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SOMBA K'E/YELLOWKNIFE - NWT businesses will suffer if the GNWT institutes a new sales tax, according to several chambers of commerce in the territory.

Other options should be considered before going down the tax route, they said.

Chris Buist, president of the Norman Wells Chamber of Commerce, said he would be opposed to five or eight per cent retail tax hike by the GNWT. - Guy Quenneville/NNSL photo

A week and a half ago the GNWT released a discussion paper detailing several tax-raising options that could be used in a bid to raise money for the territorial budget, which the government said will be short $40 million for the current billion-dollar budget as well as next year's.

One of those options entails instituting a new eight per cent sales tax in the territory, bringing the total sales tax in the NWT to 13 per cent. Another option is to raise the goods and services tax from five to 10 per cent.

But Don Yamkowy, former president of the NWT Chamber of Commerce (his term ended on Wednesday), said the government's discussion of revenue-raising options is shortsighted.

"I think we should be doing some more belt-tightening prior to raising taxes," he said. "If you look at what the finance minister has brought out, everything is on the side of raising taxes. Nothing is on the side of reduction of services. We have to look at both sides."

Privatization of some but not all services is one alternative, he added.

"We think that there's a lot more in government that could be privatized, could be given to the private sector and functions could happen cheaper and better."

Yamkowy pointed to guard services at the North Slave Correctional Facility as an example.

"Government should not be a doer of everything. It should be a facilitator," said Yamkowy.

Government job cuts are also an acceptable alternative in Yamkowy's eyes.

In a letter dated earlier this year and signed by Yamkowy and Bob Doherty, president of the NWT Construction Association, Yamkowy wrote in support of the GNWT's desire, expressed earlier this year, to shrink its staff.

"...the number of GNWT employees has surged to about 4,720 today from just over 3,500 in 2000 - despite the fact that the GNWT administers about half the number of communities and 40 per cent of the land mass since Division, while the popularity of the NWT itself has grown by only two per cent over the period," wrote Yamkowy.

While personally agreeing taxes are not the answer, Steve Anderson, president of the Hay River Chamber of Commerce, cautioned against layoffs.

"We don't want to see layoffs," he said.

He added more taxes in the NWT would benefit Alberta more than it did the NWT.

"I think, from the customer's point of view, you would see movement down south, buying more products down south and to Alberta," said Anderson. "They don't have a sales tax."

As for NWT businesses, "(taxes) would impact them a lot because you would have less of an opportunity to be competitive," Anderson added.

Chris Buist, president of the Norman Wells Chamber of Commerce, said businesses have a hard enough time already.

"It would put a hardship on the businesses that are already struggling in our economy right now," he said.

Customers will ultimately feel the pinch worst, he added.

"Once it's put in place, you have to deal with it. But I think it's going to end up being put back on the consumer," he said.