Thank you, Mr. Speaker. Mr. Speaker, earlier today, I spoke about the cost of living and the many factors that are affecting the cost of living here, in the North. Our government is partially to blame as it relates to the challenges that we are having internally with our own government revenue. My questions today are to the Minister of Finance. I want to talk first about the territorial financing formula. I want to know: can the Minister maybe explain to us what the formula consists of?
It seems to me that this is a punitive arrangement, one where it disincentivizes us from generating our own revenue. It might be time that we have to renegotiate this. Can the Minister give us a little bit of background on how we got into this arrangement to begin with? Thank you, Mr. Speaker.
Masi. Minister of Finance.
Thank you, Mr. Speaker. Mr. Speaker, the Territorial Formula Financing is one we have been operating under for a length of time now. They do recognize the cost of doing business up in the Northwest Territories, and I think they funded us accordingly. Governments past have been successful in keeping the territorial formula funding as it is right now.
We get just over $1.2 billion from the federal government for 44,000 people, and that allows us to help lower the cost of living, because I believe we spend close to $190 million to try to lower the cost of living. We could have discussions with the federal government on renegotiating. I know the current one expires in April, I believe, in 2019, and there will be an opportunity to have a discussion with them. I know they are of the opinion that, if we were to use the Canadian average, our grant from the federal government would be quite low. Thank you, Mr. Speaker.
Thank you to the Minister for his reply. I recognize and we all recognize that the North is unique in this situation. Yes, we are 44,000 people, but we are on a land mass that is about the size of western Canada, and we lack the infrastructure that western Canada has. I mean, $1.2 billion is wellappreciated, most certainly, but it's a drop in the hat as it relates to recognizing the challenges that we have here.
Is there anything further that the Minister can inform us on as it relates to the opportunity to revisit the financing formula arrangement?
Can we bring the Feds to the table and have a serious discussion about re-evaluating and potentially fixing this formula so that we are not penalized when we generate our own revenues?
In my discussions with my colleagues from across the country when we have our FTPs, I always say, if you want to allocate money based on land, we will go for that, because, at 1.3 million square kilometres, we'll be in pretty good shape. I think they recognize some of the challenges we face. That is why our average per capita in Territorial Formula Financing is way higher than the rest of the country.
As I said, the deal will expire in 2019. The legislation that is governing this, the Federal-Provincial Fiscal Arrangements Acts and Territorial Formula Financing, expires in April of 2019, and then we will have an opportunity to have discussions with them. Any time we can use that opportunity to try to get more money for the Northwest Territories, obviously, we will take advantage of that.
I am pleased to hear that the Minister of Finance is having these discussions and that there might be potential to revisit this in 2019. In the meantime, one thing that we are undertaking right now is the federal government is in the midst of undergoing their Arctic Policy Framework. We are going to be making a contribution to that. Right now, it's the Pan-Territorial Vision for Sustainable and Economic Development. This includes our sister territories.
Does the Minister see an opportunity at those discussions and in building that framework where we can maybe promote all three territories to have some sort of special economic zone that would consist of certain tax reliefs and commitment to infrastructure dollars that would benefit us before we sit back down to discuss finance formula?
As Members are aware, at the beginning of the 18th Legislative Assembly, I think even before we sat in this Chamber, the first news we got was our formula financing grant from Canada was cut by $34 million, so we were behind the 8-ball right off the bat. We will take every opportunity, as I have said before, to work with the federal government to see about accessing more funds for the Northwest Territories. They do recognize the cost of doing business up here is higher than the rest of the country. They've made significant infrastructure investments into the Northwest Territories, which in turn has put a lot of people to work, which in turn has allowed them to pay payroll tax, purchase goods, pay all the other taxes that we put on residents who are working. So there has been a side benefit from that, but they do recognize that we are challenged up here, and through a lot of the infrastructure money we welcome that investment and we'll continue to seek more.
Masi. Oral questions. Member for Yellowknife North.
Thank you, Mr. Speaker. Mr. Speaker, one of the things that we know is coming is a carbon tax, again imposed by the federal government. We are doing what we can to, I guess, develop our made-in-the-North version, because it's going to be imposed on us. So, Mr. Speaker, the Minister has referenced a few times that there are ongoing discussion with the federal government, that we are somehow going to get special consideration as it relates to the carbon tax. Can the Minister inform us, update us as to what those special considerations might be, and when will we know exactly how the federal government is going to treat us with regard to carbon tax? Thank you, Mr. Speaker.
We are still going through the process right now, but as Members in this House are aware, the Prime Minister has made a commitment to our Premier about recognizing the uniqueness of the North. I have assurances from the Minister of the Environment that they recognize the unique situation of the North. The Member is absolutely correct. We want to put a product together that is made in the North. I think we've given some numbers to the committee; if we use the federal backstop, then what residents would have to pay would be a lot higher than if we implement our own made-in-the-North approach to it. Our plan is to use our made-in-the-North approach to it because we live up here, right. We know what we are paying up here, and so we are the ones who should be deciding what's best for the Northwest Territories, not somebody who is thousands of kilometres away. Thank you, Mr. Speaker.
