Debates of January 21, 2004 (day 2)

Thank you, Mr. Speaker. My question is to the Minister of Finance, Mr. Roland. I know everybody has been hearing a little bit more back room grumblings about the growing inequities in the employment within the mining industry of aboriginals and northerners; that the mining industry is reaching a point where they’re just barely meeting their quota for northern employment. With the growing number of mines that are going to be opening in the future, I think this gap is going to keep growing. My question, Mr. Speaker, is that I’ve been hearing some concerns from some employees of these mining industries that some non-resident employees are taking advantage of our northern taxation policies. I know changes in these policies are also being hindered by the Government of Canada’s taxation harmonization policy. That’s why we’re having a hard time recovering more dollars from non-resident employees and making it more fair and equitable for our northerners.

The issue I want to raise with the Minister is that I know that a lot of the non-resident employees of these mining companies are starting to take up residence just north of the NWT border in areas like Hay River, Enterprise and Fort Smith. That makes them qualify for these northern allowance benefits. Every two weeks there’s a mass exodus going south after the shift changes. People are just taking addresses and filling them out on their application forms to the mines that are situated in these communities, which qualifies them for the northern benefit allowances.

I just want to ask the Minister what measures he is going to make to ensure that the northern allowance benefits are taken advantage of by northerners only, and not by southern employees who do not reside in the NWT on a full-time basis. Thank you, Mr. Speaker.

---Applause

The Minister of Finance, Mr. Roland.

Return To Question 19-15(2): Non-Resident Mining Industry Employees

Thank you, Mr. Speaker. I’d like to thank the Member for that question. It’s an area that has been a bit of an issue through a number of Assemblies from the day the payroll tax was put in place. Many northern businesses felt that it was an added cost to them. The government itself wanted to ensure that we tried to encourage employees who were working from other jurisdictions to live in the Northwest Territories so we could benefit in a number of ways by them taking up residence in the Northwest Territories, and also to encourage businesses to hire northern residents and put them into gainful employment.

There are things that we have done. It’s admittedly in an area that has some issues. We have looked at a number of issues across the board around the payroll tax and how we’re affected by harmonization of tax policies across the country, but it is an area that we see as one of the avenues to try to…If we can't have employees working at the mines living in the Northwest Territories, then we will keep this tax in place and look at enhancing it, possibly, as one of the ways to try to bring some money back to the North that we're not getting through royalties, for example, or other areas. There are a number of options, but in the area itself of payroll tax, it has its problems. It's something we need to continue to work out, but it is based on residency in the Northwest Territories. So if someone works for a mine or a company in the Northwest Territories and does take up residence in the Northwest Territories, they would qualify for that rebate, for the credit, depending on the income that they make. So if they've moved to the North and taken up residence here, that benefits us in a number of ways. One, it increases our grant from Canada because we have a higher population but, as well, most of the money would stay in the North. If the Member is referring to the fact that people are taking up an address but not really living at it, that's something we need to follow up on and get more detail on. If the Member has some specific information he'd like to meet with me on, I'll gladly meet with him. Thank you.

Supplementary, Mr. Villeneuve.

Supplementary To Question 19-15(2): Non-Resident Mining Industry Employees

Thank you, Mr. Speaker. I know that the payroll tax is something of an unknown for this government in making any real change in it because of this harmonization policy. What I'm getting at, Mr. Speaker, is I'm just wondering how the Minister intends on making some positive policy changes that would curb the practice of employees in the mine, like you would get 10 or 20 employees with the same address. They're all living in the NWT but they all have the same address. It basically just goes to show they've found a loophole in our taxation policies, and I'm just wondering how the Minister plans on addressing that. Thank you.

Minister of Finance, Mr. Roland.

Further Return To Question 19-15(2): Non-Resident Mining Industry Employees

Thank you, Mr. Speaker. To address and do audits, it would come down to follow-up on that kind of information. If in fact there are a large number of people at one residence, it's something that would trigger an enquiry and is it in fact being used by a multiple number of people who fly in and use that address as a mailbox. That's something that has been raised in this Assembly. We don't have right now something that we can pull out besides more inspections or more audits on files.

The other side of it is if we are going to enhance that area, I would have to look at increasing staffing levels to ensure that we follow through on the submissions made to ensure that people are where they are; if they're actually living in the North or if they're using that and trying to gain benefit at that end. That would affect not only the payroll tax -- if they're using a northern address and qualify for NWT health care -- that would also impact on the cost of government. So it's something we have to look at and ensure that we're doing the best we can. I'll admit now we're not doing enough in that area, but that goes back down to the resources that we have as a Department of Finance to try to catch all of these things that are in place. Thank you.