Mr. Chairman, I just want to make some comments, because I was responsible for originally introducing this bill, and presenting it to the Standing Committee on Finance. I will take the liberty of making some comments.
Mr. Chairman, as I said when I introduced the bill, at that time, it is easy to assume that a small percentage increase in the premium tax in the Northwest Territories, will automatically translate into increased premiums rates. Premiums, and I think I explained this to the committee at the time, are set, based on a much larger area than the Northwest Territories. They are set by these large, sometimes multinational insurance companies, and there are a whole range of factors that are taken into account.
One principle factor is the lost rate, or the accident rate, and I think it is fair to say, although no one can predict for sure, it is unlikely that a small adjustment in the tax rate in our very small jurisdiction, is going to have an impact on premiums that are set by national companies for much larger areas than the Northwest Territories. You know, our population is relatively small when you look at the size of these insurance companies.
So, I would not want the public to assume that there is going to be a direct correlation between premium costs, and this tax. In fact, if loss rates go down nationally, we might well have a reduction in premiums. Or, if they go up nationally, we might have an increase in premiums quite apart from this relatively small factor of the premium tax.
So, I do want to repeat what I said in introducing this bill, that the N.W.T. is a small part of a very much larger country, and jurisdiction, and it is simplistic to suggest that this adjustment is automatically going to be passed onto our consumers.
Mr. Chairman, I would just also mention that we get requests for additional spending in this House from ordinary Members, and the government has to try to respond where ever possible, and so it is incumbent on us to come up with what we think are reasonable sources of revenue, and this one seems reasonable. Yes, there are some risks, but people who buy insurance on new buildings, houses, or cars, they may have money to do so. I am not sure that when you recognize that we are facing declining revenues, and increasing demands for services, I would hope Members would put this request in the proper perspective, you cannot always ask for more programs and services, and, yet, turn down every revenue initiative that the government brings forward.
So I would hope that it can be considered in that context, that sometimes we have to make decisions that may appear to add a burden, although I am not sure that is the case. Sometimes we have to act responsibly, and make some difficult decisions. Thank you.