Debates of February 3, 2006 (day 22)

Thank you, Mr. Speaker. Mr. Speaker, my questions today are for the Minister of Finance. I've stood up in the House before and questioned the Minister on consultation with Regular Members, and this is similar to that. I'm suggesting that consultation has to take place with the Regular Members on reductions. The $30 million reduction in the corporate tax revenue is a pretty substantive reduction. I'd like to ask the Finance Minister why is there no discussion with Regular Members on proposed reductions? Why do we, as Regular Members, approve extraordinary spending, but we have no say in extraordinary reductions? Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. The honourable Minister responsible for Finance, Mr. Roland.

Return To Question 328-15(4): Consultation On Budget Reductions

Thank you, Mr. Speaker. I'm glad the Member has raised the issue of consultation again, specifically in highlighting in his Member's statement the fact that I've, in the past, presented our fiscal situation and the strategies we'd have to work with, and how I guess he would put it, has selective memory of what I've stated. For the record, Mr. Speaker, when we've put the case before Members about where our situation was, I've also informed them why our arrangements were the way they were. So just for the record, Mr. Speaker, it wasn't the fact that we would say that we did not care if large corporations would file their tax outside the Northwest Territories. Our fiscal arrangement of the day impacted how we made our decisions.

Further to the question, Mr. Speaker, about consultation, is through the process of building the budget that's before the Members, through our supplementary appropriations for new expenditures, we undergo quite a rigorous process unlike any other jurisdiction in Canada -- the only one similar to us would be Nunavut -- in how we share the information and what our plans are. With the reduction scenario that the Member has raised, that was an area that we were informed of. I informed the House of our reduction in corporate taxes back in October, and that forced us to look at the overall budget and look for reductions. When you look at the amount we had to reduce, the target I sent to departments, in consultation with my Cabinet colleagues, was a one percent reduction. When you look at that scope of one percent over the whole budget of $1 billion, it's a fairly small amount and Ministers felt that they could take that amount and work it within the departments they were managing. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Ramsay.

Supplementary To Question 328-15(4): Consultation On Budget Reductions

Thank you, Mr. Speaker. Mr. Speaker, my memory is fairly good on this and I know that the decision two years ago to go from 12 percent I think to 14 percent was the wrong decision at the time. The mistake has come back to haunt this government now for $30 million. I'd like to ask the Finance Minister if he's got any idea or indication of what that decision two years ago is going to cost the government going forward. Is it another $60 million? Is it $70 million? Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 328-15(4): Consultation On Budget Reductions

Thank you, Mr. Speaker. Mr. Speaker, yes, the Member's memory and his comments are accurate about how he felt the decision we were making would have an impact. The impact that we've given, we've highlighted already in October. Now, the difference of our loss of corporate tax falls on two areas. One, the approximate amount of companies shifting where they would pay their taxes; two, probably more significantly, was how companies would refile their corporate income taxes. They have a three-year window where they can write off profits to previous losses so they can reduce the amount of corporate tax that they would pay, and that's what has hit us quite significantly in this fiscal year that we are in today. So it's not all about just having a higher tax rate; it's how companies can use the corporate tax system in their favour. What we've highlighted for loss for our corporate tax rate has been highlighted in the document that's going to be before Members for this year's upcoming budget. Thank you.

Thank you, Mr. Roland. Supplementary, Mr. Ramsay.

Supplementary To Question 328-15(4): Consultation On Budget Reductions

Thank you, Mr. Speaker. Mr. Speaker, I thank the Finance Minister for that. But I want to get back to the consultation. I think a $30 million restatement of corporate tax revenue is a pretty substantial thing. I think that it's incumbent upon the government to come back to Regular Members and ask us for an opinion, or consult us on where we think these reductions could happen, instead of just making decisions to go for a one percent across-the-board cut in all the various departments. Sure, the Ministers can handle it, but we had no idea or indication of where those cuts were going to come from. I think it's important, in our style of government, that that consultation take place. So I'll ask the Minister, in the future when there are reductions of that size or magnitude, will he at least just consult with us, ask us what we think? Thank you, Mr. Speaker.

Thank you, Mr. Ramsay. Mr. Roland.

Further Return To Question 328-15(4): Consultation On Budget Reductions

Thank you, Mr. Speaker. In line with our consensus style of government and being an open and transparent government, gladly I would seek the Members' input on any reduction scenarios that may come up in the future. Hopefully as we're building our position and our case before the new federal government, we will be able to instead be talking about where we invest more dollars, not how we reduce the expenditures we're in. Thank you.