Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, typically if the vehicle comes in under $50,000, then we wouldn't necessarily have to see it coming in here. That's the threshold for having to come in on a capital -- as a capital project or a capital item. So with the cost of vehicles rising, and particularly if they're specialized vehicles like the ambulance in Behchoko that was in one of the earlier items here today, then that does need to come in through an infrastructure budget item. I hope that answers the question. Thank you.
Thank you. I'm going to go to the Member from Inuvik Boot Lake.
Thank you, Mr. Chair. So are these eight vehicles then being purchased here, are they specialized vehicles or vehicles that just weren't budgeted for in the capital budget and now are coming through in a supplemental? Thank you.
Thank you. I'll go to the Minister.
Thank you, Mr. Chair. So these eight items were budgeted originally under the operations budget. This is where seeing going from Fund 1 to Fund 2 is part of just moving that they were -- the amount that we're putting in to the infrastructure operations part -- or the infrastructure budget here is coming off of the operations budget to reflect that. So they're just -- they're moving in terms of the accounting, how they're being accounted -- considered in the accounting. Thank you.
Thank you. I'm going to go to the Member from Inuvik Boot Lake.
Thank you, Mr. Chair. So just, again, clarity, so they were budgeted in operations, they weren't purchased through operations, therefore they brought them through a supplemental?
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, again, it's -- perhaps let me see if the deputy minister wants to take a go at sort of explaining this end of it. Thank you.
Thank you. I'll go to the deputy minister.
Thank you, Mr. Chair. So as the Minister mentioned, there's a capital threshold that the OAG sets for -- as $50,000. So any capital asset that you purchased that's over $50,000 has to be accounted for in Fund 2 as an infrastructure acquisition. So in this case, the cost of the vehicles turned out to be more than $50,000 so they have to move it from the operations budget to the capital budget, so from Fund 1 to Fund 2. So that's -- there's a supplementary appropriation here and then a negative supplementary appropriation on the operations side. Thank you.
Thank you. I'm going to go to the Member from Inuvik Boot Lake.
Thank you for that clarification. Nothing further, Mr. Chair.
Thank you. Are there any further questions from Members? Seeing no further questions.
Supplementary Estimates (Infrastructure Expenditures), No. 3, 2024-2025, Department of Infrastructure, capital investment expenditures, asset management, not previously authorized, $3,086,000. Does the committee agree?
Agreed.
Thank you. Supplementary Estimates (Infrastructure Expenditures), No. 3, 2024-2025, Department of Infrastructure, capital investment expenditures, programs and services, not previously authorized, $120,000. Are there any questions? Seeing no further questions.
Supplementary Estimates (Infrastructure Expenditures), No. 3, 2024-2025, Department of Infrastructure, capital investment expenditures, programs and services, not previously authorized, $120,000. Does the committee agree?
Agreed.
Supplementary Estimates (Infrastructure Expenditures), No. 3, 2024-2025, Department of Infrastructure, capital investments expenditures, total department not previously authorized, $3,206,000. Are there any questions? Seeing no further questions.
Supplementary Estimates (Infrastructure Expenditures), No. 3, 2024-2025, Department of Infrastructure, capital investment expenditures, total department not previously authorized, $3,206,000. Does the committee agree?
Agreed.
Members, there is a schedule on page 10 that details the impact of capital estimates. This schedule is not a voteable item and is included as information only. Are there any questions on this schedule? Seeing no further questions.
As this is not a voteable item, we will continue on. Committee, do you agree that you have concluded consideration of Tabled Document 278-20(1), Supplementary Estimates (Infrastructure Expenditures), No. 3, 2024-2025? Does the committee agree?
Agreed.
Thank you. Member from Inuvik Boot Lake.
Thank you, Mr. Chair. Mr. Chair, I move that consideration of Tabled Document 278-20(1), Supplementary Estimates (Infrastructure Expenditures), No. 3, 2024-2025, be now concluded and that Tabled Document 278-20(1) be reported and recommended as ready for further consideration in formal session through the form of an appropriation bill. Thank you, Mr. Chair.
Thank you. The motion is in order. To the motion.
Question.
Question. Question has been called. All those in favour? All those opposed? The motion is carried.
---Carried
Tabled Document 278-20(1), Supplementary Estimates (Infrastructure Expenditures) No. 3, 2024-2025, will be reported as ready for consideration in formal session through the form of an appropriation bill.
Thank you, Minister, and thank you to the witnesses for appearing before us. Sergeant-at-arms, please escort the witnesses from the chambers.
Consideration in Committee of the Whole of bills and other matters. Tabled Document 279-20(1), Supplementary Estimates (Operations Expenditures), No. 2, 2024-2025, February 7, 2025.
Committee, we have agreed to consider Tabled Document 279-20(1), Supplementary Estimates (Operations Expenditures), No. 2, 2024-2025. Does the Minister of Finance have any opening remarks?
Thank you, Mr. Chair. Yes, Mr. Chair, briefly. I am here to present Tabled Document 279-20(1), Supplementary Estimates (Operations Expenditures), No. 2, 2024-2025. This document proposes a total appropriation increase of $74.725 million comprised of the following items:
$16.9 million to provide funding to address the Marine Transportation Services projected deficit for 2024-2025;
$14.7 million to support the increase in road construction and maintenance costs, community support for fuel resupply, and utilities and lease costs;
$14.5 million to support health care operations in the NWT; and,
$12 million to provide funding to reduce the impact of costs associated with the NTPC proposed rate increases.
Additionally, we are proposing the following supplementary expenditures, which are supported by federally funded agreements, including:
$5.4 million to provide funding for various health and social services cost share agreements;
2.3 million to provide funding for the Canada-Northwest Territories National School Food Program Agreement 2024 to 2027;
$1.5 million to provide funding for the section 11 conservation agreement with Environment and Climate Change Canada; and,
$1 million to provide funding in support of the Northwest Territories Wraparound Service Agreement.
These supplementary estimates also propose an adjustment of $50 million to the authorized short-term borrowing limit established under the Appropriation Act (Operations Expenditures), 2024-2025.
These supplementary estimates will ensure the Government of the Northwest Territories is in compliance with the Financial Management Act by reflecting the borrowing limit for debt less than 365 days for the 2024-2025 fiscal year at $750 million. The request is the result of increased fiscal pressures, including unforeseen expenditures, as a result of low-water and other climate change impacts, as well as continued operational pressures within the health care systems.
That concludes my opening remarks. I would be happy to answer questions that Members may have, Mr. Chair. Thank you.
Thank you, Minister. Does the Minister of Finance wish to bring in witnesses into the House?
Please, Mr. Chair.
Does the committee agree?
Agreed.
Thank you. Sergeant-at-arms, please escort the witnesses into the chambers. Would the Minister please introduce her witnesses.
Back again, Mr. Chair, we have on my left deputy minister of finance Bill MacKay, and on my right Mandi Bolstad, the deputy secretary to the financial management board.
Thank you. I will now open the floor for general comments on the Supplementary Estimates (Operations Expenditures). I'm going to go to the Member from Range Lake.
Thank you, Mr. Chair. The supplementary appropriations are rarely a subject of significant debate in the House because they are -- you know, they're required to address money that's already been spent. But I think given the uncertain times we're in, given that there's a push for fiscal sustainability and fiscal discipline especially so we have resources to invest in the right priorities, I think it's appropriate to kind of take a look -- a deep -- a more careful look at how money's being spent. And there's some -- everything in here is very important. I'll be clear on that. And no one would question things like Metis health benefits and chemotherapy drugs and things like that. But when you see the cost overruns of these things, they're significant, and you have to wonder is there a way we could have planned for this more prudently so these wouldn't be such -- you know, wouldn't be significant amounts of money, and also is there a way to apply more fiscal discipline to the management decisions around how some of these funds are being spent. And, you know, we shouldn't be the -- we shouldn't be in a situation where because, typically, we don't have many questions and it is almost like a rubber stamping exercise to approve supplementary estimates that you could just do whatever you need to and they're going to get approved anyway even if you go a bit over. So I think in this case in particular, I certainly will be having more questions as we go through the document. But until we have -- until we start to see some progress on balanced budgets, we do need to take a closer eye here.
My question for the Minister is what is the impact of this on the supplementary reserve that's established by the main estimates? Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. So, Mr. Chair, we do have a supplementary reserve that we set at $35 million and, obviously, this one alone would certainly put us over that. We do -- sorry, Mr. Chair, I'm just trying to see where -- anyways, it is obviously going to put us over that we -- oh, there we are. Thank you.
So, Mr. Chair, the net impact here, we are going to end up at a total impact of $64,717 million in this case, obviously significantly beyond a $35 million target that we would have set. And, yes, I guess that's the answer to start, Mr. Chair.
Thank you. I'm going to go to the Member from Range Lake.
Thank you. And this is the Supplementary Appropriation No. 2, the impact -- I mean, I have the numbers here. But the impact of Supplementary Appropriation No. 1 which we already proved was 160 -- a little over $160 million. So the net impact of all this -- and members of the public can find this on the back of the document but it's $188 million -- just over $188 million in the red. So is this -- why -- I mean, and these costs, some of them are certainly things you can't control due to fire and things like that but some -- again, some of these costs I think reflect -- could reflect something else. They could reflect, you know, controls -- or sustainability controls, let's call them, that aren't being applied or aren't being followed but, you know, it seems like this government either has a message that's spend no money, like a flat out freeze, which we see time to time, or it's spend as normal. So there's got to be a more balanced way that can get these supplementary estimates under control. So is there -- and not counting new revenue. I always want to see new revenue, but is there a way that the Minister can think of, or the Minister's working on, to find a way to limit supplementary appropriations to the reserve for example, or some other mechanism, that would better align expenditures to -- or better align the operations of the GNWT to the main estimates, especially around health. Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, I appreciate that question. So first just -- I know there's been sort of chatter, if you will, around the idea of a freeze. So we did put out that there would be some -- we wanted departments to engage in fiscal restraint which is not the same necessarily as a freeze and that was -- is likely to probably arise in the discussions over the course of today. But the idea is as we come to the idea of the fiscal year, we are saying -- you know, departments do have budgets. If they are under a certain amount then they can -- you know, for example, if there's an unfunded position and there is funding there, they may be able to utilize funding if it's not restricted. We're saying, look, don't utilize funding. It's not going to lapse. You're not losing your budgets, which sometimes is a narrative that gets out there that people can just use this money that -- before it gets used up, and we're trying to impose more of a rigor around, you know, ensuring that money is, in fact, being used for what this Assembly is approving it for, so for ones, but there's certainly not a freeze per se. As far as mechanisms, so that is -- for starters, that's why we impose the $35 million as a target for the supplementary reserve fully anticipating that we are likely to go over that in the course of any given year because a lot happens in the course of a year that you cannot budget for or that you don't necessarily know what the actual costs may be. The vehicles that we saw were an example of that -- sorry, in the last -- in the infrastructure supplementary appropriation that we just dealt with. So that is one part of it.
Another part, Mr. Chair, is the processes that take place at the financial management board table where you have a process whereby every department who wants to come and says, look, I need a supplementary estimate, has to go through a process of analysis. It includes determining whether or not it's even appropriate, whether it falls within the definition of something that could reasonably have been considered an unforeseen expense. Departments are often turned away and told, no, you're going to have to come back through the budgeting process, the usual process, because what you're asking for isn't unexpected, didn't arise unexpectedly, isn't urgent or essential at this moment. So there certainly are times where they get turned away. So, again, there's that analysis that takes place there.
Last, but not least, Mr. Chair, with respect to health specifically, again, you know, there's significant -- this is frankly one of the most significant fiscal challenges that we are facing. It's such an essential area of services that we provide to the public, and it is 30 percent of our budget, and there are continuous cost overages and significant supplementary estimates here.
So work happening there is two-fold. We do have the health system sustainability unit that's resting within the executive and Indigenous affairs, as well as the public administrator who is doing significant work to try to determine what those right sizing of budgets are, and the two of them will, I'm confident, be coming forward with some suggestions and proposals of how to better budget in a way that provides the services without ending up, for example, here in the cost overage. Thank you
Thank you. I'm going to go to the Member from Range Lake.
Thank you, Mr. Chair. When is the last time the supplementary reserve was not exceeded from what it was initially budgeted at in the mains? Like, is there any time in -- that the officials probably -- because I don't expect the Minister to know this. But is there any time that it hasn't -- that it's been kept to what we've -- what the ledge has voted it at? So right now it's $35 million. Has there ever been a time when supplementary expenditures have been kept underneath the limit that's set by the main estimates? Thank you.
Thank you. I'll go to the Minister.
Thank you, madam -- sorry, not Madam Chair; I'm so used to the last government. Sorry, Mr. Chair. No, I mean those of us sitting here haven't necessarily occupied these positions, any of us, for, you know, ten years of history, but to the best of all of our knowledge, it does -- we do tend to typically go over. Again, I will be frank, Mr. Chair, I have often asked why we put it at 35, and I'm promptly reminded that raising it doesn't necessarily create the kind of fiscal barriers that we are discussing now. So I'm happy to go back and ask the department if they can look back in time. But, again, our knowledge right now is it's certainly not in the last sort of five or six years.
Thank you. I'm going to go to the Member from Range Lake.
Thank you. No, I appreciate the offer from the Minister but I don't -- I think the point is made. This is -- and it's not like -- I get it if it was like, well, we went to $40 million and we budgeted for $35 million, or $38 million or $50 million or even $60 million, but it's $188 million, and we're suppose -- we budgeted $35, right, so like this is -- I think -- you got to think of what the average reader who is looking at these documents sees and thinks about our financial process. And, again, when they hear we've got to belt tighten because we can't -- our expenditures are exceeding our revenues and they see us blowing past our supplementary reserve, maybe it's time to rethink how we budget that supplementary reserve so these don't look like shocks. Because it's fine to say all the smart people in this room understand this process, and it's -- and we have all the in-camera meetings at committee which, again, the public doesn't get to see to really tease this information out, so we need to do a better job of explaining this. And we also, quite frankly, need a plan to cover expenditures. We'll have more discussions as we go on through this process, but this is not a blank cheque for supplementary appropriations, not this time. Thank you, Mr. Chair.
