Thank you. Sergeant-at-Arms, if I could please get you to escort the witnesses into the Chamber.
Mr. McLeod, could I please get you to introduce your witnesses for the record?
Thank you, Mr. Chairman. I have with me Mr. Mike Aumond, deputy minister of MACA, Laura Gareau is the director of corporate affairs for MACA, and we have Kelly McLaughlin, legislative counsel, Department of Justice.
Thank you, Mr. McLeod. I’ll now open the floor for general comments on Bill 15. General comments? No general comments? Is committee agreed that there are no comments?
Agreed.
Can we proceed to clause-by-clause review of the bill?
Agreed.
Okay. We’ll defer the title and bill number and proceed with the clause-by-clause. Clause 1.
---Clauses 1 through 4 inclusive approved
Bill 15, An Act to Amend the Fire Prevention Act.
Agreed.
To the bill as a whole.
Agreed.
Does committee agree that Bill 15, An Act to Amend the Fire Prevention Act is now ready for third reading?
---Bill 15 as a whole approved for third reading
I’d like to thank the Minister and his witnesses for joining us today. If I could please get the Sergeant-at-Arms to escort the witnesses out.
Is committee agreed that we proceed with Bill 17?
Agreed.
All right. I’ll now ask the Minister responsible for the bill, the Honourable Michael Miltenberger, Minister of Finance, to introduce the bill. Mr. Miltenberger.
Thank you, Mr. Chairman. I am here to present Bill 17, An Act to Amend the Income Tax Act. This bill is the result of our collaboration with the Department of Justice and the Canada Revenue Agency to ensure the NWT Income Tax Act remains harmonized with the federal act pursuant to the Tax Collection Agreement between the two governments.
Besides minor changes in terminology, the proposed amendments relate to the following:
revising definition of “adjusted income” for the purpose of calculating territorial Child Tax Benefit;
Child Tax Benefit entitlements in a shared custody situation;
deductions for taxable dividends as a percentage of the grossed-up dividends;
deductions for corporations with foreign investment income.
Since introducing the Universal Child Care Benefit (UCCB) in 2006 and the Registered Disability Savings Plans (RDSP) in 2008, the federal government has excluded income and repayment amounts from these sources in the calculation of the Canada Child Tax Benefit. Following other provinces and territories which have adopted a similar approach in calculating their respective provincial/territorial child benefits, Bill 17 proposes to replace the current definition of “adjusted income” with a new definition that has the same meaning as in the federal act for the purpose of calculating NWT Child Tax Benefit. Under this new definition, the NWT child benefit will not be reduced when parents receive the UCCB or income from a RDSP.
Under existing rules where two individuals share custody of a child, only one individual can receive the combined federal and territorial Child Tax Benefit for that child in a particular month.
The federal budget 2010 proposed to introduce the concept of a “shared custody” parent, and to allow each “shared custody” parent to receive one-half of the monthly Child Tax Benefit for the child. In this regard, Bill 17 proposes to introduce a similar provision respecting a “shared custody” parent, and to allow this parent to receive one-half of the monthly NWT Child Tax Benefit for the child.
Both the NWT and federal acts provide a dividend tax credit for investors receiving dividend income. Currently the territorial credit is defined as a fraction of the federal gross-up rate, and it must be changed whenever the federal gross-up rate changes. As federal corporate income tax rates will be reduced over the next three years, the federal gross-up rate will be changed as well. To avoid amending the NWT Income Tax Act every time there is a change in the federal gross-up rate, Bill 17 proposes to express the territorial credit as a percentage of the grossed-up dividend. The current credit level remains unaffected by this amended provision.
Lastly, Bill 17 proposes to amend the provision that deals with deductions for corporations with foreign investment income. A corporation that maintains a permanent establishment in the NWT can claim a foreign non-business tax credit for taxes paid to another country where it earned its non-business income. This credit, based on an allocation formula if the corporation also maintains a permanent establishment in other provinces and territories, prevents double taxation and reduces the NWT corporate income tax. Annual claims for this credit are not significant. For example, between 2006 and 2008, companies in the NWT claimed an average of $87,000 per year in the territorial foreign non-business tax credit. The federal government offers a similar credit with the intent that the corporation is required to claim the maximum amount for the federal credit first before it can claim the territorial credit on any remaining foreign non-business tax. The amended provision ensures that the federal intent be followed, and that only taxable income that the corporation earned in Canada be included in the allocation formula mentioned earlier. Thank you.
Thank you, Minister Miltenberger. I’ll now ask the deputy chair of the Standing Committee on Government Operations, who have reviewed this bill, to make comments. Mr. Hawkins.
Thank you, Mr. Chairman. The Standing Committee on Government Operations met on December 9, 2010, for a detailed review of Bill 17, An Act to Amend the Income Tax Act.
Following the clause-by-clause review a motion was carried to report Bill 17 to the Assembly as ready for Committee of the Whole.
This concludes the committee’s general comments on Bill 17. Individual Members may have additional questions and comments as we proceed, Mr. Chairman. Thank you.
Thank you, Mr. Hawkins. Minister Miltenberger, would you like to bring witnesses into the Chamber?
Yes, Mr. Chair.
Is the committee agreed?
Agreed.
Sergeant-at-Arms, if I can please get you to escort the witnesses into the Chamber.
Minister Miltenberger. Can I please get you to introduce your witnesses for the record?
Thank you, Mr. Chairman. I have with me the deputy minister of Finance, Margaret Melhorn; John Monroe, the director of fiscal policy; and Mr. Ian Rennie, legal advice and legislative counsel from the Department of Justice. Thank you.
Thank you, Minister Miltenberger. On that, I will open the floor for general comments on Bill 17. Does the committee agree that there are no comments on Bill 17?
Agreed.
So, can we proceed back to the clause-by-clause review of the bill?
Agreed.
Okay. We will defer the title and the bill number and go clause by clause. Clause 1.
---Clauses 1 through 13 inclusive approved
Bill 17, An Act to Amend the Income Tax Act.
Agreed.
To the bill as a whole.
Agreed.
Does committee agree that Bill 17, An Act to Amend the Income Tax Act, is now ready for third reading?
---Bill 17 as a whole approved for third reading
Thank you committee. Bill 17 is now deemed ready for third reading. I would like to thank the Minister and his witnesses. If I can please get the Sergeant-at-Arms to escort the witnesses out of the Chamber. Can we move along to Bill 18?
Agreed.
I will now ask the Minister responsible for the bill, the honourable R.C. McLeod, the Minister of MACA, to introduce the bill. Minister McLeod.
Thank you, Mr. Chairman. I am here to present Bill 18, An Act to Repeal the Settlements Act.
Municipal and Community Affairs is proposing a Repeal of the Settlements Act. This legislation has ceased to have effect because there are no longer any settlements in the Northwest Territories.
The last settlements were Enterprise, Fort Resolution and Colville Lake. Enterprise and Fort Resolution became hamlets and Colville Lake revoked its settlement status entirely and became a band-governed community referred to as a First Nations designated authority.
There is no further need for the Settlements Act because there are now a wide range of governance options available to community governments, ranging from the many forms of municipal governance to designated authority. This is an arrangement where First Nations bands enter into contribution agreements with MACA for funding to provide municipal-type services to residents. This is a transitional mechanism for municipal-type service delivery until self-government arrangements are completed.
On repealing the Settlements Act, references to settlements in our other statutes will no longer be necessary, so those references will be removed through the consequential amendments to those statutes included in this bill.
I look forward to hearing comments from the Members and answering any questions. Thank you, Mr. Chairman.
Thank you, Minister McLeod. I would like to go to the chairperson responsible for the Standing Committee on Economic Development, which reviewed this bill, to make general comments or to make comments. Mr. Ramsay.
Thank you, Mr. Chairman. The Standing Committee on Economic Development and Infrastructure met on February 16, 2011, to review Bill 18, An Act to Repeal the Settlements Act. Following the clause-by-clause review, a motion was carried to report Bill 18 to the Assembly as ready for Committee of the Whole.
This concludes the committee’s general comments on Bill 18. Individual Members may have additional questions or comments as we proceed. Thank you, Mr. Chairman.
Thank you, Mr. Ramsay. Minister McLeod, would you like to bring witnesses into the Chamber?
I would, Mr. Chairman.
Does the committee agree?
Agreed.
Sergeant-at-Arms, if you could please escort the witnesses into the Chamber.
Thank you. Minister McLeod, if I could please get you to introduce your witnesses for the record.
Thank you, Mr. Chairman. I have with me to my left Mr. Michael Aumond, deputy minister of MACA. To my right is Laura Gareau, director of corporate affairs for MACA; and Kelly McLaughlin, the legislative counsel, Department of Justice. Thank you.
Thank you, Minister McLeod. I will now open the floor to general comments on Bill 18. Does committee agree that there are no comments on Bill 18 at this time?
Agreed.
Can we proceed to the clause-by-clause review of the bill?
Agreed.
