The government recently proposed a number of revenue initiatives to reduce and better manage its forecasted cash deficit for the 2003-2004 fiscal year. The government proposed:
- An increase of $6.80 per carton of cigarettes, effective April 1, 2003, and
- A 10 percent increase in liquor markups, effective April 1, 2003.
These proposed revenue increases are forecast to raise respectively $2.5 million and $1 million for a total of $3.5 million for the government in 2003-2004 and a similar amount for 2004-2005.
Committee members were concerned about the significant impact of the proposed revenue initiatives upon the high cost of living in the Northwest Territories. Accordingly, the committee referred the matter to AOC for further discussion by all Regular Members. Detailed comments by members of the Standing Committee on Governance and Economic Development are summarized in its review of the Department of Finance, proposed revenue initiatives, found later in this report.
A number of Members noted that tobacco and liquor consumption is not discretionary, but rather an addiction. Low or fixed income families would be affected the most. The proposed revenue initiatives may result in additional social costs for the government.