Frieda Martselos Thebacha

Fiscal Responsibility Policy: The Fiscal Responsibility Policy is a public statement of the government's commitment to maintain long-term fiscal sustainability by spending responsibly, controlling expenditure growth, and prudently managing borrowing and debt repayment.

In 2019-20, the government was not compliant with the infrastructure financing provision of the FRP. This provision required the government to generate $78 million in cash from the operating surplus, the minimum amount to ensure infrastructure investments were funded at least 50 percent from the operating surpluses and no more than 50 percent from debt. Instead, the government only generated $46 million in cash from the operating surplus.

The consequences of noncompliance with the FRP and the government's policy response to return to compliance are not clear to the committee. The committee is more broadly concerned that the FRP, as it is currently defined, is not meeting its objective for long-term fiscal sustainability. The FRP excludes P3s, which have recently become a significant category of capital expenditures with respect to determining the appropriate level of infrastructure investment. The FRP further disallows any capital spending if the government has an operating deficit.

The committee's concerns are heightened by the significant risks to the NWT's fiscal outlook, especially ongoing operating expenditure pressures, slow projected revenue growth, and trajectory to exceed the borrowing limit in 2023-24.Therefore, the committee recommends:

Recommendation 3: The Standing Committee on government operations recommends that the Department of Finance undertake a review of the Fiscal Responsibility Policy to ensure that the policy meets its objective for long-term fiscal sustainability and provide the committee with the opportunity to comment on any proposed revisions to this policy.

Transparency, Relevance, and Accessibility of the Public Account: The committee is concerned about the Government of the Northwest Territories consistently low score in C.D. Howe reports on fiscal transparency. While the committee commends the Department of Finance, through the Office of the Comptroller General, for the notable improvements to public accounts reporting in recent years, there remains much work to be done. Instead, the Minister has said that the department's always looking for ways to improve reporting. The committee is pleased to offer several recommendations for improvement.

Following the public hearing on the 2017-2018 public accounts, and in response to a committee recommendation, the comptroller general provided committee with a review of best practices for public financial reporting in five provinces and territories. That review identified several reporting items in other jurisdictions that are either missing in the NWT's public accounts or could be improved.

The committee believes that matching the best reporting practices in other jurisdictions will enhance the transparency and relevance to the NWT's public accounts. Therefore, the committee recommends:

Recommendation 4: The Standing Committee on government operations recommends that the comptroller general add to the financial statement discussion and analysis section of the public accounts several reporting items that are present in the public accounts of other jurisdictions; specifically;

(a) Population data;

(b) Unemployment rates;

(c) Key non-financial results of major sectors;.

(d) Variances between budget and actuals and between the current and prior year actuals by revenue source;

(e) Variances between budget and actuals and between current and prior year actuals by expense program and object;.

(f) Discussion details on each liability line item;

(g) Classification of the indicators of financial health to one of three elements: Sustainability, flexibility, or vulnerability

The Standing Committee on Government Operations further recommends that the comptroller general extends all historical charts in the financial statement discussion and analysis section of the public accounts to include ten years of data.

The committee further notes that there is growing work across Canada to make public accounts reporting timelier, more online, and generally more accessible. The federal government recently indicated that it would begin work to develop potential changes to its public accounts to make it more user-friendly and accessible.

The federal government already provides several online datasets for its public accounts and other financial reporting as part of the Open Data portal.

The committee also heard from officials at the Office of the Auditor General that Yukon has recently expanded the discussion section and included more graphs in its public accounts to improve accessibility.

I will now pass it on to the Member for Yellowknife North.

The Speaker Lesa Semmler

Thank you, Member. Member for Yellowknife North.

Rylund Johnson Yellowknife North

Thank you, Madam Speaker.

The committee believes the GNWT can and should be a leader in the accessibility of financial reporting, and therefore recommends:

Recommendation 5: The Standing Committee on Government Operations recommends that the comptroller general, in consultation with the Office of the Auditor General of Canada and the Standing Committee on Government Operations, study potential changes to the public accounts to make them more user-friendly and accessible while ensuring a high degree of transparency and accountability from the Government of the Northwest Territories.

Conclusion

This concludes the Standing Committee on Government Operations Report on the Review of the 2018-2019 and 2019-2020 Public Accounts. The committee looks forward to the government's response to these recommendations.

Recommendation 6: The Standing Committee on Government Operations recommends that the Government of the Northwest Territories provide a response to this report within 120 days.

The Speaker Lesa Semmler

Thank you, Member. Member for Yellowknife North.

Rylund Johnson Yellowknife North

I move, seconded by the honourable Member for Thebacha, that Committee Report 23-19(2), Report on the Review of the 2018-2019 and 2019-2020 Public Accounts, be received by the Assembly and moved into the Committee of the Whole. Thank you, Madam Speaker.

The Speaker Lesa Semmler

Thank you. The motion is in order and non-debatable. All those in favour? All those opposed? Abstentions? The motion is carried. Committee Report 23-19(2), Report on the Review of the 2018-19 and 2019-20 Public Accounts is received by the Assembly and moved into the Committee of the Whole.

---Carried

The Speaker Lesa Semmler

Reports of standing and special committees. Tabling of documents. Member for -- where am I-- Workers Safety and Compensation Commission. Minister responsible.

Tabling of Documents
Tabled Document
Workers' Safety and Compensation Commission 2020 Annual Report