Debates of April 2nd, 1993

This is page numbers 1409 - 1492 of the Hansard for the 12th Assembly, 3rd Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was tax.

Topics

Members Present

Item 1: Prayer

Eastern Arctic Bulk Fuel Contract

Access To Government Information

Legislative Action Paper On The Workers' Compensation Act

Community Teacher Education Programs

Access To Government Information

Charter Community: Deline

Support For Heritage Resources And Programs

Cancellation Of Tree Of Peace Kindergarten Program

Panarctic Dumping Of Waste In Arctic Ocean

Social Services Agreement With Town Of Iqaluit

Agreement With Rae-edzo School Society

Dumping Of Waste Into Ocean

Lack Of Action To Improve NWT Economy

Opposing Opening Of Uranium Mines In The Keewatin

Traditional Dene Drums

Support From Constituents

Appreciation Of Peter Gzowski

Appreciation Of Constituents

Protection Of Transportation Artifacts

Final Day Of Session

Item 4: Returns To Oral Questions

Provision Of Consultant's Report

Response To Question Regarding Ocean Dumping

Accident At Royal Oak Mine

Funding For Tree Of Peace Kindergarten

Status Of Mine Safety Act Review Committee

Communication Difficulties Between Education And Tree Of Peace

Disposal Of Panarctic Waste

Delegation Of Authority To Rae-edzo School Society

Broken Narwhal Tusk On Mace

Nuclear Waste Disposal Into Arctic Ocean

Expo 1992 Audit

Development Of Memorandum Of Understanding

Economic Development Strategy

Lack Of Action To Stimulate Economy

Minister's Statement On Student Financial Assistance

Professional Programs For Aboriginal People

Royal Oak Mine Occupational Health And Safety Committee

Student Financial Assistance

Financial Controls At Expo 1992

Policy On Disposal Of Scrap Metals

Legal Authority Of Rae-edzo School Society

Government's Commitment To Economic Strategy

Eastern Arctic Bulk Fuel Contract

Meeting With Federal Minister Of Housing

Options For Increasing Revenue

Viability Of Churchill Railhead

Payroll Tax In Other Jurisdictions

Keewatin Region Transportation Committee

Consultation With Kitikmeot Re Environmental Issues

Return To Written Question 35-12(3): Contract For Revamping Of Public Health System

Item 8: Replies To Opening Address

Committee Report 20-12(3): Standing Committee On Finance Report On Bill 27, Payroll Tax Act And Bill 26, An Act To Amend The Income Tax Act, No. 2

Item 11: Reports Of Committees On The Review Of Bills

Item 12: Tabling Of Documents

Changes To Student Financial Assistance Program

Motion To Move Minister's Statement 88-12(3): To Committee Of The Whole

Appointment Of Alternate Members To The Special Committee On Health And Social Services

Legislative Action Paper On Workers' Compensation Act To Standing Committee On Legislation

Tabled Documents 133-12(3) And 134-12(3) To Committee Of The Whole

Proposed Amendments To Maintenance Act And Domestic Relations Act Referred To The Standing Committee On Legislation

Proposed Bill, Personal Property Security Act

Cities, Towns And Villages Act, Hamlets Act, And Charter Communities Act Referred To The Standing Committee On Legislation

Appointment Of Alternate Members To The Special Committee On Health And Social Services

Legislative Action Paper On Workers' Compensation Act To Standing Committee On Legislation

Tabled Documents 133-12(3) And 134-12(3) To Committee Of The Whole

Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

Committee Report 20-12(3): Standing Committee On Finance Report On Bill 27, Payroll Tax Act And Bill 26, An Act To Amend The Income Tax Act, No. 2

Committee Motion To Move Bill 26 And Bill 27 Into Committee Of The Whole

To Adopt Recommendation 2

Bill 27: Payroll Tax Act, 1993

Bill 26: An Act To Amend The Income Tax Act, No. 2

Committee Report 10-12(3): Report On Tabled Document 21-12(3): Payroll Tax Act

Tabled Document 133-12(3): Evaluation Of The Financial Operations Of Expo '92 Revolving Fund And Tabled Document 134-12(3): Aurorales Expo '92 Revolving Fund Account Balance Sheet, March 19, 1993

Changes To Student Financial Assistance Program

Tabled Document 2-12(3): The Justice House - Report Of The Special Advisor On Gender Equality

Tabled Document 19-12(3): 1992 Master Plan For Corrections Service Division

Item 19: Report Of Committee Of The Whole

Bill 25: Supplementary Appropriation Act, No. 1, 1993-94

Bill 26: An Act To Amend The Income Tax Act, No. 2

Bill 27: Payroll Tax Act

Revert Back To Item 12: Tabling Of Documents

Assent To Bills

Committee Report 10-12(3): Report On Tabled Document 21-12(3): Payroll Tax Act
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

Page 1474

The Chair Ludy Pudluk

Is this committee agreed?

Committee Report 10-12(3): Report On Tabled Document 21-12(3): Payroll Tax Act
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

Page 1474

Some Hon. Members

Agreed.

---Agreed

Tabled Document 133-12(3): Evaluation Of The Financial Operations Of Expo '92 Revolving Fund And Tabled Document 134-12(3): Aurorales Expo '92 Revolving Fund Account Balance Sheet, March 19, 1993
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

Page 1474

The Chair Ludy Pudluk

Thank you. Evaluation of the Financial Operations of Expo '92 Revolving Fund. Mr. Dent.

Page 1474

Charles Dent Yellowknife Frame Lake

Mr. Chairman, after reading the report on the evaluation of the financial operations of Expo 1992 I have some questions which I would like to ask the Minister of Economic Development and Tourism. I was quite concerned when I saw

the way the office of the Comptroller General found, or how they reported that they had found the way the government operation was managed, especially in its bar and restaurant inventory. It was incredible to see that inventory control reports were not produced, that gross margin reports were not produced, there were no daily inventory procedures to ensure that food and liquor sales were recorded, guest tickets were used for food orders, but these were not pre-numbered or recorded. There were no procedures in place to ensure that liquor consumed corresponded to liquor sales. Mr. Chairman, the list of management deficiencies in controlling inventory and sales goes on and on.

Mr. Chairman, recognizing that these sort of things are the things that every bar manager or restaurant owner knows how to do everyday. I was wondering if the Minister could explain how the on site administration of our food and liquor operations could have been so badly carried out.

Page 1475

The Chair Ludy Pudluk

Mr. Minister.

Page 1475

John Pollard Hay River

Mr. Chairman, I was not physically there so I cannot say first hand. As I have said to you before, we were dealing at some distance, we were dealing with different time zones, we were also dealing with a system over there that was very frustrating for the staff that were there, to try and get inventory and stock into the country and to try and get our inventory which was in Spain out of the bonded warehouse that was controlled by the Spanish authorities was very difficult and frustrating. Deliveries did not always occur when they were supposed to occur. I can see that in the food and the beer end of things, and I could sense from the reports which I was getting that there was a great deal of frustration with those kinds of things.

I think in the arts and crafts area there was probably better control. Mr. Chairman, I cannot say to this House why these kinds of things happened. I know there was not enough office space. I know there was not enough staff. One of the things I found out, being a private business person who has become involved with government is that when I ran a business I would have had to have another 15 or 20 per cent more staff to comply with all the rules and regulations within government, if I had to have those same rules and regulations with operating a business. We were trying to keep the cost down. I did not allow the staff to increase. I would not send as many staff as people were advising me to send, because I knew going in that I had to keep the thing as lean and mean as possible. I would imagine that for some of those reasons, Mr. Chairman, some of these things were not done. Thank you.

Page 1475

The Chair Ludy Pudluk

Thank you. Mr. Dent.

Page 1475

Charles Dent Yellowknife Frame Lake

Thanks, Mr. Chairman. I alluded to this earlier today. I think this may have been a situation where penny pinching may have cost us more in the long run. I guess I take some exception to the Minister's reply in terms of inventory controls being better in retail, especially arts and crafts. This government brags a lot about the opportunities that Expo would create for artists and crafts people, and would have expected that variable art and craft work would be treated with care. On page 15 of 20 of this report where it is talking about the retail inventory, the first weakness noted was that there was no inventory control systems. What explanation can the Minister provide for the lack of any inventory control system in Expo retail operation?

Page 1475

The Chair Ludy Pudluk

Thank you. Mr. Minister.

Page 1475

John Pollard Hay River

Mr. Chairman, I met George Ferrand before he went to Expo. He had been connected with the department. I believe from the reports I received that although maybe on paper to an accountant there was no proof that there was inventory control, but I have faith in the fact that I believe Mr. Ferrand exercised inventory control over the items that were under his jurisdictions. The unfortunate part about it, Mr. Chairman, is I cannot prove that. However, I have enough faith in the man to say he knew what was there and what was being sold, and had some control over it. Thank you, Mr. Chairman.

Page 1475

The Chair Ludy Pudluk

Thank you. Mr. Dent.

April 2nd, 1993

Page 1475

Charles Dent Yellowknife Frame Lake

Mr. Chairman, the Minister just a moment ago mentioned that he become aware that there were perhaps some problems along the way. I notice that the Comptroller General has reported, for instance, that the cash register controls were not always maintained and there were days when cash flow shortages were as much as $120 Canadian. I think these are clear warning signs that there were serious problems in the management of food and liquor operations. I think that is a field in which the Minister has some experience in a previous job. Also, when the Minister told this House that he and his department would be very closely monitoring the field operations, I was wondering if he would tell us how he could miss those signs that were coming back. He mentioned he did see some of the signs. How could he miss how important they might be, and why did they not get addressed? Why did he not feel they were important enough for him to perhaps jump on a plane, go over there himself and investigate what was happening?

Page 1475

The Chair Ludy Pudluk

Mr. Minister.

Page 1475

John Pollard Hay River

Mr. Chairman, the problems which were occurring there were not something that I could have gone over there and solved. The problems that I saw coming back were frustrated messages from Mr. Ward who was running the show for us, about an inability to get stock and so on and so forth, and some interference by the authorities over there. So, I think the supervisors were trying to keep the thing going and address all those other outside irritants, and that at times they had problems when there were two or three people who ran the cash register. I am sure they knew that was wrong. However, I think when you have a restaurant that is full and you have to put extra people on, sometimes all those procedures are not followed. Mr. Chairman, Mr. Dent is correct. I have been in that business and I know how easy it is to lose money at those cash registers. I also know that when you are putting the customer first, which is what I had told those people to do, you make changes for whatever reason, maybe someone gets sick or gets busy, or there is a shift change and you are busy and you do not have time to count the cash out and back in again, that those kinds of things that happen is shortages. Thank you, Mr. Chairman.

Page 1475

The Chair Ludy Pudluk

Thank you. Mr. Dent.

Page 1476

Charles Dent Yellowknife Frame Lake

Thanks, Mr. Chairman. I only have a couple more questions for the Minister. In his report, the Comptroller General points out that the inventory records were considered inadequate. I think we have agreed to that in the last couple of comments. In recognizing that there were 30,000 pounds of musk-ox meat which is valued at over $300,000 left over in the inventory of the food operation, can the Minister advise who was responsible and what criteria were used to make decisions about the volume purchase of food and liquor supplies?

Page 1476

The Chair Ludy Pudluk

Thank you. Mr. Minister.

Page 1476

John Pollard Hay River

Mr. Chairman, the department made some contact with suppliers prior to the staff being hired to go to Seville. They had made some estimates about the amount of meat they would require et cetera. So, I do not think having an excess in Seville could be attributed the people who were actually on staff there. That was a result of people at the Department of Economic Development and Tourism in Yellowknife forecasting and making arrangements to have those products in advance and having them shipped over there. Thank you, Mr. Chairman.

Page 1476

The Chair Ludy Pudluk

Thank you. Mr. Dent.

Page 1476

Charles Dent Yellowknife Frame Lake

Thank you, Mr. Chairman. I want to point out, that dollar value represents about 34 per cent of the amount of total sales in the restaurant. I am just astounded that the procedures used could be so far out of whack for projecting the volume of food stuff that might be sold. I do not have any more questions, Mr. Chairman. I just wanted to express dismay over the situation where the Minister knew there was some concern in this House that this was going to lose a lot of money for the Northwest Territories, those concerns had been expressed by a number of Members. We were assured that proper controls would be in place and that this would be looked after. I am not convinced that the sort of tightness that we had expected from the Minister when he knew the number of concerns that were being expressed about the operation were there. I really find it hard to understand. I guess, Mr. Chairman, it is all after the fact and I can only hope we have learned a great deal from this lesson. I know I certainly have my fingers crossed that we sell a lot more goods in Europe and that we see more tourists, but to be honest I think it has been a gross overexpenditure for what the potential value is for us to receive. Thank you, Mr. Chairman.

Page 1476

The Chair Ludy Pudluk

Thank you. General comments. Mr. Koe.

Page 1476

Fred Koe Inuvik

Me too, I am shocked and dismayed.

---Laughter

The evaluation of financial operations of Expo, I think the report of the Comptroller General is pretty clear and pretty damning in terms of compliance with the Financial Administration Act. I know this is supposed to be a business but it is a government business. Members of this committee raised concerns last spring when the operation started and mentioned some projections to the Minister, at which time I think they estimated a $1.8 million loss. Today, we see we are in a $4.2 million loss. Then it has been brought to our attention all the deficiencies and weakness as they are called in the report on the controls and adherence to proper financial management and financial administration.

There are several things I would like to raise. Knowing that we are a year late and $4.2 million short, total sales -- this is at the March 19, 1993, accounting -- were $1.74 million. The net loss of the entire operation is $4.2. Just a quick analysis, there is some $5.9 million of expenses and write offs that have occurred.

Page 1476

Some Hon. Members

Shame, shame.

Page 1476

Fred Koe Inuvik

It is one hell of a way to run a business and I hope this is not reflective of how we are going to do other operations in the future. I know it is another one time operation, another one time shot, but it just astounds me how sometimes we do these types of operations and businesses.

The one question I have on the operating cost of goods sold. We have an item called ending inventory and there is a negative amount. How can we end up with a negative amount of ending inventory? It is ($398,432). Can the Minister elaborate on this, please?

Page 1476

The Chair Ludy Pudluk

Thank you. Mr. Minister.

Debates of April 2nd, 1993

Topics

Help us improve OpenNWT