General comments. Mr. Dent.

Thank you, Mr. Chairman. Mr. Chairman, I share the Minister's optimism for the opportunities that are out there for the Northwest Territories, economically. I too would say that it is not yet time to start to slash the spending. I think we need to make sure that we are ready to take advantage of those opportunities.

Though I have to admit I am somewhat surprised. I had thought that the debt wall was, even in the worst case scenario, further off than what the Minister has now suggested.

I was wondering, if the debt wall is looming a bit closer than we had thought and even though I do not think any of us wants to sound the alarm, I think we still need to continue to invest where it makes sense. Has the Financial Management Board started to look at the programs to make sure that the priorities of this government are being reflected in the programs that are offered, looking for confirmation that what we are doing is really what was set out in our strategic action plan, Towards a Better Tomorrow?

Mr. Handley.

Mr. Chairman, annually, we do an evaluation of our programs and provide the document to the committees. Yes, we are continuing to monitor what is happening. If there are programs where there is a lot of slippage, then we need to tighten up on those. I cannot name any offhand right now, but we have not looked at doing away with any larger initiatives yet.

I think the main area where we have put some limits on is on capital. We realize that by targeting a capital budget of $50 million a year, we are in a pattern that is not sustainable in the capital side over the long term. We have chosen to put the limits on that program as opposed to putting it on the operations side. Of all the adjustments, that would be the main one that we have made. Thank you.

Thank you, Mr. Handley. Mr. Dent.

Thank you, Mr. Chairman. Mr. Chairman, when this House adopts the budget, that is basically our agreeing with the government that these are the strategies that we want to support because we are saying here is the money to go ahead and do the job.

With the new revenues that came in this year after the budget was passed, have there been any new initiatives embarked on that might now be called into question because we are seeing a reduction in the revenues being forecast over the next three years, or have we stuck to the business plan? Have we stuck to the plan that was laid out when we adopted the budget and not changed the strategy or approach?

Mr. Handley.

Mr. Chairman, we have essentially stayed with the business plan. There are no significant changes at this point. Again, depending on the response from the committees, there could be changes made for 2002-03.

A lot of the new initiatives that we have embarked on over the last year are initiatives that can be curtailed at any time. At the end of the year, we could choose not to invest money in any of those particular areas.

We have tried to stay away from building ongoing operational demands.

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

Thank you, Mr. Chairman. With the recent changes in federal priorities, especially on the security front, I am sure that every jurisdiction in Canada is looking at their short- and medium-term plans and expectations, especially as they relate to the federal government as a partner. Of course, we know that the federal government here in the Northwest Territories is much more than a partner. They are the umbilical cord. They are fiscally what we depend on in order to sustain ourselves, especially in the lack, the very frustrating lack of a real tangible process on getting a resource revenue sharing deal. That is another issue and we can take that up at other times.

I wanted to look at the formula financing or the formula framework that we have with Ottawa. This is typically a four-year deal. I understand the current one we have expires in 2003, is it? 2004? Mr. Chairman, maybe just a quick clarification on that. When does the current formula financing deal expire? Thank you.

The current formula expires, Mr. Chairman, at the end of March, 2004.

Thank you. My understanding as well is that negotiating this is a lengthy process and a complex one that will probably get started in its earliest phases in the next little while.

What I am focusing on here is the emergence in the Northwest Territories, Mr. Chairman, of self-government agreements. I anticipate that we are going to have perhaps at least two deals, the Dogrib and the Beaufort-Delta agreements in place, at least in principle by then, or by the March, 2004 time frame and that over the years, their implementation will kick in.

The aspect that I wanted to explore is to what extent will the emergence of self-government deals and the need for cash and resources for those governments to get up to speed, how will that be incorporated into a formula financing deal? Does the Minister have anything he could offer in that area? Thank you, Mr. Chairman.

Mr. Chairman, my intention is to begin doing some of the preliminary work on negotiating a new formula beginning in 2002, early 2002. That will allow us essentially two years to negotiate a new agreement, providing the federal government is willing to sit at the table and begin discussions.

The issue of self-government is a complex one because there is only one of them that is basically finalized right now. There are two. The Dogrib one is probably close as well, but we do not know with certainty yet what the provisions will be with regard to the extent that they take over their own programs and therefore want their own money or what the incremental costs will be. Hopefully, we are not going to bear any of that. We have maintained the position that those should be covered by the federal government.

We do not know with certainty either whether any of the self-governments will want to negotiate their own arrangement with the federal government as opposed to doing it through the GNWT formula.

So it is difficult at this point to predict with any specific facts on what the impact will be.

I think one of the first things we will have to start doing in 2002 is begin to identify some of the issues that will have to be dealt with. Of course, self-government is a big one that the Member raises. It is the biggest unknown, the biggest question mark in my mind.

As well, we need to do some projecting on how fast we will proceed on resource revenue sharing because that will change it as well, if we get a lot of our own resources. That is about as specific as I can be at this time, Mr. Chairman.

Thank you, Mr. Chairman, and to the Minister, thank you for that explanation. Another area of this, as the Minister just pointed out, is the linkage that has been made that is in the formula with the performance or spending patterns of other jurisdictions in Canada.

I take this to mean, Mr. Chairman, that for instance, if the auto industry in Ontario and Quebec takes a nose dive and provincial spending levels are reflected in that, correspondingly there is a domino effect and agreements such as ours on a national scale are also impacted.

I wanted to ask whether that is a good reflection or a good way to manage a spending agreement. I would contrast it with, for instance, say a slowdown in the auto industry in eastern Canada. If our economy is strong and as vibrant as we hope it will be with oil and gas, pipelines and diamonds, then there is a kind of punitive impact there. The funding levels we would like to have to bolster that kind of economy is going to be dragged down because of what is happening thousands of kilometres away in another part of the country.

I guess I wanted to ask the Minister if I have that connection correctly stated and if it does work that way, what can we do, if anything, to disengage ourselves from that linkage, that imbalance? Thank you.

Mr. Chairman, yes, we are on the current formula very much linked to the economic picture in the rest of Canada. I too believe that is not a good way of funding our needs in the North. I have made that point many times in various federal-provincial meetings, that we are on a non-renewable resource development wave that the rest of Canada is not. The rest of Canada is more on the manufacturing and high tech industry. That is what drives their economy.

Ours is a different economy and the current formula does not reflect that. It puzzles me why -- let us say the auto industry in Ontario or the high tech industry in Quebec, or wherever it may be, or the oil and gas industry even in Alberta -- why it has such a big impact on it.

However, under the current formula it does and I assume the thinking was that all economies in Canada moved along at the same pace. I think we have a different economy and ours is only slowed down to the effect that the federal government forces it to slow down through reduced transfer payments. That is becoming less and less of a factor as we become more dependent on mining, diamonds in particular, and later on oil and gas.

I am meeting with Minister Martin on Sunday and I hope to get some feedback from him of how he is responding to the potential recession and what his reaction is to the increased need for spending on security. He is putting forward a budget in December so I do not expect we will get all the answers on Sunday. That is one meeting. We will get some hints. Certainly by December we will get a pretty good idea of how Canada is responding to the current economic climate and then be able to do a more accurate assessment of the impact on our government's fiscal framework. So by the time we do our main estimates in February, we should be able to provide much more clarity to that question. Thank you.

Thank you, Mr. Chairman. That was a lead-in to a final question that I had. Does Minister Handley consider that the meeting this weekend, is this a pre-budget meeting for Finance Minister Martin? What will be our Minister's priority for inclusion of the North in the upcoming federal budget? Thank you, Mr. Chairman.

Mr. Chairman, this is a federal/provincial/territorial Finance Ministers' meeting. It is only a few hours long. It goes from 2:00 p.m. to probably 7:00 or 8:00 at night. This is an opportunity for all provincial and territorial Ministers to have input into the federal budget. There was a conference call of provincial and territorial Finance Ministers this morning. I could not be there because our House is sitting, but my officials were there. They will have, this morning, hammered out the main points that they want to make collectively.

In addition to that, I intend to continue to make the point that we need investment in the North because of our non-renewable resource developing economy and its demands on people, on training, on infrastructure and on services. I will continue to remind him that we have put together a non-renewable resource strategy at his request and that we need investment today. We are not in the same position as is the rest of Canada.