To the motion. Minister of Finance.

Thank you, Mr. Chair. Mr. Chair, the Heritage Fund Act was enacted on August 1, 2012, and the legislation establishes a trust fund as a long-term investment in which surplus funds typically received from resource royalties may be transferred at the discretion of a Legislative Assembly. Once transferred, these funds become part of the principal of the Heritage Fund. Under the Act, for the first 20 years once first contribution is made, both the principal and the interest, or the income generated by the fund, are retained in the fund. After 20 years have passed, transfers out of the fund for use by the GNWT may be made through the creation of a special act, in addition to going through the standard budget appropriation processes. The current act limits the transfers out of the fund to an annual withdrawal of five per cent of the year-end balance of the fund, provided that the principal of the fund is not removed. In other words, all contributions to the fund can never be removed and moved by the Legislative Assembly for any purpose. Only the interest income can ever be withdrawn and appropriated by the Legislative Assembly.

Because resource revenues are volatile and unpredictable, the 17th Legislative Assembly decided not to include these revenues to fund operations and maintenance or ongoing programs and services from net fiscal benefit from devolution. The 17th Legislative Assembly instead decided through the budget review process to invest 25 per cent of the GNWT's net fiscal benefit from devolution into the Heritage Fund and the remaining 75 per cent in infrastructure. Because the NWT has been in a cash deficit program for the last number of years, the GNWT had to incur short-term borrowing costs to meet this obligation. Since the start of the fund in 2012-2013, we have paid over $41,000 in interest costs related to these payments. I would agree that discussion of how much of any further contributions to the Heritage Fund the GNWT should continue while the GNWT is in a cash deficit position would be worthwhile. We have heard in the Assembly that investment in infrastructure such as Mackenzie Valley Highway, the road to the Slave Geological Province, and an all-weather road to Whati. Our priorities are needed to grow our economy and reduce the cost of living. We also need to invest in infrastructure to provide required services to our residents, such as schools, health facilities, public and seniors' housing, airports, parks to support tourism, and maintenance of our existing highways. If we want to undertake these investments in a reasonable time frame, we need to have the financial resources to pay for 50 per cent of these investments from within our own revenues, under our Fiscal Responsibility Policy. Again, discussion on how much of the NWT fiscal benefit from devolution should be invested into the Heritage Fund and how much should be invested in infrastructure is something we should engage on. Should we enshrine a certain level of investment in legislation or should we let each Assembly decide based on its own objectives the fiscal situation it finds itself? These are all things we should discuss.

With respect to the independent or arm’s-length management and administration of the NWT Heritage Fund, the current act does not prevent this from happening. But while the fund is new and still in a modest balance of $5.5 million, the value of benefit would outweigh the cost of such third-party management and administration. Although the interest earned by the fund could be used to pay these costs, the estimated interest earned for 2015-2016 is only $37,000, and likely not sufficient to pay for costs of third-party management. Initial feedback from fund managers indicates that fees on a $6 million fund would range from $45,000 to $75,000 per year, depending on the level of monitoring we want them to do. Having said this, the Legislative Assembly does receive an annual report on the performance of the fund as part of the GNWT Public Accounts. I tabled the 2014-2015 Public Accounts in this Assembly yesterday. The annual financial statements of the fund are included in section 3. The current act includes a requirement for the Legislative Assembly to conduct a review, after 10 years of the provisions and operations of the act, including recommendations on how to seek public input and advice on expenditures for the Fund and whether independent oversight and management of the fund is required. I would encourage the Standing Committee on Priorities and Planning to entertain a detailed briefing on the act to ensure it fully understands the act's provisions and to engage in a detailed discussion on what is the best path forward, given there is legislative requirement for a comprehensive review of the act in 2022. Thank you, Mr. Chair.

Thank you, Mr. McLeod. To the motion. Seeing no one else on my list, I will call on Mr. Testart to close debate on the motion.

Thank you, Mr. Chair. I appreciate the Minister's comments. However, the longer we wait to make these amendments that many people in the Northwest Territories feel are necessary to ensure stronger public governments, a defined revenue stream, and greater dividend returns in the future, the longer it'll take to make those changes. During the election, this was an issue for many, and it was directly put to members of the public who supported, again, many of the people in this House today. I believe we do have a mandate to move forward on this issue in the short term and not wait until 2022, which is why this amendment exists. During the election people voted for it, so it's time to put it in the mandate and start work right away to make sure we have the strongest Heritage Fund possible that will result in greater benefits for Northerners. I would also like to call for a recorded vote. Thank you, Mr. Chair.

A recorded vote has been requested. All those in favour, please stand.

All those opposed, please stand.

All those abstaining, please stand. The results of the recorded vote are nine in favour; six opposed; zero abstentions. The motion is carried.

---Carried

Are there any more comments on the “Economy, Environment and Climate change” section? If not, would the committee agree to return to the “Cost of Living” section?

Do the Members have any comments or question for the cost of living section? Mr. Thompson.

Thank you, Mr. Chair. Mr. Chair, I move that Tabled Document 1-18(2), Proposed Mandate of the Government of Northwest Territories, 2016-2019, be amended on page 20 by deleting the words, “There is potential for development of expanded hydro capacity while at the same time better diversifying our energy resources with solar, wind and biomass,” and inserting the words, “There is potential to expand hydroelectric capacity and diversify energy production with solar, wind, biomass and geothermal resources.”

A motion is on the floor. The motion is in order. To the motion. Mr. Thompson.

Thank you, Mr. Chair. This is just to be consistent throughout the document. We talk about solar, wind, biomass, and geothermal in other areas, so it is to be consistent with it as well. Thank you, Mr. Chair.

Thank you, Mr. Thompson. To the motion.

Question has been called. I'll call on Mr. Thompson to conclude debate on the issue.

I've said enough. Thank you, sir.

All in favour? All those opposed? Motion is carried. ---Carried

Are there any more comments or questions on the “Cost of Living” section? Mr. O'Reilly.

Thanks, Mr. Chair. I have one further amendment I’d like to propose to the mandate document. I

move that Tabled Document 1-18(2), the Proposed Mandate of The Government of the Northwest Territories, 2016-2019, be amended on page 21 by deleting the words “We will provide incentives for residents to invest in energy efficient products, help businesses, condominiums and co-operatives make investments in energy conservation and energy efficiency, support residents and communities so they can make investments into renewable energies such as solar, and improve the energy efficiency of public housing,” and inserting the words “We will expand and improve access to incentives for residents to invest in energy-efficient products; help businesses, condominiums and co-operatives invest in energy conservation and efficiency; support residential and community investment in renewable energy such as solar; and improve the efficiency of public housing.”

Thank you, Mr. Chair. We seem to be missing the second part of that, but it’s exactly the same, as I understand it.

Thank you, Mr. O’Reilly. We'll take a very short recess while the clerks get that motion out. Two minutes.

---SHORT RECESS

Thanks, Mr. Chair. I

move that Tabled Document 1-18(2), the Proposed Mandate of The Government of the Northwest Territories, 2016-2019, be amended on page 21 by deleting the words “We will provide incentives for residents to invest in energy efficient products, help businesses, condominiums and co-operatives make investments in energy conservation and energy efficiency, support residents and communities so they can make investments into renewable energies such as solar, and improve the energy efficiency of public housing,” and inserting the words “We will expand and improve access to incentives for residents to invest in energy-efficient products; help businesses, condominiums and co-operatives invest in energy conservation and efficiency; support residential and community investment in renewable energy such as solar; and improve the efficiency of public housing.”

Thank you, Mr. Chair. For those that are listening, or are going to read this in the Hansard, the difference here is we’re changing the wording that was in the tabled document from “provide incentives” to “we will expand and improve access to incentives.” That’s the key difference here. Just a little bit of an explanation. The original wording says, “provide incentives.” We already do that through the Arctic Energy Alliance, so I don’t think this really represents any kind of innovation or change in any way, and I think what I heard, certainly, during the campaign and from a number of constituents is that we should be looking to improve access to incentives to make them more widely available, particularly to lower-income families, but also perhaps, other communities as well, and that we shouldn’t just improve access, but we should actually expand incentives. I’m sure we’ll have an interesting discussion around what that means as well, but the idea here is that energy efficiency is one of the main ways that we can actually reduce the cost of living for our residents. We should always be doing our best to improve energy efficiency. Arctic Energy Alliance does offer some amazing programs and I think the objective of this change is to ensure that we can do a better job with our residents to lower the cost of living through energy efficiency. Thank you, Mr. Chai