Well, thanks, Mr. Chair. I appreciate that, but I'm not going to continue the debate here. I got the Minister on record, and now I'm going to hold our government to account for that. Thanks, Mr. Chair.
Mahsi. Any further comments in this section? Just to make a correction on the department. It's the Department of Infrastructure, capital investment expenditures, energy and strategic initiatives, not previously authorized, $51,227,000. Does committee agree?
Agreed.
Okay. The ones that are awake are talking. Department of Infrastructure, capital investment expenditures, total department, not previously authorized, negative $72,515,000. Does committee agree? Did you hear anything?
Agreed.
Thank you, committee. Do you agree that you have concluded consideration of Tabled Document 74719(2), Supplementary Estimates (Infrastructure Expenditures), No. 2, 20222023? Member for Frame Lake.
Thanks, Mr. Chair. I move that consideration of Tabled Document 74719(2), Supplementary Estimates (Infrastructure Expenditures), No. 2, 20222023, be now concluded and that Tabled Document 74719(2) be reported and recommended as ready for further consideration in formal session through the form of an appropriation bill. Thank you, Mr. Chair.
Mahsi. The motion is in order. To the motion. We'll just wait for everyone to get the motion in front of them.
Okay, the motion is in order. To the motion.
Question.
Question has been called. All those in favour? All those opposed? The motion is carried. Tabled Document 74719(2) will be reported as ready for consideration in formal session through the form of an appropriation bill.
Carried
Thank you, Minister, and thank you to the witnesses for appearing before us. Sergeantatarms, please escort the witnesses from the chamber. Mahsi.
Committee, we have agreed to consider Tabled Document 74819(2), Supplementary Estimates (Operations Expenditures), No. 2, 20222023. Does the Minister have any opening remarks?
Thank you, Mr. Chair. I am happy to present the Supplementary Estimates (Operations Expenditures), No. 2, 20222023. These supplementary estimates propose a total increase of $80.684 million of which $27.7 million will be offset by revenues from the Government of Canada.
Included in this amount is $22.4 million in changes in accounting treatment that was previously reported as work on behalf of others. These agreements include the following agreements:
$8 million to provide support for RCMP facilities, including maintenance, utilities, janitorial services, and minor capital repairs;
$4.6 million to support the Labour Market Development Agreement;
$2.5 million in support of the Mutual Aid Resources Sharing Agreement;
$2.1 million for road maintenance across the Northwest Territories; and
$1.6 million for the protection of caribou.
We are also proposing to support federally funded agreements, including:
$2.3 million in support of the Building Skills 4 Success Program in the Northwest Territories;
$1.4 million to support legal aid services under the agreement respecting access to justice services; and,
$1.4 million to support other access to justice services for Indigenous residents, families, and victims of crime.
These supplementary estimates include two significant items to support the government’s response to combat natural disasters:
$39.2 million for flood relief and recovery in the Town of Hay River and the K’atlodeeche First Nation; and
$5 million for additional fire suppression support during the 2022 fire season.
These supplementary estimates also propose the following items which are not offset by federal funding programs:
$5.3 million for the government’s share of costs related to the RCMP collective agreement; and
$2.7 million to support the retention and recruitment of health professionals.
That concludes my opening remarks, Mr. Chair. I'm happy to answer any questions committee may have.
Mahsi, Minister. Does the Minister of Finance wish to bring witnesses into the House?
Yes, Mr. Chair.
Mahsi. Sergeantatarms, please escort the witnesses into the chamber. Minister, please introduce your witnesses.
Thank you, Mr. Chair. Back again for a second time I have deputy minister of finance Bill MacKay, and the assistant deputy minister Terence Courtoreille.
I will now open the floor to general comments. Mr. O'Reilly.
Thanks, Mr. Chair. So can someone explain to me, in plain language, what this extra $22.4 million is all about? It's some sort of change in accounting treatment. Thanks, Mr. Chair.
Minister.
Thank you, Mr. Chair. Let me turn that to the deputy minister, please.
Deputy minister.
Thank you, Mr. Chair. So under the public service accounting rules, we have to treat certain transfers of funding from the federal government as either flow through arrangements or revenue and if it's we determine that this amount of money is actually revenues and needs to be treated as revenue because it goes into the department and then is used in their general appropriation to fund certain projects whereas if it was a flow through arrangement, it would just go from a government to a third party, including a territorial government and just go directly to another party. So they would just be basically flowing the money directly to a third party rather than including as part of the revenue. So we just have to change the accounting treatment of that funding. Thank you.
Mr. O'Reilly.
Thanks, Mr. Chair. And thanks for that. So do we have to go back in prior years and try to fix this? Thanks, Mr. Chair.
Minister.
No, Mr. Chair.
Mr. O'Reilly.
Mr. Chair, well good thing I'm not an accountant. So I guess the bottom line here is that we have to this money is now showing up on our books as money that we're spending, and we've got $22.4 million less to work with? I am confused at the best of times. Thanks, Mr. Chair.
Minister.
Thank you, Mr. Chair. So no, Mr. Chair, fortunately it doesn't work out that way. It really is just a way in which the funds are classified and where it's being reported upon. It's not a change to the funding arrangements or funding agreements that are in place but just a change in that it's being reported now as an appropriation whereas before, it was not. But it doesn't change money available to the government. It's just money that was previously being classified as money that was brought in to do work for others, federal government being probably the top of that list, as opposed to now wanting to show up elsewhere. It is maybe I should just start with this or just end with this, Mr. Chair. It's money that's fully offset from third parties. So whether it's money that we say is on behalf of others or that we now show as a different under a different classification to work on behalf of, that's really all that's happening here. So no actual changes to the financial standing of the government.
Did you get all of that, Mr. O'Reilly?
Mr. Chair, actually believe it or not, I now understand it. There's an offsetting amount that's coming in as revenue from the federal government, and we just have to show the money going out. And that's what this is about. So thank you for that explanation late on a Tuesday night.
So there's some money in here for flood relief and I, of course, support that, but is this the end of it or can we expect to see more funding in future supplementary appropriations just for flood relief? And my next one will be about whether there's anything in here for planning to in terms of longer term mitigation. But let's just deal with is there more money coming in a future sup for relief? Thanks.
Minister.
Thank you, Mr. Chair. So the money that is being sought for appropriation here is for up to 20222023 or, well, for this year in terms of what we are anticipating. Certainly, obviously can't see into the future of what might happen in the spring and would certainly note that this doesn't account for whatever amounts we may then ultimately get by the federal government under the disaster assistance policy. We certainly are hopeful of an advance and then ultimately hopeful to see a full 90 percent coverage. But neither the first of those might arrive this fiscal but it may well be that it's not until next, and the full amount is unlikely to arrive this or next fiscal. Thank you, Mr. Chair.
Mr. O'Reilly.
Thanks. Yeah, I think there's going to be a cash flow problem here. But can someone tell me where we stand at with the supplementary reserve for the operations side for 20222023? Thanks, Mr. Chair.
Minister.
Thank you, Mr. Chair. I certainly can. So we start off the year just to remind the House, we start off the year with the $35 million supplementary reserve, and we right now are in a deficit of just over $42 million. The main reason for that is as a result of the costs of the flood for 2022, and that is yes, that is a significant reason for that overage. Thank you, Mr. Chair.
Mr. O'Reilly.
Mr. Chair, so how do we make up that $42 million deficit? Is it shortterm borrowing that we have to incur to cover that and yeah, I'll start there. Thanks, Mr. Chair.
Minister.
Thank you, Mr. Chair. So there will be well, depending on what the surplus our operating surplus position is, we were, you may recall, forecasting at one point a fairly significant operating surplus. So that is the first piece that it gets taken from, is what would have been an operating surplus will now likely not be and anything beyond that would increase our debt. We'd be taking on debt in order to ensure that we can meet those cash obligations. Thank you, Mr. Chair.
Mr. O'Reilly.
Thank you for that. So what, if any, lessons have we learned, then, in terms of the size of the supplementary reserve? And I recognize that we wouldn't expect a Hay River flood every year but clearly with the climate crisis on us and so on, we need to find a way to set aside some more money to deal with this kind of stuff that's more likely to happen. So how are we going to try to manage this into the future? Thanks, Mr. Chair.
Minister.
Thank you, Mr. Chair. I mean, I and I appreciate the comment again. We certainly don't want to see a flood impact that's the size of $100 million as we did this year. Certainly I mentioned the year before, while devastating in the Deh Cho region and the Nahendeh region, the costs of that flood in 2021 were nowhere near what this one was. So there's by no means any certainty that we're going to be year over year seeing $100 million for what appear to be climate change impacts. That said, I take the point it is that, you know, there may need to be some looking at where this what kind of reserve is required. This particular year, this it was part of the fiscal strategy early days of how we might mitigate and how we might plan to have reserves and what that would like like as the overall fiscal strategy for four years. Things, obviously, change a lot over the course of four years notwithstanding a pandemic. So, again, point well taken and probably well made given that we are kind of going into our last main estimates but then planning does begin almost immediately thereafter for what the government would look like in the future. So, you know, point taken and thoughts on that can begin to crystallize. Thank you, Mr. Chair.
Mr. O'Reilly.
Thanks, Mr. Chair. It's one last one maybe, and the Minister already touched on this, but for I guess 20232024 oh, well it looks like for 20222023 we've gone now from an operating surplus to probably an operating deficit. How is that going to be in compliance with the fiscal responsibility policy in light of the capital estimates that are also before the House? Thanks, Mr. Chair.
Minister.
Thank you, Mr. Chair. So there is within the fiscal responsibility policy, a two year period so it's not necessary it doesn't line up there is kind of a grace period where if there is an event such as, you know, what we all hope to be a once in a lifetime flood that in those circumstances, we would see that you do get a bit of room. We get these two years where the deficit that we're running now we can catch up on. And so with that also said, the operating deficits, the surpluses aren't necessarily we need to actually see where the actuals land to see just what level of compliance we have with the fiscal responsibility policy, and that is that is information that we'll be in a position to provide within the next couple of months. Thank you, Mr. Chair.
