Thank you Mr. Speaker. My question today is for the Minister of Finance, who is also the chair of the Financial Management Board. It goes back to the $34 million loan to Discovery Air. What I want to speak about today, Mr. Speaker, is the process that allowed this to happen. The way I look at it, if something like this happened in a province and the government made a decision to lend $34 million, that loan would come under some heavy scrutiny; there would be some accountability and there would be some oversight. In the case of the Government of the Northwest Territories, two Ministers show up to a meeting with Regular Members and tell us they lent $34 million and don’t have once ounce of information with them on two consecutive occasions. To me, that is wrong. That is why this is drawing so much fire from across the Territory, not just here in Yellowknife, but all across the Territory. I would like to begin by asking the chair of FMB, the Minister of Finance, if FMB makes the final decision on lending money from the Opportunities Fund, then what utility do the senior bureaucrats who form the society have?
Thank you, Mr. Ramsay. Honourable Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. The Opportunities Fund is under the oversight of the Minister of ITI, but this fund was structured very specifically back in 2003 in its passive form. The criteria set, the government made a decision to put deputies on there when we were approached with this unsolicited proposal and given the economic circumstance. At that point FMB decided to play an active role. In this case, we made the decisions right away, the committee and the appropriate departments did a lot of the groundwork in conjunction with the consultants that were brought in, but the decisions were made by the Financial Management Board in this case. Thank you.
The Opportunities Fund itself is a substantial amount of money, in the neighbourhood initially of $128 million. A decision like that by Cabinet to go from a passive investment vehicle to something which is very high risk, I think that’s a decision and a question that should have been asked of all Members of this House. There is a number of Members on this side of the House that have some good ideas about how to stimulate our own northern economy and perhaps even borrowing some of the money ourselves and looking at our own stimulus package. You know, we never had the chance, and like I said, the Minister showed up, and the reason I am asking the Minister of Finance this is because FMB made the decision, even though the Minister of ITI --and ITI oversees the Opportunities Fund; the decision was made by FMB, which is chaired by the Finance Minister. I would like to ask the Minister of Finance, did the society and the senior officials supply FMBS with a recommendation to pursue this risky investment and where is that recommendation, Mr. Speaker? Thank you.
There was extensive work done. The due diligence part was done through FMB -- FMBS sorry -- and the Department of Finance. There is an extensive file, there is some due diligence that we shared, there was ongoing negotiations, there is a file. We recognize that there is risk. We didn’t think it was a high enough risk to preclude us, given the economic circumstances, from not making the loan. We looked at the jobs, the economy, the value-added as well as the $13 million in interest payments. So, yes, there is a file, there was recommendations brought in, the assessment of the due diligence, the level of risk, all the revenue projections, the health of Discovery Air, and the final decision was made by FMB.
I would like to ask the Minister of Finance, the due diligence, as I have been told, was done by the company itself. I am not sure to what level FMB did its own due diligence on this, but the people I have talked to -- and myself, I am not an accountant, but looking at the financial statements, unaudited financial statements of that company dated October 31st of last year, they are $141 million in debt and I don’t know how their cashflow projections are going to enable them to pay any money back at the end of four years. They are in an awful lot of trouble, Mr. Speaker. Again, I want to find out from the Finance Minister, it sounds like this was a political decision and to heck with the evidence, and maybe the next phone call I will be making here is to the Auditor General of Canada.
Thank you, Mr. Ramsay. I didn’t hear a question there. The honourable Member for Frame Lake, Ms. Bisaro.
