Thank you, Mr. Chairman. The Standing Committee on Accountability and Oversight conducted a public review of Bill 13, An Act to Amend the Income Tax Act, No. 2, on Monday, September 10, 2001.

The committee would like to thank the Minister of Finance and his officials for presenting the bill. The bill will change the income tax system in the Northwest Territories from one that calculates income tax on the amount of federal tax payable to a system that calculates income tax on the amount of taxable income.

This bill also makes technical changes to the territorial Income Tax Act to clarify the language and to update references to the federal Income Tax Act.

During discussions on the bill, the committee expressed concerns that the amendments will result in:

• • an increase in the amount of income tax payable;
• • a decrease in the level of NWT tax credits; and
• • a more complex tax filing exercise from the current tax system.

The Minister advised the committee that the proposed change to tax on income would simply convert existing personal income tax rates. Individuals will pay no more tax in the 2001 tax year than they would under the current tax system. The committee expressed concerns that although our territorial tax rates may remain the same, our territorial tax credits may not.

The department assured the committee that people will be entitled to the same tax credits available under the current system. The only change to our territorial tax credits is an increase to our northern cost of living tax credit, which was approved earlier by this Legislative Assembly.

The committee also observed that under the proposed tax system, it may be more complex for tax filers to complete an income tax return. The Minister replied that the proposed tax system would result in a different calculation, but it is not any more complex and may be simpler to use than the current system.

Bill 13 was amended in standing committee to renumber two French sections of the bill. As well, clause 4 of the bill was amended by striking out "on the last day of taxation" in that portion of the English version of the proposed subsection 2.3(4), preceding paragraph (a) and by substituting "on the last day of the taxation year."

Mr. Chairman, following the committee's review, a motion was carried to report Bill 13, An Act to Amend the Income Tax Act, No. 2, to the Assembly as ready for committee of the whole as amended and reprinted. Additional comments or questions of the Members may be posed as we proceed. Thank you, Mr. Chairman.