Merci, Mr. Speaker. Based on the analysis done by Alternatives North, GNWT should also determine and announce a timetable outlining which of the available options it intends to implement during the remaining life of this Assembly. I'll have questions later today, Mr. Speaker, for the Minister of Industry, Tourism and Investment. Mahsi.

Masi. Members' statements. Member for Sahtu.

Thank you, Mr. Speaker. Over the last several days, I've spent a number of days in both the Vital Abel Home and the Stanton Hospital assisting residents and families.

Mr. Speaker, we have always been seeking ways to hold dialogue and improve our program delivery, especially in the small, remote, isolated communities. The strategic plan developed in 2014 for the Sahtu Health Authority is a reflection of this; however, it needs updating.

Mr. Speaker, a number of positive changes are in the proceedings which are the new Sahtu Regional Health Centre, new legislation that became effective August 1st, and the new organization at the regional level, as well as the territorial level.

Mr. Speaker, given the new change for the region, we now need to update our regional strategic plan with involvement of all stakeholders, namely, residents whom we serve in the Sahtu region. It should be for the Sahtu, made by the Sahtu, for the Sahtu people in the area of medical care. Mr. Speaker, thank you, and I will have appropriate questions for the Minister of Health later. Thank you.

Masi. Members' statements. Member for Deh Cho.

Masi. Members' statements. Member for Nunakput.

Thank you, Mr. Speaker. Mr. Speaker, as the daylight gets longer and more people go out on the land, on-the-land programming helps ensure that youth are exposed to traditional culture and ways of harvesting and preparing country food. The Department of Environment and Natural Resources' field environmental programs for youth are a valuable part of education in the Northwest Territories. For generations, youth have learned on the land. Now that we no longer rely on traditional skills for survival, we must ensure our vital connection to the land is not lost. ENR delivers a range of programs in NWT schools both inside and outside the classrooms. These programs teach students about ecology, natural history, traditional knowledge, wildlife, arctic botany, geology, archaeology, and safety and survival skills. Mr. Speaker, this learning can spark an interest that can lead to further education through Aurora College's Environment and Natural Resources Technology diploma or environmental monitor and training programs.

Mr. Speaker, youth who might not excel in classroom academics may do well out on the land where hands-on learning is emphasized, where they get to practise skills with family members outside of school. Mr. Speaker, on-the-land programming teaches students about how people lived before the modern amenities they have never lived without. It introduces new Canadians to the traditional ways of life when Canada's first people and the people who adapted to a new land, culture, years before.

Mr. Speaker, climate change is rapidly changing the traditional territory of the Inuit. Youth need to learn about what is changing and what has stayed the same for generations.

Mr. Speaker, programs like Take a Kid Trapping or original programs like the Dehcho Youth Ecology Camp are great for teaching traditional knowledge from a practical perspective. It would be good to see similar opportunities offered to students in the Beaufort Delta.

Mr. Speaker, it is essential for youth to have positive learning experiences on the land. Field environment programs should be a permanent part of the education curriculum. They also present great opportunities for partnership between government departments and with Aboriginal governments that could ultimately help build a greater trust between governments and diverse groups of people who work together to teach the next generation about life on the land. Quyanainni, Mr. Speaker.

Masi. Members' statements. Member for Yellowknife Centre.

Mahsi, Mr. Speaker. Mr. Speaker, the saga of what funding is available to implement junior kindergarten continues because communication by the Minister of Education, Culture and Employment and his department is so ineffective. But it is not too late to turn things around. What we need are some straight answers.

In early December, parents and trustees appeared at the Standing Committee on Social Development to deliver a simple message about the introduction of junior kindergarten. Another grade of school requires another grade of funding. At that point, the Minister said he planned to fund the new grade with a combination of new investments and cuts.

Last week, the Minister of Finance said the government would provide an additional investment that would fully fund junior kindergarten in the life of this Assembly, although he did say that not all schools were ready for JK. Then later in the week, an assistant deputy minister at the Department of Education, Culture and Employment announced through the media that the government would provide the whole $5.1 million needed this fall. He said school boards would not be asked to reallocate any of their funding to cover the extra grade; but wait, there is more.

Yesterday, the Minister told this House that the whole amount of money allocated to JK won't be needed this year. He said, and I quote: "We will work with boards to make the money they need to implement junior kindergarten available to them when it is needed. Once we know the actual enrolment figures, the government will bring a request for supplemental funding to the Legislative Assembly in the fall of 2017 to fully fund implementation."

Mr. Speaker, this is not how school boards or district education authorities' budgeting works. Once we pass the budget, school authorities create a budget for the 2017-18 school year and it is submitted to ECE for approval. That has to take place before the end of the fiscal year in March. If they are going to hire new teachers or they are going to lay them off, they must plan in advance and not do that two weeks before school starts.

Mr. Speaker, school boards in Yellowknife are behind the idea of JK. They are holding parent information nights this month. They expect enrolment of about 250 four-year-olds in September. They remain concerned that inclusive schooling doesn't include the new grade and about the cost of busing these little people, yet they are ready to go. But is the government ready? Mahsi, Mr. Speaker.

Masi. Members' statements. Member for Tu Nedhe-Wiilideh.

Mr. Speaker, I seek unanimous consent to move item 12 on the orders paper, replies to budget address. Thank you, Mr. Speaker.

---Unanimous consent granted

Item 12, replies to budget address. Member for Frame Lake.

Merci, monsieur le President. I will use my reply to the Budget Address to set out some of my thoughts on the following: a quick review of what I recommended to the reply to the Budget Address of 2016; description of the process for 2017 and how it might be improved; and the good, the bad, and the ugly of the 2017-18 budget as proposed by Cabinet.

What did I recommend in my last reply to the Budget Address in 2016? I recommended the following: open up the budgeting and business plan review to allow for some level of public scrutiny; set firm deadlines around negotiation processes between Regular MLAs and Cabinet on the budget, which may lead to a process convention of the budget process; better cross-referencing of the main estimates to the business plans; clear reconciliation tables to show changes in staffing by departments and by community in relation to full-time and part-time employees as a result of sunsetting of programs, reductions, and new initiatives; better engagement of our citizens as part of the budgeting process; and raising revenues for a more balanced approach to fiscal sustainability. I will come back to these again, the various points, in my reply, but I wanted to highlight them now to help set the context for what follows, the budget process.

Regular MLAs have been working diligently on the budget behind the scenes since September 2016, when we reviewed so-called business plans, which are really departmental budgets. I attended all of those meetings even though I was not a regular member of two of the standing committees. One major failing is that there was little or no effort to reach any agreement or consensus of what the overall fiscal context or direction should be prior to that review. The overarching objectives of the budget were not established before the detailed work on business plan reviews began. This is a serious flaw, as was raised yesterday by the Member for Yellowknife Centre.

During those business plan reviews, behind closed doors, most of the presentations and exchanges made reference to the reduction targets given to each department and the overall target of cutting $150 million. Regular MLAs sent detailed correspondence back to the Finance Minister and held meetings in an attempt to reach some sort of a compromise by rolling back some of the cuts and strongly urging investment in the mandate. We listed unacceptable reductions and provided supporting rationales for our opposition.

The response was to roll back some of the cuts and then offer some new initiatives that were largely based on issues raised in this House in the fall sitting. The new initiatives were not discussed with us first and did not necessarily reflect any particular approach or linkage to the mandate. Further reductions were also introduced that more than offset the cuts that had been rolled back.

Given the lack of consultation on new initiatives, Regular MLAs spent considerable time developing our own list of strategic investments in the mandate. These were rejected by Cabinet.

After another meeting, one more reduction was rolled back, likely to happen next year, and then a promise of more funding later in our term for another initiative. I should point out the requested revisions from the Regular MLAs amount to a very minor proportion of a $1.7 billion overall budget, less than 2 per cent.

Here we are in a game of chicken to see who will blink first. This is not my idea of consensus government. It is a disservice to our residents.

I go back to one of the recommendations I made last year about opening up the budget process to greater public scrutiny. I believe this will encourage more accountability. There also needs to be earlier, meaningful consultations with Regular MLAs about the overall fiscal context and direction of the budget. I think we also need to develop a process convention for the budget.

Lastly, in terms of the budget process, I am not aware of any attempt to engage the public in the development of this budget. The Finance Minister used to hold annual public consultations. These resulted in a shopping list of public suggestions, but at least the effort was made to gather some input. The Premier spoke in his sessional statement about Cabinet open houses. While this is a worthwhile effort, I went to the open house here in Yellowknife and there was no invitation to discuss the budget.

Last year I recommended improved efforts, a public engagement, but this has fallen on deaf ears. In my previous life, I volunteered with a Yellowknife-based non-governmental organization. I remember having at least four or five Finance Ministers come to our meetings pre- and post-budget to hear us out. Similar meetings were held with others, including the business community and Aboriginal governments.

For the life of me, I don’t understand why our Cabinet and Finance Minister have stopped this practice of focused meetings on budgets. This only reinforces the impression of government being aloof and unresponsive. Continue this approach at your own peril.

The good, the bad, and the ugly of the budget. I'll start with the good, Mr. Speaker. There are some good points in this budget. It would be unfair and dishonest of me not to recognize this work by our colleagues on the other side of the House. Here is my list of favourite, good things in the budget.

There is a small increase in tobacco taxes and some fees. Some of these fee increases are long overdue, but should have been phased in. It took a long time for me to better understand what Cabinet is actually doing in terms of income assistance and the NWT Child Benefit because the communication was so poor, but I am now convinced that there will actually be an increase in support for our most vulnerable individuals and families. This is a very good thing and has my support. Hats off to Cabinet, but please find a better way to explain all of this, especially to our clients and the general public.

We also need to work very hard to ensure that everyone files tax returns to see the full benefit of these changes. The addition of $500,000 to support seniors staying in their own homes through a home repair program is another good move, but definitely not enough and low compared to the $1.85 million investment requested by Regular MLAs.

The new funding for homelessness in Yellowknife is desperately needed and another positive item in this budget. It is very good to see GNWT supporting the comprehensive homelessness plan coordinated by the City of Yellowknife.

We will finally get 911. I've raised this on many occasions in my short time as an MLA and sincerely thank Cabinet for seeing the light. There's still a lot of work to do with the city and others to get this fully implemented, and I look forward to helping with this essential service.

An additional $132,000 for a North Slave tourism officer is a good thing, but I'm just not quite sure what it's going to be used for while we have a crumbling visitor centre that desperately needs to be rebuilt.

A relatively small increase in funding for community governments for infrastructure and services, that's another good thing in the budget. There's still a need for a plan and money to make up the municipal funding review shortfall.

Mr. Speaker, now onto the bad things in the budget. In my opinion, your budget trumpeted lots of great investments, but most of this is actually forced growth beyond our control. I believe the budget should have been much more transparent and more accountable in presenting the cuts, especially positions to be eliminated through sunsets and reductions. No one likes to deliver bad news, but it's even worse to hide it. If you don’t disclose some of the bad and ugly items in the budget, that's now the job of this side of the House, so let's go.

No new taxes except for a small increase in tobacco taxes. Taxes are the price of civilization. To focus almost exclusively on reduction sends the wrong message. Taxes are also a way for us to start to ensure that wealth is shared. The world, this country, and the Northwest Territories have witnessed growing and unparalleled gaps between rich and poor. Our government has done little to address this issue through the tax system. For example, we should create a new income tax bracket for our highest income earners. Competitiveness and capitalism rule in our race to the bottom.

If our government is to have any credibility and moral authority to implement the drastic austerity it preaches, there must be an equal effort to raise new revenues through our tax system and fair return to government from the extraction of non-renewable resources.

In this budget, lip service is paid to renewable energy. No new investment in renewable or alternative energy, but a decrease through the sunsetting of $760,000 of funding leveraged by Regular MLAs during the bailout of the NWT Power Corporation for diesel to replace hydro power during low water levels. What are we waiting for? Federal dollars to rain from heaven? There are no positive proposals to get our communities off diesel or for housing retrofits to bring our stock out of poor need.

We can subsidize the road to help the Fortune NICO mine to the tune of about $130 million, but we can't find a cent to increase the $2.75 million budget for Arctic Alliance that delivers programs on renewable energy and conservation. To be clear, Regular MLAs proposed an increase in funding for Arctic Energy Alliance of $1.5 million a year, but this was rejected. The next time the entire Cabinet goes to Ottawa to outline its climate change fighting priorities, it would be good to talk to the lowly Regular MLAs beforehand. Cabinet could have pitched costed programs to bring all of our housing out of core need while we create employment in all our communities, lower the cost of living, and make real reductions in our greenhouse gas emissions.

My colleagues have raised the point that, although the addition of $3 million to the small communities' employment fund is interesting, their concerns are about being able to actually get the money out the door. The GNWT needs to move this program from wage subsidies to actual job creation. Virtually no work has been done, and certainly nothing has been shared with Regular MLAs on a carbon tax. There is no money identified in the budget for this work, although a carbon tax gets an honourable mention in a few places in the Budget Address.

Within Environment and Natural Resources, there will be five positions cut at headquarters, four of these in corporate management that appear to be related to communications and policy. There was a lack of detail in the publically available ENR business plan. This is troubling, and I'll have lots of questions. My main concern is the internal capacity of this department, which has a lot on its plate with at least six legislative proposals that have not seen the light of day.

ENR is also responsible for major public policy initiatives, including the climate change strategic framework and heavy communications responsibility with caribou and fire management. How can this work be accomplished with a reduced capacity when it is already behind schedule?

While the Finance and ENR Minister boasted about action on transboundary water management, he's making cuts of about 5 per cent, or $155,000, in the water management function within water resources at ENR. I will obviously have questions on this and how this really squares up with our commitments to protect water.

I'll move on to Industry, Tourism and Investment, where cuts are being made to our efforts at economic diversification. While all of Cabinet was off in Vancouver, the budget presses were at work to cut 17 per cent, or $2 million, compared to grants and contributions for economic diversification and business support last year. I recognize that some of this is sunsets, but there are also some reductions in there. For example, the budget of the Business Development and Investment Corporation is being cut by 15 per cent, or $500,000. So much for Cabinet's commitment to economic diversification.

Now, on to the Department of Lands, which will also take some heavy cuts of almost 7 per cent, or almost $2 million. Travel for field operations or inspections is being slashed by a whopping 33 per cent, or $415,000. What is going on? Needless to say, I'll have lots of questions. What happened to our commitment to do things better than the feds under devolution? Is this money that was given to us by the federal government to manage our resources under devolution now being used to help build a surplus for ill-defined infrastructure mega projects?

Overall, there is about a 14 per cent reduction in the NWT Housing Corporation total expenditures between the revised 2016-17 estimates and the 2017-18 mains. Not good, when our housing stock continued to decline without a real plan to get housing out of core need.

The mains show a decrease in transitional supportive housing of $225,000, or a 38 per cent reduction, and the Transitional Rent Supplement program is also being cut by a third, or $300,000. The Shelter Enhancement Fund is also cut by about 39 per cent from last year. All this in the face of a motion for this Assembly calling for core need in our housing stock to be reduced by 2 per cent per year to bring the NWT housing stock in line with national core need levels. We can all hardly wait for the housing survey to be finished and put into action, but the NWT Housing Corporation is not waiting, as it is making some substantial cuts in transitional housing now.

Sorry, Mr. Speaker; on to the ugly parts of the budget. Seventy-nine positions will be lost through discontinuation of programs and services and elimination of positions. This will have a profoundly negative impact, particularly in small communities where every job is important, and in Yellowknife where another major employer is moving its offices to Calgary.

I didn't even bother this year asking for an economic impact analysis of the cuts because the one done last year was so poor and biased, it was useless.

Cabinet has said that many of these positions to be eliminated are currently vacant. That may be true, but in many cases there may be term or casual people filling those positions who will lose their jobs. Even if the positions are vacant, these programs and services are being lost, and the contribution that they can and should have been making to our quality of life and our economy.

I'd also add that continuing to cut positions while we are in negotiations is a clear sign that Cabinet would rather cut people than find new sources of revenues. That's not the kind of message I think we should be sending to our valued public service.

Offloading cuts onto others, including the implementation of junior kindergarten: there is still no clarity on the timing of junior kindergarten funding and whether it will cover all the costs, which is inclusive of schooling and busing, due to the evasive answers in this House from the Education Minister. Now, there is going to be some kind of magical meeting with the school board chairs to make them find the shortfalls from within. This is totally unacceptable.

Another example of offloading costs is the proposed changes at the Yellowknife Airport. Let no one be fooled that this is driven by improving facilities and economic opportunities. If that was truly the case, it would have been done a long time ago. It was simply low-hanging fruit, a way to reduce expenditures by $4 million without any real say by users in how the airport will be run or improved. I will have a lot more to say about this, Mr. Speaker, when the report on Bill 7 comes forward to this House.

Departmental amalgamations that were driven by the goal of cost-cutting alone: again, let no one be fooled that the motivation is to improve public services and find efficiencies. If this was the case, where are the zero-based budgeting and functional analyses to support these mergers? How were form and function analyzed to improve public services and programs? Clearly, reduction targets are what guided this effort.

I'm particularly concerned about the amalgamation of Aboriginal and Intergovernmental Relations into the Executive, where there will be a continued decline in capacity to carry out negotiations on land rights with Indigenous governments. By the way, let's stop using colonial terms like "land claims" and use "land rights" instead, Mr. Speaker. The 2017-18 business plan for the Department of Aboriginal and Intergovernmental Relations also shows a loss of four positions. In no way do these cuts or this amalgamation support our mandate and the Premier's commitment to speed up negotiations.

Other education-related reductions include $3.8 million to Aurora College, or more than 10 per cent of the total contribution. What a bad idea in the middle of a strategic planning exercise, the outcome of which seems to inevitably point toward further cuts. Yesterday, we found out that the Minister knew what programs the college was going to cut as far back as November. These cuts include the Teacher Education Program. The Minister's own labour force survey shows that the most in-demand job over the next 15 years will be -- you guessed it -- teachers.

The contribution to the education authorities is also going to be reduced by $1.86 million on a total of over $151 million, but it comes at a time when they're being told to take in junior kindergarten students, without access to inclusive schooling funding and no plan for busing of junior kindergarten students. Ordering school authorities to do more with less is not something I can support.

The proposed elimination of the Mackenzie Delta winter ferry service of $1.8 million may save some money for infrastructure projects, but it will certainly put Inuvik at risk, as we heard from the mayor last week on the radio. With a storage capacity of a couple of weeks for propane and a possible stoppage in vehicular traffic of four to six weeks during freeze-up and break-up, how can this cut be justified?

In conclusion, Mr. Speaker, I've offered some thoughts on how to improve the budget process, highlighted the need for better public engagement, recommended a focus on diversifying our economy in line with new federal funding and ensuring a more balanced approach that includes more revenues.

As I said last year, what has been driving Cabinet is the belief that big projects in non-renewable resources are the preferred and only future for the Northwest Territories. That way of thinking was blown out of the water in the fall of 2015 with the election of a new government in Ottawa. Their priorities include infrastructure for a cleaner economy, more inclusive schooling, a low-carbon economy, and transformative change. We need to get our housing out of core need while creating local jobs; providing stronger support for tourism, agriculture, and the fishing industry; reduce greenhouse gas emissions; lower the cost of living; and develop a real post-secondary education system with a university for the Northwest Territories. These sectors will create even more jobs than the non-renewable resource development. This is the kind of leadership I had hoped for in the budget.

Above all, this budgetary process and the resulting plan can in no way be described by the word "consensus." Regular MLAs have attempted to get more strategic investments that benefit the greatest number of our residents, help diversify our economy, and create lasting benefits or avoid future costs. I'm not going to trot out those investments. I've referred to a few of them, and they're going to be available, apparently, later today.

It is most unfortunate that we have come to this point, where there are fundamental disagreements. There are some exciting initiatives in this budget, and I thank my Cabinet colleagues and their staff and my committee colleagues for much hard work in getting us to this point. However, on balance, I cannot support the 2017-18 budget given the fiscal austerity and debt management approach of Cabinet. Mahsi, Mr. Speaker.

Replies to budget address. Member for Yellowknife North.

Thank you, Mr. Speaker. Mr. Speaker, last Wednesday the people of the Northwest Territories and the Members of the 18th Assembly listened to the Finance Minister give his second Budget Address. It is astonishing how quickly our term in office is flying by. The speed that time is passing underscores for me the urgency of making meaningful changes now.

Today, in this reply to the Budget Address, I want to reflect on Cabinet's approach to the work at hand and the expectations held by Members on this side of the House. Most importantly, I want to reflect on the degree to which we are meeting the needs and expectations of the people who elected us to represent them.

As I am sure most people are aware, when the Members of the 18th Assembly took office, we agreed to work together on a mandate to guide this government's actions over the coming four years. The ability to do this is one of the advantages of our consensus system of government. As a caucus of 19 Members, we collectively identified the priorities of this Assembly. We agreed that these priorities would serve as the ultimate business plan, orienting our decisions and actions over the coming four years. From amongst ourselves, we selected a Premier to lead the government and Members to sit on Cabinet. We placed our trust in these individuals to meet the priorities we set, and we did it with the belief that, when moving forward, they would be guided by the roadmap we collectively established.

As a caucus, we also reviewed and in some cases modified the GNWT's draft mandate. The finalized mandate identifies the commitments made by the government to meet the priorities set out by the 18th Assembly. Why is it important to have a mandate to guide us? For one thing, it provides Members of this Assembly and the people we serve with a shared understanding of the progress we hope to achieve; in other words, transparency. It also sets out clear commitments that we can judge progress against, but, most importantly, it is a way for NWT residents to decide for themselves if their government is living up to the promises it has made. This is vital to government accountability, but, if the mandate is not really driving government decision-making, then really it is nothing more than window dressing.

As we enter this second year of our term and as I listened to the Budget Address, it has become increasingly clear to me that our mandate is not what is driving the decision-making of this government. Instead, it is Cabinet's fiscal strategy, one which was developed behind closed doors, that is dictating how the government moves forward. As an MLA and as someone who believed we were working collectively toward shared goals, I find this very troubling.

Mr. Speaker, the Finance Minister has told us the government has a three-pronged fiscal strategy. Let me share those with you. One, increasing fiscal capacity by lowering our operating expenditures or increasing our revenues. Two, disciplined spending to ensure expenditure growth is aligned with revenue growth. Three, reducing our reliance on our line of credit as a way to finance day-to-day operations.

Now, Mr. Speaker, I don't believe there is a Member in this House or a member of the public who would take issue with this approach. It appears at first glance to be the very definition of sound fiscal management, but let's examine each part of the strategy to see what the practical implications are.

First, what does it mean to have increased fiscal capacity by lowering our operating expenditures or increasing our revenues? If memory serves me, Mr. Speaker, the GNWT's revenues are expected to decline by almost 2 per cent or more in the next five years, owing mostly to decreased corporate income taxes and resource royalties and downward adjustments to transfer funds coming from Canada.

We have heard repeatedly from this government that our ability to raise additional revenues is limited. In fact, in March 2016, the Finance Minister tabled a revenue options paper which concluded, and I quote: "The few revenue options that could generate significant revenues would discourage business investment and economic growth and would leave individuals and families with less disposable income at a time when the costs of living are rising."

Lacking any real option for raising revenues practically speaking, that leaves us with only one option: reduce spending, lowering our operating expenditures as a means to increase our fiscal capacity. In one word, Mr. Speaker, cuts. This, as the Finance Minister pointed out in the October 2016 fiscal update, "requires us to make difficult decisions on what programs and services are no longer needed or that can be funded at a reduced level."

I agree 100 per cent that difficult decisions are required, but what I do not agree with is how those decisions are being made. I do not believe that these decisions are only Cabinet's domain. I believe that each and every MLA, representing the people who elected us, should have a real, meaningful hand in those decisions.

This, Mr. Speaker, appears to be the crux of the concern that Regular Members have over this budget. It highlights a fundamental difference of opinion about who is ultimately responsible for making the difficult decisions in a consensus government and that it ought not come from the fiscal strategy derived by a few, but rather, it must be driven by the voice of the people, which is in the mandate we 19 MLAs assembled.

In last year's Budget Address, the Finance Minister informed the public of the GNWT's target to cut spending by $150 million. Mr. Speaker, Members on this side of the House were notified that departments were tasked with identifying potential cuts, starting from $30 million, then $50 million, up to $75 million, and even $100 million. Almost before we knew it, and with no consultation, that $150 million figure became the chosen target, the only target, and the one that was enshrined in the budget.

It is a target I can assure you was not and has never been endorsed by Regular Members. When we asked why this target, we were told that these cuts were part of the GNWT's fiscal strategy and that they were necessary to ensure the government is in a cash surplus position by the end of the 18th Legislative Assembly. We were also told they were necessary to ensure the GNWT has a cushion of at least $160 million between the money it has borrowed and the limit of its borrowing authority, a limit of $1.3 billion set by the federal government. Again, Regular MLAs endorsed neither of these objectives.

We have objected strongly to this target and these objectives for a number of reasons. The key one is that they are simply too severe. I, for one, do not believe it is either responsible or prudent to attempt to wipe out a year-end cash deficit accumulated over a number of years and estimated at over $300 million in the life of this Assembly. We have asked time and time again to find compromise. Maybe one of those other fiscal reduction targets would have been a suitable compromise. Unfortunately, we never got to see what those options looked like.

While I believe that the government should work as efficiently as possible, I do not believe that undertaking a major government reorganization yet again is the way to achieve it, especially given that it will cut jobs and will most certainly result in the loss of families. These families, many living in my constituency, will be forced to look outside the NWT for work, taking with them approximately $30,000 per person in revenue that comes to the GNWT through federal transfer funding.

Mr. Speaker, what happened to the population growth strategy of the last Legislative Assembly? What happened to attracting 2,000 people to the North over five years? Have we deflated those efforts already? Although the government may improve their bottom line with this reorganization approach, the NWT's economic bottom line will indeed suffer, and this is not the time to impart more suffering.

Let me be clear, Mr. Speaker: This government reorganization was not included in the mandate. It was quietly introduced in the business plans in neutral, nonthreatening language, describing it as a zero based review. The benign name given this initiative was, in my opinion, not unintentional. A deficit reduction measure by any other name is still a deficit reduction measure, and this one will still result in job losses.

As a matter of fact, the GNWT has a long and storied history of responding to fiscal challenges with restructuring initiatives dating back 25 years. In 1991, it was Strength at Two Levels, also called the Beatty Report, advocating the decentralization of power to local governments, an effort which is still a work in progress. That report was followed very closely by the 13th Assembly's fiscal restraint measures, which ushered in the deepest cuts to the public service to occur in the quarter century since the government moved from Ottawa in 1967. That restraint initiative was followed by more, including the 2001 Cuthbert Report recommending health and social services board reform and the 2003 Deloitte Touche review of the GNWT's departmental and headquarters organizational structure.

Now, we have the zero based review, the details of which have not, unlike the others, been made public. This means that Regular Members and the public still aren't privy to the government's overall vision for a reduced public service. Whatever that vision is, it appears to have been designed without any analysis of the economic impacts associated with cutting jobs.

I will be frank, Mr. Speaker. I am discouraged by this government taking the easy route. Make no mistake about it; that is exactly what restructuring is, an instant gratification approach to budget reduction. Its appeal lies in the fact that Cabinet of the day can proclaim success by pointing to all the belt tightening it has done during the four years in office.

Mr. Speaker, making really tough choices would involve having the vision to address the root social problems driving up the delivery of costs of government programs and services such as poverty, addictions, low levels of education, high levels of incarceration, and poor health.

Mr. Speaker, these are the factors that contribute the most to increased expenses of our government, not the salaries and wages paid out to hard-working public servants.

Speaking of economic impacts, I would be remiss if I didn't raise my objection to the Department of Transportation's plans to create a so-called self-sustaining Yellowknife Airport by imposing an airport improvement fee of up to nearly $30 per ticket for NWT residents travelling south. This initiative is another example of something not included in the mandate, yet now deemed necessary by the GNWT to ensure that taxpayers are no longer subsidizing the airport by $4 million per year. Really? Taxpayers subsidizing public infrastructure? If taxes are not intended to finance public infrastructure, what exactly does government think they are for? I will note that, of the $4 million currently subsidizing the airport's operations, only $1 million of it is paid by Northern taxpayers, because we all know that 75 cents of every GNWT dollar comes from Canada in transfer funding.

Now we will be going from $1 million in northern taxes to $10 million in mostly northern user fees. That is driving up the cost of living for Northerners, no matter how you look at it. I will have more to come on this fee at a later date.

This brings me to the final part of this government's fiscal strategy, reducing our reliance on our line of credit as a way to finance day-to-day operations. We have heard the Finance Minister repeatedly admonish Members that the government relying on its line of credit to finance operations is like an individual maxing out their credit cards, and that it is something you wouldn't want to do with your own personal finances. I am getting mighty tired of hearing this old analogy.

I do agree with the Finance Minister to a point. No one would want to run their personal finances in a way that would see them undergoing unnecessary hardships to save money in the first two years of their financial plan so that they could spend wantonly in the final two. Yet, this is exactly the fiscal strategy that the Finance Minister is asking Members to buy into, one that would see job cuts and increased expenses for our residents, while we, as the Finance Minister would say, get on firmer financial footing so that the government can make investments in the mandate later.

From where I sit, this is nothing more than a thinly veiled strategy that will allow the government to cut now and spend more money in the run-up to the next election. I have to hand it to the Finance Minister for his enthusiasm to eliminate the GNWT's deficit in the life of this Assembly. If he is going to practise what he preaches and run his government like he runs his own finances, then he ought to know that you can't spend all of your income on the mortgage at the expense of feeding, clothing, and educating your kids.

As I conclude, Mr. Speaker, allow me to read you a quote: "Reducing expenditures to this degree when we are facing growing needs from our ever-increasing population and our very real social problems has meant that we have to make some tough decisions. However, these decisions have been necessary to bring our expenditures in line with revenues and ensure the sustainability for the system in coming years."

This message sounds not unlike the message we heard from our Finance Minister last week. However, it comes from the Budget Address delivered in this House in 1997, 20 years ago.

Mr. Speaker, if we are truly going to put this government on a sustainable course, we do not need approaches that are decades old and have been announced in this House again and again. What the people of my constituency need are investments in people and investments in the mandate we collectively developed and promised to fulfil. What my constituents and the people of the North need and expect is balance and moderation in government saving and in government spending.

This is what sustainability means to me. It means consulting with Members in a way that implies a willingness to listen, to accommodate the input that is heard, and to reflect it in the decisions made. It means making strategic investments in the infrastructure projects identified in the mandate, which will power the engine of the NWT's economy. It means balancing these strategic investments with investments in people, ones that will significantly lower cost drivers associated with low levels of education, poor health, joblessness, and addictions, and will assist our residents to live happy, healthy, and productive lives.

Mr. Speaker, the Government of the Northwest Territories has made important investments in critical infrastructure projects in recent years, including the Deh Cho Bridge, the Inuvik to Tuktoyaktuk Highway, the Canyon Creek Road project, the Stanton renewal project, to name just a few. Over the same time frame, many systemic social issues have gotten far worse, not better. Big-ticket infrastructure projects are essential, and I support the investments that are made in them, but not to the extent and pace that it leaves our people behind.

Mr. Speaker, as the budget is currently presented, I find myself unable to support it. We cannot afford to wait for some magic day in the future when the deficit is wiped out before making investments in our mandate that better the lives of the people we serve. I intend to continue to fight for balanced strategic investments in our mandate, both in this budget and in those yet to come. Thank you, Mr. Speaker.

Masi. Replies to budget address. Member for Nunakput.

Thank you, Mr. Speaker. Mr. Speaker, the future of the Beaufort Delta is uncertain. My constituents know this, I know this, and the government knows this. Despite this knowledge, my constituents still have hope and are willing to work together for the future, but they need to know they have willing partners. Unfortunately, Mr. Speaker, from what my constituents hear coming out of Yellowknife these days, they aren't optimistic about what kind of partnership, if any, they can expect, but this is something that we can work on together, Mr. Speaker.

Many of my colleagues said they represent small communities. Mr. Speaker, I, too, represent small communities, and they face many challenges. Unfortunately, their concerns are often lost in the noise of the debate which has focused on the negative instead of looking for solutions and a way forward.

I want to take this opportunity to speak directly to my constituents and explain to them why I support this budget. I believe this is a financially responsible budget that gives the government the right amount of flexibility to make serious investments in the long-term future of the NWT.

Mr. Speaker, this budget isn't just about the future or about cuts. It's about $1.7 billion in spending for the 2018-19 fiscal year, $1.7 billion for a territory of 42,000 people. It may not be enough, especially for my communities that have the highest cost of living than any others in the Northwest Territories. My colleague from the Sahtu has communities with the second-highest cost of living. It's not a competition we want to be in, Mr. Speaker. We want long-term solutions to lowering the cost of living. We have to pass budgets that are smart and that will allow for long-term investments that will lower the cost of living.

I support the budget because it means my constituents will continue to receive housing, education, healthcare, income support, student financial assistance, medical travel, water, and sewer service, to name a few; and, yes, Mr. Speaker, even junior kindergarten.

There is a meaningful partnership in my constituency between junior kindergarten and the Aboriginal Head Start program. Without the cooperation of those two programs, there wouldn't be early childhood programming available to the children of Nunakput, Mr. Speaker, and that would be a shame. If we cannot agree that supporting our children is our most important task, then I don't know what is. Junior kindergarten will also give the children of Nunakput increased opportunity to get ahead, Mr. Speaker, a chance to begin their life's journey with hope and high expectations for what they can achieve.

I say yes to 911 service, as well, Mr. Speaker. I have to say that I have not heard one single Nunakput resident say that the NWT shouldn’t have 911. They are supportive of safety for all, no matter what size of the community.

I say yes to the NWT Child Benefit. That means all families who make less than $80,000 a year will receive increased benefits. That affects over 500 families in the Beaufort Delta, Mr. Speaker.

I say yes to the $3 million increase being invested into the Small Communities Employment Program. This means there will be $4.3 million for all residents, including those in my constituency who gain employment skills and opportunities.

I say yes to the much-needed upgrades for Mangilaluk School in Tuktoyaktuk. The project will bring jobs and business opportunities during construction, but more importantly, it will give the children of Tuktoyaktuk the school that they deserve.

Mr. Speaker, my constituents know hardship. They also know patience and forbearance, but how much more are we going to ask of them and other Northerners? This budget is the spending planned for the next fiscal year, and it looks at what we can do now and what we can do in the future, Mr. Speaker.

As I said in my Member's statement last week, the people of the Beaufort Delta want responsible economic development, oil and gas development that has been an economic driver since the exploration began in the 1960s. Interest in development has already dropped, and in 2015 Imperial Oil BP PLC scrapped their plans for drilling north of Tuktoyaktuk. The communities are struggling. Residents feel like their options for the future are very limited.

When we first met at the start of this Assembly, we talked a lot about the importance of doing government better. We agreed that changing the way the Assembly does business was one of our priorities. Strengthening consensus was one of ways that we said we would do that. Consensus is about hearing what matters to people right across the Northwest Territories and doing what's best for them. It isn't about getting a win for one side or for the other or for one point of view over another point of view. Sometimes, once we've heard and debated all sides of an issue, doing what is best for the Northwest Territories means setting aside our individual preferences and priorities.

Strengthening consensus, not trying to tear it apart, is ultimately something we all need to be responsible for. Whether people realize it or not, this budget was put together in the consensus system. MLAs have been involved from the very beginning in reviewing and providing feedback and comments to Cabinet. Not all their changes we wanted were included, but to vote down this budget means a vote against the very consensus system that allows MLAs such a significant role in developing this in the first place, Mr. Speaker.

I support consensus, not just because it was a system I believed in when I made my decision to run for MLA but because it's a fundamental way that decisions have been made for the North for thousands of years. Our survival has been based on what we could achieve together. We focused on our strengths and helped one another because we knew that our survival meant being part of a strong group. There was no room for egos, but a lot of room for leadership and just getting on with it, Mr. Speaker.

Mr. Speaker, I want to close by saying thank you to the people of Nunakput for their continued confidence in me. Their support means everything to me, and I will make sure their voices are heard. I have said it before, Mr. Speaker, but it bears repeating. Whether it is decisions about development, moratoriums, or budgets, nothing about us is without us. The people of Nunakput deserve to be heard loud and clear. Thank you, Mr. Speaker.

Masi. Replies to budget address. There appear to be no further replies to budget address for today, so we will return to item number 4, reports of standing and special committees. Member for Yellowknife North.

Thank you, Mr. Speaker. Mr. Speaker, this is a report on Bill 7, An Act to Amend the Revolving Funds Act.

Bill 7, An Act to Amend the Revolving Funds Act, provides for the establishment of a revolving fund at the Yellowknife Airport to meet the airport's capital, operations, and maintenance needs. The bill received second reading and was referred to the Standing Committee on Economic Development and Environment on June 27, 2016. The committee reviewed the bill in conjunction with the draft business plan for the Yellowknife Airport that is essential to understanding the implications of amendments to the act and how the revolving fund will be used.

The committee received substantial feedback from the public on the proposed changes to the operation of the Yellowknife Airport that Bill 7 enables. A public hearing was conducted in Yellowknife on December 7, 2016, and was well attended. The committee thanks all those who provided written comment and made presentations at the public hearing. The committee has now concluded its review and is pleased to report to the House on Bill 7.

Enabling Legislation

Bill 7 amends the Revolving Funds Act to establish a revolving fund of up to $36 million for the purpose of meeting the capital, operating, and maintenance requirements of the Yellowknife Airport. Public concern and debate is focused on how the legislation enables the airport to generate sufficient revenues to cover the cost of the airport operations and improve upon existing facilities and administration whereby users have a say in the operation of the airport.

The success of the new operating model requires the department to impose a $20 Airport Improvement Fee on each southbound passenger departing from the Yellowknife Airport and a $10 fee on every passenger traveling from Yellowknife to destinations within the territory. Existing aeronautical fees would also increase, in some instances by over 200 per cent. The increased aeronautical fees would add approximately nine dollars to each airfare. The combined total of these fees would increase airfares by approximately $29 on each southbound ticket and $19 on trips within the territory.

The Department of Transportation currently operates the Yellowknife Airport at an increasingly significant annual cost, and charges some of the lowest aeronautical fees in the country. At this time, resources for capital upgrades and airport operations are allocated through the government’s capital and business planning processes, where the airport competes with all other Government of the Northwest Territories’ infrastructure and program needs.

Public Communication

The committee notes that travelers from remote communities may be charged an additional $48 for travel as a result of the new revolving fund. Arriving in Yellowknife on a regional carrier, these passengers would pay an extra $29 to travel south, then an extra $19 to return to their home community.

The committee suggests that the new fees are not well understood by the public. Members acknowledge the department’s current campaign to promote the Yellowknife Airport and stress the importance of clearly communicating the introduction of the new revolving fund to the public.

Recommended Action 1

The committee recommends that the Department of Transportation enhance its public messages on changes to fees and other operational aspects of the Yellowknife Airport to ensure that airfares are well understood and that new charges are applied in a transparent manner on ticket receipts.

Economic Impacts

The committee heard serious concern that increased airfares would be detrimental to the northern economy, especially the tourism industry. NWT Tourism firmly believes that higher airfare will have a negative effect on tourism operators and other businesses. The organization highlighted that it was not aware of any analysis showing how the Northwest Territories’ tourism industry could absorb the impact of higher airfares.

Air North president, Joseph Sparling, cited Yukon statistics on the positive results of reduced airfares to the Yukon, including growth in the tourism sector, and expressed concern that increased fees at the Yellowknife Airport would result in a decline in visitor spending and a loss to the economy almost equal to the revenues generated by higher fees. Essentially, increased ticket prices would increase the cost of living and decrease residents’ quality of life while reducing the number of visitors and visitor spending.

Cost of Living

Introducing a user-pay system at the Yellowknife Airport increases the cost of living, and doing business in the North comes at a time when the economy has slowed, exploration and industrial activity in the Northwest Territories has stagnated, and the population of the Northwest Territories is declining. Reducing the cost of living is key to the mandate of the 18th Assembly. The committee heard that increased ticket prices would significantly impact individuals’ cost of living and affordability of Northern residency as well as the cost of Northern business travel.

Considering the timing of the increased fees, the committee heard that a phased-in approach could help both individuals and the business community absorb the increased travel costs more easily and allow them to make resulting adjustments with less impact on customers.

Recommended Action 2

The committee recommends that the department reconsider implementing increased fees over a period of time, and regularly reviewing fees to determine whether they may be reduced in the future.

Federal Responsibility

The committee heard that transportation to and from the Northwest Territories should be as inexpensive as possible and that airport infrastructure is a federal responsibility. Residents want the Government of the Northwest Territories to urge Canada to act on the recommendations in the 2014 federal Transport Act review for greater investment in northern airports. The committee points out that the federal government provided a substantial contribution to the expansion of the air terminal at the Erik Nielsen Whitehorse International Airport through the Canada Strategic Infrastructure Fund. The committee further notes that improvements to airports in the Northwest Territories are not included in the Federal Engagement Strategy, which serves to guide efforts to secure further infrastructure investments.

Recommended Action 3

The committee recommends that the Government of the Northwest Territories advance airport improvement projects through federal infrastructure funding programs, review its Federal Engagement Strategy to include federal investment in air transportation as a priority, and press the federal government to invest in upgrades to northern airports’ infrastructure and safety as recommended in the 2014 Canada Transport Act review.

Public Accountability and Operating Model

The operating model proposed for the airport created concerns related to public accountability. The committee is aware that the department reviewed a range of operating models, from status quo to a fully privatized airport. The revolving fund model was chosen essentially because it allows the airport to become financially viable while remaining within government control. It moves the airport away from operating at a net loss most quickly without privatization.

The committee heard that some stakeholders would prefer the creation of an airport authority under the purview of an arm’s-length board of directors instead of the proposed special operating entity and revolving fund. The committee has drawn two recommendations from the issues of public accountability.

Recommended Action 4

The committee recommends that the operating model implemented through amendments to the Revolving Funds Act be reviewed regularly with a view to increasing independence and establishing a publicly accountable airport authority.

Recommended Action 5

The committee recommends that the department report annually on the performance of the Yellowknife Airport Revolving Fund.

The department plans to establish an economic advisory committee, a group of up to seven business community representatives appointed by the deputy minister of Transportation to advise on the commercial operation of the Yellowknife Airport. Standing committee members reviewed the terms of reference for the economic advisory committee and remain concerned about its accountability and oversight. Members believe it should be more representative of the people the Yellowknife Airport serves, established under legislation, accountable to the Minister of Transportation, and that participation of the economic advisory committee should not represent undue hardship. Members pointed to the Department of Environment and Natural Resources’ Waste Reduction and Recovery Committee as an example of an advisory body with broad public representation which is established in legislation.

Recommended Action 6

The committee recommends that the department establish the economic advisory committee in legislation, as soon as possible, in conjunction with the revolving fund, under the authority of the Minister of Transportation; and that members appointed to the committee represent a wider range of stakeholders such as the City of Yellowknife and Aboriginal governments and business partners; and further, that the committee report annually to the public.

There is an apparent consensus that improvements are needed at the Yellowknife Airport and other airports across the Northwest Territories. Funding these improvements is a challenging issue. The committee heard that stakeholders want complete assurance that revenue generated at the Yellowknife Airport would be dedicated to the operation, maintenance, and capital costs of the airport and not used to support other government infrastructure. Yellowknife resident Wendy Bisaro also suggested that an airport improvement fee also be considered at other airports.

The committee heard that some travelers were willing to pay an additional fee in Yellowknife if they saw such improvements as greater efficiency for check-in, security, aircraft de-icing, and baggage handling procedures among other upgrades identified in the draft airport business plan. Airport employee Brad Enge offered the committee many practical examples of much-needed upgrades to existing airport facilities. The City of Yellowknife, Javaroma, and the Yellowknife Chamber of Commerce all highlighted business and growth opportunities as the basis of their support for the new operating model. While NWT Tourism disagreed with any additional costs to travelers, it supported proposed air terminal enhancements as a way to improve visitors’ experience and create a sense of place.

Recommended Action 7

The committee recommends that the department prepare an annual business plan for the airport for the economic advisory committee’s review and comment, and make this information and the committee’s input publicly accessible.

Additional Comments

The review of Bill 7 also raises some broader concerns beyond the enabling legislation. While the legislation may be quite simple, its implications may be complex and wide-reaching. In introducing any future amendments to the Revolving Funds Act, the committee expects departments to accompany the legislative proposal with a full business case for revenues collected. In the case of Bill 7, legislation was introduced prior to the completion of the proposed business plan for the operation of the Yellowknife Airport. As a result, the committee was limited in its ability to consider the implications of the bill and the legislative review process was delayed.

Conclusion

In closing, the committee highlights both the risks and opportunities that Bill 7 enables. The committee heard general support for further investment in the Yellowknife Airport and its improvement and enhancement. At the same time, Members are fully aware of the risk that the revolving fund may not perform as well as intended and that impacts on tourism, business, and leisure travel have yet to be quantified. Increased fees also raise the cost of government travel. Stakeholders and the public also expect a greater role in operations and accountability.

The committee has made recommendations in this report in an effort to mitigate risks and represent stakeholders’ concerns related to operating the airport under a revolving fund. The Yellowknife Airport is a public airport and ultimately belongs to all residents. Associated user fees are an investment in this critical northern infrastructure hub. They should be regarded as such by those both paying and collecting fees and managed with utmost accountability to all Northerners.

Recommendation 1

With that, Mr. Speaker, the committee recommends that the government provide a comprehensive response to this report within 120 days.

With that, Mr. Speaker, I move, seconded by the honourable Member for Sahtu, that Committee Report 6-18(2) be received and moved into Committee of the Whole.

Masi. Motion is in order. To the motion.

Question has been called. The motion is carried.

---Carried

Committee Report 6-18(2) is received and moved to the Committee of the Whole. Masi. Item 5, returns to oral questions. Item 6, recognition of visitors in the gallery. Member for Frame Lake.