Mr. Chairman, I am pleased to present the 1996-97 budget for the Department of Finance.
For 1996-97, the department is requesting an expenditure budget of $10.171 million and a revenue budget of $984,701. The department has no capital funding.
Expenditure Budget
Salaries and wages make up 25 per cent of the budget of the Department of Finance. Together, the expenditures for salaries, wages and associated other O and M are 5.9 per cent lower than they were in 1995-96.
Three areas of uncontrollable other O and M expenditures, all within the treasury division, make up over 65 per cent of total departmental expenditures.
First, borrowing costs are estimated to be $3.25 million based on the projected $40 million operating deficit in 1996-97. In previous years, these costs were authorized through supplementary appropriations, which means that the full 1996-97 borrowing cost of $3.25 million is an increase over the 1995-96 main estimates.
Third, the budget includes the interest costs of $1.313 million for Northwest Territories Power Corporation bonds. Each year, this cost is reduced as the outstanding debt decreases. The 1996-97 interest cost is $588,000 less than in 1995-96.
Revenue Budget
The revenue budgeted in the Department of Finance represents 84.3 per cent of total government revenues. The largest component of this revenue is the grant from Canada which is forecast to decrease by $66.6 million in 1996-97. The majority of this decrease results from the five per cent cut to the gross expenditure base imposed by the federal government.
An increase in revenues as a result of the 10 per cent increase to the education tax rate that applies to tax-based municipalities and the 10 per cent increase to the property and education tax rates that apply to the general taxation
area. This is only the third increase to the property and education tax since it was implemented in 1967. The annual increase for an average single family home will be less than $30 per year.
1996-97 Outlook
The fiscal year 1996-97 will offer a number of significant challenges to the Department of Finance.
The department will be aggressively examining all tax and investment policy options to determine the best manner to encourage investment and business growth in the Northwest Territories.
Outstanding taxes and penalties will need to be pursued, to ensure that all sectors are supporting the government.
The department will provide statistics and analysis in support of formula funding negotiations and for government initiatives such as division of the Northwest Territories and community empowerment. Thank you, Mr. Chairman.