Thank you, Mr. Roland. Mr. Braden.

Thank you. The amount we are looking at here, is this the first of those 10 years' worth of interest payments? Thank you, Madam Chair.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. No, this is the third year of the program. As well, after a five-year period we review if we will continue the interest fee portion. We will do that review after year five and decide if we continue along those lines. So right now we are in year three and, again, we will be doing a review of the interest fee forgiveness portion after year five. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Madam Chair. The intent and the purpose of this, I think, is quite clear and it is quite justified to me that government felt it was appropriate to shoulder some of the cost and the risk associated with setting up secondary diamond operations in the NWT, and in so doing we then set out to set up appropriate business deals. Some of our research, Madam Chair, has indicated that when these arrangements were set up, or at least this particular one, I believe it was at the end of the life of the 13th Assembly, so we are going back five or six years now, and the House or committee was assured that conditions were very, very stringent, I believe is the word that was used at the time. So it would seem that if the GNWT had taken time and care and the due diligence to structure a stringent loan guarantee with lots of protection for the taxpayer so that if something did go wrong, our exposure would be covered. We have here now a decision made by, I understand, the previous Cabinet to ignore the terms of a well-structured business deal on behalf of the taxpayer, and take and $800,000 hit. Mr. Roland, I know you were not in that Cabinet at the time, but I really have some serious questions about why Cabinet would have made that decision if it had a business deal in place that would have returned to the taxpayer its exposure. Madam Chair, could the Minister offer some explanation as to why Cabinet would have chosen to ignore the terms of its own business deal and take this loss? Thank you.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. As with every Cabinet that comes into power, they were faced with a decision as to whether they should collect on an agreement that was signed or if they would look at other opportunities or options that might be available to them. I can only suggest that this situation, the idea of keeping employment going, and keeping operations going, and still getting the principal amount back to the government was enough for Cabinet to decide that this was the best agreement at the time. There is still an operation ongoing, there are still jobs that are paying taxes as well. That was part of the puzzle and is existing today. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Madam Chair, is it the policy or the routine that whenever a business deal that we are involved in with some kind of risk on, do they always go before Cabinet for this kind of assessment to see whether they should be forgiven or not? Thank you.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. The loan guarantees we have on the diamond industry businesses would come before Cabinet. On any of those, if there was any change in the patterns or there were concerns, it would have to come back to FMB because it is a money issue and the guarantee is through FMB. It would come before FMB if there were any concerns that arise over the business of that facility or one of the companies that has a guarantee in place, that would come before FMB for discussion and any decisions. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Madam Chair. I am kind of curious about other agencies of the GNWT that also do lending and from time to time have deals that go wrong. What I am looking for here, Madam Chair, is just testing for consistency and application of policy or approach in assessing whether or not indeed it is it worth the taxpayer taking a hit and to what extent does Cabinet always have discretion. Thank you.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. In the business cases, for example the Business Credit Corporation, they would have their own discretion in setting up their arrangements operating within the budgeted amount that they have. Because this was an issue of a new industry, that there was not any real information known within Canada and banks were hesitant to become directly involved without some support through a government mechanism, it was felt that this was the best avenue to take in this situation and we continue to carry that on through the commitment of our guarantees. Thank you.

This aspect of protecting the jobs, it is not as if the company that suffered these problems was the only game in town where we have to protect the last swan hill or the last mine going here. There are indeed other companies that need these kinds of workers. So I don't know that I entirely support the contention that the taxpayer is taking an $800,000 hit here to protect some jobs. Would the Minister care to comment or agree or disagree with me that that is really a good argument? Did these jobs really need protecting? Thank you.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. It is hard to debate the decisions after the fact of what is the best judgement to use, but in my case going forward, I would have to look at all of the options put before me and decide if in fact the best interest of the Government of the Northwest Territories would be to continue with the arrangement made and collect on our guarantee, or would it be best to try to come up with another alternative arrangement that would still see some benefit, both to government and to the industry. Then I think we would have to take that at the time it would come forward. So based on that, as I said earlier, not knowing the atmosphere of the day and all the points that were considered, it would be difficult to discuss and come up with sort of a theoretical approach that would be used 100 percent of the time on every occasion. It would be, I think, case by case as each situation would come forward. Thank you.

Thank you, Mr. Roland. I am going to move on now to Mr. Ramsay.

Thank you, Madam Chair. The first question I have for the Minister is going back to the grants-in-kind. I want to know a little bit further about that. Why does it have to show up on our books as a grant-in-kind? To me it is bad debt and it should be dealt with in a different manner than it appears here, and maybe the Minister can explain why it shows up as a grant-in-kind when in reality it is a bad debt.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Madam Chair. The process used is one where we as a government would give any type of assistance to any company. We would have to account for it as a grant-in-kind. If we were to forego, for example, the principal and not have any other action in mind, then we would start falling into the category of debt or bad debt situation. We are receiving and will be paid out the principal, but to have that arrangement made, the government has foregone the interest portion of that payment and it is considered as a grant-in-kind. It is helping a business stay active and that is the consideration in how we would account for this. Thank you.