Thank you, Mr. Speaker. Today I would like to quote five sentences and phrases from the North American Outlook, which is an economic activity newsletter prepared by Nesbitt Burns of the BMO. This edition of the newsletter was released last week.
Quote number 1: “The outlook for the North American economy is lowered in response to the watershed events that have reshaped Wall Street and roiled the global credit markets.” Number 2: “The near term growth outlook has worsened.” Number 3: “Minimal recovery in ’09.” Number 4: “The higher borrowing costs, tighter lending standards and equity sell-off will prolong the slump in consumer and business spending.” And number 5: “For Canada, the pullback in commodity prices will slow the Western provinces.”
I am not intending to be an alarmist here. I know that the Canadian banks are sound, with sufficient resources and better lending practices than many banks in other countries. I know that the Canadian mortgage system is strong and that our mortgages are a smaller percentage of our home values and our disposable income than averages in American mortgages.
However, I am very interested in the views of the Minister of Finance of how the change in the North American outlook has affected the short and long term fiscal outlook of this government. How is the Mackenzie Gas Project affected by lower natural gas prices and by reduced share prices for the producers? How are the diamond mines affected by the huge sell-off in equities that has occurred? Is the borrowing of the Government of the NWT affected by the freeze-up of bank to bank borrowing? Is the Minister of Finance now facing higher interest charges? How does the slowdown of the Canadian economy affect our fiscal forecast?
I listened to the CBC interview last Tuesday with a local mortgage broker who explained that there was a slowdown in Yellowknife housing sales which he had not seen since the ’90s. There was another CBC interview last week about the sharply declining share prices of Aber Resources and MGM Energy. Both companies have seen an approximately 65 per cent decrease in share values in the last six months. MGM is an energy corporation working on exploration in the Mackenzie Delta. If companies we have counted on to lead economic development have been hit hard by the market decline, what is the effect on the GNWT?
The Minister of Finance advised Members of this House in his fiscal strategy statement that he was counting on economic growth and population growth for the longer term. How realistic is this now?
I seek unanimous consent to conclude my statement.
Unanimous consent granted.
I would expect that the Minister of Finance has had to take some of these realities into consideration during the preparation of the government’s business plan. At the appropriate time I will be asking the Minister of Finance to share his views on the changed fiscal outlook of the GNWT.
Thank you, Mr. Abernethy. The honourable Member for Frame Lake, Ms. Bisaro.
