The motion is in order. To the motion.

Question.

Question has been called. All those in favour? All those opposed? Motion is carried.

---Carried

Does this committee agree that Committee Report 20-12(3) is concluded?

Agreed.

---Agreed

Thank you. What does the committee wish to do now? Member for Thebacha.

I think Members want to address Bill 27, Payroll Tax Act, 1993, and then we will attempt to do the rest of our tabled documents that are on the order paper.

Does this committee agree?

Agreed.

---Agreed

Thank you.

Bill 27, Payroll Tax Act, 1993. Mr. Minister, do you have any opening remark?

Introductory Remarks

Thank you, Mr. Chairman. Mr. Chairman, much of what I am going to say has been said, but for the record, on September 10, 1992, in the Budget Address I announced the introduction of a one per cent payroll tax to be effective July 1, 1993. Bill 8, the Payroll Tax Act, received first reading on November 27, 1992, and was referred to the standing committee on finance. Mr. Chairman, as part of its review of the bill the committee invited submissions from interested parties, and the standing committee tabled its report on February 18, 1993. Mr. Chairman, the bill before the committee today is Bill 27, Payroll Tax Act, 1993. The previous bill had been revised into Bill 27 after seriously considering comments and suggestions made by the standing committee on finance and by the organizations and individuals who responded to the standing committee.

Mr. Chairman, changes were also made as a result of subsequent public consultation and these changes as well as those resulting from the recommendations of the standing committee on finance include an exemption for members of religious orders who take a vow of poverty to match the exact exemption in the Income Tax Act and an exemption for housing for clergy also to match an exemption in the income tax act. There is also an exemption for those who normally work outside the Northwest Territories but who might work in the North for a short time. Mr. Chairman, this exemption will make the tax simpler to administer for southern employers who may send employees to the North for a few days at a time, but it will not significantly affect revenue. Also, Mr. Chairman, to clarify of section 4 which allows the Minister to deem employees of related non-resident sub-contractors to be employees, this section is intended only to prevent tax avoidance and will not normally affect Northwest Territories businesses.

There is also inclusion of office holders in the definition of employee to clarify that M.L.A.s, judges and corporate board members will be subject to tax. Mr. Chairman, the payroll tax is a way of taxing the earnings of individuals who work in the Northwest Territories but who do not pay personal income tax in the Northwest Territories. For example, individuals who work at isolated sites or in seasonal construction jobs may not be residents on December 31 and therefore pay no Northwest Territories income tax. Most residents, Mr. Chairman, of the Northwest Territories will pay less tax after considering both the payroll tax and the cost of living tax credit. Mr. Chairman, the payroll tax is an important part of this government's effort to reach a balanced budget. It will raise some $8.2 million in 1993-94 and $11.7 million in 1994-95. Mr. Chairman, I realize the concerns of the committee members with regard to the amount of time that was allocated to discuss the bill. I also hear the words coming across the floor that we are sitting here late on a Friday night when we should be done discussing this bill.

As I said in question period today, Mr. Chairman, we had been planning to be back here next week, either April 5 or 7 or April 6 or 7, to finish up work after out trip to Fort Providence and the government had considered that these two bills, Bill 26 and Bill 27 along with supp number one for this particular year would be those items that would be on the order paper and that it would have given us a little more time to consider the bills. I do apologize for the short space of time. I apologize for, as it were, creating this late sitting, and I would be prepared at this time, Mr. Chairman, to ask for the admittance of officials and then respond to questions with regard to the bill. Thank you, Mr. Chairman.

Agreed.

---Agreed

Thank you, Mr. Chairman. Mr. Chairman, on my left is Diane Buckland, legislative counsel with the Department of Justice, Government of the Northwest Territories. To my right is Mr. Eric Nielsen, the deputy minister of Finance and next to him is Mr. Jean Guertin, the director of fiscal policy for the Department of Finance. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Mr. Chairman, first of all in the definition of "assessment." "Assessment" means "an assessment, reassessment and additional assessment made under this act." That includes the confirmation of variation of an assessment under subsection 32(6). I guess that means we may assess, reassess or make any additional assessments to an employer at any time. That the Minister may assess, reassess or make any additional assessments on an employer at any time where there is misrepresentation attributed to neglect, carelessness or wilful default or fraud or be within six years later of the time the return should have been filed or when it was actually filed. Thank you, Mr. Chairman.

Employers will be assessed. That is correct, Mr. Chairman.