Question has been called. All those in favour? All those opposed? Any abstentions? The motion is carried. Bill 44 has had second reading.
Carried
I now call Committee of the Whole to order. What is the wish of committee? Member for Frame Lake.
Thanks, Madam Chair. Our committee wishes to consider Committee Report 18, Committee Report 19, Bill 24, Tabled Document 43719(2) Capital Estimates 20222023, Northwest Territories Housing Corporation. Thanks, Madam Chair.
Thank you. Committee, do you agree?
Agreed.
Thank you, committee. We will take a short recess and start with the first item.
---SHORT RECESS
I call Committee of the Whole back to order. Committee, we've agreed to consider Committee Report 1819(2), Report on Bill 24, an Act to Amend the Revolving Funds Act. I will go to the chair of standing committee on economic oh, just a moment.
All right. So committee, we've agreed to consider Committee Report 1819(2), Report on Bill 24, an Act to Amend the Revolving Funds Act. I will go to the deputy chair of the Standing Committee on Economic Development and Environment for any opening comments.
Madam Chair. Madam Chair, committee's report was read into the record on November 23rd, 2021 so I do not have any additional substantive comments to add at this time. Individual Members may have comments on the report. I would like to thank the committee for their work on this report. Thank you, Madam Chair.
Thank you. Committee, I will now open the floor to general comment on Committee Report 1819(2), Report on Bill 24, an Act to Amend the Revolving Funds Act. Any Members who wish to speak to this, please let me know so I can write your name down.
Thank you, committee. Do you agree that you've concluded consideration of Committee Report 1819(2), Report on Bill 24, an Act to Amend the Revolving Funds Act.
Agreed.
Thank you, committee. We have concluded consideration of Committee Report 1819(2), Report on Bill 24, an Act to Amend the Revolving Funds Act.
All right. So we'll move on to Committee Report 1919(2), Report on Bill 29, Resource Royalty Information Disclosure Statute Amendment Act. I will go to the chair of the Standing Committee on Economic Development and Environment for any opening comments.
Thank you, Madam Chair. No opening comments at this time. Or sorry, I have my script here.
Consideration in Committee of the Whole, Madam Chair, committee's report was read into the record. The committee could not reach an agreement to proceed with the bill. Individual Members may have their own comments on the report.
I'd like to thank stakeholders for their submissions, presentations, on to the review of the Bill 29 and the committee for their hard work on working on this report. Thank you, Madam Chair.
Thank you. I will now open the floor to general comments on Committee Report 19-19(2), Report on Bill 29, Resource Royalty Information Disclosure Statute Amendment. All those who wish to speak to this, please let me know. Nobody else going to speak to this? Anybody else? Okay, Member for Yellowknife North.
Thank you, Madam Chair. I'm going to have quite a few comments so I appreciate committee indulging me.
This was a private Member's bill brought forward by MLA O'Reilly. I thank him for doing that. It has started a lot of conversations in the department with industry, and within the committee. Ultimately this report has no recommendations and as noted by our chair, there wasn't the committee was not able to reach agreement on whether to proceed with it.
Firstly, I think there's a bit of a learning curve on how to deal with private Member's bills, and what exactly can be done in that case. Sometimes it opens up a conversation that puts a lot of work that could not be expected about private Member. And I think royalty disclosure is one of those.
I'll note this committee yesterday tabled a report with a number of recommendations regarding the mining fiscal review. One of those, I think most importantly, was for the department to look into transparency measures.
Some of the origin of this bill was the department's current review of the mining fiscal regime and committee asking for some hard data on what is actually been paid by the mines and then being told that that's not information that could be shared, which made the review kind of difficult and led to ultimately, I believe, MLA O'Reilly's private Member bill.
I want to clarify the current state. Right now, you can't find out how much the mines are paying in royalties with any precise measure. There's a number in the public accounts which contains oil and gas and mining royalties. We know, the last couple of years, they've paid about $20 million to the GNWT. You can't get that number to just be mining or just be oil and gas. I suspect the reason for that is if we just included oil and gas, well we're all very aware that would just be Imperial Oil's royalties, which is protected information. You could kind of, in a backhanded way, look, considering they're onethird owned by the federal government, find that out. Right now, the federal government has ESTMA which shows some of the payments that mines are making, but that doesn't necessarily line up within the public accounts, and there's a number of reasons committee got quite into detail about what ESTMA was intended to do versus what the public accounts are intended to do.
I think there's a lot of work to be done in the transparency area. As I said, I encourage the department to take that request seriously.
I'll note that the Member's private bill does not actually touch on public transparency at all. It is able being able to share information with committee. Committee also ran into this issue when one of our mines went in to creditor protection and we wanted to know how much they owed the GNWT. That was not a figure we were able to get, let alone publicly. There was some of that in the court records so you could kind of glean some things.
Also, committee has asked for some of the historical data, specifically, you know, what happened with gold mining in Giant Mine and Con Mine. There's one report done by the federal government that kind of gleans at that, and it really says that the most significant income government got from gold mining was personal income tax from miners. And this kind of leads to trying to piece together how much we're getting from mining is a very difficult thing to do. I think the government is not doing a good job of reporting enough in this area.
And I want to say, I think there is some credit to industry that there is an argument to be made that when you look at the impact benefit agreements, that our diamond mines might be paying the most in royalties of really anywhere in Canada, but no one can say that with a fact because the impact benefit agreements are extremely confidential.
I understand why they're confidential. If you, you know, ask the Tlicho to see their impact benefit agreement, they would tell you to go away quite quickly and the mines would also say no, that would prejudice our negotiation with other Indigenous groups. Also impact benefit agreements are hard to quantify because sometimes they're jobs, sometimes they're contracts, sometimes they're cash payments. And what is reported in ESTMA doesn't really reflect that. But given the size of some of our development corporations and the success, it's clear that the mining industry up here is working very well with Indigenous governments, but I think it would be nice to get a little more information on where we're actually going with that.
I think as part of the ongoing review that the department is doing, one of the big questions is how Indigenous governments can get more; what does the role of equity play in this? I note that that would be another one of those questions.
I also want to comment that I think there is a lot of mistrust in this area. I think there's mistrust from some members of the Department of ITI. I think there is mistrust between some members in industry. I think there's mistrust between some Members on the committee which led to some divisiveness. And I think we really can't have a reasonable conversation about mining and whether the mines are paying their fair share without building some of that trust. So I have some hesitancy about passing a private Member's bill that may, you know, start off what is going to be one of the most important conversations we have in this legislature about royalties if it's going to cause further mistrust. I think the department has a lot of work to do make sure that the various parties can come together and find some common agreement. I think there is common agreement that we want mining to pay their fair share, we want a little more transparency, but we don't want to, you know, essentially tax mines out of existence or make ourselves less competitive. Those are all balancing acts but to piece together what a mine is actually paying, you would have to get into IBAs, which you can't do; you'd have to get into corporate income tax, which you can't do; you'd have to get into personal income tax and payroll tax, which you can kind of glean. You have to then get into royalties, which you can't do. Then you'd have to get into the "I know we charge them some land lease fees and other payments.” So it really is a complex endeavor and the data that is incomplete and can be shared with committee is very incomplete.
I believe that a principle here that committee could allow the Minister to share more is a fair principle, and I believe the Minister, you know, is not going to hand over one of the mine's corporate income tax returns. I just don't believe that's ever going to happen. I don't think you're going to have the Minister of ITI handing over that kind of information. But I think you could get a Minister who could maybe confirm whether the modeling they're using right now to talk about mines is accurate of what is actually been collected over the years.
I think you could get a Minister to give committee a little more information about when they are using actual data based on what we have received since devolution verse modeling based on other jurisdictions. I think there is a lot of work to be done in this area, and I'm hoping that this Member's private Member's bill, as well as our report on the royalty resource review, can allow us to have a conversation that makes sure that the people of the Northwest Territories, the mines, the industry, and all Members in this House, understand what we are asking the mines to pay and understand how much in royalties they're actually paying. That's a very hard thing to figure out right now with publiclyavailable data.
That is all. I thank the department for their work. I thank all of the people who submitted on this. A number of people from industry came forward. I thank the committee for their deliberations.
I think probably the best course of action is to hold off on passing this bill until we get a response from yesterday's motions regarding the resource royalty review and to see what the department's next steps are but obviously that would be up to the Member who introduced it. Thank you, Madam Chair.
Thank you, Member for Yellowknife North. Member for Great Slave.
Thank you, Madam Chair. Madam Chair, I spoke at length yesterday to my thoughts around the royalty regime and how the Department of ITI is carrying that out and the importance of our mining sector to our economy.
First off, I like efficiency. I like to spend my time on things that are worthwhile, that we can actually do something about. To me, this bill just seems to be here to sort of poke or inflame public perception of what is our biggest economic sector at a time when it is really struggling and they have shown to be good corporate citizens during the COVID pandemic.
It is if this bill were to be passed, the Minister would be under actually no obligation to share any further information than she already does and I would guess, given the confidentiality of sharing private company's financial statements with anyone, she's likely not to exercise her rights under this bill to share that information with us, which kind of makes me think this bill is irrelevant and pointless.
It is targeting a sector that is only one of our industries and only one sector that pays royalties to the Northwest Territories. There are other sectors that are not being included in this bill, including quarrying. If we're going to start asking that we get private information from private companies, then why aren't we doing that across the board to everybody that pays to the Northwest Territories? Instead, we are unfairly targeting one sector.
I do agree, there is a lot of mistrust and a lot of disagreement in this area; however, I think that pushing more bills towards forcing mining companies to do things and industry to do things is not a great way to start off the conversation, as Member Johnson stated. I think there's a lot of work that's going to be done and is being planned to be done by the Department of ITI, and to start off with doing this prematurely will get us off on the wrong foot. I will not support this bill. I think it is pointless. Thank you.
Thank you, Member for Great Slave. Member for Frame Lake.
Thanks, Madam Chair. Yeah, I do have some prepared comments. For the record, whenever Bill 29 was on the agenda for discussion at the Standing Committee on Economic Development and Environment, I declared a conflict of interest. I was not present for any discussion. The only exception was on September 15th, 2021, when I was invited by the committee to present on the bill and answer questions as part of the public hearing.
I will not discuss the bill directly or its merits as that is for another day. But I do wish to comment on parts of the committee report. The report states that some view the bill as "unaligned to other jurisdictions".
And that is true. What the bill does reflect is the concept of information sharing, including confidential information, that is at the foundation of consensus government. We even have a process convention where Regular MLAs can request confidential information and Cabinet can and does share confidential information with Regular MLAs, all in the interest of making betterinformed decisions. That's not how party politics works.
We also have an evolving relationship with Indigenous governments that includes sharing of confidential information and even codevelopment or codrafting of lands and resources legislation. So these two hallmarks of GNWT consensus government and an evolving relationship with Indigenous governments are what makes us different. And we should all be proud of that and incorporate that into how we review the mining fiscal regime. This is why Bill 29 is different than how things may be done elsewhere.
Concern was also expressed in the report that royalty information may be shared beyond financial and tax staff within the GNWT. This is what already exists now in the resource management legislation where royalty information can be shared within GNWT for "use in the development and evaluation of policy for the GNWT."
The current legislation allows royalty information to be made available to Cabinet and the public service but not Regular MLAs or Indigenous governments. This hardly seems fair in a consensus government.
The report states that some believe the bill does not support the mandate of the GNWT. The most relevant point from the priorities, and indeed the mandate of the 19th Assembly that we developed together back in November 2019, is the following, "adopt a benefit retention approach to economic development."
To me, this means finding ways to maximize benefits from development of onetime natural capital in the form of mineral resources. Our job as MLAs is try to find the right balance between competing rights and interests to maximize those benefits, including.
Revenues to public government in the form of royalties;
Profits to shareholders;
Jobs and contracts from resource development; and,
The distribution of benefits within the Northwest Territories and across generations.
This is exactly what we are trying to do with a procurement review and should be doing the same with the review of the Mining Fiscal Regime which requires informed decisions and access to information about royalties.
The only information now available from GNWT on resource royalties is the aggregate or total amount of mining and petroleum royalties and water fees on an annual basis. No information is available on how these royalties are calculated or the use of various allowances or depreciation. This makes our job trying to figure out ways to maximize benefits, including royalties, very difficult and more difficult than it needs to be.
The report states that royalty information is already available under the Federal Extractive Sector Transparency Measures Act. This is true, but the information presented in the ESTMA reports is selfreported with little to no oversight from the federal government. ESTMA data also varies greatly in terms of financial year dates, property sale by more than one mine, currency reported, and other factors. ESTMA data does not represent what GNWT actually receives, and there is no information on how royalties are calculated or why they may change from year to year.
Lastly, on the topic of duplication, on Monday of this week I tabled details of the ESTMA reports covering the producing mines and petroleum projects from 2016 to 2020, the period where GNWT has managed these resources under devolution. I attempted to reconcile the royalty payments reported as paid to GNWT in the ESTMA reports and the royalties received by GNWT as reported in the public accounts.
There is no duplication between ESTMA and public accounts. There would be no additional reporting required under Bill 29, as it only covers royalty information already in the possession of GNWT. And sorry, I need to go back.
On any given year, the figures are presented in ESTMA and when you look at the public accounts, they're out between anywhere between about $11 million and $54 million. So there is no duplication. It's not the same figures. You cannot reconcile them.
The report from the committee expressed concern that Bill 29 would only apply to the mining and petroleum sector and not other extractive sectors such as quarrying or forestry.
Quarrying revenues are already reported separately in the public accounts as revenues to the Department of Lands and, generally, amount to $82,000 to $173,000 per year, a mere fraction of what mining and petroleum royalties comprise in any given year.
There is no current active commercial forestry in the NWT; and, if there was, those revenues would likely be reported separately by ENR in the public accounts.
All this to say that other extractive industries' payments to GNWT are reported separately in the public accounts, but we only get an aggregate resource royalty amount from mining and petroleum right now.
It was noted in the report that Bill 29 would give the ITI Minister discretion to disclose royalty information to Regular MLAs and Indigenous governments. This is absolutely true. But right now, there is a legislative barrier preventing the Minister from disclosing any royalty information outside of Cabinet or the public service.
It's my view such discretion is appropriate and that the Minister would exercise this discretion judiciously but in ways that should allow for betterinformed mining fiscal regime review and ultimately better decisions around ways in which we can maximize benefits.
I know that at least three submissions on Bill 29 suggested changes but committee does not appear to have responded in any way to those recommendations. I was disappointed that committee did not express any views on these proposed changes and did not propose any amendments.
No recommendations for policy changes were made either, specifically with regard to information sharing during the mining fiscal review or more generally transparency and accountability regarding resource royalties and benefit retention.
I contrast this approach with what happened in the Standing Committee on Government Operations on another private Member's bill, a report that we dealt with yesterday, where specific recommendations were made to Cabinet, including proposals to deal with underlying issues.
In conclusion, I thank the committee for its work on the bill and look forward to more opportunities to discuss this bill, the mining fiscal regime review, greater transparency around resource royalty reporting, and benefit retention. Merci, Madam Chair.
Thank you, Member for Frame Lake. Member for Thebacha.
Thank you, Madam Chair. The reporting with resource royalties to Indigenous governments that signed on to devolution is a percentage of the entire royalty that is received by all resource development in the North, and it's per capita to all those who have signed on to devolution. So there is a way of looking at this in a different way, and the Indigenous governments would not be willing to share those kind of that kind of information. It's an agreement between the federal government and Indigenous governments when they signed on to devolution. And maybe that's one of the reasons why this kind of information is kept confidential, and rightfully so. They're the first peoples of the North, and they're First Nations, and I want to recognize my colleague to the left. I mean, he works very hard for his the mandate that he carries and might not always agree with him but, you know, I appreciate his view also. But I want to say that there are some agreements that when you are in when you come to an agreement with the federal government on devolution and agreed to go on with devolution in and in royalty sharing, those are private agreements with the Indigenous government and it was also signed off by the government of the NWT, but that was one of the things that was to be kept confidential, okay. So thank you, Madam Chair.
Thank you, Member. Thank you, committee. Do you agree that you have concluded consideration of Committee Report 1919(2), Report on Bill 29, Resource Royalty Information Disclosure Statute Amendment Act?
Agreed.
Thank you, committee. We have concluded consideration of Committee Report 1919(2), Report on Bill 29, Resource Royalty Information Disclosure Statute Amendment Act.
Committee, we've agreed to consider Bill 24, an Act to Amend the Revolving Funds Act. I will ask the Minister of Infrastructure to introduce the bill.
Thank you, Madam Chair. I'm here to introduce Bill 24, an Act to Amend the Revolving Funds Act.
The Revolving Funds Act establishes several revolving funds in operation in the Northwest Territories and sets out the authorized limits for those funds. One of these is the Petroleum Products Revolving Fund, through which the Government of the Northwest Territories funds the cost of purchasing, selling, and distributing petroleum products to consumers served by the Department of Infrastructure.
A feature of the Petroleum Funds Revolving Fund is the Petroleum Products Stabilization Fund, the limits of which have remained unchanged since 2005 while the cost of fuel has doubled, the volume of fuel sales has tripled. This proposed bill will amend the Revolving Funds Act to increase the Petroleum Products Stabilization Fund's maximum limit from $1 million to $3 million, which provides the department’s budget with greater protection from program losses.
The increase in the maximum limit will support the Government of the Northwest Territories’ ability to better manage events and inevitable changes in petroleum product costs and smooth changes to petroleum product prices for NWT communities.
It is important to note that the bill does not seek additional appropriations. It is simply intended to increase the capacity of the Stabilization Fund feature of the Revolving Fund.
The Standing Committee on Economic Development and Environment has indicated their support for the passage of Bill 24. I thank the standing committee and the public for their work in the review of the bill.
This concludes my opening remarks regarding Bill 24. I'm prepared to answer questions if Members have any. Thank you, Madam Chair.
Thank you, Minister. Would you like to bring witnesses into the Chamber.
SergeantatArms, please escort the witnesses into the Chamber.
Minister, please introduce your witnesses.
Thank you, Madam Chair. Madam Chair, to your left, I have John Vandenberg who is the assistant deputy minister for programs and services with Department of Infrastructure. And to your right, Allison Scott, who is manager of policy and planning, also with the Department of Infrastructure.
Thank you, welcome. I will now open the floor to general comments on Bill 24. Does committee agree that there are no comments. We can proceed to a clausebyclause review of the bill.
Committee, we will defer the bill number and title until after consideration of the clauses. Please turn to page 1 of the bill.
Clause 1, does the committee agree?
Agreed.
Clause 2, does the committee agree?
Agreed.
Committee, to the bill as a whole, does the committee agree that Bill 24, an Act to Amend the Revolving Funds Act is now ready for third reading?
Agreed.
Thank you, committee. Bill 24, an Act to Amend the Revolving Funds Act is now ready for third reading.
Does committee agree that this concludes our consideration of Bill 24, an Act to Amend the Revolving Funds Act?
Agreed.
Thank you, Minister, and thank you to your witnesses. SergeantatArms, please escort the witnesses from the Chamber.
Committee, we have agreed to consider Tabled Document 43719(2), Capital Estimates, 20222023. We will now consider the Northwest Territories Housing Corporation. Committee, the Northwest Territories Housing Corporation is included in the capital estimates as an information item, and the totals are not voteable. We will continue to review these estimates as we have for the previously considered departments; however, we will not vote on the totals. If Members have comments or questions, they can be raised at the appropriate time.
Does the Minister responsible for the Northwest Territories Housing Corporation wish to bring witnesses into the Chamber?
Yes, I would like to Madam Chair.
Thank you. SergeantatArms, please escort the witnesses to the Chamber.
Minister, will you please introduce your witnesses for the record.
Thank you, Madam Chair. To the left is president, Ms. Eleanor Young. And to the right vicepresident, Mr. Jim Martin.
Thank you, welcome. The committee has agreed to forego general comments. Does the committee agree to proceed to the detail in the tabled document?
Agreed.
Committee, the Northwest Territories Housing Corporation begins on page 67 with defer the corporation totals and review the estimates by activity summary beginning on page 68 with finance and infrastructure services with information items on page 69.
Are there any questions from Members? Who else wants to speak to this? I miss you guys if I don't get you all written down. All right, start with Member for Yellowknife North.
Thank you, Madam Chair. I understand that we fund the Housing Corporation differently, because they're an arm'slength corporation, through a grant through the Department of Finance. And then they pass the information, they give us a capital number, and they consistently give us $10,625,000. But I'll note that the revised estimates for last fiscal were actually $70 million, and the revised estimates for the year before that were actually $21 million. So that's good. That's good that they say they're going to spend $10 million, and then they spend a lot more on capital.
But can someone just explain to me why well, let me start with how do we get to this $10 million number; what is it actually budgeted as? Thank you.
Thank you, Member. Minister of Housing.
Thank you, Madam Chair. I'll defer the question over to vicepresident Jim Martin. Thank you.
Thank you. Mr. Martin.
Thank you, Madam Chair. The Housing Corporation goes through an annual business planning process, as with other GNWT departments, and in this process we look at a couple of factors. One is our revenues, our revenue sources, which is essentially comprised of GNWT funding, federal funding sources, as well as ownsource revenues such as our rent. So we take our available revenues into consideration, and then we look at what our planned expenditures are going to be. And with those resources, we cover off both O and M as well as capital. So we take into consideration what we have available within our fiscal framework for capital investment.
So for 20222023, our business planning review has identified $10.6 million towards capital. Thank you, Madam Chair.
Thank you. Member for Yellowknife North.
