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.
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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.