Thank you, Mr. Minister. Mr. Menicoche.

Thank you very much, Mr. Chair. I am not going to support this motion only because I believe that by doing the increase the way it is suggested, that at least it maintains our ability to hang on to some of the programs and services that we do have. That is why I am in favour of it. Thank you.

Thank you, Mr. Menicoche. Ms. Lee.

Thank you, Mr. Chairman. I want to reserve my comments for last, as the mover of the motion. Thank you.

Thank you, Ms. Lee. Mrs. Groenewegen.

Thank you, Mr. Chairman. If we're going to raise the corporate tax, there is no sense doing it if it's revenue neutral for us. You might as well not bother with it. If you're going to go to the trouble of raising the tax, you might as well make it worthwhile. It's not exorbitant and it's not outrageous. Like I said before, it's going back to what we had that was an historical level a few years ago. Thank you.

Thank you, Mrs. Groenewegen. Mr. Handley.

Thank you, Mr. Chairman. I just wanted to point out for Members, especially the new Members, that this is a money bill and that Cabinet will be voting on this issue. But we have done the work on it, we feel that 14 percent is justified and it is reasonable, and that all of Cabinet will be voting against this bill. Thank you.

---Laughter

---Applause

Thank you for clarifying that, Mr. Handley. To the motion. Ms. Lee.

Thank you, Mr. Chairman. Just a short comment to close the debate. I appreciate the Members' comments. I just wanted to add that this goes back to...Having been here for five years, I guess not everybody shares my view, but I have gained a healthy dose of skepticism and cynicism in the way the information is provided to us. Mr. Chairman, I don't mean any disrespect to any of the staff or accountants. Accountants balance numbers. They make sure that what goes on the left side goes on the right side. Ministers are the ones who set the priorities, and I think under the consensus government maybe we should have Finance Ministers running and laying out their agenda at re-election time, because otherwise we get one Finance Minister on one extreme spend, spend, spend, decrease taxes...

---Laughter

...and then we get another Finance Minister using exactly the same fiscal relationship we have with Ottawa, exactly the same social problems, probably using exactly the same facts that the department staff provides and comes out with a completely different interpretation. I've been

sitting here listening to the same thing, but drawing different conclusions.

We have gone through two weeks of a budget debate, and I'm telling you they gave us a box and we are giving them a box back with a rubber stamp on it. We have not been able to make one iota of change as Regular Members. If we really have a consensus government, then we on this side of the House should have more say in making into a dough and not a square box where we either take it or leave it. None of the suggestions we have made in terms of saving programs or anything, none of it was addressed.

Mr. Chairman, obviously this is my motion and I will be supporting that. Thank you.

Thank you, Ms. Lee. Just to clarify, Ms. Lee's comments do not conclude the discussion on this item, so to the motion.

All those in favour? All those opposed? The motion is defeated.

---Defeated

Clause 2.

Clause 3.

To the bill as a whole.

Does the committee agree that Bill 2 is ready for third reading?

Bill 2 is now ready for third reading.

---Applause

I would like to take an opportunity thank Mr. Roland and his staff, Ms. Veinott, Ms. Melhorn, and Mr. Gagnon, for their appearance here this afternoon. Thank you for your time.

Thank you, committee. We would now like the Honourable Floyd Roland, Minister of Finance, to begin with his opening remarks on Bill 3, An Act to Amend the Income Tax Act, No. 2.

Thank you, Mr. Chairman, for the opportunity to present Bill 2, An Act to Amend the Income Tax Act, No. 2.

Bill 3 would increase personal income tax rates for higher income earners, effective July 1, 2004.

Because this income tax measure will be effective in 2004, we need to advise the federal Minister of National Revenue of our new rates before April 15th of this year so that they can be administered by the Canada Revenue Agency. In order for these changes to be implemented, this bill needs to be passed in this sitting of the Assembly.

Bill 3 would increase personal income tax rates for taxpayers with taxable income over $66,492. The rate for the third bracket, covering taxable incomes between $66,492 and $108,101, will increase by one-half a percentage point, from 11.7 percent to 12.2 percent. The rate for the highest income group, those with taxable incomes over $108,101 will increase from 13.05 percent to 14.05 percent.

This change will raise about $1 million a year from the 4,600 highest income taxpayers in the Northwest Territories.

I would like to note that there is a difference between an individual's taxable income and his or her total income. Taxable income is calculated by deducting a number of items, such as pension contributions, RRSP contributions, and the northern residents' deduction from total income. Someone with a taxable income of $66,492 would have, on average, $80,111 in total income before deductions. Someone with taxable income of $108,101 might have total income of around $124,254.

Someone with a taxable income of $68,000 will see his or her tax increase by about $7.54 a year, while someone with a taxable income of $110,000 will have an annual increase of $227.

Because this tax measure will be effective starting July 1st for source deductions, the amendment sets transitional rates for the 2004 year halfway between the old rates and the new rates. The CRA requires notification by April 15, 2004, so that payroll deduction tables can be adjusted.

Mr. Chairman, I would be pleased to answer any questions the committee has on this measure. Thank you.

Thank you, Mr. Roland. I now call on the deputy chairman of AOC, Mr. Hawkins, to make comments from the committee with regard to this bill.