Debates of February 14, 2005 (day 35)

Thank you, Mr. Minister. Ms. Lee. Ms. Melhorn; sorry.

Thank you, Mr. Chairman. Just to follow up on the Minister’s response, we do work with the WCB, and we work with RWED who has programs and information packages for new businesses. To ensure that anyone starting up a new business is aware of the requirements, we have information pamphlets. If we are aware of businesses operating in the Northwest Territories, and we are not aware that they have registered, we will follow up with them to ensure that they are registered and remitting payroll tax. Over the last year we have made a fairly significant effort to review our files, to eliminate businesses that are no longer operating in the Northwest Territories and to follow up on businesses which may not have registered. As the Minister indicated, our first efforts will be to encourage businesses and organizations that have employees, to register and to comply with the act voluntarily. That is where our focus is right now.

Thank you, Ms. Melhorn. Ms. Lee.

Thank you, but the questions that have been brought to me have to do with businesses that have been in existence for quite a few years, and that had been submitting taxes and payroll taxes. Now, two or three years later -- in one case, it is still a very rapidly growing business -- they might have been employing 10 people three years ago and are now employing 300 people. They are advertising; they have a strong presence in the city as well as in the surrounding communities. They have been called twice within a span of two months asking if they were going to be remitting taxes. They said, of course, we are going to be paying payroll taxes or, of course we…It was done in a way that raised a question in their mind, of how the government is keeping track of people that are paying taxes. Why would there be any reason to believe that they would not be submitting any taxes and how does the government keep track? Maybe I should ask how do you know when the business goes out of business, or how do you know when the business is supposed to pay taxes?

Ms. Melhorn indicated that the department keeps track of new companies registering. I wouldn’t think that every fiscal year you would be calling everybody to ask if they were going to be paying taxes. In general terms, what sort of mechanisms are there for checks and balances, to make sure that you are keeping track of businesses that are ongoing, as well as making sure that a new business is registered? I would certainly think or hope that you are not calling everybody and asking are you going to be filing taxes.

Are there inspectors out there? Is there a computer program that helps this section to do this job? I would like to have some more solid information about how, from a layperson's point of view, this work is done. Thank you.

Thank you, Ms. Lee. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, we do have programs and staff who track, as Ms. Melhorn stated, new businesses as well as older businesses in a number of ways. Without knowing the specifics of what the Member is raising, it is difficult to respond in a very specific fashion. There are times when an older company in the Northwest Territories changes ownership or registers a different portion of a company and receives a new GSN number, as we call it; a government services number, I believe is the term. That could get some calls happening. Again, initially to inform people that they need to register and hopefully they will follow through that process.

As well, if we find companies that are avoiding that, there are avenues that we use to ensure that they do end up registering. It is something that everybody has to follow in the Northwest Territories; it's not a voluntary choice. We try to use the kinder approach initially; based on that, we get into the side of enforcement, making sure that companies do register. We do have people on staff who review the files, and that is what they are doing now, is going through some of the files and ensuring that the companies are still registered and, again, there may have been change in ownership or directorship that may have changed some of the relationship and trying to make sure that we are staying on top of it. There are avenues that we do use, and we are continuing to try to improve on our methods about that. Thank you.

Thank you, Mr. Minister. Ms. Lee.

Could I just ask a question on how many people are employed by the government who actually look at making sure that people pay taxes? I don’t know what they are called; inspectors. How many people are actually employed full time to make sure that employers pay the taxes that they are supposed to?

Thank you, Ms. Lee. Mr. Minister.

Thank you, Mr. Chairman. I believe within treasury is the area that we work on the taxation side. Total for the taxation side, I believe that we have 6 people who would work in that area. Two specifically to do with the payroll tax. Seven -- I’m actually corrected on that -- seven people work in that treasury branch that work on the taxation side; two specific to payroll tax. Thank you.

Thank you, Mr. Minister. I have Mr. Braden next on the list. Thank you. We will go to Mr. Pokiak. Mr. Pokiak.

Thank you, Mr. Chairman. I just have a couple of questions for the Minister. In his opening remarks, he talks about the significant efforts in 2005-2006 on the Expert Panel on Equalization and Territorial Formula Financing. My question to the Minister is how far are you with this panel? When can we find out exactly how the negotiations are going with regard to the formula financing? Thank you.

Thank you, Mr. Pokiak. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, the work is very dependant on the federal government and when they make final appointments to the panel. We are expecting that that would happen in the very near future. Once that is done, we expect to receive a copy of the terms of reference that would apply to that. There is a draft terms of reference right now, but we are also aware that they are beginning to work on setting up a schedule of where they would go and appear, but it is still early and we are waiting for, I believe, final appointments to that panel. Thank you.

Thank you, Mr. Roland. Mr. Pokiak.

Thank you, Mr. Chairman. Does your department work along with the drafted terms of reference right now or is that taken care of by the government? Thank you.

Thank you, Mr. Pokiak. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, the Panel on Equalization and Territorial Formula Financing is a federal initiative and they’re working on the terms of reference. There’s also another panel that’s being worked on by the Council of the Federation, that being the Premiers of all provinces and territories. They’re looking at another aspect of the fiscal imbalance, both vertical and horizontal. It’s somewhat different than the work that’s being undertaken by the federal equalization panel as it gets up and going. There are a couple of initiatives that are happening and are beginning to be moved on. We’re expecting that within the year we’ll have some recommendations to work with. Thank you.

Thank you, Mr. Roland. Mr. Pokiak.

Thank you, Mr. Chairman. I’m just wondering, I want to talk a little bit about my next question, which is with regard to the $290 million repayment on the corporate income tax. What plans are in place in order for us to repay that amount of money back? Thank you.

Thank you, Mr. Pokiak. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, the initial plan is one of the federal government's. They have a structured repayment plan that every jurisdiction would operate under in the area of taxes collected on behalf of jurisdictions. This one’s specifically the repayment plan from the Canadian Revenue Agency. It is a three-year repayment plan base that uses population figures. The first two years, because of our population the amount is very low, but the third year is full payment. We have yet to finalize that with federal Finance. We’re aware again of the conditions that do apply. That’s why we’ve recognized it and are also recognizing it in our fiscal framework going forward. Thank you.

Thank you, Mr. Roland. Next I have Mr. Braden.

Thank you, Mr. Chairman. Further to our discussion about the liquor review which is about to really get started, by my understanding. The Minister had responded and given some of the areas that the review or act covers now and, of course, that would be contained in the review. Where I’d like to go with this question as well as in terms of the scope and how inclusive and how broad this investigation is going to go. One hundred sixty thousand dollars over two years is not a lot of money from my point of view, Madam Chair, related to the overall size of the impact of the Liquor Act. I’m wondering if the kind of consultation and involvement that the Minister envisions is potentially not going to be as broad as it might be. Are we potentially choking this review back by not giving it some more funding? This is where my original question was prompted, Madam Chair, is when the Minister said we heeded cautions that this should not be a large, expensive process. I’m just trying to find out, are we going to be potentially closing off some areas of public involvement for the sake of cost and maybe even time? Thank you.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. Madam Chair, the area of the Liquor Act, I guess is not an absolutely new issue. This is something that’s been looked at for awhile as being a concern to the government, as well as members in other organizations, because of the impact of alcohol and alcohol abuse in the Northwest Territories. Unfortunately, we have a lot of statistics that show that we’re one of the jurisdictions with the highest consumption rates. That impacts on our ability to deliver services and provide services to residents. It’s something that is of concern.

We’ve been looking at this initiative and went back and looked at some of the work that’s been done. There was a review done a number of years ago. In 2003 another report was undertaken about the Liquor Act itself, and from that report there was an initiative taken to then go to the phase we’re in now and we’ve hired a company to enter into this process we’re going into now. A steering committee has been formed and includes Finance, Justice and the Liquor Licensing Board and the consultant that’s been successful with the RFP that was issued. They begin to look at some further issues about where we need to go with this. There are a number of other areas we can use. Those that are directly impacted and affected through the Liquor Act itself, whether it’s in the sales or service end of it as well as from the community end, there’s going to be opportunity for residents to put their information and feedback into this in the next process. There will be community visits, as well. Not every community will get a visit from this group, but there will be community visits. From there we’ll begin to look at the options of how far we go in reforming the Liquor Act and its regulations and going forward, looking to develop the legislative proposal and coming back to committee members with that.

We’re just starting to enter into the next portion. We have followed through with the RFP and have hired a company to begin this process. We’ve put the steering committee together from Finance, Justice and the Liquor Licensing Board and are beginning that work. Again, hopefully we’ll have the initial report given to the steering committee by the end of April this year. Then going from there and seeing how much further we need to go with a final report given to myself and the Department of Finance by November 2005. Then we’ll need to decide at that point how to frame up the legislative proposal and bring it forward to Cabinet and Members. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Madam Chair. That’s a good review and certainly looks after that one for me right now. Then, Madam Chair, we can look forward to a potential revision and renewal, a modernization of the way we manage liquor. In the meantime, Madam Chair, this department still continues the mandate to look after the liquor management and the way public awareness programs are implemented. There is in the business plan an outline of this mandate that the liquor licensing and enforcement areas and Liquor Commission encourage responsible use of alcohol through regulation, education of staff in licensed premises and public awareness programs promoting responsible use of alcohol by NWT residents.

I’m wondering if the Minister could advise the committee, Madam Chair, of two things: some detail on the type of public awareness programs that are in place now promoting responsible use of alcohol; and what kind of fiscal investment, perhaps as well as from an HR point of view, what is our investment in promoting public awareness programs and the responsible use of alcohol? Thank you, Madam Chair.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Madam Chair. There are a number of areas that we do work with in conjunction with other departments; for example, Health and Social Services, in some of the awareness areas, as well, in general. For example, the liquor stores that are operational do labelling on the bags, as well in the Northwest Territories we have bottles that are labelled to make people aware that consuming alcohol, especially while pregnant, is not a good thing. So we do that bit of work.

The other area of education and training, as the Member touched on, is in the area with the Liquor Licensing Board which is part of their process. As they deal with companies and those who are set up with licences to sell alcohol in the Northwest Territories, they do reviews from time to time on their operations and make recommendations to the companies that they do serve training in areas of that nature.

We don’t have a particular program or budget line that would deal through a broad sense with alcohol education, if it’s in schools, for example, and so on. But we do work with Health and Social Services in that area. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Madam Chair. It’s not really a very impressive list given the impact that alcohol and its abuse has across our society. A number of the things that the Minister has outlined here really are quite passive and non-interactive. A label on a bag, a label on a bottle. Is that really communicating? Is it really working with people to persuade them of the consequences of abuse and helping them to make more responsible decisions? I really think we have badly undershot the responsibility we have. If we have undertaken in the mandate that it’s the Department of Finance’s job to look after public awareness programs promoting the responsible use of alcohol, we have sadly understaffed and under-resourced this mandate. We’ve certainly not taken it up from a political position. I just see so little being done in this area, Madam Chair. I would look at the work that this government has undertaken through the Department of Health and Social Services and the tobacco reduction mandate. Superb work there. The WCB has also been a big part of that and some community governments, as well.

Where I see such an amazing change in society’s attitude toward tobacco and the impacts that it has, we have chronically missed the responsibility and the opportunity to do something much more aggressively about alcohol. Madam Chair, I’ll stop there because I hope these are the kinds of things that we will see engaged during the review of the Liquor Act. I believe and I hope what we’re going to hear from the public is that somebody somehow has got to take a far more aggressive action to better manage alcohol in our society. I’ll leave it at that. It’s more of a comment and maybe a rant, Madam Chair. I welcome the Minister’s comments, but I’m not really asking a question there. Thank you.

Thank you, Mr. Braden. We are in general comments. I’ll take that as a comment. Next on the list I have Ms. Lee.

Thank you, Madam Chair. I wasn’t going to comment more, but this issue that Mr. Braden has been discussing has prompted me to say something here so that it’s on record. I was going to wait until the Minister’s work is done in April or May when this initial report on this review comes hopefully to AOC to discuss it, but this is such a huge issue. I know Mr. Braden is very passionate about this issue. I’m not sure if what Mr. Braden is calling for, which I think is necessary, should be placed and that debate should take place by way of this review. I think the way we manage or not manage well the use of alcohol and all the accompanying problems and concerns and issues that we have due to addiction or abuse of alcohol and the impact that it has on our citizens should be a discussion that we have among ourselves. I’m not sure if that’s a mandate of the Liquor Licensing Board to do this. I think the fact that the Liquor Licensing Board is under the Department of Finance says a lot, because it was really meant to process alcohol through the system. It was never meant, it seems to me, that they were supposed to engage in any kind of public relations or promotion or campaign about how to use liquor responsibly. I understand that they do this work to the limited degree of putting labels on bottles to prevent or dissuade pregnant women from drinking or people to not drink too much. I mean, the Liquor Licensing Board engages in how much taxes to charge. It’s a very limited thing and I just had a problem from the beginning in calling for a review to be done in this way.

I see this $80,000 allocated under this department as a response from the government to the concerns being raised by a Member who is very passionate about it, but by any measure I think that’s too little money, probably, to get the job done, but maybe a lot of money to do a lot of damage because you don’t have enough money to do the right thing. I think we are probably force feeding our responsibility as a Legislature in discussing the real issues at hand here about use and abuse of alcohol. I think that debate should take place in this House amongst ourselves and in a big way in society. I don’t think it’s the role of the Liquor Licensing Board or the Finance department who is in charge of this Liquor Act to do that.

I also think that the Liquor Act, the way it’s written, gives very specific powers to the Liquor Licensing Board. They should not have any power to speak about whether people should use or abuse alcohol. I have a very different view. I think somebody has to do it; I don’t think it’s the Liquor Licensing Board that has to do that. I think they have a very limited mandate now and they do work within those limited guidelines.

I understand from this side of the floor we’re giving the Minister mixed messages, but I’m prepared to wait until the Minister comes back with an initial review. I’m thinking that would have done enough work for us to make the next set of decisions and actions about where to go from here. I certainly hope that this review will consist of going back to all the studies that were done and compiling them together and presenting us with what issues we need to look at and how to conduct further consultation and have a debate.

I thought I should just put this down as an opinion of at least one Member about where I stand on this review before it went too far down. I’m going to, I’m sure, have further comments on that when we get the results of that review back in May. Thank you, Madam Chair.

Thank you, Ms. Lee. Mr. Roland.

Thank you, Madam Chair. Madam Chair, the Member is right; the role we play now from within the Department of Finance and the NWT Liquor Act is not as broad as some of the areas. We know, for example, as a government, the impact that liquor has on our communities and families is much broader than the act itself. As a government, we’re going to have to deal with and come up with a way of dealing with this as we’ve heard earlier about what programs are being run through Health and Social Services, like the anti-smoking campaign. Those are things as a government-wide issue we have to start wrestling with and trying to see if we can do things in respect to how people in the North deal with that issue and how we, as a government, would go forward dealing with that issue.

The Liquor Act itself comes right down to the fact of the operations of the Liquor Licensing Board, the relationship that they would have with establishments in ensuring that there are some rules and regulations in place and the sales of the product here. As well, part of this work will entail and we’re expecting that the consultant will review existing research and studies on the impact of alcohol on the social behaviour in other jurisdictions. That is a part of it that’s going to happen. Again, we’re looking for what’s happened in other jurisdictions in Canada with respect to the retail and regulatory side of the liquor systems and maybe some recommendations on appropriate change that can be looked at, as well as our enforcement side.

So the Liquor Act itself deals more with the mechanics, operations, enforcement side of things; punishment and provisions, for example. But we’re aware there is a social impact. There is going to be some of that looked into as we go forward. I think in the broader scope as a government we’re going to have to start to deal with that issue besides sort of after the fact coming up with treatment programs. That is one of the pieces, but I guess we’re going to have to take more of a proactive role as a government. But the Liquor Act review is narrower in some of the areas, but we’ll touch on some of those comparisons in other jurisdictions. Thank you.

Thank you, Mr. Roland. Any further general comments on the Department of Finance? Okay. Everybody is indicating we should proceed with the detail. Under Finance in your budget binder, page 3-13, directorate, operations expenditure summary, $1.351 million.

Agreed.

Page 3-14, directorate, active positions, information item. It goes on to page 3-15, as well. Mr. Braden.

Thank you, Madam Chair. I know that page 3-10 is there for information only, but I do have a couple of questions on that.

Okay. Thank you. We’ll come back to that after we’ve gone through the rest of the detail. Mr. Braden.

Thank you, Madam Chair. That will be fine.

Thank you. Activity summary, treasury, operations expenditure summary, $4.863 million.

Agreed.

Pages 3-20 and 3-21, treasury, active positions.

Agreed.

Fiscal policy, operations expenditure summary, $745,000.

Agreed.

Page 3-24…oh, I’m sorry. Committee, I’m going by what I’m hearing and I’m hearing people shouting agreed. That’s a very agreeable group on this side. I’m sorry. I’ll slow down then. I’ll read it slower, but when you’ve had a chance to note the page and if you have any questions, please indicate. Page 3-24, information item, fiscal policy, active positions.

Agreed.