Debates of October 20, 2006 (day 12)

Clause 2.

Agreed.

Clause 3.

Agreed.

Clause 4.

Agreed.

Clause 5.

Agreed.

Clause 6.

Agreed.

Clause 7.

Agreed.

Clause 8.

Agreed.

Clause 9.

Agreed.

Clause 10.

Agreed.

Back to the bill as a whole.

Agreed.

Thank you. Does the committee agree that Bill 8 is ready for third reading?

Agreed.

Agreed. Thank you. Bill 8 is now ready for third reading. Thank you, committee. Thank you, Mr. Minister. Thank you, Mr. Aitken.

Thank you, colleagues. We will now look at consideration of Bill 10, Forgiveness of Debts Act, 2006-2007. Does the Minister wish to bring in witnesses?

Thank you, Mr. Chairman. I am here to introduce Bill 10, Forgiveness of Debts Act, 2006-2007. This bill requests authority for the forgiveness of certain debts listed in the schedule of the act.

Pursuant to section 25(1) of the Financial Administration Act, the forgiveness of a debt or obligation to the government exceeding $1,000 must receive Legislative Assembly approval.

When a debt is forgiven, no further collection action shall be pursued.

The forgiveness of certain debts being proposed in this act will not require a new appropriation. Allowances for doubtful accounts were charged to an appropriation at the time it was determined that collection of the debts was considered unlikely.

The accounts being recommended for forgiveness are the result of bankruptcy, compromise settlements and/or are in the public interest.

In cases where a compromise settlement is reached, the following factors have been considered:

the possibility of future recoveries;

the cost to continue legal actions; and,

the value of security. For example, do the personal guarantees hold a realizable worth.

That concludes my opening remarks. I would be pleased to answer any questions Members may have. Thank you.

Thank you, Minister Roland. I'll now go to the deputy chair of the Accountability and Oversight committee, Mr. Braden, for committee's comments on Bill 10. Mr. Braden.

Thank you, Mr. Chairman. The Standing Committee on Accountability and Oversight reviewed Bill 10, Forgiveness of Debts Act, 2006-2007, at a meeting on September 5th, 2006. This concludes the committee's general comments on Bill 10. Mr. Chairman, individual Members may have comments or questions as we proceed. Thank you.

Thank you, Mr. Braden. Does the Minister wish to bring in witnesses?

Yes, Mr. Chairman.

Thank you. Does the committee agree?

Agreed.

Agreed. Please, Minister Roland and Sergeant-at-Arms, we'll entertain the witnesses.

Thank you. Mr. Roland, if you could, please indicate your witness, for the record.

Thank you, Mr. Chairman. With me at the table is the secretary to the FMB, Mr. Mark Cleveland.

Thank you, Minister Roland. Welcome, Mr. Cleveland. General comments from committee on Bill 10. General comments. Mr. McLeod.

Thank you, Mr. Chairman. I would like to declare a potential conflict of interest in relation to a person's name in the schedule to Bill 10, Forgiveness of Debts Act, 2006-2007. I will withdraw my discussion on this item and remove myself from this House.

Thank you, Mr. McLeod. Moving on to general comments. Mr. Yakeleya.

Thank you, Mr. Chair. Mr. Chair, the question I had somewhat was answered, and I'd like to follow up with Minister Roland on this specific bill here, more in line with the debt counselling in terms of how or what type of system process we have in terms of helping people with debt counselling. I know there are many steps to go in terms of trying to get these debts collected. I know some people are good, honest, hard-working people who want to work on this and sometimes there's a blockage or barriers for whatever reason. Does the Government of the Northwest Territories have any form of unit or an office where debt counselling, financial planning can be used by the people of the Northwest Territories to resolve some of these debts that we are going to see in this bill here? Thank you.

Mahsi Mr. Yakeleya. Minister Roland.

Thank you, Mr. Chairman. Mr. Chairman, as we find ourselves at this stage of coming forward with a bill of forgiveness of debts, many things have occurred before we get to this stage. These all originate within departments, and departments initially would work with individuals. For example, if there's a debt with student financial assistance, the Department of Education, Culture and Employment and that section would work with students initially, trying to set a program up or a plan to recover that debt. Beyond that, then it goes to the next stage when the government then goes into a more formal process of debt collection. Some accounts are sent to the private sector for collection; at least in the past we've done that. As well, our…(inaudible)…within FMBS would look at that. So there are a number of ways counselling does happen, but it's normally initially done through departments at the initial stage when they recognize a problem is growing. Thank you, Mr. Chairman.

Thank you, Minister Roland. Anything further, Mr. Yakeleya?

Yes, thank you, Mr. Chair. I certainly support the departments going through their own debt counselling process in terms of retrieving some of the debts that they would like to have paid back. Maybe I could be a little more specific, Mr. Chair. Is the core need under one department to have all these debts? I know this is the last stage of the debt efforts and it's going through this bill here. I'm leading up to a framework that all the departments go there and say this is how we'll handle it. Is there one shop, I'm asking, that people in the communities and people in the Northwest Territories can call, rather than call the housing? It has a different debt collection process. Student financial has another process where they collect their debts, and other departments. Is there one unit within the government that people can call and say this is what we have? One unit can give them basic information and this is the way they can help them.

I know we're at the end of the stage on this bill here. I certainly support the Minister on this process here in terms of the forgiveness of this bill here. I'm just looking at ways that the people in the North can make one phone call and then they can be directed to…they know the framework of…(inaudible)…up their debt. Because this debt here will hurt people in the long run, in terms of their credit rating, credit base. So I'm just working out a scenario here, Mr. Chair. Thank you.

Mahsi, Mr. Yakeleya. Minister Roland.

Thank you, Mr. Chairman. Mr. Chairman, the Member's correct; at this stage it does hurt individuals for credit rating as we find ourselves at this stage, because it's already gone through the collections process and was not recovered. As I stated earlier, there are a number of factors that come in, but it is primarily done…The initial counselling or discussion of trying to set up prepayment plans is done within departments and boards and agencies. Because it's such a broad spectrum of groups that are involved, whether it's specifically with departments or agencies, there are a number of different factors that do come into play. It does get much more formal when it comes to our stage, and that's government accounting. When we come to this stage, it is much more formal because we are now in the stage of collecting the money and trying to recover any potential loss. For more detail on some of the specifics, Mr. Cleveland will get into that. Thank you, Mr. Chairman.

Thank you, Mr. Roland. Mr. Cleveland.

Thank you, Mr. Chairman. The Member's quite correct; that for the vast majority of individuals accessing funding, debt collection isn't a problem. Most people do pay on time.

When the individual departments do counsel individuals who have debts, they tend to work out something that will work for the individual. We do the same thing once it comes to government accounting. All of the debts from across the government get consolidated there, except for those that are with boards and agencies. So all of the government's debts are with the government accounting, and the staff in government accounting then do try to contact the individual and work with the individual to establish a reasonable payment plan that matches their income as well as their debt. Generally speaking, we're successful in that. If we cannot, we then continue to pursue it. If the debt is under $5,000 and we're unsuccessful in setting up a repayment plan, it is referred to a collection agency. If it's a larger amount, more than $5,000, then we actually do that work ourselves over time.

So to answer the Member's questions, the debts are consolidated within government accounting. The staff in government accounting do work with individuals to set up a repayment plan that meet the individual's needs and reflect the debt. Thank you, Mr. Chairman.

Thank you, Mr. Cleveland. Anything further, Mr. Yakeleya?

Thank you, Mr. Chairman, and thank you, Minister and deputy minister, in terms of the process. This process here, what you just explained to me, it's so simple that, you know, it could be communicated to the people in the regions in the communities. I know people in the communities in the regions, from the goodness of their heart, uncertainty sometimes comes with seasonal work or things that come up in their lives that they sometimes have to cause a delay in their payment for whatever reason. I guess what I'm asking is that they understand the process well. It does come to a consolidated unit and sometimes, because of the amount of debts that the government is trying to collect in all the Northwest Territories, it's more on the paper than the numbers and hearing what the people's situations are. You know, it works both sides, it works both sides. Everybody has to take responsibility for it, so I guess that's what I'm looking at in terms of the forgiveness of this debt here.

I guess I wanted to ask in terms of the Minister must be doing a good job because the amount of debts are going down. We see a decrease over the years and the numbers are showing that we are being fairly successful in collecting debts. Mr. Chair, that's what I have here. Thank you.

Mahsi, Mr. Yakeleya. Minister Roland.

Thank you, Mr. Chairman. What we're in the process of doing is trying to clear off our older files from the books. We realize that we're not going to be collecting on these ones and haven't been doing so for a while. Hopefully as we proceed down the path working with departments and now with regional directors put in place, that will be another avenue on providing information to regions and communities regarding some of the services. We'll also communicate with departments that are in the business of lending money or providing grants to individuals, that information be passed on to those who are receiving funds from our government. Thank you, Mr. Chairman.

Thank you, Minister Roland. Anything further, Mr. Yakeleya?

Thank you, Mr. Chairman. I want to ask the Minister in terms of their being diligent about their debt collection and the prevention, or are they just lending less money out to the public in the Northwest Territories as there were no write-offs for this year or last year. Thank you.