Thank you, Mr. Chairman. There is a small reduction in the 1994-95 expenditure budget of the Department of Finance as a result of the reduced interest expense on redeemed Northwest Territories Power Corporation bonds.
On the revenue side, the payroll tax, which was implemented in July of 1993, is estimated to generate new revenue to this government of $11.7 million in 1994-95. Partially offsetting this revenue is the estimated administration cost for 1994-95 of $222,000 and three person years.
During the current fiscal year, the department solicited proposals for government banking services. The contract resulting from this proposal will achieve the realistic objective of delivering limited banking services to communities.
The fiscal policy division of the department has devoted a significant portion of its time to negotiating formula financing with the federal government. A method was developed to eliminate perversity from the formula, which was proposed to the federal government. Discussions have been held with the federal government regarding this issue and proposed changes to the GDP ceiling and the treatment of investment income.
Mr. Chairman, the 1994-95 grant from Canada is forecast to be
$878 million, up $43 million from the 1993-94 main estimates. Increases in the grant are attributable to formula financing growth factors, such as population and national GDP, but also to the failsafe arrangement in the formula which offsets the decline in tax revenues.
Mr. Chairman, the taxation revenues for the Department of Finance, shown on page 04-14 of the main estimates, do not include the revenues from the two percentage point increase in the corporate income tax rate. Corporate income tax revenue for 1994-95 is now projected to be $28.853 million.
Tobacco tax revenues shown for 1994-95 were developed prior to the federal government's decision to reduce excise taxes on cigarettes by $5 per carton. Once this government decides on the territorial response, these figures will be adjusted appropriately.
Taxation revenues are expected to be $133 million in 1994-95, down $11 million from 1993-94 main estimates. This decrease is due to a very sharp decline in corporate tax collections which has resulted from a large fall in taxable income reported by a few large corporations and a general reduction in corporate profits associated with the recession in 1992. Because 1992 tax returns were not assessed until later in 1993, lower corporate incomes in 1992 will reduce our tax payments from the federal government in 1993-94 and 1994-95.
The increase from $8 million to $12 million in payroll tax collections between 1993-94 and 1994-95 is due to the fact that the tax was only implemented for three quarters of the 1993-94 fiscal year. Other tax revenues are showing only small changes.
In total, Mr. Chairman, revenues budgeted in the department of Finance are expected to increase by $29 million over the 1993-94 main estimates.
The expenditure budget has been reduced by $592,000 related to the interest on redeemed NWTPC bonds. This is partially offset by an expenditure increase of $222,000 for payroll tax administration and $223,000 for increased insurance premiums.
In total, Mr. Chairman, the department's expenditure budget will decrease by $147,000 over the 1993-94 main estimates and by $692,000 over the 1993-94 revised forecast. Thank you, Mr. Chairman.