Thank you. Mr. Roland. Can you introduce your witnesses, please?

Thank you, Mr. Chairman. Mr. Chairman, to my right I have with me the deputy minister of the Department of Finance, Ms. Margaret Melhorn; and, Mr. Mel Enge, the director of finance. Thank you, Mr. Roland.

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

Thank you, Mr. Chairman. I wanted to provide a few opening comments on the Department of Finance. Again, I know the Minister and the department have worked extensively over the past year to try to develop this macroeconomic policy framework and hiring new people to work in a policy shop within the Department of Finance.

I mentioned last year, and I don't think it's a coincidence, the Department of Finance actually looked at a loss in positions when the Bureau of Statistics was moved over to the Department of Executive. Lo and behold, a macroeconomic policy shop was set up in the department.

I am going to provide the House a little bit of an analogy if I could, Mr. Chairman. I would equate the Northwest Territories today and our government today like an adolescent child on an allowance. Let's say instead of his allowance being $1 billion a year, it's $10 a week. Mr. Chairman, it's like that adolescent kid going out and hiring four investment specialists from Investors Group, or you could pick and choose who you want, trying to tell that kid how to spend his $10 a week. Oh, little Johnny, you can afford to go to the movies this week...

---Laughter

Mr. Chairman, if you put it in that context, this policy shop is premature. All the work that's been done to date is hypothetical. We don't have a resource revenue deal with Ottawa. We are on a fixed income, more or less, we have an allowance. We have limited or no ability in raising revenue. Make no mistake about that. Our debt limit is set in stone at $300 million. We have no control over that. Investments, we are limited in our investment capability on a fixed income. Again, I take issue with the fact that now...We saw in our discussions earlier today an initiative like the ABC review of boards and agencies across this land. For most Members, it was one of their number one priorities. Meanwhile, a macroeconomic policy shop with four people in it is shoved in our face. That's what it was, Mr. Chairman. We are just made to take it. I don't understand, in the absence of a deal with Ottawa, how can we afford at this time to be developing a macroeconomic policy framework? It's all hypothetical; absolutely hypothetical.

Again, I wanted to mention that for the record. I was opposed to the hiring of the positions last year. I am still opposed to the policy shop being in the Department of Finance and I stand by my thoughts on this, Mr. Chairman. I am not an economist or a specialist in the economy or things of that nature, but I do have a brain and I try to think about things in a logical fashion. Mr. Chairman, as much as I think about this, it just causes me a lot of...

...heartburn, yes. Again, the government has a lot of priorities. This right now shouldn't be one of them. We have been operating as a government since 1967 without one. Why? Because we are on a fixed income. We were in 1967 and we still are today. Mahsi.

---Applause

Thank you, Mr. Ramsay. General comments. Next I have Mr. Miltenberger.

Thank you, Mr. Chairman. I, as well, wanted to comment on the macroeconomic initiative and the perspective that I have on this particular issue and to provide that comment as well as identify some of the areas that I am assuming would be included in the final policy. In my mind, Mr. Chairman, we live in a territory that has, I don't know if it's untold billions but it's probably hundreds of billions of dollars of resources that we are setting the stage to develop. We know that in gas and oil alone, it's in the billions of dollars.

We know that we have enormous challenges as a government on the expenditure side where we are expending 60 to 65 cents of every dollar on preventable causes like personal choice issues, the drinking, the smoking, the lack of exercise and diet, yet out of our budget, consuming an enormous amount of money. We know there's a need to put a frame around all the work we are doing and we can't just look at the revenue side, we have to look at the expenditure side. Otherwise, we can never generate enough revenue, nor can any other jurisdiction in the country, to cover off the rising cost on the health care side.

We have to make that adjustment. We need to make sure we put a better frame around that. We talk about what some see as the untravelled growth in government, the need for the zero-based review that everybody is going to be looking towards in the 16th Assembly to look at where we are and are we right sized and if we are going to change the structure of government, how do we do that?

We have unprecedented demand for our resources. We know we have to do a much better job in accounting for and incorporating an environment in economic development. No macroeconomic development policy in the Northwest Territories can even think of going forward without a clear inclusion front and centre of the environment being we are a resource-based economy. The value of the land, the issues we are dealing with with climate change and water and the many transboundary issues.

If we are going to do a proper macroeconomic policy, we know we have to talk about land use planning. We have to talk about how we are going to develop our resources, how fast, where, to what extent. We have to look farther down the road than the four-year terms of government.

We have some very fundamental decisions to have that I see are intrinsic to having an effective macroeconomic policy. There is a need for us to do that. We heard talk today in the House, for example, on a human resource plan. We have to finish some of those internal workings as well. Grant Thornton, last Assembly, in their study and their report and recommendations said we should have a human resource plan in government that ties into our zero-based review. We haven't yet managed to do that, but that's a piece of looking at the zero-based review and are we right sized as a government.

In my opinion, we have to plan for the future. I know I am confident, as the Premier said he is and every Member here is. We have to be chronically optimistic that we are going to get a resource revenue sharing deal and we have to plan for the day that we are going to leave the nest, be able to stand on our own two feet and be able to decide on how we are going to develop the North. We don't want to do that from a dead stop because we weren't going to do it until we had the deal in hand. We have to look at some foresight, some planning, some long-term work that's going to put a frame around all these very complex issues.

The land use planning alone, if we look at the protracted struggle with the Dehcho indicate the kind of work we are going to have to do, though they should receive credit for breaking trail on this issue. To me, it's a fundamental piece of any kind of policy, is how we are going to look and use the land incorporating all the uses that are already there and projected uses. They are very significant when you look and overlay all the maps with the land claim areas, with the protected areas strategies, with the parks, with where the caribou winter, where all the exploration permits are. Right now, we have no real clear idea as a government how all those pieces fit together. So you can't do a macroeconomic policy unless you have that information and it's clear. Then you could have the discussion with the people of the Northwest Territories and plan for the future. Everything we do is going to be tied to the land.

Finally, the macroeconomic issue that is going to be inherent in this as well is going to be a lot of the water

-related issues; the hydro expansion, both in the Taltson and other small communities and what we are going to do with the transboundary issues, both on the development side and the environmental impact side.

So is there a need for a, if you want to call it a macroeconomic policy? I believe there is. I believe it's good, sound sense to start planning for that. We have pieces all over the place we are already working on that aren't as well coordinated as they should be, as has been pointed out time and time again in this House.

So if this is going to give us the framework to be able to link these pieces, as I think it should and I think that's the intent, then I think it's an investment worth making. That's not to say that the other things that have fallen off the table should have fallen off the table, but clearly for those of us...For myself anyway, let me rephrase that. Having been at this table now eleven and a half years planning coordinated, comprehensive planning by government has been seen as something as an oxymoron at times. It's something that we have to recognize and I think we have to do a better job. I think this is a vehicle to help us do that.

I would be in support of this, but I would be very interested in the Minister's comments to make sure that it is a macroeconomic policy that doesn't just focus on revenue. It recognizes the expenditure drivers that if we don't get them under control, they will keep us chronically in the poor house.

The other piece I would look to see built into this as we anticipate the future, is the issue of some type of fund, legacy fund, heritage fund, for the future that we have to build into this policy so that we can recognize that, as we speak, oil, gas and diamonds are being taken out of this territory that will never be replaced and that our children and grandchildren and their children, you can use as many generations as you can think of, are going to count on us now to set the proper plans in place. That includes putting money aside for those generations because the oil and gas won't always be there nor will the diamonds. But if you do this right, the land should be there, the caribou should be there and they should still have a good life. They should be able to still live off some of the good and sound investment decisions we are going to make as a government and the pieces we are going to put in place in the coming months. Thank you, Mr. Chairman.

Thank you, Mr. Miltenberger. General comments. Mr. Yakeleya.

Thank you, Mr. Chairman. The issue of finance is important because over a period of time, we, as a government and people up here, have shown the amount of money that we have to work with. The needs are very high, the wants are high and we have only a certain amount. We have pre-conditions already set for us in terms of borrowing money and the money you get from the government in a grant and the amount of dollars that leave the Northwest Territories and the taxation that we have.

I think that over the years I have known the Minister and his department, they have shown some good results regarding our finances. I don't really understand the macroeconomic policy, so I had to get research to help me understand what it means. It does make sense because of all the multi facets of how we handle our finances. The biggest one is the resource revenue sharing. I am really quite concerned as to whether we've done any work in terms of post resource revenue sharing regime. There are various levels that we are going to have in the Northwest Territories and there has to be one government that has to be the central body. I know other governments are...(inaudible)...and that's true in negotiations in terms of if there's one central government, it needs to work out some very delicate jurisdictions with the other governments in terms of post resource revenue sharing. So everything affects it. I, myself, Mr. Chair, would continue to support this department to continue on with their macroeconomic policy framework and see how it fits into the other governments and how we, as the Northwest Territories, are going to ensure that all the angles are covered, so to speak, in terms of how we deal with finance. So I want to say that to the Minister and I want to ask him some questions later on in terms of the one revenue we do have. I know he's going to have the same answer, in terms of the liquor revenue fund. But again I'm going to make another plea. I just hope my people can get a good explanation. Logically they really can't see it. I'm not in the finance business. He's got some good people to help him explain it, so I might just ask him through a letter. But I think that's important, to let our people know that we have revenue from the sales, and that the majority of this revenue is killing our people in terms of the liquor sales, and people just try to see why is it so difficult just to take some of that revenue, not all of it, to set aside a little bit for the treatment and prevention programs of addictions, specifically alcohol and drugs. The Minister has talked to me many times, other Ministers have talked to me about this issue, and I just need to have a good explanation for our own people back home in my region.

Mr. Chair, the comments I have for the Minister...That's all I have to say to the Minister.

Thank you, Mr. Yakeleya. General comments. If there are no further general comments, does committee agree to go to detail?

Thank you. We're on page...Mr. Miltenberger.

Thank you, Mr. Chairman. Just some direction. Should we wait until we hit the macroeconomic piece? I'd just be interested to hear the Minister's comments, having heard some of the concerns around the table.

Thank you, Mr. Miltenberger. Maybe I'll let the Minister go ahead.

Thank you, Mr. Chairman. I can respond at this time to a number of issues Members have raised. The macroeconomic policy would fall under our fiscal policy unit or section, but I can address a number of the issues raised at this point.

I know Mr. Ramsay had raised this in the past, about his concern of this development and he calls it a coincidence, or questions the fact that it's a coincidence. Well, let me confirm I think I did, as last year we went through this process, that it wasn't a reaction because we were taking one section of the department out. The fact that the macroeconomic policy was discussed I believe as far back

as the 12th Assembly and direction was given that the government should start looking at doing that. As the Member made a comparison to us as being an adolescent child, well, the fact is we have $1.2 billion being approved by this Legislative Assembly. We make tax decisions that would have a huge impact on how things flow in the Northwest Territories. We make spending decisions on non-renewable resource development and how we support that or don't support that, how we come up with funds for many of the other programs. Yes, we are boxed in a number of places; for example, our borrowing limit, which we're working with the federal government on increasing, as well as transfer payments. But the fact is we still have $1.2 billion and as we make those spending decisions, this macroeconomic policy unit will be the lens in which a government will need to look through as one of the tools of how we spend that money is it the best investment and where we make that investment. So those things are part of the process we need to do. So I would say we're far from adolescent children.

Although it is frustrating at times to know that when it comes to the revenue raising initiatives, ultimately we're negotiating with the federal government on a transfer payment, but so is every jurisdictions across Canada, including the provinces, around equalization. We're in the territories in the form of territorial formula financing. We do have initiatives where we can raise our own revenues, and that's either establishing new taxes or increasing existing ones.

As well, just for confirmation, we did table, as part of the budget day process, the interim report on consultations, Charting the Next Course. So that was tabled in the Assembly. In fact, when you look at it, the two roundtable discussions going towards some of the issues Mr. Miltenberger raised around what's in there and how will this unit start coming together and what focus it will have, as I said, it will be a lens that we will look at in making spending decisions or revenue-raising decisions. When you look at the two tables, one when Yellowknife was a business-orientated process and we had a questionnaire go out to each group. That side we had protecting the environment come up as item number four from the business side. The Inuvik roundtable was community leaders and NGOs, as well. At that table, educating our people first, number one, and protecting the environment was highlighted as number two priority as the government looked forward. So as part of this process, looking at the environment is going to be one of the things we go through on that.

Of course, Mr. Yakeleya raised the issue of the macroeconomic policy and the work we have been doing. In general, trying to get more revenues to our jurisdiction. The liquor revenue portion, when we get to that piece I will again go into a little bit more detail of how that is used. But right now we highlight it, it looks like there's $19 million sitting there. That money gets wrapped up into our revenues as a government and gets spent on a number of programs and services. So there isn't a pot of money sitting there on a yearly basis that we can tap into. That money comes back to the Government of the Northwest Territories and we use it as part of our revenue source for making spending decisions on all kinds of programs. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Maybe I'll recognize Mr. Ramsay.

Thank you, Mr. Chairman. Actually, I'll wait until we get to 3-23 on fiscal policy to ask some questions. Thank you.

Thank you, Mr. Ramsay. Can we turn to page 3-10? Finance, information item, revenue summary.

Pages 3-12 and 3-13, Finance, activity summary, directorate, operations expenditure summary, $1.506 million.

Mr. Yakeleya.