Mahsi, honourable colleagues. In November 1993, again, a new list of community groupings was developed, and certain communities were moved. Basically, there were ten communities moved from level II classification to level III classification. These level I communities are communities which have well developed community business infrastructure with air and road transportation links. Level II are communities that have a lesser developed business infrastructure and have some air and road links. Level III communities have the least developed business infrastructure.

Madam Speaker, I believe this system of classification works if everything is fairly equal. However, in business and in the economy things don't work that way. There are businesses in all communities and they all need the right set of circumstances for them to flourish and prosper. In some cases, I'm sure that many of them would appreciate the expertise and assistance of some level of government. But because of the classification of the communities by the Department of Economic Development, not all businesses can access government assistance on a fair and equitable basis. Mahsi.

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Thank you. Item 3, Members' statements. The honourable Member for Yellowknife North, Mr. Ballantyne.

Thank you, Madam Speaker. I rise today to support the position taken by the government, as outlined by the Minister of Finance on tobacco taxes, yesterday.

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I am sure that there will be many critics of the decision. I am sure the smokers of the Northwest Territories are going to see their fellow and sister smokers smoking at half price across the country. I am sure there will be those who say we won't be able to control smuggling in the Northwest Territories. But I think the decision was the correct one for three reasons.

The first reason, as outlined by the Minister of Finance, is health. We not only have a high percentage of our population smoking in the Northwest Territories, more so than anywhere else in the country, we have a higher percentage of our young people smoking in the territories than anywhere else in the country. The first time we had a noticeable decrease in smoking among young people was when we raised the taxes on cigarettes.

The second reason is that, the nature of this deal, which was a bilateral deal between the federal government and Quebec, solved the problem in Quebec but created a whole series of problems across the country. We have some problems with how our confederation works when that is the approach.

The third issue is that of finances. The Minister, quite rightly, pointed out that $2 million in revenue that we'll lose, but in the long term there's a much more significant financial cost. Right now, we are blessed by having a young, relatively healthy population and our health costs in the Northwest Territories are a lot less than in many other jurisdictions.

But that won't always be the case. All these young people, eventually are going to be middle aged people like many of us, and old people like some of us. At that time, we will really see the real cost of increased smoking now. There will be such a significant jump in our health care costs, 15 or 20 years down the line, that I don't think we'll be able to absorb that cost.

Madam Speaker, can I seek unanimous consent to continue my statement?

Thank you. The honourable Member is seeking unanimous consent to continue. Are there any nays? There are no nays? Continue, Mr. Ballantyne.

Thank you, Madam Speaker. Not only do I say that at this point in time we should support the Finance Minister, but we should also recognize that the Finance Minister and the government may need some flexibility three or four months down the line.

Right now, there seems to be agreement between the western provinces to hold firm on tobacco taxes and to try to control smuggling. But in three or four months down the line, it might be that the pressures are too great and that coalition breaks apart. I think at that time, everyone will have to recognize that if everybody else falls like dominoes, we'll probably have no alternative down the line but to do the same. But I firmly believe that the decision taken by the government right now is the right one, and I fully support it. Thank you very much.

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Thank you. Item 3, Members' statements. Item 4, returns to oral questions. Item 5, oral questions. The honourable Member for Inuvik, Mr. Koe.

Mahsi, Madam Speaker. I have a question for the Minister of Economic Development and Tourism. The Department of Economic Development and Tourism has a policy which classifies communities into level I, level II or level III communities based on economic indicators. My question to the Minister is, is there a review which has been done to re-evaluate this policy?

Thank you. Minister of Economic Development and Tourism, Mr. Todd.

Thank you, Madam Speaker. I believe there is a review that was undergone some time ago because there was concern raised about -- as the honourable Member said -- inequities in how we define certain levels of communities. If the honourable Member wants, I can provide him with a copy of that review. Thank you.

Thank you. Supplementary, Mr. Koe.

Mahsi. I am sure Members of this House would appreciate a copy of that review. It's very hard for small businesses in level I communities to access government funds because of this policy. My supplementary is, what has been done to assist small businesses in level I communities to qualify for some of the financial assistance programs that this government has?

Thank you. Minister of Economic Development and Tourism, Mr. Todd.

If the level I community that Mr. Koe is talking about is his particular riding, if it is Inuvik, as I've stated earlier in the House, we have given new authority to the regional superintendents, financial authority which is supposed to, theoretically, speed up the process of providing grants and loans. We've converted a new policy for grants which provides up to $5,000 worth of grant funding for small business. We've put these policies in place effective early December. We're confident they'll meet the needs of all communities in the Arctic, including level I communities. Thank you.

Thank you. Supplementary, Mr. Koe.

Thank you. So for the record then, the new grants and loans policy or program for small businesses is not based on the classification of communities in level I, II and III, because right now with the existing policy a lot of businesses in level I communities don't qualify for a lot of the grants and loans and other financial assistance from the department. For the record, are the new programs going to do away with the existing classification system?

Thank you. Minister of Economic Development and Tourism, Mr. Todd.

Thank you, Madam Speaker. No, the new programs are not going to do away with the classification system. I don't have at the tip of my tongue each and every program we have. I have instructed the department to change some of the programs to more clearly reflect the needs of the small business community. I can get for the honourable Member a breakdown of them as they relate to Level I communities. However, I would say, in fairness to the honourable Member, that certainly my focus and the emphasis has been on the Level II and III communities because that is still where we believe the attention should be.

Thank you. Final supplementary, Mr. Koe.

Thank you, Madam Speaker. I, too, agree that there is a need for development in Level II and III communities. But, the fact of the matter is, a good portion of our population lives in the major communities, Inuvik being one. Inuvik presently is undergoing a period of recession, unlike maybe Yellowknife for example. There are still a lot of unemployed people in these communities and a lot of small businesses that wish to start up in these communities because that is where the people are. So, I would wish that in your review you would take into consideration the economic situation of the various communities.

My question, again, is will the Minister look at the policies and programs to assist communities like Inuvik and the surrounding district, in developing and assisting small businesses?

Thank you. Minister of Economic Development and Tourism, Mr. Todd.

I think it is recognized that with a town like Inuvik and a number of others, the department has to be a little more flexible than it has been in the past. I will give the honourable Member assurances that when we are reviewing -- as we constantly are, by the way -- these programs so they're more reflective of the needs and, more importantly, the economic conditions of the territories, that Inuvik and small towns similar to Inuvik will be treated accordingly. Thank you.

Thank you. Item 5, oral questions. The honourable Member for Yellowknife Centre, Mr. Lewis.

Thank you, Madam Speaker. My question is for the Minister of Finance. We listened carefully last week to the Minister's budget address. On page nine there is a list of things that are not going to happen, no increases to personal income taxes, no increases to the one per cent payroll tax, no increases to fuel taxes and so on. There's a whole list of things that aren't going to be taxed. In fact, he only announced one tax change, the two per cent increase on corporate income over $200,000.

He mentions in his budget that we're going to lose $2 million but he also says that there will be no increase of the tax burden this year because of the negative impact on individual persons and the economy. My question to the Minister is, since he knew all about the federal initiatives before this budget was prepared, why wasn't the tax initiative that is being discussed today and that was discussed yesterday included in this budget?

Thank you. Minister of Finance, Mr. Pollard.