This is page numbers 1105 - 1142 of the Hansard for the 14th Assembly, 6th Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was justice.

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Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Charles Dent

Charles Dent Frame Lake

Mr. Chairman, I would like to recommend we consider Bill 19, followed by Bill 20.

Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Mr. Dent. Does the committee agree?

Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you. Will the Minister of Finance introduce the bill? Mr. Handley.

Bill 19: Write-off Of Debts Act, 2003-2004minister's Opening Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Joe Handley

Joe Handley Weledeh

Mr. Chairman, the purpose of the Write-off of Debts Act, 2003-2004, 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 92 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 a 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 the case of debts owed by companies, we track the principals of each firm for future credit reference.

Mr. Chairman, I am prepared to answer Members' questions on the proposed write-off. Thank you.

Bill 19: Write-off Of Debts Act, 2003-2004minister's Opening Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Mr. Handley. The chair recognizes the chairman of the standing committee, Mr. Dent.

standing Committee On Accountability And Oversight's Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

September 30th, 2003

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Charles Dent

Charles Dent Frame Lake

Thank you, Mr. Chairman. The Standing Committee on Accountability and Oversight reviewed Bill 19, Write-off of Debts Act, 2003-2004, on August 28, 2003. This bill wrote off $162,433.72 in debts owed to this government and its public agencies. The Department of Education, Culture and Employment will write off this entire amount as it is comprised exclusively of student loans that have been deemed uncollectible.

The committee would like to thank the Minister of Finance and his officials for presenting the bill. This bill authorizes the write off of debts in accordance with the Financial Administration Act. Section 24 and 82 of the Financial Administration Act require an act for the write-off of a debt or an obligation owed to the government or public agency that is worth more than $20,000.

Mr. Chair, no debt or obligation or part of a debt or obligation that is written off shall be 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 budget at the time it was determined that collection of the debt would be unlikely.

Mr. Chairman, during review of the bill, the committee suggested the department should do more to encourage qualified students to utilize the department's interest relief program. The program assists students who reside in the NWT and experience difficulty repaying their student loans. Based on their gross family income and number of dependents, monthly loan obligations could be deferred if monthly payments exceeded a proportion of their gross family income. While receiving interest relief, students do not pay the principle and the territorial government absorbs the interest. Students may receive up to 36 months of relief. For example, some former students may not earn enough income to service the interest portion of their student loan. Consequently, their debt continues to compound with no chance of successfully meeting a repayment plan. The interest relief program may provide some people a chance to get on their feet so they can start making loan payments later on.

Mr. Chairman, from documents provided to the committee by the government, committee members understand that very few students have accessed the program. From that, we presume that many students who might qualify for the program may not be aware of its existence. The committee encourages the department to undertake more diligent efforts to further publicize the interest relief program. It may help us to avoid writing off some loans in the future.

Mr. Chairman, following the committee's review, a motion was carried to report Bill 19, Write-off of Debts Act, 2002-2003, to the Assembly as ready for Committee of the Whole. Additional comments or questions may be posed as we proceed. Thank you, Mr. Chairman.

standing Committee On Accountability And Oversight's Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Mr. Dent. Does the Minister wish to bring in any witnesses? Mr. Handley.

standing Committee On Accountability And Oversight's Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Joe Handley

Joe Handley Weledeh

Yes, I do, Mr. Chairman.

standing Committee On Accountability And Oversight's Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Sergeant-at-Arms, escort the witnesses in.

Mr. Handley, for the record, could you introduce your witness, please?

standing Committee On Accountability And Oversight's Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Joe Handley

Joe Handley Weledeh

Mr. Chairman, with me is Lew Voytilla, secretary to the Financial Management Board.

standing Committee On Accountability And Oversight's Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Mr. Handley. The chair will open the floor to general comments. Mr. Dent.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Charles Dent

Charles Dent Frame Lake

Mr. Chairman, briefly, as alluded to in the comments from committee, in reviewing the details of this bill, we found that at least one of the people had been trying to make payments, but could just not possibly keep up. That's what led us to ask about the interest relief program and whether or not it was going to be publicized. I would just like to ask the Minister if he's had a chance to talk to the Minister of Education, Culture and Employment about that program and publicizing it so that people know that there is an opportunity for them not to have to declare bankruptcy or something else to get out of a debt, but this is a way that they could maybe defer their payments for a couple of years to get themselves on a solid footing in a job and get themselves in a position where they could make payments.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Mr. Dent. Mr. Handley.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Joe Handley

Joe Handley Weledeh

Yes, Mr. Chairman. The Department of Education, Culture and Employment is making sure that all students are aware of the interest relief information. That information is now available on the student financial assistance Web site. It's in the student guide. It's with their notice to begin repayment. When they receive their first letter, their demand letter, before the files are sent to collections, they are notified again of it. They are notified as well when they are in default status. I think the departments, both Education and FMBS, are doing everything they can to make students are aware of this program. Thank you.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Mr. Handley. General comments. Ms. Lee.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Sandy Lee

Sandy Lee Range Lake

Thank you, Mr. Chairman. I just have a brief question. We will be dealing with another bill later called Forgiveness of Debts Act. We are right now dealing with legislation that would enable the government to write off some debts that arise out of student loans. For the record, could I get the Minister or Mr. Voytilla to explain what the difference is between the debts the government writes off and the debts that are forgiven? Thank you.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Ms. Lee. Mr. Handley.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Joe Handley

Joe Handley Weledeh

Mr. Chairman, I will let Mr. Voytilla explain the difference between those two.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

Page 1138

The Chair

The Chair Paul Delorey

Thank you, Mr. Handley. Mr. Voytilla.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

Page 1138

Voytilla

Thank you, Mr. Chairman. The write-off is a debt that we have deemed to be unlikely of collection. So from an accounting perspective, we don't want to report it as an asset, as an accounts receivable, because we don't expect that it will be paid and realized. So we write it off. We take it off of our financial statements as an asset. That doesn't relieve the debtor of the obligation. We still vigorously pursue collection of the debt, but it would be inappropriate to report it as an asset because, in our view, it has little realizable value. That's a write-off. For the forgiveness, of course, is different than that. Forgiveness is where for various reasons, we are actually taking the debt off of our books and won't pursue it. Usually that's because a debtor has gotten released through the courts in a bankruptcy or there's been a negotiated settlement on the debt and we no longer have recourse to collect or there is some other valid reason or interest to do it. Sometimes debts that are owed by volunteer organizations or things like that where the organization no longer exists and there's no practicality in pursuing the debt are put forward for forgiveness as well.

The difference is, on forgiveness that's it, it's off our books, we don't pursue it anymore. The debt is forgiven.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Mr. Voytilla. Ms. Lee.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Sandy Lee

Sandy Lee Range Lake

Thank you, Mr. Chairman. I thank Mr. Voytilla for elaborating on that end and answering to what I was actually going to ask next, which is, even though these debts will be written off, that collections will still be pursued because I appreciate that all these debts that are being written off arise out of student loans and there are probably a number of legitimate cases where these people who had got loans from the government to pursue their educational goals were not able to pay that up and the government has deemed them almost uncollectible. At the same time, I know that there are hundreds of...Every year there are lots of people who get student loans and most of them are paying off their debts, so we want to make sure that everybody's treated equally and all those people who have the advantage of getting a student loan to go to school should be asked to pay back. I don't have any question on that. I just wanted to put that additional information on the record so that the public can be aware of the purpose of writing off debts of the government. Thank you.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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The Chair

The Chair Paul Delorey

Thank you, Ms. Lee. No question there. Are there further general comments? Clause by clause. Bill 19, Write-Off of Debts Act, 2003-2004.

general Comments
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.