Oral questions. Final supplementary, Mr. Krutko.

Mr. Antoine.

Thank you, Mr. Speaker. Mr. Speaker, I think the first step is already done. We realize there has been a trend and we have asked the Department to review these contracts and the information it has shared with the House is what we are faced with. We are faced with a situation where as the honourable member is saying there is a problem out there. The instructions to the department is we have to look carefully at every project we have. The client departments will have to do that as well because the Department of Public Works is serving the client departments.

Together, we have to really look at each project to make sure we take into consideration the environment we find ourselves in. Like I said there is a big growth in Nunavut. Nunavut is drawing trades and contractors and in Alberta as well, where they are doing the same thing. The cost of mechanical is somehow higher than estimated. All these things have to be taken into consideration as we review all of these projects. Thank you.

Thank you. Oral questions, Mr. Steen.

Mr. Premier.

Thank you, Mr. Speaker. We plan on meeting this fall. I plan on calling the Premier's Panel Advisory Group together in the fall. Part of those discussions will be the new economic strategy for the Northwest Territories for west and east. It is important to know I believe through a new relationship with aboriginal governments, through a new

relationship and creation of a new Western Territory for the west which consists of many people, that it is important to involve as many people as we can before we move ahead. The Premier's Panel will be involved as well and hopefully, get out to as many communities, meet as many people as we can and get their concerns and advice documented as well. Thank you.

Thank you. Question period is over. I will allow the member to conclude his supplementary. I also want to, for today, apologize to the Member for Nunakput too. I was not quite paying attention to the Members on this side. Mr. Steen.

Mr. Morin.

Thank you, Mr. Speaker. By all means, they will be involved. It is a broad representation from across the Northwest Territories. Once we get draft, speaking notes, as well as the other issues of the economic strategy, pull in the whole transportation strategy, as well as, the training strategies and western governance. We will have to sit down and have some serious discussion on that. I think we are very fortunate to be in this House at this time and being able to make some key decisions on how the new Western Territory will be formed and the new government. Thank you.

Thank you. Question period is over. Item 7, written questions. Mr. Henry.

Thank you. Written questions. Item 8, returns to written questions. Item 9, replies to opening address. Item 10, petitions. Item 11, reports of standing and special committees. Item 12, reports of committees on the review of bills. Item 13, tabling of documents. Mr. Todd.

Thank you, Mr. Speaker. I wish to table a return to oral question, 607-13(5), provided to Mr. Roy Erasmus on June 1, 1998. Yesterday in this House the honourable Member from Iqaluit, Mr. Ed Picco, indicated this government was using a modified Hay Plan Job Evaluation System. The document I am tabling today indicates the GNWT implemented the Hay Job Evaluation System without modification. As well, during the last session of this Assembly, I tabled document 87-13(5) on May 25, 1998 entitled the Hay Job Evaluation System, and the GNWT Job Evaluation process.

Mr. Speaker, I trust this material demonstrates once and for all, for the benefit of the members of this Assembly that the GNWT implemented the Hay Job Evaluation System without modification. The job evaluation system that we are using is one of the two systems that the Human Rights Tribunal itself uses in determining the validity of pay equity complaints as indicated in its' recent treasury board decision.

In the case before the Public Service Alliance of Canada, the Canadian Human Rights Commission and the Federal Treasury Board, the Human Rights Tribunal in its decision of July 28, 1998, sets forth the process that has been established for the investigation of complaints by the Commission. Under section 11 of the Canadian Human Rights Act, clause 18 of the decision. It says, if an employer has an existing job evaluation system, or if you are listening, Mr. Ootes, the Commission uses section 9 of the guideline to analyze that the system and to determine its' suitability for a pay equity complaint. Otherwise, the commission uses the Aitken or the Hay Job Plan Evaluation System. Thank you.

Thank you. I would like to remind the Member of Keewatin Central regarding the rules on tabled documents and that the Member may make a brief factual statement to identify the document. In this case, I would have to say that the Member is misusing the rules. It is more appropriate perhaps for the Member to make it as a Minister's

statement. Tabling of documents. I would also remind the Member that my statement is also in the record about the statements.

Item 14, notices of motion. Item 15, notices of motion. Item 15, notices of motions for first reading of bills. Item 16, motions. Item 17, first reading of bills. Item 18, second reading of bills. Item 19, consideration in committee of the whole of bills and other matters. Bill 1, Family Law Reform - Statutes Amendment Act, Bill 2, Intercountry Adoption (Hague Convention) Act, Bill 3, Risk Capital Investment Tax Credit Act, and Bill 4, An Act to Amend the Income Tax Act with Mr. Ningark in the Chair.

Thank you. I would like to call the committee to order. Item 19, consideration in committee of the whole of bills and other matters. We have Bill 1, Family Law Reform - Statutes Amendment Act; Bill 2, Intercountry Adoption (Hague Convention) Act; Bill 3, Risk Capital Investment Tax Credit Act and finally Bill 4, An Act to Amend the Income Tax Act. I need direction from the Chairman of the OMC, Mr. Ootes.

Thank you. As Mr. Ootes indicated, he recommends that we deal with Bill 3, and then followed by Bill 4. Do we have agreement? We shall take a break and come back. Thank you.

--Break

Thank you. I will call the committee back to order. As indicated by Mr. Ootes and agreed to by Members, we will deal with Bill 3, Risk Capital Investment Tax Credit Act and Bill 4, An Act to Amend the Income Tax Act. I believe Mr. Todd is the Minister in this case. Mr. Todd are you prepared to make your opening remarks?

Thank you Mr. Chairman, I am. I am pleased to present today two bills that will improve access by small and medium sized northern businesses to equity capital. These are: Bill 3, Risk Capital Investment Tax Credit Act, and Bill 4, An Act to Amend the Income Tax Act. In 1996, the Investment Sub-committee of the Standing Committee on Government Operations recommended that the government consider investment tax credits as a means of encouraging investment in the north. In my 1997 Budget Address, I responded that the government would examine options for encouraging investment through the tax system, and in my budget this past January, I announced that the government intended to introduce a Northwest Territories Tax Credit Program. This program would encourage the private sector to market shares of the Northwest Territories businesses to northern taxpayers and encourage northern investors to purchase shares in northern businesses.

The bill allows a taxpayer to qualify for tax credits by purchasing shares in any one of the three venture capital corporations; labour sponsored venture capital corporations, employee venture capital corporations and community endorsed venture capital corporation. The bill requires the venture capital corporations, in turn, to invest the funds received from investors in the shares or subordinated debt of eligible businesses. A labour sponsored venture capital corporation must invest 70 percent of its funds in eligible businesses.

An employee venture capital corporation must invest 70 percent of its funds in the eligible business that employs the investors. A community endorsed venture capital corporation must invest 70 percent of its funds in eligible businesses that have been endorsed by the communities in which the employees of the eligible businesses live. The bill also allows taxpayers to qualify for tax credits by investing directly in the shares or subordinated debt of certain eligible businesses, referred to as territorial business corporations.

Bill 4, An Act to Amend the Income Tax Act, permits taxpayers, either individuals or corporations, to deduct from Northwest Territories income tax otherwise payable, an amount equal to the tax credits issued under the Risk Capital Investment Tax Credits Act, up to an annual maximum amount of $30,000 less any tax credits that may be deducted under the federal Income Tax Act. This bill just compliments the previous one.

The bill also permits unused tax credits issued under the Risk Capital Investment Tax Credit Act to be carried back three years and forward seven years and deducted from tax otherwise payable in any of those years. Because of a recently announced change to the federal Labour Sponsored Venture Capital Tax Credit, I will be introducing an amendment at the appropriate time to the Risk Capital Investment Tax Credit Act, to ensure that the Northwest Territories credit remains harmonized with the federal one. Thank you, Mr. Chairman.

Thank you, Mr. Minister. On behalf of the Standing Committee on Infrastructure, the honourable Member for Iqaluit, Mr. Picco, do you have any opening remarks?

Thank you, Mr. Chairman. Good afternoon, Mr. Chairman. The Standing Committee on Infrastructure reviewed

Bill 3, Risk Capital Investment Tax Credits Act, on August 27, 1998. The committee would like to thank the Minister of Finance and his officials for presenting the bill. The bill allows a taxpayer to qualify for tax credits by purchasing shares in any one of the three venture capital corporations; labour sponsored venture capital corporations, employee venture capital corporations and community endorsed venture capital corporations. The bill requires the venture capital corporations, in turn, to invest the funds received from investors in the shares or subordinated debt of eligible Northwest Territories businesses.

The committee noted that the introduction of tax credits may reduce tax revenues for both territories in the short term. Committee Members were also concerned with the potential short fall of government revenues to maintain current levels of programs and service delivery. Committee Members also pointed out the potential market disruption in smaller communities, and that the proposed venture capital corporations are more appropriate for larger communities where there is an increased level of competition.

The Finance Minister advised that the government's view, business start-ups and expansions as a result of venture capital investments would enhance government tax revenues in the long run through increased employment, and potentially produce a proportional reduction of income support clientele. He further added that access to venture capital funding is open to all eligible businesses thus minimizing any potential market disruption in smaller communities. The Minister agreed with the committee that there should be an established regulatory process to ensure adherence to the act and provide reasonable protection for investors.

Finally, committee Members were concerned with the exemption powers the bill gives to the Finance Minister, not to Mr. Todd, but to the Finance Minister whomever that may be, setting caps and time limits for venture capital procurement and investment. The Minister advised that the government must remain responsive to any potential changes in its operating environment. Mr. Chairman, following the committee's review, a motion was carried to report Bill 3, Risk Capital Investment Tax Credits Act, to the Assembly as ready for committee of the whole. Additional comments or questions of Members may be posed as we proceed. If you would like, Mr. Chairman, I could go on and give the over view of Bill 4, at this time also.