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

Thank you, Mr. Minister. Welcome, witness. We are dealing with Bill 32. General comments. Mr. Dent.

General Comments

Thank you, Mr. Chairman. I couldn't help but notice in the Minister's opening comments, they often indicate when we are looking at supplementaries that there will be no impact on the overall fiscal position of the government because the request for supplementary appropriations are within the supplementary reserve that was approved when we approved the mains. I am wondering if the Minister could advise us if we were to pass this supplementary, it would be still be within the supplementary reserves approved in the main budget.

The Minister responsible for the Financial Management Board, Mr. Handley.

Mr. Chairman, yes, with the approval of this supplementary request after removing out the non-cash items, we would have slightly less than $1.5 million left in the supp reserve.

Mr. Dent.

Thank you, Mr. Chairman. Mr. Chairman, could the Minister then provide us, based on what we've seen in previous years and in supplementary appropriations No. 3 and No. 4, how much over the supplementary reserve does he think we will be or does he believe we can finish the year with two more supplementaries and stay within that $1.5 million?

Minister responsible for the Financial Management Board Secretariat, Mr. Handley.

Mr. Chairman, we still have several months to go before the end of the fiscal year. If this is a typical year, then I would expect that we're going to be short on the supplementary reserve or we'll go over it. I would estimate another $5 million. Thank you.

Mr. Dent.

Thank you, Mr. Chairman. Looking, for example, at Supplementary No. 4 that we just concluded, that would tend to indicate to me that it would be difficult for us to do another two supplementaries in this year and stay within $5 million. Does that indicate that the Minister has embarked or had the government embark on a cost savings program or has he found some new revenues? I guess just an indication of how he intends to try and keep expenditures within that $5 million over budget.

Mr. Handley.

Mr. Chairman, we have built $5 million more into our fiscal forecast. So this is already in the forecast. We're expecting that this year's not going to be different than the other ones. Second is, we did earlier this year ask departments to identify $10 million through economizing measures. We have also further asked them to identify another $5 million that they would not spend in order to help balance this out. Thank you.

General comments. Mr. Bell.

Thank you, Mr. Chairman. I just wanted to ask if the Minister could give us a little more detail. He just indicated that some months ago he embarked on a $20 million cost savings exercise and he indicated that the departments were asked to find $10 million worth of savings that would do minimal impact on service levels where possible, another $5 million savings was asked of the departments to come up with some lower-priority areas if they could and there was still another $5 million that leaves to account for in the $20 million exercise. Can the Minister give us some indication of where he expected that other $5 million in savings to come from? Thank you.

The Minister responsible for the FMBS, Mr. Handley.

Mr. Chairman, generally, the $5 million that we've asked to be found comes from three sources. First, there's about a $1 million savings on interest charges; second, there was a double entry in the contribution to the Housing Corporation worth about $1.4 million; and we have asked the departments to try to lapse the balance, about $2.5 or $2.6 million.

Further comments. Mr. Bell.

I just want to make sure I'm clear. That's the other $5 million that brings us to $20 million. So we had $10 million the departments were initially asked to come up with, another $5 million in savings and then the $5 million you just spoke of, which was interest charges, the Housing Corporation double entry and the request that the departments lapse some money. Is that right or am I confusing the $5 millions? Thank you.

Mr. Handley. Mr. Voytilla.

Mr. Bell.

Thank you, deputy, for that response. That was my recollection was that of the $20 million, $5 million was coming from a reduction in the supplementary reserve. We'd talked about this $20 million and I remember at the time thinking that was not real savings, this is an accounting exercise. We can't very well take credit for a $20 million savings when $5 million of it is really just reducing our supplementary reserve and here and now we come back and realize that because of the spending pressures we weren't in fact able to do that. I just wanted to clarify that and make sure that I understood that. Thank you.

Mr. Handley.