This is page numbers 6291 – 6330 of the Hansard for the 17th Assembly, 5th 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 public.

Topics

Alfred Moses

Alfred Moses Inuvik Boot Lake

Thank you, Mr. Speaker, and thank you, Mr. Yakeleya.

Limiting the Impact of Bill 37 on Public Agencies

The consultant’s report pointed out the potential of Bill 37 to have a significant impact on the workloads of the Office of the Comptroller General and the internal Audit Bureau in the Department of Finance, as a result of added responsibilities for public agencies under the bill and on those public agencies who would be required to respond to these offices when they exercise their new authorities.

The standing committee considered options for addressing this concern, including the possibility of exempting certain public agencies from the requirements of Bill 37. In discussions with the Minister and Department of Finance it became apparent that Finance shared the committee’s concern about the potential impacts of Bill 37 on the capacity of the department and public agencies. As a result, the bill has been amended to make the authority of the comptroller general and the internal Audit Bureau discretionary with respect to public agencies, rather than compulsory.

With respect to the internal Audit Bureau, the bill has been amended to limit the powers of the internal Audit Bureau to the government only, except where requested to exercise its powers in respect of a public agency by the Minister responsible for that public agency, or where

requested by the comptroller general to conduct investigations or post-investigation audits into allegations of fraud, negligence or other impropriety.

Limiting the Impact of Bill 37 on Public Agency Budgets

As observed in the consultant’s report, “Bill 37 imposes much tighter control on public agency financial management” (p. 5) and, as a result, requires public agencies “to treat their ministerial approved budgets as if they were voted appropriations” (p.4). The standing committee was concerned that this might have consequences, perhaps unintended, for public money administered and controlled by public agencies.

Education Surpluses

Some education authorities derive some of their revenues from school taxes. The standing committee sought and received reassurances from the Department of Finance that any budget surpluses generated by these public agencies would not be returned to the GNWT’s Consolidated Revenue Fund at the end of a given fiscal year.

The standing committee was informed that Section 136(5) of the Education Act provides that an education authority does not require ministerial approval for that portion of its budget that “relates directly to funds acquired by the education body through the taxation of property.” The standing committee also learned that the Education Act provides for the Minister of Education, Culture and Employment (ECE), with the approval of the Minister of Finance, to give direction concerning the financial procedures and activities of an education body. The Minister of Finance currently provides this direction through the Finance and Administration Manual for Education Authorities (FAMEA). FAMEA allows that surpluses may be used to cover operating deficits in subsequent periods, or as the education authority sees fit.

The standing committee is reassured that the continued intent of the direction provided to education bodies with respect to surplus retention is to keep the funding within the education system.

The Workers’ Protection Fund of the Workers’ Safety and Compensation Commission (WSCC)

Section 78(4) of the Financial Administration Act (RSNWT 1988, c. F-4) currently in force contains a provision to the effect that a ministerial directive, issued by the Minister of Finance, “is of no effect to the extent that it affects the disposition of any funds in the Workers’ Protection Fund continued under the Workers’ Compensation Act.”

This provision, the purpose of which is to protect the Workers’ Protection Fund from use by the government, was not included in Bill 37. For this reason, and because of the potential impacts of Bill

37 on public agency budgets noted in the consultant’s report, the standing committee was concerned that Bill 37 might permit the GNWT to access the funds in the Workers’ Protection Fund for other purposes.

The standing committee sought to ensure that the Workers’ Protection Fund would continue to enjoy the protections that it has under the current Financial Administration Act. As a result, an amendment to Bill 37 was made to re-introduce the limitation on the Workers’ Protection Fund noted above which is in the current FAA.

Addressing the Overlap of Authorities between the Financial Management Board (FMB) and the Minister of Finance

In its review of the powers and authorities granted under Bill 37, the consultant’s report noted (p.9) the potential for overlap between the authorities granted to the Financial Management Board and those granted to the Minister of Finance.

After some discussion between the standing committee and the Minister and Department of Finance, agreement was reached to amend Section 13 of Bill 37 to address overlap of authorities between the FMB and the Finance Minister as set out in this section and Section 7(1)(a) by clarifying that FMB approval is required for the Fiscal Responsibility Policy and the “policy respecting the management, collection and control of money, other than public money, held in trust or administered by Government or public agencies.”

The consultant’s report also raised a concern (p. 9) with respect to the authority granted to the Finance Minister to determine annual expenditure targets. The Minister of Finance confirmed with the standing committee that the intent of Bill 37 was to leave these authorities as they are currently exercised, i.e., that the FMB retains the authority to set departmental expenditure targets. Consequently, a motion to amend Bill 37 was passed that achieves this end by including the word “aggregate” before the word “targets,” thereby indicating that the Minister of Finance has the authority to set an overall spending target for government, but that the authority to set individual departmental expenditure targets remains with the FMB.

Mr. Speaker, I’d now like to turn the report over to Ms. Bisaro.

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Moses. Ms. Bisaro.

Wendy Bisaro

Wendy Bisaro Frame Lake

Thank you, Mr. Speaker, and thank you, Mr. Moses.

Planning and Accountability Framework

One of the ways that Bill 37 increases the focus on fiscal accountability is by providing the authority for the Financial Management Board to establish a framework for planning by and accountability of

government and public agencies. As originally drafted, Bill 37 required that this Planning and Accountability Framework be tabled in the Legislative Assembly at the earliest opportunity after being established and after any amendments. The standing committee was concerned that this approach did not allow for the Legislative Assembly or its standing committees to have input into this important accountability framework while it was still in the draft stages. The Minister of Finance acknowledged this concern and agreed to a motion to amend Bill 37, which ensures that the Legislative Assembly or one of its standing committees is consulted before the FMB approves or amends the Planning and Accountability Framework.

Fiscal Responsibility Policy

The GNWT introduced the Fiscal Responsibility Policy during the 16th Legislative Assembly. This

policy is composed of the 1400 Section of the Financial Administration Manual and contains key rules that the government is bound by when borrowing money. Despite the significance of the policy, and the GNWT’s commitment to be bound by it, the policy was never formally approved by the Commissioner in Executive Council or signed by the Premier. For this reason, it exists outside of the 17th Legislative Assembly’s process convention for

the standing committee review of proposed policy initiatives and implementation plans. This means that the policy was brought into effect and can be amended without input from Regular Members of the Legislative Assembly.

The standing committee is pleased to see that Section 13 of Bill 37 acknowledges the existence of the Fiscal Responsibility Policy by providing authority to the Minister of Finance to develop and implement this policy. However, as was the case with the Planning and Accountability Framework, the standing committee was concerned that there is no allowance in Bill 37 for the Legislative Assembly or its standing committees to have input into this important policy before it is amended.

The Minister and Department of Finance clarified for the standing committee their interpretation that Section 13(2)(d) of Bill 37 requires the Minister of Finance to bring the Fiscal Responsibility Policy forward for formal approval before the coming into force date of Bill 37, set for April 1, 2016. In addition to providing this reassurance, the Minister of Finance concurred with an amendment to Bill 37 to ensure that the Legislative Assembly or one of its standing committees is consulted before the Financial Management Board approves or amends the Fiscal Responsibility Policy.

Forgiveness of Debts and Obligations

Under Section 25 of the current Financial Administration Act, the GNWT must have the authorization of an act in order to forgive a debt or obligation owed to the government which exceeds

$1,000. The standing committee normally reviews these forgiveness of debts bills, and as part of that process, the committee has been accustomed to receiving detailed briefing materials from the Department of Finance explaining the circumstances giving rise to the decision to forgive a debt. Although this material is provided and reviewed in confidence, it provides important information that allows the standing committee to fulfill its oversight role.

Under Bill 37 the Financial Management Board may write off a debt or obligation owing to the government or a public agency without the authority of an act, provided that where the debt is owed to a public agency they do so on the recommendation of the governing body of a public agency. Instead of requiring the authority of an act, Bill 37 requires that any debt or obligation forgiven pursuant to the act, be reported in the annual report of the public agency [S. 62(6)] or in the public accounts in the case of government [S. 65(1)(b)]. Because the standing committee will no longer be reviewing forgiveness of debts bills, the standing committee sought reassurances from the Minister of Finance that the briefing materials that were once provided to the standing committee to substantiate the decision to forgive particular debts or obligations would continue to be provided to the standing committee for future reviews of the public accounts. The Minister of Finance provided the standing committee with written confirmation of this commitment and assurances that an arrangement to this effect would be formalized.

Section 62 of Bill 37 provides the authority for the Financial Management Board to forgive a debt owed to government or a public agency. The consultant’s report contained a recommendation to the standing committee that this section of Bill 37 be amended to include qualifiers which would, in effect, describe the circumstances under which debts owed to the government or public agencies could be forgiven. After discussion with the Minister and Department of Finance, it was agreed that a motion would be made to amend Bill 37 such that debts owed to the government or public agencies may be forgiven by the Financial Management Board if the board considers that the collection of the debt is unreasonable or unjust or if the board believes that it is otherwise in the public interest to forgive the debt. The wording for this amended provision is based on similar wording contained in the federal Financial Administration Act.

Mr. Speaker, I would now like to move the reading of the report along to my colleague Mr. Nadli. Thank you.

The Speaker

The Speaker Jackie Jacobson

Proceed, Mr. Nadli.

Michael Nadli

Michael Nadli Deh Cho

Thank you, Mr. Speaker.

Deemed Appropriations

The consultant’s report (p. 12) points out what may have been a drafting error in Bill 37, with respect to Section 77. This section, as drafted, provides for the comptroller general to charge an expenditure to an appropriation, even if that results in the appropriation being exceeded. Section 77 provides that the excess shall be a deemed appropriation. As the consultant notes: “This is a very significant departure from previous provisions in this area that restricted such authority to the recording of year-end expenditure accruals, and made provision that any overage was an interim appropriation, rather than a deemed one.” The consultant goes on to question whether or not this was the government’s intent, noting that “the new section 77 is not restricted to year-end accruals but would allow the comptroller general to exceed an appropriation at any time of the year and for any purpose and such excess would be a deemed appropriation.

The standing committee discussed the consultant’s observation with the Minister and Department of Finance and learned that the intent of the bill was not to grant the comptroller general broad authority to exceed an appropriation at any time for any reason. Accordingly, a motion was passed during the clause-by-clause review restricting the authority of the comptroller general to book an expenditure that exceeds an appropriation and record the excess as a deemed appropriation so that it only extends to year-end accruals.

Authority of the Commissioner

Section 111 is another section in Bill 37 which contains what may be considered a drafting error. In this section, Bill 37 appears to grant broad authority to the Commissioner of the Northwest Territories to “do any act and exercise any power necessary for the purpose of fulfilling the obligations and enforcing the rights of Government.”

In discussions with the Minister and Department of Finance, the standing committee learned that this authority was intended to be specific to borrowing authority granted under Section 110 of Bill 37. A motion was subsequently approved limiting the Commissioner’s authority to the borrowing referenced in Section 110 of the bill.

Reporting Requirements under Bill 37

With its focus on modern financial management practices and increased accountability, Bill 37 changes a number of reporting practices that exist under the current Financial Administration Act. During the course of the review, the standing committee asked the Minister and Department of Finance to provide details on all reports that will be required under Bill 37. The standing committee reviewed this material and added to it additional reporting requirements revealed as a result of its

own research. This list is attached to this report as Appendix C.

Mr. Speaker, I will now pass it on to my colleague Mr. Dolynny.

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Nadli. Mr. Dolynny.

Daryl Dolynny

Daryl Dolynny Range Lake

Thank you, Mr. Speaker. Thank you, Mr. Nadli and my colleagues.

Conclusion

The Standing Committee on Government Operations’ Review of Bill 37 is the result of a highly collaborative process. The standing committee wishes to thank everyone involved in the review of this bill for their assistance and input.

During the clause-by-clause review, the standing committee and the Minister of Finance agreed to 16 motions to amend Bill 37. Those motions resulting in substantive changes to the bill were detailed in this report.

Following the clause-by-clause review, a motion was carried to report Bill 37,

Financial

Administration Act as amended and reprinted as ready for consideration in Committee of the Whole.

Daryl Dolynny

Daryl Dolynny Range Lake

This concludes the standing committee’s review. Therefore, I move, seconded by the honourable Member for Frame Lake, that Committee Report 15-17(5), Report on the Review of Bill 37: Financial Administration Act, be received by the Assembly and moved into Committee of the Whole for further discussion. Thank you.

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Dolynny. The motion is in order. To the motion.

Some Hon. Members

Question.

The Speaker

The Speaker Jackie Jacobson

Question has been called.

---Carried

Mr. Dolynny.

Daryl Dolynny

Daryl Dolynny Range Lake

Thank you, Mr. Speaker. I seek unanimous consent to waive Rule 100(4) to have Committee Report 15-17(5), Standing Committee on Government Operations Report on Bill 37: Financial Administration Act, moved into Committee of the Whole for consideration later today. Thank you.

---Unanimous consent granted

The Speaker

The Speaker Jackie Jacobson

Item 14, tabling of documents. Mr. Miltenberger.

Michael Miltenberger

Michael Miltenberger Thebacha

Thank you, Mr. Speaker. I wish to table the following document, entitled “2014 NWT Fire Season Review Report.”

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Miltenberger. Mr. Ramsay.

David Ramsay

David Ramsay Kam Lake

Thank you, Mr. Speaker. I wish to table the following document, entitled “NWT Oil and Gas Annual Report 2014.”

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Ramsay. Mr. Abernethy.

Glen Abernethy

Glen Abernethy Great Slave

Thank you, Mr. Speaker. I wish to table the following document, entitled “Working Together: An Action Plan to Reduce and Eliminate Poverty in the Northwest Territories.”

On behalf of the NWT Network to Prevent Abuse of Older Adults and the NWT Seniors’ Society, I wish to table the following document, entitled “Networking to Prevent Older Adult Abuse: A Comparative Research Study.”

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Abernethy. Item 15, notices of motion. Item 16, notices of motion for first reading of bills. Mr. Ramsay.

Bill 59: Estate Administration Law Amendment Act
Notices of Motion for First Reading of Bills

May 31st, 2015

David Ramsay

David Ramsay Kam Lake

Thank you, Mr. Speaker. I give notice that on Wednesday, June 3, 2015, I will move that Bill 59, Estate Administration Law Amendment Act, be read for the first time.

Bill 59: Estate Administration Law Amendment Act
Notices of Motion for First Reading of Bills

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Ramsay. Mr. Beaulieu.

Bill 60: An Act To Amend The Motor Vehicles Act, No. 2
Notices of Motion for First Reading of Bills

Tom Beaulieu

Tom Beaulieu Tu Nedhe

Thank you, Mr. Speaker. I give notice that on Wednesday, June 3, 2015, I will move that Bill 60, An Act to Amend the Motor Vehicles Act, No. 2, be read for the first time.

Bill 60: An Act To Amend The Motor Vehicles Act, No. 2
Notices of Motion for First Reading of Bills

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Beaulieu. Mr. Beaulieu.

Bill 61: An Act To Amend The Public Airports Act
Notices of Motion for First Reading of Bills

Tom Beaulieu

Tom Beaulieu Tu Nedhe

Thank you, Mr. Speaker. I give notice that on Wednesday, June 3, 2015, I will move that Bill 61, An Act to Amend the Public Airports Act, be read for the first time.

Bill 61: An Act To Amend The Public Airports Act
Notices of Motion for First Reading of Bills

The Speaker

The Speaker Jackie Jacobson

Thank you, Mr. Beaulieu. Mr. Ramsay.