Thank you, Mr. Speaker. I would like to dredge up my Member’s statement from June 3, 2015. I talked about putting more cash in Northerners’ pockets. It’s a known fact that the northern residents deduction was implemented to stimulate growth in the NWT by helping compensate for the high cost of living. Sadly, this initiative has not kept up with inflation, and with a paltry 10 percent increase in 2008 we are left wondering why the Finance Minister or Premier have failed to consider this specifically. I’m talking about the Population Growth Strategy. My questions today are for the Premier.
Can the Premier indicate if this government has examined and quantified the economic benefits for the various levels of an increase to the northern residents deduction? If so, what are the results? Thank you, Mr. Speaker.
Thank you, Mr. Dolynny. Honourable Premier, Mr. McLeod.
Thank you, Mr. Speaker. On June 26 and 27, 2012, a Northern Premiers Forum was held in Iqaluit where northern Premiers called on the federal government to increase the northern residents deduction and index it against the cost of living in the territories to help ensure that taxpayers in northern Canada pay a similar proportion of their income in federal tax as taxpayers in southern Canada. Thank you, Mr. Speaker.
I do appreciate the Premier indicating that, but I was asking about the quantified economic benefits. I don’t think we heard that answer.
Has the Premier examined the possible adjustment in benefits of the northern residents deduction to northern employers in our workforce? If so, what are the results? Thank you.
The northern Premiers’ chair wrote to the three territorial Finance Ministers requesting that the Finance Ministers work together to develop an approach and a rationale for engaging the federal government to seek an increase in the northern residents deduction. They asked for a progress report by October 31, 2012, and a final report by January 31, 2013. So on October 31, 2012, on behalf of the three territorial Finance Ministers, Nunavut’s Finance Minister provided the northern Premiers with a report and a possible work plan. The report noted that increasing the northern residents deduction would decrease personal income tax revenue for federal, territorial and some provincial governments and would only benefit high income northern taxpayers. In addition, support of six provinces whose northern residents also received the northern residents deduction would need to be reconfirmed if the Northwest Territories wished to pursue this initiative further. Thank you, Mr. Speaker.
Again, it’s painfully clear that you’ve had meetings with some of our northern colleagues. There have been some reports not knowing whether or not it had a full impact to the NWT economy, but the Premier did formally write to all federal election leaders and although the letter did not cite northern deduction per se, only one federal leader replied specific to this deduction.
Can the Premier formally indicate, aside from this single letter writing campaign that we have heard during this federal election, what formal collaborative lobbying efforts are in place to secure an increase to northern residents deductions as part of the Population Growth Strategy? Thank you.
On the basis of the final report, the three Premiers decided not to pursue it at that time because it recognizes that the northern residents deduction reduces individual taxable income but also decreases the amount of tax that we collect. So, I think it would be something that if this Assembly felt it was important and that it would benefit other high income residents, northern residents, I suggest it would be put forward as part of the transition planning. Thank you, Mr. Speaker.
Thank you, Mr. McLeod. Final, short supplementary, Mr. Dolynny.
Thank you, Mr. Speaker. We’ve heard from many constituents that this is not dealing with just high income earners. Many people across the Northwest Territories felt that the northern residents deduction has lacked any vigour or rigor to deal with the issues of the day. They always say the squeaky wheel gets the grease.
To ensure there are no blurred lines here, what is the Premier prepared to do during this fiscal year and federal election to get the Government of Canada to increase northern residents deduction? Thank you.
As I indicated, the Tax Collection Agreement between the Northwest Territories and Canada requires that both jurisdictions use the same definition of taxable income. So, a northern residents deduction increase would reduce federal and territorial personal income tax revenues. For example, in 2008 with the increase of the NRD to the maximum deduction at $6,022.50, the cost to the GNWT is about $800,000.
We are prepared, if this Assembly supports this, to make it part of the transitional process and also to write to the federal government, recognizing that they are in the middle of an election. Thank you, Mr. Speaker.
Thank you, Mr. McLeod. Time for oral questions has expired. Item 9, written questions. Item 10, returns to written questions. Item 11, replies to opening address. Item 12, petitions. Item 13, reports of committees on the review of bills. Mr. Moses.
