank you. Perhaps I'll just follow up with some
important things that we're putting in place. One of the things, as I
mentioned, is that during the project planning stage it's important
to actually undertake the correct planning as we move forward so
that we don't run into unintended consequences, because those
typically put us behind. During the project planning stage we are
evaluating sites prior to selection. This allows, as I said, for early
detection of additional costs. It also allows us to make sure that we
know what we're dealing with before we actually move out with a
build.During the design and construction stage we are developing
construction estimates throughout the design of the project. This
really does allow us to confirm that the design and our scope align
with the proposed budget or that it's modified where required and
to conduct risk assessments to identify project risk factors that may
impact construction costs. We're kind of looking at it from both
ways just to make sure that we have identified the risks and that we
are making sure that we can best manage them as we move forward
with respect to construction.

Mr. Gotfried: I appreciate the answer, but I think my concern here
is twofold. We are talking in many cases about infrastructure
spending being a stimulus to the economy when we most need it,
taking advantage of lower costs during this period of time, and,
again, the financial and economic stress that many of our large
construction-related companies are undertaking. It's very sad, of
course, for any of us to see a company choose to shut down because
of the lack of available work for them and the financial decision
that, actually, closure and complete shutdown of their business is
the right economic and financial decision for them to make.

February 28, 2017 Public Accounts PA-349

Let me just move on. I made reference to the sunshine list before.
Maybe I'll be a bit more specific. We have a sunshine list, but what
I was really more referencing is a prioritized one so that we can see
the evaluation that you have put into it with respect to readiness,
costs, status of commitment, investment in construction, and other
factors and so that we can hold this government accountable to not
only the list but to the prioritization of the list and the homework
that's done in achieving that prioritization, and then we can hold it
accountable in terms of actually getting those projects into the

Mr. Breakwell: I'll leave that question to be answered by Minister
Mason, but the decision of the government when we produced the
2016-17 plan was to do a listing in alphabetical order of those
projects as opposed to the priority ones. The question about
changing that I'll leave for the minister to address.

Mr. Gotfried: The alphabet can be an interesting thing sometimes.
It doesn't tell us a lot of information. It just stacks them accordingly.
One of my observations over the past year or so and as stated by
various ministers, specifically in this case the Minister of Seniors
and Housing, was their preference for government investment and
not to consider things like P3s or other forms of public-private and
nonprofit partnerships in various types of projects. While these
models are not perfect, done well they can leverage the best of the
three sectors: again, public investment, which is challenged at this
point in time; private capital and expertise; and some of the
resources that we can take advantage of. Can you maybe tell
me a little bit more about how you're approaching these as
appropriate to various types of projects in terms of infrastructure –
community-focused, capital-intensive, or expertise-based projects
– and how you're approaching those in terms of the best investment
for the public purse?

Ms Flint: Sure. One of the things, as I spoke to previously, is that
we are working with Seniors and Housing in terms of understanding
what the needs are out in the community. They have been working
closely with the not-for-profit groups and the housing associations
to understand what the need is and putting those in order of priority
in terms of moving forward. They're starting to move on projects
in terms of trying to get those projects moving forward as quickly
as they possibly can by working with their stakeholders to make
sure that they get the right list and the right need and in the right

Mr. Gotfried: I hope that's true. The minister has stated on a few
occasions that their preference is actually to plan, build, and operate
publicly.Thank you, Mr. Chair.

The Chair: Thank you, Mr. Gotfried.
Our final rotation will be five minutes for each party. I would like
to remind members that we will have probably two to three minutes
at the end for outstanding questions that will be read into the record.
If we can start with Mr. Taylor.

Mr. Taylor: Yes. Thank you. On page 14 of the 2015-16 annual
report it mentions that the Grande Prairie regional hospital is still
under construction. Is this facility scheduled for opening in 2019?
Any indication when it might be open?

Ms Flint: Alan, did you want to add anything else to what I had
spoken to previously about the Grande Prairie regional hospital? Mr.
Humphries: I think that perhaps the only other thing I would
like to add is that the work is ongoing. The exterior of the building
is more or less complete. We're working on the interior fit-out now.
The last of the tender packages for the subtrades on things like
drywall and the internal fittings are being issued right now. We are
expecting that it will take about another 24 months or so for
construction completion.

Mr. Taylor: Okay. On page 14 of the annual report it talks about
improving processes for planning and construction of health
facilities. What does it cost from inception to planning phase,
architectural renderings, and concept design that is required for you
to initiate a build, and how much will improving these processes
limit these costs?

Ms Flint: One of the things it will improve is that as we take more
time up front in terms of planning and understanding what we need
to build and what the site conditions are, we should actually be able
to deliver projects in a much more sustainable fashion moving

Mr. Taylor: What would that cost be? How much is that cost to go
from inception to that phase? You have not actually started the build
yet, but how much are Alberta taxpayers paying each time that they
do that? Then they all of a sudden seem to mysteriously disappear
frequently. It's happened. I want to know what that cost is.

Ms Flint: Yeah. I'll look to Alan.

Mr. Humphries: Typically to get a health facility to the tenderready
stage under a design/bid/build package, it would take you
about 15 per cent of the total build cost.

Mr. Taylor: Okay. What is the estimated time frame for a hospital
build project, such as the five projects in progress mentioned on
page 14, from putting it into the unfunded capital project list to the
time that it's completed?

Ms Flint: It depends on the complexity of the health project that
you're talking about. Obviously, a Calgary cancer health facility
would be much longer than perhaps a health care facility that we're
looking at or a health facility like we put in High River, for instance.

Mr. Taylor: So what is that in terms of years?

Ms Flint: Alan, can you . . .

Mr. Humphries: Unfortunately, that's a very difficult question to
answer. It depends on the nature of the project. If you're doing a
small detox centre with maybe seven beds . . .

Mr. Taylor: How about something like the Wainwright hospital?

Mr. Humphries: That's a renovation project?

Mr. Taylor: No. We're talking – it was on the priority list to have
a new hospital just a few years back.

Mr. Humphries: I'll have to defer to the capital planning team
because the question is: when does it become identified as a priority
and then get approved by the government?

Mr. Taylor: Okay. Fair enough. If somebody can look into that, I
would appreciate that.

PA-350 Public Accounts February 28, 2017

In relation to the Grande Prairie project, as mentioned on page
14, what is the timeline for the repurpose and renovation of the
existing Queen Elizabeth II hospital in Grande Prairie?

Ms Flint: I'm going to turn to Alan to answer that question. Alan,
the question was: what is the timing, if I understand the question
right, for repurposing the Queen Elizabeth hospital up there with
respect to opening up the new Grande Prairie hospital?

Mr. Taylor: Yeah, the timeline for repurpose and renovations of
the existing Queen Elizabeth II hospital in Grande Prairie.

Mr. Humphries: It's my understanding that that's not in the capital
plan right now.

Mr. Taylor: Okay. If we look further down in the April 2016
report, on page 16 the Auditor says that the infrastructure . . .

The Chair: Thank you, Mr. Taylor.
I'd like to move on to the phones. Member McPherson.

Ms McPherson: Thank you. What is the status of the internal
review of the KPMG report on deferred maintenance?

Ms Flint: The status of the internal review of the KPMG report on
deferred maintenance: an action plan to address the recommendations
in the report has been developed and reviewed by Infrastructure's
executive team. The feedback from the executive team will be
incorporated, and the revised action plan will be further reviewed
by the executive team for approval to implement. Recommendations
on deferred maintenance include things like introducing
standards for deferred maintenance calculation and reporting, as we
discussed previously, defining and categorizing infrastructure
based on criticality and importance to service delivery, and aligning
performance measures with objectives and service requirements.

Ms McPherson: Great. Thanks very much.
In the April 2016 report the Auditor General recommended that
Education and Infrastructure improve systems for managing and
controlling projects. What improvements have been made as a
result of this recommendation?

Ms Flint: To address this recommendation, Infrastructure has
developed updated processes, procedures, and systems for updating
the public website to ensure that all publicly reported data is
accurate. We've enhanced internal efforts to ensure that project
management and project reporting are improved. Senior management
receives weekly updates on projects' status. We have improved
communications with the Department of Education to ensure that
publicly reported milestones are reasonable and supported by
project schedules that consider project status, complexities, and
estimated time frames for remaining activities.
In addition, we've implemented a requirement that senior management
sign off on project information that is updated and put on
the public website. We've ensured that current reporting practices
and website updates are to monitor actual project progress, with
updates based only on verified information. With Education we're
finalizing a memorandum of understanding between the two
ministries that requires both ministries to collaborate on defining
clear project requirements and time frames prior to making any
public announcements.

Ms McPherson: Thank you.
The Auditor General's recommendations on capital planning
have been outstanding since 2007. What has been done to address
these capital planning recommendations? Ms Flint: Thank you. Maybe I'll
turn to David to respond to that

Mr. Breakwell: Yeah. Certainly, over the last couple of years
we've been working to change the capital planning process within
Infrastructure to ensure that we are putting some formalized criteria
in place, that we're providing the information that is needed for
Treasury Board to make decisions. We've been working closely
with the Auditor General, who has been looking at our current
processes, and we're expecting a report to come from the Auditor
General in the near term on how we may have addressed those
outstanding recommendations or how they still apply.

Ms McPherson: Thanks very much. It sounds like you're taking it
all pretty seriously.
In the April 2016 report the Auditor General recommended that
Infrastructure improve reporting systems and controls by improving
“its systems for publicly reporting on the status of school capital
projects.” What is Infrastructure doing to address this

Ms Flint: Sure. Roy, did you want to answer that question?

Mr. Roth: When it comes to publicly reporting statuses, we make
sure that we work closely with project teams to ensure that we have
real and verified data, that is utilized to inform our reports. These
reports are updated on a regular basis and provided to senior
officials on a weekly basis. Ultimately, those reports are developed
into a monthly package of information that is circulated and verified
by Alberta Education staff in their contact with various school
jurisdictions. Once that has been verified, senior officials, deputy
ministers sign off on that data, and then all of that data is uploaded
on the public website. Ultimately, there are a number of checks and
balances that are put in place to ensure that whatever we are
reporting has been verified and validated prior to it appearing on
any website update.

The Chair: Thank you, Member McPherson.

Ms McPherson: Thank you.

The Chair: Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair. Just a little bit back on P3s
and other types of partnerships, can you tell us what the current
liabilities are which remain from previous P3 projects, how they're
being managed, and maybe just a little bit of a note on if this model
has been relatively cost- and capital-effective for the previously
referenced major infrastructure projects across the province?

Ms Flint: That's information I don't have with me today, but I'm
happy to provide that in writing.

Mr. Gotfried: Okay. That would be fine.
Moving on to some capital plan issues, in drafting the capital plan
that came along with Budget 2015, the government sought the
advice of David Dodge. Now, Mr. Dodge is a well-respected expert
in this area of capital and infrastructure investment, and to my
understanding his report noted that increasing infrastructure
spending when your economy is struggling can be an effective tool
as we all know, as previously referenced, how that can help in a
struggling economy. However, this has to be done in a countercyclical
manner, where projects are approved, funded, and, as
importantly, initiated while the economy is struggling and where
those savings can be put in place with respect to lower labour costs
and other input costs.

February 28, 2017 Public Accounts PA-351

I'd just like to know which major infrastructure projects which
have been newly announced by this government have been initiated
under this plan: newly announced, initiated because of the David
Dodge recommendations, and actually moving forward in terms of
getting a shovel in the ground and moving ahead.

Mr. Breakwell: Sure. I don't have my complete list in front of me,
but I know that there was a postsecondary institution project that
was announced at that point in time. There were a number of other
smaller projects that were deemed to be shovel ready, ready to go.
I think the other part that was done was that a significant amount
of funding was set aside in Health, Education, postsecondary as
well as in Seniors for future projects, and I think that when the
capital plan comes out, you'll see that that funding has been
allocated more effectively now because the planning, that's been
talked about a number of times, and the upfront work have been
done on a number of projects now.

Mr. Gotfried: Okay. My concern goes back to, again, that much of
the raison d'être for David Dodge's recommendations was that we
could take advantage of low labour costs and other input costs
during a downturn and stimulate the economy. I guess I'm asking
again: you know, do we have a list of those projects that were newly
announced? Is the funding in place? How many are actually moving
ahead, or are they being delayed?

Mr. Breakwell: I can get that for you in writing.

Mr. Gotfried: That would be helpful. Thank you.

Ms Flint: I do have a list here if you'd like me to mention a few of

Mr. Gotfried: If you share it in writing, that's probably sufficient.
Thank you very much. That's very good to have.
Following up on my last question about the David Dodge report,
does the department have a way to measure and then report on
whether or not the overall objectives of that highly touted report are
being met, and does the department have a mechanism to measure
how the timing and implementation of a project impacts the end
cost of that project? Can you attach some savings to the fact that
we're moving these ahead during a downturn in the economy?
Obviously, that's one of the reasons to do it. I know you noted some
earlier savings on some projects that may have been under way
already, but I'd just like to know that there's a process in place for
us to actually capture that and demonstrate that we're saving money
at the same time we're putting Albertans to work.

Ms Flint: Sure. Some of the things that we are looking at in terms
of when we go out and scope some of these projects are: are we
seeing incremental savings in terms of what we thought it would
be? Then we would look at: if we are seeing savings, how do we
reallocate those two other projects that might be deemed high on
the priority list for this government?

Mr. Gotfried: Okay. I guess my follow-up question to that as well
would be just around, again, the shovel ready but, as importantly,
that shovel ready shouldn't be the only determinant. Is there a need,
a demonstrated need within the communities that are asking for
these? Is there a robust process in place for communities around
Alberta to come forward with various types of projects? We know
that there are some Seniors and Housing projects coming forward.
Obviously, the schools have been previously announced. But are
there other opportunities for municipalities and other rural areas to
come forward with projects that are ready to go, possibly have
complementary funding, and where there can be significant savings
realized in moving ahead quickly?

The Chair: Thank you, Mr. Gotfried. Did you finish your question?

Mr. Gotfried: I think we're good. If there could be a written answer
to that, that would be fine.

The Chair: Fair enough.
I will open the floor to questions that are requesting written
answers. I have a list. Mr. Barnes.

Mr. Barnes: Thank you, Mr. Chair. I have two. Thanks to the
Infrastructure people. I had a tour of the Medicine Hat regional
hospital expansion the other day, and my compliments to you on
how well it's done. It is a little bit behind schedule, however, and I
would like an answer on: do you have a process to analyze and
review what causes these delays?
My second written question, Mr. Chair, is on design/build versus
a bid/design, bid/build process. You know, a design/build so often
turns into cost plus. I'd like to hear from Infrastructure what
mechanisms or what matrices they use to decide when they should
use design/build versus a more traditional bid/design, bid/build
situation.Thank you.

The Chair: Thank you, Mr. Barnes.

Mr. Taylor: On page 13 the annual report talks about the modernization
of procurement practices. What risks are there in the
development of standing offers of smaller or medium-sized
contractors being excluded from bids? That would be one.
I have three questions if I could. In the April 2016 report on page
16 the Auditor says that Infrastructure lacks a system to manage and
report on school projects. What is the ministry doing on this issue,
and when can we expect a publicly accessible program that reports
on such things as the progress of builds? Is the report, mentioned
on page 13 of the 2015-16 annual plan, going to be made public? If
not, why not?
My final question . . .

The Chair: Mr. Taylor. Sorry.
Is there anybody on the phones that has a question? Mr. Fraser.

Mr. Fraser: Thank you, Mr. Chair. The question that I have for the
panel is: where there are cost-shared savings, partnerships, either
between cities or private businesses, can you tell me how many
projects you have embarked on with that type of cost sharing and if
there are any slated to start this year?
Thank you.

The Chair: Thank you, Mr. Fraser.

Mr. Fraser: Thank you.

The Chair: Mr. Taylor, you have about 30 seconds.

Mr. Taylor: On page 16 of the April 2016 report the Auditor
General recommends that the ministry use common reporting
systems that specify, among other things, who will update
documents and how they will be updated. Based on my reading of
the school RECAPP reports online, many of them seem to be well
passed the five-year deadline for a new report to be put online. What
progress has the ministry made towards this goal, and will the
school VFA/RECAPP report be updated any time soon? Do they
update in bunches or one at a time? Are the updates scheduled?

PA-352 Public Accounts February 28, 2017

The Chair: Thank you, Mr. Taylor.
I don't see any further questions.
I'd like to thank the officials from the Ministry of Infrastructure
for attending today and responding to the committee members'
questions. We ask that any outstanding questions be responded to
in writing within 30 days and forwarded to the committee clerk.
The committee will return in 10 minutes to the same room that
we're in right now to meet with the Ministry of Transportation.
Thank you.

[The committee adjourned from 2:46 p.m. to 2:56 p.m.]

The Chair: I would like to welcome our guests from the Ministry
of Transportation. My name is Scott Cyr, MLA for BonnyvilleCold
Lake, and I am the chair of the Public Accounts Committee.
I'd ask that the members, staff, and guests joining the committee
at the table introduce themselves for the record, and I will go to the
members on the phones next. Starting to my left, we will do

Mrs. Sawchuk: Karen Sawchuk, committee clerk.

Dr. Massolin: Good afternoon. Philip Massolin, manager of research
and committee services.

Mr. Saher: Merwan Saher, Auditor General.

Mr. Driesen: Rob Driesen, Assistant Auditor General.

Mr. Fung: Dale Fung, Transportation.

Mr. Tharmalingam: I'm Ranjit Tharmalingam, assistant deputy
minister, corporate services and information.

Mr. Day: Barry Day, deputy minister of Transportation.

Mr. Loo: Tom Loo, acting assistant deputy minister of delivery
services, Transportation.

Ms Renaud: Marie Renaud, MLA, St. Albert.

Dr. Turner: Bob Turner, Edmonton-Whitemud.

Mr. Dach: Lorne Dach, Edmonton-McClung.

Ms Miller: Barb Miller, MLA, Red Deer-South.

Mrs. Littlewood: Jessica Littlewood, MLA representing Fort
Saskatchewan-Vegreville and acting deputy chair.

The Chair: The members that are teleconferencing in are Mr.
Barnes, Member Cortes-Vargas, Ms Luff, Member McPherson, and
Mr. Malkinson. If you could state your names and your constituencies
for the record.

Mr. Barnes: Drew Barnes, MLA, Cypress-Medicine Hat.

Mr. Malkinson: Brian Malkinson, MLA for Calgary-Currie.

Mr. Fraser: Rick Fraser, Calgary-South East.

Ms McPherson: Karen McPherson, MLA for Calgary-MackayNose

The Chair: For the sake of the people that we have on teleconference,
those that are speaking at the mike or if it's not the DM
could you please state your name and your title so that we know
who is speaking. The members should have a research report prepared by
services, the Auditor General briefing document as well as an
updated status report on the Auditor General's recommendations
document completed and submitted by the Ministry by
Transportation.I will invite the officials from Transportation to provide
remarks not exceeding 10 minutes.

Mr. Day: Thank you, Mr. Chair, and good afternoon, everyone. On
behalf of Minister Brian Mason, thank you for the opportunity to
present some of the highlights of Transportation's work in the fiscal
year 2015-16. Staff at the table with me have already introduced
themselves, and we have some additional staff present today to
watch and learn and also to assist with some of the detailed
questions as necessary.
Transportation is a very busy ministry, and fiscal year 2015-16
was no different. In our annual report the following was identified:
$1.35 billion in expenses, which includes grants, amortization of
capital assets, and consumption of inventory; and $1.49 billion in
capital investment.
Some of our main focus areas at Transportation include building
and maintaining roads and bridge infrastructure across the
provincial highway network, water management structures such as
dams and reservoirs on behalf of Alberta Environment and Parks,
helping to ensure that people who use our roads and infrastructure
are safe, and supporting local municipalities by providing grants for
local infrastructure.
Alberta's provincial highway network includes more than 31,400
kilometres of roads. About 28,000 kilometres of those are paved,
and we also own, maintain, and operate nearly 4,500 bridge
structures, including culverts.
Transportation's mandate is to provide a safe, integrated,
innovative, and sustainable multimodal transportation system. To
do that, we're organized into three divisions. First is safety, policy,
and engineering, which develops standards and governance for our
transportation system, develops long-term investment in capital
planning strategies, oversees 511 Alberta, and provides strategic
policy support.
Second is delivery services, which is responsible for the
planning, programming, and delivery of provincial highway
projects, managing highway maintenance and rehab activities and
municipal grant programs, and providing transport engineering
services such as permitting for commercial vehicles. They do that
through a network of district and regional offices.
The third division we have is corporate services and information,
which provides financial services, strategic business planning and
reporting, FOIP support, tender administration, procurement of
consulting services, records and information management, as well
as emergency management and response.
The ministry also includes the Transportation Safety Board,
which conducts driver review hearings and independent appeals of
driver, vehicle, and safety decisions from the registrar of motor
vehicle services, and also conducts hearings under the Railway
(Alberta) Act and the Dangerous Goods Transportation and
Handling Act.
I'd like to share now with you some of our highlights for the
2015-16 fiscal year.
We maintained 56.5 per cent of our highways in good condition,
which exceeded our performance goal by 1 per cent.
We worked with our partners across the province, including
municipalities and law enforcement agencies, to increase safety on
our highways. Through our regional traffic safety consultants and
staff we worked with community partners to promote our public
education initiatives.

February 28, 2017 Public Accounts PA-353

We also provided personal and commercial drivers with better
information on road conditions by improving 511 Alberta, which is
the province's official road reports program.
Penalties for distracted driving were strengthened. As of January
1, 2016, any driver convicted of distracted driving receives three
demerits in addition to the $287 fine.
In February 2016 we implemented regulations to allow
transportation network companies such as TappCar and Uber to
legally operate in Alberta, and we also introduced regulations that
allow skilled, trained current or retired Canadian armed forces
members to more easily get approval to operate commercial
vehicles without additional testing.
We continue to collaborate with other governments and industry
to adopt a co-ordinated and diversified approach to transportation
systems and planning. We also continue to move Alberta toward an
integrated multimodal transportation system by investing $1.5
billion in capital investment on our highways in Alberta. This
included work on major highways, bridge construction, and
pavement rehabilitation projects all around and across the province.
We also completed 99 per cent of the twinning of highway 63
between Grassland and Fort McMurray, 237 of the 240 kilometres,
and that was higher than we had forecasted for the '15-16 fiscal
year. In doing that, we invested $239 million to complete 150
kilometres of twinning.

We continue to work along the northeast Anthony Henday Drive,
the final leg of the Edmonton ring road, which, as you will know,
has now been completed. At the same time we were planning for
the next step in building the southwest Calgary ring road, which
now is in the construction phase. That's a major project that
includes 31 kilometres of six- and eight-lane divided highway; 49
bridges, including bridge structures over the Elbow River and Fish
Creek; and 14 interchanges. On May 14, 2015, the government of
Canada officially approved the land transfer of property from the
Tsuut'ina First Nation to the province of Alberta. That meant
construction on the southwest ring road could begin.
We also provided $185 million in green transit incentives
program funding, or GreenTRIP funding, to 10 communities. These
grants supported projects such as buying more light rail transit
vehicles and buses for local, regional, and paratransit services,
construction of bus storage facilities, transit transfer hubs and parkand-
lots, and planning for future LRT expansion in Edmonton
and Calgary.
We also worked with officials from smaller urban centres and
rural municipalities, including providing $36 million in water for
life grants to 27 communities or water commissions; $25.3 million
in Alberta municipal water/ waste-water grants to 32 communities;
and $5.4 million in strategic transportation infrastructure program,
or STIP, grants to 11 communities. In March of 2016 we began a
municipal stakeholder engagement seeking input into criteria for
future STIP grants. That same month we began public transit
engagement to get stakeholder and public input into a new
provincial and public transportation strategy and a municipal transit
funding program.
While we moved forward with capital plan work, we also worked
hard to address concerns raised by the Alberta Auditor General. I'd
just like to take a minute to update the committee on outstanding
items from the October 2016 OAG report. One item in that report
relates to a 2009 recommendation to enforce compliance by carriers
who persistently fail to comply with rules and regulations. We're
addressing that by doing the following.
The majority of our computer system enhancements specific to
the management of carrier activities have been implemented. We've approved,
updated, and enhanced polices and procedures for
complaint handling, and we're continuing with the collection,
analysis, and review of the results until mid first quarter of 201718.
We expect to be ready for a follow-up audit. Hopefully, we'll
see those recommendations implemented.
Additionally, in July '16 the Auditor General confirmed that the
department has implemented effective contracting processes to
manage the structural safety of bridges. The report also noted that
we've improved processes for contracting out bridge inspections
and determining if contracting out inspections was cost-effective.
The Auditor General was clear in his 2012 report and in July 2015
that our provincial highway bridges are indeed safe.
With that, I'd like to thank you for your attention, and we will
open up for questions.

The Chair: Thank you, Mr. Day.
I'd like now to turn this over to the Auditor General for his
comments. Mr. Saher, you have five minutes.

Mr. Saher: Thank you, Mr. Chairman. I'm pleased that the deputy
has drawn attention to the one outstanding recommendation. It was
my plan to draw attention to it, so I don't need to repeat what he
said. The department anticipates the recommendation will be ready
for a follow-up audit by the end of the first quarter of 2017-18,
which I take to mean by the 30th of June of this year, and we will
be ready to do that follow-up work as soon as we hear from you.
Just to put the recommendation into context, the key finding we
had when we repeated the recommendation in 2014 – and I'll just
quote from the 2014 report: “One third of carrier files with noncompliance
issues we examined were not followed up by
Transportation with timely and appropriate action.” This is, I
believe, a recommendation of substance. It goes to the safety of
Albertans, those who use the roads, so I'm pleased that we will be
invited back shortly to do that follow-up work.
Thank you.

The Chair: Thank you for your comments, Auditor General.
We are now following the time allotment format for questions
from the committee members, adjusted for the hour and a quarter
time slot. The first rotation will be 10 minutes each for the Official
Opposition and the government members, followed by seven
minutes for the third party opposition. Our second rotation will be
six minutes for each of the parties, with the agreement of the
committee that any time remaining will be distributed equally
among the three parties.
I will now open the floor to questions from the members;
however, I would like to note that there will be a one- to two-minute
time frame allocated to outstanding questions to be read into the
record at the end of this meeting.
Mr. Barnes, are you ready for questions?

Mr. Barnes: Yes, I am, Mr. Chair. Thank you very much, and
thanks to all the Transportation officials for your time and your
work in being here today. I want to start with: the Transportation
ministry identifies four desired outcomes and associated
performance measures in its 2015-18 business plan. I want to jump
to number 4, and I've got some questions around that.
Desired outcome 4 is “A safe and secure transportation system
that protects Albertans.” I want to go back. It was referenced, the
bridge inspection program, bridge inspection contracts. Of course,
the Auditor General in 2012 and 2015 pointed out recommendations,
whether or not to contract out to bridge inspectors and how
to improve the process to contract visual inspections. Good to hear
that at that time it was indicated that all the bridges were in safe
condition, but obviously, you know, time can change that. If

PA-354 Public Accounts February 28, 2017

somebody from the ministry could talk to me just briefly about how
you decide to award who gets the bridge inspection contracts and a
quick rundown on the degree of due diligence.
Thank you.

Mr. Loo: The department has privatized the inspection of our
bridges on the provincial highway network, and we go through a
competitive process by a request for proposal. Firms are invited to
submit proposals to do this work, and they are evaluated based on
their understanding of the work, the staff that they are proposing to
do the work, and obviously cost. Alberta's system, our bridge
inspection and maintenance system, includes a certification
process, which requires training; classroom work, where there are
exams they're required to pass; and certain levels of education and
experience. This competitive process that we're using to hire bridge
inspectors takes all of those elements into account. We are seeking
through that process to find best value for Albertans.

Mr. Barnes: Okay. Sir, do you use a prequalification process then
a bidding, or do you combine it?

Mr. Loo: We do have a prequalification process for all the
consultants that do work for us; however, with the bridge inspection
process, it's an open call. However, one of the requirements is that
the staff doing the inspections for us must be certified and have a
valid certification to do this work.

Mr. Barnes: Okay. Thank you.
I would like to move on. The outstanding recommendation: I
agree that it is good to hear that you've addressed it and there's a
follow-up audit from the Auditor General very shortly, but I am
concerned. You know, for eight years it was outstanding, and of
course we're dealing with safety here. How sure is Transportation
that things were safe the last eight years, how sure of your
mechanisms in place? Jeez, I think I heard that a third of citations
were never followed up on.

Mr. Day: Thank you. Good question. First, let me stress that
Albertans are not and were not at risk due to the delay of
implementation. To clarify, there were three recommendations at
the time on commercial vehicle safety, and two of those were
implemented earlier on. The third one is still outstanding. The
department feels we dealt with the two recommendations that may
have led to compromised safety first.

The first one was to improve our inspection capability by
incorporating risk analysis into the selection of vehicles for
roadside inspection and increasing the amount of information
available at roadside. To respond to that, thermal imaging was
piloted in 2004-2005 and fully implemented in 2010. That allows
us through thermal scans to determine if a carrier has overinflated
tires, which could cause a blowout and safety risk. We introduced
prescanning technology such as our smart roadside inspection
system in 2012, and electronic inspection reports were implemented
in 2012. So we have faster access to information through that.
The second piece . . .

Mr. Barnes: Thank you, sir. If you don't mind, I'm just a little
limited on my time.

Mr. Day: Okay.

Mr. Barnes: Eight years is a long time. Why do you think it took
eight years? And it's still not addressed fully. Mr. Day: You know, as I
said, they will be addressed and ready for
reaudit in the first quarter of 2017-18. Those were changes to
address some of the systems that we're using for inspection
services. As I said in my previous answer, at no time did we feel
that the safety of Albertans was compromised.

Mr. Barnes: Okay. Thank you.
I remember two or three years ago quite a number of fines for
certain highway maintenance people for, I guess, not doing things
on a timely or a complete basis. I represent mostly a rural constituency
where a couple of years ago there were a lot of concerns about
trying to save money by not cutting grass at approaches, which
could have devastating effects. Can somebody briefly touch base
on how we're holding our private corporations accountable going
forward for the contracts we've given them and what our plans are
for grass maintenance in the rural parts of Alberta?
Thank you.

Mr. Day: Sure. In the last year – and I'm not sure if it goes back to
2015-16 – the department reduced the number of cuts that we do
alongside roads and in ditches and road allowances. Due to the
number of complaints that were received and the number of
concerns raised, Minister Mason directed us to do a full cut in
September, which we did. Since then we've met with rural
municipalities, the AAMDC, and the Agricultural Fieldmen, and
we've come up with a mowing and vegetation control program that
will be implemented this coming season that everyone seems
satisfied with. So, you know, we've done our homework, we've
learned our lesson, and we're moving on.

Mr. Barnes: Okay. Thank you.
How about road maintenance itself, whether it's snow-clearing
or maintenance items?

Mr. Day: For road maintenance, again, safety is the number one
priority. Snow-clearing is job one, absolutely, in the wintertime.
We're looking at, you know, within the budgets that we're given,
doing an effective job in terms of crack-filling and maintenance.
Again, we are not able to do everything to meet everyone's
standards, but we think we're maintaining the roads at an acceptable

Mr. Barnes: Okay. Thank you.
I want to jump ahead to the 50-year transportation strategy that
was started in 2010. My understanding is that seven years in it is
still not delivered. I also understand that it's a little hard to know
exactly, you know, what the focus of it is going to be in terms of
whether it's going to create a priority list or long-term kind of
oversight. I'm also fully aware that the transportation industry is
changing, with almost self-driving vehicles and those kinds of
things. Can somebody talk about your goal with the 50-year
strategy and how that might tie in with these top-drawer
technologies, please?

Mr. Day: Sure. Thanks for the question. As you've intimated, a lot
has changed since 2010, when the 50-year transportation strategy
was first being looked at. Over the past couple of years, because of
this emerging technology, we've had to take another look at what
the long-term transportation strategy will in fact accomplish. We're
looking at whether 50 years, actually, is too long of a horizon, you
know, if you just look at the last two or three years with the
emerging technology for automated and connected vehicles, some
of the economic factors and climate change initiatives that we now
need to factor into that strategy. I can assure you that we are
working hard on it, but we're really working hard to adapt it to a

February 28, 2017 Public Accounts PA-355

strategy that is meaningful for the future given what we know is
coming at us.

Mr. Barnes: Okay. Thank you.

The Chair: Thank you, Mr. Barnes. Your time is allotted.

Mr. Barnes: Thank you, Mr. Chair.

The Chair: Mr. Malkinson, are you ready for your rotation?

Mr. Malkinson: Yes, I am, Mr. Chair. Thank you very much.
Just to start off, you know, you mentioned in your introduction
about the twinning of highway 63, and my question is related to
that. On page 11 of the annual report the twinning of highway 63 is
listed as a performance measure. Now, given that highway 63 is one
of Alberta's most important transportation corridors, especially as
we rebuild Fort McMurray, while it isn't necessarily the busiest
route, it's perceived as being a dangerous route. What has
Transportation done to improve the safety of these corridors, and
how much has it cost?

Mr. Day: Okay. Thanks again for the question. Highway 63 we've
twinned from Grassland to Fort McMurray. That work was
completed ahead of schedule. The primary goal, again, is safety and
movement of goods and services. That's a high-load, heavy-load
corridor, so we want to make sure that those loads can be delivered
to the industrial sites in a safe and efficient and effective manner.
There's one bridge structure that's left to be completed over the
Hangingstone River.
To your question, Mr. Malkinson, on the total cost, since 2005
we've invested more than $1 billion in highway 63. That also
includes improvements that we've made for highway 881, which
provides a secondary route. I don't have the breakdown specifically
for highway 63, but we can provide that to you if you're interested.

Mr. Malkinson: That's perfect. It's good to hear that.
Now, that bridge you were talking about: does the ministry have
an ETA for completion of that?

Mr. Day: We're on target for construction completion in 2018.

Mr. Malkinson: When that's done, that would complete the
twinning of highway 63? Would that be correct?

Mr. Day: From Grassland to Fort McMurray, correct.

Mr. Malkinson: Excellent. Thank you.
Moving on, page 20 of your annual report lists the major capital
projects that were under way or planned. How are these capital
projects prioritized?

Mr. Day: Okay. Thank you. We look at a number of factors in
prioritizing our projects, starting with safety – safety is always
paramount – and we look at things like condition of the
infrastructure, road, or bridge; we look at the traffic volumes; and
we also layer on 12 criteria that government has adopted for
prioritizing capital projects. We put our projects through the paces
to make sure that they meet the government's priorities in the best
way possible, and then they're submitted into the capital planning

Mr. Malkinson: Perfect. Thank you very much.
Moving on along the same vein, from pages 18 to 20 of the annual
report there are lists of projects that are under way, completed, or
planned. Can you discuss whether the project priority rating has
changed, and is this information available to the public?

Mr. Day: Absolutely. The ratings can change, again, particularly if
a safety issue crops up or if a piece of infrastructure deteriorates
more quickly than anticipated through additional traffic volumes,
you know, those sorts of things. Our construction program is a
public document. In addition to the capital plan that government
publishes along with the budget, we have on our website a threeyear
construction program which identifies all the work that
Transportation is going to do in that forward-looking, three-year

Mr. Malkinson: Perfect. Thank you.
I imagine the truck that hit the bridge by Ponoka would perhaps
be an example of where a funding priority would change due to
something happening to a structure.

Mr. Day: That's an excellent example, sir, and we're looking at
what the best repair is for that situation.

Mr. Malkinson: Perfect. Thank you.
Moving on, right now I'm looking at page 23 of the annual report.
On that page there's a graph showing the physical condition of
provincial highway surfaces. The ministry had a target for the
condition of our highways in good condition to decrease to 55.5 per
cent, but the actual result was 56.5 per cent. I was just sort of
wondering why your department forecast a decrease. If you could
elaborate on that?

Mr. Day: The decrease was the result of a previous forecast based
on the available funding. In the 2015-16 budget government
introduced a significant increase to major maintenance funding,
which will be implemented over time. It's in the current five-year
capital plan. We're seeing continued increased funding for major
maintenance, so we will be reflecting the current levels of funding
in terms of our condition ratings going forward. We believe that
with the additional funding we will see more of our highways and
bridges coming into good and fair condition, lowering the numbers
in poor condition.

Mr. Malkinson: Perfect. Thank you.
Just sort of expanding on that, you know, what is the status of the
deferred maintenance on the provincial highways? If you could just
expand on that some more?

Mr. Day: The number that was published in 2015, I believe, was
$2.6 billion. Again, we will be re-evaluating that and producing,
you know, a more current number going forward.

Mr. Malkinson: Perfect.
Mr. Chair, how am I doing for time?

The Chair: You have two minutes and 30 seconds.

Mr. Malkinson: Thank you, Mr. Chair.
Moving on then, again looking at page 20 of the annual report, it
seems to me that you sort of mentioned earlier the QE II corridor.
The report says that $6 million was allocated to conduct a corridor
improvement study from 2015 to 2017 on the QE II, with a focus
on the review and consolidation of the previous corridor plans, the
review of alternative corridors and congestion mitigation methods
as well as an implementation plan. How much progress has been
made on this QE II corridor improvement study in 2015-16?

PA-356 Public Accounts February 28, 2017

Mr. Day: We're, I think, making good progress on that study.
Forecast completion is on track for December of 2017. It's taking a
long time because we want to get it right. We're taking, you know,
a broad, holistic look at QE II's current and future capacity as a
corridor for the overall efficient and effective movement of goods
and people and not just as simply a highway for cars and trucks.
The study has four main objectives: obviously, review and combine
the results of previous corridor studies and plans; assess the
corridor's future needs, including, you know, land-use plans from
municipalities; examine alternative north-south corridors; and
congestion management.
The answer might not always be or only be to add a lane to
highway 2, or QE II. We need to look at other corridors like 2A,
highway 22, highway 21, et cetera, and then develop a construction
or implementation plan for each of the options. As I said, it's a very
broad and very thorough look at the corridor needs of highway 2.

Mr. Malkinson: So it's more than just the QE II and, you know,
the potential for more lanes; it's around the surrounding highways
there as well. Would that be a correct summation?

Mr. Day: Yeah. Absolutely. You know, as I said, we're looking at
working with municipalities to look at future land-use plans and
those sorts of things because all of those things have an impact in
terms of access and egress from the highway.

The Chair: Thank you, Mr. Malkinson. Your time has been

Mr. Malkinson: Perfect. Thank you, Mr. Chair.

The Chair: Mr. Fraser, are you ready to ask your questions?

Mr. Fraser: Yes, Mr. Chair. I just wanted to thank the panel for all
their work. I asked this question to Infrastructure, and I'll ask it to
you. Are there any projects currently approved and/or currently
being built that involve cost sharing with other municipalities and
private business?

Mr. Day: I'm going to say yes because that's something that we
look for and look at in terms of delivering some of our projects. I
do not have a list that I can cite, Mr. Fraser, but we can provide that
if you're interested.

Mr. Fraser: Yeah. That would be perfect.
More specifically, is there money allotted to the interchange at
Deerfoot Trail and 212th Avenue in southeast Calgary?

Mr. Day: I think that's a question best asked once the next budget
is out. As of today there is no money allocated for that project.

Mr. Fraser: Okay. I guess we'll just wait for budget on that.
In terms of the growth of the province and the challenges we've
seen – certainly, there are other areas that have faced these challenges
when it comes to transportation infrastructure – how often does
your business unit and department go through and look for best
practices in cities similar to ours that, you know, have faced these
challenges and maybe learned something new? How often are we
updating our practices to stay ahead of the curve when it comes to
this type of infrastructure? Certainly, if we stay ahead of it, we can
promote growth of business and planning for future business.

Mr. Day: Thank you. We promote continuous improvement. We
are always looking at ways to do things better, more effectively,
more efficiently, more cost-effectively. We work with the
Transportation Association of Canada, and we're members of TAC. TAC is
continuing to look at making sure that standards and
processes are up to date and current. We adhere where we can to
the national standards to make sure that our system requirements,
you know, make it as smooth as possible for someone to operate
within the system from province to province and certainly from
border to border within Alberta. We share information. The major
cities are members of the Transportation Association of Canada, so
we're all, I think, engaged in making sure that we are looking at
continuous improvement in a very mindful and a very serious way.

Mr. Fraser: Right. In that regard, when safety becomes an issue
because a piece of infrastructure isn't built and it's creating certain
chaos in communities, is there a different approach? You did
mention, with the colleague before me – you know, when there's a
specific need, what does it take? Does it have to be a catastrophic
failure, a loss of a life before something would be moved up in the
chain of priority?

Mr. Day: No. As I said, you know, safety is job one. We look at a
number of factors. I mentioned, obviously, safety, collision data.
We look at condition, and we look at congestion. We also look at –
and I mentioned the 12 criteria that apply to the capital planning
process across government. Operating costs impact the projects.
There are a number of factors that we look at.

Mr. Fraser: Do you look at economic viability? Like, how often
are you involved with the ministry – sorry; it's just slipped my mind
– and, obviously, Treasury Board and Minister Bilous's office?
How often are you in connection with them in terms of, you know,
something being built as a priority that brings a huge economic
windfall to a community? How much does that change the priority?

Mr. Day: Well, we look at, obviously, economic impact and
economic assessment and not just from the perspective of moving
goods and services, you know, effectively and efficiently on our
roads. We look at contributing economic impact. That's why I
mentioned before that in the QE II study we look at the potential for
development and the impact (a) that that's going to have on the
system, and then how do we plan and design and build for that? But
we also look at the economic impact in terms of jobs created, both
from a construction and a permanent standpoint. So we are in
constant conversation with other ministries, including Economic
Development and Trade, Culture and Tourism, Treasury Board and
Finance, obviously.

Mr. Fraser: Just to clarify, you're basically saying that when it
comes to some of these new projects, you're not privy to which ones
may come up in the next budget.

Mr. Day: That's correct.

Mr. Fraser: Okay. That's all for my time, Mr. Chair.

The Chair: Thank you, Mr. Fraser.
I would like to move on to Mr. Barnes. Are you ready again?

Mr. Barnes: Thank you again. Do I have another eight minutes?

The Chair: You have six minutes, Mr. Barnes.

Mr. Barnes: Okay. Thank you. First, I want to go back to that 50year
transportation study, started in 2010. Again, I mean, no doubt
it can contain a lot of good work, but I'm still very, very concerned
about the effectiveness, the focus, and the cost. Does the Department
of Transportation have any idea what they've spent on this so

February 28, 2017 Public Accounts PA-357

far? What are the measurements going to be as to, you know, how
effective this is?
Thank you.

Mr. Day: Again, thanks for the question. That strategy is something
that we're developing internally. We haven't yet seen the need to
bring in a consultant to help us with that. I can't give an exact
breakout of the costs because staff who are working on that are also
working on other things and other files. You know, as I said earlier,
we need to take the time to get this right. When you're looking
ahead into the future – again, I can't stress enough the rapid changes
that we've seen in technology. In the last five or six years automated
vehicles were something that was rarely talked about. Today people
are saying that in five to 10 years we could be faced with driverless
vehicles on our highways. So we need to make sure that we get this
as right as we can.

Mr. Barnes: Okay. Thank you.
Highway 61 down south in my constituency between Foremost
and Etzikom: work started on it this year to do some improvements,
and I believe it got shut down because – you know, it doesn't rain
down here very often, but it did rain a little bit in August, and a little
bit of water pooled. The rumour is that Environment actually shut
the job down and heavy-duty equipment sat on the side of the road
for a long, long time. Hopefully, work will resume very quickly in
the spring. Is that accurate? Does a slight pool of water shut down
a big project, and who bears the cost of that?

Mr. Day: Yeah. I can't comment on that specific project, but I'd be
happy to, you know, discuss it with you offline once I can get the

Mr. Barnes: Okay. Thank you very much. I would appreciate that.
I want to talk about P3 contracts for a sec. Ontario came out a
short time ago suggesting that it was, I think, $9 billion extra that
they'd spent on these P3s over time. Of course, P3s: you know, it's
not only that they're going into the new projects. We have to
maintain them, whether it's for the 30 years of the life and the
condition we get at the end. I'm wondering what the Department of
Transportation has got for analysis and for costs on our ring roads
and our P3s going forward. Do we have a good handle on what kind
of shape we're going to get these roads back in and what it's costing
us now?

Mr. Day: We do have, you know, accurate costs for the construction
and the development of the P3s. Transportation has completed
a number of segments of the Edmonton and Calgary ring roads
using P3 delivery. Those projects that have been done to date have
all been reviewed by the office of the Auditor General.
What we don't have yet, you know, in terms of the 30-year
maintenance agreement is a lot of data to tell us whether those
projects will indeed be more or less expensive in the long run, and
we will only get that over time.

Mr. Barnes: Okay. Would that come through your department, or
would it come through Treasury and Finance? Even the costs now:
would that be something you would be privy to?

Mr. Day: Yeah. The costs of the ring roads, you know, the capital
costs we have: we can provide those to you for each of the legs.
The analysis, you know, going forward on the 30-year contracts:
we'll be working closely with Treasury Board and Finance, with
our colleagues at Infrastructure to review those over time.

Mr. Barnes: Okay. Thank you. On page 60 of the 2015-16 annual report I
believe you have 97
claims made against Alberta Transportation, a possible $5.6 billion
in claimants. That's an average of $58 million per claim. What do
we have for risk management? What do we have for looking at
these? Of course, two other colleagues have talked about how
important safety is, and you mentioned the same thing, and I greatly
appreciate that, but where does the legal liability, where does the
risk mitigation fit into this, please?

Mr. Day: Can you clarify? You said you're on page 60 of the
annual report . . .

Mr. Barnes: Yes.

Mr. Day: . . . talking about claims?

Mr. Barnes: Yeah. My information: I have 97 claims against Alberta
Transportation in excess of $5.6 billion in total potential liabilities.

Mr. Day: The amount I'm reading on page 60: $5.6 million.

Mr. Barnes: Billion.

The Chair: Okay. Thank you, Mr. Day. Can you respond to that in

Mr. Day: Yes, we can.

The Chair: I'd also like to mention that when Mr. Barnes asked a
question about highway 61, you were asked a question on the
record, and you said that you would take it offline. I don't think
that's appropriate when it was a question asked before the committee.
Can you respond to that in writing to the committee, please?

Mr. Day: Yes, we will. Absolutely.

The Chair: Thank you.
Ms Miller.

Ms Miller: Thank you, Mr. Chair. Thank you to the ministry. On
page 26 of the annual report it says, “Reliable access to quality
drinking water and wastewater treatment . . . is crucial in building
strong, healthy communities and rural economies.” How is Alberta
Transportation's work with partners, including the federal government,
in 2015-16 improving access of indigenous communities to
reliable clean and safe drinking water?

Mr. Day: Okay. Thanks for the question. We've got two water
programs. One is water for life. The other is the Alberta municipal
water/waste-water fund. What we're looking at when we're working
closely with our colleagues at Indigenous Relations and with
the federal government to determine where we can extend existing
waterlines to serve indigenous communities: where new lines are
being contemplated, can we extend, you know, what we call the
final mile to the First Nation indigenous community's boundary?
We're actively looking at those opportunities.

Ms Miller: Can you discuss how much funding was available for
the water for life grant program in 2015-2016?

Mr. Day: In 2015-16 there was $30 million budgeted. If you look
at our financial statements, we actually paid out $36.3 million to 27
communities or water commissions, and we pay these contracts or
these grant agreements on progress. In this case we overspent a little
bit in '15-16, and that was offset by an underspend in another area.

Ms Miller: Okay. Thank you.

PA-358 Public Accounts February 28, 2017

On page 88 of the annual report it shows a list of federal grants,
including the Canada strategic infrastructure fund, the provincial
base fund, the building Canada fund, the infrastructure stimulus
fund, and the Asia-Pacific gateway and corridor transportation
infrastructure fund. What are these funds for, and what impact have
they added in Alberta?

Mr. Day: Thank you. That's a lot of funds. The Canada strategic
infrastructure fund contributed to the twinning of highway 63. It
was specifically targeted to a hundred kilometres of twinning of that
highway. The provincial base fund contributed to the provincial
highway rehabilitation projects or our major maintenance projects
from 2009 to 2014. The building Canada fund major infrastructure
component contributed to six major construction projects. Four of
those were interchange projects along Anthony Henday Drive, and
two projects were on highway 63. The infrastructure stimulus fund
contributed to about 127 various construction projects around the
province such as interchange upgrades, road and bridge rehabilitation,
and adding new passing lanes on some of the highways. The
Asia-Pacific gateway and corridor transportation infrastructure
fund contributed to a highway 2 and 41st Avenue interchange just
south of Edmonton.

Ms Miller: Thank you.
Can you provide details about the funding for the strategic
transportation infrastructure program, the STIP, in 2015-16, listed
on page 100, line 7.2 of the annual report?

Mr. Day: Okay. The STIP fund is intended primarily for smaller
rural communities. Funding for STIP in 2015-16 was primarily to
address projects that were committed to and under construction the
previous year. To finish those projects off, $18.7 million was
budgeted, and we spent only $5.4 million. Again, funding is
allocated or spent based on project progress.

Ms Miller: Okay. From page 22 of the annual report can you
provide an update on how you continue to improve permitting for
oversized commercial vehicles?

Mr. Day: Okay. Thank you. We have a system called TRAVIS,
which is the transportation routing and vehicle information system.
We expanded that to be called the TRAVIS MJ, which means
TRAVIS multijurisdictional. What that allows the carriers to do is
access one permit one time to run not only on provincial highways
but within and around municipalities. We charge a permit fee for
heavy loads, and the program also allows that permit fee to be prorated
between the province and the different municipalities,
depending on kilometres travelled within each jurisdiction.

Ms Miller: Thank you.

The Chair: Thank you, Ms Miller.
Our last rotation will be a three-minute rotation for each of the

Mr. Gotfried: Sorry, Mr. Chair. Is there no rotation?

The Chair: Am I skipping the third party?

Mr. Gotfried: Yes, you are.

The Chair: I will tell you that I am very sorry for that.

Mr. Gotfried: No worries. Just thought I would remind you.

The Chair: Thank you. Mr. Gotfried: Thank you, Mr. Chair.
I'm going to shift gears here and put some wings under the
discussion a little bit. I understand that air transportation is also
under the purview of your ministry. I'd be interested in what
strategy, if any, you have to protect our air passenger services
network, which we're very blessed to have in this province and
which may be at risk during an economic downturn, to ensure that
we do not lose any existing services, noting that it's often the case
that if you lose them or don't engage in supportive dialogue to try
and retain them, you may never get them back.

Mr. Day: Thanks for the question. I will admit I don't have a
detailed knowledge of our department's role in air transport other
than that we work with, you know, some of the smaller local and
regional airports. I'm not sure – and I apologize for that – and I'll
follow up in writing in terms of what our role might be in what
you've described, Mr. Gotfried.

Mr. Gotfried: Okay. I'm going to ask another question which may,
then, also precipitate a follow-up in writing. I spent 20 years in the
airline industry, so I have a reasonable understanding of this file.
I'm going to ask you about air cargo. We're blessed to have,
obviously, in addition to Air Canada and WestJet providing belly
service, such air cargo service providers as Cargolux, Air China,
Cathay Pacific, and others. What is being done within your
department to monitor the status of their services here, any that may
be at risk, and what may we be doing in terms of addressing the
economic downturn and risk to services that may exist there as

Mr. Day: Again, we'll follow up with some detail in writing, but
what we are looking at are transportation hubs in terms of the
distribution of that cargo as it comes in either by air, rail, or
whatever. Again, we're working closely with Economic Development
and Trade to make sure that we've got the infrastructure in
place that allows dispersal or distribution of those goods as they
come in, whether it's by air, rail, or by truck.

Mr. Gotfried: Okay. Maybe I'll throw in a third question, which
may relate to this if you're doing some research at the same time.
Obviously, with the air cargo side of things and also the logistics
business that can often be spurred by that, we run into the
multimodal transportation issues: rail, trucking, and air services. As
you noted, there's obviously some crossover into the economic
development side of things, with Economic Development and
Trade, but I'd be very interested also in what your ministry, the
Ministry of Transportation, is doing in concert with other ministries
to ensure that not only are we supporting that infrastructure but also
protecting it and about the risk that may come from an economic
downturn in terms of operators we may have attracted during busier
and more robust times in the economy. What are we doing to protect
that infrastructure going forward?

Mr. Day: A good question. We are working with colleagues. We're
also working with industry around not only transportation hubs, but
we've got a number of studies going on the high-load/heavy-load
corridors to make sure, you know, that we're making the right
investments in that infrastructure, again taking a multimodal view
or approach. This was also part of the analysis that we're doing for
the longer term transportation strategy to make sure that those, the
part of the network that needs to be protected to allow for that
economic distribution of goods and cargo and people, are protected.

February 28, 2017 Public Accounts PA-359

Mr. Gotfried: Okay. Maybe just as a final question, somewhat
around that as well, the logistics industry is one that's become much
more significant in our province. Does your department engage
with that sector through organizations like Calgary Economic
Development and Edmonton Economic Development to ensure that
that logistics sector is well serviced and addressed in terms of
access to roadways and things like that, that are often barriers to
their success and their viability?

Mr. Day: Yes. We are plugged in with industry, primarily through
the Alberta Motor Transport Association, which represents the
trucking industry.

Mr. Gotfried: Okay. That's very good. I expect some good
research and responses on that if possible.
In terms of some of the long-term planning, you know, we've
been looking, obviously, at the Calgary ring road. I know you
mentioned that earlier. Can you tell me: has the general contractor
been selected for that project, and when will the contracts,
particularly for upstream work such as excavating and earthmoving,
be moved forward on that project specifically?

Mr. Day: That contract has been signed and is in place. It was
signed last September. We had an agreement with the contractor to
do some early work ahead of the main contract being signed. If
they're not working, they will be very, very soon. They're, for sure,
mobilizing on-site.

Mr. Gotfried: I made some references in the earlier presentation
with Infrastructure that I had a chance to meet with Keystone
Excavating, who is shutting down operations. One of things that
they cited was the delays in some of the larger infrastructure
projects. Obviously, some fall under the purview of Transportation
as well, and the ring road was one of them, where they have been
on the sidelines waiting for projects like that and then some larger
projects like the cancer centre and whatnot. So that's of concern, I
think, for us as Albertans and certainly for those businesses that are
looking for economic activity around those.
Thank you.

The Chair: Thank you, Mr. Gotfried.
Now we will endeavour to start the last rotation. The last rotation
will be three minutes for each of the parties. I would like to note
that at the end of this meeting there are going to be one to two
minutes that will be designated for outstanding questions to be read
into the record for written answers.
Mr. Panda.

Mr. Panda: Thank you, Mr. Chair. I was in Ottawa this past week,
and I noted that they have a bus-only transitway, and the maximum
speed is 80 kilometres per hour, and I noted that passengers were
standing in those buses. In Alberta we don't have those kinds of
transitways, but our speed is 100 to 110 for the buses from Airdrie
to Calgary, Calgary to Airdrie. Do we allow standing passengers?
If so, is there any safety hazard when the buses run at that high
speed of 100 to 110 kilometres? Was there any risk assessment

Mr. Day: An excellent question. I'll ask Wendy Doyle to respond.

Mr. Panda: Yeah. Please be brief. I'm racing here because I only
have three minutes.

Ms Doyle: I'll be very brief. Standees are allowed by permit. So for
any transit-style bus to be used on a highway at highway speeds, they must
obtain a permit from the department, and they have to
meet some safety criteria to allow for that.

Mr. Panda: Thank you.
I know that some of these overweight buses cause damage to the
roads, provincial highways. Can you comment if the buses run by
the cities of Edmonton and Calgary are overweight and if you are
allowing them to run on highway 2 or other highways? Are there
any plans to mitigate that risk, and are the cities paying any kind of
extra cost for mitigating that risk? Are the cities trying to contract
out for proper weight compliant motorcoaches? Any comments on

Mr. Day: I don't know exactly if buses would be overweight
compared to, say, a transport truck, you know, that's hauling cargo
and what the specific additional damage might be, but intuitively I
can't see a bus causing more damage to a roadway than a fully
loaded cargo semitrailer unit.

Mr. Panda: Okay. Thank you. I asked because in cities, you know,
they have these hard concrete pads at the bus stops, so I thought that
maybe for that reason they had them.
Anyway, my other question is: in 2012 Tim Grant, the deputy
minister back then, said . . .

The Chair: Thank you, Mr. Panda. You can submit that as a
question for a written . . .

Mr. Panda: Thank you, Chair.

The Chair: Mr. Malkinson, do you have some questions for three

Mr. Malkinson: I sure do, Mr. Chair.

The Chair: All right.

Mr. Malkinson: On page 28 of the annual report it mentions the
traffic safety plan. I was hoping that the ministry could let us know
what the department is doing to improve transportation safety here
in Alberta, specifically including implementing that traffic safety

Mr. Day: Okay. Thank you, Mr. Malkinson. In 2015 the department
continued to deliver the traffic safety plan of 2015, which was,
really, a comprehensive strategy designed to reduce collisions on
our roadways. The key strategy is to encompass safety, improving
road infrastructure, obviously; promoting safer vehicles and vehicle
safety equipment; implementing an effective speed-management
program; deterring, apprehending, and convicting impaired drivers;
increasing the use of seat belts and child safety seats for vehicle
occupants; and implementing enhancements to electronic data
capture and the modernization of our IT system: a three-pronged
approach through education, awareness, and enforcement.

Mr. Malkinson: Perfect. Thank you.
One more question here. The report also noted that “the Alberta
Traffic Safety Fund was instrumental in enhancing community
capacity by supporting stakeholder involvement in awareness,
training and community engagement . . . across Alberta,” as per
page 28. Forty-seven grant applications were approved by ATSF.
Can you speak to the kinds of projects that are improved through
the traffic safety fund? And, after that, if you could perhaps just
quickly comment on what Alberta Transportation's long-term plan
is for the high-load corridor network. I think that should probably
use up all my time.

PA-360 Public Accounts February 28, 2017

Mr. Day: Okay. We look at projects, you know, for alignment with
our traffic safety plan, the need in the community for the project,
the effectiveness of the strategy and implementation plan, whether
the project is sustainable, whether it can be done by others and not
by us, whether there's community support, and whether there's
demonstrated value for the projects. I've got a long list of grants,
that I will not read through unless you want me to, that were
allocated in 2015 under that program.

Mr. Malkinson: That's good. Thanks.

The Chair: Thank you, Mr. Malkinson. That is your time.
Mr. Gotfried, if you're ready.

Mr. Gotfried: Thank you, Mr. Chair. Just to maybe change some
gears again, how is your ministry accounting for potential
technological changes – you mentioned Uber and other ride-share
services; I could throw high-speed rail into the mix of the
conversation – that are occurring now or maybe just envisioning
pilot or test phases such as driverless vehicles when planning for
long-term projects, rehabilitation of roadways, or perhaps acquiring
of land required for technology-driven or blue-sky projects? Is that
in your purview as well or in your sights?

Mr. Day: Thanks. A good question. Absolutely, we are looking at,
you know, all of those items. Again, that's one of the reasons that
we're taking a step back on our overall transportation strategy.
We're engaged on the automated and connected vehicles front with
a project called ACTIVE-AURORA, which is a partnership between
the U of A, I believe, and the city of Edmonton. There's going to
be some testing of autonomous vehicles on a University of Alberta
site this coming year. We are engaged and involved in emerging

Mr. Gotfried: You can test it on some MLAs between Calgary and
Edmonton, perhaps, in the future.

Mr. Day: I'm not sure we're ready for that.

Mr. Gotfried: Another question: how does the ministry balance
some of the priorities and outcomes the province would like to see
in transportation with potentially differing outcomes sought by the
municipalities, specifically Edmonton and Calgary? Obviously,
there's not always a complete alignment on opinions of what's the
highest priority, so how are you addressing those opportunities for
investment and collaboration?

Mr. Day: We do work closely with not just Edmonton and Calgary
but all of the municipalities as well as the Capital Region Board in
Edmonton and the broader region around Calgary. We participate
in planning studies, you know, with the regions and with the
municipalities to determine the infrastructure that's needed. We
talked earlier about the transportation hubs and multimodal, but it's
broader than that in terms of movement of goods and services in,
through, and around the major cities.

Mr. Gotfried: All right.
That's fine, Chair. I'm sure my beeper is just about ready to go
here now, in any case.

The Chair: You can read a question into the record if you'd like.

Mr. Gotfried: I'm fine. Thank you.

The Chair: Fair enough. Okay. I'm going to give an opportunity to all of
the members to read
questions into the record for written responses. I have interest from
Mr. Panda.

Mr. Panda: Thank you. In 2012 Deputy Minister Tim Grant
indicated that Alberta Transportation statistically needed to rebuild
1,350 kilometres of road each year but was only able to do 1,200
kilometres. What do you statistically have to repave now, and what
are you actually accomplishing, and what is the dollar amount to
bridge that delta?
My other question is . . .

The Chair: Just a second, Mr. Panda.
Was there anybody else that has questions? Mr. Gotfried, if you
could read your question into the record.

Mr. Gotfried: Yes. I'd just like to ask the department if they can
disclose to us in the future any of the information that they've
received around the economic impact or perhaps the barriers to
future economic activity around the Deerfoot-212th Avenue interchange
in Calgary.
Thank you.

The Chair: Thank you, Mr. Gotfried.
Was there anybody on the phones that has questions for the
record?Hearing none, Mr. Panda.

Mr. Panda: Page 9 of the annual report also states that a key
responsibility is to “lead the planning, construction, operation and
preservation of our provincial highway network to connect
Alberta's communities, and to support a sustainable and diversified
economy and social growth for the province.” In 2005 Premier
Klein promised Premier Calvert of Saskatchewan as a provincial
centennial gift to build an Alberta road connecting Fort McMurray
to La Loche. Saskatchewan has their side of the road built to the
border, but, 12 years on, nothing from Alberta. We made a promise
to Saskatchewan. Why is this interprovincial highway not a

The Chair: Okay. Thank you, Mr. Panda, and thank you to all the
members.I would like to thank the officials from the Ministry of
Transportation for attending today and responding to the committee
members' questions. I would ask that any outstanding questions be
responded to in writing within 30 days and forwarded to the
committee clerk. Thank you very much. If you would like to leave,
we can start with agenda item 8.
All right. I'll start the discussion on committee input to three-year
performance audit program of work. It was the consensus of the
committee at its January 24 meeting that this item would be dealt
with by the committee as a whole possibly during an in camera
meeting, and today the committee is considering the options for its
input. Members should have a copy of the OAG briefing note.
I would like to turn it over to Ms Gibson from the OAG to address
this item of business.

Ms Gibson: Thank you, Chair. Well, you've given the perfect
introduction. Basically, we'd like to offer the committee an
opportunity to give us their insight as we refresh our three-year
program of work for the performance audit line of business. There
are two options before you, either an in camera session or a survey.

The Chair: Thank you, Ms Gibson.
Were there any questions for Ms Gibson or for myself?

February 28, 2017 Public Accounts PA-361

Ms Renaud: I'm just wondering which you would prefer and why.

Ms Gibson: My preference would be just a short facilitated session,
a couple of hours. We would provide you with some prereading
material, and it's just a general discussion.

The Chair: Okay.
Mr. Gotfried.

Mr. Gotfried: Thank you, Mr. Chair. Thank you, Mary and team,
for that. I think we did have a short session before, where we did an
in camera discussion over lunch one time just to discuss where we
were at in terms of progress. I think it would be very useful and very
helpful for us to ensure that we're on track, not only on some of the
topics that we're handling but also in terms of the direction and
processes that we're following.
So thank you for that suggestion, and I would encourage us to
proceed with that.

The Chair: The Auditor General.

Mr. Saher: Thank you, Mr. Chairman. With respect, Mr. Gotfried,
I agree with you that we should continue to do what we did the last
time, which is really a facilitated self-assessment of the committee's
progress in meeting its goals in becoming the most effective Public
Accounts Committee in Canada if I can put it that way. This is
slightly different in that we are requesting your input to our threeyear
program of work.

Mr. Gotfried: A little more formalized, then.

Mr. Saher: Yeah. If you were suggesting that – the way that
session was handled was that it was interactive, it was facilitated,
we got to the end with a result. I think Mary and I are recommending
to you that we'd prefer to do it that way than just ask you to
complete a survey because we know from that sort of work that
we'd have to come back and ask: “What exactly did you mean? Did
you mean the same as, you know, a fellow member? You've used
different words.” If we can engage with you, I think we would get
to the end of that session – and I'm not sure how long it should be
– with a real understanding of what's in your minds and the ability
to make those decisions as to whether or not we can include your
ideas into our program of work.

Mr. Gotfried: Mr. Chair, if I could, maybe I'm thinking of a hybrid
of what we did before. The lunch one we had was a little too
informal perhaps, so maybe if we can do something that has a bit
more formality to it but achieves the results that you're looking for,
I think that would be very, very effective for us.

The Chair: Okay. Thank you, Mr. Gotfried. I did contact the Auditor
General's office through our clerk. One
of the questions that I had was: if we do a survey, is it going to be
something that we're going to be able to do in three minutes? It's
probably going to be a lengthy amount of time no matter what way
we look at doing this. So I would recommend as the chair that we
consider the advice of the Auditor General's office in saying that
an in camera session be done. I would ask that somebody make the
motion moving an in camera session. Mr. Dach.

Mrs. Sawchuk: Do you want me to read the motion into the record,
Mr. Chair?

The Chair: If you would, please.

Mrs. Sawchuk: Sure. The motion by Mr. Dach would be that
the Standing Committee on Public Accounts schedule an in
camera session with the office of the Auditor General for the
purpose of participating in the Auditor General's three-year
performance audit program of work.

The Chair: Does that meet your expectations?

Mr. Dach: It meets the expectation, yeah.

The Chair: Okay. Thank you, Mr. Dach.
Is there any discussion on this motion? Okay. All in favour? On
the phones? Any opposed? Thank you. This motion is carried.
All right. As another matter under other business, I would like to
remind members that any requests for additional research should be
discussed with their caucus colleagues on the committee and
submitted to the committee clerk for consideration by the working
group. To give research services time to complete additional
research, please provide requests for meetings starting March 21
and for the balance of the approved spring schedule.
Are there any other items for discussion under other business?
Are there any other items for discussion under other business on the
phones?Hearing none, the committee meets next on Tuesday, March 7,
2017, to hear from the Ministry of Executive Council, including the
Public Affairs Bureau. The meeting is scheduled from 8:30 a.m. to
10 a.m., and a premeeting briefing is at 8 a.m. sharp.
I would call for a motion to adjourn. Would any member move
that we adjourn.

Mr. Panda: Yes.

The Chair: Mr. Panda. All in favour? On the phones? Any who
object? Carried.
Thank you very much.

[The committee adjourned at 4:18 p.m.]

PA-362 Public Accounts February 28, 2017

Published under the Authority of the Speaker
of the Legislative Assembly of Alberta