Thank you, Minister. Ms. Green.
Thank you, Mr. Chair. I appreciate the response from the Finance Minister. What does he anticipate the lead time is between fully making the case for an increase in the borrowing limit and getting approval for that? How much time does he anticipate that will take? Thank you.
Thank you, Ms. Green. Minister.
Thank you, Mr. Chair. Mr. Chair, as I have often, I will inform a meeting with the Minister of Finance again, I will make an argument. They take it back to their Cabinet, and they can do it through an order in council, is my understanding. So they can make it happen fairly quickly, depending on the time that we go down there and present our case. I do not have the exact timeline for that. We are just working on it now. As soon as I do, I will inform Members. Thank you, Mr. Chair.
Thank you. Ms. Green.
Thank you, Mr. Chair. Mr. Chair, my last question in this area is whether the Minister anticipates having approval to increase the borrowing limit within the life of this 18th Assembly? Thank you.
Thank you. Minister.
Yes. Thank you, Mr. Chair. Mr. Chair, I will make the case for an increase, and, as far as whether we will get it or not, that is not our decision to make. It is a federal decision, but we will make the best case possible. Thank you, Mr. Chair.
Thank you. Ms. Green.
Thank you very much for your responses. I have nothing further.
Thank you, Ms. Green. Mr. Testart.
Thank you, Mr. Chair. I am just looking for clarification on the borrowing plan. The first two columns here are the estimated balances of March 31, 2018, and then the estimated balance March 31, 2019. Could the Minister just explain the difference between the two? Is this the balance of the total debt, what it looks like currently, at the start of the fiscal year, and what it will look like at the end of the fiscal year? Is that correct?
Thank you, Mr. Testart. Mr. Stewart.
Thanks, Mr. Chair. The Member is right. So the first column would be the estimated balance that will be in place at the end of this fiscal year, and then the second one is the balance for the next fiscal year, so by March 31, 2019. Thanks, Mr. Chair.
Thank you. Mr. Testart.
Thank you, Mr. Chair. I am on page Roman numeral XV. So the first item on this page is shortterm debt less than 365 days, so the difference between the two columns is $2 million. So is it anticipated that we'll have cleared off $2 million from shortterm, from our balance of shortterm debt, by the end of the fiscal year? Am I reading that right? Thank you.
Thank you, Mr. Stewart.
Thanks, Mr. Chair. The Member is correct. So we are forecasting a cash surplus of $2 million for the year, and then that would then reduce the shortterm debt by that $2 million. Thanks, Mr. Chair.
Thank you. Mr. Testart.
Nothing further, thank you.
Thank you. Anything further from committee? Mr. O'Reilly.
Thanks, Mr. Chair. So the estimated balance of March 31, 2019, that does not include anything related to Mackenzie Valley Highway, Slave Geological Province Road, Taltson Hydroelectric Expansion, yet our government continues to make application to the federal government for these things. How could we possibly carry those out when we are so close to the debt limit already? Thanks, Mr. Chair.
Thank you. Minister.
Thank you, Mr. Chair. Mr. Chair. Those are not approved projects, so we do not account for them. Thank you.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. I appreciate the response from the Minister, but that's not what I asked. Given that we do not have much room before we hit the debt wall, how can we have any assurance of that? Why do we keep submitting these proposals to the federal government for these large infrastructure projects when we do not have much fiscal capacity to do it? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly, Minister.
Yes. Thank you. That goes back to my responses to Ms. Green before. This is one of the reasons that we would go to the federal government. If we do get a project of this size, part of the proposal we bring to them is that we need to see an increase to our debt limit to help us with our share of the project. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. I have been on record as expressing concerns about raising, perhaps, unrealistic expectations by submitting all of these large infrastructure project proposals at the same time, so I will leave that one at that. That's all I have got. Thanks.
Thank you. Anything further from committee? Seeing nothing, I will call the borrowing plan. Borrowing plan for the government reporting entity and established borrowing limits for the Government of the Northwest Territories, total government borrowing, established limits per 20182019 Appropriation Act, $811,688,000. Does committee agree?
Agreed.
Thank you, committee. Committee, please turn back to Department of Finance. We can now consider the departmental total and the information contained on pages 136 to 140. That includes the revenue summary, graphs, organizational charts. First, I have Ms. Green.
Thank you, Mr. Chair. Mr. Chair, I am going to have another run at that question that I tried in the wrong place. So what I see on page 140 under taxation, personal income tax, is that the estimate of income tax to be collected in this fiscal year, about $82.5 million; in the next fiscal year, about $103 million? I am wondering why the Department of Finance thinks there will be a rebound of over $20 million in this area. Thank you.
Thank you, Ms. Green. Mr. Stewart.
Thanks, Mr. Chair. So, when we forecast the take from personal income tax as well as corporate tax, we work with Finance Canada. I think the Member can appreciate that you do not have the full benefit of all of the tax filing when you are doing those estimates.
In the case of the 20172018 revised estimates, where the personal income tax went down quite significantly, the reality is that Finance Canada had overestimated the amount. What they discovered is that there were some, what they described as, “tax behaviours” that they did not account for, that were a result of some of the changes at the federal level in the income tax, and people were taking steps to avoid any increases that may take place.
Most of those impacts are expected to be just a single-year impact, and that is why they forecast for the following year, that we would be back up to $103 million, because of the onetime nature of some of the impacts that they saw.
We work closely with Finance Canada as they get those tax returns in to see if there are any other patterns. You could well imagine with all of the tax filers, sometimes those patterns are hard to discern, but that is the reason why it goes down and then is coming back up. Thanks, Mr. Chair.
Thank you. Ms. Green.
Thank you, Mr. Chair. I appreciate Mr. Stewart's response. Does he have any example of tax avoidance as he referenced in his answer? Is he talking about, for example, investments in RRSPs or something other? Thank you.
Thank you, Ms. Green. Mr. Stewart.
Thanks, Mr. Chair. I do not have anything too specific, but I am sure the Member was aware of all of the various proposals that the federal government put forward. I think there were things around incomesplitting and being able to have some of the expenses from your business written off for family members and those sorts of things.
Not all of those changes came through, but, when they were announced as possible changes, I think what happened was that people were noting that those were coming and did some steps to structure themselves a little bit differently.
We can see if the federal government has a paper on some of those specifics that they could share with us, that we could maybe give to the Members to be able to explain some of those differences that took place. Thanks, Mr. Chair.
Thank you. Ms. Green.
Thank you to Mr. Stewart for that answer and to the offer of the additional information. I will leave that category.
Still under the category of taxation on page 140, the fuel tax and the payroll tax, does the GNWT audit these taxes for compliance? Thank you.
Thank you. Minister.
Yes, we do, Mr. Chair.
Thank you. Ms. Green.
Thank you to the Minister for that response. When did the GNWT last audit each of these taxes? Thank you.
Thank you. Mr. Stewart.
Thanks, Mr. Chair. In our taxation division, there are tax auditors in that group, and they are pretty much constantly auditing various filers to look at their records and making sure that we are getting the level of tax.
It's not so much an audit of the entirety. It's a rotating audit of all of the various tax collectors that we would have on those, as well as some of the big payroll tax payers and those sorts of things. We have a unit where that is their business, to do those audits with businesses and with tobacco tax folks. Thank you, Mr. Chair.
Thank you. Ms. Green.
Thank you, Mr. Chair, and thanks again to Mr. Stewart for that response. Can he give a very high-level view of what the audits show? How much leakage is there in these areas in noncompliance paying? Thank you.
