Mahsi, Mr. Chairman. I am pleased to speak to you about Bill 5, the Professional Corporations Act.

This bill would allow self-employed members of regulated professions to incorporate where they are not now permitted to do so; provided that the member’s professional responsibilities are not affected.

Lawyers, accountants and most health professionals may not currently incorporate, as the limited liability of an ordinary business corporation is inconsistent with their professional responsibilities. While members of these professions accept that liability for professional errors or misconduct should not be diminished, the ability to incorporate can provide tax advantages for individuals in business that are not currently available to members of these professions.

Mr. Chairman, in order to remove this disadvantage, this bill allows for the creation and recognition of a different type of corporation, a professional corporation. Such a corporation should be treated the same as all other corporations, including for tax purposes, except that its voting members must be members of a designated profession and it would not have the limited liability that other corporations have.

This legislation was requested by the legal, accounting and medical professions. The development of the bill has been a joint effort. Justice staff worked closely with officials from the Department of Finance, responsible for legislation in respect of the accounting professions and the Department of Health and Social Services, in respect of the health professions. The bill was completed after consultation with the professions that might be affected.

This bill supports the principle of fairness in the taxation system, creating the same choices for professionals as for other businesses in the Northwest Territories and the same choices professionals would have if they resided and practiced in most other Canadian jurisdictions.

Attracting and retaining professionals is currently a challenge in the NWT and the absence of legislation to permit them to operate within a professional corporation may be one factor.

Mr. Chairman, I would like to thank the Standing Committee on Social Programs for its review of Bill 5 and members of the various professions for their input into the development of this bill. I would be happy to answer any questions that Members may have. Mahsi, Mr. Chairman.