This document contains the policy as revised June 1, 1994.
- To retain or acquire only the essential assets required to
deliver government programs efficiently;
- To manage the existing asset base effectively and make
appropriate changes to it within available resources; and
- To provide a rational context for resourcing considerations
and project approvals.
It is government policy that capital assets be
- acquired, improved, and retained;
- in support of program goals consistent with broader
government objectives;
- based on long-term plans that outline a responsible
investment program within available resources and that take into
account managing the asset base on a life-cycle basis;
- justified and approved, through capital projects, in the
context of long-term plans; and
- disposed of, as being surplus, when they are no longer required.
This policy applies, in general, to departments
listed in Schedules I and II of the Financial Administration
Act. However, only those departments and agencies listed in
Policy Appendix A, or others identified by the Treasury Board,
are required to submit long-term capital plans for consideration
by the Board.
- Departments must plan the management and investment in their
capital assets, over the longer term, based on adequate
information on the state and best use of their asset inventory
with due consideration given to the life cycle management of the
asset base:
1.1 to ensure they develop effective
strategies for acquiring and preserving assets essential to the
delivery of their operational programs as well as their eventual
disposal, taking into account resource constraints;
1.2 to support the allocation of
adequate budget and management resources for this purpose;
and
1.3 to assess the consequences of
their capital asset strategies, including those arising from any
devolution of operational responsibilities and divestiture initiatives.
The Long-term Capital Plan (LTCP) is
a management tool intended to assist departments in the overall
management of projects and the capital assets that support their
programs. It can also serve in establishing an accord with the
Treasury Board with respect to the management of the capital
base. Departments, in developing capital plans, should consider
the impact of other departmental strategies such as those
contained in their information management plans and any long-term
accommodation plans. In arriving at appropriate plans and
projects to implement those strategies, departments should base
their decisions on the full costs of the preferred options,
including both capital and ongoing operating expenditures, and
the projected full costs of alternatives. Departments should make
a strategic investment decision by making a relative comparison
of the fully costed options that have been identified as meeting
program requirements.
For those departments listed in Policy Appendix A, or others
as specifically identified by the Treasury Board, the LTCP provides
Treasury Board ministers with the opportunity to review the department's
capital priorities and strategies. It also allows the ministers to review
any significant issues with respect to the asset base and
resource levels that either the Treasury Board of Canada
Secretariat or the department wishes to raise. The LTCP provides
the context for Treasury Board decisions about appropriate
funding levels for departmental capital programs and individual
project approvals.
The LTCP is to be prepared in two parts. Part 1 sets
out the department's proposed capital priorities and strategies
over a period of at least five years, and Part 2 outlines
proposed funding profiles and project activity. The project
funding estimates in the LTCPs must, in aggregate, relate to
departmental reference levels and any proposed changes. The
relationship of individual projects to the capital asset strategies
specified in the LTCP and to the department's goals and objectives
must be shown.
Basic content requirements for LTCPs are outlined
in Appendix B. Departments are encouraged, upon consultation
with their Treasury Board analyst, to make use of existing
internal documentation to meet these information requirements.
LTCPs are intended to include all capital expenditures
as defined in the Glossary to this volume and any operating
expenditures (like leases) where these expenditures are used
to acquire the long-term use of a capital asset.
Departments should also indicate any changes to ongoing
operating and maintenance (O&M) expenditures associated with
capital strategies or individual projects listed in the LTCP.
Any revenue implications (both vote-netted and revenues accruing
to the Consolidated Revenue Fund) associated with the proposed
capital strategy should also be highlighted.
Part 1 of an LTCP must set out the proposed capital
priorities and strategies, for a planning horizon of at least
five years. It outlines proposed capital asset and expenditure
priorities, clearly indicating linkages to program results, and
specifies how the department intends to implement the stated
priorities. Departmental priorities and implementation strategies
must be established within the context of approved resource levels
and broader government-wide priorities. Significant issues with
respect to the department's asset base or proposed priorities
with resource implications should be highlighted.
Part 2 of the LTCP provides information on the concrete
plans and associated funding levels the department has developed
to implement the priorities outlined in Part 1. Annual updates
of Part 2 must be submitted along with the fall multi-year
operational plan (MYOP). A new planning year must be included
with each update in accordance with MYOP procedures. Alternate
timing for the submission and the time-span of the LTCP may be
negotiated with the Treasury Board of Canada Secretariat.
The updated LTCP provides justification for the department's
proposed future year reference levels.
Sponsoring departments are responsible for the cash
management of projects within their approved program so
that the aggregate cash flow remains within the department's
approved reference levels. If the department has exhausted all
internal measures to contain deviations within approved reference
levels, it should consult with its Program Branch analyst at the
earliest opportunity regarding the possibility of reprofiling
capital funds.
Departments may choose to use the LTCP to seek specific
Treasury Board approvals. For example, departments may seek
Treasury Board approval for individual projects or groups of
projects through their LTCP Part 2. When reviewing or proposing
a capital project for approval, departments must consider and
describe the relationship of the project to their capital priorities
and their goals and objectives. Where Treasury Board project
approval is being sought, the level of detail and completeness
of the information provided must meet the requirements set out
in the Treasury Board Project Approval policy.
Departments may also propose certain policy
exemptions and tailored delegation authorities for particular
types of projects within the LTCP. Increased delegations would be
considered in those instances where the Treasury Board has agreed
with the importance the department attaches to a particular
priority and that priority will be realized through a series of
similar projects within the context of a specific management framework.
The Treasury Board of Canada Secretariat will use
the following criteria to assess departmental performance in
meeting the objectives of this policy:
- consistency between capital strategies developed in the LTCP
and all other government objectives, including those related to
expenditures in general and expenditures associated with the
government's capital stock in particular;
- consistency between broad capital strategies contained in the
LTCP and projects proposed for approval within the context of the
LTCP; and
- compliance with the information requirements provided for in
this policy, including the timeliness of submissions and the
quality of the information provided. Quality is considered to
cover such aspects as completeness, accuracy, and ease of
understanding.
This policy on Long-term Capital Plans replaces
Treasury Board Circular 1983-25, dated May 1, 1983, on the
Approval of Capital Projects and Long-term Capital Plans. It is
issued under the authority of section 7 of the Financial
Administration Act. It should be read with the other chapters
in this volume and other policies, particularly those dealing
with Risk Management, Materiel Management, Information Technology
Management, Contracting and Common Service Organizations, and
Real Property Management.
Policy Interpretations
Please direct enquiries
about this policy to your departmental headquarters. For
interpretation of this policy, departmental headquarters should contact:
Real Property and Materiel
Policy Directorate
Treasury Board of Canada Secretariat
L'Esplanade Laurier
140 O'Connor Street
Ottawa ON K1A 0G5
Telephone: (613) 941-7173
Facsimile: (613) 957-2405
E-mail:
rpmpd@tbs-sct.gc.ca
Submissions
For questions relating to particular details of
the LTCP or specific projects, departments should contact their
analyst within Treasury Board of Canada Secretariat Program
Branch and, as appropriate, their specialist analyst in the
Real Property and Materiel Policy
Directorate or the Office of Information Management,
Systems and Technology.
Note: Treasury Board may also require other
departments to submit an LTCP for approval.
Agriculture and Agri-Food Canada
Canadian Heritage
Canadian Space Agency
Correctional Service Canada
Department of Foreign Affairs and International Trade
Environment Canada
Fisheries and Oceans Canada
Public Works and Government Services Canada
Health Canada
Human Resources Development Canada
Indian Affairs and Northern Development Canada
Industry Canada
National Defence
National Research Council Canada
Natural Resources Canada
Royal Canadian Mounted Police
Transport Canada
Veterans Affairs Canada
Introduction
The purpose of this policy appendix is to provide
departments with the basic requirements for a Long-term Capital
Plan (LTCP). An LTCP must be designed to reflect the department's
mandate, programs, and structure in a manner that is meaningful
to departmental management. For that reason, apart from the broad
general sections of the plan outlined here, no specific format is
required. Departments may wish to discuss with the Treasury Board
of Canada Secretariat whether existing internal documents will
fulfil requirements for an LTCP.
Part 1: The department's proposed capital program priorities and strategies
The purpose of Part 1 is to establish the
department's capital asset priorities and strategies over a
longer time frame, normally five years. It should be developed on
the basis of existing resource levels and a realistic assessment
of the department's asset base, as well as departmental and known
government-wide priorities.
Part 1 must clearly relate these capital
priorities and strategies to the department's overall objective
and its intended program results. The presentation of the
department's capital program (including investment and disposal
initiatives) should be high level and concise, yet comprehensive in scope.
Part 1 must be submitted at least once every
five years or more frequently when warranted by significant
changes in either priorities or funding levels. Part 1 must
contain an overview of the following:
- certain baseline data, including capital expenditures as
defined in the Glossary and any operating expenditures (like
leases) where these are used to acquire the long-term use of a
capital asset;
- the proposed capital program priorities over the planning
horizon and how these are linked to the department's program
activities, results, and broader departmental priorities;
- how the proposed capital priorities will be realized;
- any formula-driven expenditures (e.g. fleet replacement at a
given rate of x units per year);
- any standards (e.g. square metres per person) that relate to
capital procurements;
- any trade-offs related to capital requirement priorities that
have been made; and
- any significant issues related to the department's capital
program over the planning period, including funding shortfalls
and the impact of any such shortfall on program objectives.
Part 2: Proposed funding profiles and project activity
Part 2 of the LTCP translates the department's
capital priorities and strategies into a detailed project listing
and associated expenditures. The level of proposed resources in
the plan must be explained and linked to priorities.
Part 2 must be submitted annually together with
the fall multi-year operational plan (MYOP). Alternate timing for
the submission may be negotiated with the Treasury Board of
Canada Secretariat. Part 2 consists of two sections as described
in the following paragraphs.
Part 2, section 1 - proposed LTCP funding levels
This section provides the following:
1. The proposed level of funding for the Plan. In
this instance, funding refers to capital expenditures as defined
in the Glossary and any operating expenditures (like leases)
where these are used to acquire the long-term use of a capital
asset. To support this, proposed expenditures should be broken
down by appropriate categories. Examples include the following:
- the program activity structure;
- capital and operating dollars;
- class of asset (such as real property, equipment, information
technology);
- program priority (expenditures to meet each program
priority);
- replacement or refurbishment of the existing asset base and
new assets (i.e. expansion of the capital asset base);
- existing capital base and incremental funding requested; and
- expenditures by region (if appropriate, available, and
sufficiently reliable).
2. The relationship between the capital
strategies proposed in Part 1 and the requirement for operating
resources. This should include changes to lease or rental costs
as well as the impact on the operating base of acquisitions and
disposals; and
3. Justification of any proposed incremental LTCP funding.
Part 2, section 2 - project activity
This section provides an overview of the intended
project activity within proposed reference levels consistent with
the priorities identified in Part 1. This information is required
to justify the proposed reference levels and consists of the following:
- a listing of projects and groups of similar or related
projects that have already received at least preliminary
approval, including current approval status (both internal to the
department and by Treasury Board), total estimated project costs,
and the most current forecasts of cash requirements. Details
concerning the grouping of projects and information requirements
are to be determined through negotiation with the Treasury Board
of Canada Secretariat by each department. In general, most
projects approved internally are expected to fit within a very
small number of groups for LTCP reporting purposes;
- a description of projects and groupings of similar or related
projects, complete with total estimated project costs and cash
flow requirements, that are being put forward within this section
for the purposes of approval by Treasury Board; and
- brief descriptions of planned projects and groups of projects
that have received at least initial approval within the
department and that will require separate consideration by
Treasury Board.
For the latter two sets of projects, financial
information should be provided to indicate the impact of the
project on the ongoing departmental operating and maintenance
expenditures. For real property projects, this would include
grants in lieu of taxes. This includes any changes to lease or
rental costs, implications of acquisitions and disposals, and the
impact of productivity improvements arising from capital
expenditures. Finally, where there are revenue implications (both
vote-netted and revenues accruing to the Consolidated Revenue
Fund) associated with projects, they should be highlighted.
The descriptions of projects proposed for
approval and planned projects must identify the linkages with the
departmental priorities defined in Part 1. The data on planned
projects are submitted to the Treasury Board of Canada
Secretariat for its information and to support, in aggregate,
proposed future year reference levels. To facilitate the
presentation of information, departments are encouraged to adopt
a database approach to capturing, storing, revising, and
reporting the resource and project information required to
prepare their LTCPs.
When Treasury Board project approval is being
sought, the level of detail and completeness of the information
provided must meet the requirements of the Treasury Board Project
Approval policy.
This example is intended to be illustrative only.
Departments, in meeting the requirements set out in Appendix B,
should develop an information display that is meaningful to
departmental management.
Department of National Infrastructure
Long-term Capital Plan
1993-94 to 1997-98
Part I
Departmental Strategies and Priorities
The Department of National Infrastructure is
responsible for ensuring that the infrastructure is in place
across Canada to support a safe and reliable transportation
system either by air, surface transport, or through navigable
national waters. In support of this mandate, the department has,
under its control, assets with a replacement value amounting to
some $40 billion, including airports, the Marine Transport and
Rescue fleet, air and marine navigational aids, and the
Trans-Canada Highway.
Of the total asset base, $25 billion is devoted
to the national air transportation system and includes such
capital assets as airports, surrounding land, associated
infrastructure, and air navigational aids and equipment,
including snow removal and fire fighting equipment situated at airports.
A further $10 billion of the base is devoted to
the Navigable Waters Program to ensure that national waters are
safe and navigable. Of this amount, $5 billion is for the
existing Marine Transport and Rescue fleet and $5 billion for
navigational aids and supporting machinery and equipment, such as
automated buoys.
The balance of the asset base, $5 billion,
belongs to the Land Infrastructure Program and includes the roads
and bridges comprising the Trans-Canada Highway system and all
equipment necessary to maintain it.
In terms of annual expenditures, Annex A shows
last year's capital expenditures by activity and by major asset
group. In recent years, the department's capital expenditures
have been driven by two primary factors. The first, external to
the department, are clients' demands for the department's
services. This includes, for example, demands for ferry services
to the province of Newfoundland and increasing traffic at
international airports. Additional spending over the planning
horizon will be required to meet these external demands if
reasonable service levels are to be continued. In addition, the
department has been attempting to slow down and, if possible,
reverse deterioration of the existing capital stock. This rustout
is most noticeable in the areas of roads and bridges and the
Marine Transport and Rescue fleet. The department will address
the issue of roads and bridges internally. For the Marine
Transport and Rescue fleet, the department is in the process of
developing a reasoned approach to replacing it that will involve
rationalizing active use schedules, decommissioning certain
ships, and obtaining the agreement of the Treasury Board to
replace the remaining ships on a regular basis over the next
20 years. It is currently expected that the department will be
approaching the Treasury Board with a formal plan for the Marine
Transport and Rescue fleet within the next two years.
The department's primary program priority over
the planning horizon is to ensure that the required
infrastructure is in place to allow the department to fulfil its
mandate to provide a safe and reliable national transportation
system. This infrastructure includes not only buildings and
equipment but also trained and motivated staff and a viable
information gathering and sharing network. This overall program
priority has been subdivided into three strategic objectives that
the department will be pursuing over the next five years. These
strategic objectives are further explained in the 1993-94 MYOP
Program Memorandum.
These strategic objectives form the backdrop
against which the department's capital priorities, addressed in
greater detail below, have been developed. The strategies that
the department will be adopting in pursuing these priorities are
described later in this section.
The department intends to pursue five capital
priorities over the next five years. The LTCP has been
constructed with those priorities in mind.
The first is to ensure that all constitutional
entitlements in which this department has a role to play are
fulfilled in a reasonable manner. More specifically, one of the
critical and most non-discretionary objectives of this department
is providing the transportation links to the province of
Newfoundland promised as a condition of confederation. Certain
aspects of these links are falling into disrepair and are being
overused. These problems must be urgently addressed.
The second capital priority is to ensure that
urgent safety concerns are addressed. While this crosses all
three program areas of the department - land infrastructure, air,
and navigable waters - initial priority will be placed on
addressing the concerns identified in the land infrastructure
program. This is where the greatest potential hazards to the
travelling public have been identified. The primary program
result of these expenditures will be the safer movement of people
and goods across Canada.
The third capital priority is to increase the
efficiency of the national air traffic network by eliminating the
causes of slowdowns and backups at the Western hub of air traffic
in Canada. With deregulation, four regional air traffic hubs have
developed, all served by the major airlines and smaller regional
carriers. To contribute to the program result of supporting and
promoting the competitiveness of the Canadian airline industry,
it is essential that the Western hub be upgraded to minimize the
diversion of passenger traffic to the United States.
The fourth capital priority is investing in new
information technologies to reduce administrative overhead costs.
These can be reallocated internally to meet emerging funding
pressures. This project is expected to result in increased
efficiency in delivering all of the department's programs and services.
The fifth capital priority is maintaining the
existing national infrastructure, including such projects as
repaving runways and replacing certain navigational aids. This
priority contributes to all of the department's results.
The department has developed an integrated
strategy for addressing these capital priorities. Specific
project proposals that involve the direct expenditure of
departmental capital and operating funds for priorities one
through four have been or will be developed for Treasury Board
approval. The fifth priority will be addressed through a series
of departmentally approved projects. In terms of capital
replenishment, the department will continue with its past
practices that have been dictated by the budget restraints of the
last several years. Approximately 80 per cent of available
expenditures will be devoted to correcting deterioration of the
existing asset base. The most non-discretionary rustout problems
will be dealt with on a priority basis, with any new acquisitions
limited to those that demonstrate significant resource savings downstream.
In addition, the department intends to
rationalize its capital infrastructure, with a view to disposing
of any surplus assets and using those proceeds to help address
both government-wide land sales targets and the department's
considerable capital needs over the next few years. It will
probably take two years to identify all redundant assets and
develop disposal plans. Approximately $100 million may become
available as credits to the Consolidated Revenue Fund from land sales.
Part II
Resource Requirements
1993-94 to 1997-98
Detailed Project Listings
Background
As background information for this section of the
LTCP, a series of summary annexes are included.
Annex B shows proposed LTCP funding by activity
(air, land infrastructure, navigable waters, and corporate) by
class of asset for each year in the planning horizon. Last year's
expenditures have been included as a point of reference.
Annex C looks at proposed funding by level of priority.
Annex D shows proposed O&M and capital
spending by priority.
Annex E examines the split of proposed
expenditures between approved (by Treasury Board and by the
department), seeking approval, and planned.
Annex F disaggregates proposed LTCP funding by
purpose for each year over the 199394 to 1997-98 period.
Resource requirements
Annex G provides a reconciliation between
proposed and approved reference levels.
It is proposed that reference levels for the LTCP
increase in total by $10 million in 199394, $18 million in
1994-95, $30 million in 1995-96, $50 million in 1996-97, and
$65 million in 1997-98. These proposed increases are attributable
to a number of factors.
First, the planned acquisition of the
Newfoundland ferry has been delayed one year because a suitable
design capability was not available locally. A Memorandum to
Cabinet is being prepared on this issue. In addition, anticipated
costs of the ferry have risen by about $12 million over the
planning period.
A rise in petroleum costs as well as
higher-than-anticipated wage settlements has led to an increase
in the estimated cost of adding passing lanes to the Trans-Canada
Highway. This amounts to $4 million in 1993-94 and $8 million in
1994-95. Further planned additions will not proceed in 1995-96,
resulting in a savings of $7 million.
Given the need to generate overhead savings, the
department plans to undertake major investments in information
technology over the 1993-94 to 1997-98 period. Pilot programs
will be established at headquarters in 1993-94, with broader
applications implemented in subsequent years. Since the overall
costs of this project are likely to be in excess of $100 million
and make- or-buy considerations will play a major role in the
final decisions, early Treasury Board direction will be sought on
this project. This project is responsible for most of the
proposed increase over the planning period and is considered
absolutely essential if the department is to realize the savings
that are expected of it.
Finally, current projections show an increase of
close to $46 million in the cost of renovating the Winnipeg
International Airport. This is primarily due to the projected
upswing in the Manitoba economy with the resultant price and wage inflation.
As indicated in Part 1 of this Plan, the
department intends to rationalize its asset base over the next
few years. It is currently anticipated it will take about
two years to identify surplus assets and develop disposal plans.
Once these plans are implemented, funds will be available to
offset some of the proposed incremental costs of the LTCP in the
out years and as credits to the Consolidated Revenue Fund.
However, the department is unable to commit itself to either the
split or the precise timing of potential available funds at this
time and will address this issue in future LTCPs.
Detailed project listing by priority
1. Projects in support of constitutional commitments
1.1 St. John's Wharf Retrofit (T.B. XXXXXXX), $(000s)
John's Wharf Retrofit
|
1993-94
|
1994-95
|
1995-96
|
Approved Cash Flow
O&M
Capital
|
-
12,000
|
-
3,500
|
-
500
|
Revised Cash Flow (if required)
Not Required
|
|
|
|
1.2 Newfoundland ferry
Preliminary Project Approval (PPA) for the design
of a new ferry to provide passenger service between the mainland
and the province of Newfoundland.
Authority is sought to proceed with the project
definition phase for the design and construction of a new ferry
to service the Province of Newfoundland. Current passenger
traffic as well as projections over the next ten years indicate
that there will be a significant shortfall in ferry capacity.
1.2.1 Departmental priority and rationale
The department accords this project a high
priority in that failure to introduce an additional ferry will
seriously undermine the department's ability to provide a
reasonable level of service to the residents of Newfoundland and
will call into question this pre-Confederation commitment by the
federal government to the province.
1.2.2 Regional strategies
Initial market surveys have indicated that there
is limited regional capability for the design phase of this
project. As a result, a Memorandum to Cabinet is being prepared
and planned construction of the ferry has been delayed one year.
1.2.3 Projected cash flows, $(000s)
Projected cash flows
|
1993-94
|
1994-95
|
1995-96
|
Project Design Phase
(authoritative estimates)
|
-5,000
|
-5,000
|
-5,000
|
Project Implementation
(indicative estimate)
|
-5,000
|
-
|
25,000
|
(Total estimated cost
(indicative) $125 million)
|
|
|
|
1.2.4 Potential risks
As with most projects of this type, the greatest
potential risk at this time involves whether the industry in the
Maritime region is able to deliver the required product on time
and within budget. Past experience has indicated that cost
overruns in the order of 20 to 30 per cent are not unusual.
2. Projects concerned with health and safety
2.1 Trans-Canada Highway passing lanes
Doubling the number of passing lanes on the
Trans-Canada Highway through Northern Ontario.
2.1.1 Description
Based on traffic analysis that the department has
undertaken, doubling the number of passing lanes on the
Trans-Canada Highway through Northern Ontario could potentially
reduce the number of traffic deaths and injuries by 10 per cent
per year.
2.1.2 Priorities and rationale for priorities
Because of the health and safety considerations,
the department accords this project a relatively high priority.
It is, however, ranked lower than the projects related to
passenger and freight service to the province of Newfoundland.
Those projects are based on constitutional commitments that must
be honoured.
2.1.3 Projected cash flow
The total estimated cost of this project
(indicative estimate) is $40 million. It is expected that
Treasury Board authority will be sought early next spring so that
work can begin with the new construction season.
2.1.4 Potential impact on future O&M expenditures
This project is expected to result in increased
maintenance expenditures in the order of $250,000 per annum
starting in 1995-96.
3. Maintenance of the national air traffic network
3.1 Expansion of Winnipeg International Airport
3.1.1 Description
With deregulation and the regionalization of air
carrier service, Winnipeg has become a major air traffic hub.
Studies indicate that current traffic exceeds the airport's
capacity. Authority will be sought to add additional runways,
expand the terminal, enlarge current baggage-handling facilities,
and lease an additional hangar.
3.1.2 Priorities and rationale for priorities
Given the increase in competition from American
airlines, the department accords this a relatively high priority
to ensure that Canadian airlines can continue to compete for the
travelling public.
3.1.3 Projected cash flow
The total estimated cost of this project
(indicative estimate) is $150 million. It is estimated that PPA
from Treasury Board will be sought within the next fiscal year.
Aside from direct capital expenditures for the airport upgrade,
O&M expenditures will be incurred for the lease of an
additional hangar. This is expected to amount to $5 million per
annum over the planning horizon.
4. Investments in new technology
The department is expected to find overhead
savings in the order of 5 to 10 per cent over the next
five years. Having carefully considered all facets of our
operation, the department has concluded that such overhead
savings will only be realized with significant investments in
information technology. These investments will reduce the need
for support staff, increase productivity, and could result in an
increase in revenues accruing to the department as a result of
improvements in services rendered to outside parties.
4.1 Headquarters information technology
4.1.1 Description
Pilot projects will be established in 1993-94 at
headquarters to determine the feasibility of using many of the
alternative software and hardware configurations available. The
department will undertake a make-or-buy analysis during the
course of the next fiscal year to determine the most efficient
and prudent means of acquiring the information technology deemed
most suitable.
4.1.2 Priorities and rationale for priorities
The department accords this project a very high
priority. As indicated earlier, it is deemed to be essential if
the expected overhead savings are, in fact, going to be realized.
4.1.3 Projected cash flow
The total estimated cost of this project
(indicative estimate) is $150 million. The make-or-buy analysis
to be conducted by the department could have a significant impact
on these estimates. PPA will be sought from the Treasury Board
early in the new fiscal year.
4.1.4 Potential impact on future O&M expenditures
It is anticipated that once mature systems are in
place, overhead operating costs can be reduced annually by some
10 per cent or $20 million.
Annex A - Summary of 1991-92 Expenditures by Activity by
Class of Asset
Summary of 1991-92 Expenditures
Activity
|
Expenditure
$(000s)
|
AIR
Buildings and Land
Vehicles
Tech. Equip.
IT Equip.
Office Equip.
Furniture
Roads or Runways
TOTAL - AIR
|
3,000
5,000
10,000
-
-
-
5,000
23,000
|
LAND INFRASTRUCTURE
Buildings and Land
Vehicles
Tech. Equip.
IT Equip.
Office Equip.
Furniture
Roads or Runways
TOTAL - LAND
|
-
2,000
5,000
-
-
-
6,000
13,000
|
NAVIGABLE WATERS
Buildings and Land
Vehicles
Tech. Equip.
IT Equip.
Office Equip.
Furniture
Roads or Runways
TOTAL - NAVIGABLE WATERS
|
3,000
16,000
15,000
-
-
-
-
34,000
|
CORPORATE
Buildings and Land
Vehicles
Tech. Equip.
IT Equip.
Office Equip.
Furniture
Roads or Runways
TOTAL - CORPORATE
|
6,000
-
2,000
-
-
2,000
-
10,000
|
GRAND TOTAL
|
80,000
|
Annex B - Proposed LTCP Funding by Activity by Class of Asset, $(000s)
Proposed LTCP Funding
|
1992-93
|
1993-94
|
1994-95
|
1995-96
|
1996-97
|
1997-98
|
AIR
|
|
|
|
|
|
|
Buildings and Land
|
3,000
|
-
|
5,000
|
15,000
|
30,000
|
39,500
|
Vehicles
|
5,000
|
-
|
-
|
-
|
-
|
-
|
Tech. Equipment
|
10,000
|
15,000
|
15,000
|
15,000
|
15,000
|
15,000
|
IT Equipment
|
-
|
500
|
5,000
|
7,500
|
7,500
|
8,000
|
Office Equipment
|
-
|
-
|
-
|
-
|
-
|
-
|
Furniture
|
-
|
-
|
-
|
-
|
-
|
-
|
Roads or Runways
|
5,000
|
6,000
|
6,000
|
6,000
|
6,000
|
6,000
|
TOTAL - AIR
|
23,000
|
21,500
|
31,000
|
43,500
|
58,500
|
68,500
|
LAND INFRASTRUCTURE
|
|
|
|
|
|
|
Buildings and Land
|
-
|
-
|
-
|
-
|
-
|
10,500
|
Vehicles
|
2,000
|
-
|
-
|
-
|
10,000
|
10,000
|
Tech. Equipment
|
5,000
|
-
|
-
|
-
|
-
|
-
|
IT Equipment
|
-
|
500
|
5,000
|
7,500
|
7,500
|
8,000
|
Office Equipment
|
-
|
-
|
-
|
-
|
-
|
-
|
Furniture
|
-
|
-
|
-
|
-
|
-
|
-
|
Roads or Runways
|
6,000
|
21,000
|
31,000
|
6,000
|
6,000
|
6,000
|
TOTAL - LAND
|
13,000
|
21,500
|
36,000
|
13,500
|
23,500
|
34,500
|
NAVIGABLE WATERS
|
|
|
|
|
|
|
Buildings and Land
|
3,000
|
12,000
|
3,500
|
500
|
-
|
-
|
Vehicles
|
16,000
|
16,000
|
11,000
|
36,000
|
36,000
|
36,000
|
Tech. Equipment
|
15,000
|
15,000
|
15,000
|
14,500
|
15,000
|
15,000
|
IT Equipment
|
-
|
500
|
5,000
|
7,500
|
7,500
|
8,000
|
Office Equipment
|
-
|
-
|
-
|
-
|
-
|
-
|
Furniture
|
-
|
-
|
-
|
-
|
-
|
-
|
Roads or Runways
|
-
|
-
|
-
|
-
|
-
|
-
|
TOTAL -
NAVIGABLE WATERS
|
34,000
|
43,500
|
34,500
|
58,500
|
58,500
|
59,000
|
CORPORATE
|
|
|
|
|
|
|
Buildings and Land
|
6,000
|
6,000
|
1,500
|
-
|
-
|
-
|
Vehicles
|
-
|
-
|
-
|
-
|
-
|
-
|
Tech. Equipment
|
2,000
|
2,000
|
-
|
-
|
-
|
-
|
IT Equipment
|
-
|
3,500
|
5,000
|
7,500
|
7,500
|
11,000
|
Office Equipment
|
-
|
-
|
-
|
-
|
-
|
-
|
Furniture
|
2,000
|
2,000
|
2,000
|
2,000
|
2,000
|
2,000
|
Roads or Runways
|
-
|
-
|
-
|
-
|
-
|
-
|
TOTAL - CORPORATE
|
10,000
|
13,500
|
8,500
|
9,500
|
9,500
|
13,000
|
GRAND TOTAL
|
80,000
|
100,000
|
110,000
|
125,000
|
150,000
|
175,000
|
Annex C - Proposed LTCP Funding by Priority by Project, $(000s)
Proposed LTCP Funding
|
1993-94
|
1994-95
|
1995-96
|
1996-97
|
1997-98
|
1. Fulfilment of Constitutional Commitments
|
12,000
|
3,500
|
500
|
-
|
-
|
St. John's Harbour Wharf Retrofit Ferry
|
10,000
|
5,0900
|
30,000
|
30,000
|
30,000
|
2. Urgent Health and Safety Concerns
|
|
|
|
|
|
Trans-Canada Highway Improvement
|
15,000
|
25,000
|
-
|
-
|
-
|
3. Maintenance of National Air Traffic
Network
|
|
|
|
|
|
|
-
|
5,000
|
15,000
|
30,000
|
39,500
|
4. Investment in New Information Technologies
|
|
|
|
|
|
Headquarters Pilot Project
|
5,000
|
2,500
|
-
|
-
|
-
|
Fully Operational IT System
|
-
|
17,500
|
30,000
|
30,000
|
35,000
|
5. Maintenance of Existing National
Infrastructure
|
|
|
|
|
|
High Priority Departmentally Approved Maintenance
and Repair Projects
|
20,000
|
20,000
|
20,000
|
20,000
|
20,000
|
Other Departmental Projects
|
38,000
|
31,500
|
29,500
|
40,000
|
50,500
|
Total Proposed LTCP
|
100,000
|
110,000
|
125,000
|
150,000
|
175,000
|
Annex D - Proposed LTCP Funding by Priority and Type of
Expenditure, $(000s)
Proposed LTCP Funding
|
1993-94
|
1994-95
|
1995-96
|
1996-97
|
1997-98
|
1. Fulfilment of Constitutional Commitments
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
22,000
|
8,500
|
30,500
|
30,000
|
30,000
|
TOTAL
|
22,000
|
8,500
|
30,500
|
30,000
|
30,000
|
2. Urgent Health and Safety Concerns
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
15,000
|
25,000
|
|
-
|
-
|
TOTAL
|
15,000
|
25,000
|
-
|
-
|
-
|
3. Maintenance of National Air Traffic Network
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
5,000
|
5,000
|
9,500
|
Capital
|
-
|
5,000
|
10,000
|
25,000
|
30,000
|
TOTAL
|
-
|
5,000
|
15,000
|
30,000
|
39,500
|
4. Investment in New Information Technologies
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
5,000
|
20,000
|
30,000
|
30,000
|
35,000
|
TOTAL
|
5,000
|
20,000
|
30,000
|
30,000
|
35,000
|
5. Maintenance of Existing National Infrastructure
|
|
|
|
|
|
Operation and Maintenance
|
|
-
|
-
|
-
|
-
|
Capital
|
20,000
|
20,000
|
20,000
|
20,000
|
20,000
|
Other Departmental Projects
|
-
|
-
|
-
|
-
|
-
|
Capital
|
38,000
|
31,500
|
29,500
|
40,000
|
50,500
|
TOTAL
|
58,000
|
51,500
|
49,500
|
60,000
|
70,500
|
Total Proposed LTCP
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
5,000
|
5,000
|
9,500
|
Capital
|
100,000
|
110,000
|
120,000
|
145,000
|
165,500
|
TOTAL
|
100,000
|
110,000
|
125,000
|
150,000
|
175,000
|
Annex E - Proposed LTCP Funding by Type of Approval, $(000s)
Proposed LTCP Funding
|
1993-94
|
1994-95
|
1995-96
|
1996-97
|
1997-98
|
Approved
|
|
|
|
|
|
By Treasury Board
|
12,000
|
3,500
|
500
|
-
|
-
|
By Department
|
23,000
|
10,000
|
5,000
|
8,000
|
10,000
|
Approval to be sought this FY
|
|
|
|
|
|
By Treasury Board
|
25,000
|
30,000
|
30,000
|
30,000
|
30,000
|
By Department
|
15,000
|
15,000
|
10,000
|
15,000
|
20,000
|
To Be Approved in Future Years
|
|
|
|
|
|
By Treasury Board
|
5,000
|
25,000
|
45,000
|
60,000
|
74,500
|
By Department
|
20,000
|
26,500
|
34,500
|
37,000
|
40,500
|
Total Proposed LTCP Funding
|
100,000
|
110,000
|
125,000
|
150,000
|
175,000
|
Annex F - Proposed LTCP Funding by Purpose, $(000 s)
Proposed LTCP Funding
|
1993-94
|
1994-95
|
1995-96
|
1996-97
|
1997-98
|
Renewal and Maintenance of Existing Asset Base
|
73,000
|
76,500
|
49,500
|
60,000
|
70,500
|
Improvements to Existing Asset Base
|
-
|
5,000
|
15,000
|
30,000
|
39,500
|
Acquisition of New Assets
|
27,000
|
28,500
|
60,500
|
60,000
|
65,000
|
LTCP Total
|
100,000
|
110,000
|
125,000
|
150,000
|
175,000
|
Annex G - Reconciliation Between Proposed LTCP Funding and
Approved Reference Levels, $(000s)
Reconciliation Between Proposed LTCP Funding and Approved Reference Levels
|
1993-94
|
1994-95
|
1995-96
|
1996-97
|
1997-98
|
Proposed LTCP Funding
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
5,000
|
5,000
|
9,500
|
Capital
|
100,000
|
110,000
|
120,000
|
145,000
|
165,500
|
Total
|
100,000
|
110,000
|
125,000
|
150,000
|
175,000
|
Reference Levels
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
5,000
|
5,000
|
9,500
|
Capital
|
90,000
|
92,000
|
90,000
|
95,000
|
100,500
|
Total
|
90,000
|
92,000
|
95,000
|
100,000
|
110,000
|
Difference
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
10,000
|
18,000
|
30,000
|
50,000
|
65,000
|
Total
|
10,000
|
18,000
|
30,000
|
50,000
|
65,000
|
Explanation of Change
|
|
|
|
|
|
Trans-Canada Highway Project
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
4,000
|
8,000
|
-7,000
|
-
|
-
|
Total
|
4,000
|
8,000
|
-7,000
|
-
|
-
|
Investment in IT
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
5,000
|
20,000
|
30,000
|
30,000
|
35,000
|
Total
|
5,000
|
20,000
|
30,000
|
30,000
|
35,000
|
Newfoundland Ferry
|
|
|
|
|
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
1,000
|
-10,000
|
15,000
|
3,000
|
3,000
|
Total
|
1,000
|
-10,000
|
15,000
|
3,000
|
3,000
|
Winnipeg International Airport
|
-
|
-
|
-
|
-
|
-
|
Operation and Maintenance
|
-
|
-
|
-
|
-
|
-
|
Capital
|
-
|
-
|
-8,000
|
27,000
|
27,000
|
Total
|
-
|
-
|
-8,000
|
27,000
|
27,000
|
|