Debates of August 17, 2007 (day 12)

Page 14.

Agreed.

And on page 15, a total of $8,017,825.77. Does committee agree?

Agreed.

Thank you, committee. I will now turn your attention back to page 1, Bill 10, Forgiveness of Debts Act, 2007-2008, clause 1.

Agreed.

Clause 2.

Agreed.

Thank you, committee. To the bill as a whole?

Agreed.

Does committee agree that Bill 10 is ready for third reading.

Agreed.

Thank you, committee. Bill 10 is now ready for third reading. I would like to thank you, Mr. Minister, Ms. Lavoie and Mr. Cleveland. Mahsi.

Thank you, committee. I would now like to draw your attention to Bill 17 and ask the Minister responsible for Bill 17 to please introduce the bill.

Mr. Chairman, Supplementary Appropriation Act, No. 4, 2006-2007 requests authority for additional appropriations of $13.486 million for operations expenditures for departmental over-expenditures in the 2006-2007 fiscal year.

The requests include:

$10.395 million to increase the accrual for environmental liabilities related to the estimated costs to remediate NWT contaminated sites that are the responsibility of the GNWT, pursuant to Public Sector Accounting Board requirements; and

$3.091 million for over-expenditures in the Department of Health and Social Services related to higher than anticipated costs for out-of-territory hospital and physician services, the Extended Health Benefits Program, and the Metis Health Benefits Program, pursuant to the authorization process for over-expenditure of appropriations in the Financial Administration Act.

That concludes my opening remarks. I am prepared to answer any questions Members may have.

Thank you, Mr. Minister. I would now like to ask if you would like to bring in witnesses.

Thank you, Mr. Chairman, yes.

Thank you, Mr. Minister. Does committee agree to bring in witnesses?

Agreed.

Thank you. We will bring in witnesses, Mr. Sergeant-at-Arms.

Thank you, committee. Thank you, Mr. Minister. If you could, would you please introduce your witnesses?

Thank you, Mr. Chairman. Mr. Chairman, to my right is the secretary to the FMB, Mr. Mark Cleveland; and to my left is Mr. Sandy Kalgutkar, director of budget evaluation.

Thank you, Minister Roland, and thank you, committee. Before we deal with the preamble of the clauses, we will go to general comments.

Clause by clause.

Does committee agree?

Agreed.

Before we go to the schedule, the preamble and the clauses, we will go to the detail first. So if I could draw your attention, please, to page 5, Financial Management Board Secretariat, operations expenditures, Financial Management Board Secretariat, not previously authorized, government accounting $10.395 million. Mr. Braden.

Thank you, Mr. Chairman. Mr. Chairman, the need to book this amount in excess of $10 million has been well explained and well justified. If we know we may have a liability or a future liability or debt, we should flag it now and make sure that it’s recorded for openness and accountability.

The detail in this area here is entirely environmental. It relates almost entirely to known or potential contamination from tank farms, fuel facilities, Mr. Chairman. This is not an uncommon situation all over North America, all over the world. The question I wanted to ask was, as our government took over tank farms, airports and barge landings and various other facilities over the years from the federal government, from the former Northern Canada Power Commission, potentially even from the RCMP from some of the churches, to what extent have we determined that we are actually the ones liable for these potential costs and is there any historic or contingent liability that could, or should, be assessed where a previous owner or previous government may have been the ones who have built the tank farm and had some responsibility for its contamination, Mr. Chairman?

Thank you, Mr. Braden. Minister Roland.

Thank you, Mr. Chairman. I will give you what I am familiar with and then I will go to Mr. Cleveland for more detail. As we looked to properties that have been transferred to the Government of the Northwest Territories in previous years by other governments or as we purchased properties for our use, we have done estimates on the potential liabilities and more, at least to where I'm familiar with, negotiate that in a transfer in recognition of that. For more details how that's happened, what may have happened prior to that, I'll go to Mr. Cleveland.

Thank you, Minister Roland. I'll now go to Mr. Cleveland.

Thank you, Mr. Chairman. Just briefly, it's clear that environment cleanup, environmental liability has been growing understanding on the part of governments and other organizations. So I would say that over the last few years it's been an item of considerable attention when any transfers occur, and certainly at the present time, when such transfers occur, potential environmental liability is monitored very carefully and discussed with the person we're getting the property from. I would say was a little less attention in the past and as a result, we do have some elements on our books that were transferred in the distant past where we didn't necessarily see a transfer of funding associated with the liability.

We do, wherever possible, pursue funding from the body that transferred us the property if there is any potential at all for recovery, though, even now. Thank you.

Thank you very much, Mr. Cleveland. Anything further, Mr. Braden?

Thank you, Mr. Chairman. Yes, I appreciate that in some of the really longstanding deals before the whole consciousness of environmentalism and liability was really at the fore, that our government probably did not include the kind of contingent liability things that we should have in the transfer. I accept that. The main purpose of my question here is to make sure that on each and every one of these properties that we're dealing with and potentially taking over, that this is one of the criteria that we're looking at to explore whether there was a previous owner/operator and to what extent, if any, can they also be held responsible for the cost of the cleanup. I just want to make sure that that is part of the process that we use when we book these kinds of liabilities. That's all, Mr. Chairman.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Yes, it is one of the factors now whenever we look at sites or equipment and the potential for environmental liabilities. We go through a process initially for environmental site assessment, and phase one is look at the initial area and the likelihood of site contamination and begin to work on that, identify it, whether it's soil, water, air, and what could be the impact of that contamination. Then we go to phase two of an environmental site assessment where we look at and do an undertaking to provide employment or information on the nature and the extent of that, and that's looking at surface soil types, human impact as well, and then we go to phase three of an assessment where we then estimate the costs of doing remediation. Thank you.

Thank you, Minister Roland, and thanks, committee. We're on page 5 of the detail. Financial Management Board Secretariat, operations expenditure, Financial Management Board Secretariat, not previously authorized, government accounting, $10.395 million.

Agreed.

Thank you. Total Financial Management Board Secretariat, $10.395 million.

Agreed.

Total department, $10.395 million.

Agreed.

Thank you, committee. On to page 6, Health and Social Services, operations expenditures, not previously authorized, directorate, $3.091 million. Mr. Braden.

Thank you, Mr. Chairman. A question of clarification. The information provided indicates that this amount, $3 million, is about 50 percent more than the amount originally allocated for this kind of activity here, which basically, Mr. Chairman, relates to rising expenses in out-of-territory hospitals, physicians from outside of the NWT. I just wanted to confirm, am I interpreting this correctly? Are the expenses that are being requested here, the funds being requested, about a 50 percent increase over what was originally budgeted, or can the Minister offer some context for this number?

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, no, it is not 50 percent of the actual expenditures. For example, out-of-territorial hospitals, the revised estimates we have is in the neighbourhood of $13 million; $13.6 million. Physicians is over $3 million, and a number of other organizations, Metis health benefits over $1 million, extended health benefits is $6.8 million. So there's substantially more being spent already. Thank you.

Thank you, Mr. Roland. Anything further, Mr. Braden?

Thank you, Mr. Chairman. I appreciate the clarification. The detail that we were provided with, Mr. Chairman, explains that this money is needed because of higher than planned expenditures in these four different categories. This is obviously something that's in front of us every year. I wanted to ask to what extent is this a sustained trend and are we able to forecast and budget for these kind of costs with any more predictability, Mr. Chairman?

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, over the years, the estimating has become more accurate and the numbers have reduced, but it's very difficult to try to narrow it right down because if we have a large or a bad season of illnesses and diseases that we end up sending residents out to southern facilities, that can have a significant impact. If we are short on locums or different doctors that take care of our residents here in the Northwest Territories and we end up sending our residents south again to receive that type of service, that also has an impact on us. So it is difficult. We've found, the history here within this area has been one where it's typically under budgeted and one is again trying to do an estimate. You go on previous years and you work forward on that basis, but it's difficult, again, to try to catch all the different impacts that may be having an impact on the final outcome here. Thank you.

Thank you, Minister Roland. Thank you, committee. We're on page 6, Health and Social Services, operations expenditures, not previously authorized, directorate, $3.091 million.

Agreed.