Debates of November 30, 2021 (day 87)

Thank you, Minister. Mr. Courtoreille, can tell us how much money we have.

Thank you, Madam Chair. To the Member's questions, this doesn't impact the approved borrowing plan for the 2021-2022 fiscal year. And that borrowing plan is estimated at just under $1.5 billion relative to the $1.8 billion limit that is imposed by the federal government. Thank you, ma'am.

Thank you. Member for Yellowknife North.

Thank you, Madam Chair. That is the fact that I needed to click here. We are adjusting what was done in 2021, we have already approved the main estimates which get us to $1.5 billion. That's adding another $300 million, leaving us about $300 million in our debt cap. I believe I just stated that correctly.

Can I just get an update from the Minister of Finance? I believe during her budget address, there was talk about unsustainability and that current projections project us hitting our debt cap of $1.8 billion just at the end of this Assembly. Is that still the case? Does this change any of the projections, or has any changes to the projections occurred? Thank you.

Thank you, Member. Minister of Finance.

Thank you, Madam Chair. Madam Chair, the adjustments and forecasting is continually being updated. So if, in fact, there's an increase in revenues again, then that certainly can start to impact our overall situation in terms of what would be required to undertake debt, particularly debt particularly, again, if our revenues continue to be lower and expenses continue to be higher. So, you know, the overall situation that the territory is facing hasn't drastically changed since, I think, the fall update that would have been provided, and certainly since the time of budget dialogs, it would have been done this summer.

Right now if there isn't a significant alteration in the overall fiscal situation, I believe we are still, you know, looking at being at or near the borrowing limit by the end of this Assembly or certainly into that first year of the next Assembly.

So, again, that's not changed, but things do change fairly quickly, particularly with COVID, and depending on the extent and the speed of an economic recovery. Thank you, Madam Chair.

Thank you, Minister. Member for Frame Lake.

Thanks, Madam Chair. So this $10 million we're being asked to approve for the previous fiscal year, is there any additional borrowing or debt costs associated with this? Thanks, Madam Chair.

Thank you, Member. Minister of Finance.

Thank you, Madam Chair. Madam Chair, I'll perhaps check in with the deputy minister in a moment. But just  just briefly, this isn't it wasn't an unanticipated amount. What was unanticipated was the timing of it. So and largely this is owing to the pace at which the Tlicho AllSeason Road was deemed to completion and the timing of when the associated debt to that project would have to come on the books.

So I do want to be clear that it wasn't something unexpected or unanticipated or unplanned for; it was only the timing of it. Seeing on when the timing came through, that is what has brought us back to the Assembly here because of course we approve the borrowing plan in every set of mains. And we approve, you know, not only the total borrowing which also hasn't as I think we've established now have been impacted, but we actually do approve specifically the short term amount and the long term- amount. The long-term amount is what we went over on.

Madam Chair, if I could turn to Mr. MacKay to the deputy minister and just to confirm if in fact there's some other or additional interest costs that I've not aptly explained. Thank you.

Thank you. Deputy Minister MacKay.

Thank you, Madam Chair. So just to clarify, the short term and long term debt limits were approved by the legislature, and the long term debt limit was approved at $617 million as it said in there. And as the Minister said, the $10 million we need to increase that limit was because of the way the TASR project rolled out. So there was an actual liability that we needed to be made at the end of the year.

Now that $10 million will go into our long-term debts. So and I'll ask Mr. Courtoreille to give a little more detail on that, but it will add to our long-term debt and be rolled in with our other debt carrying costs. So I'll just turn it over to Mr. Courtoreille to explain that a little further. Thank you.

Thank you, Deputy Minister. I think I'm going to pass it back to Member for Frame Lake.

My time is being gobbled up. I don't want to go to a third person to ask what I thought was a relatively simple question. So I'm going to move on.

So it sounds like the completion of the Tlicho AllSeason Road was sped up, that we had to start to incur the debt sooner than we had planned for. Is that the case, and what was the original completion date then? Thanks, Madam Chair.

Thank you, Member. Minister of Finance.

Yes, thank you, Madam Chair. Madam Chair, the debt in question was expected to have come in under this current fiscal year and not last fiscal year, and that's what resulted in this. Thank you.

Thank you, Minister. Member for Frame Lake.

Thanks, Madam Chair. What are the annual service payments then going to be for the Tlicho AllSeason Road, and is part of this over expenditure where we're starting to get into these annual service payments? Thanks, Madam Chair.

Thank you, Member. Minister of Finance.

Thank you, Madam Chair. I don't have the number on the service payments in front of me, but let me see, Mr. Courtoreille may have that. And Madam Chair, in my haste, I realize I didn't actually fully explain the last answer.

The change, indeed, was that the costs incurred here that we're dealing with had been forecasted, of course, to be over in this year. So I hope that part is clear. And as for service payments, let me go to Mr. Courtoreille, please.

Thank you. Mr. Courtoreille.

Thank you, Madam Chair. I don't have the exact service payment with me, but I can tell you that it's comprised of two components. One is to repay the P3 debt associated with this project, and then the other component of that payment is for the operation and maintenance of the road. Thank you, Madam Chair.

Thank you. Member for Frame Lake.

Thanks, Madam Chair. Yeah, I was looking for this information, actually, last night. I think it's probably in the neighbourhood of 8 or $10 million a year. Does that ballpark figure sound correct? And just a yes or no would be very helpful. Thanks, Madam Chair.

Thank you, Member. Minister.

Madam Chair, I mean ballpark figure, I'll have to confirm. I don't want to say yes and then have to be on the floor answering for why the numbers are wrong. I'd prefer to be exact. So I'll commit to getting those costs to the Member in terms of what those payments and fees are. What's happened here is that the project was at a stage where the costs needed to be put to be booked, and so they were booked, and so now it's just ahead of schedule. It was in one fiscal year when it was expected and planned to be in the next. So not an unexpected cost, nothing new, and nothing adding in a way that we didn't plan for. Just didn't plan on the timing. And, fact, I mean, really, in some ways it's the good news that it's ahead of schedule, not behind.

We will get the exact breakdown of costs to the Member, though. Thank you, Madam Chair.

Thank you, Minister. Member for Frame Lake.

Thanks, Madam Chair. Well, whether it was a good thing it was finished ahead of schedule, I guess that's perhaps others to weigh in on but certainly yesterday, I discussed how GNWT, in my view, has not completed a number of environmental management and wildliferelated plans in connection with the road opening that's happening today because it sounds like now the project was sped up. So that extra time that could have been spent on building this, stretching it out a bit a longer, would have allowed for maybe some of that work to get approved. So maybe I can get an answer as to why the project was sped up. Thanks, Madam Chair.

Thank you, Member. Minister of Finance.

Thank you, Madam Chair. Madam Chair, I think was already the subject of a fair bit of discussion between Minister Thompson and the Member already with regards to the project with regards to the work that's underway and/or already completed. I'm not going to restate all the answers that were given by my colleague. I can certainly turn it over to Minister Thompson and have him just speak to what work is outstanding.

All right. Back to the Member. Member for Frame Lake.

Thank you, Madam Chair. I don't want to rehash that. I asked what I thought was a simple question, Madam Chair. Why was the project sped up? Can I have someone please answer that question. Thanks, Madam Chair.

Thank you, Member. Minister.

Thank you, Madam Chair. Madam Chair, again, I'm not sure that I have detail as to the exact month by month or week by week timeline of the project. I can perhaps send this to Mr. Courtoreille who may at least have some breakdown of the variants and would have some understanding of the timing. Thank you, Madam Chair.

Thank you. Mr. Courtoreille.

Thank you, Madam Chair. The Tlicho AllSeason Road was originally scheduled to be substantially complete today, on November 30th. That date hasn't changed.

To the timing comment that my Minister mentioned earlier, it's really about an accounting recognition of the amount of debt related to that P3 project and adjusting the long-term borrowing limit for the prior fiscal year. Thank you, Madam Chair.

Thank you, Mr. Courtoreille. Member for Frame Lake.

Okay, thanks. I guess I'm still trying to understand, then, why was the debt then moved forward into the old here? Is that just somebody an accountant noticed that you had to book it all in the one year rather than another year; I'm just trying to understand this. Thanks, Madam Chair.

Thank you, Member for Frame Lake. Minister of Finance.

Thank you, Madam Chair. So because of the fact that the road was able to well, again, the end date hasn't changed, but in terms of the timing of when some of the portions of it were complete, my understanding is that as a result of that, payments had to be made, and it was underestimated how quickly some stages of that project would go. When some of them go more quickly, the expenses incurred, the debt is then booked to the books, and that's what in doing that final reconciling at the time of doing year end, it was noticed that, in fact, they had exceeded the debt limit as appropriated under the 2021 dates. Thank you, Madam Chair.

Thank you, Minister. Member for Frame Lake.

Thanks, Madam Chair. Yeah, I'm just trying to understand why this was not anticipated at the beginning of this project, why we're now trying to approve extra money for a financial year that's, like, six, eight months over now, ten months over, eight months, whatever. I just don't get why this wasn't planned from the beginning. Thanks, Madam Chair. And if anybody can help me, go for it.

Thank you. Minister of Finance.

Thank you, Madam Chair. So, again, Madam Chair, it's not new money, it's not unanticipated money. It's not unexpected money. There's no new money. There's no new debt. It's the costs of the road and it's the cost of incurring the expenses on the road. What was different was in terms of the timing of when the expenses are showing as having been incurred based on the periodic completion leading up to today, which was always the expected date. And it takes there is a lag, you know, there is a lag in terms of when invoice's received. I've come to discover that it's at least a month by the time an invoice is received to the time when it is necessarily reconciled at the Department of Finance. And so it does take some time, and on a major project like this, it takes even longer.

When the final year end was done, that is the point at which they were able to determine that, in fact, as those expenses were being incurred, they had gone over in this fiscal year.

We have to come back Madam Chair, this has gone through the auditor general's office. This is an accounting matter. It's one that we've been told is not abnormal; we're not going to be, you know, subject to any sorts of notes. But I do need to bring it back to the Assembly to explain to the Assembly why there needs to be this adjustment. That's what we're trying to do here. Thank you.

Thank you, Minister. Supplementary Estimates (Operations Expenditures and Borrowing Authorization), No. 4, 20202021, Department of Finance, total government borrowing authorization, proposed adjustment, $10,031,000. Does committee agree?

Agreed.

Thank you.

Committee, do you agree that you have concluded consideration of Tabled Document 46619(2) Supplementary Estimates(Operations Expenditures and Borrowing Authorization), No. 4, 20202021?

Agreed.

Thank you. Member for Frame Lake.