Richard Gleeson
Northern News Services

Yellowknife (May 13/02) - Finance Minister Joe Handley says the GNWT is considering a mineral tax that would help give the territories a "fair share" of the profits going to Ottawa.

Handley said because the lion's share of corporate taxes and all of the mineral royalties go to the federal government, Northerners continue to lose out.

Handley said the government is currently exploring options for securing some of those profits to deal with increased pressures the diamond industry has put on government services and infrastructure.

Those options include the introduction of a mineral tax.

"It's a possibility we are looking at," Handley said.

The legislation for a new tax is ready to go. It was drafted three years ago, when one of Handley's predecessors, John Todd, threatened to introduce a tax "that would choke a mule," if BHP did not agree to provide rough diamonds from Ekati to Northern cutting and polishing plants.

Other options include an increased payroll tax (which would be rebated to Northern residents) and continuing to lobby the federal government for investment in Northern infrastructure.

"I haven't heard of any such proposal, but clearly it would be of concern to us," said BHP Billiton Diamonds spokesperson Graham Nicholls of the possibility a new mineral tax.

Nicholls said the company is caught in the crossfire of a dispute between the territorial and federal governments over how royalties and taxes from the mine should be shared.

Handley said the benefits of a new tax would be temporary.

The revenues it would generate would likely be clawed back once the federal-territorial funding agreement is renegotiated, in 2004.