Thank you, Mr. Speaker. I have a return to oral question asked by Mr. Henry on November 5, 1998 with respect to the Formula Financing Agreement - Impact of Population Decline.

Under the new Northwest Territories/Canada Formula Financing Agreement, the gross expenditure base - a measure of the Northwest Territories' spending needs - is escalated each year by the three-year moving average of the growth in provincial local government spending across Canada, multiplied by the three-year moving average of growth in the western NWT population compared with that of Canada.

The population adjustment factor, as this last term is referred to, reflects the fact that if territorial population is growing at a faster rate than that of Canada, spending needs are also growing, and therefore, funding under the grant increases. However, if territorial population grows more slowly than that of Canada, or even declines, the grant will grow more slowly or in some cases even decline.

This link between population and funding levels is a standard feature of federal/provincial fiscal arrangements. Provincial governments also experience a decline in federal transfers if their populations decrease. Thank you, Mr. Speaker.