Yellowknife (Feb 25/04) - Fresh from his first meeting with federal Finance Minister Ralph Goodale, the NWT finance minister says a new funding deal may come as early as next year.

Formula funding from the federal government has long been a sore point for the territorial government.

Minister of Finance Floyd Roland said the latest talks between his provincial and territorial counterparts and the federal government in Ottawa were encouraging, however.

"We have an agreement to try and pull this together before the year-end," said Roland.

The current funding agreement between the territorial government and Ottawa ends this year.

Roland said he would like to see an additional $30-$40 million added to NWT's coffers per year.

In 2003, Ottawa contributed $809 million to the territorial government -- about 85 per cent of budgeted revenue.

"I'm happy that we did get a commitment to continue working on the technical nature of the formula," said Roland.

As for this year's territorial budget, Roland said a looming deficit may result in a need for tax increases, although he wouldn't speculate on how much.

"It's possible," said Roland.

"It's fair to say tax initiatives are being looked at, as well as reducing growth."

He said this year's accumulated debt will likely total around $190 million.