Well, I am obviously not as knowledgeable about RFPs as I should be, but my honourable colleague, Mr. Arlooktoo, really handles most of those. No, a

negotiated contract is with one party. The Cabinet makes a decision to negotiate with company A and to make an arrangement to ensure that there is a balance within the economic constituency where there was not historically in this government. I think we have achieved a great deal over the last ten years in some of these negotiated contracts with aboriginal groups in providing a balance within the economic constituency. I have to get that in because I think it is important to say that. On the RFP, it is a publicly tendered, if you want, process where anybody can put forward with their request for proposal. It is not in my opinion, anyway, a negotiated arrangement approved by Cabinet. Negotiated arrangements are approved by Cabinet. RFPs are issued by departments. Thank you.

Well, as my honourable colleague knows I respect his frequent and wise council on many of the policies that relate to this government. In fact, every morning, Mr. Chairman, I listen intently to the guidance he gives me and try to make adjustments accordingly as I move forward to give my advice to the Premier and Cabinet. So, my colleague has a significant influence in the way in which this government's policy are undertaken. The question in respect to capital that is taken out, how does it get back in? Again, it could be for a variety of reasons. If it does get put back in, it would either get put back in under a number of ways, a special warrant, supplementary appropriations, et cetera. We do it all the time. It is common business practice with this government that where there is a requirement for additional dollars, there is a project or a program that requires it. It is justified. We do it, and then we bring it back to committee through the supp and back to committee through this House. On the program side we approve $4 million worth of reprofiling health care two or three weeks ago. That is one example. That is just the reality of the FMB and the Cabinet doing the job that you have tasked it to do. But, it is certainly not done in isolation of the wise council and the frequent advice that we get not only from MLAs as individuals, but in terms of the committee and the House that ultimately has to approve the supp. Thank you.

That is a fairly sweeping question to ask so I am going to take some time to answer it if that is okay with you, Mr. Chairman. We got into this government two years ago. We had $150 million problem. We had, in fact, a $230 million problem because of gross expenditures that were over $40 million a year in the social envelopes. No question about that. We had to undertake unprecedented change against all odds that were facing us. People did not want to give up wages. The NWT Construction Association did not want to give up capital. No one wanted to give up programs, et cetera. So we had to make tough decisions, and we made the tough decisions where we took the monies from each of the programs and each of the envelopes in government. We tried as much as possible to protect social envelope. We have an obligation and responsibility to protect your weakest link. We want to make sure that people on income support, the people on low wage, et cetera were being protected and contrary to what we have heard over the last two years. The

fact of the matter is we only took 1.9 percent of the total social envelope budget out of that budget while we had to take the rest of it out of areas that were stronger. Yes, we had to take it from the capital budget. Where else would we have taken it from. Health care? Did not want us to do that. Education? Did not want us to do that. Public, sure as heck did not. So, somebody had to make the tough decisions and we had to make them fast because if we did not make them fast, today we would be sitting with $200 million accumulated deficit, paying about $40 million in interest payments, et cetera. So these decisions were difficult and they did clearly have an impact on the investment community, on employment of northerners, et cetera.

I do not think that we have secured our financial future. I think that all we have done is balance the budget, and we have ensured that for our future generations and for my kids and my neighbour's kids at least there is not going to be any debt while this Cabinet is in office. What we have got to do over the next 18 months or two years that is left is do exactly that. Create an economic environment that provides new investment to replace the government dollars that are no longer there. Let me remind everybody, the federal government cut us $60 million on an annual basis. Forced growth was costing us $40 million because of population explosion, health care, education, social and income support, et cetera. These are costs that are not controllable. These are costs that in some cases we are legislated to pay for. That was the dilemma that we were facing, all of us and we all cooperated, however, reluctantly some of us, cooperated to do exactly that.

Where are we today? Today we are in a position where we have a tiny, tiny surplus of $9 million that is going directly to the accumulated deficit. We are moving forward with Mr. Kakfwi's department and others to try to find ways and means to secure and improve the economic conditions that exist in this country. To do that, what are we going do? It was pretty darn obvious to most of us, and certainly to me that if you have less government dollars and if the government, historically, has been the engine of the economy and growth in this country, including Yellowknife, with office buildings, and the towers that are up there which all came about because of government spending, then we have to find alternatives. To find alternatives, you need to provide an investment climate on a level playing field that is going to attract, outside money coming north to make it work for northerners. That is what we are trying to do, and that is what some of us have been trying to do for the last two years.

What did we do? We did not increase the corporate income tax. We kept it at the second lowest in Canada. We made no increases to the personal income tax, we kept that at a fair and reasonable rate. We are going regulatory reform in an effort to cut red tape, so that small business and big business can proceed and get out there and replace government jobs that we can no longer can afford. We reassigned $16 million and levered it to $32 million in an employment strategy for those on the bottom end of the scale, the people who need it the most, the ones who do not have jobs. We have moved aggressively, and everybody knows what my position has been on the diamond valuation and sorting and the diamond industry as a whole. We are under discussions with Mr. Martin, right now, in an effort to increase the tax window for this government, so that we are not penalized every time we manage to improve our fiscal position by the nonrenewable resource industry. We are trying to move effectively forward with division to ensure that has adequate levels of funding so that the two new governments can operate and function with a level of comfort and a level of service and standards that we have become accustomed to.

It is certainly my intent, with the support of the Premier and my Cabinet colleagues, to move forward very aggressively on trying to create an investment environment that will bring new and existing money into the territories and make it work for northerners. On the more, on the smaller side of the scale, we went out and we did the Aurora Fund, which brought in somewhere between $25 to $30 million new investment capital. We are out there right now on a second Aurora Fund in an effort to find new capital dollars for northern business. We are examining, and I do not want to divulge it now because I have a budget to do in January, but we are examining some tax structure that may make this a more attractive environment. We are looking at the possibility of bringing forward some tax credits and RRSPs, if they are invested in small business, et cetera. The difficulty for all of us was, and the fact of the matter is, historically, government spending has been the engine of the economy, and it was very difficult for many of us, including myself, to make the adjustment that it no longer is going to be.

I think we have a fairly aggressive plan in place to hopefully provide an environment, because that is what governments do, provide environments, for the dollars to be replaced by some form of investment dollars whether it is in the form of tax windows with a nonrenewable resource base, in particular, our friends in the diamonds, or whether it is to invest in a small business, like some of my colleagues in the House here, or others out there. It has been an uphill battle because there is an environment of unease, which I recognize, particularly in the investment community because of the dramatic changes that took place both in the budgetary exercise and now with the unease and uncertainty with respect to division.

It would be difficult at the best of times to create a stable, creative, investment environment. Never mind the fact that we are cutting and now dividing. It is not as cut and dried as I would like it to be, but certainly there is a genuine effort on our part to try to address it as quickly as we can. I do not know whether that helps my colleague or not, but it certainly gave me the opportunity to get it off my chest. Thank you.

Thank you. I would like to remind Members that we have still have five Ministers to review for today. We started reviewing yesterday, but we only reviewed three out of the eight Ministers. When Ministers respond to Members, try and make it brief. Thank you. Member for Yellowknife Centre, Mr. Ootes.

Thank you. Minister for Finance, Mr. Todd.

Thank you, Mr. Chairman. I have said on several occasions in the House and today, that it is my intention to meet with Mr. Martin and Ms. Stewart on Monday. I do not want to... I know I am saying this like this is the meeting, so I have to qualify it by saying that Mr. Martin did request the meeting in an effort to try to reach some agreements on some of the issues this government is currently under negotiation. Obviously, division and the cost of division is a very important one, and I think there is an acknowledgement that there is a requirement for some speaking and discussion at a political level.

At a technical level, when the technocrats get to the table, we have managed, at least to date, to keep the coalition of northern interest together through working very hard, through reaching compromises with each other and through it all, understanding that we all have a common goal. The goal has been asserted many times. The Premier said there should be a reason to celebrate on April 1, 1999, and we want to make sure that happens. For us to celebrate on April 1, 1999, we need to ensure there are adequate levels of funding for the two new governments. Certainly the officials level is working hard to try to reach an arrangement where I believe I am comfortable enough, and I am sure the Interim Commissioner and others are comfortable enough to go forward to Mr. Martin and say this is the number that we require and to be able to substantiate that number in a very professional, concise way and see if we can reach an arrangement by March 31, 1998, a year ahead of division, so that we know, clearly, what monies are available for the two new territories on April 1, 1999. Thank you.

Thank you. Question. Mr. Ootes, Member for Yellowknife Centre.

Thank you. The honourable Minister, Mr. Todd.

Well I can tell him, the successful proponent was the low bid.

Thank you. Question number four, Mr. Ootes.

Mr. Todd.

I would have to check with my department on this particular issue. I knew it was one of concern by both Mr. Henry, which is understandable, and Mr. Ootes. I was advised by my department that a low bid was the reason for this contract being awarded to a Hay River firm. What was the question again, Mr. Chairman.

Thank you. Mr. Ootes, will you repeat or rephrase your question? Thank you.

Thank you. Mr. Todd.