Thank you, Mr. Minister. General comments? Mr. Roland.

Thank you, Mr. Chairman. Just a couple of general comments on the Department of Finance. As the committee reported, and as we discussed in committee, some of the forecasting and the models used, as informed by the Minister that in the area of revenues or corporate taxes, there was an anomaly. Through the federal government, they give us the numbers when it comes to building into our budget and forecasting in the area of corporate taxes, as well as personal income tax.

Our concern, and it is an area that is highlighted in the committee report, is the fact that we seem to be budgeting on that amount in the area of expenditures. We are hopeful we can achieve the corporate tax as identified, but that is yet to be seen.

From all information gathered so far, we will not have that kind of banner year again for a while, unless somebody else chooses to file their corporate taxes in the Northwest Territories.

The unfortunate thing is at this present time, we are no longer the lowest jurisdiction when it comes to corporate tax rates. I believe Ontario and Alberta are working, if they have not already, to lower their corporate taxes. So we are not far out, I guess, but we will not be as competitive as we were in the previous year.

In the area of revenues again, and with all this increased work that is happening, it would be nice to know if we expect to get more in the area of income taxes and how we will deal...for example, a concern that has been in the Northwest Territories for quite some time, the fly-in/fly-out staff that has been hired for some of the larger companies operating in the Northwest Territories, and if there is going to be any work done to try to capture that market.

I know the payroll tax was identified to try to do that, and there was some discussion of our ability to monitor that and increase or make sure we are getting the revenue we should be getting as a government with that tax being in place. With that, I will save further comments for detail. Thank you.

Thank you, Mr. Roland. What is the wish of the committee? Will we wait until everybody does their general comments before the Minister answers?

Okay. Any more general comments? Mr. Braden.

Thank you, Mr. Chairman. Going to the department's business plan and a discussion in there of economic conditions that are going on in Canada and as we might anticipate things, I am wondering if the department could give us a snapshot as of today what some of its expectations are for activity in the Northwest Territories economy. We are obviously in a growth mode here. What kind of numbers does the Minister have in his crystal ball as far as our overall growth in areas such as GDP, population, our final domestic demand? Those kind of big-brush indicators. Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Handley.

Thank you, Mr. Chairman. Just to answer Mr. Roland's comments first and then Mr. Braden's, we are benefiting this year from large corporate taxes. We cannot count on those happening every year, not in the same way in any case. However, I think as our economy grows, we will see increases in all of the tax areas as people are employed and companies are doing well. So we are going to see a continually improving situation in terms of our revenues. I am fairly optimistic about that.

The other factor in here, is as we are progressing along we are also talking resource revenue sharing. Resource revenue sharing is going to change our whole fiscal situation considerably as well.

As our economy improves, we will also hopefully see some decreases, at least in a proportionate level compared to our whole budget, in social program costs, which would be seeing less of a percentage of our people dependent on income support and the other programs as we get a healthier economy.

On fly-in/fly-out, that is an ongoing issue. We have looked at the payroll tax. We will continue to look at the payroll tax. Because we have to apply it to everyone, it does create a bit of a burden for northern residents, but as our economy improves, maybe we can afford to look at a payroll tax and at the same time, look at tax credits and other incentives for encouraging people to stay in the North as compared to flying to the south.

Certainly in the last year, we have seen a very healthy trend, even setting aside the big corporate windfall we received. There is still a healthy trend going on.

I think, as I mentioned a couple of days ago in my meeting with Paul Martin, it all looks positive. The development that is taking place is real and it is positive on the diamond mining side, on the oil and gas side, and hydro potential. So I think we have a pretty optimistic economic future in the Northwest Territories. Every indication, and I do not think we are taking undue risks, is looking good.

In answering Mr. Braden, looking at the economic indicators for the Northwest Territories, we look at a number of indicators. Final domestic demand, for example, is up. A 19.5 percent increase over last year is what we are projecting. Total investment in the Northwest Territories, we are looking at 68 percent over last year; consumer expenditures, we are looking at four percent over last year; government expenditures, 2.3 percent over last year; average weekly earnings, 2.9 percent; employment change improving by 3.1 percent; and CPI for Yellowknife, improvement by two percent.

So all of the indicators are very positive. I think it is a time where we can be fairly optimistic in terms of our investments and not be too focused on that debt wall. Thank you.

Thank you, Mr. Minister. General comments? We are on page 3-9, activity summary, directorate, operations expense, total operations expense, $1,185,000.

Page 3-11, treasury, operations expense, total operations expense, $7,004,000. Mr. Miltenberger.

Thank you, Mr. Chairman. Could the Minister clarify or provide a bit of detail in the other expenses, which is almost a $6 million hit. It has gone down somewhat from last year. I know you covered that in your opening statement.

The other question I would have is the issue of long-term debt. Could you speak to that as well? I notice it is not on the books here. Could the Minister speak to those two issues, please? Thank you.

Thank you, Mr. Miltenberger. Mr. Handley.

Mr. Chairman, in terms of the other expenses, that is fairly obvious here. It is made up of short-term debt and insurance premiums. Short-term debt, we are budgeting $3,243,000. Insurance premiums are estimated at $2,070,000. The rest of it is minor pieces that fit in here, other O and M and so on. The big pieces are short-term debt and insurance premiums.

In terms of long-term debt, the estimates for this year are $176 million. That is made up of the Power Corporation debt at $124 million, Energy Corporation at $24 million and Housing Corporation debt at $28 million. The Government of the Northwest Territories itself does not have any long-term debt.

Thank you, Mr. Minister. Mr. Miltenberger.

Thank you, Mr. Chairman. I think it was in his budget address where the Minister made reference to a total debt of about $251 million. Where would that be in the scheme of things?

Thank you, Mr. Miltenberger. Mr. Minister.

Mr. Chairman, that is based on an assumption that was made when we prepared the budget. It continues for the time being, where we would have an accumulated cash deficit of $74,357,000 at the end of the 2001-2002 fiscal year. Of course, that quickly disappears when we get another payment on the grant in April. We are taking into account a cash deficit as well that is fluctuating continually. Thank you.

Thank you, Mr. Minister. Mr. Roland.

Thank you, Mr. Chairman. In the area of taxes in the Northwest Territories, again looking at the projections the department has put forward in this document, we see a large increase in the corporate income tax. Previously, it was $39 million identified this year. In the revised estimates, $102 million, projecting $160 million. The Minister stated that the future looks bright indeed with the potential here and he mentioned royalty revenue sharing.

We have conflicting messages here. At one point, he stated in the House that in fact royalty revenue sharing was something we probably would not hear back from until 2003. We are looking at the next year here at the end of 2002. Is the Finance Minister stating that we will have results and something we can bank on?

I have concerns with the idea of not focusing on the debt wall. I guess when you see it up close, it is hard to focus on it because it takes up the whole view. Those areas are areas I have watched over the last couple of years and continue to watch. We have staved off the debt wall, as the Minister stated, after receiving some one-time payments, some cash assets sort of trades with Nunavut, and this one-time corporate tax filing. What I am saying is can we count on those?

In the corporate tax area, what would you see as the actual number that we would see? Is it identified in this document? Do you think we will actually get another $160 million? Thank you.

Thank you, Mr. Roland. Mr. Minister.

Mr. Chairman, I think the Member is right. We are not going to likely see any significant revenues from resource revenue sharing arrangements for a number of years, depending on what is negotiated, but we will certainly will not see it next year, I do not believe.

As well, when I say we should not be too concerned about the debt wall, rather than saying focus, I should be saying we do not want to become fixated on it to the point that we do not dare move on anything. I think this is a time for some investments. We are working on a number of fronts. We are not just relying on some huge corporate tax windfalls.

There are other areas, as I have mentioned in my Minister's statement a few days ago, that I think we have made some good headway in meetings with Finance Minister Martin. I hope to see us gain from that.

As well, with our economic situation improving, while we need to pay attention to the debt wall, I do not think we want to become too fixated on it. There is an opportunity now to ensure that Northerners can benefit from the economic upswing we are facing right now.

In terms of the treatment of the corporate taxes and its impact on us next year and in future years, I will ask Ms. Melhorn to speak to that one.

Thank you, Mr. Minister. Ms. Melhorn.