Thank you, Mr. Testart. The Minister has indicated that Mr. Koe will fill this. Mr. Koe.
Thank you, Mr. Chair. Territorial Tobacco Products was consulted at this stage. They did provide a letter of reply to our consultation letter. They did make some comments around the purchase method, but none of the comments were about any capital concerns or any inventory concerns. They were about the overall control of the tobacco products and collecting the proper amount of tax revenues for tobacco products sold in the Northwest Territories. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you for that. I'm content that the government did conduct its consultations appropriately. I just raise this issue because often we aspire to very effective legislation that's based on examples drawn from other jurisdictions and sometimes we can forget that Northerners and northern districts may not be up to the same capacity as southern jurisdictions. I guess I'll just leave it with this. I think we're only affecting a small section of the economy, and if Mr. Walker did not raise those concerns, then I'm content that these concerns have been properly addressed through the legislative process. Thank you, Mr. Chair. Nothing further.
Thank you. Mr. Testart. No more comments. I see no further comments or questions. Does committee agree that we proceed to a clause-by-clause review?
Agreed.
Thank you, committee. We'll defer the bill number and title until after consideration of the clauses. Committee, please turn to page 1 of the bill. Bill 15, An Act to Amend the Tobacco Tax Act. I will read out the clause and, if committee agrees, just please respond within an "agreed." Clause 1.
---Clauses 1 through 15 inclusive approved
Thank you, committee. Committee, to the bill as a whole. Does committee agree that Bill 15, An Act to Amend the Tobacco Tax Act, is now ready for third reading?
Agreed.
Thank you, committee. Bill 15 is now ready for third reading. Does committee agree that this concludes our consideration of Bill 15, An Act to Amend the Tobacco Tax Act?
Agreed.
Thank you, committee. Thank you to the Minister and your witnesses. Sergeant-at-Arms, please escort the witnesses from the Chamber. Committee, we have next agreed to consider Bill 26, An Act to Amend the Revolving Funds Act, No. 2. I will turn to the Minister responsible for any opening comments that he may have. I believe that's Minister Schumann.
Thank you, Mr. Chair. I am pleased to introduce Bill 26, An Act to Amend the Revolving Funds Act, No. 2. This bill would amend the Revolving Funds Act and establish a new revolving fund for the Marine Transportation Services with an authorized limit of $35 million. The proposed revolving fund would meet the capital operating and maintenance requirements in providing marine transportation services to the communities on Great Slave Lake, Mackenzie River, and the Arctic Coastal Region. A business model for Marine Transportation Services is currently under development, which will help determine how Marine Transportation Services will be operated in the future.
The summer operations will inform the analysis as to which business model will likely be the most appropriate. We will return with options for the long-term structure of this entity in the fall. In the interim, segregating monies by means of this revolving fund will allow these marine operations to be self-financing. Costs associated with ongoing operations, maintenance, and capital expenditures in this manner will not require the government of Northwest Territories to fund these through appropriations as is required from normal program delivery. It will also prevent financial confusion and ultimately facilitate the transition to a long-term business model once it is decided upon.
Our purchase of the shipyard, terminals, and marine fleet is a strategic investment in transportation infrastructure that provides jobs, helps stimulate our economy, and will maintain the Mackenzie River as a primary route for safely and effectively moving essential goods to our communities. Bill 26 will facilitate a successful sailing season this summer as we consider options for the long-term business model of the Marine Transportation Services. This is a key step that will ensure a seamless transition to critical marine re-supply services for NWT residents and businesses now and into the future. Thank you, Mr. Chair.
Thank you, Minister. Do you have witnesses you wish to bring to the Chamber?
Thank you, Minister. Sergeant-at-Arms, please escort the witnesses into the Chamber. Minister, will you please introduce your witnesses?
Thank you, Mr. Chair. On my right, I have Deputy Minister Paul Guy of Infrastructure and on my far right is John Vandenberg, assistant deputy minister of programs and services, and on my left is Vince McCormick, director of corporate services.
Thank you, Minister. As we agreed to send this bill directly to Committee of the Whole, it was not reviewed by a standing committee, so we have no opening comments to go to but I will open up the floor. General comments and I have a list started. First, Mr. Vanthuyne.
Thank you, Mr. Chair. The Standing Committee of Economic Development and Environment in fact did have the opportunity to interact with the Minister on this bill. We did share with the Minister some items of concern. However, most of those have to do with the future of the marine transportation system. We certainly recognize the need for the amendment to the Revolving Funds Act so that the MTS, if we can call it that now, has the ability to function with the degree of fluidity much like a business and allowing the flexibility that it needs to react quickly, if need be.
We also want to take the opportunity to commend the government for stepping up and acting fast to make this acquisition possible as the Minister alluded to in his comments, the former provider had provided critical services to the territory for a long period of time and knowing that we could have possibly lost this critical service that the reliance on this service to the community was highly important and that the acquisition was necessary. We also want the department to know that the Standing Committee on Economic Development and Environment wants to work with the department going forward on the future of the evolution of MTS and we will be seeking to engage the public on that front, but in the meantime, we appreciate the department's resources, human and otherwise, are very focused right now on finishing up the transition but more importantly getting ready for the forthcoming sailing season and that's crucial to our communities.
I'm not sure that I have anything more to add at this point. I just want the department to know that by and large, there was no real opposition to the revolving funds amendment itself. Generally, we find ourselves in support. Thank you, Mr. Chair.
Thank you, Mr. Vanthuyne. Next I have Mr. O'Reilly.
Thanks, Mr. Chair. I sit on the economic development and environment committee, and I do have concerns with the bill. In fact, I most likely will be voting against it. My concerns really revolve around a couple of areas. First off, I do not believe that this is a requirement for Marine Transportation Services to operate; and secondly, I am concerned about the purpose of the revolving fund, and what it covers and what it doesn't cover. Lastly, I also believe that setting this up as a revolving fund will limit the ability of Regular MLAs to have oversight on capital acquisitions of marine transportation systems.
I also want to state clearly for the record that I do support our government operating this in the absence of a private sector operator, and we do want to make sure that our remote communities have access to transportation systems. I certainly support that. My concerns are with setting this up as a revolving fund. I do have some questions for the Minister, and I would like to start with if he could tell us who was consulted in preparing the bill? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Minister.
Thank you, Mr. Chair. Infrastructure consulted internally with the Departments of Finance and Justice regarding the establishment of the revolving fund for the MTS, and we also consulted with Transport Canada, the Department of Lands, and the Department of Environmental and Natural Resources to discuss regulatory and safety requirements associated with MTS as well. Thank you, Mr. Chair.
Thank you, Minister. Mr. O'Reilly.
Thank you, Mr. Chair. No one outside of government was actually consulted during the preparation of this bill, and no one in Hay River was consulted? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Minister.
No, no one else. Thank you, Mr. Chair.
Thank you, Minister. Mr. O'Reilly.
Thanks, Mr. Chair. That is a concern of mine. It is the process as well, then, as to who was consulted in preparation of the bill, and I think it would have been more helpful if there had been opportunities for the public to express some views on this, but I understand the department is in a rush to get this done. Can someone tell me whether this is a requirement for the operation of MTS, or is this just the preferred option for the department? MTS could go off and continue to operate, but this revolving fund is not a requirement for the operations? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Minister.
Thank you, Mr. Chair. The establishment of the revolving fund, in our view, is a transitional step. We were going to return to standing committee in the fall with the proposal for the long-term structure of this entity; and moving forward, that was our whole role and intent as the Member alluded that he does not think this is a necessary step. We can probably run empty, yes, without doing this, but it would cause a lot of confusion around the finances about how this thing operates. Thank you, Mr. Chair.
Thank you, Minister. Mr. O'Reilly.
Thanks, Mr. Chair. I think I heard the Minister say, then, that this is not a requirement for MTS to operate. That is what I understand as well, so we are on the same page on that. Can a department not maintain a separate set of accounts internally so that the operation of this could be tracked? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Minister.
Thank you, Mr. Chair. I will defer that to Mr. McCormick.
Thank you, Minister. Mr. McCormick.
Thank you, Mr. Chair. We cannot run segregated separate accounts within the department. We can track it as a project in the system, but this is the only way to segregate it from the consolidated revenue fund. Thank you.
Thank you, Mr. McCormick. Mr. O'Reilly.
Thanks, Mr. Chair. I understand it would be possible to track the funds in and out separately, and that is good to know. What sort of oversight will the Regular MLAs have if this continues to operate as a revolving fund? Is it going to be separately reported in the main estimates? Are we only going to see it in the public accounts? What sort of oversight is there for Regular MLAs if this is set up as a revolving fund? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Mr. McCormick.
Thank you, Mr. Chair. The oversight, primarily, would come through the business planning process where there will be a chance for fulsome discussion about this. The financial statements, of course, will be audited, fully audited, and published, consolidated with the public accounts and published on the Finance web site. We are still in discussions with the Department of Finance about how exactly, and if and what method the capital piece of this would be presented, whether it would be part of the capital mains, or there would be some other reporting process we would follow.
Thank you, Mr. McCormick. Mr. O'Reilly.
Thanks, Mr. Chair. I appreciate the answer, and that increases my discomfort level, but I understand that is going to get sorted out eventually. I think there is a real concern about the ability of Regular MLAs to do their job when they do not have oversight, particularly on the capital expenditure side. I want to move forward to the purpose of the revolving fund. It is to meet the capital operating maintenance requirements and providing grain transportation services and movement of cargo. When our government purchased the assets, they obviously purchased, or acquired a bunch of environmental liabilities. The wording of this for the purpose of the revolving fund, would this legally preclude those funds being used for remediation of any of the contaminated sites that are part of the assets that we have acquired? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Mr. Guy.
Thank you, Mr. Chair. The revolving fund would not be specifically used to address the environmental liabilities. Those are currently addressed through the GNWT's environmental liability fund, and that is administered and funded by the Department of Finance. We would identify our environmental liabilities like we do on any other government asset and report them to the Department of Finance, and they would be tracked and processed through the environmental liabilities fund. In the event we had excess or surplus revenues that will be returned to the government as a form of general revenues, the government could choose to apply those funds towards environmental liabilities or any other financial need of the government. Thank you, Mr. Chair.
Thank you, Mr. Guy. Mr. O'Reilly.
Thanks, Mr. Chair. I think I heard that it would preclude the use of the funds directly, and I hate to put our law clerk on the hot seat here, but I guess I would like to get an outside opinion on whether any of the funds in the revolving fund could actually be used for remediation of contaminated sites? Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. There is about a minute left in your time for the law clerk to answer your question, and she will give it her best shot.
Thanks, Mr. Chairman. Mr. O'Reilly has asked a very interesting question. I am actually not sure. It would depend if the environmental remediation would fall under the definition of "maintenance requirements." I think, arguably, it certainly would not follow under the definition of a capital purpose. Likely not under the definition of an operating purpose, but possibly under the definition of a maintenance requirement. My short answer, and very much a first instance answer without further reflection, would be that it is possible that it could fall under the definition of maintenance. A lot would depend on the nature of the environmental remediation and what it would entail. Arguably, maintenance of almost any asset could, in some respects, be looked at as environmental remediation. For example, if you are operating a vessel and you are cleaning up something that you have spilled in the course of that operation, arguably, that is maintenance, but it also could fit the very, very broad definition of environmental remediation. A lot would depend on the factual circumstances but, yes, there is an argument to be made to that effect.
Thank you, Madame Clerk. Mr. O'Reilly, your time has expired. You will have another shot at this when we get to clause 2. Next on my list for general comments, I have Mr. Nakimayak.
