Oral questions. Final supplementary, Mr. O'Brien.

Thank you, Mr. Speaker. Mr. Speaker, the feeling of the community is that we have talked for the last two years about community empowerment. They see this as the real meaning of community empowerment where they will have control and authority over their own destiny. This is why they are looking to have these resources brought closer into their community. That is what I thought was being said in this House for the last two years, that this community empowerment is to shift these responsibilities to the communities. That is up to the department. There may be areas where there has to be some common sharing, such as what you have indicated. These are the questions I guess they want answered. Hopefully, they will be decided at this upcoming meeting you will have in Baker Lake. Does the Minister consider this request from Baker Lake as true community empowerment where they want to be the authors of their own destiny by controlling the capital operations and maintenance and so forth? Thank you.

Ms. Thompson.

Thank you, Mr. Speaker. Baker Lake is one of the communities in the region who have taken on a lot of transfers and that is exactly what we are doing. What has also happened and this was probably initiated by the Member, is that we were going to do housing transfers to the hamlet. As I heard, they do not want to deal with the regional office now. Are we saying that we do not need regional offices in the future, the way Baker Lake is approaching the Keewatin pilot project? We will need a decentralized model and we will have to share resources, so those are types of options. We will have to talk with Baker Lake and my staff will be going there to talk about these options. I have been talking to members in Baker Lake who are not involved in the political arena. They want to be part of the region. They want to share resources with the region. We have to start listening to people on the street, in Baker Laker, before we make decisions to isolate the community. Thank you, Mr. Speaker.

Oral questions. Mr. Steen.

Thank you. The Minister responsible for the NWT Housing Corporation, Mr. Arlooktoo. Two questions.

Thank you, Mr. Speaker. We have received the letter and we are in the process of responding to it. If I can make a couple of comments on it first of all. I do appreciate the fact the community is interested in taking over more programs. That is something that I said last week. We encourage, foster and we will work with the community. I understand part of the reason for the urgency other than the community wanting to take it over, is because of the ice road conditions, et cetera, the fact there is a time limit on when materials can be delivered for housing to Tuktoyaktuk. The community of Tuktoyaktuk has had portions of the Home Ownership Program transferred to it. I understand from this new request is they would like to take over more. This is something I support. We have done this in six other communities and here in the western Arctic. What I can say is

we will look at the request positively, keeping in mind the concern about the ice road situation and also the facts that there are some details we need to work out on when a person's EDAP funding is approved. It does require some backing from the housing corporation, but those are details we can work on. Thank you.

Oral questions. Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, the federal budget, as addressed by Mr. Todd, his emergency statement was quite impressive, but I did not find certain areas in there for the Northwest Territories government to be very good. I would like to follow up on that. Two years ago, the federal government had cut our base funding which caused us the fiscal difficulties, which was a major part of the fiscal difficulties that we experienced as a government. There was no reduction in our base this time in the federal budget, but there was no increase either. Were those types of concerns addressed by Mr. Todd in his deliberations with Mr. Martin when this budget was put together? I note in Mr. Todd's Budget Address, he says the federal budget contained specific reference to the economy of Canada's territories, which includes the Northwest Territories, but there was no mention of our cut by the federal government, which has not been replaced. Thank you, Mr. Speaker.

The Minister of Finance, Mr. Todd.

Thank you, Mr. Speaker. On a national context, I just appreciate the fact that we were mentioned. Historically, we have not. While some of us think maybe we are the centre of the universe, we simply are not. What I was encouraged with, was the fact that the Finance Minister of Canada, the Honourable Paul Martin, made it clear that he balanced the budget for this year, for next year and the year after. We should applaud him for that.

By implication of balancing the budget, that means there will be no more future cuts. He has also indicated in the fine print in the budget that incremental costs associated with division of the two territories would be there. I would hope that my honourable colleague, who I know has a keen interest in ensuring there is adequate funding in the eastern Arctic, would be encouraged by that, as I am. I am encouraged by the fact there are no more reductions in federal territorial transfer payments. That is in keeping with the commitment I had from Mr. Martin, both on a personal and a professional basis. I am encouraged by the fact there is reference to division and the term incremental costs are there, in the verbiage, in terms of the fine print. I am optimistic we will be able to sit around the table, all parties and indicate that the funding that will be provided on April 1, 1999 east and west, will be adequate. I do not know how much more I can say. Thank you.

Oral questions. Supplementary, Mr. Picco.

Thank you, Mr. Speaker. Sometimes we feel because we are in the Northwest Territories, we do not count for much for something, and we should really get excited when they mention us in a line item. Our situation here is 82 cents of every dollar comes from the federal government. When you look at $60 million out of a multi-billion budget, it is not much of a line item to have been rebased. That was the point of my question. Following up on my question to the Finance Minister on the budget, one of the big concerns we have in the Northwest Territories because our salary levels are inflated due to the cost of living, some programs offered on the federal level, we do not qualify for. As an example, Mr. Speaker, when they talk about a family making $30,000 in the south, that is probably $60,000 in the north. Has Mr. Todd looked at those cases inside the budget? Thank you.

The Minister of Finance, Mr. Todd.

I do recognize my honourable colleague has not had the same opportunity to get the same detailed briefing as I have, but I do not think there is any reference to anybody making $30,000. I believe the tax credit is to families between the $50,000 and $65,000 range, for which there is a significant amount in the Northwest Territories who benefit from that. As I said earlier this morning, while the tax credit, for example, and that is one of the issues I think my colleague is alluding to, dollar-wise is not a significant amount, it is something like $238. The fact that tax credits is on the table is significant enough for the next stage of negotiations, as I think there is more to come in 1999 and the year 2000. That is just one example of if you look long term rather than looking for the quick fix. I am encouraged by the direction in which the federal government is going. Thank you.

Thank you. Oral questions. Supplementary, Mr. Picco.

Thank you, Mr. Speaker. Mr. Speaker, that was not the point I was trying to make at all. My point was in the Northwest Territories, when a family makes $30,000, that is about $18,000 equivalent in the south because our cost of living is higher. When the federal government comes out with amounts like $50,000 for a family in the south that is a very large number. Fifty thousand dollars in the north would probably be an $80,000 salary because of the differential in cost. That is what I was trying to point out. I wonder if he could respond to that, now that he knows what I am talking about. Will he be working with the Finance Minister to have those numbers increased? That is one of the reasons why we came up with the northern allowance tax deduction, to offset that extra cost in extra salaries. Thank you, Mr. Speaker.

Mr. Todd.

Mr. Speaker, as I said earlier, many of my provincial counterparts have been pushing hard for tax relief, even some of the opposition. The Reform Party said the same thing. What I am trying to say to my honourable colleague, Mr. Martin probably had the most difficult task of any Finance Minister in the history of the federal government, a balanced budget for the first time in 30 years. He has had to make some tough choices. You cannot spend what you do not have. He indicated yesterday and today, from what I saw, I do not want to sound like an advocate for the man, but certainly I admire what he has done, and I am proud to say that today. As an advocate, we are in a situation where he is advocating there will be additional initiatives by the federal government in the year 1999 and the year 2000 because he is projecting a balanced budget in these years. The fact that we have tax credits on the table, my honourable colleague, is an important one because it was not there before. You have to give the man some credit that he had to balance the budget. He is now looking at options that will be good for Canadians and northern Canada. I think that is important.

One area, I talked about earlier today, the child tax benefit, which my honourable colleague almost single-handedly persuaded me months ago that we should look at, there is going to be an additional $850 million there. I would hope he would be encouraged by that and I am sure he is. This will put more money into the hands of the less fortunate. It is a good budget. It is not perfect by any means. I said earlier today in the press I was concerned about a number of areas: infrastructure, job creation, health care, et cetera, so there are some areas that have some weaknesses. I am encouraged by the fact this is the first step for future initiatives, which I hope we will be able to do, with my provincial counterparts, influence Mr. Martin in the coming months ahead, and I certainly intend to do that with the clear and concise advice that I get from my colleague from Iqaluit and other Members of this House. Thank you.

Oral questions. Final supplementary, Mr. Picco.

Thank you, Mr. Speaker. I am encouraged by the faith the Finance Minister has put in me. I would just like to follow up because he has not answered my question again. Mr. Speaker, when the federal government announces tax credits based on a base salary, they use a figure of $30 or $40, but in the north because the cost of living is higher, we have a differential of 30 and 40 percent. Has the Finance Minister communicated that situation, so that indeed, more northerners could be eligible for these tax credits because they are all based on gross family incomes? Gross family incomes are a lot different from gross family incomes in the south, about a 30 percent differential. Thank you, Mr. Speaker.

Mr. Todd

Thank you, Mr. Speaker. To help my colleague out, I have some notes here I could indicate, to him, that the elimination of the federal three percent surtax for individuals earning less than $50,000, there will be some benefit for people between $50 and $65,000 and no change on the three percent surtax on $65,000 above. This measure will also benefit higher income taxpayers in the north that they claim the northern deduction or RRSP contribution, so I believe there is a benefit there. On the other side of the equation, the tax-free component of low-income families will increase by $500 for single taxpayers and by $1,000 for families of two or more. This will be a benefit to northerners. That is the only point I am trying to make here. I am certainly an advocate of tax cuts as everybody knows. We certainly indicated that in the last two budgets. I am encouraged by the fact these are on the table right now and as we move forward for further provincial, territorial and federal discussions with Mr. Martin for the coming years, we now have an opening to see if we can encourage him to do more. Thank you.