Thank you to my colleagues, Mr. Speaker.
d. Note 21: Environmental Liabilities
The government recognizes that there are costs associated with the remediation of environmentally contaminated sites for which the GNWT is responsible. The standing committee was pleased to learn that the Auditor General of Canada considers the GNWT’s disclosure of these liabilities to have improved this year.
As of March 31, 2012, 139 sites for which the GNWT is responsible had been identified as potentially requiring environmental remediation. Twenty-six are active or decommissioned landfill sites that are outside incorporated communities, and therefore are the responsibility of the GNWT. A liability of $1.1 million has been recorded for the 26 landfill sites, in accordance with public sector accounting standards.
Another of the 139 sites, Giant Mine, has been formally designated as contaminated under the NWT Environmental Protection Act. The balance of the GNWT’s share of the Giant Mine remediation liability as at March 31, 2012, was approximately $20 million.
The remaining 112 identified sites include 15 airports or airport-related sites, 19 sewage lagoons, 12 fuel tanks and six highways. Environmental assessments have not been completed for more than half of these potentially contaminated sites. Most have been investigated but are awaiting full assessment. GNWT remediation costs for the sites that are known to be contaminated are estimated at about $23 million. Ongoing efforts to assess the remaining sites may result in additional environmental liabilities, which will be recorded in the year they become known. The committee would like the government to provide a schedule for the environmental assessment of all known potentially contaminated sites for which the GNWT is responsible.
Recommendation 7
The Standing Committee on Government Operations recommends that the Government of the Northwest Territories provide this House with a timetable or schedule for the environmental assessment of all known potentially contaminated sites for which the GNWT is responsible.
e. Note 25: Over-expenditure
This note refers to over-expenditures after supplementary appropriations have been voted. During 2011-12, two departments, Transportation and Education, exceeded their appropriations for a total of $592,000. These over-expenditures contravene the Financial Administration Act subsection 32, which states that, "No person shall
incur an expenditure that causes the amount of the item set out in the estimates on which the appropriation is based to be exceeded.” However, the standing committee was pleased to see that the amount of such over-expenditures is considerably less than the previous year, when the over-expenditure was nearly $6 million. The government encourages the government to continue striving to reduce the incidence of over-expenditures.
5. Government
Indicators
This unaudited section of the public accounts provides background information on factors such as the Northwest Territories Gross Domestic Product, debt management, and trends in net financial resources and annual surplus. It concludes with an assessment of the GNWT’s fiscal health in terms of accepted accounting criteria of sustainability, flexibility and vulnerability.
The GNWT rates itself as “stable” in terms of sustainability. Net debt, as described previously, increased by $76 million in 2011-12, to a total of $458 million. The GNWT describes this as a deterioration of its financial position, but suggests that the debt is manageable in the context of GNWT annual revenues of approximately $1.5 billion. The net debt represents 30.5 percent, or approximately 16 weeks of revenue. The GNWT assumed the debt associated with the Deh Cho Bridge on April 1, 2010, significantly increasing its debt load for 2011 and subsequent fiscal years.
However, the government considers that it has limited flexibility to raise new revenues. While tax revenues are up in terms of dollar amounts, the GNWT’s own-source revenue decreased as a proportion of total revenue in 2011-12 from about 29 percent to about 27 percent, mainly due to fluctuating amounts of income tax collected. The GNWT states that it has little room to increase taxes and still remain competitive with other provinces and territories.
Finally, the GNWT notes that it continues to be vulnerable to federal control over changes to its future revenues. The GNWT has limited own-source revenues and the corporate and personal tax remittances it does collect can vary considerably from year to year. The formula used for the annual grant from Canada will remain in effect until March 31, 2014. The Government of Canada has committed to renewing the current financing for an additional five years, to March 31, 2019.
Conclusion
The Standing Committee on Government Operations has a mandate to review the Public Accounts of the Government of the Northwest Territories. Members were pleased with the assistance provided by the Office of the Auditor General and the frank responses of the NWT
comptroller general in this initial review. The standing committee intends to continue the practice of a public review of the public accounts, so that GNWT spending issues are publicly examined and all relevant information is placed before the public.
Recommendation 8
The Standing Committee on Government Operations recommends that the Government of the Northwest Territories provide a response to this report within 120 days.