Thank you, Madam Chair. Members of the Accountability and Oversight committee had an opportunity to meet with the Minister of Finance on September 28, 2005, to review the draft business plan for the Department of Finance.
Members also received a briefing from the Minister of Finance on January 17, 2006, outlining the changes to the budget for the department since the committee reviewed the draft business plan in September.
Committee members made note that the department is proposing to spend $7.953 million in operations expense in fiscal year 2006-2007.
Committee members offer the following comments on issues arising out of the review of the 2006-2007 Draft Main Estimates and budget-planning cycle.
Borrowing Limit And The Fiscal Responsibility Policy
The borrowing limit for the GNWT is arbitrarily set at $300 million by Order-in-Council of the federal Cabinet. The Standing Committee on Accountability and Oversight notes with concern that the current fiscal framework projects that the GNWT will exceed the arbitrarily imposed borrowing limit, often referred to as the 'debt wall,' in late 2007-2008.
During the last business planning cycle, the Standing Committee on Accountability and Oversight supported the Finance Minister's initiative to establish a fiscal responsibility policy to replace the arbitrary debt limit. Since that time, the GNWT's fiscal situation has taken a turn for the worse, making the need to establish the fiscal responsibility policy all the more urgent.
The Standing Committee on Accountability and Oversight continues to offer strong support for the government's efforts to advance the fiscal responsibility policy with the federal government. The committee believes it is a positive step to move away from the arbitrarily established debt limit, and to establish a borrowing limit that recognizes the GNWT's capacity to finance debt. Not only is this consistent with practices in other jurisdictions, but moreover, it places responsibility on the GNWT to be accountable for its own debt management.
Formula Financing
During the review, the committee noted the federal government has extended the interim approach to formula financing for another fiscal year while it waits for the delayed report from the expert panel. The Finance Minister advised the committee of the government's intention to increase efforts to move the GNWT's position forward, especially on the key issue of resource revenue sharing. The committee sees the change in government in Ottawa and the Council of the Federation report on Fiscal Imbalance as opportunities to raise the profile of GNWT.
The standing committee strongly supports the Finance Minister to be aggressive in his lobbying efforts. Thank you, Madam Chair.