Thank you, Mr. Speaker. As Members of this House are aware, the NWT has had a payroll tax in place since 1993, before I became a Member. It happened before my time.
The tax was originally brought in because so many non-resident workers were flying in and out of the Territory on a regular basis and benefitting from our job opportunities, government programs and services, and public infrastructure without contributing to our tax base. A tax credit was brought in at the same time to partially offset the payroll tax for NWT resident workers.
In 2005 the payroll tax increased from 1 percent to 2 percent. At the same time changes were made to the cost of living tax credits. The combined effect of these measures is that NWT residents now pay 2 percent payroll tax on any net income from employment over $66,000.
The cost of living continues to rise. We are still coming out of a global recession and even middle and higher income workers are struggling. These workers already pay higher rates of income tax for their higher earnings. Why should they have to pay another 2 percent on top of this? Not only that, Northerners who make just as much or more money from non-employment sources such as investments or business income get the tax credit but are not subject to the payroll tax at all. Where is the fairness in penalizing employees over other NWT residents? What message are we sending?
While I am supportive of the payroll tax as a way of getting at least some revenue from fly-in/fly-out workers who benefit from our roads, hospitals and high-paying jobs without paying our income tax, I am concerned about the impact it is having on employees who live here and have to cope with our higher cost of housing, fuel, food and other basic necessities.
For NWT residents the GNWT should get off our backs and axe the tax.
Thank you, Mrs. Groenewegen. The honourable Member for Yellowknife Centre, Mr. Hawkins.
