Thank you, Madam Chair, and welcome to the Minister and the delegation here this evening. I know everyone is a bit tired.
I have two items that I would like to bring; observations during the process or preparation for the Department of Finance being here today. One in which is an observation in accounting practices and it has to deal with the issue of amortization.
Coming from the corporate side or the corporate sector for most of my adult life, amortization I know is dealt with a little bit differently in the public sector. That said, in a lot of cases throughout the process of the Finance review, as well as some of the departments, it was very notable that the amortization numbers were identical from year to year, and as a person who came from the corporate world, that would raise a lot of flags. Whether the departments weren’t prepared in time for the
budget numbers or the main estimates, but this repeated itself multiple times in multiple departments, and when questioned, the finger kept being pointed back, well, these are the numbers we got from Finance. So I’ll let the Minister comment as to why, or he may want to let one of his designates comment on it, but as a corporate executive I found it quite I would say concerning, that amortization numbers… There’s a depreciation calculating factor, there’s a sliding calculating factor that has to happen. To have that number repeated or to have the same number in departments and the different expenditure summaries is, I guess, somewhat questionable.
My second area of open comments – and I’ll do it in this context instead of doing it in the detail – is no stranger to the Minister and Department of Finance, because I know I spent some time with him and this has to do with the tobacco tax and the collection thereof. When this was brought forward, we were told as Members that the internal Audit Bureau was involved in the investigation of how this government was dealing with the tobacco tax. Subsequent to that, discussions pursued with myself and the Finance team, but there’s still gaping holes, Madam Chair, in terms of how I believe this government is calculating the tobacco tax. There is no doubt there is a loophole in the system. There’s a manual component in the system and whenever you have manual components, there is doubt and it creates lot of questions. Subsequent to that, the department is using statistics to validate their numbers and those are also statistics which are questionable.
Smoking rates for the Territories are considered much higher than the Canadian average yet this government is using averages that are less than Canadian averages. If you take that to any senior people throughout the Territories, they would be somewhat amused with those numbers. The calculations and statistical calculations that the Department of Finance is apparently using to validate tobacco tax collection, in my humble opinion, is wrong.
This is a pursuit that I will not let go. This is a pursuit I will take the levels that I need to take to make sure that the revenue that is entitled to the taxpayers is put back in the coffers in its capacity. Calculations up to and including anywhere from $4 million to $10 million, in my estimate, is not being collected appropriately. This could be a value-add for days like we had today when we were having to spend another $10 million on the bridge. More importantly, I would rather take this money, since it’s a tobacco tax, and put it towards prevention, which these Regular Members have been fighting desperately to get back into the budget so that we can help the people and their health care in the Northwest Territories.
I’m a bit dismayed, again, that this issue has been in its opinion. It was looked at to a certain degree by, like I said, the Internal Audit Bureau. I’m not denying the fact that they spent some time doing that. Auditing is an art and I can tell you that when you’re auditing a big topic such as tobacco, there are many shoeboxes in the bedroom, and picking one shoebox and auditing and saying everything is fine is not the way to prove beyond a reasonable doubt that there is a problem. There are many shoeboxes in the closet and we don’t have the resources, we don’t have the manpower or person-power to go and audit every one of those shoeboxes. We need to close those elements of doubt. That element of doubt is the manual process of tobacco tax collection. That was the only way we can validate, if we’re truly collecting every dollar out there. Otherwise we’re using statistics, and again those are statistics that can be questioned as to where your source is, what year you’re picking it from, and there’s a lot of interpretation into statistics.
I think the people of the Northwest Territories deserve facts. The people of the Northwest Territories deserve actual numbers. As I said, this will be something that this Member will not drop until I see solutions.