Richard Gleeson
Northern News Services

Yellowknife (Jun 21/00) - You have to spend money to make money.

That's an argument territorial politicians have been making to the federal government for months now, and one Finance Minister Joe Handley repeated in presenting the draft 2000-2001 budget yesterday.

"This is a time for us, even though our resources are limited, to make investments in the future," said the rookie MLA. "It's not a time for drastic cuts."

The draft 2000-01 budget, if approved as is, would result in a $12.3 million deficit by the end of the year.

The final numbers are not yet in yet, that's about the same position the government anticipates it ended up with at the end of the last fiscal year.

Two former cabinet ministers said the budget did not result in much of anything new.

"There's very little change, if you look at it," said Inuvik Boot Lake MLA Floyd Roland. "It is status quo, except that MACA has been reduced and passed that cost onto the municipalities. Transportation has had a reduction in capital."

Frame Lake MLA Charles Dent said the government should have looked harder to find cost savings.

"If it had been me, I think I would have been a little more insistent on economizing measures -- not cutting programs and staff, but challenging them to get by without increases wherever they can," Dent said.

Asked what specific new initiatives this budget proposes, Handley replied the government will be spending an additional $4.8 million in new federal health transfers on improving health care service in the North.

The government is also spending another $1.6 million to reduce student-teacher ratios and improve services for special needs students.

Other programs, such as the Working Together summer employment program, that were scheduled to end this year, are being continued, said Handley.

Social programs continue to eat up a large chunk of government spending.

Together, the departments of Health and Social Services and Education, Culture and Employment account for just over 45 per cent of the government's spending, slightly less than last year.

The total government debt is expected to rise to $231 million this year, just $69 million shy of the limit imposed by the federal government.

New Tax

Though it won't go into effect until next year, the government also announced its intention to apply a 5 per cent tax on hotel accommodation charges.

That's something Deh Cho MLA Michael McLeod said will not be well-received by business people in his communities. Once introduced, the tax is expected to generate $1.5 million annually, which is to be invested in the development of the tourism industry.

"I don't know if (the tax) is going to encourage area tourism, if we're increasing the cost," said McLeod. "At the same time, I'm doing more research because I'm concerned that the claw-back clause we have in our formula financing agreement might kick in, not this year or the next couple of years, but when the agreement is renegotiated."

The clause, said McLeod, reduces the grant the territorial government gets from the federal government by 80 cents on each dollar of new tax money.

Noting the government only spends about $2 million a year on tourism now, Handley said the added funds would go a long way toward developing tourism markets.