Good afternoon. I would like to invite Bishop Chris Williams to say the opening prayer.

I understand that Her Honour, the Commissioner of the Northwest Territories, is prepared to enter the Chamber to give the opening address.

Mr. Clerk, could you please attend to and escort the Commissioner of the Northwest Territories into the Chamber?

-- Playing of National Anthem

Thank you, Ms. Hansen. Please be seated. Good afternoon everyone, and welcome to the opening of the Third Session. Orders of the day. Item 3, Ministers' statements. The honourable Minister responsible for Finance, Mr. Handley.

Thank you, Mr. Speaker. Mr. Speaker, I give notice that I will deliver the budget address on Tuesday, June 20, 2000. Thank you, Mr. Speaker.

Thank you, Mr. Handley. Item 3, Ministers' statements. The honourable Minister responsible for Finance, Mr. Handley.

Thank you, Mr. Speaker. Mr. Speaker, I request to waive Rule 35(2), requiring the Speaker to place the item, budget address, on the orders of the day, and Rule 35(3) for the placement of the item, replies to budget address, for the orders of the day for today, and proceed immediately with the delivery of the budget address which I just gave notice of. Thank you, Mr. Speaker.

Thank you, Mr. Handley. The honourable Member is seeking unanimous consent to waive Rule 35(2) and 35(3), and to proceed with the presentation of the budget address. Are there any nays? There are no nays. You may proceed, Mr. Handley.

Thank you, Mr. Speaker. Before beginning to give the budget address, I just want to assure the Members that I have followed the tradition of all Finance Ministers of buying and wearing a new pair of shoes as a sign of good luck. I think good luck is something we certainly need.

I want to tell you the new shoes I have are runners. There are several reasons for choosing to wear runners today. First of all, I want to say that this job, and our whole government's mandate, has been incredibly busy. We have to move fast. I have never had to move so fast as I have had to in the last few months. I do not see that changing. I think as we make progress on many fronts, whether it is investments or trying to balance our budget or devolution, resource revenue-sharing, self-government, land claim settlements, Mackenzie Valley development...we have a whole bunch of issues we are going to continue to move fast on. Runners are certainly the favoured footwear of anyone who wants to move fast. My traditional cowboy boots do not work that well for moving quickly.

A second reason is that I think runners represent the healthy lifestyle we want to see in all our communities.

-- Applause

We strongly make a commitment to healthy communities and a healthy lifestyle of all our people in the Northwest Territories.

A third reason is that they are economical, practical, and much cheaper to buy than a good set of Oxfords. Being a practical man, I chose these. I want to assure the Members that these are not sneakers.

-- Laughter

These are runners. They used to be called sneakers when I was a young kid. We always referred to them as sneakers, but we operate a very transparent government. There is no need to have sneakers at all.

-- Laughter

-- Applause

Mr. Speaker, it is with considerable optimism that I present the first budget of the 14th Legislative Assembly, and my first as Minister of Finance. I am optimistic because these are exciting times for the people of the Northwest Territories. We are on the brink of substantial development of our Territories' immense resource potential -- our diamonds, oil and gas have made us the focus of national and international attention. Our renewable resource economy, including tourism, forestry, and fur harvesting, also offers great promise.

On the political side, we have made, and are continuing to make, progress in resolving lands, resources and self-government issues. Aboriginal leaders appear confident that non-renewable resource development can be a positive force. Federal, territorial and aboriginal governments have committed to work together on key issues such as devolution -- the transfer of jurisdiction over northern resources to northern governments, including resource revenue-sharing.

This is not to say that the challenges of unemployment, low education levels, social conditions and health concerns have been eliminated. Unfortunately, they still exist. However, if we can achieve a healthy economy and fiscally sound governments, we will be in a much better position to address these challenges.

In Towards a Better Tomorrow, Members of the 14th Assembly have laid out a vision for a prosperous future for the Northwest Territories. Members clearly recognize the great potential we hold. This government fully supports the vision laid out in Towards a Better Tomorrow. Over the next four years, we hope to bring forward fiscal and economic initiatives that will put the Northwest Territories on track to realize this vision.

In order for us to achieve our potential, we must carefully assess our strengths and our weaknesses and focus on the strategies that will help us achieve our goals. These strategies must include:

• • Building partnerships with other governments so that we are not working in isolation, but rather are sharing information and decision-making; and
• • Making key investments in our people, in our infrastructure and in our future.

However, Mr. Speaker, as I have stated in this House, along with my colleagues, the new resources we are able to commit toward this vision in this budget are limited. Given our fiscal position, the fact that we are able to maintain the service levels we currently enjoy is an achievement worth noting. This budget allocates resources to keep pace with the growing demands in health, education and social services. I see this budget as just the first step for achieving our vision. During this fiscal year, we must finalize our strategies and determine how they can be financed.

We recognize that we cannot do this alone. We need to work together -- Cabinet and Ordinary Members with the federal and aboriginal governments -- to put the necessary pieces into place. For example, we will need to draw on the work of the Economic Strategy Panel. We need to encourage the deliberations of the Intergovernmental Forum on devolution and resource revenue sharing. We need to develop our Non-Renewable Resource Development Strategy further to identify the investments required to maximize the benefits to Northerners from development. Finally, we need to know if the federal government will participate in a meaningful way in these crucial investments in the economic future of the Northwest Territories.

I am very optimistic that Northerners working together can achieve a prosperous future. Both the Northwest Territories and Canada stand to make substantial gains if we make the right investments now.

Mr. Speaker, I would now like to review with you our current fiscal position, based on the results of the last two fiscal years.

The 1998-1999 fiscal year concluded with the creation of Nunavut and the new Northwest Territories. Although the audit of the 1998-1999 Public Accounts is not yet final, we anticipate that the non-consolidated accumulated surplus at the end of 1998-1999 will be $38 million. This amount will be allocated between Nunavut and the new Northwest Territories in accordance with the Agreement on the Division of Assets and Liabilities entered into prior to division. As a result, the Northwest Territories will have begun its new existence on April 1, 1999, with an estimated $21 million accumulated surplus.

Mr. Speaker, the fact that we were able to start this new era with an accumulated surplus should be recognized as a major accomplishment, and credit for this achievement should be given to the 13th Legislative Assembly. Unfortunately, our ongoing problem of low revenue growth in the face of rising costs required the last government to budget a $34 million deficit for 1999-2000. This deficit is expected to eliminate the starting accumulated surplus of $21 million and place us in a small accumulated deficit position at the end of 1999-2000.

Mr. Speaker, this fiscal year the government is making a significant change in how it presents its budget and financial information. In accordance with the recommendations of the Public Sector Accounting Board, all Canadian governments are expected to report on the value and accumulated depreciation of their tangible capital assets such as schools, highways and hospitals. Up to now, the value of these assets has not been reflected in our books. In the words of the Auditor General of Canada when speaking on this matter in relation to the federal government, I quote:

"The biggest problem with the way the government has kept its books for 130 years is that it did not give the information needed to manage assets and plan for the future. We cannot delay further -- we are just catching up to 20th century practices as we enter the 21st century."

The Government of the Northwest Territories is proud to be among the leading jurisdictions in the implementation of these new accounting guidelines. We firmly believe they will lead to better planning and greater transparency in government operations. We are also using this opportunity to enhance our budget presentation to include cash and debt forecasts in addition to our traditional forecasts of surpluses and deficits. We believe this additional information will provide the public with a more thorough understanding of government operations.

Mr. Speaker, because the technical aspects of these accounting changes require more explanation than I can provide in my speech, we have included in the budget documents a full explanation and reconciliation to former accounting practices. In addition, we are offering briefing sessions to the media and other interested groups.

The 2000-2001 budget anticipates operating expenditures, including supplementary appropriations and lapses, of $763.6 million. Total revenues are estimated to be $751.3 million. This represents an expected operating deficit of $12.3 million. We also expect to make investments in additional tangible capital assets of $54 million during the 2000-2001 fiscal year.

When the operating deficit of $12 million and the undepreciated value of our investment in capital assets are taken into account, we expect an accumulated surplus position at the end of 2000-2001 of $843 million. Contributing to the $843 million accumulated surplus is the net book value of our capital assets at $846 million.

As Members are well aware, Mr. Speaker, we find ourselves in a deficit situation because our revenue growth has been, and is expected to continue to be, insufficient to meet the growing needs of our residents for programs and services. Having said this, we are expecting our revenues in 2000-2001 to be slightly higher than originally forecast. We are encouraged that the Northwest Territories population is growing again, after the decline experienced in 1998. However, our rate of population growth is still lower than that of Canada, and this translates into very little growth in the Formula Financing Grant. One-time federal funding of $8 million provided through the Canada Health and Social Transfer (CHST) and $5 million for prior years' nurses salary adjustments will help boost this year's revenues. In addition, we will receive funding from Canada of about $13 million to compensate for the increased pension costs imposed on us by changes to the federal Public Service Superannuation Act.

We are also expecting a substantial increase in our tax revenues over last year. Even though a portion of this increase is due to one-time adjustments for previous years, we anticipate that economic activity associated with resource development will translate into a higher tax base for this government. However, under our current fiscal arrangements with Canada, the GNWT will only benefit from about 20 per cent of this increase.

On the expenditure side, the program and service needs of our residents are forecast to continue to grow more quickly than our revenues. The demands on our expenditures are driven by a number of factors:

• • Our demographics are a challenge -- we have a large population of young people who need education, jobs and housing. At the same time, those over 65 years of age are the fastest growing segment of our population. We know, therefore, that we will face increasing pressures on our health care system and on our programs for the elderly;
• • We have pressing needs for capital infrastructure -- our highways and our basic community infrastructure, such as water and sewer, are badly in need of significant investment. This investment cannot be deferred indefinitely, especially in light of the need to attract further investment in resource development and ensure that we maximize the opportunities presented by our non-renewable resources;
• • The health needs of our population are of serious concern -- although there have been substantial improvements over the past 15 years, we continue to lag behind national averages in many key areas; and
• • We need to respond to the serious social challenges of the Northwest Territories - we need to address the underlying causes of issues such as substance abuse and other unhealthy choices which result in family violence, high crime rates, and fetal alcohol syndrome and fetal alcohol effect. If we do not, future governments will face even higher costs in dealing with these issues.

We cannot solve our problems simply by cutting expenditures. In 1995 and 1996, faced with a unilateral $55 million federally imposed cut to our Formula Financing Grant, the previous government of the 13th Assembly reduced spending significantly. Departments were combined, wages were reduced, hundreds of staff were laid off, capital spending was cut and services were reduced. However, these cuts did not solve the fundamental problem of the growing gap between our expenditures and revenues.

If we are to act as responsible fiscal managers, it is necessary to look at our expenditures to ensure that we are getting the best value for our dollars. A number of reviews have been initiated within the government to determine if there are areas where it makes sense to reduce spending:

• • We are conducting a broad review of all government programs and functions. It is necessary to know if there are ways we can do things better, or if there are things we should no longer be doing; and
• • We are also reviewing some specific areas such as government purchasing, energy use, and subsidies, to ensure spending is effective and efficient.

Finally, we are reviewing potential sources of additional revenue, including taxation.

I want to assure the public and the members of the public service that we are not looking either at wholesale cuts to programs and services or at large-scale layoffs as the solution to our fiscal situation. Making cuts to essential services will likely cost us much more in the future in terms of health and social problems.

Mr. Speaker, although major cuts to basic services are not considered wise, we must all temper our expectations of what the Northwest Territories government can afford to do. This includes our departments, our boards and agencies, our contribution recipients, our public sector unions and our program and service clients.

In Towards a Better Tomorrow, the 14th Assembly has identified four key priorities for the next four years. It is on these priorities that the work and resources of this government will be focused. We will make investments where we are able, just as the previous government made key investments in the diamond value-added sector, and in providing support to oil and gas activity, because they knew these investments would pay off.

However, our fiscal resources are limited. We know that substantial revenues will be generated from the development of our non-renewable resources. But it is only when Northerners gain control over the pace of development and receive the fiscal benefits of that development, that we will have the means to reach our goals.

As its first priority, the 14th Legislative Assembly identified the need for our government to work with individuals, families and communities to improve the social well-being of Northwest Territories residents. The spending measures contained in this budget reflect our strategies to achieve this priority. This budget allocates $454 million, or 60 per cent of our total expenditures, to key social programs -- health, education, social services, justice and housing. Despite fiscal constraints, we will maintain service levels. For example, in this budget, we propose to:

• • Increase funding by more than $5 million to allow the Department of Health and Social Services to respond to the growing needs of our population for health care and, in part, to continue to address the ongoing health needs of our seniors population;
• • Allocate an additional $3 million to allow the Department of Education, Culture and Employment to respond to projected growth in school enrolment and income assistance demands.

We have begun to make those strategic investments which we feel will pay large dividends in the future. Improving the social well-being of Northwest Territories residents begins with our youngest residents, Mr. Speaker. In many ways, the future of the Northwest Territories will depend on the measures we take today to improve and ensure the wellness of our youngest children. This is where investment will yield the greatest returns.

In recent years, we have reduced the rates of communicable diseases in children. Infant mortality and low birth weight rates have been reduced, and our children are staying in school longer.

Despite these successes, we still face many major challenges. For example, we continue to see unacceptable rates of alcohol and tobacco use during pregnancy. Our children are admitted to family violence shelters at four times the national rate. Our teen birth rate is three times the national average. If we believe our children are our future, we must do a better job of addressing these issues, not just at a government level but together at a community, family and individual level.

There is overwhelming research evidence that the years between birth and six years of age are key to future success. Investment in early childhood development pays off by reducing the likelihood that people will develop difficulties later in life. Over time, this reduces costs in the health care system, in the justice system, and in a variety of social services.

Under a federal-provincial-territorial agreement, the GNWT reinvests savings from the National Child Benefit in programs targeted at children. In 2000-2001, the Department of Education, Culture and Employment will invest an additional $210,000 under the Healthy Children Initiative, which enables children to start life as healthy as possible and to enhance their potential for full development. Through the Healthy Children Initiative, community groups can design and deliver integrated programs and services for children up to six years old.

We must, however, do more than this. I am pleased to announce that the Departments of Education, Culture and Employment and Health and Social Services will work on the development and implementation of a territorial agenda for children and youth. The first component of the agenda is an initiative in early childhood development, reflecting the fact that it is in the early years that the greatest impact can be made.

We have identified four key areas for investment under the agenda:

• • Support for parents and families;
• • Programs for expectant and new mothers;
• • Early childhood care; and
• • Literacy programs.

As a sign of our commitment, later during this Session, the Honourable Jane Groenewegen, Minister responsible for Health and Social Services, will be making a statement in support of early childhood development. This will be followed by consultations and the release of an early childhood development action plan. We will use the current fiscal year for planning and consultation. I hope that this government will be in a position to implement new initiatives in each key area in next year's budget.

By investing in our youngest residents, we can ensure our children begin their school years ready to learn. From there, we must ensure that quality education and training is available to students of all ages. A well-educated population will be crucial if Northerners are to benefit from the economic opportunities available.

We will increase funding in 2000-2001 by $1.6 million for student support services and to reduce the pupil-teacher ratio. This amount will increase to $4 million next year, to $6.4 million in the following year and to $8.2 million in 2003-2004 and will bring the pupil-teacher ratio to 16 to one in 2003-2004 from its current level of 18 to one.

Financial assistance to students is a vital support to promote life-long learning and career development. This year, we are enhancing the individual benefits for students to ensure that the support available better reflects the costs of post-secondary studies. Thanks to the support of all Members of the Legislative Assembly, we have obtained approval to proceed with a redesigned Student Financial Assistance Program, one that will put more money in the hands of Northwest Territories students with a particular focus on aboriginal and long-time Northerners.

We are making these investments in our residents, but there is a great need for additional investments to ensure a healthy and educated population in the Northwest Territories. We can only make investments within our means.

The needs of territorial residents require that the Government of Canada make its contribution to the cost of social programs. Unfortunately, in spite of the improvement in the federal fiscal situation, transfers for social programs continue to be subject to federal restraint measures.

In its last two budgets, the federal government has announced a partial restoration of CHST funding. This budget has made provision for a supplementary reserve of $4.8 million, which represents the GNWT's share of the 1999 CHST Trust - one time federal funding which the provinces and territories have committed to allocate to health care. The Department of Health and Social Services will be coming forward with proposals for the use of this money, which will focus on the implementation of primary health care models.

Along with the provinces and other territories, the Government of the Northwest Territories has called for full restoration of the CHST to 1994-1995 levels, including the addition of an appropriate escalator to reflect growing costs.

The additional CHST funding provided to date will increase our revenues by about $4 million per year over the next four years. Full restoration of the CHST would provide the GNWT with a further $4 million per year. However, this is far less than the ongoing effect of the 1996 cut to the formula financing grant.

Mr. Speaker, the second priority in Towards a Better Tomorrow is that of "Better governance through partnerships." We recognize that we cannot achieve our objectives in isolation. We need to work in partnership -- federal, aboriginal and territorial governments -- to make change happen.

The building of strong partnerships between the Government of the Northwest Territories and aboriginal governments is a priority of this government. We are working diligently to strengthen and enhance our intergovernmental relationship with aboriginal governments.

In the Beaufort Delta region, our government and the Government of Canada have entered into a political accord with the Gwich'in Tribal Council and the Inuvialuit Regional Corporation to work together on issues of common concern. On June 13, 2000 in Lutselk'e, the Minister of Aboriginal Affairs, the Honourable Jim Antoine, entered into a political accord on behalf of the government with the Akaitcho Dene First Nations. This accord recognizes the growing relationship between our respective governments and the need to work closely together on issues affecting both the Akaitcho region and the territory as a whole.

At the territorial level, the Intergovernmental Forum process brings together the territorial, federal and aboriginal governments to discuss issues that are territorial in scope. At the first Intergovernmental Forum meeting held in Hay River on May 5, 2000, leaders agreed to work together on pipeline developments, devolution and capacity building for aboriginal governments leading up to the next Intergovernmental Forum meeting in the fall.

This government is fully committed to building solid intergovernmental relationships through the Intergovernmental Forum. This unique governments to government to government approach will provide a process for ongoing dialogue among the parties on such key issues as devolution of control over northern resources and other shared concerns. As part of our commitment to this process, we have dedicated three full-time positions to work on this important initiative.

The Government of the Northwest Territories, along with the federal government, is also committed to ensuring that aboriginal governments have adequate resources to participate as full partners in this process. While we have not identified financial resources in this budget to fund aboriginal government participation in the Intergovernmental Forum, this government has made a commitment to fund one third of these costs. Once final decisions are made on these costs, we will be asking for additional appropriations from this Legislative Assembly.

This government recognizes the inherent right of self-government of aboriginal people in the Northwest Territories. We are working with aboriginal people to create an environment in which this right can be realized and implemented. To this end, we are strongly committed to negotiating agreements that will achieve the Assembly's goal of "strong and effective aboriginal and public governments, operating co-operatively with no reduction in program and service levels as a result of implementing self-government agreements."

The third priority of the 14th Assembly is "A northern-controlled economy that is balanced, diversified, stable and vibrant." We are fortunate that our economic future holds such great promise.

The prospects for mineral and petroleum development in our Territory are bright. Diamond mining has become an established industry in the North, with one mine in production and planning to expand, a second in the final planning and approval stages, and a third expected to soon make application for environmental licensing. We have weathered a severe downturn in the international gold market and are hopeful that the worst is over.

The recent increase in the North American market for natural gas has led to a renewed interest in Northwest Territories oil and gas reserves. For the first time in 25 years, the possibility of a Mackenzie Valley natural gas pipeline is a hot topic in boardrooms across the nation. In addition, Northwest Territories aboriginal leaders have formed the Aboriginal Pipeline Group to promote aboriginal ownership and participation in pipeline development.

Our renewable resources also hold great potential. We have made great strides in our tourism industry, but there is room for considerable growth. Northwest Territories fashion designers are making the national scene with products that combine traditional materials and methods with a more contemporary look. Our forestry and agricultural potential has not been realized.

The renewable resource sector is especially important to the smaller communities and to those who prefer seasonal employment or employment related to traditional skills. Tourism now generates in excess of $30 million a year in income in the Northwest Territories. The recent display of northern fur garments at the Montreal fur exposition confirms the world demand for our high quality northern wild fur. With healthy fish and wildlife populations, outfitting continues to provide seasonal employment for over 300 Northerners. Proven agricultural ventures include two egg production facilities and successful market gardens located in Hay River and Fort Smith. The egg quota alone exceeds $3.8 million in value. Opportunities exist in such areas as secondary processing of timber, the harvest of wild plants and agriculture. Examples of recent success stories in these new areas include the test harvest of morel mushrooms in the Yellowknife area last summer and the Inuvik Community Garden Project. Development of the renewable resource sector is critical to developing a diverse and stable economy.

Finally, the development of our resources needs to be balanced against the impact on our environment. The Government of the Northwest Territories is coordinating the development of a northern strategy to control greenhouse gases. This process involves over 40 federal and territorial agencies, aboriginal organizations, industry and environmental groups. The general public will be part of the consultation process as well. The draft strategy to control greenhouse gas emissions will be presented to Cabinet in the fall of 2000.

Mr. Speaker, we are working to maximize the opportunities for Northerners from development of our resources. To do this, we have to address a number of challenges, such as the need to provide training, to build the necessary infrastructure and to ensure that we as Northerners benefit from development. The Government of the Northwest Territories has made a substantial investment in promoting a secondary diamond industry, and has supported aboriginal organizations in becoming partners. In addition to the direct funding of $5 million to support and promote value-added diamond initiatives, the GNWT has also approved $20 million in loan guarantees to three companies establishing operations in the Northwest Territories. Within our means, we are committed to continuing to provide similar support to northern companies working in the oil and gas sectors.

In January of last year, the previous Minister of Resources, Wildlife and Economic Development, the Honourable Stephen Kakfwi, initiated the Economic Strategy Panel, representing a cross-section of Northwest Territories interests, to examine the opportunities and challenges we face. The diverse interests represented on the panel have ensured a broad and informed view of what needs to be done to stimulate development and improve the circumstances of Northwest Territories residents.

Under the leadership of Mr. Richard Nerysoo and Mr. Daryl Beaulieu, the panel has completed its work and has provided the comprehensive recommendations we need to focus our economic development efforts.

I am pleased to announce that the report of the Economic Strategy Panel, entitled "Common Ground", will be tabled during this Session, and I look forward to the debate of the report's discussion and recommendations. The document will also be made available to interest groups and the general public to ensure we are on common ground and can proceed confidently with a clear and definitive economic development strategy for the Northwest Territories.

Development of our non-renewable resources has the potential to generate $35 billion in resource royalties and over $55 billion in taxes to both levels of government over the life of known and potential reserves. An agreement on devolution of authority for resource management with Canada would allow a significant portion of those revenues to flow to northern governments --both public and aboriginal.

However, in order to realize those revenues, major investments must be made today. The Northwest Territories lacks the basic infrastructure to support economic development, including a system of all-weather roads, communications systems on par with the rest of Canada, and municipal services that can support rapid community expansion. Many northern residents lack the educational levels that would allow them to take advantage of jobs created by development. Northern businesses, including aboriginal development corporations, may not have access to the necessary venture capital or expertise. Industry has told us time and time again that the regulatory regime in the North needs to be streamlined and the rules have to be clearer before they are willing to make major investments in the development of our resources.

In order to address these challenges, I have proposed a Non-Renewable Resource Development Strategy. The strategy outlines the investments that are required to create the right environment for resource development in the North, to manage development effectively, and to ensure that northern residents reap maximum benefits.

But this is not just a plan for the Government of the Northwest Territories. We cannot do it alone. We want to see all the parties with an interest in northern resource development work together to make the needed investments, including the federal government, the territorial government, aboriginal groups and industry. For this reason, we have presented our proposal to the federal Ministers of Indian and Northern Affairs and Finance, to our aboriginal partners through the Intergovernmental Forum, and also to members of industry.

The strategy proposes an investment level of $340 million over the next four years. Mr. Speaker, the GNWT is prepared to do our part. We propose to maintain current levels of investment totaling more than $100 million over four years. We are hopeful that the federal government will make the required level of commitment and invest in a bright future for the Northwest Territories.

Part of the strategy is the vision of a Mackenzie Valley gas pipeline, which would bring natural gas from the Beaufort Sea and Mackenzie Delta to markets in southern Canada and the United States. This pipeline would also be the cheapest way to bring gas from northern Alaska to markets, and would allow for the development of other reserves along the route of the pipeline.

A Mackenzie Valley pipeline would also provide significant benefits to the rest of Canada. Much of the equipment and materials used to build the pipeline will come from southern Canada. We estimate that a Mackenzie Valley pipeline, with a link to Alaska's Prudhoe Bay reserves, would result in about 80,000 person-years of direct, indirect and induced employment during construction.

Eighty per cent of these jobs will be in southern Canada. The construction would increase Canadian Gross Domestic Product by $5.5 billion. More secure supplies of natural gas would replace other kinds of fuel and help Canada meet its commitments to reduce greenhouse gases under the Kyoto Accord.

To respond to ongoing and future development of the Northwest Territories' resources, a number of initiatives will be undertaken by this government this year. The Department of Resources, Wildlife and Economic Development will commit over $700,000 this fiscal year to help communities prepare for this development. These initiatives include:

• • The creation of four regional petroleum advisor positions, one in each of the three regions that have the greatest levels of activity and one position in headquarters, so that northern communities can maximize economic and employment opportunities through planning and preparation for the expected increase in industrial activity;
• • Allocating funding to provide legal and business development advice to aboriginal organizations to work together to obtain significant ownership in the construction and operation of Northwest Territories pipelines. Equity participation in oil and gas infrastructure is considered to be one of the primary ways to ensure long-term wealth creation for northern residents;
• • Providing resources to the Aboriginal Pipeline Group to assist with acquiring legal, financing and business development advice to support the initial establishment of this consortium;
• • Gathering information on the ecosystem and baseline health data for the Deh Cho, Sahtu and Inuvik regions. This information will be used to support environmental and socio-economic monitoring of the impacts of development in co-operation with communities, industry and the federal government; and
• • Investigating options for adding value to the gas industry through the manufacture of products and developing access to northern produced natural gas as an alternative source of energy for communities and industry.

We will also make investments to ensure Northerners have the education they need to take advantage of job opportunities. The Department of Education, Culture and Employment will spend $1.3 million in 2000-2001 to promote employment in the oil and gas and diamond industries. The department will also invest an additional $1 million to target youth employment.

The recent expansion in the Northwest Territories resource industries has increased the demands on the territorial highway system. To keep pace with this heavier, industrial traffic, the Department of Transportation has planned capital improvements for Highways 3,4,7 and 8 where the impacts of the increased traffic have been greatest.

The reconstruction of Highway 3 between Rae and Yellowknife should progress by another eight kilometres this year at a cost of $6 million. The department is involved in federal-territorial discussions to apportion the $600 million in National Highway Program funds announced by the federal government earlier this year and it is hoped that a significant amount will be allocated to the Northwest Territories for work on the Rae-Yellowknife portion of Highway 3.

In anticipation of continuing oil and gas industry development in the Liard Valley, approximately $500,000 is scheduled for grade stabilization and surface improvements on the first 50 kilometres of Highway 7 from the British Columbia border north to Fort Liard.

On Highway 8, the Dempster Highway from the Yukon border to Inuvik, the $2 million reconstruction program for 2000-2001 includes the installation of a new bridge at Campbell Creek south of Inuvik. The bridge replaces two large diameter culvert pipes and should prove more habitat friendly for fish stocks in the stream.

This year, the Department of Transportation intends to continue its bridge program on the Mackenzie Valley winter road into the Sahtu. The completion of the Ochre River Bridge, at a cost of $960,000, will allow the winter road to open earlier and should extend the winter road season by as much as a week.

I would now like to turn to the issue of taxation. Today I am announcing a tax initiative which I believe will help make our economy more diversified. Mr. Speaker, the tourism potential in the Northwest Territories has barely been tapped. This industry can be an important component of the Northwest Territories economy and can play a key role in diversifying the economic base of our communities. First, we need to let potential tourists know where the Northwest Territories is and what we have to offer. We need to project a strong Northwest Territories image and promote the Northwest Territories as a destination throughout the world. Second, to better serve our customers we need to strengthen the base of tourism services in every region. We must develop quality attractions, products and services in every region and we must advertise these attractions.

However, to effectively achieve these two objectives, investments are necessary. The GNWT cannot afford the required investment on its own. One of the sources for such investment is a tax on hotel occupancy. Today, I am proposing that the Government of the Northwest Territories, effective April 1, 2001, adopt a five percent tax on occupancy charges in commercial accommodation facilities with four or more rooms. We propose that the estimated $1 million in annual revenue raised from this tax would be reinvested in tourism with the goal of developing our tourism potential. If this tax is approved, the Department of Resources, Wildlife and Economic Development will be coming forward with a plan for tourism promotion for inclusion in the 2001-2002 budget.

It is my intention to introduce legislation respecting this measure later during this Session. I will also be seeking input from MLAs, individuals, and business groups, in particular the tourism industry, and other organizations prior to the passage of this legislation.

The fourth priority the 14th Assembly has set is to secure "adequate resources to help all levels of government to become more self-reliant in meeting the needs of the people they serve." This is key to achieving the Assembly's vision of "a strong, unified and self-reliant Northwest Territories that can take its rightful place in the federation and the international community". Mr. Speaker, for the first time in our history, we are poised to achieve that vision, and to become the first "have" territory in Canada.

New resource development in the Northwest Territories has the potential to provide as much as $90 billion in royalties and tax revenues for government over the life of the developments, most of which will flow to the federal government. Funds from resource development have the potential to help finance needed investment in infrastructure and growing costs in the social area.

The three territories are the only jurisdictions in Canada which still do not have complete control over their non-renewable resources. Virtually all of the mineral and oil and gas royalties generated in the Northwest Territories currently go to the federal government. As well, about 80 percent of the Northwest Territories tax revenues generated by resource development reduce the grant from Canada. As a result, the Government of the Northwest Territories does not have the money required to fund the infrastructure necessary for the new development or to mitigate the social impacts of development.

Steps need to be taken immediately to ensure that these funds flow to the governments, both the Government of the Northwest Territories and the aboriginal governments, that have the responsibility for providing services to the people of the North. Devolution of both control over development and the revenue from natural resources needs to happen to provide the residents of the Northwest Territories advantages equal to those enjoyed by residents of the provinces.

Investments needed to take full advantage of development, such as the investments made in secondary diamond processing, have been primarily funded by the Government of the Northwest Territories. This has resulted in higher deficits and fewer resources over the short term for other programs. The Northwest Territories does not have the capacity to make these proactive investments alone. We need to act now to ensure that the revenues from resource development in the North go to northern governments to provide needed investments and services for northern residents.

Northern control over resources will allow Northerners to take better advantage of our non-renewable resources, ensuring that development occurs when northern residents are able to take maximum advantage of it. Control will allow us to ensure that more processing occurs in the North, and that there are more employment opportunities for Northerners. Control will also allow us to bring clarity and certainty to the regulatory and fiscal regimes. If northern governments have full control over all our resources and diamond, oil and gas developments proceed, the Northwest Territories could become a "have" territory over the next ten years.

Mr. Speaker, I sincerely believe that the future of the Northwest Territories has never looked brighter. There will be opportunities over the next ten years in a number of areas for developments that can benefit the residents of the Northwest Territories. However, we need to act now to ensure that we can take full advantage of these opportunities. We cannot afford to wait.

The Legislative Assembly has set out a vision of a strong, unified and self-reliant Northwest Territories that can take its rightful place in Canada.

We need to make the right decisions over the next few years to ensure that we achieve this vision. We are doing our best to improve social well-being and service levels with existing resources, but we need full access to the revenues from our resources if we are to make significant progress towards addressing our problems. We need to ensure that we continue to maintain a tax and regulatory environment that does not unnecessarily restrict business, without compromising the environment or social programs.

We must work in partnership with the federal and aboriginal governments to ensure that Northerners benefit from the development of our resources and that northern governments have the resources needed to take our place in Canada to provide top quality programs and services to our residents.

Mr. Speaker, it is clear there is a lot to do over the next four years and we, as the 14th Legislative Assembly, have developed a vision of what we want to accomplish. We face many challenges in the North, but there are many opportunities as well. Although we are forecasting a deficit budget for the fiscal year 2000-2001, we are maintaining the levels of services provided to Northerners and investing where we can to provide maximum returns on the future both for our people and our economy. In closing, I would like to re-state my optimism for the future and that I truly believe these are exciting times.

-- Applause

Thank you, Mr. Handley. Before we proceed to item 5, Members' statements, I wish to bring to the attention of the House another very special event we are marking today. Our esteemed clerk, Mr. David Hamilton, and his lovely and very, very understanding wife Kate are celebrating their silver anniversary today.

On behalf of all Members and staff, I wish to extend our very best wishes as you celebrate 25 years together. Congratulations to you both.

-- Applause

Item 5, Members' statements. The honourable Member for Mackenzie Delta, Mr. Krutko.

Thank you, Mr. Speaker. Mr. Speaker, my statement today is a follow-up to meetings held last week in Calgary regarding the World Petroleum Conference. There has been a lot said about the potential we have in the Northwest Territories. I think one thing we can lose sight of is the people themselves. Our most precious resource is the people.

Mr. Speaker, in ensuring the people of the Northwest Territories benefit from these developments, we have to ensure we have the training, infrastructure and the opportunities for the people of the North.

There are development opportunities in all of our different regions. We have the potential in different sectors, such as the mining sector, oil and gas, tourism, and renewable and non-renewable resources.

In particular, Mr. Speaker, in my riding of Mackenzie Delta, there is the potential for oil and gas development. There is talk about a gas pipeline up and down the Mackenzie Valley and the results that have to come forward regarding the land sales recently in the Mackenzie Delta, especially the sale of lands from the Inuvialuit, which have brought in some $75 million. There are opportunities in different sectors, from the seismic operation to drilling, to the potential development of that resource.

In order to meet that requirement, we have to look back in time. As a young man, I started my involvement with oil and gas in the Mackenzie Delta. I worked on the Beaufort Sea. It seemed like there was never going to be an end to this development. It came and went. We had large scale drilling operations, drill ships, man-made islands. We had drilling platforms, ice-breakers, some large camp facilities in Tuktoyaktuk and also in Inuvik.

Yet as quick as it came, it also left. Ensuring we receive the benefit to its maximum potential this time around, I encourage this government to put all of its resources and its abilities to develop programs and services to assist the people in the Mackenzie Delta to take advantage of this opportunity, which has come once again.

I feel it is essential that this government put as much effort in the oil and gas sector as it did in mining. Mr. Speaker, I seek unanimous consent to conclude my statement.

The Member for Mackenzie Delta is seeking unanimous consent to conclude his statement. Are there any nays? There are no nays. Mr. Krutko, you may conclude your statement.

Thank you, Mr. Speaker. Thank you, colleagues. Mr. Speaker, in order to meet the requirements, especially for the people in the Mackenzie Delta, we as a government have to play a role in developing that industry. We have responsibilities in the areas of education, health and developing the infrastructure in our communities.

I find it appropriate that this government takes whatever means necessary to find the adequate resources that are going to be needed to develop the training programs, so we can have quality jobs for trained people. Also, we need to ensure we have the facilities to take on this large-scale development, such as hospitals and college facilities. We need to ensure that the infrastructure is there to be able to sustain this development, such as airports, highways and the facilities that are going to be needed to house this large-scale operation.

Regarding the development of the North and its people, I feel it is critical that we should not hear the industry say we do not have the trained people in our communities or region. I feel that is a copout.

As a government, we have a responsibility to ensure we have the human resources, so people can develop those skills through the college and other facilities to ensure they take full advantage of this development when it comes once again. Thank you, Mr. Speaker.

Thank you, Mr. Krutko. Item 5, Members' statements. The honourable Member for Great Slave, Mr. Braden.

Thank you, Mr. Speaker. When this newly elected Assembly gathered barely five months ago in Fort Providence, we set out to establish a fresh vision for our government. Our Caucus decided to build on the vision of previous Assemblies.

At the end of March, we released our plan, entitled Towards a Better Tomorrow. I would acknowledge, Mr. Speaker, the Commissioner's recognition of that vision in her opening address and the use of that vision and its principles by the Minister of Finance in the budget address.

The key principle of the vision is the importance of communicating our messages. We realize we have many different audiences among our own constituencies. We also recognize that there are many other audiences. The Honourable Joe Handley, Government House Leader; Mr. Nitah, deputy chair of Caucus and I, as Caucus chair, wrote to more than 60 Northwest Territories organizations to personally solicit their review and comments on the document.

Our outside audiences, Mr. Speaker, are people who need to know about our plan. They include our neighbouring provinces in other territories, businesses and investors in Canada and offshore, and especially, Mr. Speaker, our colleagues in the senior government in Ottawa. I acknowledge the work of my colleagues, the Premier, the Ministers and many hard-working staff, in helping to take that message to the outside audience.

On many occasions, Mr. Speaker, MLAs, as members of standing committees, and Ministers have worked together in support of our common goals, agendas and messages. We have attended national and international symposia on diamonds and petroleum, and events here in the Northwest Territories, such as the Association of Municipalities in Fort Simpson, the Sport and Recreation Directions workshop in Hay River and the Intergovernmental Forum there.

We will continue to build and enhance the communication we need to have with Northwest Territories residents, Mr. Speaker. This includes taking our message to every part of the Territory we live in and make every effort to hear what people have to say.

In this respect, Mr. Speaker, I am pleased to advise, along with host MLAs for Inuvik Boot Lake, Mr. Roland, and Inuvik Twin Lakes, Mr. Allen, that Caucus will be travelling to Inuvik in September, from the 5th to the 8th, to continue our work as the 19 Members of this Assembly on the evolution and progress of Towards a Better Tomorrow. Thank you, Mr. Speaker.

-- Applause

Thank you, Mr. Braden. Item 5, Members' statements. The honourable Member for Hay River North, Mr. Delorey.