Yellowknife (Jun 19/06) - This year, the GNWT will "forgive" more than $655,000 in bad debts from private individuals, bankrupt companies and on this particular bill, even a failed dance troupe called Abel's Dance Group, who are in arrears to the territory for $2,500 and change.

Each year the government clears bad debts from its books. After a period of attempting to collect, these debts are eventually pardoned under the Forgiveness of Debts Act.

Mark Cleveland, secretary and comptroller general for the Financial Management Board Secretariat explains the process of clearing the debts from the books and eventually jettisoning them.

"First we write-off a debt, basically meaning we write down that value in our books," said Cleveland. "This doesn't mean we don't pursue them but that we write it off (from the overall accounting process)."

If collection is impossible or only partial, which according to Cleveland can be due to anything from bankruptcy settlements only covering a portion of an outstanding debt, the statute of limitations expiring on bad personal loans, a debtor's death or people, "With no prospect of getting out of their fiscal situation," then the amount owed is eventually covered under the Forgiveness of Debts Act.

"Only after considerable effort is made to collect the debt, does it get to this stage and by the time we get to forgiveness, it tends to be quite a while," said Cleveland. "Some range as far back as 1990."

However, one which does not go back as far and may raise some eyebrows is an outstanding $101,000 Workers' Compensation Board bill to North American Tungsten Corp. The company declared bankruptcy but recently reconfigured and continues to mine in the territories.

With general creditors owed a total of $6.5 million, according to WCB spokesperson Dave Grundy, "We got in line with the creditors like everybody else."

Under a settlement agreement to resurrect the mine, general creditors were able to collect 20 cents on-the-dollar owed and the GNWT was able to recoup approximately $25,000.

In 2003, the GNWT Forgiveness of Debts Act erased $950,000 in bad debt and in 2004 the figure was $508,000.