Thank you, Mr. Chairman. For the interest of Members who may not have had an opportunity to catch all your comments. I would suggest you make a copy of that available for all Members.

Agreed.

Thank you, Mr. Chairman. Very brief. The proposed expenditure budget for the Department of Finance for '97/98 is $9,351,000, which is 9.5 percent less than the revised budget in '96/97. The revenue budget is $1,011,639,000. The Department of Finance has four principal roles. First, the department is responsible for the management of over 85 percent of the government's revenues including negotiating and administering the formula financing agreement with Canada. The department develops and analyses tax policies, administers tax legislation, regulations and agreements and collects property, payroll and tobacco and fuel taxes for the GNWT. A second departmental responsibility is the management and preservation of the government's financial assets. The department carries out the activities of comprehensive cash management borrowing, banking and insurance. Third, the department develops, interprets and distributes statistical data about the Northwest Territories. Comprehensive statistics are critical to establishing and evaluting the program of the government to meet the needs of the people of the Territories. Fourth, the department represents the govenment in federal and interprovincial discussions and negotiations relating to fiscal tax and the statistical mattrers. Te 1997/98 main estimates of the Department of Finance included two responsibilities which were transferred from the Department of Safety and Public Services during the year. First there is the responsibility for insurance registries and the collection of insurance premium taxes and insurance license fees and second, Mr. Chairman, is the responsibility for the Liquor Licensing Board and the Liquor Commission. Thank you.

Thank you, Mr. Steen. Mr. Steen, the committee members were glad to see that the Minister had put on hold any plans to amalgamate the Department of Finance and the Financial Management Board Secretariat. Should this option be raised again in the future, the committee looks forward to discussing it again with the Minister. On the payroll tax, the standing committee and the Minister of Finance discussed issues related to the payroll tax in great detail. During the review of the business plans, committee members discussed the possibility of eliminating the tax and the associated costs of living tax credit due to the relatively small return compared to the administration costs of the tax. However, the potential increase of fly-in and fly-out workers which would occur with increased mining activities in the Northwest Territories is a development which merits further analysis. The standing committee understands that the Minister and the department are reviewing various revenue-generating options and look forward to discussing any possible initiatives that might arise from that review.

Discussion also took place on the continued non-payment of the tax by the Dene Nation. Committee members will continue to monitor these with the Minister. Borrowing costs. With the revelation that the deficit for 1995/96 is lower than was forecast, the Department of Finance will show a significant reduction in borrowing costs from previous estimates. Revenue forecasts for 1996/97 are up both from taxation and from the grant from Canada. This will help off-set any expenditure slippage. So is the report on the Department of Finance for the Standing Committee on Infrastructure. Mr. Chairman.

Agreed.

Agreed.

Yes. Thank you, Mr. Chairman. With me is Miss Margaret Melhorn, who is the director of fiscal policy. Mr. Nielsen, I believe is indisposed -- not feeling very well -- so Miss Melhorn of course is very active in the fiscal policy of this government. I am sure the questions I am unable to answer, she will be able to do so. Thank you.

Thank you, Mr. Chairman. Mr. Chairman, just after doing the response we did, the department, the Infrastructure Committee, I just have a quick question or comment basically, on the federal cutbacks. For 1995/96 the formula financing grant was frozen at its 1994/95 level. For 1996/97, the formula's gross expenditure base was reduced by a further 5 percent. I guess these unilateral federal decisions are expected to cost the Government of the Northwest Territories about $170 million over the four year term of the agreement. In addition, the cost of the provincial government spending will also have a negative effect on the grant through formula financing and the escalator. The federal fiscal situation will require close monitoring of the Formula Financing Agreement to maximize the GNWT's entitlements. I would like to know after Mr. Todd's recent meeting with Mr. Martin, can he update the House and the people of the Northwest Territories on any further meetings he is going to have and basically where we are now with the gross expenditure base for this Territory as we head into division and for the two Territories and beyond? Thank you. Just a general comment on the formula financing gross expenditure base. Thank you, Mr. Chairman.

Agreed.

Yes, thank you, Mr. Chairman. Good question, very statesmanlike by my colleague, Mr. Picco, in his new glasses and suit. There was a meeting January, 9th, 1997 with respect to the formula and, of course, the issue we have really is the floor, not so much the ceiling, trying to ensure any future cuts to provincial and local government spending does not impact on our formula until 1999. I felt reasonably assured that Mr. Martin was sympathetic to our position and in fact did instruct his department to once again discuss this issue with our department officials and one meeting has taken place. While no arrangement has been made, I think there is a political understanding that an accommodation has to be made. As those negotiations proceed, I will only be too happy to keep the house involved or advised and of course, my good friend from Iqaluit, will keep him abreast of this important issue as we move on. I indicated in the House, as you know when I returned, that we have not signed off the agreement which gets concluded in 1999 because of the floor. As I say, we are moving expediously to seek an appropriate resolve in compromise so we can sign off this agreement and protect the base that is in place at the present time. Thank you.

Agreed.

Agreed

Agreed