Mr. Chairman, this debt developed over a period of time and as of March 31, 1998, they had a $214,000 debt. It recovered a bit and at March 31, 1999, it was down to $52,000 and then between March 1999 and March 2000, it jumped back up to $383,000. The mayor and council, it appears, did not grasp the severity of their financial situation until December of 1999 as a result of getting misleading information, as I mentioned, from some of their senior people working in the hamlet office. I assume that MACA as well was not receiving any better information than were the mayor and council. Both MACA and the mayor and council have to depend on the information the officials in the hamlet office are providing. Thank you.

Thank you, Mr. Handley. Mr. Bell.

Well then, I think this speaks for the need for frequent auditing, if this can go on for a few years with internal officials, as the Minister suggests, not providing adequate or correct information to the departmental staff and to the council. I am amazed that no auditing takes place to ensure that this information is accurate. As the Minister explains it, it would seem that one person not paying attention to the rules can go for years at a time before their leadership or their management abilities are even questioned. Is this the case? Can we go years without auditing?

Thank you, Mr. Bell. Mr. Handley.

Mr. Chairman, MACA are provided with audited financial statements annually, so while they had a debt over a period of years, it was not felt to be an unmanageable situation until the 1999-2000 year where it jumped up to $338,000. There are other situations where hamlets may run deficits, but while MACA will be monitoring that mainly through the audited statements they receive, they do not step in until it gets to the point where it simply is not manageable. They are continually monitoring it and watching what is happening. In this case, unfortunately, you had a senior officer employed by the hamlet who just was not providing accurate information. Thank you.

Thank you, Mr. Handley. Mr. Bell.

Thank you. How many other municipalities currently are in debt? Could the Minister please give us those municipalities and the amounts?

Thank you, Mr. Bell. Mr. Handley.

Mr. Chairman, the following communities have reported accumulated deficits for the year ending March 31, 2000. Those communities are Fort Good Hope with $190,000 deficit at that point; Fort Simpson, $642,817; and Fort McPherson, $55,382. Those three communities all reported accumulated deficits for the year ending March 31, 2000. Thank you.

Thank you, Mr. Handley. Mr. Bell.

Thank you. In our government's opinion, how many of those are considered deemed to be unmanageable situations?

Thank you, Mr. Bell. Mr. Handley.

Mr. Chairman, that is a question that I would like to refer to the Minister of MACA because I do not know which ones are manageable and to what extent MACA would determine to be unmanageable.

Thank you Mr. Handley. Mr. Handley has referred that to the Minister for Municipal and Community Affairs, Mr. Allen.

Thank you, Mr. Chairman. Mr. Chairman, it is difficult to analyze each one, as each community is a little different and we feel that we are on the right track to eradicating some of the financial problems of those specific communities. We now have action plans put in place to try to resolve the debt problems of each municipality and I feel that within the time restraints applied to the deficit problems that we will be able to, at least, address those fairly quickly. Thank you.

Thank you, Mr. Allen. Mr. Bell.

When we speak of action plans in place, would it be appropriate to assume that the action plans would be similar to the action plan for Rae-Edzo, which is to come back to the House for money? Is that an action plan to deal with the debt that we can expect to see?

Thank you, Mr. Bell. Mr. Handley. Okay, the Minister is referring it to Mr. Municipal and Community Affairs, Mr. Allen.

Thank you, Mr. Chairman. No, our action plan really should address several key areas. One is that we are preparing a debt recovery plan. First of all, that is the number one objective. Secondly, I believe that we are looking at implementing expense reduction plans. We are also looking at developing some internal financial workings, so that we can deal with our financial situations. We have a number of developments going on as it applies from community to community. Thank you, Mr. Chairman.

Thank you, Mr. Allen. Mr. Bell.

Thank you. I hope the Minister will forgive me for being nervous when I hear the government talk about debt recovery plans. Clearly, the debt recovery plan for Rae-Edzo involves dealing with a $454,000 debt and we are doing that by spending $405,000 in the supplementary appropriation. I do not know if that is a debt recovery plan. I think that is a bail out, and I am nervous about what kind of message that this sends to our municipalities. If the message is, we will bail you out, they are all listening. I would assume that if they are paying any attention to what is going on in this House, Fort Good Hope, Fort Simpson, and Fort McPherson, will be coming forward for requests to have these debts written off, and if we are going to bail out Rae-Edzo, certainly we are going to bail out everybody else.

I am wondering if Mr. Handley can speak to this. How do we make the decision that one situation is manageable and another is unmanageable? Are we talking about internal personnel and whether or not they were qualified? This is a judgement call I guess, but I am certainly concerned about the message it sends. We have also spent some money in helping the hamlet hire a new SAO, I understand, and recruit a new SAO. Is this typical standard procedure? Do we do this as SAOs leave other communities? Do we come outside their block-funding to provide additional funding, to hire and recruit staff? I do not know, but I would like to hear the Minister speak to it.

Thank you, Mr. Bell. Mr. Handley.

Mr. Chairman, just to give you an example of how Municipal and Community Affairs handles these situations. In Fort Simpson, as of the end of March, Fort Simpson reported an accumulated deficit of over $600,000. Municipal and Community Affairs' response to that was in June, Municipal and Community Affairs prepared a detailed review of financial concerns for the council and offered assistance in developing a revised budget and operating plan.

In August, Municipal and Community Affairs requested a revised budget and operating plan that reflected the deficit recovery. In September, the village requested Municipal and Community Affairs' assistance to develop the revised budget and so on. Work is scheduled to commence on October 25 and 26 and so on, so I am not sure what has happened since. Municipal and Community Affairs does follow through in any of these situations where they find they are in trouble.

In the case of Fort McPherson, when the accumulated deficit of $55,382 was reported on March 31st, there was an initial meeting between Municipal and Community Affairs and the council. I think that happened in early October. Council has since asked to review the matter with their administrator prior to responding to Municipal and Community Affairs' offer of assistance to develop a revised budget and operating plan. In each of these cases, it is not just a matter of picking up the deficit and bringing it back to the government. Municipal and Community Affairs does work closely with them to revise their budgets and develop an operating plan that is going to help them recover from the debt situation that they find themselves in.

Thank you, Mr. Handley. Mr. Krutko.