Thank you, Madam Chair. I will quickly give a response. The Member for Frame Lake indicated that the government gets to spend what they want and MLAs are told we have no money to spend and, I would, just for the record, make it clear that we spend what the Legislature votes us to spend. It is a collective budget of this body here, this august body that we are now before.
The Member also commented that a major concern is that we don’t have a lot of new money to spend. As you look around at the landscape around us, pick a province or another country where there’s layoffs, freezes, rollbacks, pension cuts, benefit cuts. Yes, the fact is that we could always spend more money, but the fact that we are here spending and discussing how to spend $1.5 billion dollars and we have had no layoffs, we’ve had good collective agreements signed, we’re going to continue to invest in all the things we need to, I think we should take comfort and solace and some
pride in the fact that our glass, in this case, in my opinion, is half full.
We are working towards new revenue. The most imminent source of new revenue, and not resource rents at this point, but the most imminent source of revenue is going to be the signing of the Devolution Agreement. When that money flows, the resource revenue sharing agreement gives us about $60 million a year and our share will be about $45 million a year. New money. It’s not anywhere in our budget yet because the deal is not signed. We will have the discussion of how to put that money to use. Over time as we take over authority for land, water and resource development we will look at what other opportunities are there. The most immediate one that will come within 18 months is that.
The issue of no new taxes in this time, I think, is still pertinent. I know we will have other discussions about other revenues, but we’ve been focused on efficiencies and working towards the issue of devolution. The legal authorities are absolutely critical but there’s also those fiscal benefits that are there waiting for us. We’ve already left over $300 million on the table, as we’ve talked about this. Three hundred million dollars that we could have put to good use.
We will be bringing forward an LP on the Financial Administration Act by Christmas is the plan. We are very confident in the economic viability of the fibre optic link and Inuvik becoming one of only two places in the world that does that type of remote sensing. It will add significant stability to the economics in Inuvik and the Inuvik region.
We are looking at a Revenue Stabilization Fund. We indicated that in the budget address. We want to move forward, because we agree with the Member, there are these price shocks or revenue shocks, and if we can come up with a way to level those out and cushion them, similar to what we are trying to do with the cushioning of the power rates, that would be a good thing.
With the NEB we intend within 18 months to have, as well, a legislative proposal that we can put on the table. Mr. Bromley indicated the concern about the $15.6 million we’re putting in to cushion the impact of the general rate application. I want to make a clear distinction: The rate restructuring is a separate issue from the fact that there were no rate increases for five years. That five-year no rate increases would be impacting us regardless of what kind of rate structure we now have. The fact is, when you have no new revenues as your expenditures go up, there’s a widening gap that is not sustainable. We’ve acknowledged that we have to come up with a better way, through regulatory reform, to even those out, to minimize them, as well as look at efficiencies to the system to do that.
Our transfers have been done. When we were in Victoria last December and the federal Minister of Finance came into the room, when he laid the document on the table, it covered the health transfer, the social transfer, equalization and the formula funding arrangements with the territories, and those amounts were laid out. There is some work being done to clarify some of the information that was in there, but it covered, pretty well, the majority of our fiscal relationships with the federal government.
We are going to do a review of petroleum products to deal with some of the issues and application issues that the Member has mentioned. Once again, the intent is not to look at raising taxes, but if there are efficiencies and loopholes, we want to look at those.
Devolution is a priority, as well, for finance. It’s on the third bullet, I think, on the last page of my opening comments. It’s in our mandate letter from the Premier. We are fully engaged at all the tables that deal with the negotiations with the organizational structures. All the work that’s being done given the financial implications, Finance is there.
Amortization is done according to the accepted practices. We work with the Auditor General of Canada. They review our books yearly. It’s an issue that has grown in profile over the years. It’s become much more visible, and their need to account properly, so we do that. During detail I’ll ask Mr. Kalgutkar to speak to that.
Mr. Dolynny said some fairly strong things about tobacco collection, and his assertion that somewhere out there is $4 million to $10 million going missing every year. We have spent over 600, more like probably 700 now, hours of auditor time and a significant amount of time of other staff going through this. We’ve reviewed it with everybody, and at this point Mr. Dolynny indicates he still has these significant concerns. He questions the stats we use, which are either our own stats or from Stats Canada. He makes some assertions. We’ve opened every shoebox that we’re aware of that we’ve seen. We’ve put a lot of time to this. He says, in his opinion with his experience with the folks he’s talking to, that there is some clear smoking gun out there that is not visible to us, so we’ve asked. We’ve asked Mr. Dolynny, we’ve asked other folks that have raised this issue, give us that smoking gun so we can backtrack and have the evidence to track this $4 million to $10 million now, because like Mr. Dolynny, we are very interested in if that money exists and it’s not coming to where it should be, which is to the government and to the people of the North. We want to work with the Member to track it down. We need that piece from him. Barring that, of course, the work that I’ve seen, the work we’ve reviewed that all the folks have done, is the
evidence that we have before us, and all the copious amount of effort that was put into that.
In regard to the revenue summary questions, the corporate income tax, if you could stretch the corporate income tax back into the past another three years, you would see that at one point we received an overpayment in corporate income tax, a big overpayment, and we had to pay that back. The last three years we’ve been paying that overpayment back, which has dropped our normal corporate income tax down much lower than it would if you had longitudinal view of, say, 10 years. We’re finishing that now and our projections are that our corporate income tax will go back to those normal rates that you would see over a longer span, that aren’t visible the way they’re laid out in the document that’s before this House.
Amortization, we’ll have that discussion, as I indicated.
Devolution, as the Member for the Sahtu talked about, I’ve spoken to that. Decentralization is critical. The Premier has outlined the commitment. In regard to finance, we have three positions in this document. One of them is forced growth. The other two have reprofiled positions using our own internal resources. Thank you.