Thank you, Mr. Speaker. I would like to follow up on my Member’s statement today with questions to the Minister of Finance. This government definitely needs increased revenues if it’s to shift to a sustainable foundation and continue providing a sufficient level of services and programs to people it serves. We’ve heard of a plan to attract 2,000 new souls to the North. To date, we have seen neither the plan nor the souls.
The global economy is, understandably, stalled and our big investments in giant infrastructure provide little economic return. Five percent on $2 billion worth of diamonds exported from the NWT seems too little.
What real opportunities for increased revenue is the Minister of Finance pursuing? Mahsi.
Thank you, Mr. Bromley. The honourable Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. One quick word about the diamond mines. We have a GDP of about $3.6 billion a year. Of that, half of that comes from the diamond mines. So when you look what they pay in royalties, but you have to combine that with all the money and value added that comes into the territory, that if we didn’t have those diamond mines and the $1.6 billion or so that they contribute to our economy, we’d be having a considerably more difficult conversation in this House.
The approach that we are taking in an area that has some of the highest costs of living in the country is to look at trying to build the strategic infrastructure that’s going to help create the conditions and provide the tools for continued economic growth that will expand our tax base as a result. I point to things like the $80 million commitment to put in the Fibre Optic Link which, if it holds true as to what happened in Kiruna, Sweden, we’ll see over the years an added value to the community of Inuvik of hopefully over $100 million a year. If we get good at it, the value added in terms of jobs could be anywhere in the neighbourhood of 400 jobs, if Kiruna, Sweden, is any indication.
It’s that kind of investment that we see as where we want to put our attention and invest our money, as opposed to at this point looking at expanding the taxes on Northerners. Thank you.
I think the fibre optic line is a good project and probably our best and, unfortunately, our only example. The 400 jobs the Minister speaks of are obviously far beyond any estimates I’ve seen provided by Cabinet, but I do support that project.
Obviously, the GDP that the Minister mentions is a false measure. It has been well recognized as a false measure. We know that over half a billion dollars, the Minister tells me, in wages are being sent out of the Northwest Territories. That all goes to the GDP, right? So how real is that?
One possible enticement for people who might be considering a move to the NWT, though, and a reason for those already here to remain, would be lower income taxes on low and middle income brackets. There are many aspects of this that would have to be examined, but the Minister seems to write this off out of hand.
How has the Minister considered this possibility in a plan to attract new residents and their intended transfer payments? Mahsi.
We’re looking at our initiative, as noted by the Member, where we’ve committed to provide an actual formal strategy that links together all the pieces that we’re doing on our 2,000 folks into the territory in now four years. We see that as, once again, a way where we can bring people into the territory.
The issue of changing the tax rates, more taxes on the higher income, lowering it on the lower incomes, we haven’t. I’ve made a decision, we’ve made a decision that we want to focus on building the tax base. So we haven’t spent a lot of time looking at how much we would need to raise the taxes on the high income, lower them on the lower and middle income. If it’s to be revenue neutral, that’s one thing. If it’s to put a whole bunch of new revenue in the pockets of the government so that we can spend it on other needs, then I would think that would be a fairly significant increase. We’ve tried over the years to raise our corporate taxes. We raised them up to 14 percent. I think that lasted about a year. We’ve quickly changed back to a more competitive rate as there was an absolute flood of equity and investment out of the Northwest Territories to file their taxes in other jurisdictions where the rates were more competitive. So it’s a very delicate balance. Thank you.
Obviously, the Minister has got a hope and a prayer for revenues, but I think we need a little more than that. You know, the hope that people are going to move here because we want them to move here is not going to get us what we’re looking for. We need some real action on revenue. Increasing taxes on bad behaviours, or sin taxes they’re called, are always popular and we’ve done a little bit of that. The increased revenue is useful and any decreased demand on costs of the bad behaviour is welcome.
The inclusion of fossil fuel use for energy generation and transportation could be considered in this light. When was the last time this House reviewed the Petroleum Products Act, and how will the Minister go after this potential opportunity? Mahsi.
To dismiss out of hand the initiatives to become more efficient in our hiring, to empower our people to go down south on hard-to-fill positions to be able to make on-the-spot job offers, to make us more competitive in terms of how we do that, to say that the Nominee Program that will hopefully increase the number of seats available with the expedited process, cut the times down to six months would help bring, hopefully, hundreds of people into the Northwest Territories, plus their families is not worth the effort, I think doesn’t do justice to the complexity and the going back to the issue of let’s just tax the small diminishing population that we do have in the hopes that somehow we can generate the amount of revenue that we need. What we need is an expanded population, expanded tax base that’s going to create more tax revenue, more people with jobs, families here using our services, driving up the quality of living in the Northwest Territories and giving us the capacity to do things we need to do.
Thank you, Mr. Miltenberger. Final, short supplementary, Mr. Bromley.
Thank you, Mr. Speaker. Thanks to the Minister. I agree this is complex and there’s a complexity to this that can’t be addressed in this format, but this Minister is not coming forward with discussions on revenue generation. We’re not having any of that. There’s no analysis being done. To do analysis requires an unbelievable effort on part of committee. Currently there is no tax levy on natural gas and propane in the NWT. The Mackenzie Valley Pipeline, had it gone ahead, would have been powered on natural gas without a penny of tax collected by this government, and this situation, this travesty remains true today. Not surprisingly, no other jurisdiction subsidizes such fossil fuel consumption and foregoes revenues in this completely inexplicable way.
Would the Minister at least consider closing the policy gap and protecting our people by establishing a revenue opportunity to help with costs incurred from that activity, even though he’s refused to do so to date? Mahsi.
Once again what I will commit to do is I’ll commit to put a paper together that I’ll share with committee that will lay out some of the challenges when it comes to raising some of the taxes, which we have looked at in terms of petroleum products and motive and non-motive fuels. It’s not like we dismiss it out of hand, but we have to look at the balance and the cost impact on the economy. I will share that with committee and we can have a discussion if committee wishes to ask us to appear before committee. If there is a consensus, we will look at including that in the transition document, but in this budget there’s no intention to raise taxes. Thank you.
Thank you, Mr. Miltenberger. The honourable Member for Sahtu, Mr. Yakeleya.
