Inuvik (Oct 02/06) - When Polish tourist Arkadiusz Jedras visited Inuvik on Sept. 28, he kept his receipts neatly organized in a coat pocket.

That's because he expected the government to refund his GST.

But now, tourists like Jedras will have to pay the same tax as Canadian citizens.

Polish tourist Arkadiusz Jedras visited Inuvik on September 28. He didn't know about the GST rebate being cancelled, and was saving all his receipts. - Philippe Morin/NNSL photo

As part of a series of spending and program cuts announced last week, the federal government has cancelled a GST exemption for foreign travellers, making them pay the same tax as everyone else.

According to government figures, the rebate's end might generate 78.8 million dollars in the next two years.

David Grindlay, executive director of NWT tourism, said about 930,000 people applied for the GST rebate every year it was active. This is a small proportion of the millions of tourists who visit Canada every year, he said.

While the end of the rebate might mean millions in government revenue, Grindlay said he doesn't think foreigners should pay GST.

"The rebate was a small tool to demonstrate that Canada is a tourism-friendly destination," he said.

Another point Grindlay raised was the popularity of "package tours" in nations like Germany and Japan.

Under the previous government, he said, foreign agencies could sell things like pre-booked hotel or train tickets without charging GST.

Thus, the cost of the tours was a bit lower, and perhaps more enticing to tourists choosing a destination.

"Will it affect their decision to come here? Probably not," he said of the rebate's end.

"But in choosing an international destination, all sorts of factors come into play."

Despite these arguments, Inuvik's Deputy Mayor Arlene Hansen said she likes the idea.

Hansen owns the Originals on Mackenzie souvenir store in Inuvik, and said she feels tourists should pay GST, if it means millions for the Canadian public.

"If you visit a country, you should pay its taxes," she said.

The end of the visitors' GST rebate was announced in Ottawa by Finance Minister Jim Flaherty on Sept. 25.

It is part of the government's pledge to cut $1 billion in spending over the next two years.