Thank you. Mr. Stewart.
Thanks, Mr. Chair. I think, typically, what the audits end up finding is there are some recordkeeping issues sometimes with folks or that they misclassified. In the case of the fuel type, they may have misclassified some fuel types, but, generally speaking, I think, with the reality of the audits, people know that we are coming, and they tend to keep pretty good records for us.
You always find a little something that they can improve on administratively and those sorts of things, but I do not think that it would be fair to say that there is a pattern of an area where people are being noncompliant. It's really just to make sure the record keeping is done in a way that makes sure that we can feel comfortable that we are getting what we should be getting under the tax system. Thanks, Mr. Chair.
Thank you. Ms. Green.
Thank you, Mr. Chair. Thank you to Mr. Stewart for that response. What I hear is that he has a lot of confidence that all of the tax owing is in fact tax paid in these two taxes. Can he please confirm that? Thank you.
Thank you. Mr. Stewart.
Thanks, Mr. Chair. Yes.
Thank you. Ms. Green.
Thank you, Mr. Chair. Thank you to the witnesses for their responses. Nothing further.
Thank you. Next, Mr. O'Reilly.
Thanks, Mr. Chair. I want to ask about the Mackenzie Valley Fibre Optic Link revenue line on page 140. Back in 20172018, it was predicted to be $1.182 million, but it was significantly less. Can someone explain what is happening there and why we are not getting the revenues that were predicted? Thanks, Mr. Chair.
Thank you. Mr. Kalgutkar.
Thank you, Mr. Chair. When we prepared the main estimates for 20172018, we were projecting that the fibre line would be in service by April 1st of that year. The fibre line did not come into service until the summer of that fiscal year, which is why we saw a little bit of a drop in our projected revenues, and we are still projecting a little bit of a drop for 20182019.
We are being fairly conservative in our forecast. The number of customers that we do have using the line right now is what we were anticipating. They are not downloading at the capacity that we were anticipating because of the lateness of the fibre. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. I did not quite catch that at the end. The demand that we predicted is not there? Is that what is driving the reduced revenues? Thanks, Mr. Chair.
Thank you. Mr. Kalgutkar.
Thank you, Mr. Chair. The number of customers are there. Because we were a couple of months late, we did have to undergo some testing of the fibre line. When that was happening, the amount of capacity that these customers were purchasing was lower than we were anticipating.
However, our customer count is higher than we anticipated and will be increasing shortly because we do have another satellite customer coming onboard within the next couple of months. We are seeing indications that these customers are starting to buy more capacity. As the customers start getting the confidence that the line is operating like it is supposed to be operating, I think we will start seeing the revenue start going up. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Thanks, Mr. Chair. I guess I am still concerned that maybe we were overly optimistic with that one, but I look forward to seeing how it rolls out. Are there any plans to expand the network to Tuktoyaktuk or other communities along the way, like Jean Marie River? Is this something that Finance is starting to think about? Thanks, Mr. Chair.
Thank you. Minister.
Yes, thank you, Mr. Chair. Mr. Chair, we do have plans to expand the service down to Tuktoyaktuk, and I think it is part of our federal submission to expand it to Tuktoyaktuk.
As far as the other communities, I am not sure we have looked at those yet, but, if we have not looked at them, I am sure we will, and we will do a cost analysis of what it might cost to run lines into those communities, as well. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Maybe it's time to update the standing committee, then, if there's a three or fiveyear plan for this, given that the revenues may not be what you predicted or they're somehow going to pick up and that there is a plan to expand that. I think it's probably time to update standing committee. Is that something the Minister is committed to doing? Thanks.
Thank you. Minister.
Yes, thank you, Mr. Chair. Mr. Chair, yes, we are optimistic that this line is going to benefit, as Mr. Kalgutkar said. As it is starting to prove itself worthy, then you get more people online. I will commit to updating the Regular Members’ committee on some of the work that we are doing and get some feedback from them, as well. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Okay. I want to move on to corporate income tax, which has taken a precipitous drop from the 2017-2018 Main Estimates of $83 million down to $31 million. So can someone explain what is happening here? Thanks, Mr. Chair.
Thank you. Minister.
Yes, thank you, Mr. Chair. Mr. Chair, that is a result of one of the large payers having the ability to write off their infrastructure investments in one year, and that is what they chose to do for this particular year, so that is why you see a significant drop in the corporate income tax. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Well, I understood they could write it off against mining royalties, but they also have an opportunity to write it off against corporate income tax, as well. Is it double accounting? Thanks, Mr. Chair.
Thank you. Minister.
Yes, thank you, Mr. Chair. My understanding is that they can write it off against both royalty and corporate tax, and they may have chosen to do so. I will confirm that, and I will share it with the Member. I will share it with committee. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
That causes me a little bit of concern, so what is it we can do as a government to make corporate income tax or taxes in general more predictable and stable? I will start with that, thanks, Mr. Chair?
Thank you, Mr. O'Reilly. Mr. Stewart.
Thanks, Mr. Chair. It is a real challenge for us because we have a couple of factors that are at play here. One is that we do not have that many large filers in terms of the system, so the behaviour of any one of them in terms of a circumstance where they may be able to do more write-offs can have quite an impact. The other issue is that corporations can go back and re-file for previous years, so there are always adjustments that are taking place, as well, and then, because we would have already received that money from the federal government, then they are clawing that back from us, for lack of a better term, in subsequent terms. So I think you'll never really see a ton of stability on the corporate tax side just because it's a small base and there are lots of ways that the system can go up and down, so it is just a reality that we face in our corporate income tax. Thanks, Mr. Chair.
Thank you, Mr. O'Reilly.
Thank you, Mr. Chair. Yes, so I think earlier the Minister committed to talking to standing committee about the issue of revenues. I am hoping that he would agree to have a broader approach to this that could involve the public, as well. A couple of years ago, we did a revenue options paper. Is that something that the Minister is prepared to do again to engage the public on this issue of revenues? Thanks, Mr. Chair.
Thank you. Minister.
Yes, thank you, Mr. Chair. Mr. Chair, first of all, in the process we operate under, I want to have a conversation with standing committee, and then we will look at the possibility of having a broader discussion at that time. I know they and we always welcome comments to the Department of Finance on revenue options, whether we proceed with them or not. I mean, we have to have a look at them, but it is not like they can only comment when we go out for public discussion. Comments are always welcome, and then I am sure we get the odd one as to how we can increase revenue. I want to have a conversation with committee, and then we will go from there. Thank you, Mr. Chair.
Thank you. Mr. O'Reilly.
Mr. Chair, this is going to be more of a comment. I appreciate the Minister's response, talking to the standing committee first, but I am certainly advocating for the public process, revenue options paper like was done a couple years ago, and I have continually given the Minister ideas about how to stabilize and make our revenues more predictable through a resource tax, capital tax. There are lots of different instruments out there. I think it is time we start to look at those. All of our effort so far have been on the expenditure side of the equation, and we need to start to focus more attention on the revenue side. Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Anything further from the Minister?
There is, but I will accept that as a comment. Thank you, Mr. Chair.
Thank you. Anything further from committee? If not, I will call the department. Department of Finance, total department, $234,688,000. Does committee agree?
Agreed.
Thank you, committee. Does committee agree that this concludes our consideration of the Department of Finance?
Agreed.
Thank you, committee. Thank you to the Minister and your witnesses. Sergeant-at-Arms, you may escort the witnesses from the Chamber. What is the wish of the committee? Mr. Testart.
Thank you, Mr. Chair. I move that the chair of Committee of the Whole leave the chair and rise to report progress. Thank you.
