Debates of March 31, 2004 (day 12)

Thank you, Mr. Speaker. I move, seconded by the honourable Member for Frame Lake, that Bill 6, an Act to Amend the Payroll Tax Act, 1993 and the Income Tax Act, be read for the second time.

Mr. Speaker, this bill would amend the Payroll Tax Act, 1993 to increase the rate of the payroll tax. The bill would also amend the Income Tax Act. Alternative versions of the amendments to the Income Tax Act are included because Bill 3, An Act to Amend the Income Tax Act, No. 2, also amends the provisions of the Income Tax Act relating to individual income tax. Both versions of the amendments would amend the Income Tax Act to decrease individual income tax rates for persons with taxable incomes less than $66,492 and to increase the amount that an individual may deduct from his or her tax payable. The second version would also clarify the provisions of the Income Tax Act relating to individual income tax in the event that An Act to Amend the Income Tax Act, No. 2, is not enacted. The changes to both the Payroll Tax Act, 1993 and the Income Tax Act would take effect on January 1, 2005. Thank you, Mr. Speaker.

The motion is in order. To the principle of the bill. Mr. Braden.

Thank you, Mr. Speaker. There has been considerable discussion already in this Assembly, Mr. Speaker, about a number of tax measures that this government has proposed, a couple of which we have already approved and two of which have yet to come. I’ve already said that I think the government has taken a positive step in putting these together in a bundle, so to speak, as the Minister of Finance did in his budget address. This helps everyone understand and comprehend what we’ve got ahead of us and what this government’s plans are for how to manage our fiscal situation.

The principle of the payroll tax is fairly straightforward. It is a move that is within our limited authority to generate some of our own revenue by which we can get some of the wealth that is being earned by non-resident workers and keep that here. It is amply justified, Mr. Speaker, because in earning their living or part of their living here in the Northwest Territories, Mr. Speaker, those workers use much of the infrastructure such as airports, water, sewer and roads. All services, such as our Workers' Compensation Board network, for instance, our hospital and health care service system are here to help and support them. But through the normal taxation process we normally have, there is no recourse or way of getting some measure of payment or investment from them. So there’s a very straightforward equity and balancing exercise as relates to how to get some of the wealth from southern-based workers to stay here in the North.

Where it becomes problematic is because it has to be equally applied. We have to have counterbalancing measures in our system so that northern residents who are assessed by the payroll tax are not penalized. Herein lies the problem for small and big businesses to administer this. For salaried workers who have to forego what would otherwise be discretionary money that they would get in their pay cheques, at least in part, are not determined until we all file our tax returns at the end of the year.

So we have these inequities to work out. By proposing that we’re going to be doubling the payroll tax, but are we potentially doubling the administrative headaches? Are we potentially doubling the hit that we northerners are going to take on our disposable incomes because of this tax? I’m not going to get into a discussion or reasoning about that.

My plea here, as I stand here in favour of the principle of the bill, Mr. Speaker, is to ask the Minister and the government to make the fullest possible communication plan on this bill so that when a committee goes forward to assess the public’s view of this they are well informed, they have all the information before them, and while they may not agree with the idea of this tax, at least there is a solid base of information and understanding of what it does and what the impact is going to be on them.

With that, I think this is a progressive measure, but there is yet a communication effort that remains before we can, I guess as committee, effectively bring this bill back and report on it potentially or hopefully in the May session. Thank you, Mr. Speaker.

To the principle of the bill.

Question.

Question has been called. All those in favour? All those opposed? The motion is carried.

---Carried