I am concerned and from a business perspective of the costs of complying with the act. From a business perspective and knowing that no one likes to pay taxes and how when something is imposed on someone they are always trying to find a way or means to get around it to put it in nice terms, so the compliance auditor or your analyst, I believe they will have a tough job. We know how large the north is. We know we have construction projects with people working all over the place. So, my concern is I think you may be underestimating the compliance aspects, and I am just curious how do you intent to ensure that the people we are trying to retrieve taxes from, that they are the persons we are targeting and they are going to pay their rightful dues?

Mr. Chairman, we are using the same kinds of forms that people fill out under the Income Tax Act and we are doing that purposely. So, we will be provided, hopefully, with the same information.

With regard to how do we know where people are and what they are doing, there has been some communication with the WCB, people have to file with the WCB when they are up here. There are also compliancies with regard to business licences and so on and so forth. I guess I go on the premise that if you are a company and you are an upstanding company in the Northwest Territories, you will not try to duck out on paying taxes. I am trusting those people to comply with the legislation. Thank you, Mr. Chairman.

(Microphone turned off)

I would still like to hear some kind of impassioned plea from the Minister to convince me that this is the right thing to do, that we are doing the right thing. People in the Northwest Territories and I know we are going to deal with the amendments to the Income Tax Act next, but by imposing this payroll tax that it will not be a progressive tax and not something we are going to see increase annually to offset more upcoming one time costs because we know there is going to be more, or we hope there will be more decentralization, we know there will be more amalgamation of departments and hopefully after this weekend in Providence, a new strategy on how we do business and where the government is going. So, I need to be assured that this is not going to be a progressive tax and that it is not going to hit the lower income people. I know your threshold level is about $66,000, but I also note in your budget address that you talk about non-employment income and business investment in forms of pension income would not be subject to tax and I have some concern about that because in 1990-91 your taxes to commercial businesses were reduced and I have not seen the offset increased. The self-employed people in business and professionals are not going to be hit with the taxes. I also note -- I am reading from page 36 of your budget address -- hunting, fishing and trapping income would also be exempt unless earned by an employee. We know in the north that many employees use hunting, fishing and trapping to offset their incomes and to use it for subsidizing their living, especially in many of our cases we do hunting to subsidize and offset our food and use northern foods. So, I am not clear what you mean by that because a good many people are hobby hunters, fishermen or trappers, and are employees. So, I hope that the income earned, and I have stated many times, the trapping income this year has not been good so there is not going to be a big return on it, but I hope the intent is not to capture the people in those categories. I need some assurance from the Minister.

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.

That was not as impassioned as I wanted it but there was a little passion in there. Thank you. Can I hear from the Minister that the cost of administration of this tax on businesses in the Northwest Territories is going to be negligible. Can you state that it will not be costing employers in the Northwest Territories an increased burden to administer this tax?

Mr. Chairman, it is going to be reasonably negligible. They are going to have to change some of their computer programs, the people who are generating cheques by Accpac or Bedford, or any of the other programs which generate payroll. However, I think the employers end of this part of balancing our budget is the extra time that it is going to take for someone to make that additional deduction and then make a remittance back to us in the form of a cheque to remit what they have taken from their employees. I cannot say it is going to be negligible but certainly it is their contribution to balancing the budget. Mr. Chairman, I would point out that there will be only 79 companies who will be remitting monthly. There will be 68 companies remitting quarterly. There will be 316 companies remitting semi-annually. There will be 2,268 companies who will be remitting annually. Mr. Chairman, I will not have to tell those companies that as they deduct the money from their employees, and if you are a small company and you do not have to remit until the end of the year they may get the benefit of those funds for a month, quarterly, semi-annually, or annual. I do not know how they conduct their business but it would appear to me that they would be gathering funds that they would ultimately remit to us. Thank you, Mr. Chairman.

My final comments, Mr. Chairman. I have expressed my viewpoints and my position earlier on today. We have been wrestling with this since it was first proposed. I am in a similar position that Mr. Arngna'naaq had indicated, between a rock and a hard place, in terms of where I personally sit on this issue. Many of my colleagues made comments earlier on how they felt about the process. I made some comments also. I do not think the process was well handled. It would have been difficult going out to employees and telling them we want to tax them and ask them how they felt about it. I know the response you would get. I still feel that they deserve an opportunity to express their feelings. So far, we and a few selected people have expressed our feelings on this proposal. I have also expressed my concerns in the Standing Committee on Finance. I believe, very much, as participating in as many committees as I can. I believe very strongly in the committee structures and the processes that we use in this Assembly. I stated in the Standing Committee on Finance, I was given an opportunity to talk, which I appreciate, even though I am not a Member of the committee. I stated to them that I would support whatever recommendations they came out with on this bill. However, they did not come to a full agreement. I have given it, obviously, a great deal of careful, sober consideration. I have listened to all of my colleagues and all of their comments. Earlier today I stated emphatically that as the bill stood and because of the comments made in the standing committee's report earlier that I could not support the bill. I have since in the last six hours changed my mind and I will not, at this stage, oppose the bill but I will not also be supporting the bill. I will stand by the SCOF recommendations and abstain from voting on it. Mahsi.

I do not feel that we can until we have a quorum. I think all Members should be here to approve the clauses.

For the record, whenever we talk about taxes and as a Dene I have certain rights with Canada under my treaty. One of the areas we have is the area of not paying taxes. As for the people who do not know this, as a treaty Indian whenever I travel in the provinces and even visiting the

reserve in Hay River, I do not pay taxes because I am a treaty Indian and I have a treaty card. That gives me the right not to pay taxes, GST, or if I work on a reserve I do not pay income tax. So, these are the rights as a treaty Indian I am entitled to. I was asked by Members in my constituency who are treaty Indians, if this new tax we are trying to impose goes against those privileges. That is one of the areas where the chiefs have been saying it has not been cleared up between the government and the treaty Indians in the Northwest Territories. There are members in my band who have filed claim and got reimbursed by the federal government for being chiefs in the communities under designated band land. So, that whole area has not been cleared up with this government yet. Before clearing it up and having a good view of it, what we are going here is imposing upon the rights of treaty Indians. There are treaty Indians in this Assembly and on the Cabinet, and it is going to be difficult for you to vote in favour of something like this because you are imposing upon the treaty rights of your fellow treaty people in the north and that is one area that has not been cleared up.

In the land claims negotiation it was a very contentious issue. There are some regions that have presently negotiated and they are going to be paying taxes in the future in certain areas. There are other ones like in Treaty 8 in the south and Treaty 11 in my area, we have not negotiated that particular part. So, in that particular area I have been asked to raise this in the House that there is a real deep concern from people about peoples.

I understand that Treaty 8 Indians wrote a letter to the Standing Committee on Finance raising that issue on the original go-round for consultation. I was wondering if the Minister could tell me in the House if any work has been done to deal with this problem we have as treaty Indians. Thank you.

Mr. Chairman, this act will be exactly the same as the Income Tax Act of Canada and it will also respect the Indian Act. Mr. Antoine is correct that on a reserve, for instance the Dene reserve in Hay River, wages earned on that particular reserve are not taxed either by the federal government nor will they be taxed by this piece of legislation.

With respect to the treaties and the problem with the federal government and the concerns of the chiefs about taxation in general in their treaties, that issue has not been resolved. Mr. Antoine is correct, it has not been resolved and if it is resolved with the federal government then it affects then presumably, Mr. Chairman, it would affect this act as well. Thank you.

Agreed.

---Agreed

Clause By Clause