Thank you, Madam Chair. I am pleased to present the Department of Finance's main estimates for the fiscal year 2006-2007.

The Department of Finance, through its responsibilities of generation and management of our cash and borrowing activities, plays an important role in ensuring the government is able to deliver its programs and to make informed decisions.

The department's mandate has changed with the reorganization of the Government of the Northwest Territories' central agencies. The responsibility of the Bureau of Statistics has been transferred to the Department of Executive, and the Department of Finance's mandate to provide a macroeconomic policy analysis and advice has been clarified and strengthened.

The department's focus in 2006-07 will be on the major fiscal and economic issues highlighted in my budget address:

• • ensuring that the new formula financing arrangements reflect the needs of the NWT;
• • changing the $300 million federal borrowing limit to one that reflects our government's ability to finance debt;
• • working toward the conclusion so resource revenue sharing arrangements that provide a fair net fiscal benefit to the NWT; and
• • developing a macroeconomic policy framework for the Northwest Territories.

Other ongoing initiatives that continue to be a priority include:

• • participation in the analysis, information gathering and preparation related to the Mackenzie Valley pipeline;
• • finally, a key outcome for the department is the development of amendments to the Liquor Act for consideration by this Assembly.

For 2006-07, the Department of Finance has identified a total expenditure budget of $7.953 million, or 14.3 percent, or $994,000 more than the 2005-2006 Main Estimates amount. The net increase is composed of:

• • $491,000 to implement the department's macroeconomic policy responsibilities;
• • $117,000 for projected insurance cost increases;
• • $145,000 to help ensure that the department's tax collection function has the capacity to cope with the increased volume of tax activity resulting from our growing economy;
• • $375,000 to fund Collective Agreement, TSE and WCB premium increases; and
• • a reduction of $80,000 to reflect the sunsetting of the Liquor Act review in 2005-2006.

As I mentioned earlier, it is my intention to proceed with a broad inclusive process to develop a macroeconomic policy for the NWT over the next year. We will research and analyze the big picture policy options available to us. The resulting economic blueprint and policy direction will allow us to make effective investments and adopt positions and provisions that will maximize our opportunities and influence the direction and expansion of our economy and resulting government revenues. The funding proposed will provide the resources needed to implement this initiative.

The GNWT has seen large increases in its insurance costs over the last few years, although recent market reports indicate the rates are starting to decline in 2005. Last year's hurricane season will have some impact on the Canadian insurance property market and the department is focussing an increase in property insurance premiums. Forecasting, I'm sorry, the department is forecasting an increase in property insurance premiums. The liability insurance market is stabilizing and rates are expected to remain largely unchanged in 2006-2007.

The growth in the NWT economy over the past five years is having a significant impact on the workload on the department with respect to tax collection. The department is proposing an increase of $145,000, beginning in 2006-2007, to fund the cost of two additional tax collection and compliance positions. The financial resources allocated to tax collection will protect our existing tax base and generate additional revenues to the government.

The department received one-time funding in 2005-2006 to undertake a review of the Liquor Act. This initiative has recently been completed and a report has been provided to Members and to the public. I look forward to working with Members to bring forward amendments to the Liquor Act that will make the act more responsive to the needs of our residents.

The Department of Finance, as the lead revenue department of government, accounts for over 89 percent of total GNWT revenues forecast for 2006-2007. The main estimates include a forecast of departmental revenues for 2006-2007 of $984.119 million. This includes a formula financing grant of $752 million. Because the report of the Expert Panel on Equalization and Territorial Formula Financing will not be available before spring, the 2006-2007 grant will be fixed in federal legislation. This means that the GNWT will bear 100 percent of the risk of tax and revenue changes during the year.

The department's main estimates do not identify any increased borrowing cost for 2006-2007, but our medium-term fiscal outlook does forecast significant increases for 2007-08 and beyond, as the GNWT is required to repay almost $300 million by the end of 2006-2007 for the 2002-2003 overpayment of corporate income tax.

The forecast, of course, is also dependent on our revenues and our spending decisions for both operations and capital over the next few years. That concludes my opening remarks and I would be pleased to answer any questions Members may have. Thank you, Madam Chair.