Mr. Chairman, I apologize for my lack of passion. I think Mr. Koe has raised an important point, Mr. Chairman. If people are believing if you are an employee and you also hunt, fish and trap that we are going to catch you, that is not what that means. Most of the hunter, fishermen and trappers in the Northwest Territories are self-employed, so they will not be affected by this tax. What that means though is if you are an employee of a trapper, if a trapper has someone working for him or her and is earning a salary from that hunters or trapper, then there would have to be a charge of one per cent payroll tax on the employee's salary that he or she received from the hunter, fisherman or the trapper. So that is what that means. It does not mean if you are an employee of some company and on the weekend you are out trapping, that you are going to pay. You would only pay the payroll tax on the money that you earned from your employer.
Secondly, Mr. Koe wants me to tell him why this is a good deal. Mr. Chairman, it is really difficult being a Finance Minister anywhere in Canada today. We all sit down and try and figure out new ways to do things and try and do it in a way that gives people the least amount of pain. Yes, I did have the option of increasing business taxes in the Northwest Territories. Certainly, they had been reduced in previous years, but with the economy the way it is at the present time, I did not want to put an extra burden on those businesses, but I did want to try and capture those people who earn a living in the Northwest Territories and do not pay any taxes here. So, I zeroed in on those people, it took as considerable amount of time for the department and its staff to put together something that would be, acceptable by the federal government. As Mr. Patterson said earlier, earlier attempts at this were rejected by the federal government. So we had to come up with something that was acceptable to the federal government and they did agree that they would handle the tax credit system for us.
At the same time, and as I said in committee, Mr. Zoe had been one of those people in the House who had been talking about some credits for lower income people, so at the same time as we were looking at the payroll tax and the tax credit system, we made a conscious decision to try and improve the lot of those people who do not earn a lot of wages in the Northwest Territories. That was to recognize that it does cost more money to live, work and spend 365 days per year in the Northwest Territories.
I agree that we are not going to get those self-employed people who, for one reason or another, own companies and do not draw by way of salary or wages benefits from that company. If those people are taking dividends or cash withdrawals which do not include a pay cheque whereby they are deducted for CPP, UIC and for income tax, then those people will not pay payroll tax, but they will be eligible for the tax credit system. I admit that, Mr. Chairman, and I tried really hard to figure a way to get those people and I could not figure it out. Although, a novel idea was presented to me at the break earlier this evening and that would be to send a letter to all those people and say, "I have not been able to get you with the payroll tax because the administrative costs would be too great, but you are receiving the tax credit because you are filing an income tax form with the federal government, which entitles you to the tax credit. So would you voluntarily supply a tax credit back to the Government of the Northwest Territories." Mr. Chairman, I am tempted to try that.
---Laughter
Just to see if it works. I am serious, I am tempted to try it. On the other end of the scale, this tax does not affect those hunters and trappers in the Northwest Territories who are not earning a salary from their own companies. If they are self-employed and doing the same thing as those rich people, then they indeed will not pay the payroll tax, but they will receive the tax credit as well. There is some good in the lower end, people do benefit.
With regard to will we increase this tax? Mr. Chairman, I have no intention of increasing this tax. It certainly is there for a purpose and I do not see this tax being able to address any future big money that this government may require. It is just a part of a package of coming up with a balanced budget. There has been reductions in departmental spending, there has been reductions in travel, deputy ministers have been very cognizant of our poor fiscal position and have been very responsible and cut back. We have eliminated a number of positions, we have stopped the growth of government spending. We have increased personal income tax by one per cent. We have started to charge for services that we did not charge for before. There is a new housing strategy, we are trying to get out of the housing market, it may not appear that way sometimes, but we really are trying to get out of housing. This is just one part of that overall package to bring us to a better fiscal position. I know that it is sometimes hard for Members to keep up with how these things tie together, but believe me, ultimately at the Department of Finance we do tie all of those numbers together. By doing this particular exercise, people say you are only going to $500,000, $2 million or $2.1 million out of this. The fact that it is part of a larger package, it is bit of a strategy whereby this is just a piece of it, overall we will attain a balanced budget and we will come out of this in a better fiscal position. It is true that earlier this evening somebody mentioned that we will be the only budget that will be balanced in Canada this year. The Yukon have made some drastic steps now and it is my understanding that they will be in a position of some $440,000 surplus this year as a result of drastic tax increases and they have made some cut backs. I understand the year before they were in a deficit position of some $58 million. They have changed things around dramatically and there will be two jurisdictions in Canada this year, assuming these bills pass, that will be in a balanced position. Mr. Chairman, at the present time, as we sit, if these bills pass, we are actually in a deficit position of some $992,000. I would hope that I would be able to pick that up throughout the year, here and there, and perhaps cut back on some of the supplementary appropriations. I think I have addressed the issues that Mr. Koe brought forward. Certainly people should not feel, and I cannot speak for future Finance Ministers or future governments, Mr. Chairman, but people should not feel that next year I am going to bring this bill back and ask for an increase, because I can count and I know there is 15 on that side and eight on this side, and I do not think I would get away with it. Ultimately where there is these tax measures if a new government or if a new Legislative Assembly or a new government of a new Legislative Assembly want to increase this tax they are certainly going to have to bring it before these people. Ultimately it will come back here. It is not giving me a blank cheque to be able to go out and insert the numbers which I think are required. Thank you, Mr. Chairman.