This is page numbers 187 - 209 of the Hansard for the 13th Assembly, 7th Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was communities.

Topics

Members Present

Honourable Jim Antoine, Honourable Charles Dent, Mr. Erasmus, Honourable Sam Gargan, Mrs. Groenewegen, Mr. Henry, Honourable Stephen Kakfwi, Mr. Krutko, Honourable Michael Miltenberger, Mr. Morin, Mr. Ootes, Mr. Rabesca, Honourable Floyd Roland, Honourable Vince Steen.

Oh, God, may your spirit and guidance be in us as we work for the benefit of all our people, for peace and justice in our land and for the constant recognition of the dignity and aspirations of those whom we serve. Amen.

Item 1: Prayer
Item 1: Prayer

April 19th, 1999

Page 187

The Speaker Samuel Gargan

Thank you, Mrs. Groenewegen. Good afternoon. I welcome all of you back to the House and I hope that you have had the opportunity to spend some time with your families and visit your constituencies during the break. I also hope that your travels were safe and that you found everyone in good health.

I would also like to welcome the Pages, staff and members of the public to the House today to hear the first budget address for the new Northwest Territories, as we know it now.

As we have all noticed Spring is just around the corner and it promises a summer of sunshine, open water and new possibilities. So Spring is the best season to present a new budget because it is the beginning of a new direction for all of us. As we begin this new direction, I would like to remind Members that we are working for all of the people out there who are on the land, in the communities, in the towns and in the city. In this House we are representing more than just our personal interests. We are elected to represent the views of our constituents regardless of colour, culture or creed and without prejudice or judgment.

As the Speaker, I remind Members that I will continue to be strict with the rules of the operation of the House. I also remind Members that we are to treat each other with respect and dignity.

But, before we begin, I ask all Members and the public to join me in offering our prayers to the Clerk of the Legislative Assembly, Mr. David Hamilton, whose father passed away this weekend. Mr. Hamilton, we offer our thoughts to you, your mother and your family. Our prayers are with you as you travel tomorrow.

On that note, I would like to begin. I have received correspondence from the Deputy Commissioner. I wish to advise the House that I have received the following messages:

Dear Mr. Speaker,

I wish to advise that I recommend to the Legislative Assembly of the Northwest Territories the passage of Appropriation Act, 1999-2000, during the seventh session of the 13th Legislative Assembly.

Yours truly,

Dan Marion

Deputy Commissioner

Orders of the day. Item 2, budget address. Mr. Dent.

Item 2: Budget Address
Item 2: Budget Address

Page 187

Charles Dent Yellowknife Frame Lake

Thank you, Mr. Speaker. Good afternoon. Mr. Speaker, as I stand today to present the first budget of the new Northwest Territories, we find ourselves at an important crossroads. Down one path lies continued, no, increased dependence on federal transfer payments. Down the other path lies more financial independence and the responsibility that goes with that. I am an optimist. I believe that we will, together, choose the road that gives northerners the best chance to succeed and to live up to our potential.

In February of this year the Premier, the Honourable Jim Antoine, presented the public with this government's vision for the future in a document called The Western Agenda. Recently renamed Agenda for the New North, this document outlines five related strategies to achieve this vision. The Agenda explains the need for northerners to take greater control of our future and become more responsible for our own well-being.

The agenda sees the Northwest Territories as a place where people come first; where people are better educated; where people are healthier; where all people benefit from increased economic development; and where all of our residents work together to build a strong north.

We have our work cut out for us but I have no doubt that northerners are able and willing to build on our strengths and address our problems. My priority as Finance Minister is to secure the financial tools the north must have to meet our future head-on, and to succeed at making our vision for tomorrow a reality. This is an important point and I will come back to it later in this Address.

The success of our new territory will not be measured by the government's balance sheet nor by a statistical measure of growth in the economy. Rather, the success of our new territory will be measured by the ability of our citizens - men and women, young and old, aboriginal and non-aboriginal - to lead healthy and productive lives.

For our government to achieve this success:

-We must look ahead - to the coming fiscal year and beyond - to our future in the next millennium, and recognise the challenges it will bring.

-We must work together - Members of this Assembly and Cabinet, together with Aboriginal First Nations, communities, businesses, our elders and our youth; and most importantly,

-We must take control over our economy and its resource potential.

If northerners can work together and find an equitable way to share control of our resources, we will have the tools necessary to build a future for our youth. With these tools, northerners will be in charge of the pace of development and can ensure that northern residents benefit from development.

This will lead to a stronger fiscal position for the government and will mean that we can keep up with the investment we need to make in education, in health care, in economic development, and in job creation. There is only one way to improve social and economic conditions for northerners. We must work together and we must have more control over revenue sources.

Mr. Speaker, when looking ahead to the future we must not forget the past. I would like to recognise the work that went into ensuring that our new territory began on the best possible foundation for the future. I want to commend everyone - Members of the Legislative Assembly, the Western Coalition, the Aboriginal Summit, the public service, and all the people of the Northwest Territories and Nunavut - who worked to ensure that we are ready for our future.

In October, 1998, we signed the Formula Financing Agreement with Canada to ensure secure funding for our new territory for the next five years. In March, 1999, we signed an Agreement with the Government of Nunavut to divide the assets and liabilities of the GNWT as of April 1, 1999. We successfully concluded agreements on the NWT Power Corporation and the Workers' Compensation Board, both of which will be operated jointly by the two territories for the near future.

We recently concluded a new Collective Agreement with the Union of Northern Workers and have reached settlements with 80 percent of the employees affected by the pay equity issue; that represents 85 percent of the amount we set aside to resolve this issue. We continue to urge the UNW to reach a negotiated settlement on the remaining claims.

These achievements show our ability to meet difficult challenges now and in the future, through cooperation and mutual effort. They are the basis on which to build our vision of the future. We have met the challenges of the past and we can meet the challenges of the future, but we need the right tools.

Mr. Speaker, our biggest challenge over the past few years has been to ensure the Northwest Territories and Nunavut start on a stable fiscal foundation. It was a difficult task and I would like to thank my predecessor, Mr. John Todd, and all Members of the 13th Assembly for their commitment to this task.

At budget time last year we anticipated ending the 1998-99 fiscal year with $28 million in accumulated debt. It looked like both the Northwest Territories and Nunavut would start out in the red. But, because of a favourable one-time adjustment to the Formula Financing Grant from Canada, based on revised Northwest Territories population estimates, we enjoyed a forecast $62 million accumulated surplus as of March 31, 1999.

This surplus was split 56 percent to the Northwest Territories and 44 percent to Nunavut, according to the Division of Assets and Liabilities Agreement between this government and Nunavut. For the Northwest Territories, this means we start this new chapter in our history in the black, with $34 million.

Addressing the growing demand for government spending will continue to be a challenge. Currently, our Formula Financing Grant comprises over seventy percent of our yearly total revenues, and largely determines how well we are able to meet our expenditure needs. The comparative growth rates of the populations of the Northwest Territories and Canada figure in the calculation of the Formula Financing Grant. This is where our new territory faces its most critical fiscal challenge. The population in the Northwest Territories declined slightly last year and our growth rates for this year and future years are forecast to be below Canada's. This means that for 1999-2000 we are expecting virtually no revenue growth over last year. In dollar terms, that means revenues are forecast to be $708 million.

Although the revenues available to us are not enough to meet all of the critical needs we face, we must strive to maintain current programs and services, and address at least some of the areas of urgent need. This requires us to bring forward a budget for 1999-2000 with planned expenditures of $742 million, an amount that exceeds revenues by $34 million. This will consume our accumulated surplus and leave us with neither an accumulated surplus nor deficit by the end of 1999-2000.

As a new Finance Minister I would have preferred to bring forward a balanced budget. My years in the private sector have instilled in me a fiscal discipline that is based on spending within your means. However, at this time, I do not believe that we can cut services to our citizens any more than they have been to date. Using the accumulated surplus to cover the $34 million deficit forecast in this budget will give us a year to make progress on restructuring our fiscal relationship with Canada.

At the same time we must continue to exercise fiscal restraint and carry on working aggressively to deal with the root causes of expenditure growth. But make no mistake, if we do not find more revenues, we may have no choice but to cut services, or more likely, both services and capital spending in next year's budget.

Recently, Premier Antoine, and my predecessor, Mr. John Todd, met with federal Ministers, the Honourable Paul Martin and the Honourable Jane Stewart, to lay out the need for a revised fiscal relationship with Canada. We believe that both Canada and the citizens of the Northwest Territories can benefit from a different regime.

The solution to our fiscal problem is to increase the size of the fiscal pie in the north. To achieve this we need the support of all people in the Northwest Territories. We need their understanding, we need their patience, we need their creativity and, most of all, we need everyone's cooperation.

Increasing our revenues to meet growing expenditure needs can only be done by restructuring our fiscal relationship with Ottawa. This means that we must work together to ensure the federal government turns over control of northern resources to northerners. Just as importantly, we must work together to ensure the Northwest Territories gets a greater beneficial share of tax revenues and royalties generated in the north. In order to accomplish this, we recognise the need to find innovative ways to share the responsibilities as well as the revenues. Mr. Speaker, I will have more to say on this later, but I will now focus on the social challenges that we face in the Northwest Territories.

Mr. Speaker, children and youth of today are the hope of tomorrow. The Northwest Territories is a young territory. Forty-three percent of our population is less than twenty-five years old. This compares with 33 percent for Canada. The challenge for this government is to help prepare our young people to be our future leaders. To be good leaders they must be educated, healthy, and able to participate in the economy.

Education and training are critical to the development of our youth. That is why we have invested significantly in improving our education system. We have extended grades to all communities in the Northwest Territories and helped adults return to school to continue their education. Enrolment in high school increased 23 percent from 1990 to 1997 and our high school graduation rate is rising.

These successes are encouraging, but much more needs to be done. Thirty-six percent of our adult population has not completed secondary school. This limits access to jobs in government, resource industries, and in other sectors of the economy.

Mr. Speaker, this government is committed to our youth. By continuing to make strategic investments in education and training we can help ensure that our young people are ready for the jobs that are available. As part of this commitment we have allocated $1.2 million in this year's budget to ensure that the pupil/teacher ratio is maintained. This means that even with a growing number of school-aged children the pupil/teacher ratio will not increase.

In 1997-98, the government announced the Northern Employment Strategy. This was designed as a one-time investment to provide northerners with employment opportunities as well as the skills required to take advantage of those opportunities. One tremendously successful element of the strategy was the Working Together Program which provided employers with a wage subsidy to hire northern students and youth. This program helped provide many of our young people with the experience they need to obtain meaningful and lasting employment in today's labour market. For the two year duration of the program, more than 900 job opportunities were created in the 33 communities across the Northwest Territories.

I am pleased to announce that this budget includes $1 million to extend the Working Together Program for one more year. We anticipate that this funding will create over 450 jobs for young northerners this fiscal year.

The Working Together Program will allow the Honourable Michael Miltenberger, the Minister of Education, Culture and Employment and the Minister responsible for Youth, to take steps to alleviate the problem of youth unemployment in the Northwest Territories. Our young people suffer from the highest rate of unemployment in the Northwest Territories and therefore are a clear priority of this government. However, equally important is our commitment to ensure that all our residents of working age are equipped to fill available jobs.

We have provided an additional $1 million to continue the Investing in People Program. This successful program helps fund adult basic education and job-related skills training for income support clients, so they can move into productive employment. Many community-based work projects employing local residents are funded by Investing in People. This kind of investment is a clear sign of our commitment to help residents become more self-reliant.

Mr. Speaker, children are also a priority of this government. In keeping with the goal to improve the future of our children we are continuing to support the Healthy Children Initiative. Reinvestment of approximately $160,000 from the second phase of the National Child Benefit Program will allow us to maintain funding for this successful program. During the 1998-99 fiscal year, almost one hundred community-based projects were delivered in the Northwest Territories as a result of the Healthy Children Initiative.

Providing education and economic opportunities for northerners is only part of what needs to be accomplished. All residents of the territory need to be confident they will have access to adequate health services. An issue of increasing concern over the past year has been the crisis facing us in recruiting and retaining health professionals. The turnover rate for nurses is much higher than the government staff average. The vacancy rate for nurses is currently 25 percent. Furthermore, there are national shortages of nurses and other jurisdictions have launched aggressive recruitment campaigns.

Our ability to recruit and retain nurses is impacted by many factors. While we are making good progress in training northern nurses, we do not yet have an adequate pool from which to draw. For nurses in our small communities, the stress of being constantly on call can lead to burn-out in a relatively short period of time. As national and international competition increases for nurses, our salary and benefits packages have not remained competitive enough. Recent announcements by British Columbia, Ontario and Alberta that they will be hiring significant numbers of additional nurses will only heighten the competition. Similarly, physicians are also in short supply in other rural and remote areas of Canada. The Northwest Territories will have to offer competitive packages to continue to attract and retain physicians.

The Minister of Health and Social Services, the Honourable Floyd Roland, is aware of the need to address the issue of access to quality health care, especially in smaller communities. He is committed to follow up on the agreement reached by Premiers and the Prime Minister, to reinvest the additional Canada Health and Social Transfer funding contained in the 1999 federal budget, for health care. This budget reinvests not only the approximately $3 million per year in additional CHST funding, but adds an additional $3 million of our own.

I am pleased to announce three related initiatives to assist in recruiting and retaining health and social services professionals.

-We have identified $1.9 million for specific recruitment and retention initiatives.

This funding follows through on a commitment made by the Minister of Health and Social Services last fall. The Department of Health and Social Services, in partnership with Health and Social Services Boards of Management, is putting into action a variety of strategies designed to encourage northerners to pursue professional opportunities in this field, to attract health and social services professionals to the North, and to encourage our current staff to remain in the north.

These strategies range from scholarships, to summer employment and mentoring opportunities, relief pools for community nurses, and better promotion of the Northwest Territories as a career location. In addition to these actions, this government will dedicate $3 million over the next two years to provide salary incentives to attract new nurses, encourage current nurses to stay, and promote nursing as a career to our young people. This initiative recognises that our wage and benefits packages are not competitive enough under current market conditions. We will work with the Health and Social Services Boards, the Union, and the nurses to structure this funding to have maximum impact. This budget includes $750,000 for the Department of Education, Culture and Employment to enhance training opportunities in the nursing and social service professions.

Finally, we have set aside an additional $556,000 in Student Financial Assistance to support students who choose to pursue these careers. These spending measures will help keep and attract the professionals that are needed to ensure northern residents receive quality care.

This government believes the education and health initiatives announced in this budget will improve the social and economic conditions in the Northwest Territories. Obviously, they will not erase all of our problems. Our crime rates are high and our incarceration rates continue to increase. The GNWT's Correctional Service is facing severe challenges in delivering appropriate services to communities and to offenders. Our correctional facilities are severely overcrowded.

We are the only jurisdiction in Canada without a fully dedicated community-based probation service, which results in an even higher incarceration rate. Furthermore, we do not have adequately funded programming for inmates to provide them with the counselling and skills development that will help them succeed upon release.

I am pleased to announce that this budget includes approximately $1.5 million in new funding to allow the Minister of Justice, the Honourable Stephen Kakfwi, to implement a comprehensive plan to improve community justice and corrections services. This integrated approach includes several components.

-As part of the new funding, Community Justice Committees will receive additional support to allow them to work more effectively with the RCMP and the probation system.

Also, until this year community social services workers have provided probation and parole support in addition to their many other responsibilities. Over the next two years, the Department of Justice will phase in a dedicated probation and parole service that will improve community services. This means that convicted persons who qualify can be placed earlier in a community-based setting, thereby easing the transition of inmates back into their communities and reducing the strain on overcrowded correctional facilities.

Funding will also be used to enhance rehabilitation programs in correctional facilities, including aboriginal healing, family violence prevention, and sex offender rehabilitation. In addition to these programming initiatives, the government is committed to improving the quality of our corrections facilities. Planning for much needed renovations to the Yellowknife Correctional Centre will begin this year. This facility currently operates at an average of forty percent above maximum capacity.

Two new Young Offender facilities are also in the planning stage - a 24 bed building for males in Yellowknife, and a 12 bed facility for females in Inuvik. These two projects are among the seven pilot projects currently being planned through the government's Public/Private Partnerships initiative.

Mr. Speaker, just as we are seeking greater control over northern issues, this government is also committed to providing resources to local governments to address local concerns. In order to address growing concerns about fire prevention and safety in northern communities, this budget contains $729,000 in additional funding. This will enable the Minister responsible for Municipal and Community Affairs, the Honourable Vince Steen, to improve direct training and fire safety support services to communities. This investment will help cut down on loss and expense due to fire.

Mr. Speaker, before I move on to the economic challenges that face this government, I will take time to talk about a current economic initiative that is being delivered by a government agency usually associated with social initiatives.

The Minimum Down Payment Assistance Program is being delivered through the NWT Housing Corporation, and gives many northerners the opportunity to own their own homes. To date, the program has generated over $45 million in housing sales and assisted 350 families in the north to own their own homes. This initiative was introduced in the last fiscal year as a pilot project until March 31, 1999, and was designed to meet several objectives. With several hundred housing units for sale in 1998, there was very little demand for new residential construction. The construction of new homes, which creates jobs and causes businesses to grow, cannot occur until units for sale are purchased. The program was also designed to encourage families to move between communities to work and to encourage those who work in the north, but live in the south, to move here permanently.

Although this program has been a success, and as previously announced will continue until June 30 of this year, it does not detract from the commitment of this government to social housing. The funding contained in this budget for the NWT Housing Corporation will allow for the continued delivery of social housing programs at current levels.

Mr. Speaker, the continued commitment by this government to improve education, health care, and social services for residents will better prepare us for tomorrow. At the same time, this government must also encourage economic development that creates employment for northerners. Our investments in developing the economy have put many more people to work. Over 1,200 additional people were employed in the Northwest Territories between 1991 and 1996. But the large number of young people in the Northwest Territories today means that we will need many more jobs in the future. At our current rate of population growth, our youth will need an additional 3,500 jobs by the year 2008.

The initiatives contained in this budget build on our ongoing commitment to ensure our youth are better educated and better trained, but we must be sure that the jobs are there for them when they graduate.

The increased need for new jobs comes at a time when we are facing an economic downturn in the Northwest Territories. Our economic growth is tied to resource industries, and current global economic conditions have hurt us. Historically low gold and oil prices, caused in part by economic problems in Asia and Latin America and by the sale of gold bullion by the world's central bankers, are examples of factors outside the control of this government that have impacted our economy.

The tools needed to allow northerners to live healthy and productive lives are strongly linked to resource development. Resource development provides the greatest potential source of the additional revenues that this government needs to provide programs and services to northerners at adequate levels.

Although this government cannot change the realities of the global economy, we can take steps to counter the impact by better insulating our economy from these shocks. In these difficult economic times, our government has taken steps to encourage investment in the north. Our tax rates remain competitive with the provinces and we have recently implemented the Risk Capital Investment Tax Credits program to improve the investment climate for business.

On the positive side, opportunities for growth do exist, and this government does welcomes investment in our economy. The opening of BHP's Ekati Mine, and the work toward the development of the Diavik and other diamond properties in the Northwest Territories, are welcome bright spots. The Ekati Mine alone directly employs about 450 northerners and has created further opportunities in other sectors of the economy.

The potential development of the Diavik-Aber property would benefit the north during the construction and production phases beginning in the year 2000. Although the regulatory review process is not complete, we are encouraged by the approach taken to date by everyone involved. This government will continue to work toward our goal of developing sustainable resources and generating maximum benefits for the people of the Northwest Territories. Companies must recognise that development in the north will only be supported when it generates direct northern benefits to the greatest extent possible.

Mr. Speaker, let me say it again, this government wants and needs to see more development, but companies must understand that only environmentally responsible development will be supported - and then only when northerners benefit significantly.

Although the sparkle of diamonds has caught the eye of most people, we cannot ignore the significant resource potential in oil and gas developments in the Deh Cho, the Mackenzie Valley, and the Beaufort-Delta regions. These regions are still relatively unexplored and contain significant oil and gas potential. Although oil prices are low at this time, a gradual improvement is expected. In addition, pipeline construction in southern Canada, and a forecast improvement in gas prices, are increasing the economic viability of natural gas developments in the Northwest Territories.

Opportunities exist, but we must work to ensure that we are able to take advantage of these opportunities and maximize benefits for northerners. The results of the 1998-99 Fraser Institute Survey of Mining Companies in North America highlights the fact that uncertainty surrounding land claims and the administration and regulation of both resources and resource development is limiting the attractiveness of the Northwest Territories to new investors. The settlement of land claims and self-government issues will bring greater certainty to our investment climate and contribute to the development of our untapped potential. This government supports the aspirations of aboriginal people in the Northwest Territories to settle land claims and implement their inherent right to self-government. This government is committed to working with our aboriginal partners and the federal government to settle land claims and self-government issues. It is only by working in partnership with aboriginal governments that we can create opportunities for everyone to jointly share in the economic development of the north.

Greater certainty would also be realized if control of resources were transferred to the north. At present, companies wishing to undertake resource exploration and development in the north must contend with a regulatory burden complicated by the fact that the federal government controls resources and the territorial government controls other aspects related to development.

In addition, companies who wish to invest in the north face uncertainty because there is no formal role for this government to play in assessing and permitting development to proceed. Therefore, it becomes necessary for this government to proceed on an ad hoc, and therefore uncertain basis, as it rightly attempts to ensure that benefits from development remain in the north.

Mr. Speaker, I would now like to turn our attention to increasing the range of opportunities for the people of the north. If we are to create the jobs required for our children and ensure that those jobs are both long-term and less vulnerable to changes in the global economy, we need to diversify our economic base.

We must examine opportunities to improve self-sufficiency by undertaking more value-added activities. The government's procurement policies and existing economic programs encourage value-added activities but do not focus on generating an export base. The diamond sector provides an example of the employment potential associated with products developed for the global market. Exploration and development of the resource sector will continue to be the strength of our economy, but we need to create additional opportunities in the service and manufacturing sectors. This government has supported diversification by providing guarantees to businesses interested in the cutting and polishing of diamonds.

I have already touched on the importance of creating a future for our youth. If the diamond industry is a bright spot on the economic horizon of the Northwest Territories, we must equip our residents to take advantage of these opportunities. Therefore, this budget includes:

-$265,000 for Aurora College to sponsor diamond industry pre-employment training.

-$133,000 in direct support to Sirius Diamonds to assist them in providing on-the-job training to northerners to work in their newly-established diamond cutting and processing facility in Yellowknife.

This government is also open to providing further training support to other diamond value-added manufacturers who are prepared to set up in the NWT and provide priority hiring and training to northern residents.

Mr. Speaker, constructing the roads that we travel on also creates economic opportunities and employment. This year the Department of Transportation will upgrade 17 kilometres of Highway 3 between Rae and Yellowknife at a cost of $10 million. This work will provide training opportunities for 16 employees. These employees will be learning skills on the job, which will be transferable to other jobs in other sectors of the economy once the upgrading is complete.

It is necessary to generate growth in all sectors of the economy. Therefore, this government is committed to working with aboriginal groups, industry and business interests to develop a new economic strategy for the Northwest Territories. This strategy will provide recommendations to guide the orderly development of various sectors of our economy, including the resource sectors, as well as tourism, trade and services, and manufacturing, and will serve to promote further diversification.

Mr. Speaker, as I said earlier, we cannot afford to cut programs and services any further. Our social programs are under extreme pressure. We already have close to, if not the highest, pupil/teacher ratio in Canada. We already have a severe shortage of nurses. We have a serious shortage of housing in most communities. Our jails are overcrowded. It will take millions of dollars to address any one of these needs - way more than what we have now. The only solution is to increase our revenues - and increase them significantly. The reality is, at present we face revenues that are not expected to grow much over the next few fiscal years. There are several reasons for the slow growth.

Recent developments in the Northwest Territories have created new jobs in the mining sector and the businesses that serve it. However, rather than contributing to employment growth, these new jobs have only reduced the impact of other job losses, particularly in the government and resource sectors. Job losses have meant that people have left the Northwest Territories. Between 1996 and 1998 there was a net outflow of more than 2,000 people from the Northwest Territories. This has had consequences for our fiscal situation. The outflow has caused our population to decline and has negatively affected the growth in the Formula Financing Grant, since the grant is based, in part, on our population growth relative to that of Canada.

The net outflow of people has also affected our tax base. As working people leave the Northwest Territories we are losing income tax revenues. Although the Formula Financing Agreement protects us against 80 percent of the decline in our tax revenues, the drop we are experiencing is significant and will affect our ability to finance programs and services.

These factors mean that our revenues will be growing slowly, if at all, as long as our economy is flagging. Increasing tax rates to make up lost revenues is not an option. We have a small tax base compared to our spending needs. Tax increases would not generate the additional revenues needed and would adversely affect our business investment climate and severely impact families.

Currently, our tax rates are competitive with the provinces. We have the lowest corporate income tax rates in Canada, with the exception of Quebec, and have no corporate capital tax. Our personal income tax rate is still among the lowest in the country, although it is facing competition as provinces look to decrease the personal income tax burden. We have no territorial retail sales tax.

To achieve our economic goals, it is important that we maintain an attractive environment for business investment in the NWT and encourage families to live here. Therefore, I am pleased to say that there are no tax increases in this budget.

Although our revenues are growing slowly over the next few years as a result of economic conditions, expenditure pressures are growing more quickly. The importance of re-examining our fiscal arrangements cannot be emphasized enough. Unless we increase our revenue capacity, we simply cannot keep up with our spending demands. Without revenue increases we face the prospect of either large annual deficits and a large accumulated debt in the next two to three fiscal years, or significant cuts to services, or in the worst case scenario, both. We need to address this problem now.

We must increase our capacity to invest in economic development to provide jobs for young people and, at the same time, we must take positive action to address our social conditions. However, to meet both of these objectives, we must generate more revenues. Even though the Northwest Territories has significant resource deposits, we only have access to a small portion of the revenue potential of these deposits. The federal government controls most resource revenues.

Mr. Speaker, we estimate that, over the 25-year life of two diamond mines, the federal government will receive a fiscal benefit of $7 billion, compared to the $500 million the Government of the Northwest Territories can expect to receive. On an annual basis, this translates into almost $300 million for the federal government and $20 million for the Government of the Northwest Territories.

The federal government receives more than 90 percent of the fiscal benefit from resource development in the Northwest Territories. This means that for every additional dollar raised by the federal government from the resource sector in the Northwest Territories, this government keeps less than ten cents. Therefore, we are seeking a commitment from the federal Minister of Finance, the Honourable Paul Martin, to examine the structure of our Formula Financing Agreement with respect to how the Northwest Territories can benefit more fully from tax and royalty revenues raised from development in the north, and how they are treated in our current fiscal arrangements. As I said earlier, we believe that both Canada and the Northwest Territories can benefit from a restructuring of our fiscal relationship.

To meet our long-term goal of a strong and healthy Northwest Territories, we must work together. The Northwest Territories, together with our aboriginal partners, must gain control of its own resources and we must restructure our fiscal arrangements with the federal government. Gaining control of our resources will enable northerners to affect the pace of development and to create an attractive investment climate. I have already mentioned how gaining control of our resources will improve investment certainty and foster a more positive investment environment.

Gaining control of our resources will also give this government the opportunity to design policies and budget initiatives that are coordinated with resource development scenarios, thereby increasing the fiscal rewards to both northern governments and to the federal government.

Leaving control of resource development in the hands of the federal government may limit opportunities for the type of win-win situation this government envisions. For example, the federal government may be reluctant, because of national interests, commitments, or objectives, to establish a royalty regime that allows companies to deduct the cost of local employment creation when determining royalty payments.

These are the types of initiatives that could be considered if the Government of the Northwest Territories, in partnership with aboriginal governments, had control of the resources in the north. This government believes these types of initiatives, a more certain investment environment, and a reduction in regulatory overlap will generate additional development, employment and revenues in the north. Local control over our resources and new fiscal arrangements will give us the tools to generate additional revenues for the north and for the federal government B an increase in the size of the fiscal pie. This can be a source of money to help fund self-government structures, helping aboriginal organizations meet their political aspirations, supporting our partners in achieving our mutual goal of control over our own future.

New fiscal arrangements can include both expanding the "tax window" - the revenues we keep as a result of economic growth and development - and sharing the resource revenues currently retained by the federal government.

Mr. Speaker, we are at a crossroads. We can either rely on increased federal transfers or we can increase our financial independence and the responsibilities that go with it. I believe that increasing our independence is the right road to take. How can this government and our partners achieve this? In the short-term, we need to gain support from aboriginal governments. We also need the support of industry and other partners in our economic and social development. We must work together to redefine the federal government's role in northern development and show how northerners can do better with control over their own resources.

We need to ensure that our business environment remains competitive and attractive. And, most importantly, we need to prepare our young people to assume responsibilities in a more diversified economy through education and training initiatives.

Mr. Speaker, the Northwest Territories has changed dramatically since 1967. This year, 1999, marks a major milestone in our development as a new and revitalized territory. We must build on the strength of the people who helped create the new territory and the wisdom of all those who have contributed in the past.

Over the last thirty years, we have acquired many of the tools we needed to build our territory. However, we have gone as far as we can with these tools. We need a new set of tools. We need a new set of tools with which to ensure:

-The capacity to address social conditions.

-The capacity to develop a stable political environment.

We need control over our resources and a greater share of the benefits they generate. This will allow us to expand economic development in the north, to share in a larger portion of revenues generated from this development, and to increase the size of the fiscal pie for all Canadians.

New fiscal arrangements and economic development will generate additional revenues that we can invest in the future of our children:

-through education, training, and health care; and

-through job creation, business stimulation, and diversification of the economy.

Mr. Speaker, all people and governments in the Northwest Territories must work together. The control of resources in the Northwest Territories must be in the hands of northerners. The initiatives and directions contained in this budget can lead to a sound fiscal and economic position. The initiatives contained in this budget can result in healthy, educated and productive people and a future for our youth. Thank you.

--Applause

Item 2: Budget Address
Item 2: Budget Address

Page 194

The Speaker Samuel Gargan

Thank you. We will take a short break and invite the public to a reception in the Great Hall.

--Break

Item 2: Budget Address
Item 2: Budget Address

Page 194

The Speaker Samuel Gargan

The House will come back to order. Item 3, Ministers' statements. Mr. Kakfwi.

Minister's Statement 35-13(7): Protected Areas Strategy
Item 3: Ministers' Statements

Page 194

Stephen Kakfwi Sahtu

Mr. Speaker, I am pleased to announce that Cabinet has approved the Northwest Territories Protected Areas Strategy. This strategy provides a framework for the overall development and management of a system of protected areas in the Northwest Territories. Community consultation was an important element in developing the Protected Areas Strategy. Aboriginal organizations, industry, environmental groups and the federal government were equal partners in the process.

Mr. Speaker, this strategy will benefit future generations in the Northwest Territories by protecting unique environmental, geological, cultural and historic areas. It promotes a balanced approach to land use decisions by incorporating the best available traditional, ecological, cultural and economic knowledge. The members of the Protected Areas Strategy Advisory Committee can be proud of this document. They have developed a strategy which will allow us to protect areas of land and water with special natural and cultural values while providing greater clarity about the status, access and development options for these areas. Communities, regional and land claims organizations will take the lead in identifying areas to be protected. The Department of Resources, Wildlife and Economic Development, with support from the Department of Indian Affairs and Northern Development, will establish a Protected Areas Strategy Secretariat to provide assistance and support for identifying and establishing protected areas.

Mr. Speaker, the Protected Areas Strategy is the culmination of several years work by the Advisory Committee. It is dedicated to the memory of two members of that group: Mr. Nelson Green, a champion of Inuvialuit culture, traditions, language and harvesting rights; and Mr. Ron Seale, a man who devoted both his professional and personal life to preserving our wild spaces and parks. The Protected Areas Strategy will now be sent to the federal Minister of DIAND, the Honourable Jane Stewart, for her approval. Once that approval is given, we look forward to implementing the strategy in partnership with communities, regional organizations and land claims bodies. Mashi Cho.

--Applause

Minister's Statement 35-13(7): Protected Areas Strategy
Item 3: Ministers' Statements

Page 194

The Speaker Samuel Gargan

Thank you. Ministers' statements. Item 4, Members' statements. Mrs. Groenewegen.

Member's Statement 93-13(7): Resources For Quality Education Programs
Item 4: Members' Statements

Page 194

Jane Groenewegen Hay River

Thank you, Mr. Speaker. Mr. Speaker, today I would like to direct my comments to the subject of education in light of our overall budget deliberations. I submit that rising to the legal and moral obligation to provide a quality education to northern students is something which impacts every other goal and challenge that this government faces. A quality education is essential to the hope which we hold for every northerner that they have the opportunity to achieve an independent, healthy, productive life. If we cannot adequately educate our children, we cannot reasonably expect them to reach their potential, access jobs, or fully contribute to society.

This government pays lip service to education as a high priority of our agenda. To what lengths as a government are we prepared to go to back up this claim?

Recently the Department of Education, Culture and Employment undertook a Minister's Forum on Education. This process articulated the positive and the deficient aspects of our current education system. Although I agree that it is important to clearly identify the needs, I do not think that the results of this forum came as a surprise to anyone. The system needs more money. If this document is not now used as a basis for implementing a response to these needs, we might as well have spent the money on something else.

It is not realistic to put the identifying of solutions onto the public. Neither is it realistic to put the identification of additional resources solely on the shoulders of the new Minister. If indeed education is a priority of this government, it is going to require the commitment, effort and determination of each Member of this House, on the government side and on this side of the House.

Mr. Miltenberger has stated on a number of occasions that 31 of the report's recommendations are non-monetary. I simply do not buy that. We commission surveys, reports, strategies, forums, reviews by departments all the time. Perhaps we do this too often and at too great an expense. If these initiatives cost money, what makes us think that we can implement the recommendations of the education report at no cost. There is no way of sugar-coating or dancing around the fact that education requires more financial resources. When we balanced the budget, we accepted the argument that we had no choice. To allow the deficit to accumulate would erode our children's future. The same is true of our education system. If we allow the lack of resources to persist, the accumulated effect will never be addressed. When the opportunity to provide learning as a foundation in the formative years is lost, the effects can be life long. Mr. Speaker, I would like to seek unanimous consent to conclude my statement.

Member's Statement 93-13(7): Resources For Quality Education Programs
Item 4: Members' Statements

Page 194

The Speaker Samuel Gargan

The Member for Hay River is seeking unanimous consent to conclude her statement. Do I have any nays? Mrs. Groenewegen, you have unanimous consent to conclude your statement.

Member's Statement 93-13(7): Resources For Quality Education Programs
Item 4: Members' Statements

Page 194

Jane Groenewegen Hay River

Thank you colleagues and thank you, Mr. Speaker. Mr. Speaker, I ask each Member of this House as

we review the budget of this government over the next several days, to carefully consider from where we might find resources to invest in education. Just as surely as investment in education will pay real dividends, failure to respond to the needs in our current system will result in real losses of immeasurable proportion. Mr. Speaker, I will be speaking further on the subject of education this week and will look forward to questioning the Minister responsible. Thank you.

--Applause

Member's Statement 93-13(7): Resources For Quality Education Programs
Item 4: Members' Statements

Page 195

The Speaker Samuel Gargan

Thank you. Members' statements. Mr. Krutko.

Member's Statement 94-13(7): Ministerial Forum On Health Care
Item 4: Members' Statements

Page 195

David Krutko Mackenzie Delta

Thank you, Mr. Speaker. Members will recall that I previously called for a public inquiry into the quality of health care in the Northwest Territories. It is now apparent that there will be a Ministerial Forum on Health and Social Services in the near future. Mr. Speaker, my constituents may be wondering what is the difference between a public inquiry and a ministerial forum. A public inquiry can compel witnesses to appear and can cause documents to be presented to the Inquiry Board. A ministerial forum cannot force anyone to testify or cause any documents to be produced. The recent Minister's Forum on Education gives a clear indication of what is wrong with the education system in the Northwest Territories. It is, Mr. Speaker, the same thing that is wrong with health and social services in the Northwest Territories. There is not enough money to meet the demands being placed on the education system and there is not enough money to meet the demands being placed on the health and social service system.

So, what will we get out of a Ministerial Forum on Health and Social Services? Probably the same thing that we got out of the Minister's Forum on Education, 40 or 50 recommendations on what can be done to improve the system, in which 30 or so do not involve the expenditure of any money. The Minister will then stand up in the House and say, we can implement the recommendations that will not cost any more money, but the recommendations that call for increased spending to deal with the crisis cannot be implemented at this time.

Mr. Speaker, I do not believe that a ministerial forum will be able to address the true crisis that affects health and social services in the Western Territory. The crisis is a lack of money to deal with program shortfalls. However, I do believe, Mr. Speaker, that a ministerial forum does have the role to play in defining the future of health and social services in the new Western Territory. Mr. Speaker, I seek unanimous consent to conclude my statement.

Member's Statement 94-13(7): Ministerial Forum On Health Care
Item 4: Members' Statements

Page 195

The Speaker Samuel Gargan

The Member for Mackenzie Delta is seeking unanimous consent to conclude his statement. Do I have any nays? Mr. Krutko, you have unanimous consent to conclude your statement.

Member's Statement 94-13(7): Ministerial Forum On Health Care
Item 4: Members' Statements

Page 195

David Krutko Mackenzie Delta

Thank you, Mr. Speaker. Thank you, colleagues. It is important that the ministerial forum travel to small communities in each of our regions as well as the regional centres. Members must have a true understanding of health and social service delivery in the smaller communities if they are to make relative recommendations. It is important, Mr. Speaker, that the broadest possible cross-section of northerners is given an opportunity to participate in the deliberations of a ministerial forum. It is important that the membership of the forum also represent the diversity of northern realities. Mr. Speaker, I will be following up with questions at the appropriate time with the appropriate Minister. Thank you, Mr. Speaker.

--Applause