Mr. Speaker, we look forward to working with the Members, the committee members. There’s been a clear signal that they would like to have Members on the refocusing committee because of the issue with boards and agencies, because of the program review issues. We’ve laid out the work to date. Funds have been voted. There’s been a five member staff that’s been put together. We’re working out a work plan. Clearly, this is a complex issue as you start looking at analyzing and doing zero based reviews and program reviews. There are some very big pieces of government out there. We look forward to working with the Members. As we indicated, here’s the work plan. Let’s see what we can get done and how do we make this work, because it is going to be a complex, ongoing, long-term process, as the Member indicated.
Mr. Speaker, the next question I have for the Minister of Finance is: of the $135 million that was proposed to be reduced over two years, exactly where is the government in terms of finding that $135 million today?
Mr. Speaker, we concluded the budget a number of months ago. We’re doing capital, in fact, in the next number of days here in this session, and then we’re going to be coming forward with the business plans that will be laying out year 2 of the reduction exercise.
At the end of the day, with the revised targets, we’d be aiming for closer to $111 million when you look at revenue as well as reductions.
Final supplementary, Mr. Ramsay.
I know the Finance Minister is new to that role, but he’s been here for a number of years.
You know, given the fact that we don’t have a resource deal with Ottawa, devolution is slowed down, has the government got a direction in terms of equity investment in resource extraction areas in our territory? Are we going to go there? Because in terms of finding new revenue sources, I think we need to start investing our money where we can make some money. So I’d like to ask the Minister that.
Mr. Speaker, clearly — clearly — that’s an option: for the government to buy into business. Of course, first we need to have the money to do the investment. We have a limit here of $500 million, but we are looking at all the options, and we want to be as creative as possible. We’re interested in setting up, as the Members pushed for it since the last Assembly as well, things like a heritage fund that will allow us to plan for the future. Clearly, we want to look at all the opportunities that are out there, but we are limited by the funds and resources we have available, in addition to trying to make sure we keep the government operational.
Thank you, Mr. Miltenberger. The honourable Member for Inuvik Twin Lakes, Mr. Robert McLeod.
Mr. Speaker, the question I’m asked a lot after this discussion came out on the revenue options is: when? I’d like to ask the Finance Minister: when would the earliest implementation time be? I mean, are we looking at six months, a year? There are people out there who are even thinking we are going to be doing it this session. So just for comfort, for a lot of people out there listening, when is the earliest possible implementation were these proposals to go ahead?
Thank you, Mr. McLeod. The honourable Minister of Finance, Mr. Miltenberger.
Mr. Speaker, the plan as laid out was to find $10 million in new revenue for the ’09–10 budget that was laid out initially last year. We are going to be aiming for that target, with a subsequent $30 million for 2010–11 and going forward. All the work that is being done is getting pulled together, so it will feed into the business planning process. Departments will come forward with the work that has been done. I will come forward as the Minister of Finance with the work, the feedback, the revenue options, including suggested areas where there could be tax increases, but also lay out, we think, some very productive high potential revenue options.
I thank the Minister for that. I notice in the discussion paper that there is mention that 18 per cent of employment income in the NWT was earned by non-residents. How much money are we actually talking about being earned by non-residents and leaving the territory?
Mr. Speaker, I don’t have an exact figure, but it would be millions of dollars. The Member for Kam Lake had some numbers that he has used, but it is a significant amount of money. It is leakage south that we want to try to capture and keep in the North.
Mr. Speaker, I noticed in the discussion paper that there seems to be no option to try to capture that money. I think that’s a target we should aim at and leave the personal income tax part of it, which hits people who are staying in the Northwest Territories, contributing to the Northwest Territories. I could go on forever, but I won’t. I’d like to ask the Finance Minister: do we get anything out of the 18 per cent employment income earned by non-residents?
Mr. Speaker, the payroll tax is one small attempt to capture some of that wealth that is now flying over as they go back to where they may be living in the south.
Thank you, Mr. Miltenberger. Final supplementary, Mr. McLeod.
Mr. Speaker, we also talk about money leaving the Northwest Territories, and we talk about a $30 per person fee. We do not have the authority, according to the document, to tax resources, which I still can’t believe. Do we have the authority to tax industry for the number of workers they have who are non-residents of the Northwest Territories, and if we don’t, would they consider that an option too?
Mr. Speaker, one of the proposals was a potential $30 levy on all southern air travel. But, clearly, especially with the mines right now, there is a socioeconomic agreement, bilateral in nature, that we are working with. The Minister of ITI is engaged in those discussions, and the issue of the fly in/fly out, having workers in the North, is at the top of the list to assist us.
The estimates are that if we can work closely with the diamond mines, then we can start bringing, we believe, up to 100 workers a year, to have them, in fact, start living in the North, because there is going to be enough incentive for them to do that. This has a tremendous ripple effect. The 100 workers, they tell me, statistically would be more like 300 if they have families and they move to the North. So as the Member for Kam Lake has said repeatedly, there is a huge benefit here. We just have to do the right thing to capture that.
Thank you, Mr. Miltenberger. The honourable Member for Tu Nedhe, Mr. Beaulieu.
Mahsi cho, Mr. Speaker. Today I talked about the impact and effect the high cost of living is having on families in the smaller communities. I also talked a bit about the proposed taxes and how they can also impact their efforts to make a better living for themselves.
I’d like to ask either the Premier or the Minister of Finance if, while looking at options, the Minister or Premier, the Cabinet, has considered the impact of taxing our citizens, as far as retaining those families in the Northwest Territories.
Thank you, Mr. Beaulieu. The Minister of Finance, Mr. Miltenberger.
Mr. Speaker, as I have indicated already, we are very clearly aware that there are upsides and downsides. While we may generate some revenue, there are going to be implications and consequences. We are looking very carefully at all the decisions we are going to be making and the suggestions and recommendations we are going to be bringing forward.
We are very sensitive to the issue of the cost of living in small communities. We have set up a committee to in fact address that issue. We do not want to engage in counterproductive exercises here in government. So, yes, we are going to be very careful in measuring how we do this to make sure that at the end of the day the cure is not worse than what ails us.
Prior to even the consultation process, I am assuming there has been some thought given to this. I would like to ask the Minister if Cabinet had examined leaving as much disposable income as possible in the pockets of the citizens, letting the natural economic process of the multiplier effect take place.
Mr. Speaker, that is entirely in keeping with the comment I made earlier. If we can focus on consumption areas and try not to put too heavy a burden on the income of individuals across the board but make it more focused on areas where there are consumption issues, where there are choices, then that would be better.
Mr. Speaker, I would like to ask the Minister if Cabinet examined the negative impact on the cost of living and employment of our citizens as far as looking at other jurisdictions to determine whether additional taxing is the way to go.
Mr. Speaker, that’s part and parcel of the work that’s currently underway. We’re going to be bringing forward a package on the next phase of reductions. We’re going to be bringing forward a package that deals with the revenue options, both bringing people into the North and growing the economy, as well as looking at those areas where increased taxes may be advantageous.
Thank you, Mr. Miltenberger. The honourable Member for Great Slave, Mr. Abernethy.
Thank you, Mr. Speaker. Earlier today my colleague from Hay River South mentioned the application for a rate increase that the NWT Housing Corporation has put forward to the Public Utilities Board. My question is for the Premier.
Given that the rate increase, if it does in fact occur, will actually increase the cost of living for every resident of the Northwest Territories, I’m curious whether or not bonuses have been provided to the senior managers of the NWT Housing Corporation for the 2007–08 fiscal year.
You said Housing Corporation.
Oh, I meant Power Corporation.
Thank you, Mr. Abernethy. The Hon. Premier, Mr. Roland.
Thank you, Mr. Speaker. The NWT Power Corporation has indeed filed an application to the PUB for rate riders to deal with the cost pressures around fuel to deliver the services. The board operates at arm’s length from this Assembly through the NWT Power Corporation Act. They have gone out to seek outside sources to look at the method of bonus or merit pay that they would deal with, and they’ve come back with an area…. I believe they’re in the process of finalizing what and who would qualify.
Thank you, Mr. Roland. The honourable Member for Kam Lake, Mr. Ramsay.
Thank you, Mr. Speaker. I want to continue with some questions for the Minister of Finance. It’s easy to be critical, but I think sometimes you also have to offer some suggestions. I’d like to ask the Minister if the government has ever entertained what it would mean to our population if we did away with the personal income tax here in the Northwest Territories. Instead of increasing it, what if we did away with it? What would that mean, and would they be able to deliver that type of analysis for our consideration?
Thank you, Mr. Ramsay. The honourable Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. I believe that work has been done, looking at, if not getting rid of income tax completely, a type of flat tax. I can commit to share that information with the Member and with committees.
I think it’s creative things like that that we need to look at. We need to be attracting people here, and we need to be competitive. So we need to be looking at everything.
One of the things I was hoping to ask the Minister today, and I think he’s heard it loud and clear…. There’s no appetite, whether in Yellowknife, Inuvik, Fort Smith or Hay River for that matter, for tax increases that are going to add to the cost of living here in the Northwest Territories. There’s absolutely no appetite for it. It’s already expensive enough to live here.
I’m wondering if the Minister could commit to taking the proposed initiatives that will increase the cost of living for our residents and putting them on the shelves for the time being. Let’s start discussing some other options. Those ones have no place here.
What we have in the North is a very high level of service by this government with some of the best programs, I believe, in the country, be it for seniors, health, the SFA or some of our housing programs.
The question is, it’s not just taxes. The issue is the type of government we want and we think we can afford. What are we prepared to pay to have that government and those types of services? Very clearly, we’re going to come forward with all the work we’re undertaking right now. There will be a full chance for committee to engage in the discussion. We’re doing the preparatory work to get all that pulled together. As we move into the business planning process, I’ll be coming forward with all that work so we can have the full discussion.
At this point I think we have to keep our options on the table, both with reductions and revenue options, which include growing the territory and the economy as well as possible tax considerations.
Mr. Speaker, I agree with the Minister of Finance, but I think if we’re going to have an overall view of everything, we need to have all of our cards on the table. Until the government goes out and does the analysis of our spending government-wide, we won’t be able to do that. Today we don’t know the value of the dollars we are spending. That type of analysis hasn’t been done. Until it’s done, I’m not sure what we’re going to gain by going through this process, or any other process for that matter, budget to budget, unless we get a handle on where we’re spending our money and how effective every dollar is that we’re spending. We need to do that level of analysis.
Like I said, it doesn’t have to happen overnight. It could be one or two departments a year. We have to start somewhere in order to make a difference, and I’d like to see that happen.
I appreciate the Member’s concern. We have committed to and the Assembly has voted money for a process that we are now undertaking. The plans have been laid out. We’re prepared to work with committee to make sure they’re the best plans possible.
I’d also point out that every year this Assembly, through the work of the committees and the government, votes a budget. If this Assembly makes determinations that the government is too big or that there are changes needed, then the authority to make those changes is here.
We came forward with a number of options last year. There was significant debate. We’ve regrouped. We’re going to come forward with another package geared to those reductions. As well, we’re going to come back with other options in terms of revenue.
This Assembly has the authority in this hall to make those decisions. If the determination is made that we’re going to shrink government by 25 per cent or we’re going to make a decision, then that’s the way our institutions are set up. We’re bringing forward our best work here to say that this is what we need to have a sustainable government. We’re looking forward to working with committee and Members to in fact achieve that goal.
Thank you, Mr. Miltenberger. Final supplementary, Mr. Ramsay.
Thank you, Mr. Speaker. Again, I think the Minister is correct in what he’s saying, but I just have to say what we saw last budget session. That happened because of haphazard cost cutting measures government-wide. There was no rhyme or reason to what happened in February.
I’m saying something needs to happen so that level of analysis, the detailed information, does take place so we can all make decisions collectively. I just didn’t see that happening. When you just hand it over to your DMs and tell them to cut $6 million in this department, $7 million in that department, you’re just going to get back the product they want you to get back. There’s no political direction there. So I think we need to take the reins back.
I’d like to ask the Minister again: will he commit to some type of zero based spending review government-wide? It doesn’t have to be every government department today, but we have to start somewhere.
Mr. Speaker, that commitment has already been made. There’s a program review that’s been set up. There’s been money voted for their operation. We’ve laid out the work plans, the terms of reference for the committee. We’ve committed to working with committee to lay out the planning and engagement so they, along with Cabinet, have an oversight role to play.
As the Member indicated, that’s a process that’s going to take time. This is a large, complex organization with many, many component pieces. In the meantime we have another business planning process cycle now upon us. We’re going to be doing capital. We’re going to be moving into the business planning process. We’re going to be coming forward with further suggestions on what the government is proposing in terms of reductions and revenue options. Clearly, we’re going to have to work through this process as we wait for this program review process to kick into gear. We can’t wait, so between us we’re going to have to come up with a way to have a sustainable government.
Thank you, Mr. Miltenberger. The honourable Member for Weledeh, Mr. Bromley.
Thank you, Mr. Speaker. My question is on some of the statements in the sessional statement presented by our Premier. I’d like to start by briefly saying that we want to “develop our vast oil and natural gas resources as soon as possible to the maximum benefit of Northerners.”
To me this is an absolute oxymoron; this is the definition of an oxymoron. They do not go together. We have no ability to levy royalties and so on. Can the Premier explain to me where he sees the truth in that statement?
Thank you, Mr. Bromley. The Hon. Premier, Mr. Roland.
