Thank you, Member for Hay River South. Minister of Finance.
Madam Chair, thank you. I am alive to the fact that our small business tax rate is higher, and indeed one of the highest, at least in Western Canada. I don't disagree. I do want to differentiate that, perhaps, to lumping all corporate taxes into one group. I don't disagree with what the Member is saying, that there are small businesses that might benefit from a reduced rate, even as the conversations going on about other places to find revenue. As I have said already, I think that should be part of the conversation, but how it can provide impetus for small businesses and growth in small businesses, that may be one of the tools that we have in the toolbox. Thank you, Madam Chair.
Thank you, Minister of Finance. Any further questions? Member for Hay River South.
Thank you, Madam Chair. Just on other potential revenue, I guess what I would like to see the Minister do is to take a look at some of the loans that we have out there, and take a look at what they're for. If they are related to items that, the cost of living in the territories is high, and we've got hydro. We've got power. We've got fuel. We've got all that stuff that's fairly high. There are other costs, as well. What I'd like to see is the department take a look as to why we have loans, what are those loans for, and can we go to the federal government to try and get some dollars to reduce those loans on the basis that it's costly to live in the Northwest Territories; it's costly to operate in the Northwest Territories. I'm not sure if there's anything that can be done there, because that seems to be one of the areas that we could look at for additional revenue. Thank you, Madam Chair.
Thank you, Member for Hay River South. Minister of Finance.
Thank you, Madam Chair. As I had alluded to earlier, we've already had a Ministers' meeting for Ministers of all provinces, territories, and the federal government, and we've been following up, and we've continued to have dialogue and continue to have engagement with the federal government about the situation. I am alive to the degree of engagement necessary when you look at the source of the income that's on our page here, and where it comes from, and maintaining a positive relationship with the federal government is going to be important, and to have dialogue about our finances, and our Department of Finance's plan, and our fiscal plan going forward. I can certainly assure the Member that I will have fulsome conversations. As far as exactly what solutions might ultimately come from that, I'm going to need a bit of flexibility at this point to move those conversations forward. Thank you, Madam Chair.
Thank you, Minister. Seeing nothing further, I'm going to call the page and the department. Department of Finance, 2020-2021 Main Estimates, departmental total, $283,107. Does committee agree?
Agreed.
Thank you, committee. We'll now turn to the government borrowing plan, which is the second blue tab in the main estimates. Are there any questions on the government's borrowing plan? Member for Frame Lake.
Thanks, Madam Chair, and sorry for being out of step. The loan guarantees that are listed at the bottom there under other public agencies, can someone tell me what that is all about? Thanks Madam Chair?
Thank you, Member for Frame Lake. Minister of Finance.
Thank you, Madam Chair. I will ask the deputy minister to fill in those details, please. Thank you.
Thank you, Minister of Finance. Deputy Minister.
Thank you, Madam Chair. I believe those are loan guarantees related to some debentures that were issued by one of the school boards in Yellowknife. Thank you, Madam Chair.
Thank you, Deputy Minister. Member for Frame Lake.
Thanks, Madam Chair. Do we normally provide loan guarantees for our education authorities? I'm just trying to figure out how this happens. Thanks, Madam Chair.
Thank you, Member for Frame Lake. Minister of Finance.
Again, I'll let the deputy minister continue, Madam Chair. Thank you.
Thank you, Minister. Deputy Minister.
Thank you, Madam Chair. My recollection is, no, this was a one-time event, and it's not something that the Department of Finance typically does. Thank you, Madam Chair.
Thank you, Deputy Minister. Member for Frame Lake.
Thanks, Madam Chair. I think the Finance Minister in her budget address, and I'm sorry, I don't have that in front of me, said that we would exceed our federally set borrowing limit, probably next year or this year. Is that what this amount is that's shown here, total government borrowing? Is that this line here that is going to exceed $1.3 billion? I guess it would be in the next year, that's what the projections are. Thanks, Madam Chair.
Thank you, Member for Frame Lake. Minister of Finance.
Thank you, Madam Chair. At the moment, projections are for the next two fiscal years; we would be within the borrowing limit, but it's the third year of this life of this government that the current projection is that we would be at risk of exceeding it. Thank you, Madam Chair.
Thank you, Minister. Member for Frame Lake.
Thanks, Madam Chair. What kind of contingency or sort of room is there for us, and what happens if we actually exceed the limit? Thanks, Madam Chair.
Thank you, Member for Frame Lake. Minister of Finance.
Thank you, Madam Chair. Certainly, my intention is not to exceed that limit, period. We do have two years between now and when it's even projected. It's not something that is set in stone that we would. In the next few years, either the limit is increased at the behest of the federal government; if it is not and certainly not at the Nth hour, if it is not, then we have to certainly reconsider the borrowing plan and the fiscal plan that we are in at the point in time. At this point, we certainly have solidly two years within which to make those considerations. I am, at this point, optimistic that that will not be a concern. Thank you, Madam Chair.
Thank you, Minister. Member for Frame Lake.
Thanks, Madam Chair. I am not sure I should say if I am less or more optimistic than the Minister, but she's got her hands on the numbers. Have we actually written to or formally requested an increase in the borrowing limit? Thanks, Madam Chair.
Thank you, Member for Frame Lake. Minister of Finance.
Thank you, Madam Chair. I think some of those conversations were perhaps already even under way before the life of this government. I can certainly assure the Member that it is something that I am already engaging with our federal counterparts on. Thank you, Madam Chair.
Thank you, Minister. Member for Frame Lake.
Thanks, Madam Chair. I don't even know what is involved in doing this. Has this Minister actually signed a letter to the federal finance Minister asking for an increase in the borrowing limit? Thanks, Madam Chair.
Thank you, Member for Frame Lake. Minister of Finance.
Madam Chair, yes. I have personally been engaged on this issue with the Department of Finance federally along with a host of other issues. I think I have had telephone conversations, there have been letter exchanges, and we have had an opportunity to meet at the federal, provincial, and territorial finance Ministers' meetings. When I am saying that it is an act of engagement and dialogue, it has been that already, even in four short months. It is a dialogue and an exchange that is really more than just the federal debt limit. It is much more, also, about really looking to the federal government for their flexibility and for their investment in the North. To me, it is a conversation that is much bigger than just: what is the debt limit? It is really about: what are we going to do for the economy in the North, for the fiscal plan in the North? Those conversations absolutely have occurred. When I say I am optimistic, it is because I believe the conversations have been positive and that the relationship-building is under way. Thank you, Madam Chair.
Thank you, Minister of Finance. Member for Frame Lake.
Thanks, Madam Chair. Look, I just don't know. How close are the Yukon and Nunavut to their borrowing limits, and are they part of these discussions, as well? Thanks, Madam Chair.
Thank you, Member for Frame Lake. Minister of Finance.
Thank you, Madam Chair. I have looked at their limits, but I don't know how close they are. I don't know what their internal fiscal planning might be. I am not basing our planning on the planning of the two neighbouring territories. Although we remain in contact, certainly, with our territorial neighbours, the North as a whole now has the Arctic Policy Framework to work from. There are some shared goals within that and some shared challenges within that. While we are all working as neighbours, I also am not going to be constrained, necessarily, by what they may or may not be doing with the federal government. Thank you, Madam Chair.
Thank you, Minister. Member for Frame Lake, any further questions on the borrowing plan for the GNWT?
Thanks, Madam Chair. Just one more, if I can. When I look at these numbers, I just don't see how it is going to be possible for us to take on any of the three big infrastructure projects that are part of the mandate or the priorities that were identified by the majority of the 19 MLAs. How is it going to be possible to take on even one of those three large infrastructure projects if this remains the same? Thanks, Madam Chair.
Thank you, Member for Frame Lake. Minister of Finance.
Thank you, Madam Chair. I have already had the benefit of investment from the federal government, partnered with the GNWT, to begin the process. The Taltson and the Slave Geologic Province are both at a point where they can begin the process toward environmental assessments. There is already support from our federal government partners to advance those projects. There is a lot of work that can be done in the course of three years to have them to be at a point where they would be then ready to proceed to a construction stage. A further injection of dollars at this point may not be necessary to actually see that advancement in the life of this government, a very significant advancement in the life of this government.
Beyond that, as far as creating, for example, a business plan for the Taltson and creating a partnership, if it is to be a partnership or a P3, again, that is work. That can go on right now. It doesn't necessarily require an injection of money to do that kind of planning. Similarly, developing partnerships with Indigenous governments who may want an equity share, that kind of engagement does not require an injection of money. Undertaking consultation with impacted areas, that kind of a process is definitely part of the GNWT's work already through EIA and through Indigenous Affairs. That, again, may or may not necessarily involve a significant injection of money. A lot of work can be done in the next three years that will significantly impact the advancement of these projects. We will bring them forward and have them at a stage where they would be ready to proceed with business cases, with partnerships. It is my view that we don't necessarily need to see significant increases to our debt load or certainly irresponsible increases to our debt load. That is not the intention, and it is not necessary to get these things moving. Thank you, Madam Chair.
Thank you, Minister of Finance. Are there any further questions on the government's borrowing plan? Yellowknife North.
Thank you, Madam Chair. I believe I asked this question before, and perhaps this is the page to get it. I have trouble reading these numbers and making any sense of them. Perhaps you or your deputy minster can just give me an estimate. We are borrowing essentially $1.2 billion here. I know it is over a number of projects. I know there is short term and long term. How much interest do we pay on borrowing $1.2 billion?
Thank you, Member for Yellowknife North. Minister of Finance.
Thank you, Madam Chair. I think our total debt servicing payments, that includes both interest and principal, is $33 million. That is maybe not entirely the breakdown that the Member is looking for, but that at least now is giving some collected number. Thank you, Madam Chair.
Thank you, Minister of Finance. Member for Yellowknife North.
Thank you, Madam Chair. Okay, I understand. We are paying $33 million a year. A percentage of that goes to principal, and a percentage of that goes to interest. Perhaps the Minister can commit to breaking down that further. I am just looking for some simple numbers I can repeat so I understand how much it costs us to keep borrowing this amount of money. Is that possible?
