Thank you, Mr. Speaker. Mr. Speaker, I wish to table the following document entitled Investing in Roads for People and the Economy: A Highway Strategy for the Northwest Territories. Thank you, Mr. Speaker.

Thank you, Minister Steen. Item 13, tabling of documents. The honourable Member for North Slave, Mr. Lafferty.

Thank you, Mr. Lafferty. Item 13, tabling of documents. The honourable Member for Mackenzie Delta, Mr. Krutko.

Thank you, Mr. Speaker. Mr. Speaker, it is a letter sent to Mr. Joe Handley from the Mayor of Fort McPherson. It is a motion to move that the territorial government be urged to pass legislation to empower communities to establish, collect and promote tourism development.

Thank you, Mr. Krutko. Item 13, tabling of documents. Item 14, notices of motion. Item 15, notices of motion for the first reading of bills. Item 16, motions. Item 17, first reading of bills. The honourable Member for North Slave, Mr. Lafferty.

Thank you, Mr. Lafferty. There is a motion on the floor. The motion is in order. To the motion. Question has been called. All those in favour? All those opposed? The motion is carried. Bill 17 has had first reading. Thank you. Item 17, first reading of bills. Item 18, second reading of bills. The honourable Member for Weledeh, Mr. Handley.

Thank you, Mr. Handley. The motion is in order. To the principle of the bill. The honourable Member for Weledeh, Mr. Handley.

Thank you, Mr. Speaker. In the development of our economy, we have to take into consideration the need to have an economy that is diversified, that is not based on any single industry or single one or two industries. We have put a great deal of emphasis on our non-renewable resources. We have spent a lot of time and energy over the last few years on diamond mining and getting that industry started and the value added pieces that go with it. We have also dealt with oil and gas development much more recently and with a tremendous amount of effort. We have put a lot of effort into our traditional economy.

Tourism is a tremendously important industry around the world. It is a $425 billion industry and it is growing at about four percent per year. It is growing by $20 billion. It is huge. We have a beautiful land here that we live in and it is an area that tourists should be coming to in droves, but unfortunately, if we look at the statistics, our summer tourism is down. We are fortunate in some parts of the Territories to have Japanese tourism up. Japanese tourism is growing by 20 percent a year. Hopefully it will continue to grow. We are fortunate as well that business travel is up. It is up considerably recently and it is tied probably mostly to the increased activity in oil and gas and diamonds and so on, but we cannot count on those. We cannot be satisfied to just see the Japanese tourists growing and the business travel growing. We need to be proactive on this. We need to continue to work.

What would happen if something happened in Japan and the Japanese tourism went flat on us? We would see a tremendous loss in activity here. The same thing applies to our non-renewable resource industries. In Yellowknife alone, we see this year a lot of optimism on the part of businesses. There is a 45 percent increase in rooms in the Northwest Territories. People are optimistic about tourism. We need to find a way of being able to help that industry grow.

The hotel industry itself is probably a pretty good indicator of what is happening. We see that a large number of people who stay in hotels are from the North. A large number are government employees or agencies paid for by government. We see in the smaller communities in particular sometimes very low occupancy rates. Even in Yellowknife, which is the centre, we still see occupancy rates around 60 percent. With that 45 percent growth in hotel rooms, it is going to become even worse.

What is the answer to it? Mr. Speaker, I would say that the main answer to both our economy generally and also to the hotel business is let us do something to get our tourist numbers up. As a government, we have been doing a fair bit. We continue to put $2.5 million into this industry. This is more than we even put into some of the other areas such as the diamond industry or even in oil and gas, but it is not enough. We are not doing enough. While we see industry around the world growing, our tourism business is either declining or it is, at best, holding its own. We need to do something. I ask you to work with me. Let us find a way of improving that industry.

I think it is really dangerous when I see our small airline operators, for example, saying that if they did not have medical travel contracts, they would be broke, or seeing our hotels in a situation where if they did not have government money paying for people to stay in their hotels, they would have to fold up. Worse yet, seeing a lot of hotels in small communities that are probably on the verge of folding, or seeing people who used to make their living on the land who cannot do that anymore. There is not enough money in it. It is too expensive. They need a way of getting more cash into their businesses.

We have a lot of room for tourists. We could probably take ten times as many tourists into this land and still not see any impact, still be able to have a place that people could believe and quite possibly be the first ones who have stepped on that piece of land. People want that. I think people want to come to Canada.

The Canadian Tourism Commission reports statistics show that tourism to Canada is on the rise, but it is not happening in the Northwest Territories. I believe we lost a lot of ground in the last few years. We lost ground in the time of division. At that time, Nunavut got a lot of attention and we did not get very much. People did not know where the Northwest Territories was. I had one of the businesses, in fact, a hotel business, tell me that they were moving their headquarters to Vancouver because people do not know where Yellowknife is. When it goes to the Toronto Stock Exchange, they do not know where Yellowknife is. The answer is not to see our businesses move out of here. The answer is to make this place known around the world. We need to work together on that.

It is a difficult time for us right now from a fiscal situation. We are still facing a deficit. We need to manage that side but we cannot just hunker down and look after our deficit and do nothing. I think the time is now and I believe strongly for us to make a difference in this important area of our economy. It employs a lot of people. It employs a lot of people in the communities. It employs a lot of people in Yellowknife. It is a very diverse industry that has an impact right from grocery stores to hotels to taxi companies to airlines to restaurants to hotels to tour groups to almost everybody. It has more impact broadly in terms of the communities and within a community. It is a critical one.

We do not have a lot of money to put into tourism. Even though it is very easy to say find it from within, how many times can we keep finding it from within? I am doing everything I can just to find money from within or find savings from within just to manage the deficit. I keep track of how many times people say we should find it from within or how many times they say different things are priorities. I know one Member across is now up to 18 or 19 different things that we have to find money from within for because they are all high priorities. We cannot keep doing that. There has to be a better answer than that.

We need two things, generally speaking. We need to be known internationally. That means marketing the Northwest Territories as a destination. We also need the services and products tourists expect. That means training. That means development of products. That means an expensive marketing campaign.

As the committee that worked on Common Ground went around the communities, they heard very clearly from people that tourism is an important part of our economy. We have to give it more priority than it has met with in the past. We cannot be focused just on a couple of major industries. This is also recognized in Towards a Better Tomorrow, the document that we all had a hand in crafting. I do not think tourism is an option. I think it is a requirement. It is absolutely essential that we begin for the sake of our small communities as well as our hotel industry, as well as our large communities, as well as the airline industry, everybody, that we take this seriously. That it not just be something that we flippantly say we cannot afford to spend any money on or we cannot take some of the pain that is needed to make the investments and get on with this side.

What do we do? We need dollars. As I said, we cannot keep finding everything from within. That is a challenge for me just to balance our budget. We have looked other places. We cannot seem to get the federal government's attention on an EDA. We have not had an EDA since 1996. We are continuing to work on that one and we will continue to work on it. If we can get money through an EDA, then I will be very happy; if we can get that through the tourism industry and build the tourism industry even faster.

We have looked at new sources of money from other areas. We have talked with the federal government on many occasions to try to get money for the non-renewable resources strategy so we would be able to move some money around. Again, we will continue to do that.

We have worked with Northerners through some of the main strategies we have worked on. We also worked on the hotel tax itself. Typically, if a government was going to introduce a new tax, we would not approach it the way I approach this one. You would not give people a year's notice, a lot of opportunity to discuss it, hear about it, think about it, have input into it. That is not the way governments would typically introduce a tax. We did it that way because this tax is linked to the tourism industry and I want people's input on how we improve that industry. I also wanted to give people the opportunity to have input into alternatives. What is the alternative? Is there a better tax? Is there a better way of getting revenues? I have to say a lot of people in industry have really put their heads to that one. I do appreciate the support I have received from industry in saying we want to work with you on this.

Of course, nobody likes a tax. I am even surprised when you go to the Hotel Owners Association, for example, to find that 20 percent of the hotel owners support a hotel tax. It is unheard of. People do not like taxes. I would have expected it to be around zero but the fact that we have at least 20 percent of the hotel owners saying, "It is not a bad idea. We have to put some money into this thing." is an indication that this is recognized by the industry. We have a lot of people who are saying I am against it but I want to work with you. So it is not a strong "No".

We have had people give us various options that they thought we should deal with. I am certainly listening to those and I will continue to listen to those. I have personally met with the Arctic Tourism Association. They say they want to continue working on it. They voted in favour of it. I have met with the Frontier Visitors Association who have some questions and we have been working with them. The hotel association on several occasions; the Fort Smith Chamber of Commerce; the Inuvik Hotel and Tourism Business Leaders; the Northwest Territories Chamber of Commerce; the Yellowknife Chamber of Commerce. We have hired a contractor, Nexus, to work with us and go out and do a survey and meet with people and listen to what their concerns are. Everybody agrees that more dollars are needed. They are working to address concerns. They are working with us on things like the formula for how we would have the supply with lodge owners, let us say.

I have heard from a lot of people and I have listened to what they are saying. I have heard from the hotel association and I have met with them. They have said, "Please delay this tax. Do not have it come into effect on April 1st. Give us some time to think of some options". They do not have any right now but I am listening. I told them I am willing to delay the implementation until July 1st. We will delay for some months yet and wait. I am ready to do that. I have told them I will and they appreciate that. They have written me a letter recently to that effect.

As I say, we are open to alternatives. I have heard what the bed and breakfast operators have said. We did not realize when we were drafting the proposed tax what the licensing rules/regulations were in the city and we have adjusted it so it only applies to bed and breakfasts, I am proposing, where there are more than four rooms because of a complication. We did not want to draw a line between some bed and breakfast operators and not others. So we are listening.

The administration of the tax itself, we have estimated at $100,000 for us plus a one-time $50,000. For the hotel owners themselves, there will be some costs but as one hotel owner told me, for most of them it is just the press of a key. We are prepared to work with them to get the software that is necessary. I am not going to go through the statistics on how much money it will raise and so on because we will never know how much it will cost until we do it because every hotel owner operates as an independent and they are not going to share a whole bunch of information with us and with their competitors.

The bill itself that we are proposing adds five percent on hotel room charges only. It applies to Government of the Northwest Territories and federal employees. That is fair. We will pay our share the same as everyone else does. Lodges, as I said, are treated differently. There is a formula for how they will be treated. This formula is based largely on the way the tax is managed in BC and Alberta.

There is research that shows that the tax will not make a difference at five percent to tourists. They will not go away because of a five percent charge. We have asked tourists who were here last summer and all of them I believe without exception said no, it would not make any difference. If they were planning to come here, they would come here anyway. Five dollars or seven dollars a night difference is not going to change their mind about where they go.

The administration cost for us is not going to be as bad as some people think it might be. The intention is to build up our capacity at the regional level. I mean every region. We will collect the tax from every region.

However, we do need training. The tourism training program has fallen by the wayside recently. We need to get that up. We need an ability to get programs back in place. That is the purpose of this tax.

If we do not achieve the objectives within three years, I have made the commitment to industry that we would repeal it. If we cannot show that this makes a difference in three years time, then we do not intend to have this thing continue. It is not a tax that is going to end up staying in government revenues. Every dollar of it will be identified. Every dollar of it will go back into the industry.

I just want to say in closing that we are on the verge of a tremendous opportunity. We have a huge industry that is growing. It is the biggest, fastest growing industry in the world. It is $425 billion and we should be getting a bigger share of it here than we are.

All I am asking of you is work with me. If the hotel tax is not the way to do it, do not just sit back and say we do not support it, stop it and then we go back to the same status quo we have right now. That is not the answer to our challenge in the tourism industry. We need to work together on that. Industry has told me they are ready to work with me. I think every letter and every conversation I have had has indicated the industry out there, including the hotel industry, want to work with us in finding a way of boosting our tourism industry. We need to work together. I believe if industry can cooperate, if industry wants to work on this, then let us as a government work together here and get this side of our economy going.

The big winners are all over. It is the big centres, like Yellowknife. It is also the little communities. It is the people who have been living their lives for hundreds of years off the land who can link into tourism. It is the airline industry. It is all parts. It has much more potential than anything else we do in this Territory. So all I am saying to you is let us work together on this. I think it is a huge opportunity. Now is the time to get on with it. Thank you, Mr. Speaker.

-- Applause

Thank you, Minister Handley. To the principle of the bill. The honourable Member for Great Slave, Mr. Braden.

Thank you, Mr. Speaker. It is with some regret that I stand to oppose this bill for a couple of relatively straightforward reasons, Mr. Speaker. I will take just a few minutes to put my position forward. I know there are many other topics I think my colleagues will address.

I would like to make it very clear that this is not an indication or an opposition or a lack of confidence or optimism that I have for the tourism industry. In a previous life, my wife and I ran a small business of our own that we built from scratch that depended in large part on the tourism industry. I made my living from this industry. In yet a different previous life, Mr. Speaker, I was an executive with the Northwest Territories Tourism Industry Association and I have learned much about the potential and the hard work that has to go into making a successful industry, especially the partnerships that are required to make it work.

My position on this tax has been consistent from the start. I am not in principle opposed to the tax as a legitimate and appropriate way to raise revenue. What I have not been convinced of, and I am still not convinced of, Mr. Speaker, is that it is a tax that has a plan that people have bought into. This is where the Minister and I have at least a philosophical difference.

The Minister is saying give me the money and we will come up with a plan. I believe, Mr. Speaker, that our strategy as partners should be develop the plan. The money will follow if the plan has integrity, if it has buy-in and if it has support. That is what has been missing, Mr. Speaker, from what the Minister has been telling us.

I cannot take issue or argument with anything that Mr. Handley has put forward this afternoon but what has been missing is a confirmation that there is indeed a plan for how this industry is to advance, what role the government and private sector will be playing in that. The Minister has indicated that there is correspondence and consultation and he and the department are to be complimented and congratulated on that, Mr. Speaker. Indeed, he has genuinely taken this idea out in the street and generated a lot of goodwill for the department, for this Legislature, by making that move.

In the correspondence and comments I have seen and heard from industry, Mr. Speaker, I do not see anybody saying, "Go ahead with the tax, Joe, we will work out the plan at the same time or we will work out the plan later". No one is saying that. They are indeed saying we will and want to work with government to move this industry forward but no one that I have seen has said go ahead with the tax at the same time.

Mr. Speaker, I will come back to that position which I have held from the start. This tax is not in itself a bad idea, but it is lacking a plan that everybody can have a say in how this industry can move forward. Thank you, Mr. Speaker.

-- Applause

Thank you, Mr. Braden. To the principle of the bill. The honourable Member for Frame Lake, Mr. Dent.

Thank you, Mr. Speaker. Mr. Speaker, I too rise to speak against the principle of this bill. Before getting into it, I would like to say that I cannot disagree with the Minister when he talks about the potential in the Northwest Territories for tourism and the need for us to support it better. I agree that it is absolutely essential that we do that. In fact, I said so during the campaign a year ago. At that time, I suggested that we needed to spend more money on promoting tourism. I agree with everything he has said there. I also agree that he has gone out in advance with this bill and that constitutes something that is novel in our form of government. I think it has given the people a chance to have a look at the bill and have some discussion that would not have happened in other jurisdictions. That too I think is something that we can be proud of.

However, going back to the campaign, Mr. Speaker, last year during that campaign, I was asked explicitly if I would support a sales tax. Mr. Speaker, we have fallen into the habit of calling this a hotel room tax. It is in fact a sales tax. He can call it a hotel tax but it is really a sales tax on hotel accommodation. I said during the campaign that I would not support the imposition of a sales tax. Therefore, I cannot possibly support this tax bill.

Mr. Speaker, a sales tax is never a fair tax because it does not reflect a person's ability to pay. For instance, a company like BHP will pay exactly the same tax on a hotel room as someone from Wha Ti who travels to Yellowknife to visit a sick relative in the hospital. It does not matter that one is a rich mining company and the other is struggling to afford to be able to come and visit that relative. A sales tax does not reflect ability to pay. Your taxable income does not count. If this government feels that it must raise more money through taxation, it must be made fair. Ability to pay must be one important consideration.

Now to me, Mr. Speaker, that is the principle issue. It is a tax issue. If a sales tax on hotels is acceptable, what is to stop it from being acceptable on something else? Should we prepare for an airport tax? Should we prepare for a toll on roads? What happens if this government is not successful in getting new money from Ottawa? Are we going to look at a general sales tax? Mr. Speaker, that would be unacceptable and I think we have to make sure that any taxes we bring in reflect people's ability to pay.

Some people have justified this tax, including the Minister, I must say, by saying most other jurisdictions have such a tax. Well, Mr. Speaker, most other jurisdictions do have general sales taxes. Most other jurisdictions charge health care premiums and most other jurisdictions require their students to pay back their student financial assistance. Are we now going to institute those things in our jurisdiction because other jurisdictions do? No, I do not think we should.

This also comes down to an issue of fairness. Why should a sales tax be collected by just one sector? At the Northwest Territories Arctic Tourism Conference that I attended which Minister Handley spoke about, he said that an equivalent amount of money was spent on parks that is being spent on tourism. Why is that sector not being expected to pay as well? Why does the rubber tire traffic not pay the same sort of tax? The hotel industry should not be expected to collect a tax that will benefit all of the industry from just their sector.

I have to say that I have some questions about the act in which it says that only those places with five rooms or more will be required to collect the tax. Again, where is the fairness here? If people are making their money from selling rooms, why should everybody not collect it? Do people who stay in bed and breakfasts make less money than those who stay in hotels? I doubt it.

Again, it is not based on the ability to pay. What about dormitories? What about dormitory-style accommodation at hunting camps? If someone has a hunting camp with ten beds in each of the four rooms, will they be exempted from paying this? They could have 40 beds, in other words, and not pay the hotel tax.

Well, Mr. Speaker, I would say that if we are going to follow the example of other jurisdictions, we are going to have to consider what other jurisdictions are doing about taxes, and that is reducing them rather than increasing them.

On that note, Mr. Speaker, I would like to note the letter that was tabled earlier this week from the Yellowknife Chamber of Commerce. In the second paragraph there in this letter to Minister Handley, it notes that:

"We must advise and maintain the same positions as the Canadian Chamber of Commerce in being opposed in principle to tax increases or the introduction of new taxes. Northwest Territories businesses have a difficult time competing with southern businesses and additional taxes drive up costs which results in less attractive pricing for our products and services."

Mr. Speaker, the Canadian Federation of Independent Business sent a letter to Premier Kakfwi earlier this year vetting their concern about the planned introduction of a hotel tax. They noted that in other provinces, members are calling for elimination of this kind of special tax because, as in Alberta, the members are unanimous that they believe their industry should not be singled out and forced to charge a sales tax. There is also a concern they note that rather than encouraging tourism, such a tax deters tourists as it drives up the cost of accommodation.

Mr. Speaker, this tax has also been justified by saying it is a way to capture non-government dollars. At the Northwest Territories Arctic Tourism annual general meeting, Minister Handley said that in talking about the reasons to look for this money, the only way he could see moving more money into tourism was to work in partnership. So as he said, we are looking at a tax that would be imposed on those outside government.

Now, Mr. Speaker, there is no way to prove the government suggestion that most of the tax will come from non-northerners. In fact, most hotel association members do not agree. In fact, how much will come from government, if not directly or indirectly through government-funded agencies?

For the past nine years in particular, Mr. Speaker, since I have been a Member of this House, I have traveled extensively in northern communities. The majority of the people I met staying at hotels in the North were on the government's tabs, if not directly then at least indirectly. Consultants, contractors, people working for boards and agencies funded by the government, municipal employees and on and on.

The Minister, I know, has said in this House that he has an estimate about how much it will cost government, or how much of this money will actually be collected from the government. I know that the hotel association or the hotel operators have a significantly different number but since we do not have any proof, I guess we are going to have to assume that the real number is somewhere in between the two estimates.

Mr. Speaker, the introduction of this bill today is premature. In advance of having numbers to demonstrate, and the only way that we are going to do that is to take some time to survey hotels to find out what are the numbers, how many people are going to be staying in hotels at government expense? How much of this is just going to be a simple reallocation from one pocket of the government to the other? I say that we need to put this off. It is premature.

Mr. Speaker, we know as well that this is a high cost area for tourists. Lovely as the Northwest Territories is, the Minister spoke very well about why people should want to visit the Northwest Territories. This sort of tax will make it worse.

Japanese tourism contributes $3.9 million a year to the economy of the Northwest Territories. I know that in talking to a hotel operator, he told me that he recently travelled to Vancouver to meet with tour packagers who bring Japanese tourists to Canada. One of the first things that they said to him was, "Are you going to bring our costs down this year?" Instead, he has to say, "No, it looks like in the not too distant future, we may have to start charging a five percent room tax."

The Minister said that Japanese tourism is up, but I know that I have a letter from the Hotel Association that also indicates that Japanese visitors to Canada in number last year were down by 20 percent. That is in the year 2000. The letter goes on to say that there is no improvement projected for the year 2001. Again, we have a concern about the numbers. Where are the numbers coming from?

It is premature for us to say that we are going to bring this tax in without having much better numbers. We are facing significant competition in the Northwest Territories for Japanese tourists. Between Whitehorse, Alaska and Eastern Europe, it is a very price conscious market that we are after. I think that we have to be careful about what sort of impact we are liable to have on that market.

I have heard the Minister talk about people not being impacted by the cost of accommodations and I find that hard to accept. I know that it affects me when I travel. In fact, I can tell you that I have in the last year visited one place that, because of the costs, when people ask if I enjoyed it, I say it was marvellous, it was spectacular, it was great to go to. Will I go back? No, it was too expensive. Do I encourage others to go there because of that? No. That word of mouth advertising is what is going to hurt us the most. People who come to the North and then travel back home and tell their friends and neighbours that the Northwest Territories is far too expensive to visit, encouraging them to visit somewhere else. We have to do what we can to bring the costs down.

Adding a sales tax like this will not do that. There are also some problems with the application of the act, Mr. Speaker. I am concerned about the rule as for who pays the tax. For instance, what proportion of the room in the fishing and hunting package is going to account for the room portion?

Mr. Speaker, we have had the legislation presented. The legislation talks about regulations but we do not have the regulations. So much of the detail is left to the regulations. This is a concern to operators I know. For instance, under the act, in section 1(a), "Lodging. Accommodation does not include lodging for which the charge for accommodation is less than the prescribed amount." What will be the prescribed amount? We do not know that. Operators do not know that.

Item 1(c), "Accommodation does not include a place and establishment or a type of place and establishment exempted from the regulations." Why would somebody be exempted by the regulations? I think the introduction of this bill at this time and asking us to vote on it is premature. If we must have a sales tax like this, we should see the regulations before being asked to vote on it. The operators should have an opportunity to review those regulations and give us their comments before we vote on it.

Mr. Speaker, I also know that some hotel operators believe that they will be able to set the plan for the spending. I have been told that they understand that they will be able to ensure revenues are spent to increase off-season room sales, for example. Or that there will be regional allocations of funds based on where the revenues are raised and so on.

Mr. Speaker, the Minister has, since first talking about this tax, also suggested a number of different ways that the money could be administered. First he suggested a separate board to look after the funds. Now he seems to have settled on giving the revenues to the Northwest Territories Arctic Tourism. I know that at the Arctic Tourism annual general meeting on October 28th, the Minister said that money would come to the Northwest Territories Arctic Tourism but they would have to develop a business plan with input from government and the Hotel Association. Yet I would note that my reading of the Northwest Territories Arctic Tourism resolution did not directly support the imposition of this tax.

Again, I would say, Mr. Speaker, that I believe it is premature to introduce this bill in advance of industry-wide agreement on the plan for spending the money.

The other thing I am wondering about is whether or not this is the right time to introduce this tax measure, Mr. Speaker, from the comment that the Minister also made at the Northwest Territories Arctic Tourism on October 28th. He talked about the government's fiscal situation. He talked about how we have been under significant fiscal pressure, but he did imply that the pressure may be off a bit right now and that we may have some time. If so, I would again say, Mr. Speaker, let us put the money into tourism. Let us spend the time to work with the Minister and find the right source for that money, but let us not support a sales tax on hotels at this time in the Northwest Territories. Thank you, Mr. Speaker.

Thank you, Mr. Dent. To the principle of the bill. The honourable Member for Thebacha, Mr. Miltenberger.

Thank you, Mr. Speaker. I rise today as well to speak on the principle of the bill and frankly add something to the discussion, in addition to the comments from our learned colleagues.

For me, one of the issues is a question. Why is this Bill coming forward now? We have just started the business planning process. We soon will be moving into the budgetary process. Why is there such a big hurry to get this out ahead of the budgetary parade? The Minister indicated that people should be prepared to take some of the pain. I would suggest, Mr. Speaker, that the people of the Northwest Territories are in fact hurting their loins to take some of the pain.

The question is the hand that the Finance Minister intends to stick into the taxpayers pocket will go in how many times? How deep and how much does it plan to extract over the course of the next number of months? In my opinion, Mr. Speaker, good government should only come forward once with the budgetary process, to lay out their revenues and expenditures and how they intend to in fact raise shortfalls if they are anticipated, such as this tax. The big question for me, Mr. Speaker, is what would be the cumulative affect of the budgetary process?

We have this proposed tax increase. We know that we are being hit with some of the largest fuel increases in history. It is going to affect transportation, cost of food and the cost of all of our programs. Those costs are all going to go up. The taxpayers, the residents of the Northwest Territories are going to be reeling from these costs. I do not think it is fair to them to stand up now and talk about this tax without putting the whole pie on the table so we could all see how much we are going to have to tighten our belts and what that is going to mean to every family in the Northwest Territories. That for me, Mr. Speaker, is a significant issue.

I too have questions about the numbers put forward by the Minister. The numbers in terms of the money being raised and the numbers in terms of hotel usage. However, I have learned from hard experience in this House in five years that invariably they are estimates. The numbers brought to us are estimates and invariably, there is a fudge factor. There is room for fudgification. There is room to slip and slide, shuck and jive, and that is another issue of concern for me. I want to be very clear that we have blue chip information. This government should be bringing forward that kind of information for us to make that kind of decision.

The fundamental issue for me is I, like my colleagues, am not necessarily opposed to putting more money to tourism. In fact, I think that is essential as well. However I, like my colleagues, have significant concerns. I do not think that it is fair to the people of the Northwest Territories to nickel and dime them to death, to stick the Finance Minister's hands repeatedly into every pocket the taxpayer may have. We should do it once as part of the broad strategy, so that when the Finance Minister does stick his hand into the taxpayer's pocket, they know how much he is going to extract and only once. Thank you, Mr. Speaker.

Thank you, Mr. Miltenberger. To the principle of the bill. The honourable Member for Range Lake, Ms. Lee.

Thank you, Mr. Speaker. I would like to take this opportunity to speak to the principle of this bill and to advise the House that I will be voting against this bill. At the same time, I would like to ask for a recorded vote.

Mr. Speaker, I had a grave concern about this idea when it was first announced by the Minister on June 21st, but I reserved my conclusion on this because I was hoping I would get enough information to satisfy me that this is something that will be good for the North and that it will do what it is going to do and what it purports to do as proposed by the Minister.

Mr. Speaker, I must say it has not been easy to go against one of the popular Ministers of this government. I remember an old lady coming up to me and saying, "I have known Joe for all my life and I know he will always do the right thing."

-- Applause

I know he means well. I know he means well and I know he does good things in many areas. However, I must tell him that he still has more work to do on this bill.

Mr. Speaker, I think a lot has already been said by my fellow Members on this side. If I could just go down my list and highlight the things that perhaps have not been mentioned or something that I think that deserves mention again.

Mr. Speaker, I really want to say that our vote here is not about who loves tourism more or who loves Joe Handley more or who loves taxes the least. I think it really is about good policy making and good law making.

Mr. Speaker, I realize the Minister really believes in consulting with the people. I know he has done all that but he must have received answers that he really did not want to hear. For example, he mentioned that he hired Nexus, the consulting firm, to do a survey on this. In answer to questions in the House yesterday, he mentioned that he is not going to have the result of the survey until the end of the month. Yet he feels that he is going to introduce this bill anyway, regardless of what is in that, Mr. Speaker.

As well, Mr. Speaker, the Yellowknife Chamber of Commerce; I know it has been a very difficult decision for that committee. Yellowknife members have met with them. We have discussed it a lot and basically the Chamber of Commerce thinks they will support it under eight conditions. I must say, Mr. Speaker, I am prepared to support it if the Minister is prepared to meet those eight conditions. However, the letter, which was tabled in the House yesterday, says that the Chamber of Commerce has not received the responses that it was looking for from the Minister as of yet. I think if the Minister could keep his good name and work on that and rethink this one.

Mr. Speaker, I think there is major confusion as to how this tax will apply in enforcement and application. Mr. Speaker, I think we have to be really aware that the tax, once instituted without all of us, is there for posterity. You may think if the Minister says, "Well, if it does not work in three years, I will get rid of it." I do not know if anyone could give an example of any government anywhere who has intentionally removed a tax once it has been instituted unless it was replaced with something more favourable to that government. So to say I know what I am doing and that I will get rid of it if I do not think that it works just will not do, Mr. Speaker.

I am worried about loss of competitiveness that this tax will have on the industry. Mr. Speaker, in the summer I talked about the radio reporting on this bus operator in Toronto who was quoted as saying on CBC that he would rethink about sending visitors to Inuvik because their cost of hotel there is too expensive. I had many discussions with the operators in Yellowknife who cater to Japanese tourists and I am told over and over again that market is very price competitive and the Japanese do not come here with pockets full of money ready to spend in Yellowknife. They count every extra benefit they will get from that. They will not hesitate to eliminate Yellowknife or the Northwest Territories as a possible destination for their very valuable holiday dollar.

Mr. Speaker, I have also mentioned in this House about the fact that for some local businesses, five percent of their revenue could constitute the money that they spend on fuel annually. In this House, we have heard many questions here about the rising fuel costs and what kind of impact that would have on business operators such as hotel operators, as this will not be a good thing in the near future.

Mr. Speaker, I have already heard from people who said that a five percent increase in hotel fees will be more than a five percent increase in the final bill because most businesses will try to increase the cost on top of five percent, perhaps up to ten percent, in order to ensure that they recover the cost of collecting this tax.

Mr. Speaker, I have not had a chance to read every clause of this bill, but I see that it is quite thick and it has something like 66 clauses and about 30 of them have to do with enforcement. The Minister has assured this House over and over again that it only takes one PY to enforce this law. However, I have to doubt that very much, Mr. Speaker. I will say that enforcing 30 clauses will take more than one person to do the job.

Mr. Speaker, I compared this to the payroll tax where I would think the law to collect payroll tax is much more straightforward because almost everyone in the Northwest Territories who works here in the North has to pay that tax and, even then, we are experiencing difficulties collecting that tax. They have a need to hire extra people to make sure that the southern businesses coming to the North are paying the tax and they are registered to do so.

Hotel tax is much different, Mr. Speaker. We do not know where everybody is. There will be some bed and breakfasts that will be eliminated, some not, some lodges. How could anyone sitting in a Yellowknife office know who should pay tax, how much they should pay, or whether they paid it or not? Would it not end up that we would have five to ten people enforcing a tax which, in my view, will not bring any more than really $500,000 net? Mr. Speaker, I have grave concerns that this tax will be collected from Northerners. It will be the people who work here, who travel in the North on personal visits as well as government businesses.

Mr. Speaker, something that has not been mentioned that is of great concern is the impact this will have on our formula financing from the federal government. I think most people have a basic understanding that we have very limited power to institute a new tax because every dollar we gain on a new tax, the federal government will take 80 cents away. It does not make any sense to me that we will institute a tax that will take the money from our people and then it will add to business operators like hotels in small towns, not necessarily in Yellowknife, and then to have 80 cents of that taken away at the end of it. I do not think that is the kind of legacy that I want to leave behind as a lawmaker, Mr. Speaker.

Mr. Speaker, the Minister mentioned that it is not fair to keep saying that you have to eat the cost from within. I must admit, Mr. Speaker, I am one of the people who has been speaking that way. I have suggested that. I think everyone out there really understands the financial difficulty this government is in. I think the business community has shown tremendous willingness to really work with the Minister and really work with this government to come up with alternatives. I commend them for that. I think that with that sort of willpower and will out there, the Minister can do a lot.

However, the problem, Mr. Speaker, is that even though this government has been saying and everyone knows about the financial difficulties, it has not demonstrated yet that it has taken internal measures to do cost cutting. Mr. Speaker, when I asked in a Written Question about the cost of travel that this government spends, the Minister answered last week, giving information on money spent on travel. It shows that last year for the fiscal year 1999-2000, no less than $25 million were spent on duty travel by government employees. I believe that it does not include the money spent by agencies, boards and commissions or any other contract being done by anybody who is doing business on behalf of the government.

So there are millions of dollars that are being spent on travel. Assuming that this tax will really only bring about $500,000 income, I do not think it is unreasonable to say reduce your travel money by $500,000. If you are spending about $30 million on travel, asking him to cut $500,000 is not a lot.

Second of all, Mr. Speaker, as a Yellowknife MLA, I would not actively promote cutting any government jobs. I think we have suffered enough. However, I think some Members here have noticed the level of vacancy in government departments. I believe Resources, Wildlife and Economic Development alone has dozens of vacancies and every vacancy is calculated into about $100,000 per PY. If there are 50 vacant positions, that is $5 million.

Mr. Speaker, all I am saying is the Minister and this government have so much to work with. He has a great deal of credibility. He has a lot of support from the community. He is in charge of Resources, Wildlife and Economic Development and Finance, so he has all the leverage that he needs to do good government policy making. I believe for someone who is in charge of a $750 million government budget and $70 million with RWED, it should not be that difficult for him to come up with $500,000 to help the tourism industry that he loves without additional burdens on small businesses and industries. Saying that, I am not instituting this tax because I really love the tourism industry, which when the people first heard that, it sounded too much of an oxymoron.

Mr. Speaker, I believe that I have said everything that I could on that. I appreciate the Minister's effort. I am going to tell him that I will work with him on any other initiative that he could bring. Maybe this could be revisited once he sorts it out, but as it stands now, I cannot support it, Mr. Speaker. Thank you.

Merci, Mademoiselle Lee. Thank you, Ms. Lee. To the principle of the bill. The honourable Member for Mackenzie Delta, Mr. Krutko.

Thank you, Mr. Speaker. Mr. Speaker, I feel as a government we do have to do something to assist this industry. We cannot sit back and say that we are not competitive, we do not have the resources and that we have to find new ways and mechanisms to assist the tourism industry. We have for years gutted this department to a point where we are now facing reality, where we have to compete with other governments.

Using the Yukon as an example, they have a tourism industry worth $30 million. They are our next door neighbours. They have made it a priority, but yet, Mr. Speaker, we hear about competing in the international market. Tourism is the fastest growing industry in the world but we are losing out. We talk about what is going to happen with these funds that are collected via the tourism tax. I, for one, feel that it will eventually make its way back into the tourism industry, to assist them by promoting their hotels, by promoting the regions, by promoting the different sectors of our tourism economy from the fishing lodges, to the tour operators, to the guides and other people that depend on this industry to make a living.

I think it is essential that we as a government find new forms or new solutions to how we are going to assist this industry, but also expand on promoting our sectors within this economy. We have been able to come up with some stringent ways of assisting the diamond industry. We were able to have some guaranteed loans where we could assist the industry. We are managing tourism programs. Also, we have dollars within this government to assist in training and what not through the Department of Education.

I have been following this industry for quite a few years and realize we have to do something as a government because this industry is a turning industry, especially for the operators who are barely making ends meet with what they have. There are some sectors of our economy that are making a go of the tourism industry, especially with the Asian tourists, but that is just one sector of our economy. We have to start realizing that there are other elements to tourism that also need a hand out.

We have to look at our small communities. We have operators in our small communities who are trying to get their bed and breakfast operations off the ground. Again, they need to have the resources and the ability to promote their business. Right now, there are no programs in place within this government to assist them. Again, I would like to ask, where is that money going to come from?

We had an economic development agreement with the federal government where there were dollars to assist tourism but that ran out in 1996. There again, we are waiting with our hands out to the federal government to say help us. However, unless we have some agreement in place with the federal government, we will continue to find ways to drag out the tourism industry and say just wait, hold on, we will try and find some other way. I for one feel we have to come up with some solutions to this problem.

There are other ways that we can look at generating revenues. We have different programs within this government. We have the Development Corporation. I think we have to start looking at how we can streamline some of these programs and services that we have to assist in other areas. I feel that it is essential that we realize there are presently tax systems in place. We pay GST. We find hidden taxes. We have taxes added on in regard to your interest payments that you have on credit cards. Taxing is just another form of collecting revenues.

I think we have to find a way to assist this industry. For us to simply say no to this proposition without trying to find some unique solutions to assist the industry and also to be able to work with the tour operators and the hotel operators, making them realize tourism is their bread and butter. You can say it does not really affect me, but tourism in a lot of our communities and regions is a seasonal activity. With that activity comes revenues that get a lot of those small operators, the small bed and breakfast operators in the communities, through the winter. If they did not promote, enhance, or attract tourists to the different regions in the Mackenzie Delta, Tuktoyaktuk or the Beaufort Sea, they will not be able to make a go of that industry.

I think we have to find initiatives and ways to enhance that industry. I mentioned the motion that was passed by the Hamlet of Fort McPherson. One of the things that they asked for is they urged the passing of this legislation. Also, what they would like is to empower the regions and communities to have the ability to establish a collection agency for the hotel tax and to use it to promote tourism in that area. I think it is apparent that we will have to find new ways and new forms of generating revenues.

The resources we have in the North continue to flow south. A lot of our revenues and royalties that come from the North continue to flow to Ottawa. We depend on Ottawa for our transfer payments to run this government. Yet the amount of money that they take out in royalties almost exceeds that with the developments that are happening. The federal income tax that is being taken out can be used towards this. There is one area that I feel we can continue to enhance or strive to become independent in, but also realizing that unless we settle devolution of the Northern Accord with the First Nations and amongst ourselves and retain those revenues in the North so we can use it to offset programs and services, we will continue to see programs and services declining. Also, different resource sectors striving to make a go of it, regardless if it is the fishing industry, tourism industry, the forestry industry, the trapping industry, even the oil and gas industry.

We have done tons and tons of studies but again, it takes money to implement those studies. Right now, we do not have those revenues. I, for one, feel that we have to do more than just simply saying we do not agree with this, but as a government and as Members of this House, we have to find initiatives and ways of finding new means of generating revenues. I feel we have to be able to avoid the burden that we have with Ottawa, where every dollar we generate goes to the federal government and we only get 80 cents on the dollar. We have to find a way to get around that.

The other concern I have is how is this tax going to be distributed fairly across the North, not just to the large regional centres. A lot of tourism and promotion takes place, but people within the tourism sector need the resources. I think it is imperative that we do have answers to these questions and that we do try to work together to find solutions to this problem. With that, Mr. Speaker, thank you.

-- Applause

Thank you, Mr. Krutko. To the principle of the bill. The honourable Member for Tu Nedhe, Mr. Nitah.

Mahsi, Mr. Nitah. To the principle of the bill. The honourable Member of the Deh Cho, Mr. McLeod.