Thank you, Madam Speaker. I would like to apologize to the House for not having the documents available for viewing as I am speaking, but it is being distributed right now, so I will resume.

Budget Strategy

The government informed the committee that it is following a long-term strategy of creating a "more efficient, more productive, and more responsive government". While fully recognizing the importance of this strategy, the committee is concerned that other equally important strategic objectives may be overshadowed.

One of the critical elements in ensuring future fiscal stability for the NWT lies in the development of a stronger local revenue base. The more revenue we, as northerners, can generate and control, the more we will be in control of our future. It is for this reason that the successful negotiation of the northern accord and the mineral accord is so crucial. Successful completion of these agreements with the federal government will allow us to make our own decisions about priorities in the areas such as finance, economic development and environmental protection.

In view of the fact that all of these fiscal policy matters are inter-related, Members would like to emphasize the message contained in the second recommendation of the committee's response to the option paper "Report on Deficit Management", that is, the committee encourages the government to continue developing and implementing a budget strategy using the concept of the package approach. The package approach is comprehensive and incorporates issues such as health billings, funding for social housing, incremental added cost to division, land claims implementation, the formula financing agreement and others. Also included are revenue producing initiatives such as the northern accord and the mineral accord.

Financial Management Trends

The committee decided to examine the issue of fiscal management over the long term. A number of items were viewed over a ten-year period. These items include the following:

- total revenues;

- budgeted and actual expenditures; and,

- annual and accumulated surplus/deficit.

Figure 1 depicts the NWT yearly and accumulated surpluses/deficits from 1983-84 fiscal year to projections for fiscal year 1993-94. Table 1 on the following page provides the corresponding figures for annual surplus or deficit, accumulated surplus and surplus or deficit percentage. So there are two pages following this one, figure 1 and table 1. No, they are just one page. They are both on that one page.

The present Government of the Northwest Territories Legislative Assembly is the third successful government and legislature that has taken a fiscally cautious approach managing public money. Although the times have changed and issues are more complex, the actual financial results have remained remarkably stable.

The 10th Assembly and government came into power with a $50 million accumulated surplus and left office four years later with a $40 million surplus accumulated. The 11th Assembly and government served for four years, and there was a $50 million surplus accumulated at the end of their final budget year. The current Assembly and government, the 12th, inherited that large accumulated -- there is a typo there -- surplus. Over two years later, on January 11, 1994, the Finance Minister informed the Standing Committee on Finance that the government was projecting a $42 million accumulated surplus for the fiscal year-end, 1993-94. This amount is about the same as surplus which had been accumulated a decade ago at the end of the 1984-85 fiscal year.

These three governments, for six of the last ten years, have produced annual surpluses and have balanced the overall budget over the entire ten-year period. This is an achievement unparalleled in Canada. The Government and the Legislative Assembly of the Northwest Territories have managed their finances better than all other jurisdictions in Canada over the past decade. This fiscal prudence should be considered a very positive achievement in Ottawa. The Government of Canada should not use the fact that the Northwest Territories have managed to maintain an accumulating surplus position as an excuse to reduce funding in the formula agreement.

However, while recognizing this admirable fiscal performance, we need to maintain an awareness of the serious fiscal problems that face us. The gravity of the situation is not as dramatic as was forecast two years ago, but it could deteriorate very quickly and we must continue to be vigilant. Many outstanding financial issues are still being negotiated. There should be a period there and a typo here again. The Finance Minister should be supported in maintaining his cautious approach to the budget, and you could add it in. There's a typo here as well. However, there are dangers in overstating the problems. Investor and consumer confidence have been hurt as a result of dire fiscal predictions during the last two years.

On the other hand, there is no doubt that firm government action in contract negotiation, downsizing and streamlining have had a positive impact on the fiscal position. Overall, the Finance Minister has done a good a job in continuing to steer the government clear of accumulated debt. However, the government should strive to pursue a careful and balanced approach in the future.

The present formula financing agreement, although flawed in some areas, has provided a good measure of stability. However, the federal government has been reducing funding to the Northwest Territories in areas not covered by the agreement. A prime and significant example of this type of funding cut is the $100 million in health billings and the reduction of $47 million to support social housing.

Deficit Management

All the northerners must realize that our financial position is extremely vulnerable. Because of its limited tax base, the Government of the Northwest Territories is dependent on federal funding for some 80 per cent of its expenditure needs. For the fiscal year of 1992-93, only 12 per cent of government revenues came from taxation. The balance is from multiple small sources.

Many large fiscal issues such as the pay equity and health billings disputes and the shortfall in social housing remain outstanding. In addition, the federal government is seeking ways and means to deal with its own deficit situation and, as a result, has cut funding in critical areas such as official languages and have off-loaded fiscal responsibilities in other areas such as health billings and providing housing to aboriginal people. The cumulative affect of all these factors is to increase the burden on the Government of the Northwest Territories. In response, the government must develop effective strategies to ensure that the Government of Canada lives up to its fiduciary responsibilities. As well, the Government of the Northwest Territories must continue to be vigilant in monitoring and streamlining the costs of providing essential services and renew efforts in identifying new and innovative approaches to generating revenue.

The committee is very aware of the fact that the 1994-95 capital and main estimates do not allocate funding to address the serious shortfall in housing. This shortfall has been offset to some degree in the current 1993-94 fiscal year by generating one-time revenue from the sale of staff housing. This is an option that, obviously, does not remain open. Other means must be found to deal with this very serious funding shortfall.

Budget Overview

Spending Priorities

The government did not submit a clear statement of its spending priorities to accompany the 1994-95 main estimates. Committee Members would like to reiterate the position they took during the review of the 1994-95 capital estimates and encourage the government to make a firm public commitment to education as the top spending priority. This position, as noted in the committee's report on the review of the 1994-95 capital estimates, is not in any way intended to undermine the importance of housing as a spending priority. However, the committee firmly believes that two factors need to be considered:

- First, it is felt that the number one priority assigned to capital spending on housing by the government is due to the crisis situation created by the withdrawal of federal funding. And,

- Second, if the federal government were to live up to its fiduciary responsibility, then the Government of the Northwest Territories could shift its priority from housing to education.

The committee's rationale for suggesting education as a number one spending priority is based on a number of considerations:

- The committee believes that it is through an investment in education that we may become more independent of the federal government.

- By educating young people we will be able to build a stronger economic base.

- With an educated population, there should be less reliance on other programs such as social housing and social services.

Therefore, the committee recommends that future budgets, both capital and operating, should clearly reflect the government's commitment to education as the number one spending priority. Further, the committee urges the government to develop a comprehensive and detailed statement of these spending priorities to be included in future budget documents. This statement of spending priorities should note any changes to previous priorities and include the rationale for and consequences of the recommended order of priorities.

Definitive Objectives

During the review of the 1994-95 main estimates, the Finance Committee noted that the definitive objectives provided for each department do not seem to be tied to the budget process in any meaningful way. Committee Members feel that in order to guide the budget process, definitive objectives are required and need to be:

a) specific;

b) attainable within the fiscal year;

c) measurable; and,

d) include milestone and target dates.

In many instances, the departmental definitive objectives lacked some or all of these characteristics.

Recommendation 1

The committee recommends that the Financial Management Board direct all government departments to review and report progress on all of the definitive objectives contained in the 1994-95 main estimates documents. These reports should be provided to the Standing Committee on Finance one week prior to the commencement of the review of the 1995-96 main estimates.

Further, the committee recommends that all future main estimates documents contain a status report of departmental accomplishments in relation to its definitive objectives for the fiscal year preceding the one under review.

The Need To Priorize Government Initiatives

While reviewing the 1994-95 main estimates, the committee noted an extremely ambitious schedule of recent and new initiatives being proposed for the upcoming fiscal year. Table two, which appears at the end of this section, provides an outline of the major government initiatives described in the departmental definitive objectives and by the Ministers when they appeared before the committee. 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. 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 do a few things well as opposed to a lot of things poorly. Committee Members feel that it is important government resources are allocated in a planned and focused manner and not be spread too thinly.

Recommendation 2

The committee recommends that all departments and the government, as a whole, develop a priorized list of planned initiatives, with descriptions of the type and availability of resources required and realistic time frames required for implementation for the fiscal year 1994-95. The committee recommends that departmental responses be available to the committee prior to departmental budgets being reviewed in committee of the whole. The government-wide response should be provided prior to concluding the review in committee of the whole.

The committee recommends further that in future main estimates documents, major initiatives should be contained in each department's definitive objectives. The Standing Committee on Finance should receive, one week prior to its review of the main estimates, an analysis of the resources and time required for all major initiatives being proposed for the fiscal year under review.

Madam Speaker, that concludes the overview comments for the Standing Committee on Finance report on the 1994-95 main estimates.

Motion To Move Committee Report 2-12(5) Into Committee Of The Whole, Carried

Therefore I move, seconded by the honourable Member for Kitikmeot, that the report of the Standing Committee on Finance on the review of the 1994-95 main estimates be received and moved into committee of the whole for consideration today. Mahsi cho.

---Applause

Thank you. Your motion is in order. To the motion.

Question.

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Item 11, reports of standing and special committees. Item 12, reports of committees on the review of bills. Item 13, tabling of documents. Item 14, notices of motion. Item 15, notices of motions for first reading of bills. Item 16, motions. Item 17, first reading of bills. Item 18, second reading of bills. The honourable Member for Keewatin Central, Mr. Todd.

Thank you, Madam Speaker. Madam Speaker, I move, seconded by the honourable Member for Tu Nedhe, that Bill 9, An Act to Amend the Motor Vehicles Act, be read for the second time.

Madam Speaker, this bill amends the Motor Vehicles Act to put the terms "license plates" and "validation stickers" in the singular in order to allow the use of a single license plate and validation sticker. The amendments also establish which vehicles must have a license plate on the front and which much have a license plate on the back. It also clarifies the regulation making power concerning fees by prescribing the establishment of a formula or method of calculating fees instead of prescribing fees.

Thank you. To the principle of the bill.

Question.

Question has been called. All those in favour? All those opposed? Bill 9 has had second reading and accordingly, the bill stands referred to committee. Item 18, second reading of bills. The honourable Member for Hay River, Mr. Pollard.

Thank you. To the principle of the bill.

Question.

Question has been called. All those in favour? All those opposed? Those abstaining? Bill 11 has had second reading and accordingly, the bill stands referred to committee. Item 18, second reading of bills. The honourable Member for Sahtu, Mr. Kakfwi.

Thank you. To the principle of the bill.

Question.

Question has been called. All those in favour? All those opposed? Those abstaining? Bill 12 has had second reading and accordingly, the bill stands referred to committee. Item 18, second reading of bills. The honourable Member for Hay River, Mr. Pollard.

Thank you, Madam Speaker. Madam Speaker, I move, seconded by the honourable Member for Nunakput, that Bill 8, An Act to Amend the Legislative Assembly and Executive Council Act, be read for the second time.

Madam Speaker, this bill provides that indemnities paid to Members under the Legislative Assembly and Executive Council Act for the 1994-95 fiscal year will not be adjusted to accord with changes in the consumer price index. Thank you, Madam Speaker.

Thank you. To the principle of the bill. The honourable Member of North Slave.

Mr. Zoe, according to our rules, when we are discussing the principle of the bill, Members have the choice to either speak for the bill or against the bill. Members cannot question the Ministers on a particular bill until it gets

into committee of the whole. Therefore, I recognize Mr. Zoe. To the principle of the bill.

Thank you. To the principle of the bill. The honourable Member for Yellowknife Centre, Mr. Lewis.

Thank you, Madam Speaker. Whenever you are asked to vote on a bill, you are to ask yourself, "What is the purpose of this bill?" Clearly, the purpose of this bill is to make a small cut of a couple of per cent on the indemnities for 24 people. I have not heard anybody calculating what the cost is going to be. Whenever we talk about principle, what is the principle of the bill? The principle of the bill we are trying to amend is that, if you wanted to buy an orange last year, it would have cost you so much, then you should be able to buy the same orange this year and it wouldn't cost you any more because your money will, in fact, be protected from inflation. That was the principle that we used to decide that we should, at least, have an increase to keep pace with inflation. That is the first principle that we voted on previously. Members are going to ask themselves, "What is the new principle for, in fact, getting rid of that bill so that it no longer has a protection for people who want to buy that orange that they bought for a certain amount last year and can't buy it for the same amount this year?"

The most cynical view of this bill, Madam Speaker, is that what we are doing is sacrificing these 24 people. It is a very small sacrifice. It is a tiny little sacrifice. But, for many people out there, and they number in several thousands, I believe, they will take the cynical view that what we are doing here is to take a very small amount of money from 24 people so that a thousand or five thousand people will lose considerably more if you look at the total amount of money that is going to be lost.

I am supporting the bill because that is the principle. The principle is that we are going to take an amount of money from 24 people because we want to give a message to the other 5,000 people that they are going to have to sacrifice as well. Let's be honest about what the purpose is. The purpose is to tell people that there is going to be a cut. There are going to be tough times ahead. These 24 people are going to show the way by taking this tiny amount of money so they can save several hundreds of thousands of dollars from the larger group of people who would be affected. Thank you.

Thank you. To the principle of the bill. The honourable Member for Keewatin Central, Mr. Todd.