GNWT Department of Finance

Northwest Territories Poised to Become a Key Economic Driver in Canada

R(15)010206222

YELLOWKNIFE (February 2, 2006) – Finance Minister Floyd Roland presented the 2006 Northwest Territories Budget Address in the Legislative Assembly today.

“This budget comes at an historic time. We are on the brink of tremendous economic opportunity – opportunity that will test our imagination and our ability to respond. Opportunity that will transform the Northwest Territories into a key economic driver not only for the North but for all of Canada,” said Minister Roland.

The Budget sets a bold agenda for the Northwest Territories (NWT) – an agenda designed to take full advantage of the economic opportunities ahead, and an agenda with a clear message to the Canadian government.

Minister Roland stated that two essential conditions are necessary to ensure the potential for the NWT is realized. First, the Government of the Northwest Territories must use revenues wisely, adhere to the Fiscal Responsibility Policy, invest in essential services, prepare people for the challenges ahead, and, in doing so, create a positive climate for investment and business growth.

Second, the Canadian government must act immediately to resolve critical fiscal issues affecting the NWT. In congratulating Mr. Harper on his election, Minister Roland called on the Prime Minister-designate to act on his commitment to help the North achieve its dreams. Minister Roland said, “I am very encouraged by Mr. Harper’s understanding of the challenges we face in the NWT and by his commitment to work with us to overcome them. I am sure he wants to work as quickly as I do towards immediate progress and positive long-term solutions.”

Specifically, Minister Roland called on the federal government to:

• Take immediate action on implementing a new approach for Territorial Formula Financing
• Resume negotiations on resource revenue sharing to ensure the Northwest Territories and its people are the primary beneficiaries from resource development
• Maintain its commitment to financial support to address the social and economic impacts of the Mackenzie Valley pipeline
• Lift the arbitrary $300 million limit on borrowing

The 2006 Budget projects an operating surplus of $31 million. Spending is expected to increase by 7 percent from last year’s budget, as the government addresses increased social program costs, community infrastructure needs and the need for competitive wages. Revenues are projected to increase by about five percent. $111 million will be invested in capital projects.

To encourage investment and improve competitiveness in the NWT, the Budget includes a reduction in the corporate income tax rate on large corporations from 14 per cent to 11.5 percent, effective July 1, 2006.

As part of his Budget address, Minister Roland committed to action on two priorities – developing a new economic blueprint for the NWT and taking immediate action to resolve outstanding issues with the federal government.

Highlights of initiatives included in the 2006 Budget can be found in the attached Budget Highlights document. The Budget Address can be found on the Department of Finance website at www.fin.gov.nt.ca . The Main Estimates can be found at www.gov.nt.ca/FMBS/documents/mainestimates/MainEstimates.html.