Thank you, Mr. Chairman. I will conclude with a comment and, I guess, a request of Minister Handley to carry that message to Ottawa as he has described. It is the right one. This government has been consistent with it and from indications that I have, it has managed to get us on the radar screen in a number of places, in Ottawa and elsewhere in the country. We have heard it loud and clear in recent committee hearings and in public meetings that I have been at in the NWT. Continue, Minister Handley, to press this message forward as clearly and as strongly as you can. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. I too have concerns with regard to exactly where we are going in the next two years, realizing the economic uncertainty that we are in with what happened in the United States and what is happening in the different sectors of the Canadian economy, such as the auto industry, the high tech and the major layoffs in a lot of the provinces. It does have an affect on the bottom line and as a government, where are we going to go?

I think we have to realize that we are not immune to that. I think sometimes, because of distance, we think we are but my experience with the 13th Assembly, it was this specific type of activity that decreased the amount of revenues that we received from Ottawa. I think we have to keep that in mind, not knowing what the amounts are going to be with the new fiscal arrangement for expenditures we are going to see next year because of that uncertainty.

I would like to ask the Minister, do we have an idea of what the amount of the transfer payments we will receive next year will be in regard to covering the expenditures of this government?

Mr. Chairman, because of the impact of the one-time funding that we received from the anonymous corporation, the grant from Canada drops considerably next year. They give us the full amount. I think it is roughly $350 million and then later on take out their share of it. For the current year, our total grant from Canada is estimated at $263 million. Next year, it is estimated at $282 million and on top of that, there is a $12 million federal pension subsidy. That is down a lot from our 2000-2001 grant, which was at $574 million.

Having said that, we do only get the $282 million in 2002-2003, but then some of it is clawed back later on, resulting in some of the corporate revenues clawed back, resulting in an increase in grants in later years.

In 2003-2004, if everything stayed the same, we could be looking at a federal grant of up to $800 million because of the clawbacks from the corporate taxes and the offsetting increase in the grant. So because of these one-time tax revenues, our grant jumps all over the place, from $260 million up to $800 million over the next few years.

Thank you, Mr. Chairman. Mr. Chairman, I do not believe I recognize a quorum in the House.

Thank you, Mr. Chairman. Mr. Chairman, I believe that, realizing we have a limited amount of resources and time in the term of this, the 14th Assembly, I feel we are taking on a lot of initiatives we will not be able to accomplish within the term of this Assembly. We have energy initiatives that are on the drawing board. We have made expenditures regarding a highway toll. We are already expending on something that has not been passed in this House.

Also, Mr. Speaker, we are looking at other strategies that, for myself, there are a lot of resources attached to these strategies. Knowing they will not bear fruit in the term of this Assembly, I feel that those types of initiatives should be put on the back burner, realizing that we will be faced with some sort of a deficit situation. We do have to consider cutting expenditures of this government. Those are some areas I feel we have the ability to cut, which would have a major impact on the programs and services we have.

If anything, it will enhance programs and services for those areas that are stretched to the limit, where we need those extra funds where they can be earmarked or put in the areas where we can have it as more of a priority rather than continue with the route of doing strategies.

I would like to ask the Minister, are any of those strategies we are looking at a real priority of this government that we can possibly do without and leave for the next Assembly to deal with? A lot of those strategies will not be accomplished within the lifetime of this Assembly.

Thank you, Mr. Chairman. Mr. Chairman, I do not have the full detail on all of the strategies that our government is undertaking because they are within various departments. We have, for example, put a lot of extra money into recruiting, retaining and training nurses. That is something that hopefully will give us returns in the long run. Those kind I hope to keep.

We have, in Maximizing Northern Employment, a number of initiatives that we are funding, whether it is interns or summer student hires or finding employment for people who have graduated in a particular program. Those again I would like to keep.

The one area where we have said we cannot afford to get into commitments on huge investments is on the highway infrastructure. We felt that there is a choice. We can borrow more money, but that is not a good alternative because that will do exactly what Mr. Krutko is saying could be a problem for us, hitting our debt limit very quickly. We could put it off to another government to worry about but we know they are deteriorating. We could try to find other means of financing, which is what we are doing.

Those are the kind we are trying not to have to put a lot of money into during the life of this government in order to prevent what Mr. Krutko is warning us about. We have also, as I have mentioned earlier, put a limit on our capital expenditures, again to try to maintain a reasonable budget. That is one initiative.

There may be specific things we could do differently, in the amount of support to businesses. It is not huge. I would not want to cut it back right now. We do have opportunities for private companies, aboriginal corporations to get into the oil and gas sector, to mining activities; those I would have to cut back too. It is not an easy decision to say we should cut back some of those kinds of initiatives. I have the same difficulty when it comes to water and sewage systems and municipal infrastructure.

Right now, Mr. Chairman, in my view, it is a little bit early to begin to make cutbacks. I think we are fine for another year or two years, depending on how our revenue projections work out and our expenditures, of course. Thank you.

Thank you, Mr. Chairman. Mr. Chairman, another area that we will have to sooner or later face is the whole challenge of what do we do when we do find ourselves in a deficit situation?

In the 13th Assembly, they had to implement what they called a Deficit Elimination Act which was in place to ensure we were monitoring the expenditures of the government. In some cases, there were some radical things done where we were amalgamating different departments into one and also looking at getting rid of capital within the government, trying to streamline expenditures of the government.

I would like to ask the Minister, is there anything in place or anything that is being looked at to consider having such legislation in place through the Financial Administration Act to come through this House, to ensure that we do not have excessive spending, that there is legislation that the departments know they have to follow? We as a government have to assure the public we are doing something and we are taking action on the expenditures within the government, not with regard to public programs and services but the expenses of maintaining the bureaucracy of this government, which is an expense.

We have to eventually somehow find ways of not downsizing, but of controlling the growth within government. I think we have seen quite a bit of growth in the last number of years in the government from what it was in the 13th Assembly.

I would like to ask the Minister of Finance if they have considered looking at areas that we may have to consider, realizing that we are not immune to the deficit or the situation with regard to the downturn in the economy in Canada. We are going to be affected. I think that is something that we have to keep in mind, realizing that our deficit situation will be going up in the next couple of years. Has the Minister and his department considered those options or alternatives?

Mr. Chairman, yes, we have considered those options. I think having a Deficit Elimination Act or policy was good at the time of division, to make sure that we were not burdening another jurisdiction with debt.

Right now, the federal government essentially placed a deficit limit on us of $300 million. I think, given the size of our budget, our economic activities, that $300 million limit is probably a reasonable target. It is something that we might have set ourselves if the federal government had not put us in that position.

To try now to aim at complete deficit elimination in the future I think would really limit our spending at this time, our spending on a lot of good initiatives. My view now is that we are looking at a cash surplus at least until the end of the 2002-03 year and then we will find ourselves going into a cash deficiency if nothing improves.

I think it is a little bit early to begin to earmark things that we want to reduce or cut back on. My preference is to wait and see what happens with the projected recession, see what happens with our economic development, see if we get a pipeline -- move those decisions further down the road before we decide if we have to look at curtailing some of our spending. Thank you.

Thank you, Mr. Handley. Mr. Krutko.

Thank you, Mr. Chairman. Mr. Chairman, realizing that we only have the time frame that is allotted to this 14th Assembly, which is two more years before we go to the polls, is that our responsibility is within that two years. What happens with a pipeline or what happens in other areas would not happen within that time frame.

I would like to ask the Minister, has he or his department tried to find ways, knowing that the federal government is now receiving royalty payments from the diamond mines and what not, if there is a possibility of instead of having to wait for the conclusion of negotiations for the Northern Accord, that we can possibly look at a percentage distribution of that up-front now, knowing it will happen later on?

If there is a possibility or a consideration with the Minister of Finance, knowing we are negotiating a new formula financing agreement, but also knowing that these new revenues, which were not part of the previous financial agreements or arrangements, and seeing if we could get a tax break or allowed to keep more of the resources, rather than having to send 80 percent of the capital corporate taxes or taxes back to Ottawa? Any revenues that are generated, if we could keep a bigger percentage of it, realizing that we are going through some difficult times and that we will need those additional resources to get us through.

I think instead of asking for 100 percent of the resources, we are asking for 20 or 15 percent that we are allowed to hold back, instead of having to give 80 percent back to the government. We will let them take 75 and we keep 25 or something to that arrangement.

Is the Minister willing to look at something like that with the Minister of Finance to see if there are those types of alternatives that we can work on over the next two years?

Thank you, Mr. Krutko. Mr. Handley.

Mr. Chairman, we have raised that point with the federal Minister of Finance in the past and I will continue to take the Member's question and continue to raise that. The one thing we have to keep in mind is that we have agreement from the federal Minister of DIAND to enter into devolution, resource revenue sharing negotiations. That is going to be essentially a three-party negotiation with the aboriginal governments, our government and the federal government. Before we would go to the federal government with a proposal to retain any particular percentage of the royalties, unless it was 100 percent to be put in trust, then I would want to talk with the aboriginal governments first to make sure that they are on side with that kind of thinking.

I hope that we are able to get on with the negotiation process by December or early in the new year. I think that is the time for us, jointly with aboriginal governments, to make the point that Mr. Krutko is suggesting.

Thank you, Mr. Handley. Mr. Krutko.

Thank you, Mr. Chairman. The next question I would like to ask Mr. Handley is there is a federal budget, possibly in December. Does the Minister know if there are any initiatives within that budget that could be beneficial to this government with the upcoming budget session in Ottawa so that we can see -- one of the things we have been striving for for years is trying to get some sort of economic development agreement, similar to what they have in the provinces. Yet the Territories, from the Yukon, Northwest Territories and Nunavut, has not had one for quite some time. I would like to ask the Minister if he has heard of or is there anything of substance within that upcoming budget which could be beneficial to the Government of the Northwest Territories?

Thank you, Mr. Krutko. Mr. Handley.

Mr. Chairman, I do not know with certainty. Minister Tobin, when he was in town a month or so ago, certainly hinted that there would be some good news coming for us. I think there have been hints from other Ministers that there is something. I hear unofficially that there may be a form of an economic development agreement but that it would be no more than somewhere in the neighbourhood of $5 million a year for three years, but nothing specific at this point. I doubt that Minister Martin will give us many clues before he tables the budget in December. Thank you.

Thank you, Mr. Handley. Mr. Lafferty.