Thank you, Mr. Bromley. The Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. That’s still work to be done. We’ve structured and set up a Heritage Fund. We’re waiting for resources to put into that. A lot of work is going to be done between now in the fiscal years one and two here, as I’ve indicated, as we look at managing our resources and building up our cash reserves and where we can anticipate things in two years or so down the road where we get additional revenue from devolution, then we’ll be in a position to be able to decide in the interim what we want to do and how we want to structure it and then be in a position to actually have resources to contemplate where we put those. Thank you.
Thanks for the comments. That’s a very long-term prospect, obviously, the Heritage Fund, and I see absolutely no commitment in this budget for putting money in that, despite the fact that it’s there, and as the Minister said, the valuation of diamond export last year was a near record. Gold prices are at the highest they’ve ever been by a great deal, hundreds of percent. So I’m wondering, rather than wait, given our revenues in addition to that, our revenues are up $132 million this year, would the Minister commit to starting to capture some of that value right now, recognizing the lack of lasting legacy benefits that we’re getting from non-renewable resource benefit right now and for the past several decades. Will he get some money in that fund this year? Mahsi.
If we were to contemplate putting money into the Heritage Fund, it would be money that we’d have to borrow at this point. We have, as I indicated and tried to lay out in the budget address, our short-term and long-term borrowing costs, how much we have, the need to put aside and replenish our cash reserves so we can commit to infrastructure in year three and four and we’re very aware of the Heritage Fund sitting there. We do have plans to do a number of things in year three and four, as I’ve indicated as well.
The Heritage Fund is on that list. In the meantime we have to have two years of fiscal discipline to get us in the position to make those type of investments. Thank you.
I do disagree with the Minister on that. If we waited until we don’t have debt to put money in the Heritage Fund, it’s never going to happen. This government has made decisions on tens, I would even say hundreds of millions of dollars in this budget, so that’s not an acceptable response. But I’d like to ask, is the Minister looking at any other sources of revenue or potential sources of revenue that we might be able to develop and at least start getting that in place late this year or next year. Thank you.
As I indicated in the budget address, there are no new taxes in this particular budget. We do have some projects that I think are going to be a real boon economically as well as for building the North, like the fibre optic line. We do know with the conclusion of devolution and the resource revenue money that will flow, the A base funding that will flow, that we will have some additional revenue there as well. If our projections stay on target and there’s not any kind of negative downturn in this fragile global economy that we’re still in, then we anticipate there’s going to be some continued modest growth to our revenues there. As I pointed out, every dollar we have is subscribed to and then some. We’ve put money into a number of projects to offset a number of unexpected events and we’ve all agreed or the majority of us have agreed we need to have a replenishment of our cash reserves. I appreciate the Member’s concern. He and I agree about the Heritage Fund. It’s going to be a question of working on the timing.
Thank you, Mr. Miltenberger. Final, short supplementary, Mr. Bromley.
Thank you, Mr. Speaker. As far as the fragile global economy goes, as the Minister has said, the record export of the valuation of diamonds last year, this is after the 2008 downturn, the financial, the fiscal reasons for that have not changed at all, as we know from JP Morgan and so on. It’s not a matter of fragility. It’s a matter of governments not taking their responsibility seriously. So my last question is: Again, given these resources, will the resource developments that we’re getting and evaluations, will the Minister commit to doing a complete resource rent review for the Northwest Territories both under the conditions of devolution and without the conditions of devolution this year?
The issue of whether there’s a fragile global economy or not we could debate. We could debate the use of the term “fragility.” Clearly, when you have written Ireland, Greece, Spain, Portugal, Hungary, Poland, most of the former Eastern European block countries, France, either in recession or teetering on the edge of recession and the United States just struggling to get back out of recession, when we have our own provincial jurisdictions all in severe deficit reduction mode, I would say that things could be defined to be tenuous. The Member has made reference to what sounds like a fairly significant undertaking that he would like done, and if I was going to do that, I would need significant more clarity so that we could have a discussion about it before we look at putting a lot of resources to work to do that.
Thank you, Mr. Miltenberger. Final supplementary, Mr. Bromley.
Thank you, Mr. Speaker. A review of resource rents is something that’s undertaken by many jurisdictions on a regular basis. There are lots of examples out there. My point is that we are not capturing an appropriate value from the non-renewable resources that we’re exporting from the NWT. We are talking about devolution and we are not acting as a responsible government already. With devolution, are we going to do that? I’d say the best way to start taking this more seriously is to develop a thorough review of how do we capture value from our resource development, what are the rates elsewhere – look at Norway, look at Alberta, look at Alaska, and so on, decide our philosophical approach and get some things in place to do that.
I will look at Hansard. I agree with the Member that as we look to take over land, water, resource development, we want to be fully up to speed and up to date on all the rents, I think is how the Member referred to them. There are also other areas across the land, for example, where we want to look at are we putting the proper value on things like water. As we go forward as a territory looking at all these issue post-devolution, we will be looking at that and we will be having that discussion with Members, and I’m sure with Northerners as a whole.
Thank you, Mr. Miltenberger. The honourable Member for Range Lake, Mr. Dolynny.
Thank you, Mr. Speaker. My questions today will be for the Minister of Finance as a follow-up to my Member’s statement. Back in December 2011 our Minister of Finance along with his colleagues were dealt with the federal announcement, I guess, drastic announcement of the changes in the Health Canada transfers that were going to be occurring over the next five years. This has been a subject of great debate amongst provinces and territories, so much so that even the Premiers themselves are leveraging in in terms of their confusion as to what exactly the outlook is going to happen over the next couple of years. Now our Minister of Finance has addressed the House here and has addressed some of the Members in terms of the short order the territory’s going to be in an okay position. I guess we’re a bit concerned here, because of the nature, because of the concerns we’re seeing on a national level. My first question to the Minister is: Can the Minister reassure us on the short order that the federal transfers that we see before us are going to suit the needs of Northwest Territories residents for health?
Thank you, Mr. Dolynny. The honourable Minister responsible for Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. I’m not sure if it’s short order or short-term, but really in the short term we’re guaranteed the 6 percent increase and then subsequent to that it will be tied to the nominal GDP to a minimum of 3 percent. We will have to govern ourselves accordingly. It depends. I laid out some demographics, for example, about the doubling of our population over 60 by 2015 or so. We’re going to have to manage ourselves accordingly.
I would also point out that under the arrangements that have been proposed there were two jurisdictions that were positively impacted. One of them, in a fairly significant way, was Alberta to the tune of nearly a billion dollars. The other one, of course, was the Northwest Territories to a much more modest degree but to the amount of about $6 million. We’re paying very close attention to this.
As well, the Member referenced the Premiers. The Premiers and the Council of the Federation have put the Finance Ministers from the provinces and territories to work to look at the impact going forward of all the announcements that were made last December in Victoria. My final comment would be that at that meeting it was very clear that the federal government was announcing its intention. It was not asking for feedback. It was not asking for debate about what we thought about what was being proposed. It was almost by a type of fiat where it was very clear they have a majority government and a plan that they have decided to implement. That’s what this one is.
I appreciate the Minister’s thorough response to that. Again reassuring the House that on the short term or short order, so to speak, that we are okay and probably one of the better recipients of the so-called short-term order.
As I said in my Member’s statement here, changes in the health care transfers are going to shift dramatically in 2014-2015 on a per capita cash basis. Can the Minister indicate to me how that’s going to change the funding formula for that year moving forward?
The Member made reference in his statement to what sounded like what is referred to a base-plus approach to blended funding where you have a fixed amount, everybody receives a fixed amount and after that the calculations move to a per capita basis. That is an approach that is in use at every opportunity by every ministry of the government, and the territorial government as a whole supports that kind of approach. It has been put to use in some cases.
In regard to the health transfer, there’s a floor of no less than 3 percent. No province or territory is supposed to be disadvantaged using the 2013-2014 as a base year. As I indicated, as well, by removing the tax transfer condition we in fact are one of two jurisdictions that have in fact benefited.
Again, I do thank the Minister for clarifying that. Changes that are going to occur in funding are definitely going to affect this territory. It would be prudent to know what exactly the mechanics are behind that in terms of the financial mechanics that we’re going to be looking at. So much so that my next question has to deal with as we move forward in terms of the future. A lot of these processes are a five-year outlook and they say after 2017-2018 that the changes could be even further drastically affected. Does the Minister or the department have a strategy in place? As he indicated in his budget, we’re looking at an aging population, obviously more expenses on our budget line. Does this department have some thoughts moving forward with that type of budgeting?
As I indicated just in the previous response, the Premiers and the Council of the Federation have put the Finance Ministers from the provinces and territories to work under the chairmanship of Premier Selinger from Manitoba, who has many, many years – he’s one of the longest serving Finance Ministers in Canada – to work, to review those issues raised by the Members and others, as well, so as a collective we can come up with the best understanding possible and agree hopefully on a way forward and be able to have a sound basis to engage the federal government in any discussion that may be required.
Again, I do appreciate the Minister being forthright with the House here in terms of a very serious topic, one in which I know wasn’t part of the budget address but one in which I think should affect everyone here in this room in terms of large funding dollars.
My last question for the Minister is one in which I brought in my Member’s statement. There seems to be a push or a movement to look at a two-tiered system with respect to funding and being pushed by the provinces. I want to know if the Minister is indeed on board with that certain thinking. Which is meaning are we including an Aboriginal component? Are we including a proportionate of aging population base? Are we including the geographic hurdles we have in this territory in serving the needs of health care? Is the Minister in agreement in potentially using some of those elements as we negotiate our fair share of health transfer dollars?
We’ve been negotiating these agreements now for literally decades. There’s a very complex criteria in some cases with the formula funding agreement. As well, there’s a lot of specific criteria used. The health transfer numbers were laid out pretty clearly and bluntly by the federal Finance Minister. As I indicated, we have a working group through the Council of the Federation at work. That work that they’re doing is supposed to be ready for June when the Premiers meet at their next meeting. When that work is completed, we will have an idea collectively of what the landscape looks like or could look like. When we have that information, we’ll be very interested in sharing it and discussing it with all Members of this Legislature.
Thank you, Mr. Miltenberger. Final supplementary, Mr. Dolynny. The honourable Member for Yellowknife Centre, Mr. Hawkins.
Thank you, Mr. Speaker. It’s no secret that the Deh Cho Bridge Project has had its difficulties. It’s critical that we continue to reflect back on some of the experiences that have happened and learn from every opportunity how we can fix the mistakes and certainly not repeat them in the future. My questions today are specifically in relation to the GNWT’s relationship with the project lender who, for some reason, cut off access to the construction account sometime in February or March 2010. My questions are directed to the Minister of Finance.
Has the GNWT conducted any investigation or review into the reasons why the Deh Cho Bridge Project lenders took the unusual steps of cutting off access to the construction account in early 2010, and how might we have prevented ourselves from getting into this situation? If we have not done this, why haven’t we done this?
Thank you, Mr. Hawkins. The honourable Minister responsible for Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. I think our first priority as a government and Legislature is in fact to put all our efforts into making sure that the bridge gets concluded, that it gets opened and operating and generating the revenue that has been budgeted for and will provide that service to Northerners as well as help lighten our fiscal burden.
The questions the Member has raised have been discussed. Has there been a formal debriefing? Has there been a formal forensic review and post-mortem? No, there hasn’t at this point. In due course when the project is, in fact, concluded and up and running, there will be that opportunity to look as we go forward on learning from this process. Thank you.
I have to say I’m kind of disappointed by that last answer by the Finance Minister, because, quite frankly, the lenders cutting off funding to the territorial government through the Deh Cho Bridge have nothing to do with the ongoing process. That process has been done. That bridge has been burnt. It’s over. So now is our chance to look at the situation.
There must have been significant correspondence from the lender. I’m asking the Finance Minister would he be willing to provide the correspondence between the Department of Finance and the lenders to Members of this side of the House as well as committee members so we can look at some of the reasons why they chose to cut off the financial accounts to the GNWT in early 2010.
What I will commit to is when the project is completed, we will do a review, a post-mortem to make sure that we learn the lessons necessary on what worked well, what didn’t work as well, how we structured ourselves, and the very many other issues that may flow out of that. I know the Member has indicated a very specific interest, but by just providing single pieces of correspondence or a sheaf of correspondence on a very, very complex process without a broad context and having all the pieces together would be counterproductive, in my mind, and we’re not in the position to do that until the project is done and we do that post-mortem. Thank you.
I’ve heard several indications that there was an attempt to undermine the GNWT’s position by calling and harassing the lenders about the GNWT being incompetent and unable to manage this type of loan. I’ve heard this from various sources that expressed this quite adamantly. I would think the Finance Minister would be quite concerned and shocked by that suggestion.
The fact is we can’t have the reputation of the GNWT put at risk. I ask the Minister, once again, if this type of concern is out there, what would stop him from wanting to get to the bottom of why the lenders pulled the carpet out from the GNWT, put such financial risk on our government directly and caused us to have increases, major increases to the Deh Cho Bridge project, and now sitting here and waiting and saying, well, when it’s done. We should be doing this now.
In fact, I was, if my memory serves me correctly, the Minister of Finance at the time as we dealt with the very many bumps in the road that were there with the Deh Cho Bridge. We’ve managed our way through that, I think, in a very constructive way. The project is nearing completion.
The Member has indicated that he has had indications and he has had some sources tell him things. I don’t know who those people are. I can tell him and can tell you in this House and the people of the Northwest Territories, we have a project that is nearing completion, that once it is built everyone will stand up and say that’s a very good project.
This is long overdue and we would never want to go back to ferries and ice roads. We will do the post-mortem. We will share that and we will do that in due course in the fullness of time.
Thank you, Mr. Miltenberger. Your final, short supplementary, Mr. Hawkins.
Thank you, Mr. Speaker. The fullness of time is always the worst response from this Minister, because it could be a lifetime. It is not an answer, Mr. Speaker. Quite frankly, this Minister should be concerned that this project financing, that portfolio, that file got pulled out and embarrassed on his shoulders while this happened. And he should have fought like heck to make sure it didn’t, Mr. Speaker.
The fact is, this should be investigated. I’m not calling for a royal commission on this particular issue, I’m talking about will he start a process getting this kicked off, because this could take several years, and to wait for the fullness of the project to come to fruition could be years away. If they want to defend doing nothing, they’re accepting and supporting nothing. The question really comes back to let’s get to action. Why defend doing nothing when we could be doing something?
A point of fact, the Member has no idea how I feel and he has no idea how hard I fought or not fought on this issue.
I think the proof is in the pudding. We have a project that is nearing completion. There have been challenges, without a doubt, and they’ve been reported and debated and discussed in this House and in the press.
Our first priority and our first full attention is to get the project done and completed, and open to traffic and generating revenue. After that, we have committed to doing a full post-mortem and we will make sure that that information is shared. It has nothing to do with our not caring or not being concerned.
We’ve been on this, like I said, I was the Finance Minister in the last government, and this issue has consumed a lot of time, as everyone well knows. Our first job is to complete that project and then we will honour the commitment for the post-mortem.
Thank you, Mr. Speaker. My questions are for the Minister responsible for the NWT Housing Corporation.
Would the Minister please provide a list of the communities that were consulted in the shelter policy review?
Would the Minister please indicate which community groups were consulted during the review?
Would the Minister please confirm the number of NWT seniors who were consulted during the review?
Would the Minister please provide an outline of the consultation process for the shelter policy review?
Thank you.
Thank you, Mr. Speaker. I wish to table the following document, entitled “Northwest Territories Main Estimates 2012-2013.”
Thank you, Mr. Miltenberger. Item 17, notices of motion. Item 18, notices of motion for first reading of bills. Item 19, motions. Item 20, first reading of bills. Item 21, second reading of bills. Item 22, consideration in Committee of the Whole of bills and other matters, with Mrs. Groenewegen in the chair.
I’d like to call Committee of the Whole to order. The only item we have before Committee of the Whole today is Tabled Document 3-17(3), NWT Main Estimates 2012-2013. I would like to ask what is the wish of the committee. Mr. Menicoche.
Thank you very much, Madam Chair. Your committee would like to do some opening comments.
Thank you. We will proceed with that after a brief recess. Thank you.
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I’ll call committee back to order. We have agreed to consider Tabled Document 3-17(3), NWT Main Estimates 2012-2013. We have also agreed to begin with general comments. Although the Minister will not be bringing witnesses in at this moment, when they do arrive, does committee agree that the Minister could have witnesses and that the Sergeant-at-Arms could escort them into the Chamber when they arrive? Agreed?
Agreed.
Thank you. At that time we’ll ask the Minister to introduce his witnesses for the record. But in the interest of time, we will get underway. There will be 10 minutes allowed per time that Members speak and you can always go back if you want to. Just in terms of format, as well, does committee agree that we will make our general comments and allow the Minister to respond to general comments just once at the end of your general comments? Agreed?
Agreed.
