Mr. Speaker, I am going to talk today about the bright future that lies before us as residents of the Northwest Territories. I am going to describe our tremendous economic potential. I am going to speak about what we as Northerners must do to realize this potential – not just for ourselves, but more importantly, for our children and grandchildren.
This Legislature includes in its vision of a better tomorrow “self-reliant, healthy, well educated individuals, families and communities doing their part in improving the quality of their lives.” To achieve this, Northerners need meaningful, long-term employment and business opportunities. Governments need revenues to finance the education, health care, and other key programs vital to our quality of life. To achieve this, we need a vibrant Northern economy.
This Government’s first Budget, as I noted last June, was the first step in achieving this Legislature’s vision of a prosperous future for the Northwest Territories. As we promised, we used our first year in office to finalize our strategies and to determine how they could be financed. We also listened to the suggestions and concerns of the Members of this Assembly.
As
we enter the second year of our mandate, we know what needs to be done:
·
We need to match
every Northerner who wants to work with a job that uses his or her skills.
There will be plenty of jobs over the next decade. We need to ensure that
Northerners can fill these jobs.
·
We need to start our
children off in life on the right foot. We need to see they get every
opportunity to lead fulfilling and productive lives.
·
We need to work
together with Aboriginal governments, the federal government and with industry
to ensure our future prosperity.
·
We need to take
control of and develop our resources. We need to invest in our economy and
infrastructure. We need to create business and employment opportunities for
Northerners, while being mindful of the need to protect our environment.
·
We need to invest
today in a better tomorrow.
Our
Premier, the Honourable Stephen Kakfwi, laid out the vision in his address in
January. This Budget sets out how it will be implemented.
We
will use all the resources at our disposal to achieve our vision. I am very
pleased to be able to announce that our fiscal situation is brighter than we
expected at this time last year. However, we do not have the fiscal resources
to do everything that needs to be done. Some initiatives cannot proceed without
support from the federal government. And until non-renewable resource revenues
are transferred from the federal government to Northern governments, there will
continue to be a gap between what needs to be done, and our ability to do it.
ECONOMIC REVIEW AND OUTLOOK
Mr. Speaker, we are a territory rich in natural resources. Whether it is oil and natural gas, diamonds and other minerals, hydro potential, or the sheer natural beauty of our Northern wilderness, I believe every region of the Northwest Territories has the potential to develop a strong economic base.
The Northwest Territories’ Mackenzie Delta/Beaufort Sea region holds immense reserves of natural gas – approximately 56 trillion cubic feet. At current prices the region’s estimated reserves could generate over $400 billion in revenue. Over the last two years, petroleum companies have bid approximately $650 million for Crown exploration licences in the region and an additional $76 million in the form of bid bonuses for Inuvialuit subsurface lands. Petro-Canada plans to drill an exploratory well in the region this month, following up the seismic program they conducted last winter. This will be the first well targeting natural gas to be drilled in the region. Other natural gas related activity in the region is in the form of seismic work – six different companies are already engaged in this work this winter. It is expected that petroleum companies will spend over $80 million in the Beaufort Delta this winter, and employ approximately 400 people.
The current energy situation in Canada and the United States overwhelmingly demonstrates the need for a Mackenzie Valley pipeline. The demand for natural gas is increasing in North America as the current supply is decreasing. The Mackenzie Valley pipeline is clearly in the interests of southern consumers, residents of the Northwest Territories, and the country as a whole.
The pipeline would cross several regions of the Northwest Territories, from the Mackenzie Delta, through the Sahtu and Deh Cho, into the Northern Alberta pipeline system. Construction of this pipeline will create an estimated 6,000 person-years of employment in the Northwest Territories during the three year construction phase. A standalone Mackenzie Valley pipeline could generate an additional $600 million in economic activity for the territory, creating enormous opportunities for Northern businesses.
This year we provided $500,000 to the Aboriginal Pipeline Group to prepare a business plan for Aboriginal equity participation in a pipeline. We will continue to support the Aboriginal Pipeline Group in its work on building business partnerships with industry to maximize the benefits of a Mackenzie Valley pipeline.
In addition to the potential for Mackenzie Valley pipeline development, the Sahtu region continues to experience substantial oil and gas activity. Oil production and drilling in the Norman Wells area continues. In addition, just last year, almost $60 million was bid for exploration licenses in the Central Mackenzie Valley. These funds should be spent in the area over the next four to five years.
In the Deh Cho, natural gas production continues in the Fort Liard
area from five different wells. Later this year, a sixth producing natural gas
well will be added. The search for resources in the area is still under way. In
January of this year work was being conducted on five different well sites.
Estimates indicate that there is another
4 trillion cubic feet of gas to be found in the Deh Cho region. Production
statistics show the region produced an average of 105 million cubic feet a day
of natural gas last November. Using current prices, production is valued at
approximately $770,000 per day.
Over the last year, industry has raised concerns about the regulatory environment in the Northwest Territories. The Government of the Northwest Territories has been encouraging regulatory bodies with jurisdiction in the Northwest Territories to address these concerns.
These
agencies have met to lay the groundwork for a co-ordinated regulatory approach
in the Mackenzie Valley. This could include joint assessment or co-ordination
of the regulatory processes under the Inuvialuit
Final Agreement, the Mackenzie Valley
Resource Management Act and the National Energy Board. We will continue to
encourage these boards and agencies to put in place a fair, predictable and
efficient regulatory process.
Many
Northerners may be wondering what lies in store for our economy given the
uncertain economic conditions currently prevailing in Canada and the United
States. In the short term, we do not expect to see any slowdown in the energy
sectors, given the present demand, and high prices, for all forms of energy
throughout North America. The long-term outlook for the North’s resources
remains strong. Nevertheless, we must remain vigilant in monitoring economic
conditions and their implications both for the Northwest Territories economy as
a whole, and for the Government’s fiscal situation.
The Northwest Territories is in a position that is
unique in Canada, and perhaps the world. We are beginning to experience
significant new economic development opportunities while continuing to enjoy
clean water, air and land, and abundant wildlife and fish. The right balance is
urgently required as we continue to develop our economy. As we all know, the
natural environment is a critical component of Northerners' cultural, social
and economic identity. While the Government of the Northwest Territories is
committed to renewable and non-renewable resource development, all development
must be sustainable and satisfy certain key conditions. It must contribute to
the long-term development of the Northern economy, its benefits must accrue to
the Northwest Territories, it must meet environmental standards, it must
include local decision making, and it must be accompanied by appropriate
environmental mitigation and monitoring measures.
As we have known for years, the North Slave region is clearly destined to become a producer of high quality diamonds rivalling the world’s finest. The BHP mine has produced diamonds for over two years, with the value of 1999 production reaching almost $600 million. Diavik expects to spend approximately $500 million in 2001 to construct its Lac de Gras mine and anticipates production in 2003. Earlier this month, DeBeers Canada confirmed its intention to develop Canada’s first underground diamond mine at Snap Lake and has begun the environmental review process. Full production is anticipated in 2004. In five years, diamond mining in the Northwest Territories will employ approximately 1400 people and will be producing $2.2 billion worth of diamonds annually.
Furthermore,
we don’t just mine diamonds in the Northwest Territories. We cut and polish
them as well. Three cutting and polishing plants already exist. Following
negotiations with Diavik, Aber and DeBeers, we anticipate an even greater
diamond polishing capacity. We are confident that future discussion with our
industry partners will result in continued growth in this sector. It is very
likely that at least two more plants will be established in future years, which
could raise employment in this field to 300 or more.
The
Northwest Territories’ potential to generate hydro-electricity is immense. The
Taltson River, in the South Slave region, could produce an additional 200
megawatts and the Upper Snare could provide 20 megawatts of environmentally
friendly power. We estimate that, using run of the river technology, the Bear
River, in the Sahtu, has a potential to produce 800 megawatts, and the
Mackenzie River, 2500 megawatts, all without flooding. As North America
continues to identify the need for new energy sources, this places the
Northwest Territories in a very promising position.
All
regions have the potential to benefit from the growth of the tourism sector in
the Northwest Territories. About $11 million is generated by the northern
lights tourism business in Yellowknife alone. Globally, tourism is one of the
fastest growing industries, and one in which the Northwest Territories has not
come close to achieving its potential.
I do not want to understate the importance of the traditional economy to the residents of the Northwest Territories. This sector plays an important role in augmenting employment and income in our small communities. In a report about to be published by the Department of Resources, Wildlife and Economic Development, the economic value of our traditional economy – trapping, hunting and subsistence fishing – is estimated to be from one-third to one-half of the economic value of all renewable resource activities. The traditional economy is also responsible for substantial social and cultural benefits, and these make important contributions to community well being.
Mr.
Speaker, the economic opportunities in the territory are impressive, and they
occur in all regions of the Northwest Territories. I can say with all
conviction that our economic future has never looked brighter, but we need to
acquire our fair share of resource revenues for reinvestment in people,
infrastructure and economic diversification.
FISCAL REVIEW AND OUTLOOK
Our short-term fiscal position is significantly improved over last year’s forecast. We ended the 1999-2000 fiscal year with a $17 million operating deficit, very close to the $18 million deficit budgeted for that year. Our overall debt position was well within our borrowing limits and financing capacity. Later this Session, I will be tabling the detailed 1999-2000 Public Accounts.
Our
2000-2001 outlook is much brighter than was forecast in the Budget last June.
We started the year with the expectation of a $13 million operating deficit.
Mr. Speaker, the current forecast for 2000-2001 calls for a $23 million
operating surplus.
This
turnaround is directly attributable to our successful efforts to constrain
spending, coupled with a much more positive revenue picture.
·
Increased economic
activity, particularly from diamond mine construction and oil and gas
exploration, has increased our forecast tax revenues.
·
Stronger population
growth and higher provincial government spending have resulted in a general
improvement in the performance of our financing formula with Canada.
·
Finally, we have
benefited from a large, fortuitous one-time increase in corporate tax
collections. After the offset to the Formula Financing Grant, this higher tax
revenue alone will result in a one-time net increase in our 2000-2001 revenues
of $18 million.
The improved outlook for 2000-2001 means we will see our overall accumulated surplus, on a tangible capital asset basis, rise to $864 million by the end of the year. Our capital investment represents $859 million of this. The Government’s own debt will drop to just over $12 million, while the consolidated Government will have $190 million of debt outstanding, the majority of which is financed from the revenues of the NWT Power Corporation.
2001-2002 Fiscal Outlook
The
positive revenue developments of this year will partially carry over to
2001-2002 and allow us to make some modest but critical new investments. Even
with a projected
$34 million increase in spending for 2001-2002, we anticipate we will still be
able to achieve a small operating surplus of around $2 million. On the revenue
side, the picture is brighter for several reasons. A higher grant from Canada
and higher own source revenues reflect our stronger economic outlook and higher
population growth.
On
the expenditure side, the coming fiscal year will see a significant increase in
our capital investments as we begin work to replace the Inuvik Hospital and
build the North Slave Correctional Centre. This will translate into a $61
million increase in capital assets.
The
debt level of the Government itself will return to about $74 million by the end
of the fiscal year, the point at which our short-term borrowings are at their
highest. With the addition of the debt of Government corporations, our
consolidated debt will rise to
$251 million.
FISCAL STRATEGY
Mr.
Speaker, the best way to control our future is to create it. We as Northerners
have a vision of a territory providing economic growth and opportunity; stable,
meaningful jobs; a sound environment and high quality public services
supporting healthy lifestyles. The means to achieve this vision are within our
reach.
We have been fortunate this year because our revenue windfall pushes the debt wall back. This year’s surplus gives us the opportunity to make some critical investments: in advancing Northern employment, in addressing social issues, in badly needed infrastructure, and in business and economic development.
However,
the Government of the Northwest Territories does not want to rely on luck to
make the investments to see our northern economy grow and our people prosper.
Nor do we want to continually depend on the federal government for the majority
of our revenues. Especially not when we live in a territory endowed with such
great natural wealth.
With
three producing diamond mines, a Mackenzie Valley pipeline, and other oil and
gas developments, this territory will generate at least $200 million in
royalties annually by the end of the decade, in addition to the taxes generated
from development. There is no reason why the transfer of federal resource
revenues to northern governments should be delayed. In fact, there are many
reasons why it should happen quickly. Already, major resource developments are
producing, or soon will produce, substantial revenue for the federal government.
Northern
governments need this revenue to ensure our residents have the skills to take
advantage of the opportunities created by development. Northern governments
need this revenue to build the infrastructure required to cope with the impact
of development and to encourage further resource development. Northern
governments need this revenue to protect the environment while we develop the
resources. In short, we need these resources to control our future.
We
understand that the future of the North includes a change in the structure of
government for territorial residents. We need to make progress on finalizing
Aboriginal self-government agreements. We want the process to be an example to
governments everywhere on how to design structures that effectively allow
Aboriginal people to control their own destinies. All Northern governments,
however, will need adequate financial resources to deliver programs and
services and to make the investments we know are needed. We require devolution
of lands and resources including the transfer of a fair share of non-renewable
resource revenues.
We
are beyond the stage of discussing whether devolution should happen and are on
the way to discussing how and when it should happen. A year ago in this
Assembly, the Honourable Robert Nault, Minister of Indian Affairs and Northern
Development, committed to fast tracking devolution. Last December, Aboriginal
Summit leaders met with the Premier, the Minister of Aboriginal Affairs, the
Honourable Jim Antoine, and myself. The majority of leaders agreed to begin a
formal process to determine how the transfer of authority over lands and
resources will devolve to the appropriate territorial and Aboriginal
governments. We have commitment from all three parties. Devolution will happen.
We
have the Intergovernmental Forum’s support to develop proposals for devolution
and resource revenue sharing. At this time, I am pleased to reaffirm this
Government’s support for the Intergovernmental Forum process. This Budget
includes $330,000 to facilitate the participation of the Aboriginal Summit in
the process.
Given our economic
outlook and with control of resource revenues, our long-term fiscal outlook is
bright. In the meantime, we will continue to press the federal government to
make strategic investments. However, we must also bridge the gap between our
present needs and our future potential.
There are many millions
of dollars of investment required to ensure that Northerners receive the
maximum benefit from the development of our resources. For example, our Non-Renewable Resource Development Strategy
identified the need for investments in training, in infrastructure, in business
development, in social mitigation and in protecting the environment. These
investments must be made now. It makes good financial sense to make them now,
since the payback, in terms of economic growth and social benefits, will be
substantial. Therefore, we will, as necessary, borrow at reasonable and
fiscally sustainable levels, to finance these investments.
Currently, the Government of the Northwest Territories has an authorized borrowing limit of $300 million. We are reviewing our borrowing capacity with the federal government as an interim measure until the devolution of resource management is complete. We believe that our economic and fiscal outlook justifies a review of this limit.
Our vision depends on working together with Aboriginal, business, and community leadership. Together we can create our future.
INVESTMENTS IN A BETTER
TOMORROW
Mr. Speaker, in his address last month, the Premier outlined how we are going to achieve the vision described by this Legislature in Towards a Better Tomorrow. I am very pleased to be able to provide specifics about the investments we intend to make in the coming fiscal year.
We are prepared to make investments. We are prepared to be bold. We expect results and will be monitoring those results. But I want to reiterate the challenge Premier Kakfwi made last month. In making these investments, we need and expect Northerners to work with us. We expect individuals to become trained, to become educated and to seek out the jobs that will become available. We expect businesses to become competitive, and to look to the growing economy for opportunity. We must all work together.
Maximizing Northern Employment
Last
fall, our Government established “Maximizing Northern Employment” as one of its
priorities. Simply put, it is our belief that all Northerners should be able to
compete for and obtain all jobs offered by the public and private sector
throughout the Northwest Territories. We believe, based on the concerns we have
heard in this House, that Members share this goal.
Maximizing
Northern Employment is a long-term commitment. We must plan our actions
carefully in close co-operation with Members of this Assembly and with
employers and workers across the Northwest Territories. While our plans in this
area will be shared with this House over the next few months, to indicate our
commitment, this Government is committed to invest up to $5 million per year in
support of this priority. We will be returning to this House with the detailed
plans and proposed allocations as part of supplementary estimates later in the
year.
In
terms of action, our first priorities are as follows:
First,
students at the high school level will have more opportunities to prepare for
northern careers in the trades, technologies and professions. We continue to
stress the importance of completing high school. However, we also recognize the
importance of providing “hands on” experience to those students who want to
begin building their careers as early as possible. We intend to expand the
School North Apprenticeship Program and develop opportunities that combine work
and schooling. We expect to implement this initiative in the next school year.
Second,
we want to be sure that Northerners are matched with available jobs. In
co-operation with industry, and building upon our recent experience supporting
employment in Fort Liard and the Beaufort Delta, we plan to increase the
availability of information on employment in all communities. To do this, we
will post information on available jobs, and in close cooperation with
community and regional organizations, actively match and refer work candidates
to available positions. Our plans in this area will be fully developed by March
31 of this year.
Third,
we must place a renewed emphasis on bringing post-secondary graduates into our
northern public service. Our Premier announced this Government’s commitments in
January. In support of these commitments we will:
·
Provide job
opportunities for all northern graduates of recognized teacher education,
nursing and social work programs. Discussions with education councils and
health and social service boards are already underway and the policies to guide
this action will be in place by the end of this fiscal year.
·
Hire post-secondary
graduates, particularly those in priority occupations, such as engineering and
other applied sciences, accounting, computer sciences and management into the
public service following their graduation. We are developing a program that
will establish “intern positions” of one year in length, which will provide
recent graduates with valuable job experience in a Government of the Northwest
Territories department. During his or her year of service, an intern will be
expected to carry out assigned tasks, but will also receive selected skill
development in areas such as financial management, managerial skills and basic
labour relations. Detailed plans for this new program are being developed at
this time and will be finalized by the end of March.
·
Further, we want to
ensure that summer work placements and cooperative work opportunities for
students are meaningful and support the development of future public servants.
To assist students in obtaining positions with the Government of the Northwest
Territories this year all departments are now preparing listings of the
positions that will be available for the summer months. This listing will be
made available to students so that they can identify potential jobs that match
their skills and interests. We are launching a website where students can post
their resumes for the consideration of any employer.
Mr. Speaker, we recognize that we have a dedicated and hard working public service – a public service that has had to deal with extensive challenges over the past several years from downsizing to division. Our staff have met those challenges while continuing to provide a high level of service to the public.
We need to support our public servants in meeting the challenges that lie ahead. Part of this support must be fair compensation. I was very pleased with the strong support for the recent collective agreement with most of our unionized workers. This Budget includes over $13 million related to the implementation of that agreement and extension of similar increases to non-unionized groups.
In
addition to fair compensation, our staff need to know that they are respected.
To this end, together with the Union of Northern Workers and the Northwest
Territories Teachers’ Association, we jointly developed and implemented a new
Conflict Resolution Policy. We must also ensure that the public respects and
has confidence in the public service. To address this need we have, after extensive
consultation with employees and the union, developed a Code of Conduct. This
Code will help ensure the public is aware of the high standards of conduct and
integrity that public servants bring to their job.
Finally,
it is important to recognize that the Government of the Northwest Territories
is only one of many partners in the effort to increase Northern employment.
Business and industry have a major role to play as do educational institutions
and Aboriginal governments. We will be examining our policies to ensure that
they support increasing employment. We will be actively promoting, and will be
asking our partners to join us in promoting, the importance of northern
employment.
Mr. Speaker, I cannot overstate the importance of literacy for the North. Over the past decade we have made excellent strides in increasing literacy rates. Now, more than ever before, youth and adults across this territory have the skills and abilities they need to fully participate in the social, economic and political development of the Northwest Territories.
However, even with this success, we still face a serious challenge. We still need to emphasize the importance of literacy and to ensure that all Northerners with literacy needs have access to programs and services that strengthen their skills. Last June, Members of this Assembly called for the development of a strategy to increase literacy levels in every community in the Northwest Territories. We agree. Later this Session, the Honourable Jake Ootes, Minister of Education, Culture and Employment, will be tabling the Literacy Strategy in this House and providing further details. This Budget provides the funding to implement the Strategy, including:
·
$700,000 to deliver
community-level literacy programs;
·
$400,000 to establish
workplace literacy programs;
·
$300,000 for
Aboriginal language literacy courses;
·
$300,000 to extend
library services to 15 smaller communities;
·
$300,000 to deliver
specialized programs or services to persons with disabilities, to seniors, and
to those in correctional institutions; to monitor and report; and to promote
the use of plain language within government.
This
initiative to improve the literacy levels of Northerners is fundamental to
achieving many of this Government’s key priorities and is essential to our
future success.
Jobs are important, but they are only part of what we need to achieve our vision. We must address the needs of our most vulnerable citizens – children, elders, those with disabilities and those who are disadvantaged. We recognize that a vibrant economy and job opportunities are of little value unless we address the problems faced by many people – drug and alcohol abuse, family violence, FAE/FAS, and various other addictions. I want to emphasize some of our Government’s main priorities.
Early Childhood Development
Action Plan
Our
children are our future. If we are to realize the true potential of the many
economic and other opportunities before us, we must have a healthy, well-educated
population, ready to take advantage of all that the future has to offer.
Recognizing that our capacity to learn and grow is significantly influenced by
our experiences in early childhood, we are committed to improving programs and
services to our youngest residents. We want all children in the Northwest
Territories to be born healthy and to have every opportunity to reach their
full potential. This Assembly has identified Early Childhood Development as a
priority. We have responded to this challenge and are prepared to implement an
Early Childhood Development Action Plan. We are committing $2 million per year
for the next three years to this Action Plan.
Our
investment in Early Childhood Development will have four major streams:
·
Healthy pregnancies
and healthy babies – with a significant focus on FAS/FAE prevention and early
intervention and remediation;
·
Healthy parenting –
with special supports for young parents and “at risk” families;
·
Early childhood care
and learning opportunities – ensuring that children arrive at school “ready to
learn”;
·
Stronger community
supports – through integrated planning and program delivery for more effective
early childhood development at the community level.
Most
communities already have access to some type of support for early childhood
activities. The federal government, Aboriginal governments, parents, private
entrepreneurs and the Government of the Northwest Territories all play
significant roles in providing services. However, the current funding and
delivery mechanisms are fragmented and not co-ordinated as well as they could
be. We plan to strengthen co-ordination between funding bodies and build on
successful community programs wherever possible. Our goal is to ensure that
every child has access to an effective, integrated early childhood development
program in his or her community, and that all children arrive at their first
day of school, healthy and ready to learn.
Our
attention to early childhood development is clearly focused on the long term.
It will take a number of years to move from our current, fragmented patchwork
of programs to a strong, truly integrated and effective early childhood
development approach in all communities. However, we know that successful early
childhood development will lead to healthy, educated and productive adult
citizens. This, in turn, will lead to healthier children in the future. If we
truly believe that our people are our strongest resource, we must make these
investments in our youngest residents.
Last year this Government committed to increasing funding to ensure schools can reduce the pupil-teacher ratio as well as enhance special needs instruction. This Budget includes $4.5 million in additional funding for Education Councils to address current enrolments and high fuel costs, and to allow us to meet the requirements of the Education Act with respect to reducing the pupil-teacher ratio and increasing funding for special needs instruction.
Mr. Speaker, it is common knowledge that governments in Canada today
are facing increasing challenges in providing health care. Rising costs of
technology and pharmaceuticals, shortages of health care providers, and an
ageing population with increasing needs for health care all contribute to the
strain on the health care system. Almost one quarter of our operating budget,
or $183 million, has been allocated to the Department of Health and Social
Services. Of this, three quarters, or $136 million, goes directly to the health
and social services boards for the delivery of services. The
2001-2002 Budget includes increased expenditures on health care of $17 million
to address these growing needs. Five million dollars has been allocated simply
to keep pace with growing demands, including: the need to provide competitive
compensation for physicians, the cost of medical travel, and the cost for
providing care in southern institutions. We have also set aside a $6 million
reserve in this Budget to fund further increases to forced growth expected to
occur within the health and social services system in 2001-2002.
This
Budget also invests over $6 million in a number of critical areas:
·
We will invest $2.8
million to improve the primary care model by stabilizing the physician
workforce in Yellowknife;
·
We have allocated
$1.5 million to negotiate the extension of the nurses market supplement for one
more year while it is being evaluated – as the Standing Committee on Social
Programs has observed, we need to be competitive to attract and keep qualified
staff;
·
We have allocated
$1.2 million to improve child protection and family support services through
the addition of extra staff and training – another critical area flagged by the
Standing Committee;
·
Finally, we are
investing over $200,000 to provide expanded telehealth access and have
committed $280,000 to fund the Stanley Isaiah Adult Disabled Group Home in Fort
Simpson.
The Northwest Territories will also benefit from new federal funding commitments through the Canada Health and Social Transfer which were announced at the First Ministers meeting in September, including new targeted funding for primary care, early childhood development and medical equipment.
Mr.
Speaker, we are facing ever-growing demands on our limited resources to provide
basic health care services to the residents of the Northwest Territories. We
find ourselves, however, in the unfortunate position of subsidizing the
delivery of the federal government’s responsibility to Status Indian and Inuit
residents for non-insured health care benefits. The Government of the Northwest
Territories currently delivers this program, under contract, on behalf of
Health Canada. Since taking on this function, however, we have been unable to
recover our full costs from the federal government. We estimate that, for
2001-2002, we would be reimbursed only $5 million of the $6 million we
would spend. We have given notice to the federal government that, unless an
acceptable administrative agreement can be reached to address our concerns,
effective April 1, 2001, this Government will no longer deliver the Non-Insured
Health Benefit (NIHB) program on their behalf. Some progress has been made in
recent negotiations between Health Canada and the Department of Health and
Social Services; however an agreement has not yet been reached.
A
return of administration of the NIHB program will not represent a cut in
benefits to Northwest Territories Status Indian and Inuit. The benefits will be
maintained, but the program will be administered by a different party. We will work
with Health Canada to ensure there is no interruption in services to clients.
We recognize that the demands on our health care system are pressing. We have received a number of recommendations for changes and improvements to the health and social services system over the past few years. We agree that change is needed. However, we still need to address gaps in our existing analysis, and map out an action plan.
The Minister of Health and Social Services, the Honourable Jane Groenewegen, has commissioned the development of such an action plan, to be completed by the end of June. We expect to receive practical recommendations to improve the efficiency and effectiveness of the health and social services system, and to address issues of sustainability and quality of care. With a birth rate twice the national average, and an ageing population, we have a responsibility to ensure that our health and social services system delivers the best services possible within the funding available.
Mr.
Speaker, our young people who have run into difficulty with the law need every
opportunity to get their lives back on track. We want to ensure the facilities
are there to provide the help they need. The Department of Justice is planning
for the opening of two new Young Offenders Facilities a year from now – a
facility for males in Yellowknife and a facility for females in Inuvik.
However, staffing and training must begin well in advance of opening. This
Budget includes $2.9 million for the coming fiscal year, to allow these
projects to be fully operational in a year. Ongoing operating costs for these
facilities will total $2.7 million annually.
We
must not forget the most vulnerable of our citizens, especially our elders. The
2000 Housing Needs Survey, tabled last March by the Honourable Roger Allen,
Minister Responsible for the Housing Corporation, identified that one-third of
our seniors are in need of more suitable housing. In response, the Northwest
Territories Housing Corporation directed some of its capital resources to
address the greater need for housing for our seniors. Also, through
consultation with the communities, the Northwest Territories Housing
Corporation developed a Seniors Housing Strategy. As part of that strategy,
this Budget includes $560,000 to fund the operation of 37 new seniors housing
units.
As
our economy continues to improve, and as Northerners gain access to jobs in
their communities, the costs of our Income Support Program can be expected to
decrease. However, as we have heard from the Standing Committee on Social
Programs, Northerners with the greatest needs must continue to be supported by
this Government. To this end, the Income Support Program will be increasing the
food scales by $500,000 to allow for increases in the cost of living. As well,
the allowance for disabled Northerners receiving income support will be raised
by $50, from $175 to $225 per month to cover additional costs that disabled
Northerners face in their daily lives.
We realize Northerners have been hard hit by rising fuel prices. The rapid increase in prices has placed an additional burden on residents, particularly homeowners, business operators and hunters and trappers. Members of the Assembly have effectively expressed their concerns. This Government already is providing help to many – through our social housing and income support programs and through our power subsidy programs for residents and businesses. These programs will continue. In fact, this Budget includes almost $1 million in additional funding to the Housing Corporation to pay the increased fuel costs for public housing and $1 million to maintain the Power Subsidy Program.
We
recognize, however, that there are many at low to moderate income levels who
need help to offset the high cost of fuel. In response to concerns raised by
Members, I am announcing today that we will provide a one-time fuel rebate of
$320 to eligible households who directly purchase home heating fuel and $150
per household to renters living in eligible apartments. Eligibility for the
rebates will be determined by an income test.
These
rebates will be paid in this fiscal year, so households can receive the
assistance before the end of March. We estimate this program will cost $1.3
million in 2000-2001.
While employment opportunities are improving in many remote communities, the economy of most is closely tied to traditional harvesting. Individual trappers make modest livings, and have been adversely affected by rising fuel costs. In recognition of this, we will be providing a one-time payment of $150 to each trapper who harvested at least $500 worth of fur in either of the last two trapping seasons. This investment will cost an estimated $62,000.
We realize, of course, that there are other harvesters, such as fishermen, who may have been heavily impacted by rising fuel prices. We will be monitoring this impact and will be developing strategies to assist those most severely affected.
A
number of Members have raised the issue of rising fuel costs and the impact on
Government. We recognize that higher fuel prices have increased the operating
expenses of the community governments in the Northwest Territories. These
additional costs are significant enough that they cannot be absorbed by local
governments and will be passed on to residents unless the Government of the
Northwest Territories can offer assistance. We will provide additional funding
to community governments of $230,000 in 2000-2001 and $434,000 in 2001-2002.
Mr.
Speaker, this Government does not have the resources to shield all residents
from the full effects of fuel price increases, nor do we have the ability to
sustain the support we are providing on a long-term basis. It is up to all
residents and businesses to reduce the amount of fuel we use by becoming more
energy efficient. To this end, we will be exploring ways of promoting
efficiencies in fuel consumption throughout the government and the private
sector. In conjunction with the Arctic Energy Alliance, our goal is to increase
the understanding of energy related issues and promote conservation.
Support to Communities
In addition to support to cope with increased fuel costs, this Government is increasing the annual funding allocated to communities by almost $1 million in 2001-2002. We recognize that, as part of this Government’s initiative to rationalize the method by which community governments are funded, communities will need a period of time to adjust to the new approach. The new method of allocating funding is based on a fair and equitable formula, making the entire process easier to understand.
A Healthy and Diversified Economy
Mr. Speaker, if we want to ensure a prosperous future
for the Northwest Territories, if we want to create a climate of growth and
development, if we want to leave our children a legacy of fulfilling and
meaningful work, we need to make investments in our economy now.
It is not a question of deciding what our path should
be. We have spent the past year mapping our route. We know the path we need to
take.
·
In
June last year we received the report of the Economic Strategy Panel – Common Ground – which gave us a
long-term, comprehensive economic strategy. Common
Ground was the work of seventeen Northerners from all regions of the
Northwest Territories who represented Aboriginal organizations, business,
industry, and environmental and social organizations. The recommendations in
the report reflect a wide variety of interests and provide a balanced approach
to moving the Northwest Territories economy toward self-sufficiency.
·
Building
on Common Ground, the Government of
the Northwest Territories’ Non-Renewable Resource Development Strategy provides
a short-term road map identifying the investments needed to maximize the benefits
of northern development for both Northerners and Canada, and identifies the
federal commitment needed to achieve these benefits. The greater the federal
investment in the Strategy, the more we can do and the sooner we can do it.
·
In
November, we received the report on Electrical Power Generation, Distribution
and Regulation that outlines the exciting opportunities for hydro power
generation in the Northwest Territories.
We know what needs to be done. We intend to do what is
achievable with the resources available to us. In
December, I released Securing Our Future,
the Government’s comprehensive response to Common
Ground. This Budget responds to many of the issues raised in the Economic
Strategy Panel’s report. Many of the action items contained in the Government’s
response require a collaborative approach with the federal and Aboriginal
governments. We will continue to look to
the federal government to fund its share of the investments needed in the North
today.
Let
me now turn to what we plan to do this year in this area.
Mr.
Speaker, the lack of transportation infrastructure in the Northwest Territories
is impeding our economic growth. This fact has been consistently noted in the
Fraser Institute’s survey of the mining industry, and was highlighted in our
own Non-Renewable Resource Development Strategy and in Common Ground. It has also been a major concern expressed by many,
if not all, of the Members of this Assembly. The Standing Committee on
Governance and Economic Development noted that limited funding is impairing our
ability to repair, maintain and expand our transportation system to meet
current and future demands.
I
am pleased, therefore, to announce major transportation initiatives this
Government intends to begin in the coming year.
The
Department of Transportation has been working for the past two years on a
Highway Strategy initiative. The report Investing
in Roads for People and the Economy was tabled by the Honourable Vince
Steen, Minister of Transportation, in this Legislature last November. The
report lists the next steps to be taken. One of these steps is to improve the
existing highway system so that it can cope with the ever-increasing demands
being placed on it by development.
We
must make investments now.
I
am announcing today that, over the next four years, this Government will be
investing an additional $100 million in the existing highway system, over and
above the current capital plan. We will begin with an additional $11 million in
the coming fiscal year. Over the next four years, investments will be made on
Highways 1, 3, 4, 5, 6, 7, and 8. At the end of the four-year period, the
highway between Rae and Yellowknife will be reconstructed and paved;
significant reconstruction will be completed on the Mackenzie Highway, the
Dempster Highway, the Ingraham Trail, and the Liard Highway; and the highways
to Fort Smith and Fort Resolution will be paved.
We
will likely have to borrow a significant portion of the additional $100 million
to finance these highway investments. I do not think there are many people in
the Northwest Territories who would argue against investing in our highways to
improve public safety and promote economic development. However, many may ask
how we will pay the interest costs and repay the debt, given our limited fiscal
resources.
We
are proposing, therefore, the introduction of a highway user toll on commercial
trucking in the Northwest Territories. We estimate that, when fully
implemented, such a toll could generate up to $15 million annually. We propose
that the revenues generated from the toll would go into a dedicated highway
trust fund, and would be used to finance the borrowing costs.
We
recognize that a highway user toll will result in higher costs for consumers.
In order to reduce the negative impact of the toll on Northwest Territories
consumers, we are proposing that the Cost of Living Tax Credit be increased.
We
will be announcing the details of the proposed road toll and tax credit changes
by May. We intend to introduce the necessary legislation to implement these
measures during the June Session of this Assembly.
Winter
roads are also an integral part of the northern transportation system and need
additional investment to cope with increased resource activity.
The Mackenzie Valley winter road bridges acceleration
program, announced last November, is funded jointly by this Government and the
federal Department of Indian Affairs and Northern Development. We have
allocated almost $2 million to this project in the current fiscal year, and
have included an additional $700,000 in this Budget for 2001-2002. This
project, which has already resulted in the completion of permanent river
crossings along the Mackenzie Highway's winter road extension north of Wrigley,
is an example of the types of investment needed and of the collaborative
approach needed among governments - federal, territorial and Aboriginal
governments and industry. We will continue to identify projects and programs
where federal investment is called for.
This Budget also includes the continued operation of the
winter road between Colville Lake and Fort Good Hope supporting the emerging
gas development activities in the region.
Airports are a lifeline to Northern communities. This
Budget proposes to invest in critical airport needs throughout the Territory.
Over $11 million will be spent on airport capital improvements in 2001-2002.
Some of these investments again are the result of partnerships working with the
federal government particularly through the Airports Capital Assistance
Program. Runway work will begin at Inuvik and Tulita and continue at Sachs
Harbour. New terminal improvements will proceed at Wha Ti, Fort Simpson,
Aklavik and Tulita.
Overall, this is a significant change in our investment
pattern in transportation. It will provide a better system but will also create
opportunities for northern contractors to build these projects and create many
new jobs in the construction sector. This Budget challenges northern business
and workers to invest their resources to build a better transportation system
for the future.
Mr.
Speaker, this Government has had a Business Incentive Policy in place since
1984. Common Ground recommended that
the Business Incentive Policy should be completely revised. We agree. The
dynamics of our economy have changed, and will continue to change for the
foreseeable future. Government purchasing will play a smaller role in
supporting local business as other opportunities arise in both our renewable and
non-renewable resource sectors. We want to encourage the growth of northern
businesses, but northern businesses must strive to compete for other
opportunities. Furthermore, we want to encourage “real” northern businesses.
In
January we released a discussion paper outlining options for changing the
policy. The paper outlines options for a Business Incentive Policy based on
employment incentives and tax reductions. One option would see the elimination
of corporate income tax for small private corporations. We are asking northern
business, industry and Aboriginal governments to provide their recommendations
on a new northern business incentive policy. Public consultation will be
completed by mid-March and we will be coming forward with recommended changes by
May of this year.
Last year’s Budget highlighted tourism as a priority for this Government. Common Ground recommended increased investment in tourism marketing and product development. We agree.
Tourism
can play a very important role in the diversification of our northern economy.
Jobs in tourism will contribute to celebrating local history, preserving
Aboriginal cultures and sustaining the environment.
We
have consulted widely over the last year with the tourism industry. We have
developed our Tourism Strategy in collaboration with Northwest Territories
Arctic Tourism. The Strategy provides a focus for renewed investment in the
industry. Our goals include strengthening the image of the Northwest
Territories as a destination, revitalizing tourism training, supporting the
creation of new tourism products in each region, supporting Aboriginal and
cultural tourism, and encouraging the growth of new markets in Europe and Asia.
If
the Hotel Room Tax is approved, we will invest $900,000 in new funding in the
Strategy. This represents the anticipated revenues to be generated by the Hotel
Room Tax in 2001-2002. In addition the Department of Resources, Wildlife and
Economic Development will reallocate $375,000 in existing funding to the
Strategy.
Common Ground identified the need for greater availability of risk
capital. We agree. Northern businesses need capital in order to participate in
the business opportunities afforded by resource development.
The Government of the Northwest Territories provides incentives, through the income tax system, for Northerners to invest in Northern businesses. The Risk Capital Investment Tax Credit program provides a tax credit equal to 30 per cent of eligible investments, up to a maximum credit of $30,000. The program has been in place since 1998, but its uptake has been limited. We plan to market the existing program more aggressively, but will also be examining options for revising the program, to make it a more effective vehicle for raising capital for Northwest Territories businesses.
Tax on Income
In
recent years, all the provinces have moved from calculating their tax as a
percentage of federal tax to basing it directly on income.
Mr.
Speaker, like the provinces, we want to reduce our dependence on the federal
government. I am announcing that, starting in 2003, the Northwest Territories
will also base its personal income tax on income, not on Basic Federal Tax.
This change will give us more flexibility to design our tax system to meet the
needs of the Northwest Territories population. The Canada Customs and Revenue
Agency will still collect our income tax, and Northwest Territories residents
will still only need to file one tax return.
However,
we recognize that Northerners will need some time to understand the new system,
and we want to take the time necessary to consider the options open to us under
the new system. Therefore, Mr. Speaker, I am proposing the establishment of a
Minister’s Advisory Committee on Personal Income Tax, composed of residents
with experience in the tax area, which will look at the options and make
recommendations to me by the fall of this year. Based on this input, I plan to
bring forward the necessary legislation in 2002, in order to make the changes
effective for 2003.
Hydro Development
One
of the more exciting development opportunities highlighted this year was the
Northwest Territories’ vast hydro-electric generation potential. The Northwest
Territories possesses large hydro resources. Parties such as the Northwest
Territories Power Corporation have undertaken engineering and market research
studies. However, recent events have put a much different economic light on the
development of this potential. With the effects of deregulation in some provinces
and states, with increased environmental restrictions on the production of
electrical energy by the burning of fossil fuels, and with large industrial
developments increasing electrical demand, it appears that Northwest
Territories hydro resources could be delivered to an energy hungry market on an
economic basis. Although much work needs to be done to confirm and realize this
hydro development potential, the possible fiscal yield to Northwest Territories
governments demands that we move aggressively to flesh out this opportunity. In
our continuous struggle to meet the growing needs and demands of our
population, the Northwest Territories’ hydro resources may provide some
desperately needed and environmentally responsible relief.
During
the early part of 2001-2002 we will need to invest in the legal, financial and
engineering work necessary to determine whether our hydro resources do indeed
offer the economic benefits we need, and whether they can be developed in a
manner that results in substantial returns to the Northwest Territories.
CONCLUSION
Mr. Speaker, this Budget lays out an ambitious program. It has been built with advice from Members, Aboriginal and community leaders, representatives of industry and social groups and the public. We are confident this program can be achieved.
The Northwest Territories has immense potential, but there is a lot to be done to maximize the benefits to our residents. I believe it is only a matter of time before everyone recognizes this potential, as well as the needs. It is only a matter of time before residents of the Northwest Territories are given full control over their future, control that residents of the other provinces take for granted.
However, we cannot wait for others to come to this realization. The time for action is now. To take a timid approach to development and economic growth would be a mistake. The opportunities we have today may not be there tomorrow. Together with our Aboriginal partners, with the federal government, with community leaders and with industry and business, we can achieve our vision of a prosperous and vigorous Northwest Territories.
We are investing today in a better tomorrow.