Thank you, Madam Speaker.
Enhance disclosure on environmental liabilities,resource revenues, and tangible capital assets.
Environmental Liabilitities
Environmental liabilities represent the costs required to remediate contaminated sites for which the GNWT is responsible.
The 2020-2021 public accounts reported 277 contaminated sites with a total liability of $68 million. This liability is further broken down according to seven types of sites, such as "abandoned mines" and "landfills."
For years, committee has advocated for more transparency on the GNWT's contaminated sites. In 2018, committee recommended14 that the GNWT develop an online inventory modeled on the federal government's Federal Contaminated Sites Inventory.
The GNWT accepted that recommendation and, in the past year, released the GNWT Environmental Liabilities Dashboard.
Committee commends the GNWT for this work. The dashboard is a significant contribution toward more transparency on environmental liabilities. However, the GNWT's dashboard is missing key categories of information of interest that are available on the federal inventory. Take, for example, the Giant Mine Remediation Project, which is co-managed by the GNWT and the federal government. The GNWT's dashboard plots the site on a map, identifies the site type and contaminant of concern, and provides a brief description. The federal inventory provides this information and much more, such as the volume of contaminated media, population estimates at distances around the site, and a breakdown of remediation spending for each year.
Committee encourages the GNWT to build on its Environmental Liabilities Dashboard and provide more disclosure. Committee therefore recommends:
Recommendation 3: That the Department of Finance provide a plan with timelines to enhance reporting on the GNWT Environmental Liabilities Dashboard by matching reporting practices in the Treasury Board of Canada Secretariat's Federal Contaminated Sites Inventory.
Resource revenues
The public accounts reported that in 2020-2021, the GNWT collected $66 million in gross non-renewable resources revenues. Non-renewable resource revenues include mineral, quarry, oil and gas, and water revenues as defined in the Northwest Territories Lands and Resources Devolution Agreement.
The public accounts only break down the gross revenue amount into three broad categories: minerals, oil and gas royalties; licenses, rental and other fees; and quarry fees.
Committee wants to see a more detailed breakdown of each type of resource revenue and a clear presentation of gross revenues, disbursements to other governments, and the resulting net revenues for the GNWT. Thorough reporting is important to maintain the credibility of resource revenue collection and distribution.
While current reporting practices meet minimum standards in the Public Service Accounting Standards, the OAG indicated that "there is room for enhanced disclosure in a note." Committee agrees and therefore recommends:
Recommendation 4
That the Department of Finance provide more detailed resource revenue data on gross amounts received and calculations of amounts retained. This enhanced reporting should separate annual aggregate values from petroleum, mineral resources, and each other type of resource revenues.
Tangible Capital Assets
The public accounts reported that in 2020-2021, the net book value of the GNWT's tangible capital assets, or TCAs, was $3.7 billion. Tangible capital assets are the buildings, roads, equipment, and other assets whose life extends beyond the fiscal year and are being used on an ongoing basis.
Each asset is amortized over its estimated useful life. Some assets may be fully amortized even if they're still in use, making them assets with a zero book value. Committee is not aware of reporting in the public accounts on assets with zero book value. Information on accumulated amortization, which was $2.2 billion in 2020-2021, does not indicate how much of that amortization comes from fully amortized assets. Committee believes this type of reporting is important as an indicator of future asset replacement costs that are potentially imminent.
Committee wants to see more reporting in this area and therefore recommends:
Recommendation 5: That the Comptroller General add to the financial statement discussion and analysis section of the public accounts information on tangible capital assets with zero book value and provide a timeline for implementation.
Make fiscal reporting more timely, frequent, comparable, and digital.
For this review of the public accounts, committee took a special look at transparency in fiscal reporting. This kind of transparency refers to the comprehensiveness, clarity, reliability, timeliness, and relevance of reporting on public finances. Transparent fiscal reporting is important for effective fiscal management and accountability. It helps ensure members, businesses, and residents have information to hold government accountable. It provides government with accurate information to make better budget and policy decisions. And it strengthens the credibility of a jurisdiction's fiscal health to markets.
In recent years the GNWT has made several changes to make the public accounts more transparent. Significant changes include enhancing the financial statement discussion and analysis section and more detailed disclosure in the notes. Committee appreciates the Comptroller General's commitment to continually improve the public accounts and openness to committee recommendations.
In support of continual improvement, committee evaluated the GNWT's fiscal transparency compared with international standards - specifically, the IMF's Fiscal Transparency Code. The IMF, an international financial institution, calls the Code "the international standard for disclosure of information about public finances." The Code includes 12 dimensions of transparency in fiscal reporting.
Committee found that the GNWT met the highest advanced standard of transparency in five of the 12 dimensions. In the remaining dimensions, the GNWT could improve its fiscal reporting practices to meet the highest international standards.
Madam Speaker, I would like to, please, pass the reading of the report on to my colleague from Thebacha.