Debates of March 2, 2017 (day 62)

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Thank you, Mr. Chair. Mr. Chair, that information is available in public accounts, but, realizing that public accounts is a fairly lengthy document, I will make a commitment to the Member that we will look at including that number in our business plans and our main estimate document. I think that answers his first question. I am sure he has another one. Thank you, Mr. Chair.

Thank you, Minister. Mr. O'Reilly.

Thanks, Mr. Chair. The Minister is a good mindreader today. How much is in the heritage fund now? Thanks, Mr. Chair.

Thank you, Mr. O'Reilly. Minister.

$10.6 million as of December 1st.

Thank you, Minister. Mr. O'Reilly.

Thanks, Mr. Chair. I appreciate that. Of course, I think we all wish it was a lot more. I know it's in our mandate to revise the heritage fund legislation. Can the Minister tell us where the update or the revisions to the legislation are actually at? Thanks, Mr. Chair.

Thank you, Mr. O'Reilly. Mr. Stewart.

Thanks, Mr. Chair. I think, for the Member, we will be in a position by the MayJune session to provide a briefing to the standing committee. The issue really with the heritage fund  there were two issues that were to be examined. One was around the overall governance of it and administration. The other was around some of the contribution levels.

The issue I think around governance, and we will get into this more, is really around some of the criteria on what kind of instruments we invest in. We are very conservative in our investments, and I think that is a smart strategy with this type of fund. Having an external management when you are mostly investing in government bonds and those sorts of things, there are some challenges in terms of why you might do that at that additional cost, but we will get into all that in the briefing that we provide as some of the options that we have looked at. Thank you, Mr. Chair.

Thank you, Mr. Stewart. Mr. O'Reilly.

Thanks, Mr. Chair. I appreciate the answer from the deputy minister. I don't need to lecture him on this, but there are lots of great models out there. The Norwegian pension fund is over $1 trillion now, and there are difficulties with the Alberta one; it's capped. In Alaska, they just give it away, which I don't think is an appropriate model. The governance issue is more than just having people watch over it. How the money is invested, I agree, we want to be fairly conservative because we do not want to lose the principle, but, at the same time, some funds have been placed in environmental social screens in terms of what they invest the money in and so on.

I think, by having some element of public governance, it will also elevate the profile of this fund and help us in terms of promotion of it and so on. My main concern is that right now we do not have a legislated revenue into it. It's by Cabinet policy, which is discretionary. I don't think there is any intention to change it, as far as I can detect, but that should be legislated, to take that option away or make it much more difficult, require public debate and discussion around that in the future.

In any event, I don't know if the deputy minister or the Minister has any further thinking on that, but I am happy to hear it. Then I have one other question, if I may, Mr. Chair. Thank you.

Thank you, Mr. O'Reilly. Minister.

Thank you, Mr. Chair. Mr. Chair, we hear the Member's concern in regard to the governance of the heritage fund, and it would be nice to have a trilliondollar heritage fund like they do in Norway. We would have no shortage of governors then, to govern over it.

This is a new process. I think we have been at it for about four years, so we are just working our way through it. I am sure that, as we work our way through it, there are opportunities to improve it or have public governance of it. We just have to be sure that there is not a huge cost factor in doing something like that. We will look at the options, and we will see what we can come up with. Of course, we will have discussion. We can have a discussion with committee and get their feedback, too, as to how they would like to see this, going forward. Thank you, Mr. Chair.

Thank you, Minister. Mr. O'Reilly.

Thanks, Mr. Chair. I appreciate that. Certainly, I was advocating for a heritage fund before the diamond "gravy train" had even arrived. In any event, let's move on to the Mackenzie Valley fibre link. It looks like the project is going to be substantially completed in 2017-18. I just want to confirm that with the Minister? Also wondering when we can expect to see revenues from it and where they might show up? Sorry. It's a complicated question, but there you go. Thanks.

Thank you, Mr. O'Reilly. Minister.

Thank you, Mr. Chair. Mr. Chair, as I think the Members have read in the paper or in the news, the line is being lit up all the way up to Fort Good Hope. One of the comments I remember is they don't have to wait for Netflix now. It is just "boom," they got it automatically. The last update we had was the crossings. I think they were doing okay with the crossings. They just have one more that they had to do. Then they should be connected all the way up to Inuvik. On the revenue side, my understanding is we have started seeing some revenue already. We will confirm that if the Member is interested in the numbers. We will confirm that and share it with committee. Thank you, Mr. Chair.

Thank you, Minister. Mr. O'Reilly.

Thanks, Mr. Chair. I appreciate all of that. I am just curious, though: where would the revenue start to show up when they start to flow? Is it going to be in the Finance budget or the main estimates? Where are they going to show up? Thanks, Mr. Chair.

Thank you, Mr. O'Reilly. Minister.

Thank you, Mr. Chair. The revenue would show up in Finance under revenue summary. If you look on page 128, you are going to see the number $1,182,000. That is what we are anticipating for 2017-18.

Thank you, Minister. Nothing further from Mr. O'Reilly. Mr. Thompson.

Thank you, Mr. Chair. Hopefully just one question. The Minister probably already knows what I am going to ask. Other program costs, could he explain what that is under the Mackenzie Valley fibre link? Thank you, Mr. Chair.

Thank you, Mr. Thompson. Mr. Stewart.

Thanks, Mr. Chair. Thanks, Mr. Chair. The Member I think is looking at page 141. What we have done is, rather than just combine it under deputy secretary of the FMB, we separated out the Mackenzie Valley fibre link payments, which is the $13,987,000. The other $2.8 million is other costs related to the office of the deputy secretary of the FMB, so it is salaries and those sorts of things. The other thing it includes, as you can see it is significantly higher than last year, it also includes the amortization for the fibre link project in that value.

Thank you, Mr. Stewart. Is there anything further from Mr. Thompson?

No, thank you, Mr. Chair.

Nothing further from Mr. Thompson. I see Mr. McNeely. Mr. McNeely.

Thank you, Mr. Chair. Just looking at the fibre optic link, if you total over the last few years, it comes out to roughly $30 million. The total project is $18 million and this year 2017-18, it doesn't really amount to that. Is the rest being identified as holdback until the completion of this project is done? Thank you.

Thank you, Mr. McNeely. Mr. Kalgutkar.

Speaker: MR. KALGUTKAR

Thank you, Mr. Chair. The $18 million that the Member is referring to is the amount that we have in our capital estimates. It is the amount that will show up on our books once the fibre line becomes operational sometime in May or June of this year. The amount that is in our main estimates, $14 million, that is our operating payments that we will start to make once that line goes into operation. Thank you, Mr. Chair.

Thank you, Mr. Kalgutkar. Mr. McNeely.

Thank you, Mr. Chair. Is it expected on the operational side for 2017-18, assuming everything goes right, to have a clean bill of health, I would say, for an unclaim, unleave on this program transferred to our books within the fiscal year? Thank you, Mr. Chair.

Thank you, Mr. McNeely. Mr. Kalgutkar.

Speaker: MR. KALGUTKAR

Thank you, Mr. Chair. If I understand the Member correctly, we will not certify that project complete until we have fully commissioned and fully tested the fibre link, that it is operating to spec. Once that is done, then we will accept the project and the payments will flow. Thank you, Mr. Chair.

Thank you, Mr. Kalgutkar. Nothing further? I see nothing further from committee. I will call this activity. Finance, management board secretariat, operations expenditure summary, total activity, $63,372,000. Does committee agree?

Speaker: SOME HON. MEMBERS

Agreed.

Thank you, committee. On to the final activity found on page 144 to 147. Office of the Comptroller General. It is a $68 million activity. Office of the Comptroller General, pages 144 to 147. Mr. O'Reilly.

Thanks, Mr. Chair. It is on page 145, environmental liabilities. It is just a flat $2 million. Are we not assessing these sites so that we understand the liabilities better? Are we remediating the sites and getting these liabilities off our books? What is happening here? Thanks, Mr. Chair.

Thank you, Mr. McNeely. Mr. Stewart.

Thank you, Mr. Chair. The way the environmental liabilities work for our own sites is we have a listing of all of the GNWT sites with liabilities. We have a liability fund of about $48 million that is put away to clean up those sites. The $2 million that you see in the main estimates reflects the changes on an annual basis that we would expect to happen as we either get better estimates of costs or that we clean up things or adjust them or, frankly, as new sites are identified and those sorts of things. The $2 million is actually almost like a debt value, if you like, because there may be negative adjustments as well as positive adjustments. It really is how we adjust that $48 million liability fund as we clean up things and also then as we identify new sites or get further detailed estimates on the cost of cleanup and that sort of detail. Thank you, Mr. Chair.

Thank you, Mr. Stewart. Mr. O'Reilly.

Thanks, Mr. Chair. Maybe I am just a little bit thicker today. This $2 million, is this money that we allocate on an annual basis then into the liabilities fund? Is that what is happening? Thanks, Mr. Chair.

Thank you, Mr. O'Reilly. Mr. Stewart.

Thank you, Mr. Chair. I think the short answer would be yes, but it really is based on, as opposed to just going in with the $2 million, it is as we refine estimates of cost and those sorts of things or identify new sites, it is sort of up to $2 million. Although, obviously, if some event happened and you had to allocate more, then we would have to come back for a supplementary appropriation or those sorts of things. Thank you, Mr. Chair.

Thank you, Mr. Stewart. Mr. O'Reilly.

Thanks, Mr. Chair. That is very helpful. Even the 2016-17 revised estimates, there is a two and then some very round zeros after that. I am not sure if that actually reflects the work that is done or is it just an estimate. Does it actually get reconciled in some way or does that happen through the public accounts? Thanks, Mr. Chair.

Thank you, Mr. O'Reilly. Mr. Stewart.

Thank you, Mr. Chair. That one is actually a very interesting case, because that was one where there was an offset of new sites identified and costs, as well as reductions as we cleaned up our sites, so it netted out to zero, the impact that year; but there was actually activity both positive and negative that led to that point. It wasn't that there wasn't anything going on. It just happened to net at that level for that fiscal year. Thanks, Mr. Chair.

Thank you, Mr. Stewart. Nothing further from Mr. O'Reilly. Mr. Thompson.