Item 5, oral questions. Mr. Nerysoo.

Thank you, Mr. Speaker. Could I ask the Minister of Municipal and Community Affairs to indicate to the Members of this House, if any financial resources were paid out for flood damage in the Mackenzie Delta?

Mr. Allooloo.

Mr. Speaker, I could provide that information. Thank you.

Supplementary, Mr. Nerysoo.

Thank you, Mr. Speaker. Could I also ask if the Minister could provide me with a copy of all the submissions made from Aklavik and Fort McPherson, for financial support as a result of flood damage?

Mr. Allooloo.

Yes, Mr. Speaker.

Item 5, oral questions. Mr. Todd.

Thank you, Mr. Speaker. My question would be for the Minister responsible for constitutional negotiations, Mr. Kakfwi. It is my understanding that under the new Constitution, should it be signed, that the responsibility for public housing currently held by C.M.H.C., will be transferred to provincial jurisdictions.

What steps, if any, has this government taken to ensure that we negotiate an alternative program for northern public housing?

Madam Premier.

Mr. Speaker, the Constitution has not been ratified at this time. In our discussions at the federal level, it was very clear that the ongoing syndrome of off-loading was thoroughly discussed. The federal government is very aware, not only in the Northwest Territories, but also other jurisdictions are very concerned that in transferring, with the division of powers and taking over new responsibility in those negotiations when they go on, it is not an automatic assuming of responsibility, but one that each jurisdiction will be dealing with the federal government. It has been made very clear by all jurisdictions, and particularly from the Northwest Territories' point of view, that we do not have the revenue and the options that the provincial jurisdictions have in terms of raising extra revenue. It is very clear that the division of power in taking over responsibility, is not of interest to the Northwest Territories, if the benefit is zero. Thank you.

The time allotted for question period has lapsed. Item 6, written questions. Item 7, returns to written questions. Item 8, replies to opening address. We will take a short recess at this point. Thank you.

---SHORT RECESS

Item 9, replies to budget address. Mr. Koe.

Mahsi, Mr. Speaker. I would like to make some comments, and take this opportunity in the agenda to make a reply to the budget address that we heard last week. As an M.L.A., one of my first concerns, when I was elected, was dealing with the budget of the Northwest Territories. My immediate concern is that here we are in September, five and a half months after the start of the new year when 50, 60 and in some cases 70 percent of the departmental budgets are spent, and we are being asked to approve the operations and maintenance budget of the government.

There is a projected deficit for two years, of approximately $50 million. The Minister has announced his intentions and plans to reduce, and balance the budget in two years. In the documents that were tabled, the Minister announced cuts and reductions of $25 million for this fiscal year, and another $25 million for the next fiscal year.

I have doubts if these are realistic, and whether or not we can achieve a balanced budget in two years. Several issues come to mind. One is, yesterday, we talked about the reduction in social housing. Another issue, that I heard this morning, is that the federal government is cutting off family allowance payments to everyone in Canada.

The social concerns, the economic concerns, the health concerns, and the dispute with the federal government also comes to mind. I have raised issues throughout this Assembly, as to whether or not the $40 million that is projected is a real, true figure. There is also a focus on the salary and PY reductions of the civil service. In this statement that the Minister made, they are eliminating 160 positions. When I look at the details that have been tabled here, the Summary of Total Continuing PY Requirements, I note that there is a change from 1991-92 Main Estimates to 1992-93 Main Estimates of only 15.2 PYs.

Now I have been around in government for a while, and I know that a PY does not equal a position, but I am not sure how you can reduce staff, if the overall change in the PY budget is insignificant. I will be very interested in the next few weeks to find out where these reductions are going to be made.

The Minister also made reference to increasing alcohol prices. I have no problem with that, however, the statement that this increase will help our battle to lower consumption rates, and hopefully reduce some of the damage done to our society, I have some problems with that statement. An assumption has been made that by increasing the rates, we are going to reduce the levels of alcoholism in the Northwest Territories, and I think some debate is needed on that reference, in that statement.

An announcement was also made of a payroll tax of one percent, and I am very curious to find out how this government intends to collect this tax. I have been made aware by business people in the north, that the cost to collect this tax will be more than the benefits that they are going to receive. It always seems that we impose the extra costs on the small businesses to achieve these types of programs.

I agree that we should allocate, or allot, and collect taxes from seasonal employees, but I hope that careful consideration is going to be given on how we administer, and how the collection process is going to be developed.

I have some suggestions for improvement on how to balance the budget, how to do some of the government work, and a lot of these are raised by people in the business community and more recently by a publication by the Canadian Federation of Independent Business. Small businesses in the north, and in Canada, support government's commitment to eliminate deficits. Saying that, they also want the Government of the Northwest Territories to do more than balance the budget.

While the government's efforts to restrain spending have been rated substantially better than those in the federal or provincial governments, substantial cuts in spending will have to be achieved, in light of the new realities of federal cutbacks and off-loading. The budget must undergo the kind of restructuring that continues in industry to deal with new fiscal realities.

The government should define and commit to a realistic, aggressive plan to balance the budget. I mentioned before, the government has announced a two year program to balance the budget, I think that a more realistic approach would be a three year program. We must look at realistic projections of revenue sources, and specific, meaningful restructuring and down-sizing, based on clearly defined priorities, or on limits to government spending.

A balanced budget will provide the foundation on which to build a stronger, and more competitive, economy in the north, avoiding the excess tax burden and weakened government services that deficits and debt servicing costs force on the economy. Deficits and debts are merely deferred taxes. A major element in the balanced budget plan should be a freeze on the total amount allocated annually to pay for all public sector pay and benefit plan costs. A motion was passed earlier this week making those recommendations.

Unfair competition in the labour market from excessive public sector pay and benefit levels, is a major problem in the north for independent businesses trying to attract and retain good employees. The loss of valuable and key personnel to the public sector, sets off a vicious circle that undermines the economic viability, and the ability for business to provide competitive pay and benefits.

These excess pay and benefits are paid for, in part, by the owners and employees of small businesses; the double whammy of lower pay and higher taxes. The public's private sector adjustment to hard economic realities continues unabated. Small business owners and employees have faced these realities. Many have implemented restraint measures in their businesses due to the current economic situation.

Lay-offs and pay cuts for employees, and even many shutting their doors. These continue to be wide spread measures that face the private sector. There is an unfair standard between public and private sector employment. With government employees still enjoying substantially more security, well paying jobs, and generous benefits, than those who work in small and medium sized businesses.

Public sector enumeration should follow, not lead the private sector. Businesses strongly support the amalgamation of departments to reduce waste and duplication. Hopefully to increase efficiency, and cut costs. Restructuring will force a review of the myriad policies, programs and administration, that was inevitably built up over they years.

As part of this program, the G.N.W.T. should launch a review of the program duplication, redundancy, and inefficiency. Sunset clauses should be included as a standard element when establishing programs, to ensure that they do not become self-perpetuating.

Government should also develop a system where departmental managers are given monetary, or other incentives, for identifying additional budgetary reductions, or for maybe coming in under their budget.

There is still a pervasive spend it, or lose it, approach engrained in public servants. This creates a surge of questionable spending patterns at year end. It is good for some small businesses, but for the budget balancing process, it is not good for this government.

The N.W.T. should also aggressively expand the purchasing of products and services from the private sector, whenever possible. Including direct purchase from business suppliers, contracting out provision of services and supplies, reducing direct and indirect competition from public agencies, or government subsidies to competitors, and selling of government operations to private ownership.

Maximizing private sector supply whenever appropriate, and cost effective, will pay tremendous dividends in both spending and tax restraint, and in stimulating the economy.

In some discussions, and especially in public accounts, this government has over $3 billion worth of assets. Equipment, buildings, et., maybe a fire sale should be held to increase the revenue side of the budget.

Primary objectives, and ongoing objectives of economic policy, should strengthen the economy through broad measures, which enhance business growth in general. Tremendous job creation of small business indicates the powerful economic potential of reinforcing general business growth.

Government should focus on reducing barriers that unnecessarily impede the success of business start ups, and expansions as a first priority before turning to special support, or selected industries or projects.

Government should also have initiatives on an ongoing review, an audit program to identify, target and eliminate some of the excess regulation, paperwork and administrative requirements.

Government departments and public agencies, institutions, and Crown corporations would have to report annually to the Legislature on their progress on how this is done.

They create problems, and are one of the most widespread concerns of N.W.T. businesses. The regulatory paper burden problem has the potential to explode. Bureaucratic attempts are made to design solutions to such huge issues as environmental protection, transportation, workplace health and safety, municipal government control, and now a new payroll tax.

Priority of governments procurement policy should be to make the process of selling to government as easy as possible, for small and medium sized businesses.

More open tendering, especially when tenders are lost, and, information should be given as to why they did not meet the grade, or meet the bill. Smaller volume contracts, instead of huge large multi-dollar contracts. An improved payment policy, so that businesses can get quicker payments in the smaller communities.

Government should also apply a more stringent policy providing subsidies to any commercial activity, that competes with businesses in the local economy.

No real progress is made when government subsidies create unfair competition that serves to destroy existing jobs or businesses, in the name of helping others. There are probably many effective ways of encouraging local economic development, but this does not seem to be one of them.

Priority of training programs should continue to meet the needs of small and medium sized businesses. The G.N.W.T. should lead by example, in ending the unfair competition by the public sector, and very tight and critical Northwest Territories labour market, by reducing the overly generous pay and benefits, which bleeds skilled people away from the private sector.

In many cases, the government uses the private sector as a training ground for people who then move into government jobs. The government should also continue to develop new, and innovative ways, to aid better financing for independent business.

In conclusion, Mr. Speaker, the Minister expressed his optimism on future investment opportunities. He stated that the discovery of diamonds in the vast area between Rae-Edzo and Coppermine, has unleashed the greatest staking rush in the history of Canada.

This is good news. More probably for the people who are involved in the mining industry and many investors in southern Canada. However, I wonder what the local residents, the Dogrib think, who have recently initiated land claims talks. What is left for them? How can they be land owners, on their own land, if every bit of available land is being claimed by third party interests?

From my prior knowledge of negotiating land claims, I know that government negotiators have very little sympathy for aboriginal arguments on land selections. I wish the Dogrib Nation, Sahtu Dene, Metis and the Nunavut people all the best in their land selection negotiations.

Mr. Speaker, I was asked to try to sum up the budget in one word. My response is, that this is a cautious budget. Mahsi.

---Applause

Thank you, Mr. Koe. Item 9, replies to budget address. Mr. Lewis.

Thank you, Mr. Speaker. In the last Assembly, I was the only Member to reply to the budget, and I did so on four occasions. I intend to do the same thing over the next three years, Mr. Speaker.

My major concern this year, has been that it is almost a year now since legislators were elected, and this is an unusual thing to happen. It is the kind of thing that does not happen in democracies. Usually what happens is that the public is aware of government options that are available to it. They decide to vote on the kind of government they think would best serve the people of their society. Unfortunately, Mr. Speaker, in our system, the public is not involved at all, really, in deciding what kind of government we have. We do not have any kind of platform which has to be translated to a budget, so that people know politicians are being straight and honest in what they intend to do.

That is one of the weaknesses of our system, Mr. Speaker, although I admit that it has other strengths to compensate to some degree. It has been a very frustrating year for many of us who really feel that we are dealing with a phantom. We do not really know what it is doing, or what it is trying to do, as they decide how many chips should go there, and whether this constituency should have this, or whether this constituency should have that.

It is almost like a game of dividing the pie, after we have been elected, we sit down to decide where all of the bits and pieces should fall. I appreciate that Mr. Pollard, our new Minister of Finance, has inherited a difficult fiscal position, Mr. Speaker, and he deserves credit for planning a return to a balanced budget over the next two years.

However, I would like to say something about the whole issue of balanced budgets. One of the big weaknesses of governments in our time, is that they have responded to peoples' needs in a way that was beyond their capacity to raise the revenue to meet those needs. As a result, we have got governments all over the world that are deeply in debt. I believe that there are many, many occasions when you should go to the banks and borrow money, and there are times when we say, "well, we do not have the resources to do it." If we do not do this then, we are not being responsible, because these are needs that just have to be met.

It seems to me, Mr. Speaker, that we can liken the whole issue of balanced budgets, to something that I used to do when I was very young. It was called rock climbing. What you did was, you looked for a hold, before you put your weight on that little ledge, once you had committed yourself, whether you could put your weight back on the foot that you just left. You have to be sure that you can make the next step after that.

I would like those governments, Mr. Speaker, that have borrowed too much money to the guy who has committed himself to putting his weight on one foot, he can not go forward, he can not go back, and he needs help. He needs to be rescued. There are occasions, I think if we plan properly, that we can say, "well, we need to do this" but we have to be sure that when we make that decision, we know a way of getting out of it.

Canada, I believe, has reached a position now where everything we do we still stay in the same position because we have over-borrowed. We have lived far beyond our means, and we cannot get back on that foot that we were on before we began to borrow. The debt of the United States is so huge that it will never get back on that foot, it will always be in debt, and most economists believe that.

So, although I am very pleased to know that in two years we can get back to a balanced budget, I think as a rule of thumb, any Legislature in our kind of system should plan in such a way that if it is going to borrow, they know that within the four years of its mandate it can get back to a balanced budget. That, I think, should be the rule of thumb, not to borrow so much that you are never, ever going to be able to pay it back. We should plan it in such a way that you know that you can get back to a responsible, balanced budget, within a definite timeframe, with proper planning.

I would suggest that is the kind of thing that we may have to do, as it relates to housing, and I will get to that when I reply to the Commissioner's address. Mr. Speaker, I no longer serve on the Finance Committee, but I did help Mr. Pollard for a four year period, and recognize that when you are a Member of that committee, you do get first-hand information, and insights, on the current fiscal position of the government.

However, having listened to everything that has gone on over the last few days, things do not change much. We are dealing with the same issues now, as we were dealing with in the last four years, and if you read Hansard, for the four years before that, many of the problems remain. The world looks very, very similar through the pair of glasses I am wearing today.

Mr. Speaker, there have been some concerns about the burden that the Minister of Finance has in running two departments. I have looked at the nature of his responsibilities, and find that the departments that he is responsible for, consumes 5.8 percent of the territorial budget. That is not a big management job, to manage that kind of budget. I agree that he has responsibilities that are all-encompassing, but in terms of a management responsibility, it is not huge.

I also do not believe, Mr. Speaker, that there is a conflict between a Minister of Finance carrying the economic development portfolio. The biggest challenge to any government in this generation, Mr. Speaker, is that we need revenue, and everybody knows that one of the ways of getting revenue is to make sure that you get all kinds of economic activity taking place. The more of it that happens, the greater the opportunities to generate the kinds of monies that governments need to provide the services to people.

So, I think that it does provide the flexibility, and insights, and gives the Minister a responsibility, which is not incompatible, I believe. Mr. Speaker, in this budget, one of the controversies has been the one percent increase in taxes. Many people, in the public services feel that they have already gone to the wall, they have cooperated fully with government by asking for a zero percent increase, or agreeing to a zero percent increase, and a 1.8 percent increase in the second year of the contract.

This means, I suppose, Mr. Speaker, that some people consider that an extra imposition of a one percent tax, is a bit of a betrayal of the trust that they have placed in this spirit of cooperation. Despite the fact that many of constituents, Mr. Speaker, have indicated to me that they are not happy, and not pleased to see the government take this position. I believe that the payroll tax that is being proposed in this budget to capture employees who do not live in the Northwest Territories, but who are employed here is, in fact, a good move.

Simply applying that tax to that group only, makes no sense economically, Mr. Speaker, because you cannot justify setting up a tax regime just to capture that group of people, and not everybody else. I support it, despite the opposition some of my constituents have indicated that I should make today.

There are disappointments obviously, Mr. Speaker. One of the concerns that I have had for some time is the amount of investment money that is available in the Northwest Territories. Mr. Speaker, in this budget address the Minister has indicated that he has a very, very rosy outlook, as it relates to investment in the future. Yet, this Minister has decided that the $8 million, will be sufficient for the Economic Development Corporation.

In fact, it has been reduced every year since we started it, and that, to me, is an anomaly. Investment is a big problem, yet, our own instrument to invest money was reduced, and we expect the Metis, the Dene, and the southern investors, to pour money into this area when our government does not do it. I think that is a shame. Investment is critical, Mr. Speaker, and as I said, I will deal with the issue at a later date when I respond to the Commissioner's address.

Finally, Mr. Speaker, because I did promise to be brief today, a disappointment to me has been the removal of several government functions from Yellowknife. I never made a huge fuss about it, because we are all grown up people, and we know that sacrifices have to be made here and there.

However, I should point out, Mr. Speaker, that several Members, and they know who they are, who wanted to be in the Cabinet last fall, went around talking to individuals and pledged how much they would fight to make sure that Yellowknife would not suffer, that Yellowknife's interests would be protected, and that people like myself, Mr. Ballantyne, Mr. Dent, and Mr. Whitford, would never have to worry about anything, because all of these talks that you hear about really wanting to devastate the place is really garbage. We really would do our best to make sure that this city does not suffer.

I am afraid, Mr. Speaker, when you look at this budget, that is exactly what did happen, and I did not see much scrabbling and fighting to live up to those commitments. Thank you, Mr. Speaker.

---Applause

Thank you, Mr. Lewis. Item 9, replies to budget address. Item 10, petitions. Item 11, reports of standing and special committees. Item 12, reports of committees on the review of bills. Item 13, tabling of documents. Mrs. Marie-Jewell.

Thank you, Mrs. Marie-Jewell. Item 13, tabling of documents. Item 14, notices of motion. Item 15, notices of motions for first reading of bills. Item 16, motions.

I understand we are not proceeding with this motion today.

The motion has been stood down for two days, and it will be dropped from the order paper.

Item 17, first reading of bills. Item 18, second reading of bills. Item 19, consideration in committee of the whole of bills and other matters: tabled document 9-12(2), Strength at Two Levels; tabled document, 10-12(2) Reshaping Northern Government; motion 6, Discussion on Sobriety Clause in Contribution Agreements; committee report 10-12(2), Special Committee on Constitutional Reform Report on the Multilateral Conference on the Constitution; tabled document 62-12(2), Report on Northwest Territories Operations at Expo '92 as at May 31, 1992; Minister's statement 82-12(2), Update on National Constitutional Reform Negotiations; committee report 17-12(2), Report on the Review of the 1992-93 Main Estimates; Bill 33, Appropriation Act, No. 2, 1992-93; Bill 9, Insurance Act; Minister's statement 90-12(2), Social Housing Budget Cuts; committee report 18-12(2), Multilateral Meetings on the Constitution and First Ministers' - Aboriginal Leaders' Conferences on the Constitution; tabled document 89-12(2), Housing Needs Survey 1992. Mr. Pudluk in the Chair.

This committee will come to order. Yesterday, we were dealing with the Ministers' statement 90-12(2), and also the tabled document 89-12(2). We were on general comments. Are there any further general comments on this issue? Member for Thebacha.

Thank you, Mr. Chair. Since I reported progress last night, I would like to make a few additional comments to the Minister on this issue. Mr.

Speaker, I would just like to summarize what I stated yesterday, in that I believe the implications are devastating to the territories, and that they are also totally unacceptable. I would like to indicate to the Minister that I believe it is very critical that he use whatever measures he can, in addition to the Premier's office, in respect to additional political support that he needs, and indicate to the federal government that this government cannot afford to pick up any additional units. To lose 219 units is not acceptable to the territories, taking into account the high birth rate, the difficulty of individuals being able to build their own houses, and that it is the federal government's responsibility to provide housing. We cannot in any way, shape, or form, be considered to be like the provinces. I believe this point has to be stressed. We just do not have the funding available, and we cannot make the funding available to be able to build the units that they have cut. The units are badly needed. The other point that I want to bring to the Minister's attention is, to advise that it was under their direction, and that they felt there was substandard housing in the north years ago, and they have raised the expectations from territorial people that a certain quality and standard of housing should be expected in the north. It is totally unfair, unethical, that they decide now to take away the funding that they stressed to us was once so important for providing a standard of housing. I cannot emphasize enough, and I believe the Minister recognizes that he has to use every measure he can politically, use all the assistance that he can politically, to indicate to the federal government that this Legislative Assembly will not just accept the reduction that the federal government is proposing on housing, which is a critical need of many of our constituents across the north. Thank you.

Thank you. Mr. Morin.