Yellowknife (May 05/06) - Reaction to Tuesday's federal budget ranged from cautious optimism to mild dismissal.

Particularly disappointed was Western Arctic MP Dennis Bevington who characterized the Conservatives budget as a "missed opportunity."

Budget highlights Corporate income tax rate drops to 19 per cent from 21 per cent by 2010; corporate surtax and capital tax to be eliminated. $1.1 billion increase over two years for the military although there was no mention of increases for the North. Lowest income tax rate rises from 15 per cent to 15.5 per cent. Universal child care benefit payments of $100 a month for each child young than six begins July 1 Projected 2005-2006 surplus of $8 billion with total estimated 2006-2007 spending of $223.6 billion with total revenues of $227.1 billion.

"We have a very strong fiscal position in the federal government this year, large surpluses, record corporate profits across the country and now we're cutting taxes and not investing in people," he said, pointing to the Harper government's abandonment of a national childcare system and the Kyoto Accord.

He will vote with his NDP caucus and the opposition Liberals against the budget.

However, with the Bloq Quebecois indicating that it would support the budget, the Conservative government should have enough votes to avoid a new election.

With $26 billion in tax cuts to Canadians over the next three years, what the territory will see this year is $50 million in money for housing, $1.9 million in additional transfer payments and a continued commitment to the $500 million in socio-economic infrastructure money in the event the Mackenzie Gas Project gets the go-ahead.

As for the Conservative's plan to review the aims of last year's landmark Kelowna Accord, in which Paul Martin's Liberal government agreed to spend $5 billion over 10 years on infrastructure, programs and services to improve the lot of the nation's aboriginal population, Bevington was skeptical that the $450 million the Harper government pledged to spend on aboriginal housing, childcare, health and education over the next two years would get the job done.

"When you think of (that amount) in terms of the aboriginal population, they just haven't put enough resources to meet the targets that were set under Kelowna," he said. "It's going to be difficult to accomplish."

Bill Erasmus, Vice-chief for the Assembly of First Nations was "disappointed" in the end of the Kelowna Accord.

"The first ministers meeting committed roughly $5.2 billion, and this budget doesn't really reflect what we wanted to do and that was bridge the poverty gap over a 10-year period.

"We had a real concise plan to do this and we expected that commitment to be followed through on."

"(Conservatives) are saying they want to take a new approach, if that means with a conservative flavour to it then that's not a problem, but we're unsure as to how they want to proceed because we're hearing little coming from them on the matter."

The territorial Finance Minister Floyd Roland's feelings on Tuesday's budget was somewhat optimistic.

"I'd give it a cautious positive," he said.

"I think it's a fairly safe budget that deals with individuals and targets the small businesses increasing the income threshold for small business from $300,000 to $400,000. That will cost us a little bit but overall it's good for business in the North."

Like Erasmus, Roland was pleased to see $50 million for public housing in the North and called the government's commitment to the $500 million in pipeline socio-economic impact dollars "good news."

But the finance minister certainly wasn't jumping for joy with an additional $1.9 million for territorial formula financing and was setting his sights on upcoming discussions on improving the GNWT's royalty sharing agreement with Ottawa.

"(The $1.9 million increase) won't really mean much in term of the overall budget," he said.

"But the Conservative's commitment to get together with all provinces and territories to have further discussions about transfer payments and formula financing is my big concern."