Debates of March 24, 2004 (day 7)

Thank you, Mr. Speaker. Mr. Speaker, my questions today are for the Minister of Finance as well. They are to do with my Member’s statement in regard to the federal budget. Mr. Speaker, I would like to ask the federal Minister, I don’t know if he heard our MP, Ethel Blondin-Andrew, on the radio this morning really bragging up how good this federal budget was for the North. When she mentions territorial formula financing for $150 million, it’s health support, $60 million; economic development, $90 million; northern oil and gas, $75 million; contaminated sites, $3.5 billion. How much of that money can we really expect to see in the Northwest Territories? Thank you, Mr. Speaker.

Minister of Finance, Mr. Roland.

Return To Question 73-15(3): Benefits Of The Federal Budget

Thank you, Mr. Speaker. Mr. Speaker, on the territorial formula financing side, of the amount that was identified, the Northwest Territories over the five-year period would see approximately $74 million. That, Mr. Speaker, is already built into our budget estimates and forecasting, and we are still falling short. For example, the other one of $90 million over five years, split, if you use the existing formulas that have been in place, we might see $6 million a year coming North, not through the GNWT but through DIAND as we expect it will flow, and we are waiting to see the initiatives, the criteria that will be attached to that. The health funding that was identified as part of the formula, in fact as I stated, is part of the formula. The agreement that was agreed to with the Prime Minister and the three Premiers of the territories, on the $20 million split between the three territories, there is a commitment to extend that beyond 2006-07. So the $60 million is in there over three years, again split by each territory. So ongoing beyond 2006-07 we might be netting in the area of approximately $8 million. So the numbers do break down differently as we see it and we’d have to get more details to see the final numbers and how they fall out. Thank you.

Supplementary, Mr. Delorey.

Supplementary To Question 73-15(3): Benefits Of The Federal Budget

Thank you, Mr. Speaker. Mr. Speaker, I suspect then that the way our MP laid out the figures this morning, she is probably stealing a couple of other MPs' thunder because when she speaks of northern Canada, or when the federal government talks about monies coming to northern Canada, what area are they talking about? Is the Finance Minister aware of what area they talk about? Is it just the three territories, is it northern BC, northern Ontario, northern Quebec, how big is northern Canada? Thank you, Mr. Speaker.

---Applause

Minister of Finance, Mr. Roland.

Further Return To Question 73-15(3): Benefits Of The Federal Budget

Thank you, Mr. Speaker. I know when I go south I think northern Canada is our territory, but as well we know when we meet with our federal colleagues they have northern jurisdictions as well. So it is difficult to pinpoint that, and as I said, we will have to wait to see what criteria is attached in those dollars and how they roll out in the North. Thank you.

Supplementary, Mr. Delorey.

Supplementary To Question 73-15(3): Benefits Of The Federal Budget

Thank you, Mr. Speaker. There is one thing we are getting good at and that is to wait and see. We have played that game before and I guess we will continue to do it for some time now. Mr. Speaker, in the budget it was addressed. If there was a positive one, it was the $50 million to deal with our tax effort. How long will it be, Mr. Speaker, before we know how the federal government is going to treat that, whether it is going to be just a one-time thing, whether they are going to adjust the thing on an ongoing basis? When could we expect to find out how the federal government is going to go on that? Thank you, Mr. Speaker.

Minister of Finance, Mr. Roland.

Further Return To Question 73-15(3): Benefits Of The Federal Budget

Thank you, Mr. Speaker. Mr. Speaker, in the correspondence I received from the federal Finance Minister, Minister Goodale, he states it is a one-year break. The rebasing exercise will not happen for 2004-05, and there is direction that we have our people get together and work out the tax effort portion of what we would say is rebasing. We will have that in place by 2005-06. So it is a one-year break and that is why we have the $50 million for this year that would have been taken out, and we’d already built our budgets around that money being taken out. So he has given us one year to get an agreement in place with them around the tax effort and rebasing. Thank you.

Final supplementary, Mr. Delorey.

Supplementary To Question 73-15(3): Benefits Of The Federal Budget

Thank you, Mr. Speaker. Mr. Speaker, on that line, when we say we are going to review our tax effort, they are giving us one year off and giving us time to review it or they are willing to look at it. If they decide to readjust that what can we expect? Would it be $50 million a year if they decided to do away with the tax effort and if it did, what are the possibilities that these new revenues could maybe replace some of the reductions that the Minister has talked about for the next following two years, the $20 million each year for the next two years? Could that affect those reductions? Thank you, Mr. Speaker.

Minister of Finance, Mr. Roland.

Further Return To Question 73-15(3): Benefits Of The Federal Budget

Thank you, Mr. Speaker. Mr. Speaker, without knowing if we are getting close to an agreement stage, I couldn’t tell you if we would benefit $1 million more, or $50 million more. We just know that the existing exercise is costing us $50 million a year ongoing if it doesn’t get fixed. We feel we have a good example that it is not working properly, and feel that the federal Department of Finance has recognized that. That is why he has agreed to forego the rebasing exercise for 2004-05. If I stood here today and said if it is $20 million, let’s match that in reductions. If it doesn’t happen I would have given you the wrong information. We are too early in that stage. Right now as things are going on, it depends on what year they measure our tax effort on. It could impact those negotiations, so that is one of the reasons why on our side of safeguarding our revenue base through one of the initiatives I put forward in the budget address. So I couldn’t give the Member an accurate figure going forward. All I know is I have one year to come up with a new tax effort situation. They will not get rid of tax effort, it is a matter of how it works out in the system, and what numbers will be used, and how they will be weighted. Thank you.