Minister of Finance, Mr. Pollard.

Thank you, Mr. Speaker. Mr. Speaker, this year we will run a deficit of some $50 million. This year the forecast was to run a deficit of some eight million dollars. That will eat up our accumulated surplus, Mr. Speaker, and if we continue to spend in the manner in which we have been spending and our revenues from the federal government continue to decline, then next year we could see ourselves running a $75 or $80 million deficit. In two years that could grow to well over $100 million, Mr. Speaker. So when I say between $50 and $100 million, I am saying that could happen in the next two years. Thank you, Mr. Speaker.

Supplementary, Mr. Lewis.

Thank you. We have new figures now, Mr. Speaker, of between $75 and $80 million. I would like to ask the Minister of Finance, since we have already taken all kinds of measures -- we have put the brakes on spending all over the place -- does that mean that if we continue going the way we are going, that these figures will not apply, that we will not have that kind of deficit, because we have already taken all kinds of money-saving measures?

Mr. Pollard

Mr. Speaker, no. The freeze measures that were put on were to stop the spending that was taking place, because I was alarmed at its growing from an eight million dollar forecast deficit, and I could see it going through the $40 millions -- and it went through there very quickly, Mr. Speaker -- and so the freeze was put on to stop the spending this year, to get the thing slowed down. If we continue with the freeze, we still may run a large deficit, so that is not the answer to our problem, Mr. Speaker. The answer to our problem is to live within our means. Thank you.

Supplementary, Mr. Lewis.

Will the Minister confirm, then, that our overall problem is really a revenue problem? Is that how he would describe the nature of the beast he is trying to tackle?

Thank you, Mr. Speaker. Mr. Speaker, our revenues from Canada have declined because the down turn in the economy in southern Canada has had an effect upon our formula. The gross domestic product has been very low, and that has had an effect on our formula. The population factor which we thought would work in our favour has not worked in our favour, and we are some $33 million lower in revenue this year than what we had forecast, Mr. Speaker. So the Member is correct that the lack of revenues coming from Canada is one of those things that are aggravating our financial situation -- that and increased demands. We have got Health, which is continually demanding money, and we have to treat those people, Mr. Speaker, so it is demand partly, and it is also the fact that we are receiving less money from Ottawa, partly. Thank you, Mr Speaker.

Oral questions. Supplementary, Mr. Lewis.

Thank you, Mr. Speaker. Since it seems that the formula is what is causing difficulty, and we had a shortfall of $30 million, it is very difficult to translate this $30 million, in light of the fact that we had a surplus, into this $50 to $100 million that the Minister of Finance has referred to. Is he anticipating that there will be a further reduction in revenue, then, to account for this $100 million he keeps on talking about?

Mr. Pollard.

Mr. Speaker, that will occur if our revenues remain as they are. Our spending has to be brought below our revenues, Mr. Speaker, and at our present rate of expenditure that is not occurring. So I do anticipate that if we do not get out of this recession, if the formula does not start to perform better, there may be some further losses of revenue from Canada; but that alone is not the problem. The problem is that we are spending more than we are taking in, Mr. Speaker. Thank you.

Oral questions. Mrs. Marie-Jewell.