Masi. Oral questions. Member for Yellowknife Centre.
Mahsi, Mr. Speaker. Mr. Speaker, my questions are for the Minister of Finance regarding sole-source contracting. In his October 14, 2016 replies to my oral questions, I asked if the Minster would commit to carrying out an evaluation of the sole-source contract awarding practice and performance, a request to which he agreed. Can the Minister give an update on the status of that review? Thank you.
Masi. Minister of Finance.
Thank you, Mr. Speaker. The Member is correct: I did commit to providing a formal review. The review is a bit behind schedule right now, and we are looking at providing something to Members in the May-June session. Thank you, Mr. Speaker.
Thank you to the Minister for that response. I wonder if the Minister can commit to providing the draft terms of reference or, in fact, the final terms of reference for this review to the government operations committee before the close of this session.
Those are available, and those can be shared. I don't see that there would be a problem sharing; the work is already ongoing, though, so the terms of reference would just apply to the work that is ongoing. If there is a possibility that I could share them with the Members, then I will look into that.
I appreciate the Minister's commitment to investigating sharing that. I guess it would have been helpful if he had done that before the review began, so that the government operations committee could provide some oversight in this area, which is their responsibility. I also want to talk about reports. We certainly appreciate seeing sole-source contracting reports on a quarterly basis now. I think that that really walks the talk of transparency. It is my understanding that these reports are actually quite easy to produce, just a matter of selecting particular database fields. I am wondering if it would be possible to also increase the reporting on contracts under $5,000? They are now only produced annually. I am wondering if they could be done more often.
I take the Member's concern about the terms of reference, and going before government operations before we actually went out, but we are elected to do the work. We go out and do the work, and we are held accountable by the Members' office for the work that we do. Sometimes we need to get out there and actually get to work right away, instead of holding it up with bringing everything forward to government operations. Having said that, the Member's question was contracts under $5,000, or over $5,000? I do know that the contracts over $5,000 document is tabled once a year, I believe, with all different types of contracts, and they are sole source negotiated. I am not sure if her question was under $5,000. It is something that I would have to investigate. The Member is absolutely correct: as the Department of Finance, we are posting all of the sole-source contracts on our website, and they are reported on a quarterly basis, and we try to ensure that these reports are updated within 30 days of the end of the quarter. It is easily accessible, and in the spirit of transparency, we are putting everything on the website, so people out there will know which are sole source.
Masi. Oral questions. Member for Yellowknife Centre.
Thank you, Mr. Speaker. Mr. Speaker, the importance of giving the terms of reference to government operations proactively is that the value of all the contracts left by the government is very substantial. It is a significant piece of business. I understand that you need to get on with the business of governing, and we want you to get on with the business of governing, but I think on an issue this size, it would have been useful for the committee to have contributed its oversight to this issue. I say that, as somebody who is not a member of that committee, that I know that they do good work, and they would have done it in this case, as well. To clarify my question from the previous one, I was wondering if it would be possible to produce reports on contracts under $5,000, as often as you do the sole-source contracts. Thank you.
Thank you, Mr. Speaker. Mr. Speaker, the Member is correct. Since April 1 to December of this year, there has been a substantial number of sole-source contracts. I believe there are about 290 of them. On the contracts under $5,000, I would have to look into that, because a lot of that are corporate credit cards and such. I think it will be a substantive piece of work to try and pull all of that information together. I will do some investigating. If I have to have a conversation with the Member on the number of transactions, which I think would actually be almost as large as the tabled document of contracts over $5,000, I will do some investigating. I will have a conversation with the Member.
I would like to remind Members to keep your preambles short, and your questions short and precise. Also, keep answers precise and to the point. Masi. Oral questions. Member for Nahendeh.
Thank you, Mr. Speaker. Yesterday, the Minister of Lands spoke in his Minister's statement on what the departments have been working on to serve residents, in the way that best reflects the Northwest Territories' interests and priorities. It talks about Lands and bringing the two Lands acts together. One of the things they talked about was reviewing --
Member, what is your question?
That is good. We will get to the question. Sorry, Mr. Speaker. My question is: what factors do the Department of Lands use to come up with the rate of 10 per cent to charge on land leases? Thank you, Mr. Speaker.
Masi. Minister of Lands.
Thank you, Mr. Speaker. As the Member's office has correctly stated, the leases are based on 10 per cent of the assessed value, and that is standard across the Northwest Territories, that 10 per cent of assessed value exists from Fort Smith, all the way up the valley to the ocean. Now, that is standard across the Northwest Territories, and that 10 per cent is roughly a standard that would be true, all across Canada. What happens is that the MACA assesses the land based on several factors: location of force is always important; whether the land is developed or surveyed; or whether there is a road nearby. All of those factors go into determining what the assessment is, and the lease amount is based on 10 per cent of that. Of course, as mentioned when I was answering the other question, there is a reduced rate for agricultural, seniors, or for non-profit groups, which is half of the regular rate. Thank you.
I thank the Minster for his answer. Why isn't the department using the mill rate, like tax-based communities use, instead of using the flat rate of 10 per cent for land leases?
The Land Pricing Policy was developed in 1997, and as the Member mentioned, it is being reviewed. Now, the mill rate is a municipal rate which each municipality sets to determine the amount of money that is required to be raised from local taxpayers. That is different in each community, so the mill rate has to do with taxation. The lease rate, that I have referred to, has to do with leasing of the land itself.
I thank the Minister for his answer. Will the Minister direct his department to look at how tax-based communities come up with their mill rate and then develop their own mill rate to replace the 10 per cent approach presently used by this government?
As mentioned in my answer to the previous question, of course the mill rate is the way in which municipalities establish their needs to raise tax revenue in each community, and that tends to be different in each community, depending on their needs. We are, of course, reviewing the whole policy in this area, but I don't think we would be referring to a rate as a "mill rate," which is really specific to municipalities.
Masi. Oral questions. Member for Nahendeh.
Thank you, Mr. Speaker. I understand the mill rate belongs to municipalities, and I am talking about a similar approach. Since the Minister isn't going to look at that, will the Minister have his department look at only charging for 10 years and have the total cost spread over a 30-year time period instead of the lessees paying for, over and over again, as every 10 years, they are paying for their land? Thank you, Mr. Speaker.
Thank you, Mr. Speaker. As mentioned earlier, our lease rate is based on 10 per cent of the assessed value. We are looking at the whole regime, if I can put it that way, of taxation, but I am not prepared to commit to the specific plan suggested by the Member opposite.
Masi. Oral questions. Member for Tu Nedhe-Wiilideh.
Thank you, Mr. Speaker. Mr. Speaker, I apologize to the Minister of Lands for not giving him a heads-up, but it's just a bit of a continuation of the honourable Member from Nahendeh. Mr. Speaker, I'd like to ask the Minister if this 10 per cent policy is a policy that is left over from the equity lease, where leases were paid out in full in 10 years? Thank you.
Masi. Minister of Lands.
Mr. Speaker, I am not absolutely sure of whether there was a connection between the assessment, the 10 per cent assessment, that I have spoken of earlier and the equity lease situation, which is quite a different situation. I do know that the land pricing policy was established in 1997, so it hasn't been looked at in some time by Cabinet. Land leasing and equity leases are somewhat different. Thank you, Mr. Speaker.
The honourable Member for Nahendeh talked about mill rates. In the municipalities where they charge mill rates, you get a service, curbs, water and sewer, piped systems, usually. What type of service does the GNWT charge to -- I can't think of the word that would constitute the 10 per cent being charged for the leases.
One of the advantages to the tenant is certainty of tenure. By granting a lease, of course, a person is given rights, the surface rights to the property, and that is certainly something that is very valuable. The revenue that is collected, however the government collects it, whether it's through regular taxation or through leases, of course would go into general revenue to provide all the services we provide to our citizens.
The Minister speaks of the review on the land leasing policy hasn't occurred, I do believe he said, since 1999. There are some properties where the units have been on there since the 1980s, since the 1970s, and so on. Mainly since the 1970s would probably be the older units in our smaller communities. I would like to ask the Minister if he is prepared to look at what the original deal was, because many of the people who are leasing have indicated that that was their land to start with and they built their home on their own land and now they are paying the government for 10 per cent of the value of that equity that they have accumulated.
The Member opposite has raised a complex issue. I can advise that the Department of Lands, with assistance from Justice, is looking into the whole area of equity leases and our responsibilities under these leases.
Masi. Oral questions. Member for Sahtu.
Mahsi, Mr. Speaker. I apologize for not giving heads-up notice to the Minister of Lands, but it's a continuation on the same similar subject. I am really not too sure when the acts were developed, but one was mirrored from devolution. Is the Department of Lands having some preliminary discussions with the stakeholders out there who have claims or leases in preparation for the amendments to the act? Thank you, Mr. Speaker.
Masi. Minister of Lands.
Yes, of course, the department is always interested in engaging stakeholders as we move forward. In particular, as I referenced earlier, there is this complex area of equity leases that we are looking at from both an Honour-of-the-Crown position, if I can put it that way, and also looking at our legal obligations that may exist under these leases. Thank you, Mr. Speaker.
I welcome the answer. My second question here is: is there going to be a draft schedule of consultation provided to Members on this side in preparation for those changes?
As I have mentioned earlier, we are looking at the minimum lease changes. Certainly, we have been consulting with Aboriginal and other stakeholders, and I imagine I could provide a list of consultations that have taken place and those that are planned.
When can we expect a draft schedule so we can respectively assist in the consultation with the stakeholders in our respective areas?
I would have to consult with the department to determine how soon we could provide that to Members opposite.
Oral questions. Member for Sahtu.
Mahsi, Mr. Speaker. Can we expect this material information to come to our side prior to the next session? Thank you, Mr. Speaker.
Yes, I think Members opposite could expect that. Thank you, Mr. Speaker.
Masi. Oral questions. Member for Yellowknife North.
Actually, Mr. Speaker, at this time I would like to seek unanimous consent, if there are no further questions, to go back to item 5 in the orders of the day, recognition of visitors in the gallery. Thank you, Mr. Speaker.
---Unanimous consent denied
Oral questions, Member for Kam Lake.
