Sergeant-at-Arms, can you escort in the witnesses?

For the record, Mr. Minister, can you introduce your witness? Thank you.

Thank you, Mr. Chairman. Mr. Chairman, with me this evening is the secretary to FMB, Mr. Lew Voytilla.

Thank you, Mr. Minister. General comments. Mr. Braden.

Thank you, Mr. Chairman. Further to the fiscal regime, and the impact that this supp will have on some of our numbers and the performance through the year, Mr. Chairman, a bit earlier in this session, in fact, just yesterday, the Minister advised us that in relation to the uncertainty we face overall in our revenue situation, it's magnified, and I am reading from the statement he made yesterday, Mr. Chairman. "Our uncertainty surrounding our formula financing agreements with Canada for the next financial year and beyond..." There is an uncertainty there, and it's magnified by the difficulties we are having. Mr. Chairman, the Minister went on to say that until we hear the recommendations of the federal Expert Panel on Equalization and Territorial Formula Financing, and how the federal government intends to act on these recommendations, our fiscal outlook is difficult to predict. Mr. Chairman, I hope you will permit me this question in relation to this supp and our overall fiscal situation. Could the Minister advise on the work of this territorial formula financing panel, especially the expert panel, that's looking at northern conditions? I believe we are anticipating a report from that panel late this year. Can we still expect that kind of timing? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. The situation we see ourselves in when we look at the supplementary appropriation, and the total amount that it is requesting authority for, and looking at our fiscal forecast in light of the information that I gave the other day, we have the reserve built to meet this, and a lot of the money is flow-through. Following further to the question about our ability to predict where we will be fiscally is a difficult one, indeed. The federal government established the Expert Panel on Equalization and Territorial Formula Financing. They are to report back to the federal government by the end of December 2005. I am aware that the expert panel has contacted federal Finance to seek an extension for that to springtime, so the spring of 2006.

On that, there are a number of jurisdictions waiting to hear what the federal government would be saying. For myself, I am looking to set up a meeting with Minister Goodale, to try to firm up our situation around formula financing and where we find ourselves today with the information we have. Thank you.

Thank you, Mr. Minister. Mr. Braden.

Thank you, Mr. Chairman. I guess this even more compounds the difficulty that we face: a $30 million shortfall in anticipated revenues. Today, we hear that this panel, on which so much of our immediate and long-term future has been hinged, is now going to be another three or four months late in reporting. The Minister is absolutely correct, as he said yesterday in his statement, our difficult outcome is difficult to predict.

Mr. Chairman, if we aren't going to hear from this panel until next spring, that is going to be after our budget planning process. So we will go into another year of uncertainty, where we are probably looking at a federal election next spring, which means the federal government will not be in a position to take this panel and this information in until...It seems that we are probably looking at a year from now until we potentially get any feedback on the work of this expert panel. What are we going to do in the meantime with such a precarious fiscal situation already? The panel that was going to have the answers, or at least have a map for us, we are not going to hear from for another year. Is there anything the Minister can bring to the table that says, "Here is how we can operate"? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, as I stated earlier, the expert panel has made a request. I am not aware if that has been agreed to by the federal government. As the Member stated, we are definitely in a situation where predicting our future fiscal position is getting more difficult as we continue down the path of fiscal reform in our relationship with Ottawa.

The situation we are in means we are going to have to proceed in a very cautious manner. In fact, the supplementary reserve we have in place, up until February, with the passage of this one, would be fairly small. We have $11 million identified left in the reserve, and looking at our fiscal position today, we need to try to minimize that amount to make sure we don't lose the full reserve, along with looking at a number of other options. Going forward, we will have to use our revised numbers, look again at our business plans and how we can make some adjustments to ensure we live within the means of our own policies and the fiscal environment we find ourselves in today. Thank you.

Thank you, Mr. Minister. Mr. Braden.

I guess, if this is a request from the expert panel, I don't think we can wait. Can we, Mr. Minister? That's the question I have. Should we be going back to Revenue Canada and saying, "No, no more delays. We cannot tolerate it. We can't continue to put things together this way. We just can't put up with another delay." So should we take that message to the federal people right away? Is that an option for us, Mr. Chairman? Thank you.

Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, as I stated earlier, one of the things, in light of the news we have, I've put a call into Minister Goodale's office to try and establish a meeting to go over a number of the issues, formula financing being one of them. The expert panel, and the work that it has been mandated to do by the federal government, is one that's across the country. So although we are in a difficult situation, that work will continue to go on, as the federal government has stated. I think we'll have to seek relief from the federal government in looking for a number of other options, and I think that's what we'll need to try to look at.

Meanwhile, we'll have to look at our numbers that we have now that are firmed up around our revised corporate tax figures, our expenditures that we had planned to make for the remainder of this fiscal year, and look at addressing our fiscal responsibility policy through our own initiatives at this point. Again, as we proceed down the path, and as we prepare for the main estimate process in the new year, we're going to have to look at that plan, because that plan was developed in a different fiscal environment that we were predicting than what has actually come out now. So we're going to have to look at that and make some adjustments. Unfortunately, for us in the Territories, it's not going to get any easier. Our work is that much more important with federal Finance in trying to seek some positive outcomes for us, and the work that we've talked about ongoing since we've taken office, and previous governments, and that's around royalty revenue sharing. Thank you.

Thank you, Mr. Minister. General comments. Mr. Ramsay.

Thank you, Mr. Chairman. I enjoyed going through the supp, and the meetings that we've had over the last few days. I expressed my frustration to the Finance Minister at the time, that there were, and are, quite a few items in this supp that, quite frankly, I don't understand, and obviously I won't be supporting them. I will encourage other Members of this House to finally say no to some of these things.

The issue that I'd like to bring up first is that of the transfer of $30 million from the Housing Corporation over to ECE, and the fact that now ECE is looking at hiring 11 positions. Now in the supp, Mr. Chairman, that only amounts to about $460,000. I think there's $183,000 in one-time costs, and about $266,000 or $277,000 in the costs to get us through this year. What's not in the supp, Mr. Chairman, is the fact that, on an ongoing basis, this creation of 11 new positions to look after the social policy side of things within ECE is going to cost this government $1.2 million. To me, that's just not on, and I'm not going to mince words, or sugar coat anything. I think it stinks, and I think the government did not do its homework when looking at this transfer of funds from the Housing Corporation over to ECE. There should have been some positions that were earmarked to go along with the $30 million, and, Mr. Chairman, there weren't. I think the onus now has to be put back on the government to go and revisit this, and come up with the positions within the Housing Corporation, or from within existing resources, to fund it.

Thank you, Mr. Ramsay. Just by some of the comments you're making right now, I think you are getting into some details. Can we have general comments to the Minister's opening address, at the moment? Thank you.

Thank you, Mr. Chairman. I'll try to keep my comments to the supp, generally speaking, and I won't be that specific, but I still think, overall, I'm not too impressed with what's before us. I can understand, and I can appreciate, a lot of it is federal money that's flowing through, and that's an obvious thing. A lot of it also has to do with the agreement that we signed with the UNW and the NWT Teachers' Association, and that makes up another substantial portion of it. The reality of it is, Mr. Chairman, that I think this government has a really, really tough time in saying no. To be honest with you, I don't know if my colleagues across the floor can spell no, from time to time, because every time we turn around, they're coming back for more money. Some of it can be substantiated, but, Mr. Chairman, a lot of it can't be. There are a number of things, as I mentioned, that are included in the supp that I'm going to try to get the rest of the Members on this side of the House to put their foot down, and to make a stand, and to tell the government that we're not going to put up with it. I don't know how else to put it, Mr. Chairman, but I look forward to going page by page, because there are quite a few things in here that I'm not going to support. Thank you.

Thank you, Mr. Ramsay. Mr. Minister, would you like to comment?

Thank you, Mr. Chairman. Mr. Chairman, the supplementary appropriation document before us includes quite a number of initiatives. The

Member has spoken to a few of them. A large portion of this is flow-through money. For example, the community capacity building fund, that's flowing through the Department of Municipal and Community Affairs, as well as a transfer of assets to the new Tlicho Government, and from those communities, and, as the Member mentioned, the contracts that we've negotiated with the unions are another significant portion of this. As well, when you look at this, there are a few areas that one may call, or describe, as being preparatory work. When we look at environmental work that needs to be done, or assessment work that needs to be done around the pipeline initiative, those are things we feel as though we're waiting for the announcement; we're also sensitive to the fact that we've been told that we're not quick enough off the mark to address the issues of community governments and the community groups when it comes to dealing with the impacts of the pipeline. So even though we're waiting for the announcement, we must, as a government, be prepared to do some of the work, as that work is ongoing at this time when you look at the statements that have been filed. Of course, everybody is waiting for the formal hearings to start proceeding, and when they do, we'll need to be ready. Thank you.

Thank you, Mr. Minister. Mr. Ramsay.

Thank you, Mr. Chairman. I just look forward to having the opportunity. I'd like to thank the Minister for that, and I look forward to the opportunity to go through this page by page, issue by issue, and expenditure by expenditure. Thank you, Mr. Chairman.

Thank you. General comments on Bill 11. Does committee agree to go into detail?