Thank you, Mr. Chairman. Mr. Chairman, the department's budget for 1997/98 must be seen in the context of the government's larger priority to balance this budget and eliminate the deficit prior to division. It has been a difficult budget to prepare. It represents an overall 14 percent reduction in the Transportation portfolio. The department's budget dropped from $99 million in 1996/97 to $85 million in 1997/98. This is a combined capital and O and M reduction for the next year of $14 million.

In the transfer agreements, the Department of Transportation has negotiated since 1989 with the Government of Canada. It has taken on responsibility for the construction, operation, and maintenance of 45 public airports and 2,200 kilometres of public highways. The territorial system of transportation infrastructure represents a long-term public investment with a replacement value of approximately $2 billion. Mr. Chairman, despite the budget reduction, the Department of Transportation retains responsibility for the upkeep and maintenance of a much expanded public transportation system. Meeting the reduction in its 1997/98 budget will require the department to reduce its maintenance operations and levels of service across the system. We will not be able to provide the services to the public as we have in the past. The department's capital program has been reduced from $42 million in 1996/97, to $30 million in 1997/98. This is a substantial reduction. At this rate of capital spending, the department can meet only a third of its capital requirement, as identified in 1994 transportation strategy update. It no longer has the resources to make many needed improvements in the transportation system.

I would like the Members to know that in prior years, the Department of Transportation has moved capital from its highway programs to its airports and community marine programs. This was done principally to take advantage of one time cost-shared federal infrastructure agreements that came with the airport transfer in 1991, as well as the strategic transportation infrastructure agreement, or STIA, of 1993. As airport and marine projects are completed and cross sharing agreements come to an end I hope, in future years, to return capital to the highway program.

On other matters, I have more positive developments to report. The Department of Transportation is moving along well with the community empowerment initiative. All seven communities in the Keewatin region, as well as several more in other regions, have expressed interest in taking over responsibility for their airports. I fully expect several airport transfers will take place over the next few months. The department continues its work on the transportation agenda, to develop partnerships with aboriginal groups and the private sector for the construction of new northern roads.

The Department of Transportation is an active participant in the national program Vision 2001, to improve road safety in all the jurisdictions across Canada. Specific initiatives include: the national occupant restraints program to increase the use of seat belts and child safety seats, the strategy to reduce the impaired driving, aims to reduce highway fatalities and injuries through enhanced enforcement measures, and public awareness campaigns.

In closing, Mr. Chairman, I have heard the Members of the Legislative Assembly commenting on the government's budget reduction measures and calling for fairness and equity. I want to assure the committee that in deciding on the reductions detailed in this budget, I have done my utmost to achieve fairness in equity. The fairness in equity we strive for is the efficient operation and balanced delivery of programs across the territorial public transportation system. I hope the committee will agree that we have done this. With that, Mr. Chairman, I conclude my remarks. Mahsi cho.