Thank you, Mr. Chairman. Mr. Chairman, I think the tax lawyers with the big corporations watch very carefully what is happening in each jurisdiction, so we do not have to put an ad out in the paper or anything to tell them about it. The word will get out very fast. Over the next couple of weeks, I am meeting with two groups of investors to let them know about the benefits of doing business in the Northwest Territories or with the Northwest Territories. We have issued a press release. We will just continue to ensure that the business world is aware of the changes that are made. That is for the large, out-of-territory corporations. Everyone in the Northwest Territories, large corporations and small companies, are already very aware of what we have done here.

Thank you, Mr. Handley. The Chair recognizes Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, the idea of lowering income tax rates would be troubling to some, when we consider our fiscal situation. Although we have had some good fortune during this term to date, the debt wall is still looming out there. It has been some time since I have talked about that issue, but it still looms out there. From time to time, we are given a reminder about the possibilities.

At the same time, one of the things we are made very aware of, and the thing that has benefited the Northwest Territories to date, is that we have had large corporate tax filings in the Northwest Territories. If it was not for those, we would definitely be looking at curtailing expenditures of government in a very serious way.

During the business planning sessions when we were provided with this information, committee members asked if the department would in fact look at lowering corporate tax rates. Initially, the department said no, that it was not something that would be considered. It is good to see that we are moving in this direction. We do have to stay competitive, especially if we are going to try to get those one-time filers in the Northwest Territories. Keeping the ones who have just started to file here is something that would make good sense, in light of the impact that they have had in the Northwest Territories when it comes to filing the taxes.

In any other jurisdictions, the amount that gets filed would probably mean very little. When you look at the other provinces, it is not a large amount on their side of the books. However, here in the Northwest Territories, $60 million net to us is a huge impact. It has kept us able to spend and improve on programs and services to a certain degree. In that sense, I support this move and I hope it works out. I know the Minister had cautioned committee members when we first asked about the fact of potentially losing some revenue, but hopefully it will work out and we will still find corporate tax filers that will file in the Northwest Territories and bring benefit to us.

There are so many other issues, as we have heard today, around revenue and how it is counted with the federal government. One question for the Minister is, with our lowering our corporate taxes, I know the federal government, in formula financing discussions, looks at our tax effort. Lately, in fact, it has been a benefit to us because other jurisdictions have lowered theirs and we were starting to go on the high side. Would this just bring us back to the levels we were at previously when it comes to tax effort in the Northwest Territories? Thank you.

Thank you, Mr. Roland. Mr. Handley.

Mr. Chairman, I think when we look at our tax effort, it is always measured relative to what the other provinces are doing. If the provinces are lowering theirs and we are lowering ours, then the relationship between the two does not change. If we were lowering our taxes and no one else was doing it, then I think it would have some impact.

I do not think we will lose on the tax effort factor, given what the provinces are doing and what our economy is doing. I do not think there is much risk there, at least for the life of this formula. We have to weigh whatever small loss may be there against the potential for the one-time revenues that we have benefited from. Again, we are dealing with unknowns here and trying to pick the best options to work with. Right now, and the last couple of years have shown us, that looking to the one-time tax revenues and also paying attention to our large corporate taxpayers in the Northwest Territories has been the best route for us. I do not think we are going to lose much on the tax effort adjustment factor, Mr. Chairman.

Thank you, Minister Handley. Mr. Bell.

Thank you, Mr. Chairman. Just quickly, I will be supporting the bill and we talked about this at committee. I will not rehash the same discussions. I do think it is important though that we pay keen attention to being competitive and that we stay at the front of the pack. I think this Minister is aware of that and his department is aware of that and they are looking to move in that direction. Some Members have talked about contradictions. I think the Minister is right. I think what we are trying to do here is go after money. Yes, we do not have enough money for programs and services that we want to deliver, but lowering taxes is not necessarily counter-intuitive to that, Mr. Chairman.

If you think about it in terms of if we were to tax people at 100 percent, nobody would work, so lowering taxes would certainly generate more income for us. If we did not tax at all, everybody would work and we would not generate any revenue. Somewhere in the middle ground you find the point at which you can collect the most revenue. I think we are searching for that. Sometimes you raise and sometimes you lower. These are our options, Mr. Chairman, we have fiscal stimulus, that is it. We can either spend money or we can lower taxes if we want to see money pumped into the Northwest Territories economy.

We are not a country. We do not have the benefit of monetary stimulus. We cannot tweak interest rates. We cannot buy or sell government bonds. There is a lot we cannot do. This we can do and I am glad to see the Minister doing it. Thank you.

Thank you, Mr. Bell. Mr. Dent.

Thank you, Mr. Chairman. I too just wanted to go on record as supporting the bill. You often hear the question about what the federal government is going to think if we are cutting taxes and then going to them to try and ask for contributions. You know, I remember not too long ago looking at a budget that was presented that showed $6 million in total corporate tax revenues to this government -- $6 million. In the last two years, we have had tremendous windfalls that have made that $6 million look absolutely puny. Ten times that amount, $60 million, we have received in a very short period of time, which is an amazing increase when you compare it to what we were getting on a regular basis.

I think we do have to, given our fiscal climate, look for those one-time windfalls. There is going to come a time when we can no longer stay in the race to be the lowest or among the lowest. I suspect that is not too far off. I hope the Minister is right that we will have until 2004 when we are still extremely competitive. For the past two or three years, it has made a tremendous difference to us having a low tax rate. We have had a tremendous amount of money that we can put into education. We have only been able to increase the amount of funding that we put into education to the extent that we have because of things like the corporate tax windfall that we have had in the past couple of years. For health care, the only reason that we have been able to add into health care at all is because we have had those windfalls.

It may seem like it is a counter-intuitive way to raise government revenues, but it certainly has worked for us over the past few years. Yes, it is a gamble, but I have been convinced, as have most members of our committee, that this is the right gamble to take. We will have to see if it does not pay off for another couple of years. Thank you, Mr. Chairman.

Thank you, Mr. Dent. General comments. Is the committee ready to go clause by clause?

We will turn to tab 13 in your binders to Bill 13, An Act to Amend the Income Tax Act, No. 2. Clause 1.

Clause 2.

Clause 3.

Clause 4.

Does the committee agree that Bill 13 is ready for third reading?

Bill 13 is now ready for third reading. I would like to thank the Minister and his witnesses for appearing. As previously agreed, we will go on to Bill 17, Supplementary Appropriation Act, No 1, 2002-2003. Does the Minister have any opening comments? Mr. Handley.