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.