SOMBA K'E/YELLOWKNIFE -The territorial finance minister said he has no plans to raise taxes next year, but government cuts and a shift in taxes to suit the government's social, environmental and economic objectives is something the GNWT is considering.

Last Monday, Miltenberger addressed the legislature on the current economic state of the NWT. He said the economic downturn has hurt the NWT, particularly in corporate income tax revenues.

There was $82 million in corporate tax revenues expected, but currently only $50 million is being predicted this year – along with an additional loss of $3.7 million in other tax sources.

The NWT experienced an 80 per cent drop in mineral exploration and the price of diamonds dropped off significantly, two reasons why tax revenues were lower than anticipated.

"Our revenue outlook for 2010 continues to be uncertain," Miltenberger said in his address to the legislature last week.

"That's where we get to the issue and engage in raising revenues or making cuts," said Miltenberger on Friday, Oct. 23.

"The message we've sent is we're not looking at raising taxes during these current fiscal economic circumstances."

He said the option of implementing a territorial-federal combined harmonized sales tax, as suggested in a finance department revenue options discussion paper on its website, isn't something he is seriously considering.

"There's no thought about doing a sales tax," Miltenberger said. "I can tell you politically, I have no intention of coming forward with any sales tax."

The paper suggests a new eight per cent sales tax on goods and services in the NWT, combined with the five per cent federal sales tax. He said the option was presented to spark debate and discussion on what direction the government should take while raising revenue.

"There was a discussion on resource tax, or a junk food tax," he said.

"Those types of things are within our context of looking at shifting taxes, but not adding new ones. There is nobody at that round table that I recollect saying that we should look at a sales tax."

Business, community and environmental representatives from across the territory participated in a round table discussion earlier this month on potential tax options for the 2010-2011 budget. Miltenberger said his department is looking at ways to shift the current tax structure – focused mostly on income tax to taxes based on consumption.

Currently, income tax makes up 24 per cent of all tax revenues in the NWT, while consumptive taxes (tobacco, fuel, alcohol) make up 22 per cent.

Miltenberger said the $81 million in expected borrowing debt will be $43 million less in part because of accelerated cash flow from the federal government under the Economic Action Plan. But while this decreased debt load is a sign of relief, it's only temporary, said Margaret Melhorn, deputy minister of finance.

"The fact we're getting more up front means we're still going to have the expenditures next year," she said. "Overall, it might end up being a wash. It's money we're getting from the federal government but there is a commitment that goes into the next fiscal year."