Andrew Raven
Northern News Services

Yellowknife (June 06/05) -A Yellowknife MLA called on the federal government last week to repeal the goods and services tax for Northern residents.

Eliminating the seven per cent levy would reduce the high cost of living and attract more professionals to the three Northern territories, said Kam Lake MLA Dave Ramsay.

"We need some kind competitive advantage, " Ramsay said in the legislative assembly, June 1. "We need to find a way to give Northern residents a break."

Ramsay said the federal government collects about $60 million annually from the Northwest Territories in GST - a drop in the bucket compared to $37 billion dollars that comes from the rest of the country.

The tax break would attract more doctors and nurses to the North, which suffers from a chronic shortage of professionals, Ramsay said.

"If the federal government's intention is to have three strong Northern territories, a very good start would be to exempt (them) from paying the GST," he said.

Premier Joe Handley called the proposal "interesting" and said he would discuss it with his fellow Northern premiers.

A spokesperson for the federal department of finance said relief from GST is reserved for those in need - including low income families.

He added that the issue of exempting the territory would not be addressed through the media. Earlier this year, a Nunavut MLA called on the federal government to repeal the GST for residents of that territory, though movement on the issue has been slow.

The GST was introduced by the Progressive Conservative government under Brian Mulroney in 1991.

The Liberals promised to eliminate the controversial levy during the 1993 election campaign, but backtracked from that promise.

Ministers at the time said the tax was necessary to balance the budget and pay down the federal deficit. There have been large budget surpluses ever since.