This is page numbers 909 - 930 of the Hansard for the 12th Assembly, 5th 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 chairman.

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Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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John Pollard Hay River

Mr. Chairman, the Financial Administration Act says that if we're going to write off anything exceeding $20,000 we have to report it to this House, which is what the act is doing. I guess what we're doing is trying to be realistic and saying that instead of carrying these debts on our books and hoping to get them paid in future years, we're being realistic in saying -- as all businesses and governments do -- we do not think we will be able to collect these portions of our debts at the present time Secondly, we're saying that in the event that they are collectible in the future, we will try to do that. It doesn't mean that we won't try to pursue that money in the future. So if somebody has a turn of luck and they have made certain commitments when they took out the loan, we will try to get those people. As I said before, if their financial situation changes in the future, to get that money back. But only within the terms of the loan agreement that they signed, Mr. Chairman. So it may be possible for an individual to not have to pay anything on these particular loans, yet still be in business in the Northwest Territories and appear to be successful. It depends upon the agreement that was signed between themselves and the government, in this case, at the time the loan was let out. That may have included personal guarantees. It may have included using their own personal homes to back the loan, it may not have.

So I think in the instance that the Member was talking about where somebody had owned a company and the company had gone down, it depends on what was pledged from that company or from those shareholders to the government. If it wasn't anything personal, theoretically, those shareholders could go away and become business people in other parts of the territories and not have to pay these loans back. It changes from loan to loan. In this instance, we are being realistic in saying that we don't think we can get this money back.

With regard to changing acts, I think that the Minister of Economic Development and Tourism would agree with me that since the time that the majority of these loans were made, things have changed over at the Business Credit Corporation. It is a much more professionally-run organization. Although the Minister says it will take higher risks than a bank, it is certainly getting the "i's" dotted and the "t's" crossed before money flows. In some of these cases, perhaps things were done absolutely to the tee.

I think when Mr. Arvaluk asks if we should be changing things, I think the Minister would concur with me that policies have been changed within the BCC to try to prevent some of these

things from happening in the future. Thank you, Madam Speaker.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair Tony Whitford

Thank you. Mr. Arvaluk.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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James Arvaluk Aivilik

Thank you, Madam Speaker. I'm having a very hard time that John Doe from Iqaluit can go to the government and say he would like to buy a tractor from Montreal, bring it to Coral Harbour and start a little company there, a subsidiary of his Iqaluit company, and when that Coral Harbour company goes bankrupt, that you decide to forgive him. The tractor that was used for work in Coral Harbour cannot think, cannot talk, cannot make deals and goes bankrupt because it has broken down. But, the owner who made the deal is still doing very well in Iqaluit. Who is the one who made the deal to get the loan? Not the tractor in Coral Harbour, that he's hiring to do the work.

I cannot see the logic in those kinds of business deals the government makes with the company, where such persons are not accountable for their loans. They just file bankruptcy and they do very well in other places.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair Tony Whitford

Thank you. Minister Pollard.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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John Pollard Hay River

Mr. Chairman, I sympathize with the Member because many years ago when you borrowed money from somebody, or you borrowed money from a bank, you did it on the shake of the hand and said you were giving your word that you would pay the money back. I remember those days and I think there's a lot of people who remember those days. When banks turn them down, they get extremely frustrated because they say that they gave their word that they would pay the money back and the banks are not prepared to loan them the money.

Unfortunately, in today's corporate world, there isn't that kind of personal guarantee any more. There's not that kind of pride in knowing that people took the money out and, in one form or another, they will pay it back. Today, we're into who is liable, what does the law say, and what was placed as collateral. In the instance that Mr. Arvaluk cited, if the person from Iqaluit never pledged anything from his company in Iqaluit or never pledged anything personally of his own against the loan he made in Coral Harbour, unfortunately all that would be left would be the asset which might or might not be operational.

I sympathize with the Member, but in today's day and age, things have changed greatly as far as paying back loans. I think people who loan money are expected to take the risk and if they don't make it or they don't get good enough collateral, then they take their lumps. It's sad, but true. I think in defence of the Business Credit Corporation, they are now recognizing some of the problems that have occurred ten or twelve years ago and are trying to make, within the realm of reasonable, some of the changes so that there aren't as many cracks for people to slip through. Thank you, Mr. Chairman.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair Tony Whitford

Thank you. General comments. Does the committee agree that we proceed clause by clause?

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

---Agreed

Clause By Clause

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair Tony Whitford

Clause 1.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

---Agreed

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

Page 929

The Chair Tony Whitford

Clause 2.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

---Agreed

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair Tony Whitford

Schedule 1, debts written off.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

---Agreed

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair Tony Whitford

Total debts written off, $2,169,075.34.

Bill 18: Write-off Of Debts Act, 1993-94
Item 18: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

---Agreed