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