Yes, Mr. Chairman. Mr. Chairman, I am pleased to be before the committee today to present the Financial Management Board Secretariat's 2001-2002 main estimates.

The 2001-2002 main estimates propose expenditures of $26,961,000. This provides for total net expenditures growth from the 2000-2001 fiscal year of $1,370,000. The expenditure increases proposed for the FMB Secretariat include:

1. $623,000 associated with the compensation changes resulting from the successful completion of negotiations with the Union of Northern Workers;
2. $1,314,000 related to the interim financing arrangement with the federal government that provides funds for the increased costs to the Government of the Northwest Territories associated with changes to the Public Service Superannuation Act. This arrangement runs until the 2003-2004 fiscal year;
3. $1,100,000 to provide for additional costs to the power subsidy program associated with fuel rate rider increases.

These increases are partially offset by funding reductions associated with the conclusion of one-time projects including tangible capital assets implementation, the external evaluation of public/private partnership pilot initiative, and collective bargaining with the Union of Northern Workers.

For 2001-2002, the FMB Secretariat's main estimates provide funding for 139 of its 146 current and term positions. This provides for a total net reduction of two positions for the 2000-2001 fiscal year. This is comprised of a reduction of three term positions in headquarters associated with projects that have been successfully completed, and is partially offset by the re-establishment of one position in the Fort Simpson area office.

The Standing Committee on Governance and Economic Development has made an observation that there has been significant growth in the FMBS funding, responsibilities and human resources over the past few years.

Since 1999-2000, the FMB Secretariat budget does show a 46 percent increase in funding and a 25 percent increase in human resources. However, only nine percent of the funding growth and five percent of the human resource growth have been ongoing base increases. These ongoing funding increases are primarily associated with the power subsidy program, amortization expense, and collective agreement revisions.

The balance of the funding increase, 37 percent, and human resource increase, 20 percent, is associated with term projects: the equal pay project, the pension reform project, self-government related activity, and the four-year federal superannuation contribution.

The standing committee is correct in observing that over the past few years, there have been many significant responsibility areas that have been assigned to the FMB Secretariat. These additional responsibility areas have been high-profile short-term projects and have been assigned to the FMB Secretariat primarily due to the significant government-wide financial impacts associated with them. All the projects have been undertaken by the FMB Secretariat without the requirement for additional funding, including:

1. The division of the assets and liabilities of the Northwest Territories;
2. The division of the Northwest Territories Power Corporation;
3. The reporting of GNWT geographic expenditure data from an expenditure beneficiary point of view -- geographic tracking of expenditures;
4. The coordination of the Non-Renewable Resource Development Strategy; and
5. The review of electrical power generation, distribution, regulation and subsidization in the NWT.

Many of the strategies the FMB Secretariat is involved with are multi-year in nature. However, the FMB Secretariat has undertaken numerous initiatives that speak specifically to the Towards a Better Tomorrow strategies.

Public expectations concerning probity and accountability continue to rise with more demands for greater transparency, disclosure and rules designed to protect the public interest. Accountability expectations mean more consultations, clearer plans with specific goals and objectives and public results reporting on accomplishments. Accountability and efficiency demands also extend to how government does business with respect to such things as competitive tendering, preference policies, adherence to trade agreements, debriefing of unsuccessful bidders, public appeal processes and many more.

The FMB Secretariat has undertaken specific initiatives in this regard:

1. A review of government procurement and contracting vis-à-vis best practices;
2. With RWED, initiated the Business Incentive Policy review;
3. The development of a code of conduct for the public service;
4. Major efforts to improve government results reporting, including the development of government-wide performance measures and improvements to department performance measures; and
5. Initiation of the development of a third-party accountability framework.

Public sector management is becoming more complex as governments strive to meet increasing expectations with fewer dollars. Conditions change rapidly and public sector managers must adapt while adhering to best practices. Recent trends to partnership arrangements, delegation, client focused "one-window" service access, e-commerce, and operational streamlining constantly require re-evaluation of how business is conducted and the role of the government. All of these issues are impacted by how government manages and uses information and knowledge.

The FMB Secretariat is leading the development of a knowledge management strategy. The strategy will provide direction regarding information and knowledge management and will provide a policy framework by which the Government of the Northwest Territories can structure its related activities. These are some of the major ways that the FMB Secretariat is working to meet the goals outlined in Towards a Better Tomorrow. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. The Financial Management Board Secretariat, along with the Ministry of Aboriginal Affairs and the Executive Offices, is part of the Department of the Executive. Each one submits their own business plans and main estimates for committee review.

FMBS is comprised of the following activities; the directorate, labour relations and compensation services, government accounting, budgeting and evaluation, and the audit bureau.

The Standing Committee on Governance and Economic Development met with the chair of the Financial Management Board and his staff on Wednesday, January 17, 2001, to review the Secretariat's main estimates for 2001-2002.

The committee noted a $1,719,000 increase in the operations expense from the Secretariat's 2001-2004 business plan projections. This projected increase reflects:

• • amendments arising from increases in compensation and benefits in the amount of $623,000 as the result of the recent UNW collective agreement;
• • a reduction in amortization estimates of $29,000;
• • an increase of $1,280,000 in the base funding for the Power Subsidy Program (which provides subsidies for both domestic and commercial consumers of electricity who pay for their own power and reside in high cost areas); and
• • a decrease in other adjustments of $155,000.

FMBS did not propose any new capital expenditures from their 2001-2004 business plan.

There were no changes to FMBS' revenue projections. Although the Secretariat proposed a six-position increase from their 2001-2004 business plan, this readjustment results in an actual two-position decline from their 2000-2001 main estimates.

In addition to the committee's earlier comments in this report, members questioned why this project is with FMBS instead of the Department of Resources, Wildlife and Economic Development or the Northwest Territories Power Corporation. Committee members had previously noted in the review of FMBS' 2001-2004 business plan that there had been a significant growth in the Secretariat's funding, responsibilities and human resources over the past few years. FMBS explained that this hydro initiative is an overall government issue as it will have significant financial impact. The committee concurred and referred this issue to the Standing Committee on Accountability and Oversight as a government-wide concern.

Some committee members added that the proposed hydro project will be located in the South Slave region and reminded the government that jobs associated with the project should be located there too.

The cost of the pay equity dispute amounts to $3,000,000 annually for this government. The government reports an 83 percent settlement rate. The government added that if they could locate the remaining employees, a 100 percent acceptance rate could be achieved, effectively retiring the pay equity issue for this government. The committee encourages the government to find and settle with the remaining employees. However, FMBS added that this process might be further complicated as the Bell Canada pay equity decision has been overturned.

The committee was also concerned with the financial implications of the next collective agreement with the teachers. The Minister advised the committee that the government and the union are still negotiating.

NWTPC's long-term debts shared with Nunavut need to be settled. Although Nunavut funds their portion of the debt service, the debt principal is nonetheless carried on our books and restricts our borrowing capacity. Committee members stated that if we divide the assets of the NWTPC with Nunavut, then we must divide the debt too.

Our debt limit or maximum borrowing limit is $300,000,000 as per the NWT Act. Most of this debt is for NWTPC. There is some program debt, but the NWTPC debt accounts for the largest portion of our total debt. If the Nunavut portion is transferred, this will increase our borrowing capacity. At the very least, it will move us away from the debt wall. Our territorial government's guarantees for the NWT Power Corporation accounts for $124,458,000 of our total debt for the upcoming 2001-2002 fiscal year. Our total net debt is expected to be $250,815,000 and our available borrowing capacity will be $49,185,000.

The committee noted that the program had initially projected a decrease of $180,000. However, upon review of the main estimates with FMBS, the committee learned that there will be no decrease as the government decided to retain the program to help offset power rate increases. Instead, there will be an upward adjustment in the 2000-2001 power subsidy program of $1,280,000.

Committee members were concerned how the government will pay for the expenditure increase. The Minister replied that he will come forward with a supplementary appropriation to address program demands in the short term and hopes that development of alternatives such as hydroelectricity will economically meet our energy demands in the future.

The committee recognizes that self-government negotiations have an impact on the development of future regional organizations. However, the committee is of the opinion that rather than focusing on the end product and doing nothing, government should focus on developing an effective and responsive process for future regional reorganization to occur.

Furthermore, the committee concluded that the territorial government needs to be aware of their responsibility in this matter to accurately determine the current costs of program and service delivery. The committee added that economic development opportunities are dependent upon and are delayed by land claim negotiations. Negotiations require that at least the present costs of program and service deliveries be identified.

That concludes the committee's report, Mr. Chair.

Yes, I would, Mr. Chairman.

Thank you, Mr. Chairman. With me on my right is Lew Voytilla, secretary to the Financial Management Board, and Mr. Taggart, manager of corporate services. Thank you.

Thank you, Mr. Chairman. I would like to make some comments. After listening to the Minister's opening remarks, and he spoke of projects that have been undertaken by the FMB Secretariat without the requirement for additional funding, he included the division of the assets and liabilities of the Northwest Territories, the division of the NWT Power Corporation, the reporting of the GNWT geographic expenditure data from an expenditure beneficiary point of view, geographic tracking of expenditures.

Those three in particular, Mr. Chairman, as I am aware, were undertaken and for the most part completed during the 13th Assembly as we prepared for division. I find it a little difficult to hear that this Minister is stating those things when our concerns of growth have been in the 14th Assembly for the most part. It is almost a case of blowing your own horn, and I just felt that I had to make that comment. Thank you.

Mr. Chairman, I do not think it is a just a matter of blowing our own horn. There has been a considerable amount of work that has had to be done to complete these tasks. In fact, division of the Power Corporation is an exercise that is still ongoing. Thank you.

Thank you, Mr. Chairman. I detected a smirk on the Minister's face. The fact is, I agree, there has been a lot of work done by this department in preparing for division of the Territories and some of the ongoing work. My comments are not to belittle the work of the department because they have done some good work, and I am always impressed with Mr. Voytilla's forecasts. He is coming in sharper than a bell. I must say that in a previous life he must have been a weather forecaster. Thank you.

-- Laughter

Thank you, Mr. Chairman. Mr. Chairman, in the Minister's opening comments he made the observation that the Standing Committee on Governance and Economic Development has made the observation that there has been significant growth in FMBS funding responsibilities in human resources over the past few years.

Mr. Chairman, the one word that is missing there is "influence". In my five-and-a-half years in this Assembly it seems to me that FMBS has become the single most influential government -- it is not even a department - but it has become the most influential unit in government. It is the gatekeeper, it seems, to just about all government activity.

While I recognize the need for probity and accountability in counting the money, my concern is in fact that they have significant influence as well in a lot of program areas. While I as well appreciate the hard work of the FMBS and Mr. Voytilla's unique and never-ending forecasting requirements and having to balance all those many financial bills and do all that work, I do share the concern and observation by the Standing Committee on Governance and Economic Development.

It is not necessarily a money issue, but it is just a concern - and this was a concern when I worked for the government as well - that personnel, finance and government services went from service organizations to control organizations. I do not know if it is part of this cyclical revolutionary development of bureaucracies, but it is something that I want to state for the record as part of this process today.

The Minister has laid out the many projects that the FMBS has worked on. Some of them seem like RWED processes, some of them seem that they could be in other departments. However, that is not what has happened. I must acknowledge as well that my recollection is that every Minister of FMBS has been very influential because where the money is, is where the decisions tend to be made.

The Ministers that I have had involvement with have all been hard-charging individuals and I must give them credit for their initiative. However, the corporate structure they have built up around them has had a significant and lasting influence long beyond the time of the particular Ministers. So my concern is that. I am watching with interest to see because things like the Human Resource Development Strategy, for example, I am hoping will be separate from FMBS, so FMBS can concentrate on running PeopleSoft and keeping the books balanced and not get involved with necessarily a lot of these other program areas. A lot of these program areas are not necessarily financial and the people at FMBS tend to be financial people. That is my concern. Thank you, Mr. Chairman.