Mr. Speaker, I thank the House for the opportunity to speak against this disappointing NDP proposal.
Before addressing the specifics of this proposal, let me reiterate our Conservative government's strong support for the Northwest Territories as well as the other territories.
Federal support for the territories is at an all time high. For the territories, this totals almost $3 billion in 2010-11, an increase of a whopping $766 million from the previous Liberal government. This is helping to ensure the territories can provide essential public services, such as health care and education. In the words of the finance minister of the Northwest Territories, Michael Miltenberger, this commitment of long-term growing support has provided “much needed relief”.
Additionally, as part of our overall northern strategy, we have taken numerous other measures. For instance, to help offset the higher cost of living in the north we have increased the northern residents deduction by 10%, representing nearly $10 million in annual tax relief for northern residents. This was a much welcomed move.
Yellowknife Mayor Gord Van Tighem heralded it as “something we've been asking for for a significant period of time. The move will mean more spending into local economies and further reduce the cost of living”.
Inexplicably, the NDP member for Western Arctic voted against it and deeply disappointed his constituents.
Quoting from an editorial in the Yellowknifer, it states:
—a boost for the Northern Residents Tax Deduction...It is not a whole lot is a whole lot more than previous Liberal governments ever gave. Despite enormous budget surpluses and the voice of a...the Liberals never lifted a finger to increase the tax deduction, even after years of steadily rising costs...it would have been best had [the member for Western Arctic] swallowed the pill and voted with the government.
Unfortunately, that pattern of disappointment among northerners has continued with the NDPs last minute support to keep the long gun registry and, here today, with a poorly thought out NDP proposal.
Let me be clear from the outset. Our Conservative government respects territorial governments, especially on matters that directly impact them, like their borrowing limits. We are already actively working and consulting with all three territories about their borrowing limits.
Earlier this year we initiated a review of the operation of the territorial borrowing limits with all three territorial governments. This review will ensure consistency in the accounting or debt instruments between the borrowing limit and the territorial government's own public accounts, as well as ensure territorial governments are clear about their authority and can make appropriate decisions about their borrowing. Moreover, we are focusing on the borrowing limits of all three territories, not just one. We are actively engaging all three territorial governments.
This NDP proposal would effectively toss aside this consultation process and impose a solution that territorial governments would have no involvement in crafting. As such, we fundamentally believe that such an issue should only come from a consultation process and a careful review and government to government dialogue.
There is a long tradition in Canada of federal-territorial matters like this being discussed directly between governments. It would be grossly inappropriate to push this tradition aside, pushing aside territorial governments on matters that directly affect them and dictate to the territories through a private member's bill considered only in the federal Parliament in far away Ottawa.
While the NDP may disagree, we believe it is important to be sensitive and to be engaged directly with the concerns of all three territories. That is why we are working collaboratively with their governments in the current review, and we will continue to do so in the future.
To that end, our government strongly believes the review currently under way and the spirit of our collaborative work with all three territorial governments should be allowed to continue. This is a sign of respect.
On the other hand, to unilaterally impose a new borrowing limit on a territorial government without even consulting it, as this flawed NDP proposal would do, is not a sign of respect. That has been demonstrated in the extremely muted and skeptical reaction we have seen to this proposal since it was first introduced last June.
For instance, I note that Northwest Territories Finance Minister Miltenberger has not endorsed this proposal publicly. Likewise, other regional politicians, like Deh Cho councillor Tom Wilson, have even publicly voiced caution about it. Let me pause here to provide a bit of background.
First, through the Northwest Territories Act, the NWT government is required to have its borrowing approved by the Governor-in-Council. Similar provisions are included in both the Nunavut Act and the Yukon Act. Each territory is free to borrow up to the total borrowing limit established. I should note the federal government does not review individual territorial borrowing decisions within the limit. Such decisions are the territorial government's alone to make.
This existing framework sets fixed borrowing limits for each territory to operate within, providing them with certainty about their authority to borrow and the development of their fiscal plans. I underline once again that this is a framework that applies to all three territories equally.
This unsound NDP proposal we are dealing with today, on the other hand, would give one territory preferential treatment, completely ignoring both Yukon and Nunavut. Our Conservative government understands all territories should be considered equally when speaking of borrowing limits, which the NDP proposal clearly does not.
Another problem with this faulty NDP proposal is that it would tie the borrowing limit of the Northwest Territories to total estimated revenues. However, total estimated or projected revenues can and do change significantly, even from year to year. This is especially true for resource-based territorial economies.
While territorial governments are accustomed to this variation, this troubling NDP proposal would unilaterally expand the consequences of this variation for territorial decision makers and their borrowing. This would not be helpful. What is more, it is not even feasible.
For example, how would this estimated revenue number used to calculate territorial borrowing limits be generated? What information would be used? When is the estimate to be done and by whom? Does the federal government have to review this information? Does it have to agree with it? How will the Auditor General review it to ensure that it is transparent? The NDP proposal provides zero answers to any of those key questions.
For the information of parliamentarians, let me remind them how limits are currently set. A territorial government's own economic and fiscal outlook, chiefly the revenues from the economic activity within each of the territory's borders, forms a primary consideration. This is an objective and a prudent way to establish borrowing limits as it reflects the actual economic reality of the territories themselves.
On the contrary, this misjudged NDP proposal would not make revenues from economic activity within a territory the chief consideration. Rather, it would create an artificially elevated combination of territorial tax revenues along with various federal government supports, both temporary and permanent. This would include territorial formula financing, support for health care and even one-time initiatives.
In summary, the NDP proposal would unilaterally impose an unworkable, uncertain and unequal framework on the territorial government's borrowing authority. This is not in the best interest. The territories would and should be opposed.
What is more, our Conservative government has already undertaken a more responsible and respectful course of action by working with all three territorial governments to review the borrowing limits collaboratively.