Thank you, Mr. Speaker.

The committee shares the disappointment expressed by witnesses that Minister Cochrane demonstrated such unequivocal opposition to allowing representatives of the arts community to engage in this exercise. The committee holds the view that there is little harm in mutually respectful dialogue and that the input of representatives outside of the sport organizations may bring fresh views as to what the notion of recreation encompasses.

The committee considered the merits of including a definition of recreation in the bill, but considered that, given the long shelf life of legislation, this might have the inadvertent outcome of preventing the future funding of recreation activities not yet considered or imagined.

The committee notes that "A Framework for Recreation in Canada 2015 – Pathways to Wellbeing" offers the following nationally accepted definition of recreation:

Recreation is the experience that results from freely chosen participation in physical, social, intellectual, creative and spiritual pursuits that enhance individual and community wellbeing.

Noting that establishing a clear definition of "recreation" would help people identify their eligibility for accessing lottery funding, the committee makes the following recommendation:

The Standing Committee on Government Operations recommends that the Minister of Municipal and Community Affairs develop a funding policy which provides clear guidance as to funding eligibility requirements to guide the disbursement of lottery funding under the new Western Canada Lottery Act.

Committee understands that the delivery of sport and recreation programming in the Northwest Territories depends on the commitment of volunteers and upon the funding provided by the GNWT and by non-government organizations and private businesses that sponsor sport and recreation activities.

For this reason, the committee is concerned that the inclusion of multisport games funding, under subclause 6(1)(e) of the bill, will result in the reduction of multisport game funding currently provided by the department's budget appropriation as voted in the Legislative Assembly. The committee's concern is borne out by the 2018-2019 Main Estimates for the Department of Municipal and Community Affairs, which show a reduction in the department's appropriation for multisport funding from $650,000 in 2016-2017 to $250,000 in 2018-2019.

The committee feels strongly that the bill should be amended by deleting subclause 6(1)(e), thereby deleting multisport games as being automatically eligible for funding from Western Canada Lottery proceeds. To this end, the committee proposed a motion to amend the bill to delete subclause 6(1)(e) of the bill.

The purpose of the proposed amendment is to signal that multisport activities will be funded, first and foremost, from the department's budget. This would not prevent the Minister from exercising the authority to supplement such funding with disbursements from the fund in appropriate circumstances.

During the public hearing, the committee heard, from representatives of the sport and recreation community and others, that they wish to see more detailed reporting on the administration of the Physical Activity, Sport and Recreation Fund. The committee agrees that transparency and accountability are important, so that the public may see how lottery proceeds are disbursed from the fund.

In response to questions raised by the committee during the public hearing on Bill 1, the committee was advised of the department's view that the Financial Administration Act (FAA) together with the GNWT's Planning and Accountability Framework provide the requirement for sufficient public reporting on the proposed fund. The committee is not satisfied with this response.

Part 7 of the FAA governs special purpose funds. While section 104 requires year-end reporting for revolving funds, there is no similar requirement for year-end reporting for special purpose funds which, like the proposed Physical Activity, Sport and Recreation Fund, are not revolving funds.

The GNWT's Planning and Accountability Framework imposes certain accountabilities on Category A public agencies, such as the Liquor Commission, the Human Rights Commission, and the Legal Aid Commission. Bill 1 does not propose to amend the FAA to include the proposed Northwest Territories Lottery Commission in Schedule A; therefore, the committee surmises that it cannot rely on this part of the Planning and Accountability Framework to ensure adequate public reporting on the proposed fund.

While the Planning and Accountability Framework does impose certain accountability obligations on government departments (Category D), the required reporting (i.e., business plans, operating budget, and annual report) is at a high level. The committee seeks a greater level of detail than is required under the framework.

Accordingly, the committee proposed a motion to add subclause 5(5) to the bill. This proposed amendment requires the Minister to table a report in the Legislative Assembly on an annual basis, within 90 days following the end of each fiscal year, with the following details:

• The total amount paid into the fund in the preceding fiscal year;

• The recipient and amount of each disbursement from the fund;

• A description of the purpose for which each disbursement was made from the fund; and

• The value of the fund at the close of the preceding fiscal year.

The committee shares the concern raised in submissions about the Minister's power under subsection 6(2) of Bill 1 to accumulate a deficit or surplus in the Physical Activity, Sport and Recreation Fund and wishes to ensure that reasonable limits are placed on this power.

When considering how best to amend the bill to address this matter, the committee sought and received additional information from Minister Cochrane. This exchange included a proposal from Minister Cochrane, developed in consultation with the Department of Finance, that the Department of Municipal and Community Affairs will make a submission to the Financial Management Board requesting that the FMB establish a limit on any accumulated deficit or surplus in the fund.

The committee agrees with this approach, provided that the limit set by the FMB is made public and shared with the standing committee and reported on annually by the department, in accordance with the amendment proposed with respect to year-end reporting. Accordingly, the committee makes the following recommendation:

The Standing Committee on Government Operations recommends that the Minister of Municipal and Community Affairs make a submission to the Financial Management Board requesting that the Financial Management Board establish a limit on any accumulated deficit or surplus in the Physical Activity, Sport and Recreation Fund and, furthermore, that this limit be made public, shared with the Standing Committee, and reported upon annually by the Department in its year-end reporting on the fund.

I would now like to pass the report on to the honourable Member for Nunakput. Thank you.