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