Thank you, Mrs. Groenewegen. Orders of the day. Item 2, budget address. Mr. Todd.

Thank you, Mr. Speaker. Mr. Speaker, I rise today to present the second budget of the 13th Legislative Assembly of the Northwest Territories.

This budget represents the final stage of our two-year deficit recovery plan announced last year. With the implementation of this budget, our government will return to a balanced budget position.

-- Applause

As importantly, Mr. Speaker, we will ensure that the two new territorial governments are not burdened with a large accumulated debt when they come into existence on April 1, 1999.

Mr. Speaker, the 1997-98 budget calls for expenditures, including estimated supplementary appropriations and lapses, of $1.155 billion. Total revenues in 1997-98 are estimated to be $1.164 billion.

I am pleased to announce that with the cooperation and commitment of the Members of this Legislative Assembly, for the first time in four years, this government will not run an annual deficit.

In fact, we are projecting a small surplus of almost $9 million for 1997-98.

--Applause

Furthermore, Mr. Speaker, our planned deficit for the 1996-97 fiscal year is expected to be $5 million less than we budgeted for last May.

Our accumulated deficit picture has shown improvement as well. Last May, we expected our March 31, 1997, debt to be $85 million. We can now expect that figure to be $65 million, and by March 31, 1998, it will have declined further, to less than $57 million.

Mr. Speaker, we all know how difficult it has been to achieve these results. We have had to reduce government spending by almost five percent this past fiscal year and by an additional five per cent in 1997-98. Everyone has had to make a contribution to lower government spending.

- Employees of the GNWT and its boards and agencies have seen their salaries and benefits reduced;

- The rationalization of programs and services has resulted in substantial reductions to person years;

- Contributions to municipalities, boards and agencies have all been reduced;

- Capital spending has been cut significantly, and in some cases, Mr. Speaker, facilities have had to be closed.

Mr. Speaker, there has also been a great deal of discussion in this Assembly about the fairness and equity of the reductions being implemented by this government. It is important to observe that the reductions implemented by this government have transcended regional and constituency boundaries. Job reductions, facility closures and program restructuring have affected all constituencies and all communities in the north.

Mr. Speaker, it is important to point out that we are not out of the woods yet. While we have significantly restructured government and reduced duplication and inefficiencies, we continue to face intense pressure on the expenditure side. Reducing expenditures to this degree when we are facing growing needs from our ever-increasing population and our very real social problems has meant that we have had to make some tough decisions. However, these decisions have been necessary to bring our expenditures in line with our revenues and to ensure the sustainability of the system in coming years.

Mr. Speaker, in order to meet our deficit reduction targets we have had to reduce expenditures by $100 million in each of 1996-97 and 1997-98. In fact, Mr. Speaker, we have not yet succeeded in reducing our operating budget to a sustainable level. We cannot continue to reduce capital spending without long-term implications. It is essential that we continue to look for ways to do government in a more cost-effective manner.

The stark reality is that funding from Ottawa will not continue to grow annually, as it has in the past. We took an exceptionally large hit in 1996-97. The federal government reduced our gross expenditure base in our Formula Agreement by five percent, a reduction, as I have said many times, totalling $60 million annually. In addition, the growth in our funding under the formula is tied to the growth in provincial and municipal government spending in the rest of Canada. Since provinces have been reducing their spending, some by dramatic proportions, we have taken another substantial blow. Continued budgetary reductions in southern Canada, particularly in larger provinces like Ontario and Quebec, will significantly impact on our revenues and further threaten our ability to deliver essential programs and services to our residents.

Mr. Speaker, this government cannot afford to absorb any further revenue reductions. It is for this reason that the Formula Financing Agreement which covers the period 1995-1999 has not yet been signed.

I have been meeting with the federal Minister of Finance, the Honourable Paul Martin, to try and obtain his support to include a "floor" in the Agreement. A floor would provide us with some protection against further large reductions in our funding should provincial governments continue to curtail their spending. I am pleased to say, Mr. Speaker, that Mr. Martin has agreed to review the GNWT proposal with a view to finding an equitable solution to this important issue.

Mr. Speaker, those who suggest that we are moving too aggressively to put our financial house in order and return this government to a balanced budget position are not considering the consequences of in action on future generations. Larger deficits, and correspondingly high interest payments to service this debt, will only lessen our ability to deliver essential services and programs to the people. Mr. Speaker, this is not an acceptable alternative. This government is not prepared to leave a legacy of debt to future generations.

Mr. Speaker, it is clear that the greatest pressure towards increasing expenditures is within, what we call the social envelope. Staggering demographic factors such as our rapidly increasing population continue to create demands for services that are straining the existing system.

As a result of the deficit recovery plan adopted by this Legislative Assembly, a conscious and informed decision was taken to protect the funding levels within the social envelope. In fact, Mr. Speaker, as a percentage of total expenditures, the social envelope funding has increased from 58 per cent in 1995-96 to 61.5 percent in this budget.

However, Mr. Speaker, maintaining or even increasing funding levels, frankly, is only a short term solution. As I stated earlier, a rapidly increasing population is placing demands on the system that is outstripping our capacity to deliver services as we have in the past. We recognize that fundamental change must occur within the system to ensure its sustainability.

The Minister of Health and Social Services, the Honourable Kelvin Ng, with the participation of our program delivery partners, is actively managing the evolution of the health and social service system.

This process includes an extensive analysis of the current system and the development of a comprehensive plan for reform that will serve as a solid base for the future development of two sustainable health care systems. Systems that will ensure our ability to meet the needs of our residents over the long term. To guide this process, Minister Ng has established a steering committee comprised of the Minister and the chairpersons of the Inuvik and Baffin Regional Health Boards and the Northwest Territories Health Care Association.

Mr. Speaker, while the reform of our health care system and social services system is a critical issue, I said last May that we must also look hard at how we do business throughout our entire organization.

We had to improve communications, eliminate unnecessary administration and duplication, streamline departments and get out of the areas that are best left to the private sector or communities.

Mr. Speaker, we have done many of those things. The past 12 months has been a time of unprecedented change in the way that government programs and services are delivered.

We are in the process of developing a digital communication network with our private sector partners to support cost-effective government operations. This network will provide for communications needs required by a modern, decentralized government operation as we head into the twenty-first century.

We have consolidated and reduced the number of government departments from 17 to 11. The new Department of Resources, Wildlife and Economic Development has been established to provide a one-stop, one-window approach to sustainable development.

Government has removed itself from functions that can be better done by the private sector. Systems management has been privatized, property management functions are being privatized in several regions and, in some cases, the operation of facilities has been privatized. Decisions relating to privatization in areas such as petroleum products and computer services will be made in the near future.

Mr. Speaker, these operational changes have not been an exercise in moving functions around. They have been serious and successful actions that have reduced expenditures. They have been followed up with action to reduce internal red tape, decentralize decision-making and increase the authority and accountability of our managers. Today, our managers have more authority to make decisions than ever before. It is a fundamental belief of this government that decisions affecting our communities are most effectively made by the people living in those communities and by our front line managers who deal with these issues on a daily basis.

Mr. Speaker, it is fair to say that these organizational changes have not occurred without consequences. Although we are now administratively more efficient, organizational change, undoubtedly, brings stress. We have attempted to help our staff deal with these changes through the Employee and Family Assistance Program. However, Mr. Speaker, what is now necessary is clarity on what the future holds. I hope to offer some clarity today.

Mr. Speaker, last week, the Minister of Public Works and Services announced that we have accepted the recommendation of the Legislative Assembly not to proceed with the amalgamation of the Northwest Territories Housing Corporation, the Department of Transportation and the Department of Public Works and Services. With this decision, our fiscally induced restructuring is largely complete. We can now bring greater stability to the organization. This is not to say that we will stand still. Division, community empowerment and social and economic reform will bring about some change. However, Mr. Speaker, it is now time to turn our attention away from restructuring, towards the issue of the division of the Northwest Territories and the implementation of a transition plan that will ensure that there are two viable governments on April 1, 1999.

There are only two years and two months remaining prior to division. During this time, decisions must be taken to implement government structures for Nunavut and the new western territory, assess and determine employee complements and establish any inter-territorial service delivery agreements necessary to ensure continuity in the delivery of programs and services. As stated on many occasions, this government is committed to taking the operational steps necessary to ensure that there will be two efficient governments operating on April 1, 1999.

This Assembly has established as a priority and demonstrated its commitment to have two fully functional governments on April of 1999. However, Mr. Speaker, to accomplish this, we must begin soon. We are currently in the process of preparing a division transition plan for all departments that will address the necessary steps and identify the financial and human resource requirements for Nunavut and the western territory. This plan will be ready for review by Members of this Assembly at our next session in June.

Mr. Speaker, a key issue for this government as we prepare our transition plans is the government design for both Nunavut and the new western territory. With respect to the design of the Nunavut government, the Nunavut Implementation Commission (NIC) recently released its second comprehensive report recommending a design structure for the government of Nunavut. Earlier this month, this government responded in detail to the NIC report emphasizing our commitment in principle to an affordable model of government that is decentralized and serves all residents of Nunavut effectively and efficiently. It is our intent to move quickly to ensure a smooth transition as we approach April 1, 1999, by entering into a protocol with the interim commissioner with respect to the implementation of the new government.

However, Mr. Speaker, it is important to point out that we are only one party to this process. We have fulfilled our obligation to further the process by providing our response to the NIC report in a timely fashion. We now anxiously await the response of our two partners, Nunavut Tunngavik Incorporated (NTI) and the federal government. Once the positions of the federal government and NTI are clear, it is essential that we move quickly to reach a consensus on design considerations so that planning and implementation can proceed in an orderly manner.

Mr. Speaker, it is important to point out that the implementation of a new Nunavut government is wholly dependent on the federal government living up to its commitment to provide the necessary incremental and on-going operations and maintenance funding. Mr. Speaker, to that end, it is essential, essential, that the federal government address the funding issue in a clear and comprehensive manner in its response and at the Nunavut Leaders' Summit in February.

With respect to the western territory, the design of the new government will emerge from constitutional and self-government discussions. We are fully committed to participating in this process and have identified over $1 million in 1997-98 budget to ensure that we can contribute effectively to the self-government talks. At the same time, Mr. Speaker, it is important that our division transition plan for the western territory includes an efficient model of government that ensures that services and programs continue to be delivered in an efficient manner after division.

Mr. Speaker, as Minister of Finance I am very concerned that the Northwest Territories is left in sound financial condition on March 31, 1999. The successful creation of Nunavut and the new western territory is dependent on the steps we take to stabilize our financial situation and ensure that our 1996-97 funding base not be permitted to erode any further.

Mr. Speaker, one of the key issues that must be addressed in the short term is the determination of base funding, including incremental costs, that will be established for both two new territories.

The federal Minister of Finance, the Honourable Paul Martin, has agreed to a process that will address the structure of the financial arrangements and the amount of funding that will be available for each territory after division.

For Nunavut, this process will include the participation by the interim commissioner and Nunavut Tunngavik Incorporated.

Parallel to this, on the advice of the western Caucus, we have ensured similar participation by the stakeholders from the western territory in this process. To facilitate this participation, the government has provided seed funding to the western Caucus to form a steering committee to oversee this work. The steering committee is comprised of representatives of the western Caucus, the Aboriginal Summit, the Northwest Territories Chamber of Commerce and the Northwest Territories Association of Municipalities.

It is important to note, Mr. Speaker, that given the importance of this issue to the people of both new territories, this government is committed to ensuring that there is broad representation from both territories at the negotiation table.

The timely resolution of the funding issue is essential for the planning and implementation of two new viable governments.

On April 1, 1999, the governments of Nunavut and the western territory will require a capable public service to ensure the continued delivery of programs and services to all residents of the Northwest Territories. In Nunavut, decisions to address the immediate staffing needs of the Nunavut government will have labour relations implications for the GNWT and its current staff.

While the interim commissioner has the mandate to recruit employees, prescribe their conditions of employment and establish human resource systems and processes for the Nunavut government, the GNWT's position on labour relations with respect to Nunavut has been clear and unequivocal:

- All GNWT staff located in Nunavut must become employees of the Nunavut government on April 1, 1999 and that they be automatically transferred with all terms and conditions of employment intact;

- Existing GNWT headquarters staff should have hiring priority on Nunavut positions for which they are qualified;

- The same principles must be applied to the staffing of the Nunavut and western territorial governments as were applied to federal-territorial devolution arrangements; and

- The costs associated with hiring new staff for Nunavut, the transfer process, office space adjustments, relocation and severance packages are transitional costs and must be covered by the federal government.

It is our intention to enter into discussions with the interim commissioner at the earliest possible opportunity to discuss the transfer of GNWT employees to the new Nunavut government so that our employees are given the security they require as we approach division.

Mr. Speaker, there are many fundamental issues to address in the division process. This Legislative Assembly is committed to addressing these issues with our partners in a manner that ensures that division occurs, I have said many times, in an orderly and equitable fashion.

Mr. Speaker, while the planning and implementation for division will continue to be the focus over the remaining two years of our mandate, we recognize that dealing with our fundamental social and economic challenges and delivering programs and services remains the primary role of this government. As I stated previously, addressing these issues in a time of severe fiscal restraint, frankly, is a daunting task.

However, as a beginning, we have reinvested funding in the social envelope to target specific program initiatives designed to deal with some of the more pressing challenges faced by our communities. It is important to note, Mr. Speaker, that these initiatives have been funded by internal reallocations from other envelopes. For the past two years the social envelope has been allocated funding for the Community Action Fund. This fund allowed communities to develop wide-ranging plans for wellness activities and resulted in a number of successful initiatives. It is now time to begin providing communities with the funds and support required to implement these plans.

In order to maximize the long-term benefit, the social envelope will be focusing community expenditures on children and their families. By investing early in children, and supporting their caregivers, communities can realize immediate improvements, and help prevent the development of problems later in life which may require expensive remedies.

This year the social envelope has allocated $3 million for early childhood initiatives, bringing the total funding for this initiative to $4.5 million, Mr. Speaker.

The Minister of Education, Culture and Employment, the Honourable Charles Dent, has the lead for this initiative and will work in conjunction with the Honourable Kelvin Ng, to distribute funding to communities to enable them to offer early intervention services that support families. These funds will be used primarily to provide community based education or health promotion activities to families, to pay for early intervention workers, to enhance specialized services for children, to purchase specialized equipment, to improve screening programs for better detection of children at risk and to enhance child and home care programs for all these children.

The Department of Health and Social Services will also be investing in a specialized treatment program for youth suffering from addictions. By investing in our young people we believe that we can most effectively ensure the future wellness of our communities.

However, this is not the extent of this government's reinvestment in social programs.

An additional $960,000 has been allocated to the Department of Education, Culture and Employment, for income support community program delivery, bringing the total budget for this program to $1.4 million. Minister Dent has the primary responsibility to distribute these funds to local delivery agencies who will be involved in the design and delivery of income support services best suited to meet local needs and priorities.

This funding will enable communities to hire and train staff to deliver income support programs, while allowing community social workers to more fully concentrate their efforts on working with the community to prevent or alleviate our growing social problems.

The social envelope has also received an additional $1.5 million to train and support staff in communities who supervise offenders on probation or in the fine-option or other community-based supervision programs. Working with the Department of Health and Social Services, the Department of Justice will be distributing this funding to communities that assume responsibility for community supervision.

Given the high cost of incarceration in the Northwest Territories and the need to develop better and more effective alternatives to the present system, this government is committed to encouraging communities to develop their own strategies, services and programs to deal with their own residents who find themselves in conflict with the law.

Mr. Speaker, these three initiatives, Early Intervention, Income Support Community Program Delivery and Community Supervision, represent a strong commitment by this government to enhance the resources available to communities so they are better able to develop programs designed to meet the needs of their residents and address local program requirements.

Mr. Speaker, this government also remains firmly committed to the transfer of program authority and capital infrastructure to communities through the community empowerment initiative. Led by the Honourable Manitok Thompson, the Department of MACA is proceeding with transfer requests at a pace that is acceptable to communities and is based on building capacity at the community level through training and development.

To facilitate this process, the department has been allocated an additional $2 million dollars to address the community empowerment priority. The department will be also be reallocating $1.7 million of existing funding to this priority from savings realized through land reform initiatives. These financial resources will be specifically targeted for community-based planning, community assessments, community training and community ownership of infrastructure.

Mr. Speaker, we also recognize the tremendous demand for social housing across the north. The Minister responsible for the Northwest Territories Housing Corporation, the Honourable Goo Arlooktoo, has been working diligently to address this issue through program reform but it is obvious that the demand for social housing far exceeds the Housing Corporation's delivery capacity.

As part of our initiative to sell our stock of staff houses, we expect to identify surplus units. This government is not prepared to allow surplus units, whether owned or leased, to sit empty. In cases where unsold housing units are no longer required to meet the housing needs of employees and where we have vacant leased units, we intend to transfer these units, and the corresponding funding, to the Northwest Territories Housing Corporation to help address our urgent social housing needs.

Mr. Speaker, in the long term what people want most is hope. Hope for their future and the future of their children. The hope that comes from opportunities to become more self-reliant and productive.

This can mean jobs. But it is not just a wage employment. It can also mean pursuing traditional activities like trapping, sealing, fishing and hunting. It can mean self-employment or the opportunity to start a small business.

We have good reason for hope. The north has a wealth of natural resources, which are the envy of many nations. We are blessed with minerals, oil and gas, forests, fish and wildlife and a vast unspoiled landscape. We must conserve and protect these resources. We must use them wisely so that we can harvest them today for the maximum benefit of northerners and ensure that they are there for future generations.

Whether it is mining, renewable resources, tourism, arts and crafts, manufacturing, construction, or small business, every sector of our economy has the potential for growth.

Mr. Speaker, in my last budget address, I indicated that government can no longer sustain economic growth. The onus for future economic growth and job creation must shift to the private sector and to communities. This government, Mr. Speaker, is committed to developing a climate that will stimulate economic growth and create new, sustainable jobs.

A stable and competitive tax environment is critical to ensuring that this occurs. Our personal and corporate income taxes are among the lowest in Canada. Mr. Speaker, I am pleased to confirm that this budget contains no new tax measures.

--Applause

In addition, Mr. Speaker, a clear and concise regulatory environment is also an important element of economic growth. Last year, we made a commitment to initiate a comprehensive review of all government regulations in an effort to reduce regulatory burden that deters economic growth while, at the same time, ensuring that the public trust is protected.

Although this initiative has been slow to get off the ground, we have now established an office to undertake this work. I want to make it clear that this review will be transparent and an open process and will include participation by all interested stakeholder groups.

Mr. Speaker, opportunities do exist for significant job creation if the business community has access to a trained labour force. This remains one of our most pressing needs. Without an adequately trained northern workforce, the new jobs that are created will be filled by imported labour and historically disadvantaged northerners will continue to be under represented in our workforce.

During a recent discussion of the affirmative action policy, Ordinary Members called for the development of a broad northern employment strategy to deal with this issue. The Minister of Education, Culture and Employment has taken the first step through the preparation of a labour force development strategy that he will be bringing forward during the current session.

With this baseline work completed, the Minister of Resources, Wildlife and Economic Development will be able to work with industry to develop a strategy that brings together supply-side training with demand-side job creation measures. It is our intention to fast-track this initiative for completion this summer.

Mr. Speaker, to assist in the creation of an economic climate conducive to economic growth, we launched a new business investment strategy and established a Northwest Territories Investment Office designed to bring money and jobs into the territories.

Since that time, we have sponsored the establishment of the Aurora Fund, an Immigrant Investment Fund incorporated under the current federal regulations. This fund was approved by federal regulators on November of 1996, and is now being marketed overseas, with potential for up to $21 million dollars of reasonably priced debt financing to be available to northern businesses in the coming construction season. It is important to note that this fund is expenditure neutral to this government. We made an initial $300,000 working capital advance that is fully repayable by the fund prior to March 31, 1998.

Mr. Speaker, the Investment Office has also been reviewing a number of other exciting initiatives to foster trade and investment in the territories, including but not limited to:

- Marketing the advantages of doing business in the territories including, as I said earlier, the attractive corporate tax rates and support services available in the territories;

- We are looking at a taxpayer investment initiative plan designed to encourage northerners to invest in the establishment or expansion of existing businesses, and;

It is our intention to bring forward recommendations on these initiatives for review by this Legislative Assembly in the spring of this year.

Mr. Speaker, I made a commitment to Members of this House that I would not proceed with the $5 million equity investment in the Mortgage and Loan Fund until I had discussed this issue with the traditional banks. I have since met with senior representatives of several of these banks. They have provided assurances to me in writing that they are willing and eager to provide financing to prospective home owners and housing developers, particularly in our smaller northern communities, and for this reason, Mr. Speaker, we will not be proceeding with this initiative at this time.

Hear, hear!

Mr. Speaker, the government will reinvest $1 million in economic development initiatives designed to provide opportunity for northerners.

The community futures program is a community economic development initiative that provides small loans to community businesses and supports the creation of badly needed jobs in small communities. $500,000 will be allocated to this program to assist in the establishment of Community Futures Societies in those regions where none now exist.

The Minister of RWED is also examining ways to supplement this funding to ensure that viable Community Future Societies are functioning in all regions.

$500,000 has been allocated to the NWT Corporation to place increased emphasis on the marketing northern arts, crafts and products outside of the Northwest Territories. The enhanced sale of northern products will maintain and increase the number of jobs supported by the Development Corporation.

In addition, Mr. Speaker, the Honourable Charles Dent has indicated to the federal government our commitment to extend the Canada/NWT Infrastructure Agreement for one further year. This program provides contributions from the federal, territorial and municipal governments and is targeted at the construction of small community infrastructure projects and the creation of much needed short-term employment. The federal and territorial governments will each contribute $1.1 million to this program in 1997-98.

Mr. Speaker, as the Premier has stated on many occasions, we are governing in a time of unprecedented fiscal, economic, social and political change in the Northwest Territories. With change comes some difficult challenges.

As difficult as these challenges may be, we are moving ahead on the issues of fundamental importance to the Northwest Territories. Progress on these issues will not always be easy and, certainly, not without a great deal of debate, but I am confident that if we all work together, we can maintain our course and achieve our goal. Thank you, Mr. Speaker.

--Applause

Thank you, Mr. Todd. Item 3, Ministers' statements. Mr. Morin.

Thank you, Mr. Speaker. I wish to advise the Members that the Honourable Stephen Kakfwi is ill and will be absent from the House today. Thank you.

Ministers' statements. Item 4, Members' statements. Mrs. Groenewegen.

The Member for Hay River is seeking unanimous consent to complete her statement. Do we have any nays? There are no nays. Mrs. Groenewegen.

Thank you, Mrs. Groenewegen. Members' statements. Mr. Ningark.

(Translation) Thank you, Mr. Speaker. As I stand, today, I am from Natilikmiot region. I ask on behalf of the people from my region, from my constituency, Taloyoak, Gjoa Haven, regarding housing. This is their main concern as well as ours. We all understand that we are concerned about our housing situation. Mr. Speaker, in Gjoa Haven, there are 13 houses without any sewage system, no running water. In Taloyoak, five houses without any sewage or water system, and they are occupied. There are some vacancies in those communities and they belong to the government staff. When you see those vacancies, and they are all fully supplied with sewage and water, and you see our people in the community that do not have any sewage system or water. Those people without any running water in their places, they have to do the upkeep on a daily basis for hygienic reasons and keep their clothes clean. They normally have to heat their water on the stove. Mr. Speaker, when it is time to ask questions, I will ask the Minister about the housing situation. Thank you, Mr. Speaker. (Translation ends)

Thank you, Mr. Ningark. Members' statements. Mr. Krutko.

Thank you, Mr. Krutko. Members' statements. Mr. Picco.

Thank you, Mr. Speaker and good afternoon. Mr. Speaker, I want to clarify some points that happened last week during Session, specifically question period. Thus, my statement is about misinformation. First of all, Mr. Speaker, I did not say that I wanted to tax charitable bingos or bring VLTs into the Northwest Territories, as quoted by certain members of the media.

For the record, I will quote from the unedited Hansard of Thursday, January 23 in response to my questions to the Honourable Minister Todd about other revenue-generating possibilities and ideas for the Northwest Territories. I quote from page 300 of the unedited Hansard: "We should not tax lotteries or any other monies coming in to help charitable organizations but scratch and win cards, and those types of things, should and can be looked at." That is what I said, Mr. Speaker. The point of my questioning, Mr. Speaker, for the benefit of the people of the Northwest Territories, was to demonstrate the need for this government to look at other revenue-generating ideas. I suggest that those people interested should review the Hansard.

As for the VLTs, I said that they are another form of revenue-generation. I did not say I was in favour of them. I asked Mr. Todd if he had looked at that possibility.

The other area, Mr. Speaker, is the fuel problem. For the record, I am now satisfied that the fuel purchased on the 1996 sealift met GNWT standards as demonstrated by the information provided to me by the Minister of POL, Mr. Arlooktoo, on Friday. My line of questioning was on the purchase of fuel at rural markets that was below standard and bought on the cheap. This was the information that was provided to me and it would seem that it was not entirely accurate.

Collaterally to this, the fuel supplier in Iqaluit, Nuksuk Corporation, were not at fault and they have been doing an excellent job. It is unfortunate, however, that it took four days of questioning to resolve that matter. I would like to thank Minister Arlooktoo and Minister Dent for their cooperation and the extra work put in by their staff to clarify the issue for me, for the record, Mr. Speaker.

Thank you, Mr. Picco. Members' statements. Item 5, returns to oral questions. Mr. Ng.

Thank you, Mr. Speaker. Mr. Speaker, I have a return to an oral question asked by Mr. Picco on November 29, 1996 with respect to the appointment process for a Supreme Court justice for Nunavut. The appointment of a Supreme Court judge is the responsibility of the federal government. However, the government of the Northwest Territories is responsible for the administration of the court which includes such matters as facilities for the judges and the court, as well as the personnel to support the maintenance of the court, such as court reporters, clerks and the sheriff's office.

The Department of Justice has determined that there will be incremental costs if a judge were to be appointed and based in Nunavut. The department does not currently have the resources to cover these costs and it has asked the federal government to cover the incremental costs as a cost of division of the Northwest Territories. Once funding for incremental costs has been identified and the structure and composition of the Nunavut court is clarified, steps can be taken to appoint a Supreme Court judge in Nunavut. It is expected that this will happen within the next 12 months. Thank you, Mr. Speaker.

Thank you. Returns to oral questions. Item 6, recognition of visitors in the gallery. Mr. Ningark.

Thank you, Mr. Speaker. Mr. Speaker, I would like to recognize my partner in life, Celine. Thank you.

-- Applause

Welcome to the Assembly. Recognition of visitors in the gallery. Mr. Krutko.

Welcome to the Assembly. Recognition of visitors in the gallery. Mr. Erasmus.

Thank you, Mr. Speaker. I would like to recognize Mr. Bill Erasmus, if he is still here, the esteemed leader of the Dene Nation, who lives in the community of N'dilo, which is in my constituency. Thank you.

-- Applause

Welcome to the Assembly. Recognition of visitors in the gallery. Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, it gives me great pleasure to introduce a well-known, investigative and gutsy journalist from Iqaluit, Todd Phillips, of the Nunatsiaq News.

-- Applause

Welcome to the Assembly. Recognition of visitors in the gallery. Mr. Henry.

Thank you, Mr. Speaker. As I have often mentioned, it is difficult, from this particular location in the House, to see the gallery but if there are residents of Yellowknife South in the gallery, I would like them recognized, Mr. Speaker. Thank you.

Thank you. Recognition of visitors in the gallery. Mr. Ootes.

Thank you. Recognition of visitors in the gallery. Mr. Miltenberger.

Thank you. Recognition of visitors in the gallery. I would like to recognize Fred Koe, a former member. Welcome to the Assembly.

-- Applause

Item 7, oral questions. Mr. Ootes.

The question would have to be made perhaps to the Government House Leader, but I would like to ask Mr. Ootes if he might be able to rephrase his question because I am not too sure if the Minister can respond. Mr. Ootes.

Again, the Minister would not be able to respond until the question has been asked. Do you want to ask the question? Mr. Ootes.

I want to remind the Members that the budget address will be moved into committee of the whole for discussion. As of yet, we do not have a motion on referring this. Members are allowed to ask questions regarding this budget while it is still in the House. Once the motion has passed to put this in the items for committee of the whole, it will no longer become a question regarding this, there will be no questions asked.

Mr. Ootes, did you wish to ask a question to the Minister regarding the budget itself. Okay, just a correction. All tabled documents that are referred into committee of the whole, Members are not allowed to ask questions on them, with the exception of the budget itself. Members can ask questions regarding the budget itself, in the House or in committee. I am sorry but I was mistaken. Mr. Ootes.

Mr. Todd.

If any colleague wishes to ask a question of any Cabinet Minister, on any issue, there is some obligation, I suppose, for us to make an effort to respond and we will do so. Thank you.

Thank you. Oral questions. Supplementary, Mr. Ootes. No. Oral questions. Mr. Krutko.

Mr. Premier.

Thank you, Mr. Speaker. I have not been informed recently by the Minister of Health as to what the strategy of those talks are. I will raise the issue with him, and he will bring me up-to-date, honourable Member. Thank you.

Thank you. Oral questions. Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, my question is regarding Mr. Todd's budget address. I noticed in the 1997-98, the document provided by the Minister, and provided to all the Members that Mr. Todd is forecasting a surplus of $8,893,000 for 1997-98. That is a dramatic turnaround, Mr. Speaker, from 1996-97 where we had a cumulative deficit on the current books of $38,304,000. My question to the Minister has he been low balling the numbers to show a huge increase in the surplus, this dramatic increase? Will the Minister tell the people of the Northwest Territories?

The Minister of Finance, Mr. Todd.

No, Mr. Speaker.

Supplementary, Mr. Picco.

Thank you, Mr. Speaker. Maybe, I would rephrase my question for the benefit of Mr. Todd, and his short answer today. I am getting tired of these little short answers. Can Mr. Todd explain why the dramatic turnaround from a $38 million deficit to the $8 million surplus for the people of the Northwest Territories? Thank you, Mr. Speaker.

Mr. Todd.

Yes, thank you, Mr. Speaker. Well, it is important to differentiate and that was something my honourable colleague did, given his previous experiences as community futures executive director between a balanced budget approach and the accumulated deficit. In fact, the accumulated deficit is the only place the balanced budget approach will come about based upon this budget being approved and the targets that we set together in committee with the ordinary Members. Thank you.

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

Thank you, Mr. Speaker. Mr. Speaker, the Minister has provided the Main Estimates for 1997-98, the surplus for the current year, $8,893. Can Minister Todd give us an idea of what he thinks the picture will be like the following year, for 1998-99?

Mr. Todd.

Thank you, Mr. Speaker. We are projecting, as I said, a balanced budget this year, subject to the budget being approved and the targets that have been set by Committee and by the Ministers. I think it would be imprudent of me at this time to make any public statements as to what I can project in 1999, because there are a number of factors out there that have to be taken into consideration, and if I had to do that I would have to qualify it by saying, you know, subject to et cetera, et cetera. So, perhaps I may be prepared to answer that question in the coming months or next fall. Thank you.

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

Thank you, Mr. Speaker. Mr. Speaker, the surplus of the $8,893, will Mr. Todd be putting that against the accumulated deficit of $56,586, as forecast?

Thank you. That was your final supplementary, Mr. Todd.

Sometimes, you can lead a horse to water, but you cannot make it drink. Anyway, if Mr. Picco will take the time to read the financial statement, he will see that any surpluses that are determined are charged up against the accumulated surplus.

-- Applause

Thank you. Oral questions. Mr. Miltenberger.

The Minister of Finance, Mr. Todd.

Yes, thank you, Mr. Speaker. Mr. Speaker, the party responsible for determining the costs associated with Footprints in the Snow 2, I believe, would be the NIC. We have a significant amount of obvious fiscal data that we would be prepared to share with them, but I would see them taking the lead on determining the actual costs associated with the design that they have provided us with.

I think it is important, as I have said last week and I said in the budget address, that it is incumbent upon the federal government and the NTI to come forward with their response to Footprints 2, and now. We hope that they will call for action, so that we can then work on appropriate compromises, what the basic framework of the new Nunavut government would be. I am prepared then to get on with a much more aggressive approach to costing it and determining the associate interim costs on the basis required to get it going. Thank you.

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

Mr. Todd.

Thank you very much, Mr. Speaker. Excellent question by my honourable colleague from Thebacha. The fact of the matter is, any operation/maintenance costs, not the capital costs, only operation and maintenance costs, on infrastructure, that is going to go into a decentralized government, has to come from the federal government, from what we call on the incremental side. The responsibility, as I said in the budget, and I have said consistently, and I am speaking with Mr. Martin, has to come from the federal budget. It is important on this serious question being asked and the serious discussion/debate that is taking place, on a serious issue, that we get some clarity as to the position of our partners, as to the framework that is being suggested in Footprints 2. Naturally, that is what we are pushing for right now. Once that is done, I

think we will be in a much better position to determine the associated costs and of course the additional funds that are required because it is in a decentralized format. I hope that answers his question. Thank you.

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

Mr. Todd.

Thank you, Mr. Speaker. I am fairly confident that the NTI response that we have received, it is my understanding, I was talking to some people on the plane last night that there is a major meeting in Coppermine going on this week. One of the issues on the agenda for the Nunavut Tunnagavik Incorporated, I believe, is the response to Footprints. The Premier, I believe, has corresponded with the Minister of Indian Affairs, asking him if we are going to get a comprehensive response from the federal government. We do not know what that is going to be at this time, or we do not know if in fact we will get one. I am fairly optimistic that we will get NTI's and we will have to push hard for the federal government's. If we get that, then I think there could be substantive progress made in the February meeting in Cambridge Bay. If we do not get that, I would obviously have to seek counsel from my colleagues in the Nunavut Caucus and seek some direction from the Premier as to what course of action we want to take. Thank you.

Thank you. Oral questions. Oral questions, Mr. Ningark.

Thank you, Mr. Speaker. Mr. Speaker, as I indicated in my Member's statement earlier, we have about 13 homes in the community of Gjoa Haven, and we have about five homes in Taloyoak without the benefit of a running water system. It is not an uncommon sight in a small, remote community in the eastern Arctic, I am sure, as well in the western Arctic, to be walking down the street in a community, past homes without running water on the same street that you see government style homes, that are vacant, with a running water system, with furnacing, with all the comforts of a home that we expect to see in a community.

Sometime when we talked about long range planning, we talked about looking over that horizon. Sometimes we tend to forget the real issues, the real situations in the community, the smaller communities especially. My question, Mr. Speaker, is directed to the Minister of Housing, Mr. Arlooktoo. When does the government plan to address the homes in Gjoa Haven, and Taloyoak, that have no running water? The request has been made some time ago. I am wondering if the Minister will, in this case looking at the brighter financial future of this government, address the need of the community of Gjoa Haven and Pelly Bay, in the area of homes without running water systems? Thank you.

The Minister responsible for the NWT Housing Corporation, Mr. Arlooktoo.

Mr. Speaker, as the Member indicated, this is not the first time that he has brought up the issue. He has spoken to me earlier this year about it. I am well aware of the housing situation in Gjoa Haven. Houses without running water in that community are the inventory of northern rental housing units that were turned over to the housing corporation from the federal government, and at this point in time we have set aside about a quarter million dollars for the Kitikmeot area, as its share for improving and modernizing those units. I am told that the majority of that funding will likely go to Gjoa Haven this year. On the issue of empty staff houses, we are aware that in a few communities there are empty staff housing units that are vacant, ones that we have not sold, or are not going to sell. As the Finance Minister said, the financial board secretariat is in the process of transferring them to the housing corporation, and the housing corporation will soon be transferring those to the local housing organizations to be used as social housing.

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

Thank you, Mr. Speaker. Supplementary. I would like to thank the Minister for his positive response, but the term he used "likely", gave very little comfort to communities of Gjoa Haven and Pelly Bay. Mr. Speaker, we are, in fact, building access units left, right and centre. Mr. Speaker, we are retrofitting homes with running water systems. When will the Minister address the real problem in Pelly Bay, in Gjoa Haven, and Taloyoak? I am not comfortable with the term "likely". Will the Minister do it, and when? Thank you.

Mr. Arlooktoo.

Mr. Speaker, the materials for the Gjoa Haven houses will arrive this summer and the work will begin shortly after that. Our limitation is with funding. We have very little funding for modernizing these older units. The federal government has effectively cut off all funding to improve those houses and therefore we are left to find our own funding from the territorial government. We are taking some action. We are spending a quarter million dollars in the

Member's constituency to improve these houses, and that is the best we can do for now.

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

Thank you, Mr. Speaker. Supplementary to the honourable Minister. Will the Minister assure this House that conditions like the housing situation in Gjoa Haven and Taloyoak will be addressed during the coming summer? Thank you.

Mr. Arlooktoo.

Mr. Speaker, the communities in the Member's constituency, as well as all other communities, are participating in the housing needs survey that we are doing at this very moment. Early indications are that we have an immediate need for over 3,500 new units, just to address today's needs. As the Finance Minister said in his address to the House, we have nowhere near that amount of funding. We are doing what we can to understand and to find out exactly where the needs are. Then we will use what little funding we have to address those.

Thank you. Oral questions. Final supplementary, Mr. Ningark.

Thank you, Mr. Speaker. Mr. Speaker, there is a demand for housing in the NWT, and we can realize that, and I can relate to that. Because people are living in homes without running water, are these people in fact living in condemned homes? Thank you.

Mr. Arlooktoo.

Mr. Speaker, I would not be able to comment on any specific house without seeing the case, but the northern rental units that are being used without running water are not condemned homes. They do not have the shower or bath facilities that we would like to see in houses to meet health standards. We are doing the best we can to improve them and to put running water into them. As I said, we need them to house the people that are in the community, and it is going to take some time to catch up to what we need to fix them up.

Thank you. Oral questions. Mr. Erasmus.

Thank you, Mr. Speaker. My question is for the Minister of MACA. It is in relation to community empowerment. I am pleased to see, from the Finance Minister's budget address, that this government is still committed to the community empowerment initiative. We had been told in the past that this government was looking for someone at the assistant deputy minister level to work in this area. We all know that the communities are suspicious of the community empowerment initiative. We have all been anxiously waiting to see who that person would be. We know we are probably going to find a familiar face that communities can trust, that they know is honest to deal with.

I know that there have been about 200 people in Yellowknife laid off this year alone, and numerous others in other communities. I know there are a lot of people out there, and I would like to know if there has been someone at the assistant deputy minister level, or there-abouts, that has been hired to work at community empowerment? Thank you.

The Minister of Municipal and Community Affairs, Ms Thompson.

(Translation) Thank you, Mr. Speaker. In regards to a deputy minister, or ADM, who will be responsible for community empowerment programs, maybe I will say this in English. (Translation ends) An offer has been made to Mr. Graham Murchie from Vancouver. I felt having two masters degrees, well qualified, also having 20 years of management and planning experience with municipal, state, provincial and federal levels, and also extensive experience in teaching and leading workshops, would be beneficial to all the communities in the Territories. We did interview people from the Territories, but the offer was made to this candidate who was considered both qualified and suitable for the position. We hired the best person for the job. Thank you, Mr. Speaker.

Oral questions. Supplementary, Mr. Erasmus.

Thank you, Mr. Speaker. I wonder if we could get a short explanation of what this person's job is going to be?

Ms. Thompson.

Thank you, Mr. Speaker. We will table the job description as soon as I get it. Thank you, Mr. Speaker.

Oral questions, supplementary, Mr. Erasmus.

Mr. Speaker, it is disheartening to hear that, or to infer from the Minister's statement, she does not know what this person is going to be doing. However, will the new Mr. Murchie, be travelling to the communities to talk to the people in the communities?

Ms. Thompson.

Thank you, Mr. Speaker. I did not say that I did not know what this person is going to do. The ADM position will have a major leadership role in insuring overall success in the government's community empowerment initiative. If the Member would like a description, then I will be tabling that. This person will certainly be travelling to the communities and meeting all of the regions. Thank you, Mr. Speaker.

Oral questions. Final supplementary, Mr. Erasmus.

Thank you, Mr. Speaker. The Minister had indicated that they hired the best person for the job, but I had also indicated that we laid off over 200 people in Yellowknife alone, and many from the communities. This government, as I understand it, still has a policy of affirmative action, and they are developing a northern employment policy. I would just like to know if MACA is still following the affirmative action Policy. Thank you.

Ms. Thompson.

Thank you, Mr. Speaker. An open competition was held to staff this particular position, with ads appearing in newspapers in western Canada, and throughout the Northwest Territories. The competition closed on November 22, 1996 with 23 northern applicants, and 37 applicants for a total of 53 applicants. The screening criteria was consistent with the qualifications set out in the advertisement, and after interviewing northern applicants and southern applicants, we made an offer to this person because we felt he had the best qualifications for the job. Thank you, Mr. Speaker.

Thank you. Oral questions. Mr. Steen.