This is page numbers 337 - 368 of the Hansard for the 12th Assembly, 7th Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was budget.

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Further Return To Question 192-12(7): Status Of Fire Suppression Review
Question 192-12(7): Status Of Fire Suppression Review
Item 6: Oral Questions

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Silas Arngna'naaq Kivallivik

Thank you, Mr. Speaker. At the beginning of the community consultations by departmental staff, I was hoping we would be able to come out with a written report and recommendations from these consultations by today. However, to date, we still have the one community which has not been consulted. I am hoping that we'll be able to go into the town very shortly and be able to complete our list of communities that have been consulted in this review. I hope that we will be able to come out with a report and recommendations from these consultations by the end of March. Thank you, Mr. Speaker.

Further Return To Question 192-12(7): Status Of Fire Suppression Review
Question 192-12(7): Status Of Fire Suppression Review
Item 6: Oral Questions

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The Speaker Samuel Gargan

Thank you. Item 6, oral questions. Mr. Patterson.

Dennis Patterson Iqaluit

Thank you, Mr. Speaker. I would like to ask the Minister of Finance about the impact of the federal budget on the Northwest Territories, particularly with regard to the cutback of federal public servants. I understand there are tens of thousands of public servants to be cut over the next number of years, and I would like to ask the Minister if he's had

a chance to assess how those numbers shake down in the Northwest Territories. Thank you.

The Speaker Samuel Gargan

The Minister of Finance is not here. Madam Premier.

Return To Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Item 6: Oral Questions

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Nellie Cournoyea Nunakput

Mr. Speaker, I apologize, the Minister of Finance just went up to receive an important phone call, so he is unable to be here. On behalf of the Minister of Finance, I will take the question that has been put forward as notice. Thank you.

Return To Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Item 6: Oral Questions

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The Speaker Samuel Gargan

Thank you. Item 6, oral questions. Item 7, written questions. Item 8, returns to written questions. I'm sorry, Mrs. Marie-Jewell.

Return To Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Item 6: Oral Questions

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Jeannie Marie-Jewell Thebacha

Mr. Speaker, I had my hand up for written questions. May I proceed?

Return To Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Question 193-12(7): Impact Of Federal Staff Cuts On Nwt
Item 6: Oral Questions

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The Speaker Samuel Gargan

Please, proceed.

Jeannie Marie-Jewell Thebacha

Thank you. Mr. Speaker, I have a written question for the Premier.

Would the Premier please answer the following questions:

On September 7, 1994, the former Minister of DPW faxed information pertaining to the negotiated contract for the provision of airtanker services, item two of the August 16, 1994 letter -- which I tabled yesterday -- indicates that "The Minister of Public Works and Services report back to Cabinet, at the conclusion of the negotiations with the information item." Given Dene Metis Holdings request to formally extend negotiations, and with no responses from the Minister, did the Minister unilaterally terminate the negotiations?

What was the basis for the Minister's direct exclusion of Dene Metis Holdings participation in the request for proposal for the airtanker services? Thank you.

The Speaker Samuel Gargan

I'm sorry I didn't recognize you, Mrs. Marie-Jewell, but in order to maintain order in the House, if we are on a different item number, then we have to seek unanimous consent to return to the item. Item 8, returns to written questions. Item 9, replies to opening address. Item 10, replies to budget address. Mr. Koe.

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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The Speaker Samuel Gargan

Mr. Koe's Reply

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Fred Koe Inuvik

Mahsi, Mr. Speaker. I would like to take this opportunity to make a reply to the Budget Address delivered by our honourable Minister of Finance. I would like to congratulate the Minister of Finance and the Cabinet for the work they have done in the last year. There have been difficult times within our government and within the federal system. There has been a lot of difficulty in juggling and balancing this government's financing.

Timing for introducing budgets is always difficult and here in the north, it is no different. Mr. Pollard introduced this government's budget just seven days prior to the introduction of the federal budget. Some of us watched it on TV yesterday afternoon and last night we got copies of the speech. So, there has been very little time to try to analyze the budget and make comparisons. It is difficult to provide intelligent comments on the federal budget and its impact on our territorial budget.

All I know and can deduce from the package introduced by our Minister of Finance is that here, in the Northwest Territories, we seem to be, and are, steadily going into the hole, from an accumulated surplus of $56 million in 1992-93 to an estimated accumulated deficit of $38 million in 1995-96. Mr. Speaker, this is a negative turnaround of about $95 million. After this projected deficit, there will be another $58 million, which the Minister of Finance has stated will be the projected cuts for the 1996-97 fiscal year. If you add all this up, we have a whopping $150 million turnaround -- all negative, in terms of straight cash dollars -- in the last five years.

However, Mr. Speaker, given this negativity, this government has done some positive things and I have to congratulate them for pursuing many of the initiatives and changes they have made in government. They've adopted many of the recommendations made by our standing and special committees. Their motto has been to try to do more with less and I guess the jury is still out on whether or not we are doing more with less. The Standing Committee on Finance has been diligent in pushing this government to ensure that effective monitoring and evaluation systems are in place to measure all government programs and expenditures.

Mr. Speaker, one of the recommendations which came out loud and clear at the recent Western Constitutional Steering Committee Conference was that governments should devolve as much responsibility and authority to the community level as possible. The conference supported four levels of government: community, aboriginal, regional and central. In this regard, this government has taken several initiatives to strengthen the roles of communities and the regions.

The community transfer initiative has been under way, although not as quickly and as much as we had wanted to get transferred. But, the ones that are in place seem to be working. The government has devolved departments, or sections of departments, to regional levels and those seem to be in place and people employed. However, there is still a lot to do. We seem to have just touched the surface. With reshaping northern government, some of the initial initiatives that were planned for have been done, but I believe there is still a lot more to do. For the regions and especially the communities, I think more is better.

Most of the departments right now are being reviewed and reorganized. I believe this should give the Ministers opportunities to make more appropriate changes to devolve responsibilities to communities and regional levels. In this regard, the Minister of Economic Development has taken a lead role, and I believe his initiatives should be followed by other Ministers.

I would also be remiss if I didn't congratulate this government for providing funding for some new programs and for enhancing some existing ones. The $1 million increase to Arctic College programs and the $3.8 million increase to student financial assistance are going to help our people get further education and, hopefully, we will have jobs for them once they graduate. We've also increased funds for services to the aged and disabled; coordinated home care programs that are going to be put into place in several communities.

The community wellness projects are starting up. These are major initiatives and are pulling communities together to work on healing themselves. There is also increased funding for business development, which I mentioned yesterday. We have to try to get more, and not bigger chunks of money, but smaller chunks of money, to more people. This will create jobs, enhance small businesses and help develop them. In the area of renewable resources, there are a lot of resources out there that we have to push to enhance and develop. Finally, we have $1 million for a new Metis health benefit insurance program. Mahsi cho.

There is still a need to finance these initiatives and this is where we still have a problem. A big area of concern is the inability of this government to generate lots of new revenue. We are always continually rehashing and increasing the fees and services that we provide to the public. These fees and services impact the business community and our middle-class residents the most.

I also understand, based on recent CBC radio interviews with the honourable Minister of Finance, that he is considering increasing personal income tax rates. In this period of economic recovery and growth, I would hope that our Minister takes the lead demonstrated by the federal government yesterday and does not increase our income tax rates in the upcoming year.

Mr. Speaker, I have a lot more comments on particular issues raised by the Minister in his statement, but I will pursue these when we deal with the budget on a department-by-department basis. Mahsi cho.

---Applause

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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The Speaker Samuel Gargan

Thank you, Mr. Koe. Item 10, replies to budget address. Mr. Dent.

Mr. Dent's Reply

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Item 10: Replies To Budget Address

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Charles Dent

Charles Dent Yellowknife Frame Lake

Thank you, Mr. Speaker. Mr. Speaker, I, too, would like to take this opportunity to make some brief comments on our budget. I think there is widespread recognition of fiscal belt-tightening which will have to take place, resulting from Canada's current fiscal situation. I think in yesterday's federal budget, we got a clear indication of some of the hits that the territories will take. I know that in the past couple of years, the territories have already taken some pretty hard hits in terms of funding for social housing and funding for languages. The provinces are going to get hit harder as time goes on, but I think people have to remember that this government started taking hits a couple of years ago. It's been getting tougher and tougher all the time.

Like Mr. Koe, I would like to give some credit where credit is due. I don't think we should point the fingers of blame for reduced funding from the federal government at Mr. Pollard. I think Mr. Pollard has done a terrific job of managing the negotiations with Canada. I think he has done the best that anybody could have done in a difficult time. Having said that, I must say that I'm disappointed that Mr. Pollard chose to introduce a deficit budget.

I think we have to be very careful, given our limited potential to raise our own funds, that we don't get into the position that Canada has gotten into. We don't want to have to make those dramatic decisions to cut a significant number of civil servants in order to have any hope of dealing with a deficit. We need to stay away from accumulated deficits. I recognize, Mr. Speaker, that it is not always possible, on a year-to-year basis, to avoid a deficit. We will have years when we will have tremendous forest fire problems and there are always going to be situations that arise like that. But, we have to make sure we are setting up a financial structure that doesn't have a deficit built into it.

In order to do that, one of the things that we have to seriously consider, as the Standing Committee on Finance has indicated, is legislation to ensure that there is no accumulated deficit by the time the next government ends.

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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An Hon. Member

Hear, hear.

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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Charles Dent

Charles Dent Yellowknife Frame Lake

I think it's very important that we see that legislation soon, get a chance to talk about it in this House and that we pass it this session.

Mr. Speaker, it's also important that we work to loosen the ties with Ottawa. Right now, we are really at risk, as Canada has to find ways to cut its deficit. Because of the small population up here, we may be a very tempting target. I think our best potential is the northern accord. I would like to continue to urge the government to work with aboriginal groups and organizations to address their concerns. Bring them together at the table, as I know they are trying to do, and negotiate with Canada to try to conclude an agreement. I want to indicate that I support the contention of the Minister of Energy, Mines and Petroleum Resources that even if that fails, even if we don't get an accord, we must find ways to exert control so that we can ensure that when mines open up in the north, we get benefits for northerners.

Mr. Speaker, I think that one way in which this government has responded to the concerns expressed by the Standing Committee on Finance and the Special Committee on Health and Social Services has been setting up the envelope committees. I think this is a good step. I think that, in the long run, these committees will help this government achieve much better fiscal planning and stability. A concern, though, is having put these envelope committees in place -- and especially the Social Envelope Committee in place -- and having presented a budget supplement document to the Standing Committee on Finance, we are left to say, where's the beef? The standing committee expected that we would see some clear identification of how the government was going to respond to our call for balance between social issues, infrastructure and economic development. Yet, in the budget and budget speech, we found no identification of funds. The standing committee, over a year ago, demanded to see some action. The Special Committee on Health and Social Services, a year and a half ago, demanded to see some action. There has been clear evidence in this House that Members wanted to see considerable movement by the government in this area. The budget should have included the supplement.

Item 10: Replies To Budget Address
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An Hon. Member

Hear, hear.

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Charles Dent

Charles Dent Yellowknife Frame Lake

Whether this required shifts in priority to fund it, or new revenue initiatives, it should have been in the budget.

Mr. Speaker, I would like to address a few issues, more specific to departments than the broad budget, that are areas of concern to me. I think all Members of this House have some concern about the number of initiatives that the government seems to be taking on and whether or not the resources are available to complete them. For instance, the reorganization and amalgamation that is taking place in the Financial Management Board Secretariat. It is now a much larger agency and it may be trying to do too much. Here's a clear example: After hearing an extensive presentation a year ago about what was planned over the course of the next few years, this year we were told that the program evaluation task will not be expanded.

Mr. Koe just pointed out that it is very important to have program evaluation. It is something that the Standing Committee on Finance and Members of this House have been harping on for the last three and a half years. Something like program evaluation not being expanded really causes me concern because as times get tougher fiscally, we need a good tool that will help us decide what programs deliver the best value for money spent. The program evaluation task could have helped ensure that we make the right choices. Now, we don't have that tool.

Another area that I think we're going to have to take a look at has to do with contracts. Again, this has to do with the fiscal climate that we face. The government is currently undertaking a review of the business incentive policy and I think we're really going to have to take a look at it closely. Is it needed in all areas of the Northwest Territories? Does it do today what it was supposed to do? Does it meet the original intent? I'm not so sure that it does. I understand what the original intention was and I think it was something that was important. If it is decided that it is still an effective tool for business development in the Northwest Territories, then I think it is imperative that we provide full disclosure of evaluations under the business incentive policy. These are public funds that we're expending; we must show the public why the decisions are being made.

Another area we're going to have to examine, as the fiscal climate gets tighter, is the number of contracts, especially large contracts, not being publicly tendered. Mr. Speaker, there's a need for balance. I recognize that negotiated contracts may be worthwhile in some places but I would like to point out that other than through public tenders, there is no way to ensure you're getting the best value for money. There is always a risk, no matter how good a department estimate is that the negotiated price will be higher than might have been obtained through a tender. Another concern is the capacity of the company to do the job. We have had some expensive failures. While the risk may be judged acceptable for some projects, I am concerned about taking that risk with some of the larger projects. Mr. Speaker, it's hard to buy the Public Works and Services argument that they check companies thoroughly, when we have had some expensive failures.

Another thing that we have to take into account is the long-term effect on existing businesses. Can the north support all of the businesses that we might be developing? Perhaps we could write provisions into tendered contracts to ensure that there are local or northern benefits, or perhaps we should only tender to northern companies. As money gets tighter and tighter we may be forced back to the tender process, in any case, to ensure that we get the maximum value for dollars. Only then, Mr. Speaker, we may find that there are no northern companies left to do the job.

Mr. Speaker, another area I would like to address is the revenue initiatives in the budget. I understand the need for revenue initiatives and I am generally supportive of the ones in this budget. But there's one that I have had some calls about and I expressed some concerns about in Standing Committee on Finance, and that is the Health and Social Services co-payment increase to $250 for a return trip. Mr. Speaker, this revenue initiative hits those who can least afford it the most. I think it is a very unfair way to raise revenue. The people who are most penalized are the working poor, especially someone who must receive a series of treatments down south. I would like to point out that it's much more than an inflationary increase, this is an increase that goes two and a half times its current level. It's also discriminatory. The numbers of people, we are told, who will be affected are small but I'd have to question, has this government lost sight of the need to care for the individual? How can we justify a measure that will seriously impact a segment of the population by saying, well, it only affects a small percentage. I'd like to point out that in the Yukon and in Manitoba, there's currently no co-payment charge for emergency services if you have to medevaced south. I will be strongly supporting the Standing Committee on Finance recommendation for a cap on these co-payments but would also like to urge the government to reconsider. For the amount of total funds that this revenue initiative will raise, I'd like to strongly suggest that it be reconsidered totally.

Generally speaking, Mr. Speaker, I think that the budget is a reasonable document. As I said earlier, my one concern is that it does represent a deficit and I think that we should not be introducing deficit budgets. I think that too often we run the risk of unforeseen events throughout the course of the year causing us to get into problems. Starting out with a plan to go into a deficit is not the best way to go. I'm looking forward to hearing from the Minister of Finance when he meets with the Standing Committee on Finance to talk about what he might see as possible changes. I would encourage him to take a look at this budget again and see if there aren't ways in which we could reallocate some funds, perhaps reallocate some priorities, perhaps make some changes, and make sure that we don't drive up the deficit this year. Thank you, Mr. Speaker.

---Applause

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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The Speaker Samuel Gargan

We'll take a 15-minute break.

---SHORT RECESS

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The Speaker Samuel Gargan

The House will come back to order. Item 10, replies to budget address. Mr. Ballantyne.

Mr. Ballantyne's Reply

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Michael Ballantyne Yellowknife North

Thank you, Mr. Speaker. First of all, I would like to compliment the Finance Minister on the budget. I think it was a very careful budget, and the Finance Minister tried his very best to balance all the different demands here and also in Ottawa. I think that before people criticize this budget too much, they should probably put it in some perspective. What we didn't do is we didn't cut our social programs. We're the only jurisdiction in the country that hasn't cut their social programs; in fact, there is a small increase to the social program as we knew it last year.

Also, the union should take note of the fact that we haven't cut the bureaucracy. With what happened in Ottawa yesterday and what has happened across the country, there should be some recognition of this government's record of the past number of years, as again I think we've been more than reasonable with our civil servants and we're the only jurisdiction in the country that hasn't had drastic cutbacks of the civil service. I would like to hear occasionally union leaders acknowledge that, because if they don't like it here there's nowhere else in the country to go. I think here in the Northwest Territories is the best place right now to be a civil servant.

The one warning bell in this budget is the deficit. The deficit is a small one and a manageable one. I know the Finance Minister is concerned about it, I've heard him say that. I think we're all aware of how fast accumulated debt compounds. So I hope that the government and the Finance Minister pay some heed to the recommendation of the Standing Committee on Finance to bring in legislation which limits the opportunity for accumulating a debt for between now and division. Although $38 million in a $1.1 billion budget is not a lot, that $38 million can change into $250 million very, very quickly, as every other jurisdiction in the country has found out.

So I don't have to remind the Minister, the Minister is quite responsible in this area. He's aware of it, and I just want to express my concern on public record that we have to keep this particular concept of debt under control.

On the revenue side, for those on the other side of the equation, those in businesses who are quick to judge and quick to blame, the reality is there are no taxes. So this budget really defies any ideological labelling. I think it has tried very hard to present a balanced non-ideological approach. So we still maintain, by far, the lowest tax rates in the country and we do this in spite of the fact that there is increasing pressure on the Finance Minister and on the government by the federal government, by their clause in the formula financing agreement, to raise our taxes.

So I think although the government didn't raise taxes this time, I think we should be quite forthright and say that at some point, because of this tremendous pressure from Ottawa, this government is going to have little option than to raise taxes somewhat to bring them a little more in line with southern jurisdictions. But I compliment the government for not doing it this time.

There was a fair amount of comment in the Finance Minister's address to do with the northern accord. I guess a northern accord really is a metaphor for self-sufficiency and a metaphor for new streams of revenue. I basically believe that the federal government's budget that was presented yesterday contained no surprises, but it should be a wake-up call. I think our government did quite well to minimize the decreases to some $55 million over two years. I think that's the best that we can expect. But I think that that should put us all on notice that the very favourable arrangements we've had with Ottawa over the past 15 years are going to be changing. I think we have to be aware of that, and I think everybody in the Northwest Territories can look at this budget as a respite from what we're going to have to deal with and what we're going to have to prepare ourselves for.

So I, for one, think it's very important that the Minister of Energy, Mines and Petroleum Resources tries to conclude an arrangement with the aboriginal leaders this summer; however innovative that arrangement can be, because I think there's lots of room for an innovative approach, I think the bottom line is that we want to ensure that the revenues and the control of oil and gas and mining rests here in the Northwest Territories.

At some point in the future, we'll decide how we're going to divvy up those responsibilities and those revenues. But whatever the process is, even if it means we bring it out and put it a trust fund until we can figure it out, I think it's important that we do that. Even if it means that the Minister of Energy, Mines and Petroleum Resources and the Finance Minister sign arrangements with individual aboriginal groups that there's no way that a northern accord will take away from any arrangements that they will make with the federal government, whether it's through treaty negotiations or whether it's through self-government negotiations.

But I hope that this budget does act as a bit of a wake-up call for all of us. And at the end of the day, it's really in our interest that we gain control of our own resources.

So I would like to see a northern accord and mining accord concluded by this fall, before the election. I would like to see the formula financing agreement concluded by this fall, before the election. I think it would be a shame if the work that has been done on both of these is lost, and that the next government with new people and with trying to build a new consensus has to start over again because we could lose a lot of valuable time and effort. So I see this government as having a very serious responsibility in the next six months to try to conclude both of these initiatives.

I also think it's very important that the government and the Finance Minister follow up on the Standing Committee on Finance recommendation for a transition plan. I, for one -- and this is only a personal point of view -- think that the next government and Legislative Assembly is going to take place during a very, very difficult time. Simultaneously, I think what's going to happen is there's going to be increasing fiscal pressure by the federal government cutting back; there's going to be tremendous political pressure motivated by division; and, as division comes closer that will start to dominate the political agenda. I think anyone who thinks differently is perhaps being a little unrealistic because it's inevitable with something that profound, that big a change is going to happen here in the territories that there will be concern on either side that it's done fairly. I really think that it's going to be a tremendous challenge of the next government and Legislative Assembly to be able to carry out their duties with that tremendous pressure of division hanging over their heads.

I also think that the next government is going to be facing tremendous challenges in the west, as the parallel courses of self-government and public government start to come together, start to take some shape, to take some form. That will again be an interesting challenge for the Legislative Assembly to provide the continuity and to provide the forum where many of the problems which will inevitably occur can be resolved. So I think it's key that this government prepares the groundwork for the next government with a northern accord and a formula financing agreement.

Mr. Nerysoo has a number of negotiations with the federal government and the whole concept of employment strategy and alternatives to welfare, education. I hope over this summer that Mr. Nerysoo will conclude some successful negotiations with the federal government in many of these very, very important areas.

I think if this government can finish their mandate over the next few months by concluding some very important discussions and negotiations, I think they will have provided a tremendous service to the people of the Northwest Territories.

As I said, the federal government's budget contained few surprises. I, for one, believe that Minister Martin had very little choice but to take the harsh steps that he took. I think anybody in the Northwest Territories who thought we would be spared from those decisions was being unrealistic. There should be no doubt in anybody's mind that we will share the burden of trying to wrestle down the debt. I also think there should be no doubt in anybody's mind that we have a responsibility to do that. I, for one, can't criticize Paul Martin for the steps he has taken.

I think the budget was a reasonable budget. I think it did the most important thing it had to do. It reassured the money markets that Canada is not the Third-World basket case they were talking about a month ago. From what we've seen so far, and we obviously haven't seen the details, we haven't been treated any worse than anybody else. In fact, some would say we've been treated very fairly in these times. I think it's really important with the cuts we have for the Premier, the Finance Minister, and the Minister of Energy, Mines and Petroleum Resources to make the point that we've talked about for so many years, the point of self-sufficiency.

We don't have a problem helping the federal government wrestle down the debt, but what we want in return is means for us to be more self-sufficient, so we will be less of a drain on the federal government. I think the Finance Minister's approach to the federal government, of cooperation rather than confrontation, is the only approach we can take. I think in the former age of political heroes it would be fine to see the Finance Minister ranting and raving but at the end of the day, it won't mean anything because a lot of jurisdictions much bigger than us are ranting and raving and they're not getting anything. I think we should bite the bullet, acknowledge the reality and do our very best over the summer to maximize whatever gains we can make. I think if we do that, this government can leave a good legacy from their four years in office.

The one concern that reinforces the things I've been saying about the need for us to take over as many programs as we can and the need for us to become more self-sufficient -- and I brought this up before when I used the Quebec example -- is whether Quebec stays in or out. To me, it inevitably means a lessening of the power of the federal government. If they're out, the remaining jurisdictions will be in a dogfight to see how the country will come together. If they're in, just as Paul Martin said he would do by turning over block funding for education, health and social services to the provinces, again, the federal government's power and influence diminishes. We, of all jurisdictions, are by far the most dependant on a strong federal government.

The experts across the country are all saying that, so we have no excuse not to see that the power of the federal government is diminishing and will continue to diminish. We cannot live in a fool's paradise thinking that the status quo will remain for the next decade because it won't. We have to take every step that we can, every single initiative we can, to bring power and authority here to the Northwest Territories. If we don't, I see us being extraordinarily vulnerable to whatever happens across the country. I will tell you, I believe lots of things are going to happen across the country.

Just a few thoughts for the future which came out of the constitutional conference here in the west; there really seems to be a consensus on a few important things. One is the importance of communities to take over responsibility for as many things as they are capable of. I think it's very important that we take a new look at the policies we have for community transfer to see if we can speed it up, make it more efficient, and build some credibility into our process. As we all know, there is a lot of frustration that goes along with the community transfer process. I'm not blaming anybody. It's a difficult process at the best of times, but I really think we have to look at ways to break the gridlock that we find in the process if we are to build credibility for some kind of a central government here in the west.

My colleague, Mr. Dent, brought up the ongoing perception of a problem with negotiated contracts.

I am on record as saying that I think there is a time and a place for negotiated contracts. I think what is happening is something that was predicted by some of us when this government got into contracts in a bigger way. Negotiated contracts can work, in some cases, if you have one business in a community that is able to hire the local people to do the work. Now what's happening is there are two or three businesses in a community who all think they should get it, and the two who don't get it are really unhappy because they think there is political interference. So, at the end of the day, you are probably going to have to publicly tender negotiated contracts.

What people forget is, at the beginning, the reason for a public tendering system isn't only because it is the fairest and because it protects the public interest, it also protects the politicians. Because there is a set of rules that everybody understands and it is a set of rules outside of politicians' influence. The politician can step behind the rules and say I'm not going to favour you, you or you. These are the rules; whoever wins fair and square gets the contract.

---Applause

Again, it's a matter of finding a balance. Because there are times and opportunities where a negotiated contract makes sense. Maybe we should be looking at limiting the percentage of negotiated contracts and limiting dollar value so that anything over $1 million should go out to tender. There are some ways of doing it. A lot of people are using it as a metaphor for community fairness and for protecting communities. That's not what I'm talking about. Anything we can do so there are more opportunities for jobs and businesses in the communities, we should do. My point is that the negotiated contract is not the only tool.

Even though some of us will ride the white charger of negotiated contracts, at some point, they will be riding that charger out into the sunset because it won't work any more. You are going to have to have so many bureaucrats to keep the politicians from getting into trouble, so any money you may have thought you were saving is long gone. At some time, I'll ask about how many are reviewing all the negotiated contracts. Anyway, just some thoughts on that. I really think, in everybody's interest, that we should have a good look at it and probably have a few more rules to govern how it happens.

Another thought, and this is probably more appropriate here in the west than in the east -- and I'm not saying that right now this government should do it -- I would like to see, as part of the transitional plan, aligning the regions in the west to existing political regions. We are running into many problems right now. At the end of the day, we are going to have to recognize political regions. We should look at having our government respond to political regions and making them into administrative regions. I think we should start looking at that right now because I think that would take away some of the frustration.

Mr. Speaker, those are just a few ideas and thoughts I have about the budget. To sum up, I thought the government did a good job with the budget. I really believe that people in the territories have to recognize the incredible number of conflicting pressures that are on our government at any given time and that putting together a budget trying to address all those conflicting pressures is a very, very difficult process.

Item 10: Replies To Budget Address
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The Speaker Samuel Gargan

Mr. Ballantyne, your 20 minutes are up. Would you please conclude.

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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Michael Ballantyne Yellowknife North

If no one else thanks the Minister of Finance, Mr. Speaker, I will thank him now for a good job. Thank you.

---Applause

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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The Speaker Samuel Gargan

Item 10, replies to budget address. Mr. Patterson.

Mr. Patterson's Reply

Item 10: Replies To Budget Address
Item 10: Replies To Budget Address

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Dennis Patterson Iqaluit

Thank you, Mr. Speaker. Mr. Speaker, I guess I'm not going to leap to my feet to thank the Minister of Finance yet. I think he's done a difficult job as well as possible, and the budget that was presented earlier this session is finely crafted, I will acknowledge that.

However, Mr. Speaker, for my constituents, some decisions made by this government that predated this budget are far more important and had a far more devastating impact than anything that was announced in this session. I refer to the social housing rent increases and the staff housing rent increases. Mr. Speaker, there's no way of measuring the effects of these policies in our communities. We're just beginning to see some of the impacts of the apprehended increases in the social housing rent scales. As far as the increases to staff housing rent, we'll never know how many people were discouraged from seeking employment with the Government of the Northwest Territories or left employment with the Government of the Northwest Territories because of the hardships that have been wreaked. I know, Mr. Speaker, the policy was adjusted, I know it may still be adjusted, I know that there was a so-called hardship allowance put in place, but I have to tell the Minister of Finance that although these two initiatives will produce some revenues for the Government of the Northwest Territories and may have contributed to the praise that's being offered on his budget, the social and human cost has yet to be tallied up. People in Nunavut are saying these two initiatives were a double hit.

Mr. Speaker, people in my constituency are asking how this government can justify collecting -- not just from the head of the family, but from total household income -- up to 30 percent of income towards social housing rent scales when banks in this country, when adjudicating eligibility for a mortgage, would never risk having that high a percentage of the household, of the family income, go towards paying the rent. Mr. Speaker, we've taken the hit in Nunavut already and, in some respects, those two major initiatives have overshadowed the budget that was presented to this House earlier this session.

Mr. Speaker, I'm not naive about the need to make cuts and to restrain government spending, but my advice to the Minister of Finance, the Premier and her Cabinet is that when cuts are necessary and when they're being implemented there are ways of implementing cuts and there are ways of implementing cuts. I'm not satisfied, Mr. Speaker, when I look at the reorganization of MACA, which I think was driven by the need to reduce headquarters spending and person-years; when I look at the plans for reorganizing the GLO positions in the Nunavut communities; when I look at the plans to revise the funding for student residences in the regions, I'm not sure if the government is implementing those fiscal changes in a way that is thoughtful, in a way that is planned, in a way that is incremental.

Mr. Speaker, I want to encourage the Minister of Finance in implementing these cuts to do so in a way that maximizes the existing resources, takes a logical approach at looking at other ways of supporting some of these essential services, and considers the human element. I think all too often we have not considered the human element. Even though this government's had a long tradition of being considerate of its employees, now that we're in more difficult financial circumstances and tougher decisions have to be made, I think somehow that reputation is suffering in the rush to implement financial restraint.

Mr. Speaker, a couple of other points made by other Members I'd just like to endorse: I think it's critical that balanced budget legislation be adopted by this government during the life of this Assembly. I agree with Mr. Ballantyne that with the imminence of division of the Northwest Territories, with added financial pressures that we now know will be upon us from the federal government, it's critical that this Assembly which has been more or less spared from the severity of these financial pressures, leave a legacy of balanced budget legislation. I think now is the time to do it and I think it's critical that it be done well in advance of the very difficult and perhaps confrontational negotiations and discussions about fiscal matters that are going to intensify as we approach April 1, 1999. This is in the interest of the new western territory; it's in the interest of the Nunavut territory that those territories not be talking about the division of significant liabilities as well as the division of assets. I'd like to just echo the recommendation of the Standing Committee on Finance, on which I'm privileged to serve, that this matter must be dealt with this session and that I consider it a critical part of our budget deliberations during this session. I'm prepared to support a private Member's bill if the Premier and the Minister of Finance cannot get support from Cabinet to move ahead with this critical piece of legislation.

I would also like to say that I think it would be responsible if there was a thoughtful transition plan developed. I think it did benefit the current Legislature that there had been some considerable work done. I think it allowed our new Legislature to get some work under way quickly so that the changes that we've now seen being implemented in terms of departmental reorganization, consolidation, achieving efficiencies by rationalizing departments and department functions, these have actually been able to be accomplished in the life of this Assembly. If we don't have good advice for the next Assembly about what are the critical issues that should be pursued, they may not have that advantage of being able to continue the momentum. Now, of course, Mr. Speaker, it's up to the new Assembly whether or not they take that advice, but I think we can provide them with the benefit of our experience and it will be probably be gratefully received.

Mr. Speaker, the last major point I wish to make has to do with social issues. Mr. Speaker, when I ran for office in 1991, I was running against a former superintendent of Social Services for this territorial government in the Baffin region. She ensured that the social issues were prominent in the election campaign. But I also want to say that the people of my constituency impressed upon me that social issues came before everything else.

Mr. Speaker, I made pledges to my constituents that I would make social issues a priority. I informed my constituents of my first belief, which hasn't changed, that if we don't have healthy families, if we don't have educated young people, if we don't

have healthy communities, all the political, constitutional and economical development in the world will pass us by.

So, Mr. Speaker, not that political, economic development and constitutional development aren't important and aren't of great interest to me, it's just that unless we're well and ready to take up those opportunities others, not northern people, will benefit from those developments.

We got off to quite a good start, I think, Mr. Speaker, after the 1991 election. A Special Committee on Health and Social Services was appointed, toured widely, didn't spend a lot of money but came up with, I believe, a very sound and practical blueprint for social change and progress. Following the tabling and adoption of the special committee reports, I think we lost some momentum.

To my mind, one of the reasons the social issues were neglected, frankly, Mr. Speaker, was the crippling turnover of Ministers in both Health and Social Services. I was one of those short-term occupants of those portfolios and it was a very frustrating exercise because there was just barely enough time to begin to see the problems, begin to develop a plan, and I was history and another poor soul was taking up the challenge. I think these were circumstances that no one planned, particularly.

But the end result, Mr. Speaker, was that the social issues were neglected. We saw some evidence of this in the capital budget of 1993 when, after the dust settled, we found to our surprise that it seemed the major priority for the Government of the Northwest Territories was transportation. This was a great credit to the dynamic, aggressive and -- as I heard him called today -- "spiffy" Minister in that portfolio, Mr. Speaker. But somehow I believe that hard programs like transportation and even public works won out in the debates in the budget preparation over the soft programs in social services; the ones that I think most of us really know are fundamental to the needs of the people of the Northwest Territories.

Mr. Speaker, we made a little progress in the development of this year's budget when the Minister of Finance decided to develop envelope committees. I was especially pleased to see that this year in the O and M estimates, we've actually seen that there has been an increase of over $36.6 million in both capital and O and M spending in the social envelope compared to 1994-95. I don't think this is a matter of Ministers in the Social Envelope Committee winning over other Ministers; I think that it's a matter of adjusting priorities to what we all understand are some pretty fundamental needs in our communities. So there is an overall increase in the coming year in the Social Envelope Committee, and I think we're now starting to make some progress.

However, Mr. Speaker, if we look closely at what the departments of Health and Social Services have been actually able to do to meet the urgent recommendations of the Special Committee on Health and Social Services, we only find that the surface is just being scratched. I note that all we have budgeted for, in terms of some of the new initiatives recommended by the committee, are pilot community-based mental wellness projects in select communities; $200,000 to provide training programs in the prevention of suicide.

Mr. Speaker, I think we all know that a lot more is going to be needed. The good news is that the department has developed a community wellness strategy based on the fundamental truth that we all understand, which is that communities can look after themselves far better than anyone else, that the very good efforts of the government bureaucrats and professionals to help communities from the top-down from outside have not really worked. Mr. Speaker, we're now well placed to harness the resources and the energies of those communities to tackle their own problems.

The only problem, Mr. Speaker, is that perhaps because this wellness strategy has only been developed in recent months and is just being formed and finalized, sufficient monies to implement it are simply not in the budget that is before us. I think we should commend the Premier and the Minister of Finance for being upfront about this; that there was a community action plan or a supplementary social envelope budget amount that was discussed by Cabinet; but, for one reason or other, didn't make it into the main estimates.

There was also some uncertainty about the effect of the federal government, which was also an unknown that perhaps made everyone nervous about committing the sum of $3.3 million that has been identified.

I would say now, Mr. Speaker, that the early indications are that although there are certainly no new dollars in the federal budget and there will be pressures, we will, at least in the coming year, be spared the worst impact we might have feared.

So, Mr. Speaker, my recommendation -- and I guess the most important recommendation I'd make in this reply to the Budget Address -- is let us, now that we know all the facts, now that we know the impact of the federal budget, have the courage to make the community action plan a first call on the supp reserve. I know that the supp reserve has been set aside for inflation, for forced growth, for lapses and other important fiscal considerations, but I would like to say to Members of this House and the Cabinet, I think social issues are even more important than keeping up with inflation. I think we should have the courage to say that we are willing to risk making social issues a first priority over inflation, over allowing for lapses, over some of the fiscal categories that make up the supp reserve. I would urge the Cabinet, who I know is considering this issue tonight, to do the right thing. Finish off the good work this Assembly has done in preparing for a community action plan that will finally start to seriously tackle the social issues that are eating away at our communities and impeding social, economic and political progress, by agreeing that this $3.3 million will be our first charge on the supp reserve that is within this budget.

I, for one, Mr. Speaker, will not be satisfied to put this budget to bed without assurances that that community action fund will be financed. The plan is there, it is crystallized, we will have a chance to debate it in this session. Everything I know about it is a very sound work because it is based on community strengths and resources. So, let's find the money to make it work and make the budget complete. Thank you, Mr. Speaker.

---Applause