Thank you, Mr. Speaker. There is no doubt a weariness by the public with our deficit cutting agenda. However, many northerners know this is important, even if they do not like it. Hopefully, with this budget, we now have the deficit under control. The deficit elimination effort has consumed our attention for two budgets. Last year it was difficult, but this budget is even more difficult because such areas as staff cuts are more pronounced. We are dealing with the most difficult budget in the history of the NWT, as Mr. Todd said yesterday. I am certainly quite prepared to support the tough decisions that need to be made to eliminate this ugly problem. However, even if we balance the books this year, I understand we are not out of the woods yet.

We do not know what the federal financial cut backs are forthcoming, nor if we will encounter any disasters this year. Also, we have to remember, we still have an accumulated debt load of $50,000,000, which must be eliminated at some point. This debt load continues to cost this government several million dollars per year. Mr. Todd presented an interesting budget address, but I must remind everyone that $80 million was scooped out of the budget. I think it is important for the public to note where the cuts have been made. The operations and maintenance budget has been reduced by about $30 million.

The departmental reductions from 1996-97, to this budget are as follows, and I think this is of interest to the public, Mr. Speaker. The Legislative Assembly has been increased by, in the operation and maintenance end, the Legislative Assembly has been increased by $12,000, the Executive, the following are reductions, the Executive $5,889,000 reduction, Finance $974,000 reduction, Public Works and Services $8,188,000, NWT Housing Corporation $3,303,000, Education, Culture, and Employment $612,000, Transportation $4,380,000, Resources, Wildlife, and Economic Development $13,968,000. An increase has been proposed for the following departments: Municipal and Community Affairs $2,131,000, Health and Social Services $6,011,000, and Justice $1,201,000. The capital budget has been reduced by $50,000,000. The departmental reductions from

Thank you, Mr. Speaker. It is encouraging to get the Members back so quickly, and rather discouraging when we are speaking with a very interesting speech, but thank you, Mr. Speaker, I will continue.

The capital budget has been reduced by $50,000,000, the departmental reductions from 1996-97 to this year are as follows: Municipal and Community Affairs $10,600,000, Public Works $1,355,000, Health and Social Services $8,152,000, Justice $1,858,000, N.W.T. Housing Corporation $3,653,000, Education, Culture, and Employment $10,566,000, Transportation $12,086,000, Resources and Wildlife and Economic Development $2,260,000, and Legislative Assembly has been increased by $495,000.

We cannot continue to reduce the capital budget to that extent without serious long term implications and the Minister of Finance has said that yesterday as well, Mr. Speaker.

It is also important to refer to staff position reductions and they are as follows: headquarters 242 positions, Fort Smith 93, Inuvik 80, Baffin 37, Keewatin 24, Kitikmeot 13. I am very concerned about the amount of staff reductions, Mr. Speaker. The job reductions effect all constituencies and communities.

I would like to comment on the Minister's statement, that we have participants in the budgetary process. While this is true, I would like to explain that, in my case, like some other Members, this has been limited to a review of business plans for two departments and other Members for perhaps other departments. I did not have a hand in reviewing all the business plans of all the departments. And as we go through the review and approval process, I think that I will be very observant and ask a number of questions of the appropriate Ministers in those particular areas that are before us.

Going through this budgetary process is a very important step. It must be done by all of us as carefully as possible so we can tackle the next huge hurdle, and that is division. As we head towards division, we must be sure of our steps. From my constituency, division of the N.W.T. means a phenomenal amount of change. Yes, it is true, we have a diamond mine under construction. Yes, it is true, this will provide 600 permanent jobs. What is also true is that not all 600 employees will choose to live in Yellowknife. Many employees will be scattered in various communities, such as Hay River, Fort Smith, Rae, Edzo, Lutselk'e, Wha Ti, Coppermine. Yellowknife has been hit with this budget with the loss of 242 positions. Last year, about 200 positions were eliminated. Division will mean the transfer of several hundred more positions, and the economic impact of all this is very severe for Yellowknife, its business communities, and its citizens. Not only are we losing the positions, and many of employees, but our business community will also be, as times goes, hit with a substantial less demand for existing office space that is here now.

Speaking about division, Mr. Speaker, a big question that we need to urgently know, is: what will be the cost of operating Nunavut? And the Minister of Finance is well aware of our concerns and he also is very concerned about this, so that we can get on with identifying our incremental costs and transitional costs and making representations to the federal government to provide appropriate funding for this government for incremental and transitional costs, as well as the new, so that we in the west know what we can look forward to for funding for our government.

This is the second year that we have seen an increase in the social envelope expenditures. This year, the forced growth is $40,000,000. This area is out of control. Mr. Todd is right. We need to address this issue. As a percentage of total expenditures, the social envelope funding has increased from 58 percent in 1995-96, to 61.5 percent in this budget. We cannot continue to add to this envelope and take away from other programs. Otherwise, we will eventually have no other departmental programs.

The northern public has never had to face cut backs the way we have to deal with during our term. But this is reality. It is also real to me that the expectations of northerners will have to be brought down to a more reasonable level. In order to keep our costs at a sustainable, it may mean the public has to accept a lower level of service, or the elimination of some programs. We cannot depend on the federal government to fund us to the hilt forever. Currently, 80 percent of our revenues are received from the feds. We generate very little revenue from our own economic activity.

I am disappointed that this budget did not offer up any large scale economic thrust and very disappointed that the Premier's panel on the Economy did not bring forward a report that would enlighten us all as to what can be done to create jobs and to stimulate our economy. I appreciate that the concentration had to be on deficit elimination, but frankly we seem so engrossed with cutting GNWT staff, thus creating unemployment, and justifying the problems facing the social envelope area, that we are totally ignoring a sector of the north that can provide some solutions to a number of social problems.

We have to develop economic and job opportunities in such areas as tourism, mining, forestry, fishing, and the fur industry, and by small business. I hope the Minister of Finance will soon make announcements about the potential investment program opportunities stemming from the investment search work that was done last summer and a good initiative. We need to look at how we can support northern businesses more effectively, however. This government's role is multi-fold. It is to run an efficient fiscally responsible administration, but it is also here to improve the health lifestyle of its people, and in order to do this, this government must help people get out of the social safety net. My preference for a focus on job creation does not, however, necessarily mean I want to return to high deficits. There will be no argument from me that our government has to continue to act in a fiscally responsible way. I am sure there is not a desire, by anyone here, to return to the past of budget deficit. Thank you, Mr. Speaker.

-- Applause

Mr. Speaker, I would like to present a petition dealing with the matter of recent budget reductions at Thebacha campus. Mr. Speaker, the petition contains 395 signatures, and Mr. Speaker, the petitioners request that the government and the Minister of Education, Culture, and Employment, reconsider its decision in regards to cut backs in the education field, specifically as they effect Thebacha campus of Aurora College. Thank you, Mr. Speaker.

Mr. Chairman, I would recommend that we consider Bill 8, Appropriation Act and general comments by Members, followed by review of the Department of the Executive and Finance.

Thank you, Mr. Chairman. Mr. Chairman, in my general comments to the budget I would like to address a few points that some Members have already spoken towards, but I still would like to address these points from my point of view as well. My first point is the overall picture that this budget gives to the general public is that at first glance it seems that this is a very good budget in the sense that we are now addressing the second phase and possibly the last phase of the cuts to the positions and the reductions to programs. In fact, that is what this budget is doing, but what has to be pointed out is that it will be a year before we know these results to cuts to programs and further cuts to positions.

Up to now, the government has put in place some reductions to programs already and I am sure most of the communities are still analyzing, since their fiscal years are just approaching their ends. They will only now realize whether they have survived this reductions in funding. For instance in the past year the government has reduced water and sewage expenditures by 5 percent to the hamlets and communities. The communities are still absorbing this and adjusting to it and of course the citizens in the communities as well have to adjust to this. There may be further cuts to this in the communities that the hamlets themselves will have to apply in order to adjust to these cuts to water and sewage programs.

Now we are suggesting to them that there is going to be a roll back of 5 percent on overall expenditures for hamlets. This, at a time when there is an increase in power rates and an increase in fuel rates, is hard for the hamlets. At this point in time I am sure administrators are trying to adjust to see how they will put their budget in place to incorporate these cut backs and increased costs. So in this regard, the results of these roll backs and expenditures are not going to be really addressed completely or realized completely in the communities for at least a year or two. No doubt, as with other government expenditures, whenever there is a cut back it never comes back later. You never see the government put back money that they have taken away.

There is also the situation of community empowerment where communities are realizing that as they accept these programs, they are accepting them with less funding than the government used to do the same job. Many of them are reluctant to accept these programs because this is all the impacts of these cutbacks or reductions in costs and responsibilities as well, have not been analyzed completely and not been in place long enough for hamlets to really be able to make decisions at this time as to whether this was a good move on the part of the government. No doubt it was a necessary move on the part of the government, but the hamlets still have to adjust to this.

We talk about reform for income support. Well, the last I heard, the reform for income support was supposed to start January the 1st of this year. I have not heard yet from the communities whether this is in fact being done. Therefore, it is going to be a year at least before we start getting the full impact as MLAs from the general public as to these roll backs and cut backs to programs.

I have heard that there may also be cut backs to the O and M money for my alcohol centre in Tuktoyaktuk for instance. 50 percent cutback. Well if we are going to do these things we must do them in such a manner to allow these communities to actually put their budgets in place by the fiscal year of April 1st. They have the same fiscal year as we do. If we are going to do this, we must do this with enough information to the communities to adjust to this in time. And no doubt there is going to be negative responses from the people that work and deliver these programs because they would feel it is almost impossible to operate at those costs, effectively. So I guess in summary of this particular subject, on the budget, I would say that the reductions in program and positions will not be felt for a time yet and we can expect lots of negative response from the public especially in our ridings.

On the second topic that I wish to talk about Mr. Chairman.....

Mr. Chairman, the last time I looked at the number here I had seven minutes to go.

Do I have unanimous consent to continue?

Thank you, Mr. Chairman. I will continue. My second point is in regards to the governments plans to start addressing division, as suggested that they have now finished with the cut backs and roll backs. They are suggesting here there is many very important topics that have to be addressed in regards to division. I would like, Mr. Chairman, to address this point from the perspective that last sitting we were here before Christmas, we in committee of the whole talked about the governments response to NIC, and the response put through here was from the government with comments from the Members.

I recall at that time that I stated I was reluctant to impose my will on the Nunavut government or people by suggesting what form of government they should come up with. Therefore I put forward that I would support the government's position provided that we are not going to impose this on the Nunavut people but rather as an advisory capacity. Now that was my understanding of our approach to NCI's Footprints 2. Mr. Speaker, since that time and in this budget address, the Ministers suggested that we are going to come up with a new model ofgovernment which would fit both the Nunavut and the new Territories. Now I am not sure if I totally agree that as a Member that has a riding that will end up in the west rather or not I feel confident in my self that I would be imposing my will, if you may, on the design for the government of Nunavut. I am always under the impression, Mr. Chairman, that this is the responsibility of NIC and I thought we were advisors so to speak as to what they would come up with in the end as far as a design for a new government for Nunavut. Therefore I am reluctant to, and I am a bit surprised, I might say, to find out that this government is in fact designing a new model for Nunavut which is in fact going to be a new model for this new western territory.

I am not sure if we have the mandate to do this and perhaps the Minister could clarify that from his point of view, but nonetheless as a Member I would be very careful whether I approved such a model for Nunavut knowing full well that whatever I wish on Nunavut no doubt applies to me in the west. In other words, if I suggest this is a good model for Nunavut there is no doubt that I am supporting this model for the west. I am not sure if I am prepared to do that at this point in time. I am not sure if I am prepared to have the government spend that much time doing this at this point in time. Knowing that time costs money.

There is no doubt, Mr. Chairman, that if I as a Member whose riding will eventually end up in the west and if I feel reluctant, not only reluctant, I feel that I have no business designing a government for Nunavut, I would suggest does it also not stand then that the Nunavut Members and Cabinet should be reluctant to design a government for the west. Let us not forget the basic principle of good government. You do not design something you do not have to live with. Since I do not have to live with the results of my decisions in Nunavut. I wonder just how much the Nunavut Cabinet Members have to designing a government for the west because they will not have to live with their decisions either.

I am not suggesting this as a possible confrontation between east and west but it is obvious that at some point in time this has to be addressed. In the east, we could say very easily that NTI, NIC and the new commissioner would be basically responsible for designing the government and a new model of

government if they wish. But we do not have such a process in place for the west. Although there seems to be one slowly shaping up. It may be that would be the appropriate way to go. On the other hand, we could just leave well enough alone. In other words, leave the status quo in place and let the two new governments come up with a design that suits themselves after division. I have no problems with that. I do not understand why we are trying to fix something that is not broken. I do not understand that. There is nothing wrong with the existing government that I can see.

-- Applause