Thank you, Mr. Chairman. The Standing Committee on Governance and Economic Development conducted a public review of Bill 1, An Act to Amend the Northwest Territories Business Credit Corporation Act, on June 11, 2001. The committee would like to thank the Minister of Resources, Wildlife and Economic Development and his officials for presenting the bill.
The bill would amend subsection 37(3) of the Northwest Territories Business Credit Corporation Act and increase the limit for loans, bond guaranteed loans or indemnified bonds from $1 million to $2 million.
During discussions on the bill, the committee expressed two major concerns. The Business Credit Corporation's requirement to increase the limit prior to the Standing Committee on Governance and Economic Development's consideration of the government's Business Program Review Committee's upcoming report and the ongoing necessity for balanced risk management and diversification.
Committee members recalled during their review of the government's 2001-02 business plans and main estimates, the government established a Business Program Review Committee to consider the amalgamation of the Northwest Territories Business Credit Corporation, the Northwest Territories Development Corporation and its Business Development Fund.
A report from the review committee was originally due on March 31, 2001, but this has been moved to June, 2001. The standing committee has not yet received a copy of the report. The committee members were of the position that consideration of the report may aid in its consideration of the BCC's request to increase its lending limit.
The government answered that the standard review process involving Cabinet and the standing committee may be lengthy. However, they provided assurances that the BCC needs the legislation as soon as possible to meet capital requirements from recent developments in the diamond and oil and gas sectors.
The Minister added that the government has consulted and received support from the review committee regarding this proposed lending limit increase.
Committee members noted that as of March 31, 2001, total outstanding borrowing for the Business Credit Corporation, stood at $27,500,000, with $22,500,000 remaining to lend out in accordance with its act.
The standing committee was concerned that an increase of the lending limit may increase overall risk by concentrating limited funding with a few business enterprises or a group of related enterprises.
Committee members confirmed with the Minister that a single business, or related entities of a single business, may not access more than the lending limit, and the proposed lending limit would continue to ensure that the loan portfolio remains diversified.
Mr. Chairman, following the committee's review, a motion was carried to report Bill 1, An Act to Amend the Northwest Territories Business Credit Corporation Act, to the Assembly as ready for committee of the whole. Additional questions or comments of Members may be posed as we proceed. Thank you, Mr. Chairman.