Thank you, Mr. Speaker. I would like to ask my questions to the Premier and it is about the Deh Cho Bridge. Mr. Speaker, in the statement that the Premier made, it said: “First, I want to assure Members and the public that assuming responsibility for the Deh Cho Bridge Project will not change the GNWT’s fiscal situation or the GNWT’s ability to pay for programs and services.”
Mr. Speaker, that is a very categorical statement and doesn’t really take into account anything unforeseen. As my colleague Mr. Ramsay had pointed out, there have been some unexpected occurrences with the Deh Cho Bridge Project. I am thinking specifically about the cost. We had a fixed price, fixed contract, but it seems that that had to be adjusted somewhat. Mr. Speaker, we have a household income here if we make this an analogy. It is the $1.3 billion that we have to work with each year. We have some long-term debt -- Housing Corporation, Power Corporation and now potentially the Deh Cho Bridge -- but we have a limit. We have a limit. It is like having a credit card. There is a limit. We can’t go over that limit. It is $500 million.
Mr. Speaker, I would like to ask the Premier, interest rates are projected to be going up. We have $100 million from the Immigrant Investment Fund sitting in a bank account or in some investment somewhere. It is not doing us much good financially. Is there any possibility that the lenders could be… If their fortunes and their interest could be better putting their loan someplace else, is there any chance that we could take the $165 million bridge debt for the Deh Cho Bridge and pay that down more quickly through some other means, maybe partially by using some of the Opportunities Fund’s money? I know it sounds kind of convoluted, but I mean interest rates are going up. Maybe the lenders could find a better deal somewhere else. Thank you.
Thank you, Mrs. Groenewegen. The honourable Premier, Mr. Roland.
Thank you, Mr. Speaker. The options for us, there are a number of things that could be developed and the Member has put the idea of the Opportunities Fund as part of a solution that could be looked at paying out a debt early. The situation that we would have to look for is, for example, the Opportunities Fund has a time amount once borrowed that it has to be paid back. The concession agreement and the agreement with the lenders that stands is already built into our fiscal strategy for the 35 years. There will come a time as interest rates go up and real bonds and the real bond market, we could weigh the possibilities of paying out the debt early and still be ahead of the game with the… I don’t know if we call it a penalty clause at that point, but the early payout would cost us some money so we would have to weigh those things out. Again, that is building into assumptions in the future. Thank you.
Mr. Speaker, if we leave the Deh Cho Bridge debt on the books long term and that becomes part of our borrowing limit for the long haul, does the Premier not see that as really tying the hands of this government since it does not affect our fiscal capacity and does not affect our ability to deliver programs and services, it doesn’t anticipate anything unforeseen and it limits our borrowing ability? Does the Premier not see that as affecting our fiscal situation?
As this scenario developed and as we went to Members highlighting the concerns that we had, by not taking any action there would be immediate impact on the Government of the Northwest Territories when it comes to our debt wall. By taking the steps we have and getting confirmation from the federal Minister of Finance, Minister Flaherty, to work with us in dealing with this debt around this project short-term relief we’ve been able to work through this scenario where there will not be an immediate impact.
As I was responding earlier to Member Bromley, there would be an impact in a sense of our available borrowing capacity being impacted as we go forward as the Government of the Northwest Territories. That’s always a consideration that governments face. That is why, for example, we went outside to the Deh Cho Bridge Corporation who structured this project as it was. The Taltson project is structured as purely a business case because we realize that the Government of the Northwest Territories is unable to take on projects of that magnitude on its own.
I’d like to ask the Premier, since he brings up the Taltson hydro expansion, how is having our debt card full going to affect our ability to guarantee any loan to do the Taltson expansion?
Regardless of our debt situation as the Government of the Northwest Territories, even the bridge project aside, we are unable to, as the Government of the Northwest Territories, guarantee the debt of the Taltson. With drawing this down and bringing it into our books does not impact us that way. We’re going to have to find partners out there or have the federal government make an investment. There are a couple of funds that we have made application to try to help offset some of those costs.
Thank you, Mr. Roland. Final supplementary, Mrs. Groenewegen.
Thank you, Mr. Speaker. Sorry, dumb question there. I forgot the Taltson was $700 million and I guess that is a bit outside of our debt limit. What do we do -- this is a hypothetical question -- I was going to say what do we do if something unforeseen comes up that’s in the millions of dollars? If we had brought the Deh Cho Bridge onto our books through a normal process similar to the Inuvik school, if we had brought that money onto our books in a similar fashion, this would be three or four years’ worth of our capital budget. Is there any possibility that we could still do that, understanding that the lenders would have to agree to allow us to do that? Has that been analyzed or looked at?
The process with the lenders, one, has unfortunately gone the track it has. Where we felt we had some flexibility, we came forward and requested the $15 million in our last sitting. We got that approval and then we were informed by the lenders that they are requesting us to assume the debt. With that in mind, that has now put us into this scenario. When it comes to repayment, the repayment structure is in place. If we want to repay earlier, there is going to be a penalty. We’d have to weigh those.
At some point, as I was speaking earlier to the markets that are out there on real bonds in that scenario and versus the penalty payment option, this is built in our fiscal strategy. It has been for the life of the agreement. With us taking over with the work of the federal government we will, we are working on ensuring that the room is there seeing if there were some changes to other expenditures, for example forest fires and so on.
Thank you, Mr. Roland. The honourable Member for Sahtu, Mr. Yakeleya.
