Thank you, Mr. Speaker. My questions are for the Premier with regard to the Deh Cho Bridge Project. We are approaching our last year of the 16th Assembly. Here we are proposing to take on a considerable amount of debt for the Deh Cho Bridge Project. I am wondering what are the implications and the consequences to the 17th Assembly of carrying this much debt on to their backs in the future. Thank you.
Thank you, Mr. Bromley. The honourable Premier, Mr. Roland.
Thank you, Mr. Speaker. The issue of the Deh Cho Bridge Project, and assuming the debt has come to this session for that purpose, is one where we had to initiate additional discussions with the federal government to work with us around our borrowing limit. With that in place, there will be no further impact on this government or the next government. Of course, the next government will have to set its own fiscal strategy as to how it goes about investing and spending of the dollars that are available. Thank you.
Mr. Speaker, I am not sure I quite buy that. I am just wondering if we would have been able to take on a project like this if we had already been carrying this much debt and does that not get through to the Premier in terms of what some of the possible limitations he might consider as consequences of this project.
Mr. Speaker, the whole Deh Cho Bridge Project, the Deh Cho Bridge Corporation, that agreement that was signed, all contemplated of trying to have this debt outside of our accounting structures within the abilities that we have already set or the borrowing limit set by the federal government. The debt limit was taken into consideration in trying to come up with ways of trying to get the large infrastructure projects of this nature off the ground. That is why this process was taken.
Previous governments have looked at the P3 initiative as well. Unfortunately, as we find ourselves now, many of the pieces that were laid before us and put in place by a previous Assembly, we have had to go in and restructure and take over the control of that. By taking control of that, we will have to assume that debt. That will affect future governments in the sense of available debt and the total debt limit that is available for borrowing of future governments. Thank you.
Mr. Speaker, I am glad the Premier appreciates or is a little more to it than he inferred in his first response there. I think there is a huge implication of carrying this much debt through messing up as we have done.
I have heard the government say, Mr. Speaker, that we are going to service this debt no problem, with less than 1 percent of our revenues and so on. Does that mean that we are going to continue to pay this debt down that we are now carrying on our books at this low rate so that we are going to be carrying the debt for 35 years as we slowly pay it down and be restricted in what we can take on, the flexibility we have fiscally for a long period of time? Thank you, Mr. Speaker.
Mr. Speaker, before I get into the financial arrangements made by the lenders and the Deh Cho Bridge Corporation, with input from quite a number of sources, let’s be clear. There was a project put in place by a previous government that had a concession agreement that flowed into this government. The Deh Cho Bridge Act was put in place even prior to that. Members may throw about the words “messed up” and so on. The simple fact is that we have had to step in because of contractor issues, because of capacity issues of this project.
Now, if all of the pieces fell together as they were initially identified, we would have Members standing up when the ribbon cutting ceremony happened, talking about the best thing the Government of the Northwest Territories ever got into. Unfortunately, we didn’t get there. We as the Government of the Northwest Territories have had to now step in, as this process clearly identifies, of having to assume that debt. By assuming the debt and by looking at what we have to face as the Government of the Northwest Territories, the Member is correct; there are future, in a sense, implications about available borrowing room. Every government has to weigh that if they will borrow for projects. Our Minister of Finance, Mr. Miltenberger, laid out in his budget process the fiscal strategy of going back to a more typical capital program with the Government of the Northwest Territories and that would be $75 million on an annual basis.
So as we go forward on this project we do have to look at the impacts of such an agreement, what they mean to us going forward, what it means in this environment, ensuring that we do not burden the future governments with the decisions we have.
As we’ve had to step into this project, the financing agreement that’s been put in place by the Deh Cho Bridge Corporation with the lenders has a 35-year payment plan to it, if that’s the proper terminology to use. That plan can be paid out depending on, for example, the real bond market that’s out there and how much of a penalty that’s potentially put on to that payout. There are going to have to be some things that we’ll have to look at. Right now we would be assuming or making huge assumptions as to what future bonds may be.
Thank you, Mr. Roland. Final supplementary, Mr. Bromley.
I appreciate those comments from the Premier. I personally believe there are huge implications to the services and infrastructure that this government can and will be able to contemplate because of this. My last question is: what are the implications to the government if we decline this proposed appropriation bill for $165 million?
As Members are aware and as we have briefed Members, the need for this session is based on the lenders requesting the GNWT assume the debt. If we do not assume the debt, then there will be a make-whole clause that would kick in. There would be a penalty on top of the repayment of the debt. We would have a project that is out of the water but yet to be complete. So it will cost additional monies on the Government of the Northwest Territories and without assuming this process and having the federal government work with us as they have committed to on debt relief, in future years we would have to do what some Members have talked about in our meetings about having to squeeze our belts and reduce our expenditures to afford this in future years. The steps we have taken provide us the necessary tools so that will not have to happen.
Thank you, Mr. Roland. The honourable Member for Kam Lake, Mr. Ramsay.
