Thank you, Mr. Erasmus. Mr. Dent.

Thank you, Madam Chairperson. Madam Chairperson, I would suggest that the staff of the Department of Finance is not the best suited to be pursuing economic initiatives. I would respectfully suggest that this may be something Members should propose to the Department of Resources, Wildlife and Economic Development. The Department of Finance would certainly be prepared to assist through the Bureau of Statistics or through the provision of financial information to the economic development marketing arm of RWED if that would be of assistance. We do not really have people who are skilled in the area of seeking out companies and encouraging them to move to the Northwest Territories.

Thank you, Mr. Dent. Mr. Erasmus.

Thank you, Mr. Erasmus. Mr. Dent.

Thank you, Madam Chairperson. Madam Chairperson, as I mentioned in my opening comments we have recently brought forward the Risk Capital Investment Tax Credit. This kind of incentive encourages investment and business in the north. The incentive the Member refers to would certainly be a similar type of program that could be considered in conjunction with the department of Resources, Wildlife and Economic Development.

Thank you. Mr. Erasmus.

Thank you, Mr. Erasmus. Mr. Dent.

Madam Chairperson. I cannot answer that question right now. The fiscal frame work falls under the mandate of FMBS. The Department of Finance concentrates on the revenue side. We are projecting very similar revenues for next year in the area of $708 million. I could venture to say given the fact we are running a $34 million deficit this year, we should expect an amount in excess of that next year, likely something over $40 million.

Thank you, Mr. Dent. Mr. Ootes.

Thank you, Madam Chairperson. Madam Chairperson, in previous years, I believe we had substantial expenditures in the area of forced growth. I do not have the exact figures, but I do believe, certainly in one year, in the neighbourhood of $18 to $20 million. My question for the Minister is, has he an indication of how much the forced growth was in this particular budget?

Thank you, Mr. Ootes. Mr. Dent.

Thank you, Madam Chairperson. Madam Chairperson, the expenditure side of the budget is what FMB looks after. I had the experts with me yesterday to answer that question. I am afraid it is not an area covered by the Department of Finance. I do not have the figures available, Madam Chairperson.

Thank you, Mr. Dent. Mr. Ootes.

Thank you, Madam Chairperson. Madam Chairperson, I do know that it is fairly substantial. The percentage may not be large, but then when we are dealing with 1 or 2 percent forced growth area, on this particular budget, for example, a 1 percent forced growth would be $7.5 million. If it is 2 percent, you can naturally double that. It is substantial money that we are into. I guess my question relates to the Formula Financing Agreement when it was formulated. If we have to live with a static figure other than some population change, then in five years time we potentially could be out a lot of money. Is not the problem of our deficit projection part of the formula financing that was agreed to?

Thank you, Mr. Ootes. Mr. Dent.

Thank you, Madam Chairperson. Madam Chairperson, the formula is a very complicated and strange animal, I guess I should say. It has its up sides and its down sides. Two years ago we benefited to the tune of $80 million from a population adjustment because of the 1996 census. That has allowed us to have a surplus going into this fiscal year.

While population is one factor that plays in the formula, the federal government has always insisted that it must also be tied to provincial and local spending across Canada. That too could make a significant difference on how the formula performs for us. While it would be nice to be able to say to the federal government, give us the money we need to do our operations, they have required us to follow this formula. They feel it helps make sure that our funding requirements stay within their ability, while reflecting changes in population and changes in spending across Canada and therefore, should be able to deal with our changing needs in the north as well.

Thank you, Mr. Dent. Mr. Ootes.

Thank you, Madam Chairperson. Madam Chairperson, I am sitting here today saying we are projecting a substantial deficit for the next two or three years and unless we cut programs, knowing the force growth factor that this government has traditionally gone through, was that a factor negotiated into the formula financing? I do not believe it was from what the Minister says. My understanding is that the amount that we were allocated is static for a five year period other than population growth and the performance of provinces. It bothers me that we did not take that into account.

The Minister next year is going to be faced with a tremendous difficulty of balancing the books, whoever the Minister may be. I appreciate we cannot probably readdress with the federal Minister of Finance or can we? Maybe that is a question, can we re-address this as an area that is an oversight? Is there a possibility for us to say, look the forced growth situation in the north is extreme, we have tremendous difficulties after all. It is not hard to tabulate a list and we went through them, Mr. Henry made reference to them yesterday, the highest birth rates, the highest smokers, the highest health problems, the highest this and that so, could it not be addressed from that perspective, that we have extreme problems here in the north and in order to address them, we have to have an adjustment for the forced growth area. Is that a possibility to present?

Thank you, Mr. Ootes. Mr. Dent.

Thank you, Madam Chairperson. I would say there is absolutely no opportunity to open up the Formula Financing Agreement in the area of adequacy. It is important to remember that adequacy was something that was brought up by all the parties at the table. There was Nunavut, the Northwest Territories, the Western Coalition and NTI, all at the table. Everybody brought up the issue of adequacy. The federal government did, in fact, cough up an extra $95 million between the two territories to cover the incremental costs of division, but have held firm on the issue of adequacy. In terms of forced growth, forced growth is not accepted as an argument outside of the formula because it typically relates to population growth. As your population grows, your funding requirements grow to provide services. The federal government's argument is that the formula does, in fact, deal with forced growth. Unfortunately we believe it does not. If our population only grows at the same rate as Canada's then our formula does not perform very well. Even though our school population may only be growing at half a percent a year, that is not reflected. Even though our population is not increasing significantly, the formula does not reflect the increased demand on health and social services. The Member is right, there are pressures from forced growth but in federal eyes that is supposed to be handled through the population factor in the formula.

Thank you, Mr. Dent. Mr. Ootes.

Thank you, Madam Chairperson. The formula, I believe, works on a basis where at one time had a perverse factor. Today, I believe it is one on one. Am I correct on that or perhaps the Minister could tell us how it works now?