The government continues its community empowerment initiative under the guise of regional capacity building. Committee members reminded the government that adequate funding, training and facilities must accompany the downloading of programs and services. Public safety should always be the primary concern.

An effective, accountable, and auditable third party accountability framework must be a required component of any downloading. Committee members pointed out that this was also suggested by the Auditor General of Canada in his Report on Other Matters for 1998-1999. The government needs to know if communities are managing and administering their programs and services in a safe, effective, economical and efficient manner.

The committee commented that this department is doing better than other departments in the area of affirmative action. The committee also encouraged the department to continue to improve upon its efforts and for other departments to follow suit. That concludes the committee's review on the Department of Finance.

Thank you, Mr. Delorey. At this time, I would like to ask the Minister if he would like to bring in any witnesses.

Mr. Chairman, yes, I would.

Does the committee agree?

Sergeant-at-Arms, would you please escort the witnesses in?

Mr. Handley, for the record, could you introduce your witnesses, please?

Thank you, Mr. Handley. General comments? Mr. Miltenberger.

Thank you, Mr. Chairman. I have a question for the Minister. Yesterday, in the House, the Minister committed to table the calculations used to arrive at the $1.25 million projected revenue for the hotel tax. I noticed in his statement he has made a point of mentioning the tax. I was wondering if he has that information available today. It would certainly aid the discussion if we could see how they arrived at that calculation. Thank you.

Thank you, Mr. Miltenberger. Mr. Handley.

Thank you, Mr. Chairman. Mr. Chairman, I have a draft of it. I would be willing to table that. I have not had a chance, since the question, to really go over it carefully, but it does outline the two methods that were used for estimating the hotel tax revenues. I would be happy to table that, if you would like, as it is. Thank you.

Mr. Miltenberger.

Thank you, Mr. Chairman. Would it be possible to have one of the pages or the Clerk's copy so that we could circulate it to the Members?

It should have been in general comments, but by the time we get to detail, there may be some questions. Thank you.

Thank you, Mr. Miltenberger. The Minister is circulating that information. General comments. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, as in the committee report, we are very concerned that if the work that is being done to secure more funding with Ottawa, in the form or royalty revenue sharing, does not come through in the very near future, we are going to be facing some drastic situations when it comes to budgets and reductions.

I know the Finance Minister is very positive and upbeat regarding the discussions that are going on and I think it is a good thing in that sense. I think that we need to have a bit of shoulders when it comes to reality to really look at the situation.

I am aware departments will once again start working on budgets come late summer, in preparation for fall and work again in committees. If we do not have any new funding by that time, as the Minister stated in his opening comments, there is a further increase that includes over $2 million to cover the interest costs associated with increased borrowing needs.

Overall, this budget that is being put forward is one that leaves us in a cash deficit of over $28 million, and throwing that to our accumulated debt, we are running rather close to what is at times called the debt wall.

I do not like to be all that negative, but the fact is we are going to have one situation to deal with if new funding is not found.

The Minister has introduced the hotel tax to try to help on the tourism side, but the Northwest Territories on its own, our people in the North, is over 40,000. We do not have much room when it comes to taxes. The cost of living alone is eating away at people's budgets in the North, faster than increases can come along to offset those when it comes to employees.

I have used examples of my community, the cost of living that is going up, and I know the Minister and this department have to look at taxing options. Hopefully, that is a last resort. The funding we have received from that would have its own spin-off effects if taxes were to be increased.

Right now, even though there is talk of a lot of business, I know in my community, there is one group that owns the major hotels and they are fighting to stay alive. A loss of business would not help them right now. I have yet to have a real, in-depth discussion with him. It is something I will do over the summer.

With that, Mr. Chairman, I will leave some questions to detail as we go through it. Thank you.

Mr. Handley.

Yes, Mr. Chairman, I do not think there was really a question there. If there was, I am sorry if I lost it. Thank you.

General comments. Mr. Dent.

Thank you, Mr. Chairman. I have a few questions for the Minister.

Towards the end of his opening comments, he talks about the proposed five percent sales tax on hotel rooms. He says in here, "If this tax is approved, the Department of Finance will be coming forward in the next business plan to implement the tax."

How does the Minister see this tax being approved?

Minister of Finance, Mr. Handley.

Mr. Chairman, my intention would be, as I have said before, to do consultation over the next few months to introduce legislation in our sitting in November. Assuming that the legislation is passed, the tax would come into effect the next fiscal year. Thank you.

Mr. Dent.

Thank you, Mr. Chairman. So I am to take it then, that the Minister's consultation with whomever he chooses to consult, if he happens to get a majority of those people he consults with to approve the tax, he will implement it? Is that the approval he is talking about here?

In his comments, Mr. Chairman, he said that if this tax is approved, he will come forward with it in the fall business plans, which we should see in October.

I am just wondering how we are going to assess whether or not this tax has been approved?