Thank you, Madam Chairperson. I would like to give the report on the review of the 1999-2002 business plans and the 1999-2002 Main Estimates for the Standing Committee on Resource Management and Infrastructure and it is the report on the Department of Finance.
The Department of Finance and its Minister have the mandate for obtaining the necessary financial resources required to implement the Government of the Northwest Territories policies and programs, negotiating major financial arrangements with the federal government, regulating the insurance industry and controlling the sale of alcohol products in the Northwest Territories.
The Standing Committee on Resource Management and Infrastructure reviewed the Department of Finances business plan on November 20, 1998. Committee Members noted that the Department's business plan reflected federal funding changes that arose from the creation of two new territories. Importantly, variances in projected revenues and expenditures continue to be affected by national and global economic malaise, as metal commodity prices remain depressed. The Northwest Territories economy is resource driven. As such, until commodity prices recover, tax revenues affected by this downward cycle will most likely decline.
The committee reviewed the department's draft 1999-2000 Main Estimates on March 24, 1999. Total proposed 1999-2000 operations and maintenance expenditures declined by $88,000 or 1.22 percent from the business plan projections. Total operations and maintenance revenues also declined slightly by $97,000 or 0.02 percent for projected net revenues of $630.056 million. The Department of Finance administers the grant from Canada, territorial taxes and other revenues and accounts for over 85 percent of the total estimated 1999-2000 revenues of the territorial government.
Committee Members during their review of the draft 1999-2002 Main Estimates were concerned about the future of the gold mines, the economic potential of the diamond industry and the impact of the eventual loss of Nunavut business on the west. Committee Members agree that unless significant sources of revenue are produced or innovative or more efficient management of existing resources is developed, the government's ability to maintain and deliver programs and services may be severely compromised.
Insurance premiums. During the review of the business plan, committee Members expressed concern about rising insurance premiums and the very significant increases in the government's deductible, now $2 million. As a result, the committee recommended that the government examine options for increased fire prevention education programs in schools and initiatives to increase public awareness. The committee further recommended the adoption of on-site security personnel and the study of other alternatives to prevent and reduce losses due to fire and criminal activity.
In accordance with the committee's recommendations, the government has established an interdepartmental Facilities Risk Committee, chaired by the Department of Finance. The objective of the committee is to identify and implement practical loss prevention strategies (such as on-site security personnel) and procedures to protect government assets from loss at a reasonable cost.
Alternative Sources of Revenue. During the review of the department's draft Main Estimates, the committee noted that the government would no longer be bound by the Deficit Elimination Act after the 1998-1999 fiscal year. The government by its own projections is expected to be in a significant deficit situation in the next (2000-2001) fiscal year. Without the infusion of the accumulated surplus, the government would have been in a deficit situation for the 1999-2000 fiscal year.
Further, as commodity prices such as oil and gold continue to decline, taxation revenues from mining concerns may be severely compromised or eliminated altogether. Committee Members concluded that unless innovative means of income are found quickly, the government's ability to deliver and provide programs at satisfactory levels may no longer be possible. The committee recommends that timely efforts be made to identify and evaluate alternative sources of revenue.
Nunavut Service Contracts. Committee Members noted during both reviews that revenue from services performed for the Nunavut government represents a significant portion of the government's overall income. This income may be an important contribution to the government's current level of program and service delivery. The committee would like to receive a summary of Nunavut contracts to date and their respective contract values.
Madam Chairperson, that completes the report of the Standing Committee on Resource Management and Infrastructure on the Department of Finance.