Clause 27.
Debates of May 16th, 2007
This is page numbers 233 - 265 of the Hansard for the 15th Assembly, 6th Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was going.
Topics
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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David Ramsay Kam Lake
Thank you, Mr. Chairman. Just a question on the investment and that goes back a little ways; sorry, but 22. If the Government of the Northwest Territories is going to backstop this project and it does cost whatever, $180 million for the transmission line and whatever else for the actual plant expansion at Taltson, how is it going to be set out that the government gets that money back, the financing charges specifically, because obviously they're going to have to borrow the money? I mean we don't have $180 million or even more to do this. So on the financing side of it, how do we get that money back, or are there arrangements to get that money back?
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Voytilla
Thank you, Mr. Chairman. The specific arrangements between the government and Deze or another subsidiary that's doing the borrowing, at this point in time we haven't got those determined because that will be project specific. It will be what's the purpose of the borrowing and what's the circumstances around each one. The intent here is that the project would stand on its own. So the project would have to be able to finance the debt and the carrying charges on that debt out of the revenues
associated with the project. So we're not looking for a direct government contribution towards the capital costs of the project.
Where the government role normally would come in backstopping or in supporting the project would be to give comfort to the financiers that the revenue flow in the long term will be there to retire the debt. So it's a potentially contingent liability for the government if, for some reason, the mine life didn't extend as long as possible, as long as required to retire the full amount of the debt. So that's the area where we may -- I use the term "may" -- need some government backstop because we don't know that yet. That will really depend on the structure of the project, the results of negotiations with the mines and the requirements of the financial providers as to what they need to feel comfortable lending that money. So I can't give you a specific answer other than to say it's not the intention that the government would be subsidizing these projects.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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David Ramsay Kam Lake
Thank you, Mr. Chairman. I thank Mr. Voytilla for that. If we are looking at a loan guarantee -- and that's probably what it will end up being -- there will be a cost associated with that. I don't know whether you want to call it a subsidy or not or whether or not we'll get those costs back or not, I mean those are things that are going to be worked out into the future, but the federal government recently increased the NWT's borrowing limit from $300 million to $500 million. I'm wondering if the GNWT does have to backstop and sign some loan guarantees for the Taltson expansion, what will that do to the debt cap at $500 million? Is that something we're going to have to account for and is that going to push us close to the $500 million mark? Thank you, Mr. Chairman.
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Voytilla
Thank you, Mr. Chairman. We're in close discussions with the Department of Finance on that issue, because we do have to make sure that any debt that this project incurs, that in any way flows back into the GNWT's accounts, does not negatively impact on the GNWT's own basis and ability to borrow for its own needs. So that is something that we're working with GNWT Finance to work out how to address that issue. Either we have to keep the borrowing so small that it doesn't have a significant impact, or we would have to perhaps look at going to the federal government for a project-specific exemption to the borrowing limit. So those are all options that we are exploring at this time with the Department of Finance.
I would note that with respect to the costs, if you will, of the borrowing, that there are some models out there. We just recently met with Manitoba Hydro to talk to them about how their financing is done, and in Manitoba any borrowing required for a Manitoba Hydro project they borrow the money from the province, the province issues the bonds and actually they go to the market and borrow the money and then re-lend it to Manitoba Hydro and they charge a fee for that to Manitoba Hydro that would have to be paid for by the project. So ultimately I don't want to put revenues necessarily in the Minister of Finance's hands, but that might be something he insists on. To give the backstop to the project, the government may want to charge a fee for that that the project would have to pay. So those are potentials that could work into the arrangements.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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David Ramsay Kam Lake
Thank you, Mr. Chairman. I thank Mr. Voytilla for that. Again, it goes back to the point where I wouldn't want to see a project like this tie the hands of the government for the next few years. If it's $180 million, it would probably be more than that, but that would certainly put us up near $500 million. So just be cognizant of that and if there's other financing models out there, I would encourage you to look at them. Thank you.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 20: Consideration In Committee Of The Whole Of Bills And Other Matters
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