Thank you, Mr. Chair. The discussions the Department of Transportation has been having with communities in the Keewatin have been in terms of applying the Business Incentive Policy as part of any transfers. The issue of GST, though, is interesting in that the rules that will apply to communities after transfers are different than the rules that apply to the GNWT. In some cases insurance premiums and deductibles are different. The case of the application of

the GST or excise taxes on fuel is different as well. So, the approach that is being taken is to be very open with all the communities in any of these discussions to show and put all of the information on the table, so everybody can see what the financial implications will be to communities and what funding is available within the GNWT for these transfers.

On the one hand, there may be extra costs. One of the objectives for the transfer is to achieve savings through consolidations of assess management at the community level and to identify those potential opportunities for greater efficiencies by consolidating some of these activities through transfers at the community level. In the end there should be a net gain to the community as a result of these empowerment transfers. The increased GST cost is recognized, but it is brought into the presentation and the discussion and analysis that goes into coming up with transfer agreements that are developed. Thank you, Mr. Chair.