Mr. Speaker, I would like to provide an update on our budgetary process and some brief comments on our fiscal situation. Despite the fact that the NWT is one of the fastest-growing economies in Canada, the Government of the NWT is facing a growing gap between its expenditures and revenues. Resource development is placing large pressures on our expenditures. We need to provide infrastructure, we need to prepare the people of the NWT so they see a positive benefit from development, and we need to counter the less positive effects of development which can cause social disruption in our families and our communities.

At the same time, the Government of the Northwest Territories has to cope with critical issues in the areas of health care, education and social support. The demands of the expanding economy are competing with these needs for the government's limited financial resources.

Furthermore, the government is trying to meet these needs with inadequate federal funding arrangements. Changes imposed by the federal government in the past mean that our formula financing arrangements with Canada no longer meet their original goal of filling the gap between our expenditure needs and our ability to raise our own revenues. In the absence of resource revenues, the economic development that is putting such pressure on our expenditures generates little in the way of new revenues to allow us to cope with that pressure.

These are the circumstances that our fiscal strategy must address. Since we took office in December, we have reviewed our fiscal position and outlook. We have talked about our options and the measures we are prepared to take with respect to revenues, expenditures and borrowing. As the Premier stated yesterday, difficult choices will have to be made. He indicated that we need to take a hard look at our spending and also at our revenue options. How much money we have to spend, how much we are prepared to raise in new revenues, and how much debt are we prepared to take on, all set limits on activities and initiatives. The Premier stated that it is important that we work together to make changes; we want to make these changes with careful forethought and consideration. We have to work hard to achieve balance.

Fiscal strategies are based on considerable uncertainty over exactly how much money we will have, so we have to make some assumptions, set some priorities, develop short, medium and long-term plans and then be ready to review and revise these plans as new information becomes available.

For example, we still do not know what our formula financing arrangements for 2004-2005 and beyond will look like. The previous Prime Minister made a commitment last February to find solutions to our long-term funding needs. While we are confident that this commitment will be met, the issue is still unresolved and presents a significant source of uncertainty in our planning. I will be approaching the federal Minister of Finance in order to try and resolve this critical issue.

Mr. Speaker, I will be presenting the Government of the Northwest Territories 2004-2005 budget when the Legislative Assembly meets in March. This budget will present our plan for the upcoming fiscal year and outline our strategy. Although we have begun to look at some medium and long-term plans, we need to start today to begin to build a sustainable future for the people of the NWT.

Given the relatively short timeframe, we are limited in the measures we can implement for 2004-2-05. This budget, therefore, will be a stepping stone toward achieving our medium and longer-term goals. For 2005-2006 and beyond, we will have to develop longer-term plans. These plans may include changing the way we, as a government, do business so that we can implement the 15th Legislative Assembly's vision, priorities and plans in a fiscally responsible way. Thank you, Mr. Speaker.

---Applause