Thank you, Mr. Menicoche. The motion is on the floor. It is being distributed now. The motion is in order. To the motion.

Question has been called.

---Carried

As agreed, we will turn to Bill 1-17(2). Does the committee agree to turn to Bill 1?

Committee, we have agreed to consider Bill 1, An Act to Amend the Borrowing Authorization Act. I will allow the Minister responsible for Bill 1, the Honourable Michael Miltenberger, to introduce the bill.

Thank you, Mr. Chairman. I am here to present Bill 1, An Act to Amend the Borrowing Authorization Act. The purpose of this act is to increase the short-term authority to borrow provided in Section 1(2) of the act from $175 million to $275 million.

The amendment is being proposed in order to provide the short-term borrowing authority needed to make a $65 million corporate income repayment on March 31, 2012. On April 1, 2012, the GNWT will once again be within the current limit when the GNWT receives the first Territorial Formula Financing payment for 2012-13.

The proposed amendment also recognizes the growth in government operations since 1995 when the limit was last increased. The current limit represented about 24 percent of revenues at division. Over the last 13 years, government operations and revenues have increased while the limit has remained the same and now represents only 13 percent of revenues. The proposed limit will make it easier to manage cash, especially if new infrastructure programs are announced by the federal government in the next three or four years.

Although this proposal increases the short-term borrowing limit, the GNWT will, under its current Fiscal Strategy, start to recoup cash resources over the next few years and actual short-term borrowing requirements will therefore start to decrease. Thank you, Mr. Chairman.

Thank you, Mr. Miltenberger. I would like to ask the Minister responsible for the bill if he would like to bring witnesses into the House. Does the committee agree?

Thank you, committee. I will ask the Sergeant-at-Arms to escort witnesses into the Chamber.

Would the Minister please introduce his witnesses?

Thank you, Mr. Chairman. From Finance I have with me Mr. Michael Aumond and Mr. Sandy Kalgutkar.

Thank you, Minister Miltenberger. I will now open the floor to general comments on Bill 1. Mr. Yakeleya.

Thank you, Mr. Chairman. I want to ask the Minister several questions. However, first I would like to make my comments to the bill right now.

This bill here, as the Minister indicated, hasn’t been increased for awhile. The Minister has said that this bill here, looking at an increase of $100 million from $175 to $275 million, it is increased to a short-term borrowing authority and that this money is needed to pay a $65 million bill that we need to honour to the federal government. The repayment is within a couple of months from now, March 31, 2012. I really don’t know what the financial impact will be on the federal government transfers. This money will be taken off the transfers. I am wondering, we have a $65 million bill and we are borrowing $100 million to bring it up to $275 million.

I am not too sure how this arrangement or the details or the numbers come out to state why we need to have this huge increase. We have always recognized growth in the government. Every budget that comes before us, we always account for forced growth, growth in the operations, growth in human resources. Somehow we seem to make it okay. Maybe I need a little more explanation on that.

Our revenues have been fluctuating up and down. The Minister states that we have only 13 percent of revenues. Our needs are great. It makes it, as the Minister states, easier for government to manage cash for new infrastructure programs. That will be announced by the federal government in the next three or four years.

Mr. Chairman, I want to raise these concerns with the government and how do we start recouping these cash resources in the next couple of years. Is that assumption on the fact that we have a couple of months to come to a devolution final agreement and then implement the final agreement? We are on a timetable with the devolution. We are going to receive a huge amount of cash if this government or Cabinet here says we are going to sign the final agreement. We already know there are a number of positions going to be coming to the territorial government. We don’t know where those positions will be located yet. We haven’t had those serious discussions. I wonder where the Minister is getting this magic pot that we are going to have some of this cash recouped. We haven’t been told yet or I haven’t been told yet. I may have missed some meetings.

So these are some of my comments here, Mr. Chair. The assumption is we’re going to spend. I know any time you borrow money, sometimes it’s good debt, sometimes it’s bad debt. There is such a phrase as bad debt. Sometimes there is good debt. But we’re borrowing on some type of promises that may not come to fruition. Is it on some assumption that we’re going to get money? I know the federal government has promised some infrastructure money on transportation for the Mackenzie Valley Highway. It’s stated in their budget. I read their budget. There was some transfer money being looked at. I’m not too sure how much in total to the Government of the Northwest Territories, health and some other programs. I don’t have it at my fingertips right now.

So this borrowing idea, this act, means that we have...and the government probably responded to our needs. We said we can’t do this, we have to borrow it. We have to pay a bill here, $65 million. We have to pay that or we’ll be penalized by the federal government. Besides, we’re growing. We’ve been growing since 1995. Why all of a sudden now do we need to bring in this act? We could have brought it in four years ago or eight years ago. Is it programs and pressure that we need to consider?

These are the types of things that make me think about some of the infrastructure in our communities. I hope we get some infrastructure in our communities if we are borrowing this short-term cash. That’s what it is. I’m not too sure what the government is banking this on. I’m just making the assumption, Mr. Chair, that when I read this, start to recoup cash resources over the next few years, I want to know what. How do you start recouping?

Right now the biggest thing on our ticket right now is devolution. We know how much money is coming to the North. Maybe there are some bigger things at play here that I’m not aware of or people of the Northwest Territories aren’t aware of. I’m going on the assumption that the government has a lot to respond to and this is what they’re trying to figure out. They’re saying hey, we’ve got to increase our borrowing limit. We’ve got to do this. Is there a hiring freeze on our people within the government? Why do they sometimes come to our communities and say we’ve got no money, we’ve got no money?

So tell me and tell my people. If you can’t put an RCMP detachment in Colville Lake, tell me. But you’ve got lots of money here you want us to borrow. What the heck is going on? If that is there, then certainly you can put a detachment in Colville Lake.

I’m confused. Thank you.

Thank you, Mr. Yakeleya. Minister Miltenberger.

Thank you, Mr. Chairman. This borrowing limit is, in effect, an operational line of credit. It’s up $75 million. We have a very specific need in this particular instance. As the Member has noted, it hasn’t been touched since 1995. The government has grown significantly as has our budget. The short-term borrowing cycles in and out, literally tens of millions of dollars a week moving in and out of government coffers and bank accounts as we manage the complex business of government.

I want to as well speak briefly that there are no hiring freezes. If folks are saying there’s no money, then it probably means whatever the circumstance, they’ve expended their budget allotments for that year and they have to manage their money to get to the end of the fiscal year. We’ve made every effort and have been successful at protecting programs and services and we’re going to continue to do that.

There is not going to be a huge windfall with devolution. We are going to get money for positions moving north to our A base. We have three hundred and some positions. We are going to get some resource royalties; about $60 million roughly a year and growing, tied to our gross expenditure base. That money will be split between ourselves and the Aboriginal governments.

As the Member well knows, we are constantly beset on all sides by forced growth pressures or pressures for additional programs. So that $60 million in our share will go partway to help bear some of the cost pressures and deal with some of the cost pressures. But this particular request is for an operational line of credit. I will ask Mr. Kalgutkar if he will lay it out for us a bit the way the money moves and why we need this type of capacity to manage the complex government operations. Thank you.

Thank you, Minister Miltenberger. Mr. Kalgutkar.

Thank you, Mr. Kalgutkar. Ms. Bisaro.

Thank you, Mr. Chair. I just have a couple of questions with regard to clarifying some of the intent of this particular motion or bill. I understand that it is for short-term debt, short-term borrowing, but I would like to know from the Minister, I have some concerns and I’m sure from the previous questions that the Minister has heard from Members that there will probably be some lack of understanding on the part of our residents with regard to this particular bill.

We talk a great deal about our borrowing limit and our debt, the government’s debt, and the fact that we’re close to our borrowing limit and the impact it has on us as we go about our business and spend our money and so on. I would like to know from the Minister and basically to provide some education and information to those of our residents who are listening or who are reading Hansard, will this change to the Borrowing Authorization Act have any impact on our long-term debt.

The other question I have in sort of a larger picture is relative to our fiscal strategy. The Minister has talked often about our fiscal strategy. Will the fact that we are increasing our Borrowing Authorization Act have any impact on our fiscal strategy? Is it going to require that we make some change to our current fiscal strategy? Will it make it easier, will it make it harder for us as we go forward?

Thank you, Ms. Bisaro. Mr. Miltenberger.

Thank you, Mr. Chairman. No, this will not affect our long-term borrowing or debt. Our current fiscal strategy will remain in place. All this gives us basically is a tool that allows us to manage the $1.4 billion that flows in and out of government in its very many different ways through the Consolidated Revenue Fund, as Mr. Kalgutkar pointed out. Recognizing how long it’s been since the last increase with the growth in government and the amount of money that now flows through there and some of the pressures that we’ve been managing as of late just with the economic downturn and a lot of the other projects and unanticipated events that we’ve been managing. I hope that clarifies it for the Member.

I think so. Thanks to the Minister. The other concern that’s been expressed is that we are making a very large repayment of our corporate income taxes. I think it’s $65 million that is coming due. It is, though, a corporate income tax overpayment on the part on the federal government from quite a number of years ago. I think I’ve lost the actual year in my brain. I’d like to know from the Minister why we are making this balloon payment at this point. Is the fact that we’re having to make this income tax payment the reason that we have to change our borrowing act or is there another reason why we’re making the change?

People looking at this from the outside, it’s a simple amendment, I think, is the way it’s been described, but we’re increasing borrowing from $175 million to $275 million. One hundred million dollars is a lot of money. Why is this balloon corporate income tax repayment happening now? Has it been to our benefit to have had this money for this long or is it an oversight on somebody’s part? All of those questions, if I could get them clarified that would be great.

It was not an oversight, but I will let Mr. Aumond lay out the plan as we’ve dealt with this particular issue.

Thank you, Mr. Miltenberger. Mr. Aumond.