Thank you, Mr. Speaker. Mr. Speaker, your Standing Committee on Government Operations is pleased to provide its Report on the Statutory Review of the Northwest Territories Heritage Fund Act and commends it to the House.

The Standing Committee on Government Operations conducted a statutory 10-year review of the Northwest Territories Heritage Fund Act to assess whether the Heritage Fund is positioned to function as a credible, disciplined, and forward-looking sovereign wealth fund for the people of the Northwest Territories.

Evidence from public engagement, expert testimony, and comparisons with global best practices, showed that the Act requires modernization to ensure the fund can deliver lasting intergenerational benefits and effectively transform finite resource revenues into long-term public wealth.

The review highlighted several overarching themes essential to the success of any sovereign wealth fund:

• A clear and durable legislative purpose,
• Strong and independent governance, and
• A coherent long-term investment framework.

Committee found that the Heritage Fund's purpose must be more explicitly defined as permanent intergenerational savings supported by a governance model that separates the roles of government, an arm's-length board, and professional investment managers. Strengthening transparency and alignment with international standards, such as the Santiago Principles, is equally critical to building public trust and ensuring accountable stewardship.

Committee also emphasizes the importance of long-term financial discipline. Predictable, rules based contributions and withdrawals, protection against short-term fiscal use, and planning for resource revenue volatility are necessary for the fund to grow to a meaningful scale.

Together, the report's recommendations point towards a modernized, transparent, professionally governed Heritage Fund positioned to convert today's resource wealth into enduring prosperity. With the right legislative and governance framework, the Heritage Fund can stand as a model of intergenerational stewardship and long-term financial resilience.

With that, Mr. Speaker, I will summarize the recommendations of the report.

Recommendation 1: The Committee recommends that the Government of the Northwest Territories amend the Northwest Territories Heritage Fund Act to clearly describe the fund's purpose as intergenerational savings. Committee recommends replacing provision 2(2) and 2(3) in the Act with the following:

• 2(2) The purpose of the Heritage Fund is to serve as a permanent intergenerational savings mechanism for the people of the Northwest Territories.
• 2(3) The Heritage Fund is to benefit future generations of people of the Northwest Territories from ongoing economic development, including the development of non-renewable resources, by maintaining safety of principal while maximizing total return on investment.

Recommendation 2: The committee recommends that the Government of the Northwest Territories develop a comprehensive mandate for the Heritage Fund that goes beyond the wording in the Act and serves to explicitly link the fund's savings rule, spending rule, and investment model.

Recommendation 3: The committee recommends that the Government of the Northwest Territories, through the Minister and the financial management board, establish clear policies, oversight mechanisms, and structured decision-making processes for the Heritage Fund to ensure investment decisions align with the fund's purpose and to ensure that investment decisions remain the responsibility of an independent board free from political involvement.

Recommendation 4: The Standing Committee on Government Operations recommends that the Government of the Northwest Territories amend the Northwest Territories Heritage Fund Act to create an independent, arm's-length Heritage Fund investment board responsible for administering and managing the Heritage Fund. Committee further recommends that the board's mandate should be set out in in the Act to include:

1. Investing the Heritage Fund in accordance with this Act and any regulations;
2. Providing independent professional investment expertise to safeguard and grow the fund;
3. Acting in the best long-term financial interests of the residents of the Northwest Territories;
4. Ensuring that investment decisions are made free from political involvement; and
5. Performing any other prescribed duties.

Recommendation 5: The committee recommends that the Government of the Northwest Territories repeal all provisions in the Act assigning investment-related powers, duties, or reporting obligations to the secretary to the financial management board and replacing with the Heritage Fund investment board.

Recommendation 6: The committee recommends that the Government of the Northwest Territories establish accountability, appointment, and conflict of interest provisions for Heritage Fund investment board members.

Recommendation 7: The Standing Committee on Government Operations recommends that the Government of the Northwest Territories amend the Northwest Territories Heritage Fund Act to establish a clear governance model with defined role separation between government as the fund owner, an arm's-length governing board, and professional investment managers to ensure independent and accountable oversight.

Recommendation 8: The committee recommends that the Government of the Northwest Territories align the Heritage Fund with the Santiago Principles to strengthen transparency, accountability, prudent investment practices, and long-term public trust.

Recommendation 9: The Committee recommends that the Government of the Northwest Territories engage with global best practice organizations, including the International Forum of Sovereign Wealth Funds, to support ongoing improvements to the Heritage Fund's governance and investment management.

Recommendation 10: The Committee recommends that the Government of the Northwest Territories establish a comprehensive transparency framework for the Heritage Fund, including regular plain language public reporting, audits, clear disclosure of investment strategy and performance, and mandatory publication of governance and investment policies.

Recommendation 11: The Committee recommends that the Government of the Northwest Territories continue 10-year statutory reviews of the Northwest Territories Heritage Fund Act to be publicly undertaken by a committee of the Legislative Assembly and requiring a government response.

As such, committee recommends that section 10 concerning the 10-year review of the Act remain in place.

Recommendation 12: The Committee recommends that the Government of the Northwest Territories establish a clear, legislated investment mandate for the Heritage Fund that defines its purpose, strategic and long-term investment objectives, and acceptable levels of risk, providing the foundation for strategic asset allocation and performance expectations to be reviewed by committee.

• Committee further recommends that the following comprise the investment mandate:
• Adopting a long-term strategy to support sustained growth and diversification;
• Setting rules-based deposits and withdrawals to ensure predictable contributions and protection against short-term pressures;
• Applying a total portfolio approach to maintain a balanced asset mix and regularly reviewing allocations;
• Identifying and managing investment risks while pursuing long-term returns;
• Once the fund reaches a large enough value, consider a legislated inflation proofing rule to ensure it maintains its purchasing power over time.

Recommendation 13: The committee recommends that the Government of the Northwest Territories amend the Northwest Territories Heritage Fund Act to establish clear rules based deposit and withdrawal provisions, including how often, how much, and under what circumstances, to ensure predictable, long term contributions that support intergenerational wealth and economic stability.

Recommendation 14: The Committee recommends that the Government of the Northwest Territories assess increasing the proportion of resource revenues deposited into the Heritage Fund to ensure the fund grows at a rate capable of supporting intergenerational equity as resource revenues decline.

Recommendation 15: The Committee recommends that the Government of the Northwest Territories maintain the current ban on withdrawals from the Heritage Fund beyond 2033 to allow it to reach a critical threshold.

Recommendation 16: The Committee recommends that the Government of the Northwest Territories amend the Northwest Territories Heritage Fund Act to include a clear provision that the Heritage Fund is not to be used for short-term deficit financing, and recommends inclusion of the following language into section 7:

1. The Heritage Fund shall not be used for the purpose of financing a short-term deficit, including but not limited to:
2. An operating or cash-flow deficit of the Government of the Northwest Territories;
3. Temporary revenue shortfalls; or
4. Any other short-term fiscal pressure arising within a fiscal year.
5. No withdrawal may be made from the Heritage Fund unless expressly authorized under this Act for a purpose consistent with the long-term objectives of the fund.

Recommendation 17: The Committee recommends that the Government of the Northwest Territories enact a legislative requirement that any future amendments to the Northwest Territories Heritage Fund Act, or any authorization of transfers from the Heritage Fund, be approved by a special majority of Members of the Legislative Assembly. Committee recommends replacement of section 8 with the following language:

1. No amendment to this Act, nor any authorization of transfers from the Heritage Fund, shall be valid unless approved by a special majority consisting of not less than two-thirds of all Members of the Legislative Assembly.

Recommendation 18: The Committee recommends that the Government of the Northwest Territories undertake a comprehensive review of mineral and petroleum royalties and taxation to determine whether the Northwest Territories is retaining an appropriate and equitable share of resource revenues for the benefit of its residents.

Recommendation 19: The Committee recommends that the Government of the Northwest Territories strengthen forecasting capacity within the Departments of Industry, Tourism and Investment and Finance to improve accuracy and reliability of resource revenue projections and support long-term fiscal planning.

Recommendation 20: The Standing Committee on Government Operations recommends that the Government of the Northwest Territories provide a response to the recommendations in this report directed to it within 120 days.

Thank you, Mr. Speaker.