Thank you, Mr. Speaker. Mr. Speaker, one of the goals this Legislature set for itself two years ago was the creation of a healthy and diversified economy. We wanted to see more businesses starting up and more businesses locating in the Northwest Territories. To keep our economy healthy, and to encourage businesses to grow and to create jobs, our tax regime must be competitive.
The Northwest Territories has long maintained a very competitive tax environment, with both personal and corporate tax rates among the lowest in Canada. These competitive rates have helped us attract individuals and businesses to the North. In fact, our competitive corporate tax rates have, in the last two years, resulted in several large revenue gains. These corporate tax revenues have allowed this government to make important investments in programs and infrastructure that would not otherwise have been possible.
Recently, however, a number of provinces and territories have announced significant reductions in their personal and corporate income tax rates. These changes have reduced the NWT's overall competitiveness.
In the Budget Address last February, I announced changes to the personal income tax system that lowered taxes for all NWT residents. Effective this July, NWT taxpayers will see these changes reflected in their payroll deductions.
I also indicated in February that this government would be monitoring the changes made by other provinces and territories in order to keep our tax structure competitive. Our position, relative to other jurisdictions, could have negative effects on our tax base, as companies look to do business where the tax climate is most favourable. Even existing businesses may re-examine their corporate structures to minimize their tax liability.
Mr. Speaker, I am announcing today our government's intention to make changes to the NWT corporate income tax regime. If the Legislative Assembly agrees, effective July 1, 2002:
The general corporate income tax rate will be reduced from 14 percent to 12 percent, that is a reduction of 14 percent in tax payable; and
The "small business" rate, that is, the rate applicable to the first $200,000 in income of Canadian-controlled private corporations, will be reduced from 5 percent to 4 percent. This represents a reduction of 20 percent in the small business tax rate.
The legislation required to enact these changes will be introduced later this session. We will be looking for an early indication of Members' response to this proposed change, in order to be able to confirm the effective date with the federal government, who administer the corporate income tax on our behalf.
These changes will send a message, Mr. Speaker, that the Northwest Territories welcomes businesses that want to locate here, to create jobs here, and to contribute to our bright economic future. Thank you, Mr. Speaker.
-- Applause