Yellowknife (Dec 15/03) - The Government of the Northwest Territories burgeoning $200-million debt should be addressed, said TD Financial senior economist Derek Burleton late last week.

Burleton, although careful not to advocate the idea of a sales tax, added that if the government wants to address the debt problem it could consider a sales tax.

The economist said last week that the federal government's current funding formula is calculated with the notion that a sales tax exists. The fact that it does not would mean the government could institute a sales tax and not have it clawed back.

Both Hay River North MLA Paul Delorey and Yellowknife Centre MLA Robert Hawkins took issue with the idea of installing a sales tax in the territories.

"If taxes increase there will be a corresponding increase in the cost of living," said Delorey.

"We have to look at ways to increase revenue without increasing the cost of living," said Delorey.

Delorey said the problem of the debt does not have to be addressed right away.

"We need to ask how we should spend to develop our resources and how we deal with our social problems," he said.

The options to government are limited, said Delorey.

"Either we cut spending, withdraw programs or find different ways to generate revenue," he said.

Yellowknife Centre MLA Robert Hawkins also thought the idea of introducing a sales tax was a "negative idea."

"When discussing the issues over spending and the debt we have to ask: Does spending meet our needs? If we're not meeting our needs, then why spend?" said Hawkins.

"I don't believe a sales tax would be significant here with our low population," said Hawkins.

While Hawkins and Delorey disagreed with Burleton's assessment on the introduction of a sales tax, they both agreed with him on the potential for oil and gas as well as hydro-electricity.

"It has enormous potential," said Delorey.

"The problem with any one of those issues is that you have to look down the road to the mid to long-term before they bring any revenue back," said Delorey. "We have to come up with strategies for worthwhile borrowing and going into debt."

Hawkins said it makes sense to develop hydro-electricity for export at the same time oil and gas is being developed.

"Oil and gas is the new frontier ... we have such an opportunity, and the Great Bear River has been studied. That pipe will need power," he said.