This is page numbers 4103 - 4182 of the Hansard for the 18th Assembly, 3rd 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 going.

Topics

Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair

The Chair Daniel McNeely

Can we proceed to a clause-by-clause review of the bill?

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Some Hon. Members

Agreed.

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The Chair

The Chair Daniel McNeely

Committee, we will defer Bill 19 and title until after consideration of the clauses. Please turn to page 1 of the bill, the act as amended by this act. Clause 1. Does committee agree?

Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members

Agreed.

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The Chair

The Chair Daniel McNeely

Clause 2.

Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members

Agreed.

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The Chair

The Chair Daniel McNeely

Committee, to the bill as a whole. Does committee agree that Bill 19, An Act to Amend the Revolving Fund Act, is now ready for third reading?

Consideration In Committee Of The Whole Of Bills And Other Matters
Consideration In Committee Of The Whole Of Bills And Other Matters

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Some Hon. Members

Agreed.

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The Chair

The Chair Daniel McNeely

Bill 19 is now ready for third reading. Does committee agree that this concludes our consideration of Bill 19?

Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members

Agreed.

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The Chair

The Chair Daniel McNeely

Thank you, Minister, and thank you to the witnesses. Sergeant-at-Arms, please escort the witnesses from the Chamber. Thank you. Committee, we have agreed to consider Bill 21, An Act to Amend the Northwest Territories Business Development and Investment Corporation Act. I will ask the Minister responsible, Minister Schumann, to introduce the bill.

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Wally Schumann

Wally Schumann Hay River South

Thank you, Mr. Chair. I am here to present Bill 21, An Act to Amend the Northwest Territories Business Development and Investment Corporation Act.

The NWT Business Development and Investment Corporation, or BDIC, is a territorial Crown corporation that was established in 2005 to promote and maintain economic development and employment.

While the corporation generates substantial income from its investments and loans, it is currently prohibited by its act from using this income to fund its operations.

Instead, the BDIC relies on the Government of the Northwest Territories and some third-party funding for its operating expenditures.

We are proposing amendments to allow BDIC, with the Minister's approval, to use interest and dividend revenue that it receives to cover shortfalls in its operating budget. This would allow the Department of Industry, Tourism and Investment to reduce its annual contribution to BDIC, while enabling the corporation to sustainably continue operating.

ITI has been exploring a variety of options for increasing the BDIC's efficiency and effectiveness in advancing the economic objectives of our government.

In response to concerns expressed by Members of the Legislative Assembly during their review of the 2018-2019 Main Estimates, the department is proceeding with this amendment immediately to ensure that the BDIC has the appropriate long-term sustainability that it requires.

This concludes my opening remarks. Thank you, Mr. Chair.

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The Chair

The Chair Daniel McNeely

Thank you, Minister. Minister, would you like to bring witnesses into the Chamber?

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Wally Schumann

Wally Schumann Hay River South

Thank you, Mr. Chair.

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The Chair

The Chair Daniel McNeely

Sergeant-at-Arms, please escort the witnesses into the Chamber. Minister, please introduce your witnesses.

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Wally Schumann

Wally Schumann Hay River South

Thank you, Mr. Chair. On my immediate right is the director of finance and administration for the Department of ITI, Julie Mujcin. On my right is Department of Justice legislative drafter, Doug Ward. Thank you, Mr. Chair.

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The Chair

The Chair Daniel McNeely

Thank you, Minister. I will now open the floor to general comments on Bill 21. Recognizing Mr. Vanthuyne.

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Cory Vanthuyne

Cory Vanthuyne Yellowknife North

Thank you, Mr. Chair. Mr. Chair, as the Minister noted, BDIC has a number of economic development programs from providing businesses support services to running its own subsidiaries. One of the most popular programs is the credit facilities program, which disbursed $6.2 million in 2016-2017, part of a growing portfolio of $47.3 million. The program provides for key credit facilities; loan facilities, standby letters of credit, guarantees, credit risk management, and interest rebates. These initiatives help NWT business start-ups as well as establish businesses to grow. This program also generates interest for the BDIC.

There is no doubt that BDIC is a critical organization that nurtures entrepreneurship in the NWT. To continue to diversify our economy, we need to support organizations that help budding entrepreneurs get their businesses off the ground and expand them across our communities.

BDIC is largely funded by the Department of Industry, Tourism and Investment. However, since 2015-2016, following government-wide fiscal restraint policies, ITI has been reducing its contributions. Funding flowing to BDIC has been reduced by half in four years from $3.8 million in 2014-2015 to $1.9 million in the current fiscal year. At the same time, BDIC has accumulated a significant amount of money in interest earned over its lifetime, but the current Northwest Territories Business Development and Investment Corporation Act forbids BDIC from using its loans and investment funds to fund its own operations.

During the most recent ITI business plan review, EDE expressed concerns over the reduction in funding to BDIC and potential impacts on program delivery. Pursuant to Clause 41 of the NWTBDIC Act, a five-year program review is required and this is currently under way. While ITI expected amendments to the act following program review, EDE recommended that amendments to the act be brought forward sooner to allow for BDIC to use some of its interest revenue to fund its operations now and, therefore, maintain the sustainability of its programs.

Mr. Chair, Bill 21 is a targeted bill that proposes to amend the NWTBDIC Act to allow for BDIC to use its interest revenues to fund operations. Bill 21 further adds ministerial approval requirements when an operating budget proposes to use part of the interest revenue and adds reporting requirements to account for these changes. Once the current five-year review is completed, EDE will assess the outcomes and make additional recommendations as needed. These may result in further amendments to the act.

Mr. Chair, Bill 21, An Act to Amend the Northwest Territories Business Development and Investment Corporation Act, proposes small amendments to address immediate needs that I think are critical for the full and uninterrupted delivery of BDIC's programs. I also want to thank the department for their expedience on this bill. Members are welcome to ask questions of the Minister as they see fit.

Those are my comments. Thank you, Mr. Chair.

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The Chair

The Chair Daniel McNeely

Thank you, Mr. Vanthuyne. Any further comments? Mr. O'Reilly.

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Kevin O'Reilly

Kevin O'Reilly Frame Lake

Thanks, Mr. Chair. I would like to ask the Minister how he sees himself exercising his discretion over the operating budgets that the corporation may put forward that start to use some of that interest. I see in the act that is his authority set out in Clause 5 of the bill. Can he just tell us how he anticipates exercising that ministerial authority? Thanks, Mr. Chair.

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The Chair

The Chair Daniel McNeely

Thank you, Mr. O'Reilly. Minister Schumann.

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Wally Schumann

Wally Schumann Hay River South

Thank you, Mr. Chair. What I see and what we have been doing is, through their corporate planning process, when they come forward, I work with the management of the BDIC and work with them on their corporate plan with their strategic plan going forward. Thank you, Mr. Chair.

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The Chair

The Chair Daniel McNeely

Thank you, Minister Schumann. Mr. O'Reilly.

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Kevin O'Reilly

Kevin O'Reilly Frame Lake

Thanks, Mr. Chair. That was almost going to set a record for the shortest answer ever, but it didn't really provide any detail. What kind of criteria or what is the Minister looking for when he is going to be reviewing this use of interest funds? He has total and unfettered discretion here, so what is he going to be looking for in approving use of these funds by BDIC? Thanks, Mr. Chair.

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The Chair

The Chair Daniel McNeely

Thank you, Mr. O'Reilly. Minister Schumann.