Thank you, Minister Sebert. Ms. Green.
Thank you, Mr. Chair. I appreciate that it is difficult to keep all of these numbers straight when you are getting them in an audio way, but the fact is that they are all going up 25 percent according to what I have heard the Minister say, and this is in communities that have fee simple land holdings and mortgages. The last time that land transfer tax came around, it turned out that 70 percent of those places were in Yellowknife, 20 percent in Hay River, and 10 percent in Fort Smith. On what basis, other than trying to fatten the budget for roads, is the government imposing these new fees? What is the rationale for imposing these new fees? Thank you.
Thank you, Ms. Green. Minister Sebert.
It is a revenue increase, but we are constantly under pressure for new programs for various worthy things. The land transfer tax, as Members may recall, would have been a much more radical change than this is. These are fairly modest increases in my mind. They will be borne by those who are buying houses or putting on mortgages, but I don't regard this as a particularly large increase. It is certainly far less than was contemplated under the land transfer tax, which was not popular.
I thought, since the rates had not been changed in many years, that a change was worthwhile. As I say, for your $400,000 house with a $300,000 mortgage, yes, you will pay more, $350 or so more than you might have before. When you are talking about housing costs and prices, just an increase in the mortgage rates, for example, on that $300,000 mortgage, if I can use that example of 1 percent, is $3,000 a year; $15,000 over a five-year term, if persons hold onto their house for five years, as many do. I mean, a $350 cost, and that's not a yearly cost; that's simply when you register, in my view, is not terribly significant. As I say, we are constantly under pressure for many of the programs that we have discussed today and many of the programs that the government has entered into have, as I say, constant demands. My submission to you is that this is a reasonable increase, far, far less than the significant increase that we were contemplating under the land transfer tax. Thank you.
Thank you, Minister Sebert. Your time has expired, Ms. Green. Next, we have Mr. Thompson.
Thank you, Mr. Chair. I guess my first question is: can the Minister explain what he means by modest and minor? Is it similar to when he talked about the increase to land fees in going to 10 percent? Can he explain what he means by minor or modest? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Yes. This is a modest increase. I mean, it is not something you pay every year unless you buy a new house every year. Again, if someone is contemplating buying a $400,000 house, a $300,000 mortgage, yes, they will have to pay $350 more in the example that I gave, assuming that my numbers are correct. That is not a huge amount when you are dealing with hundreds of thousands of dollars on a purchase. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. Thompson.
Thank you, Mr. Chair. Again, can you tell me what you mean by modest or minor? I am sitting here looking at these numbers, and even though you are saying that it is 50 cents on one and 50 cents on the other, my calculations are a 33 percent increase and a 50 percent increase. I don't know where you come from saying it's minor and modest. That is a huge increase. If you are doing that across the board with all of these things, it is a minor amount, you figure? For somebody that is buying a home, that may be something that is a little bit of a challenge as well. Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
On a $400,000 purchase, I don't think a $350 cost is significant. I mean, these rates have not been changed for many years. I forget how many, but more than 20 years. I mean, most things are more expensive than they were 20 years ago. It hasn't been increased for a long period of time. I feel that the increase is justifiable. We need to raise money. I don't want to cut valuable programs. We did need to raise money when we were looking at our overall finances. I think this is a sensible, modest way of raising some additional funds. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. Thompson.
Thank you, Mr. Chair. I am glad that the Minister figures that a 33 percent increase and a 50 percent increase, regardless of the fees, is modest and minor. I mean, for people out there who are house poor, that is an impact on them. Did the Minister or the department look at averaging or increasing it gradually instead of just one lump sum? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Thank you, Mr. Chair. A gradual increase, perhaps, would have been sensible if it had been raised every year, but it hasn't been. It hasn't been raised for many years, and going back to the example I gave, on a $400,000 purchase, $300,000 mortgage, $350 is not a terribly significant sum.
As I say, the banks have raised their rates. If they raise their rates 1 percent on a $300,000 mortgage, that will cost you $15,000 over the five years. $350? I think that is an entirely justifiable increase, far less than we had originally contemplated. We heard from the people, we heard from the Members, and therefore, we came back with what I submit is a reasonable increase. Thank you.
Thank you, Minister Sebert. Mr. Thompson.
Thank you. It just blows my mind. I am glad that he thinks it is reasonable. I am glad that he thinks it is moderate. I am glad that he thinks it is minor. When he talks about getting a mortgage, well, you lock into a mortgage for a period of time, unless you don't want to lock into it, depending on the market. He said we didn't do it for 20 years. Well, why are people being punished now? Could we not look at gradually implementing it? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
I am not sure that I accept the proposition that all tax is punishment. I mean, after all, this money isn't being wasted. It goes into our coffers to support many of the programs that Justice and many of the other departments have. I mean, as far as affordability, the increase in mortgage rates of 1 percent has a much more dramatic effect than a $350 one-time cost. Thank you, Mr. Chair.
Thank you, Minister Sebert. Mr. Thompson.
Thank you, Mr. Chair. We are talking apples and oranges. If you want to talk about mortgages, then let's talk mortgages on another day, but we are talking about increasing the fees. The fees are 33 percent and 50 percent on just those two that the Minister talks about. Can the Minister, then, provide us the increases for each of those programs and the percentage? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Okay. Land transfer for property buys less than $1 million is currently $1.50 per thousand with a minimum fee of $100. It is going to $2. That is a 33 percent increase. Correct. Mortgages, I should go to next, are currently $1 per thousand in most cases, and that will go to $1.50, which is a 50 percent increase. Correct. Again, on the example I gave of the $400,000 house with a $300,000 mortgage, instead of paying $900, you would pay $1,250, an increase of $350.
Thank you, Minister Sebert. Mr. Thompson.
Thank you, Mr. Chair. I will just try to make it real simple. Can the Minister provide us with the information of all the increases that he has talked about with this here with a percentage? Just give it to us. You don't have to tell us the numbers here today, but if you can give us the information for all the things that he is proposing to increase? Thank you, Mr. Chair.
Thank you, Mr. Thompson. Minister Sebert.
Certainly. I mean, I don't think it is terribly complicated what we are proposing to do here or we are going to do here. I would be quite happy to provide these numbers in writing.
Thank you, Minister Sebert. Next, we have Mr. Vanthuyne.
Thank you, Mr. Chair. The concern with this particular matter is not about it even being modest. The first thing is that had we not even raised this here on the floor today, then there would probably have been no disclosure to us that this increase to the cost of living was going to be coming. I mean, clearly, the Minister and the government are very well aware that the idea of the proposed land transfer tax a year ago was not publicly palatable. Simply, this is just a new angle. It is simply a new approach to cash grab. The Minister has indicated that is all this really is. It is just a revenue generator. Really, all you would have to do if you were just seeking to increase some money is just cover off the costs that it takes to administer these land transfers. This is basically a substitute for replacing the land transfer tax that we knew publicly failed.
You know, the Minister might continue to see this as being modest, but what he is failing to see is that the idea of a sugar tax, the forthcoming carbon tax, the airport tax, the lease rates that came out of his other department, Lands, the ongoing power rate increases, that this is another increase to the cost of living. We are a government that says that we stand by reducing the cost of living. This is just another factor that is going to tip somebody to that point where they just cannot afford to live here anymore. "Modest" is not the word that they want to hear. We are a government, along with the federal government and the municipal government, that is responsible for driving up the costs of living. The government, in my view, Mr. Chair, should be embarrassed as it relates to this attempt, this backdoor attempt at trying to hijack those who will disproportionately be penalized for selling residences and/or businesses in market communities. I don't need any further clarification. I know exactly what this is. The department should be ashamed for trying to attempt to put this forward. Thank you, Mr. Chair.
Thank you, Mr. Vanthuyne. Minister Sebert.
This government, all governments, are faced by an insatiable demand for new and better programs. I mean, the money has to come from somewhere. The original land transfer tax we talked about was something that was far greater than this. This generally is a tax that will fall on those who can afford it. Let's be honest with it. These are home buyers. $350, really, I don't consider that a particularly outrageous or unfair increase. Rates have not been changed in 20 years. As I say, a bigger impediment, if there is such a thing, to buying a house might be increasing mortgage rates. I mean, we are constantly being asked for more programs all the time. In my view, this is a modest and reasonable increase in taxation. Thank you.
Thank you, Minister Sebert. Mr. Vanthuyne.
Mr. Chair, the way you deal with that is by creating an economy. You attract more people. You build and sell more houses. That will generate more fees to begin with. I mean, we are running into a soft economy. Things are going to be slowing down. We are continually chiseling away at residents' earned dollars. Their take-home net pay is getting smaller and smaller and smaller. At some point, they are just going to reach tipping points where they just can no longer survive. I have said it before: the worst thing about this job is when you get those emails or those phone calls from residents that say, "You know what? I am packing the van as we speak. I can't afford to live here anymore." Yet, we are a government that continues to say that we want to lower the cost of living and that we need to attract more people to the North.
The Minister can continue to say that this is modest and that it is hardly an increase, but that is the same thing the City of Yellowknife says when they propose a new property tax increase. It is the same thing when we say we are going to put up an airport tax fee. It is all just modest, but it is not modest to the homeowners and to the residents of the North when it is slowly chipping away from their income. That is hurting our economy. We are taking away from disposable income.
You know, if we haven't learned anything in the recent months about how dire the situation is out there, then we need to open our eyes. I still stand by the fact that residents need a government that is going to support them in reducing the costs of living. Thank you, Mr. Chair.
Thank you, Mr. Vanthuyne. Just reminding committee we are discussing the budget here. We are getting a little off topic. I will give the Minister a chance to reply.
Thank you, Mr. Chair. I know it has been a long day. I don't want to repeat the arguments I have previously made. Just going back to say that we are constantly trying to enhance the lives of people in our community. Sometimes, that costs money. There are many programs that are funded by the monies we raise. Again, I feel this modest increase is justifiable. Thank you.
Thank you. Committee, noting the clock, we will conclude the item under consideration, the departmental total for the Department of Justice. Justice, total department, $127,617,000. Does committee agree?
Agreed.
Agreed. Thank you. Does committee agree that this concludes consideration of the Department of Justice?
Agreed.
Agreed. Thank you. Thank you, Minister. Our thanks to the witnesses for appearing before us. Sergeant-at-Arms, please escort the witnesses from the Chamber. Thank you. Thank you, committee. I will now rise and report progress.
Thank you, Mr. Speaker. Mr. Speaker, your committee has been considering Tabled Document 322-18(3), Main Estimates, 2019-2020, and would like to report progress. Mr. Speaker, I move that the report of the Committee of Whole be concurred with. Thank you.
Thank you. Do I have a seconder? Member for Tu Nedhe-Wiilideh. The motion is in order. All those in favour? All those opposed? The motion is carried.
---Carried
Orders of the day for Friday, February 22, 2019, 10:00 a.m:
Prayer
Ministers' Statements
Members' Statements
Returns to Oral Questions
Recognition of Visitors in the Gallery
Acknowledgments
Oral Questions
Written Questions
Returns to Written Questions
Replies to the Commissioner's Opening Address
Petitions
Reports of Standing and Special Committees
Reports of Committees on the Review of Bills
Tabling of Documents
Notices of Motion
Notices of Motion for First Reading of Bills
Motions
First Reading of Bills
Second Reading of Bills
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Bill 36, An Act to Amend the Petroleum Resources Act
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Bill 37, An Act to Amend the Oil and Gas Operations Act
Consideration in Committee of the Whole of Bills and Other Matters
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Bill 32, Naturopathic Profession Statutes Amendment Act
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Minister's Statement 131-18(3), Sessional Statement
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Tabled Document 322-18(3), Main Estimates, 2019-2020
Report of Committee of the Whole
Third Reading of Bills
Orders of the Day
Thank you, Mr. Clerk. This House stands adjourned until Friday, February 22, 2019, at 10:00 a.m.
---ADJOURNMENT
The House adjourned at 6:07 p.m.
