Thank you, Mr. Chairman. Just to continue in the area of taxes, tax revenue and the predictions that are made, I know it is not good to become fixated on anything, but when it in fact is a large part of our government as we see it, we are borrowing or are going to borrow more money in the future to maintain what we have. It is something that we must keep in mind. It is always looming out there and we might not get the one-time payments that are predicted.

In the area of resource revenue, knowing that in the Northwest Territories now when we talk about diamond mines that are up and coming and some that are in operation, have we started receiving corporate taxes from any of those mines that are in existence? Thank you.

The Minister of Finance, Mr. Handley.

Mr. Chairman, we do not talk about specific tax from specific companies, but generally speaking, as the diamond industry has moved along and blossomed -- and we see not just one but now a second one in construction, a third one in environmental assessment -- then all of our corporate taxes go up now. Whether BHP is paying more corporate taxes, I would say that they are, but we do not want to get into any specific company as such. We do not expect our taxes to drop back down to where they were a couple of years ago or even a year ago, if we set aside the one-time offshore benefit we received.

We are not going to go back to the old levels, pre-diamond mine development and operations and oil and gas development. The whole thing means our corporate taxes will continue to rise, as will income tax. Thank you.

Mr. Roland.

Thank you, Mr. Chairman. The reason I asked the question about diamond mines is we know that as new companies begin operation and build new developments in the Northwest Territories, for the first number of years they can write down those expenditures and capital expenditures made on behalf of their own companies as they pay those down and begin to make a net profit. Then there are corporate taxes that end up due payable to the Government of the Northwest Territories. That is why I am asking the question.

The point I want to make is we see all the development that is happening, oil and gas sectors and so on, the companies can write down a lot of those expenditures now. We will not see much in any corporate revenue from those companies that are beginning operations. That is why I ask the question. When do we start expecting to see some significant amounts of corporate tax from these companies? Thank you.

The Minister of Finance, Mr. Handley.

Mr. Roland is correct. Companies can continue to do exploration, continue to do development and so on and they can avoid a lot of their corporate taxes by doing that, but they cannot continue to develop forever, particularly in a commodity like diamonds that holds its price and has held it well historically. So at some point, they are paying a large amount of taxes.

I expect if we are talking about the diamond mining companies themselves, it probably takes about four years. Some are estimating less than that for them to be able to recoup their full capital investment and beginning to pay taxes and royalties in full.

We have all sorts of other things that happen as Mr. Roland points out. They could do further developments and so on. Our projection is that without any resource royalty sharing or anything else like that, just staying with the present arrangement we have now, the average corporate tax revenues for the Government of the Northwest Territories under today's scenario would be $161 million a year average over the next 27 years. A lot of that is coming up front in the first ten or so years and gradually tapering off as some of the mining slows down.

That is just based on the current development and an assumption on a pipeline. It is not looking at any further expansion. I guess the bottom line is we will see corporate tax increases and that will start within the next couple of years. Thank you.

Mr. Bell.

Thank you, Mr. Chairman. I just have a question about the program delivery detail under the treasury. I understand that treasury falls under other expenses. When I look at the programs here, bank fees and insurance premiums, those two look like expenses to me, short-term debt. I wonder if I can get an explanation. It does not look to me like this is the cost of servicing our short-term debt. Is this principal repayment plus interest? Or is this just interest on short-term debt?

The Minister of Finance, Mr. Handley.

Mr. Chairman, the $3,243,000 that Mr. Bell is referring to on page 3-12, that is all interest. There is no principle there. The $80,000 is all bank fees and the same is true, Mr. Chairman, of the insurance premiums. That is the cash we pay for insurance premiums. Thank you.

Mr. Bell.

Thank you, Mr. Chairman. So when we look at $3 million in short-term interest, what are we talking about as far as a line of credit here? What is the projection as to how much we borrow in the short term and for what length of time?

The Minister of Finance, Mr. Handley.

The amount varies from day to day. Depending on when we are receiving payments and revenues, it could go as high as we pointed out. At the end of the fiscal year, we have a cash deficit of $74 million, but it varies all the time. It can go from zero to as high as $70 some million. It could be positive when we are earning interest sometimes. As we have more cash in the bank, the less interest we are going to be paying.

Mr. Bell.

Thank you. Do we have various lines of credit with various interest rates that make this up or is this one of credit with one bank?

The Minister of Finance, Mr. Handley.

Mr. Chairman, I will ask Mr. Setchell to explain how we do our borrowing here.

The director of finance, Mr. Setchell.

Mr. McLeod.

I would like an explanation on the statement that he made in his response to Mr. Miltenberger about the government not having long-term debt after he has indicated that the Power Corporation and Housing Corporation had debt. Could you clarify for me how that works and how this government is not ultimately responsible if they do not have any long-term debt?

The Minister of Finance, Mr. Handley.