Debates of March 30, 2004 (day 11)

Thank you, Mr. Hawkins. I would now like to ask the Minister if he would like to bring in witnesses and introduce them.

Thank you, Mr. Chairman. I would like to have witnesses.

Does the committee agree?

Agreed.

Thank you. I would ask the Sergeant-at-Arms to please escort the witnesses in.

Thank you. Mr. Minister, for the record, please would you introduce your witnesses.

Thank you, Mr. Chairman. To my far right is Mr. Gerry Gagnon, manager of tax policy; to my immediate right is Ms. Margaret Melhorn, deputy minister; and to my immediate left is Rebecca Veinott from Justice. Thank you.

Welcome. We will now move to general comments. Mr. Hawkins.

Thank you, Mr. Chairman. Mr. Chairman, in this particular case I'm going to state that I will be supporting this adjustment. Although very unusual probably for me to be enthusiastic about a tax increase, $7.54, under the $68,000 taxable income bracket, basically could represent a box of Tim Horton's doughnuts. So I don't think that's going to have a significant impact on that tax bracket.

The other side of the taxable income of $110,000 plus, the increase being $227 per year, we are really only talking about $15 a month so I don't think that will have a significant impact on that bracket either. Therefore, I will be supporting this. Although I stress it's highly unusual for me to be enthusiastic about a tax increase, I feel that this will have a very minimal impact on those in the sense that they will never even notice. Thank you, Mr. Chairman.

Thank you, Mr. Hawkins. Other general comments. Ms. Lee.

Thank you, Mr. Chairman. It appears that I'm going to have to play the lonely role of a contrarian here. I am not going to support this tax bill either, on the basis of many things that I've said. I do believe that we have had a break from the federal government for $50 million. I do believe it is unreasonable to go from a deficit position of $47 million and the federal government gives us $50 million that we were not expecting, and we go into a surplus of $3 million but still pursue an increase in taxation.

Mr. Chairman, I should state -- I think everybody here understands but I just want to make it clear -- that we have, as Members, to state our position and argue on an issue-by-issue basis and present our justification for the way we take our positions. I don't think it means any disrespect to the work of the Finance Minister. I know that the Minister of Finance, since becoming the Minister of Finance, has not I don't think given thought to anything but his budget. I'm sure he speaks this formula financing and rebasing and tax effort adjustment and all those jargons in his sleep. So I know that he is constantly crunching the numbers. But I am just very resistant to this taking the box again that I was fed in the last Assembly, where not only did we increase the spending, as the Minister's of Finance budget address suggested, our spending grew by $220 million in the years between 1999 and 2000 since division, where our revenue only went by $140 million. We spent way more than we got. At the same time, we reduced the personal tax credit, we reduced corporate tax, all in the name of justification that the Finance Minister of the day told us.

So I think Members could understand that I have a healthy dose of cynicism and skepticism when I'm presented with a completely 360 degree backwards on another set of assumptions. I'll be watching the Minister's work over the next while and once I've had a chance to go through the business planning process, not as a new Member but as a returning Member to this Assembly, maybe I’ll feel that I could actually have an input into the way that we make our priorities by the way we set our budgets. After all, when we pass a budget that is setting our priorities. So far I feel like I've had zero input into how we spend our money, what assumptions we expect, how we accept and how we interpret those assumptions. I guess I live my life where I don't mind making mistakes, but I don't like making mistakes twice and I'm not going to sit here and accept everything that is told to me.

Another reason, Mr. Chairman, is that I think anyone who walks down to Tim Horton's, not only to buy a box of Tim Horton's doughnuts with, well, I guess extra money we will have to spend once this is passed, anyone who walks down there will hear from the people that the biggest problem we have in the North is the cost of living. Everything about living here is high. Even the government acknowledges that it's too high to buy here that they're going to go south to buy where it's cheapest. Not only that, Members that come here have gotten themselves a housing allowance increase because they can see with eyes open how expensive it is to live in Yellowknife, and it applies to all the communities in the North.

This taxation would affect the top two tax brackets, but it would affect about 3,500 taxpayers. We have only been here for four months, we have not had a chance to look at what we can do better. I'm telling you we had lots and lots of spending stuff last time that I haven't seen, and I'm not speaking for cuts in programs, I'm talking about what we can do to better use our dollars before we go out and reach into the pockets of the people out there. It's not their problem that we have spent out of control and spent like drunken sailors, which is a quote that I gave to this Assembly.

Perhaps in a year's time I may be willing to support something like this, but I think this is way too new in this Assembly and I am going to exercise my right to flex my healthy dose of skepticism and cynicism and I'm going to not give support to the Minister's of Finance initiative just because. I know he's good and willing and he operates under good faith and he's certainly working hard to put some fiscal discipline into our work, but I do believe the picture is incomplete and I do believe that if somebody came to me and said they're going to pay off my mortgage and I owed the amount of $47 million and somebody gave me a $50 million cheque, I think somebody could get a break here and not respond to that by a tax increase. In the House I fought and fought and fought hard to save some of our programs and none of that happened. So I'm thinking why should I be doing everything that the government wants if the government is not prepared to listen to any of the suggestions we make on this side of the House. So on that principle and all the reasons that I have given already, for that reason I am not prepared to support this bill. Thank you.

Thank you, Ms. Lee. I have Mr. Menicoche.

Thank you, Mr. Chairman. One of the things that I have been telling the people back home and I'm going to be consistent about, is that it would be unrealistic to come to government and try to get more. We cannot get more programs, more services, but we can hang on to what we have. Unfortunately this tax is one of the ways we do it, and I would like to look in the long term as well. I do want to achieve a balanced budget and this is one of the ways we're going to have to do it.

This afternoon I had the pleasure of being at a presentation where one of our organizations that we support was in a severe deficit position, but they rolled up their sleeves and they did lots of hard work just to climb out of it, and that's where we are today. That's what I would like to concentrate on, is here we are today and what can we do to better ourselves for our people and the future? This is one of the ways of doing it right now. So I'm supportive of this increase in Bill 3. This is one of the best ways I think today we can achieve those results of a balanced budget, which I am striving for as well. Thank you.

Thank you, Mr. Menicoche. Mr. Roland, did you care to make some comments?

Thank you, Mr. Chairman. Mr. Chairman, the philosophy of the 15th Assembly is different from previous assemblies, and that's something I think we need to recognize. As a new government we sat down as new Members, some returning, some more experienced, some with new ideas, and decided that we would set a fiscal course early on. Now we've taken that direction, myself as Finance Minister and my Cabinet colleagues, and looked at the alternatives we have before us in trying to meet that target. It's not an easy process. We know that taxes are something that is not an option that's looked upon lightly. In fact we're going to have to ensure that as we go forward that we're spending the money wisely, the money that the taxpayers of the Northwest Territories pay as well as the rest of the Canadian citizens as they play a big part, as over 70 percent of our revenue comes from Canada. So we're going to have to ensure we're doing the best we can.

Early in the life of this Assembly our Cabinet has committed to ensuring we're going to begin to look at that and how we spend money as a government. Look internally, see how we're delivering programs to those in small communities as well as those in the large communities. That balance is going to be a tough balance to come across.

I respect Members who, on principle, do not support the tax initiative. As Ms. Lee mentioned, on principle it's her right to speak and I respect that. We all have that opportunity here, and I've done that on many occasions in the past myself. But one of the things we have to remember is we ended up in a situation, for a number of reasons, that we were now looking at a potential deficit of $46 million for 2004-05. Now myself as a homeowner, if somebody came to me and using the scenario that was used by the Member, if somebody came to me and paid off my mortgage, I wouldn't be tempted to get myself back into a huge debt. I would be very thankful that somebody paid my mortgage, but then I would use my resources to ensure that I didn't end up in a position like that again unless I knew I could pay my own way out of it.

So there are difficult choices that we'll have to make going forward from here. I think again with the options before us, the timeline that we have, we can't afford to put off initiatives and see what the future may hold. By doing that, we only create a bigger hole and deeper hole to try to dig ourselves out of. So we're being proactive here in trying to come up with the approach that we agreed to as new Members of the 15th Assembly. We've taken the initiative, we've gone forward, we are looking long term down the road in trying to secure a stable fiscal environment for the 15th Assembly, but, more importantly, beyond. I think we have to take the actions today to ensure that our children aren't paying for equipment and infrastructure that we make use of today and that they'll run out of in the future. But I agree; we're going to have to look internally and look at how we're spending those dollars and ensure that we're doing the best job for the residents. Thank you.

Thank you, Mr. Roland. Mr. Menicoche.

Thank you, Madam Chair. I have concluded my comments. Thank you very much.

Thank you, Mr. Menicoche. Mr. Allen.

Thank you, Mr. Chairman. As this tax bill evolves, I will support it but I think I need to put it on the record, Mr. Chairman, that during the last couple of weeks I was raising a number of educational questions to the Minister of Finance and trying to offer some helpful suggestions and what we should do to try to develop some incentives to work alongside the Cabinet to achieve the solutions to some of the understandable problems he has. I think it's quite right, with the limited amount of information we have to ascertain whether a tax increase would be a net benefit, I think the question is always in the back of people's minds. I think for the Fast Food Cafe in Inuvik, it doesn't differ from any other restaurant.

Nonetheless, one key comment I would like to enter into the record, whether it's a small increase or a large increase, there's still a concern out there. Again, this is an evaluation done by the Canadian Federation of Independent Business, that there may be less spending by the higher income tax bracket people to purchase services and products throughout the Northwest Territories. Just a quick comment to that, I don't know if it's relative to the principle of the bill, but if you go to northern Alberta you see about 150 NWT plates on a given weekend in the larger municipalities shopping throughout the Peace region, Grand Prairie and large municipalities south.

The other one that also concerns ourselves is the fact that if this is not communicated wisely to the employable public, I believe we will have some problem recruiting highly skilled labour into the North. That's what I think we have to be very cautious of. Even the Minister expressed that in one of his presentations to ourselves through his briefings. He stated very clearly that we have to take some precautionary measures, and I agree with him. But from a comment point of view, I just wanted to make the Minister aware that I will support this bill, but I think also we need to inform the public that we are taking some precautionary measures to make sure that it doesn't increase from beyond what he is proposing. With that, Mr. Chairman, thank you.

Thank you, Mr. Allen. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, I thank the Member for his comments. The discussion about alternatives is something that as a government we will have to look at to see how we can stimulate growth in a way that still protects our base. So there are initiatives looked at, the suggestion is made, we've already started to do some work to see where we can go as a government in those areas. Again, it's critical that because we're a small jurisdiction with a very small tax base, we will have to look carefully at the impacts not only through the effect of the formula, but just on the base itself and delivering programs. So we're looking at the options that are out there and trying to become more proactive than reactive. That will take some work.

The idea of being in the box; well, that's something we're working on, is to try to be a little more creative in that sense. At the same time, we have to protect the level of the base we have now. Thank you.

Thank you, Mr. Roland. Mr. Allen. At this time can we take a short break? I was told that supper might be ready.

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At this time, I will go to Dave Ramsay.

Thank you, Mr. Chairman. I will start my comments. I have had a chance to be in the chair for awhile and my blood pressure came down a little bit and I had something to eat.

---Laughter

---Applause

I feel a lot better, Mr. Chairman. Once again, I would just like to reiterate a couple of things. The first one is the obligation that Members of this Assembly have to do what we can to deliver a balanced budget to the residents of the Northwest Territories. I also wanted to talk again a bit about the formula financing arrangement that we have with Ottawa and how I see that as a key inhibitor to any success we are going to have as a territory.

Last week, the Premier will remember my Member’s statement when I talked about the fact that we’ve been talking about trying to fix our arrangement with Ottawa for a number of years as well as the devolution process and all that comes with that. I am going to say this again, I think the common denominator -- I am a Conservative and I don’t hide that -- to a lot of our difficulties here in dealing with the federal government is the Liberal government that’s in Ottawa. I can’t state it any more clearly than that, Mr. Chairman.

I see lately that they’ve agreed to give $1 million to Mr. Peterson who is in charge of negotiations on the NWT file on devolution; $1 million a year to carry on with that. The Premier has talked that we are going to have a new arrangement and everyone is saying all the right things, but really we haven’t gotten anywhere. I think that is the crux of the problem. We have not gotten anywhere with the federal government.

In terms of this specific tax revenue or revenue option here, I can’t support this the way it is. I have heard other Members say it’s only going to be a box of doughnuts, it’s only to be this or it’s only going to be that. What it is to me, Mr. Chairman, is an increase to the cost of living in the Northwest Territories, something I feel is high enough already. I don’t care if it’s 25 cents. If it’s more, it’s too much. I do believe that we have to try to attract people to live in the Northwest Territories. We have to have the skilled labour here. It’s very competitive out there right now across the country, across North American, for that matter, in terms of attracting skilled labour. Anything we do to increase the cost of living here is the wrong thing to do. I think we should be trying to look at ways of lowering taxes here and trying to attract people here. I have talked about the permanent trust fund I would like to see the money that Ottawa is taking from us every year and put into this trust fund for the benefit of Northwest Territories down the road and into the future. I think those are things the government should be supporting, not raising taxes. I think it sends the wrong message.

The argument can be made it’s for the higher tax brackets, they make enough money already. I can’t buy that. I think any tax increase is the wrong thing to do. Again, a lot of the same arguments are the same ones I had for the corporate income tax. I don’t think the government has done enough to have a look in the mirror, Mr. Chairman, and try to find ways or means within our own organization where we can effectively cut spending. Like Ms. Lee, I haven’t got a lot of say in how things are done and how we might be able to realize some savings. I think once taxes go up, they never come down, unless it’s the corporate income tax, but that’s another story.

---Laughter

It’s like chasing a rainbow, Mr. Chairman, our relationship with Ottawa and how numbers change week in and week out, Mr. Chairman. To me, it’s not a very good way to run a government. If we are going to have any success here, we have to get a better financial situation, better financial reality with Ottawa. I have got my own ideas on how that might happen, but I will leave it there, Mr. Chairman. Thank you.

Thank you, Mr. Ramsay. Mr. Roland, would you like to comment?

Thank you, Mr. Chairman. Mr. Chairman, I respect the Members and their opinions as we come to this table and discuss the initiatives of government and what we need to do or should do. Again, it was not our intention as we took office to look at trying to make it a more difficult place to live, but again as elected Members and as a direction we set for the 15th Assembly with our fiscal targets, Cabinet has gotten down to work and come up with what we feel are some of the better options than were out there for the time frame. Again, I would encourage Members to encourage us to look in the mirror and take a hard look at how we run business. Your support is going to be needed as well as we go through the next cycle and start looking at what areas we have to reallocate money on or reduce budgets. It’s not going to be an easy exercise. I am a Member who came into the 13th Assembly and it seemed like I cut my political teeth in a period of harsh restraint. We are trying to come up with a balanced approach so we don’t have to be back there again looking at massive cuts across the board. We are trying to be more surgical and look at how we do spend money and if there are pockets out there where it’s ineffectively spent, we have to look at reallocating. Thank you.

Thank you, Mr. Roland. May I remind the committee to relate their comments to Bill 3. Mr. Ramsay.

Thank you, Mr. Chairman. Thank you for that reminder, Mr. Chairman. I just wanted to make one last comment. I know there are going to be some difficult decisions to make here. I have a strong stomach and if some of the things he talks about are going to happen here the next couple of years, he will have my full support in that. Thank you, Mr. Chairman.

---Applause

Thank you, Mr. Ramsay. Mr. Roland.

I take the Member’s comments. As we go forward, we will be sharing the information and building into the business plan process on the initiatives we set forth as government and how we are going to save the next $20 million. Thank you.

Thank you, Mr. Roland. Mr. Braden.

Thank you, Mr. Chairman. To the bill, I am speaking in favour of this bill, but like the one that we just passed, Mr. Chairman, with little enthusiasm, even less than the one before. The advantage of the benefits of this bill, which would obviously be for people in the higher earning brackets are quite real and quite tangible. This is much more of an initiative that we, as a government, are taking of our own volition. Part of what we see as an available opportunity to raise some more revenue, not a lot of revenue, but it is one that the Finance Minister obviously has enough conviction that he is bringing this forward.

I want to compliment the Minister on one hand, Mr. Chairman. In his budget address and in bringing this tax initiative forward Mr. Roland has also signalled that in the very near future, we are going to see two other tax initiatives, payroll and the cost of living tax credit brought forward in May. Not that I like taxes very much, but if we are going to be doing some work, this Assembly and certainly the businesses and people in the NWT are much better served by having all of this presented in a bundle, if you will, so that all of the government’s ideas and initiatives about tax can be seen more or less as a whole. We can, with some certainty, figure out what the net impact of this is going to be once it’s all said and done. This, I think, is something that was a good move and I am appreciative of it because it makes this job even in something like taxes just a little bit more straightforward; not necessarily easier, but more straightforward to discuss with the public where they know what all the aspects are going to be.

Some of the aspects of this, we know, of course, what makes it unfair, we can all feel the money slipping from our pockets for the brackets that are being affected, but it will still leave this jurisdiction the fourth lowest in Canada for personal income tax. It has the impact on our social situation, as was pointed out by the people from Alternatives North, that there is a very solid body of survey and study of taxpayers’ attitudes that says if what we are going to do is see our social services framework threatened, then the pain or the grief or the inconvenience caused by tax measures seem to fall below the concern that people have if they see social services being cut instead. So we would seem in this case to be on the right side of the fence if we look at our society as a whole. I would like to take that venue here that we need to do some things to protect our social infrastructure and this is one of them.

I am, to some degree, comforted by the assurances that I have so far from the Department of Finance and Minister that the provisions that are tied together in the payroll tax and the cost of living tax measures will, in effect, actually leave more money in the pockets of lower income northerners. So this is part of some of the layers that I have learned that you have to peel away when you are talking about taxes because they aren’t black and white all the time. There are aspects to them that need to be comprehended. This is probably the most significant thing for me, Mr. Chairman, that says this is a bill we are supporting. It’s because of the net effect. Once all these things are bundled and done, it leaves some money, not a lot, but leaves some money for the lower income wage earners.

What it takes from the higher income wage earners is also going to be offset to some extent, I understand, by the tax credit allowance. All in all, it is a workable piece of legislation.

Some Members have made some remarks about the $50 million very dramatic and very positive change in our situation. I don’t see it as something, Mr. Chairman, that should affect the measures that we have already got in place, not only for this year but for coming years. I don’t regard it as a gift or new money or a windfall, not at all. We are going to continue to be in a very tight situation in subsequent years and we should stay the course. I just wanted to mention that from my point of view, as big a piggy bank as $50 million is, we still need to keep a longer view on things.

I have a couple of questions for clarification. I hope the information I have heard so far is going to be consistent with the answers. With the measures that are going to come forward through the payroll tax, on my paycheque, my biweekly paycheque, or any other northerner, am I going to be seeing less disposable income because of these tax measures in my regular pay packet? Am I going to have to wait until tax time before I see a reconciliation? Thank you, Mr. Chairman.

Thank you, Mr. Braden. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, the Member is correct to an extent on the impact of the tax initiatives that have come before this Assembly, this being the second of three tax measures we, as a government, have identified in my budget address as well as in our revenue picture that we put forward to the committee. The payroll tax, which just got first reading today, does change more, depending on your income. Again, it would be using a certain amount of income and we could come up with examples. The way the tax is calculated, it’s a progressive system. Each bracket is taxed at a certain level and then you get up to the next level and it hits the next bracket and then the higher ones. The two lowest tax brackets will drop and will impact on how much tax they're actually paying. There will be a drop in some of the tax, that is the percentage of tax, because of our progressive system. So there will be a reduction, and the majority of people who will benefit from this will be in the $66,000 figure and less. They will benefit through an increase to the cost of living tax credit, as well as a drop in the two lower brackets. But on this bill, the two higher brackets that we're moving upwards, there's going to be a certain affect. Some of the work we're doing now is to the actual net impact that happens after all the tax initiatives are put in place on personal income tax. So we have started that work and we have some estimates now on different categories. Again, this is sort of going beyond the scope of this bill, but since they're put out as a package and explained to Members that in fact the net impact that residents will feel, the higher tax brackets once the next bill comes into effect will actually drop down. So there will be some offset as a result of the payroll tax which drops the two lowest tax brackets. The highest levels won't negate the total increase, but it will drop back down a little bit again. Thank you.

Thank you, Mr. Roland. Mr. Braden, your time is up. I'll go over to Mr. Villeneuve.

Thank you, Madam Chair. Thank you, Mr. Chairman. I just have a question on this new initiative. I guess I concur with the Finance Minister that the half a percentage point increase of a person grossing more than $80,000 a year is not really a big chunk of money that we're talking about. Out of $80,000 wages, $7.50 is not a heck of a lot of money, but I think it's just the principle that people tend to look at more than what are the actual dollar amounts that they'll be paying out.

I just wanted to ask the Minister of the 4,600 taxpayers in the NWT that are going to be affected by these changes, probably a large number of those income tax payers are GNWT employees. As Mr. Ramsay was referring to, that this tax increase is basically just going to raise the cost of living for these income tax payers in the NWT. I'm just wondering if that's just going to provide the GNWT employees with some ammunition when it comes time to negotiate their new public service agreements in the upcoming year. Will this $1 million that we get out of these changes be offset by I'm sure the changes in the public servants' collective agreement, and in the next round of negotiations will equate to much more than that insofar as getting income increases with GNWT employees? I'm just wondering if that had been considered over the long term, and what effect that would have. Thank you, Mr. Chairman.

Thank you, Mr. Villeneuve. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, trying to give you the exact figure of how many of the employees are GNWT employees that would fall into that bracket, there are probably a significant amount. As to the actual going forward, there are a number of factors that would come into play as a government how we would go forward, in either a negotiation setting or just in our cost measures that we have to look at going forward. But it's hard to try to estimate or predict what might be on the table and what issues are there, the type of increase they will use. The cost of living will be a factor. It is just about in every set of negotiations we have that come up. So to a degree, yes, this will impact. I know from my previous experience as a Member of the public service, that it was something that was considered when you sat down and did your votes as a union member going forward. But unfortunately, again, with our fiscal situation, looking at what options we have, we're taking a look at all our sources. As we go forward we'll have to look at all those areas of belt tightening that we have yet to do. So it's difficult right now to say what potentials are out there when it comes to that negotiation setting.

In the budget we just dealt with as an assembly, actually a lot of the forced growth is due to a three percent increase for this fiscal year. So that's something we've had to deal with and as new negotiations come on, government will have to look at how we can try to ensure that we're living within our means. Again, it's difficult to put all the pieces on the table and try to predict what will happen. We know that the cost of living is a factor that plays a role in how much of an increase our union members would be looking to get. Thank you.

Thank you, Mr. Roland. Mr. Villeneuve.

Thank you, Mr. Chairman. I guess as everybody in the room is well aware, over the past couple of weeks when we were going over the budgets, that forced growth consumes millions and millions of government dollars that we have to deal with. A lot of points came up by a lot of Members saying that maybe we should put some belt tightening measures on forced growth. Something like this tax initiative, although it's regrettable that I would have to support something like this, I know that our fiscal framework taken into consideration is something that we're just going to have to do.

All I'm just wondering and I'm really concerned about is the amount of leverage that a taxation increase like this is going to put in the hands of the Public Service Alliance. Any three percent forced growth right across the board on the GNWT, in the GNWT books, equates to a lot more than $1 million a year. So I don't want to throw caution to the wind I guess, but I just want to let the Minister know that something like this could have some real high impacts as far as coming back to us and everybody in the PSA saying we're paying more taxes and we need more money. You're the ones who increased the cost of living for us. Something like that concerns me because I think just the forced growth alone in the government is just exorbitantly high. I think this will add to that forced growth and give them more reason to say we need more money because of these new tax initiatives, which ultimately affect I would say a high percentage of the GNWT employees because of the fact that in that tax bracket I know a lot of private individuals and small businesses don't even make near $80,000 a year. Ultimately anybody who is in the government I think would probably be at the $60,000 to $70,000 after just a few years in the government. I'm just wondering, just a point of concern, I guess, that maybe…

Mr. Villeneuve, can you keep your comments towards Bill 3, please.

Sure. Thank you, Mr. Chairman. Like I said, it's just some cautionary measure that we should consider before looking at any more tax increases such as this.

But regrettably, like I said, I will be supporting the bill because I don't think it's a whole lot of dollars we're talking about. That's all I have to say. Thank you, Mr. Chairman.

Thank you, Mr. Villeneuve. Mr. Roland, would you like to comment?

Thank you, Mr. Chairman. Mr. Chairman, looking at the big picture and potential impacts as a result of this increase and some of the comments the Member said about our public service within the Government of the Northwest Territories, right now the Government of the Northwest Territories, through its own staff and through staff who are hired through the health boards and education boards, we're paying in the area of $400 million a year in wages and benefits to those employed with the Government of the Northwest Territories and delivering the programs and services for us. So when you look at that picture and take $1 million in comparison to that, it's a very small percentage. That's just government employees. There are many other employees out there in that area. But, yes, we have to look forward in seeing what potential other impacts may result as a sort of reaction to what this does and go forward on that basis. As a government we've tried to limit the impact on residents. We haven't targeted reductions of employees through this budget. We've tried to maintain what we have and move forward so we can continue to deliver the programs and services available to residents at the level that they become accustomed to, as well as meeting our mandatory requirements. So we will take the Member's comments and keep those in our back pockets as we go forward and then seeing how we develop our other scenarios. Thank you.

Thank you, Mr. Roland. Mr. Villeneuve.

Detail.

Mr. Ramsay.

Thank you, Mr. Chairman. I will keep this fairly brief, and I'll just go back to some comments that some other Members had in that it's only going to cost a box of doughnuts; $7.54 a year or whatever. In the Minister's opening remarks, he talks of the basic level of that tax bracket that you'll see an increase of $7.54. At the beginning of the upper tax bracket of $110,000, you'll see an increase of $227. Mr. Chairman, those numbers paint the rosiest picture possible. I've done the math on what the government is intending to raise, and if you do the math on that tax bracket; that first tax bracket averages out to $67.56 per taxpayer. If you go to the highest tax bracket it looks like it averages out to roughly $780, Mr. Chairman. So I don't know why we don't put all the numbers on the table and call it like it is.

I mentioned earlier, numbers seem to change around here on a weekly basis, and I just want to make sure that the residents of the Northwest Territories and folks who are affected…There are 4,600 taxpayers who are going to be impacted by the decision here to raise the rate on these higher two income tax brackets, and I think they have a right to know what the average taxpayer is going to pay and, Mr. Chairman, it's a heck of a lot more than what's in the Minister's opening comments. Thank you.

Thank you, Mr. Ramsay. Mr. Roland.

Thank you, Mr. Chairman. Again I agree and respect the Member's position on taxes and tax initiatives, but we are trying to come up with an average. How many people earn $80,111? How many people earn $85,000? That bracket from $108,000 and upward, it's difficult to have an average because that goes from $108,000 up to $1 million. There are some people making very large amounts of income in the Northwest Territories. So trying to come up with an average number between those to say this is what the majority of those people, the 900 taxpayers -- I believe that's the figure, 900 taxpayers in that highest bracket -- what the average would be, it tells a very different story and it wouldn't be an accurate one either. So there's an in between there between each category. We would have to go up for $80,000, for $88,000, for $92,000, and as well for $100,000 forward. In trying to come up with saying 900 people would pay so many dollars when in fact the wages are anything but average when you start looking at those levels.

So I agree; we're giving you scenarios: one of someone who has a taxable income of $68,000 and somebody who has a taxable income of $110,000. We could provide many levels of information. When you look at it, somebody with a taxable income of $88,000 would be paying $108 a year. Somebody making $150,000 of taxable income would be paying $627 a year. So there are scenarios and we could do that, but it's almost going down to the individual taxpayer and what they're able to claim and deduct and so on that really has an impact. I would say using an actual average wouldn't be an accurate way of doing it either. Thank you.

Thank you, Mr. Roland. Mr. Ramsay.