Yellowknife (Mar 10/03) - The GNWT must move quickly to reduce the tax burden on small and medium-sized entrepreneurs, says the Canadian Federation of Independent Business.

Fuel taxes and utility charges top the list of the CFIB's "most harmful" taxes.

The federation has called on finance minister Joseph Handley to decrease gas taxes from 10.7 cents/litre to 6.4 cents/litre "for all regions of the NWT."

It wants diesel taxes cut from 9.1 to 7.2 cents/litre at the same time.

Corrine Pohlman, CFIB director for Alberta and NWT, urged Handley in a letter last month to "do what you can to help relieve the pressure on gasoline and diesel fuel taxes so that small firms can remain competitive."

Pohlman said gas tax in NWT is 73 per cent higher than in Yukon and 67 per cent higher than in Nunavut.

Almost 80 per cent of CFIB member firms in NWT pointed to gas and diesel taxes as the most harmful in a major CFIB survey last fall.

"Almost two-thirds also cite utility charges, which are often heavily dependent on the price of fuel," she said.

"There is no surprise that they have a harmful impact as well."

The CFIB applauded the GNWT's recent reduction of corporate income taxes.

The government should now follow that initiative by working with the federal government to increase the small business threshold to "at least $300,000, preferably $400,000," she said.

An option would be to establish a permanent medium-sized tax rate.

The federation is less happy with the recent territorial budget, cautioning strongly against deficit spending.

While the GNWT has done a good job in the past setting aside surplus revenues against future deficits, at current spending levels that cushion won't last long, the federation warned.

"Before this surplus is depleted, CFIB encourages the NWT government to immediately start finding ways to control expenditures," said Pohlman.

In the same survey, the CFIB found that 50 per cent of member firms in the NWT give the government a passing grade for attracting investment into the territory.

But nearly 60 per cent believe the GNWT has a poor understanding of small business.

"This contrast indicates the government may have neglected the very different needs of the small and medium-sized business sector in the process."

Pohlman will meet with Handley and others in the GNWT later this month to discuss these and other issues.