Debates of October 13, 2005 (day 9)

Agreed.

Thank you. Bill 6 is now ready for third reading. Thank you, committee. As agreed, we will proceed now to Bill 10. That is An Act to Amend the Income Tax Act. I will go to Minister Roland for opening comments. Minister Roland.

Thank you, Mr. Chairman. I am pleased to introduce Bill 10, An Act to Amend the Income Tax Act. This bill addresses a number of changes to the NWT Income Tax Act to ensure it remains consistent with the federal Income Tax Act.

The Tax Collection Agreement between the Government of the Northwest Territories and Canada provides that we will keep the NWT act consistent with the federal act. Where different provisions exist, the Canada Revenue Agency could charge our government for the cost of administering those different provisions. There is no cost to the NWT for the Canada Revenue Agency to administer those parts of the NWT Income Tax Act that remain consistent with the federal act.

The changes that are being proposed in Bill 10 will have little or no effect on tax paid by NWT residents, but will make it easier for the Canada Revenue Agency to administer the act on our behalf.

The proposed legislation will clarify the foreign tax credit so that taxpayers will have to claim the full available federal tax credit before getting the NWT credit. Tax credits will also have to be calculated separately for each foreign country, and a minor change is being proposed to bring the foreign tax credit in line with the move several years ago to an NWT tax based on income and not on the federal tax.

Changes are being proposed to sections dealing with the tax on mutual fund corporations to correct an error in the current legislation.

The amount of education and tuition credit that can be transferred to an NWT parent or spouse by a student outside the NWT will be limited to the same amount that a student in the NWT can transfer. Under the existing legislation, there may be situations where a student outside the NWT could transfer more.

Several subsections which were necessary in 1999 because of division are proposed to be repealed as they are no longer necessary.

It is proposed to change the definition of income for the NWT child benefit to include income of common-law spouses. This will bring the definition in line with the treatment under the federal act.

The amendment would change the name of federal legislation referenced in the NWT act from the Unemployment Insurance Act (Canada) to the Employment Insurance Act (Canada) because the federal government changed the name of this legislation several years ago.

Similarly, it is proposed to amend the act to reflect the change in the name of the federal legislation from the Immigration Act (Canada) to the Immigration and Refugee Protection Act (Canada) and to include persons previously determined to be members of a class defined in the humanitarian designated class's regulations under the Immigration Act (Canada).

Section 7 dealing with income averaging for farmers and fishermen would be repealed to reflect the repeal of mirroring provisions in the federal act. Few, if any, of the small numbers of farmers and fishermen in the NWT were able to take advantage of this provision, and the section has not been in force nationally for a number of years since the federal provisions have been repealed.

Finally, parts (c) and (d) of the French translation of section 3.1 defining a qualified dependant for the child benefit will be amended to correct the inclusion of two parts numbered (c) in the act.

At the appropriate time, I will be proposing an amendment to the bill in order to correct a minor drafting error.

That concludes my opening remarks. Thank you, Mr. Chairman.

Thank you, Minister Roland. I would now like to ask Mr. Hawkins for the standing committee's comments on the bill. Thank you.

Thank you, Mr. Chairman. The Standing Committee on Accountability and Oversight met on October 11, 2005, to review Bill 10, An Act to Amend the Income Tax Act. Following the clause-by-clause review, a motion was carried to report Bill 10 to the Assembly as ready for Committee of the Whole. This concludes the committee's general comments on Bill 10. Individual committee members may have questions or comments as we proceed. Thank you, Mr. Chairman.

Thank you, Mr. Hawkins. I would now like to ask Minister Roland if he has witnesses that he would like to introduce.

Yes, I would like to have my witnesses present.

Thank you, Minister Roland. Please proceed to bring in the witnesses. Does the committee agree that we bring in the witnesses?

Agreed.

Thank you, committee. Thank you, Minister Roland. For the record, could you please introduce your witnesses?

Thank you, Mr. Chairman. With me here, I have Mr. Aitken from the Department of Justice and to my right I have the deputy minister of Finance, Ms. Margaret Melhorn, and from Finance, as well, is Mr. John Monroe. Thank you.

Thank you, Mr. Minister. Does committee agree that we go to general comments on Bill 10?

Agreed.

Okay, general comments on Bill 10. Mr. Yakeleya.

Thank you, Mr. Chairman. Mr. Chairman, I just want to ask for some explanation or some clarification on the comment the Minister made in his opening comments in making reference to section 7 dealing with the income averaging for farmers and fisherman. He made reference to those two occupations of workers. The trappers are left out. They are not mentioned in here, which is something that I don't quite understand. I would ask the Minister for clarification. Thank you, Mr. Chairman.

Thank you, Mr. Yakeleya. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, this section is dealing with special provisions that were in the federal legislation that we had mirrored. Federal legislation has removed that section and now we are just following up and removing that from ours. There were never any special provisions for trappers under the federal Income Tax Act. Thank you.

Thank you, Minister Roland. Mr. Yakeleya.

Thank you. I guess that begs the next question, Mr. Chairman. In the future is there any potential or is this something that we don't want to discuss right now in terms of including trappers because it is federal legislation? Thank you.

Thank you, Mr. Yakeleya. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, again the amendments that we are proposing here would bring us in line with the federal tax act. There is no plan from our part to bring forward any other special provisions that would create any differences between our act and the federal act. Thank you.

Thank you, Mr. Minister. Anything further, Mr. Yakeleya?

The point here, Mr. Chairman, and I understand the coming in line with the federal provisions of this act, and that is where the Northwest Territories seems to be somewhat unique in always following the top dog in terms of this type of legislation. That is where the North needs to stand on its own to have this type of discussion with the legislation as is being talked about today. I am going to leave it at that, with just a comment to the Minister, Mr. Chairman. Thank you.

Mahsi, Mr. Yakeleya. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, as I stated in my opening comments with our act, if there are sections that are not mirrored or tied to the federal act, we would have to pay Canada Revenue Agency for dealing with those differences. That is why we are falling in line; and that would be the same with every other jurisdiction. Thank you.

Thank you, Mr. Minister. Any other general comments on Bill 10? Okay. Does committee agree to clause by clause?

Clause by clause.

Bill 10, An Act to Amend the Income Tax Act, clause 1.

Agreed.

Clause 2.

Agreed.

Clause 3.

Agreed.

Clause 4.

Agreed.

Clause 5.

Agreed.

Mr. Minister.

Thank you, Mr. Chairman. I have an amendment to make on the bill.

Thank you, Mr. Chairman. I move that Bill 10 be amended by adding the following after clause 5:

5.1 Paragraph 3.3(5)(a) is amended by striking out "breakdown of their marriage" and by substituting "breakdown of their marriage or common-law partnership". Thank you.

Thank you, Mr. Minister. The motion is in order. To the motion.

Question.

Question has been called. All those in favour? All those opposed? The motion is carried.

---Carried

Back to Bill 10, clause 5, as amended.

Agreed.

Clause 6.

Agreed.

Clause 7.

Agreed.

Clause 8.