EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
Some members were pleased, actually all members were pleased, to see that the 2005-06 main estimates, for the first time ever, contained information on the government’s prior year’s actual spending.
This improvement is to be applauded. Last year, during the review of the department, the standing committee indicated its desire to see information tabled that details the actual costs of capital projects previously approved by the Legislative Assembly.
In recent correspondence to the standing committee, the minister indicated that the department will “prepare on an annual basis a listing of those multi-year projects that have been completed and also indicate the budgeted and actual costs, as well as the variance.
A preliminary report will be prepared for those multi-year capital projects completed in the 2005-06 fiscal year and this report will be provided at the 2006 Winter Legislative Assembly session.”
Members look forward to reviewing this information as well as the GN’s formal statement of policy with respect to the use of P3 projects, which the committee has been informed is under development.
Members continue to note the Auditor General’s ongoing recommendations and the GN’s responses with respect to the need to further improve financial reporting so that MLAs and the public can compare the government’s financial plans to its actual results.
The minister’s recent correspondence also responded to members’ concerns regarding the transparency of the GN’s grants and contributions expenditures across all departments by indicating that a comprehensive report is in preparation for tabling in the Legislative Assembly.
One of the goals agreed to by all MLAs at our Arviat Caucus Retreat was to manage Nunavut’s financial resources responsibly by acting decisively on the recommendations of the Auditor General and Legislative Assembly Standing Committees with respect to strengthened financial management across government departments and Crown agencies.
Members will continue to closely monitor progress towards this commitment.
In response to a question in the House posed earlier this month, the Minister of Finance indicated that the GN has accumulated approximately $153 million in debt. Nunavut’s borrowing limit of $200 million was established by way of a federal Order in Council.
The committee continues to urge the government to include comprehensive information on its lending and borrowing activities under section 27 of the Nunavut Act in its annual consolidated financial statements and that such information include a clear picture of the government’s available borrowing room.
Members would also wish to see the minister clarify the government’s current position with respect to whether or not it is time to approach the federal government for an increase in our borrowing limit.
Members have taken careful note of the major changes that have occurred with respect to territorial formula financing in recent years.
The standing committee looks forward to the pending release of the final reports of the federally established Expert Panel on Equalization and Territorial Formula Financing and the Advisory Panel established by the Council of the Federation.
The department provides the primary support to the Financial Management Board.
One issue with GN-wide implications that I would like to comment on today concerns the growth in the size of the public service since the creation of Nunavut in 1999.
According to the GN’s own departmental business plans, the total number of PYs in 2004-05 was approximately 3,040, not including the approximately 150 positions in the Qulliq Energy Corporation.
The number of PYs in 2006-07 is projected at approximately 3,410.
This is an increase of almost 370 positions, or 12 percent, in just two fiscal years.
This is taking place at a time when the GN’s overall vacancy rate is around the 20 percent level.
In other words, while the government has over 700 positions sitting vacant, it continues to add new ones to its organizational charts.
The standing committee has been advised that the Financial Management Board recently approved a new PY control mechanism to ensure that all PYs listed in departmental structures are fully funded.
The growth in management positions is also of concern. To illustrate, in January of 2000, according to the GN’s own IEP report, there were 233 positions classified as middle management. That number has since grown to approximately 432 positions, an increase of over 85 percent.
Mr. Chairman, since January of 2000, the number of executive and management positions has grown by over 50 percent - significantly faster than the growth in the number of non-management positions.
It is unclear to the standing committee as to how this growth in the management level has delivered better programs and services to our constituents and communities.
The GN plans to spend over $300 million in 2006-07 on compensation and benefits, an amount, which accounts for over 30 percent of its total spending. It is important that we keep in mind that a dollar spent on compensation and benefits for employees is a dollar that is not available for other spending, such as capital projects in communities, or increased financial assistance for young people to attend college or university.
In the past, the GN has been able to use unspent salary dollars to make up for overspending in other areas. To an extent, this may encourage undesirable management practices, as the ongoing vacancy rate in the government almost ensures that money will be unspent and available for other purposes at the end of the fiscal year.
We must recognize that the bureaucracy cannot grow forever, and that a reasonably definitive size cap must be determined.
Mr. Chairman, over $10 million of the department’s budget is allocated for paying the GN’s commercial leases.
The committee has been pleased to see the GN being more proactive with respect to public reporting of its leasing activities. These improvements were in response to concerns from members concerning transparency in this area.
The committee is aware that the question of whether the new Qikiqtani General Hospital will be a leased or purchased property remains under review.
Mr. Chairman, the issue of Crown corporation governance has engendered much discussion in recent years at both the territorial and national levels.
The work and actual accomplishments of the GN’s Crown Agency Council in addressing issues related to the governance of Nunavut’s Crown agencies would continue to bear close scrutiny over the coming year.
Members were pleased to note that the first annual activities report of the Crown Agency Council was recently tabled in the Legislative Assembly.
Last year, letters of expectation to the Nunavut’s Crown agencies were also tabled in the House.
The QEC’s response to the letter of expectation was subsequently tabled, but a number of other responses from Crown corporations have yet to be tabled.
It is worth noting, Mr. Chairman, that although the GN provides millions of dollars in direct funding to Nunavut’s Crown agencies each year through the main estimates process, business plans for these entities are rarely provided in time for meaningful scrutiny to occur in the Legislative Assembly prior to the funding requests being voted on by members.
The committee would wish to see the annual business plans for Crown agencies are tabled at the same time as the main estimates and budget package.
The committee also reiterates its call for all ministerial directives, instructions, and other instruments directed to Crowns to be tabled in this House in a timely fashion.
Mr. Chairman, energy issues continue to be of concern to all members.
Although there is no specific funding in this year’s departmental budget for direct contributions to the QEC to offset its losses, members would be unsurprised to see further supplementary appropriations come forward in this area.
Members note that the Department of Finance has certain energy-related responsibilities in relation to such initiatives as the Nunavut Electricity Subsidy Program.
Members recognize that managing the government’s revenues is a critical function of the department.
Members are well aware of the significant tax cuts that were proposed by the GN and approved by the Legislative Assembly in 2002, and urge the department to closely monitor, and publicly report on, their actual success in achieving the government’s stated policy goals.
This observation would also apply to the GN’s new Fuel Tax Rebate Initiative.
As members are aware, the GN’s recent background document on this initiative states that the government anticipated that the introduction of the Fuel Tax Rebate would result in approximately $1 million annually in Fuel Tax Rebates to the mining sector.
However, the GN expects to get back approximately $4 million in various forms of taxes, including corporate, property, personal, and payroll taxes.”
Mr. Chairman, it is important that such significant initiatives be rigorously evaluated to assess if they are actually achieving their intended results.
I would also note that the standing committee was surprised at the extent to which the government’s projections for personal income tax revenue have changed in just one year. While the 2005-06 main estimates for the government projected that close to $24 million would be raised in this fiscal year from this source, the projections for 2006-07 are significantly lower, at just $13 million.
The standing committee has also noted that a recent motion passed in the Legislative Assembly of the Northwest Territories calls on the three territorial governments to lobby Ottawa for improvements to the residency deduction that Northern taxpayers are entitled to claim when they file their personal income tax returns.
Recognizing that the amount that our constituents are allowed to claim has not changed in over a decade, the standing committee would fully support lobbying efforts in this area on the part of our minister, his colleagues in the NWT and Yukon, and our six Northern Parliamentarians.
Members noted that the department’s business plan indicates that a new approach to capital planning will be considered this fiscal year, for implementation in the development of the 2007-08 Capital Plan. Members have welcomed the recent creation of the Nunavut Community Infrastructure Advisory Committee. Although members recognize that the government’s resources are limited and not every desired capital project can be funded, communities must have clear opportunities to provide input into the GN’s overall capital planning process in order to articulate local priorities.
The standing committee was pleased to hear GN witnesses indicate that efforts are being made to address such issues as the significant number of capital carryovers that are brought forward for approval. The committee has also been advised that GN’s new capital planning process will include more comprehensive planning for future O&M costs for new facilities.
The issue of budget adjustments and intradepartmental transfers is also of concern to members. When the government changes the scope or timing of previously approved capital projects during the course of a fiscal year, members whose communities are impacted expect to be consulted and kept informed in a timely manner.
While some departments, most notably the Department of Community and Government Services, regularly do so with respect to their own projects, the committee would wish to see the government adhere fully to section 4.3 of the GN’s Financial Administration Manual.
This section deals with the issue of consultation guidelines for capital project budget adjustments. The section specifies that, each quarter, the Chairman of the Financial Administration Board will provide the Standing Committee on Government Operations with a report, by department, that identifies all capital adjustments made in that quarter.
The operations of the Nunavut Liquor Commission fall under the jurisdiction of the Department of Finance.
Liquor management functions have recently been repatriated to the territory. Members understand that the department is considering undertaking a comprehensive review of the Liquor Act. The issue of access to liquor is a contentious one, and members recognize that different communities have different views on the extent to which access should be permitted.
Members are also aware of the view that in those communities where alcohol is permitted, excessive barriers to the legal importation and purchase of alcohol can result in the unintended consequence of driving people into the hands of bootleggers.
Earlier in the Second Legislative Assembly, a member posed a written question to the minister, which sought data on such matters as the number of fines imposed for offences committed under the Act.
At that time, the government was unable to respond in detail to the question, and members evinced surprise that while the government made the effort to amend the legislation in this area, it apparently did not track the actual impact of its own changes.
Last November, a similar written question was posed, and the GN was able to provide significantly more information. This improvement is encouraging, and the committee hopes that the recent functional repatriation of liquor management to Nunavut will enable more cooperation to take place with the RCMP in combating bootlegging.
The idea of earmarking fine revenue from liquor-related offences - on top of existing program funding - for the specific purpose of substance abuse treatment and awareness programs is worth considering.
This idea is not without precedent. For example, Mr. Chairman, the federal government introduced Bill C-15 in the last Parliament. This bill, which amended the Canadian Environmental Protection Act and the Migratory Birds Convention Act, I didn’t know migratory birds had conventions, Mr. Chairman, included a specific provision to have all fines received in respect of violations to be credited to the federal Environmental Damages Fund and used for protecting and conserving the environment.
Mr. Chairman, doing something similar here could help to send a clear message that we are serious about the issue of substance abuse.
This could help to address the confusion that arose after the government’s news release of January of 2005.
I’m sorry, Mr. Chairman, my throat is getting dry.
In that announcement, the Health and Social Services Minister was quoted as saying that the extra revenue generated by the repatriation of the liquor management function will help to address the negative social repercussions of alcohol. Although this statement implied that the additional funds raised by the GN through the sale of alcohol would go directly to treatment and awareness programs, this was not, in fact, the case.
Mr. Chairman, these sorts of mixed messages to our public are not desirable.
Mr. Chairman, that brings to a close my opening comments, and members may wish to raise their own questions and concerns, and I welcome them to do so.
Minister Simailak, do you have witnesses you would like to bring to the table?
Hon. David Simailak: Yes, I do Mr. Chairman.
Chairman: I hear agreed.
Sergeant-at-Arms, escort the witnesses in please.
For the record, minister, please introduce your witnesses.
My apologies, minister, we will try this again.
On my right is Mr. Bob Vardy, Deputy Minister of Finance, and on my left, Victor Tootoo, is Assistant Deputy Minister of the same department.
Before we proceed I would like to remind members of the following: According to Rule 77(1), you have ten minutes to speak, and according to Rule 77(2), subject to the discretion to the Chair, a member may speak more than once to a matter under discussion, but not until every member wishing to speak has spoken.
I welcome the minister and his officials: Mr. Tootoo and Mr. Vardy.
I can’t really add too much more to what the Chairman said in his comments. I think financial management is the foundation of any organization, whether it’s your government, or your department, or your family, or just your personal individual situation.
If you don’t have your finances in good shape then you are likely going to have a lot of problems, as evidence around the world and different jurisdictions.
We are always hearing about governments running into financial difficulties, and businesses running into financial difficulties, and individuals running into financial difficulties.
There are so many reasons. It’s probably a combination of reasons why you spend more than you make. You don’t have good financial controls; if you don’t keep track of your finances, you’ll soon run into difficulties.
That’s what I’m seeing with the Government of Nunavut.
I’ve been a Member of the Legislative Assembly for two years now. The first year we had the Auditor General’s Report, and it was a very scathing report. We spent a week with the Auditor General going over the report.
It was good exchange of information. From that our standing committee made recommendations to the government; she made recommendations to the government and we’re hopeful that things will improve slightly. I don’t think we’re looking for overnight success, but then this latest Auditor General’s Report came out and she’s reiterating the fact that since there’s been some improvement, but not a whole lot.
She’s gone to the extent in her Auditor General’s Report, in Chapter 8, making recommendations to the Government of Nunavut how to improve financial management today and tomorrow. She considers it a crisis situation. We can’t continue to move ahead unless we get our financial controls in place.
I firmly believe that we’re on the verge of a lot of important activities in Nunavut.
The Premier and the Government of Nunavut want to commence devolution negotiations with the federal government. I’m sure the federal government folks are pouring over the Auditor General’s report; they’re probably pouring over the budget address and they’ll be using that as a basis for their negotiations. If the Government of Nunavut doesn’t even have their financial affairs in place, how can they manage devolution and control our resources two, three, four, or five years down the road.
I think it’s very important that we start putting those controls in place and preparing for that day. I also am concerned, as the Chairman said, that we seem to be spending more money every year. I’m not sure that’s totally necessary.
I would like to see the government curb it’s spending a little bit because in the end, if we rely on almost 90 percent or higher on the federal government transfer payments, whether it’s through the territorial formula financing arrangement currently it can’t continue.
It’s not healthy for any province or territory where you’re almost 100 percent reliant on federal government transfer payments.
At some point they’ll flatten out, and if you get changes in governments, then they may start to decrease.
If we become dependent on a certain level of funding, and then that funding has to be cut, then what ends up typically occurring is that you have to start re-profiling departmental programs and person years. For anyone who doesn’t know what re-profiling means, it means, it’s a fancy word for lay-offs and cuts in the basic essential programs.
I recall that happening many times, probably three times over the 15 years with the Government of the Northwest Territories. When they got to a certain level, they had to curb their spending.
Then what happened in the Northwest Territories, and this was when we were still part of the Northwest Territories, the economy started to stagnate. People lost their jobs, lost their benefits.
There were very few capital projects contracted in the communities. They didn’t have contracts they could bid on that would keep people employed in the community.
So it was very painful for a lot of the communities, they also had the affect of hurting us in other areas too.
The tourism industry suffered a little bit because, we don’t have a lot of people come up from down south, like a real true tourist, but any time, say, someone from Iqaluit flies to Cambridge Bay, you’re going to be supporting the hotels and vice-versa.
If you go to any of the communities, there are government employees, but if you’re not going out on these trips because there is no money to pay for their travel, the hotel industry starts to suffer.
The tourism industry starts to suffer.
I think it’s very important that we look at ways to improve our financial control, find a way to reduce our spending, perhaps look at program reviews, and see if we’re getting a bang for our buck with some of the programs we have out there.
It seems like if you read the main estimates for three weeks, every department has got a multitude of programs.
You have to wonder if they’re all necessary, if they have all had their intended effect.
There are probably some savings there. I think it’s also important that the Department of Finance and the Department of Economic Development and Transportation, work very close together in attracting investment in Nunavut so we can bring in some outside money, investment, whether it’s from the private sector, or from the federal government, to get our economy going because I think that will be, not for all communities, but for several communities it’s going to be a boost to help them.
If you get five or six communities doing well, and then the other communities can feed off of them and be supported that way.
I think it’s very important that we bring in some outside investment to support improving our financial reporting, and management, and to support our decreasing reliance on federal government transfer payments.
I think if we start now, and start putting those changes in place, I think within four to five years we can start seeing some noticeable changes. I’m not saying it will happen overnight.
I think the Government of Nunavut is kind of like the Titanic to me; they can’t change things real fast, but if you look far enough ahead you can try to avoid some of the inevitable problems that you are going to run into if you don’t make the changes.
I don’t want to burden our future governments and our future generations of Nunavummiut with a lot of problems if we can solve them now, when we are not MLAs or ministers, I think it’s incumbent upon us to keep in mind the future, it’s very important to us, otherwise we are not going to have a future. We are just going to be constantly dependent on others for our health and wellbeing.
I don’t think this is necessarily a good thing that we have depended on others.
I think we have it within ourselves to be self-sufficient, independent, aggressive, and be solid contributors to the country of Canada as a territory.
I would like to make a motion that we report progress.
Chairman: Thank you. We have a motion on the floor to report progress and the motion is not debatable.
Your committee has been considering Bill 12 and the main estimates and would like to report progress. Also, Mr. Speaker, I move that the Report of the Committee of the Whole be concurred with.
A reminder for meetings tomorrow at nine o’clock in the morning a meeting of the Standing Committee Ajauqtiit at the Nanuq Boardroom. Also at nine o’clock a meeting of the Standing Committee on Government Operations and Accountability in the Tuktu Boardroom. And a notice that the Regular Caucus Members meeting for half past eleven has been cancelled.
Orders of the Day for tomorrow, March 14:
Speaker (interpretation): We will stand adjourned until tomorrow March 14, at 1:30 in the afternoon.
>>House adjourned at 19:56
Tuesday, March 14, 2006
Pages 1781 – 1899
Opening Prayer 1781
Ministers’ Statements 1781
Members’ Statements 1783
Returns to Oral Questions 1789
Recognition of Visitors in the Gallery 1791
Oral Questions 1792
Written Questions 1810
Returns to Written Questions 1810
Tabling of Documents 1811
Notices of Motions 1812
Motions 1813
Consideration in Committee of the Whole of Bills and Other Matters 1815
Report of the Committee of the Whole 1896
Third Reading of Bills 1896
Assent to Bills 1898
Orders of the Day 1898
Tuesday, March 14, 2006 1781
088 – 2(3): Importance of Sealing to the Inuit Culture, Economy and Diet (Akesuk) 1781
089 – 2(3): 2006 Arctic Winter Games Conclusion (Tapardjuk) 1782