Mr. Speaker, it is my pleasure to speak in this budget debate. I noted with interest some of the comments the Parliamentary Secretary to the Minister of Finance made at the beginning of her speech. She set the tone that the government wanted to follow. With this bill, she felt it was opening up new opportunities for Canadians to be better served in the tax system and she spoke to a number of specific instances of that.
She also spoke of the importance of working Canadians as part of the whole tax structure, and in a way we all are. Working Canadians are the wealth creators. I come from a region of the country which is doing very well in creating wealth for Canadians, with the diamonds, oil and gas in the Northwest Territories. We are starting to push a lot of wealth into the rest of the country.
We can look the oil and gas industry in northern B.C. and say the same thing. People working in that part of the country are creating a lot of wealth for the country. We could say the same thing about northern Alberta. We can go to northern Saskatchewan where the uranium mines are now pumping out enormous profits, another indicator of wealth creation.
The development of hydroelectric power in Manitoba will create more wealth. The northern Ontario diamond mines, the potential great hydroelectric developments in Quebec, the Labrador nickel, and the list goes on, create more wealth. Throughout northern Canada, working people create wealth for the rest of the country. Wealth is a good thing; it makes our world work.
Within the concept of that, we need workers in the north. We need people to live, work raise their families and have a normal life there, just like every other Canadian. That is very important. It creates wealth and helps the whole country out.
In the mid-eighties we had some pretty far-sighted Conservatives in the Mulroney government who realized it was important that northerners be well protected in terms of their ability to live and work. To their great credit, they created what was called the northern residents' tax deduction. That spoke to fairness.
However, when we look at 2006, and in preparation for next year's budget, we need to talk about what the north needs. We need measures to deal with the high cost of living. The tax deduction created in 1986 and remains the same amount in 2006 does not accomplish that purpose. It does not deliver that for northerners any more.
According to information provided by the NWT Bureau of Statistics, a food item which costs $1 in Yellowknife, on average costs $1.35 in Fort Liard, $1.70 in Wekweti, $1.91 in Fort Good Hope and $2.22 in Pawitik. These increased costs do not reflect the fact that the costs of items in Yellowknife are already significantly higher than southern Canadian cities like Edmonton.
On average, households of northerners spend $15,000 more per year on living essentials than other Canadians. Some will argue that higher northern wages make up for these increased costs. If we were talking about a time many years ago, we might say that was the case. However, when we look at Statistics Canada and we look at the wages across the country, we see it is not the case.
The other day I had the opportunity to travel on a plane with a young fellow from Newfoundland who had worked in northern Canada and in Alberta. When I asked him if he was better paid in the north, he said that his paycheque was larger for less work in Alberta than it was when he worked at the diamond mines in the Northwest Territories. This young fellow was a skilled tradesman whose skills could be used anywhere in the country. It is not working for northerners any more.
High wages are not really the answer. It is not about that. High wages only benefit those who have a job which pays well. For the unemployed and the working poor, the high cost in the north only adds to their burdens. The majority of people in northern communities across the country are working for very low wages in very substandard conditions.
Some would say that the much promoted cut to the GST has helped northerners to deal with the high cost of living. In reality, the 1% cut lowered the price of a cup of coffee in Yellowknife by a whopping 1%. A 1ยข drop in the price of a cup of coffee really helps when the price of a litre of milk is $4 or $5 and when someone needs a loan to buy fresh fruit, vegetables and groceries. The GST is very perverse in what it does to northern communities where the cost of living is high. Northerners pay more GST for every item they buy than southerners. In some respects, we in the north pay more taxes than those who live in the southern part of Canada. The GST, the tax on consumption, exacerbates that issue.
If the government really wants to help northerners, and I am talking about northerners in every province and territory, then it should increase the northern residents tax deduction. This is a pretty simple thing to do.
As many members know, since being elected to the House, I have called for the northern residents tax deduction to be increased by 50%, with future increases indexed to a northern inflationary measure. It has been estimated that for each increase of $1,000 to the deduction, $3 million would be put back into the pockets of northerners.
If the Minister of Finance cannot take my advice, then perhaps he will take the advice of the Canadian Chamber of Commerce. At its annual general meeting in Saskatoon, chamber members, those very progressive and enlightened people we all know as the backbone of the country with their large and small businesses, voted to support the federal government in: reviewing the provisions allowing for income tax deductions for northern residents and increasing the housing deduction to reflect the actual inflation index costs of housing in northern areas; reducing record burdens by eliminating the current employer specified vacation travel deduction and replacing it with a standardized inflation indexed northern vacation deduction based on the number of people in the taxpayer's household and the area of residence; and dispensing with the limit on medical travel being the lowest return air fare and allowing northern taxpayers the deduction for their actual costs incurred in medical travel.
These tremendously progressive statements came from the Canadian Chamber of Commerce. I thank the members for those statements. I thank them for their support because they truly recognize that northern workers are making a difference to our economy. They will continue to add wealth into the country and will continue to support the efforts of southern Canadians to live in a good fashion.
Maybe the Minister of Finance will take the advice of the legislative assembly in the Northwest Territories that unanimously supported a motion to increase the deduction.
Also calling for this change is the NWT Chamber of Commerce and the Hay River Chamber of Commerce. The head of the Hay River Chamber of Commerce said:
Hay River is experiencing a period of rapid economic growth, but to sustain this prosperity we must retain and attract residents.
He went on to point out that in order to address this need for residents, there must be an increase in the northern residents tax deduction. What a good idea.
I do not know if the federal government realizes this, but if we pay the cost of flying people in and out of the north, that adds to the company's costs and reduces its taxes, which go back to the federal government.
By encouraging northerners to live in the north, we are going to improve the financial viability of companies and we are going to see a return to the federal government. That is not a bad idea; it is a good idea. This is what we want to create in our country.
Increasing the northern residents' tax deduction will help ordinary northerners, but more is needed, and I will not stop there. I speak to that first because it is an issue for people and people first is the way our party deals with things. We also need to speak to the increased need of funding to our territorial governments.
During the election, the Prime Minister wrote to the Premier of the Northwest Territories, saying:
We recognize the unique circumstances faced in the North regarding the delivery of programs and services to residents [in small, remote communities] and we are prepared to discuss the challenges regarding the costs and circumstances for the delivery of those services.
I appreciate the Prime Minister's comments. We all appreciate them. We want them backed up in the budgets of the government so they reflect what the Prime Minister said. That seems to be pretty straightforward. The government has had plenty of time to talk. It has had an expert panel report, advising how to change the funding formulas for the territories.
The Northwest Territories has identified four key issues that stand in the way of the north achieving its full potential. First among them is a need for a new fiscal relationship with Ottawa, one that reflects the needs of the Northwest Territories. The current fiscal arrangement simply cannot continue. They are deep-seated. Our territorial government, representing the full number of the people in the Northwest Territories, can only borrow up to $300 million. Most of that is tied up already in debt on public utility systems, which of course it has to provide.