Thank you, Mr. Chairman. Mr. Chairman, the purpose of the NWT Energy Corporation Limited Loan Guarantee Act is to guarantee loans to the NWT Energy Corporation Limited. There is a requirement, Mr. Chairman, of the Financial Administration Act, that no person shall make a guarantee or indemnity for or on behalf of the government unless authorized by an enactment to do so.

The total borrowings contemplated by the NWT Energy Corporation Limited is $25 million and the funds are to be used to lend to the Dogrib Power Corporation for construction of the Snare Cascades project. The principal amount of loan guarantees under this act must not exceed $25 million, Mr. Chairman. I would be glad to try to answer anyone's questions. Thank you.

Thank you, Mr. Minister. On behalf of the Standing Committee on Finance, Mr. Antoine, do you have any opening remarks?

Standing Committee On Finance Comments

Thank you, Mr. Chairman. The Standing Committee on Finance reviewed Bill 18. This is straightforward and we didn't have any real concerns with this bill. Thank you.

Before I open the floor for general comments, I would like to ask the honourable Minister if he wants to bring in witnesses. Mr. Minister.

With the permission of the committee, Mr. Chairman.

Thank you. Do we have the concurrence of the committee that the Minister can bring in witnesses?

Agreed.

---Agreed

Thank you. Proceed, Mr. Minister. Mr. Minister, are you ready for general comments?

Yes, Mr. Chairman. I will deal with the bill until my witnesses get here. Thank you, Mr. Chairman.

The floor is now open for general comments.

Agreed.

---Agreed

Mr. Koe.

General Comments

Mahsi, Mr. Chairman. The summary of the bill is here and it is to borrow $25 million to enable the Power Corporation to guarantee loans of the Government of the Northwest Territories. I would like to know why this bill is coming forward at this time.

Mr. Minister.

Mr. Chairman, the Financial Administration Act says that nobody can borrow money on

behalf of the government unless authorized by this House. It is the wish of the government, through the Power Corporation that it owns, to borrow money by a wholly-owned subsidiary of the Power Corporation in order to advance those funds to the Dogrib Power Corporation in order that the Dogrib Power Corporation can go ahead with the construction of a hydro plant. Mr. Chairman, the reason that we are using an arm of the government, as it were, to borrow these funds is because the Power Corporation has a proven track record, with the ability to not only borrow but raise capital and to repay that capital. It has a track record, therefore, if it were to borrow through the Energy Corporation, it's track record would be reflected in the Energy Corporation, that Energy Corporation could raise the money and probably at a much lower rate than a new company such as Dogrib Power Corporation who is just getting on its feet and has no track record with money or loans of this size, Mr. Chairman.

So recognizing that costs incurred by the Dogrib Power Corporation ultimately get passed through to the Government of the Northwest Territories through its Power Corporation, we felt that it would be better for us to borrow the money at a lower rate with a proven track record and assist this company with which we have a contract to buy their power. Thank you, Mr. Chairman.

Mr. Koe.

I appreciate the responses from the Minister and also support very much the initiatives the Dogrib are working on. It is going to provide a big economic boost, not only for the Dogrib, but for the territories and Canada. What guarantees are there of this government getting back the $25 million if there is ever a default? What guarantees are there in place that the Dogrib would be able to recover $25 million?

Thank you. Before I ask the honourable Minister to respond, I would like you to introduce your witnesses for the record.

Thank you, Mr. Chairman. I have on my right Mr. Mark Aitken, legislative counsel from the Department of Justice and on my left, I have with me a man whose name I have just forgotten.

---Laughter

Tony Dawson from the Department of Finance, revenue and asset management. Thank you, Mr. Chairman.

Thank you. It has been a long day, Mr. Minister. We tend to forget things. Now you can respond to the honourable Member. Mr. Minister.

Thank you, Mr. Chairman. There is an assignment whereby the Power Corporation, when it is buying the power from the Dogrib Power Corporation, first of all subtracts from it the principal and interest owed to it by way of the loan that is made from the Energy Corporation, a subsidiary to Dogrib Power. In the event that this thing were to fail, Mr. Chairman, in all probability the Power Corporation would take over the project. We don't believe that it's going to fail. We believe that all the work has been done and that this is a very viable project so we believe the risk of failure is very, very minimal but as I say, in the event, we may have to take it over. Certainly with regard to getting our money to pay back the $25 million from whom we borrow it, that will come from the Dogrib Power Corporation right at the beginning. Thank you, Mr. Chairman.

Thank you. General comments. The honourable Member for Inuvik.

These are not general comments I'm making. I'm asking questions to get at the detail. I'm trying to get clarification on the principle and the reason for the bill.

This government is guaranteeing this loan and so I assume the Power Corporation is a partner within the project. Can the Minister advise as to who the players are, who the partners are in this new venture that we're lending the money to. Is the Power Corporation a partner in it or is the Government of the Northwest Territories a partner in the project?

Thank you. The honourable Minister.