Thank you, Mr. Speaker. That is a good question at an opportune time. Let me start off by saying that Federal Cabinet approved last year $150 million expenditure to provide monies, seed monies if you want, for a variety of initiatives that had to be undertaken prior to 1999 with respect to the division of the Territories, and specifically Nunavut. However, in that $150 million there was money for the infrastructure as required, money in there for the training that is required, money in there for the Interim Commissioner's Office and a variety of expenditures necessary to pre-implement, if you want, our onward move to Nunavut. So that is what that $150 million is. Most of that money has been expended by the Federal government directly although we do have some relationship with the expenditures on the education training side, on the community infrastructure that will be required through MACA and a number of other areas but it is primarily being spent by the Federal government, DIAND, on Nunavut's behalf.
The discussions with Mr. Martin are in terms of the two new gross expenditure basis, that is, the money required to run Nunavut and the West on an on-going basis or what we call the gross expenditure base. That is the base on which we develop our funding requirements. Over and above that base, that was recognized by our predecessors and others, there will be a requirement for incremental costs and those are costs over and above what it would normally cost to run one government. We would now be running two governments in different geographical locations with different costs associated to it. So once the base is established, once the design of governments has been established we will be able to identify what the additional costs are over and above one single government. So that is the definition of incremental costs and that is probably the most important issue that faces us all. How do we ensure that, depending on what is finally decided on the kind of structure of government, those incremental costs are sufficient and are there?
On the issue of transition costs, those are costs that are currently being expended as it relates to the pre-implementation of division of the Territories. There is some money being assigned by the federal government. For example, on the judicial side there is money being provided. Other areas that we are currently expending money on, we are now documenting that, and that will be subject to negotiations with the federal government and whether or not we will recover the transitional costs. So again, if I may, just for clarity purposes, as I said the federal government in its first Cabinet submission approved the $150 million, which was primarily pre-implementation costs associated with Nunavut, whether it is infrastructure, training, Interim Commissioner, et cetera. We have now documented the transition costs associated with the efforts that we are doing to pre-implement an east/west, two new Territories. That is called transition costs. Some of these transition costs are going to be recovered particularly in the justice side. I understand that those discussions are underway. Once we have identified what I call the transition costs in this government, then we have got to start negotiating now.
The incremental costs, which I see as the most important aspect of it, are recognized by Federal Finance who will lead the discussions on the two new gross expenditures basis. That is recognized that there will be an additional cost over and above what we currently have and that perhaps, is probably the most critical factor as we move forward in trying to negotiate two appropriate new formulas and identify what the incremental costs are. Thank you.
