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

Tony Whitford

Tony Whitford Yellowknife South

That is us, Mr. Ningark. The Public Accounts committee of the 13th Assembly will look forward to examining the results and recommendations. Mr. Speaker, with your permission, I will stop here and ask the representative for Baffin Central, Ms. Mike, to carry on.

The Speaker Samuel Gargan

Thank you, Mr. Whitford. Ms. Mike.

Cash, Surplus And Increased Borrowing

Rebecca Mike Baffin Central

(Translation) Thank you, Mr. Speaker. The Auditor General notes that "the government's March 31st net cash balance has been negative for three of the last four years. To cover this negative balance, the government needs to borrow." Essentially, expenditures are increasing at a greater rate than revenues. In the last four years, the accumulated shortfalls have decreased the government's surplus by 62.8 per cent. It is anticipated that, if the decline is not halted, the government will face increased borrowing and interest costs.

It is important to monitor the cash/borrowing positions throughout the year. In last year's Public Accounts committee hearings on the Report of the Auditor General for 1992/93, the Department of Finance presented a forecast for 1994-95 which showed a deterioration of the cash position throughout the year.

At the public hearings in May 1995, the committee again requested an update of the present cash balance and the new forecast for 1995-96. The committee then discussed the government's cash position with the deputy minister of Finance, who provided an overview of the forecast. The cash and surplus positions are deteriorating further and the 1995-96 forecast indicates that cash shortfalls will force the government into short-term borrowing on a sustained basis as early as July 1995. (Translation ends)

As a result, and based on current interest rates, the accumulated interest on borrowing by year end could be as much as $2.3 million. This estimate is subject to significant change depending on interest rate.

The deputy minister of Finance maintains that for the time being, it is to the government's benefit to lend its surplus to municipalities, for example, because interest earned from cash on hand reduces the grant from Canada. This is discussed in more detail in connection with the municipal lending practices.

The committee's main concern is that current estimates indicate a cash shortfall of almost $120 million at year end. This is significant because the borrowing limit established by the recently amended Loan Authorization Act is $100 million. It appears that the government may soon be in a position to request additional authorization from the Legislative Assembly. The committee is also concerned that it may also be necessary to address the $400 million limit on accumulated borrowing set by federal Order-in-Council, as that total currently stands at about $300 million.

The standing committee has taken on an enhanced "watch-dog" role as discussed in the 1994 public hearings on the Auditor General's 1992-93 report. Therefore, given the crucial nature of the information to Legislative Assembly decision-making, the committee will be requesting monthly cash balance statements from the deputy minister of Finance. At this point, Mr. Speaker, I would like to ask Mr. Allooloo to continue. Thank you.

The Speaker Samuel Gargan

Thank you, Ms. Mike. Mr. Allooloo.

Recommendation 3

Titus Allooloo Amittuq

Thank you, Mr. Speaker. Recommendation 3 is that the Department of Finance, through the Minister, provide copies of the GNWT Cash Flow Projection Schedule to Members of the Legislative Assembly on a monthly basis.

Administration Of Municipal Loans/Loan Lending Practices

Many capital and land development projects in municipalities are financed by loans provided by the government through the Department of Municipal and Community Affairs. The Department of Finance administers these loans which, for a number of reasons, may end up not being repaid, as was recently the case in one municipality.

The Auditor General has identified the following concerns:

-When borrowing for most long-term capital projects, municipalities must obtain approval of their taxpayers. However, where the loan is to be repaid from the proceeds of sales of developed land, the municipality can request a waiver of taxpayer approval. In this event, the loan can be repaid only from the sale proceeds and not from general tax revenues or special funds created for other purposes. If, as happened in Iqaluit, the municipality is unable to sell the land, then the government is on the hook for the amount of the loan.

-The Auditor General commented that, particularly in times of fiscal restring, it doesn't make sense for the government to assume risk without resource. He suggests that if the government wants to be in the business of lending money, it should:

- establish sound business practices

- analyze projects for viability

- assess all risks.

The Auditor General notes that the government has loaned millions of dollars to tax-based municipalities for capital projects. Given economic realities, it may be time to look at alternatives. For tax-based municipalities, he suggests that private sector financing may be an option, and could include refinancing existing loans. This would have the advantage of freeing up significant amounts of cash for the government to address other needs, and also improve commercial lending experience in the north.

In discussions with the committee, the Department of Finance indicated that they will continue to explore alternatives for meeting municipal borrowing needs. The deputy minister of Finance informed the committee that the government is in the process of re-examining its position on borrowing and then lending its surplus. For now, meaning the present fiscal year, this practice still appears to provide a net benefit to the government because the interest earned by the government from municipal loans does not reduce the grant from Canada. Therefore, municipal loans are attractive as a government investment. The results of the review will be presented as options for Cabinet to consider.

The standing committee understands the dynamics of the situation, but cautions the government that, if the costs of the municipal lending program exceed the net benefits, the government should endeavour to institute fall-back measures to minimize the impact on our financial position.

The Auditor General also recommended that the criteria for waiving ratepayer approval be reviewed and changes should be made to allow greater flexibility in collecting delinquent loans from a municipality's general and special funds. On this issue the deputy minister of Municipal and Community Affairs noted that it was not an option, as it is contrary to the spirit and intent of the municipal legislation.

The Department of Municipal and Community Affairs has indicated that they established the Debenture Review Committee in 1993 to review municipal loan applications. The committee will assess the viability of land development projects and make recommendations to the deputy minister and the Minister regarding waiving of ratepayer approval. The department "supports more rigorous scrutiny of long-term borrowing where ratepayer's approval is waived."

The Department of Finance also informed the committee that the number of municipal loans is decreasing. Ratepayers are turning down requests for funding and where their approval is waived, the new Debenture Review Committee is asking serious questions of municipalities regarding self-liquidating developments.

The Department of Finance, in cooperation with Municipal and Community Affairs and Justice, has also recently completed a new Financial Administration Manual Directive for municipal loan agreements. It was sent to the Financial Management Board in March 1995.

The committee noted that the tightening of controls and the installation of the Debenture Review Committee seems to be an improvement. However, the standing committee is concerned that the government must take every precaution, and analyze every risk, to ensure that there is a net benefit in the municipal lending process. The committee also encourages the government to take every possible step to lessen the impact of long-term loan agreements on the government's financial position.

Mr. Speaker, I will now ask our colleague and chairperson of the committee, Mr. Henry Zoe, to conclude the report. Thank you.

The Speaker Samuel Gargan

Thank you, Mr. Allooloo. Mr. Zoe.

Overexpenditure

Henry Zoe

Henry Zoe North Slave

Thank you, Mr. Speaker. In 1993-94, the Department of Education, Culture and Employment incurred an overexpenditure of $942,000. The committee discussed the circumstances with the deputy minister who indicated that it amounted to less than one-half of one per cent of their total budget. He explained that unexpected increases in a number of areas, including student financial assistance and advanced education, accounted for most of the overspending. Essentially, the department was unable to forecast an additional enrolment of 300 students in January 1994, and the expenditure was incurred in the fourth quarter.

The committee would like to remind departments that section 32 of the Financial Administration Act prohibits overspending appropriations, and any indications of this likelihood should be addressed within the provisions of the act.

Acknowledgements

The Standing Committee on Public Accounts, Mr. Speaker, would like to thank the departments and their officials who appeared as witnesses before the committee on short notice. Their cooperative and responsive efforts contributed greatly to a constructive review of the Auditor General's Report.

Motion To Receive Committee Report 9-12(7) And Move To Committee Of The Whole, Carried

Mr. Speaker, that concludes the report of the Standing Committee on Public Accounts; therefore, I move, seconded by the honourable Member for Natilikmiot, that the Report of the Standing Committee on Public Accounts on the Review of the Financial Statements of the Government of the Northwest Territories and the Report of the Auditor General for Canada for

the Fiscal Year Ending March 31, 1994, be received by the Assembly and moved into committee of the whole.

The Speaker Samuel Gargan

Thank you, Mr. Zoe. The motion is in order. To the motion.

An Hon. Member

Question.

The Speaker Samuel Gargan

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Mr. Zoe.

Henry Zoe

Henry Zoe North Slave

Thank you. Mr. Speaker, I seek unanimous consent to waive Rule 93(4) and have Committee Report 9-12(7) of the Standing Committee on Public Accounts moved into committee of the whole for today. Thank you.

The Speaker Samuel Gargan

Thank you. The Member for North Slave is seeking unanimous consent to waive Rule 93(4). Are there any nays? There are no nays. Mr. Zoe, you have unanimous consent.

Henry Zoe

Henry Zoe North Slave

Thank you.

The Speaker Samuel Gargan

The report will be put into committee of the whole. Item 11, reports of standing and special committees. Mr. Whitford.

Tony Whitford

Tony Whitford Yellowknife South

Introduction

Over the course of the 12th Assembly, a number of initiatives have been taken relating to the conduct of Members and to the possibility of Members or candidates being convicted of criminal offences.

On December 8, 1993, Members of the Legislative Assembly passed a motion to adopt the Members' code of conduct guidelines. These guidelines are a statement of guiding principles that reflect a level of moral commitment of shared values and a minimum level of behaviour that is expected from Members of the Legislative Assembly.

On February 11, 1994, Members of the Legislative Assembly passed a motion that the Legislature adopt the principle of zero tolerance for violence against all people.

In December 1994, the government introduced Bill 15, An Act to Amend the Elections Act. Responding to a recent Supreme Court of Canada ruling, this bill included an amendment allowing prisoners serving sentences of less than two years to vote in Territorial Court.

However, the Elections Act specifies that anyone eligible as an elector is also eligible as a candidate. This would imply that prisoners would then be able to run and serve as Members of the Legislative Assembly. Concerns were raised that allowing this would violate the spirit behind the Members' code of conduct and the declaration of zero tolerance for violence. As a result, Bill 19, An Act to Amend the Elections Act, No. 2, was introduced by the government in March 1995. This bill provides that prisoners may not be candidates in elections. Bills 15 and 19 received assent on April 14, 1995.

The concern about perceived violations of the code of conduct and zero tolerance declaration, however, still exists. At present, subsection 6(2) of the Legislative Assembly and Executive Council Act has the effect of expelling a Member who is sentenced to a term of imprisonment. But many crimes of violence do not always result in jail sentences. Many of those convicted of common assault and sexual assault, for example, are given fines or probation for first offences.

Introduction Of Private Member's Bill

Bill 32, An Act to Amend the Legislative Assembly and Executive Council Act, No. 2, was introduced by Mr. Charles Dent, MLA for Yellowknife Frame Lake, as a private Member's public bill on April 10, 1995. As originally introduced, it would provide that any Member convicted of an offence under the Criminal Code where "violence against a person is used, threatened or attempted" would be expelled. This would address the concern that one who is convicted of a violent offence, yet not sentenced to imprisonment, should not be permitted to sit as a Member.

Upon second reading in the House on April 26th, there was much debate on the principle of the bill. There was concern that past offences could lead to a Member's expulsion; however, this would occur only if the conviction for that offence occurred after the Member's election to the House. Some felt that the bill should be broadened to cover more offences; for example, all Criminal Code offences, or offences involving illegal drugs. Others felt that the bill should cover those who are found guilty of an offence but are given an absolute or conditional discharge. As well, concern was expressed that the bill, as presented, allowed no discretion for the House; any crime involving any degree of violence, from a slap to murder, would be treated the same.

When Mr. Dent spoke to the principle of the bill in the House, he mentioned two possible amendments which would address some of those concerns. First, he wanted to see the bill broadened to include sexual offences against children. While sexual interference, invitation to sexual touching, sexual exploitation, and incest are obviously grievous and inherently violent offences, they may not be considered as violent in the legal sense. Second, Mr. Dent proposed distinguishing between crimes prosecuted by summary conviction and those prosecuted by indictment.

Committee Hearings

The Standing Committee on Legislation heard from Mr. Dent in public hearings on May 25th. There was further discussion on the issues raised by Members earlier in the House. Some discussions arose concerning whether the bill should cover drug offences or all Criminal Code offences; however, the committee agreed that such amendments would go beyond the principle of the bill, and would therefore be out of order at this time. There was also significant discussion on the nature of amendments which would address points raised by Mr. Dent.

Also appearing at these public hearings was Ms. Lynn Brooks, executive director of the Status of Women Council of the Northwest Territories. In her presentation, she noted that we too often see leaders in the NWT convicted of violent offences. She also noted that most employees in the north would lose their job if convicted of a violent offence, and questioned, "Shouldn't political leaders live up to that same standard?"

Amendment To The Bill

Following the appearances of Mr. Dent and Ms. Brooks, the bill was amended in committee to meet Mr. Dent's suggestions. Crimes "involving the sexual exploitation of children" are now included in the scope of the amended bill. Furthermore, the "automatic" expulsion of a convicted Member would now only occur when a conviction is the result of an indictment. If the conviction is the result of a summary conviction, "The Legislative Assembly shall...determine whether it is necessary...to expel the Member..." The privilege of the Assembly to exercise discretion is thereby preserved.

One final part of the amendment also ensures that "the right of the Legislative Assembly to expel, suspend or discipline a Member" is not limited by this amendment, nor by any other part of the Legislative Assembly and Executive Council Act.

Mr. Dent concurred with the amendment as carried in committee, and the committee agrees that this bill is now ready to be reported to the House for consideration by committee of the whole, as amended and reprinted. Mr. Speaker, that concludes the report of the Standing Committee on Legislation.

Motion To Receive Committee Report 10-12(7) And Move To Committee Of The Whole, Carried

Therefore, I move, seconded by the honourable Member for Natilikmiot, that the report of the Standing Committee on Legislation on the review of Bill 32, An Act to Amend the Legislative Assembly and Executive Council Act, No. 2, be received by the Assembly and moved into committee of the whole.

The Speaker Samuel Gargan

Thank you, Mr. Whitford. The motion is in order. To the motion.

An Hon. Member

Question.

The Speaker Samuel Gargan

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Mr. Whitford.

Tony Whitford

Tony Whitford Yellowknife South

Mr. Speaker, I seek unanimous consent to waive Rule 93(4) and have Committee Report 10-12(7) of the Standing Committee on Legislation moved into committee of the whole for today.

The Speaker Samuel Gargan

The Member for Yellowknife South is seeking unanimous consent to waive Rule 93(4). Are there any nays? There are no nays. The report will be put in committee of the whole for today.

Item 11, reports of standing and special committees. Item 12, reports of committees on the review of bills. Item 13, tabling of documents. Mr. Kakfwi.

Item 13: Tabling Of Documents
Item 13: Tabling Of Documents

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Stephen Kakfwi

Stephen Kakfwi Sahtu

Mr. Speaker, I have three documents to table. The first two I wish to table as a Minister. Mr. Speaker, I wish to table Tabled Document 110-12(7), concerning Bill C-68, an Act Respecting Firearms and Other Weapons. It is letters from the hunters' and trappers' committee of Holman Island, the First Nations band of Wrigley, the Inuvik Hunters' and Trappers' Committee, and the Tsiigehtchic Charter Community of Arctic Red River.

I also wish to table Tabled Document 111-12(7), concerning Bill C-68 which includes resolutions from the Deh Cho First Nations leadership, the town of Norman Wells, the K'asho Got'ine Charter Community Council of Fort Good Hope, the Inuvik Native Band, the Aklavik Gwich'in Council and the NWT Association of Municipalities.

Finally, Mr. Speaker, I wish to table Tabled Document 112-12(7), three community council resolutions from Fort Norman, Fort Good Hope and Deline, and one letter from the Sahtu Dene Council supporting Bill 32, an amendment to the Legislative Assembly and Executive Council Act to provide that a Member who is convicted of an offence involving violence against another person must resign. Thank you.

Item 13: Tabling Of Documents
Item 13: Tabling Of Documents

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The Speaker Samuel Gargan

Thank you. Item 13, tabling of documents. Pursuant to section 21(1) of the Legislative Assembly Retiring Allowances Act and the Supplementary Retiring Allowances Act, I wish to table Tabled Document 113-12(7), the Pension Administration Report for the Year Ending March 31, 1995.

Item 13, tabling of documents. Mr. Clerk.

Item 13: Tabling Of Documents
Item 13: Tabling Of Documents

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Clerk Of The House Mr. David Hamilton

Mr. Speaker, according to Rule 42(10), I wish to table Tabled Document 114-12(7), a response to Petition No. 5-12(7), tabled by Mr. Todd and responded to by the Minister of Health and Social Services.

Item 13: Tabling Of Documents
Item 13: Tabling Of Documents

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The Speaker Samuel Gargan

Thank you. Item 13, tabling of documents. Item 14, notices of motion. Mr. Patterson.

Dennis Patterson Iqaluit

Thank you, Mr. Speaker. I wish to give notice that on Thursday, June 8th, I will move the following motion, seconded by Mr. Ballantyne, MLA for Yellowknife North.

I move, seconded by the MLA for Yellowknife North, that this Legislative Assembly endorses and supports the commencement of negotiations to transfer prosecutions from the Government of Canada to the Government of the Northwest Territories provided that the transfer does not prejudice any negotiations in the Northwest Territories on aboriginal self-government. Thank you, Mr. Speaker.