Thank you, Mr. Chairman. I have a question to the Minister of Health in regard to under grants and contributions. I see the Northern Lights Special Care Home in Fort Smith is going to be purchased by your department from the Town of Fort Smith. I would like to know exactly…We are putting a lot of money into the hospital in Fort Smith where tons of money is being spent in that area…

Mr. Krutko, could we not deal with that when we get into the detail? You will be able to ask your questions at that time.

We will move back into detail. We will defer the department summary and review the estimates by activity summary beginning on page 8-8. Infrastructure investment summary, information item. Are there any questions? Does the committee agree?

Page 8-9, revenue summary, information item. Mr. Krutko.

Thank you, Mr. Chairman. My question is under grants and contributions. I know that the Northern Lights Special Care Home in Fort Smith is being purchased for $639,000 from the Town of Fort Smith and yet we are putting a lot of money in facilities throughout the Northwest Territories. I would like to know what are we doing purchasing property off municipalities and yet we are spending a lot of money in regard to the capital in regard to the health services in those communities. Why is this item there in regard to purchasing this asset and yet we are spending a ton of money on capital expenditures?

Thank you, Mr. Krutko. Minister Lee.

Thank you, Mr. Chairman. This is basically an accounting procedure. The facility was owned by the Town of Fort Smith but, for many years, the government has been paying them lease payments which they use to pay the mortgage. While we were doing the latest renovations, questions about ownership came up in that it is better for us to do the renovations because we are paying for all of the expenses; not only the lease payments but they used to pay the mortgage,

but running, operating and renovating. So this is just to clean up and make it clean a property that really is, in practice, owned and taken care of by the government. Thank you, Mr. Chairman.

Mr. Chair, this is a purchase of property of over $600,000. I don’t think it is just a small item. I think, if anything, this government basically has to identify capital expenditures and yet we are spending a lot of money on capital. We are looking at different types of facilities throughout the Territory and yet this government can find it in their budget to purchase private property. I think that, if anything, this government should be looking at…

On the top line item under “general,” you basically talk about a subsidy to the same facility. On the one hand you are still asking for the subsidy, and on the other hand you are purchasing the same asset. I would like to know what it is. You are providing a subsidy and you are purchasing the asset on the next line item. I think, as a government, how many other types of these purchases are out there that we are not aware of?

There is no actual exchange of cash here. This is an accounting procedure. We are assuming the ownership of the property. The assumed value of that property is $2.75 million. We are buying it for $2.5 million because that is the outstanding mortgage on it, so the accounting department is telling us that that is the proper thing to do, that we have to report a gain that we are making from this purchase. That is why it is being recorded here.

Just in regards to another line item regarding hospital services to Nunavut, $5.883 million. It looks like it’s an ongoing expense. Did I hear the Minister correctly that you’re going to write this off?

No, we’re not writing this off. That is the projected revenue from the services that we provide to Nunavut for next year.

Well, if that’s the case, can the Minister clarify her comments earlier when she mentioned that there’s a possibility of writing off the outstanding account regarding Nunavut health care?

The Members here are very well aware that over the last 16 months we have had many discussions here about the deficit situation at Stanton. The department has been working very closely with Stanton to get to the bottom of that, so to speak. We have discovered that we know that part of that deficit has had to do with outstanding receivables from Nunavut. The Stanton officials, under the leadership of Mr. Al

Woods, and the department officials have had a number of meetings with Nunavut officials and we have been able to collect most of the money. But there is an amount of about $2.5 million accumulated over many years, not one year but over many, many years, that we have agreed that it’s not collectible. So we will be looking at writing that off. But most of the revenues we have collected. We also have a good agreement in place that would allow us to have a clearer picture as we go forward.

Thank you, Ms. Lee. Moving on I have Ms. Bisaro.

Thank you, Mr. Chairman. I do have a question on page 8-9 relative to the revenue for hospital care, Indians and Inuit, and medical care, Indians and Inuit. This is the revenue that I presume we’re getting from the federal government. I wonder if the Minister can advise what our expenditures are for these two line items.

Thank you, Ms. Bisaro. Ms. Lee.

Thank you, Mr. Chairman. For the 2006-2007 actual expenditure it’s $40 million.

Thanks for the answer. So 2006-2007; we don’t have numbers then for 2007-2008?

Not yet.

Thank you. Okay. So what I’m seeing here is give or take $26 million in revenue and at least $40 million in expenditures, because we’re talking two years ago now. So I’m wondering if it’s accurate to say that we are spending $14 million more on expenditures for these two line items, hospital and medical care for Indians and Inuit, than we are taking in.

There has been an increasing level of gap between the services we provide and the amounts that the federal government recognizes under hospital and medical care for Indians and Inuit. The reason being that the federal government has imposed a 2 percent growth cap across the country. We are a very small player in comparison to, say, I don’t know what the amounts might be with Ontario or B.C. So it’s not even, we can’t even really describe it as a dispute because if it’s a dispute, it’s got to be a different understanding between two parties. The federal government is very clear about their understanding of this. They are imposing 2 percent cap on the growth, whereas our actual expenditures have been growing at a much higher rate than that. Anywhere from 13 percent in one year to about 5 percent in 2005-2006 is the information I have.

I think the important thing that we need to specify here is because some of this got mixed up into debate about self-health as well. I think what we need to understand is GNWT provides health and doctor service and hospital service and every other service to all residents whether you are eligible for NIHB or not. For our residents who are eligible for NIHB, we are able to claim that money with the federal government. That helps us with our expenditure. But whether we get all of the money or not from the federal government, we will continue to provide that service.

Thank you. Thanks for the answer. I think I understood that already. I guess my concern is more what the department is doing to try and close this gap from what the feds are willing to pay us and what we’re actually spending. What actions are we taking to try and change the minds of the federal government to fund us appropriate to the amount of money that we’re actually spending, or what actions are we taking to try and reduce the services that we’re providing? Because this is putting us continually into a deeper and deeper hole.