Being none, 5-9. Finance, information item, revenue summary. Any questions? Mr. Bromley.
Thank you, Mr. Chair. A couple quick questions here. Under recoveries, something sort of startling in terms of numbers happened between the ’12-13 revised estimates for insured and third-party recoveries. I’m just wondering if I can get a little explanation of that.
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chairman. The $2.6 million was money received in a settlement with a former insurer with the GNWT regarding a lawsuit initiated by the GNWT for compensation with respect to the GNWT and the GN’s settlement with victims of Ed Horne.
Thank you for that explanation. Just in terms of the Minister’s opening remarks with respect to income tax and corporate tax, he notes a forecasted increase to these amounts, which is good to see, but when we’re looking at the revenue, of course, it looks like there’s a decline from what the revised estimates were. I know this is always a bit confusing, but is there a date when we can get revised estimates that will more accurately predict the forecast, or do we await for the federal assessment, which I know always take a year and a half or a couple years?
We get revised amounts monthly, but the date by which most returns are in is October, so October is a month we look to to get more certainty.
My last one. I see our federal transfer grant from Canada still remains a very large proportion of our budget, and I believe 2014 was the end of our current agreement on the formula for that. Could we just get an update? Does that happen during this fiscal year we’re discussing, and where are we in renewing and is there anything that concluded that the Minister could share with us?
This arrangement, the Territorial Formula Financing will be a status quo arrangement until 2018-19, the same commitment that was given by Minister Flaherty when we, as well, with the health transfer and the social transfer.
Thanks for that information. Does that mean the same sort of rate of increase, or does it mean the amount we’re getting this year is what we’re getting annually until ’18-19?
The criteria for the formula stay the same, so it’s still governed by things like tax effort and the amount of money spent in other jurisdictions. And their operations, as I indicated in my budget address, we anticipate with the deficit reduction going on across the land, that our formula could be affected negatively, but the criteria and all the elements of the formula have been left in place until 2018-19, but we’re still bound by those variables.
Thank you, Minister Miltenberger. Committee, we’re on 5-9, Finance. Mr. Bouchard.
Thank you, Mr. Chair. I’m just looking at the taxation revenues. I’m just looking at the projection, the main estimates for 2012-13 and ’13-14. Obviously, we’re seeing an increase, if you compare those numbers, but the revised estimates have us at $312 million. I’m just wondering why we wouldn’t project that same type of number and why that number has jumped up from our main estimates and would we not expect that in the future years to come?
Thank you, Mr. Bouchard. For that we’ll go to Mr. Aumond.
Thank you, Mr. Chair. Personal income tax and corporate income tax, by their nature, are volatile. The reason we had the bump in 2012-13 to the revised estimates is we had, in particular with corporate income tax, a couple of companies that filed for previous years and restated their taxes over and above the estimate that Canada provides us. Companies can go back and file taxes for up to seven years. We had a couple of large companies do that this past year, which is the main reason for the increase in the taxes. When we try to project what is going to happen further, we take some guidance from Canada but also what is going on in the territory. If we discount those companies that re-filed, then we are just projecting a modest increase over what we had projected at the beginning of last year. Thank you.
That’s it. Thank you.
Committee, we are on 5-9, Finance, information item, revenue summary. Any questions?
Agreed.
Page 5-10, Finance, information item, active position summary. Any questions?
Agreed.
Thank you. Page 5-13, Finance, activity summary, deputy minister’s office. Mr. Bromley.
Thank you, Mr. Chair. I would just like to get on top of this business. The contributions to the NWT Power Corporation are not territorial power subsidy funding. Am I right in that assertion? Thank you.
Thank you, Mr. Bromley. Minister Miltenberger.
That’s correct.
Okay, thank you. I see that the last year we contributed $10.6 million to the general rate application. That is a subsidy, I believe, to electricity rates and that’s dropping to $3.5 million for this proposed fiscal year. Will that continue in future years? Thank you.
Thank you, Mr. Bromley. For that we’ll go to Mr. Kalgutkar.
Thank you, Mr. Chair. That’s correct. For the 2014-15 fiscal year it’s going to drop to about 1.3 or 1.4 million dollars. Thank you.
Thank you. Now, the Inuvik gas contribution I see $5 million last year, $5.9 million proposed for this year. What is the status of that? Are we expecting that to continue as well? Thank you.
Mr. Chair, the Member is correct. It is going to continue on for the next few years, and then it will also drop off after the 2015-16 fiscal year. Thank you.
So these are subsidies in addition to the territorial power subsidy?
Thank you, Mr. Bromley. For that we’ll go to Minister Miltenberger.
That’s correct, Mr. Chairman.
Mr. Chair, I just want to confirm that these do not reduce the power. They don’t reduce the underlying power and underlying causes of high power cost. They simply subsidize the rates and cushion the shock as rates go up. Is that correct? Thank you.
Yes, Mr. Chair. These mitigate the impacts of the rate shock.
That’s all I have on this page. Thank you.
Thank you, Mr. Bromley. Committee, we are on 5-13. Mr. Bouchard.
Thank you, Mr. Chair. My question is about the NWT Heritage Fund. We have guidelines in place on that contribution and what those funds will be used for in the future. Is there a buffer time zone that we don’t withdraw that money within the first 10 years of the fund or is there any kind of guidelines?
Thank you, Mr. Bouchard. Minister Miltenberger.
Thank you, Mr. Chairman. At this point we are contributing $250,000 a year and there is a 20-year period where we can’t touch the principal.
Mr. Chair, is there any expectation over the next few years to start to contribute more to this fund?
Mr. Chair, that has been flagged as we get into devolution and move into implementation and resource revenues start to flow, we have to have the discussion about the money. We are in the position that it should go mainly into infrastructure, paying down the debt and discussion about the Heritage Fund as well. Thank you.
Committee, we are on 5-13, Finance, activity summary, deputy minister’s office, operations expenditure summary, $79.725 million. Does committee agree?
Agreed.
Thank you. Page 5-14, Finance, activity summary, deputy minister’s office, grants and contributions, contributions, $77.142 million. Does committee agree?
Agreed.
Thank you. Page 5-15, Finance, information item, deputy minister’s office, active positions. Any questions?
Agreed.
Seeing none, 5-17. Ms. Bisaro.
Thanks, Mr. Chair. I have a question that I think belongs here. The Minister, in his opening remarks at the very end, talked about developing a strategy that recognizes the volatility of our revenue and plans to ensure stable revenues. Is this referencing the Revenue Stabilization Fund which has been talked about for a while? I haven’t heard anything about it for a while. Thank you.
Thank you, Ms. Bisaro. Minister Miltenberger.
Thank you, Mr. Chair. The Member is correct; there is still work being done on the framework and looking at how we would structure and fund such a fund. Thank you.
