Debates of February 14, 2005 (day 35)

Thank you, Mr. Villeneuve. The motion is in order. The motion is on the floor. To the motion.

Question.

Thank you, Mr. Speaker. Mr. Speaker, I’d like to make an amendment to Motion 26-15(3).

“Mr. Robert McLeod, Member for Inuvik Twin Lakes, be appointed to the Standing Committee on Accountability and Oversight and to the Standing Committee on Governance and Economic Development.”

Thank you.

Thank you, Mr. Zoe. Motion on the floor to amend. To the amendment. Mr. Zoe.

Thank you, Mr. Speaker. With no disrespect to the Striking Committee, Mr. Speaker, the honourable Member for Twin Lakes is the only Member who is not appointed to any of the standing committees and there is a vacancy particularly to the Accountability and Oversight committee and to Governance and Economic Development committee. That’s the reason that I’m making this amendment to this motion, so that we can deal with that particular Member to sit on these various committees. Mahsi.

Thank you, Mr. Zoe. To the amendment. The Member for Tu Nedhe, Mr. Villeneuve.

Thank you, Mr. Speaker. I just got up to let the Members know that I cannot support the amendment to the motion due to the fact that there is a lot of other concerns that the Striking Committee, in drafting up the original motion, did take into consideration and that this amendment doesn’t really address a lot of those issues. It’s just basically a status quo amendment to a motion, where the original motion is basically taking more consideration about regional balances and working together as Accountability and Oversight committee members, as was discussed this morning, and I think that the amendment to the original motion is just too cut and dried for me. It doesn’t take into a whole lot of variables that we were discussing in our meetings. Therefore, I can’t support it. Thank you.

Thank you, Mr. Villeneuve. The honourable Member for Range Lake, Ms. Lee.

Thank you, Mr. Speaker. I would just like to make a very short comment on this amendment. I will not be supporting this amendment, Mr. Speaker, for two reasons. The first one is that it basically does away with the intent of the motion. So it is a very strong amendment and if the Members support the amendment, basically they could vote against the first one. The reason why I think that is more preferable than supporting this amendment is it does away with the work of the Striking Committee, which I think is a very important element to consider, Mr. Speaker.

Hear! Hear!

---Applause

Mr. Speaker, if the Members do not agree with the original amendments, I think the right thing to do is to send the work back to the Striking Committee. It is a working committee, it’s a standing committee, it’s a respected committee that has been set up by Members to do this work. So I really think that this is interfering with the process that’s very well established and it is not respectable of the Striking Committee that was set up by Members to do Members' work. I would like to also urge the Members in voting on this, to consider what precedent this might be setting. We would not want to see a situation where decisions made by the Board of Management or Accountability and Oversight committee or Social Programs committee, any of the work that the standing committees do here that makes it such an important part of our work being revisited in this House in this way. I would urge the Members if they do not support the first motion not to vote for the amendment, but vote against the first one and send the work back to the Striking Committee where it belongs. Thank you, Mr. Speaker.

Thank you, Ms. Lee. The honourable Member for Kam Lake, Mr. Ramsay.

Thank you, Mr. Speaker. Mr. Speaker, I’m going to speak in favour of the amendment that’s before us today. I thank the Member for North Slave for bringing it here today, for one apparent reason: the regional balance that we should try to maintain. The convention is that Cabinet Members are split up on a regional basis and I feel quite strongly that our standing committees and the structure that the standing committees take should also have that convention in mind when committee assignments and our appointments are made. It is absolutely with no disrespect to the Striking Committee or the Striking Committee members that I’m supporting this amendment. I think they were faced with a difficult decision, having a new Member come into the House. The other thing is we still haven’t really heard -- and I know Regular Members aren’t privy to what the discussions are on the Striking Committee and that’s their business -- but there are three members of the Striking Committee and there are 11 Regular Members, Mr. Speaker, and if the Striking Committee makes a decision, why can’t we question it? That’s what this amendment is and I do support the amendment, and I’m not in favour of the motion. Thank you.

Thank you, Mr. Ramsay. To the amendment.

Question.

Question is being called. All those in favour of the amendment? All those opposed to the amendment? The Chair notices that there is a tie to the amendment. Rule 60(3) states that in the case of a tie, the Speaker or Chair of Committee of the Whole shall cast the deciding vote and may state reasons. In general, the principle applied to amendments is that decisions should not be taken except by a majority and that where there is no majority, the main motion should be left in its existing form. I, therefore, vote against the amendment and declare the amendment defeated.

---Defeated

Is there any further discussion on the main motion?

Question.

Question is being called on the main motion. All those in favour? All those opposed? The Chair recognizes that there is a tie on the floor. Rule 60(3) states that in the case of a tie, the Speaker or Chair of Committee of the Whole shall cast the deciding vote and may state reasons. In general, the principle applied to motions is that where no further discussion is possible, decisions should not be taken except by a majority. I, therefore, vote against the motion and declare that the motion is defeated.

---Defeated

Thank you, Mr. Speaker. I move, seconded by the honourable Member for Mackenzie Delta, that Bill 21, An Act to Amend the Public Service Act, be read for the second time.

Mr. Speaker, this bill amends the Public Service Act to provide for an appointment of staffing review officers who will hear appeals of appointments made by competition, and to authorize the enactment of regulations governing such appeals. Provisions pertaining to the present Staffing Appeals Committee are repealed. Thank you, Mr. Speaker.

Thank you, Mr. Roland. There is a motion on the floor. The motion is in order.

Question.

All those in favour? All those opposed. The motion is carried.

---Carried

Thank you, Mr. Speaker. I move, seconded by the honourable Member for Deh Cho, that Bill 22, An Act to Amend the Education Act, No. 2, be read for the second time.

Mr. Speaker, this bill amends the Education Act to provide that the Minister shall prescribe the hours of instruction for the academic year for kindergarten, subject to a minimum threshold of 485 hours. Thank you, Mr. Speaker.

Thank you, Mr. Dent. There is a motion on the floor. The motion is in order.

Question.

All those in favour? All those opposed? The motion is carried.

---Carried

I would like to call the Committee of the Whole to order. Under consideration in Committee of the Whole today we have Bill 15, Tlicho Community Services Agency Act; Bill 16, Northwest Territories Business Development Investment Corporation Act; Bill 18, An Act to Amend the Territorial Court Act; Bill 19, Appropriation Act, 2005-2006; Committee Report 9-15(3), Standing Committee on Accountability and Oversight Report on the Review of the Draft 2005-2006 Main Estimates; Committee Report 10-15(3), Standing Committee on Governance and Economic Development Report on the Review of the Draft 2005-2006 Main Estimates; and, Committee Report 11-15(3), Standing Committee on Social Programs Report on the Review of the Draft 2005-2006 Main Estimates. What is the wish of committee? Mr. Menicoche.

Thank you, Mr. Chairman. The committee wishes to review the Appropriation Act, 2005-2006.

Thank you, Mr. Menicoche. On Friday, we left off on general comments with Mr. Pokiak. As he is not here, I suggest we take a short recess.

Agreed.

---SHORT RECESS

Good afternoon and welcome back, Committee of the Whole. We had general comments and I will open the floor now to general comments. Is committee ready for detail? As we agreed, the Department of Finance is the first up, with Mr. Roland. I would like to ask the Minister to provide his opening comments on the departmental estimates for the Department of Finance.

Mr. Chairman, I am pleased to present the Department of Finance's main estimates for the fiscal year 2005-2006.

The Department of Finance, through its responsibilities for revenue generation and management, and information gathering and distribution, plays an important role in ensuring the government is able to deliver its programs and to make informed decisions.

For 2005-06, the Department of Finance has identified a total expenditure budget of $7.9 million, or 7.4 percent more than in the 2004-05 main estimates. The increase is composed of:

$530,000 for increased insurance costs resulting from the transfer of responsibility for health boards' liability insurance from the Department of Health and Social Services;

$306,000 in reductions;

$120,000 to gather and make available statistical information and analysis on the impacts of resource development;

$120,000 in limited-time funding to help ensure that the 2006 census accurately measures the population of the NWT;

$80,000 to conduct a review of the Liquor Act; and

$2,000 transferred from Public Works and Services related to computer chargebacks.

The GNWT has seen large increases in its insurance costs over the last few years. However, the insurance market stabilized substantially in 2004 for most types of coverage. As a result, the GNWT does not expect to see an increase in its property insurance premiums in 2005-06 over 2004-05 levels. Liability coverage, however, is still increasing in cost. The department recommended the consolidation of the liability policies of the health and social services authorities into the general policy of the government. This change will add $530,000 to the department's costs, but will save more than $700,000 in health board costs, for an overall cost savings. In order to implement this change, $530,000 will be transferred to Finance's budget in 2005-06 from the Department of Health and Social Services. I would note that, in the absence of this transfer, the department's 2005-06 expenditure budget would increase only .02 percent over 2004-05 levels.

The department's main estimates include $306,000 in expenditure reductions, or 4.15 percent of Finance's 2004-05 main estimates budget. This includes the elimination of two positions within the department, reductions in budgets for contract services, employee related costs, travel costs, casual wages and computer equipment, and the elimination of some statistical publications produced by the Bureau of Statistics.

In identifying potential areas of reduction, the department was constrained by the fact that over 50 percent of its budget funds wages and salaries, and a further 36 percent funds the non-controllable items of insurance premiums and interest costs. Therefore, only 14 percent of the budget funds controllable, non-salary costs. All of these reductions will affect the department's core business to a greater or lesser degree. The main focus of the department is raising revenues and reduced resources will affect its ability to pursue this task.

The department has included three new initiatives in its 2005-06 main estimates. The first is the inclusion, on an ongoing basis, of $120,000, approved in 2004-05 in Supplementary Appropriation, No. 1, for the Bureau of Statistics to develop and provide access to information on the economic and social impacts of resource development.

Secondly, a further $120,000 is included, on a one-time basis, to fund the bureau to work with Statistics Canada on the 2006 Census. Given the importance of accurate population numbers for our fiscal position and our program planning, this is a sound investment.

The third new initiative of the department is one-time funding of $80,000 to undertake a review of the Liquor Act. This initiative has been called for by Members and by the public. However, we heeded cautions that this should not be a large, expensive process. The total cost of this project has been budgeted at $160,000, half of which will be funded internally by the department in the current fiscal year.

The business plan includes a forecast of departmental revenues for 2005-06 of $946.707 million. These revenue estimates include the results of the October 26, 2004, First Ministers' meeting, which resulted in increases to our formula financing grant. The Department of Finance, as the lead revenue department of the government, accounts for about 90 percent of the total GNWT revenues forecast for 2005-06. The department will be focusing significant efforts in 2005-06 on the work of the federal Expert Panel on Equalization and Territorial Formula Financing. The negotiation of a fair resource revenue sharing agreement with Canada will also be a priority.

The main estimates do not identify any increased borrowing costs for 2005-2006, but we anticipate increases after 2006-2007 as we take into account the requirement set out by the federal government to repay them the $290 million corporate income tax overpayment that we received in 2002-2003. If the funding levels identified in our medium-term fiscal framework are confirmed, then it is likely that no increases in interest expense will be required until late in the government's business planning period. However, this is based on the assumption that the government restrains its spending and uses a significant portion of the new funds available from the formula for debt repayment. The greater our spending, the more we will have to borrow and the greater our interest costs will be.

I would be pleased to respond to any questions the committee may have. Thank you, Mr. Chairman.

Thank you, Mr. Roland. I’ll go to Mr. Menicoche for comments.

Thank you very much, Mr. Chairman. The Standing Committee on Accountability and Oversight had reviewed the Department of Finance and is pleased to provide the following comments.

The GNWT and NWT residents alike have experienced steep increases in insurance premium costs over the past few years driven primarily in the downturn in the worldwide insurance industry. According to information provided by the Department of Finance, GNWT insurance premiums increased by 57 percent from fiscal year 2001-02 to 2002-03. In early 2003, the department undertook a review of alternative ways to address property risks for the GNWT which resulted in the decision to raise the deductible amount to $10 million and self-insure losses below that amount. In conjunction with this, a loss control program was implemented and funded by part of the premium savings. This approach has significantly reduced premium costs for the GNWT, resulting in a net decrease in insurance premiums for the year ending March 31, 2004, and only a slight increase for the year ending March 31, 2005. Members were pleased to note that insurance premiums, at least in the area of property insurance, are under control.

Unfortunately, NWT residents continue to struggle with rising insurance premiums. Some Members noted that many NWT residents, in particular small business owners, have expressed that escalating insurance costs is a substantial burden to their business. Surveys conducted by the Canadian Federation of Independent Business, which include the NWT, echo this concern. Three-quarters of businesses have cited insurance rates as a topic showing impact on business.

During the review of the 2005-2006 Draft Main Estimates, the committee had opportunity to discuss a problem of escalating insurance costs with the Minister of Finance and his officials. Members raised the issues of possible GNWT intervention in the insurance industry with the aim of mitigating rising insurance costs which are a substantial burden to most NWT residents, especially small business owners, and it was pointed out that a number of jurisdictions across Canada have taken this type of action.

Members of the committee were pleased with the Minister’s commitment to contact the Canadian Federation of Independent Business, as well as other jurisdictions, to discuss possible GNWT participation and efforts that are already underway to deal with escalating insurance premiums. Members look forward to further discussions about this issue with the Premier, no later than the spring session of this Legislature.

The GNWT and the federal government were in disagreement over the results of the 2001 census. The issue is of crucial importance to the GNWT as formula financing agreements which determine the amount of transfer money from the federal government are closely tied to population. To resolve the issue, the GNWT undertook its own census. After much negotiation, the GNWT and the federal government were able to reach an agreement which saw the addition of approximately $100 million of federal funding for the GNWT. This money would have otherwise been lost had the GNWT not intervened.

Members were pleased to see the Department of Finance allocate $120,000 in one-time funding for the NWT Bureau of Statistics to work with Statistics Canada to ensure the next federal census accurately reflects the NWT’s population. The initiative is aimed to ensure the difficulties encountered during the last census and the resulting financial implications will not be repeated.

Some Members did raise the concern that perhaps the GNWT was taking on the responsibility and cost that should be borne by the federal government. However, given the potential financial loss should the situation of the last census be repeated, the committee is of the opinion that it is good investment. The committee supports the department’s proactive approach to working collaboratively with Statistics Canada on the 2006 census.

The committee further notes that the quality of a census is ultimately dependent upon the way that questions are asked, and that efforts be made to communicate the value and importance of the census to residents. Members point out that communities have been known to be resistant to sharing personal information with government officials. This hurdle will have to be overcome for the 2006 census to be a success.

The Standing Committee on Accountability and Oversight recommends that the Department of Finance focus on the communication elements of the 2006 census so that NWT residents are made aware that the 2006 census is vitally important to the NWT and its residents.

The Standing Committee on Accountability and Oversight was pleased to note the department’s initiative to review the NWT Liquor Act in order to identify appropriate legislative changes. The act has not been reviewed since 1994 and is currently considered by many to be inadequate. Members were very disappointed that more details were not available at the time of the draft main estimates review.

Subsequent to the meeting, the standing committee received additional information and notes that an initial report, that will include recommendations on potential issues, will be considered. This will be completed by April 30, 2005. The initial report will also include a review of the recommended legislative changes and proposed consultation process. A final report will be provided to the Department of Finance by November 30, 2005.

Members have noted the Minister’s commitment to ongoing discussions with the committee as the initiative progresses. The committee looks forward to further dialogue as the reports are completed. Thank you very much.

Thank you, Mr. Menicoche. I’d like to ask the Minister if he wishes to bring in witnesses at this time and ask if the committee agrees that we bring in some witnesses. Mr. Roland.

Yes, Mr. Chairman, I would.

Is the committee agreed that we entertain the witnesses at this time?

Agreed.

Thank you. I’d like to ask the Sergeant-at-Arms to gather the witnesses and have them seated. Thank you.

Thank you, Mr. Sergeant-at-Arms. Welcome, witnesses. I’d like to ask the Minister to please introduce your witnesses.

Thank you, Mr. Chairman. To my right I have the deputy minister, Margaret Melhorn, and to my left I have Mr. Mel Enge, the director of finance and administration.

Thank you, Mr. Roland. Welcome, Ms. Melhorn and Mr. Enge, to the proceedings this afternoon. I’d like to now go on to general comments on the departmental estimates from Members. General comments, Ms. Lee.

Thank you, Mr. Chairman. I would like to just say a few things about the budgeting process in general. It’s not specifically to the Department of Finance, but it is relevant in that it is the department that puts the estimates together. First of all, I want to thank the Minister for breaking down the budget books into different categories under other expenses. I appreciate that the department and the Minister took the advice of the Members. I guess the government didn’t want to be asked on each item all over again like the way we did last time. Nevertheless, I do really appreciate the changes that the Minister has undertaken.

The second thing are the budgets in general; I was thinking over the weekend about how we spent the last week with the Minister of Finance delivering his budget, by and large, a very positive or as positive as a government budget can get. I think it’s pretty good. I think the Minister should be very pleased and proud of the response not only from this floor, but from outside. When you really look at it, the budget is a lot more personal than talking about fiscal responsibility framework or how much money goes into deficit and what is our overall debt and how much debt can we get into. It’s not about that. The budget is really about how we spend our public money for the benefit and interest of those people who are out there expecting us to do good work for them. For many people in the communities it’s about our quality of life, their quality of life or what services are available and what kind of education we’re getting in schools and what we can do with our recreational time. For the children it’s about what are our adults and leaders doing to make sure that we’re taken care of and we get benefits; not benefits, but that we get good health care and our future is being looked after by those who should know better than us, looking at it from a child’s point of view.

The line of questions that we had, for example, last Friday about a lack of an indoor gymnasium in Nahanni Butte, it’s not an isolated incident. For me over the weekend I just thought that that was sort of everything here should boil down to a level that intimate. It’s about the measure of our work here and the budgets that we pass. I’ve been here…This is my fifth budget. Years down the road after I’m long gone I’m not going to be judged on whether I supported fiscal responsibility framework. Nobody would care about…Well, I mean, I guess for some policy people they might.

---Laughter

But it will be about to what extent did I do, as a Member of this Legislature and this government, to improve and enhance the lives or make it more meaningful to those we serve. That was just my thought over the weekend.

On that note, I still don’t get what role the Minister of Finance plays in deciding what goes into these books. I don’t know how it looks to you over there, but from here and from what I’ve seen over the years, some Ministers seem to get projects a lot more easily than others. How does an indoor gymnasium in Nahanni Butte rank? When you go around and duke it out around the FMBS table, how does that rank? Does it need the Minister of MACA to come and vie for -- I don’t want to call them the little guys, but I say that with affection…

---Laughter

I mean the little guys in Nahanni Butte; I mean the children of Nahanni Butte. Who is speaking for the children of Nahanni Butte or youth or who need the indoor facility in Nahanni Butte versus an indoor facility in Kakisa as opposed to office renovations on the 12th Floor of the Northwest Tower? I don’t know if there have been renovations there, but how does that work? I’ll just stop it there and see if the Minister could give us that answer. Thank you.

Thank you, Ms. Lee. Mr. Roland.

Thank you, Mr. Chairman. The number of comments Ms. Lee has made with regard to the budget exercise as we go through; one, is from within the Department of Finance. We like to accept the opportunity for any kind words that Members share with us, but the changes the Member has spoken to about other expenses being now included in the budget document were part of the FMBS process. I think it’s again listening to what Members want and trying to accommodate what we can through this process.

The Member is also right about the quality of life issues that residents face and this budget process, but I would say that the responsibility policy issue is one that directly would impact and has impacted in the past on programs and services available to clients in the Northwest Territories to the people we represent and serve. I guess as we see this budget coming forward and presenting it with the fiscal responsibility policy as a cornerstone of it, if we can secure and build a solid foundation going forward, then hopefully those programs and services that Members speak about can continue and be enhanced as we go forward, instead of looking for ways of squeezing the government for more dollars and trying to rearrange how we spend that money. That’s one of the issues I guess I would go to.

For the capital planning process that is used, it is one that is fairly difficult. In light of our fiscal challenges of the past, that was one of the areas that was reduced. Things have changed. Initially when programs or capital programs were looked at by departments, there were criteria that established what a community would be eligible for and what departments could put in for requests. As the system works today, each department would work through their system and build their capital planning by going out to their regions and asking for their regional manager’s input, and it would work its way up to headquarters and then the deputy ministers of each department would then collect that information and share it. Then it would go into a ranking system.

There was a list of five areas that are part of the process that is used and the safety of people and assets are one of those included. What we found ourselves in the last couple of years as the Members of the 15th Assembly and as FMBS and Cabinet Ministers would review the plan as it would come forward to us. As we looked at it, it became an increasing concern for us to see that there were many more projects that were not making the list that were of a critical nature, because of the amount of money that we had to be able to apply to the capital program. So decisions had to be made as to what were the most critical. Departments would have to defend what ones they wanted on that project and define why they were important.

Hopefully, as we go forward and set this fiscal policy in place and have increased the amount of capital spending that’s going to start happening, we can once again start looking at that criteria and hopefully there won’t be as many projects that would sit on that list that we call a red-flag list of each department. The red-flag list is the one where each department would bring forward their list of projects, and those would be the ones that didn’t make the initial cut and they still felt it was of a nature that should be dealt with. We’d either tell departments to go back and redo their numbers to see if other projects could be put off for a year or, at the end of the day, we’d have to decide if we could try to find more money from other sources.

It’s still an area we have to improve on but, as I stated earlier, with the fiscal responsibility policy and with the intent now to fund 50 percent of our capital program through an operational surplus and the rest through debt management, I think we would be able to start turning that around as we go forward. Thank you.

Thank you, Mr. Roland. Ms. Lee.

Seven seconds left; holy. Sorry; I had so many questions.

---Laughter

Maybe I’ll just end with one. I’m still not clear though. I know there are criteria for capital funding, safety, protection of assets and such, but how does an indoor facility, which I would think is pretty essential if there are no other facilities in that community for a place to meet or play indoor sports for children -- and I understand there are three or four communities in the North that have that problem -- how does that rank? Why does that rank behind changing the carpets in an office in Yellowknife? I really believe this is not just a Yellowknife…I mean, I don’t think I’m here just to speak for Yellowknife issues in a narrow sense. I do believe that the youth and the concerned citizens in Range Lake would want me to speak for people of all the Northwest Territories. How do we rank as a government? Why is it that we cannot make a decision? Why can’t we, as a people sitting around this room, say okay, we need to build two or three community halls in small communities for children before we spend…I could tell you; I have sat here and approved and seen renovation projects in offices amounting to $1 million in any given year. How could we make that possible? Thank you.