Thank you, Madam Speaker. At this time, when the formula financing agreement is being renegotiated, there are a number of outstanding financial issues. These outstanding issues are causing a great deal of uncertainty about the long-term fiscal stability of the GNWT. These issues include the following items:
- health billings dispute;
- federal funding for social housing;
- RCMP billings; and,
- pay equity.
The GNWT's claims to Canada for Indian and Inuit hospital care have been disputed by Canada. In November 1992, the government filed a statement of claim in federal court. This litigation action is in process. The Auditor General of Canada described the financial situation facing the GNWT in this dispute, in the following passage:
"If the courts award the full amount the government (GNWT) has claimed, the government will receive $62 million more than it has shown as receivable in the financial statements...In the worst-case scenario, the government would receive nothing and would have to write off about $60 million currently booked as receivables." (Auditor General's Report to the Legislative Assembly for the year ended March 31, 1993.)
Federal Funding For Social Housing
Therefore, the committee urges the GNWT to pursue funding support for social housing as part of the "package" of issues currently being negotiated with the federal government.
RCMP Billings - Royal Oak Labour Dispute
The issue of financial responsibility for policing during the Royal Oak Mine labour dispute remains outstanding. The Department of Justice reported to the Auditor General that no one can accurately guess how an arbitrator or a court will resolve the political, constitutional, legal and public policy aspects of the policing costs for the labour dispute. (Report of the Auditor General to the Legislative Assembly for the year ended March 31, 1993). The issues in dispute in this case must be considered in formula financing negotiations with the federal government.
In March 1989, the Union of Northern Workers filed an equal pay complaint against the government under the Canadian Human Rights Act. Negotiations to settle this complaint concluded unsuccessfully in February 1993. The GNWT has subsequently filed a motion in the Federal Court of Canada applying for a declaration that the Canadian Human Rights Commission has no jurisdiction to deal with the complaint. The issue remains unsettled and it is not possible to reasonably determine the liability, if any, that may result from the claim.
New Federal Government Initiatives
On December 21, 1993, Canada's First Ministers agreed to proceed with signing federal-provincial and federal/territorial agreements governing the infrastructure program. In August 1994, the infrastructure program agreement between the GNWT and the Government of Canada was signed. The program is intended to create short and long-term employment through investment in local communities, while meeting the need to enhance physical infrastructure in those communities.
Program funding will be allocated to communities based on the number of working age people, in each community, who are not employed. Maximum and minimum amounts will be applied to ensure that all communities have a basic amount of funding with which to work.
The program is, essentially, a two-year, cost-shared initiative to which the federal government will contribute $5.4 million. This amount includes nearly $1 million allocated through the first nations infrastructure initiative. The GNWT will match this contribution. Potential contributions from tax-based communities may provide up to $1.6 million additional funding towards infrastructure projects.
The committee was pleased with the GNWT's success in negotiating the infrastructure agreement with the federal government. However, Members caution the Minister of Finance to ensure that gains made in this area are not offset by losses in other areas. The GNWT must be vigilant and must consider all negotiated financial issues with the federal government together. The "package" approach must be maintained. The Minister of Finance must be constantly aware of the "balance sheet" with the federal government.
Changes In Revenue Sources
The bar chart shown on the following pages shows how the proportion of revenue coming from various sources has changed over the five-year period 1988-89 to 1992-93. The percentage of total revenue provided by the federal government has decreased from 85.2 per cent in 1988-89 to 80.9 per cent in 1992-93, as the table shows.
Too Many Initiatives
While reviewing the 1994-95 main estimates, the committee noted an extremely ambitious schedule of recent and new initiatives being proposed for the current fiscal year. While most of the proposed initiatives sound very good by themselves, committee Members are very concerned about the government's ability to accomplish all that has been set out, within the limits of the resources available. This is particularly important in view of the relatively short time left in this government's term.
The committee would prefer to see departments, and the government as a whole, assess and establish priorities for all of these initiatives and tackle only the top priorities. There is a need to produce significant results. Committee Members feel that it is important that government resources be allocated in a planned and focused manner. These limited resources should not be spread too thinly. The government must decide what it wishes to accomplish in the next year.
In the committee report on the 1994-95 capital estimates and, again in the report on the 1994-95 main estimates, Members indicated that education should be established as the number one priority for the GNWT over the long term. The committee's rationale for this suggestion was based on a number of considerations, including the following:
- the committee believes that, through a significant investment in education, we may become more independent of the federal government;
- by educating our youth, we will be able to build a stronger economic base; and,
- with an educated population, there should be less reliance on other programs such as social housing and social services.
Now, Madam Speaker, I would like to turn the next part of the report over to Mr. Zoe. Thank you.