Mr. Chairman, the committee learned that the community of Fort Simpson will receive extraordinary funding in the amount of $1,700,000. This amount would leave only $200,000 in the department's extraordinary funding for other communities.

The committee is aware that Fort Simpson has received extraordinary funding in the past. Documentation received from the department confirmed that the community of Fort Simpson has received extraordinary funding in the amount of $1,546,000 for its water and sewer system and for the replacement of its main street from 1997-1998 to 2000-2001 and $257,000 for deficit reduction in 2001-2002.

The committee noted that as of the next fiscal year, Fort Simpson would have received $3,503,000 in total extraordinary funding since 1989-1990. Committee members are concerned that extraordinary funding has evolved into a pool of money that is used as an additional source of funding for some communities, such as Fort Simpson and Yellowknife. Most of our communities are being penalized for good financial management, while other communities use extraordinary funding for public works projects and paving. In short, some communities are being rewarded for bad financial management with extraordinary funding bailouts.

The Standing Committee on Governance and Economic Development suggests that the department work more closely with Fort Simpson and other similarly managed communities to avoid extraordinary funding incidents in the future. Furthermore, the committee encourages the adoption and implementation of debt recovery programs as an alternative to extraordinary funding as a proactive initiative to encourage good fiscal management.