Yellowknife (Feb 14/03) - Finance Minister Joe Handley will push the territory deeper into debt to feed a hungry economy.

Handley tabled a budget with a $77 million deficit Thursday, and said the GNWT's total debt could hit $214 million by next year.

Budget by the numbers Operations expenses: $931 million. Total revenues: $854.14 million. Projected deficit: $77 million (2003-2004). Total project debt by March 2004: $214 million. Health care: $26 million added to Department of Health and Social Services bringing the total budget to $226 million. Education: Almost $8 million more for a 2003-2004 budget of $210 million. Healthy lifestyles: Tax on cigarettes is increasing $6.80 per carton and tax on alcohol is increasing 10 per cent. The GNWT estimates the two increases will amount $3.5 million more annually. Infrastructure: $1 million for Mackenzie Valley Development project which includes training. Quartermillion dollars budgeted for the Deh Cho Bridge Project across the Mackenzie River. The environment: $1 million invested to support environmental monitoring programs and $300,000 for energy conservation. Where the money comes from Grant from federal government: $809 million (2003-04 main estimates). Transfer payments: $57.3 million (2003-04 main estimates). Personal income tax: $51 million.

"Our economy is strong," said Handley before introducing his fourth budget. "There's high employment and a lot of economic activity. This is not a time to stop spending."

Handley blamed most of the current fiscal year's $106 million deficit on the federal government's funding deal with the NWT -- a deal known as the Formula Financing Agreement. He said that arrangement is inadequate for the North's fast-growing resource-based economy.

That agreement expires in March 2004.

Handley offered no clear solution for his government's deficit woes.

He said the feds simply must give the GNWT either an extended borrowing limit in two years or a new funding deal, or else programs and services will be cut.

"Federal government partnership and investment is not happening in as timely or complete a manner as the situation demands," Handley said. "Without it, many opportunities will be lost."

Optimistic of new money

Handley, wearing moccasins to deliver his budget address, said he is "optimistic" the federal government will cut a better deal with the GNWT before it hits the $300 million borrowing limit, something that could happen in 2004-2005.

He added negotiations with the federal government on transferring responsibilities and resource revenues to the NWT will help -- but not solve -- the territory's financial situation.

Health and education will see the biggest benefit of the spending during the next year.

The health and social services budget will increase by $26 million while education spending rises by $8 million.

On the revenue side, tax hikes on tobacco and alcohol will raise an additional $3.5 million, he said.

Karen Hoeft, director of community services for the Salvation Army, said she continues to be concerned about a government that goes further and further into debt focused on economic development over social development.

"There wasn't a lot of new money for social spending besides health care, and that would be high professional salary dollars," said Hoeft.

"The money going to family violence shelters wasn't mentioned. Sometimes we focus on the higher professional jobs than those jobs on the front lines."

Northern Territories Federal of Labour president Bob Haywood has heard much of the table-pounding about the federal government before. He said he's getting tired of it.

"Since I moved up here five years ago, all these government people have been saying we've got to get a better agreement with the feds. Well, we still don't have one."

Haywood also wanted to know why the corporate tax rate has gone down while the deficit has gone up. "I think that's a real problem."

Chief coroner Percy Kinney found something to praise in this year's budget.

He called a proposal to strengthen drinking and driving legislation "groundbreaking," adding, "It goes beyond where we are now, and I think it's a good move. It's going to make a difference."

Cabinet minister Jim Antoine said the GNWT took on a lot of "big ticket items" this time, "that don't need to be revisited in the future," he said.

"We took care of the big hospital in Inuvik, the jail. Whoever is going to come in the next government, they don't have to deal with these big ticket items.They can deal with quality of life in the North."

Yellowknife Mayor Gord Van Tighem held up his booklet where he'd highlighted the word Yellowknife only a few times. He shook his head.

"The GNWT is doing to the tax-based municipalities the same thing they are accusing the federal government of doing to them. It's something that needs to be addressed. We need to work together."