Thank you, Mr. Speaker. I’d like to follow up on the Finance Minister’s budget address earlier today, if I could, just with some general level questions. I know we’ll be getting into details here and I want to specifically target in on the revenue section. I have to say I wasn’t impressed with the revenue section. Obviously, it was 10 lines long and so not a lot of detail there.
I am pleased to see that our revenues are up $132 million, but there was mention of a Stabilization Fund and I was wondering if there’s any early thinking yet about how such a fund would work. I have no background in that area and I’m interested if the Minister has thought yet about how that might work or whether that’s still work to be done. Thank you.
Thank you, Mr. Bromley. The Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. That’s still work to be done. We’ve structured and set up a Heritage Fund. We’re waiting for resources to put into that. A lot of work is going to be done between now in the fiscal years one and two here, as I’ve indicated, as we look at managing our resources and building up our cash reserves and where we can anticipate things in two years or so down the road where we get additional revenue from devolution, then we’ll be in a position to be able to decide in the interim what we want to do and how we want to structure it and then be in a position to actually have resources to contemplate where we put those. Thank you.
Thanks for the comments. That’s a very long-term prospect, obviously, the Heritage Fund, and I see absolutely no commitment in this budget for putting money in that, despite the fact that it’s there, and as the Minister said, the valuation of diamond export last year was a near record. Gold prices are at the highest they’ve ever been by a great deal, hundreds of percent. So I’m wondering, rather than wait, given our revenues in addition to that, our revenues are up $132 million this year, would the Minister commit to starting to capture some of that value right now, recognizing the lack of lasting legacy benefits that we’re getting from non-renewable resource benefit right now and for the past several decades. Will he get some money in that fund this year? Mahsi.
If we were to contemplate putting money into the Heritage Fund, it would be money that we’d have to borrow at this point. We have, as I indicated and tried to lay out in the budget address, our short-term and long-term borrowing costs, how much we have, the need to put aside and replenish our cash reserves so we can commit to infrastructure in year three and four and we’re very aware of the Heritage Fund sitting there. We do have plans to do a number of things in year three and four, as I’ve indicated as well.
The Heritage Fund is on that list. In the meantime we have to have two years of fiscal discipline to get us in the position to make those type of investments. Thank you.
I do disagree with the Minister on that. If we waited until we don’t have debt to put money in the Heritage Fund, it’s never going to happen. This government has made decisions on tens, I would even say hundreds of millions of dollars in this budget, so that’s not an acceptable response. But I’d like to ask, is the Minister looking at any other sources of revenue or potential sources of revenue that we might be able to develop and at least start getting that in place late this year or next year. Thank you.
As I indicated in the budget address, there are no new taxes in this particular budget. We do have some projects that I think are going to be a real boon economically as well as for building the North, like the fibre optic line. We do know with the conclusion of devolution and the resource revenue money that will flow, the A base funding that will flow, that we will have some additional revenue there as well. If our projections stay on target and there’s not any kind of negative downturn in this fragile global economy that we’re still in, then we anticipate there’s going to be some continued modest growth to our revenues there. As I pointed out, every dollar we have is subscribed to and then some. We’ve put money into a number of projects to offset a number of unexpected events and we’ve all agreed or the majority of us have agreed we need to have a replenishment of our cash reserves. I appreciate the Member’s concern. He and I agree about the Heritage Fund. It’s going to be a question of working on the timing.
Thank you, Mr. Miltenberger. Final, short supplementary, Mr. Bromley.
Thank you, Mr. Speaker. As far as the fragile global economy goes, as the Minister has said, the record export of the valuation of diamonds last year, this is after the 2008 downturn, the financial, the fiscal reasons for that have not changed at all, as we know from JP Morgan and so on. It’s not a matter of fragility. It’s a matter of governments not taking their responsibility seriously. So my last question is: Again, given these resources, will the resource developments that we’re getting and evaluations, will the Minister commit to doing a complete resource rent review for the Northwest Territories both under the conditions of devolution and without the conditions of devolution this year?
The issue of whether there’s a fragile global economy or not we could debate. We could debate the use of the term “fragility.” Clearly, when you have written Ireland, Greece, Spain, Portugal, Hungary, Poland, most of the former Eastern European block countries, France, either in recession or teetering on the edge of recession and the United States just struggling to get back out of recession, when we have our own provincial jurisdictions all in severe deficit reduction mode, I would say that things could be defined to be tenuous. The Member has made reference to what sounds like a fairly significant undertaking that he would like done, and if I was going to do that, I would need significant more clarity so that we could have a discussion about it before we look at putting a lot of resources to work to do that.
Thank you, Mr. Miltenberger. Final supplementary, Mr. Bromley.
Thank you, Mr. Speaker. A review of resource rents is something that’s undertaken by many jurisdictions on a regular basis. There are lots of examples out there. My point is that we are not capturing an appropriate value from the non-renewable resources that we’re exporting from the NWT. We are talking about devolution and we are not acting as a responsible government already. With devolution, are we going to do that? I’d say the best way to start taking this more seriously is to develop a thorough review of how do we capture value from our resource development, what are the rates elsewhere – look at Norway, look at Alberta, look at Alaska, and so on, decide our philosophical approach and get some things in place to do that.
I will look at Hansard. I agree with the Member that as we look to take over land, water, resource development, we want to be fully up to speed and up to date on all the rents, I think is how the Member referred to them. There are also other areas across the land, for example, where we want to look at are we putting the proper value on things like water. As we go forward as a territory looking at all these issue post-devolution, we will be looking at that and we will be having that discussion with Members, and I’m sure with Northerners as a whole.
Thank you, Mr. Miltenberger. The honourable Member for Range Lake, Mr. Dolynny.
