John Goddard: Well, they have reneged on that understanding that the Lubicon membership is of the order of 500 and the other implication that the Lubicon people have the right to set their own membership. The list of 506 people that the Lubicon side brought to the Ottawa negotiations was accepted by the federal people without "let's look into this more deeply and find out if somebody's grandfather accepted scrip and doesn't qualify under our rules," which were at various times seen as illegitimate rules anyway. So they accepted -- in a way -- accepted that the Lubicon people had the right to set their own membership and they accepted the number which was given to them. Now what Tom Siddon is saying is that the Band does not have the right to set its own membership. They can put forth a list and Tom Siddon or his assistants, will check every name, check into the background of every person, and what they've done in the past is just look for excuses to deny people Indian status with this. The Alberta government had it down to 9 people at one time, and they weren't even sure about the 9. So this is a real, real set-back in the process that Siddon has reopened the membership question.

Menno Wiebe: From your observations, do see this reneging on the part of the Minister of Indian Affairs as threatening the agreement reached thus far regarding the 95 square miles?

John Goddard: I don't know if recently he has made any comments directly on the reserve size. I do know that in the past two or three years, comments like that have come up every once in a while. Brian Malone who is still the federal negotiator made a speech in Europe, in Cambridge, England, two days after the Woodland Cree plebiscite. And in that speech to an international conference of lawyers he said that the membership question of the Lubicon Band would have to be looked at now that the Woodland Cree group has been formed because he thought that some Lubicon members had signed up with the Woodland Cree and that would reduce the numbers so that the land question would have to be re-opened. Ken Colby has said things like that in the past as well. Tom Siddon, to my knowledge, has not addressed that question, but the implication is there certainly.

Menno Wiebe: I have another question if I may. You, in your observations and writings, have made some incisive and far-reaching comments that implicate the Lubicon people as well as other peoples. What has been the response to the publication, "Last Stand of the Lubicon Cree" from Lubicon people or neighboring people?

John Goddard: I haven't had a lot of reaction. Fulton said yesterday actions speak louder than words. I haven't had a lot of mail on it, but once the book had gone to the press, and just a little before the book was available in the book stores, I sent galley proofs to Bernard Ominayak. He had a chance to read it on his way to Japan. I was able to get the copy of the galleys to him before that trip. He read through the book at that time and when I did my national book tour last November and came to Edmonton, Bernard invited me to go to Little Buffalo -- I had an extra day -- he was in Edmonton anyway for some other engagements. We drove up together. There was a meeting called at the community hall there. A kind of a feast was prepared, moose stew and bannock. People had gone to a lot of preparation. At that gathering a number of people stood up. Another thing that was quite unusual about this to me was that in the meantime Bernard had got a box of 20 books and I guess had taken them up a couple of weeks earlier. Had not opened them. I guess they were stuck under a bed or something and saved these as an occasion for me to open up the box and to present the book to the community at this ceremony. I was very touched by that. Anyway, I did that. I held the cover up and there's a kind of a background picture of Edward and Summer Joe Laboucan on the cover. They were very excited and there were public speeches made. I remember Edward Laboucan particularly saying, "Now I realize why you were coming around so much and bothering us with all these questions." I found out -- maybe the box was opened, because I know that John Simon Auger had read it. He had been down to Edmonton on that trip to pick up the books and he had read it and was very complimentary, recommending it to people. Nothing that I've heard from the Lubicon people themselves has indicated to me that they feel that I've misrepresented the case. And I've just been very warmly received by the Band in response to the book.

The Woodland Cree chief is not quite so warm in his reception towards me. This is not so much on the book. It's the reporting I did during the Woodland Cree plebiscite. He was a little embarrassed that some of this stuff came out.

Menno Wiebe: I'd like to ask -- it was going to be my second question -- if there had been any negation of your findings or disowning of the data that you have presented. I think you've answered that.

John Goddard: I wish there would have been. There's lots of times where I couldn't believe the material myself. I mean, that was one of the big struggles. I think for about two years I struggled to believe this material myself. It just did not conform to my view of the country. It kind of ripped me apart at some levels. And lots of things I was afraid to say because I thought surely I'm wrong. And somebody is going to prove it wrong and that I'll have to dig up other evidence. But nothing. There's no response. The Globe and Mail articles on the plebiscite. I outlined the Woodland Cree case in Saturday Night Magazine and Tom Siddon wrote a very weak reply that had no substance at all. That was a further shock that there's just no defense on the part of the federal authorities for what they've done here. I don't see much sign that they're willing to rectify it.

Menno Wiebe: A final question here for me. You make reference to your learnings of happenings in Asia with some parallels in the development process. Would you have a recommendation to this Commission about drawing some parallels with exploitations happening in other countries in regards to Native peoples?

John Goddard: You know, I found it helpful in my whole understanding of this case to go to the Penan jungle and watch those people being forced from the land. I mean, some of the images come to mind as I'm speaking. People lolling about these longhouses, destitute, no future. I mean, it's just pathetic. It just helped me to see that this sort of thing does go on in the world and it helped me to ask the question -- is there any reason why it should not have happened in Canada. Are we any better people? This is a question that Canadians find really hard to face. We like to think of ourselves as good people and upstanding people and fair people and sympathetic to Native issues and Native rights and so forth. I think part of the big problem is just facing the fact that we have some inadequacies here. I find it hard to explain. Because on one level every Canadian knows that Indian people of this country are getting screwed. Everybody knows that. And that they're marginalized, they live in terrible conditions, and that all the programs that this new federal offer is trying to impose on the Lubicon people have failed everybody. Everybody knows that on one level. And yet on another level we have to kind of maintain this belief in ourselves that we are good, that we are better than other North Americans, there never was a war against those Indians, and that we're essentially good hearted and we're doing it right. So I know that that's the struggle I had. I'm embarrassed by that moment when I asked Bernard how come he's not more grateful that David Crombie would come all this way to see him. I'm embarrassed by that, but I just mention it as part of what I had to go through myself to try to understand what was going on here.

Menno Wiebe: Thank you very much.

John Goddard: If I can just take a moment, something's come to my attention here. Sam Sinclair has very kindly provided a letter that he received in the mail. It's dated October 28th. It must have come in the mail one or two days ago. I'll just read it out. It's a short letter and bears directly on this whole discussion of the Woodland Cree that I went over this morning.

The letter is from Tom Siddon.

"Dear Mr. Sinclair:

Thank you for your letter of August 11, 1992, requesting the establishment of a new Indian Band to be known as the Kee-sip-igamahic Band."

Here's the good part.

"The limited resources of the Department of Indian Affairs and Northern Development restricts the creation of new Bands to situations meeting the current policy on creation of new Bands. I'm enclosing a copy of this policy for your information."

And then he sums it up.

"The creation of a new Band will only be considered where such action would not result in additional funding requirements, including those relating to the provision of Departmental programs, acquisition of land, capital construction and the development of local services. Normally the existing Band to which the proposed members of the new Band now belong is expected to share its land and financial resources with the newly formed Band. It will therefore be necessary for your group to arrange to share land and other assets with an existing Band. Should you require further information," etc., etc.

So under this policy that Mr. Siddon outlines, the Woodland Cree Band could not have been created.

Michael Asch: I wondered about a few things, John. You say that you didn't have much of an opportunity to speak with government officials but you didn't mention much about whether you had any opportunity to speak with provincial officials. Did you?

John Goddard: Yes, I did. They were a lot more helpful. But even then it was tough. Remember Milt Pahl? He came into the discussion yesterday with E. Davie Fulton. He's the guy who just unilaterally decided that Fulton was no longer relevant. I called that guy and called him and he couldn't comment because there was a legal case on, which was true only in a very abstract sense. Then there were other excuses. I tried again in Ottawa. He was at a First Ministers meeting in Ottawa that was part of that process of aboriginal rights conferences on the Constitution. I sent him notes all day saying that I wanted to speak to him. He wouldn't reply. Finally at the end, when the meeting broke up, I just jumped over the barricades and marched right to him and confronted him face to face and he said of course he'd be willing to give me an interview. I said, "Okay, right now." And we sat down. He sat in Lougheed's chair and we conducted the interview for about half an hour as the sweepers swept up around us. So I did get these interviews. I went around to mainly the Departmental level, not so much the Ministerial level. I did talk to Boomer Adair. That was more of a confrontation than an interview. Jim Horsman also gave me an interview. So I did have access to some there and a lot of the Department heads and people who were directly connected to the provincial end of things. It was a mixed thing, but I did get through with some effort. People did talk to me and I got a lot of information like that.

Michael Asch: Did you have any occasion in these conversations or in any of the other information that you had, to look into the rationale behind the retroactive legislation?

John Goddard: The rationale?

Michael Asch: Or any discussion of it?

John Goddard: No. I think that decision was made at a very high level by Peter Lougheed and by Howard Irving, who's now a judge on the Court of Appeal.

He was Peter Lougheed's legal advisor at that time on aboriginal affairs. Howard Irving was also the lawyer that was involved -- he goes right back to the retroactive legislation but then all the way through to the injunction hearing before Justice Forsyth and the appeal. He was a very prominent player. Also in that whole effort to create a provincial hamlet at Little Buffalo. Howard Irving was behind all of that. Howard Irving would not agree to an interview and Peter Lougheed would not give me an interview. Now I did not try as hard with those people as I did with Milt Pahl. I was determined to get to Milt Pahl because I knew eventually if I tried hard enough I could probably get him. But Peter Lougheed and Howard Irving during that period in particular -- they were just not commenting on Lubicon at all. Nobody could get to Peter Lougheed on this. So I went through a kind of formal process of asking them for interviews, but I did not really determinedly track down those people. I had to, in a sense, concentrate on what I thought was possible. So to answer your question -- really, no, the retroactive legislation, I really covered that more from what happened rather than try to get inside the minds of the lawyers who did it -- which is dangerous territory anyway. I had to really watch myself because of the legal problems I might have created for myself by taking on...

Michael Asch: On the federal level, did you ever have the opportunity at any point along the way to have the kind of discussion in which someone might explain to you in a non-formal way their own concerns, their own views about what was going on?

John Goddard: You know, I kept having fantasies about this. Remember when I created the fantasy if I were Indian Affairs Minister what would be the perfect situation? I kept thinking, what would be the perfect situation sitting down with -- I imagined some off-the-cuff bar room encounter with David Crombie or somebody very close to him. I couldn't quite imagine that situation with Bruce Rawson, who is much more official. But you know, just somebody, because I thought there's got to be some people around who have a human understanding of this situation who would like it to go better than it's going and could explain what the real concerns were of the federal government and what was putting them off about it. What was raising their resistance to seeing that this case was really resolved? That situation just never arose...(change tapes)

...there was one case where the spokesman for Jim Horsman -- I did have, now that I think about it, that got very informal. Barb Deters. I don't know if you know her but she was the spokesman for Jim Horsman who was at one time in charge of Native Affairs after Milt Pahl. She was a very approachable kind of earthy type who wasn't afraid to show emotion, show feeling for this thing and was involved with the Ft. Chip settlement and was proud of having Indian friends and wearing Indian-designed clothing and so forth. She talked to me about going to Lac Ste. Anne for that annual event. She called me up one night, the night before I was to leave Edmonton, quite late at night. And we had a discussion. But it just kind of roamed around. I started taking notes as we talked so that it wasn't exactly the situation that you're asking about.

I did feel that she was still a spokesman for Jim Horsman and that it would be valuable for me as a reporter to make this a kind of interview, really, rather than just -- with her I wasn't comfortable about making it a totally casual kind of thing. She just kind of roamed around from -- like these swings of feeling sympathy and "No, I can't believe what you're saying about the" -- what was the event at that time? I'm not recalling this exactly, but there was some -- "I can't believe that part about the..."

Fred Lennarson: As I recall, John, it was to the effect that "you may think this is terrible and awful and so on but maybe it serves the government's purpose".

John Goddard: Oh yeah, and "I can't believe that part about a master strategy". You know, how I talked about getting Indians off the land into these government built settlements and the programs that were coordinated among about four different departments to create that provincial hamlet. It was beyond her imagination. She said she sat in on lots of high level meetings and just can't imagine the kind of Machiavellian thinking that might go into such a program. However, she wouldn't be privy to those kinds of meetings. That's why I mentioned that this must have taken place at a very high level.

Michael Asch: After all the work that you'd done and all the difficulties meeting, do you have any ideas...as to what might be happening behind some of this?

John Goddard: I've thought a lot about it. And I changed my mind an awful lot too. Because sometimes I'd think -- okay, one of my theories is that this is an unconscious process. That we are going about this whole thing in a kind of delusion that we really are sincerely trying to help Native people. That maybe it's out of ignorance or maybe it's out of being more informed but -- I mean, I had to ask myself is it possible that the federal people when they went about creating the Woodland Cree really believed that they were serving the Native interests? Did they really believe that the Lubicon leadership was obstructionist and that these people really deserved to have the kinds of social programs other Native people have and it is our responsibility in looking after Native rights in this country that these people have those programs delivered? Every time I approached that and tried to be really generous in my appreciation of that situation, I was always, you know -- I still was not able to justify the actions, like breaking all the rules and buying votes and leaving people just destitute. That was the problem. Every time I tried to go through the scenario that these people are acting basically out of good will and trying to live up to their responsibilities, there would always be some problem with that theory down the line. How could they not know? This is their job to look after Native rights. This is their responsibility. And they are not living up to those responsibilities and they are breaking the law in doing it. I would like to believe that there's lots of people in Indian Affairs who want to see things go well. But I don't know.

There's just a real problem when you look at the facts in this case. It's a real problem.

Michael Asch: I'm asking you this because one thing that we're going to be trying to do is figure out some kind of an approach that will help. And so that's why -- that's the basis for my asking, so I can get a sense. We haven't heard -- now it looks very clear that the federal government isn't going to come. It's very clear that the provincial government isn't going to come. So we don't really have a way of finding these things out.

John Goddard: Yeah, that's the same problem basically that I faced.

Michael Asch: Right. You spent a lot more time trying to work through all this stuff than we'll ever be able to do. So it's on that basis that I asked you the question, to try and figure out, is there an approach that can be used?

John Goddard: Well, I'll tell you that I took the trouble to come out here from Montreal because I'm hoping this Committee can help. I saw your credentials. I saw the cross-section of society that is represented in Alberta. And to me this represents a substantial hope for the Lubicon people in a landscape where there really isn't much else. I have taken the effort to make my views known for whatever their worth -- and I know you're talking to a lot of other people -- because I guess a couple of other things have come to my mind. You know, with this whole referendum experience people voted no and the interpretation of that is that they're sick of the politicians and we're going to do something about it. This doesn't exactly follow, but in my mind, "Let's do something for ourselves then and take some action." So this citizens' committee, this cross-section of Alberta society, it seems to me, there are possibilities there of taking this out of the hands of the politicians and the bureaucrats who have been at this so long in an atmosphere that is increasingly poisoned and a citizens' committee which does not have the same vested interests as somebody like Ivan Whitehall, who set his legal strategy in 1975 and has a personal career interest in not just all of a sudden reversing it; or the interests of Brian Malone who is -- well, there's no need to point out these people and what they might be thinking. I think that you are in a position to really look at these facts head on and deal with them head on and make a pronouncement on behalf of the citizens of Alberta. I think if I were on the panel that's what I'd think of myself as. That I am representing the people at a time when the people are sick of politicians.

I believe that a resolution of this case does serve the people of Alberta and the people of Canada. When I outlined the pattern of initiative of this Band all through history, going for treaty rights, setting up a reserve even when they weren't recognized, welcoming oil development as long as their land rights were recognized and they could prosper from that investment and then mounting this incredible international campaign through 12, 13, 14 years of just incredible oppression, that is really beyond my imagination. What if in 1984 the people of Alberta made an investment in that community instead of Novatel or something like that? I mean, I think there is a kind of racial problem to get over and that dealing with this issue is a smart investment and would profit everybody. There's just no question of that in my mind. And yet a sort of easy way of thinking about it or a common way of thinking about it is that -- or how people express it -- is that this is not just a percentage of revenues from the territory going back to local people but it is tax payers' money coming out of our pockets and being given free to people who don't work very hard. And that's just an awful travesty in itself.

Jennifer Klimek: Are there any further questions from the Commissioners? John, we'd like to thank you for your time today. The hour's gotten late and we very much appreciate your taking the time to come out to Edmonton and once again, thank you on behalf of the Commission. I'd like to adjourn the meeting until 1:30 this afternoon.

Jennifer Klimek: We'd like to reconvene the afternoon meeting. We'd like to welcome Mr. Krebes and Mr. Koliger who have done an independent cost assessment, I believe, and I understand they both have a presentation to make.

Perhaps you could start out by giving us a little bit of background as to what your task was and how you came about it. If you could give your presentation, then we'll open up the floor to the Commissioners for questions.

Bruce Koliger: Bruce Koliger. I'm with Koliger Schmidt, architects and engineers. My colleague here is John Krebes of Butler, Krebes and Associates.

I'll briefly describe a little bit about our firm and what our terms of reference were and pass the mike over to John so can he can do the same. Our intention then was that I would present the methodology and the results of the study which we prepared and then John will make a similar presentation. If at any time during that presentation you have any questions, don't hesitate to interrupt and we'll deal with them as they come up.

Our firm was selected initially by the Lubicon Lake Indian Nation to prepare this study with the concurrence of the Chief and Indian Affairs that we do this work. The terms of reference were prepared based on proposals made by our firm in discussions and negotiations between the two parties, which essentially in our case consisted of looking at the lists of facilities that had been prepared by both the Lubicon Lake Indian Nation and the government of Canada and preparing current cost estimates for those facilities. Our mandate was not to comment on the nature of those facilities or to deviate in any way from what had been proposed by either party. Essentially all we were doing was costing what each party had proposed.

I'll give you a little bit of background on our firm and our qualifications in this area. We are a multi-disciplinary firm with specialists practicing in the areas of architecture, structural engineering, mechanical engineering, cost control and building sciences. Our clients include governments at various levels including city, provincial and federal and some of Canada's largest developers in the commercial field. In the course of events as we develop projects for other clients we prepare cost estimates using in-house specialists like quality surveyors and others, and so essentially our task in this case was rather than a single building for a client which we would normally undertake, was to look at all of these facilities in total. John?

John Krebes: As Koliger Schmidt was, we were retained by the Lubicon Nation through a contribution agreement with Indian and Northern Affairs to provide a community plan and a capital development plan for the development of a community to accommodate the Lubicon Indian Nation. The assignment included consideration of demographics, site investigations, development of servicing concepts and the associated cost estimates for the community.

Butler Krebes and Associates has been providing civil engineering and land planning services to clients in Alberta since 1968. Many of our clients are small communities, municipalities, Indian Bands and Metis settlements in northern Alberta. Our fields of expertise include land evaluation; feasibility studies; site master planning; land development; water supply, treatment, distribution and storage; waste water collection and treatment; solid waste disposal systems; fire protection systems; road and pavement design with particular emphasis on remote municipal systems. We have been involved with a number of Native communities in the province providing services through from initial planning to feasibility studies, pre-design, design, and services during construction. An example of some of these are as follows:

Ermineskin reserve -- we prepared a long-range capital development plan and previous to that we provided engineering services for a sewage disposal system.

Horse Lake reserve -- we conducted a village development study.

Meander River reserve -- we provided civil engineering services for a water and sewer system and for their roads.

Saddle Lake -- we developed a long-range village development plan.

Whitefish -- we also conducted a long-range capital development plan.

Kehewin -- we provided engineering services for a water supply and distribution system.

North Tallcree -- a water supply feasibility study.

Paul Band -- a water and sewer extension.

Sucker Creek, Sunchild, Whitefish Lake -- we provided civil engineering services.

We believe that this background provides us with a solid understanding of the cultural and location factors that impact planning of communities for indigenous people in northern Alberta. At the same time our extensive involvement with this type of project has given us a good working knowledge of the nature of the operations of Indian Affairs. In selecting Butler Krebes and Associates for this assignment, the Lubicon Nation and Indian Affairs have expressed a confidence in the experience and integrity of the firm to provide an independent and impartial assessment of the infrastructure required to develop the community.

That's about it as far as the background and experience is concerned.

Bruce Koliger: You earlier referred to us as independent cost consultants. I think I want to put a codicil on that a little bit. To the extent that this study included access to documents prepared by both parties and to research documents of the Lubicon Lake Indian Nation, we can argue it probably could be more appropriately described as a third-party evaluation of costs since it wasn't totally independent of work done by others. Our evaluation does not include the estimated costs for infrastructure. That's in John's report. Nor does it include the costs of vehicles, machinery, equipment and so on.

I mentioned earlier that there were two lists that we were asked to cost. The first list shown here is the Lubicon Lake Indian Nation proposals. It includes a section on community construction, commercial construction and agricultural construction. The government of Canada proposal includes community construction items only. For comparison the numbers in each case correspond to similar types of facilities on both lists.

I want to go through the methodology and the organization of the report. It's fairly lengthy, although a large part of the report is repetitive in nature as it deals with similar structures with each facility. The material in the bulk of the report is organized showing project descriptions, summary estimates, and building type cost models.

What we've done is prepared a written scope of work for each facility to the extent that that could be defined at the present time. The size and nature of each building proposed, as I explained earlier, has not been adjusted with one exception that I'll deal with later. In other words, we simply took the proposals from both parties as we found them. We expanded on them in the programmatic sense to provide further definition of building types, but if a specific area was specified by either party we didn't deviate from the total area. So that the size of each building is consistent with that which has been proposed by either the government or the Lubicon Lake Nation.

I should make a note on one of the elements, which is a relatively important part of the costs, which is furniture and equipment for each facility. Because the nature of the study did not involve extensive program inter- consultation with the parties, we simply used the figures that each party contained in their estimates for furniture and equipment. So if the government, for example, would carry 10% of the school estimate for furniture and equipment we used that number. In the case of the Lubicon Lake proposals, we used the numbers that had been carried in their 1988 proposals. We adjusted them for inflation to January of 1992 dollars.

Each cost estimate included basic costs for the building, site work, furniture and equipment and an allowance for architectural and engineering fees. We have a section on building type cost models for each project type. The models are identified by name, the place that they were originally constructed, the year of construction and a brief description including construction in the area.

The kind of estimates that we're doing are referred to as class "D" estimates.

This is something that is going to come up from time to time in my presentation. Class "D" estimates are largely based on costs of other buildings of a similar type. They include in this case projects which were actually tendered, some designed by our firm, some designed by others. They also include published cost models. In each instance, because many of these projects were not tendered in the current time frame it was necessary to adjust those costs to 1992 dollars. The base that we used for our estimate was January 1992. So for a model was constructed in '88 or '87, for example, we applied cost factors to adjust those costs to current levels. We have utilized in doing so a cost index published by Hanscomb's called Yardsticks for Costing. It's a national publication which has several base cities across the country. In Alberta the base city is Calgary. So in the first instance we adjusted costs to a Calgary base in January of 1992. In addition in most instances the model that was being used was not exactly the same size as the proposal of either party and so it was necessary to do a further adjustment using cost modifiers based on size that are produced by the R.S. Means company which is an international cost consultant firm, the basic premise being that larger buildings are less expensive to construct than smaller buildings of a similar type.

Location where any one of the models was constructed also has an impact on costs, and so it was necessary to adjust those models again to initially the Calgary base and then later adjusting those numbers to the Lubicon Lake site itself.

This is an example of the basic project sheet prepared for each project. This is an example of one of the school options for the government of Canada proposal referred to as Option A, 450 residents.

I should note, by the way, that the government proposal was structured on the basis of options A and B for 3 population scenarios. A population of 300, 500 and 700, with an assumption that 90% would live in the community; hence, 270, 450 and 630 were the numbers that were based for sizing these facilities. In a sense the size of the facility was determined by the federal government at 2,365 sq. meters and these were the facilities that were intended to be included, including the number of students it was intended to accommodate.

This is an example of the building cost model that was used, which happens to be one of the projects that we have designed -- Aurora Elementary School constructed in Drayton Valley tendered in December of 1991 and currently under construction. The cost of the project, the size of the project, a brief description of that project and then the adjustment. In this case 1992 dollars required an adjustment. The building size had to be adjusted by a factor of 7% because the government proposal is smaller than the school that we used. The location factor in Edmonton divided by 9%. In other words, Edmonton is less expensive than Drayton Valley. We made building quality adjustments in certain instances, and in this case, for example, allowing for an emergency generator for the school and other interior finishing material. This is typical of the models that we've used in the way of structure.

In each instance those models were summarized in a table. We looked at the average cost of those models and the median costs. In this case we looked at 7 different models for the school. We noted that the range from the lowest cost to the highest cost was 16.5% and that the maximum deviation from the higher to lower schools was 8.5% to the average and 10.6% to the median. That deviation is well within the range of a class "D" estimate, which is considered to be a plus or minus 20% accuracy. We selected in this instance a rounded median value of $1,270 per sq. meter and in each instance we made decisions whether to go with the average or the median based on various assumptions which we have stated in our report. So the selected 1992 Edmonton based price per sq. meter was $1,270 per sq. meter for the school.

We've then taken those numbers and we used a factor of 30% to adjust the Edmonton-based cost to the Lubicon Lake site. And I'll be discussing later how we arrived at the 30% number. We've added a factor for site work, and in this instance because site work for public schools is typically fairly limited with playgrounds provided by way of a public reserve, in this instance we've added another 5% to bring it up to Indian Affairs standards which would include a track and all the other facilities that you would associate with a school of this type. We've carried in this instance 10% for furniture and equipment in accordance with the government of Canada proposal and we've carried an estimate of basic and additional fees and expenses for architectural engineering services based on our current fee schedules. The total rounded off to $2,111 per sq. meters at the Lubicon site.

In the final analysis, the application of the proposed area times the unit price of $2,111 yields the cost of the building.

So the entire project, the bulk of it is consisting of models of this nature addressing each of the facilities on the list and organized in the same manner. Are there any questions at all so far?

I'll show you one further example which deals with housing, and that's probably relevant to one of the issues that I'm going to raise later. In this case housing was based on conventional stick-built wood frames, the kind of housing you see constructed in Edmonton. This again is the Indian Affairs proposal, or rather the government of Canada proposal for 450 residents. Using a Department formula they derived a need for 120 new houses with a total area of about 92.9 sq. meters each, which is about 1,000 sq. ft. Now this proposal, as was the Lubicon proposal, was based on the notion that 30 houses would be relocated from the existing settlement to the new settlement, so in the final analysis the proposal as it was structured by both the Lubicon and the government would have been a certain number of new houses plus 30 relocated and renovated houses.

Again, as was the case with the other projects, we looked at a number of cost models, we determined an average and median cost for those models which are actually very close, and selected a rounded value of $700 per sq. meter to which we applied the various set of factors identified earlier. In this case we've used the 30% adjustment for Lubicon Lake as we have for all of the projects. We did not carry an allowance in this instance for architectural and engineering fees because our assumption is that in this instance arrangements would be made with the house builder to provide both design and construction with these units as is typically the case.

The cost of the housing using those factors was determined to be approximately $84,000 for a unit of 92.9 sq. meters, or 1,000 sq. feet at the Lubicon site.

One of the models which was utilized in this instance was a model from the Department of Indian and Northern Affairs cost reference manual. This is a manual which includes examples of buildings of different types that they use internally to establish a reference data base and therefore proposals for various communities. In this case it was a three bedroom bungalow built at Saddle Lake for $65,000 in 1984.

We talked earlier about location factors for converting Edmonton-based costs to the planned construction site and you'll note that I used the figure of 30%. Obviously the geographic location of the Lubicon Lake site will have an impact on costs. One is looking at shipment of materials and equipment and, more importantly, a fairly significant portion of the cost is that given the location of the site, its distance from Peace River, a construction camp will have to be established yielding costs somewhere in the neighborhood of $80 per person per day for accommodation in the camp. When you add that to the cost of labour, you find a very significant percentage is added to the cost of labour on a site like this, and that combined with shipping costs and so on yields a figure of about 30%. It has to be said that the magnitude of the impact of costs will to some extent be dependant on market costs at the time these projects are tendered. In other words, projects on a location like that may be less attractive in an instance where the market is fairly busy and the contractors have the option of addressing the needs for a volume of work with work in a major center like Edmonton or Calgary, for example, as opposed to a more remote location. To some extent, we noted that this category needs to be addressed to some extent under risk factors, which is something I will be talking about momentarily.

In order to derive the 30% figure we looked at a number of different sources. Alberta Public Works, for example, uses a factor of 25% for the Peace River area, which includes Peace River itself and the surrounding communities. We also looked at Alberta Education's support prices for schools in remote locations. Currently, for example, the factor for the town of Peace River is approximately 15% more than Edmonton itself. Our experience has been that contractors working in this area typically have to source most of their staff from Edmonton, that there isn't a wide availability of workers in the Peace River area who are not otherwise employed. So while motel accommodation is locally available, as I've noted, the Lubicon Lake site is too far in terms of driving time and distances to really consider that option, and so we looked at the development of a construction camp.

Our estimate of camp accommodation as opposed to alternate arrangements in the town of Peace River we believe will add from 6-9% to overall building costs. And that additional travel and shipping costs may add again something in the order of 5-6%. We concluded that the Lubicon Lake site, then, as compared to Edmonton, will probably range from 26-30% of Edmonton-based costs. We've also talked to general contractors who have been active in that area and other similarly remote communities who suggest location factors for Lubicon Lake ought to be in the range of about 30%. We also looked at the Department of Indian and Northern Affairs cost reference manual methodology that they use in determining these factors and found that considering all the issues that they address that we're also looking at a number that's fairly close to what we already determined -- and that's 29.5%.

So in conclusion considering all the sources and different ways of coming at this problem, we determined that 30% would be an appropriate number.

One of the issues that had been addressed in the government of Canada proposal is escalation. By escalation we mean increasing costs of construction over a period of time. Both proposals are predicated on the notion of a 5-year construction process. This is an example taken from the Lubicon proposal, which may ultimately not be the schedule that's utilized, but this is what was initially proposed for the years of construction for various buildings. By taking that schedule and applying inflation factors to those numbers we determined an overall escalation factor to be applied to these prices over the five year period.

We used a number of sources in determining what these escalation rates ought to be and I want to explain what two of these are. One was the CPI which you're probably familiar with. It's a publication of Statistics Canada. It is the Consumer Price Index. The other was the document I referred to earlier which is Hanscomb's Yardsticks for Costing published by Southam Business Communications; and we have cost trends from Hanscomb's Yardsticks for Costing from January 1973 to January 1992. The CPI index is based on an average annual index from 1973 to 1991. The Yardsticks for Costing varies from April in its earlier years to January most recently. So these numbers are slightly out of sync, but they're essentially comparable. We used projections for the period 1992-1997 based on the last federal budget which saw projected increases in the CPI of approximately 2% per year.
(Continued in next part)