Mr. Speaker, I move, seconded by the honourable Member for Yellowknife Kam Lake, that Bill 11, Petroleum Resources Act, be read for the second time.
Mr. Speaker, this bill substantially mirrors the Canadian Petroleum Resources Act and coordinates with the requirements of the Northwest Territories Land and Resources Devolution Agreement. Thank you, Mr. Speaker.
Thank you, Mr. McLeod. The motion is in order. To the principle of the bill.
Question.
Question has been called. Bill 11, Petroleum Resources Act, has had second reading.
---Carried
Mr. Premier.
Mr. Speaker, I seek unanimous consent to waive Rule 69(2) and have Bill 11, Petroleum Resources Act, moved into Committee of the Whole. Thank you, Mr. Speaker.
---Unanimous consent granted
I’d like to call Committee of the Whole to order. We have three items on the agenda today. What is the wish of committee today? Ms. Bisaro.
Thank you, Madam Chair. Committee wishes to continue with Tabled Document 22-17(5), with the Department of Industry, Tourism and Investment and, time permitting and the Members willing, the Department of Finance. Thank you.
Thank you, Ms. Bisaro. Does committee agree?
Agreed.
We will resume after a short break.
----SHORT RECESS
We’ll carry on with the Department of Industry, Tourism and Investment. I’d like to ask Minister Ramsay if he would like to bring witnesses into the Chamber.
Yes, Madam Chair. Thank you.
Thank you, Minister Ramsay. Is committee agreed?
Agreed.
Agreed, thank you. I’ll ask the Sergeant-at-Arms to please escort the witnesses to the table.
Minister Ramsay, for the record could you please introduce your witnesses.
Thank you, Madam Chair. To my left I’ve got Mr. Peter Vician, deputy minister of Industry, Tourism and Investment. To my right, Ms. Nancy Magrum, director, shared services, finance and administration. Thank you.
Thank you, Minister Ramsay. Industry, Tourism and Investment, general comments.
Detail.
Detail. Okay, we will defer page 12-7 and move on to page 12-8, information item, infrastructure, investment summary. Any questions?
Agreed.
Agreed, Thank you. Page 12-9, information item, revenue summary, $124.394 million. Ms. Bisaro.
Thank you, Madam Chair. My first question on this page has to do with the capital transfers. We’ve got a huge increase from $265,000 to $2.7 million. So what accounts for this grand increase in capital transfers?
Thank you, Ms. Bisaro. Minister Ramsay.
Thank you, Madam Chair. That’s a gifted asset from AANDC. It’s the C.S. Lord Building with the geosciences. That’s what that accounts for. Thank you.
Thanks to the Minister for that. My other question has to do with, I have two other questions here, but my first of the other questions has to do with the regulatory revenues and the minerals oil and gas royalties.
The $120 million, as I understand it, is the estimated amount of resources revenues that we’re going to be getting in the ’14-15 budget year, but that’s the total amount, that’s not the net amount. So I’d like to know why we are recording the total amount in this budget. I don’t believe there’s a corresponding expense of the 50 percent of this net fiscal benefit that we’re going to be losing to the federal government, so why do we record this whole amount as revenue when there’s no offsetting negative amount? Thank you.
Thank you, Ms. Bisaro. Mr. Vician.
Thank you, Madam Chair. Good afternoon, Madam Chair and committee. The $120 million that’s forecasted as revenue is the revenue responsible for collection by the Department of ITI from anticipated neural and petroleum resource activities in the Northwest Territories. The responsibility then, under that fiscal benefit arrangement with the Devolution Agreement, is dealt with through the Department of Finance as part of the reconciliation of the amounts that are kept and those that are adjustments to the gross expenditure base of the GNWT. Thank you.
Thanks to the deputy minister. So, if I understood correctly, the corresponding expense is found in the Department of Finance. Is that correct? Thank you.
Thank you. The adjustment is reflected in the Department of Finance’s accounting, yes.
Thanks for the clarification. My other question has to do with the investment income interest earned on the NWT Opportunities Fund and it reflects in ’13-14 budget year a revised estimate of $7-plus million. My recollection is that that was the value of the fund. So is this, in fact, interest, $7 million in interest or is that simply how we’ve recorded it? Is the NWT Opportunities Fund now finished, is it empty, is it done and closed? A status update on the fund would be helpful and why have we recorded $7 million in interest? Thank you.
To the questions, the reflection in the main estimates for 2013-14, which are revised, reflect the interest that was earned by the fund. That interest was received as a result of earnings from a loan that had been dispersed to a company through the NWT Opportunities Fund. That was booked before ’13-14. Those funds have been subsequently funded to the Consolidated Revenue Fund and that Opportunities Fund is in the final stages of winding down legally and officially, so it’s anticipated it will be wrapped up before the end of the fiscal year.
My last question then. The fund is going to be wrapped up by the end of this fiscal year, so that would be ’13-14, that’s why there’s no anticipated activity or revenue in ’14-15. Is that correct?
That is correct.
Thank you. Page 12-9, information item, revenue summary. Mr. Bromley.
Thank you, Madam Chair. Ms. Bisaro asked most of the questions that I had as well there, but perhaps I could just ask, do we know what the adjustments are to the $120 million to resource revenue royalties and so on that we are responsible for collecting, that this department is collecting? Do we know what the adjustments will be?
Thank you, Mr. Bromley. Minister Ramsay.
Thank you, Madam Chair. The $120 million represents a five-year average, and I’m not sure, maybe the Member could just clarify what adjustments he maybe is talking about.
Thank you for that information and I appreciate this is a five-year average. With Ms. Bisaro’s questioning, the deputy minister mentioned that adjustments would be made in the Department of Finance and reported in there. I’m wondering if we’d know what the amount of those adjustments will total.
Thank you, Mr. Bromley. Mr. Vician.
Thank you, Madam Chair. The allocation of the $120 million is on the basis of the net fiscal benefit arrangement under the Devolution Agreement, which reflects the sharing of the royalties collected by the GNWT at a ratio of 50 percent, up to 5 percent of the gross expenditure base. That adjustment would be reflected in the Department of Finance’s accounting at this point. Further to that is the allocation of the 25 percent collected from the GNWT portion that would then be remitted to the Aboriginal organizations of the Northwest Territories.
Thanks for that information. With my rudimentary math, that leaves 25 percent still remaining. Is that in this department somewhere?
All funds collected under the revenue summary are remitted to the Consolidated Revenue Fund. No funds are retained by the department. Those would be appropriated the vote 1 and vote 2 allocations from this House.
My understanding is that those dollars could be anywhere in this budget, in the expenditures in this budget. Is that correct?
All revenues collected by this department and other departments are remitted to the Consolidated Revenue Fund and then this House would appropriate those funds available in addition to any other grants and funding received from other parties accordingly through the main estimates process.
That seems pretty clear. Much clearer than the process I’ve experienced to date. I believe not only myself but many Members have requested input on where the other 25 percent goes, and we never really had that opportunity other than this general, you know, the dollars disappear into the budget sort of thing. I’m clear on that. Thank you.
The petroleum fees, $10,000 seems quite modest, and I know we don’t have much petroleum production, obviously. About a third of the egg levy. What are those for? I know we’re busy fracking and doing all kinds of stuff out there. Is that what the federal government collects in petroleum fees from the NWT?
Thank you, Mr. Bromley. Minister Ramsay.
Thank you, Madam Chair. The department will collect revenues from the administration of our petroleum interests in the NWT and these include non-refundable rentals on the Pointed Mountain oil and gas leases held by Lone Pine Resources, issuance fees and fees for services under the Frontier Lands Registration Regulations, for instance, there’s a $250 fee for the issuance of an exploration licence, and rentals due to the Crown for exploration licences as well.
Are those all within this $10,000 of revenue?
