Thank you, Mr. Dolynny. Mr. Miltenberger.
Thank you, Mr. Chair. It’s new money. Thank you.
So again, I’m trying to do the math. I’m assuming these appropriations are coming out of short-term cash, and what we’ve heard from the deputy minister, when I asked a question with respect to the $20 million to mitigate the low water rate rider, with that appropriation the equal sign on our bank account, the drawdown was $225 million. Again, I do ask… Maybe I should rephrase my question and it might help when we get to the next page here. If we were to look at all the appropriations that we have before us, both in operations and I know we are going to be doing infrastructure after that, can we have some indication as of today, or within the last week, where are we exactly on our short-term borrowing line with respect to all the appropriations and all of the demands on the short-term account? Are we really at $225 million, say, as of today? Thank you.
Thank you, Mr. Dolynny. Deputy Minister Aumond.
Thank you, Mr. Chair. As I said, as of October 14th we were at $225 million. Depending on the outcome of the deliberations of the Assembly on the supp bills, our expectation is that we would be close to the $275 million borrowing limit by the end of the fiscal year. Thank you.
So now we are dealing with whole numbers. Again, as we just heard, if both appropriations go forward without a hitch and they’re approved, we have just heard that we are right up to the line of the $275 million probably as of today. Once these appropriations get approved, I’m assuming it’s a triggering mechanism and the monkey flips the switch and the bank accounts are withdrawn.
We also heard from the department here today that we would be inching close to the debt limit of the $275 million “near the end of our fiscal year.” Our fiscal year, I believe, does not end until March 31, 2015. So we have already heard today that we are already, by virtue of these appropriations, going to be there and then somehow magically we’re going to have some type of money to play with in our short-term line between now and March 31st.
Can I get some clarification as to if we are at our line today? Basically what we have heard, by what methodology, by what cash flow management system are we going to be paying the bills with, with this government, between now and March 31, 2015? Thank you.
As I said, as of October 14th we have a cash deficit of $225 million. Between October 14th and March 31st we’ll have cash coming in and cash going out on a regular daily basis. So based upon what is up for deliberation in the House today and perhaps tomorrow with the supplementary appropriations, both O and M and infrastructure, along with some other assumptions around some other costs that we may be taking that we would normally see through O and M supp that we would consider in the February/March session, and some other assumptions, if we take all that into consideration, we expect that by March 31st we will be under the $275 million internal line of credit, somewhere between $10 million and $15 million. Thank you.
So again we are getting more clarity in terms of where we are with our short-term borrowing, that during the course of daily operations of the government, cash in, cash out, paying our bills, all that kind of stuff, it sounds like we have very little wiggle room on our short-term borrowing, that we are really financing this government on cash surpluses between now and March 31st, which doesn’t leave us a lot of opportunity to deal with any type of mitigating circumstances should they arise.
Does the government foresee, outside of the normal appropriation program that we have before the House here, do you foresee any mitigating circumstances on the horizon that would put this number dangerously over this $275 million cushion that we have in our Borrowing Act? Thank you.
Thank you, Mr. Dolynny. Mr. Miltenberger.
Thank you, Mr. Chairman. We have captured all the numbers that we think are going to be there between now and the end of March. But as I indicated earlier, in order to err on the side of caution and to make sure that we have enough room to respond and to keep the government operational, we’re going to come forward with a request, through legislation, to increase that amount from $275 million to $300 million. Thank you.
Thank you, Mr. Miltenberger. Next I have on my list Mr. Yakeleya.
Thank you, Mr. Chair. I want to ask the Minister, with regards to Junior Kindergarten and the work that needs to be done in some of the educational facilities in the communities. Just hearing from Ms. Bisaro and the response back from the Minister and the Education Minister, are these works and are these some of the special situations we run into when we want to implement infrastructure to support programs and services, something not present but we have done to help the community to implement a program and sometimes it doesn’t work, sometimes according to text and I believe there is some grey area as to what Mr. Dolynny said is black and white, but sometimes there are areas where you have to look where it can be best suited to support the programs that the communities are asking for. Thank you.
Thank you, Mr. Yakeleya. Minister Miltenberger.
Thank you, Mr. Chair. The Member is correct in this case. Building season and the school year got way ahead of the legislative and budgetary process that we run and we are currently in. So the Member is correct. There were commitments made. There was a need to be ready and so the work was, certainly in these instances, done, contrary to what the law of general application for supplementary appropriations and getting approval before you spend the money, in order to meet the program needs, as the Member alluded to. Thank you.
What would be the consequences? Would the onus fall on our government if we said to the educational boards, sorry, we have to follow process here. I guess I’m looking at what would be the consequences if we didn’t do this and follow the process as outlined and agreed by this Assembly as to how do we approve expenditures.
As I indicated, this money is new money. It’s not money coming out of the various school boards. Should the money not be approved, then Education, Culture and Employment would be absorbing that cost from their existing budget.
Okay. Thank you. It’s clear to me and certainly I’m going to lend my support to this supplementary. We know that the challenges have to be given special consideration and some of the issues that we have to work with in our small communities. I have no more issues on this one.
Thank you, Mr. Yakeleya. I’ll take that as a comment. Does the Minister have follow-up? Committee, we’re on Education, Culture and Employment, operations expenditures, Education, Culture and Employment, not previously authorized, $764,000.
Agreed.
Total department, not previously authorized, $764,000. Mr. Bromley.
Thank you, Mr. Chair. I’m wondering what incremental cost actually refers to on the implementation of the three-year Education Renewal and Innovation Action Plan.
Thank you, Mr. Bromley. Mr. Lovely.
The department funded a number of initiatives internally and the balance is coming through on this supplementary appropriation. We have the information here. If the Member would like, we can provide that.
Thank you, Mr. Lovely. Mr. Bromley.
Mr. Chair, that would be useful. Thank you. I’m sure Social Programs has that information, but that would be useful.
Are we expecting additional requests in subsequent years, I guess, or will those be funded out of the internal budget? Do we know at this point in time?
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chairman. Once the start-up is over, the anticipation is that it would become a part of the regular budgeting process and not necessarily through the supplementary appropriation process.
Thank you, Minister Miltenberger. Committee, we’re on total department, not previously authorized, $764,000.
Agreed.
Committee, we’re on Department of Industry, Tourism and Investment, operations expenditure summary, mineral and petroleum resources, not previously authorized, $400,000. Mr. Bromley.
Thank you, Mr. Chair. Am I right in believing that this is an extension of a past, I believe, three-year contract, and if so, was that provided for in the original contract and when would this go out for RFP for competition to see if we could reduce this cost?
Thank you, Mr. Bromley. Deputy Minister Aumond.
I believe we provided this information to committee just today, but the $400,000 is the incremental cost for a contract. The Department of ITI had, I believe, $2 million in their budget for the diamond evaluation work for the contract, but the contract negotiations came in about $400,000 higher, which is why we’re here seeking the supplementary appropriation there. It was a contract that was previously held by the federal government with this proponent. The contract was not assigned at the time of devolution but was, rather, negotiated with the proponent and the negotiations weren’t complete by the time the budget process was completed for ’14-15 and came in, as I said earlier, $400,000 over the appropriated budget amount and now we’re seeing an additional $400,000 for that purpose.
I appreciate that information. So this is a 20 percent leap in this contract. That seems like a pretty steep increase in a year. Have the value of diamonds gone up by 20 percent? Again, I’m assuming that this was not an RFP, but was this contract a competitive thing, and if not, will we be contemplating that in future years?
Thank you, Mr. Bromley. Minister Miltenberger.
The current contract was a negotiated contract, and I’d ask the Minister about the future years and what the intent of the department would be.
Thank you, Minister Miltenberger. Minister Ramsay.
Thank you, Mr. Chairman. The deputy minister outlined the reason why we sought the increase of $400,000. The Member is right; the value has increased on rough diamonds and evaluation services. It’s the funding that we require to provide the service, and the company that we’re working with has the experience to deliver the service that the Government of the Northwest Territories requires in evaluating diamonds.
Thank you, Mr. Ramsay. Mr. Bromley.
Thank you, Mr. Chairman. I guess, am I correct in hearing in that answer that this will not be put out for competition in the future?
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chair. I just note that there’s a clause in the current contract that does also allow for a three-year extension of the current contract.
Thank you, Mr. Miltenberger. Mr. Bromley.
Thanks, Mr. Chair. If we’re looking at a 20 percent increase every year, would the government exercise that clause without going to competition?
Thank you, Mr. Bromley. Deputy Minister Aumond.
Thank you, Mr. Chair. My understanding is that this is the cost for the contract per year and we’re not looking at a 20 percent increase per year over the next subsequent years of the term.
Thank you, Mr. Aumond. Mr. Bromley.
Thank you, Mr. Chair. So, at the end of the three years, would we be going out for a competition on this contract?
Thank you, Mr. Bromley. Minister Ramsay.
Thank you, Mr. Chair. I guess that would be determined based on a number of factors, and three years from now I guess we’d be able to answer that question.
