Thank you, Mr. Speaker. In the development of our economy, we have to take into consideration the need to have an economy that is diversified, that is not based on any single industry or single one or two industries. We have put a great deal of emphasis on our non-renewable resources. We have spent a lot of time and energy over the last few years on diamond mining and getting that industry started and the value added pieces that go with it. We have also dealt with oil and gas development much more recently and with a tremendous amount of effort. We have put a lot of effort into our traditional economy.

Tourism is a tremendously important industry around the world. It is a $425 billion industry and it is growing at about four percent per year. It is growing by $20 billion. It is huge. We have a beautiful land here that we live in and it is an area that tourists should be coming to in droves, but unfortunately, if we look at the statistics, our summer tourism is down. We are fortunate in some parts of the Territories to have Japanese tourism up. Japanese tourism is growing by 20 percent a year. Hopefully it will continue to grow. We are fortunate as well that business travel is up. It is up considerably recently and it is tied probably mostly to the increased activity in oil and gas and diamonds and so on, but we cannot count on those. We cannot be satisfied to just see the Japanese tourists growing and the business travel growing. We need to be proactive on this. We need to continue to work.

What would happen if something happened in Japan and the Japanese tourism went flat on us? We would see a tremendous loss in activity here. The same thing applies to our non-renewable resource industries. In Yellowknife alone, we see this year a lot of optimism on the part of businesses. There is a 45 percent increase in rooms in the Northwest Territories. People are optimistic about tourism. We need to find a way of being able to help that industry grow.

The hotel industry itself is probably a pretty good indicator of what is happening. We see that a large number of people who stay in hotels are from the North. A large number are government employees or agencies paid for by government. We see in the smaller communities in particular sometimes very low occupancy rates. Even in Yellowknife, which is the centre, we still see occupancy rates around 60 percent. With that 45 percent growth in hotel rooms, it is going to become even worse.

What is the answer to it? Mr. Speaker, I would say that the main answer to both our economy generally and also to the hotel business is let us do something to get our tourist numbers up. As a government, we have been doing a fair bit. We continue to put $2.5 million into this industry. This is more than we even put into some of the other areas such as the diamond industry or even in oil and gas, but it is not enough. We are not doing enough. While we see industry around the world growing, our tourism business is either declining or it is, at best, holding its own. We need to do something. I ask you to work with me. Let us find a way of improving that industry.

I think it is really dangerous when I see our small airline operators, for example, saying that if they did not have medical travel contracts, they would be broke, or seeing our hotels in a situation where if they did not have government money paying for people to stay in their hotels, they would have to fold up. Worse yet, seeing a lot of hotels in small communities that are probably on the verge of folding, or seeing people who used to make their living on the land who cannot do that anymore. There is not enough money in it. It is too expensive. They need a way of getting more cash into their businesses.

We have a lot of room for tourists. We could probably take ten times as many tourists into this land and still not see any impact, still be able to have a place that people could believe and quite possibly be the first ones who have stepped on that piece of land. People want that. I think people want to come to Canada.

The Canadian Tourism Commission reports statistics show that tourism to Canada is on the rise, but it is not happening in the Northwest Territories. I believe we lost a lot of ground in the last few years. We lost ground in the time of division. At that time, Nunavut got a lot of attention and we did not get very much. People did not know where the Northwest Territories was. I had one of the businesses, in fact, a hotel business, tell me that they were moving their headquarters to Vancouver because people do not know where Yellowknife is. When it goes to the Toronto Stock Exchange, they do not know where Yellowknife is. The answer is not to see our businesses move out of here. The answer is to make this place known around the world. We need to work together on that.

It is a difficult time for us right now from a fiscal situation. We are still facing a deficit. We need to manage that side but we cannot just hunker down and look after our deficit and do nothing. I think the time is now and I believe strongly for us to make a difference in this important area of our economy. It employs a lot of people. It employs a lot of people in the communities. It employs a lot of people in Yellowknife. It is a very diverse industry that has an impact right from grocery stores to hotels to taxi companies to airlines to restaurants to hotels to tour groups to almost everybody. It has more impact broadly in terms of the communities and within a community. It is a critical one.

We do not have a lot of money to put into tourism. Even though it is very easy to say find it from within, how many times can we keep finding it from within? I am doing everything I can just to find money from within or find savings from within just to manage the deficit. I keep track of how many times people say we should find it from within or how many times they say different things are priorities. I know one Member across is now up to 18 or 19 different things that we have to find money from within for because they are all high priorities. We cannot keep doing that. There has to be a better answer than that.

We need two things, generally speaking. We need to be known internationally. That means marketing the Northwest Territories as a destination. We also need the services and products tourists expect. That means training. That means development of products. That means an expensive marketing campaign.

As the committee that worked on Common Ground went around the communities, they heard very clearly from people that tourism is an important part of our economy. We have to give it more priority than it has met with in the past. We cannot be focused just on a couple of major industries. This is also recognized in Towards a Better Tomorrow, the document that we all had a hand in crafting. I do not think tourism is an option. I think it is a requirement. It is absolutely essential that we begin for the sake of our small communities as well as our hotel industry, as well as our large communities, as well as the airline industry, everybody, that we take this seriously. That it not just be something that we flippantly say we cannot afford to spend any money on or we cannot take some of the pain that is needed to make the investments and get on with this side.

What do we do? We need dollars. As I said, we cannot keep finding everything from within. That is a challenge for me just to balance our budget. We have looked other places. We cannot seem to get the federal government's attention on an EDA. We have not had an EDA since 1996. We are continuing to work on that one and we will continue to work on it. If we can get money through an EDA, then I will be very happy; if we can get that through the tourism industry and build the tourism industry even faster.

We have looked at new sources of money from other areas. We have talked with the federal government on many occasions to try to get money for the non-renewable resources strategy so we would be able to move some money around. Again, we will continue to do that.

We have worked with Northerners through some of the main strategies we have worked on. We also worked on the hotel tax itself. Typically, if a government was going to introduce a new tax, we would not approach it the way I approach this one. You would not give people a year's notice, a lot of opportunity to discuss it, hear about it, think about it, have input into it. That is not the way governments would typically introduce a tax. We did it that way because this tax is linked to the tourism industry and I want people's input on how we improve that industry. I also wanted to give people the opportunity to have input into alternatives. What is the alternative? Is there a better tax? Is there a better way of getting revenues? I have to say a lot of people in industry have really put their heads to that one. I do appreciate the support I have received from industry in saying we want to work with you on this.

Of course, nobody likes a tax. I am even surprised when you go to the Hotel Owners Association, for example, to find that 20 percent of the hotel owners support a hotel tax. It is unheard of. People do not like taxes. I would have expected it to be around zero but the fact that we have at least 20 percent of the hotel owners saying, "It is not a bad idea. We have to put some money into this thing." is an indication that this is recognized by the industry. We have a lot of people who are saying I am against it but I want to work with you. So it is not a strong "No".

We have had people give us various options that they thought we should deal with. I am certainly listening to those and I will continue to listen to those. I have personally met with the Arctic Tourism Association. They say they want to continue working on it. They voted in favour of it. I have met with the Frontier Visitors Association who have some questions and we have been working with them. The hotel association on several occasions; the Fort Smith Chamber of Commerce; the Inuvik Hotel and Tourism Business Leaders; the Northwest Territories Chamber of Commerce; the Yellowknife Chamber of Commerce. We have hired a contractor, Nexus, to work with us and go out and do a survey and meet with people and listen to what their concerns are. Everybody agrees that more dollars are needed. They are working to address concerns. They are working with us on things like the formula for how we would have the supply with lodge owners, let us say.

I have heard from a lot of people and I have listened to what they are saying. I have heard from the hotel association and I have met with them. They have said, "Please delay this tax. Do not have it come into effect on April 1st. Give us some time to think of some options". They do not have any right now but I am listening. I told them I am willing to delay the implementation until July 1st. We will delay for some months yet and wait. I am ready to do that. I have told them I will and they appreciate that. They have written me a letter recently to that effect.

As I say, we are open to alternatives. I have heard what the bed and breakfast operators have said. We did not realize when we were drafting the proposed tax what the licensing rules/regulations were in the city and we have adjusted it so it only applies to bed and breakfasts, I am proposing, where there are more than four rooms because of a complication. We did not want to draw a line between some bed and breakfast operators and not others. So we are listening.

The administration of the tax itself, we have estimated at $100,000 for us plus a one-time $50,000. For the hotel owners themselves, there will be some costs but as one hotel owner told me, for most of them it is just the press of a key. We are prepared to work with them to get the software that is necessary. I am not going to go through the statistics on how much money it will raise and so on because we will never know how much it will cost until we do it because every hotel owner operates as an independent and they are not going to share a whole bunch of information with us and with their competitors.

The bill itself that we are proposing adds five percent on hotel room charges only. It applies to Government of the Northwest Territories and federal employees. That is fair. We will pay our share the same as everyone else does. Lodges, as I said, are treated differently. There is a formula for how they will be treated. This formula is based largely on the way the tax is managed in BC and Alberta.

There is research that shows that the tax will not make a difference at five percent to tourists. They will not go away because of a five percent charge. We have asked tourists who were here last summer and all of them I believe without exception said no, it would not make any difference. If they were planning to come here, they would come here anyway. Five dollars or seven dollars a night difference is not going to change their mind about where they go.

The administration cost for us is not going to be as bad as some people think it might be. The intention is to build up our capacity at the regional level. I mean every region. We will collect the tax from every region.

However, we do need training. The tourism training program has fallen by the wayside recently. We need to get that up. We need an ability to get programs back in place. That is the purpose of this tax.

If we do not achieve the objectives within three years, I have made the commitment to industry that we would repeal it. If we cannot show that this makes a difference in three years time, then we do not intend to have this thing continue. It is not a tax that is going to end up staying in government revenues. Every dollar of it will be identified. Every dollar of it will go back into the industry.

I just want to say in closing that we are on the verge of a tremendous opportunity. We have a huge industry that is growing. It is the biggest, fastest growing industry in the world. It is $425 billion and we should be getting a bigger share of it here than we are.

All I am asking of you is work with me. If the hotel tax is not the way to do it, do not just sit back and say we do not support it, stop it and then we go back to the same status quo we have right now. That is not the answer to our challenge in the tourism industry. We need to work together on that. Industry has told me they are ready to work with me. I think every letter and every conversation I have had has indicated the industry out there, including the hotel industry, want to work with us in finding a way of boosting our tourism industry. We need to work together. I believe if industry can cooperate, if industry wants to work on this, then let us as a government work together here and get this side of our economy going.

The big winners are all over. It is the big centres, like Yellowknife. It is also the little communities. It is the people who have been living their lives for hundreds of years off the land who can link into tourism. It is the airline industry. It is all parts. It has much more potential than anything else we do in this Territory. So all I am saying to you is let us work together on this. I think it is a huge opportunity. Now is the time to get on with it. Thank you, Mr. Speaker.

-- Applause