Thank you, Mr. Speaker. I suppose when a community corporation gets into a difficult situation, there are always options that the government could look at. In the case of Whale Cove that the Member knows very well, the community was very willing to work with the department to come up with a recovery plan for their deficit.
Mr. Speaker, the Iqaluit situation was reviewed back in 1988 and again in 1989, and 1990. Finally, the situation got so serious that my deputy minister wrote a letter to the town saying, "That unless you do something, you're going to be in a very difficult situation." Back in November, 1992, the inspectors informed the town management and the mayor about their concern regarding debenture payment shortfalls. The town manager asked for some time to review the debenture financing with the auditor and the Director of Finance.
Mr. Speaker, the town's own auditor made some recommendations to the council about how to recover from the deficit. Those recommendations were not followed by the council. Therefore, we approached the council again saying they needed to recover from their deficit. Again, the town needed time to rethink. So, we gave them time. The department did not receive a response for two months. Again, the deputy minister wrote to the mayor and council expressing grave concern and requesting action. We were asking that the council develop a recovery plan that would allow them to get out of their deficit.
In January 1993, the town manager met in Yellowknife with municipal inspectors to discuss the debenture dilemma. The department engaged an independent auditor to confirm the inspector's findings in regards to the debenture dilemma, which he did. The town was very confrontational and uncooperative. This attitude persisted for the next several months. The town SAO and the mayor were told that the interest on the debenture was growing by $1,500 per day and for a month the town continued to refuse their cooperation.
Mr. Speaker, because of their confrontational attitude towards my department, my options were limited. We took it to FMB and the decision was made. Thank you.