Oh, I think that it would, you know. Depends on your political ideology. It all boils down to that. I think the federal government, I suspect, would probably like to see us raise the taxes. My position has been and will stay, as long as I am in the job, that given the cost of living and the cost of operating, I am not prepared at this time to raise taxes to generate, at least certainly on the corporate or personal income tax to raise revenues. I think we need to maintain and run government more cost effectively. That is the first way in which to bring our fiscal position in order, our house in order.

If there is a requirement down the road that certainly we would not close the door. If there is a requirement down the road to look at how we would do that, I would be prepared to consider that. You know if I increased personal income taxes, by five percent that gives me roughly about $1.3 million, so that is five times 1.3 so I am going to get $8 million. Of course, I am going to aggravate every single person there is in the Northwest Territories working for a living and the cost of living associated with working for a living. So I do not think, as we move into 97/98 it would be appropriate at this time. The other thing is the volume of dollars associated with it are not significant enough to have an overall impact on our fiscal position. I think it would impede growth, not add to it. Thank you.

Not since I have come to office.

Thank you, Mr. Chairman. Following up on Mr. Roland's comments, last year and in this proposed budget when it is passed, the Territories will have eliminated approximately, for round figure's sake, 900 positions. The related positions in each community that will also disappear will have a substantial reduction in the amount of taxes received by the federal government. The Minister has confirmed in this House that the reduction in taxes going to the federal government does not impact the formula financing. We still get the full amount of formula financing. My question is, at what time or what point does the federal government say, okay look we have a formula financing in place, we were collecting this amount of taxes, we are not collecting this amount of taxes now, we are going to cut back again?

It does not work like that. You make an arrangement between two governments for a formula based upon some formula, determining what the level of funding is. Revenue is a part of it, I agree. But once you sign off on the deal, you sign off on the deal and we are close to signing off on a deal right now, when we determine an appropriate floor in the formula that I was discussing with Mr. Martin on January 9. So it is not a question when you go talk to the Finance Minister and say that your revenues, when you are getting 74 to 76 percent of your revenues from the federal government, and then the federal government recognizes some of the difficulties that arise from running a constituency like the Territories. It is more a concern to ensure that there is adequate money within the formula and as the previous Finance Minister did get provision within the new formula arrangement for a 20 percent tax window that would not impact on our formula financing arrangement. Correct? And that is applauded to the previous Finance Minister and of course the able staff like Margaret and Mr. Nielsen. So that is the way it is viewed. It is viewed, if you have not collected "x", we are not going to give "y". Thank you.

I think it is important to clarify that it is not the federal government that does not want to sign off, it is myself. The federal government would like to sign off, but I spoke to Mr. Martin, explained the difficulties that this Legislature is under, the unprecedented change that we have made to our fiscal policy, the cuts that we have made, and asked him for some leniency and some consideration for a floor, just in case there are additional, massive, unprecedented cuts in the provincial and local government spending. Mr. Martin, the federal Minister, agreed that we would go back to the table, see if we can establish a floor that would protect any further erosion of our base funding that we have until 1999. I am very pleased, if I can say publicly, that the federal Finance Minister was prepared to make that concession for us at this time, and negotiations are under way at the officials' level to try to reach an appropriate compromise or arrangement, so that we can sign this thing off and all live happily until 1999, fiscally.

You have to bear in mind that if you raise the tax, you have to raise the tax credit. The net gain, if I moved the payroll tax from A to B, if it is one percent and we change it to two, we are netting $700,000. We are just going to net double that because the reality is that, my position is that you cannot, at this stage of the game, for us to get our budgetary fiscal house in order, we have to contain spending, not increase taxes, particularly as it relates to payroll and to

corporate taxes at this time. That is not to suggest that that cannot change, but to increase the payroll tax means that I would then have to increase the tax credit to protect northerners. The net impact would be marginal. But I would be prepared to consider if somebody wanted to put forward a recommendation.

My first objective, the last 12 months, was to work closely with this House and many Members to bring our spending under control, to try to move towards a balanced budget based on fairness, on equity, and in as caring a way as possible. An inordinate amount of effort has gone into trying to manage the changes that we have to make on the fiscal side, the last 12 months. Now, I am prepared to, once this budget is approved and we have the difficult decisions behind us, that I am prepared to work closely with the committees, Mr. Picco's committees and others, at looking at revenue-generating initiatives. But frankly, the amount of energy and the time we put into trying to manage our way through this difficult fiscal period, very little time was put into the generation of revenues. I think we are prepared to work closely with the committees if there is a will there and a desire there for us to look in certain areas. I have said, and I will say again, categorically, I will not support taxation as it relates to charities and bingos and things of that nature. I would caution everybody on the VLTs. There is considerable opposition, for example, in Alberta right now to VLTs, et cetera. But there may be other areas besides that we can look at in terms of generating revenues that may have an impact on this government and I will make a concerted effort, once this budget is through, to stimulate debate and discussion with the committee on looking exactly at that. Thank you.