This panel is an initiative lead by all Canadian Premiers. Its purpose is to examine the vertical and horizontal fiscal balances among federal, provincial and territorial governments in Canada and to make recommendations on how fiscal imbalances should be addressed.

If I may, Madam Speaker, when we speak of vertical fiscal imbalance, that refers to the gap between revenue sources and spending responsibilities of different orders of government. Horizontal imbalance, Madam Speaker, refers to the differences and abilities by provinces and territories to raise revenues to meet the needs of their citizens.

All Members are aware of the federal Panel on Equalization and Territorial Formula Financing currently underway that is considering allocating fixed amounts between provinces through the equalization formula, and between territories through territorial formula funding. For example, for 2005-06, the fixed amount for allocation between the three territories is $2 billion.

The Council of the Federation panel is taking a broader view. Many provincial and territorial jurisdictions are running deficits while the federal government is running huge surpluses. It is the position of provinces and

territories that this situation indicates a fundamental imbalance.

The Northwest Territories provides a classic example of fiscal imbalance. The NWT has responsibilities for mitigating the impacts of development, yet does not have the associated resource revenues.

As noted in my sessional statement earlier this week, it appears the federal government is taking some steps to address this imbalance. This is the result of the continued efforts of many northerners to get our message out to the national audience. The Council of the Federation panel is another important forum northerners will have to get our message out nationally.

I am pleased to advise Members that the North will have a choice on this important panel. Mr. John Todd has been selected as one of its five members. This panel will be dealing with complex issues and all members have a great deal of technical expertise. Mr. Todd’s experience as a past Minister of Finance for the Northwest Territories and his familiarity with the territorial formula financing agreement and the unique challenges associated with northern development will serve the panel well. Thank you, Madam Speaker.

---Applause