Thank you, Mr. Chairman. The Standing Committee on Finance reviewed this bill at meetings on April 1, June 9, June 12, and June 22.
The Standing Committee would like to thank the former Minister, and his staff, who appeared before the committee to answer the questions of the committee on this matter.
Mr. Chairman, this bill would amend the Insurance Act, as the Minister said, to allow insurance companies to use both print of a separate size to warn of the amount payable on their insurance contract.
It also amends the act to increase the insurance premium tax rate from two to three percent, and to raise the fire tax rate from one half percent to one percent.
The Minister informed the committee that these increases would place the Northwest Territories rates in the middle of the pack relative to other jurisdictions in Canada. The department estimates that these increases will provide an additional revenue of $375,000 annually. Are you listening, Mr. Minister?
Several Members of the committee were concerned that these increases would simply be passed onto the consumer, in terms of higher premiums. This could be interpreted as a hidden tax on the consumer.
The Minister informed the committee that the insurance premiums are set on the basis of accident claim ratio and other factors, and it was highly unlikely that these increases would translate into increases into insurance premiums in the Northwest Territories.
It should be noted, that despite the Minister's assurances, several Members of the committee continue to have serious concerns about these increases, and may wish to pursue them today. Mr. Chairman, the committee agreed at its meetings on September 14, 1992, to refer this bill to the committee of the whole for consideration.