Thank you, Mr. Chairman. As the chairman of the Standing Committee on Finance, I must say that this was a very tough bill to deal with. We took many hours of meetings, early mornings, late in the evenings and even on the
weekends, to deal with this situation. We have come to the point now where the committee has made a report to the House to allow it to go into committee of the whole.
My original position, which I had related to the Minister of Finance earlier on in the deliberations and discussions which went on in the discussion of the payroll tax was that, we suggested to him why do we just not table these documents at this sitting and deal with it in a public consultation process through the spring, summer and fall, and we will deal with it in the fall. The argument there is that the fiscal framework is already built, and the money this tax will generate is already worked into the budget. If we are to do that, then we will have to cut some programs and cut within. With the amount of requests, financially, to provide programs and services at the community level it is already as skimpy as can be, and there are yet more demands for more funding. The argument of the government is that. I understand that argument. I appreciate what a hard job it is to run a government and you need the funds for that. However, that is the way I would like to see it done. Unfortunately, we are here to decide to vote today, later on, on this bill.
My concern is that there is a need for proper consultation process. I feel obligated to this bill in a way because we helped to make the necessary technical changes to make it into a better bill through our recommendations and through our tax expert, the consultant we used. In that way, we feel a little bit of ownership toward this payroll tax. The problem is we are asking, the government wants to ask us to create a payroll tax to take money from the workers in the Northwest Territories, as well as the southern fly-in workers. My understanding of the percentage we are going to generate from the southern fly-in people is between 15 to 20 percent of the money that it will generate. So, the majority of the money which is going to generate from this payroll tax is from northerners.
However, the attachment to the amendment of the Income Tax Act which was given to us, indicates that the majority of the people who are poor and do not make that much money will not benefit in the end. That way it is a good tax. However, I question whether it should be in the form of the payroll tax act because what we are doing is creating another creature and this creature is going to be there for as long as possible, I guess. The nature of the tax is that it grows every year, one per cent, two per cent, three per cent. How long is it going to? We saw that with personal income tax. Then there is the business tax and the GST as well. When the personal income tax went up in the fall session by one per cent, because it is already an existing tax structure there was not that much concern by the public. It went from 44 per cent to 45 per cent. However, the payroll tax is, like I said earlier, a new thing and the amendment to the income tax, while you get a tax rebate it is a separate act altogether, so they are not really tied together. So, I am thinking about the future and what we are creating. It is one per cent now and we are going to generate some funds. However, in the future when another batch of politicians will be sitting in our place down the line, if the payroll tax is up to four or five per cent, and maybe if they decide to take the amendment to the income tax at that time, then you have another tax infrastructure in place. Because these two acts are not tied together, that could happen. I know the Legislative Assembly will eventually have to decide, but who knows how to predict the future. I do not. I am just cautioning people in the House of what it is we are trying to do.
My concern is about the future of the people in the north. I know it has been said by the government that when you are going to consult with people about tax that everyone is going to say they do not want any more taxes. However, we have said in the beginning of this Assembly that we want to have more open government and we want to have more involvement by people in important decision making. I feel it is important, especially when you are talking about asking the people who work hard for their money to pay this one per cent. They are the ones who count. They are the ones who voted for us and we have already made a commitment to them that we are going to let them be involved in all the decision-making. We do that in programs and services but in this case it is something that people work hard for and feel they are entitled to the money they make. A government such as this has the authority to create a whole different tax body that has the authority to take their hard-earned money, and I have some difficulty with that.
You are probably wondering as a Member who sits on the Standing Committee on Finance we were in a dilemma. We could not come to a solid consensus on whether to support the bill the way it is or not. The reason for me speaking and the type of recommendations we made is that it allows for individuals and the committee to express their views publicly. This is another commitment we had made to the people in the north is that we would have a more open government. This is a good place to discuss this payroll tax in public before the decision is made. That is the reason why I am expressing my concern about this payroll tax. It is a difficult one and everyone will have to make a decision when the time comes.
I want to reiterate my position. What I would like to see is that preferably if we could deal with this item through a consultation process in the spring, summer and fall and then deal with this item in the fall, I wonder if that is possible and I wonder if the government has already possibly looked into its own operation to see how they could make up the shortfall. I understand it is between $6 million and $8 million, but that could be conservative at this time.
I understand the principle. I agree with the principle of the tax that we should try to capture the tax dollars that are escaping us. We should set a net for southern workers who come in and try to capture the tax dollars from them. I feel we should, to do it fairly for the people who put us here, try to deal with it in a more reasonable manner. I say reasonable because some Members feels that the process is flawed, as we indicated in our report and that the consultation process was done in a way that not everyone had an opportunity to look at the tax. The tabled document which was sent to the people who were consulted is different from the document which was read for the first time in the first reading. There were differences in the documents from the tabled document to the document which was read for the first time, the other day. We checked this out. We were told and we were satisfied that there were not very big changes between the two papers. The intent and the content of tax act is still the same even though there were some changes. For all these reasons, I feel that I would prefer to see this bill be dealt with over a longer period of time, perhaps deal with it in the fall. Those are my general comments, Mr. Chairman.