Thank you, Mr. Speaker. Mr. Speaker, when the 14th Legislative Assembly first took office a little over two months ago, we were aware that we faced a difficult challenge in dealing with a looming $60 million deficit for the 2000-2001 fiscal year. The last Legislative Assembly had completed its term having done its best to leave future legislators with a balanced budget, but it had been unable to achieve this. The reasons the budget was not balanced were many, but the basic problem was that there was little or no revenue growth over the past few years while spending was increasing.
The solution to our financial problems must be to increase our revenues while reducing the growth in our spending. This sounds straightforward, but it is not. The last Legislature did a lot of cost cutting. Departments were combined, wages were rolled back, hundreds of staff were laid off, capital spending was cut, and programs and services were reduced. But even after all of this cutting, the budget was not balanced when the 14th Legislative Assembly took office. From this we can only conclude that just cutting costs will not solve our financial problems.
Mr. Speaker, governments must be run efficiently and they must be accountable. But it is even more important that governments be effective in achieving their goals. Our economic development policies and programs must create jobs and bring about economic growth and do this in a way that maximizes the benefits to NWT residents. Our social policies and programs must result in a measurable improvement in the quality of life in our communities and in the health of our citizens. If we do not achieve these goals, we will never balance our budget. To achieve these goals, we may even have to invest more resources in the short term to realize reduced spending demands in the future.
It is in recognition of these realities that the 14th Legislative Assembly set as its first task the development of an agenda that would set out what we wanted to achieve, what our priorities are, and how we planned to achieve our goals. This agenda is critical as a guide to what strategies and policies we should implement, where we should invest, and from where we should reallocate. The agenda is now in a form where we can share it with aboriginal governments and other NWT stakeholders to receive their input and guidance. Over the next few months, the agenda, and the feedback on it, will guide our decision making. The first major opportunity we will have to implement new direction based on the agenda will be in the June budget.
In the meantime, we have not hesitated to act when the issue was urgent and the Members of this House were in agreement about the immediate course of action. Specifically, I refer to the decision to support a reduction in the pupil teacher ratio and to increase funding for special needs in the education system. Members also supported maintaining the Working Together program and we responded with new funding. We have also invested in the intergovernmental forum initiative, in oil and gas development and in diamond manufacturing. Although our time in office has been short, we have acted on urgent issues and will continue to do so as they arise, but we must work hard as a Legislature to complete our agenda so that our decisions are made within an overall plan.
Mr Speaker, while the development of the agenda is being finalized by the 14th Legislative Assembly and while the June budget is being prepared, the business of government must go on. That is why all Members agreed that we needed to bring in an interim appropriation. By its very nature, an interim appropriation does not reflect new direction and policy shifts. The interim appropriation is simply intended to allow us to maintain existing programs and services while we work on a new agenda and budget. However, in recognition of our fiscal situation and the fact that the interim appropriation had to include some full year contract commitments, I felt that we had to base this interim appropriation on reduced capital spending. As a result, the interim appropriation is based on a capital plan for 2000-2001 that reflects $10 million of projected deferrals from what had been originally planned by the last government.
Mr. Speaker, this $10 million in capital project deferrals, along with some other small improvements in our revenue and expenditure outlook, has reduced our anticipated deficit for 2000-2001 from $61 million to $42 million. It is my intention to reduce this deficit even further when I bring forward my June budget. But this does not mean we will try to cut our way to a balanced budget. We have learned that this will not solve our fiscal problem and will only make matters worse
When we bring in the June budget, we confirm our support for education and such priorities as maintenance of a quality health care system. We will also implement efficiencies where they make sense, but just as important, we will adopt the strategies and policies and make the investments that will lead to real economic growth, real job creation and real social improvements. Thank you, Mr. Speaker.