Mr. Chairman, the Standing Committee on Finance, I think some two years ago, recommended that we look at the computerization and the information exchange in government, particularly the electronic information exchange. I think it was to do with the number of computers that we were purchasing, the amount of computers we had at the present time. They virtually asked us to do an informatics study.

We're doing that at the present time, and I'm anticipating the report being placed before me, certainly by June of this year. The informatics strategy is, where do we need to be in five or ten years with the exchange of information, what equipment will it require and how can we best place ourselves right now to be in that position in five or ten years? So, it's a long-term strategy that deals with computerization and the movement of electronic information around the Northwest Territories. Thank you, Mr. Chairman.

Thank you very much, Mr. Pollard. Before I recognize anybody else, just a technical question, if I could, Mr. Pollard. On the question asked by Mr. Koe about the provision of written explanation of pay stub detail, does that actually mean written or printed? I want to find out if this word "written" is what you mean.

Mr. Chairman, I'm sorry for the confusion. We would like to point out to our employees, who receive pay stubs from us, what the detail on that pay stub means. I guess we would be writing to them in some respects, and saying this is what your pay stub means, amongst other things. If that makes sense, Mr. Chairman.

It's technical, but "written" means hand-written, and printed is something different to written. That's the only question. Anybody else with questions for the Minister or his witness? Are we finished with Mr. Pollard? What is the wish of the committee? Have we concluded this item? Mr. Dent.

Mr. Pollard.

Mr. Chairman, I'm sorry if there is some confusion. It has never been anything but our indication to everybody that we want to deal with this in a package

approach. Now not everything is on the table. As I've said before, health billings is out there, so is housing, the formula financing agreement, the GDP ceiling and the perversity factor within that formula, also the minerals accord and the northern accord, and the last one was the grants in lieu of taxes to municipalities on land set aside for aboriginal people. That was the package, by title, that I put before Mr. Martin. That's a package that the Premier has communicated to the Prime Minister, and that is also the indication that we've given to Mr. Irwin. So there is no hesitancy on my part in saying that that's the route that we've committed ourselves to. Until such time as the people on the other side of the table say that we're not prepared to do it in that manner, that's the way we mean to proceed, Mr. Chairman. Thank you.

Thanks, Mr. Pollard. Mr. Dent.

Mr. Pollard.

Mr. Chairman, for the record I would advise the committee that right now I'm speaking as the Minister of Finance, that this is not within the realm of the Financial Management Board Secretariat, this is in Finance. The northern accord is part of the package, as I've said, and so is the mineral accord. Thank you, Mr. Chairman.

Thanks, Mr. Pollard. Mr. Dent. Mr. Ballantyne.

Thank you, Mr. Chairman. I would just like to make a few general comments in a couple of areas. Last night the Premier brought up the Beatty report. In my reply to the budget speech I want to actually give an explanation of the Beatty report from when it was created. I don't think that has been done, but I will do that on Monday.

But there is another area that concerns me. This is not a harsh criticism of the government, it's as much a criticism of the media as anything else. Over the last ten years, our debate of the title of the Premier indicates what has happened. This jurisdiction has matured at an incredible rate. The word "Finance Minister" and the word "Premier" have very powerful significance now. Anytime a Premier or Finance Minister makes any kind of a public statement about the state of the financial affairs of the Northwest Territories, a lot of very important people listen, and listen very, very carefully. I think it's extremely critical for the Finance Minister and for the Premier to be extremely precise with the information they give out, extremely precise with the information they make public, that they give to MLAs. The media has never ever been able to do a lot of homework, for whatever reason on financial matters. It's boring, it takes a lot of work. So basically, they will report superficially whatever is said.

If the Finance Minister comes to the Standing Committee on Finance, unless the Finance Minister is very precise about the nature of the information, the public statements or the reports from the Finance committee or other committees could actually be the type of reports about which the media will make headlines, that really do scare off investors, scare off bankers

and scare consumers. I think every year this is going to be more and more of a factor.

I will give two or three examples over the last couple of years of what, at least I perceive to have been a problem in this area. One, lack of precision and, secondly, the fact that the media didn't do their homework to really look at exactly what the Finance Minister was trying to get across or what the Premier was trying to get across.

In the area of short-term borrowing. The area of short-term borrowing is very different and distinct from the area of long-term debt. It's in an absolutely different category. What has happened over the last two years, those two categories, that of deficit and that of short-term borrowing have been coming together in the public mind and that compounds the problem.

Our government over the last ten years has really had a luxury that no other governments have had because we've had large accumulated surpluses. We, like every government, have cash flow problems. Everybody does. Businesses do. So what we're talking about here is really a line of credit. We're not talking anything to do with accumulating debt or long-term debt. What's happened over the years is we've maintained pretty consistently the level of our accumulated surplus. It's been between $35 million and $60 million for ten years, and that's about where it is now. It goes up and down, but it's there. But some of that accumulated surplus can't be used the same way it was before because we have debentures out there, or what have you. So from time to time we have to go and borrow money. I'm not sure what the limit is. When I was Finance Minister the limit was $40 million, but I don't know what it is now. But it's not a big deal. That aspect of it is not a big deal. The problem is -- I just hope the Finance Minister takes this right -- the media didn't understand the difference between the real significance of a long-term debt and short-term borrowing requirements. I said that the public, when they're hearing both at the same time it compounds the message and it really scares a lot of people. That's one example of precision.

Another example of the precision of what I'm talking about is when we talk about the formula financing agreement. Now the formula financing agreement has a couple of flaws that we talked about. I think most people understand perversity, it's basically that the level of our taxation has to match some average level of provincial taxation or we're penalized for the difference. Then the GDP cap that was imposed in 1988.

Talking about precision, I think the Premier in her statement talked about the fact that we're trying to get rid of the problems that we have in our formula financing agreement that the provinces don't have in their equalization agreements. If you look at the formula financing agreement and you look at the provincial equalization agreements, we talk about losing hundreds of millions of dollars in revenue. The precise fact is a little bit different from that. Though that is true that we have lost millions from what we would have had if it had have stayed the same as it was pre-1988. The way I think that should have been put is that in 1988 the federal government imposed ceilings on provinces and on the territories. The provinces and territories, collectively, lost hundreds of millions of dollars. The question you want to ask is how did we fare with the formula financing agreement, compared to a province that has equalization? The reality is, compared to the other provinces, in that five years, we went ahead in revenue by $150 million and they dropped in revenue by $50 million. So because we had a formula financing agreement, we actually saved ourselves $200 million.

The other aspect, and I think the Finance Minister told us about the new deal that the provinces are getting. I think that was what the Premier was alluding to, perhaps, but it wasn't clear in her messages that they have been given a five per cent increase over the last couple of years. In the last two years, using the government's own statistics, but in the year 1991-92 to 1992-93 we actually went down. In that year there was a decrease of $4 million. But then from 1992-93 to 1993-94 we had an increase of eight per cent. So we're up almost at historic levels. Then, from 1993-94 to 1994-95 we're about four per cent. So I guess the question is, the difference from what we anticipate compared to that five per cent is really what we're talking about. The problem, though important, shouldn't take away from the fact that the formula financing agreement has saved us a couple hundred million bucks over the last four years. That's, again, another example where it's very important to be precise.

A third example of that is when this government first came into power. Mr. Pollard, who I think has done an extremely competent job as Minister of Finance and I think deserves a lot of credit for being able to maintain the fiscal situation that we have right now. It's a real tough job and I think he's done very well.

Another example of where precision -- and this is not the intention, I'm sure, at all on the Finance Minister's part -- is really important, the Finance Minister, for instance, quite rightly, would brief the Standing Committee on Finance of worst case scenarios. That's what Finance Ministers have done since the beginning of time. Out of that, unless there are very precise instructions about how the information is used, the Standing Committee on Finance says in the paper we're expecting a $380 million deficit by 1995. The media, of course, don't go to the Finance Minister or the chairman of the Standing Committee on Finance and say, what's this. Mr. Pollard would have said, look, we're talking as if everything went bad, we just wanted to be realistic. That doesn't happen. There's a headline. It stands there on its own. Bankers and people who are thinking of investing in the north see these headlines and there is nothing there to qualify it. I know for a fact that with bankers in this town, anyway, that has a big impact.

My point is here -- and I'm not blaming him, this is as much as the media's fault as it is anybody else because they pick the juicy part and that's the juicy part of that. They don't report a well thought out presentation. The one line is the headline. But it's the headline that does the damage. My point is, more and more every day for the Minister of Finance and the Premier to be extremely precise with the information they give out, because that information and those words have a very profound impact on how the financial world looks at investment opportunities here in the Northwest Territories. Whether banks are prepared to lend money to businesses. It's quite extraordinary. I'm not sure if you actually both recognize how important your positions are and how much people read into what you have to say. Thank you very much.

Thanks, Mr. Ballantyne. Those were general comments and observations. Would Mr. Pollard like to respond?

No, except that I'm here as the chairman of the Financial Management Board and that's the Finance Minister's concern, Mr. Chairman. It's ironic that Mr. Ballantyne is cautioning the Premier and myself to be careful about what we say lest people read that information, listen to that information and then make decisions based upon that information.

I would point out, being it's Friday, Mr. Chairman, that the Department of Finance in Ottawa and the Department of DIAND in Ottawa have readers who read all the debates in this House. Talking about our surpluses and so on, and our cash position and how fortunate we've been, does not really give me a strong card to play at the negotiating table with Mr. Martin. In addition, to myself and the Premier having to be careful about what we say about the investment climate in the Northwest Territories, debates in this House have a way of weakening our hand when we're trying to convince people that we really do need some extra funds or do need some greater consideration than other jurisdictions in Canada. Thank you, Mr. Chairman.

Thanks, Mr. Pollard. This is taking on the tone of a debate which I would like to avoid, if we could. General comments. Mr. Ballantyne.

I don't want to debate it. I think the Standing Committee on Finance was very careful to have a balanced approach. The reality is that, at the present time the fiscal situation is pretty good. On the other hand, I think we are very clear that we're very, very vulnerable in the future. I think Mr. Pollard is also well aware that not only does the Department of Finance in Ottawa listen to our debates, but they read all the financial records coming from all the jurisdictions so they are quite aware of everybody's relative position. Thank you.

Thanks very much, Mr. Ballantyne. Anybody else? General comments or questions. Mr. Ng.

Thank you, Mr. Chairman. Under your human resource management, I'm curious. I know the government has a large workforce and certainly any workforce has problems with employees. You have to deal with employees who are not performing and not doing their jobs. We always hear of these wrongful dismissal cases that happen to get publicized. How do you deal with employees who are in that kind of a situation, who are not performing their duties. What is the process for dealing with that?

Mr. Pollard.

Mr. Chairman, we have a performance appraisal system in the Government of the Northwest Territories. It may not have been working as well in the past, as we believe it is starting to work now. We have consulted, with departments in regions, et cetera, how to handle these kinds of things, how to do the assessments and appraisals, what to put on people's files, et cetera. It is something we are quite keen about and that is to point out to employees where they are failing and be fair about it. Also to

give managers of departments the ability to say you haven't been performing and we can see this consistently over the last two years and for this reason, we want to take this particular action. If we are going to ever do any of those kinds of things, it has to be documented, Mr. Chairman. That is what we are about right now. To provide departments with the on how to go through those procedures. Thank you, Mr. Chairman.

Thank you, Mr. Pollard. Mr. Ng.

Thank you, Mr. Chairman. Are there set guidelines in place already so that departments are aware of the steps they have to follow? Thank you.

Thank you, Mr. Ng. Mr. Pollard.