Good morning. Item 2, budget address. Minister of Finance, Mr. Pollard.

1995-96 Capital Budget Address

Thank you, Madam Speaker. Good morning. Madam Speaker, we are approaching a three-day weekend, which will give Members time to abate the excitement I am about to generate today.

Madam Speaker, the 1995-96 capital budget is the fourth and probably the last capital budget of the current government. Over the last four years, the capital planning process underwent considerable change. Communities and Members of the Legislative Assembly were instrumental in developing a capital budget that better meets local needs and priorities. Gone are the days of centralized priority setting for community capital projects.

Madam Speaker, before discussing the capital budget, I will begin by bringing Members up to date on our fiscal situation. In February of this year, we forecast a deficit of $23 million for the 1993-94 fiscal year. In fact, Madam Speaker, the deficit for last year was $35 million. The primary reason for this revised fiscal position was a large increase in the calculated liability for employee ultimate removal benefits.

This year, it was primarily two areas of expenditure that caused us to revise the fiscal projection for 1994-95 from a balanced budget to a deficit of $35 million. The first expense was due to the federal government's continuing refusal to reinstate the over $45 million budget for social housing in the Northwest Territories.

Madam Speaker, we, as a government, could not ignore our social housing crisis in the Northwest Territories. As a result, we expended an additional $17 million of our own funding to deliver a modified social housing program.

This, Madam Speaker, was a conscious decision that was not taken lightly. Our decision recognizes the importance of a social housing program which we believe is a cornerstone to better health, better education and better social well-being of residents of the Northwest Territories. In addition, we took into account the positive impact this housing program has on our economy and on the labour market.

This is not to say, Madam Speaker, that we have merely stepped into the Government of Canada's shoes by providing this modified program. We are continuing to try to educate the federal government about the social housing crisis in the Northwest Territories. Regrettably, the federal government has yet to take notice of the argument that the provision of adequate social housing would promote long-term cost- savings in areas of health, social services and corrections.

Madam Speaker, I don't want people to think that there haven't been efforts made to convince the federal government. Mr. Morin, the Premier, myself, other Ministers, Members of this House and particularly our MPs have played a great role in trying to convince the federal government to reinstate this funding. Madam Speaker, we must continue to pressure the federal government to reinstate this funding. Because we have funded a modified social housing program this year and plan to do the same next year, doesn't mean that we are letting the federal government off the hook. This is clearly a responsibility that the federal government must ultimately live up to.

Secondly, Madam Speaker, the summer of 1994 was the worst and most costly forest fire season since the federal government transferred the responsibility for forestry in 1987. Forest fire fighting cost an extra $20 million this past summer, and there still may be some bills coming in, Madam Speaker, to the tune of another $2 or $3 million. Supplementary reserves will fund part of this requirement, but much of it will add to the forecast deficit for 1994-95. In this area, we have recognized that even though there was an increase in the amount of money spent to fight forest fires, concerns were still raised by residents and by communities about which fires should be fought, when they should be actioned, which areas should take priority, and how the fires should be fought.

Therefore, the Financial Management Board has asked the Honourable Silas Arngna'naaq, Minister responsible for the forestry program, to consult with communities on ways to improve the approach to forest fire fighting. As a government, Madam speaker, we hope to prevent these large infusions of funds in future years and, at the same time, address the community concerns that I have previously mentioned. We hope that the consultation process will help us to find solutions to address these concerns.

Madam Speaker, the fiscal outlook for 1995-96 does not appear to offer any relief. The current formula financing agreement with Canada expires on March 31, 1995.

Discussions on a new agreement are under way. However, the federal approach to the process has significantly diminished the options. This is reflected in a letter from the federal Finance Minister in which he states, "I have instructed my officials to ensure that the renewal discussions proceed from the premise that the new formula will either cost less, or at most, cost the same as the current formula."

Madam Speaker, international financial institutions have clearly stated that Canada's future depends heavily on the federal government's ability to reduce the deficit. As responsible politicians, it is difficult to argue with the objective of reducing Canada's deficit. However, we can, and do, take exception to the method through which the federal government is making funding cuts. The federal government continues to make cuts, as they did with social housing, without consulting us. Another example, Madam Speaker, would be the reduction of funding for language programs by over 30 per cent in 1994-95. This reductions puts the delivery of our official language services in jeopardy.

Madam Speaker, our message to the federal government is that it must not abandon the Northwest Territories to achieve its short-term fiscal objectives. Our message is that there will be future benefits for Canada in investing in the north and its people. The federal government already has a large investment in the north. It must be encouraged to protect that investment and to ensure the long-term financial viability of the north and its people. Canada must recognize that our efforts towards greater self-sufficiency will, over the long run, be good for us, as well as Canada as a whole.

Madam Speaker, our dependency on the federal government is too great. We must become more fiscally independent. In order to do so, the residents of the NWT must cooperate with each other to approach the federal government with a united position, and that's regardless of the subject, Madam Speaker. For the federal government's part, they should be receptive to these positions and should support our efforts by setting the proper fiscal environment through the arrangements that they make with us.

Again, Madam Speaker, as I said in February, the current rate of revenue growth is insufficient to finance new spending. New dollars are required to meet the demands placed upon us by the basic needs of our constituents. These demands, whether they be for assistance to business, social programs, infrastructure or transportation, cost money. One of the ways to find these new monies would be to gain control of our resources. Although progress is being made by the Minister of Energy, Mines and Petroleum Resources, Madam Speaker, with regard to the devolution of oil and gas and minerals, ownership and control of Northwest Territories non-renewable resources still lies with the federal government.

Until such time that we gain control over these areas, none of the associated royalties -- whether they be in place now or whether they be future royalties -- will flow to the Government of the Northwest Territories. Collectively, Madam Speaker, we must make every effort to arrive at an arrangement whereby the territorial government takes over responsibility for oil, gas and minerals in order to gain the benefits of the revenues from those commodities. Madam Speaker, if we're regaining those benefits, they could be then spread across the Northwest Territories, for whatever requirements may exist in particular regions, and they do vary across the Northwest Territories. I reiterate, Madam Speaker, those revenues are not presently available to us under the existing arrangements, nor will they be available to us in the future under the existing arrangements.

Madam Speaker, we are faced with the same fiscal challenges as every other Canadian jurisdiction and our limited revenue-raising options lead us once again to turn to expenditure restraint. The impact of restraint must be fairly distributed taking into account the government's obligation to meet its residents' basic needs and protect those most at risk. At the same time, we must not fall into the trap of sacrificing our long-term goals for short-term fiscal relief.

The government will have to phase in spending reductions to deal with its financial situation. The federal Finance Minister's October update on Canada's fiscal position could, I say regretfully, Madam Speaker, further impact on our already bleak outlook. In addition, we have yet to assess the impact of Minister Axworthy's initiative to restructure the social safety net.

Madam Speaker, the size of the financial problem we face is too large for any one solution. We continue to look carefully at all aspects of our government's spending. Over the course of the past summer and into early fall, the government has been doing just that. We are determined to have program action plans that can be considered in conjunction with the 1995-96 main estimates.

Program cutbacks are always difficult, Madam Speaker, but may be necessary.

Madam Speaker, the largest single component of our operating costs is salaries and wages. The February budget speech identified the need to rationalize the $400 million cost of the public service. This year, the government entered into negotiations with the Northwest Territories Teachers' Association and the Union of Northern Workers. The government's approach was to be realistic within the context of today's financial realities and labour environment.

Madam Speaker, we have just completed a Northwest Territories public sector wage survey, with the input of 152 public sector employers including band councils and school boards. This survey shows that there is a wide disparity in the compensation package of the various public sector employers. Madam Speaker, you may recall that it was non-salary benefits that the February budget speech identified as an area to be researched. The results of the survey support the concern that non-salary benefits are the greatest area of discrepancy between Government of the Northwest Territories employees and other Northwest Territories public sector employees. In the area of non-salary benefits, the difference between the two groups was found to be 41 per cent.

Madam Speaker, in February, I noted that we have a history in the Northwest Territories of resolving difficult problems together. This confidence in our employees and their representatives was validated when the government and the Northwest Territories Teachers' Association signed a new two-year agreement in July. This was a responsible agreement that recognized the financial situation of the government. The agreement provided for a zero per cent increase in salaries for two years and introduced long-overdue modifications to vacation travel assistance and also to removals and severance pay. Considering the types of roll-backs that are occurring in other jurisdictions, this, we believe, was a reasonable settlement.

Madam Speaker, I am announcing today that the government has approved the same provisions for the management and excluded categories of employees as those accepted by the Northwest Territories Teachers' Association. This means that these employees will receive a zero per cent salary increase for two years and identical vacation travel assistance, removal and severance pay modifications as negotiated with the Northwest Territories Teachers' Association. Madam Speaker, there are approximately 900 employees in the management and excluded group.

The negotiations with the Union of Northern Workers for the main group of employees are still under way. I am confident that a responsible collective agreement can also be negotiated with the employees represented by the Union of Northern Workers.

Now, onto the capital budget, Madam Speaker. The 1995-96 capital estimates propose spending of close to $195 million. This maintains the level of capital spending undertaken in 1994-95, including temporary funding to partially offset the federal funding reductions for social housing. As a result, the Honourable Don Morin will be delivering a social housing capital program in 1995-96 of $49 million.

The government has made the difficult decision to maintain the level of capital spending for 1995-96, even though our financial situation has deteriorated. This decision was based on the reality that the capital plan is more than just the means to acquire and build assets. The capital plan is a major economic and social policy tool. The capital plan represents jobs. It represents the major business opportunity for the year in many of our small communities, it represents needed training opportunities and lastly, it represents the means to improve the qualify of life in our communities, primarily for our youth, our elderly and for those in need.

Nevertheless, the long-term financial stability of the Northwest Territories will require that our capital programs be subjected to the same degree of scrutiny and justification that is being applied to all programs of the government. In recognition of this, the government has initiated a comprehensive review of its capital standards and criteria. This review will:

-examine existing capital standards and criteria that establish eligibility criteria and construction standards to consider how they can be adjusted to better serve program objectives and be delivered with less money;

-examine program alternatives to acquiring or building additional physical infrastructure;

-examine the government's approach to project design to determine if there are more cost-effective alternatives; and

-examine the government's project approval and management practices to identify methods to speed up the tender and contract award process.

It is anticipated that this work will be completed by next year and be available for consideration by the new government in the development of the 1997-98 capital plan.

Madam Speaker, I would point out that it's very difficult to make changes to the capital plan because we're on a three-year cycle with communities and we certainly don't want to lessen the expectation of those communities or break any of the promises that we've made to those communities. That's why it's going to take some time to look at these particular areas.

Madam Speaker, I mentioned that the capital plan is a major economic tool. In 1994-95, 582 new contracts have been let to date with a total value of approximately $100 million. Of this number, $537,000 went to northern contractors with a value of $94.5 million. And it doesn't take a rocket scientist to figure out that that's 94.5 per cent of the value of contracts, Madam Speaker.

Madam Speaker, Members of this House requested greater disclosure of negotiated contracts. In response to this request, the Premier has provided the Standing Committee on Finance a detailed listing of all negotiated contracts since the spring of 1993. Madam Speaker, I realize that people want more details, but until those contracts have been completed and have been analyzed, some of those finer details may not be available. Madam Speaker, this listing identifies that over the past 18 months there have been approximately 50 negotiated contracts for acquisitions or construction totalling in value over $15 million. Almost every one of these negotiated contracts has been with aboriginal or community development corporations.

As was identified in the capital budget address last year, negotiated contracts provide northern organizations with the opportunity to develop experience and reputation for performance. These contractors are still required to provide full value for money.

Madam Speaker, a new innovation in our capital program is the building and learning strategy, cosponsored by the Honourable Richard Nerysoo and the Honourable Don Morin. This is a program whereby community people can get certifiable training in building occupations using capital projects in their community. In 1994-95, the building and learning strategy approach was applied to projects in 12 communities. Currently, 100 local residents are being trained on these projects, compared to 46 trained in the 1993-94 pilot projects. The scope of the program for 1995-96 is currently being developed.

Education and training are also strongly supported in this capital budget. The Department of Education, Culture and Employment, under the direction of the Honourable Richard Nerysoo, will complete construction on three new schools in Igloolik, Coppermine and Yellowknife. Construction or major renovations will start on 15 school projects throughout the Northwest Territories. In addition, 1995-96 will see the completion of the new $8.4 million applied arts building on Arctic College's Thebacha Campus in Fort Smith.

Adult education facilities are also entering the planning phase for Cambridge Bay and Taloyoak.

The Honourable John Todd is bringing forward an aggressive transportation capital plan for 1995-96. There is $19 million in the budget for reconstruction of highways in the Fort Smith and Inuvik regions. The Nahanni Butte airport will be relocated and the Cape Dorset airport terminal will be replaced.

Under the five-year $20 million cost-shared strategic transportation initiative agreement with Canada, construction will be completed on the airport upgrades in Lutsel K'e, Snare Lake, Fort Good Hope and Pelly Bay, while construction will commence on the airport upgrade at Deline. On the marine side, construction is scheduled for the Pangnirtung harbour and the Coral Harbour breakwater.

There is $3.5 million proposed for investment in the Northwest Territories tourism and parks infrastructure, along with an additional $4.9 million to be directed to the development and diversification of the Northwest Territories business sector through the NWT Development Corporation investments.

Madam Speaker, under the guidance of our Premier, the Honourable Nellie Cournoyea, the Department of Health and Social Services and its boards and agencies will complete planning for the Inuvik and Iqaluit hospital replacements as well as construction on health centres in Fort Providence and Clyde River. Construction will commence on the Gjoa Haven health centre while health stations will be completed in Jean Marie River, Snare Lake and Trout Lake. In total, the Department of Health and Social Services capital budget will be $10.4 million.

The Honourable Rebecca Mike, Minister of Municipal and Community Affairs is sponsoring a $40 million capital program which includes: $12 million for water and sewer projects; $10 million for road, site and land development; $4 million for municipal buildings; and, $7 million for recreation facilities.

Madam Speaker, two other major capital undertakings for 1995-96 do not show in the capital budget. These are the projects under the two-year $10.8 million cost-shared national infrastructure program agreement with Canada that was signed on August 24th of this year. This program provides contributions to communities to deliver programs that provide community infrastructure while generating employment and training. The Department of Education, Culture and Employment will deliver the program in all Northwest Territories communities during 1994-95 and 1995-96. The Government of the Northwest Territories share of funding for this program will be obtained from within the proposed 1994-95 and 1995-96 capital funding levels through savings generated from taking specific cost-saving approaches to construction of planned capital projects.

Madam Speaker, the second major undertaking that is not reflected in the capital budget is the corrections capital plan. Over the last few years, the Honourable Stephen Kakfwi has been developing a plan for rationalizing correctional facilities in the Northwest Territories. This was in order to address the space shortages that we're experiencing at the present time. Recently, Mr. Kakfwi brought forward a facility needs assessment for corrections. On the basis of this assessment, the Financial Management Board has authorized the Department of Justice to develop a construction plan within a funding target of $3 million for 1995-96, rising to $4 million for 1996-97 and $5 million for 1997-98. Mr. Kakfwi will be bringing forward a capital plan to the Financial Management Board shortly. Madam Speaker, as soon as we have looked at it, we will be passing it on to the Standing Committee on Finance.

Madam Speaker, this has been a difficult capital budget to prepare. We do face tough times. And, Madam Speaker, I've probably sounded like there's a lot of doom and gloom today, but the situation is not unmanageable. If it were not for the fact that we were filling the federal government's shoes, as I said before, with regard to capital funding for social housing, our budget wouldn't be in that much difficulty. If it wasn't for the fact that we're experiencing these cutbacks, because the GDP is not growing at the rate that we anticipated, if our formula wasn't so constrictive, we would be able to be living within our means.

So it's not as bleak as I've painted, but I do send a warning to this House and I send a warning to people in the Northwest Territories that tougher times are coming and we have to be very careful about the dollars we spend. I recognize the pressures that are upon MLAs from all kinds of different groups; from communities, from individuals who are requesting this particular expenditure or that particular expenditure. Somehow, collectively, we have to priorize those requests and come together and make some coordinated approach to controlling our fiscal outlay. As I said before, when Mr. Martin is done in the next budget session, it may be more difficult than we anticipate, Madam Speaker.

So as I said, we need everybody's support and contribution to keep programs and services flowing to those in need. I am confident that we will receive that support, Madam Speaker.

I will conclude by thanking the communities, who assisted with the capital budget, for their input; Members of the Legislative Assembly who also contributed their input to this budget; the Standing Committee on Finance for their direction and their suggestions; and, the Ministers for their input and assistance in putting together this capital plan. Their collective input has been critical to the development of a capital plan that provides urgently needed facilities relative to training opportunities for local business and jobs for Northwest Territories residents.

Madam Speaker, at the appropriate time I will submit the 1995-96 capital estimates to the Legislative Assembly for its consideration. Thank you, Madam Speaker.

---Applause

Thank you. Before we go on, I would like to recognize in the Speaker's gallery, Mayor Larry Aknavigak, mayor of Cambridge Bay, along with his daughter. Welcome to our Assembly.

---Applause

Item 3, Ministers' statements. Madam Premier.

Madam Speaker, as Members know, the Northwest Territories Power Corporation and the

Dogrib Power Corporation are involved in a joint venture to develop a hydro dam at Snare Cascades. Once completed, the Power Corporation will lease and operate the facility as part of the Snare/Yellowknife system serving the city of Yellowknife, Royal Oak Mine, Miramar Con Mine, Rae-Edzo and Dettah.

I am pleased to report that the details of financing the project have been finalized; that the contractor is currently on site; that the manufacture of the turbine -- a major component of the dam -- is under way; and, that the engineering and design phases of this project are proceeding. Madam Speaker, construction of this multi-million dollar facility is scheduled to begin in April and I understand that a ground-breaking ceremony is scheduled for October 12th.

Madam Speaker, the Dogrib Nation, through the efforts of the Dogrib Power Corporation, deserve our congratulations for bringing this major project to its current state. By July, 1996, the customers served by the Snare/Yellowknife system can look forward to a new, environmentally-friendly source of hydro power that will assist in the development of the Northwest Territories. Thank you, Madam Speaker.

---Applause

Thank you. Item 3, Ministers' statements. Item 4, Members' statements. The honourable Member for North Slave, Mr. Zoe.

Thank you. Item 4, Members' statements. The honourable Member for Baffin South, Mr. Pudlat.

(Translation) Thank you, Madam Speaker. I would like to express my gratitude and, in doing so, represent my constituency of Lake Harbour. Fairly late this spring and early this summer, the Finance committee came over to Lake Harbour to hold a meeting. I wanted to express my gratitude for them coming over. I'm sure my community now has a better understanding of how the committees work.

I would like to express my gratitude to the Ministers and I would encourage them to come and visit our community as well. Thank you, Madam Speaker. That is all I have to say for my Member's statement. I will have more to say during oral questions.

---Applause

Thank you. Item 4, Members' statements. The honourable Member for High Arctic, Mr. Pudluk.

(Translation) Thank you, Madam Speaker. I have a concern from my constituency that I would like to express. It concerns the seals being studied in our region. For over a year now, a survey has been conducted around the Resolute area. The seals are being handled manually in the springtime, usually in the months of April and May.

The studies are being conducted very close to the communities. Sometimes they go out to areas further away, but usually they stay within the ice floes close to the communities. Many people, of course, go seal hunting and the scientists are coming too close to the hunting areas. In the hunting areas, the seals are not reproducing any more. Pups are becoming more scarce; this has been noticed by Resolute people. People of Resolute have requested that something be done to keep the scientists from coming too close to the areas where people usually do their sealing. It would improve the pup growth rate. People have noticed a significant change in the numbers of pups.

Further on this morning, or in the afternoon, I will produce a document, a letter from the HTA of Resolute. Thank you, Madam Speaker.

Thank you. Item 4, Members' statements. The honourable Member for Nahendeh, Mr. Antoine.

Mahsi, Madam Speaker. Today, I rise in this House to speak about housing. Yesterday, I mentioned that the federal government is continuing to reduce funding support to the Northwest Territories in a number of areas. One of the most critical areas of funding cuts is support for social housing.

Madam Speaker, people in my constituency need funding support for housing. The federal government has the fiduciary responsibility to provide this support. It was part of the treaty made in 1921 by my ancestors. I understand that the Minister responsible for the Housing Corporation and our federal Members of Parliament have been working very hard to convince the federal government to reinstate this funding support. So far, these efforts have not been successful.

In the meantime, people in the communities have been allocated fewer housing units. In addition, I'm told that the number of staff in the Housing Corporation has not decreased. In fact, it seems that some positions may even have been added. It doesn't make sense, Madam Speaker, that funding from the federal government has been cut, fewer housing units are being allocated to communities, and yet the size of the bureaucracy responsible for delivering the programs remains the same.

It seems to me that we need to look at new ways to deliver programs. Maybe we also need new ways to find out what people in the communities really want and need. They need to have a say in how services are delivered in our communities. It may be that standards are too high. Maybe it would be more cost- beneficial to build smaller houses, but to build more of them. Maybe the standards should be more flexible so that the communities can make more decisions for themselves.

Madam Speaker, I strongly urge the government to examine the way the housing program is being delivered and to find new ways of meeting the housing needs of our citizens. In looking for innovative ways to deliver the housing program, the government must keep in mind the reduced funding and that people in the communities must be involved in the decisions that affect their lives every day. Mahsi cho.

---Applause

Thank you. Item 4, Members' statements. The honourable Member for Inuvik, Mr. Koe.

Excuse me, Mr. Koe, your last few statements didn't get on the record.

I seek unanimous consent to conclude my statements.

The honourable Member for Inuvik is seeking unanimous consent. Are there any nays? There are no nays. Continue, Mr. Koe.

Okay, Mahsi. I just want to conclude by saying that there's a renewed interest in the development of tourism. The Western Arctic Tourism Association has been revised. They have a new executive director. There are members of all the communities involved. There's renewed interest between the Yukon and the Northwest Territories. I wish the association and all the tourism operators in the western Arctic all the best in their future endeavours. Mahsi.

---Applause

Thank you. Item 4, Members' statements. The honourable Member for Aivilik, Mr. Arvaluk.

(Translation) Thank you, Madam Speaker. At the appropriate time today, I will be tabling two letters I have received here in the Legislative Assembly. One is addressed to the Honourable Don Morin, Minister of Housing Corporation, from Mayor John Kaunak of Repulse Bay and the other is to Mayor Kaunak from Dr. M.B.K. Moffatt, paediatric consultant from the University of Manitoba. They both deal with the

problem of alcohol and drugs being supplied to the community by outside building contractors and other transients in the summertime. (Translation ends)

The authors of the letters are very concerned about the fact that alcohol and drugs are being made available to teenagers, in particular. Problems such as impulsive behaviour that leads to suicide and injuries are cited. We all know how many problems we have in our community that can be attributed to alcohol and drugs: violence; suicide; family breakups; unplanned pregnancies; and, social diseases, et cetera.

We do not need extra imported problems in our community as described in the two letters. Most of us can recall examples of serious incidents that have occurred in small communities that resulted from alcohol and drugs that were brought in by outside construction companies.

The hamlet of Repulse Bay is asking the Minister of Housing not to award any more contracts to one company in particular, because of its unacceptable behaviour and lack of response to pleas from the hamlet to act responsibly. I will be pursuing this matter with the Minister of Housing at question period. Qujannamiik.

Thank you. Item 4, Members' statements. The honourable Member for Deh Cho, Mr. Gargan.

Thank you, Madam Speaker. I rise today to speak on an important topic to myself and several of my constituents. It is October and there is no baseball on television. Madam Speaker, for the past few weeks, we have heard the owners complain that the players want too much money and the players complain that each of the 28 major league owners have their own agenda that prevents them from working together. It kind of reminds me of this place sometimes, Madam Speaker, with salary caps and hidden agendas. We, however, have 58,000 owners.

But seriously, Madam Speaker, I feel there is a far darker cloud than two sides of a labour dispute that cannot agree on how to divide the spoils. The plot may indeed reach all the way to the White House.

Madam Speaker, the simple reason there is no world series this year are the Montreal Expos. I do not think that the upper echelon of American society could stand to see their national past-time's greatest honour go to a Canadian team for a third year in a row.

---Applause

Even though because of the strike, major league baseball announced yesterday that the Toronto Bluejays remain world champions, I still think there is a plot. Madam Speaker, I can't prove these allegations, but maybe the Premier could use some of her pull with CSIS or the RCMP to do some investigation.

---Laughter

---Applause

I would like to ask the House, Madam Speaker, to join me in congratulating the Montreal Expos for winning the national league eastern pennant for having the best record in baseball and for being Canada's unofficial world series champion. Thank you, Madam Speaker.

---Applause