Thank you, Mr. Handley. The motion is in order. Question has been called. All those in favour? All those opposed? Thank you. Bill 6, Interim Appropriation Act, 2000-2001, has had second reading. Accordingly, the bill stands referred to committee of the whole for today. Mr. Dent.

Mr. Speaker, I seek unanimous consent to return to item 11, reports of standing and special committees.

Thank you, Mr. Dent. Mr. Dent is seeking unanimous consent to return to item 11. Are there any nays? There are no nays. Mr. Dent, you may proceed.

Thank you, Mr. Speaker, honourable colleagues. Mr. Speaker, the Standing Committee on Accountability and Oversight has reviewed the draft 2000-2001 interim appropriation and has prepared a report on this review. I move, seconded by the honourable Member for Inuvik Boot Lake, that the report be received by the Assembly and referred to committee of the whole.

Thank you, Mr. Dent. We have a motion on the floor. The motion is in order. To the motion. Question has been called. All those in favour? All those opposed? The motion is carried. The Chair recognizes Mr. Dent.

Thank you, Mr. Speaker. Mr. Speaker I request unanimous consent to waive Rule 93(4) and have Committee Report 2-14(2) moved into committee of the whole for today. Thank you, Mr. Speaker.

Thank you, Mr. Dent. The Member is seeking unanimous consent to waive Rule 93(4) and have Committee Report 2-14(2) moved into committee of the whole for today. Are there any nays? There are no nays. Committee report 2-14(2) has been moved to committee of the whole for today. We are still on item 11, reports of standing and special committees. Mr. Roland.

Thank you, Mr. Speaker. The Standing Committee on Governance and Economic Development has reviewed the draft 2000-2001 interim appropriation and has prepared a report on this review. I move, seconded by the honourable Member for Range Lake, that the report be received by the Assembly and referred to the committee of the whole.

Thank you, Mr. Roland. The Member is seeking unanimous consent to deal with this motion. The motion is in order. To the motion. Question has been called. All those in favour? All those opposed? The motion is carried. Mr. Roland.

Thank you, Mr. Speaker. I would request unanimous consent to waive Rule 93(4) and have Committee Report 3-14(2) moved into committee of the whole for today. Thank you.

Thank you, Mr. Roland. The Member is seeking unanimous consent to waive Rule 93(4), and have Committee Report 3-14(2) moved into committee of the whole for today. Are there any nays? There are no nays. Committee report 3-14(2) is moved to the committee of the whole for today. Item 11, reports of standing and special committees. Mr. Miltenberger.

Thank you, Mr. Speaker. The Standing Committee on Social Programs has reviewed the draft 2000-2001 interim appropriation and has prepared a report on this review. I move, seconded by the honourable Member for North Slave, that the report be received by the Assembly and referred to committee of the whole. Thank you, Mr. Speaker.

Thank you Mr. Miltenberger. The motion is in order. To the motion. Question has been called. All those in favour? All those opposed? The motion is carried. Mr. Miltenberger

Thank you, Mr. Speaker. I seek unanimous consent to waive Rule 93(4) and have Committee Report 4-14(2) moved into committee of the whole for today. Thank you, Mr. Speaker.

Thank you Mr. Miltenberger. The Member is seeking unanimous consent to waive Rule 93(4) and have Committee Report 4-14(2) moved into committee of the whole for today. Are there any nays? There are no nays. Committee Report 4-14(2) is moved into committee of the whole for today. Thank you.

Item 19, consideration in committee of the whole of bills and other matters. Minister's Statement 1-14(2), Sessional Statement; Tabled Document 4-14(2) "Our Community, Our Decisions, Let's Get On With It, Final Report of the Minister's Forum on Health and Social Services"; Bill 6, Interim Appropriation Act, 2000-2001; Committee Report 2-14(2), Accountability and Oversight on the 2000-2001 Interim Appropriation; Committee Report 3-14(2), Governance and Economic Development on the 2000-2001 Interim Appropriation; and Committee Report 4-14(2), Social Programs on the 2000-2001 Interim Appropriation. with Mr. Krutko in the chair.

We have a number of items to deal with in committee of the whole. What is the wish of the committee? Mr. Dent?

Thank you, Mr. Chairman. Mr. Chairman, I recommend the committee deal concurrently with Bill 6 and Committee Reports 2-14(2), 3-14(2) and 4-14(2).

Does the committee concur?

We will take a short break and return to deal with Bill 6.

-- Break

I would like to call the committee back to order. We are dealing with Bill 6. At this time, I will ask for an introduction, overview and comments by the Minister responsible, Mr. Handley.

Thank you, Mr. Chairman. The interim appropriation is required to provide the government with the authority to make expenditures until the 2000-2001 Main Estimates are approved, which we expect will be by early July. We have instructed departments to prepare interim appropriations which reflect their expenditure needs for the first four months of the fiscal year. This gives us some flexibility and timing for final approval of the estimates. Departments were instructed to calculate their interim appropriation requirements based on:

1. the amount of compensation and benefits for staff for the four month period;
2. the portion of grants and contributions that must be paid during the four month period;
3. any existing contractual commitments or contracts that must be initiated during the four month period;
4. the full year amount of any contracts that must be committed at the beginning of the fiscal year. This is required because the Financial Administration Act prohibits a contract authority from entering into a contract if there is no appropriation; and
5. capital requirements including projects of an urgent nature, projects which were begun in a previous fiscal year are projects where commitments must be made because of shipping deadlines or other circumstances.

In addition to these requirements, the Financial Management Board did approve the inclusion of some new spending needs in the interim appropriation. These new expenditures are included in each departments' interim funding request and have been reviewed by the standing committee meetings. It is also important to note that the interim appropriation ceases to have any authority as soon as the Legislative Assembly approves the final main estimates.

Mr. Chairman, in light of the government's fiscal situation, departments have developed their 2000-2001 budget proposals anticipating some reduced spending levels. For example, some capital projects which were previously scheduled for 2000-2001 have been deferred and it appears that forced growth requirements for 2000-2001 may be lower than initially projected.

As a result, our previous forecast of an operating deficit for 2000-2001 of $61 million has been reduced to a forecast $42 million deficit, a $19 million reduction to the previous projections.

This is an encouraging result. However, there are a number of factors which will affect the fiscal forecast over the next few months. The most notable factors will be a revised revenue forecast which will be available in April and the finalization of departmental forced growth needs for 2000-2001, which will be completed later this month. As a result, I will be bringing an updated fiscal forecast as part of the 2000-2001 budget that will be presented in June of this year.

Mr. Chairman, that concludes my introductory comments. Thank you.

Thank you, Mr. Handley. At this time, I would like to ask the committee responsible for this department, the Standing Committee on Accountability and Oversight, to present its report. Mr. Dent.

Thank you, Mr. Chairman. The Standing Committee on Accountability and Oversight met on Saturday, March 19, 2000 to review the interim appropriation for the Legislative Assembly and to review issues with government-wide implications that arose in the Standing Committee of Governance and Economic Development and the Standing Committee on Social Programs.

The Office of the Languages Commissioner

Mr. Chairman, under the Office of the Languages Commissioner, the committee noted that the term of the Languages Commissioner expires on May 31, 2000. This requires a timely response from the Legislative Assembly. It was further noted that the Official Languages Act must be reviewed in the first sitting of the Assembly in January of 2001.

Forced Growth

Mr. Chairman, under forced growth, members of the Accountability and Oversight Committee are concerned that there does not appear to be a standard definition of what forced growth actually entails. In the presentations from the departments, it became apparent that some departments confused forced growth with new initiatives, according to the understanding of committee members.

The committee noted the government summarized these levels of forced growth were lower than expected. However, committee members noticed that departments may have different requirements for different times of the year, and may present the request for forced growth funding later in the fiscal year.

The committee suggested the departments and the Financial Management Board separate forced growth from new initiatives so they do not appear on the same column or explanation sheet. This would help the committee to determine whether funding is necessary because of forced growth or as a new initiative and would save the committee questioning the department during the review process.

It is recommended that the Financial Management Board Secretariat develop a standard definition of forced growth to assist the department in deciding whether changes to an activity funding is forced growth or a new initiative.

Administration

Under the heading of administration, Mr. Chairman, in reviewing the activities of the departments contained in the interim appropriations, committee members realized that each department had a different interpretation of what activities should be included under the general heading of administration.

This latitude in the definition renders it impossible for the committees to examine the true costs of administration on a government-wide basis. In some departments, for example, the policy section is included under the administration activity. In other departments it is a separate activity or grouped differently with another activity. Committee members believe that a standardized definition of what should be included under administration activities must be developed and communicated to the departments for implementation in time for the upcoming review of the business plans.

Tangible Capital Assets

Under the heading tangible capital assets, Mr. Chairman, the Government of the Northwest Territories has adopted the policy of adhering to the Public Sector Accounting Board recommendations on accounting for tangible capital assets. The committee was concerned that the proposed $500,000 in funding for the acquisition of the asset management system may most likely entail increasing costs for the government. The software is to assist government departments in the implementation of new accounting methods for tangible capital assets.

Further, the committee expressed concern that the valuation of ownership process may require additional training, the recruitment for extra staff and may take longer than the government's completion deadline of March 31, 2000.

The committee is of the concern that implementation costs may have been understated, as were the costs incurred to date, for the Peoplesoft program. Further, the committee noted that capital tangible assets valued at less than $50,000 will be included as operations and maintenance as part of the new government accounting process. Currently, any significant capital expenditures, including vehicles, are included under capital expenditures.

Debt Wall

Under the heading debt wall, Mr. Chairman, committee members reiterated that unless we narrow the gap between revenues and expenditures, our debt wall will soon be met. A current borrowing limit of $300 million only has $39 million remaining. Without new sources of revenues, debts and deficits shall characterize the next few years, as evidenced by the most current fiscal projections given by government during this review exercise.

Fiscal projections for 2000-2001 presented by the government indicated an increase in revenues of $5 million and a decrease in expenditures of $14 million and a decrease in the projected deficit from an initial $61 million to $42 million. Most of the cuts and expenditures came in the reduction of $10 million in capital spending. The committee noted that even with these levels of cuts, the government may not be able to meet the funding requirements for the upcoming fiscal year.

At the very minimum, there will be less flexibility or wiggle room to allow the flexibility in expenditure planning. Committee members were concerned that inevitably it will no longer be practical to continue cutting funding to programs and services and capital projects without jeopardizing the safety and well-being of the residents of the Northwest Territories.

Further, committee members were concerned growth and new revenues may be minimal at best. Committee members suggested that with continued growth in the resource sector, primarily diamonds and oil and gas, our share of resource revenues and an increase to the tax window may offer the best hope for increasing our revenues.

Affirmative Action

Mr. Chairman, under the heading of affirmative action, the committee expressed concern the Government of the Northwest Territories public service was not representative of the population it serves.

The Department of the Executive has been asked to supply the latest affirmative action statistics for the Government of the Northwest Territories.

Digital Communication Network - Ardicom Ltd.

Under the heading of Digital Communication Network, Ardicom Ltd., the Government of the Northwest Territories has invested significant fiscal resources in the development of the digital communications network. There is a grave concern that the digital communication network is not meeting the needs of the government. The lack of bandwidth is impacting on the ability of the Department of Health and Social Services to implement its Telehealth Program.

This is also a problem with the Department of Education, Culture and Employment and their ability to deliver distance education programs. Mr. Chairman, the committee strongly encourages the Department of Health and Social Services, the Department of Education, Culture and Employment and the Financial Management Board to resolve the outstanding bandwidth issue with Ardicom and the digital communication network and looks forward to positive resolution of the issue.

Capital Budget Adjustments

Under the heading capital budget adjustments, the committee noted that funding for some capital projects reported in the proposed interim appropriation differed significantly with funding levels described in the 2000-2001 five-year capital plan.

A list of capital projects that had funding discrepancies was forwarded to their respective departments for further explanation. Mr. Chairman, on Monday March 20, 2000, the committee research staff received a capital budget adjustments document from the government, explaining some of these discrepancies. However, the lack of timeliness prohibited these discrepancies from being properly addressed in committee which met from March 16th to March 18th with government to discuss the proposed appropriation.

Further, committee research staff did not receive the 2000-2001 five-year capital plan until the afternoon of March 15th, a day prior to the start of the committee review of the proposed appropriation. Until that time, research staff are dependent on the 1999-2000 five-year capital plan for capital funding comparisons.

Mr. Chairman, the committee would prefer to receive future information in a more consistent reporting format from all departments. Additionally, committee members would like a more timely flow of information. The committee requested, but still has not received, information that is considered crucial to the review of the interim appropriations in committee of the whole.

Mr. Chairman, that concludes the report of the Standing Committee on Governance and Standing Committee on Accountability and Oversight. Thank you, Mr. Chairman.