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Alternatives North recommends tax hikes
Social policy group commissions report that recommends tax hikes and new taxes as options to raise revenue

John McFadden
Northern News Services
Saturday, January 23, 2016

The territorial government needs to get its head out of the oil-and-natural-gas sand and start thinking about other economic options, say members of a think-tank commissioned for an Alternatives North report.

NNSL photo/graphic

Ben McDonald of Alternatives North, foreground, listens to a presentation by southern think-tank PolicyLink at the legislative assembly on Wednesday. Researchers Diana Gibson, centre of table, and David Thompson told MLAs the best way for the government to raise revenue is through new and higher taxes. Former Weledeh MLA Bob Bromley, right said he concurs with that idea. - John McFadden/NNSL photo

Two members of the southern based PolicyLink were asked by the NWT social justice coalition to report on the state of the territory's economy and suggest options for balancing the books without cutting jobs, programs and services.

The PolicyLink representatives spent part of last week in Yellowknife, releasing two reports and meeting with the public and representatives of the territorial government. The main thrust of their message was that a resource-based economy might look attractive now but won't help the territory's long-term economic sustainability. They are recommending the NWT focus on other economic drivers such as alternative energy, tourism, agriculture and hunting, trapping and fishing.

Introduce new taxes

Rather than offering financial incentives like subsidies and tax breaks to resource-based multinational companies, the think-tank is suggesting the GNWT rewrite its tax formula and introduce tax hikes and new taxes. They say the short-term pain that would come with higher taxes will be offset with the long-term gains of a more diversified economy, a more equitable distribution of wealth and a stronger social safety net.

PolicyLink researcher David Thompson says he is well aware of the cost-of-living challenges faced by all residents of the NWT. But he stressed the impacts of high prices are felt most prominently by low-income families, adding that's partly why he is advocating for a higher personal income tax for the territory's wealthier citizens.

He also suggested taxing things like hotel rooms and airline flights would barely be noticed by those who are paying for them, and who, for the most part, don't live in the NWT. He also said increasing so-called sin taxes on products like alcohol and cigarettes tends to lead to fewer people smoking and drinking and helps keep booze and tobacco out of the hands of children.

With prices for commodities like oil and natural gas so low right now, Thompson said the timing is not good for the government to pursue investors willing to spend to explore for resources in the NWT.

Frame Lake MLA Kevin O'Reilly was one of about 30 individuals, but the only politician, who attended an Alternatives North public forum held Wednesday night at Northern United Place. He said it's time to get the pre-budget dialogue going. "We have a number of options before us - cutting expenditures, cutting the public service - there are repercussions and impacts on that side. What we really have to do is make sure we have a balanced approach," said O'Reilly. "I do hope that it starts to raise the issue and options and that the public will become more interested in this issue and express their views to the MLAs."

Mike Bradshaw, executive director of the NWT Chamber of Commerce, was a little less

enthusiastic about the message being delivered. Yellowknifer asked him how he thinks the idea of new and higher taxes would go over with NWT residents.

"It's not going to go over very well because when people hear about new and higher taxes, they think about their own pocketbooks," Bradshaw said. "I'm not saying don't do it - but I think we need to think it through very carefully and we need to get below the surface on why we need this revenue. The information that was presented here tonight was not below the surface."

At the same time the Alternatives North report was released, Premier Bob McLeod was endorsing another report that came out at the same time. Rather than tax hikes, the National Aboriginal Economic Development Board calls for more infrastructure spending on things like roads and affordable housing - stating that would contribute to resource development, economic growth and social development.

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