Thank you, Mr. Chair. I have with me Mr. Mike Aumond, deputy minister of Finance; Mr. Sandy Kalgutkar, deputy secretary to the FMB. Thank you.
Thank you, Mr. Miltenberger. Again, thanks to Mr. Kalgutkar and Mr. Aumond for joining us today. Committee, general comments. Mr. Bromley.
Thank you, Mr. Chair. Unfortunately, this expenditure will drive us well beyond our supplementary reserve. In fact, it blows it right out of the water. In the supportive documents, I keep seeing the word shortfall. What’s happened here is we have done a very shoddy job on budgeting. This is riddled with examples of entirely predictable costs and it reflects to me a really irresponsible approach to budgeting in the first place, and here we are again putting our supplementary reserve into major deficit. This isn’t the first time this has been brought up. We have been bringing this up repeatedly. Again, I have to question what’s going on here.
Again, many of these things are known well in advance. I will be pointing out examples as we go, but I’d say this practice has to stop. These are major dollars. Obviously, we are not through the year yet, who knows what we’ll come up in a year or two from now for this fiscal year. But I am very disappointed to see these sorts of things coming forward when we’re not even through our year here.
That’s just an…(inaudible)…comment there and I will be commenting as we go. Thank you.
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chair. I will accept the Member has the right to make his comments. I would take exception to the characterization of shoddy and irresponsible. We take this work very seriously. This is a $1.6 billion operation. It’s very complex. There are many variables we can’t control. There are many demand-driven services. I have and this Assembly has full confidence in the Department of Finance and the budget because we just approved it in the Committee of the Whole yesterday, I think, with the exception of one vote against, everybody else supported it. So we will have the discussion. Yes, there are costs that exceed our Supplementary Reserve Fund, but to characterize the work of the Finance department as shoddy and irresponsible is one, as Minister, I take exception to. Thank you.
Perhaps I could ask what the purpose of the Reserve Fund is and why it’s set at the point that it’s set at and why we are exceeding that by $26 million.
Mr. Chairman, the intent of the fund is to allow us to address unanticipated pressures that we may not have anticipated in the budget. Many are demand-driven programs and you look at one of the big drivers is some of the significant costs related to services to adults and children in southern jurisdictions for example. It gives us a target. We try to hold it, along with our forced growth costs, we try to maintain that, but there are some costs that we can’t anticipate and there are costs that we have to be prepared to pay. Thank you.
I think many entities would budget with this in mind. If the supplementary reserve is insufficient, let’s change it. But what happens is we end up stealing from Peter to pay Paul here when in fact we could allocate responsibly right in the beginning. As I say, this degree of correction is unacceptable in my mind. Many of these things, as I say, are predictable and pretty well known. This government’s been operating a long time.
Thank you, Mr. Bromley. I’m trying to find a question in there. I will leave it at that, I guess. General comments. I have Mr. Menicoche, followed by Ms. Bisaro. Mr. Menicoche.
Thank you very much, Mr. Chair. I know it’s a pretty significant budget at $30 million and I think the term mini-budget is usually termed when you have some such large expenditures. Of course, they are largely unforeseen. I can certainly concur with that.
I have a couple of questions. Firstly, are any of these from the supplementary appropriation list of $30 million, is any of that included in the base going forward into 2014-15 fiscal year at all?
Thank you, Mr. Menicoche. For that we will go to Mr. Aumond.
Thank you, Mr. Chair. Some of the health items, such as children and adults out-of-territory care, blood and plasma protein products and some medical travel, Health and Social Services did get an additional $10 million starting in ‘14-15 for those four items in particular. Some examples of some of the stuff that we’ve taken from this supp list and provided base funding adjustments for in the ‘14-15 fiscal year. Thank you.
Thank you, Mr. Aumond. Mr. Menicoche.
Thank you very much. Because it was a significant over-expenditure again, as well, for the predicted 2013-14, are we looking at then a deficit budget based on these new numbers that we have before us?
Thank you, Mr. Menicoche. Mr. Miltenberger.
No, Mr. Chair.
Thank you, Mr. Miltenberger. Mr. Menicoche.
Thank you. I think he said no. Okay. Can he explain – that is such a significant $30 million adjustment to the 2013-14 budget – how we can be under?
Thank you, Mr. Menicoche. For that we will go to Mr. Aumond.
Thank you, Mr. Chair. The projected, I guess, the additional, we’ll be in a deficit for our supp reserve by about $26 million. We were projecting a budget in ’13-14 in excess of $100 million to help fund our capital plan that we approved for ’14-15, so we’re in no danger of this putting us in a deficit position.
Thank you, Mr. Aumond. Mr. Menicoche.
Thank you very much, Mr. Chair. Just one further question then. We have enough revenue for ’13-14, but Mr. Aumond mentioned, of course, it looks like we have less money for capital for ’14-15. Is that what he’s alluding to?
Thank you, Mr. Menicoche. Minister Miltenberger.
Thank you, Mr. Chairman. We’re going to keep the capital plan at the agreed to rates. It will just be short-term borrowing to cover those costs.
Thank you, Mr. Miltenberger. Mr. Menicoche.
Thank you very much. I’m done.
Thank you, Mr. Menicoche. Continuing on with general comments, I have Ms. Bisaro.
Thank you, Mr. Chair. My comments are similar to my colleagues’. In looking at the amount of this appropriation and the impact that it has on our Reserve Fund, it’s pretty mind-blowing. This appropriation is some $30 million. About $7 million is recoverable, but it leaves us with $24 million or so which, added to our $1.7 million negative already in our Reserve Fund, brings our Reserve Fund up to $26 million in the hole.
I agree with my colleagues that some of these increased pressures happen year after year after year and we should be able to predict them, and I’m very glad to hear that we have added to the base for, I think, four items, I believe the Minister mentioned. That, in my mind, is how we should be budgeting. We finally got to the point about two years ago now that we budgeted a far more realistic figure for fire activities during the summer. Previously, we budgeted an absolute bare minimum and every year the department had to come back and ask for a supplementary appropriation when we knew full well that we were not going to spend just the minimum amount in that budget.
I think being more realistic in what it’s actually going to cost us is a good idea, and I’m very glad to see that some of these things have been moved into base funding for the Department of Health and Social Services. I would encourage the Department of Finance to look with a very critical eye when they’re doing the next budget, look with a critical eye over the last two or three years and don’t budget below what we have tended to spend on a particular item. Budget what we think we’re going to spend in the next year.
I think sometimes we underestimate in our budgeting. I’m not quite sure why. Maybe because it looks better or maybe because, you know, yeah, well, that’s okay, we can always come back and ask for more money. But as I’ve said often, we can’t do that in our own personal budgets. We have X amount of dollars in our household budget and we can’t go back to ourselves and ask for more. Well, we can, but it puts us into debt. That’s the situation that we’re in here.
My question to the Minister is: With $26 million in the hole, I believe it was mentioned that we are going to have to incur short-term borrowing in order for us to get over this hump and this lack of funds and cash flow and so on, so what are the costs that we are going to incur because of this overspending and because of the negative amount in our Reserve Fund?
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Mr. Chairman. I would point out that if it was in the base or if it’s here as an over-expenditure in our supplementary reserve, we would still be paying the costs that have been incurred for these programs and services, and we come back on a regular basis. This is my 19th budget, and the Health and Social Services big ticket items that we constantly come back for are hospital care services and for children and adults, usually in southern facilities. In addition to the supplementary reserve, which is going to go into the base in those areas, we also have forced growth that we try to top up these high pressure areas and programs. Even with that, these are still demand-driven programs and we are here, and if you did a review looking back on what are the program areas that come in most regularly with the biggest amounts of money, you would find that they are very consistent with what’s before this House.
With this budget, this supplementary appropriation in our budget, we are at $128 million left of borrowing room, and we’re looking at keeping that $100 million cushion. We have some flexibility, modest as it is, so we are paying the service, the debt, the short-term debt. Some of it’s already self-liquidating, but that money, we borrow it at the rate we get as a government, and if that’s what the Member is asking, I’d have to ask the deputy minister if we have those costs. If not, we can get them for committee.
Thank you, Minister Miltenberger. Mr. Aumond.
Thank you, Mr. Chair. We would have to go back and provide that information to committee.
Thank you, Mr. Aumond. Ms. Bisaro.
Thank you, Mr. Chair. Thanks to the Minister for his comments, and to the deputy minister. It would be interesting to know what this negative amount in our reserve is going to cost us. I mean, the Minister is constantly reminding us that we need to not spend more money because we’re in a short-term borrowing situation. We have to borrow periodically during the year and the number of times that we have to borrow, apparently, is getting to be more and more frequent. There’s a cost to doing this and I would be interested in knowing that cost.
The other thing, if it’s not too much work, I would be interested in knowing for, say, the last three to five years, I would be interested in knowing the cost for even the four items that were mentioned by the Minister, blood and plasma protein products, southern placements for children and adults, and medical travel. I’d be interested in knowing what we budgeted and what we had to come back for as a supplementary appropriation, just so that I could get a sense of a trend. If there’s any other big ticket items that the department cares to provide that information for, I think it would be very, very useful. No question there, Mr. Chair. Thank you very much.
Thank you, Ms. Bisaro. We’ll ask Minister Miltenberger just for that one comment. Minister Miltenberger.
Thank you, Mr. Chairman. We’ll provide the requested information going back three to five years for those particular four areas and we’ll include supplementary appropriations plus whatever money has been added for forced growth as well.
Thank you, Minister Miltenberger. Committee, general comments.
Detail.
Thank you, committee. I’m hearing detail. Committee, I’ll ask you to turn to page 3 in your supplementary estimates. Supplementary Estimates (Operations Expenditures) No. 4, 2013-14, Legislative Assembly, operation expenditures, Office of the Clerk, not previously authorized, $170,000. Mr. Bromley.
Thank you, Mr. Chair. What is the total budget here that this $170,000 is being added to and what will the total be at the end of the year?
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chairman. We don’t have that information from the Ledge, but we can request that information from the Legislative Assembly and provide it to committee.
Thank you. I’d appreciate it if that could be provided to the House and tabled. Why the increase here?
The indication from the Speaker is that there have been cost pressures that have driven both these areas of expenditures up and we bring it forward to the Legislature for payment and we’ll, once again, ask for that information.
Thanks to the Minister. This sounds like a significant increase here and I’m surprised that the process is such that the Minister is not able to be prepared to answer very simple questions here. I would ask that this House consider a process to make sure the Minister has that information when bringing forward requests for increases such as this. Thank you.
If there are improvements in the process that are needed, then we would, of course, look for those. But standard practice is the Department of Finance brings forward the request and it’s the Legislature that disposes and it’s the Speaker that requests, all we do is incorporate it into the budget. We don’t question it, we don’t defend it, we just process and bring the request to this House. So, we will get the information that was requested. Thank you.
Thank you, Minister Miltenberger. Committee, page 3, Supplementary Estimates (Operations Expenditures), No. 4, 2013. Mr. Bouchard.
Thank you, Mr. Chairman. I just had a question about the $35,000 in the Office of the Speaker. Does the Minister know the information on that?
Thank you, Mr. Bouchard. Mr. Miltenberger.
Thank you, Mr. Chairman. There was a scholarship set up, but when the Building Society concluded its work and wrapped up, they turned over I think it was $400,000 to the Legislature and part of it was to go to a scholarship, which is why the net effect is nil. Thank you.
