Thank you, Mr. Chairman. Thank you for that reminder, Mr. Chairman. I just wanted to make one last comment. I know there are going to be some difficult decisions to make here. I have a strong stomach and if some of the things he talks about are going to happen here the next couple of years, he will have my full support in that. Thank you, Mr. Chairman.

---Applause

Thank you, Mr. Ramsay. Mr. Roland.

I take the Member's comments. As we go forward, we will be sharing the information and building into the business plan process on the initiatives we set forth as government and how we are going to save the next $20 million. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Mr. Chairman. To the bill, I am speaking in favour of this bill, but like the one that we just passed, Mr. Chairman, with little enthusiasm, even less than the one before. The advantage of the benefits of this bill, which would obviously be for people in the higher earning brackets are quite real and quite tangible. This is much more of an initiative that we, as a government, are taking of our own volition. Part of what we see as an available opportunity to raise some more revenue, not a lot of revenue, but it is one that the Finance Minister obviously has enough conviction that he is bringing this forward.

I want to compliment the Minister on one hand, Mr. Chairman. In his budget address and in bringing this tax initiative forward Mr. Roland has also signalled that in the very near future, we are going to see two other tax initiatives, payroll and the cost of living tax credit brought forward in May. Not that I like taxes very much, but if we are going to be doing some work, this Assembly and certainly the businesses and people in the NWT are much better served by having all of this presented in a bundle, if you will, so that all of the government's ideas and initiatives about tax can be seen more or less as a whole. We can, with some certainty, figure out what the net impact of this is going to be once it's all said and done. This, I think, is something that was a good move and I am appreciative of it because it makes this job even in something like taxes just a little bit more straightforward; not necessarily easier, but more straightforward to discuss with the public where they know what all the aspects are going to be.

Some of the aspects of this, we know, of course, what makes it unfair, we can all feel the money slipping from our pockets for the brackets that are being affected, but it will still leave this jurisdiction the fourth lowest in Canada for personal income tax. It has the impact on our social situation, as was pointed out by the people from Alternatives North, that there is a very solid body of survey and study of taxpayers' attitudes that says if what we are going to do is see our social services framework threatened, then the pain or the grief or the inconvenience caused by tax measures seem to fall below the concern that people have if they see social services being cut instead. So we would seem in this case to be on the right side of the fence if we look at our society as a whole. I would like to take that venue here that we need to do some things to protect our social infrastructure and this is one of them.

I am, to some degree, comforted by the assurances that I have so far from the Department of Finance and Minister that the provisions that are tied together in the payroll tax and the cost of living tax measures will, in effect, actually leave more money in the pockets of lower income northerners. So this is part of some of the layers that I have learned that you have to peel away when you are talking about taxes because they aren't black and white all the time. There are aspects to them that need to be comprehended. This is probably the most significant thing for me, Mr. Chairman, that says this is a bill we are supporting. It's because of the net effect. Once all these things are bundled and done, it leaves some money, not a lot, but leaves some money for the lower income wage earners.

What it takes from the higher income wage earners is also going to be offset to some extent, I understand, by the tax credit allowance. All in all, it is a workable piece of legislation.

Some Members have made some remarks about the $50 million very dramatic and very positive change in our situation. I don't see it as something, Mr. Chairman, that should affect the measures that we have already got in place, not only for this year but for coming years. I don't regard it as a gift or new money or a windfall, not at all. We are going to continue to be in a very tight situation in

subsequent years and we should stay the course. I just wanted to mention that from my point of view, as big a piggy bank as $50 million is, we still need to keep a longer view on things.

I have a couple of questions for clarification. I hope the information I have heard so far is going to be consistent with the answers. With the measures that are going to come forward through the payroll tax, on my paycheque, my biweekly paycheque, or any other northerner, am I going to be seeing less disposable income because of these tax measures in my regular pay packet? Am I going to have to wait until tax time before I see a reconciliation? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, the Member is correct to an extent on the impact of the tax initiatives that have come before this Assembly, this being the second of three tax measures we, as a government, have identified in my budget address as well as in our revenue picture that we put forward to the committee. The payroll tax, which just got first reading today, does change more, depending on your income. Again, it would be using a certain amount of income and we could come up with examples. The way the tax is calculated, it's a progressive system. Each bracket is taxed at a certain level and then you get up to the next level and it hits the next bracket and then the higher ones. The two lowest tax brackets will drop and will impact on how much tax they're actually paying. There will be a drop in some of the tax, that is the percentage of tax, because of our progressive system. So there will be a reduction, and the majority of people who will benefit from this will be in the $66,000 figure and less. They will benefit through an increase to the cost of living tax credit, as well as a drop in the two lower brackets. But on this bill, the two higher brackets that we're moving upwards, there's going to be a certain affect. Some of the work we're doing now is to the actual net impact that happens after all the tax initiatives are put in place on personal income tax. So we have started that work and we have some estimates now on different categories. Again, this is sort of going beyond the scope of this bill, but since they're put out as a package and explained to Members that in fact the net impact that residents will feel, the higher tax brackets once the next bill comes into effect will actually drop down. So there will be some offset as a result of the payroll tax which drops the two lowest tax brackets. The highest levels won't negate the total increase, but it will drop back down a little bit again. Thank you.

Thank you, Mr. Roland. Mr. Braden, your time is up. I'll go over to Mr. Villeneuve.

Thank you, Madam Chair. Thank you, Mr. Chairman. I just have a question on this new initiative. I guess I concur with the Finance Minister that the half a percentage point increase of a person grossing more than $80,000 a year is not really a big chunk of money that we're talking about. Out of $80,000 wages, $7.50 is not a heck of a lot of money, but I think it's just the principle that people tend to look at more than what are the actual dollar amounts that they'll be paying out.

I just wanted to ask the Minister of the 4,600 taxpayers in the NWT that are going to be affected by these changes, probably a large number of those income tax payers are GNWT employees. As Mr. Ramsay was referring to, that this tax increase is basically just going to raise the cost of living for these income tax payers in the NWT. I'm just wondering if that's just going to provide the GNWT employees with some ammunition when it comes time to negotiate their new public service agreements in the upcoming year. Will this $1 million that we get out of these changes be offset by I'm sure the changes in the public servants' collective agreement, and in the next round of negotiations will equate to much more than that insofar as getting income increases with GNWT employees? I'm just wondering if that had been considered over the long term, and what effect that would have. Thank you, Mr. Chairman.

Thank you, Mr. Villeneuve. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, trying to give you the exact figure of how many of the employees are GNWT employees that would fall into that bracket, there are probably a significant amount. As to the actual going forward, there are a number of factors that would come into play as a government how we would go forward, in either a negotiation setting or just in our cost measures that we have to look at going forward. But it's hard to try to estimate or predict what might be on the table and what issues are there, the type of increase they will use. The cost of living will be a factor. It is just about in every set of negotiations we have that come up. So to a degree, yes, this will impact. I know from my previous experience as a member of the public service, that it was something that was considered when you sat down and did your votes as a union member going forward. But unfortunately, again, with our fiscal situation, looking at what options we have, we're taking a look at all our sources. As we go forward we'll have to look at all those areas of belt tightening that we have yet to do. So it's difficult right now to say what potentials are out there when it comes to that negotiation setting.

In the budget we just dealt with as an assembly, actually a lot of the forced growth is due to a three percent increase for this fiscal year. So that's something we've had to deal with and as new negotiations come on, government will have to look at how we can try to ensure that we're living within our means. Again, it's difficult to put all the pieces on the table and try to predict what will happen. We know that the cost of living is a factor that plays a role in how much of an increase our union members would be looking to get. Thank you.

Thank you, Mr. Roland. Mr. Villeneuve.

Thank you, Mr. Chairman. I guess as everybody in the room is well aware, over the past couple of weeks when we were going over the budgets, that forced growth consumes millions and millions of government dollars that we have to deal with. A lot of points came up by a lot of Members saying that maybe we should put some belt tightening measures on forced growth. Something like this tax initiative, although it's regrettable that I would have to support something like this, I know that our fiscal framework taken into consideration is something that we're just going to have to do.

All I'm just wondering and I'm really concerned about is the amount of leverage that a taxation increase like this is going to put in the hands of the Public Service Alliance. Any three percent forced growth right across the board on the GNWT, in the GNWT books, equates to a lot more than $1 million a year. So I don't want to throw caution to the wind I guess, but I just want to let the Minister know that something like this could have some real high impacts as far as coming back to us and everybody in the PSA saying we're paying more taxes and we need more money. You're the ones who increased the cost of living for us. Something like that concerns me because I think just the forced growth alone in the government is just exorbitantly high. I think this will add to that forced growth and give them more reason to say we need more money because of these new tax initiatives, which ultimately affect I would say a high percentage of the GNWT employees because of the fact that in that tax bracket I know a lot of private individuals and small businesses don't even make near $80,000 a year. Ultimately anybody who is in the government I think would probably be at the $60,000 to $70,000 after just a few years in the government. I'm just wondering, just a point of concern, I guess, that maybe...

Mr. Villeneuve, can you keep your comments towards Bill 3, please.

Sure. Thank you, Mr. Chairman. Like I said, it's just some cautionary measure that we should consider before looking at any more tax increases such as this.

But regrettably, like I said, I will be supporting the bill because I don't think it's a whole lot of dollars we're talking about. That's all I have to say. Thank you, Mr. Chairman.

Thank you, Mr. Villeneuve. Mr. Roland, would you like to comment?

Thank you, Mr. Chairman. Mr. Chairman, looking at the big picture and potential impacts as a result of this increase and some of the comments the Member said about our public service within the Government of the Northwest Territories, right now the Government of the Northwest Territories, through its own staff and through staff who are hired through the health boards and education boards, we're paying in the area of $400 million a year in wages and benefits to those employed with the Government of the Northwest Territories and delivering the programs and services for us. So when you look at that picture and take $1 million in comparison to that, it's a very small percentage. That's just government employees. There are many other employees out there in that area. But, yes, we have to look forward in seeing what potential other impacts may result as a sort of reaction to what this does and go forward on that basis. As a government we've tried to limit the impact on residents. We haven't targeted reductions of employees through this budget. We've tried to maintain what we have and move forward so we can continue to deliver the programs and services available to residents at the level that they become accustomed to, as well as meeting our mandatory requirements. So we will take the Member's comments and keep those in our back pockets as we go forward and then seeing how we develop our other scenarios. Thank you.

Thank you, Mr. Roland. Mr. Villeneuve.

Mr. Ramsay.

Thank you, Mr. Chairman. I will keep this fairly brief, and I'll just go back to some comments that some other Members had in that it's only going to cost a box of doughnuts; $7.54 a year or whatever. In the Minister's opening remarks, he talks of the basic level of that tax bracket that you'll see an increase of $7.54. At the beginning of the upper tax bracket of $110,000, you'll see an increase of $227. Mr. Chairman, those numbers paint the rosiest picture possible. I've done the math on what the government is intending to raise, and if you do the math on that tax bracket; that first tax bracket averages out to $67.56 per taxpayer. If you go to the highest tax bracket it looks like it averages out to roughly $780, Mr. Chairman. So I don't know why we don't put all the numbers on the table and call it like it is.

I mentioned earlier, numbers seem to change around here on a weekly basis, and I just want to make sure that the residents of the Northwest Territories and folks who are affected...There are 4,600 taxpayers who are going to be impacted by the decision here to raise the rate on these higher two income tax brackets, and I think they have a right to know what the average taxpayer is going to pay and, Mr. Chairman, it's a heck of a lot more than what's in the Minister's opening comments. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. Again I agree and respect the Member's position on taxes and tax initiatives, but we are trying to come up with an average. How many people earn $80,111? How many people earn $85,000? That bracket from $108,000 and upward, it's difficult to have an average because that goes from $108,000 up to $1 million. There are some people making very large amounts of income in the Northwest Territories. So trying to come up with an average number between those to say this is what the majority of those people, the 900 taxpayers -- I believe that's the figure, 900 taxpayers in that highest bracket -- what the average would be, it tells a very different story and it wouldn't be an accurate one either. So there's an in between there between each category. We would have to go up for $80,000, for $88,000, for $92,000, and as well for $100,000 forward. In trying to come up with saying 900 people would pay so many dollars when in fact the wages are anything but average when you start looking at those levels.

So I agree; we're giving you scenarios: one of someone who has a taxable income of $68,000 and somebody who has a taxable income of $110,000. We could provide many levels of information. When you look at it, somebody with a taxable income of $88,000 would be paying $108 a year. Somebody making $150,000 of taxable income would be paying $627 a year. So there are scenarios and we could do that, but it's almost going down to the individual taxpayer and what they're able to claim and deduct and so on that really has an impact. I would say using an actual average wouldn't be an accurate way of doing it either. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.