Thank you, Mr. Speaker. Following up on my Member’s statement, my questions are for the Minister of Finance. Yesterday the Premier was asked about the current state of devolution negotiations and gave answers describing their status. Completion of a deal will take some time, and meanwhile, the revenues owed to our citizens for the sale of our resources go uncollected. Many Members have called for a resource tax as a desirable interim measure. Will the Minister commit to bringing forward a proposal for the increase of revenues through resource rents as part of his package of recommendations in the next budget? Thank you.
Thank you, Mr. Bromley. Honourable Minister responsible for Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. We are committed to bringing forward a proposal for a heritage fund. We know that from some quarters there is an interest in a resource tax. We have indicated that we’re looking at tax shifting at this point, given that we’re still in a recession that while there are some weak signs of recovery, it’s not clear that we’re on the way out and that we don’t have anything further to worry about. But we have committed, as a result of our roundtable, to do work on a resource tax, and look at the feedback we’ve received and put a discussion paper out there so that we could initiate that policy discussion to see. Keeping in mind the last time, about a year ago, when we talked about revenue options and looked at creating $30 million in revenue and we talked about a whole host of things -- resource taxes, hotel taxes, road tolls, all these types of things -- there was almost unanimous denunciation in the House for any contemplation of raising taxes and the cost of living. So we will come forward with a discussion paper and we are going to move on the heritage fund. Thank you.
Very good news to hear about the heritage fund intent. I’m happy to hear that some work is being done on the resource tax. Of course, times change and, as I say, there has been quite a shift, as well, in our thinking on the resource tax that, of course, would not affect the cost of living.
The tax shifting is of interest, though. Studies show that when taxes are lowered for low and middle income people, the money is spent priming the economy and improving standards of living. The studies also show that high income earners who get tax cuts spend their money on imported goods or they put it into savings, providing only limited benefit to the community. Will the Minister commit to including a lowering of income taxes for lower and possibly middle income earners in his revenue recommendations? Mahsi.
We would be prepared to look at all of the suggestions. I am not prepared to negotiate the contents of the upcoming budget in the House. At this point, there have been lots of recommendations made. We are looking at trying to maintain tax levels, so we are looking at things like tax shifting, recognizing, as well, it’s a delicate balancing act.
The other concern is if you continue to raise taxes at the high income level as well, you have trouble attracting people when they look at the tax regime and where is the best place for them to come and provide their services. We recognize the pressures at both ends and we will try to find that appropriate balance. Thank you.
Thanks again for those comments. I recognize it’s difficult to commit at this point and I am happy to see work is being done at this point. I hope we do go forward with that opportunity.
It’s shocking, of course, that nearly 20 percent of our earned income in the NWT economy is paid to people who don’t pay taxes in the NWT. I recognize that the MOU between the government and the diamond mines is working on that to base workers here in the North and that there is some effort to look at immigration to sort of help in an indirect way, however, tools do exist that can help us recover some of the loss in this area. What measures is the Minister contemplating and hopefully proposing to capture some of these escaping revenues right now? Thank you.
As the Minister from ITI has pointed out, there were meetings held with the mines -- BHP, Diavik and De Beers -- about the MOU. One of the best ways is going to be what the mines have committed to doing, which is limiting the incentives for flying south. The pickup points are only going to be in the North, keeping in mind, then, that it’s going to be the responsibility of communities that are going to be possibly places where these folks will stay. They have to make sure that they have housing available should these folks that fly in say that now they are prepared to live in the North, be it Yellowknife, Hay River, Fort Smith, Fort Providence, any community. We need housing available to hold up our end of the deal.
Thank you, Mr. Miltenberger. Final supplementary, Mr. Bromley.
Thank you, Mr. Speaker. I suppose the departure tax might be in line with some of the discussion that the Minister is having with the mines and so on to try to capture the entrance and exit of people from the Territories as they come to and fro from work. Will the Minister commit to leading the charge for ensuring that these measures are put together in an integrative and complementary way so we can enjoy the fullest range of benefits from them when we do put them in place? Will he recognize their relationship to each other and ensure that they take advantage of that opportunity? Mahsi.
When the Member mentions leading the charge, of course, I think of the charge of the Light Brigade into the Valley of Death of 600. But, yes, we will play a leadership role and we will pull together an integrated comprehensive package, recognizing that some work will get done in time for this budget, but any significant restructuring of our tax system is going to take time to do the work and the consultations and hopefully reaching consensus, so that if it’s not ready for this budget, it will be ready for the budget of ‘11-’12.
Thank you, Mr. Miltenberger. The honourable Member for Hay River South, Mrs. Groenewegen.
