Good afternoon. Orders of the day. Item 2, budget address. Mr. Todd.

Mr. Speaker, it is with a certain sense of nostalgia that I rise before the House to present the last budget of the 13th Legislative Assembly of the Northwest Territories. With the tabling of this document, we will be putting the finishing touches on the fiscal history of the Government of the Northwest Territories.

At the same time, however, this budget looks ahead, not just for the next fiscal year, but the next century. The new policies and programs I am announcing today will help establish two strong and stable governments in Canada's north as we move into the new millennium. As we stand on the threshold of a new era, each and every Member of this Legislature can look back with pride on our collective accomplishments. Together, we made the difficult but necessary choices that have enabled us to regain control of our governments finances. We must now forge a future filled with promise for our children.

Mr. Speaker, I want to assure the Members of this Assembly and the people of the Northwest Territories that the future has never looked better than it does today. There is every reason to believe that the north will achieve its tremendous potential in the 21st century. For the first time in generations, events are taking shape that will allow northerners to assume their rightful place in Confederation.

First, there are the gains we have made since this government came to power that have created a climate of opportunity and optimism in the north. Not only have we balanced our budget, but we anticipate a small surplus proving we are capable of prudently managing our fiscal affairs. This kind of achievement instills investors with confidence that the north is a good place to do business.

As well, our business investment strategy has sent a clear signal to investors that they are welcome in the north. We are reviewing a number of initiatives to foster trade and investment that will bring new money and jobs into our region.

The settlement of land claims and most important, the creation of Nunavut and the new Western Territory, will create both certainty and opportunity. Collectively, these efforts spell better days ahead for the young people of the north.

Fiscal Overview

Mr. Speaker, the 1998-99 budget is designed to build on this progress. It is both responsible and compassionate, striking the right balance between responding to needs and seizing opportunities.

The Government of the Northwest Territories has worked hard to balance its books and achieve a stable financial base from which it can pro-actively deal with the needs of Northwest Territories residents. On a non-consolidated basis, the government finished the 1996-97 fiscal year with a $12 million deficit which kept the accumulated deficit to $41 million. To put this in perspective, $41 million represents approximately three percent of our annual spending, or about two weeks of operating costs.

In 1997-98, the government anticipates a small surplus and a reduction in the accumulated deficit. For fiscal year 1998-99, we will bring in our second consecutive balanced budget, with spending estimated at $1.161 billion and revenues forecast at $1.163 billion.

It is important to emphasize, however, that our net fiscal position could be impacted by the results of the current negotiations with the Union of Northern Workers regarding pay equity. As I have stated on a number of occasions, while the government would prefer a negotiated settlement to this issue, the outcome of the negotiations must be affordable to the people of the Northwest Territories. We cannot agree to a settlement that forces further job loss or program and service reduction to our people.

Mr. Speaker, this budget represents the prudent management of the financial resources of the Government of the Northwest Territories. It reflects the collective will of the Members of this Legislative Assembly to ensure that we live within our financial means. Most importantly, it enables us to put the two new territories on stable footing in their first few years of existence.

Division

We are at a pivotal stage in the north's development. A little over a year from now, the east and west will go their separate ways. While we will remain tied by our history, our heritage and our geography, each new territory will follow an independent path.

In the short term, however, it will be critical that we work in close cooperation. In bringing the promise of two new territories to realization, we must ensure that:

- services to our residents are not reduced or interrupted;

- assets and liabilities are fairly divided;

- commitments and contracts are honoured;

- staff are treated fairly; and

- the business of government continues without disruption.

We have achieved a great deal in this regard.

Of particular importance is the assurance of adequate funding for the two new territories. Our government has made it clear to the Special Committee on Financial Arrangements for Nunavut and the Western Territory that we believe the expenditure base of each territory should be determined separately, based on each region's requirements. These negotiations are not merely an exercise in dividing the funding currently provided to the Government of the Northwest Territories.

This government has completed extensive work as part of the discussions on financing arrangements after 1999. The special committee now has most of the information it requires to establish funding levels and financing mechanisms for Nunavut and the Western Territory. We expect to finalize the work of the special committee by early March to enable a federal decision to be made by April. It is crucial that funding levels be determined early so that work can begin on the preparation of budgets for the two new territories for fiscal year 1999-2000.

I am confident, Mr. Speaker, based on the discussions to date with the other northern parties and the federal government, including my conversations with the federal Finance Minister, the Honourable Paul Martin, that adequate funding will be available for the two new governments in Nunavut and the Western Territory. Overall, the creation of two new territories should have a very positive economic impact on the north.

Significant progress has also been made on the equitable division of assets and liabilities between the two new territories. A framework agreement laying out the principles to be applied and the methods to be used in this process has reached the final draft stage. We expect it will be finalized in early February and submitted for approval to the Interim Commissioner for Nunavut and the Government of the Northwest Territories. Discussions are also progressing on the treatment of the Northwest Territories Power Corporation and the Workers' Compensation Board post-April 1, 1999.

Mr. Speaker, I am pleased to advise that we are close to concluding several important protocol agreements with the Interim Commissioner. One agreement establishes how existing and new contract commitments made prior to April 1, 1999, will be reviewed by the Interim Commissioner and assigned to the new Nunavut government. This protocol is important to give businesses and financiers comfort that multi-year commitments can continue to be made and honoured. My honourable colleagues can appreciate that this agreement is of critical importance. It will ensure that there is no interruption in services to Nunavut residents given that many services are currently being delivered through contractual arrangements with third parties.

The second protocol agreement nearing completion concerns the transfer of existing staff to the new Nunavut government. As the House will be aware, the Deputy Premier, the Honourable Goo Arlooktoo, was able to reach general agreement with the other parties at the recent Nunavut Leaders Meeting that this transfer will be as seamless as possible.

Our staff represent our most valuable resource. It is only with their continuing commitment that we will be able to ensure that the creation of two new territories is a success. Both the Western Territory and Nunavut will be exciting and challenging places to work, offering many opportunities for career and personal development. Our staff and new leaders need to understand this and focus on forging new relationships based on mutual trust and respect.

Mr. Speaker, I am also pleased to confirm that we have reached agreement with the Interim Commissioner to implement a $4.24 million human resource computer system. The Office of the Interim Commissioner has agreed to pay 50 percent of the total implementation cost as well as its 40 percent proportion of the software licence fees. This leading edge, integrated system will reduce unnecessary duplication and overlap, both during transition and post-division, and will benefit both new territories.

In summary, I am convinced that we are on the road to ensuring that the creation of two new territories is a success and that we meet Premier Morin's objective of ensuring that April 1, 1999 is a day of celebration for both new territories.

Economic Climate

Mr. Speaker, economic growth is critical to the long-term fiscal health of both new governments. A stronger economy will provide new sources of revenue to support much-needed housing, food allowances, health care and other social programs for our rapidly-growing population. Just as important, a growing economy will provide jobs for our young people and unemployed.

The small business sector is increasingly playing a larger role in the national economy. Long-term growth in the north will also depend on incentives and investments to encourage the start-up or expansion of small and medium-sized northern businesses.

Investment in northern business is key to the long-term growth of our economy. Traditionally, small firms have had difficulty in accessing equity capital. This was examined in 1996 by the Investment Sub-Committee of the Standing Committee on Government Operations, which recommended that the government consider investment tax credits as a means of encouraging investment in the north.

I am pleased to announce, Mr. Speaker, that this government intends to introduce the Northwest Territories Investment Tax Credit Program, which will encourage the private sector to market shares of Northwest Territories businesses to northern taxpayers and encourage northern investors to purchase shares in up-and-coming northern businesses. Under the program, investors will be able to choose from a menu of investment vehicles: labour-sponsored venture capital funds; employee/labour-sponsored venture capital funds; community endorsed venture capital funds; and private new common share sales. Eligible investors will receive a credit against Northwest Territories income tax payable of up to 30 percent, for a maximum of $100,000 of eligible shares in any tax year. As well, northern investors may be eligible for Registered Retirement Savings Plan (RRSP) tax deductions. For example, an investment of $10,000 would result in a Northwest Territories tax credit of $3,000. In addition, if the investment is made through an RRSP, a further deduction worth up to $4,400 would be available. RRSP eligibility is, of course, dependent on the taxpayer's available federal RRSP room.

All funds raised will be used to assist in financing the start-up or expansion of Northwest Territories businesses. This program will allow for a maximum of $1 million in tax credits to be granted in 1998, rising to $5 million in the year 2000. If fully taken up, $5 million in tax credits would generate approximately $35 million in equity and debt financing in Northwest Territories businesses.

Mr. Speaker, in addition to the new Northwest Territories Investment Tax Credit Program, business development and job creation will be further supported by a $16 million infusion through the second year of the Northern Employment Strategy.

Through the combined initiative of the Minister of Resources, Wildlife and Economic Development, the Honourable Stephen Kakfwi; the Minister of Education, Culture and Employment, the Honourable Charles Dent and the Minister of Municipal and Community Affairs, the Honourable Manitok Thompson, funding for this program has been strategically placed to ensure a broad but balanced approach between short-term job creation and longer-term sustainable economic growth.

Since this program was initiated in June of last year, we have seen a number of measurable results:

- The Department of Education, Culture and Employment has provided support to the private sector and municipal employers to hire 863 unemployed students and youth.

- In the year-to-date, the Department of Resources, Wildlife and Economic Development has directly invested $9.5 million in economic development partnerships that resulted in cost-shared projects with a total value of $34 million. These projects stimulated 48,000 part and full-time work weeks of employment or the equivalent of 1,200 full-time jobs.

- The Department Municipal and Community Affairs has invested over $3 million in initiatives designed to prepare communities to take responsibility for their own governance and for the transfer of programs from the Government of the Northwest Territories.

Mr. Speaker, detailed reports showing the impacts of investment by program are currently being developed and will be provided to Members of this House for review. However, the results to date give a positive indication that we are meeting our intended goal of developing the economy and providing positive alternatives to income support through the creation of jobs and economic opportunity.

Resource Development

While we are committed to encouraging the small business sector, no sector of the economy holds more promise than the mining industry. Diamonds have, quite literally, become the jewel in the north's crown. For all our vast wealth in renewable and nonrenewable resources, nothing rivals the enormous job-creation and economic-growth potential of diamond development.

Mr. Speaker, this government is committed to ensuring that the north receives a fairer share of royalties generated by resource development. As things now stand, the federal government may earn up to $4.4 billion in royalties and tax revenues over the 25-year life of the first diamond mine while the territorial government will collect approximately $400 million. This ratio is clearly unacceptable.

At the same time, Mr. Speaker, we are committed to ensuring that northerners realize the benefits of secondary and value-added industries resulting from the mining of diamonds. Key issues related to the development of these industries include ensuring firstly, that a diamond sorting and valuation facility is established in a Northwest Territories community away from the mine site and, secondly, that northerners have preferred access to a secure and affordable supply of diamond rough.

It is for these reasons that the Minister of Resources, Wildlife and Economic Development, the Honourable Stephen Kakfwi and I met with the federal Ministers of Finance and Indian and Northern Affairs last fall to lobby for the establishment of the Task Force on the Canadian Diamond Industry. Working in partnership with the Government of Canada, we will develop a strategic framework to maximize the long-term benefits of the diamond industry for the north. We are particularly keen to explore opportunities for secondary and value-added industries that create new jobs for the people of our communities.

Mr. Speaker, also key to a greater share of resource revenues is the devolution of mineral, oil and gas responsibilities and royalties from Canada to the territorial government, a goal we are determined to realize over the long term. As well, we are dedicated to achieving the decentralization of the Northern Affairs program of the Department of Indian and Northern Affairs. Our government will continue to seek the transfer of federal employees from Ottawa to the Northwest Territories to ensure federal programs better reflect, and respond to, northerners' needs. This initiative is being led by Premier Morin, who has met on several occasions with the federal Minister of Indian and Northern Affairs to press this issue.

Mr. Speaker, as much promise as the diamond industry holds for the north, we also recognize the difficulties currently being experienced in the gold industry and the tremendous effect this has had on many of our residents employed in this sector. Falling gold prices have resulted in the shut-down of the Colomac and Lupin mines and the layoff of a significant number of people from the two gold mines in Yellowknife. We all recognize there is little northerners can do to influence world gold prices. However, this government is working with both the federal and municipal governments to assist workers and their families who have been affected by these events. In addition, we are working in partnership with the Government of Canada, the City of Yellowknife, mine management and labour to examine options that support the commitment demonstrated by Miramar to keep the Con Mine operating and contributing to the northern economy.

Mr. Speaker, it is also important to note the impact on these events on government revenues. Although we expect government's tax revenues to be negatively affected in 1998-99, our current Formula Financing Agreement with Canada ensures that approximately 80 percent of these revenue declines will be off-set by increased funding through the grant from Canada. The fiscal stability that this provides will help us weather the current downturn in world gold prices.

Public Infrastructure

Mr. Speaker, every bit as important as the economy, is our investment in the north's social and political future. We know now that we must address the root cause of economic and social conditions if we are to improve life for our residents. As my grandmother always used to say, penny wise, pound foolish. If we are to successfully address many of the current economic and social conditions that prevent improvements in health, community well-being, educational attainment and economic self-sufficiency, we must invest in areas such housing, hospitals, health centres and new roads.

Our attention to balancing our budget during the past two years has now enabled us to deal with the larger social and economic challenges facing the Northwest Territories. Although we must remain vigilant to avoid spending beyond our means, we now have some limited fiscal flexibility. By using our limited dollars to lever investments by others, we can achieve significant results.

Mr. Speaker, there are few areas where the need for strategic investments is more acute than in the area of public infrastructure. Federal funding cuts have forced us to reduce spending on infrastructure, from $200 million annually to the current level of $140 million. An additional $40 million has been lost through the reduction in federal social housing funding from the Canada Mortgage and Housing Corporation.

In response to this situation, the government recently commissioned a report to examine ways that funding could be levered to increase the amount invested in public infrastructure. Specifically, the report considered the potential for Public/Private Partnerships (P3) to be applied in the Northwest Territories. These partnerships have been widely used by over 100 countries to capture the best of both public and private sector capabilities.

Mr. Speaker, Public/Private Partnerships and other innovative financing approaches are not magic. They are simply a better way to finance investments critical to the enhancement of public infrastructure. We intend to learn from the lessons learned in other jurisdictions and ensure that these types of partnerships proceed in an affordable and transparent manner.

I am pleased to announce that this government intends to increase its current $140 million annual investment in vital public infrastructure by up to $100 million in each of the next two years. These additional projects are currently being identified and will be brought forward to the Legislative Assembly for consideration in March. By applying P3 approaches to public infrastructure investment, this additional investment should be possible without increasing our overall annual spending levels. Mr. Speaker, this increased investment will not only help address many of our critical social needs and lay the foundation for future economic growth but will provide badly needed construction jobs in our communities over the next two years.

One specific area of infrastructure development of great importance to the people of the Northwest Territories is our health care facilities. 1998-99 will be an intensive planning year for both the Department of Health and Social Services and the regional boards as they prepare to replace and enhance territorial hospitals in several communities.

Mr. Speaker, not only will we invest in infrastructure, we are committed to investing in northern people. We are determined that each and every citizen north of 60 will have the same standard of living and quality of life enjoyed by other Canadians.

At the top of the priority list is adequate housing. Research shows that overcrowded, overly expensive housing is a root cause of many of the Northwest Territories health, social and educational problems. These problems have been compounded by the withdrawal of federal funding for new social housing.

It is with great pride that I announce this government's Accelerated Home Ownership Program Delivery which will help address the north's current housing shortfall. As part of its increased infrastructure investment, the Government of the Northwest Territories is proposing to apply an additional $40 million to $50 million over the next two years to meet the immediate demands for home ownership assistance. This will allow the Minister responsible for the Northwest Territories Housing Corporation, the Honourable Goo Arlooktoo, to accelerate home ownership program delivery to help more northerners, particularly in smaller communities with a heavier reliance on public housing.

We are optimistic that this new program will result in upwards of 1,000 new housing units being constructed across the Northwest Territories over the next two years. In this way, existing social housing units will be freed up for those families with the lowest incomes while more people who qualify under the corporation's Expanded Down Payment Assistance Program and Independent Housing Programs will be able to know the satisfaction of home ownership.

The benefits do not end there. New housing means new jobs in construction and manufacturing, and all the spin-off benefits those sectors create. It also means that any government housing made surplus through new home ownership can be turned over to the Housing Corporation for public housing making more housing available to those facing the greatest hardship.

In Nunavut, we will be seeking the endorsement of the Interim Commissioner for these infrastructure initiatives.

Social Program Spending

Mr. Speaker, perhaps the most crucial area for investment is our children, the north's future. Each of us is only too aware of the damaging, long-term effects of child poverty.

I am particularly pleased to announce, in cooperation with the Minister of Education, Culture and Employment, a new Northwest Territories Child Benefit that will put more money into the hands of low income families across the Northwest Territories. As part of the National Child Benefit Program, announced by the federal government last year, the Government of the Northwest Territories has agreed to reinvest income support payments offset by the federal portion of the program and to supplement this with $2 million in additional funding.

Starting in July of this year, the Northwest Territories Child Benefit Program will provide a minimum of $330 per child to all families with net incomes less than $20,921. Families with at least $10,000 in earned income will receive $605 per year for the first child, $405 for the second child, and $330 for each subsequent child. The benefit will be phased out as income increases, but all families with less than $42,000 in net income will receive some benefit. In our estimate, almost 60 percent of the children in the Northwest Territories will benefit from this program.

A related, and equally important, initiative is the enhancement of Income Support Food Allowance. Nutritional food is critical to disease prevention, healthy development and children's school performance. The food allowance rates have not changed since 1992, despite changes to the road or food supply services in many communities over the years. This government will make $1 million available to adjust the rates paid for food within the Income Support Program and to ensure that communities are placed within the proper food cost zones. These funds will ensure that additional financial support is available to purchase food for northern families.

Conclusion

Mr. Speaker, this budget represents a fresh start for the Northwest Territories. It makes clear that the painful cuts and period of restraint are behind us. The stage is set for economic growth and prosperity.

The fiscal framework we table today will create the foundation on which to build two viable, financially sound territories. With these measures, we will ensure that businesses - large and small - can be confident that their investments will yield long-term returns.

We will ensure that the north is a place where young people can find meaningful and rewarding work. Where families are assured they can meet the basic needs of their children. Where there is hope and opportunity for future generations.

Mr. Speaker, the future will be what we make it. I have every confidence that, as we turn the page on both this century and this government's brief history, we will see a new north that flourishes in the new millennium.

Critical challenges still confront us. Yet, we have never been better positioned to overcome them. Now, let us work together and get on with the job. Thank you, Mr. Speaker.

--Applause

Thank you, Mr. Todd. Item 3, Ministers' statements. Item 4, Members' statements. Mr. Evaloarjuk.

(Translation) Thank you, Mr. Speaker. I would like to take this opportunity to congratulate some graduates for grade 12 in my constituency. In 1997 there were five graduates in Igloolik and in Hall Beach who graduated on December 27th, and I would like to thank their instructors especially in Hall Beach because this is the first program they have had in Hall Beach. I believe this program was conducted for five years in Igloolik. Thank you. (Translation ends)

Thank you, Mr. Evaloarjuk. Members' statements. Mr. Ningark.

Thank you, Mr. Speaker. Mr. Speaker, I will make a general brief statement on the Pelly Bay Transportation Assistance Program. Prior to 1993, a sealift service was not available to the residents of Pelly Bay. All the building materials, products, petroleum products and consumer items were flown into the community of Pelly Bay. In recognition of the high cost of consumer items, the transportation assistance subsidy was provided for the essential goods only, normally available through the sealift service equal to the public service rate to the nearest community to Pelly Bay, in this case Taloyoak. Subsidy was phased out since the introduction of the sealift in 1993. Mr. Speaker, up to this point in time, the hamlet council of Pelly Bay, together with the coop organization of Pelly Bay has made a request of this government to do something about the cost of transportation into the community. Pelly Bay, in the Kitikmeot region has the highest cost of living. Mr. Speaker,

we have met with the Minister responsible for Transportation, government services regarding this matter. At the appropriate time I will be asking the Minister of Transportation, if he is the right Minister, regarding the status of the request. Thank you.

Thank you, Mr. Ningark. Members' statements. Mr. Rabesca.

Thank you, Mr. Speaker. Yesterday my honourable colleague, Mr. Antoine, mentioned the Deh Cho Leaders' meeting held in Hay River Reserve this past week. The reason I bring this up is that I, too, was in attendance, along with the Dogrib Treaty 11 delegation. This was a very interesting and informative meeting where many issues were brought forward. I would also agree with Mr. Antoine that it was encouraging to see the level of cooperation building. It has been many years since I have seen the cooperation and frank discussions that took place between my regions and Deh Cho regions and various level of governments. All participants should feel proud of their accomplishments, and it is without a doubt that more meetings of this type will happen over the months to come. This will help steer our country towards division and a First Nations' land claims settlement. Thank you, Mr. Speaker.

Thank you, Mr. Rabesca. Member's statements. Mr. Roland.

The Member for Inuvik is seeking unanimous consent to conclude his statement. Do we have any nays? Mr. Roland, you have unanimous consent.

Thank you, Mr. Roland. Members' statements. Mr. Miltenberger.

Thank you, Mr. Miltenberger. Members' statements. Mr. Henry.

Thank you, Mr. Speaker. Yesterday in this House I mentioned a mini-construction boom going on at the Yellowknife airport. Accordingly, that is not the only thing going at the Yellowknife airport. Mr. Speaker, I have received numerous complaints from businesses and individual constituents about the installation of stop signs at every intersection on the service road at the Yellowknife airport. These stop signs interfere with the natural flow of traffic at the

airport and are not appreciated or thought to be needed by any of the tenants at the airport. In fact Mr. Speaker, I have had several phone calls and cannot identify a single individual who is in favour of this installation of stop signs. Mr. Speaker when this government took over the operation of the Yellowknife airport from the federal government, I had a vision of increased cooperation between the tenants and our government and a meaningful consultation process that would involve the tenants and the operations at the airport. This seems to be, Mr. Speaker, a bureaucratic decision and I cannot find anyone who was consulted on the installation of these stop signs. Mr. Speaker, I stated yesterday, that the transportation industry is one of the positive economic indicators in Yellowknife. I believe that as a government, it is our responsibility to work with industry and not put up road blocks or stop signs that would impede that progress. Mr. Speaker, later on in question period I will be addressing some questions to the Minister responsible. Thank you, Mr. Speaker.

Thank you, Mr. Henry. Members' statements. Mrs. Groenewegen.

Thank you, Mrs. Groenewegen. Members' statements. Mr. Barnabas.

(Translation) Thank you, Mr. Speaker. I will be speaking in Inuktitut. Mr. Speaker, representing our community, I was told by an employee of the Government of the Northwest Territories that they do not receive enough recognition. I found a problem with that because I find that we have made a lot of layoffs in the employment of the public service, and we do not even recognize our employees when they have contributed five years of their employment for the public service. I have a problem with this. For the employees who have contributed ten years of their lives to working within the public service, they have done so because of enjoyment in their employment, but there was no recognition on their behalf. Thank you, Mr. Speaker.

Thank you, Mr. Barnabas. Members' statements. Mr. Erasmus.

Thank you, Mr. Speaker. Mr. Speaker, I rise today to speak about some forgotten people in our communities. I speak of those that many people would wish would disappear, the homeless. Mr. Speaker, every day when we sit down to eat, these people are wandering around with no place to eat. Every night when we are getting ready to sleep, dozens of people in Yellowknife are wandering around looking for a place to sleep. Can you imagine what it is like looking for a place to sleep when it is 40 below? Mr. Speaker, to illustrate the problem, a couple of my constituents have been in the news lately. They have a small shack in the Old Town, and they consistently let several people, sometimes up to ten people a night stay there. This is causing great concern to their neighbours. Yellowknife is not the only centre that has homeless people. Community people seem to gravitate to the larger centres. Inuvik, Rankin Inlet and Iqaluit all have homeless. Studies have shown that people who are homeless cause more crimes and have greater social problems, things like drug and alcohol abuse, theft, break and enters, prostitution. Mr. Speaker, we cannot rely on our citizens to help all the homeless. That is our responsibility as a government, a responsibility that we seem to be shirking. Later today, I will ask the appropriate Minister what we are doing to help the NWT homeless. Thank you.

Thank you, Mr. Erasmus. Members' statements. Mr. Ootes.