Yellowknife (Feb 25/04) - Premier Joe Handley says his government may be forced to hand control of Health and Social Services over to Ottawa if it doesn't receive more money within the next two to three years.

Premier Handley

"The worst thing that could happen is that we would have to hand it back to the federal government and say, 'here, if you think you can run it and meet people's expectations, you do it yourself,'" Handley said on Wednesday.

He said the territorial government needs an additional $15 million a year just to keep the current system afloat. He called the extra $20 million offered by former Prime Minister Jean Chretien, last year a drop in the bucket.

"Nickels and dimes, and the little bits of money we got the last time the territorial ministers protested, have not been enough to improve the system," said Handley.

To make matters worse, Alberta is threatening to pull out of the federal health agreement all together, leading to a domino-effect, the premier said.

"If that ever started happening across the country then I think we would see a fairly quick collapse of the health system as we know it now," said Handley.

When contacted, the premier was on his way back from the first-ever meeting of the Council of the Federation in Vancouver.

The body was created by premiers last year in hope of putting up a united front to the federal government.

He said all provinces and territories agree that the current health care funding arrangement with the federal government does not work.

Handley said the premiers also acknowledged the rivalry over obtaining health care professionals has been self-defeating for most of their jurisdictions. Much of the health care money for the territories is going to enticing doctors with lucrative contracts, said the NWT premier.

The bottom line, he said, is that the NWT is going to have to do some serious belt tightening, which may include increases to personal income taxes this year.

"There's a potential for it," said Handley.

"We've got to find revenue somewhere."