Thank you, Mr. Aumond. Mr. Dolynny.
Debates of Feb. 16th, 2015
This is page numbers 5529 – 5568 of the Hansard for the 17th Assembly, 5th Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was going.
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Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Daryl Dolynny Range Lake
Thank you, Mr. Chair. I would believe economists would be looking at this as a twofold opportunity for this government. I strongly applaud the raising of the average wage rate in the Northwest Territories, but yet doing nothing to this tax credit allowing more dollars in the hands of those on the lower end of the earning scale has some merit.
Will this government do any type of review during this fiscal year to make it part of a strategy to have this looked at, in conjunction with the good work they’ve done, with raising the average wage rate?
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Michael Miltenberger Thebacha
Thank you, Mr. Chairman. As we work towards the transition document, I mean, if there is sufficient impetus, this could possibly be flagged for consideration, but in the life of the next 280 days until the next election we’re going to be fully occupied concluding and working on all the things we need to go get our business concluded and make sure that we do have that orderly transition. The intention will be not to spend a lot of time on this particular issue at this time.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Daryl Dolynny Range Lake
I’m sensing very tempered, cool, not warm waters on the response to this question. I’m just going to leave it as is.
I see opportunity. I see opportunity for some groundwork to look at our most vulnerable, our working poor. This is a great opportunity. I see that the department can do some groundwork so that when we look at the transition opportunities into the 18th Assembly, this Assembly would be known
historically for laying the foundation. That’s all I’m asking and I’ll leave it at that.
My next question on this category has to do with the significant decrease in the amount of net fiscal benefit transfer to Aboriginal parties. This is about a $4 million, almost a $5 million decrease. I’m trying to look at the notes with respect to this. It is tied to the net fiscal benefit from resource revenues and it’s tied into that transfer of the 25 percent. Can I get some more clarity exactly if that’s tied to resource revenues, and maybe a little bit of accounting around that number and clarity would be great?
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Michael Miltenberger Thebacha
Mr. Chair, part of the struggle in the economy in the resource sector has been a decline in what we initially budgeted for, so there’s been a significant decrease in the expectation of budgeting of that royalty. It’s
reflected both in what we’re putting into our share of the Heritage Fund as well as what the 50 percent of federal government gets off the top or the 25 percent that the Aboriginal governments get. I will ask the deputy minister if he wants to add anything further.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Aumond
Thank you, Mr. Chair. I guess the only thing I would add is that as the royalties change, then so will the contributions to the Heritage Fund and what we provide the Aboriginal governments under the Resource Revenue Sharing Agreement tied to the devolution file agreement. When we originally put together the budget for the previous year, the estimates at that time, based on the information, were much higher. Now, instead of looking at $120 million at that time, we’re looking at average revenues of $109 million but there’s lots of volatility in that revenue stream. We’re predicting about $80 million in 2015-16, so the net fiscal benefit is $40 million. The Aboriginal governments’ share of that will be around $10 million and we’ll look to around $8 million or just under $8 million to the Heritage Fund, which will leave $23 million left for infrastructure and debt management. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Daryl Dolynny Range Lake
Thank you, Mr. Chair. I appreciate the clarification on that. If I can get maybe some historical numbers. That $50 million that was put aside in the main estimates for last year, at what point does the money get into the hands of our 25 percent Aboriginal signatories? At that same question, this amount of $10.1 million, when are the cheques inked and when do our Aboriginal signatories receive that money? Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Aumond
Thank you, Mr. Chair. We expect that starting in July of 2015 is when we’ll start to see the bulk of the resource revenues coming in for the ‘14-15 year. According to the agreement that we have with the Aboriginal governments, we’ll be making those payments on a quarterly basis starting in July once the revenue stream comes. Of course, there will be a reconciliation process done at the end of every year. But given that, I think Members are aware of the timing of when we receive them. About 75 percent of the ‘14-15 revenues will be received in ‘15-16 and the 25 percent for ‘14-15 not until ‘16-17. While we have an appropriation for $10.1 million, that’s what we anticipate to take for the year and the payments to the Aboriginal governments will start, as I said, in July we anticipate. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Daryl Dolynny Range Lake
I appreciate the details on the disbursements. If these amounts of monies, again because we collect the money, we rebate the portion to the federal government, so the bulk of that money stays within the GNWT. It sounds like we’re paying this money quarterly. Where does this money sit in our books in terms of as it’s waiting for these quarterly disbursements and are we getting any interest on that money? Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Aumond
I guess for clarification, the federal government doesn’t take its money off the top. They deduct it off in subsequent year’s grant, after there’s a reconciliation process. But the money, when we collect it, sits in the Consolidated Revenue Fund of the GNWT. If we happen to be in a cash surplus, then we’ll earn some interest, but given where we are in any given year, we are in and out of surplus, as the Member knows. It sits in our Consolidated Revenue Fund until such time as it’s disbursed. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

The Chair Robert Bouchard
That you, Deputy Minister Aumond. Committee, we’re on page 153, fiscal policy, operations expenditure summary. Mr. Hawkins.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Robert Hawkins Yellowknife Centre
Thanks, Mr. Chairman. I was listening to Mr. Dolynny’s questions regarding the cost of living tax credit. I’ve been actually doing research on this the last few weeks. I was wondering if the department could explain not the theory but the actual cost of how we drive our numbers. In other words, if we raise it by $1,000, the tax credit, how does that directly or indirectly affect us on a dollar amount? Could the Minister or someone provide a clear example? Is it strictly dollar for dollar or is it based on percentage? Who eats what? Right now, it’s set at a rate that has basically stayed since its inception, since 1987, and it’s only had a bump a few years ago, I think… I was going to say 2005, but a few years ago. But that said, can you explain what it costs us and how it costs us, the money? Give me an example based on that $1,000. In other words, if the tax credit was raised by $1,000, is it dollar for dollar? What would we be eating as a government? Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Aumond
Thank you, Mr. Chair. We’re projecting that the cost of living tax credit will cost us about $21.9 million in ‘15-16. How that works is the cost of living tax credit was intended to rebate, and rebate completely as I mentioned earlier in my response to Member Dolynny, 100 percent. For lower income earners, the payroll tax, that gets applied to everybody. The GNWT makes a net gain on the payroll tax, but the idea was to provide a rebate to those residents who live in the NWT. The total is up to $966, depending on the income you make, and after you reach a certain threshold you don’t get any of that rebate back. For us to increase
it by $1,000 per taxpayer would cost us $1,000 times however many taxpayers we have in lost revenue. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Robert Hawkins Yellowknife Centre
Sorry. I just want to make sure. Are we talking about two different things? I’m talking about the cost of living tax credit and I thought I heard him say payroll tax. I just want to make sure we aren’t talking about two different things. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Aumond
The cost of living tax credit is designed to give… I guess I’ll start back earlier. Every person in the NWT, whether you’re a resident of the NWT or not, pays payroll tax on the wages they earn. The cost of a tax credit is designed to help shield, to a certain degree, those NWT residents from payroll tax by giving them a rebate up to a certain threshold. Beyond that, if you’re a higher income earner, then you actually don’t get that tax back. Member Hawkins said what would it cost if you increase it by $1,000. It would cost us $1,000 by however many taxpayers we had in the territory, which would be foregone revenue that we currently can make today. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Robert Hawkins Yellowknife Centre
Thank you. How many people are contributing to this gain that we make? Can he provide a breakdown of how that works? It’s not a straight line, I realize. In other words, it’s not as if it’s 219 people providing $1,000. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Michael Miltenberger Thebacha
Thank you, Mr. Chairman. We don’t have that level of detail. We can provide that to the committee. Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Robert Hawkins Yellowknife Centre
Maybe I’ll just pass at this time. I agree it needs to be reconsidered and I would disagree by saying that I believe we have enough time to reconsider something like this. Unfortunately, I can tell you, though, I doubt the will is there. That’s the problem. I share the same concern as Mr. Dolynny. I think analysis needs to be taken into effect into the burden of who should carry the taxes here and who best would put the money into whose pockets. In other words, I think an additional $1,000 in the working family pocket goes a lot further to the economy than it does to the government’s.
I guess, then, I would probably proceed with the next comment. Is there any reason why the department wouldn’t do an economic analysis on this type of issue? Ultimately this is it. We want to be somewhere where money is working the best. Government probably believes it’s in their pocket. You ask a working family and they’ll say it’s in theirs. So is there any reason why the department wouldn’t take up an economist and review the situation and see what type of analysis we can get about getting the money back out there? Thank you.
Consideration in Committee of the Whole of Bills and Other Matters
Consideration in Committee of the Whole of Bills and Other Matters

Michael Miltenberger Thebacha
If there is will of committee that they would like some further information on this, we can look at that. The big issue for us – and everyone has seen the budget, the revenues versus expenditures – how do we replace the revenues at this juncture? So we’ve laid out this plan. If it’s the will of the House to have this looked at, we’ll look at it, but I suggest that would be for the 2016-17 fiscal year. Thank you.