Thank you, Mr. Handley. Mr. Bell.

Thank you. I will not continue this point except to say that I think it is one thing to say that the new formula we hope will be fair, to treat communities equally, help communities not run deficits, and another thing entirely to say, that we hope this new formula is going provide relief.

I think provide relief would indicate that it would help them deal with past deficits and past problems. Again, I am nervous when we see a debt recovery plan when it looks like a bail-out and know that there are other communities that may or may not be coming forward but I would assume probably will come forward at some point.

That is the only point I wanted to make. If we are talking about providing relief, I am wondering what kind of message we are sending. Thank you.

Thank you, Mr. Bell. That was more of a comment than a question. Mr. Krutko.

Thank you, Mr. Chairman. In regards to the hamlet debt recovery that is mentioned in the budget under the $405,000, the Minister mentioned in his earlier comments that the new formula is going to be in place to make it a lot better.

I looked at that and I have some concerns on that. It limits you to a certain percentage. I believe that it is 35 percent over and above the actual amount of your expenditures. So because the system for one is new, the ideal is on paper and there is limitations on how much you would actually cover. You have to be consistent here. Using that ratio, will you also consider dollars over and above the actual 35 percent allocation that is in the new formula?

Thank you, Mr. Krutko. Mr. Handley.

Mr. Chairman, the question really does not relate to the supp here. I do not have the answer to that. Thank you.

I think we have gotten sidetracked a little bit and I do not know where it started. I do not know if it was you, Mr. Handley, that first mentioned the debt recovery and the formula and that sort of thing, but obviously you are not in a position, or you do not want to answer a lot of questions on debt financing formula or recovery plan.

I would remind Members that we are on detail in this supplementary appropriation so we might all be better off to stick to the figures in the book and try to keep our comments as they apply to the supplementary appropriation. Mr. Krutko.

Thank you, Mr. Chairman. The Minister gave us a breakdown on the $405,000 and said that $320,000 was toward the debt and $85,000 was for debt recovery. I would like to ask the Minister responsible for Finance, do other communities have the opportunity or ability to receive dollars through a supplementary for debt recovery?

Thank you, Mr. Krutko. Mr. Handley.

Mr. Chairman, Municipal and Community Affairs monitors these situations and they work with the community during the period that they have a deficit. The decision on whether or not to move toward having a debt recovery plan in place is a decision that Municipal and Community Affairs would make based on their assessment of the severity of the situation.

Yes, hypothetically every community would have that opportunity if their situation was serious enough. Hopefully it does not get there. Hopefully Municipal and Community Affairs is able to work with the mayor and council and get it sorted out before it hits that point.

Thank you, Mr. Handley. Mr. Krutko.

Thank you, Mr. Chairman. I believe for Rae-Edzo, that problem has come forth to this House before. They have made reference to the concerns in the 13th Assembly in regard to the formula that was being used and how funds were being allocated.

This problem has been around. I think that it is important to realize that there are other communities out there who may not be in as serious a position as they are in Rae-Edzo in regard to their debt, but the communities are accumulating that debt. The concern that I have, especially with the communities in my riding who have had to get debt relief, is that they had to have the government or Municipal and Community Affairs come in and assist them financially to ensure that their audits were done and to ensure that they had resources to get them through.

I would like to ask the Minister responsible for Finance, is there actually a procedure that is being followed here which is consistent with all communities to ensure that they do have the ability for debt relief?

Thank you, Mr. Krutko. Mr. Handley.

Mr. Chairman, as I mentioned, Municipal and Community Affairs monitors all of these situations where there are accumulated deficits that are getting large. Municipal and Community Affairs will continue to monitor that. They will help to develop revised budgets and they will help with operating plans.

As I said, if it gets to the point where they just cannot manage anymore then yes, hypothetically, theoretically, they could be eligible. All communities are treated equally. This is not just a special deal for Rae-Edzo.

Thank you, Mr. Handley. Mr. Bell.

Thank you, I want to make one final point in this area and then leave it alone. I do not expect a response, but I think it is a strange message we send when we tell Yellowknife, Hay River, Fort Smith, Inuvik and Fort Simpson that they are going to take a five percent cut across the board this year. They are going to have to somehow maintain the level of service with less money, and if they have problems, they have to eat them by dealing with them internally. Find the money. On one hand we are saying that and on the other hand we are providing a bail out package if there was mismanagement or if we had a rogue SAO not report properly to town council for years and to the department.

I do not know what kind of message it sends to governments who manage responsibly. To me, the message is loud and clear, if you are irresponsible with the money we will give you more. We are awarding SAOs who mismanage. This clearly speaks to some sort of need for a tighter accountability framework. Clearly, it is not one community and who knows where these things could be building.

I do not know why we are not aware of these problems until they are $400,000 problems. I think that we have to deal with some of these situations and deal with them earlier.

If it is a matter of not enough money to a municipality, then we have to deal with that up front. Given that we know that Simpson took a five percent cut this year with the other tax-based municipalities and they have a $642,000 deficit, I would be amazed to see how this formula could possibly provide them any relief. I know that we are not speaking to that here, but that is just the final point I wanted to make.

Thank you, Mr. Bell. We are on page 6, Municipal and Community Affairs, operating expenditures, regional operations, special warrants, $962,000.

Agreed. Not previously authorized, $178,000.

Agreed. Page 7, Municipal and Community Affairs continued, operational expenditures, community development, not previously authorized, $28,000.

Agreed. Community financial services. Mr. Krutko.