Madam Speaker, I move, seconded by the honourable Member from Hay River North, that Bill 16, An Act to Amend the Income Tax Act, be read for the second time. The bill reduces the small business tax rate from 4 percent to 2 percent effective January 1, 2020. It also makes retroactive amendments to harmonize the Northwest Territories tax regime with the federal system. Those amendments do two things: ensure that split income received by a senior is factored into the determination of their Territorial Age Credit; and allow more pension credit for veterans. Thank you, Madam Speaker.
The motion is in order. To the principle of the bill. Member for Frame Lake.
Merci, Madame la Presidente. I wish to speak to this bill. The main purpose, as I can see, is to reduce the small business tax rate from 4 percent to 2 percent, and I'm sure the Minister of Finance will explain at some point that this is to bring our small business tax rates in line with some of the other jurisdictions in Canada. I am not opposed in principle to reducing taxes, but I think we need to look at the issue of tax fairness. This will result in our government losing some revenue, and I'd like to know how much. I think the public deserves to know that, as well.
I am mindful that the Minister of Finance gave a fiscal update about a week-and-a-half ago that, really, we're not in good shape, Madam Speaker, in terms of our finances, and this bill is not going to help that in any way. I would have much preferred an approach that would have been revenue-neutral so, if we're going to reduce taxes, then we have to find a way to replace that lost revenue.
I am on record supporting tax fairness rather than tax reductions, and I have suggested in the past many times that we need to look at ways to increase our revenues, and I think one of the ways that we need to look at increasing our revenues is by adding another tax bracket onto our personal income tax rates. We only have four; we're one of the few jurisdictions left in Canada that only has four income tax brackets. Alberta went to five in 2016. British Columbia went to five in 2014. New Brunswick went to six in 2015. Newfoundland and Labrador went to five in 2015. Nova Scotia went to five in 2010. Ontario went to five in 2014. Yukon went to five in 2015. Even the federal government went to five in 2016.
I'm all about tax fairness, Madam Speaker, and I think we need to find a way to replace this revenue. There is an opportunity to do so by looking at increasing our personal income tax brackets by adding one. I think it's only fair that we all find ways to contribute, especially during the pandemic. One way to do that is to add another high-income tax bracket to replace the lost revenue from this reduction in small business tax. Mahsi, Madam Speaker.
To the principle of the bill. Member for Hay River North.
Thank you, Madam Speaker. It gives me great pleasure to second this bill. There was a time in this Assembly when the idea of reducing taxes on small business couldn't even be discussed. Not this current Assembly, but the previous one I was in. We heard today that small businesses have been hit hard by the pandemic, disproportionately perhaps. This is a way that we can help support them. Revenues are important. Revenues in the GNWT, of course, are important. However, I've had small businesses say to me that, "If I could have a bit of a tax break, I would be able to hire that apprentice." We need to think beyond just the GNWT and what our needs are. We need to think about the people and the businesses of the territory. I look forward to the debates on this going forward. Again, I'm happy to be part of this, and I think it's a great move for the territory. Thank you, Madam Speaker.
Thank you, Member. To the principle of the bill. Member for Yellowknife North.
Thank you, Madam Speaker. I just would like to rise in support of this bill. I am sure my colleague, Mr. Simpson, is happy to see that this bill will pass first reading today and we will, ultimately, I believe, lower the small business tax rate. I really think the backbone of our NWT economy in recovery must be our small business. As we enter into a world and compete in a world where capital increasingly gets held in the hands of large businesses, I think we as government have to do everything we can to support our small businesses. Thank you, Madam Speaker.
To the principle of the bill.
Question.
Question has been called. All those in favour? All those opposed? Abstentions? The motion is carried.
---Carried
