(Translation) Thank you, Mr. Speaker. The Auditor General notes that "the government's March 31st net cash balance has been negative for three of the last four years. To cover this negative balance, the government needs to borrow." Essentially, expenditures are increasing at a greater rate than revenues. In the last four years, the accumulated shortfalls have decreased the government's surplus by 62.8 per cent. It is anticipated that, if the decline is not halted, the government will face increased borrowing and interest costs.
It is important to monitor the cash/borrowing positions throughout the year. In last year's Public Accounts committee hearings on the Report of the Auditor General for 1992/93, the Department of Finance presented a forecast for 1994-95 which showed a deterioration of the cash position throughout the year.
At the public hearings in May 1995, the committee again requested an update of the present cash balance and the new forecast for 1995-96. The committee then discussed the government's cash position with the deputy minister of Finance, who provided an overview of the forecast. The cash and surplus positions are deteriorating further and the 1995-96 forecast indicates that cash shortfalls will force the government into short-term borrowing on a sustained basis as early as July 1995. (Translation ends)
As a result, and based on current interest rates, the accumulated interest on borrowing by year end could be as much as $2.3 million. This estimate is subject to significant change depending on interest rate.
The deputy minister of Finance maintains that for the time being, it is to the government's benefit to lend its surplus to municipalities, for example, because interest earned from cash on hand reduces the grant from Canada. This is discussed in more detail in connection with the municipal lending practices.
The committee's main concern is that current estimates indicate a cash shortfall of almost $120 million at year end. This is significant because the borrowing limit established by the recently amended Loan Authorization Act is $100 million. It appears that the government may soon be in a position to request additional authorization from the Legislative Assembly. The committee is also concerned that it may also be necessary to address the $400 million limit on accumulated borrowing set by federal Order-in-Council, as that total currently stands at about $300 million.
The standing committee has taken on an enhanced "watch-dog" role as discussed in the 1994 public hearings on the Auditor General's 1992-93 report. Therefore, given the crucial nature of the information to Legislative Assembly decision-making, the committee will be requesting monthly cash balance statements from the deputy minister of Finance. At this point, Mr. Speaker, I would like to ask Mr. Allooloo to continue. Thank you.