Good afternoon. Item 2, Ministers' statements. Item 3, Members' statements. The honourable Member for Amittuq, Mr. Allooloo.

Thank you, Madam Speaker. Members of the Nunavut Caucus have been provided with a copy of a letter written to the federal Minister of National Defence and the federal Minister of Supply and Services from James Eetoolook, acting president of Nunavut Tunngavik Incorporated. Madam Speaker, the letter protests the awarding of a contract to operate core campsites in 1994 to a Quebec firm rather than Avati, a subsidiary of Nunasi Corporation and the Inuvialuit Development Corporation which makes it 100 per cent Inuit owned.

Avati carried out the contract successfully last year, which was to erect, maintain and disassemble working camps for other contractors that were upgrading or constructing the new Distant Early Warning stations. Avati completed this task with a workforce made up of 82 per cent Inuit. This contract is worth several million dollars, Madam Speaker, and it is the first large contract awarded by the federal government in Nunavut since the ratification of the Nunavut land claims.

Section 24 of the land claim commits the federal government to not only include Inuit firms in the solicitization of bids, but also commits the federal government to develop, implement and maintain policies to provide support and assistance to Inuit firms to compete for government contracts. It was agreed that these policies would be in place one year from ratification of the claim which is coming up this summer. Madam Speaker, it is very disheartening that these policies to provide support to Inuit companies to compete for government contracts have been completely disregarded in the awarding of this contract. We had expected that the spirit expressed...

Sorry, Mr. Allooloo, your time has lapsed.

I seek unanimous consent to conclude my statement.

The honourable Member is seeking unanimous consent. Are there any nays? There are no nays. Please proceed, Mr. Allooloo.

Thank you, Madam Speaker. Thank you, Members. We had expected that the spirit expressed during the negotiations would have been maintained. I'm extremely disappointed that the federal government has chosen to award such a major contract to an outside firm when it has been clearly demonstrated that Avati has the ability to carry out the work in a very satisfactory manner. Thank you, Madam Speaker.

---Applause

Thank you. I would like to recognize the grade six class from N. J. Macpherson school here in Yellowknife and their teacher Karen Johnson. Welcome to our Assembly.

---Applause

Item 3, Members' statements. The honourable Member for Baffin South, Mr. Pudlat.

(Translation) Thank you, Madam Speaker. I would like to stand today and make a Member's statement. I was invited to the annual conference of the Pauktuutit Women's Association but I have other commitments. I would like them to know that I haven't forgotten their invitation and I would like to apologize for not being able to attend their annual general meeting. I would be able to attend at some other time. I would like to apologize that I can not attend and I would like to assure them I will be able to attend at some other time.

I know that they have a lot of work to accomplish which is very important in the world of events and they work very hard on important issues and they will be able to work on those issues at this conference. At this time, Madam Speaker, I would like to apologize to them. Thank you.

Thank you. Item 3, Members' statements. The honourable Member for Yellowknife South, Mr. Whitford.

Thank you. Item 3, Members' statements. The honourable Member for Yellowknife Centre, Mr. Lewis.

Thank you, Madam Speaker. Most people who listened to the Finance Minister's budget speech yesterday were struck by the fact that probably a lot more was unsaid than was said. One of the things that was highlighted was the fact that they are going to reorganize the military, reduce it and eliminate racism. One of the good pieces of news in that budget address was that a whole squadron of twin otter planes would be located right here in Yellowknife. Many of us for years have said -- especially my friend Mr. Whitford -- that safety and rescue in this part of the world should be given a far higher priority than it is, with the expectation that there will be a lot of activity in this part of the world over the next several years.

This should be considered a welcome move that we have now 160 people moving into the city to replace all of those people that our government has decided should work somewhere else. It is good news for this community because when we listened to the speech yesterday, no one could see anything good in it. But for this city, there is a lot of good and it is very welcome news.

Hear, hear.

---Applause

Thank you. Item 3, Members' statements. The honourable Member for Nahendeh, Mr. Antoine.

Thank you, Madam Speaker. Today I would like to express my concern about the fur industry. I know the Minister responsible has been to Brussels and Strasbourg and has been telling us the situation we find ourselves in as a result of leghold trap regulations from the European Parliament that we have tried to abide by.

Through research, Madam Speaker, I found out in the last four years the Government of the Northwest Territories has spent about $900,000 to buy about 70,000 quick kill traps. These traps were exchanged in the north. Further, there was about $1 million spent in workshops to train the trappers in how to use these new methods of trapping. In all, there is about $1.9 million spent to date on complying with the regulations established in Europe.

I am told there is an NWT fur strategy being developed, as a result of a study that was done last year. I just hope that instead of continuing to spend money to comply with the European Parliament regulations, this government sees fit to try to establish the fur industry in the north by developing a plan of action on how to process the furs in the north, so we can have a northern fur industry. I know our furs in the north have been sent down south to be mixed with the southern furs, which I hear are not as good quality as our northern furs. Therefore, the price of our furs has dropped to bring the price in the south up. In the long run, our trappers are losing out.

We should be focusing on doing it ourselves instead of depending solely on the European market to buy our furs. I would like to stress to the Minister to look into this area in developing an NWT fur strategy. Mahsi, Madam Speaker.

---Applause

Thank you. Item 3, Members' statements. The honourable Member for Deh Cho, Mr. Gargan.

Thank you, Madam Speaker. Madam Speaker, in recent weeks I have spent a considerable amount of time thinking about the state of the correctional system in the Northwest Territories. Madam Speaker, the entire judicial process in the Northwest Territories is seen as a confusing system of conflicting European values by the majority of aboriginal people who run into trouble with it.

Madam Speaker, we, as a government, have a responsibility to tailor our programs and services to reflect the cultural identity of those it's suppose to serve. We have failed in this regard. So now, Madam Speaker, with that said, what do we do to alleviate the problems that make the situation of our correctional system culturally and morally irrelevant?

Madam Speaker, the system as it stands now is designed to incarcerate people in a facility that is usually far away from the home town of the offender. Granted, Madam Speaker, that some of the programs offered by the correctional centre, such as alcohol counselling and educational upgrading, are good programs. It nonetheless remains a fact that by the very nature of the correctional centre, it confines a person to a certain geographic area. By doing that, we provide no opportunity for the offender to make restitution to the community or to the victim. Sometimes by incarcerating a person, we create more of a hardship on their family than a long sentence accomplishes in rehabilitating.

There must be a way to split a sentence so an offender spends a certain amount of time behind bars and an equal amount of time making restitution to his victim. Maybe some sort of day parole system so that when a person is not working or making restitution to his family or victim, they are confined to house arrest.

We, as a government, must take the initiative...

I am sorry, Mr. Gargan, your time has lapsed.

Madam Speaker, I seek unanimous consent to complete my statement.

The honourable Member is seeking unanimous consent. Are there any nays? There are no nays. Please proceed, Mr. Gargan.

Thank you, Madam Speaker, and Members. We, as a government, must take the initiative. We have to take a holistic approach for corrections in the Northwest Territories. Madam Speaker, I don't only mean corrections, the community or the individual as a whole, but the family as a whole. By continuing with band aid solutions, such as incarceration, we do little to solve the problem.

Let me give you an example. In the old days, when the elders' or women's council placed a sentence on an individual, that individual always knew that when their sentence was over, they would be accepted as a full member of the community again. Now there is no opportunity for the victims or offenders to go through this healing process. Madam Speaker, our present system does not address the concerns of those it is suppose to serve. We must take steps to change it. Mahsi cho.

---Applause

Thank you. Item 3, Members' statements. The honourable Member for Inuvik, Mr. Koe.

Mahsi, Madam Speaker. I rise today, Madam Speaker, to talk about the existing classification of communities by the Department of Economic Development and Tourism. The system of classification of communities by the department was initiated in 1986 as part of the Economic Development and Tourism strategy. This classification system was used solely in relation to the business development fund policy.

In 1991, the communities were grouped into level I, level II and level III communities. In 1991, the policy was revised and the grouping of communities were made according to socio-economic indicators, such as population, per capita income, unemployment rates and the number of businesses in that community. If a business needed financial assistance from the department, they were required to contribute some form of equity. The equity requirements were determined by the community groupings. For example, residents in a level I community were required to put more money in than ones in a level III community.

When the business development fund was revised in September 1993, the requirement for grouping communities was also changed to recognize the level of existing business infrastructure in a community, and the road or transportation links into that community. This was done as a result of requests from clients and regional staff. That the policy better recognizes the potential for new economic and business development, rather than focus on the existing well-being of the community.

Under the 1993 revision, equity requirements remain linked to the community groupings, however the list of community groups was removed and instead the Minister issues instructions regarding the regrouping of communities whenever required.

Madam Speaker, I seek unanimous consent to continue.

The honourable Member is seeking unanimous consent to continue with his statement. Are there any nays? There are no nays. Continue, Mr. Koe.

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.

---Applause

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.

---Applause

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.

---Applause

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.

Madam Speaker, simply because I wasn't sure what we would be doing. I wasn't sure what we would be able to do. I wasn't sure what the federal government was going to do exactly and I wasn't sure what the western provinces and some of the eastern provinces were going to do. I was torn and did not want to state something in the budget that I might have had to retract later. So, I dealt with it by saying that the potential loss to us was $2 million at that particular time. This is a situation, and I think that Mr. Ballantyne has recognized this, that is very fluid right now and it's moving all the time. There was nothing certain that I could put in the budget, Madam Speaker. Thank you.

Thank you. Supplementary, Mr. Lewis.

Thank you, Madam Speaker. Since a decision has been made to ask for the support of this Assembly for tax increases, would the Minister indicate whether this is simply a tax to replace the money that would be lost because of the federal initiative? And if this particular bill that's being proposed would in fact be revenue neutral, how does he expect to increase our revenue as a result of his proposed amendments?

Thank you. Minister of Finance, Mr. Pollard.

Madam Speaker, I've recommended to Madam Premier and the Cabinet, and they have accepted the fact, that we will not lower our taxes. I now will be suggesting to them that we increase our taxes to backfill the $2 million that we're going to lose. There may be a situation, Madam Speaker, where I might suggest to them that we move into the federal tax room as well and bring prices back to where they were before the announcement by the federal government. Thank you, Madam Speaker.

Thank you. Supplementary, Mr. Lewis.

That was an answer, but it wasn't an answer to the question I asked. What I'm trying to get at is, is this initiative of our government going to be a revenue neutral initiative so that we would not in fact be doing more than simply replacing the monies we would have lost because of the federal legislation?

Thank you. Minister of Finance, Mr. Pollard.

Madam Speaker, I haven't gathered all the data yet and, until such time as I do, the very least that I will be recommending to Madam Premier and Cabinet is that it become revenue neutral. And, based on the information that is placed before me, I may suggest to them that we move into the federal tax room and pick up extra dollars. Thank you, Madam Speaker.

Thank you. Final supplementary, Mr. Lewis.

I would like to ask the Minister how he's going to calculate what revenue he needs? I asked this question to the previous Minister of Finance a few years ago and he found out that his staff were in fact more clever than he thought they were. My question is, are you going to be able to judge the impact of this change on smokers because the assumption is that it will be reduced? In other words, once you tax something, then smoking will be reduced and therefore, you have to use some factor to decide how much money you're going to raise. How are you going to figure out how much money you're going to raise if you don't know what the impact of this tax increase will have to reduce the number of people who smoke?

Thank you. Minister of Finance, Mr. Pollard.

Madam Speaker, I really don't know all the formulas that they use over at fiscal policy, but they have some formulas. If Mr. Lewis is ever over that way and drops into Jean Chretien's office, he will see all these formulas written on his board. I don't know all the formulas that they use, I know that they do have some method of calculation. Many times they go by historical data and they know the number of people in the NWT and they know, historically, the amount of tobacco they consume, et cetera. From that, they can give me a pretty good idea of what the impact will be but it's not a science. It gives you a good estimate, that's all, Madam Speaker. Thank you.

Thank you. Item 5, oral questions. The honourable Member for North Slave, Mr. Zoe.

Thank you. Minister of Municipal and Community Affairs, recognizing at the time you were not the Minister responsible, you may want to attempt to answer this question.

Thank you, Madam Speaker. I believe that there were a number of questions that were raised with regard to this particular resolution made by the NWT Association of Municipalities, some of which included areas that might infringe on individual's Charter of Rights. I understand that the department is, at this point, reviewing this particular legislation and should be able to advise the Association of Municipalities at their spring conference.

Thank you. Oral questions. Supplementary, Mr. Zoe.

Minister of Municipal and Community Affairs, Mr. Arngna'naaq.

Thank you, Madam Speaker. Yes, that is correct.

Thank you. Oral questions. The honourable Member for Yellowknife Frame Lake, Mr. Dent.

Thank you. Minister of Health, Mr. Pollard.

Yes, Madam Speaker, that functional review is almost completed. I received the first draft of it last Friday, and the department anticipates that within another ten days they will have the final report for my consideration. Thank you, Madam Speaker.

Thank you. Supplementary, Mr. Dent.

Thank you. Minister of Health, Mr. Pollard.

Yes, it is, Madam Speaker.

Thank you. Supplementary, Mr. Dent.

Thank you. Minister of Health, Mr. Pollard.

Madam Speaker, I have forgotten the name of the company. I will have to take the question as notice. Thank you.

Thank you. Item 5, oral questions. The honourable Member for Natilikmiot, Mr. Ningark.

Thank you, Madam Speaker. Madam Speaker, my question is to the Premier in the absence of the Social Services' Minister. Community economic well-being is fundamentally important to me and to the people who elected me. That was one of the reasons why I think they put me here. Madam Speaker, we penalize people who really need the assistance of the government who are living off the welfare system. We penalize those who are able to find jobs by not allowing them to earn a bit of money on the side. Every time recipients earn money, they are penalized the next assistance pay day when they are deducted. I would like to ask the honourable Minister if the Cabinet will review the matter and get back to the House.

Thank you. Madam Premier.

Madam Speaker, the honourable Rebecca Mike is not in the House today because she will be spending a couple of days at the conference with Pauktuutit in Iqaluit. I will review the matter. Just to note, on the issue of income reform, we hope that once we have been able to bring that forward we will address some of those major concerns, because I think that I fully agree with the Member that, often times, the difference between going to work and staying at home and living off welfare doesn't give people much incentive to be productive citizens. I hope the paper will come a long way in trying to address that. Thank you.

Thank you. Item 5, oral questions. The honourable Member for North Slave, Mr. Zoe.

Thank you. Minister of Transportation, Mr. Todd.

Madam Speaker, I don't know the exact date when we are bringing these amendments forward so I will look into it and get back to the Member.

Thank you. Item 5, oral questions. New question, the honourable Member for North Slave, Mr. Zoe.

Thank you. Minister of Municipal and Community Affairs, Mr. Arngna'naaq.

I believe the previous Minister had indicated that a legislative proposal would be forthcoming. However, there were a number of questions that the department had before completing the legislative proposal, and as far as I know, those clarifications have not been made. The department is still waiting for a response before preparing a legislative proposal.

Thank you. Supplementary, Mr. Zoe.

Thank you. Minister of Municipal and Community Affairs, Mr. Arngna'naaq.

Thank you, Madam Speaker. Once the department has received clarification on the questions that they had, they will be putting together a legislative proposal. Thank you.

Thank you. Supplementary, Mr. Zoe.

Thank you. Minister of Municipal and Community Affairs, Mr. Arngna'naaq.

Thank you, Madam Speaker. Madam Speaker, I don't know how long the preparation of a legislative proposal takes, so I am not able to give a time frame. Thank you.

Thank you. Item 5, oral questions. Mr. Zoe, new question.

Thank you. Minister of Municipal and Community Affairs, Mr. Arngna'naaq.

Thank you, Madam Speaker. To my knowledge, the review is still taking place. Thank you.

Thank you. Supplementary, Mr. Zoe.

Thank you. Minister of Municipal and Community Affairs, Mr. Arngna'naaq.

Thank you, Madam Speaker. I think part of the problem was that the department wanted to consult with Members of the Association of Municipalities. They were going to identify a contact person who would represent the association. To my understanding, this person has not yet been identified. Thank you.

Thank you. Item 5, oral questions. The honourable Member for Natilikmiot, Mr. Ningark.

Thank you, Madam Speaker. My question is directed either to the Finance Minister or the Economic Development Minister. Madam Speaker, as part of my preamble, I would like to say that Arctic Co-op will be holding their social function at the Annex D in the Yellowknife Inn at 7:00 tonight.

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

Madam Speaker, I am very familiar with this issue. It is my understanding that the ACL has been trying for some time now to seek federal funding for this initiative through the CAEDS program, and other programs, and haven't been successful, to date. It is also my understanding that they need about $6 million to $8 million. We simply don't have that kind of money to provide this kind of assistance to the ACL at this time. Thank you.

Thank you. Supplementary, Mr. Ningark.

Thank you, Madam Speaker. Is the honourable Minister planning to be at the social function tonight? Thank you.

---Laughter