Thank you, Ms. Melhorn. Mr. Braden.

That's all for now. I may have other questions later on but thank you, Madam Chair, that's all.

Thank you, Mr. Braden. General comments, Bill 2. Mr. Ramsay.

Thank you, Madam Chair. I will start out my general comments and I might have a question or two in here. I'm going to start off with stating the obvious, and that is I'm a new Member, as everybody knows, and I almost feel like I've inherited something that really I haven't had my fingertips on. I haven't had the benefit of going through a full budget cycle, I haven't had the opportunity to go through a business planning cycle, and I must say that I do not agree with the increase to 14 percent on the corporate income tax. I agree with the three of the four presenters at the committee meeting the other day who spoke against this corporate income tax increase from 12 to 14 percent. When Mr. Vaydik was there, he used the word "ridiculous," Madam Chair, and I think along the same lines. I think our fiscal arrangement with Ottawa borders on the insane. I don't understand how we operate as a government under those kinds of circumstances and all these different sorts of formula financing agreements and this tax and that tax, and if we have new tax initiatives they claw back 80 cents on the dollar. I mean it's very, very confusing and it's no way to run a government.

I would encourage the Minister and give him my full support on any new type of fiscal responsibility, legislation that this government wants to enact. Thankfully we got the $50 million one-time money last week to erase the deficit, but I can't for the life of me understand how a government in today's day and age operates in a deficit situation. That just should not be allowed to happen. There should be legislation enacted, hopefully by this government, that does not allow that to happen. It's just not a good way to run a government.

The thing I would support, Madam Chairperson, is maybe something in the middle. As much as I try to wrap my head around this, if we keep the corporate income tax rate at 12 percent we're going to be actually losing money. That makes not a whole heck of a lot of sense to me and anybody out there who's paying attention. But to take it to 14 percent I think is not the right thing to do. I do believe that the cost of doing business in the Northwest Territories, as everyone knows, power rates, utilities of all sorts are very, very expensive. We want to attract business to the Northwest Territories, we want to keep the business we have in the Northwest Territories. We don't want to send a message out there that it's going to cost people even more to do business in the Northwest Territories, and by raising it to 14 percent I think we send that message and we send it very strongly.

What I would agree with, if I have a chance later, would be to come to some sort of compromise on this and maybe look at a rate somewhere between 12 and 13 percent, or 13.5 even. But I really don't think the government has done enough to overturn every rock, to look at its spending habits. Here we are inheriting a budget from the

last government, which by all accounts spent money -- and I believe it was quoted by a few Members of the last government and I believe the Finance Minister -- like drunken sailors. That's exactly what happened, and here we are today trying to pay the bills back and now we're looking at tax initiatives coming out of the pockets of businesses and later on, Madam Chairperson, out of the pockets of residents of the Northwest Territories. We're trying to attract people here, we not trying to discourage people from living here or doing business here. So I can't in any way support this.

I'll turn to the specific revenue options that the Minister brought to us on February 13th and I'll quote from that, "By increasing the rate to two percent, this would ensure the GNWT benefit from tax base increases but would provide NWT corporations with a great incentive to rearrange their affairs to allocate income in other jurisdictions." By the Minister's own staff, they realize that we may lose businesses in the way they allocate their income. To me, it just doesn't make a whole lot of sense. I think if we are going to do this in an effort to at least not lose any more money to Ottawa, we go with somewhere in between; one percent, 1.5 percent. I think that's about all I had for my comments on this. I may be in the chair later, but if I had an opportunity to vote on this, I would vote against it. Thank you.

Thank you, Mr. Ramsay. I have on the list for general comments Mr. Menicoche, Mr. Hawkins and Ms. Lee. Mr. Menicoche.

Thank you, Madam Chair. I am in favour of raising the rate, but there is one thing in the Minister's opening statement that kind of interested me about developing alternatives to the current approach to the tax effort. I was just wondering what the Minister meant with that. Sometimes I get the feeling that it's up to us to come with unique solutions to our fiscal problems, but perhaps the government is going to have to do their own thinking as well. I'm just wondering if there are some alternatives that they have been contemplating, Madam Chair.

Thank you, Mr. Menicoche. Mr. Roland.

Thank you, Madam Chair. The current approach on the tax effort, as we've stated and stated to the federal government and put our arguments forward on is that it's not working in the Northwest Territories. Looking at alternative approaches is what we've been pursuing with Finance Canada, and we have had that agreement now with the news from Minister Goodale that they would forego that rebasing exercise for one year, and allow us that one year to come up with some work on the tax effort factor. We are starting to look at how we can develop something different than what is there now and, of course, that also goes back to the federal government in getting their agreement that what we have developed is workable. So we are beginning some work in that area. It is still in the early days, but we know we have got to get down to business and have that work done so we will have a lot of time to have it gone over by the federal Department of Finance and get some agreement on it. Thank you.

Thank you, Mr. Roland. Mr. Menicoche.

Thank you, Madam Chair. I think one of the things when we were contemplating this early in our term here was that I had thought that when we suggested the two percent increase to the corporate income tax it would have helped us alleviate the personal income tax increase, which is something else I am going to have to think about later. Is it true that we are only going to be expecting to raise $8 million per annum with the two percent increase to our corporate income tax?

Thank you, Mr. Menicoche. Mr. Roland.

Thank you, Madam Chair. Yes, with two percent, based on our estimates we would raise $8 million on an annual basis. Thank you.

Thank you, Mr. Roland. Mr. Menicoche.

Thank you, Madam Chair. Does the Minister have the answer to the question previously when the tax rate was at 14 percent, what was our revenue from the corporate income taxes?

Thank you, Mr. Menicoche. Mr. Roland.

Thank you, Madam Chair. Madam Chair, the way our corporate tax situation works it is quite volatile if you do have investors who would choose to invest their earnings in the Northwest Territories, and that happened previously. In fact, there were two filings done in the Northwest Territories while we were at the 14 percent rate, and that is good news that we had filings there, but it also has caused us some problems going forward because of the way corporate taxes are paid to the GNWT from the federal government. So we could look at 2002-03, and 2000-01 to give you some accurate figures, but again, those figures can change quite radically based on who decides to file in the Northwest Territories on investment income. We do have what we feel is a track record of those who are fairly consistent and not have those huge spikes. I don't have the exact dollars of those years in my hands right now. Thank you.

Thank you, Mr. Roland. Mr. Menicoche.

No more questions, Madam Chair. Thank you.

Thank you, Mr. Menicoche. I have Mr. Hawkins, Ms. Lee, Mr. Yakeleya, and Mr. Pokiak. Mr. Hawkins.

Thank you, Madam Chair. This budget, or I should say deficit, has been compared to an inheritance problem. I guess we could blame the 14th Assembly until we are blue in the face, but unfortunately we can't give back this deficit issue. I would love to say thanks but no thanks, but I am having a difficult time exactly which way I am going to go. I mean I look at the struggle wherein if we don't raise it we are going to lose more money. So I think of the struggle as Canada has got a noose around our neck, and the more we struggle by trying to be competitive, the tighter it gets, and it hurts. So being competitive actually kills us I guess at the end of the day. That doesn't help any of us. Our real fight is with Ottawa and not with each other on this initiative. I am still

struggling because in my methodology of life I really believe that we have to look at ourselves first because we are here to manage the public purse, and the question to myself is have we managed ourselves to the best job that we could? To some degree I see that people are taking a healthy look at ourselves, but the one thing I will say with the 14th Legislative Assembly is the fact that they knew this was coming a lot sooner than I knew that this was coming. That being said, I only got elected a few months ago, but they saw this horizon long before I did. What bothers me most is I think necessary steps could have been put in place, actions could have moved forward at that rate and at least helped us set up for the 15th Assembly. So back to my inheritance problem, I think the people who have endowed us with this legacy, I think we were very unlucky, they weren't really our friends. At the end of the day I am still not impressed. I have yet to decide what I am going to do, and I will make my final decision by the end of the sitting today. Thank you, Madam Chair.

Thank you, Mr. Hawkins. I didn't really hear any questions there. If the Minister is agreeable I will move on to Ms. Lee.

Thank you, Madam Chair. Before I do my general comments I would like to pose a question to the Minister first. These questions were asked before, but I wasn't clear about the answers. We know that the corporate tax was reduced in the last Assembly. Could I just get confirmation as to whether or not it went from 14 percent to 12 percent, or did it go from 13 percent to 12 percent? Thank you.

Thank you, Ms. Lee. Mr. Roland.

Thank you, Madam Chair. It went from 14 percent to 12 percent.