Thank you very much, Mr. Speaker. Madam Chair, I move that this committee defer further consideration of Tabled Document 97319(2), 20242025 Capital Estimates, at this time. Thank you, Madam Chair.
Thank you. The motion is in order. To the motion?
Question.
Question has been called. All those in favour? All those opposed? Abstentions? The motion is carried.
Carried
Thank you, committee, and thank you, Minister. We're going to take a tenminute break, and then we are going to come back because we have our supplementary appropriations. Yes, we're going to take a tenminute break, and then we've got you guys all want to talk on it? Then we'll be here longer. Unless you want to do a team talk and have one team talker.
SHORT RECESS
Calling Committee of the Whole back to order. Committee, we've agreed to consider Tabled Document 97419(2), Supplementary Estimates (Operations Expenditures), No. 3, 20232024. Does the Minister of Finance have any opening remarks?
Thank you. Yes, I do, Madam Chair. I am here to present Supplementary Estimates (Operations Expenditures), No. 3, 20232024. These supplementary estimates propose a total increase of $120 million to the shortterm borrowing authorization limit. The primary purpose of this increase is to address and respond to the unforeseen emergency costs as a result of wildfire activity this year.
That concludes my opening remarks. I am happy to answer questions, Madam Chair.
Thank you, Minister. Do you wish to bring witnesses into the Chamber?
Sergeantatarms, please escort the witness to the Chamber.
Would the Minister please introduce her witnesses.
Thank you, Madam Chair. So on my left, deputy minister of finance Bill MacKay and, on my right, Julie Mujcin is the comptroller general.
Welcome. Members, can we forego general comments?
Agreed.
Does the committee agree to proceed to the detail contained in the tabled document?
Agreed.
Committee, we will begin on page 2 with the Department of Finance.
Supplementary Estimates (Operations Expenditures), No. 3, 20232024, Department of Finance, revised borrowing authorization, $120 million. Does committee agree?
Agreed.
Thank you. Committee, do you agree that you have concluded consideration of Tabled Document 97419(2)? Member for Kam Lake.
Thank you very much, Madam Chair. Madam Chair, so I'm wondering if the Minister can explain in greater detail why we have a need for like, this is different than our normal sups that we get. Normally when we get a sup, it's to pay for something. And this one here, it expands our increases our borrowing limit, and so I'm wondering if the Minister can speak to, in more detail for the public, what that is, why it's needed, and then I'll have more questions after that, please, as a start. Thank you.
Thank you, Member. Minister.
Thank you, Madam Chair. So, Madam Chair, when the main estimates are tabled, the focus of the attention generally is predominantly on the ability or the authority to spend the money that we have in that budget. But another item that's in there, and it certainly does get some attention although perhaps not quite as much, is the sheet that includes the authority to borrow. And it's that number now that we're looking to have amended by way of this supplementary appropriation.
So you have the authority to spend, which is the department by department budget lines that we all look at and that are as you typically see as a supplementary appropriation. If a department, for example ECC, needs additional money to support their wildfire fighting efforts, that goes in as their ability or authority to spend. However, in order for the government to actually spend money, they have to have the cash on hand. The timing on when we have cash on hand depends on a few things.
It depends, for example, on the timing of receiving taxation revenues and, in particular, the timing of receiving revenues from the federal government, which I think most folks are aware that is the dominant amount of our budget in revenues does come from one form or another of federal transfer. We don't necessarily get those as one lump sum. We get the territorial formula of financing as a lump sum, but the rest does come in over the course of the year at different times. And at present, because of the significant outlay of additional cash over the course of this summer, significantly because of the wildfires but certainly not exclusively, there's been the low water levels have also resulted in a higher expenditures, all of those things combined put us into a situation where we are concerned that, particularly with an election and the scheduling changes around when the Assembly's sitting, we were expecting that there's a reasonable possibility of running into a state where the government won't be able to pay with cash without increasing the shortterm borrowing. So the shortterm borrowing just gives that ability of flexibility to increase the amount of cash available to us if needed. And let me stop there so that the clock doesn't run down further. Thank you.
Thank you. Member for Kam Lake.
Yeah, thank you very much, Madam Chair. Madam Chair, and I know that this has been a very difficult Assembly and, as such, that's reflected, I suppose, in the requests for increases to the borrowing limit. And so in the life of this Assembly, this is our third now request for increases to the borrowing limit, and I'm wondering what is this government going to do in order for us to see, or for the next Assembly to see, more money in surpluses and to be able to kind of be a little bit more prepared for additional dollars in emergencies because we know that we're going to see more in the years to come. Thank you.
Thank you. Minister.
Thank you, Madam Chair. So let me first start with respect to the idea of there being about the borrowing limit, because that is a term that generally is associated to the federallyimposed borrowing limit of $1.8 billion. This is different. So we're not seeking any change to the federallyimposed borrowing limit and, in fact, what we did when we changed the Fiscal Responsibility Policy is rather than kind of you would see over the course of many years, and long before this current government, you know, the Assembly would see sort of creep up towards whatever that federallyimposed borrowing limit might be and then see the federallyimposed limit go up. With the current or the most recent changes to the FRP, what we've imposed is our own internal limit to say that if we hit that line that we will at that point you know, we are obligating ourselves to take steps to engage the federal government and discuss where we're at in that borrowing limit. We are not at that internal line. We are coming up to that line, but we are not at the line. We've kept ourselves under it intentionally. We're hoping, again, to not even need to borrow what is here, but we certainly want to not be in a position of having to come back at the very beginning of the 20th Assembly with a group of new Members and to have to go through this process. We want to have this cushion now to be able to get through to the next properly constituted Assembly and sitting of that Assembly.
Now, the second part of the question being around, you know, what are we doing longer term in the fiscal update, Madam Chair.
I spoke to the medium-term outlook. The medium-term outlook, of course, is you know, as we said, does still provide us stability and does bring us back to a point where we actually create further room between our total debt and the borrowing limit. The current year was particularly significant. Last year, there were also some fairly significant cash outlays because of the summer wildfire and floods. This year was just particularly extraordinary. So, you know, again, I can't predict in the future what next summer might be. Certainly hopeful that it will not be anywhere on the scale of present. And if that's the case, then we are projecting ongoing operating surpluses and then not requiring any further adjustments to the borrowing plan beyond what would be in the main estimates of next year. The question is whether and when to pay down total debt, and if that's something that the Government of the Northwest Territories does want to prioritize is probably a discussion for the 20th Assembly at this point. Thank you.
Thank you. Member for Kam Lake.
Thank you very much, Madam Chair. The Minister spoke briefly to conversations with the federal government, and I'm wondering if some conversations with the federal government are occurring and hopefully gaining some success in giving us some advanced payments on some of the dollars that we've spent that they know that they're going to be reimbursing us down the road. I know that it sometimes takes years for those payments to catch up. And are these conversations progressing, and would those dollars actually help this situation that we find ourselves in now so that our purse strings aren't quite so tight? Thank you.
Thank you, Member. Minister.
Thank you, Madam Chair. First, apologies to the translators. I think I'm speaking quickly.
Yes, so the short answer is most definitely there have been conversations with the federal government, including from the Premier's office but also from other Ministers' offices, including in particular ECC as our EMO lead, and their counterpart at public safety. The federal government is aware of the challenges created by this huge outlay of cash without an advance on what will otherwise be at least some amount of funding coming from the federal government to help offset those costs. The trick is I don't know when and although the response has been positive and, really, the federal government invited us to put in a request for an advance. So that, I would suggest, indicates that they are well aware that we need it and that we need it to happen quickly.
For 2022's flood season, we received a 50 percent advance, but we only got it in this fiscal year. So, again, you know, we are quite hopeful right now and, you know, optimistic that we will see an advance on the current wildfire season in this fiscal year, but I would be remiss in this role to say that's good enough and we'll see what happens. So that is why we are before the Assembly saying that the borrowing authorization, that's what gives us the appropriate cushion and legal authority to borrow short term if we need so that we can pay venders and pay staff and pay our bills in cash. Thank you.
Thank you, Minister. Member for Kam Lake.
Thank you, Madam Chair. I'm wondering if the Minister can speak to without the approval of the supplementary appropriation and the increase to shortterm borrowing limit will the GNWT be in compliance with the FAA? Thank you.
Thank you, Member. Minister.
Thank you, Madam Chair. Well, it would depend. And it would depend, again, if I mean, and, really, there are other steps that we could take to ensure that we remain in compliance. If the advance from the federal government were to come in, if other anticipated transfer amounts come in, and that offsets, you know, the outlays of cash that are going out by bringing in more, then we may not find ourselves in as difficult a position. Right now, that's our projection is that over the course of this fall, we will need something extra and if we didn't have that something extra then, yes, we wind up if we take on more borrowing not authorized by the Appropriations Act, then that puts out of compliance.
To avoid going out of compliance, we could simply stop spending, which means putting holds on our payments and, you know, or other project delays, which is also not a situation that we want to find ourselves in. Thank you.
Thank you. Member for Kam Lake. Short question.
A short question. Would the approval of this create room to pay for additional resident and business supports for people who are evacuated from the territory? Thank you.
Thank you. Minister.
No, Madam Chair, this is not new money to spend. This is the ability and the authority to borrow money to pay the bills that we already have. Thank you.
Thank you, Minister. Are there any further questions?
Supplementary Estimates (Operations Expenditures), No. 3, 20232024, Department of Finance revised borrowing authorization, $120 million. Does committee agree?
Agreed.
Thank you, committee. Do you agree that you have concluded consideration of Tabled Document 97419(2), Supplementary Estimates (Operations Expenditures), No. 3, 20232024? Ms. Cleveland.
