Thank you, Mr. Minister. Ms. Lee.

Thank you, Mr. Chairman. I don't believe still that I have gotten the confirmation and clarification on what the net return is to our government at 14 percent. I understand, and I have heard this many times, that there are all sorts of factors that go into this and there is never any certainty on the forecast and the assumptions that the government makes to crunch out numbers. We are just fed like lap dogs, whatever they tell us at any given time is what we get.

Limiting the calculations to the assumptions the government made in drafting this paragraph, I am going to narrow it down to this paragraph, the second paragraph on page 2 of 2, I am told that at 13 percent we are going to come out even. At 12 percent we are going to lose $800,000. At 14 percent we are going to raise $8 million. Is that $8 million a net gain, net revenue to the government? In case I run out of time, depending on the length of the Minister's answer, when the time comes to approve or take a vote on this bill as a whole, I would ask for a recorded vote. Thank you.

Thank you, Ms. Lee. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, on that second paragraph we put in our estimate of the net gain of going from 12 percent to 14 percent. We are expecting $8 million. We have built that into the budget document that is before all Members in this House. For the 2004-05 year, we are estimating that we will receive approximately $31.750 million in corporate tax. That is our estimate based on discussions with the federal government. Thank you.

Thank you, Mr. Minister. Mrs. Groenewegen.

Thank you, Mr. Chairman. With respect to this bill, as a lot of Members have already stated, there is never anything popular about taxes. As a matter of fact the saying goes that there are only two things for sure in life, and those are death and taxes; two very unpleasant things that go together it seems. Mr. Chairman, I think that taking this out to public consultation would not have been a bad idea. I am not sure that we would have been able to get an opinion of consensus from the public. It is a very complex issue. I have already stated in the House that I think the advantage of consultation would have been to create awareness, and I think that even after we pass the bill it is not too late to make the effort to create that awareness in the public about what we are trying to do and what direction we are going in with these taxes. I would suggest that where an opportunity arises or where Members would like to have that discussion in their regions, that they invite the Minister there to do that. Because it is a complex issue, I concur with people who have expressed the opinion that we have to place some confidence in our senior officials, and in our Minister here on this. I will quickly conceive that they know a lot more about this complicated regime in how it relates to our formula, and our funds that we get from the federal government than I will ever be able to absorb I'm sure. So I will give them the benefit of the doubt on that.

As for the corporations, 500 or so that will be affected, a lot of them didn't come here yesterday. They were probably here before when the rate was 14 percent and they saw a decrease to 12 percent. They enjoyed the benefit of that for a short window of time, and now all we are doing is going back to something that was the status quo previously. So in that sense I don't see it as being that big of a hardship. Certainly, when we talk about the strain on our program services, particularly our infrastructure, which we are struggling as a public government to maintain, I think that some of the industrial activity that is taking place is in some part, although it is very welcome, contributing to that stress and our ability to keep up. So in terms of the way this tax is directed and

the history of the rates that we have seen in the past, the fact that the Minister has agreed to consult and talk to people about it after the fact, I would like to say that I will be supporting this bill. Thank you.

Thank you, Mrs. Groenewegen. Mr. Minister, did you wish to comment?

Thank you, Mr. Chairman. Mr. Chairman, again, I would like to thank the Member and all of the Members for their comments regarding the initiative that is before them, and the increase of corporate taxes. I agree, taxes are never popular, and I didn't take this job with a goal that l would cause an increase in order to provide services to our NWT residents. But after looking at the scenario presented to us and trying to come up with a balance, we have had to wrestle with this, look at our options that we had available in trying to get something in the 2004-05 year. I have heard a lot of Members now talking about what we are going to do next, and I hope we still have your support when we do actually start looking at those reductions.

A lot of Members are calling for looking internally, and that is the exercise we are going to embark on after this. What we are doing here is just to secure where we are in providing the level of service we have available to residents to date. There is no real increase, and if you look at a lot of the departments' increases they are based on forced growth, whether it is an increase in providing the service through union agreements to pay wages to nurses and doctors, or teachers, or trades people, those that we have left in trades that is. So we are trying to come up with that balance of what we can do in trying to meet our own goals and providing a level of service that is not only expected, but to meet the requirements that we have put upon us.

It is difficult, and I am willing to go to the regions and Members' constituencies to go through this and explain the impacts, as well as where we are going as a government with these initiatives, but it is not going to get any easier. As the Member stated, right now we are dealing with the strains on our programs and services, and the philosophy of the 15th Assembly is different than that of the 14th Assembly in trying to meet our goals as a government and still provide services to our residents. We have changed our philosophy, and we are going to go about that in trying to come up with an appropriate balance, and not all Members will agree with the scenarios that will come out. Again, at the end of the day we are going to have to meet those targets that we set for ourselves. Thank you.

Thank you, Mr. Minister. Mrs. Groenewegen.

Thank you, Mr. Chairman. Something the Minister said just reminded me that, yes, this is just one part of a multi-faceted approach to what we are seeing as fiscal responsibility, and there will be other things that will go together, work together with this single initiative, which we are considering right now, that all together will hopefully take us down that road towards having a more balanced and less stressful approach to our fiscal situation. It does put the government in an awkward position when we are constantly looking at that debt. I think it will be good for us, it will be perhaps painful in the short term, but when I put myself into the position of the Finance Minister, which I am very glad I am not, but in all honesty as a regular Member it is easy to take exception, and to take shots, and to find fault, but I can't see anything that Mr. Roland is doing that I wouldn't be doing exactly the same if I was in his position. Let me reiterate, I am very glad I am not in his position. Thank you, Mr. Chairman.

Thank you, Mrs. Groenewegen. Mr. Minister, do you wish to comment?

Just a comment and again I thank the Member for speaking to the bill. Thank you.

Thank you, Mr. Minister. Clause by clause. Bill 2, An Act to Amend the Income Tax Act, Clause 1.

Clause 2. Ms. Lee.

Thank you, Mr. Chairman. As I stated earlier I want to move a motion. I think I already know the outcome, but I am presenting this motion.

The motion reads that Clause 2 of Bill 2 be amended by striking out 14 percent in each of sub-clauses 1, 2, and 4, and by substituting 13 percent. Thank you, Mr. Chairman.

Thank you, Ms. Lee. The motion is in order. We are going to circulate that motion. Thank you. The motion is in order. To the motion. Ms. Lee.

Thank you, Mr. Chairman. I am presenting this motion because I do believe that we cannot be at 12 percent where we are losing money for having the corporate tax at that rate. I do believe that 13 percent will allow us to break even and possibly a little more. I do understand that our government is in fiscal restraint but, as I have stated, I don't believe that we have an opportunity to go through our final situation to the detail where we could prioritize. I do believe that 13 percent will give us extra money, but 14 percent would take us to a two percent increase. That is higher than I would like to see, so I am proposing this motion. I am not going to ask for a recorded vote on this. I understand that we can have a recorded vote on the third reading. Thank you.

Thank you, Ms. Lee. Mr. Braden.

Thank you, Mr. Chairman. I can't speak in favour of this. I am satisfied that the information presented to us justifies that 14 percent is a realistic tax level, and that the increase of two percent is not excessive. I guess what convinces me of this is that if we go from 12 to 13 percent we are just sort of tweaking and tinkering here, we are not giving ourselves the margin that I would be satisfied with to know that we are not going to continue to be in a negative revenue situation. I think 14 percent is realistic because it gives us a buffer. That being said, that is my comment. Thank you.

Thank you, Mr. Braden. Any other comments? Mr. Hawkins.

Thank you, Mr. Chairman. I will be supporting this motion. I think it is a good step, and I think it is a recognition that we still have to work a little harder to sharpen our pencils. As it has been said, I don't really think that this burden is necessarily fair to be taken solely on the 15th Assembly's shoulders, but unfortunately we have to make corrective actions. The Minister has quite clearly said that if we don't take some steps we are going to be penalized by Canada. I think it is a good saw if we are taking corrective steps, and I think we need to go back to the drawing board and make a few more creative solutions. The last point I want to hammer out, and I may have to repeat this later, but the point is if this side of the Assembly makes any comments in regard to the budget, we have to recognize that it is a position of weakness because our comments are only treated as creative suggestions, and any comments we make, they don't even vote on them for goodness sakes. It is kind of pathetic, because we may vote unanimously on a suggestion and then we just watch it go through. So it seems almost embarrassing that we provide creative suggestions, the majority of this House provides good feedback on what we want to see in this budget yet we get no reaction, it is at their discretion. So at the end of the day it seems quite sad. I will finish by saying I will support this at this time. Thank you, Mr. Chairman.

Thank you for your comments, Mr. Hawkins. Mr. Roland.