Thank you, Mr. Chairman. I do have some general comments on programs that may not have a corresponding line item in detail. The first initiative I would like to comment on is the review of BIP. I think this incentive policy is certainly something that we need to work on. As I said before, I think we have a real chance here. The Minister has agreed to look at this. I am glad he has, because I think it needs retooling. I think we need to come up with a program that works for northern business.

I think to get back to the philosophy of what we are trying to do here is to level the playing field for real northern businesses. We want to level the playing field for them with southern businesses so they are able to take advantage of the economy as it heats up in the North.

I think it has had its failings. The department admits this. We have had people who have been able to side-step the intent of the BIP for whatever reason. There have been various ways it has been done. In effect, southern businesses with little more than a token operation in the North have been able to get status under the BIP and qualify for the incentives. We know that was never the intent. I am glad the Minister is looking at it.

I think there are several things in the paper that his department has put out that are very interesting. When favourable tax rates are analyzed versus tax credits, I tend to favour overall tax rates because this broad approach will look across all sectors at all sectors. I think the minute we try to get into trying to administer specific tax credits, I think we are talking about an administrative undertaking.

The other thing that might happen is when we look at small business, I think the small business threshold can be looked at, but certainly we need small business tax rates that are competitive with our southern neighbours. We have seen Ontario move to lower their small business tax rates. Alberta is proposing to do so. I believe BC's is 4.5 percent. There was a time when we seemed to be leading the parade in this area, but it is slipping away from us and we are no longer at a competitive advantage in this area. So I think we can move quickly.

The paper looks at the possibility of moving to, I believe it is currently six or five percent, but moving to zero percent for small business as a tax rate. I think it would only cost this government an estimated $1.6 million. I think it gets back to this idea that we have very little capacity to raise our own revenues, especially in the area of small business taxation. So I would like to see us consider this as a worthwhile initiative.

Whatever we do, we have to move to make sure the BIP can provide an advantage for northern companies on more than just Government of the Northwest Territories contracting. We have acknowledged that the Government of the Northwest Territories' direct spending is now only seven percent of GDP if we take wages out. More and more, we see much of the work that is being done and money being spent is being spent by a lot of these big companies, the BHPs, the Diaviks. I think we have to make sure that northern businesses are competitive and can take advantage of these opportunities.

One of the ways we might look to do this is by providing subsidies for businesses that are northern in the form of employment. The Minister in discussing this previously has indicated that it is difficult for us to tell the private sector who to use when contracting. I would agree. I think we do not want to get into protectionist schemes. Those always seem to run us into trouble, but incentives certainly might be the way to go.

I think there is a real opportunity as well to link this very closely with maximizing northern employment, the strategy that Mr. Ootes is spearheading. I think part of the BIP should be about employing Northerners. The initial intent was to encourage entrepreneurship. I still agree with that as the thrust, but when we look at what we are trying to do, we are trying to stimulate the economy and make sure that Northerners can be hired so that we have people paying taxes in the North, living here, contributing to the economy. If there are ways that we can do this, it certainly makes a lot of sense for us to try to address that. If BIP is the mechanism for that, then that is great. I would like to see us go down that road.

I will have more comments about the BIP as we look further at the development and as the Minister gets ready to consult and eventually unveil his new program. I think it is critical that we have a manufacturing directive in this initiative. Manufacturing is a sector that we really have a lot of room to stimulate. I think I have spoken before about the need to diversify our economy. We all have. We simply cannot put our hopes strictly in the non-renewable resource sector. We simply do not know what will happen to world commodity prices. I think it would be irresponsible for us to be too reliant in this area.

I would also like to speak to the committee that is reviewing the various lending arms and economic development agents of this government; the BDF, the BCC and Community Futures. I think this is another worthwhile initiative. I think we have to take a look at what we are doing and make sure that all of these lending agents are linked.

The Auditor General has indicated over the past few years, time and time again where we see situations where one arm of our government is not aware of what another is doing in terms of lending money to people. We cannot have situations where a business accesses BDF funding and gets a grant, turns around and uses that grant as the equity portion to leverage a loan for BCC. We cannot have 100 percent borrowing. There simply has to be some ownership. There has to be some investment from the businessperson or else there is not the level of commitment.

When all of the money is leveraged, there is also a tendency to overcapitalize, to turn around and say, "All right, if I can get this amount of money, I must need all new equipment, I must need all new capital." I also believe that what happens in these scenarios is if you do not have an ownership in this capital, you tend not to take very good care of it. I think this is something that we have to address.

I certainly think there needs to be clear linkages so we know. We cannot have situations where the BCC is lending money to someone and not understanding that the equity portion they have come up with was in fact BDF funding. I am not saying that this happens often, but I know in the past it has happened on occasion.

I am glad we are taking a look at these programs. I think we also have to take a look at what some of the charter banks are doing. The BCC requires and has quite tight restrictions for security on loans, and I think it is good that we are cautious. I think we have a pretty favourable rate of collecting on our loans, but we have to realize that we are not a charter bank. We are a lender of last resort. It is important that we get into economic development in the communities, especially in smaller communities where charter banks refuse to be in the business of lending money.

Part of the BCC's portfolio is going to entail high-risk loans. I think that is the nature of the BCC. I think we have to get away from the numbers game and be more interested in taking a good look at business proposals, making decisions on the basis of sound business proposals and working with entrepreneurs who are interested in getting into business.

We certainly have some room for improvement here. I think we cannot continue to choke business by requiring security that is unreasonable. We ask people to put up homes and vehicles and all kinds of things to secure loans, when in fact if you look at the history and the record that this government has, very rarely ever do we foreclose on someone and go after someone, very rarely do we go and take homes, cars and these kinds of things. Why do we ask people to put them up in the first place? I think these are some of the questions we have to ask when we look at the mandate of the BCC and the mandate of all of our lending agents.

I will have more detailed questions, but these are a couple of the programs that did not have corresponding details, so I felt compelled to comment on them here, Mr. Chairman. Thank you very much and I look forward to detail.