Thank you, Madam Chair. I just want to offer some general comments. I can understand, and I appreciate this debate that we are having and I am listening to what the Members are saying. I am a returning Member, but I think from my experience of having sat through four budgets, and argued the points here for the last four years, if it has taught me anything it is that I cannot accept all of the information that the government feeds us at face value. I don't mean to imply that the Ministers somehow hide their information or anything like that, it is just the fact that our consensus system of government is set up in such a way that it really puts the Regular Members on this side in a disadvantaged position. We do not have the machinery of the department, and the Department of Finance, and economists, and accountants who do these numbers.

In the last Assembly there was definitely -- and I don't want to go back there -- but I think it is important to what we are doing here, and my point is I feel like I was on a ride in the last Assembly where it was let's just spend and spend our way into utopia. There was probably all of the same factors that we have now, our fiscal relationship with Ottawa, dealing with our social programs, social issues, the need to build up infrastructure, all of that was all put in a positive light. So we were on a spending spree. Now we have an Assembly and a Cabinet that seems to be on the other extreme. My position is that I refuse to get on this bandwagon. I don't want to go on a spending spree, and I don't want to go on this fiscally conservative, cut the budget and raise the taxes all at the same time regardless of what is going on. I refuse to go on that ride.

I have a question on the process too. I share the same view as many Members here who feel they have been disadvantaged for not having gone through the business planning process, and the fact that this taxation is being introduced in the first four months of this government. I really believe we have not had a chance as a new Assembly and new government to look at the whole business planning process and make sound judgments and observations about how we are spending our money. If at the end of that process I am provided with the information that convinces me that we have no way to go but to raise taxes, cut the spending because we have to meet the deficit requirement or whatever, then I am prepared to do that. At this point we do not have that information. For the life of me, I don't understand how in the last Assembly at 14 percent we had two windfalls, there were corporations that filed corporate tax in the amount of many millions of dollars at 14 percent, which tells me we didn't have to reduce the rate to attract anything. We reduced it to 12 percent and we were sold on that. Now, two years later, we have to put it back to 14 percent because we have been hit hard. Not only have we had to give back every cent we got on this windfall, wherever it came from, but then we are being penalized for the next hundred years.

I'm just not being fed the kind of information that I expect us to be fed and given as consensus government Regular Members and I feel that I should have equal power and equal strength as any Cabinet who is over there because this is not party politics and they're not supposed to be operating like a party and saving their information and justifying and philosophizing and interpreting facts that suit their needs. For that reason I'm not prepared to go on this.

This is one of three series of taxation. It's not just corporate tax increases. We're looking at increases in our personal income tax, we're looking at increases in payroll tax, and I'm telling you, if at the end of all this at least one-year exercise we are convinced and I'm provided with evidence that suggests that we don't have any other option and we are faced with major cuts in social programs, then I'm prepared to accept that. But the time is not now for me.

Another point on the corporate tax is, I understand that at 12 percent we are losing money. I don't understand how we got there, but I understand that's where we are. To be responsible I think I have to do at least that which would give us a net gain position. We can't be losing money at a tax rate. So I'm prepared to go to 13 percent, but a two percent increase is a large amount and I'm not prepared to accept that yet. I think in the intervening two weeks that we've been here in this House we have had some extra money from the federal government. I know the Minister of Finance has told us many times that it's not a long-term solution. Well, we operate under a financial arrangement and negotiation situation where we cannot have that sort of long-term guarantee. I understand that and that needs to be fixed, but that's not to say that our situation will not be different next year. If I'm convinced after one full budget cycle that we still need to do this, then I'm prepared to do that, but I am not prepared to increase the corporate tax to 14 percent yet.

The second thing is I think we need to realize that the diamond mines which this taxation is really aimed at do contribute a lot to our economy. They pay millions in fuel taxes that goes on the road. They pay millions of dollars on fuel taxes for the fuel they use on their site. They are going to be the main contributor to the bridge project that we are building on the Mackenzie River. They do contribute millions in the way of socioeconomic agreements that they have entered into with the First Nations. I want to make sure that in whatever I do in this House that I am prudent in dealing with their corporate income as I would any other income, Madam Chair.

For all the reasons I have stated, on the procedural side and on the substantive side, I am going to hold my position at 13 percent. I have suggested that. I don't know if I'm going to get that support. I am going to introduce a motion at the appropriate time. Thank you.

Thank you, Ms. Lee. Next on the list for general comments I have Mr. Yakeleya.

Thank you, Madam Chair. As my honourable colleague Mr. Hawkins said, we just got elected into the government in November and we took the onus to skip the business plan to deal with the budget here. Being new to the House and the system and learning as we go, I think one of the things that I'd like to say is that we have something in front of us, let's deal with it. Good or bad, right or wrong, we have to deal with it. I knew that this government was going to be into a debt wall when I was running for Sahtu MLA and they told me about the debt wall and how would you deal with it. I never really gave it much thought. I thought we'd deal with it as a group here. How serious the debt wall was and the other good things I'm learning now. It seems to be that we're going through a growing stage and proving ourselves to the federal government that we can handle our finances, we can take care of ourselves. I think it's how the federal government views the Government of the Northwest Territories and the people of the North here in terms of becoming our own. It seems like we're going through this process here.

Mr. Roland indicated that January 2004 is when he wants to have the corporate tax in effect. That's 10 months from now. From last year? Retroactive, sorry. Thank you, Mr. Villeneuve. Retroactive to last January.

He has some time to advise the national revenue agency by April 15th and he alluded to part of the package of revenue and expenditures and have a balanced budget by 2006-2007. We achieved that in 2004-2005, is my understanding. I'm very interested in hearing his strategy of postponing the rebasing for one year to see how we're going to deal with that. It has postponed our deficit for one year. Strategize how we're going to deal with the debt wall. He's talked about some possibilities of lost grants. If we went one way and the consequences went another way, we might lose some grant money; his development of alternatives to current approaches in terms of the tax effort, in terms of the rebasing.

In saying all this, it's still necessary to achieve long-term fiscal stability in the North here, so I think for myself that, taking a sober look at our finances, I dearly look to spend in the Northwest Territories and programs and services in the North here. However, that's not the case today. Today we have to be really conscious and sober up and say this is what we have. We can't go in the dream world anymore and spend this and spend that. We put ourselves in there. Our responsibility as MLAs in here today is to look at the issues that we have in front of us. In order to get out of it I know, for me, it's going to require some discipline and some I want this and I want that, not today, maybe tomorrow. But if we're going to achieve some fiscal stability for this government, come to a balanced budget. I think that puts us in a better picture in terms of our children. They're going to be paying for our debt.

We have to prove to the federal government over and over that we can handle our finances. There are resources here that we can do it. We're stepping up to the plate here. It has taken us a long time here and I'm not going to say anything about the 13th and 14th assemblies, they did what they had to do. It's our turn now in the House, the 15th, to do what we have to do. A lot of people in the communities are looking forward to that.

I say to the corporations, if you want to do business in the Northwest Territories this is what it costs to do business in the Northwest Territories. They have financial planners. I bet they're right now in their boardrooms figuring out how to deal with this increase if it goes through; to figure out the deal with the tax increase. Any good business will have financial planners to deal with the taxes.

Just launch the resources in the Northwest Territories. With oil and gas coming potentially down the Mackenzie Valley, there are mines here. There is potential for that. This Northwest Territories is rich in minerals and resources. It would be ludicrous if the companies don't come to do business here. They will make double and triple what they're making. They're not going to leave this country. We have it up here. We have the resources and the federal government knows that, too. They want that gas down the Mackenzie Valley, they're going to do something. They want the mines to produce the diamonds, they'll do something.

Yesterday I went to Gameti and I flew over this country here. This land is rich. Good land. Big, you know. I think that for the corporate taxes they need to keep their money here. They need to support us. We're not going anywhere in the small communities. We're not going anywhere. We need the infrastructures in the communities. We need help. Look at those mines; they have gymnasiums and everything like that. In small communities we're still fighting for gymnasiums and recreation facilities and that. They have everything there. It's about time they start spending in our small communities and keep it here.

I don't mind, I'm in full support of the corporate taxes. Unless someone else convinces me otherwise that they're going to leave, they're not going to leave. Given that maybe we haven't done a good job in terms of providing information to the corporations in terms of the increases, that's how we come into this House here.

In saying that, Madam Chair, if this is what we have to do, then this is what we have to do. I spoke to some of the representatives from the Sahtu region and I talked about the initiatives that this federal government is looking at and they said if that's what we have to do, that's what we have to do. We'll pull through. It's not the first time. We've been here a long time. It's not the first time we're going to go through this.

I think in closing that the bigger picture is to let the federal government know that we really need to look at some of the other initiatives that this government is going to use in terms of how we're going to deal with the rebasing, how we're dealing with the deficit, the debt wall, and alternate approaches to our finances. I think that's what the community needs to know in terms of achieving a balanced budget. Madam Chair, that's more of a comment and more of my thoughts and thinking in regard to the Minister's opening comments. Thank you.

Thank you, Mr. Yakeleya. I have on the list now Mr. Pokiak and Mr. Villeneuve for general comments. Mr. Pokiak.

Thank you, Madam Chair. I, like some of my colleagues here, being new to the process, it's been a struggle for us, I guess, in terms of how the process works. I've never dealt with the budgets before or with tax increases before. It's something new to me. But keeping in mind every time there's a proposal for tax increases, a lot of people raise their eyebrows and look around and say what's going on? In this instance, Madam Chair, we did have people come up to the public review and bring forward some of their concerns, especially the Yellowknife Chamber of Commerce, NWT and Nunavut Chamber of Mines and the NWT Construction Association. One comment that was made during the public review is that they may rearrange their affairs to find some of their income in other jurisdictions, which gives me concerns right now. Again, I think with regard to the proposal for the proposed change from 12 to 14 percent on the corporate income tax, I will be in support of that, Madam Chair, unless the Minister and his colleagues can find other alternatives for it. At this point in time I haven't had a chance to consider it. All I can say right now, at this time, Madam Chair, is that I am in support of the increase from 12 to 14 percent. Thank you.

Thank you, Mr. Pokiak. General comments. I have Mr. Villeneuve.

Thank you, Madam Chair. I have to concur with the other Members that on the short time that we've been allowed to review and respond to these taxation changes and I can appreciate the public's concerns with the changes as far as the Chamber of Commerce and the Construction Association are concerned.

Just to comment on some of the newer Members' concerns about the business plan review and such. I have to give some consideration to the government's staff that has probably reviewed a lot of the options that are being brought forward today in this committee with the concerns about lowering the change and perhaps going with 13 or 13.5 percent. I'm just going to give some consideration to the finance staff. I'm sure they've looked at all the possible options available and I'm sure they've come up with the best possible option to get the best possible return for the change that they are proposing at 14 percent.

I would say that being new Members, and saying we have to put some faith in the staff that they have and say they've probably already reviewed the possibilities and are going with the 14 percent because that's the best return for our buck. I know that it's gone from 12 to 14 percent, if it does go through today or tomorrow, and I know over the last two years it's gone from 14 to 12 percent and now two years later we want to look at going back to 14 percent. I think there has to be some weight given to the circumstances surrounding the new change and I think a lot of the onus is on this government's ability to expedite the negotiations on our resource revenue and devolution negotiations at next week's meetings in Hay River. I think this government has to really listen to what the other aboriginal governments and northern leaders have to say as far as getting the process underway and getting some kind of agreement-in-principle in 2005 and probably implementation hopefully in 2006 or 2007. I think something like this tax change, which has been changed before in the last two years, could change again in another two years. Then who knows, we could be in competition with Alberta on having the lowest corporate tax rate by that time after some resource revenue and devolution agreements have been made.

But I don't think it's going out on a limb by this current change here that we're proposing and I don't think it will be detrimental to the survival of a lot of small businesses in the NWT and a lot of the large industries, for that matter. I think they've dug their heels into the NWT economy and definitely dug into the NWT resources and I think they're just willing to stay here for the long time and if we have to demand a little more return on their investments and a little more bucks to put into our social programs that they are basically one of the major contributors to the rising cost of our social programs and such that we have to meet these budget restraints with. I'm in full support of this change in Bill 2 to amend this taxation act and I think it's something this government could come back and review in two or three years when we actually have some agreements-in-principle so far as resource revenue and devolution are concerned.

On the other income tax initiatives, I think we have to give some consideration to the finance people in saying that they probably considered every option that is made available to them and how it will affect this government. I think we just have to have a little more faith, I guess that's hard to say, in our government because we're always running into budget restraints and deficit walls.

When the member from the public meeting was pertaining to overall in Canada we're still one of the lowest insofar as corporate tax of large corporations in Canada, I don't think that's a bad thing. I think it's something that we can live with and we could substantiate it with the oil and gas industries. I'm sure they can come to grips with it and realize that the amount of return they are getting out of our health and justice and education systems to work with them to get some programs and apprenticeships and training and all that going, they need the government to work alongside them and I think we can't do that and can't keep up with them without more dollars in the social aspect of our operation. I'd support this initiative. Thank you, Madam Chair.

Thank you, Mr. Villeneuve. General comments. Mr. Delorey.

Thank you, Madam Chair. Maybe I should just say I hate taxes.

I do hate taxes, but it has been mentioned a couple of times, some Members have mentioned coming together in this government and what we've adopted from the last government. It always

amazes me when I think back to when we came together as a 14th Legislative Assembly if we look back at the recordings, I think we were talking about exactly the same things. About when we were going to hit the debt wall in four or five years and where we were going and how we were going to find the solutions to our problems. I guess we did get lucky in the last government with some major windfalls and it was all around, if I remember correctly, mostly around corporate tax at that time. The point has been made before that we were convinced that it was such a good thing that we should lower our corporate tax to 12 percent to attract more investments in the North and more companies to file their taxes here.

We were sold on that idea and we were sold on that idea by our Cabinet of the day and the people that do our accounting system. I won't begin to try and convince anybody that I understand the accounting system that the government uses. I know that we were delivered in our office or mailbox a book here a couple of nights ago that addresses the issue of how government accounts for funding for governments. We've been pretty busy and I haven't had time to read through it all, but I did read three or four pages of it. Long enough to know well into it that it's probably no use trying to figure it out because they said even accountants that work in industry don't understand how government accountants work and how they figure out their tax base or formula financing. I kind of got discouraged after about three or four pages saying if they can't figure it out, I'm not going to be able to figure it out.

Here we are again being told by our leaders or the Finance Minister and his accounting people that we have to increase our corporate income tax because we were sold a bad bill of goods last time and what they told us was that it didn't turn out to be that way. I guess I personally don't think that the government's track record of putting out predictions as to what a government initiative is going to bring back to government as far as revenues, I don't know what kind of a track record we have, but I would venture to guess that it's not great at meeting our predictions.

I have said before that when these taxes were first introduced I was totally against them. I had no intentions of supporting these tax bills. We have had a lot of information since then and I do sympathize with the Finance Minister that we have to try and find some way of getting some revenues and demonstrating to the federal government that we're trying to do our part. I was thinking back to when we made changes to the income tax before, and I haven't been able to look back and dig out the transcripts, but there's something that tells me that I remember our then-Finance Minister saying to us in committee when the question was asked about how the federal government looks at us playing with our Income Tax Act that he said we're such a small jurisdiction that they don't really care what we do with our income tax and it doesn't make any difference on our formula financing. But now we're being told that they're watching it very closely and we have to show them that we're doing things to generate our own revenues.

I have taken a lot of the information that has been presented to us and one of the things that has kind of convinced me that there is some value in supporting some of these taxes, as much as I hate to do it, is that it's hitting the bigger corporations. Not to say that they're not important by any stretch of the imagination. I think they're very important to our territory. They're the ones that are creating the jobs out there, putting people to work. They invest in a lot of things and I think that they're very important. But again to me it comes back to our leaders over here that are setting the direction for this government. We have to put some faith into the fact that they have done the homework and that what they are leading down the path of is not one of total destruction and driving people out of the Northwest Territories. I certainly don't think that would be a good approach.

I do believe though that we have room to move in other areas than taxes. I am not convinced that we are not trying to be too big and be in too many things to too many people. I'm really hoping that we start looking inside a little bit, before this next round of cuts comes along, and we have to set some priorities. We can't just keep going and everything that comes before us is a priority and keep throwing money after it. It has been mentioned before, spend, spend, spend like drunken sailors. I still see this government wanting to spend, spend, spend. We're still looking at huge developments that I think we're spending a lot of money in areas that if we just let business run business, they would invest the money and those things would look after themselves.

I am certainly going to be looking forward in this next round of business plans to what we're doing as a government to look internally a little bit at our spending and what our priorities are and, as much as I hate to say so, I am going to support this corporate tax rate and I'm going to put, once again, my faith into the leaders that we have that are telling us that we have to do that.

I always put a lot of faith into what I hear back from my constituents and I did go back to Hay River last weekend and talked to a few people and I was quite surprised at the level of negative remarks that I got back. I was very surprised at that. Again, that's about all I have to say now, Madam Chair, and I will be looking for some better things from the next round of business plans. Thank you, Madam Chair.

Thank you, Mr. Delorey. I have Mr. Ramsay and Ms. Lee on the list again. Mr. Ramsay.

Thank you, Madam Chair, for allowing me to make a few additional comments and ask a couple of questions. I, like Mr. Delorey, hate taxes as well. I believe most people do hate taxes. It's not a nice thing to have to do and I believe, Madam Chair, that it's the last thing a government should have to do is to go back to businesses and individuals and try to find money that in my estimation the last government misspent, and this government is misspending.

I go back to February 13th, Madam Chairperson, when we were talking about some specific revenue options that this government was proposing, and they talked about at that time to raise the corporate income tax rate by one percent, to 13 percent. I think what happened was the evolution of that, maybe they talked to some other Members and found out that there might be an inkling of an appetite for a two percent increase. The old saying holds true, Madam Chairperson, if you give them an inch they will take a mile. I believe that that is what happened here. We were talking about one percent, and now we are at two percent, Madam Chairperson.

The other problem that I had with this whole thing was that some presenters that were before the committee last week had less than 48 hours' notice or preparation time to come and give us a presentation on their input into the process. I don't know how a one-hour meeting in Yellowknife constitutes public consultation. To me it does not constitute public consultation. I think we have to pay some more attention to the folks that are out there, what type of impact these tax initiatives are going to have on the economy, on industry, and on individuals alike, Madam Chairperson. I don't think this government did the right thing, and I would have fully supported these tax initiatives going through the full 120 days, and run the gauntlet of public consultation that should have happened, and it didn't happen.

I have a question for the Minister, and that goes back to the presentation that he made to committee on the 13th of February when he talked about a one percent point increase in the corporate income tax rate would raise about $7 million. I am reading that right off of the information that was provided to us, and I think, Madam Chairperson, I heard the Minister talk about the fact that a two percent increase would raise $8 million. How is it that a one percent increase would raise $7 million, but a two percent increase would raise $8 million? Maybe I can have that explained to me. Thank you.

Thank you, Mr. Ramsay. There has been reference to February 13th numerous times here this afternoon, and unfortunately I don't have whatever document the Members are referring to in front of me. If it was a presentation that was made in committee, it is not something that is really up for disclosure and challenging the Minister on in this forum. The difficulty with it is that we have those kinds of prior knowledge and information of things the government is thinking as a unique feature to our consensus style of government. It is not typical, but it is something we try to respect that what happens in committee is not referenced outside of there. So I would ask the Member, Mr. Ramsay, if he could rephrase his question in a way that does not implicate the Minister in some way for having shared some of his thinking prior to the official proposal coming to the table. Thank you.

Thank you, Madam Chairperson. As a new Member, I will start to understand some of the shortcomings I think that our process has, Madam Chairperson, and the fact that information can be supplied at a meeting, and I can come into a public setting and want to discuss that information that was provided to us and I can't do that. I think that there certainly is a shortcoming in that, Madam Chairperson, that I take a great exception to.

---Interjection

I take exception to it though, Madam Chairperson, I am sorry. I do appreciate your comments, and I will move on now.

Thank you, Mr. Ramsay. I don't think the document you are referring to was something that was laid out in a public forum. I could stand to be corrected. Another interesting feature of our government is you are not allowed to challenge the Chair.

---Interjection

---Applause

I have already made a ruling on that and I have given you the opportunity to rephrase your enquiries. If you could do that, that would be great. Thanks.

Thank you, Madam Chairperson. I didn't mean you any disrespect in any way shape or form with my comments. Madam Chairperson, there is a part of me that wants to keep digging here, but I think I won't do that. I will stop my questioning there because as I sit here I am getting angry. Thank you.

Thank you, Mr. Ramsay. I am sorry; I was just conferring here with our Law Clerk. Did you want to talk about how expectations in terms of revenue based on percentages, did you want to ask the Minister about that?

No, thank you, Madam Chairperson. It might be a good time for me to go in the chair actually. Thank you.

---Laughter

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

Thank you, Madam Chair. Actually the question that I had in my mind, and that I had before Mr. Ramsay started asking, is the same one as his, but seeing as I am an experienced Member, I noticed that it is mentioned again in the Minister's opening statement, which we can ask questions on. It is on page 2 of 2 of the Minister's opening statement. It speaks to the revenues that we would get from changes in the corporate tax rate. It says that the increase from 12 to 14 percent would raise $8 million in 2004-05, but an extra $12 million in revenue at the 12 percent would lose $12.8 million on the grant. I want to know, is the $12 million in revenue, it says an extra $12 million, but let me ask the Minister, Madam Chair, how much revenue would 12 percent corporate taxes raise, and how much revenue would 13 percent raise, and how much revenue would 14 percent raise? Where is the cut-off in which we would actually see net gain rather than net loss? Thank you.

Thank you, Ms. Lee. That is a very good question. Mr. Roland.