Debates of October 21, 2005 (day 15)

Thank you, Mr. Speaker. If I may just say I'd like to thank the students for coming today so they can see oral question period, see history being made, and they're part of it today by being in the gallery.

Mr. Speaker, hoping for the best isn't good or sound fiscal policy. I spoke earlier, in my Member's statement, about the $296 million in corporate tax overpayment that we received from the Government of Canada. We can no longer dodge this, or keep pushing it away, or even ignoring it. So my question to the Minister of Finance is, will the Minister have his officials look into fiscal policy that would require the GNWT, when they become aware of an overpayment, to either set it aside, or return it promptly? Thank you, Mr. Speaker.

Thank you, Mr. Hawkins. The honourable Minister of Finance, Mr. Roland.

Return To Question 211-15(4): Corporate Tax Overpayment

Thank you, Mr. Speaker. I would like to thank the Member for that awe-inspiring question.

---Laughter

Mr. Speaker, this issue is not a new one. We've been trying to deal with this, and how we can deal with our federal counterparts around this issue. We have looked at a number of issues around our fiscal policy, and what we've looked at putting forward is a fiscal responsibility policy that would look at the overall fiscal situation of the government, our ability to borrow and finance that borrowing.

The issue of the overpayment itself, as the Member stated, was a decision made by a previous government. They were aware of the overpayment, and also aware of the payment plan that the federal government has in place, which is basically a three-year program once it has been identified. That has been flowing since the overpayment has been recognized. We are, in fact, coming up to the final year, where, in the next budget cycle, that overpayment has come due. We can look at ways of doing things differently. The previous government had looked at it as an interest-free loan and were aware that it would have to be paid back. In fact, we have a fair bit of that cash sitting, waiting to be repaid. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Hawkins.

Supplementary To Question 211-15(4): Corporate Tax Overpayment

Thank you, Mr. Speaker. To put it in perspective, almost $300 million is approximately 30 percent of this government's budget. By redrafting a fiscal management policy, still doesn't speak to the fact that we're spending money that does not belong to this government. So, Mr. Speaker, if the Minister will not commit to a fiscal policy that stipulates that overpayments be set aside and returned promptly, will the Minister consider a fiscal policy which stipulates that if any overpayment is to be treated as an interest-free loan, as he just pointed out, that money must be specifically voted on in this House by way of a formal motion? Thank you, Mr. Speaker.

Thank you, Mr. Hawkins. Mr. Roland.

Further Return To Question 211-15(4): Corporate Tax Overpayment

Thank you, Mr. Speaker. Mr. Speaker, all funds that come through this government, through the Department of Finance, are voted on in the House. When we present our budget, we present the corporate taxes we receive, our own source revenues, and other fees and disbursements from the federal government. So it does come to this House; it is voted on, and how we spend that money then is also voted on. So it is taken into account. It's not like we have a separate account sitting on the side that nobody is aware of. All Members are made aware of our fiscal situation, the revenues we have coming in, on that basis.

We have, Mr. Speaker, looked as if we had decided to repay it or use it as an interest-free loan, as had been done in the past. We've looked at our numbers. In fact, our numbers for our fiscal situation, the bottom line, so to speak, would change by quite a small number. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Hawkins.

Supplementary To Question 211-15(4): Corporate Tax Overpayment

Thank you, Mr. Speaker. But we have to consider most loans are paid over 20, 25 or 30 years. This has to be paid back within four years; almost $300 million. Mr. Speaker, this government can never be taken responsibly, until we show that we can deal with overpayments like this in a responsible manner. So we need to be seen as a responsible government, cleaning up the last government's mess. Would the Minister have his officials at least conduct an inter-jurisdictional review of best practices of how federal overpayments are done, and received and taken care of in their provinces? Thank you, Mr. Speaker.

Thank you, Mr. Hawkins. Mr. Roland.

Further Return To Question 211-15(4): Corporate Tax Overpayment

Thank you, Mr. Speaker. Mr. Speaker, our fiscal responsibility policy that we put forward to the federal government, and how we deal with the federal government, is based on their terms that this overpayment situation has occurred. They're aware of it; they have the repayment plan that affects every jurisdiction. It's the same plan. It's a three-year plan, and it's also based on your population, of how much is repaid on an annual basis until the third year, which is coming up in the next fiscal cycle we have.

Everything we do is processed in accordance with the rules, and so on. So I think we're of a position, we've taken the situation as we have it, and worked with the federal government, and have been working with them around a number of other initiatives. But when we look at it, we are scheduled for that repayment coming up. We have taken that into account; it's built into our fiscal plan. Thank you.

Thank you, Mr. Roland. Final supplementary, Mr. Hawkins.

Supplementary To Question 211-15(4): Corporate Tax Overpayment

Thank you, Mr. Speaker. Mr. Speaker, I think we continue to avoid the fact that we're spending money that doesn't belong to us, and we've negotiated it into an interest-free loan, by avoiding it and putting it as a burden on the next government. So my awe-inspiring question to the Minister of Finance, whom I have a lot of respect for, is, what, then, will the Minister do to ensure that this government will conduct its finances with integrity and true responsibility, and we don't leave the next government and the next Assembly with any type of burden from our willy-nillyness on dealing with interest-free loans? Thank you, Mr. Speaker.

Thank you, Mr. Hawkins. Mr. Roland.

Further Return To Question 211-15(4): Corporate Tax Overpayment

Thank you, Mr. Speaker. Mr. Speaker, let me reaffirm to the Member, and this House, and to the people of the Territories, that this government is not dealing willy-nilly with the finances of the Territories.

---Applause

We, in fact, have taken full responsibility for this and have accounted for it. In the future, working with the federal government, if our fiscal responsibility paper is adopted by them, that would give us much ability to look at how we deal with our finances.

Ultimately, yes, as a government, we do have to look at every time this occurs, and in most cases, it's much smaller than that amount, than the $290 million that has been identified; but, unfortunately, this one was a very large one, and we would be able to deal with these on an annual basis without much impact on our fiscal situation.

As I stated, we did look at the options, and did a scenario, and if we decided to pay it back immediately and just sent the money back, what that would do for our fiscal picture. Our fiscal forecast would not change significantly by doing that. But I will, as I have mentioned to the Members in this House, look at what options are in front of us, and what we can do to make sure that the NWT remains in a sound fiscal position. Thank you.