Thank you, Mr. Chairman. Mr. Chairman, this legislation will amend the Northwest Territories Income Tax Act to allow the Government of the Northwest Territories to implement the NWT Child Benefit, an initiative I announced in the budget address in January.
The NWT Child Benefit is the GNWT's contribution to the National Child Benefit Program. This is a joint effort by the federal, provincial and territorial governments to reduce child poverty in Canada.
We know that child poverty can have many unfortunate consequences, poor nutrition, mental and physical health problems, difficulties with the law, poor school performance, and ultimately, fewer job opportunities in later life.
This legislation will provide a benefit of at least $330 per child for all NWT families with net incomes of $20,921 or less. In addition, families with working income of $3,750 or more will receive an additional territorial worker's supplement. The supplement will be phased in so that the maximum benefit becomes available when working income reaches $10,000. The maximum amount will be $275 for the first child and $75 for the second child.
The maximum annual NWT Child Benefit, including the supplement, will be $605 for a one child family, $1,010 for a two-child family, and $1,340 for a three-child family. The benefit will begin to be phased out when the family net income reaches $20,921. The income level at which it would be eliminated for any individual family will depend on the number of children in the family. We estimate that about 60 percent of the NWT children will receive some benefit under this program.
The NWT Child Benefit will not be offset by lower social assistance payments. Starting this July, the federal government will be increasing the federal child benefit for low income families. Under the agreement reached between the federal government, the provinces and territories, the increased portion of the federal benefit must be treated as income for social assistance purposes. The provinces and territories must reinvest the savings in programs aimed at reducing child poverty. We have chosen not only to reinvest our estimated savings of $2.2 million in the NWT Child Benefit Program, but also to inject an additional $2 million annually into the program.
This program will reduce the disincentive for families on social assistance to earn wage income, since this portion of their income will not be reduced. In addition, the territorial worker's supplement provides an actual incentive to enter the work force, in order to receive the additional benefits.
The NWT benefit will be administered by Revenue Canada and delivered monthly together with the federal child benefit in a single cheque. The two amounts will be shown separately for information purposes.
If legislation is passed by June 30, 1998, the first payment will be issued on July 20, 1998.
The benefit will be paid to the children's primary care giver, the same parent receiving the federal child benefit. Usually, this is the mother.
In most cases, there will be no need for families to apply for the benefit. Families will be automatically considered for benefits if they have filed income tax returns as NWT residents. An application will be required following the birth or adoption of a child.
This legislation will result in low-income families being better able to meet their children's basic needs. In addition, low-income families will have an incentive to enter the work force if employment is available.
Finally, Mr. Chairman, this amendment to the NWT Income Tax Act also allows for the electronic filing of tax returns. This part of the amendment will not affect the administration of the act in practice, since Revenue Canada has accepted electronic returns from NWT residents for several years.
Thank you, Mr. Chairman.