Thank you, Mr. Kalgutkar. Any further questions? Mr. O’Reilly.
Thanks, Mr. Chair. Sorry, I just didn’t hear the last few words about why the payroll tax projections show a decrease in revenues. Thanks, Mr. Chair.
Thank you. Mr. Kalgutkar.
Thank you, Mr. Chair. We see a general trend downward of employment income. That’s why the payroll tax, there’s a decrease. Thank you.
Thank you, Mr. Kalgutkar. Mr. O’Reilly.
Thanks, Mr. Chair. There’s also a decrease, a substantive one, here, $5 million in property taxes and school levies that’s projected. Can the department explain that decrease in revenues? Thanks, Mr. Chair.
Thank you, Mr. O’Reilly. Mr. Kalgutkar.
Thank you, Mr. Chair. The main reason for that decrease is because of Snap Lake ongoing care and maintenance, so it no longer pays the property tax. Thank you.
Thank you, Mr. Kalgutkar. Mr. O’Reilly.
Thank you, Mr. Chair. Even though the property is not in production, they still have all their assets there, the valuation of the assets have changed because they’re not in production? I understood that property taxes were assessed based on your assets on the ground, not whether the facility is operating or not. Could I just ask whether that assumption is correct? Thanks, Mr. Chair.
Thank you, Mr. O’Reilly. Mr. Kalgutkar.
Thank you, Mr. Chair. The value of the property tax is based on the assessed value of the parcel, so, because the mine is now on care and maintenance, the property tax is accordingly lower than what it was when it is in operation. Thank you.
Thank you, Mr. Kalgutkar. Mr. O’Reilly.
Thanks, Mr. Chair. It’s interesting. I just don’t understand why all the same assets are there, some of them may not be used, why they’re not valued at the same rate. But I’ll accept the information as presented. It just seems rather strange to me. The other question I have is about corporate income tax. We have wildly fluctuating amounts here. Last year the predicted revenue was $40 million, but only $25 million came in. This year the projection is for $60 million. Can the department tell me why these numbers keep going up and down and what we’re doing to try to stabilize revenues from corporate income tax? Thanks, Mr. Chair.
Thank you, Mr. O’Reilly. Mr. Kalgutkar.
Thank you, Mr. Chair. The Member is right. The corporate income tax is a very hard number to predict. One of the main reasons is we have a few large corporations paying a bulk of our tax and those corporations have options available to them to either carry losses back or move their tax or just pay, some other avenues that they could take. Now, one of the things that we’re doing to try to reduce the amount of variation is, starting in 2014, we went to a fiveyear average of our corporate tax, and, hopefully, once we fully implement that, we’ll see less variation in the corporate tax revenue projections. Thank you.
Thank you, Mr. Kalgutkar. Mr. O’Reilly.
Thanks, Mr. Chair. That sounds like a good way of increasing the predictability. I was also hoping, though, that the department might be looking at other forms of taxation, like a capital asset or capital investment tax and so on to try to have a more stable source of revenue, but I think that’s a debate for another day. I have one other question about taxation. I was at a meeting recently with the Yellowknife Health and Social Services Authority, and people there raised the issue of a tax on sugary drinks and noted that, in Mexico, when such a tax was brought in, it reduced consumption by 15 per cent. Is this something that the Department of Finance is looking into or prepared to look into? Thanks, Mr. Chair.
Thank you, Mr. O’Reilly. Minister McLeod.
Yes, thank you, Mr. Chair. Mr. Chair, it’s not something that we are looking at, at the moment. However, having said that, we are going into business plans in September. We have three weeks, I believe, with business plans. There’ll be opportunity there for us to have that discussion with Members on a way forward. We look forward to having that discussion because we have seen some of the numbers that the Member references. We’ll have that discussion with Regular Members when we go through our business plans in September, and we’ll plan a course of action from there. Thank you, Mr. Chair.
Thank you, Minister McLeod. Mr. O’Reilly.
Thanks, Mr. Chair. I look forward to having that discussion, as it is not so much raising the revenues. I think we want to look at trying to promote a healthier lifestyle and providing some incentives for folks to do that. I look forward to that discussion the next business plans. Thanks, Mr. Chair.
Thank you Mr. O’Reilly. Minister McLeod.
The Member made more of a comment. But we as well look forward to having that discussion. I can see where he is coming from. Thank you, Mr. Chair.
Thank you, Minister McLeod. Any further questions on page 138? Mr. Vanthuyne.
Thank you, Mr. Chairman. I wonder if the department or the Minister could give us a little bit more detail and explanation on the line item of the investment interest. It appears over the last couple of years that it has been decreasing. Maybe an explanation on what it is and what we are invested in and why this seems to be decreasing over the last couple of years? Thank you.
Thank you, Mr. Vanthuyne. Minister McLeod. Mr. Kalgutkar.
Thank you, Mr. Chair. There are two elements to that revenue stream. Number one is when the GNWT gets its first tranche of cash from the federal government in terms of its grant revenue. It is in a cash surplus position for a couple of months, so we are earning some interest off that cash. We start to advance through the year, we enter into a cash deficit position, so that is why you see a declining investment revenue amount. Another element of that is some of our public agencies also have surplus cash that we hold in a pool. We also earn interest off that cash as well. That is what is driving that. The reason it is decreasing is we just have, obviously, less money in the bank for a shorter period of time, so we are earning less interest revenue off it. Thank you.
Thank you, Mr. Kalgutkar. Any further questions, committee, on page 138, information item? I see none. We move to page 139, active position summary, information item. Any questions? Are we agreed?
Agreed.
Brings us back to page 137. Finance, bureau of statistics, operations expenditure summary, activity total, $1,002,000. We will also defer this and move on to page 142. Active positions, information item. Any questions? I see none. Back to page 141. Bureau of Statistics, operations expenditure summary, total activity, $1,002,000. Are we agreed?
Agreed.
Agreed. Brings us then to page 144. Deputy minister’s office, operations expenditure summary, activity total $92,440,000. We will defer this and move on to page 145. Deputy minister’s office, grants, contributions, and transfers. Any questions? Mr. O’Reilly.
Thanks, Mr. Chair. In the Minister’s opening remarks, he mentions that there is an increase in funding of $2.2 million for the NWT Housing Corporation. I am just trying to see, when I see the line here, NWT Housing Corporation, and I compare what the mains said in 2015-16 to 2016-17, that doesn’t really show a $2.2 million increase. In fact, it shows almost $3.5 million dollar decrease. Can the Minister or someone explain what is happening here? Thanks, Mr. Chair.
Thank you, Mr. O’Reilly. Mr. Kalgutkar.
Thank you, Mr. Chair. I think the Member made a good point. I think our opening remarks probably were not as clear as they could have been. There is some increase to the Housing Corporation into some of the initiatives that they are doing, especially with the RCMP. Part of the Housing Corp is also undertaking some reductions at the same time. There is actually a net decrease to that contribution. Thank you.
Thank you, Mr. Kalgutkar. Mr. O’Reilly.
Thanks, Mr. Chair. The $2.2 million that is referenced in the Minister’s opening remarks… I am still trying to figure out how there is an actual increase. Where is the other money that is going into that Housing Corp actually coming from if it is not a contribution from our government? Thanks, Mr. Chair.
Thank you, Mr. O’Reilly. Mr. Kalgutkar.
Thank you, Mr. Chair. What I think I was trying to explain is the opening remarks were likely not as clear as they could have been. We are providing some increase to the Housing Corp. For example, we are providing them funding of about $3.5 million to fund construction of 46 housing units for the RCMP, but that is offset. They are also getting some forced growth of $389 million. The Housing Corp is also implementing expenditure reductions at the same time, and it is resulting in a net decrease to that contribution. Thank you. I do apologize for that confusion.
Thank you, Mr. Kalgutkar. Mr. O’Reilly.
Thanks, Mr. Chair. I am still trying to puzzle over this. I guess, certainly from this MLA, there is a concern when we are actually reducing our contributions towards housing. We already had a debate here and a motion was passed about setting firm targets to ensure that we can get our housing out of core need or at least meet the national average over the life of this Assembly. When we are actually reducing our funding to the Housing Corporation, that is not the direction I want to be going in. This is not the direction I understood we were going in. This comes as a bit of a surprise to me. That is more of a statement than anything else. I don’t expect a response, but it is not what I had expected to see in the budget. Thanks, Mr. Chair.
Thank you, Mr. O’Reilly. Minister McLeod.
Thank you, Mr. Chair. Mr. Chair, what I can commit to the Member is we will reconcile these numbers here with the Housing Corporation mains because I think it will show up in the Housing Corporation mains. Their mains are still getting an increase of funding partly from the federal government. What I will commit to do is I will reconcile this, and then I will share it with the Member. Hopefully, we will have a better understanding of how the numbers came to be. Mr. Chair, thank you.
Thank you, Minister McLeod. Mr. O’Reilly.
Thanks, Mr. Chair. I appreciate the Minister’s commitment to do that. I look forward to getting the information. I have one other question about the contribution for Arctic Energy Alliance. In 2015-16, it looks like there was a one-time contribution of $1.8 million done through supplementary appropriations. Can someone from the department explain what happened there? Thank you, Mr. Chair.
Thank you, Mr. O’Reilly. Mr. Kalgutkar.
Thank you, Mr. Chair. During the last government, the Power Corp was experiencing severe low-water issues. At that time, the government of the day did approve $29.7 million in funding over two years to the Power Corp. The 2015-16 portion of that was allocated between the Power Corp… The Power Corp got about $20 million, NTPC got $400,000 for specific initiatives, then $1.8 million was allocated to the Arctic Energy Alliance. The Arctic Energy Alliance have subsequently come back to the government and said they were unable to spend that $1.8 million, so they will be spending $840,000 in 2015-16 and a further $960,000 in 2016-17. When Members saw Public Works’ budget from yesterday, they would have seen a contribution to the Arctic Energy Alliance that carries over this amount into the 2016-17 fiscal year. Thank you.
Thank you, Mr. Kalgutkar. Mr. O’Reilly.
Thanks, Mr. Chair. Appreciate that explanation. If we made an effort to set aside some money in 2015-16 because of the $20 million subsidy for diesel operations, was there any consideration in make a similar allocation in 2016-17, the current year? Because we are still spending $7.5 million on a diesel subsidy. Why are we not setting aside some more money this year to try to get us out of this perpetual problem we seem to be in? Thanks, Mr. Chair.
