This is page numbers 1135 - 1164 of the Hansard for the 12th Assembly, 7th 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 report.

Topics

Return To Question 515-12(7): Safety Concerns Of Bird Dog Officers
Question 515-12(7): Safety Concerns Of Bird Dog Officers
Item 6: Oral Questions

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Richard Nerysoo Mackenzie Delta

Thank you, Mr. Speaker. I will advise the honourable Member that we have not been involved, as a department, in these matters. It's an issue normally dealt with by each department. If there are very significant safety issues, obviously they have to be addressed by the current policies but, other than that, we leave it up to the individual departments to address those issues. Thank you, Mr. Speaker.

Return To Question 515-12(7): Safety Concerns Of Bird Dog Officers
Question 515-12(7): Safety Concerns Of Bird Dog Officers
Item 6: Oral Questions

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The Speaker Samuel Gargan

Thank you. Supplementary, Mrs. Marie-Jewell.

Supplementary To Question 515-12(7): Safety Concerns Of Bird Dog Officers
Question 515-12(7): Safety Concerns Of Bird Dog Officers
Item 6: Oral Questions

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Jeannie Marie-Jewell Thebacha

Thank you, Mr. Speaker. The reason I asked the Minister responsible for Safety is because under section 13(1)(b) of the NWT Safety Act, which the Minister is responsible for, the Bird Dog officers have indicated they believe their employer, the GNWT, has contravened that section. I would like to ask the Minister, would he commit to this House to review section 13(1)(b) of the NWT Safety Act to ensure that safety standards are adhered to? Thank you.

Supplementary To Question 515-12(7): Safety Concerns Of Bird Dog Officers
Question 515-12(7): Safety Concerns Of Bird Dog Officers
Item 6: Oral Questions

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The Speaker Samuel Gargan

Mr. Nerysoo.

Further Return To Question 515-12(7): Safety Concerns Of Bird Dog Officers
Question 515-12(7): Safety Concerns Of Bird Dog Officers
Item 6: Oral Questions

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Richard Nerysoo Mackenzie Delta

Thank you, Mr. Speaker. We will certainly review that particular matter and I will deal with my colleague on that issue. Thank you, Mr. Speaker.

Further Return To Question 515-12(7): Safety Concerns Of Bird Dog Officers
Question 515-12(7): Safety Concerns Of Bird Dog Officers
Item 6: Oral Questions

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The Speaker Samuel Gargan

Item 6, oral questions. Mr. Whitford.

Tony Whitford

Tony Whitford Yellowknife South

Thank you, Mr. Speaker. Mr. Speaker, I would like to direct a question to the Minister responsible for forest firefighting. Many years ago, almost all the forest fires were fought by hand. Fire crews were trained and based in strategic places and whenever the fire season came about, a crew was ready to go. This also provided work for people in otherwise economically-depressed areas. There was some means of income and a lot of people looked forward to this, particularly young people, students and the like. It was hot, dangerous work but they still looked forward to working. I am happy to hear that the Minister has made some initiatives in that area, but I wonder if this is available for more ground crew workers, particularly students looking for jobs.

The Speaker Samuel Gargan

Minister responsible for forest management, Mr. Morin.

Return To Question 516-12(7): Increased Usage Of Forest Fire Ground Crews
Question 516-12(7): Increased Usage Of Forest Fire Ground Crews
Item 6: Oral Questions

Page 1151

Don Morin Tu Nedhe

Thank you, Mr. Speaker. Yes, the Member is correct that that is the direction this government is going. We have listened well to what the communities have said. The majority of the chiefs, Metis presidents, as well as the firefighters themselves, said we should be fighting fires on the ground and using less aircraft. We've already moved in that direction; for example, by using DC-4s this year instead of DC-6s. Even by cancelling two short-term helicopter contracts, we can increase our ground crews by five, which would be 40 men actually out there fighting fires.

I know last summer we spent something like $1.8 million on a DC-6 to fly 72 hours. That would put a lot of students to work, and a lot of men, fighting fires on the ground. That's where fires are put out, on the ground by the ground crews, not by bombers. Fires are put out by people who live in the region and actually work.

At the beginning of every year, we have orientation for Bird Dog officers, pilots, as well as engineers so they can all learn to work together. We also have firefighting training for our existing crews to upgrade their skills. We also have emergency firefighting training for every community, basically, to increase their ability to fight fires with ground crews. Every year, we're training more and more people and we have instructed them to make sure to train more people and give serious consideration for students who are going away to school. It's a good chance for them to make money, as long as they are trained.

In most cases, the crews that I have met with comprise five men, for example. If you have two crews of five men for a total of 10 men, eight of those men are capable of handling their own crews. So, we have the ability to increase the numbers to 40 men in a very short period of time. In every crew, you're allowed to have at least one untrained firefighter. So, there is everything in place for us to respond in a very quick period of time with more people. Thank you.

Return To Question 516-12(7): Increased Usage Of Forest Fire Ground Crews
Question 516-12(7): Increased Usage Of Forest Fire Ground Crews
Item 6: Oral Questions

Page 1152

The Speaker Samuel Gargan

Thank you. Time for oral questions has lapsed. Item 7, written questions. Mrs. Marie-Jewell.

Jeannie Marie-Jewell Thebacha

Thank you, Mr. Speaker. I have a question for the Minister of Public Works.

Would the Minister responsible for forest fire management provide to this House a copy of the actual signed contract for the land-based air tanker services for the firefighting services for the Northwest Territories?

The Speaker Samuel Gargan

Item 7, written questions. Mr. Patterson.

Written Question 28-12(7): Taxes On Imported Liquor
Item 7: Written Questions

June 5th, 1995

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Dennis Patterson Iqaluit

Thank you, Mr. Speaker. I have a written question for the Minister of Safety and Public Services regarding taxes on imported liquor.

1. What is the basis for the calculation of taxes on liquor imported to the Northwest Territories?

2. Is alcohol content considered in calculating the rate of tax on imported liquor?

3. Why is it that beer, with about half the alcohol content of wine, is taxed at about one-tenth the rate of wine?

4. Why is it that spirits, with at least four times the alcohol content of wine, attract a tax of only $1.75 more per litre?

5. Has the Minister considered the relative health impacts of various categories of liquor in devising a regime for taxes on the importation of liquor?

Thank you.

The Speaker Samuel Gargan

Item 7, written questions. Item 8, returns to written questions. Item 9, replies to opening address. Item 10, petitions. We will take a 15-minute break.

---SHORT RECESS

The Speaker Samuel Gargan

The House will come back to order. We are on item 11, reports of standing and special committees. Mr. Zoe.

Henry Zoe

Henry Zoe North Slave

Thank you, Mr. Speaker. Mr. Speaker, earlier this year, the Auditor General for Canada, Mr. Denis Desautels, forwarded his Report of the Auditor General to the Legislative Assembly for the year ended March 31, 1994 to the Speaker, the Honourable Sam Gargan. This document, along with the Public Accounts 1993-94, Volumes I and II, became the focal point of two days of public hearings in early May 1995, and one day of follow-up work at the end of the month.

The Auditor General's report is divided into seven chapters: chapter 1, matters of special importance and interest; chapter 2, financial statement issues; chapter 3, compliance with authority issues; chapter 4, audit observations; chapter 5, student financial assistance; chapter 6, municipal loans; and finally, chapter 7, hidden subsidies.

The Process

The Report of the Auditor General to the Legislative Assembly for the year ended March 31, 1994 was tabled in the Legislative Assembly on April 6, 1995. The report was subsequently referred to the Standing Committee on Public Accounts for review.

The committee would like to thank the officials of the Office of the Auditor General of Canada and all of the Government of the Northwest Territories departments for their attendance and responsiveness at the public hearings in May. The cooperation of the deputy ministers and their staff was very much appreciated and contributed to a constructive and useful review process. The witnesses and the date they appeared before the committee are listed in appendix I.

This report of the Standing Committee on Public Accounts on the Report of the Auditor General to the Legislative Assembly for the year ended March 31, 1994 is presented by issue, in consideration of the fact that, in some instances, more than one department has responsibilities in an area noted in the report.

Issues And Concerns

During the public hearings in May 1995, the committee discussed various issues raised by the Auditor General with senior departmental officials. At these public hearings, the committee requested additional information to clarify points of interest and address their concerns. At the end of May, the committee reviewed the proceedings, discussed the issues further and completed the preparation of this report. This section of the report summarizes the issues and concerns raised and presents the committee's comments and recommendations.

Follow-Up On Previous Year's Recommendations

Forensic Audit Capabilities

In last year's report to the Legislative Assembly, the committee recommended that the government engage the services of a forensic auditor to address the increasing number of attempts to defraud the government, principally by employees.

The Comptroller General indicated that the personnel in the Audit Bureau have been trained in procedures and processes used in forensic auditing on a scale in keeping with the nature of frauds most commonly encountered. He felt that their qualifications are sufficient to address the needs of the Government of the Northwest Territories. He also mentioned that, should the need arise, forensic specialists can be contracted.

The committee was satisfied that the Comptroller General's Office was providing adequate audit services in this area with the resources available. The committee may wish to look at this issue again in the future to ensure the necessary level of expertise.

Listing Of Payments To Suppliers

Another recommendation from last year was specifically to the Department of Public Works and Services to provide a listing of payments over $5,000 made to suppliers and contractors as a control and accountability measure. The listing, provided to the committee on a quarterly basis, could then be tabled in the Legislative Assembly.

The Comptroller General indicated that the program to deliver this listing has been developed and tested and departments will now be asked to verify results. The first listing should be made available to the committee in June 1995. The Standing Committee on Public Accounts of the 13th Assembly will undoubtedly look forward to receiving these listings on a quarterly basis. They will provide a valuable mechanism toward achieving accountability and fiscal responsibility.

Mr. Speaker, I will now ask my colleague and deputy chairman of the committee, Mr. Ningark, to continue with the report. Thank you.

The Speaker Samuel Gargan

Mr. Ningark.

Review Of The Capital Planning Process

John Ningark Natilikmiot

Thank you, Mr. Speaker. In response to the continuing problem, primarily encountered in municipal capital spending, of work being carried out prior to obtaining legislative spending approval, last year the committee recommended that the capital planning process be reviewed.

The committee heard evidence from the Comptroller General that the capital planning review is being conducted and completion is anticipated in July 1996. An interim report from the capital planning committee is expected in December of 1995. With respect to the main issue of municipal projects proceeding prior to funding approval, Mr. Voytilla noted that the intention is not to reduce critical consultation in capital planning, but to ensure communities understand their responsibilities. The Department of Municipal and Community Affairs has undertaken to advise communities not to expect approval and, if they proceed with projects prior to capital appropriation, it is at their own risk.

Mr. Speaker, in the interim, however, it should be noted that the Auditor General reported that in 1993-94, a hamlet started a community capital project for which the Legislative Assembly approved funding for 1994-95. Although the expenditure was recorded as incurred, it was not approved by the Legislative Assembly.

The deputy minister of Municipal and Community Affairs assured the committee that the matter of municipalities endeavouring to accelerate the capital process has been discussed extensively with the Comptroller General's Office. He stressed that municipalities have been informed very clearly that they are responsible for all costs incurred prior to approval. He noted that, except for emergencies, they do not expect this issue to arise again.

The committee was encouraged by this response. However, "emergencies" tend to arise as they are needed and may be defined by their circumstances. Therefore, the committee wishes to stress in the strongest possible terms that, in the event that circumstances and spending plans change, appropriate approval processes must be followed. The Financial Administration Act provides a number of options by which changes to appropriations can be made, and should not be circumvented.

However, the committee recognizes that there is a difference between tax-based and non-taxed-based municipalities with regard to their ability to proceed at their own risk. There may often be sound economic reasons for proceeding ahead of schedule. In order to give the non-tax-based communities a chance to take advantage of limited and timely opportunities to secure needed capital development in those instances where it is financially beneficial to do so, the committee makes the following recommendation:

Recommendation 1

That the review of the capital planning process take into account the need for an exigent approval process to facilitate limited acceleration of capital projects where it is in the best interests of the community and will provide a cost saving to the government.

The committee will examine this particular issue when the capital planning review is completed and long-term solutions are proposed that will protect the legislative spending authority.

Video Conferencing Technology

Last year, the committee made two recommendations that dealt with investigating the potential options for use of video conferencing technology.

Mr. Speaker, the committee was informed by the personnel secretariat that this work has been initiated on a trial basis in staffing selected management positions. The project is currently limited by the restricted availability of the technology to Yellowknife and major southern centres. A report to the Standing Committee on Finance suggested favourable results so far. The secretariat has indicated that they will continue to refine and utilize the process wherever possible through 1995.

At this point, it would be useful to suggest that the Standing Committee on Public Accounts of the 13th Assembly examine the results of this project in the spring of 1996. If the benefits and costs warrant, the government should continue to pursue NorthwesTel regarding the implementation of the technology in additional northern centres.

Mr. Speaker, I will now defer to the Member for Baffin South, Mr. Kenoayoak Pudlat.

The Speaker Samuel Gargan

Thank you, Mr. Ningark. Mr. Pudlat.

Auditor General's Report - Issues

Environmental Liability

Kenoayoak Pudlat Baffin South

(Translation) As noted in the Auditor General's report for 1992-93, the government's financial statements should account for the anticipated costs of cleaning up the environment. Accounting for these costs will mean recognizing, measuring and reporting environmental risks and costs associated with the government's operations.

The responsibility for reporting these costs rests with the Financial Management Board Secretariat and they had indicated their intention to record and report these costs in the March 31, 1995 financial statements.

During the hearings, the Comptroller General indicated again that this was a difficult and complex area and that no one is currently leading the way in Canada. However, a GNWT "environmental committee" has been formed to address the issue, but has not yet developed its terms of reference.

At the same time, the Canadian Institute of Chartered Accountants is proceeding to develop guidelines and standards for measuring and reporting environmental liabilities. However, at the rate things are going, the March 31, 1995 deadline for GNWT reporting is not expected to be met.

The standing committee will be monitoring progress on this important issue due to the potentially costly impact on the GNWT and northern residents. It is also an important consideration in the division of liabilities as the creation of Nunavut approaches. In addition, the Auditor General's office has indicated that they will be monitoring progress on this issue each year.

Timely Financial Reporting By Consolidated Entities

The creation of new government corporations complicates the process of completing the consolidated financial statements of the government in a timely manner. Corporations like the NWT Development Corporation must consolidate their own financial statements with those of their subsidiaries. In addition, all statements have to be audited prior to consolidation.

The financial reporting resources of corporations and their subsidiaries are often insufficient, although the recent allocation of additional resources may address inadequacies. However, as more and more subsidiaries of corporations are involved in the process, it becomes increasingly difficult for entities to report on time. As a result, the government's consolidated financial statements must wait.

Although the comptroller general noted that considerable improvement was shown in this area since 1992-93 reporting, and things are looking even better for 1994-95, the committee will continue to monitor the reporting of consolidated entities. A review being conducted of the Financial Administration Act will provide an opportunity to examine legislative relationships with consolidated entities, boards and other agencies. The committee looks forward to the results of the FAA review and will note areas for improving accountability mechanisms at that time.

Mr. Speaker, Mr. Charles Dent will now continue reading the report. Thank you.

The Speaker Samuel Gargan

Thank you. Mr. Dent.

Financial Reporting

Charles Dent

Charles Dent Yellowknife Frame Lake

Thank you, Mr. Speaker. The Public Sector Accounting and Auditing Board, PSAAB, policies and recommendations have been chosen as the government's accounting guidelines. In 1986, PSAAB released Accounting Statement 3, General Standards of Financial Statement Presentation for Governments. Two recommendations from this statement remain to be followed:

-a comparison of actual results with the government's original budget; and

-disclosure of the government's physical assets on hand and available for use.

Since the release of these recommendations eight years ago, these disclosures have not been made. The Auditor General maintains that in order to compare actual spending to the spending proposed at budget time, the financial statements and budgets should be on the same basis. Therefore, the government needs to include consolidated budget information in the consolidated financial statements to provide the necessary accountability.

PSAAB Accounting Statement 3 also recommends showing the value of physical assets used by the government (land, buildings, furniture and equipment) in the notes or schedules to the financial statements. Reporting these assets would show that the government has invested in physical assets with a future value and give a better picture of the true cost of programs. In addition, further PSAAB developments are currently being considered along that same lines for the reporting of public works or infrastructure as assets.

The government response from FMBS indicates a commitment to further investigate the possibility of compliance, particularly in the area of consolidated entities' budgets being incorporated in the government's main estimates and capital estimates for presentation in the financial statements.

On the question of physical assets, the government is committed to working toward a system for recording and reporting the cost of physical assets in 1995-96.

The committee notes, however, that, with division of the Northwest Territories approaching, it is imperative that the government continue to address the need to value and report its physical assets. The Auditor General's office informed the committee that it will monitor progress on this requirement.

Mr. Speaker, the next section is on information technology.

Information Technology

In chapter four, the Auditor General noted that the government's financial information system, FIS, which provides financial information on departments and programs, is over 12 years old and becoming obsolete. As timely and accurate financial information is crucial to decision-making, this system should be updated or replaced soon. A number of factors may influence this decision. The impending division of the territories and the future financial and information needs of two territories adds to the challenge. The Auditor General questions whether the new territories will inherit aged systems or will the government change now and possibly commit Nunavut to something it may not want or need.

As the development and implementation of such a system can take years to effect, a decision on this issue will need to be made soon. No matter which option is chosen, when the decision is made to replace the FIS, the necessary people and financial resources to do so must be made available.

The government's "informatics strategy" represents an important first step in the process, and the upgrade or replacement of financial information systems is a primary component of the strategy which addresses all the information systems needs of the government.

In discussions with the committee, the Comptroller General estimated that it would take three to four years to implement a new system. He also noted that the FIS was high on the priority list of things to change. The government currently spends $200,000 to $300,000 on updating each year. The cost of a new system is estimated to be between $3 million and $8 million, depending on the anticipated needs.

In order to provide an efficient and effective management foundation to address the impending decisions facing the GNWT as a result of division, the standing committee makes the following recommendation:

Recommendation 2

That the government proceed immediately to plan and implement revised financial information systems to meet the needs of Nunavut and the western territory as a priority for the division of the Northwest Territories.

Mr. Speaker, the next section is on the student financial assistance program.

Student Financial Assistance Program

In his report, the Auditor General raised the issue of the rising costs of the student financial assistance program and the limited resources available. This increases the need for reliable and useful results information. Program objectives need to be clearer and measurable to determine whether the desired program goals are being achieved.

The Auditor General notes that the "department's strategy identifies an increasing demand for student financial assistance and recognizes that the government's financial resources are limited". Regardless of how the department proposes to address the situation, whether by limiting access or lowering the level of funding available, the decisions must be based on reliable results information. The current program objectives are incomplete and the proper results are not being measured so that informed financial decisions can be made. For example, the current results information does not measure the number of students who successfully graduate from education programs or whether they return to the north and gain employment in their field of study.

Program evaluation is a useful tool to determine the effectiveness, efficiency and economy of a given program. The FMBS has an evaluation unit, one of the functions of which is to provide assistance in program evaluation to departments. The Comptroller General provided the committee with an update on the progress in staffing and organizing this unit and indicated a number of projects they were involved in, including reviewing and improving the management for results system.

The Auditor General recommended that the department, with the help of FMBS, evaluate the student financial assistance program to "determine what combination of grants, loans and remissions best provide value to the government, meet high level legislative policies and meet the needs of northerners".

The Comptroller General noted that the evaluation unit is involved in the review and evaluation of the student financial assistance program, having assisted with drafting of terms of reference and setting up a steering committee to oversee the review. The review is designed to examine and address the concerns discussed in chapter five of the Auditor General's report.

The Standing Committee on Public Accounts is encouraged by the commitment of the department and the office of the Comptroller General to address this situation. However, the committee takes the position that whether the government can afford to maintain the program as an "entitlement" is a political decision and any move to implement a policy change should not circumvent the Legislative Assembly. The education and training of northern residents is a stated priority of this Assembly and limiting access by any means must be fully debated by its elected representatives.

Mr. Speaker, I would now like to ask, if you would allow my colleague, Mr. Whitford, representing Yellowknife South, to continue the report.

The Speaker Samuel Gargan

Thank you, Mr. Dent. Mr. Whitford.

Secondments

Tony Whitford

Tony Whitford Yellowknife South

Thank you, Mr. Speaker. When government employees are seconded to outside organizations, it is much the same as giving money. These arrangements cost money. Therefore, as the Auditor General points out, "it is important that departments keep track of and report the full cost of secondments to the Legislative Assembly in a meaningful manner".

As of March 31, 1994, there were a total of six outside secondments of GNWT employees where the cost in administration, salaries and benefits were borne in part or entirely by the government. The Auditor General points to an example in which an employee has been seconded out for over five years at a total cost to the government of more than $550,000.

In noting the significant costs to the government, the Auditor General made a three-part recommendation for better administration, control, accountability and evaluation of secondments, including full reporting to the Legislative Assembly.

The Comptroller General responded by stating that his office will follow up with departments to ensure that existing requirements and procedures are being complied with. In addition, a policy will be developed to ensure greater consistency and the appropriate section of the human resources manual will be reviewed.

In addressing the committee at the public hearings, Mr. Voytilla indicated that the secondment process has been reviewed, and it was found that it wasn't meeting the current needs of the government. Pending Financial Management Board approval, the Comptroller General indicated that implementation of the new policy for secondments could happen as soon as the end of May this year.

In response to the recommendation to consolidate the administration of secondments into one department, the Comptroller General indicated that the administration and evaluation of secondments will be centralized in the Personnel Secretariat.

The committee acknowledges the value of secondments, both to government and industry, and will be very interested in the effects of the new policy and its impact on the administration of secondments.

Vote 4 And 5 Projects For Others

In chapter seven of his report, the Auditor General notes that "expenditures under vote 4 are not subject to the normal budgetary approval process of the Legislative Assembly. The current criteria for vote 4 and 5 projects require the costs to be identifiable and measurable and the project to be for a definite duration. Some projects have been going on for many years and the public expects them to continue. What is not known, however, are the indirect costs such as administration supervision, use of vehicles and accounting of vote 4 projects to this government. Unless the relevant departments indicate and allocate such costs to all vote 4 projects, the full costs cannot be known. To recover such administration costs, the government can charge an administration fee of 6.5 per cent of all vote 4 and 5 projects. However, the practice of departments has been to request the Financial Management Board to waive these fees. In fact, in 1993-94, only $104,000 of a possible $2.9 million was collected as administration fee revenue.

In addition, some vote 4 projects started out being fully funded by Canada but are now cost-shared. As such, a project may not fit the criteria for vote 4 and 5, and the expenditures should be subject to normal budgetary scrutiny in the Legislative Assembly.

There may also be costs to the government in excess of those in the agreement. In cases where cost recoveries are not effected, as in the case of a dispute, the government is committed to making an expenditure not authorized by the Legislative Assembly.

In its response to the Auditor General, the Financial Management Board Secretariat has committed to initiating a review of the vote 4 and 5 process to determine if the method of reporting is appropriate.

In the public hearings, the Comptroller General indicated that, primarily due to the changing focus from vote 4 and 5 projects on behalf of others to cost-shared programs and devolving programs to the territorial government, the entire process is being reviewed to clarify criteria or, if warranted, perhaps even eliminate vote 4 and 5. He stated that the results of the review and the recommendations for change will be presented to the new government some time in late fall of 1995.

John Ningark Natilikmiot

That is the new government.