Thank you, Mr. Speaker. Earlier today in my Member’s statement, I clearly indicated that this government is leaving money on the table and is clearly not working in a fiscally prudent manner for the people. This government and Minister of Finance have a fiduciary obligation to the people and to capture a significant portion of economic grant royalties and taxation since it rightfully belongs to the public. Why this government continues to ignore pleas of citizens in trying to find new sources of revenue I am not sure, but what I am certain of is, if nothing is done, as the good Minister always reminds us, it will be decided in 706 days from now. So let’s dive into the world of opportunity and ask our Minister of Finance what fuels his obdurate refusal for not listening to the people.
Why is the Minister of Finance so inflexible so as not to consider the will of the people when it comes to considering any new forms of mineral taxation? Can he clearly fortify his reasons as to his continued refusal to deal with this question? Thank you.
Thank you, Mr. Dolynny. Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. We’ve just had some discussion in this House about cost of energy, the fact that it’s driving Northerners away and it is crippling business. So one of the reasons we are very careful and we haven’t touched taxes for a number of years and we have looked at efficiencies is because we don’t want to add to the burden of business or to Northerners. We are spending millions on improving our energy efficiency and we are spending millions on looking at transmission line expansions, all tied to affecting the cost of living productively and to lower it. The issue of raising taxes, getting our fair share, we’ve had that discussion and we made a calculated decision that it is not in our best interest at this time to raise taxes. Thank you.
Mr. Speaker, we’ve had this discussion. That’s what I’m hearing from the Minister, but we did not include us on this side of the House. It is has been a Cabinet decision.
After devolution, this government will have the opportunity to raise royalty rates which, for the record, haven’t changed in years and are embarrassingly some of the lowest rates in Canada in the free world. This government, for years, has been content with not capturing what is owed to the people. There is still opportunity for the NWT to raise royalty rates and still remain competitive.
Will this Minister commit to the House and to the people that this will be done immediately post-devolution? Thank you.
Every year for months we have budget cycles and, of course, this Legislature and the Members are involved in the budgeting process and if there was a unanimous decision on the other side of the House to say we want to raise taxes here, there or wherever, of course that would have a bearing. But the reality is two things, that they are fully involved and we have listened to the debate and concerns around the North and we’ve been through this House year after year with budgets and we have been holding the line to not add a burden on our businesses or on our residents and we are continuing with that. There has been nothing in this House that would give us pause to change that, other than the Member standing up saying he wants taxes raised on industry, on resource rent.
After devolution we are going to inherit a royalty regime and we’re going to look at it very carefully, but we are going to be very measured, thoughtful and thorough about how we implement devolution. There is going to be no rush to any kind of kneejerk reaction as it comes to any type of change to the royalty regime until we are very well settled and have a good look at that whole issue. Thank you.
Mr. Speaker, I encourage the Minister to bring those discussions within the life of the 17th Assembly. I’m looking forward to it.
Capital tax which is applied on a corporation paid-up capital is a stable revenue stream and is another form of tax that most provinces and territories levy while the NWT does not. According to the GNWT’s own analysis from the Department of Finance, a tiny 0.3 percent tax on paid-up capital of large corporations would net $12 million in annual revenues. Keep in mind that in the past 10 years, federal corporate income taxes have been reduced from 22 to 15 percent. This gap leaves a significant revenue-raising opportunity for GNWT.
Can the Minister indicate to this House why his department has refused the implementation of such a taxation model?
Mr. Speaker, we have a model that we have developed through our Territorial Formula Financing Agreement. We’ve looked at our costs in the Northwest Territories. We have an 11.5 percent corporate tax rate. We have a 4 percent small business rate. We are in the middle of the pack in most of our taxation.
When we take over the royalty regimes, of course we are going to look at them very carefully. We are going to offer briefings to the other side of the House. We are going to offer briefings to Northerners so we fully understand how taxes are implemented, how royalties are exercised in this territory in the different resource areas and they’re not all the same.
It is fairly complex. We want to be very thorough and measured on how we do that. In due course, in the fullness of time, we’ll have those discussions. Come April 1st, we are not charging down the road to start raising taxes before we’ve even established ourselves in a very careful, measured way. Thank you.
Thank you, Mr. Miltenberger. Final, short supplementary, Mr. Dolynny
Thank you, Mr. Speaker. I must remind the Minister that we aren’t the middle of the pack when it comes to taxes. We are actually one of the lowest when it comes to royalty rates and we don’t have a mineral tax, so we don’t have anything to compare with.
If there is any doubt at all in the facts presented here today, then, clearly, would this Minister take this to the people? Will he conduct a public review of economic rent from the non-renewable resources to ensure fair capturing of public revenues? Will he seek out all forms of taxation revenues? Will he stand on the side of accountability and commit to the people this obligation within the next 128 days?
Mr. Speaker, in fact in the last Assembly we did those roundtables and they were based on revenue generation and we did look at taxation. We did it for three cycles, if my memory serves me correctly. The consistent feedback we got from Northerners across the regions, when we brought them to Yellowknife, was that this was not a good time to raise taxes. Thank you.
