Madam Chair, I am pleased to introduce the main estimates for the Department of Finance for the 2004-2005 fiscal year.
The 2004-2005 main estimates for the Department of Finance request a total expenditure budget of $7.354 million. The department's 2004-05 expenditure requirements are 30.1 percent, or $3.167 million less than in 2003-2004. The net decrease is a result of:
1) reduced insurance premium costs of $1.624 million resulting from the government's self-insurance initiative, implemented last year;
2) implementation of the loss prevention and risk control program associated with the self-insurance program, requiring a reinvestment of $330,000 of the premium reduction;
3) a sunset of $175,000 to reflect the completion of the data collection activities of the 2004 community survey;
4) increases of $116,000 resulting from changes to the collective agreement with the Union of Northern Workers;
5) an $80,000 negative target adjustment reflecting government expenditure reduction measures; and,
6) a decrease to our short-term interest cost estimates of $1.734 million as a result of changing estimates of the government's cash requirements.
Mr. Chairman, over the last 10 years, the GNWT faced rising property insurance costs, despite a declining trend in our losses over this period. Last year, the government faced a 20 percent increase in premiums to maintain existing levels of coverage. The Department of Finance undertook a review of alternative ways to address property risk, which concluded that raising the government's deductible amounts, and self-insuring losses below those amounts, was a more cost-effective approach. Adopting this approach has significantly reduced premium costs and this is reflected in the reduced requirements of the department. However, because the GNWT is bearing more of the risk associated with property loss, a more active loss prevention and risk
control program is required. A portion of the premium savings will be reinvested in strengthening this program.
The department also expects much lower short-term interest costs in the upcoming fiscal year. The timing of prior year adjustments to formula financing adjustments and income tax collections means that our overall cash position is much better than was forecast this time last year.
The expenditure budget in the main estimates is accompanied by a departmental revenue budget of $820.097 million; an increase of 4.72 percent over the 2003-2004 main estimates amount. This amount includes the taxation measures I announced in the budget address.
The key priorities of the department in 2004-05 will include finalizing discussions with Finance Canada on changes to the post-2004 formula financing agreement; implementing any tax changes approved by the Legislative Assembly; providing taxation and formula financing input to resource revenue sharing discussions with Canada and aboriginal governments; continuing fiscal and taxation input to self-government negotiations; reviewing the government's medium to long-term borrowing requirements, and developing a strategy to meet these needs; implementing the loss prevention and risk control program to reduce the risk of property loss to the government; finalizing the results of the community survey and making the results widely available to communities; updating the information needed to assess the impacts of development on the NWT; identifying the issues to be considered in a possible review of the Liquor Act; and continuing to administer the liquor system in accordance with the Liquor Act and with community standards and preferences.
Madam Chair, I would be pleased to respond to any questions the committee may have.