Debates of February 2, 2006 (day 21)

Thank you, Mr. Speaker. My questions are for the Minister of Finance and they relate to the introduction of the budget, the 2006-2007 budget. I’m trying to focus on one area, Mr. Speaker, and that’s the area of long-term debt. As the Minister described, one of our priority initiatives with Ottawa is to get a new fiscal financing deal, and part of that is a modernized way of handling our debt. But we need to work with what we know right now, which is that $300 million limit, Mr. Speaker. With the forecast that is provided in the budget document, we see that we are going to be pushing our debt limit to about three-quarters of our credit line this year, Mr. Speaker. It’ll be almost totally used up by the end of the coming fiscal year if we don’t turn this around. So my question was, what is our plan for managing this medium-term debt situation, Mr. Speaker? Thank you.

Thank you, Mr. Braden. The honourable Minister of Finance, Mr. Roland.

Return To Question 320-15(4): Reflections On Budget Address

Thank you, Mr. Speaker. Mr. Speaker, the debt situation that we face is a serious one and a critical one for the Northwest Territories. It’s an issue that we’ve raised before. The reason why we developed our fiscal responsibility policy is to show our counterparts in Ottawa, with federal Finance, that we can deal with the issues given the right tools. So we need to continue to work with the federal government and push it, and push hard, to have them remove that debt limit because, ultimately, when you look at what’s before us, the repayment of the 2002 corporate tax overpayment from the federal government is going to push us very close to the debt limit that we are facing through the federal government. It’s a fairly straightforward deal, as we see it. We’ve shown that we can live with what we have, and need the federal government to recognize it has to be changed. If the federal government is not willing to change that, then trying to invest in the future and infrastructure and enhancing our programs, dealing with development that’s already happening around us, we won’t be able to put the necessary resources to it. We’ll instead have to continue to work with a shrinking budget as things around us continue to, I guess, boom. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Braden.

Supplementary To Question 320-15(4): Reflections On Budget Address

Mr. Speaker, I thank the Minister for that context, but we’re looking to a situation where we may be handing off to the 16th Assembly, after the election in the fall of 2007, a situation where there will be no credit line, a big debt or cost of servicing that debt, and in fact the fiscal situation they inherit for the coming year will be that they’re over $460 million in debt. Way over the line. So I guess let’s ask this another way. Is there a plan B? How can we avoid passing on this kind of a gloomy situation? Thank you.

Thank you, Mr. Braden. Mr. Roland.

Further Return To Question 320-15(4): Reflections On Budget Address

Thank you, Mr. Speaker. Mr. Speaker, I think our goal, first and foremost, is to have the federal government remove the debt limit that they have placed on us. That would be the first goal and we would have to work hard to achieve that. We have one year to make that happen, because we’ll still be in government and still be in control of the purse strings as we start into the year 2007. As things sit right now, if we look that far down the road, we’ll have no room for a borrowing limit at that point. So we have to make some decisions and this is what’s going to change our approach, is how aggressively are we going to pursue the federal government to have that recognized and changed that they have to remove that debt limit. Because we have the fiscal responsibility policy in place and we can manage with the revenues that will come in to invest in the things that are critical for the Northwest Territories. Going beyond that and saying that the picture doesn’t change and to live within the means that we have there will be a significant change in our fiscal strategy, and we’ll have to sit down as to what we see the passing off to the next Assembly. So it’s something we have to do, is focus on the federal government, get the debt limit removed. Thank you.