Thank you, Madam Chair. The press reports from the activities in Ottawa earlier this week make quite an interesting package of reading. I was looking at a summary of the last day or two of coverage in the southern press. An interesting thing about the whole process, Madam Chair, is that it's viewed in so many different ways depending on where you're from in Canada and you're perspectives or your expectations. The process does not seem to have really connected with a whole lot of certainty in the rest of Canada. We had one Premier literally storming out of the process, others saying that they did fine, others saying that they thought they should have done better. Equalization in Canada is one of those things that I think people's eyes kind of glaze over when they hear it. It sounds like a very complex and bureaucratic thing and it is. But it is something that we in the NWT should really pay close attention to because I think it's somewhere around two-thirds of our revenue or 70 percent of our revenue that comes directly from Ottawa through processes based on the idea of equalization and formula financing.

The Toronto Star says that it's a laudable principle and it holds that all Canadians, regardless of where they live, should have access to reasonably comparable levels of public service at reasonably comparable levels of taxation. Ottawa supplements tax revenues collected by the so-called have-not provinces with part of its own revenues and theoretically Canadians from coast to coast to coast can live on essentially the same standard. In practice, the Toronto Star goes on to say, the whole process reads like a recipe for a pot of borscht soup. So it is a complex thing, but we have to pay attention to it.

With two-thirds of our revenue coming from Ottawa, we were set up for some fairly strong expectations, Madam Chair. Especially after the First Ministers' meetings at the

end of September when the Premier, joined by the Premiers from our sister territories, came out with quite a glowing expectation of what had been agreed to with the Prime Minister. But in the statement that Mr. Handley has given today I think we're seeing something that's been tempered, that's been downsized. It's regrettable that the expectations of just a few weeks ago aren't realized here and I'm trying to get a sense of where this puts us now and where we go from here.

The Premier has already indicated that a certain amount of money is going to be allocated to the three territories. There is an escalator clause in there of 3.5 percent for five years. If we look at just this fiscal year, the current fiscal year, the NWT is going to realize $25 million more and $38 million more next year. Given the size of our budget, we are approaching $1 billion in operations and maintenance costs for the territorial budget. This is, I guess I would have to say, a disappointingly small number. I had anticipated something that would be more, that would really give us some room to start moving and making a difference up here.

I think where the Premier and his team and the people at Finance Canada deserve a pat on the back is that for the second year in a row, I understand, we are going to see left on the table, to our credit, a $50 million credit for the tax effort adjustment factor. I won't even begin to try to explain it, but it does work in our favour and this is perhaps the singular thing that's going to help us through our fiscal situation.

Madam Chair, we are in a tight fiscal situation here in the NWT. We are under instruction and direction to find, I believe, this coming fiscal year $20 million in our programs; to reduce our spending by that much. Hopefully we'll be able to do so without going in and getting rid on a wholesale basis any programs or too many programs. We are also in need of restoring our capital spending in the Northwest Territories, Madam Chair. We have to protect the investment that we're making and continuing to make in our infrastructure. We, of course, want to avoid the debt wall as much as we can. I have the understanding of our go-forward financial situation now, Madam Chair, given what Premier Handley and Minister Roland have come back with, that we will indeed be protecting our capital spending plan and, in fact, there may be some anticipation that it could be enhanced.

There is no indication here that we will be threatening our position in terms of the debt wall. So we can stay out of unnecessary debt. Through this five-year deal, Madam Chair, we will have some greater stability and predictability in what our revenue stream is going to be. So those are positive things and I congratulate the Premier and his people for bringing these things back to us.

But on the less optimistic side, Madam Chair, I was really genuinely hoping, as just about every other region in Canada was, that we would see some fiscal arrangement that would allow the Northwest Territories to break through some of the log-jams that we're facing. Because of our revenue situation we are more and more compelled or restricted, Madam Chair, only to look after what is essential. We are forced to try and accommodate forced growth, the pressures of inflation and the higher cost of doing business. We just talked about what energy is going to do to us this winter.

While we have some of these advantages and some more stability and a bit more security in how we're going to go about our financing, Madam Chair, we are essentially still in a status quo. We are still more in a management stream here. We are tied down and limited to the scope and the range with which we can grow the Northwest Territories, with which we can develop our infrastructure, and with which we can go and really make aggressive strides, especially in our social arena, Madam Chair. We have not changed that situation. Of course, I want to remain optimistic and be a cheerleader for our Premier and the other northern Premiers to make some headway on this, but what I've learned today from the statement, Madam Chair, is that we have not broken any new ground.

I'd welcome the Premier's comment or reaction or challenge to those impressions. Thank you.