Clause 2?

Clause 3?

Bill as a whole?

Does the committee agree that Bill 9 is ready for third reading?

Bill 9 is now ready for third reading. I would like to thank the Minister and his witnesses. Thank you. Sergeant-at-Arms, you can escort them out. Next item, the committee agreed we will be dealing with Bill 2, Write-off of Bad Debts Act, 2000-2001. I would like to ask the Minister responsible for this bill if he has any opening comments. Minister Handley.

Mr. Chairman, the purpose of the Write-off of Debts Act 2000-2001 is to authorize the write-off of the debts listed in the schedule to the Act. Pursuant to section 24 of the Financial Administration Act, the write-off of government assets or debts exceeding $20,000 must receive Legislative Assembly approval. Pursuant to Section 82 of the Financial Administration Act, the write-off of debts owed to a public agency exceeding $20,000 must receive Legislative Assembly approval. The write-off of debts owed to the Workers' Compensation Board exceeding $50,000 must receive Legislative Assembly approval.

The write-off being proposed in this Act will not require a new appropriation. The write-off will be charged against allowances for bad debts, which were established in the department budget at the time it was determined that collection of the debt would be unlikely. I wish to emphasize that the write-off of a debt does not relieve the debtor of the liability for repayment or mean that the government will not continue to attempt to collect the outstanding amount. Through continued reviews by my staff, future recovery of the debt may still be achieved.

In addition, in cases of debts owed by companies, we track the principals of each firm for a future credit reference. Mr. Chairman, I or the appropriate Minister am prepared to answer Members' questions on the proposed write-off. Thank you.

Thank you, Mr. Minister. Does the committee responsible for overseeing this bill have any comments? Mr. Roland.

Thank you, Mr. Chairman. The Standing Committee on Accountability and Oversight reviewed Bill 2, Write-off of Debts Act, 2000-2001, on September 29, 2000. The committee would like to thank the Minister responsible for Finance and his officials for presenting the bill. The bill authorizes the write-off of debts in accordance with the Financial Administration Act, section 24 and 82, as the Financial Administration Act requires an Act for the write-off of a debt or obligation owed to the government or a public agency that is worth more than $20,000. This bill would write-off $2,660,190.45 in debts owed to this government and its public agencies.

Mr. Chairman, no debt, obligation or part of a debt or obligation that is written off shall be deemed remitted, satisfied or forgiven as a result of the write-off. Debts contained in the bill will be written off as they are considered uncollectible. The write-off proposed in this Act would not require a new appropriation. The write-off will be charged against allowances which were established in the respective department's budget at the time it was determined that collection of the debt would be unlikely.

During discussions of the bill, the committee expressed three major points: the need for a central tracking system to effectively monitor credit worthiness of government clientele; the disclosure of client information to the public after a certain time period as a collection function; and the need to inform the public that the write-off of debts does not mean collection efforts have ceased.

Members recommended that there should be a system for tracking and monitoring the credit worthiness of clients who have received write-offs or forgiveness of debts. A central monitoring system may reduce the government's lending and operating risk.

The committee also noted that the write-off of a debt also performs a collection function. Clients may be more inclined to repay their debts if their names were to be published and made readily available to the public upon non-payment.

Finally, the committee was concerned that many members of the public may perceive that the write-off of bad debts is similar to the forgiveness of debts. The committee would like to again point out that even though a debt may be written off, collection efforts have not ceased. If a debt is forgiven, then no further collection efforts are planned.

Mr. Chairman, following the committee's review, a motion was carried to report Bill 2, Write-off of Debts Act, 2000-2001 to the Assembly as ready for the committee of the whole. Additional comments or questions by Members may be posed as we proceed. Thank you, Mr. Chairman.

Thank you, Mr. Roland. With that, I would like to ask the Minister if he will be calling any witnesses. Mr. Minister.

Yes, Mr. Chairman, I will.

Does the committee concur?

Sergeant-At-Arms, could you escort the witnesses in? Mr. Minister, for the record, would please you introduce your witnesses?

Mr. Chairman, on my left is Gerry Gagnon, manager of tax administration for the Department of Finance. On my right is Lew Voytilla, secretary to the Financial Management Board.

Thank you, Mr. Minister. Welcome, witnesses. We are dealing with Bill 2, Write-off of Bad Debts Act, 2000-2001. General comments? Clause-by-clause?

We are dealing with item 2 in the grey binder. Bill 2, Write-off of Bad Debts Act, 2000-2001. Clause 1?

Page 2, schedule of debts written off, total $2,660,190.45. Mr. Roland.

Thank you, Mr. Chairman. Under the schedule, item 3, debtor Gasgo Olton Limited. For the record, can we have an explanation as to the nature of this debt? It says tobacco tax penalties and interest. What is that arising from? Someone not paying their taxes?