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Public Accounts (7 January 2008)

From Public Accounts Committee Hansard - 7 January 2008

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Orientation: The Role of the Provincial Comptroller’s Office

The video for this section of the committee meeting begins at 1:25:52.

Mr. Reiter: — Excuse me.

Mr. Bayda: — Yes?

Mr. Reiter: — I just have one question for you, if you could you explain that to me. So when a highway’s being constructed, the year it’s done, did you say now is it entirely expensed that year?

Mr. Bayda: — It used to be entirely expensed that year. So as we incurred the cost to build a highway it was, you know, written off immediately, so that would impact the government’s bottom line right away. So we used to expense the whole thing. Now . . .

Mr. Reiter: — Now it’s expensed over a period of years.

Mr. Bayda: — Now we show it as an asset on our books and then slowly over time, as the asset is used to provide services to the public, it would impact the . . .

Mr. Reiter: — And that complies with PSAB then?

Mr. Bayda: — That complies with PSAB now.

Mr. Reiter: — I’m just confused then, because my understanding actually with municipal accounting, it’s moved completely the other way, where they wanted a capital asset expensed entirely first year. Are you familiar with that?

Mr. Bayda: — I think in the municipal sector they are actually just coming to where we are now. So very soon they will also be capitalizing their assets and amortizing them much the same way, very similar to what you would find in the private sector.

Mr. Reiter: — So what do you do with, for instance, an asset like a highway? You have a schedule that you follow regardless of the actual life of the highway, or what do you do in that case?

Mr. Bayda: — You know, we’ve worked quite closely with the Department of Highways and the engineers over there and, you know, they had made recommendations to us on how long a highway lasts. And depending on the kind of the highway, whether it’s a thin membrane highway or another kind of highway, they set up, you know, a depreciation schedule for us.

Mr. Reiter: — Okay.

Workers’ Compensation Board

The video for this section of the committee meeting begins at 2:24:40.

Mr. Reiter: — Just looking at the notes to the financial statements, there’s obviously a significant amount of money in investments. Just wondering how that’s handled. I assume the board looks after the governance but the actual hands-on investment decisions — how much of that is made in house? How much is farmed out? How do you handle that?

Mr. Solomon: — We have an investment committee. The investment committee on an annual basis reviews what we call our SIP&G, our statement of investment policy and guidelines. It’s a fairly thick document. And it’s really a guideline for our investment fund managers. We have investment fund managers that manage all of our money. We get a quarterly report from them. We meet with them for half a day or thereabouts. We get a monthly report as well, as a board, at our monthly meetings. But it’s basically investment fund managers. We have Greystone Capital, looking after about 83 per cent or 82 per cent of our total amount. And the balance is with Franklin Templeton. And they’ve been both . . . Greystone has been stellar in terms of their returns for us.

What our investment policy and guidelines outlines is what we don’t want them to invest in in terms of certain derivatives, or what we want them to focus on. It also gives a breakdown of how much we want in Canadian equities or foreign equities or US [United States] equities or bonds or real estate.

Mr. Reiter: — And did you say the investment committee meets quarterly then?

Mr. Solomon: — We meet quarterly, yes.

Mr. Reiter: — And who comprises the investment committee? Is it the board itself?

Mr. Solomon: — The board members plus the CEO and the CFO [chief financial officer], who are non-voting members.

Mr. Reiter: — Okay, thank you.

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