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SOMBA K'E/YELLOWKNIFE - Yellowknife business owners are likely breathing a collective sigh of relief in the wake of the GNWT's decision to forgo the institution of a new sales tax in the territory.

On Thursday, the GNWT said a new sales tax - in the form of added GST - is now off the table as part of the government's ongoing efforts to raise $40 in revenue for its upcoming two budgets.

Bob Fitzgerald, owner of Fitzgerald Carpeting, said raising taxes of any kind would have just convinced more people to drive to Alberta for some of their purchases. - NNSL file photo

Reaction to the news was uniformly positive among Yellowknife businesses owners, the Yellowknife Chamber of Commerce and the NWT Chamber of Commerce - the latter of which sat on the round-table discussion on the government's revenue-raising options.

Don Yamkowy, acting president of the NWT Chamber at the time of the meetings, said the chamber and other stakeholders - including the NWT Chamber of Mines - took a strong stand against taxes and refused to waiver from it.

"They showed us a list of all the possible taxes and asked us which ones we'd be most likely to support," said Yamkowy. "We said 'We're not playing that game. We don't support any of them.'"

Instead, the chambers and other participants pushed the importance of providing incentives for people to move up North, like a housing subsidy, instead of raising taxes, a measure that might deter some from moving up North, added Yamkowy.

Increased taxes acting as a barrier to attracting new people to Yellowknife was a common theme among concerned parties.

"I think the government heard and understood when we said the cost of living is driving people away in the market up here and the government's got to look at reducing the cost of living as a way of dealing with their revenue issues," said Jon Jaque, president of the Yellowknife chamber.

"I think the last thing that the NWT needs is anything that will increases costs for those living in the North," said Warren Pariseau, owner of Canadian Tire. "We pay a premium on everything that we buy up here, whether it be gas or heating fuel or electricity. Just to add little more on to it would be too much to bear for common, everyday people that we're trying to get to come up and live in the North.

"It is becoming more and more difficult, if not impossible, to convince someone to live up Yellowknife," added Pariseau, who moved to Yellowknife earlier this year.

Bob Fitzgerald, owner of Fitzgerald Carpeting, said he predicted the GNWT's decision months ago.

"I figured they would scrap it," said Fitzgerald, adding some of the other taxes, like a tax on cigarettes and liquor, made it through the vetting process because they were "softer" sells compared to an outright sales tax.

"The reason it's a harder sell is because it's right in your face every time you go to a store since it's broken down," said Fitzgerald. "If a sales tax came here, I think the outcry would be more because we're so close to Alberta and so many people drive back and forth and we'd lose all the business.

"We already pay a higher price here," he said. "If you add that sales tax, it's maybe one more incentive for people to drive down south."

Finance Minister Michael Miltenberger said the government will continue with its plans to raise $10 million in revenue for the 2009-2010 budget but will delay plans to generate an additional $30 million for the 2010-2011 budget.

"I think that's a smart move," said Jaque.

"I applaud their decision to look at streamlining and reducing their costs. Finding inefficiencies within the bureaucracy is a good decision in the current economic conditions."