Doug Ashbury
Northern News Services

NNSL (May 24/99) - Facing as much as a $60-million territorial budget shortfall, Finance Minister Charles Dent may be forced to ask departments to shrink their bottom lines.

"Some time in the next month, we will send target numbers (to government departments)," Dent said Thursday.

Departments then put together business plans which are reviewed by a GNWT standing committee.

"We're in the process of figuring out what the number should be," Dent said.

"We're probably going to have to plan on reductions," he said.

"We can't justify a deficit, unless we know there is a change (in revenue) coming in the future."

The new finance minister's comments come only a few weeks after the NWT government brought down its 1999-2000 budget. In the budget, the GNWT used surplus money to offset what would have been a $22-million deficit.

But balancing the need to now trim about eight per cent across the board, soon after prior years' cuts, could prove challenging.

"What we've cut in the past three years has brought us down to the bone," Dent said at a Yellowknife Chamber of Commerce luncheon earlier this month.

"It doesn't take long for us to find ourselves in a poor fiscal situation. That means we need to find a way to do things differently."

Dent said if the NWT is to capture more revenue, it will have to come from the non-renewable resources sector. The NWT is sitting on huge oil and natural gas reserves, he said.

The NWT's natural gas reserves are estimated at about 2.5 trillion cubic metres. The bulk of the resource is concentrated in the extreme southwestern NWT.

Some one billion barrels of oil have been discovered in the Beaufort Delta area with an additional 5.4 billion in potential oil in this region.

Further south in the Mackenzie Valley, oil potential estimates are much more speculative. Apart from the 230 million barrels of original recoverable oil at Norman Wells, there are no other oil discoveries.

Though it is difficult to base projections for the valley on one discovery, Giles Morrell, oil and gas geologist with the federal government, suggests a resource of 500 million barrels of oil is "reasonable."

Efforts to capture more revenue from the federal government are at the discussion stage.

Dent said Finance Minister Paul Martin and Indian Affairs and Northern Development Minister Jane Stewart have said they are prepared to consider talking about giving the NWT a larger share of the money generated by resources.

But the NWT's political environment may make decisions related to resource royalties difficult.

Dent said Northern parties need to come to a conclusion about how to share any additional revenues from Ottawa before aboriginal self-government.

"Everybody sees the fiscal need and that provides us with incentive," he said.

"We are committed to working with aboriginal governments to find a way to equitably share our resource revenues."