I now call Committee of the Whole to order. What is the wish of committee? Member for Frame Lake.
Thanks, Madam Chair. Committee would like to consider Tabled Document 437-19(2): Capital Estimates 2022-2023. General comments Finance, Industry, Tourism and Investment, and Infrastructure. Thanks, Madam Chair.
Does committee agree?
Agreed.
Thank you, committee. We will take a short recess and resume with the first item.
---Recess.
I'll now call Committee of the Whole back to order.
Committee, we've agreed to consider Tabled Document 437-19(2) Capital Estimates 2022-2023, and we have the Minister's opening remarks yesterday. We've agreed to begin with general comments on the capital estimates, and I will go to Member for Frame Lake.
Thanks, Madam Chair. I do have some technical questions. So I'm wondering if the Minister may want to have her colleagues with her, or how would you like to do that?
Minister?
Madam Chair, I do have witnesses available so I'd be happy to have them in the room and ready to go.
Did you want -- what we can do is -- if they want to sit through general comments, we can have them come in if you need them.
Yes, I propose to bring in two of them for the general comments, which I expect might be more technical on the one side and then switch them out as need be when we get to the Department of Finance, please. Minister and Terence Courtoreille, please.
Sergeant-at-arms, please escort the witnesses to the Chamber.
Welcome. Minister, will you please introduce your witnesses for the record and so we know who is who.
Madam Chair, on your right, Bill MacKay is deputy minister of Department of Finance, and on the left Terence Courtoreille is deputy secretary to the Financial Management Board.
Thank you. All right. I will go back to Member for Frame Lake.
Thanks, Madam Chair. Yeah, I appreciate the Minister getting her witnesses here.
So this is the largest ever capital budget for this government, and I'm just wondering how much of it is actually unspent projects, unspent capital works from the previous year. So, you know, are there carryovers, or there's this new term that the department seems to be using, "future cash flow.” How much of it is unspent funds from last year or previous years beyond that. Thanks, Madam Chair.
Thank you, Member. Minister.
Thank you, Madam Chair. Madam Chair, there always are certain amount of carryovers that do accrue but I'd suggest in the hopes of having an exact number, if available, that we direct that to the department, to Mr. Bill MacKay and perhaps thereafter Mr. Courtoreille. Thanks.
Thank you, Minister. Deputy Minister Mackay.
Thank you, Madam Chair. I will refer that question to Mr. Courtoreille. Thank you.
Thank you. Mr. Courtoreille.
Thank you, Madam Chair. For the 2022-2023 proposed capital estimates, there are no capital carryovers included in that number. Those carryovers would be included -- or considered next June.
However, in the capital estimates, the Member will see an amount for 2021-2022 revised relative to 2021-2022 originally approved capital estimates. The difference between those two columns is the capital carryovers that were approved earlier this past June for 2021-2022.
Thank you. Member.
Okay, thanks. So it looks like it would be in the neighborhood of $90 million, is that correct?
Thank you. Minister.
Okay. Thanks, Madam Chair. I'm just trying to reconcile that against -- I know we've got a supplementary appropriation, which I'm not supposed to be talking about, where there's actually a negative adjustment of $126 million. So how does that relate to the $90 million I guess carryover that seems to be on page 3 of the document. Thanks, Madam Chair.
Thank you. Minister.
Thank you, Madam Chair. Madam Chair, and, yes, we are making efforts to do, frankly, a better job through the year of adjusting budgeting on projects so that there doesn't have to be a significant of an adjustment or a significant appropriation later in the budgeting cycle. And so the idea being that as the year progresses and as this particular capital plan progresses, we will be keeping an eye on it so that when projects do see changes, as any large scale projects will, that we can bring that to the attention of the House earlier, and it -- that's been foreshadowing that there is one of those coming later this session. Thank you, Madam Chair.
Thank you. Member.
Thanks, Madam Chair. That's great. I'm not sure I actually got reconciliation of the 90 versus the 126, but I'm just very mindful of how little time I've got left on the clock.
So is this capital budget going to be in compliance with the fiscal responsibility policy? Thank you.
Thank you, Member. Minister.
Thank you, Madam Chair. Madam Chair, it is certainly my anticipation that it will be, and we'll have actuals ready in the fall to know exactly what numbers we have available to spend on capital at that time. Thank you, Madam Chair.
Thank you, Minister. Member.
Thanks. Just a comment, I guess it would be really helpful if there was a page in the capital estimates that demonstrated how this is going to be in compliance with the fiscal responsibility policy. But I'll leave that for the Minister and her officials to take up with the next capital estimates.
Can someone tell me how much do we actually spend on housing? How much do we anticipate spending on housing in 2022-2023 in terms of capital? We've got about a $10.6 million, you know, budget here for the Housing Corp, which is only for information, but of course a lot of their stuff happens on the O and M side. But can anybody tell me how much is actually going to be spent on capital projects related to housing in 2022-2023. Thanks.
Thank you, Member. Minister.
Thank you, Madam Chair. The Member's already identified the fact that the capital estimates allocated to Housing Corporation are $10.6 million.
Thank you. Member.
Okay, thanks. Well, I've I look at the last couple years on the O and M side for Housing Corp, and it seems to be about $77 million. Some of that -- a lot of that I guess is staff, but some of it actually goes into care and maintenance of homes as well, as I seem to understand, or funding of LHOs or whatever. So do we actually know how much we spend on housing -- or how much we anticipate spending on the capital side for housing next year?
Thank you, Member. Minister.
Thank you, Madam Chair. Madam Chair, I'm not sure if I am realizing what is different about the numbers I have versus not. Let me see if I can direct that to the deputy minister and see if perhaps I just misunderstood the question.
Thank you. Deputy minister.
Thank you, Madam Chair. So as the Minister mentioned, the budget is 10.6. The Member is correct, we did provide a number for what IS actually spent last year. I don't have that number in front me but I believe it was in correspondence with the committee. But I'll turn it over to Mr. Courtoreille to give any further information he might have. Thank you.
Mr. Courtoreille.
Thank you, Madam Chair. I don't really have anything further to add other than I believe there was additional information provided to standing committee on this front, and I think there was some ongoing correspondence to try to firm up future capital estimate budgets for the Housing Corporation to better reflect that number. Thank you, madam Chair.
Thank you. Member.
Thanks. I've got other questions but I need to move on to my comments, thanks.
Madam Chair, I voted against the last capital budget and I intend to do so again on this one. I think we are spending too much money on capital. We're going into debt at a greater rate than any other -- any time that I've ever seen in my six years in past governments as well.
$150 million, this is what the Minister said yesterday, $150 million in this budget alone is for roads, and this budget shows us spending $10.6 million on housing, when housing is a priority for this Assembly, and certainly for myself, many of the Regular MLAs, this is completely out of balance.
You know, so we're spending 30 percent of our total capital budget on roads alone. That's what the Minister said yesterday. We're going into debt faster than ever. I listened carefully to the Minister's fiscal update an September 15th. We're not just on the precipice of a fiscal cliff, Madam Chair; we're going over the cliff right now.
You know, you look at the slides from the Minister's presentation on September 15th, capital expenses are outpacing total revenues. GNWT deficit is permanent when the federal capital is removed. Growth and debt is outpacing everything. 17.2 percent per annum over a period of years, no intent to actually raise any more revenues. We gave away $21 million in a significant discovery licence that could have been potential revenues. We've cut small business tax. We're going over the cliff. We're starting going over the cliff, and I don't sense that this government is doing anything to stop that. And the money that we do have, we're not even spending on the right priorities, Madam Chair.
I'm going to be voting against this, and I'm very frustrated that I don't have any time left on the clock. Thanks.
General comments. Member for Yellowknife North.
Thank you, Mr. Speaker. I'm looking here at a $500 million capital budget, and I think the question we all need to ask ourselves is how are we going to pay for this?
We know our fiscal responsibility policy allows us to pay for 50 percent of this with debt and based on all of the previous public accounts, it's quite likely that 50 percent of this will be paid for by debt.
It's worth noting that about $200 million of this is federal dollars. I think that fact is important because it shows that we are still largely driven by federal priorities. But also the allure of 75-cent dollars is largely a myth. We're actually operating at 40-cent dollars from the federal government when we look at what is being funded. I don't think the hard work has been put in to the capital budget to make those tough decisions and to prioritize maximum spending.
We also know that this is a capital budget that, in many ways, is still the last Assembly's capital budget and is still driving the last Assembly's priorities, and that's just the reality of some of these long-term infrastructure projects. They will be on the books for many many Assemblies to come.
A bit to the kind of procedural aspects, I don't believe we actually have any sense of what this capital budget will cost us. And I mean that in a number of ways.
There is $47 million largely for long-term care facilities in this but we know that long-term care beds, each bed costs over a hundred thousand dollars a year to operate. We also know our health authority is running a massive deficit. I don't know how we are building those beds without having proper costing to be provided in the operations budget for the health department already running a deficit.
We know that there's $84 million in here largely for roads, and we know that roads cost a lot of money to maintain, and our current roads are not being maintained properly. We know our deferred maintenance budget for all of our capital is just millions and millions of dollars in debt. Our infrastructure is crumbling, and here we are building more.
I don't believe hard decisions have been made. I don't believe there's a connection between capital and operations that this government has taken seriously. Every time we add capital, that means a cut to an operation's budget. That is the way to look at it. It could mean debt, which is just a cut for a later time. But when we spend money here and then when we don't include the money to actually maintain that infrastructure, we are just setting ourselves up for disaster.
There's a couple of projects that are continuing on for the Power Corp, over $200 million worth of Power Corp infrastructure for the complete cost of projects, here - the Fort Providence transmission line, and Inuvik wind, most importantly. But we know our Power Corp's infrastructure is billions of dollars in debt. We know that when we build infrastructure for the Power Corp, it's not revenue generating. Ratepayers are -- it's cost passed on to ratepayers in increases in rates.
Building a line to Fort Providence may be a good idea, but the people of Fort Providence are not paying for that line. It is not anything that actually makes us money. We all know there is a massive infrastructure deficit. We know the state of our infrastructure is in terrible state. We know our fiscal cliff is approaching, and it is an unsustainable path. However, when I look at the disconnect between our government's priorities, the operating budget and this capital budget, I just can't help but think that proper thought and strategic direction was not put in it. I think that is no more apparent than the two percent of this budget that is going towards housing.
Housing is a priority of this Assembly. It is a priority of every single Member in here. And only two percent of this is to build new houses. I cannot reconcile that fact with the political priorities of this House, Madam Chair.
And for some reason, we treat housing completely different. If we -- you know, we are spending $21.7 million for schools in this budget, and then we go and ask the school boards or the department to find the O and M to run those schools. For housing, we don't do that. We are so concerned about 2038 and the O and M for operating housing, and we do the math every time we build a housing unit, whether we have the funding to maintain it.
And yet here we are with 500 other million dollars where we've done none of the math. We've not done the math on what it costs to make sure that we're not having a differed maintenance backlog. We have not done the math to make sure that our highways and bridges are properly maintained. There is an obsession that we can just build capital and it doesn't -- and it maintains itself.
We need to make sure that every time we build something, the O and M is there, the care and maintenance of there -- is there, and that's not being done. The only place it seems to be even considered is in housing, and that's why we won't build any more housing.
So Madam Chair, I am frustrated that once again I see $10.6 million as a somewhat made up number for housing, and I can't seem to get the Housing Corp to actually build more housing.
I would gladly cut two percent of this budget to double the Housing Corp's two percent. But I guess I will start with a question. Thank you for indulging me.
Can the Minister of Finance give me a sense of what the O and M cost is of this capital budget is. If we build this $500 million worth of infrastructure across a variety of departments, how much money should we reasonably expect to see increased in the operating budget. Thank you, Madam Chair.
Thank you, Member. Minister.
Thank you, Madam Chair. Madam Chair, that question is not as simple as it sounds on first blush. There is a variety of different types of infrastructure in this budget. There are deferred maintenance budgets that are sitting in, for example, the Department of Infrastructure as there are also budgets available in some of the other departments for provision of health care services or education. Some of the infrastructure that we need to deliver on is so that those projects, the programs and services can continue to function.
So certainly, there will be some projects where there are obvious connections and obvious costs that can be accounted for. And I've previously committed, and I'm happy to commit here, that we do want to start including an O and M schedule in the future infrastructure budget to the best of the ability that we can. But it's not simply saying, you know, dollar for dollar, it's going to be X amount. Depending on what the infrastructure item is at play will determine what the costs of the O and M are and sometimes you simply have to make the investments in the infrastructure, or you can't deliver the program or the service. So I appreciate the frustration, and I hear it. But it's not going to be as simple as all that.
Again, with that said, we're going to try -- not try -- we will be including an O and M schedule. Hopefully it starts to get some of the answers that the Member's seeking. Thank you.
Thank you, Minister. Member for Yellowknife North.
