Thank you, Mr. Chair. I am pleased to introduce Bill 20...

---Laughter

I beg your pardon, Mr. Chair. The Standing Committee on Accountability and Oversight introduced a public review of Bill 20, An Act to Amend the Income Tax Act, No. 2, on February 23, 2006. The committee generally welcomed the bill which will reduce the corporate tax rate to 11.5 percent effective July 1st of this year. Members find it regrettable that the government was essentially forced by Canada's formula financing rule to introduce a rate of 14 percent two years ago, resulting in an uncompetitive tax regime and a significant loss of revenue to the GNWT.

The committee heard from one public witness, Mr. Ben MacDonald, representing Alternatives North. Mr. MacDonald suggested that in order to ensure corporations pay a fair share of the tax burden over the next year, the GNWT should examine options for other forms of taxes such as capital taxes or property taxes that would be tied to operation and work in the NWT and the corporations would not be able to avoid by filing in other jurisdictions. To this end, he suggested that the bill include a sunset clause to ensure that the tax rate would have to be revisited after one year.

Mr. MacDonald also expressed concern about the competitiveness between Canadian jurisdictions into a race to the bottom to have the lowest corporate tax rate. He suggested the NWT should take the initiative to work with its federal, provincial and territorial counterparts on a strategy to eliminate competition among jurisdictions and focus on obtaining a fair return for Canadian governments from the corporations.

This concludes the committee's general comments on Bill 20, An Act to Amend the Income Tax Act, No. 2. Individual Members may have questions and comments as we proceed. Following the clause by clause review of the bill, a motion was carried to report Bill 20, An Act to Amend the Income Tax Act, No. 2, to the Assembly as ready for consideration by Committee of the Whole. Mahsi.