Thank you, Mr. Chairman. I agree with the Member’s assessment and we have been talking about this for quite some time now, about the impacts of climate change and global warming and extreme weather events. We have been dealing with the costs to us, as a government, now for quite some time. I think back to things like having to replace all the wooden piles as the temperatures warmed and they thawed out and turned to, basically, mush. Either change the piles or replace the buildings, not to mention all the other impacts. So, I agree and we are going to be working collectively here to deal with that.
In regards to the concerns about the process, I think we’ve covered that issue quite thoroughly with the first three Members’ concerns, so I won’t chew peoples’ cabbage for the fourth time. I will just leave those comments stand. Thank you.
Thank you, Mr. Miltenberger. Next on my list I have Mr. Dolynny, followed by Ms. Bisaro. Mr. Dolynny.
Thank you, Mr. Chair. I am listening to the Minister’s replies not only to my opening general comments, I also heard the Minister reply to many other colleagues here today. I want to hone in on certain key terminology that was used by the Minister. The Minister is very good at sticking to a set of scripts, and he’s very attuned to his nomenclature wording. But he uses the term “there was a pressing value before Cabinet,” and he uses the terminology of “things were moving very fast,” and I’m going to come to those two terms again in just a minute here. But ideally, what we have before committee here, again, is not because we don’t believe the $20 million help offset and support ratepayers. It’s the fact that there was a process, and it’s this process to which we are talking about that has failed, and it failed miserably. We did not address the element of surprise to which Members here are not accustomed to, and it clearly violates the canons and the guidelines of consensus government, and I will ask, is “moving fast now” the new conventional wisdom of Cabinet. Because things are “moving fast,” we need to agree on spending decisions that we don’t have a choice or an opportunity to comment on.
I want to zero in on this pressing value, as indicated here by the Minister, and things are moving fast. When did the Cabinet get notification from NTPC or the Public Utilities Board as to this amount of money that was going to be hitting the ledger or that was going to be passed on to the ratepayers? When did the Cabinet, when were they aware that there was going to be a problem?
Thank you, Mr. Dolynny. Minister Miltenberger.
Thank you, Mr. Chairman. The written correspondence we have from NTPC was September 25th. Oh, sorry. August, August 25th. Sorry.
If we’re hearing correctly, it was August 25th, which is almost one month and a day when the press release and also the press conference was being held by the Cabinet. As I said, I’m trying to figure out what was so pressing, the fact that it was one month that transpired between that information and the decision that everyone heard on the 26th of September. I guess the question, Mr. Chair, was there an imminent deadline that the PUB needed to have an answer by?
This was in the tail end of summer and in the heat of the fire season. The Power Corporation had followed their process and notified the PUB, and we are aware of that as well. Then the issue came to be what was the impact gathering Cabinet to have those discussions and what would be the response and the need to review what was we thought the most feasible way to proceed, and what did we need to provide to the PUB to give them the assurance that whatever decision that was made would make NTPC whole in terms of the money they were requiring and that we were going to get through that rate rider.
Of course, we didn’t hear a date here from the Minister, so I guess we’ll leave it to the imagination. It was sometime between August 25th and September 26th which is the announcement of this amount of money being authorized or promised by Cabinet without any appropriation. I’ll leave it at that. If the Minister doesn’t want to answer the question, that’s fine. Maybe other Members might get back on that and try to pry that information out.
The question is: How pressing was the issue? Why were things deemed so fast moving that we had to circumvent conventional wisdom of a process that we all enshrine and we all believe in, which is consensus government? I don’t see where the pressing need was. I don’t see where things were moving fast where this decision had to be made on a Friday and had to be announced that Friday and circumventing the program. Unless the Minister really wants to clarify that, I have a hard time understanding and believing where the pressing value was and where things were moving fast.
I’ll leave it at that, but my other questions have to do with the fact that I’m assuming that this $20 million is coming out of short-term borrowing, and if so, can we get confirmation? Is this indeed coming out of short-term borrowing and what does that mean now to our short-term borrowing limit, which I believe our cap is at $275 million. Where does this appropriation land on that threshold?
The issue of pressing and why we did what we did, I mention to the Members that when you’re in their chair and responsible for, as the government, dealing with the issue of cost of living, forest fires, unexpected expenses like this and very many other urgent fiscal balls you have in the air that, yes, things do become pressing, and they become pressing in the context that I just laid out, and they require a timely response.
I appreciate, once again, that Members don’t think we subscribe fully enough to the protocols that we’ve agreed to. I’m saying that we had touched the bases we needed to touch. We’re recognizing here the concerns on a go-forward basis. It’s not like we’re avoiding answering the questions.
Well, there was a question there that did not get answered. I asked about the short-term borrowing line. I’ll leave it to the Minister if he wants to elaborate more, because I think that’s an important question. If, again, the Minister doesn’t want to answer that question, just maybe he can indicate that.
We are borrowing that money from short-term borrowing and it would be nice to know where we’re sitting on our short-term borrowing line of credit. But I think conventional wisdom would prevail, and I think the public is smart enough to understand that we can talk in soliloquies about the greater value of good and evil. We can talk about things that are always ongoing, but the issue of “pressing and urgent” usually means that there’s a deadline or a date that this government had to adhere to.
Again, I’ve asked twice now. I’ve asked maybe three times now, was there a deadline or a date that this department, this Minister or the Cabinet or the Premier had to adhere to so that this decision had to be done on a specific date, given full well this information was in their hands for well over a month? I guess, again, I’ll leave it to the Minister’s purview to answer that question, but I’ll still allow the question to stand regarding short-term borrowing and how does that affect our short-term borrowing line.
I apologize to the Member for not answering the question. As he was asking about short-term borrowing, my short-term memory left me there for a second and I need to get reminded by the deputy what the question was.
There was urgency to deal with the process. There was urgency to provide assurance and reassurance to the people of the Northwest Territories where there was a growing sense of urgency, demands that something had to be done and, in addition to trying to touch the bases we needed to touch, deal with the NTPC, deal with the PUB. We took all those factors into consideration and responded as we did.
In regard to the short-term borrowing and the $275 million cap and what the $20 million will do to that, I’d ask, Mr. Chairman, with your indulgence, that the deputy be allowed to respond to that.
Thank you, Minister Miltenberger. Deputy Minister Aumond.
Thank you, Mr. Chair. As the Minister stated, we do have an internal line of credit limit of $275 million currently. As of October 14th, we had a cash deficit, or we were $225 million into the line of credit, so the $15 million for the remainder of the fiscal year 2014-15 would have an additional $15 million onto that $225 million.
The remaining $5 million would not be required until the beginning of the next fiscal year. It’s uncertain or unlikely that we would have to undertake short-term borrowing that early in the year to finance that cost. Thank you.
Thank you, Deputy Minister Aumond. Next I have on my list Ms. Bisaro.
Thank you, Mr. Chair. Mr. Aumond left off where one of the questions that I wanted to go with regard to the $20 million that we’re borrowing. I heard him say that we will need $15 million in this budget year and then $5 million is expected after March 31, 2015. If the question’s been asked and I missed it, I’m sorry. But why are we being asked to approve $20 million in the 2014-15 budget year, which ends March 31, 2015, when $5 million of that is going to be used in the 2015-16 budget year? Thank you.
Thank you, Ms. Bisaro. Mr. Aumond.
Thank you, Mr. Chair. As Minister Miltenberger stated earlier, we needed to provide confirmation to the PUB that the Government of the Northwest Territories was going to make NTPC hold on the $20 million. The way that the process works is when NTPC files a notice of their requirement to increase their revenue recovery, that would have automatically triggered in based upon when NTPC filed with the PUB, which would have come in on October 1st. So we needed to provide comfort or confirmation to the Public Utilities Board that the government wanted to make NTPC hold for the $20 million.
While we will only have to provide $15 million, or anticipated that we will have to provide $15 million to NTPC this fiscal year, we needed appropriations to even provide that confirmation to the Public Utilities Board. The way the processes work, we do a contribution to the Power Corporation for the amount of $20 million so that they would have that money in their funds and then there would be a reconciliation done on a monthly basis about how much the costs actually are.
As folks may know, the cost of fuel has dropped since that decision was made. So, hopefully the cost won’t be that much, but that is the process that will be used to reconcile the account for the extra cost. Thank you, Mr. Chair.
Thank you, Mr. Aumond. Ms. Bisaro.
Thanks, Mr. Chair. I appreciate the explanation, but it doesn’t give me much comfort. I’m being asked to approve more money than what’s actually required in this budget year. We’re committing to do that, to ask for some money for a certain program or service and ask for more money than was required in a budget year. I think the Minister responsible or Cabinet would laugh us out of the room.
I appreciate this is a bit of a different situation, but it seems to go to a number of decisions that have been taken over the last six months to a year that pretty much tell me that I don’t have much of a hand in anything that’s going on here. I’m beginning to feel that decisions that are made by the Executive. We’ll tell you about it as a Regular Member, but don’t expect to have any input and don’t expect to have any opportunity to provide your views. That’s my perception. I hope that’s not what the intent is, but that’s how I’m feeling.
This $20 million as well as the money that is going to have to be spent for fire suppression is a huge amount of money. I’m not sure if Mr. Dolynny asked the question or not, but how much are we going to have to borrow and what is going to be our borrowing cost? I’m presuming that we don’t have this money since these two expenses are outside the budget that we approved February/March. So, I am presuming that we have to borrow the money. Is that correct that we have to borrow the money? If we have to borrow the money, how much are we borrowing and what is it going to cost us to borrow that money? Thank you.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Mr. Chairman. I just want to assure the Member here, Ms. Bisaro, that we’re fully invested in the process of consensus government. I can tell you that the last six months I have felt at times like she says she is feeling now, is day after day that we would be constantly bombarded with rising costs with all the fires and the impact and the huge amount of territory that was burned and the communities that were at risk and knowing that we had to spend the money. So we did that. I said at the time, this is not the time to argue about money. It’s not the time to worry about where the money is coming from. We’ll spend the money and we’ll sort it out, so here we are sorting it out. The Member does have a say, not so much on the special warrants on the $20 million.
We’re here before the Assembly asking for the authority. The money hasn’t been spent yet. We made a decision to do that. We’ve come through the supplementary process. We think it’s a critical issue that we’ve made the right decision on. The Member has the full right and we’ll be looking to the vote here hopefully in the next number of hours or in the next day or so on that issue.
I’d ask the deputy to speak to the amount being borrowed and the interest charges and those specific numbers. Thank you, Mr. Chair.
Thank you, Mr. Miltenberger. Mr. Aumond.
Thank you, Mr. Chair. With respect to the $15 million for this fiscal year, given that assumptions one might make around the drawdown on the $15 million, the total interest hit on that would be probably somewhere between $12,000 to $15,000 for this fiscal year.
With respect to the special warrants for the money expended to fight the forest fires, that’s already accounted for in the $225 million short-term interest or cash deficit that we have now. I can’t recall exactly what the interest rate would have been over the summer, so less now than it was then, and I don’t have that. We could provide that to committee in short order. Thank you.
Thank you, Mr. Aumond. Ms. Bisaro.
Thanks, Mr. Chair. The other two questions I wanted to ask here, I may have missed it when I had to step out. I think Mr. Aumond mentioned our cash position and that was one of my questions, was where are we at in terms of our cash position? We have a Borrowing Authorization Act which allows us to borrow up to a certain limit. Will we reach that limit? If we do, then what do we do?
My other question has to do with our borrowing limit and the $100 million cushion that we are trying to keep in our borrowing limit. I would like to know, in the 2014-15 year are we going to go under that $100 million limit? If it’s not this year, will it be in the 2015-16 budget year? Thank you.
If one takes into account the borrowing up for discussion today and over the next little while in the Assembly, the revised available borrowing capacity at the end of ‘14-15 on the $800 million borrowing limit, we are projecting to have about $92 million in borrowing capacity as of March 31, 2015. Thank you.
Mr. Chair, to our cash position, where does this borrowing cost of $12,000 to $15,000 put us in terms of our Borrowing Authorization Act and our limit there? Thank you.
As stated earlier, we are currently, as of October 14th, about $225 million cash deficit right now and then we would borrow the $15 million. So the interest is really of little consequence to that number, but it’s the debt. In addition to some other pressures that might be anticipated, we’re going to come very, very close to reaching the $275 million limit by the end of the fiscal year. Thank you.
Last question then. If we come close to that borrowing authorization limit, what do we do? Thank you.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Mr. Chairman. To err on the side of caution in making sure that we have the ability to continue to pay all our required debts and bills and make payroll and all those type of things, we’re going to put a bill on the table that’s going to request that we raise that $275 to $300 million for the short-term. Thank you.
Thank you, Minister Miltenberger. Committee, we’re on page 5, Department of Finance, operations expenditures, deputy minister’s office, not previously authorized, $20.037 million.
Agreed.
Agreed. Office of the comptroller general, not previously authorized, negative $175,000.
Agreed.
Total department, not previously authorized, $19.862 million.
Agreed.
Committee, we’re on Education, Culture and Employment, operations expenditures, Education, Culture and Employment, not previously authorized, $764,000. Ms. Bisaro.
Thanks, Mr. Chair. I wanted to ask a question with regards to the funding for start-up costs for implementation of Junior Kindergarten, $375,000. I know that JK was a little bit delayed in terms of getting going in some places, and I know that some of the necessary construction projects to get JK where it needed to be were a little bit behind. I would like to know from the Minister whether these construction projects – I think they were about $30,000 each maybe, give or take – have been completed. Thank you.
Thank you, Ms. Bisaro. Minister of Education, Culture and Employment, Mr. Jackson Lafferty.
Mahsi, Mr. Chair. Yes, there are three particular projects that this budget earmarked. There’s Chief Julius School, Fort McPherson, the addition of washrooms for JK classes completed September 2014. Mangilaluk School in Tuktoyaktuk, also similar work, completed September. Also, Colville’s school in Colville Lake. That’s been completed this month, October.
So those are areas of JK infrastructure for the amount of money identified. Mahsi.
Thanks to the Minister of Education for that information. So, these projects have been completed, yet we have not yet approved the expenditure. It’s my understanding that we have government policy that we’re not allowed to spend money that hasn’t yet been approved by the Legislative Assembly.
I’d like to ask the Minister of Finance or the Minister of Education, either one, but why is it that we have contravened our policy in regard to this particular expense? Thank you.
Yes, we’re fully aware of that process itself. We had to construct these renovations into our school system before school started in September and before the JK started. So the only opportunity we had was over the summer while there were no students in the school system. That was the only opportunity that we had and we needed to move forward or else we would have been challenged with the space and the infrastructure, delivering Junior Kindergarten in these three particular schools. Mahsi.
Thanks for the explanation, but I’m sorry, that’s not good enough. We have a policy which says that if money has not been appropriated, we can’t spend it. The government had to go and approve two special warrants in order to get the funding to fight the fires this summer and special warrants have very specific criteria, but they had to do a special warrant because we had no legislative sitting where we could approve the funding for fire suppression. Yet in this case, albeit it’s a relatively small amount of money, we have said oh, that’s fine, go ahead, do the renovations to Junior Kindergarten, we’ll just get the money later. Really, we should seriously be considering deleting this item because the work is completed. So why do we have to approve this funding at this point?
I’d like to ask the Finance Minister – this is a policy of Finance I thought – what does the Minister of Finance do to make sure that other departments are in line with the policies that we have for appropriations and spending before money is appropriated? Thank you.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Mr. Chairman. There have been the required discussions about the issue that the Member raises, and if the money is not voted on or approved, then the department will be having to absorb those costs from their existing budget. But it’s clear to all parties here that this is not the process that we have laid out to be followed. We have the issues before the House that have been identified by the Members and it’s been dealt with entirely within the government and now we’re here having judgment passed on this request. Thank you.
Thanks. Just one last comment. I appreciate that the Minister says that the situation is understood, that it’s been dealt with, but it again goes to my feeling that it really doesn’t matter what we think because stuff is going to happen and we’ll hear about it after the fact. So I guess I do have a question.
I would like to ask the Finance Minister what he will do in the future to ensure that these sorts of things don’t happen again, or will he change the policies so they can’t. If this is the way we want to go, then let’s change the policy, but let’s not flout the policy and do the work that we think needs to be done before we have the appropriation. Thank you.
I would encourage the Member to think back that we manage a $1.8 billion budget. We have supps on a regular basis and nearly 100 percent of the time, over 99 percent of the time the system works. We have an issue with this supplementary appropriation, which is a relatively small amount, as the Member said, that didn’t follow all the steps in the process, and we acknowledge that. There’s no plan to change the process because it’s a good process. There is a requirement and need to have the checks and balances and accountability to this Legislature and it’s why we’re here today laying this out, warts and all, for dispensation by the Legislature. Thank you.
Thank you, Minister Miltenberger. Next we’ll go to Mr. Dolynny.
Thank you, Mr. Chair. I think Ms. Bisaro has set the tone and I do agree with the Minister, we do have a process for 99 percent of the stuff that we do and we’ve got an optional process for the other 1 percent. I think that’s what the issue is here. If we do have a process, we need to follow that process.
I believe when it comes to spending money there are no shades of gray, there’s just white or black, especially dealing with public funds. If it’s our own piggybank or our own money then that’s a different story. But when it comes to public funds, I believe there is no option. The rules are designed specifically for all parties to adhere to. There’s a process in place. So when you look at the appropriation that we’re approving now, after the fact, with respect to this $375,000 for Junior Kindergarten, I can equally say that we have actually embarked on the Junior Kindergarten program without even doing the changes to the act itself to allow Junior Kindergarten to even go forward. We know that’s coming down the road. Really, when you think about this, we have put the cart before the horse on many different levels, both from an operational point of view of Junior Kindergarten, not to mention the physical changes that were required for the number of schools that we are launching it in. I am really disappointed.
Again, to echo what we have already heard, there was no notice of this happening. We found out as we prepared for the business planning cycle a couple of weeks ago, and yet we knew the renovations would have had to have been approved during the summer months to allow the school season to start. Again, there is a huge gap in communication. That element of surprise is showing itself once again in this appropriation document, even though we are hearing that, well, we don’t intend to do this, but we recognize that things are moving fast and we have to move quickly because, God forbid, we don’t want the wheels on the bus to fall off here. Clearly, once again I state, Mr. Chair, we have got optional programs here, it is a pick and choose program at the whim of Cabinet.
I am going to leave it at that. I think Ms. Bisaro did a fine job of bringing it to light and I just wanted to add a little bit of my opinion to the subject.
With respect to this $375,000, my concern is, is this new money that we’re appropriating or is this money that was used from surplus, from DEAs, DECs or school boards? Thank you.
