Debates of March 19, 2004 (day 4)

I call Committee of the Whole to order. Yesterday we left off working on Bill 1, Appropriation Act, 2004-2005, under the Department of Finance. What is the wish of the committee? Mr. Allen.

Roger Allen

Inuvik Twin Lakes

Thank you, Madam Chair. I would strongly suggest that we conclude or continue to review the Department of Finance, and if we conclude in time, that we move on to the report on the Financial Management Board Secretariat. With that, Madam Chair, that is what I would suggest. Thank you.

Okay, does the committee agree?

Agreed.

Agreed. Thank you. Would the Minister like to bring his witnesses in?

Yes, Madam Chair, I would like to have the witnesses come in. It might be a few minutes before they can make it down here.

Okay, well, maybe we will just have a very brief break while we are giving the Minister a chance to get set up. Thank you.

---SHORT RECESS

I will call Committee of the Whole back to order and ask the Minister if he would like to bring officials in.

Yes, Madam Chair.

Thank you, Mr. Roland. Does the committee agree?

Agreed.

Thank you. I will ask the Sergeant-at-Arms to escort the witnesses in.

Mr. Minister, could you please introduce your witnesses, for the record, please?

Thank you, Madam Chair. To my right is the deputy minister of the Department of Finance, Margaret Melhorn; and, to my left is Mr. Mel Enge, director of finance and administration.

Thank you, Mr. Roland. Mr. Hawkins.

Thank you, Madam Chair. On my questions, yesterday we left off on page 3-20 as you indicated, Madam Chair. In response to my last question before the time ran out, Mr. Roland’s officials had indicated under Liquor Licensing Board revenue, licensing fees and fines were the break…If they can give me an indication of how that breaks out. Thank you, Madam Chair.

Thank you, Mr. Hawkins. Mr. Roland.

Thank you, Madam Chair. My understanding is they are getting information on the other income portion, the $180,000 for 2004-05 and what that was made up of. I believe we did provide some information on the Liquor Licensing Board revenue of $632,000. So can we have some clarification on which area?

Thank you, Mr. Roland. Mr. Hawkins.

Thank you, Madam Chair. Basically I am trying to get an idea of what the breakdown is of that $632,000. Is that 90 percent fines or 90 percent licence fees? I just want to get an idea of what that composition is. I suspect it’s just two line items as you had mentioned yesterday. If you could give us a further breakdown on that.

Thank you, Mr. Hawkins. Mr. Roland.

Thank you, Madam Chair. The breakdown of that, I don't have the specific numbers, but the majority of that are the fees that are charged to the organizations. The fines make up a small portion of that $632,000. Thank you.

Thank you, Mr. Roland. Mr. Hawkins.

Thank you, Madam Chair. Thank you, Mr. Minister. That's more than satisfactory on that. Unless, of course, someone else has concern, I'm completely fine with that.

At this moment, would the Minister be able to answer further questions as I enquired about on other income with regard to the end result of the refunded bottles? Or should I at this point bow to the Chair and someone to take the mike if he's not prepared to answer those? Thank you.

Thank you, Mr. Hawkins. Mr. Roland.

Thank you, Madam Chair. We do have more information on bottle deposits in the NWT, and we can provide that hard copy to Members or I can read it off.

Thank you, Mr. Roland. What is the wish of the Member?

Thank you, Madam Chair. For the benefit of maybe all Members, I would be more than happy if he provided a hard copy while we have a discussion at this moment. If I or any other Member at the time is citing any concerns, we can perhaps ask to go back to page 3-20. So just to move forward, I would be happy to accept a hard copy at this time. Thank you.

Thank you. I'm not exactly sure how readily available copies of that would be. If they can be distributed...Mr. Hawkins, we're almost at the end of this particular department, we only have a couple more pages and then the department summary. So I'm afraid that if we conclude this, I don't know if there will be an opportunity to go back to this department, unless you want to defer it. Mr. Hawkins.

Thank you, Madam Chair. Then at this time, maybe if the Minister will walk us through it just quickly. Specifically, I'm more so interested in what happens, how the agreement works out with regard to the refunding process, who retains ownership of the bottles once they have been refunded, and is that built into the contract fee with the vendor who does the return of the bottle process. Thank you very much, Madam Chair.

Thank you, Mr. Hawkins. Mr. Roland.

Thank you, Madam Chair. I will go through what we are now handing out to Members. As well, I would just like to inform Members that as the Department of Resources, Wildlife and Economic Development moves forward on its recycling initiative, this portion of it will change because it will be incorporated into the program that is now going to be administered through Resources, Wildlife and Economic Development.

So the information we have now is we currently have bottle return depots in Fort Simpson, Fort Smith, Yellowknife, Inuvik and Hay River. In Norman Wells, a local volunteer group collects containers and then ships them out to Hay River once a year. The containers that carry an NWT deposit are accepted and refunded by the bottle depot. In turn, we reimburse the bottle depots upon receipt of proof of refund to the customer. The containers are then destroyed at the depot; cans are shredded and bottles are crushed. Some depot operators then ship the shredded cans to a recycling plant in the South, while glass is disposed of as there is no economically-viable means of recycling at this time. The depots are also paid a handling fee per unit to cover their operating costs, and that's four cents per bottle or can. The Liquor Commission provides shredding equipment at a nominal charge of $1 per year. Molson and Labatts bottles are not included in the NWT deposit refund system as they are dealt with directly by the brewery and with the depot operator. These deposits vary between communities and are available directly from the depot operator. Molson and Labatts bottles are returned to the breweries.

The deposit fees are as follows: spirits and wine bottles, 25 cents each; cans, cider and cooler bottles, 10 cents each; and the depot handling fees are four cents per bottle or can. There were 6.2 million containers sold during 2002-2003, of which 3.9 million were returned. This accounts for approximately 63 percent of all containers sold for the year. Thank you.

Thank you, Mr. Roland. Mr. Hawkins.

Thank you, Madam Chair. If I may, at the discretion of the committee, expand a little further, my question now goes into who retains ownership of the returned and sometimes destroyed containers, be it can or bottle.

Thank you, Mr. Hawkins. Mr. Roland.

Thank you, Madam Chair. Once the bottles are returned to the depots, they are theirs to dispose of. As stated, the bottles are crushed and in different locations, different communities…I'll use an example I am familiar with. In Inuvik at times, instead of using crushed rock, they would use the crushed bottles in sanding areas. As stated, the depots have shredders that are supplied by the Liquor Commission. They shred them and send them to the southern facilities for recycling. Again, for Molson and Labatts bottles the depot is the one that deals with them, sends them south and gets any further refund from them. Thank you.

Thank you, Mr. Roland. Mr. Hawkins.

Thank you, Madam Chair. I didn't hear the last couple words of the Minister there, even though I have the earpiece. Maybe he can answer it as I ask this. Does the Department of Finance recognize in any way that value of the returned bottles to the depots, whether they're crushed, shredded or other means? Do they recognize that in the contract, whereas the depot may be setting themselves for a refund? Therefore, they would be receiving, quite potentially as I see it, four cents for each bottle or can, plus the value of cashing them in at a southern location through that recycling process. I tread on thin ice as I suggest the double dipping of this particular case, so maybe if the Minister could expand a little further. Thank you very much, Madam Chair.

Thank you, Mr. Hawkins. Mr. Roland.

Thank you, Madam Chair. The last part of the earlier response was that the depots take care of the Molson and Labatts bottles through their operations and send them south for refund from those outfits. One of the factors involved in giving the handling fee to the depots as well as providing the refund to them is to pay the people that bring back the bottles and cans for returns, that is when they ship their containers south to recycling centres, they have to pay for the handling fees themselves. So the handling fees and freight are taken out of the earnings that they would receive from that. That is one of the reasons we don't count and collect the money from them. We just give them the handling fee and go forward from there.

Thank you, Mr. Roland. Mr. Hawkins.

Thank you, Madam Chair. You squeaked in just before my time expired. Can I get the Minister to confirm that the incidental fee, be it large or small, is not accounted for by the Department of Finance, or I should say recognized in any way? Thank you.

Thank you, Mr. Hawkins. Mr. Roland.

Thank you, Madam Chair. The initial dollars that go out for bottle recovery, I believe, are accounted for through the Liquor Commission. The Department of Finance does not account for the fees that are received by the depots through the other operations. They are paid for by the recycling companies in the south. We don't account for that in the Department of Finance numbers. Thank you.