Thank you. The honourable Member for Range Lake, Ms. Lee.

Thank you, Mr. Speaker. Mr. Speaker,

The bill establishes :

• • a five percent tax on the price of accommodations at hotels, motels, lodges and other such establishments;
• • a procedure to register operators of accommodation and authorize the operators to collect the tax; and
• • sets out enforcement provisions to ensure the tax is paid, collected and remitted in accordance with the act and the regulations.

The tax does not apply to lodging in a place with less than five sleeping units and other accommodation exempted by the regulations.

Every operator of an accommodations business will have to:

• • register to obtain a registration certificate (like a business licence) from the government and keep it current;
• • assign values to the value of accommodation that they sell to customers;
• • collect the tax from customers;
• • remit the tax to the government together with a return;
• • obtain government clearance to sell the land or accommodation building or its stock in trade. The clearance certificate will certify that all of the hotel tax owing has been paid; and
• • maintain proper books and records that will keep track of the amount owing, collected, remitted and paid or refunded.

The bill also contains detailed penalty, enforcement and appeal sections.

In opening comments at the outset of every public hearing the chair advised that the tax was a government initiative and it was the committee's responsibility to hear the views and comments of the residents of the Northwest Territories. The chair confirmed that, after careful consideration, the committee would report those concerns back to their colleagues in the House. Despite this reassurance the committee continually heard from various stakeholders that Bill 13 was a "done deal". Jack Rowe, a Hay River operator (Homesteader's Inn) wrote "Precedence proves that once Cabinet makes up their mind on a particular item it becomes a way of life and the individuals adapt."

There was agreement among all stakeholders that some parts of the Northwest Territories tourism industry have been in steady decline as government investment in tourism has been cut back. The government commissioned the Nexus Group to conduct a survey of hotel owners (Nexus Report) and on page 3 the report states:

"As evidence, they pointed to the fact that government investment in tourism marketing that peaked in the early "nineties" at over $1.2 million had fallen to just under $550,000, the lowest of any jurisdiction in Canada. Compounding the cuts in the marketing budget was the elimination of the regional tourism zone associations."

However, the Nexus Report also found that "certain tourism sectors, big game outfitting and aurora viewing have been able to maintain or strengthen their positions in the market place." (p.3).

The committee heard many times that there was vast potential for tourism to provide the residents of the Northwest Territories with a source of income and employment that does not depend on mega projects or the fluctuating price of oil or natural gas. However, there is now a serious need to make the necessary investment to capture this potential. There was general agreement among all stakeholders that there is an urgent need for the development of a strong NWT image or identity and for the promotion of the NWT as a "destination" place.

The committee notes that the Nexus Report states that "many operators felt that increased funding was not the only solution and that government support for the industry could be better rationalized, particularly, in conducting market research and in working closer with the NWTAT (NWT Arctic Tourism Association) in planning for the development of the industry." (p.4)

The committee also notes with interest that the Nexus Report found that "the credibility of estimates about the revenues to be generated from the tax and the cost to the government of collecting the tax was an issue." (p.3) This concern was heard again and again during the public hearings.

Mr. Speaker, now I would ask that my colleague from the committee, Mr. Delorey, continue with our report. Thank you, Mr. Speaker.

Thank you, Ms. Lee. The honourable Member for Hay River North, Mr. Delorey.

Thank you, Mr. Speaker.

Thank you, Mr. Delorey. The honourable Member for Great Slave, Mr. Braden.

Mr. Speaker, colleagues.

At the public hearing in Hay River, Don Fergusson, (vice-president of the NWT Hotel Association) told the committee:

"The Northwest Territories Arctic Tourism apparently have a lot of people that are supporting them, but I have not talked to them, I do not know who they are. In this region, I know for sure that the majority of the lodge owners are against this proposal and these are the ones that I understand that are supposed to be benefiting from this tax. They do not want it. The hotels do not want it either. I really think our MLAs should listen to this." (Committee transcript, p.47)

John Pollard, a former Member of the Legislative Assembly appeared before the committee representing his wife Ellen, owner and operator of the Brabant Fishing Lodge on the Mackenzie River. Mr. Pollard, like many of the established hotel and/or lodge operators, told the committee:

"...we do not belong to any organization in the Northwest Territories, any tourist establishment, organization, Northwest Territories Arctic Tourism or whatever they are called and we have not been contacted, to my knowledge, by any of those organizations to talk about any kind of tourism strategy. We are a premier lodge in the Northwest Territories and, as I say, we do business around the world. So, I would have thought that if somebody is doing something they might have contacted us and said, "Hey, look, we are doing something. Are you interested?" (Committee transcript, p.52 )

Jim Peterson, representing Peterson's Point Lake Lodge, appeared before the committee. Mr. Peterson is also the president of the Barren-Ground Caribou Outfitters Association, which has a membership of 11 outfitters. As an active member of the Northwest Territories Arctic Tourism Association, Mr. Peterson told the committee that he had only very qualified support for the hotel room tax. When urged by the committee to clarify his position, Mr. Peterson stated:

"We want to promote our industry; however, we do not want a tax. It is as simple as that. We do not. However, what alternatives do we have? What alternatives do we have as an industry?" (Committee transcript, p.14)

Mr. Peterson gave the committee a long list of amendments and possible funding alternatives which the Minister of Finance had told him could be considered.

In Hay River, both Mayor Duncan McNeill and Duane Morgan of the Hay River Chamber of Commerce spoke against the implementation of a hotel room tax. Likewise, in Inuvik, Mayor Peter Clarkson told the committee his council was opposed to the hotel room tax. Mayor Clarkson encouraged the government to look for other sources from within their current budget and if that was not possible, he urged the government to look at their priorities and search for further opportunities to save money. It was also suggested that any money generated in a region from the tax be reinvested in that region.

The committee heard from both Dene National Chief Bill Erasmus and Yellowknives Dene First Nation Chief Richard Edjericon. Both aboriginal leaders spoke against the tax, citing legal, constitutional and treaty grounds as the essence of their opposition. Chief Edjericon read to the committee a unanimous resolution signed by all chiefs of Akaitcho Treaty 8. The resolution stated that, "the imposition of a hotel tax of five percent by the Government of the Northwest Territories on the Akaitcho Dene people is a treaty violation" and that if such a bill is passed, "Akaitcho (will) take measures to stop the imposition of the tax on Akaitcho people."

Mr. Speaker, I would now like to pass this on to my colleague, Mr. Nitah, the Member for Tu Nedhe, to continue with the report.

Thank you, Mr. Braden. The honourable Member for Tu Nedhe, Mr. Nitah.

Mahsi, Mr. Nitah. The honourable Member for Inuvik Boot Lake, Mr. Roland.

Thank you, Mr. Speaker.

After a detailed review of what we read and heard during our committee hearings and following productive discussions with the Minister of Finance, a majority of the committee has come to a position that we cannot support the implementation of the hotel room tax.

We have heard loud and clear that the tourism industry is in dire need of additional funding. In light of this and our present fiscal position, we urge the Minister to work with all stakeholders to develop some of the creative suggestions we heard during our review. In particular, we recommend that the Minister make available to the NWTAT, without qualification, an additional $375,000 from internal RWED reallocations.

The committee is very encouraged that the public review process acted as a catalyst for raising the public's awareness of important issues surrounding the funding challenges facing the tourism industry. Members are hopeful that the Minister of Finance and RWED and all stakeholders will take this opportunity to rise to the challenge of building consensus so that all parties can be part of the solution. In closing, the committee can do no better than repeat the impassioned words of Jim Peterson, president of the Barren Ground Caribou Outfitters Association:

"Tourism is characterized by unique and powerful links to vital issues of the day. Perhaps most fundamentally, tourism raises those issues of national identity and culture that are central to the sense of who we are. Tourism serves as a bridge between the Northwest Territories, southern Canada, the United States, and the rest of the world. Tourism helps the Northwest Territories strengthen its position by helping to forge ties of familiarity and friendships with the national and international community in promoting us as a world-class destination. As we project the best possible image of ourselves to the world, we are forced to clearly express what it means to be a Northerner." (Committee transcript, p.4)

Thank you, Mr. Speaker. That concludes the committee's report.

Thank you, Mr. Roland. The Chair recognizes the honourable Member for Inuvik Boot Lake, Mr. Roland.

Mr. Speaker, that concludes the report on the review of Bill 13, Hotel Room Tax Act, by your Standing Committee on Governance and Economic Development. Therefore I move, seconded by the Member for Range Lake, that the Report on the Review of Bill 13, Hotel Room Tax Act, be received and adopted. Thank you.

Thank you, Mr. Roland. We have a motion. The motion is in order. To the motion. Question has been called. All those in favour, please signify. Thank you. All those opposed? Thank you. The motion is carried. The review of Bill 13 has been reported. Item 11, reports of standing and special committees. Item 12, reports of committees on the review of bills. Item 13, tabling of documents. The honourable Member for Nunakput, Mr. Steen.

Thank you, Mr. Speaker. Mr. Speaker, I wish to table the following document entitled Department of Transportation Revenues, Recoveries and Transfer Payments, Summary of Changes for 2001-2002. Thank you, Mr. Speaker.