Thank you, Madam Chairperson. The Standing Committee on Accountability and Oversight
is pleased to provide its comments on the Financial Management Board Secretariat.
Human Resources Consolidation
During the review of the 2005-2006 Draft Main Estimates for FMBS, the Minister provided an update on the status of the consolidation of the GNWT's human resource services, including the initial transfer of six human resource positions from the Executive and the creation of a new assistant deputy minister position.
The Standing Committee on Accountability and Oversight is in support of ongoing work to consolidate human resource services and the human resource service centres. Members believe that this initiative will reduce duplication across government and ensure hiring procedures and policies are implemented uniformly and objectively throughout the civil service. The committee looks forward to regular briefings on the planning and implementation of this initiative as it rolls out.
Financial Management Board Secretariat's Mandate And Name
During the review of the 2005-06 Draft Business Plan, some members of the standing committee raised the issue that FMBS has undergone substantial transformation and growth since its inception, particularly with the recent migration of human resource functions from the office of the Executive. It was suggested that it may be time to revisit the name of the secretariat and select something that is more representative of those aspects of the mandate of the secretariat that go beyond its financial responsibilities. The Minister responded that a change in name is something that could be considered.
Discontinuation Of Superannuation Contributions For WCB And The NWT Power Corporation
When the Standing Committee on Accountability and Oversight initially learned of FMBS's intentions to eliminate, as a cost-cutting measure, the contribution program that flowed $1.238 million to the Workers' Compensation Board and the NWT Power Corporation for superannuation costs associated with federal changes to the Public Service Superannuation Act, they sought assurance from the Minister that the pensions of employees of the WCB and the NWT Power Corporation would be in no way compromised, and that they would be legally protected. The Minister responded that as long as employees were eligible under the Collective Agreement, their pensions would be protected.
The Minister explained that when the federal government made changes to the federal Public Service Superannuation Act five years ago, they ceased to subsidize the GNWT. This came into effect April 1, 2000, however they continued to provide term funding for a few years. As long as the term funding was provided, a portion was passed on to the WCB and NWTPC. When the term funding was rolled into GNWT base funding, the decision was made to terminate the grant. The expectation is that as independent corporations, the WCB and the NWTPC should assume their true costs of doing business.
Some Members were concerned that the WCB and NWTPC's superannuation costs would ultimately be passed on to consumers; employers would see an increase in WCB premiums and power consumers would see an increase to power costs. Members noted that businesses in particular would be hardest hit, as the largest single consumers of these services outside of government. Nonetheless, Members recognize that to continue to absorb the superannuation costs for the corporations indefinitely would compromise their status as independent entities.
Sirius Diamonds Loan Guarantee
During the review of the 2005-06 Draft Main Estimates, Members were surprised and extremely concerned to hear the deal to sell Sirius Diamonds had not yet been finalized. It is absolutely unacceptable that the ongoing financial loss to government has been as high as $250,000 per month in lost interest and receiver fees since mid-August when the loan guarantee was called and Sirius Diamonds was placed in full receivership. Subsequent to the review of the 2005-06 Draft Main Estimates, the committee learned that negotiations with the potential buyer had terminated and the sale would not go through.
Recommendation
The Standing Committee on Accountability and Oversight recommends that the Chairman of the Financial Management Board work diligently with the Minister Responsible for Resources Wildlife and Economic Development to deal proactively with the growing financial and human resource liability and that this issue be resolved in the public interest no later than April 1, 2005;
And further, the Standing Committee on Accountability and Oversight recommends that the GNWT establish a firm position on dealing with diamond mines and resolve the issues affecting the viability of the secondary diamond processing industry in the NWT as quickly as possible.
Madam Chair, that concludes the remarks from the Standing Committee on Accountability and Oversight. Thank you very much.