Thank you, Madam Speaker. During a review of the 1994-95 main estimates, the committee considered outstanding issues such as deficit management and the housing crisis, and

the role that the committee should play in the resolution of these issues. Those major outstanding issues are addressed in the two recommendations made in the committee's last report to the Legislative Assembly, "Response to the Options Paper on Deficit Management," which was tabled on December 14, 1993.

These two recommendations are presented below.

The first recommendation from the response to the options paper on deficit management. The committee recommends that the Department of Finance and the Financial Management Board develop a short-term strategy, aimed at avoiding deficit financing, to guide fiscal management for the 1994-95 fiscal year. This short-term strategy should be presented to the Standing Committee on Finance at the commencement of the committee's meetings on January 10, 1994, and should include the following:

- A discussion of the underlying principles, priorities and objectives;

- A discussion and assessment of deficit reduction options;

- A detailed deficit reduction plan for 1994-95; and

- Details of any federal/provincial/territorial plans for deficit reduction.

In his opening remarks to the Standing Committee on Finance, the Chairman of the Financial Management Board informed committee Members that the government has a long term strategy for achieving financial restraint. He went on to say that this strategy has been publicly stated on several occasions and was perhaps best articulated in the Premier's February 1992 statement on Reshaping Northern Government.

Second Recommendation From The Response To The Options Papers On Deficit Management

That the Financial Management Board develop an integrated plan and political strategy that brings together the major financial issues facing the GNWT. There should be one package presented to the federal government that incorporates such issues as health billings, forest fire suppression costs, formula financing agreement, and incremental added costs for division, land claims implementation and others. It should include revenue producing responsibilities such as the northern accord and a mining accord. The Financial Management Board should develop possible compromises and trade-offs among these issues and develop the political strategy to achieve the following results:

- certainty of adequate funding to create and sustain two new territories with no diminished level of service;

- each territory to be given the economic tools necessary to lessen their dependence on the federal government - for example, northern accord, mining accord.

- a ten year financial agreement with the federal government to provide a basis of fiscal stability in order to facilitate the orderly constitutional evolution of two new territories.

The plan and the political strategy should be available to the Standing Committee on Finance for review in February, 1994.

The committee was informed that the chairman of the Financial Management Board is in the process of developing an integrated plan and political strategy and was encouraged by this preliminary response to the second recommendation.

In view of these important and timely recommendations, the committee decided to take a proactive approach to reviewing the 1994-95 O and M budget. This proactive approach is outlined as follows:

- the committee continued to encourage the government to take a lead role in establishing and implementing a responsible and responsive overall fiscal policy;

- the committee must be kept informed of, and have the opportunity to review, all major fiscal policy decisions and political strategies; and,

- throughout the review, the committee made a number of practical and concrete suggestions regarding fiscal strategy, revenue generation and potential programs and initiatives.

Review Process

The Standing Committee on Finance met in Yellowknife from January 10 to January 27, 1994, to conduct the review of the 1994-95 main estimates of the Government of the Northwest Territories. The review process is outlined below.

The committee met the first day, in camera, to discuss the following items:

- outstanding issues;

- committee schedule and approach;

- committee themes, strategies and the review process; and,

- budget overview.

An initial briefing session was held with the chairman of the Financial Management Board. The following topics were discussed:

- deficit management strategy;

- budget overview;

- fiscal framework;

- briefings/updates on the following topics:

- reorganization of Executive management functions;

- decentralization initiatives;

- privatization initiatives;

- collective bargaining; and, - formula financing.

Departmental reviews were conducted department by department. The review process for each department involved the following steps:

1. in camera review of the departments' estimates;

2. Ministers' appearance before the committee to answer questions and provide additional information that the committee required to complete its inquiry; and,

3. in camera wrap-up session to assess all available information for the department and decide on the discussion and recommendations to be included in this report to the Legislative Assembly.

A final review session was held with the chairman of the Financial Management Board to address any remaining outstanding issues.

Delivery Of Documents

The committee was not satisfied with the fact that the Financial Management Board was unable to provide the documents for this review by the promised delivery date. The result was that the committee was unable to do as much preparation as it would have liked prior to the scheduled meetings.

Scheduling

The Finance Committee made many concessions to accommodate the travel and meeting schedules of Ministers when departmental appearances were scheduled. Committee Members felt that this courtesy was not returned. Committee meetings are scheduled well in advance and Members feel that these schedules and work plans must be respected.

Madam Speaker, I would like to refer back to the chairman of the committee.