Mr. McLeod.

Are these amounts calculated when we calculate our maximums for the debt wall?

Mr. Minister.

Yes, Mr. Chairman, they are because they are loan guarantees, so they are considered part of our limit.

Mr. Dent.

Thank you, Mr. Chairman. I have a couple of questions. We may not have any long-term debt now, but I would expect that since we are predicting an accumulated cash deficit by the end of this upcoming fiscal year of $74 million, at that point some of the short-term debt might be turned into long-term debt. I would agree with the Minster that we should not focus on the debt wall too much. We had some of this discussion earlier when we went through the budget of FMBS and talked about borrowing, since we know now that we are looking at having available borrowing capacity of $49 million at the end of this upcoming fiscal year. The budget we are looking at right now has a cash deficit in it of $55,795,000. Would that not cause us some concern about whether or not we can carry on with the level of spending and the level of revenues unless we are able to, in the next year, change things with Canada?

I know the Minister suggested that corporate taxes will average around $160 million, but he said that might start in the next couple of years. Then he talked about pipelines. I know we are not going to see a pipeline in the next couple of years. Since we are predicting $160 million in this budget in terms of corporate income tax revenues, looking down the road one more year, how close to that $160 million are we going to be getting? Is it going to leave us enough room that we are not going to have to worry about only having $49 million in available borrowing capacity? Thank you, Mr. Chairman.

Thank you, Mr. Dent. Mr. Handley.

Mr. Chairman, if nothing improves and we made no progress on anything, no increases in revenues but just stayed with what is today, then we probably would be coming close to having a problem some time in later 2002. The accumulated cash deficit of $74 million, which we are projecting for March 2002, will disappear in April. In March, we will have borrowing capacity of $49 million. In April, that increases substantially again, as we are probably in a cash surplus position for a little while.

Mr. Chairman, if we had no improvement on revenues at all and we continued along this way, we would be in trouble sometime in 2002. As I said earlier, every sign is for improvements in our economy. As I mentioned, I think we are optimistic about making progress on the resource revenue sharing and improvements to our formula. Thank you.

Mr. Dent.

Thank you, Mr. Chairman. I certainly hope that the Minister is successful in his negotiations with Canada. I think he is absolutely right. We have the potential to be a "have" Territory and they should be investing in us. There is this little niggling concern at the back of my mind that in saying 2002 we are talking about part of this budget. If we do not see some action in the next little while on the federal part, it is going to be a bit of a concern. It could be something that a year from now will be a big concern. I wish the Minister Godspeed and hope that he is very successful with the federal government. Thank you, Mr. Chairman.

Mr. Minister.

Thank you, Mr. Chairman. I think realistically I am optimistic that we are making good progress. Thank you.

Treasury. Mr. Roland.

Thank you, Mr. Chairman. For clarification, a couple of times regarding questions in this area, the Minister has stated that although we have a cash deficit position in March, come April we will be in a cash surplus position. Is it not a fact that April's money is new year money and we will be using that to pay down the debt of the previous year? In fact, we will be using cash that is for the new fiscal year to pay down old year debt? In fact, we will lose out or we will need to be borrowing that $74 million sooner? Is that not the fact? Thank you.

Mr. Minister.

Mr. Chairman, as I mentioned before, our cash position changes almost on a monthly basis because it is moving around a lot. I suppose because April is a new fiscal year and March is the old fiscal year, you could characterize it that way, because we are spending next year's money to pay something that happened last year. It moves around all the time and sometimes we are in a cash surplus position. The $74 million cash deficit is one point in time. If we had a rich surplus, I guess that would not be a point at all. Thank you.

Mr. Roland.

Thank you, Mr. Chairman. Maybe when we actually start seeing some of the revenues flowing from the megaprojects in the Northwest Territories and we become a "have" Territory, we will be in the fortunate position, as Alberta finds itself, we can argue about how we are going to spend the surplus. Right now, as we see it, unless the predictions come in as they are, we are going to find ourselves in trouble. I state that because, as I stated earlier, we are no longer the jurisdiction with the lowest corporate tax rate. These larger companies can file in any other province where they have an office set up. Maybe the Minister has something planned to try and ensure we keep the corporate tax situation in the Northwest Territories. Thank you, Mr. Chairman.

The Minister responsible for Finance, Mr. Handley.

Thank you, Mr. Chairman. Yes, we are basing a lot of our future predictions and our long-term plan on resource revenue sharing. We are also seeing a pretty healthy growth in our economy. We need to look at personal income tax and we need to look at the corporate income tax, and there may be ways for us to remain competitive with Ontario and Alberta and others who are lowering their taxes. I am not optimistic that we can be a corporate tax haven for offshore companies for very long. I think our corporate taxes are going to be dependent on our own economic activity. That is going to be the most secure kind. The offshore people can come and go. It is not something we want to base our economy on. Thank you.

Mr. Roland.

Thank you, Mr. Chairman. Not only speaking about offshore companies, but companies that are operating in the Northwest Territories. Just because they have a mine here, they do not have to file in the Northwest Territories. If that is the case, if they can have a lawyer contact or work in any other province and file in that province, then we are out that corporate tax. That is the point I am trying to make. Hopefully as we review the situation, we will try to ensure that we are still the most attractive place to file for existing companies doing business in the Northwest Territories. Thank you.

Mr. Minister.

Mr. Chairman, while it is possible for companies to duck around some of the taxes and move some around, where they pay their corporate taxes is basically dependent on where the revenue is generated and where their salaries are paid. They could not operate a mine here and have employees here and pay all their taxes somewhere else. They would have to apportion some of it, a reasonable piece of it, back to here no matter what our rates were. Thank you.