It was not an oversight, but I will let Mr. Aumond lay out the plan as we’ve dealt with this particular issue.
Thank you, Mr. Miltenberger. Mr. Aumond.
Thank you, Mr. Chairman. As part of our fiscal arrangements with the federal government, any overpayment gets repaid with respect to a formula. The overpayment in 2007 was approximately $82.5 million. We have repaid that in smaller payments over the previous three years and the requirement is to pay the balance off at the end of this fiscal year, which is how we got to the $65 million that we have to repay. It’s not so much that it was an oversight, it was that given other things going on with our budgets and our money coming in and out that we did repay some $22.5 million and we’re just repaying the balance of that $82.5 million that was required.
Thank you, Mr. Aumond. Ms. Bisaro.
Thank you, Mr. Chairman. Thanks to Mr. Aumond for that explanation. I guess, I asked whether or not this has been to our benefit or whether it’s to our detriment. Maybe I can get a comment on that. I forget what my other question was so I guess it wasn’t all that important.
Thank you, Ms. Bisaro. Mr. Miltenberger.
Thank you, Mr. Chairman. How the estimates are done on taxes and why these things happen is a separate discussion, but in effect what we had here over the last number of years is an interest-free loan on which we’re now repaying the balance of the principle.
Mr. Chairman, that’s all I have.
Thank you, Ms. Bisaro. We’ll be going back to Mr. Yakeleya.
Thank you, Mr. Chairman. With this Borrowing Authorization Act we are going to the federal government and we are going to increase our borrowing limit to $100 million. What I know is that from personal banking when you go to the bank and you have enough good credit, you have some concrete, what you call it, assets that the banker says you have good credit. It’s taken you awhile to live comfortably and that you have enough assets that you could borrow more money off us, why don’t you borrow $10,000. You have a good job. You have a good income. I want to ask the Minister what is the arrangement with the federal government if we’re going to borrow short-term cash on interest payments or fees? What is our risk here?
I know the bank has risk when you don’t pay back. I know sometimes when I lend out money I certainly don’t get it back. That’s the risk. We’re doing this on behalf of the government. I want to ask the Minister what the risks are.
He’s telling us this is what we need to do. Same as if I borrow money for the operational costs for my house. There’s growth. There are other things that come into play, but I have to know what I can afford. The government has $65 million; we just found $65 million to pay it back. I guess that’s what I’m thinking about.
I need some of these things to be answered on this bill here, because we’re borrowing on behalf of the people of the Northwest Territories. Cabinet is administrating the money on behalf of the people. We are the government of the people, so maybe you could help me out here and I’ll have something to think about over the weekend.
Thank you, Mr. Yakeleya. Mr. Miltenberger.
Thank you, Mr. Chairman. This bill that’s before the House is before the House because this Borrowing Limit Authorization Act is a piece of territorial legislation that is controlled by this Legislature. It’s to deal with, as I’ve indicated before, short-term borrowing. It’s a type of line of credit. This has nothing to do with the federal government. We are having our discussions on our borrowing limit with the federal government which will be concluded, our long-term borrowing limit with the federal government that will be hopefully concluded here by the end of March.
The Member also had a question about what type of credit do we have. We have an Aa2 credit rating, second highest that’s available, up there with many other well run jurisdictions, businesses and corporations. We have audits done. How do we police this? How do we make sure we manage ourselves? That’s our job collectively. That’s my job as Finance Minister. That’s the Cabinet’s job, the Premier’s job to provide the daily operations. We have our budgets passed every year. We have a significant number of checks and balances built into how we spend money and how we manage our interest costs and all the other pressures. Which is why even as we sit here today, one of the reasons we’re getting a good hearing on the borrowing limit with the federal government is because they know that we are very well run fiscally. We have almost no long-term debt. We have some short-term debt. We’re managing ourselves effectively. We’re doing all the things we should be doing. We have the lowest GDP-to-debt ratio. We have some of the lowest debt servicing costs in the country, second only I believe to Alberta maybe, and maybe the Yukon. Some jurisdictions are paying eight and 10 percent of their budget just to service debt costs. We are not in that situation at all. This just allows us to manage our money more effectively to be more responsive to the concerns and needs of MLAs to better manage programs and services that we deliver across the land.
So this is just a tool to allow us to borrow up to $275 million on a short-term basis should it be required, always under the scrutiny of myself as Finance Minister and this House, the various committees. We have to go to Cabinet to get Cabinet approval for a lot of the decisions that are made through the Financial Management Board. We have built in all the checks and balances. This allows us just to be more, I believe, effective, efficient and responsive.
Thank you, Mr. Miltenberger. Is committee agreed that there are no further comments?
Agreed.
Can we proceed to a clause-by-clause review of the bill?
Agreed.
We will defer bill and title. Turn to page 1, clause 1.
Agreed.
Bill 1, An Act to Amend the Borrowing Authorization Act.
Agreed.
Clause 1.
---Clauses 1 and 2 inclusive approved
To the bill as a whole.
Agreed.
Does committee agree that Bill 1, An Act to Amend the Borrowing Authorization Act, is now ready for third reading?
---Bill 1 as a whole approved for third reading
I’d like to thank the Minister today. I’d like to thank the witnesses. If I can get the Sergeant-at-Arms to escort them out of the Chamber, please. Thank you very much. I will now rise and report progress.
Thank you, Mr. Speaker. Your committee has been considering Tabled Document 1-17(2), Interim Appropriation 2012-2013; and Bill 1, An Act to Amend the Borrowing Authorization Act, and would like to report progress with two motions being adopted and that Bill 1 is ready for third reading and consideration of Tabled Document 1-17(2) is concluded, that the House concur with those estimates and that an appropriation bill to be based thereon be introduced without delay. Mr. Speaker, I move that the report of Committee of the Whole be concurred with.
Thank you, Mr. Dolynny. The motion is in order. To the motion. Is there a seconder to the motion? Mr. Menicoche.
---Carried
Orders of the day for Monday, February 13, 2012, at 1:30 p.m.:
Prayer
Ministers’ Statements
Members’ Statements
Returns to Oral Questions
Recognition of Visitors in the Gallery
Acknowledgements
Oral Questions
Written Questions
Returns to Written Questions
Replies to Opening Address
Petitions
Reports of Standing and Special Committees
Reports of Committees on the Review of Bills
Tabling of Documents
Notices of Motion
Notices of Motion for First Reading of Bills
Motions
First Reading of Bills
Second Reading of Bills
Consideration in Committee of the Whole of Bills and Other Matters
Tabled Document 2-17(2), Supplementary Estimates (Infrastructure Expenditures), No. 3, 2011-2012
Tabled Document 3-17(2), Supplementary Estimates (Operations Expenditures), No. 3, 2011-2012
Report of Committee of the Whole
Third Reading of Bills
Bill 1, An Act to Amend the Borrowing Authorization Act
Orders of the Day
Thank you, Madam Clerk. Accordingly, this House stands adjourned until Monday, February 13, 2012, at 1:30 p.m.
The House adjourned at 2:05 p.m.
